Sitting of 17 April 1961

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  BIRMINGHAM CORPORATION BILL
  Read the Third time and passed.
  DARTFORD TUNNEL BILL
  As amended, considered; to be read the Third time.
GREAT NORTHERN LONDON CEMETERY COMPANY BILL [Lords]
  LANCASHIRE QUARTER SESSIONS BILL [Lords]

    POOLE CORPORATION BILL [Lords]
    RIVER WEAR WATCH (DISSOLUTION) BILL [Lords]
    Read a Second time and committed.

ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Industrial Training, Scotland
    Mr. Hector Hughesasked the Minister of Labour what statistics are kept by Her Majesty's Government of youths in technical training in Scotland; and what steps are taken to publicise this information.
    The Minister of Labour (Mr. John Hare): Statistics kept by my Department show the numbers of youths who enter employment as apprentices or learners in skilled occupations. These figures are published annually in the Ministry of Labour Gazette.
    Statistics kept by the Scottish Education Department show the numbers of students enrolled for full-time and part-time courses in central institutions and establishments of further education. These are published in the annual reports of the Secretary of State on Education in Scotland. The decennial
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    census of the population gives statistics of the numbers of apprentices analysed by age, occupation, industry and area. These have been published by the Registrar General for Scotland for the 1951 census; and similar figures will be published after the 1961 census.
    Mr. Hughes: While thanking the Minister for that comprehensive reply, may I ask if he realises that my purpose in putting the Question was to emphasise the importance of enabling youths, particularly school leavers, to plan their careers ahead so that they can fit into national productivity and exports with advantage to themselves and to the nation?
    Mr. Hare: I am grateful to the hon. and learned Member and entirely agree with everything he has said.
    Mr. Willisasked the Minister of Labour how many Scottish employers have informed him of their intention to increase their training programmes so as to provide extra apprenticeships and other forms of training during the years 1961 to 1963; and what proportion this represents of the employers approached by the Industrial Training Council in this connection.
    Mr. Hare: The detailed information for which the hon. Member asks is not available. But the hon. Member will be glad to hear that many firms are announcing their intention to increase their intake of apprentices.
    Mr. Willis: Is it not rather regrettable that the right hon. Gentleman has not got this information? How does he expect to deal with this problem, which is exceedingly serious, if he has not got any information about it?
    Mr. Hare: I honestly do not think that even the hon. Gentleman would say that there is much point in keeping statistics about intentions. I am much more interested in statistics about facts.
    Mr. Willis: The Minister has not got those either.
    Mr. Hare: Therefore, I do not think that statistics of the sort the hon. Gentleman asks for would be useful. However, my hon. Friend the Parliamentary Secretary and myself in going round the country have found that immense interest is

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    being taken in this, and I am convinced that satisfactory action will follow.
    Mr. Prentice: Did not the Industrial Training Council last year circulate large firms throughout the United Kingdom? Why cannot the Scottish aspect of this problem be extracted from the replies the Council received so that my hon. Friend can have an answer?
    Mr. Hare: The trouble about that is that it was a very incomplete exercise because many people at that time were not prepared to say what their intentions were.
    Mr. Malcolm MacPhersonasked the Minister of Labour how many training development officers are working in Scotland under the auspices of the Industrial Training Council.
    Mr. Hare: The Industrial Training Council's Training Advisory Service has been and will continue to be generally available to assist industries and individual firms in Scotland. In addition, from 1st May, the Council has appointed a training development officer based on Glasgow, who will work in Scotland.
    Mr. Malcolm MacPherson: Does the Minister consider that to be satisfactory—one officer only for Scotland as Scotland, plus the functioning Service as a whole? Does he not realise that these officers were intended to be especially concerned with the co-ordination of training in small firms, and is not Scotland especially backward in that regard? Will not he, therefore, try to do rather more?
    Mr. Hare: It is important to realise that the general effort being made by the Industrial Training Council also includes a particular effort in Scotland. This extra officer is being trained to work in Scotland alone, and his efforts will supplement those already being made.
    Mr. Rossasked the Minister of Labour what is the estimated expenditure for the financial year 1961–62 by the Industrial Training Council for their work in connection with the expansion of industrial training in Scotland.
    Mr. Hare: The work of the Industrial Training Council extends throughout Great Britain, and it is not possible to give separate information about Scotland.
    Mr. Ross: But the Minister will surely remember his Answer to Question No. 21, asked by my hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson). The right hon. Gentleman then said that a special effort was being made in Scotland, and told us about the appointment of one additional training development officer. Are we to understand that the right hon. Gentleman cannot explain what is to happen there? Is he aware that for this purpose a predecessor of his arranged for a special grant of £75,000 to be spent over five years, that 40 per cent. of that time has gone and only 20 per cent. of the money has been spent, and that, as far as I can make out from the figures, the rate of expenditure in Scotland for this important job has been less than £1,000 a year?
    Mr. Hare: As I told the hon. Gentleman, it is impossible to give separate figures for Scotland, but expenditure on this administrative side is, in fact, increasing.
    Mr. Millanasked the Minister of Labour what plans he has for providing courses of first year apprenticeship training at Government training centres in Scotland in trades other than engineering.
    Mr. Hare: My officers are negotiating with the industry about a course in radio and television servicing at the Hillington Government Training Centre and I am hopeful that a class will be set up. In addition, consultations covering Great Britain are taking place with the heating and ventilating and electrical contracting industries.
    Mr. Millan: Even so, is this not rather disappointing progress? Can the Minister say whether this arises from lack of interest among Scottish employers or from lack of initiative on the part of the Minister? Has he any other proposals in mind for the near future?
    Mr. Hare: These are the proposals. In addition, as the hon. Gentleman knows, two new classes in engineering will be started this year.
    Mr. Lawsonasked the Minister of Labour, what steps are being taken in Scotland by the Industrial Training Council to promote group apprenticeship schemes among small and medium-sized firms.
    Mr. Hare: The Industrial Training Council seeks to promote the expansion of all types of industrial training and will suggest the adoption of a group apprenticeship scheme where this is the appropriate course.
    Mr. Lawson: Are we to understand from the Minister that this one officer who has been appointed in Scotland has been engaged in this job or is now engaged in it, and can he say what success he has had with this group of employers? Will he bear in mind that this group of small and medium-sized employers are among the employers who are failing the Scottish nation? What drastic step does the right hon. Gentleman propose to take to remedy this defect?
    Mr. Hare: The officer will not be appointed till 1st May. On the other hand, the work of the Industrial Training Council has been going on solidly and it is recommending to industries the particular courses in which it considers training is most appropriate. I agree with the hon. Gentleman that there is an important place for the small employer in these group apprenticeship training schemes. There is also the benefit, if they choose to use them, of training schemes such as we run at our own G.T.C.s, as well as the facilities which the Ministry of Education is making available. Using one of these three avenues of approach should solve the problem.
    Mr. Lee: Would the Minister not agree that so far the Industrial Training Council has been singularly unsuccessful in getting group apprenticeship schemes started? Does he recall that four were begun in 1960? Will he say now whether such huge organisations as the Engineering Employers' Federation has withdrawn its opposition to this scheme and is now co-operating in it?
    Mr. Hare: There is no doubt that we are all disappointed at the slowness of the start. On the other hand, there are signs that far greater interest is now being shown. One thing I can tell the hon. Gentleman is that in my trips to the regions, I have been impressed by the fact that everywhere more interest is being aroused, and I hope action will follow.
    Mr. Smallasked the Minister of Labour how many courses for engineering apprentices will be available at Government training centres in Scotland during 1961–62.
    Mr. Hare: The present course at the Hillington Government Training Centre will be followed by two further courses in the autumn.
    Mr. Small: Is the Minister aware that the number of apprentices attending these courses is surprisingly low and that six months ago they numbered eleven? Can he say whether the variety of courses and the status of this training for higher skills are adequate to attract the apprentices who are looking for skill of a higher kind?
    Mr. Hare: The hon. Gentleman must remember what is the object of the courses. It is a limited one—to provide small and medium-sized firms with a demonstration of the benefits of systematic training.
    Mr. Prentice: Is the right hon. Gentleman aware that there will be 45,000 extra school leavers in Scotland during the next three years? Against that background does he not think that this reply and the replies to the previous Questions on this subject are hopelessly inadequate? Should there not be Government effort on a much bigger scale and quicker action because the extra school leavers start leaving at the end of the summer?
    Mr. Hare: The hon. Gentleman must be careful in what he says. The trade unions and the employers have agreed that this is a responsibility which is theirs and which they are going to undertake. To denigrate their efforts in the middle of all this is a great mistake. I cannot guarantee what the results will be, but from what I have heard I think the results will be much better than some Members opposite appear to think.
    Mr. Ross: Surely the Minister will appreciate that the grant-in-aid which is made available in respect of training development officers was conditional upon employers and industry contributing the same amount and that there has been a very unsatisfactory response?
    Mr. Hare: The hon. Gentleman should realise that a number of employers and employing organisations have done this on their own.

    Disabled Persons, Cardiff
    Mr. G. Thomasasked the Minister of Labour the number of disabled persons registered as unemployed in Cardiff at the most convenient recent date; what progress has been made in reducing the number during the past year; and whether he will announce his plans for helping those disabled persons who have been registered for employment for over a year.
    The Parliamentary Secretary to the Ministry of Labour (Mr. Peter Thomas): 401 on 20th March, compared with 503 in March, 1960. The disabled have benefited considerably from the steady improvement in the local employment situation during the past year, and my disablement resettlement officers will continue to do their best to find work for those remaining unemployed, including the 120 persons who have been unemployed for over a year.
    Mr. Thomas: Whilst thanking the hon. Gentleman for the encouraging figures he has given, which indicate that there is a reduction, may I ask how long he expects it will be before he can reduce the length of unemployment of those who have been unemployed for over a year?
    Mr. Thomas: No, I am afraid I could not give the hon. Member any guess as to how long that will be, but it is quite clear that the employment situation in Cardiff is getting better week by week. I am very optimistic about the opportunities for those people to get employment in future.
    Mr. Callaghan: Is there any proposal to set up a new Remploy factory in the Cardiff area, because more than anything else that would help to solve this problem?
    Mr. Thomas: No. there is no proposal to set up a new Remploy factory in the Cardiff area, but the question of an increase in the capitation grant for sheltered workshop employment is being actively considered at the moment.

    Ship-Repairing Industry, Merseyside (Dispute)
    Mrs. Braddockasked the Minister of Labour what progress he has made towards settling the dispute on Merseyside in the ship-repairing industry, which has caused a stoppage for nearly two months; and whether he will make a statement.
    Mr. Hare: My officers had discussions with representatives of the employers and the union on 29th March, but no mutually acceptable basis for a resumption of work could be found. The District Committee of the Confederation of Shipbuilding and Engineering Unions had an informal meeting with the Employers' Association on 13th April, but I am informed that no agreement was reached. My officers are keeping in close touch with the situation.
    Mrs. Braddock: In view of the fact that this strike has been going on for so long and very little is known about it in the industrial field, except among those who are taking part in it, does the Minister not think that it has been a rather long time in which his Department has not taken steps to ensure that some negotiations take place on this matter? Is he aware of the difficulty that it is creating? Will the right hon. Gentleman look at the position? Is he aware that in Liverpool a number of men who are not taking part in the strike are unemployed as a result and have had their unemployment pay suspended, which has created great financial difficulties for them?
    Mr. Hare: I agree with the hon. Lady. This strike, of course, has gone on for a very long time, but I assure her that my industrial relations officers have been in touch with the parties since the strike started. On a number of occasions they have offered to convene a joint meeting to try to get a basis for the resumption of work, but neither the employers nor the unions have at any time shown any desire for my intervention, and until there are signs of a change in this attitude I do not think that I can do much to help.
    Sir H. Oakshott: Is my right hon. Friend aware that a large number of men who are in no way personally involved in

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    this dispute are out of work through absolutely no fault of their own and are denied unemployment benefit? Could he not see that justice is done to these people?
    Mr. Hare: I will look at the difficulty. The strike has gone on for a very long time but, unfortunately, neither side has shown any sign of wishing me to intervene.
    Mr. Lee: Could the right hon. Gentleman confirm that negotiating machinery has been exhausted long since in this dispute, and could he say whether he has approached the executives of the unions concerned to see whether arbitration or something of that sort would be acceptable?
    Mr. Hare: I am in close touch and will do anything that can be helpful, but until there is a change of mind it is difficult to know what more we can do at this stage.

    Building and Engineering (Accidents)
    Dr. Strossasked the Minister of Labour what were the numbers, respectively, of fatal and other reportable accidents in 1959 and 1960 at building operations and works of engineering construction.

    ACCIDENTS REPORTED IN BUILDING OPERATIONS AND WORKS OF ENGINEERING CONSTRUCTION, 1959 AND 1960

    Year

    Building Operations

    Works of Engineering Construction

    Total Accidents

    Fatal Accidents

    Total Accidents

    Fatal Accidents

    1959

    …

    …

    …

    15,410

    169

    2,875

    48

    1960

    …

    …

    …

    16,934

    217

    3,650*

    60*

    (2,457)

    (40)

    * The definition of "work of engineering construction" was extended during 1960.

    The figures in brackets show the number of accidents reported in 1960 which occurred at work within the scope of the Acts before the extension of the definition. These figures and not the total figures are comparable with the figures for 1959.

    Factory Inspectorate
    Dr. Strossasked the Minister of Labour whether he will make a statement on the recent improvement in the pay structure of the Factory Inspectorate; and what improvement has occurred in the recruitment of inspectors arising from this.
    Mr. Hare: In July, 1960, the pay of inspectors up to Class 1A was increased and I am circulating details in the OFFICIAL REPORT. Since then rates of
    Mr. Hare: As the reply contains a number of figures, I am circulating particulars in the OFFICIAL REPORT.
    Dr. Stross: Would it not be fair to suggest that there has been a deterioration as between those two years? If that is so, would the Minister give us some reassurance and say that he will do everything to get as many inspectors as possible appointed and as frequent inspections as possible made and see that those who do inspect shall be as highly trained as possible?
    Mr. Hare: Certainly the hon. Member's assumption is right. I am glad that he has called attention to it. There has been a regrettable increase in the number of accidents. I also agree with him that everything should be done to make people more aware of the need for greater safety consciousness. Apart from this, I have increased the number of my Inspectorate; I am also taking power to issue further regulations, but the more that can be done on both sides of the House to draw attention to the need for greater care in avoiding accidents the better.
    Following are the particulars:
    pay of senior grades have also been increased. There has been a substantial increase in recruitment since July, 1960, but it is not possible to say how far this is due to the revised salary scales.
    Dr. Stross: May I thank the right hon. Gentleman for that reply and assure him that there are many others on both sides of the House who welcome this increase? Will the right hon. Gentleman pay particular attention to the fact that not

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    only do we need a great increase in the number of inspectors, but an improvement in the qualifications they possess at the initial grade?
    Mr. Hare: I will certainly take note of what the hon. Member says.
    Mr. Prentice: While welcoming that reply, may I ask the right hon. Gentleman what further steps are being taken to increase the numbers of the Factory Inspectorate, since the rising rate of

    IMPROVEMENTS IN SALARY SCALES OF H.M. INSPECTORS CLASSES 1A, 1B AND II

    —

    Old scale in operation at July, 1960

    Revised scale and operative dates

    Present scale from 1st January, 1961

    £

    £

    £

    H.M. Inspector Class 1A

    …

    1,380–1,950

    1,475–2,200 from 1st October, 1958 (b)

    1,534–2,288 (c)

    H.M. Inspector Class 1B

    …

    1,135–1,550

    1,200–1,690 from 1st October, 1958 (b)

    1,248–1,758 (c)

    H.M. Inspector Class II

    …

    650 (age 23)–1,035

    730 (age23)–1,095 from 1st October, 1958 (b)

    759 (age 23)–1,139 (c)

    NOTES:

    (a) The salary scales quoted are male national rates.

    (b) Pay settlement announced on 18th July, 1960.

    (c) Improvement consequent upon Central Pay Settlement for the Civil Service.

    Professional Footballers (Agreement)
    Mr. J. P. W. Mallalieuasked the Minister of Labour if he will state the details of the agreement reached between the Football League and the Professional Footballers' Association under the auspices of his Department.
    Mr. Hare: As the text of the agreement is long, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Mallalieu: Would the right hon. Gentleman kindly summarise that part of the agreement which deals with the retain and transfer system, and will he say whether at his Ministry a substantial modification of that system was agreed?
    Mr. Hare: When the hon. Member sees the full text of the agreement, I think he will agree that probably three points are most important. Point (3) is that the player is to decide by 31st May whether or not to accept; Point (4) is that, if he does not accept, the club will retain and place him on the transfer list. Point (7), which I think is relevant, is that if by 31st August he is still not transferred, the Management Commit-
    accidents in industry can be met to some extent by increasing the number of inspectors?
    Mr. Hare: We should not place too much emphasis on numbers. I think that quality, as the hon. Member for Stoke-on-Trent, Central (Dr. Stross) suggested, is very important. I do not want to dilute the quality. We must watch both these factors at the present time.
    Following is the information:
    tee of the Football League will, on the application of the player, deal with the matter. Players also have the right to appeal to the Management Committee in connection with transfer fees.
    Mr. C. Pannell: Will the right hon. Gentleman appreciate that in this matter his own good faith has been impugned, particularly by members of the Football League who suggested that Mr. Claro had what one can only call unilateral negotiations with the players? And as we who have taken part in these negotiations all know that these sort of charges are quite unwarranted, will the right hon. Gentleman deny them and say that his Department has acted as circumspectly in this matter of negotiations as it has always been its tradition to do?
    Mr. Hare: My Department certainly acted in the traditional manner in this dispute, and I would not subscribe to any criticism of the way it carried out its duties.
    The terms of the agreement are as follows:

    (1) No transfers to take place during the term of the contract except by mutual consent of club and player.

    769

    (2) The player to be informed by the 19th May preceding the end of the contract of the club's offer for a new contract.

    (3) The player to decide by 31st May whether or not to accept.

    (4) If he does not accept the club will retain and place him on the transfer list.

    (5) If he is not transferred by the 30th June the club may continue to retain him on payment of £15, £14, £13, £12, according to the Division, up to 31st July.

    (6) If not transferred by 31st July the player will sign a playing contract for one month on the offered terms subject to the club maintaining efforts to transfer him.

    (7) If by 31st August he is still not transferred, the Management Committee of the Football League will, on the application of the player, deal with the matter. The players also have their present right of appeal to the Management Committee in connection with transfer fees, etc., at any time.

    Mr. J. P. W. Mallalieuasked the Minister of Labour what was the nature of the recent representations made to him by the Professional Footballers' Association concerning the operation of the agreement made between them and the Football League under the auspices of his department; and what was his reply.
    Mr. Hare: No representations were made to me. My Department arranged a meeting on 16th March at which the Professional Footballers' Association expressed the view that the amendments which the Football League proposed to make to their Regulations did not fully implement the agreement of 18th January. The points raised by the Association were placed before the Extraordinary General Meeting of the League on 14th April, but I understand that it was decided at that meeting not to change the present transfer system.
    Mr. E. Fletcher: In view of the fact that some misunderstanding has obviously arisen between the Football League and the Professional Footballers' Association, will not the right hon. Gentleman see that his Department brings the parties together as soon as possible with a view to some sensible arrangement for the future being made?
    Mr. Hare: I think that the sensible thing would be for the parties to set up as soon as possible a joint negotiating committee under an independent chairman at which the remaining differences between them could be discussed. I will certainly give assistance with such a
    770
    committee, but conciliation can be successful only when both parties are prepared to honour their agreements.
    Mr. Mallalieu: May we take it that it is the Minister's view that the Football League has gone back on the agreement on which it gave an undertaking in the Ministry? If that is so, will the right hon. Gentleman make it very clear in future negotiations that industrial peace is impossible unless both sides can be trusted to keep their word?
    Mr. Hare: I do not want to aggravate the situation. It is not for my Ministry to interpret an agreement between the two parties, but as far as I and my departmental officers are concerned, we have no doubt that the Professional Footballers' Association is right in its contention, and the Football League was informed of our views in a letter dated 4th April.
    Mr. Lee: Is the right hon. Gentleman aware that the views he has just expressed are certainly the views held by my hon. Friends? Will he make it clear to the Football League that when the good offices of the Ministry of Labour are asked for we are entitled to expect that decisions arrived at there will be honoured by both sides, and that in an industry such as this, where the negotiating machinery is very young, it indeed strikes a mortal blow at confidence by the players if this kind of chicanery is to go on any more?
    Mr. Hare: The feelings expressed by the hon. Gentleman are probably also shared by many of my hon. Friends. I do not want to say anything which will aggravate the situation, but what has been said in the House this afternoon makes it quite clear where we all stand in this matter.

    Steel Industry (Accidents)
    Mr. E. L. Mallalieuasked the Minister of Labour if he is satisfied that adequate measures are being taken in the steel industry to reduce the rate of accidents, particularly amongst the younger workers, which reached a peak in the early part of last year.
    Mr. Hare: This industry has been particularly active in its efforts to reduce accidents. Between 1956 and 1959 the accident frequency rate for all workers

    771
    fell by 27 per cent. and the rate for young people by 53 per cent. Unfortunately, these rates show increases in 1960 of 6 per cent. and 30 per cent., respectively. This was due in part to increasing activity and to the considerable influx of new workers, but it is a disappointing reversal of the steady improvement previously achieved. I am satisfied that the industry is intensifying its efforts to reduce the number of these accidents.

    Wages
    Mr. Shinwellasked the Minister of Labour whether he will introduce legislation for a minimum wage policy to be enforceable by law.
    Mr. Hare: Minimum wages are at present enforceable by law in agriculture and the industries where there are Wages Councils appointed under the Wages Councils Act. In other industries these matters are discussed by the joint negotiating body on which both sides are powerfully represented. I do not consider further legislation to enforce minimum wages is necessary or desirable.
    Mr. Shinwell: Is the right hon. Gentleman aware that the proposal contained in the Question is taken bodily from a statement made by his right hon. Friend the Prime Minister in a book he wrote several years ago? Is he repudiating the proposal made by his right hon. Friend?
    Mr. Hare: I think that the right hon. Gentleman will know that time passes on. I am sure that he would be the first to say that he does not believe today everything that he believed, say, twenty years ago.
    Mr. Shinwell: While expressing no opinion about the right hon. Gentleman's observation of a personal character, may I ask him to be good enough to consult his right hon. Friend to see if he can persuade him to revert to his original idea?
    Mr. Hare: I am sure that note will be taken of the right hon. Gentleman's request.

    Northumberland and Durham
    Mr. P. Williamsasked the Minister of Labour what is the present level of unemployment in Northumberland and
    772
    Durham; how this compares with 12 months ago; and how he expects the position to develop in the next 12 months.
    Mr. P. Thomas: There were 26,197 unemployed at 13th March, 1961, compared with 34,803 a year earlier. The improvement should continue over the next year, especially as it is estimated that about 6,000 new jobs will accrue in that period.

    Occupational Health Services
    Mr. Prenticeasked the Minister of Labour if he will make a statement on the Government's policy towards the recent Recommendation No. 112 of the International Labour Organisation concerning occupational health services in places of employment.
    Mr. Hare: I would refer the hon. Member to the White Paper, Cmnd. 1318, which was laid before the House on 23rd March.
    Mr. Prentice: Will the hon. Gentleman acknowledge that the views which have often been expressed from this side of the House in favour of a comprehensive health service for industry are now supported by the recommendation of the I.L.O.? However, these ideas can be carried into effect only by a much more positive attitude on the part of the Government than that contained in the White Paper. Can he also tell the House, if he still relies on a voluntary approach, how long he thinks it will be before industry is effectively covered by occupational health services?
    Mr. Hare: The hon. Gentleman will not expect me to agree with what he has said. I think that our present approach is the better one. The recommendation provides for the voluntary and progressive development of occupational health services. As he knows, a great deal is being done, and I hope that a great deal more will be done. I am quite convinced that we are on the right lines and are making the progress we need to make.

    Youth Employment Service, Scotland
    Mr. Willisasked the Minister of Labour what steps are being taken to expand the Youth Employment Service in Edinburgh so as to deal adequately

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    with the extra numbers of school-leavers this year and in the next few years.
    Mr. P. Thomas: The number of youth employment officers has increased by 3 or 50 per cent. since 1956. The future needs of the Service in the area are being kept under review.
    Mr. Willis: Is the Parliamentary Secretary in fact doing anything now to meet the increasing demand for these services which is bound to arise during the next two years?
    Mr. Thomas: The increase in the number of young people reaching the age of 15 in the area between 1956 and 1962 is 41 per cent., and the increase in the number of youth employment officers is 50 per cent.
    Mr. Hector Hughesasked the Minister of Labour what steps are being taken to expand the Youth Employment Services in Aberdeen City and County so as to deal adequately with the extra numbers of school-leavers during each of the next five years, including 1961.
    Mr. P. Thomas: The number of youth employment officers in Aberdeen City has increased by 1 or 33 per cent. since 1956. In the County, where because of geographical difficulties the number of staff has for some time been generous in relation to the number of school-leavers, an additional part-time officer has been made available. The future needs of the service in the area are being kept under review.
    Mr. Hughes: Does the Parliamentary Secretary realise that he has, apparently inadvertently but unfortunately, narrowed the meaning of the word "expansion", which refers not only to numbers but also to kind? In these scientific days when the future of Britain is in the hands of youth, what expansion is taking place in the kind of employment which is offered to these educated and scientific youths?
    Mr. Thomas: The Question is about the expansion of the Youth Employment Services. We are responsible directly and indirectly for the numbers of youth employment officers. As I told the hon. and learned Gentleman, in Aberdeen City they have increased since 1956 by 33 per cent.
    Dr. Dickson Mabonasked the Minister of Labour what steps are being taken to expand the Youth Employment Service in Renfrewshire so as to deal with the extra numbers of school leavers this year and in the next few years.
    Mr. P. Thomas: The number of youth employment officers has increased by 2, or 40 per cent., since 1956. The future needs of the Service in the area are being kept under review.
    Dr. Mabon: Is there any intention of trying to link up the work of the Youth Employment Service with possible potential developments either in the graving dock or in the motor-car factory in other parts of the county?
    Mr. Thomas: We consider that the number of youth employment officers in post at the moment is adequate to deal with all eventualities in the area.
    Mr. Hannanasked the Minister of Labour what steps are being taken to expand the Youth Employment Service in Glasgow so as to deal adequately with the extra numbers of school leavers this year and in the next few years.
    Mr. P. Thomas: The Central Youth Employment Executive is at present in consultation with the education authority about the staffing of the Service. The intention of these talks is to ensure that the arrangements made will be fully adequate to deal with the additional number of school leavers.
    Mr. Hannan: Is the hon. Gentleman aware that increased staff in Glasgow is now a matter of great urgency? Will he bear in mind that in its Report in 1958 the Sub-Committee of the Estimates Committee pointed out that there were no grounds for thinking that this was an extravagant system, and that it still had to face its greatest test? Will he give an assurance that he will render all assistance to Glasgow in its expansion of the Youth Employment Service?
    Mr. Thomas: Yes, it is a matter for the local authority, and I hope that there will be some increase. But, as I have said, the matter is under active consideration at the moment.
    Mr. Manuelasked the Minister of Labour what steps are being taken to expand the Youth Employment Service

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    in Ayrshire so as to deal adequately with the extra numbers of school leavers this year and in the next few years.
    Mr. P. Thomas: The number of youth employment officers has increased by 2, or 50 per cent. since 1956. The future needs of the Service in the area are being kept under review.
    Mr. Manuel: Is not the Parliamentary Secretary by this time aware that this fiddling answer about increasing percentages of officers is quite inadequate to meet the situation we have in these areas in Scotland? Does he not think that in areas of prolonged unemployment he ought to streamline the procedure and form some kind of committee of representatives of employers, trade unionists and his own Department in order to see that proper apprenticeships are taken up in the various trades in the area, instead of fiddling about with this answer about greater percentages of officers?
    Mr. Speaker: Order. Would those hon. Members who are not so situated as to be able to abstain from conversation be so kind as to conduct their conversations a little less loudly?
    Mr. Thomas: I disagree entirely with the hon. Member that the numbers I have given are inadequate. The Question relates to the expansion of the Youth Employment Service. The increase in the number of children reaching 15 in the area about which he asks—Ayrshire—is 34 per cent. between 1956 and 1962. and the number of youth employment officers has been increased by 50 per cent. We consider that to be adequate.
    Mr. Steeleasked the Minister of Labour what steps are being taken to expand the Youth Employment Service in Dunbartonshire so as to deal adequately with the extra numbers of school leavers this year and in the next few years.
    Mr. P. Thomas: The Central Youth Employment Executive has made certain recommendations for increasing the number of advisory staff in the area. These are at present being considered by the authority.
    Mr. Steele: I am extremely disappointed that, apparently, I do not have any percentage increase at all. Whilst,
    776
    in fact, the other parts of Scotland had inadequate facilities before the percentage increases, those he has mentioned are not adequate at all. In view of this, would it not be better for the hon. Gentleman to ask the Central Office of the Tory Party to advise the industrialists in Scotland to provide money to enable this job to be done, rather than for it to be provided by the Central Office of the Tory Party for propaganda for the Tory Party?
    Mr. Thomas: An increase in the Youth Employment Service in Dunbartonshire is a matter for the local education authority, and I hope that the hon. Gentleman will persuade that authority to pay particular attention to the recommendations that have been made to it.
    Miss Herbisonasked the Minister of Labour what steps are being taken to expand the Youth Employment Service in Lanarkshire so as to deal adequately with the extra numbers of school leavers this year and in the next few years.
    Mr. P. Thomas: The Central Youth Employment Executive has recommended increases in staff to take account of the additional number of school leavers.
    Miss Herbison: Surely the Minister ought to be able to say what these increases are. Is he aware that the figures which he has already given today, when he takes credit for a 50 per cent. increase which might represent one officer, show that he assumes that the original number was adequate for the job? Is he not aware that we on this side of the House are convinced that we have never had an adequate service, and that in an area like Lanarkshire where there is so much unemployment the youth employment officers have a very heavy burden indeed? Will he say what reports they are giving to him of the very black spots that are blacker than those in Lanarkshire?
    Mr. Thomas: I will certainly agree with the hon. Lady that the service in Lanarkshire at present is understaffed. I am very glad that she has raised this question, and I hope that she will use her influence with the education authority to ensure that it accepts the proposals that the executive made to it.

    Training of Supervisors (Committee)
    Mr. John Pageasked the Minister of Labour what progress has been made with the establishment of a committee on the selection and training of supervisors in industry.
    Mr. Hare: I have now appointed a committee which will hold its first meeting tomorrow, 18th April. The terms of reference are as follows:
    "To review the progress made since the publication in 1954 of the Report of the Committee of Inquiry on the Training of Supervisors and the problems which have been encountered in organising effective training schemes; to consider arrangements for the selection of supervisors and to examine whether there is a need for a central organisation to further the development of supervisory training."
    The chairman will be an Undersecretary of my Department. I will circulate in the OFFICIAL REPORT the names of the members of the Committee.
    Mr. Page: What does my right hon. Friend consider to be the main objectives of the Committee? Will he draw the Committee's attention to the fact that in some industries supervisors consistently receive less pay than those they are supposed to be supervising?
    Mr. Hare: In answer to the first part of my hon. Friend's supplementary question, I have done this after consulting my National Joint Advisory Council. On this Council we are examining a number of problems affecting relations between management and employees. I personally believe that good supervision can help to improve relations on the shop floor. An up-to-date review will therefore be helpful to both sides of industry. As to the other question which my hon. Friend asked, employers will doubtless take note of what he said.
    Mr. R. Carr: Will the Committee be able to consider the possible extension of the Ministry's facilities at Letchworth for training supervisors and whether the facilities could be made available to industry on a fee-paying basis?
    Mr. Hare: I do not think there is any reason why the Committee, if it wishes, should not look at the point my hon. Friend has raised.
    Mr. Lee: Is the right hon. Gentleman aware that in the past there has been pointed criticism about the very low pay which supervisors receive? Is it within the terms of reference of the Committee to recommend that supervisors should not be allowed to fall below a certain salary level?
    Mr. Hare: I do not think that would be within the terms of reference of the Committee. On the other hand, publicity will be given to what the hon. Gentleman said as well as to what my hon. Friend said.
    The membership of the Committee is as follows:

    Chairman: Mr. D. C. Barnes, Ministry of Labour.

    Mr. J. R. Armstrong, British Association for Commercial and Industrial Education.

    Mr. D. B. Beynon, British Institute of Management.

    Mr. M. F. Bird, Ministry of Education.

    Mr. P. J. Casey, British Employers' Confederation.

    Mr. R. Duncan, British Employers' Confederation.

    Mr. C. D. Ellis, Institute of Personnel Management.

    Dr. C. B. Frisby, Ph. D., National Institute of Industrial Psychology.

    Mr. J. J. Henderson, Institute of Industrial Supervisors.

    Mr. A. Moffat, Industrial Welfare Society.

    Mr. A. M. Morgan, C.M.G., Ministry of Labour.

    Mr. F. Pickford, Ministry of Labour.

    Mr. R. D. V. Roberts, Nationalised Industries.

    Mr. J. P. Stoneman, Federation of British Industries.

    Miss M. Towy-Evans, O.B.E., Ministry of Labour.

    Mr. D. Winnard, Trades Union Congress.

    Secretary: Mr. J. H. Galbraith, Ministry of Labour.

    Glasgow-Port Glasgow Area
    Dr. Dickson Mabonasked the Minister of Labour what was the average percentage of unemployment in the Greenock-Port Glasgow area in the years 1952 to 1955 inclusive; what was the figure in 1956 to 1959 inclusive; and what it was at the latest convenient date.
    Mr. P. Thomas: The percentage rates for 1952 to 1955 were 8·4, 8·0, 6·1, and 5·1; for 1956 to 1959, 5·4, 6·1,7·7, and 8·0; and on 10th April, 7·0.
    Dr. Mabon: Does the Minister realise that these figures, bad as they are, would

    779
    be worse if they were not masked by emigration from the towns? Does he realise that it would be easy for the present Minister to break the record of his predecessor, and that one thing that could be considered would be to make representations to the Board of Trade, along with many others, to try to expand the advance factory programme?
    Mr. Thomas: I certainly agree with the hon. Member that this is one of the blackest unemployment spots in Scotland, and has been for many years. It has not shared in the general improvement in Scotland over the last twelve months. This is a development district, and we are doing all we can to stimulate industrial development there. There are 650 jobs in prospect locally and, in addition, work is expected to start in the next few months on the graving dock project which will provide 2,000 jobs during construction and 1,200 permanent jobs.

    School Leavers, Scotland
    Mr. Gourlayasked the Minister of Labour what steps are being taken in Scotland to deal adequately with the extra numbers of school leavers this year and in the next few years.
    Mr. P. Thomas: The Central Youth Employment Executive and local education authorities keep the staffing of the Youth Employment Service under close review in all areas in anticipation of increased work arising from the larger number of school-leavers. As a result, nineteen new posts have been created and filled since 1956. Other increases in strength are likely to be made soon, as a result of current consultations between the Executive and authorities.
    Mr. Gourlay: While I recognise the attempt that the Minister is making to provide more staff to deal with school leavers, may I ask what attempt is being made to provide more employment for the school leaver? Is the Parliamentary Secretary aware, for example, that there are fewer people employed in Scotland today than there were five years ago, and that unemployment there is higher today than it was at that time? Is he aware that we in Scotland are completely dissatisfied with the ineffectiveness of the Local Employment Act to provide necessary employment for our young people? What does he intend to do about it?
    Mr. Thomas: I will accept quite a lot of what the hon. Gentleman says, but there has been a considerable improvement in Scotland over the last year, and we certainly hope that the improvement will continue.

    Motor Industry (Industrial Relations)
    Mr. Leeasked the Minister of Labour whether he will make a statement on the conclusions reached by the joint committee which has been considering industrial relations in the car industry.
    Mr. Hare: The talks between the employers and trade unions on industrial relations in the motor industry are still proceeding and I am not yet, therefore, able to make a statement on the outcome.

    Blyth
    Mr. Milneasked the Minister of Labour (1) if he will give figures showing the length of unemployment in the Blyth constituency at the latest available date for males, females, and persons under 18 years of age, male and female, respectively;
    (2) what were the total figures of unemployment in the Blyth constituency at the latest available date and the comparable figures in 1959 and 1960.
    Mr. P. Thomas: On 10th April, the number of unemployed in the Bedlington Station, Blyth, and Seaton Delaval Exchange areas totalled 722 compared with 633 in April, 1959 and 784 in April, 1960. I will circulate in the OFFICIAL REPORT a table giving the detailed analysis of unemployment by duration at 13th March, 1961.
    Mr. Milne: Is the hon. Gentleman aware that these trends are rather alarming, and will he consult with his right hon. Friend the President of the Board of Trade with a view to seeing that jobs are directed into this area in order to improve the position?
    Mr. Thomas: I assure the hon. Gentleman that my right hon. Friend the President of the Board of Trade is continuing to keep the matter well under review.
    Mr. P. Williams: In order to keep the matter in perspective for the region as a whole, did he not give an answer earlier showing that unemploy-

    NUMBER OF PERSONS REGISTERED AS WHOLLY UNEMPLOYED AT LOCAL OFFICES IN BEDLINGTON STATION, BLYTH AND SEATON DELAVAL AT 13TH MARCH, 1961

    Length of unemployment

    Men

    Boys

    Women

    Girls

    Total

    Up to 2 weeks

    …

    …

    61

    2

    29

    11

    103

    Over 2 and up to 8 weeks

    …

    …

    149

    8

    68

    15

    240

    Over 8 and up to 26 weeks

    …

    …

    120

    17

    37

    15

    189

    Over 26 and up to 52 weeks

    …

    …

    55

    5

    18

    1

    79

    Over 52 weeks

    …

    …

    64

    —

    18

    1

    83

    TOTAL

    …

    …

    449

    32

    170

    43

    694

    Income Groups (Family Expenditure)
    Mr. Leaveyasked the Minister of Labour when it is intended to collect and to publish statistical and other information to show the analysed expenditure of families of representative income groups, such as was covered by the last Household Expenditure Inquiry.
    Mr. Hare: Information of this type has been collected by the small scale continuing Family Expenditure Survey which commenced in 1957. It is hoped to publish material in respect of the first three years of this Survey later this year.
    Mr. Leavey: Can the right hon. Gentleman confirm that if the report is published it will be based on the same principles of collection so that the new report can be directly compared with the statistics in the last one?
    Mr. Hare: Broadly, what the hon. Gentleman says is correct.

    Teachers and Hospital Workers
    Mr. Marquandasked the Minister of Labour whether he will make, and publish for the guidance of local authorities, hospital boards and all others concerned, a survey of the present and prospective supply over the next 10 years of persons of both sexes qualified, after completion of training, for employment as teachers, nurses, physiotherapists, almoners, health visitors, social workers of various kinds and in other occupations requiring similar qualifications and training.
    ment in the Northumberland and Durham area had fallen?
    Mr. Thomas: Yes, that is so.
    The following is the information:
    Mr. P. Thomas: My right hon. Friend is consulting my right hon. Friends the Minister of Education and the Minister of Health and I will write to the hon. Member as soon as possible.
    Mr. Marquand: Will the hon. Gentleman not agree that during wartime a manpower budget was a very valuable means of filling vacancies in scarce occupations of this type? Would not a manpower budget now be a more valuable contribution to the expansion of our social services than the Budget to which we are about to listen?
    Mr. Thomas: The right hon. Gentleman will appreciate that consultation will have to take place between my right hon. Friends the Ministers of Education and of Health.

    Training Development Officers
    Mr. Prenticeasked the Minister of Labour how many posts for training development officers have now been created by the Industrial Training Council; how many officers are now employed; and in what parts of the country they are operating.
    Mr. Hare: Twelve posts have been created and nine officers are now employed. A further officer will be taking up appointment on 1st May in Glasgow and a second on 1st August in Manchester.
    Mr. Prentice: What impact does the Minister think that twelve training officers will have on a nation with 50 million people in time to make a difference to the extra number of school leavers in

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    the next three years? Is it not clear that a much bigger scale of effort is required?
    Mr. Hare: The hon. Gentleman is ignoring the vast amount of extra effort which has been put into this campaign by both sides of industry. These are specialist training officers who are there to supplement what has already been done.

    Army Recruitment
    Mr. B. Harrisonasked the Minister of Labour what consultations he has had with the Minister of Defence concerning plans for obtaining the necessary personnel should the Army not reach a strength of 165,000 by 31st December, 1962.
    Mr. Hare: My right hon. Friend and I are naturally in close consultation on this matter.
    Mr. Harrison: May we take it that the plans that were referred to by the Minister of Defence in the debate on 28th February this year are well advanced?
    Mr. Hare: All I can say is that the Government, of course, have plans in hand and are considering plans to deal with any situation which may arise. I hope that my hon. Friend will agree with me that this particular eventuality will not in fact arise.
    Mr. Emrys Hughes: Will the Minister tell us a little more about these consultations? Is be aware that very many young men in this country do not want conscription in any form?
    Mr. Hare: I note what the hon. Member says.

    AGRICULTURE, FISHERIES AND FOOD

      Camel (Import)
      Sir B. Jannerasked, the Minister of Agriculture, Fisheries and Food what was the cost of preparing and presenting to Parliament the Order of March 9th 1961, authorising the landing in London of one Bactrian camel; for what purpose this camel was imported; and what special features it presented which prevented him from making a general standing order to cover the importation of this camel.
      The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. W. M. F. Vane): The cost of the Order was approximately £14. The camel was imported for exhibition by the Dudley Zoo. There were no special features about this importation. The General Order, to which I referred in my reply to the hon. Member on 26th January, will I hope be laid before the end of the month. A number of legal difficulties had first to be overcome.
      Sir B. Janner: I thank the Minister for at long last coming to the conclusion that he will help to balance the Budget by means of one standing order. Is he aware that a giraffe is to come in, or has just come in, at the cost of another £14?
      Mr. Vane: Yes, Sir; I was aware of the giraffe. I hope that this will be the last camel and the last giraffe to come in under this procedure.

      International Dairy Products Council
      Mr. de Freitasasked, the Minister of Agriculture, Fisheries and Food what reply he has made to the National Farmers' Union's proposal for an international dairy products council.
      The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames): I have not yet replied to the National Farmers' Union's letter but hope to do so very shortly.
      Mr. de Freitas: Does the Minister realise that such a council, with Governmental representation, could benefit both the consumer and the producer? Ought he not to do everything he can to help and not delay further a reply?
      Mr. Soames: There are many things to consider. I shall do it as soon as possible and reply.

      Barley
      Mr. Priorasked the Minister of Agriculture, Fisheries and Food what progress has been made in discussions on barley marketing; and if he will make a statement.
      Mr. Soames: Good progress is being made in these discussions, and I hope to make a statement within the next few weeks.
      Mr. Prior: Is my right hon. Friend aware that the orderly marketing of barley can come about only if the growers and the merchants co-operate more and that, if this happens, we could have a better price for our barley which would lower the subsidy on barley, a fact which would be very welcome to his right hon. and learned Friend this afternoon?
      Mr. Soames: I hope that this new scheme will make a considerable contribution to the more orderly marketing of barley.

      Horticulture (Improvement Schemes)
      Mr. Priorasked the Minister of Agriculture, Fisheries and Food if he will state the cost to the Exchequer of improvement schemes so far authorised under the Horticulture Act, 1960, and the average size of such schemes.
      Mr. Vane: If all the proposals approved under the Horticulture Improvement Scheme by 28th February are satisfactorily completed, our estimate is that the amount payable in grant on them will be £583,000. The average cost of work covered by an approved application is £1,465.

      Bread and Dairy Products (Distribution)
      Mr. Shinwellasked the Minister of Agriculture, Fisheries and Food whether he will introduce legislation for the creation of public utility undertakings of a non-profit character for the purpose of organising the distribution of milk, bread, butter and cheese and other articles of domestic use.
      Mr. Soames: No, Sir. Foodstuffs are more economically distributed and consumers' needs best served by competitive private enterprise.
      Mr. Shinwell: Does not the Minister recognise the language in the Question? Has he never read the erudite and constructive proposals of his right hon. Friend the Prime Minister? Will he consult his right hon. Friend in order to persuade the Government to adopt the proposals which the Prime Minister originally suggested?
      Mr. Soames: My right hon. Friend the Prime Minister is, of course, well
      786
      aware of the Question put down by the right hon. Gentleman and what lies behind it, but the right hon. Gentleman would make a great mistake if he thought that by going into this sphere of activity he could find a way out of the difficulties which surround Clause 4.
      Mr. Shinwell: Does the Minister realise that hitherto I have experienced no difficulties about Clause 4? Will he address himself to this very important question? If the proposal was good enough for the Prime Minister several years ago, why is it not good enough now?
      Mr. Soames: It has been considered.

      Seed Dressings
      Sir J. Maitlandasked the Minister of Agriculture, Fisheries and Food if his attention has been further called to the increasingly deadly effects of some kinds of seed dressing on all types of bird life; if he will ask for an immediate interim report on this particular form of poisoning from his Research Study Group; and if he will now state the action he proposes to mitigate or prevent any further occurrence of the slaughter which has been evident this sowing season.
      Mr. Soames: I am keeping closely in touch with the progress of the surveys, one of which we are doing ourselves, being carried out into the deaths of wild birds presumed to have been caused by certain seed dressings.
      My Department, with the cooperation of manufacturers, merchants and farmers, has for some months been arranging widespread publicity to encourage care in the use of these dressings. All the interests concerned agree that this is the best way of reducing casualties. I have arranged for a meeting with all the interests to be convened after this spring in order to review the effect of this publicity campaign and the results of the surveys. In the meantime, I do not think it is necessary to call for any interim advice from the Research Study Group, whose report is expected this summer.
      Sir J. Maitland: Does my right hon. Friend realise that, while he is still considering the matter, all the good done by

      787
      the Protection of Birds Act, 1954, introduced by my noble Friend the Member for Aberdeen, South (Lady Tweedsmuir) is being completely wasted in one season by the poison damage to bird life which is taking place? Will he take the matter rather more seriously and act more quickly than he has hitherto?
      Mr. Soames: I assure my hon. Friend that my Department and I myself take this matter extremely seriously. We have called for evidence throughout the country, particularly from those areas where these dressings are used, and not until we have that evidence shall we be able to assess it.

      Flood Prevention, Hull
      Commander Purseyasked the Minister of Agriculture, Fisheries and Food if he will state the extent of the recent flooding in Hull and the defects which caused the flooding; and what steps are to be taken to prevent further repetitions of flooding of industrial and residential premises.
      Mr. Vane: I understand from the Hull and East Yorkshire River Board that flooding occurred in the Swan Street and Chapman Street areas by over-topping at wharves on the River Hull, and in the Nile Street and Hessle Road area through a breach in the Railway Dock. I understand also that the City Corporation has in hand a detailed survey of the whole frontage of the River Hull within the City's boundaries and is also taking up the question of the Railway Dock with the British Transport Commission. This flooding was the result of exceptional circumstances.
      Commander Pursey: Is the Minister aware that hundreds of houses are flooded out regularly in Hull? Is it not high time that he took the necessary action to cause owners of defective wharves to build them up and prevent any further flooding.
      Mr. Vane: It would be rash for any of us to think that we could plan work which would prevent any further flooding in any conditions. In the City of Hull, the City Corporation has special powers under its Private Act of 1925 and those powers, in addition to the powers of the river board, should be sufficient to meet all ordinary circumstances.

    HOUSE OF COMMONS CATERING
    Mrs. Hartasked the hon. Member for Holland with Boston, as Chairman of the Kitchen Committee, how many of the catering staff have suffered a reduction in wages as a result of changes in staff arrangements about which they were not consulted; and how many are leaving as a consequence of the new arrangements.
    Mrs. Slaterasked the hon. Member for Holland with Boston, as Chairman of the Kitchen Committee, why the recent changes of staff were made without adequate consultation with the persons concerned.
    Sir Herbert Butcher: The recent rearrangement of staff duties which were minor in character affected only eight people. They were made for the purpose of endeavouring to improve the service given to Members and were made in the same way to similar rearrangements of duties which have been carried out on earlier, occasions. One worker will sustain a reduction of 5s. 6d. per week, whilst another will receive an increase of a similar amount. I regret that one worker decided to seek other employment before giving the new arrangements a fair trial.
    Mrs. Hart: Is the hon. Gentleman aware that I am told that four members of the staff intend to leave as a result of these new arrangements, that no consultation with them took place, and that among those who feel aggrieved at their new working conditions are members of the staff who have worked in this building for as long as 15 years? Is it not very unsatisfactory that such drastic changes should take place without adequate consultation with the staff?
    Sir H. Butcher: I cannot regard the changes involving eight people, which amounted really to no more than cross-posting, as being in any way drastic. As the hon. Lady is in touch with certain members of the staff, I hope that she will suggest that a proper approach is to the management through the staff representatives and that, above all, members of the staff affected will endeavour to give the new arrangements a fair trial.
    Mr. Lee: Will the hon. Gentleman answer my hon. Friend's question? Was there any consultation?
    Sir H. Butcher: It is extremely difficult to know where consultation begins and the duties of management end. I think that the proper steps were taken in this case by the manager, who is experienced, and what was done here exactly followed what was done on earlier occasions.
    Mr. Blyton: Does the hon. Gentleman realise that if the staff were in a trade union and organised, the Kitchen Committee would not get away with half of what it is doing in the staffing of its services?
    Sir H. Butcher: The Kitchen Committee is in precisely the same relation with its staff as other departments in this House. I think that I speak for all members of the Committee, which is entirely non-party, when I say that it has three duties: first, to provide a service to Members; secondly, to provide good working conditions for its staff; and, thirdly, to do it without imposing an undue burden on the taxpayer.
    Miss Herbison: Surely the hon. Gentleman realises that this House ought to set an example to the rest of the country on good industrial relations. Is he not aware that some of the women who have been affected give the most devoted service to Members in this House and that it was only because they were pushed too far that they consulted hon. Members? I ask the hon. Gentleman
    790
    to examine this matter again and to see what steps he or his Committee can take to rectify the harm which has already been done.
    Sir H. Butcher: I am sorry, but I cannot agree with the hon. Lady in any way. Some of the changes were made deliberately with a view to assisting those who found the long and extended hours difficult for them. The manager and I, and indeed all of us, are most eager to provide good working conditions for the staff, but I am bound to add that it is not particularly easy to run a department efficiently if at the moment anything is changed Questions arise in the House of Commons.
    Mrs. Hart: Would not the hon. Gentleman agree that the essential point is, not whether the members of the staff have an opportunity to put their grievances to the manager, but that they should have a right to be consulted before drastic changes are made? Will he not ensure in future that consultation takes place before such drastic rearrangement?
    Sir H. Butcher: I cannot accept that these changes are of a drastic character in any way. I do not regard the fact that people who are serving teas upstairs are invited to serve teas downstairs as a drastic change. Nor do I regard it as a matter which should be the subject of lengthy consultation.
    Mrs. Hart: I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity.

ORDERS OF THE DAY

  WAYS AND MEANS
  Considered in Committee.
  [Sir GORDON TOUCHE in the Chair]

  BUDGET STATEMENT
  3.33 p.m.
  The Chancellor of the Exchequer (Mr. Selwyn Lloyd): One of the elements in the ordeal of a Chancellor of the Exchequer, in presenting his first Budget, is the presence of those who have held his position before him. Today, like, I am sure, the whole Committee, I am delighted at the presence of one who presented his first Budget thirty-six years ago, namely, my right hon. Friend the Member for Woodford (Sir W. Churchill).
  Hon. Members: Hear, hear.

  EXCHEQUER OUT-TURN 1960–61
  Mr. Lloyd: I begin with an account of the results to the Exchequer of the financial year 1960–61.
  On the revenue side, the out-turn, at £5,934 million, was £46 million below the Budget estimate. Inland Revenue receipts were £3,212 million, £61 million below estimate. Customs and Excise duties, at £2,390 million, fell short of the estimate by £19 million. Motor duties yielded £126 million, £13 million more than the estimate. Other revenue at £206 million produced an extra £21 million, mainly from the sale of surplus stocks of raw materials and a special debt repayment by France.
  Expenditure above-the-line came out in total at £5,787 million, or £111 million more than the estimate. Consolidated Fund services, at £798 million, showed an increase of £29 million, of which £21 million was for debt interest, reflecting the higher levels of interest rates during the year. Supply expenditure was £82 million above the estimate, at £4,989 million.
  As a result of these changes on both sides of the account, the surplus above-the-line, at £147 million, was £157 million less than the estimate of £304 million. Below-the-line, receipts, at £428 million, were £4 million less than estimated, but payments at £969 million were £85 million lower, so that net
  792
  payments below-the-line at £541 million ware £81 million below the estimate.
  Thus, the result commonly termed the overall deficit was £394 million, or £76 million more than my predecessor estimated.
  The borrowing problem set by this overall deficit was substantially increased by the need to finance both the rise in the gold and foreign currency reserves and our other external transactions. Over the year our total requirement, after employing receipts from extra-budgetary funds, was £560 million. One hundred and fifteen million pounds of this came from the increase in the note circulation, £300 million was raised by borrowing from the public, and a further £145 million was provided by Treasury bills held by the Bank of England against the Special Deposits called from the banks.
  I have been greatly encouraged by the achievement of the National Savings Movement, an achievement helped, I am certain, by the improvements introduced by my predecessor a year ago. Net receipts to the Exchequer from National Savings of all forms have amounted to £275 million during the year. This is the third year running in which we have had outstanding results from National Savings. During those three years the amount remaining invested, including accrued interest, has grown by almost £1,000 million, or 15 per cent. I am not yet so used to these large figures that I regard these results as a matter of course, and I should like to send to Lord Mackintosh, and through him to the whole National Savings Movement, my grateful thanks. [HON. MEMBERS: "Hear, hear. "] What is important is not only the total achieved, but the fact that the habit of saving is being taught.
  The success of National Savings and a rise in holdings of Tax Reserve Certificates left me with practically no need to borrow on the market, that is, by Treasury bills and gilt-edged securities. At the same time, there was a revival of demand for gilt-edged securities. My predecessor last year regretted the fact that he was down on balance over gilt-edged; that is to say, more was paid out to investors than was borrowed from them. This year, there has been a distinct change. The figures for 1960 have been published and analysed in Part

  793
  Two of the Economic Survey. Those for the financial year 1960–61 will be published in July, but in the meantime—I can say this now—they will show that over the financial year as a whole we were able to make large sales of securities and bring about a substantial reduction in market Treasury bills.

  PUBLIC EXPENDITURE
  I shall be coming later to the detail of the Exchequer prospects for the new financial year. But I wish to say something now about the expenditure side of the account. One of the problems which has to be faced by the Committee is the continuing growth in public expenditure. Last year, my predecessor had to deal with an increase in the Estimates for Supply services over those of the preceding year of £322 million, or 7·2 per cent. This year, the Supply Estimates are £280 million, or 5·7 per cent. above what was provided for in last year's Financial Statement—and this after crediting the proceeds of £50 million this financial year from the increased health stamp and charges. The expansion is spread over the whole field with varying rates of increase. About one-third of the total increase of £280 million is caused by increased rates of pay.
  Most people no longer hold the view imputed to the nineteenth century that all public expenditure is bad and all private expenditure good. Nowadays, all political parties are committed to a high and rising level of expenditure on education, public health, and numerous other public services. But although this is accepted, public expenditure must not be allowed to outrun the prospective growth of our resources. It should not take too much of our resources from other forms of economic activity where growth is most likely to come. We must, therefore, see that we get the priorities as nearly right as we can, both within the public sector and between the public and the private sectors.
  This calls for new methods. We need increasingly to look at all public expenditure together instead of piecemeal, and to look at it for a period of years in relation to prospective resources. I have recently set in hand a study of the whole problem of public expenditure in relation to the prospective future growth of our resources for a period of five years ahead. If we look back for a decade,
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  it will be found that, for a time after 1951, total public expenditure—and in this I include the whole of the public sector, central and local government, above-and below-the-line, the National Insurance funds, and the capital expenditures of nationalised industries—rose more slowly than the gross national product. This was largely due to a reduction in the proportion taken by defence. But the process was reversed three years ago, and the share of our total product taken for public purposes is rising again, and rising appreciably. The object of carrying out the study which I have just mentioned is to see how we can best keep public expenditure in future years in proper relationship to the growth of our national product.
  I am one of those who believe that there are savings to be made by so-called administrative economies. I believe that if those, at all levels, who are charged with the spending of public money would bring to the task the same prudence they apply to their own financial affairs, the results would be worth while. Mr. Gladstone has been laughed at for his devotion to cheeseparing and to candle ends when he dealt, a hundred years ago, with an expenditure of £69 million. Today, with an expenditure of over £5,000 million on Supply, I cannot believe that there is not a good deal to be saved by more frugal administration. But, of course, the big money is involved not in administration, but in the basic decisions of policy which are taken by the Government and by Parliament.
  For these reasons I have, as Chancellor of the Exchequer, been glad of the increasing concern in the problems of public expenditure which, I know, is felt by my right hon. and hon. Friends behind me, but not, I think, by them alone. In this connection, I would draw particular attention to the work of the Plowden Committee, which has already provided my predecessor and myself with a number of valuable interim Reports. Later this year I will report to Parliament on the whole range of the Plowden Committee's work.

  THE UNITED KINGDOM ECONOMY IN 1960–61
  I now turn to the state of the economy during the past year.
  Twelve months ago, my predecessor took certain steps designed to avert the danger that the expansionary forces in the economy could lead to overloading. The Budget itself made a small net increase in taxation, and measures were taken outside the Budget to restrain the growth of bank lending and of consumer credit.
  These measures were intended primarily to restrain personal consumption, and they were successful in that aim. Purchases of cars and household durables fell away and this kept the total of consumer expenditure roughly constant during the course of 1960, although at a level 3½ per cent. above that of 1959. The limiting of spending on credit checked personal consumption without affecting the general level of personal incomes. Indeed, there was an unusually rapid rise in real personal income—about 5 per cent. over the course of the year. But there was also a rise in personal saving. In the last quarter of the year the proportion of personal income saved was running at about 9 per cent.
  It was not part of Lord Amory's purpose to restrict the growth of investment. Accordingly, the restraining measures did not include any reduction of the initial or the investment allowances, and fixed investment continued to rise rapidly. In manufacturing industry, the rate of capital expenditure in the second half of 1960 was over 20 per cent. higher than twelve months before, and in distribution and the other service industries there was a rise of 8 per cent. Public investment, having risen fast in 1959, flattened out in 1960. As a whole fixed investment was running 8 per cent. higher in the second half of the year than the year before, and for the whole year 18½ per cent. of the gross national product went to fixed investment—that is, over £4,000 million. That is not a figure we should be complacent about, but, nevertheless, an encouraging increase.
  As for the remaining elements of domestic demand, current spending of public authorities continued to rise rapidly and the rate of stock-building continued at a high level in the second half of the year. The net result of all these movements in the different elements of domestic demand was, on the one hand, a rather slow increase in the total,
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  but, on the other hand, a distinct change in composition with the share of investment rising and the share of consumption falling.
  But there were other respects in which the issue was less favourable. Mainly owing to continuing high pressure on resources, the stability of prices which had been achieved in 1958 and 1959 came under strain. At the end of 1960, the index of retail prices was two points higher than it had been a year before. The underlying trend of costs has begun to rise appreciably. This, in turn, reflects the greater scale and faster tempo of the increases in wages and salaries. In contrast with the experience of the two-and-a-half years before mid-1960, the most recent wage round has provided increases going well beyond the rate of productivity increase, and the interval since the previous round has also been shortened. Such developments are bound to put pressure on costs and prices. We saw that happening in 1960.
  Secondly, the index of industrial production flattened out from April of last year onwards after having risen about 10 per cent. in the previous twelve months. Thirdly, there was a large increase in imports associated with a higher rate of stock-building. To meet this import bill and to meet our other commitments we needed a substantial increase in exports but we did not get it. Partly responsible for this was the rather special situation in the United States where our sales, particularly of cars, fell off considerably. It is also true that the expansion of world trade in general considerably slackened last year. But even allowing for these factors our export performance was a disappointing one over the year as a whole.
  The most serious consequence of these trends was their effect on our balance of payments. Hon. Members will have read the White Papers and will be aware that the estimate of the deficit on current account of over £340 million in 1960, is not statistically comparable with previous figures. For the reasons given in the Balance of Payments White Paper we have had to move to a new basis for computing the figures. The effect of this has been to increase the provisional estimate of the deficit on current account in 1960, with corresponding offsets in other parts of the account, including a reduction in the deficit on long-term capital.
  But, on any basis of calculation, the balance of payments during 1960 was very unsatisfactory. The situation can, perhaps, best be judged by looking at the external monetary position—that is to say, the balance between our recorded short-term assets and liabilities. This deteriorated by £168 million in 1960; a figure comparable with a change for the worse of £119 million in 1959, if we ignore certain special transactions of an abnormal character in that year such as our further subscription to the International Monetary Fund.
  I have already mentioned the rapid rise in imports and the disappointing course of exports. Net invisible earnings also fell. On the capital account United Kingdom aid to developing countries continued to grow and, in 1960, was at a rate nearly double that of three years previously. And private investment overseas was maintained at the high level of previous years.
  Summing up, I would say on the good side that generally 1960 was a year of very full activity: a year of rapidly rising real personal income, of high saving and of rising investment. But the other side of the medal was the dangerously high pressure of demand on productive resources, the signs of a return of increasing costs and prices, the failure of our exports to increase sufficiently, and the consequent serious weakness in our balance of payments. It cannot be denied it was a year of widespread prosperity. Equally, it cannot be disputed that that prosperity did not rest on a sufficiently secure foundation.

  ECONOMIC PROSPECT FOR 1961–62
  It is against this background that I have to assess what should be the objectives of budgetary policy in 1961.
  The first and obvious need is a marked improvement in our balance of payments. There is some prospect of a reduction in imports, especially as stocks of industrial materials are now at a high level. There is, unfortunately, little prospect of any improvement in the invisible account. Our commitments by way of grants to the Colonies and lending to underdeveloped and other countries are likely to continue to increase. It is clear that for the necessary improvements in our balance of
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  payments we must look mainly to the expansion of exports.
  We expect the expansion of world trade to be resumed in the course of this year, and our export industries should find their opportunities improving. The President of the Board of Trade and I have, since last September, announced a number of measures designed to assist sales promotion overseas. We have also made a complete overhaul of the credit facilities available to our exporters. As a result a number of improvements have been made in the services offered by Export Credits Guarantee Department. Since last October we have been prepared to match foreign competition by guaranteeing suppliers' credits for longer periods than five years post-shipment, in cases where other Governments are offering similar facilities. We have also been prepared to give cover for the first five years where the credit given by the exporter is for a longer period still.
  On 6th February the Bank of England announced special discounting arrangements to help the commercial banks to provide finance for exports. Last week the President of the Board of Trade announced three other major changes. The charges over almost the whole field for Export Credits Guarantee Department services have been reduced. In special cases there will now be a new facility for guaranteeing loans to overseas borrowers to finance exports of capital goods from this country, and small exporters are to be helped. These are important and far-reaching improvements.
  Nevertheless, we have a long way to go in fostering the growth of our exports. We must ensure that opportunities are not lost because there is an overload of domestic demand on our productive resources. Nor can we afford to have our competitive power damaged by rising costs.
  I will take this last point first. I have already described how, in the last twelve months, the danger of chronic cost inflation from which we suffered up to 1958 has reappeared. There is reason to fear that the cost-inflationary process will speed up further. That, I feel, is our principal menace at present, and one which it is impossible to exaggerate. Whether or not this danger develops will

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  depend not only on the policies of the Government, but also on decisions by leaders on both sides of industry with regard to wages, profit margins and prices.

  DOMESTIC DEMAND
  With regard to the prospects for domestic demand, I will begin with consumers' expenditure. Taking into account the likely movements of wages and salaries, and other kinds of income, and the trend of prices, we have reason to expect another large increase in real personal income this year. The effect of this on consumer expenditure will be increased by some addition to consumer credit following the relaxations of credit restrictions made during the winter. I therefore expect a marked rise in total consumer expenditure in 1961 as compared with the average spending in 1960. By the end of 1961 it might well be running at a rate about 3½ per cent. higher in real terms than at the end of 1960. By comparison with the experience of most past years that would be a substantial increase.
  I also expect current purchases by public authorities to rise at a rate of about 3 per cent. in real terms. This is much the same rate of increase as we have had each year over the last few years, and reflects mainly the steady expansion of such public services as education, health, and so on.
  Coming to investment, it looks as if the trend of expansion will continue. The business forecasts collected by the Board of Trade suggest that in the manufacturing sector the demand for fixed capital investment in 1961 is likely to be about 30 per cent. above what it was in 1960, and in distribution and service industries about 10 per cent. I expect some rise in the investment demand of the public sector and a rise, also, in the demand of new housebuilding taking public and private building together. Taking into account the present considerable pressure of demand on the building industry, the increase in fixed investment in real terms looks like being about 7 per cent. between the end of 1960 and the end of 1961.
  With rising consumption, private and public, and rising investment, it is clear that, even allowing for the probable
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  reduction in the rate of stock-building, there will be strong expansionary forces working on home demand.

  LONGER-TERM ISSUES
  I have been talking about 1961–62, but it would be wrong to form a judgment about the coming year without taking into account some of the longer-term trends in the economy. It would be quite wrong to think that the solution to our problem lies simply in stimulating higher and higher investment. Nor can it be found by the Government giving priority to economic growth over the balance of payments and the maintenance of price stability. I have said in a previous speech that we have the capacity to raise our national production by at least 3 per cent. per annum over a period of years, but it is a condition for doing so that our exports should increase by a much larger percentage. The key to this double achievement is the strengthening of our competitive power.
  It is wrong to think of more rapid growth and a healthy balance of payments as being, in the last resort, competing objectives. The problem before us is not whether we should sacrifice the balance of payments to achieve a faster economic growth, or alternatively accept economic stagnation in order to safeguard our external position. The question, to my mind, is whether our economy is sufficiently resilient and flexible to cope with the demand of the home market and the need for increase exports. The ordinary processes of political controversy make the public discussion of this sort of question often less objective than it might be. If the Government of the day say anything is good, they are accused of complacency. If they say anything is bad, they are accused of admitting the failure of their own policies, and whatever criticism the Opposition of the day may make, the Government always accuse them of irresponsibility. Trying, however, to be objective, I would answer my question along these lines.
  It is true, of course, that we have to carry our world-wide political and economic responsibilities, which are relatively greater than those of almost any other country in the world, and that this has been a very serious constraint upon our freedom of manœuvre. But, after

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  making all allowances for this, there are things that are wrong in our approach to our economic problems. There is the danger that we try to do too much at the same time—a high and growing level of consumption, a large defence effort, expanding social services and high levels of investment in the public and private sectors—all the time knowing that we have to earn our living in the world by exports. Our productivity is held down by shortages of skilled labour.
  I am not satisfied that in all cases the two sides of industry are tackling this problem with sufficient energy. There are too few scientists and technologists. There are features in our tax system which make for inadequate rewards for initiative and enterprise. Again, some of our industries are insufficiently accustomed to competition and insufficiently aware of the need for technical improvement if they are to hold their own with their overseas competitors. The reduction in tariffs, for which we are working, may have a beneficial effect in this respect. Labour relations, standards of management, techniques of selling, are, in some cases, below what is needed in the present day world. Certain industries are still, in my view, handicapped by restrictive practices which are completely out of date. There is much that is good about British industry, but there is quite a lot that is not good enough.

  CONCLUSION
  Bearing all this in mind, what should be the purposes of this year's Budget? The rise in personal consumption must be restrained, I would hope that as in 1960 increased saving would be an important part in this. Nevertheless, I am sure that the broad effect of the Budget must be counter-inflationary; there must be a larger surplus above-the-line than last year and a smaller overall deficit. All existing encouragements to investment must be maintained. Room must be left for increased exports. I must consider whether existing methods of regulating the economy can be improved upon. I must also consider whether any additional incentive to effort and initiative can be provided. Above all, in everything I do I must have in mind the maintenance of confidence in the £ sterling, both at home and abroad.

  SIMPLIFICATION OF THE TAX SYSTEM
  Before coming to my proposals, I want to say something about methods of raising revenue and methods of budgetary or fiscal control of the economy. First, the simplification of the tax system and of the Government's accounts.
  I arrived at the Treasury with preconceived ideas, long held, and, of course, with undue optimism about the simpleness of simplification. I wanted to do three things, if it were possible. First, to have one system of direct taxation of the individual instead of two, Income Tax and Surtax, as at present. Secondly, I wanted to have one system of taxation of companies, instead of two, Income Tax and Profits Tax, as at present. Thirdly, I wanted to see whether it was possible to present the Government's accounts in a rather more easily understood form, particularly with regard to capital receipts and expenditures.
  As to the amalgamation of Income Tax and Surtax, there are two factors to be taken into account—one unalterable and the other of great practical difficulty. In the very large number of cases where there is income from more than one source, it is impossible, under our progressive system—and I use this word in a mathematical sense—to avoid dealing with liability to tax in two stages, even if the calculations are made under the same system and the same set of rules. The standard rate of Income Tax can be taken by deduction from dividends and interest. Virtually the correct Income Tax liability can be taken under P.A.Y.E. from wages and salaries as they are earned.
  Nevertheless, after the individual's total income for the year is known, there has to be another calculation in order to arrive at the tax due, and to make any adjustments which may be necessary in retrospect. Therefore, whatever the system, one cannot avoid two stages—one concurrent and the other in retrospect. That is inevitable if we are to continue a progressive system and deduction at source as we obviously must, and that seems to be unalterable.
  There is the second matter—one of practical difficulty in the year of change. At present, Income Tax is deducted under P.A.Y.E. concurrently with the

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  earning of the income. Surtax is paid on the income of the year before. If the two systems are amalgamated so that the part which is now called Surtax is deducted concurrently, what would then happen to the Surtax due in arrear? Even if one was prepared to forgive it—a heavy burden on other taxpayers—it would be impossible to do so in a way which would be fair between one taxpayer and another; for example, the salary-earner and self-employed.
  Therefore, if I were to amalgamate the two taxes, current deductions from salaries would be made to take account of the combined rates from now on, while next January the Surtax bill for last year would have to be met. It is unpleasant enough having to pay one lot of Surtax in a financial year. To ask for two lots from a considerable number of people would seem to gratify too much the naturally sadistic instincts of a Chancellor of the Exchequer.
  I have tried to get round this difficulty which, I believe, is a very real one, but it has so far proved impossible. Therefore, I have come to the conclusion that the best thing to do is to work for the assimilation of the rules governing Income Tax and Surtax as far as practicable, and this year I hope to make a beginning in one respect in a way which I will describe later.
  As for the idea of one system of taxation for companies instead of Income Tax and Profits Tax, I was confronted at once with the adverse recommendation of the majority of the Royal Commission. I read the relevant paragraphs of the Report carefully. I would not be deterred by the difficulty considerably stressed in the Report, that of the possibility that the companies tax might become lower than the standard rate of Income Tax. I would face any problems arising out of such a contingency if and when I thought that there was a chance of it happening in practice.
  However, there are other difficulties. There would have to be a standard rate of tax for deduction from dividends. In that connection, I am told there would be great complication in the case of dividends paid by one company to another. These difficulties were referred to in the Report. They have not yet been resolved and, certainly, I should not wish
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  to be responsible for introducing a new system which, in practice, proved to be more complicated and to present greater difficulties than the present one. I am not quite satisfied, however, and I intend to have these difficulties examined further before the next Budget.
  The third matter to which I referred a few moments ago was the form and presentation of the Government's accounts. This includes the Estimates and the Exchequer accounts as a whole; including the question of what items should be shown above the line and what below it. We can rightly commend what our forefathers did in the 1860s to reform the accounts of their day, but it is hardly surprising that, a hundred years later, the system they drew up should need modernisation. There is surely something rather confusing about a presentation which puts some capital receipts, including certain debt repayments, above the line. Without wanting to become too controversial, I personally would add to this category receipts from death duties. At the same time, we put below the line some items such as post-war credits which, from many points of view, are indistinguishable from other current payments. I am sure that we have to produce a less confusing presentation. I have set on foot in the Treasury a full review of this matter. It will take time; but I shall see that it is pressed forward.
  But, meanwhile, we have made a start. Certain proposals for a radical simplification and modernisation of the Estimates have been put to the Public Accounts Committee and the Select Committee on Estimates. I hope that both Committees will welcome these proposals. I shall, of course, carefully consider any comments they may have to make. I should like to see next year's Civil Estimates presented in the new form.
  So much for the tax structure and the form of the Government accounts.

  ECONOMIC REGULATORS
  I want now to say something about methods by which the Government can influence developments in the economy. There has been much complaint about the jerkiness of Government action in controlling the economy: what has been referred to as a policy of stop and start

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  I am certain myself that without any regulatory action by the Government the swings in the economy would have been much more violent. However, there has been much discussion this winter of the most appropriate methods and suggestions of the need for new ones. I therefore propose to spend a few moments examining the various possibilities. First, there are physical controls licensing and rationing systems. These are matters of some controversy. There is a deep difference of opinion between the two sides of this Committee. I am not going to argue their merits or demerits this afternoon.
  Then there are monetary methods, the Bank Rate, the Special Deposits scheme, and the hire-purchase restrictions—all operated to make credit more or less expensive or more difficult to get or the reverse. These have their disadvantages. It is not always possible to arrange that the same level of Bank Rate suits us domestically and internationally. A high rate may be prudent at home if demand is too high, but it may attract at some cost to us short-term funds from overseas which are not really wanted. I would add, in parenthesis, that we certainly should not be worried when those funds go away again. It is the long-term trends that are important.
  The effects of altering the hire-purchase regulations have proved to be both prompt and substantial: but they are heavily concentrated on a certain range of goods and bear severely on a few industries which complain—and with some justice—that they are bearing too much of the brunt of the corrective action that is needed.
  Then there is regulation by means of the Budget. That should remain the chief instrument, but it is not always possible to arrange that conditions will remain precisely the same over the following twelve months. What was right at the beginning of the financial year may well need adapting later on.
  I have, therefore, come to the conclusion that while not dispensing with any of these monetary methods, we do need further means of stimulating or restricting the economy, by measures which can be brought into operation quickly at any time of the year, and the effect of which will be reasonably rapid and widespread.
  I have read with interest the various suggestions that have been made. One suggestion that has commanded some support is that we should have a general sales tax, which could then be varied by small amounts upwards or downwards. There are practical difficulties. It means a new revenue control on half a million or so retailers. Is food to be included? Are services as well as goods to be taxed? Either way there are considerable complications. Lord Amory, in his Budget speech of 1958, went into some detail in analysing the possible yield. He formed the view that a comprehensive sales tax charged at a very low rate, but yielding the same revenue as the present Purchase Tax, is something of a mirage. I agree with his view. What I have said also applies to a turnover tax.
  Nevertheless, I do believe that new instruments are necessary. Accordingly, I have two proposals to make to the Committee both of which will be simple and will this year require no new administrative machinery. First, I propose that the Government should be empowered to direct by Statutory Instrument, at any time of the year, that either a special surcharge or a special rebate should be applied to all the main Customs and Excise revenue duties and to Purchase Tax.
  The total yield at present from these duties is about £2,300 million on an expenditure of about £7,500 million, largely by private consumers. The proposed special adjustment will be expressed as a percentage to be added to or subtracted from the amounts otherwise payable—a simple arithmetical calculation of the same percentage, from the same date, for all charges under all the heads of revenue affected. The relationship between the taxes will be fixed by the House in the Finance Bill and that will be maintained.
  The maximum change in either direction for which I seek authority will be 10 per cent. of the existing charges. As I say, that will be the maximum.
  Mr. Hugh Gaitskell: Either way?
  Mr. Lloyd: Yes, either way. It will, of course, be possible to make smaller changes, such as 2½ per cent. or 5 per cent. The effect of this proposal will be that I shall be able to stimulate or

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  restrain consumers' purchasing power by a maximum annual rate of over £200 million a year each way, giving a range for this new instrument of about £400 million in all.
  Mr. Gaitskell: Does it cover everything, Excise Tax and Purchase Tax?
  Mr. Lloyd: If the right hon. Gentleman will wait, I am just coming to that.
  Drawbacks and other repayments will be similarly adjusted so that exports are not subject to surcharge. Administrative arrangements will be simplified to ensure the maximum flexibility and to avoid accounting complications.
  Protective and anti-dumping duties, where quite different considerations apply and international obligations are involved, will be excluded; I shall also leave out the vehicle Excise duties and the television licence duty, since the administrative complications of including them would be too great. The other Excise licence duties will be excluded on de minimis grounds, except for the bookmakers' licence duty, where equity demands that it should be treated in the same way as the pool betting duty.
  So, to answer the right hon. Gentleman the Leader of the Opposition, this will cover the tax on alcohol and tobacco, the tax on petrol, and the other mass of duties on consumer expenditure, with the exceptions to which I have referred.
  Mr. Percy Collick: All of which means increased prices.
  Mr. Lloyd: If the weapon is used by way of rebate, it means reduced prices.
  Statutory Instruments made under this power, if it is granted, will be subject to confirmation by affirmative Resolution of the House of Commons, but, in addition, because this power is so new and, in my view, so important, I propose to make provision that Statutory Instruments made under it will expire on 31st August, 1962, unless, at the time of next year's Budget, the power to make such Orders is continued for a further period by a Ways and Means Resolution followed by a section in the Finance Act. In other words, it will be for the House each year to decide whether or not to give this power to the Chancellor of the day for the following year.
  Mr. Harold Wilson: This is very important, and the House must understand it. Are we right in understanding that any Statutory Instrument of this kind would have to apply flat, right along the board, that there could not be a differential of, say, 10 per cent. in Purchase Tax, leaving the other duties the same, and that the 10 per cent. would cover the whole system of indirect taxation, with the exceptions which the right hon. and learned Gentleman mentioned?
  Mr. Lloyd: The essence is that it should be the same percentage for all forms of taxation—at the same date, the same time and the same percentage.
  My second proposal relates to a special surcharge on employers, analogous to a payroll tax. The use of such a measure as an economic regulator would have the added advantage that when we are faced with a situation of chronic shortage of labour it would act as an incentive to economy in the use of manpower and to investment in labour saving equipment. I propose to ask for power this year as a temporay expedient to collect such a surcharge, should it be needed, by attaching it to the employers' share of the National Insurance stamp.
  This would mean that the liability upon employers would be in respect of the same employments as those covered by the liability to pay the National Insurance employers' contribution. It would, however, be an entirely new and separate element, the proceeds of which would be payable directly to the Exchequer. It will be subject to an upper limit of 4s. per employee per week. At this maximum amount the surcharge would withdraw from the economy about £200 million in a full year.
  A Statutory Instrument made under this power will also be subject to confirmation by affirmative Resolution. The power to make such an Instrument, if granted, will expire at the end of the financial year.
  I recognise that the method of collection with the National Insurance contribution presents difficulties, particularly the risk of confusion between this surcharge and the contribution. Any such confusion might undermine the very important contributory principle on which National Insurance is based. However, it is the only machinery

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  readily available, and if it should be necessary to utilise this economic regulator during the current financial year this machinery will be used. I will, however, continue to examine other methods of levying such a surcharge. Should Parliament be asked to grant this power again next year, I would put forward fresh proposals.
  These two new fiscal powers, which could, of course, be used either together or separately, will, in my view, greatly improve the Government's ability to regulate the economy; we shall be much better able to act by quick and flexible fiscal means, in the interval between this and the next Budget, thus reducing during that period dependence on regulation by monetary and credit restrictions. I realise the importance and the novelty of what I am asking, but I believe that we must improve our capacity for reasonably speedy action between Budgets, and to be seen to be doing so.
  I think that this is the moment for me to refresh myself in the traditional manner, before I turn to the Exchequer prospects for 1961–62. If there is any speculation as to what this liquid I am drinking is, I can say it has certain medicinal properties, and that, unlike the drink which my predecessor occasionally took, it does not depend upon any State subsidy. For every gallon that you drink, Sir Gordon, the revenue benefits to the tune of £10 10s.

  EXCHEQUER PROSPECTS FOR 1961–62
  I now turn to the Exchequer prospects for 1961–62. I will take expenditure first. I have put the cost of Consolidated Fund services at £815 million, an increase of £46 million over last year's estimate. £20 million of this represents the increased cost of servicing the National Debt; another £11 million is the increase in Northern Ireland's share of the revenue; the remaining £15 million is the settlement between the Exchequer and the Post Office Fund, under the new arrangements recently authorised by Parliament.
  Total Supply expenditure has already been published in the Vote on Account and the Defence White Paper. The figure is £5,187 million, which, as I said earlier, is £280 million more than last year's Budget estimate, the increase on
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  defence amounting to £48 million and that on civil expenditure to £232 million.
  Next, I come to the revenue which we may expect on existing rates of taxation. The coming year's receipts from Inland Revenue duties I put at £3,610 million, an increase over last year's outturn of £398 million. From Customs and Excise duties I expect to get £2,455 million, an increase of £65 million. Motor duties I put at £130 million, or £4 million above last year. Other revenue, at £245 million is expected to be £39 million more, after taking into account the special debt repayment from Germany which was announced at the end of last month. In total, I estimate the revenue at £6,440 million, or £506 million more than last year's out-turn.
  Taking revenue and expenditure together, on the basis of existing taxation there would be a surplus above-the-line of £438 million, compared with last year's estimate of £304 million and the out-turn of £147 million.
  The estimates for below-the-line payments and receipts have been fully explained in the new White Paper on the subject, so that I need not go through them in detail. I merely recall that net payments are expected to be £575 million, or £34 million more than last year's out-turn.
  So the prospective overall deficit is £137 million, which compares with last year's estimate of £318 million and the out-turn of £394 million. I remind the Committee that £60 million of this difference is accounted for by the windfall of the German debt repayment in advance.

  ALLOWANCES FOR NATIONAL INSURANCE CONTRIBUTIONS
  I now come to my proposals. First, I propose some relief for the taxpayer in the matter of the tax allowance for National Insurance contributions. Last year, as the Committee will remember, my predecessor introduced a new flat-rate allowance of £15 for adult employees. This was designed to meet the new situation which would arise when the graduated National Insurance scheme came into force. The new allowance was to take effect from 6th April, 1961. Since last year's Finance Act, National Insurance contributions have been increased. I propose to raise the flat-rate allowance to £18 to take

  811
  account of the pension element in the increase.
  The increase in women's contributions is less than men's, and taken by itself would not justify an increase in the allowance of more than £2. I do not propose, however, to make any differentiation. All adult employees—other than women who have opted not to pay flat-rate contributions—will get an increased allowance of £3. There will be appropriate increases for the other classes affected. These changes will cost £12 million this year and £15 million in a full year.
  Next, I have three proposals to make affecting the taxation of overseas income of people resident in the United Kingdom.

  FRUSTRATION
  The first of these concerns a problem which arises when overseas countries give special tax reliefs to traders and others whose activities assist the development of their territory. If a United Kingdom company operating in an overseas territory becomes entitled to such relief, its overseas tax is reduced. But since our arrangements for the relief of double taxation provide for a credit against United Kingdom tax only for the overseas tax actually paid, the effect of this reduction in the overseas tax is to increase the United Kingdom tax. So, it is said, the overseas relief is frustrated.
  Countries with which we negotiate double taxation agreements feel that we ought to be willing to include in the agreements some provision which would obviate this result. I think that there is substance in this and I propose, therefore, that the Finance Bill shall contain a Clause providing that, in respect of overseas tax reliefs designed to assist industrial or commercial development, double taxation agreements made with overseas Governments may include a provision under which credit may be given to a United Kingdom resident in respect of tax that is treated by the overseas Government as though it had been paid.

  DOUBLE TAXATION RELIEF
  There are two other matters affecting double taxation where the Royal Commission considered that some relief was
  812
  necessary and where I propose reforms. The first change deals with an anomaly which can arise because our basis of assessment for a new business differs from that of certain other countries. I therefore intend to provide that, whatever may be the basis of United Kingdom assessment on the income of a new overseas business in its opening years, as each year's profits are charged to tax, the corresponding year's overseas tax shall be credited against the bill. The second change will provide for extending unilateral relief to taxes corresponding to Income Tax and Profits Tax levied by provincial or State Governments or local authorities overseas. For those hon. Members with the stamina for further investigation of these complicated tax matters I would point out that I am dealing with paragraphs 744 and 701 of the Royal Commission's Final Report.

  GERMAN COMPENSATION
  During Finance Bill debates last year my predecessor was pressed from both sides of the Committee to concede tax relief in respect of certain payments, in the nature of income, that are made by the German Government as compensation to victims of Nazi persecution resident in this country. There is undoubtedly considerable sympathy for the recipients of these payments and I have decided to put forward a clause in the Finance Bill to authorise relief because of the very special circumstances of these cases. The cost is estimated at £¼ million this year. I also propose that the relief should be retrospective to the first assessments in 1956–57 and that may involve the repayment this year of an additional £¼ million of tax already paid.
  INVESTMENT ALLOWANCE FOR SHIPPING
  I have considered carefully suggestions put forward by the shipping industry for new tax reliefs, but I do not feel able to make proposals about them in this Budget. However, the General Council of British Shipping has suggested that it would be a help to shipping companies, in drawing up their future plans, to have a guarantee that the investment allowance will be retained at its present rate of 40 per cent. for a period of years. I can certainly state that I see no prospect of this special allowance for shipping being withdrawn or reduced during this Parliament.
  STAMP DUTY—BILLS OF EXCHANGE
  I come now to a proposal concerning Stamp Duty on bills of exchange. With certain exceptions, hills of exchange are at present liable to ad valorem duty. It has been represented to me that the complications in calculating this duty are an obstacle to trade, particularly the export trade. I have come to the conclusion that we ought to get rid of the ad valorem scale. I therefore propose to make bills of exchange subject to a fixed duty of 2d. like cheques. The cost will be about £1 million this year and £1½ million in a full year. I believe that this will be of some benefit, as I have said, to exporters.

  PARSONAGE HOUSES
  I have considered the various suggestions that have been put forward for giving tax relief to the clergy. For reasons that have commended themselves to all my predecessors who have had to consider this question I cannot accept proposals for the exemption of Easter offerings. I am, however, prepared to make a concession to which considerable importance is attached by the Churches Main Committee.
  Under decisions of the courts, certain ministers of religion, who live rent free in houses provided by their churches or congregations, are regarded as "representative occupiers"; and this means that they are not liable to pay tax under Schedule A. Other clergymen, for example, the Church of England parson, are, in law, beneficial occupiers of their residences and, as such, are liable.
  I do not think that this legalistic difference of treatment is justified by any real difference in the use of the minister's dwelling house. That was the view of the Royal Commission. I propose, therefore, to put forward a Clause in the Finance Bill to provide that where any minister of religion, by virtue of his office, lives in a house which belongs to him as incumbent, or is owned by or on behalf of his church, he shall be treated for tax purposes as though he were a representative occupier and not liable for Schedule A tax.

  SCHEDULE E ASSESSMENTS
  I propose to legislate to get rid of some minor anomalies that flow from the fact that a large proportion of wage and
  814
  salary earners, dealt with under P.A.Y.E. are never formally assessed. A taxpayer who happens not to have been assessed at the ordinary time can claim to be assessed for past years which had been treated as settled and by so doing, can get the benefit for those years of some new interpretation of the law. But others who, for any reason, were assessed in the ordinary course cannot reopen their liabilities. I propose to include a Clause which will prevent the reopening of what in substance were settled liabilities. I also intend to make it impossible in future to avoid tax by paying special remuneration and relating it to a year which is out of date for assessment, in other words, more than six years back. I do not think that that is an unreasonable proposition.
  The existing law requires that formal Schedule E Income Tax assessments must be made in all oases where an employee is liable to Surtax. In many cases, owing to personal allowances, no Income Tax is payable. To make a formal assessment carrying no tax in these cases is a waste of time and staff. It is also confusing and irritating to the taxpayer. I propose, therefore, to repeal this requirement. It will, however, still be open to any taxpayer who wishes to have a formal assessment to require it.

  MINOR ITEMS
  There are certain other small items.
  I propose that a limited tax relief shall be authorised for certain income arising to pensions funds set up in this country for employees who work overseas.
  I propose to make a change with regard to the returns made by Industrial and Provident Societies. At present, they have to make returns of interest paid on loans—but not interest paid on shares—where the amount paid to a depositor exceeds £5. I propose that they shall be required to make returns where the combined amount of loan and share interest exceeds £15.
  As I announced last November, I propose to increase by £20 the income limits for the dependent relative allowance in view of the higher National Insurance retirement pensions now payable.
  Provision will also be made in the Finance Bill authorising payments into

  815
  and from the Consolidated Fund in respect of National Savings Stamps and gift tokens. This is a necessary consequence of the new financial relationship between the Post Office and the Exchequer.
  For reasons which I have explained in a reply today to a Question by my hon. Friend the Member for Denbigh (Mr. Morgan), I am proposing to include in the Finance Bill provisions for the final redemption of the Ottoman Guaranteed Loan, 1855. I shall in due course move the Special Procedure and Money Resolutions which will be necessary for this purpose.
  Finally, on the Customs and Excise side, there is a change in the provisions about pool betting duty so as to amend the definition of pool betting, and I shall be moving a special procedure Resolution to enable us to deal in the Finance Bill with certain proposals relating to pool betting duty which are at present under discussion with the Government of the Isle of Man.

  BUSINESS EXPENSES
  I want to say something about business expenses.
  I have been exercised in my mind about the tax treatment of expense allowances and benefits in kind received by directors and other senior executives. The question of business entertaining is closely linked. A great many firms pursue a strict policy in these matters—and nothing that I am going to say applies to them. I also realise that, in the pursuit of exports, the entertaining of overseas customers is necessary.
  I think, however, that there is something behind this strong feeling which undoubtedly exists that some so-called business entertaining goes further than purely business motives. This is an unhealthy feature both on business and social grounds. I ask those concerned most seriously to consider whether some curtailment in the extent and scale of entertainment can be achieved without affecting business efficiency. It is a matter very difficult to deal with by legislation, but I shall review this matter again next year and I do not reject altogether the possibility of legislative action then.
  As to motor cars and other benefits in kind, the existing law provides, in the case
  816
  of directors and those employees who earn £2,000 or more, for a tax charge on an amount equal to the annual value of the private use. I have authorised the Inland Revenue to institute a change in practice under which the annual value of the use of a car will be taken as 12½ per cent., instead of 9 per cent., of the car's original cost; and the amount attributable to private use will be calculated accordingly.
  I also propose to include in the Finance Bill a Clause limiting the capital allowances that may be granted in respect of ordinary motor cars used by business and professional people to the allowances appropriate to a maximum cost of £2,000 for each car. If business men want to use more expensive cars, I think Chat it is not unreasonable that they should carry the excess over £2,000 themselves and not pass part of it on to the Exchequer.
  A word about administrative improvements. I intend that the present form which employers are required to return to the Revenue showing expense allowances and benefits in kind should be revised so as to provide the Revenue with more precise information initially. I do not believe that this will in the end add to work as it will save subsequent inquiries.
  I intend to adopt the recommendations of the Royal Commission on what are known as home savings arising during business travel. I have decided that the reduction of the allowance made for expenses incurred on business travel should not normally be applied in future in respect of expenditure on accommodation and such ordinary items as food and drink. This relaxation will be welcomed, I know, by those who go abroad in search of export orders. It is a source of very great irritation.
  This, of course, does not mean that private expenditure, for example on holidays, taken in the course of a business trip, will be allowed, and, obviously, inquiries will continue to be made to ensure that expenditure of this kind is not included. The Inland Revenue proposes for the first time to issue a leaflet setting out the rules it follows in dealing with expenses claims under the special provision applicable to directors and senior executives. This leaflet will cover the new rules applying to home savings.
  The concessions I have announced will cost about £13½ million this year. They will reduce the surplus above the line to £424½ million. Having regard to the economic circumstances of which I have already spoken, I have decided that this surplus is not enough. I consider that I should provide for an above-the-line surplus of about £500 million, involving an overall deficit of under £100 million. I have, therefore, decided to raise an additional £80 million of tax. If this amount proves too little, I will be able to correct the position by the use of one or both of the regulators I have proposed. If it proves too much, I can use the first regulator to reduce Purchase Tax and the main Customs and Excise revenue duties.

  TELEVISION ADVERTISEMENTS DUTY
  First, I propose to look to expenditure on television advertising for a modest contribution to the Exchequer. I am, therefore, proposing a duty of 10 per cent. on the charges made by the television programme contractors for the insertion of advertisements in programmes broadcast on or after 1st May. Provision will be made to enable existing contracts to be amended to take account of the duty. I estimate the yield at £7 million this year and £8½ million in a full year.
  Because of my minority report as a member of the Beveridge Committee on Broadcasting, I feel that I have a certain personal responsibility for the introduction of commercial television. If I may mix up my metaphor, I am sure that those concerned with the payment of the duty will not mind too much being bitten by the hand which originally fed them.

  MOTOR VEHICLE DUTIES
  Next, I have decided to turn to vehicle Excise duties, where the revenue has been very buoyant recently and where the rates have not been raised for some years.
  I am now proposing an increase of 20 per cent., which will increase the licence on a private car to £15 a year. I think that it is right to apply similar increases to other types of vehicle, excluding only those like ambulances and invalid carriages which are at present exempt, and buses and coaches for
  818
  which special relief was given in 1959. The rates of licence duty on commercial vehicles of all sorts have remained substantially unchanged since 1933, and I am satisfied that a modest increase can be made without seriously harming any class of road user.
  It is not possible to increase each of the many different rates of duty by exactly 20 per cent., since there has, for convenience, to be a certain amount of rounding up or down. The new scales, as they will affect nearly all vehicles, are set out in full in the Financial Statement, and broadly represent an increase of 20 per cent. overall. In no case does the increase exceed 25 per cent. and in very few cases, apart from buses which I have already mentioned, is it less than 18 per cent. To give a few examples, motor cycles not over 150 c.c. will go up from 17s. 6d. to £1, taxis and the lightest goods vehicles from £10 to £12, farm tractors from £2 to £2 10s., and so on.
  Owing to the recently introduced system of continuous issue of licences, the changes which I have described will take effect from tomorrow. I estimate the additional yield at £25 million during the current financial year. At the same time, I am making a small change in the law relating to the carriage of certain appliances on farm tractors, in the interests of safety. I add by way of postscript that these increases will enable me to face with greater equanimity the steadily increasing burden of expenditure upon the roads.

  HYDROCARBON OILS
  My third proposal for obtaining extra revenue relates to the hydrocarbon oil duty. At present, all light oils, that is mainly petrol, are dutiable at 2s. 6d. per gallon. Heavy oils used as fuel in road vehicles pay the same rate as the petrol they displace; but with minor exceptions, chiefly lubricating oils, which have remained chargeable at 1d. a gallon, all other heavy oils have been free of duty since 1947. The duty on them of 1d. a gallon was then withdrawn, at a time of acute shortage of coal and when every inducement was being offered to get people to change from coal.
  The same conditions do not exist today and I consider that for revenue

  819
  reasons heavy oils should now bear some duty. I propose, therefore, to reinstate the duty, at the rate of 2d. a gallon, on heavy oils at present free of duty, that is fuel oil, gas oil and kerosene. Oils at present chargeable at 1d. a gallon will in future pay 3d. a gallon.
  Following the normal practice, duty will be charged on heavy oils delivered from bond. In addition, in order to secure uniform treatment of stocks and, at the same time, to maintain the revenue yield, provision is being made for the appropriate duty to be charged on heavy oils taken out of storage at un-bonded premises and on which the new duty has not been paid. This special arrangement will be applied at premises with a capacity of 200,000 gallons or more and in setting this limit I have in mind that bonding facilities will, in the ordinary course, be granted for such premises on application being made and subject to the usual conditions.
  Heavy oils shipped as stores or bunkers in foreign-going ships will, of course, be freed from duty and, following the practice when heavy oils were previously liable to duty, oil used as fuel in coast-wise shipping will also be freed.
  The new duty will operate as from six o'clock this evening. I estimate the yield at £48 million in the present financial year and £50 million in a full year.
  These are my proposals for raising the £80 million to which I referred earlier. I have not, however, quite finished.

  SURTAX
  I have received many representations about the need to reduce the levels of direct taxation, particularly Surtax. Surtax begins at £2,000. This figure was fixed in 1920. I learn from many quarters, sometimes unexpected quarters, that the present scope and level of Surtax is a substantial disincentive to effort and initiative.
  I do not, however, feel able to provide for any relief of direct taxation to take effect in the year 1961–62. That will be a disappointment to many. Of course, so far as Surtax is concerned, the amount due next January will be upon income already earned in the
  820
  past. It would be illogical to reduce what is already payable on past effort on the ground of giving an incentive to future effort.
  Nevertheless, I consider that there is force in the arguments against the present level of Surtax. In the modern world, the work of the manager, the scientist, the technologist is of increasing importance, not only to himself but to the community. In other countries there are much higher rewards for individual effort and skill. Therefore, I want to do what I can to ensure that the present incidence of Surtax does not act as a disincentive to those who have positions of responsibility in our industries and elsewhere in our national life. Accordingly, I think it right to take action to modify, as far as earned incomes are concerned, the present rules. The changes I propose will be applicable to incomes earned—I repeat earned—during this new financial year and thereafter. In other words, the changes will affect what is payable on and after 1st January, 1963.
  I propose two measures: First, the earned income allowance applicable to Income Tax—two-ninths up to £4,005 and one-ninth thereafter up to £9,945—will be deductible in computing income for Surtax purposes.
  Secondly, the present position is that, leaving personal allowances aside, Surtax begins at £2,000. I propose, in effect, to lift this figure for earned income, again leaving personal allowances aside, to £4,000. Putting this change more precisely, but not more concisely, there will be a special allowance for Surtax purposes in respect of earned income, namely, a deduction of £2,000 or, if it is less, the excess of earned income, less the earned income relief, over £2,000.
  Mr. Gerald Nabarro: Say that again.
  Mr. Lloyd: My hon. Friend can read it. The effect of this together with my first proposal will be that Surtax will not be payable on earned income until it reaches £5,000 or more depending on personal allowances; for example, those given for children.
  Mr. Nabarro: Jolly good.
  Mr. Lloyd: These proposals will give no relief to incomes derived solely from

  821
  investment. They will give maximum relief to incomes wholly earned. But because Surtax is a tax on total income they will affect the total burden of tax on mixed incomes comprising some earnings and some income from investments. But the relief will only flow from and be related to the amount earned. So, again, there will be an incentive to increase earnings.
  I would like to make one further point. I have received many representations from married women anxious to engage in professional or other employment, but who are deterred from doing so by the system of aggregation of income for Surtax purposes. I do not feel able, in this Finance Bill, to change the system, but the proposals I have just announced will go a long way to solving this problem for a great many people.
  The cost of my proposals will be £58 million in 1962–63 and £83 million in a full year.
  Mr. Collick: What about the people below the Surtax levels?

  CAPITAL GAINS TAX
  Mr. Lloyd: It has been suggested in some quarters that these remissions on Surtax should be accompanied by a capital gains tax. I have carefully examined this possibility. From a practical point of view, the complication of the legislation and the administrative machine required present difficulties. Also, the allowance for losses and the many exemptions which would, in my view, be required would reduce the proceeds to very much smaller proportions than publicly estimated. I am, therefore, not proposing a capital gains tax in my Budget.
  Of course, individuals or firms, who make a business of seeking capital gains on the Stock Exchange or in property or other deals, are, in fact, trading and are liable to the full rates of Income Tax, Surtax or Profits Tax on the profits from such activities. This is the law. People who are genuinely investing come into a different category. On which side of the line particular cases fall is a matter not for me or the Board of Inland Revenue, but is a matter to be decided by independent Commissioners of Taxes and the courts. This aspect of the matter has been looked at by both Royal Commissions, that is to say, in 1920 and 1955.
  822
  I propose to look at it myself again during the coming year. But I am not at present satisfied that what is called a capital gains tax is worth while.

  PROFITS TAX
  Therefore, in the circumstances of today, I propose to cover by far the greater part of the cost of the Surtax remission by increasing the Profits Tax by 2½ per cent. with effect from 1st April, 1961.
  Mr. Collick: Chickenfeed.
  Mr. Lloyd: This is estimated to yield £1·5 million this year, £45 million in 1962–63 and £70 million in a full year. I believe that this switch of burden from the individual to companies will be generally approved.

  CONCLUSION
  In total, the proposals I have outlined for increasing taxation will bring in £68 million in the forthcoming year. The effect will be to give me a surplus above the line in 1961–62 of £506 million. This will be a substantial factor in moderating the growth of home demand to the extent necessary to make room for increased exports. It will also mean that in 1961–62 the overall deficit or, to put it another way, the borrowing requirement of the Budget will be reduced to £69 million. This amount is well within what I may reasonably expect to raise from National Savings and other forms of non-marketable debt, for example, Tax Reserve Certificates.
  In other words, while we shall not lose sight of our longer term aim of lengthening the debt already in market hands, and shall have to deal with the stock which matures in February next, we shall not, if things go as we expect, be looking for new money from the gilt-edged market in 1961–62. This will give us additional room for manœuvre in our monetary policy from now on. Our firm intention to keep our financial house in order will be clearly demonstrated.
  I believe that my proposals for the new economic regulators will very much improve the Government's capacity to adjust trends in the economy without violent movements. I believe that my proposals with regard to Surtax will have a dynamic effect upon the initiative and effort of individuals, including those

  823
  engaged in exporting, whose work is of vital importance to the community. They will mean that valuable resources of manpower will have more inducement to stay in this country. I readily acknowledge that there is still much to be done in the reorganisation of indirect taxation, and in the increasing of incentives throughout the economy. In this Budget I have tried to act where action was most urgently necessary.
  1. Television advertisements duty
  Motion made,
  That on advertisements inserted for payment in television programmes broadcast from stations in Great Britain after the end of April, nineteen hundred and sixty-one, there shall be charged a duty of excise, to be paid by the person providing the programme; and (subject to adjustment under any provision which the Act giving effect to this Resolution may make for the adjustment of liabilities for revenue duties) the duty payable in respect of any insertion of an advertisement in such a programme shall be of an amount equal to one tenth of the amount or value of the consideration payable for the insertion to that person (inclusive of any amount allowed by him by way of agency discount or commission, but exclusive of any amount recoverable by him in respect of the duty).—[Mr. Lloyd.]
  The CHAIRMAN put the Question thereupon forthwith, pursuant to Standing Order No. 86 (Ways and Means Motions and Resolutions).
  Question agreed to.
  The CHAIRMAN then proceeded successively to put forthwith the Question on each further Motion made by a Minister of the Crown, save the last Motion.
  2. Hydrocarbon Oils (reduction of rebate)
  Motion made, and Question,
  That for heavy oils delivered for home use after 6 o'clock in the evening of 17th April. 1961, the rate at which rebate of customs or excise duty is allowed under section one hundred and ninety-nine of the Customs and Excise Act, 1952, shall be reduced by 2d. a gallon.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.—[Mr. Lloyd.]
  put and agreed to.
  3. Hydrocarbon Oils (repayment of rebate)
  Motion made, and Question,
  That on hydrocarbon oils on which before 6 o'clock in the evening of 17th April, 1961 (in this Resolution referred to as "the relevant time") rebate of customs or excise duty has been allowed under section one hundred and ninety-nine of the Customs and Excise Act, 1952, and not been repaid, there shall be repaid 2d a gallon of the rebate allowed, if at or after the relevant time the oils are stored on a site where there is for hydrocarbon oils storage, whether in one ownership or occupation or not, of an aggregate capacity of 200,000 gallons or over (or of an aggregate capacity not shown to the satisfaction of the Commissioners of Customs and Excise, if they so require, to be less than 200,000 gallons); and the following provisions shall apply:

  (a) except In so far as other provision is made for oils in or removed to bonded storage, rebate shall be repayable on the first removal of the oils after the relevant time from storage on such a site (or, if that happens before the passing of the Act giving effect to this Resolution, then on the passing of that Act), and shall be repaid by the person in whose possession the oils are immediately before the removal, but the amount paid shall be recoverable by him, where he is not the owner, from the person to whose order he held the oils immediately before the removal; and

  (b) sites in common ownership or occupation (companies of which one controls the other, or which are under common control, being for this purpose regarded as one person) shall be treated as together constituting a single site if hydrocarbon oils can be delivered from one site to the other by pipe or if the sites are managed as a single unit.—[Mr. Lloyd.]

  put and agreed to.
  4. Surcharges or rebates in respect of revenue duties
  Motion made, and Question,
  That it is expedient to provide for bringing into operation and withdrawing increases or decreases, not exceeding ten per cent., of amounts due for certain customs and excise duties and purchase tax or (whenever duty or tax became due) for drawbacks or rebates thereof or allowances for goods chargeable thereto, and to make consequential provision as respects repayments and other matters, so, however, that this Resolution shall not authorise provision relating to part only of the field of operation of any one duty or rate of purchase tax.—[Mr. Lloyd.]
  put and agreed to.
  5. Pool betting duty (extension of definition of betting)
  Motion made, and Question,
  That for the purposes of the pool betting duty the making of payments for the chance of winning any money or money's worth shall be treated as bets if the payments are made on terms under which the payors have a power of selection which may (directly or indirectly) determine the winner, notwithstanding that the power is not exercised, if they would be so treated had the power been exercised; and this Resolution shall apply whenever a payment was made, but only where the winner is determined by reference to an event occurring after the twenty-eighth day of April, nineteen hundred and sixty-one.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.—[Mr. Lloyd.]
  put and agreed to.

  TABLE

  NEW RATES OF VEHICLES EXCISE DUTY

  PART I

  RATES OF DUTY ON VEHICLES NOT EXCEEDING 8 CWT. IN WEIGHT UNLADEN CHARGEABLE UNDER SECTION 2 OF ACT OF 1949

  Rate of Duty

  Description of vehicle

  Initial

  Additional if used for drawing trailer or side-car

  £

  s.

  d.

  £

  s.

  d.

  1.

  Bicycles (other than bicycles which are electrically propelled) of which the cylinder capacity of the engine—

  (a) does not exceed 150 cubic centimetres

  1

  0

  0

  12

  0

  (b) exceeds 150 cubic centimetres but does not exceed 250 cubic centimetres

  2

  5

  0

  12

  0

  (c) exceeds 250 cubic centimetres

  4

  10

  0

  1

  10

  0

  2.

  Bicycles which are electrically propelled

  1

  0

  0

  12

  0

  3.

  Tricycles neither constructed nor adapted for use nor used for the carriage of a driver or passenger

  2

  10

  0

  —

  4.

  Other tricycles

  6

  0

  0

  —

  5.

  Vehicles other than mowing machines, being vehicles with more than three wheels neither constructed nor adapted for use nor used for the carriage of a driver or passenger

  3

  15

  0

  —

  6. Vehicles excise duty
  Motion made, and Question put:—
  That—in the case of licences taken out after the seventeenth day of April, nineteen hundred and sixty-one,—

  (a) the rates of duty on licences (other than trade licences) for the descriptions of vehicles specified in Parts I to V of the following Table shall be substituted for the rates for such licences specified in the Vehicles (Excise) Act. 1949. and section eleven of the Finance Act, 1959 (hackney carriages other than tramcars);

  (b) the annual rates (section ten of the Act of 1949) of duty for general trade licences shall be increased from twenty-five pounds to thirty pounds and from five pounds to six pounds, and for limited trade licences shall be increased from five pounds to six pounds and from one pound to one pound five shillings.

  PART III

  RATES OF DUTY ON TRACTORS, ETC., CHARGEABLE UNDER SECTION 4 OF ACT OF 1949

  Weight unladen of vehicle

  Rate of duty

  1.

  2.

  3.

  4.

  5.

  Description of vehicle

  Exceeding

  Not exceeding

  Initial

  Additional for each ton or part of a ton in excess of the weight in column 2

  £

  s.

  d.

  £

  s.

  d.

  1.

  Vehicles mentioned in section 4 (2) (a) of Act of 1949

  —

  —

  2

  10

  0

  —

  2.

  Vehicles mentioned in section 4 (2) (b) of Act of 1949

  —

  —

  2

  10

  0

  —

  3.

  Vehicles mentioned in section 4 (2) (c) of Act of 1949

  —

  —

  2

  10

  0

  —

  4.

  Vehicles mentioned in section 4 (2) (d) of Act of 1949

  —

  —

  2

  10

  0

  —

  5

  Vehicles mentioned in section 4 (2) (f) of Act of 1949, other than showmen's vehicles

  —

  2 tons

  30

  0

  0

  —

  2 tons

  4 tons

  48

  0

  0

  —

  4 tons

  6 tons

  66

  0

  0

  —

  6 tons

  7¼ tons

  84

  0

  0

  —

  7¼ tons

  8 tons

  102

  0

  0

  —

  8 tons

  —

  102

  0

  0

  18

  0

  0

  6.

  Vehicles mentioned in section 4 (2) (f) of Act of 1949, being showmen's vehicles.

  —

  7¼ tons

  30

  0

  0

  —

  7¼ tons

  8 tons

  36

  0

  0

  —

  8 tons

  10 tons

  42

  0

  0

  —

  10 tons

  —

  42

  0

  0

  6

  0

  0

  Weight unladen of vehicle

  Rate of Duty

  1.

  2.

  3.

  4.

  5.

  Description of vehicle

  Exceeding

  Not exceeding

  Initial

  Additional for each ¼ ton or part of a ¼ ton in excess of the weight in column 2

  £

  s.

  d.

  £

  s.

  d.

  2.

  Goods vehicles which are propelled by steam or are constructed or adapted to use gas as fuel, other than farmers' goods vehicles, showmen's goods vehicles or local authorities' watering vehicles.

  —

  12 cwt.

  12

  0

  0

  —

  12 cwt.

  16 cwt.

  15

  0

  0

  —

  16 cwt.

  1 ton

  18

  0

  0

  —

  1 ton

  3 tons

  18

  0

  0

  3

  0

  0

  3 tons

  4 tons

  42

  0

  0

  4

  10

  0

  4 tons

  6 tons

  60

  0

  0

  6

  0

  0

  6 tons

  —

  108

  0

  0

  4

  10

  0

  3.

  Farmers' goods vehicles

  —

  12 cwt.

  12

  0

  0

  —

  12 cwt.

  1¼ tons

  12

  0

  0

  15

  0

  1¼ tons

  2 tons

  14

  5

  0

  10

  0

  2 tons

  2¼ tons

  15

  15

  0

  15

  0

  2½ tons

  3¼ tons

  17

  5

  0

  1

  0

  0

  3¼ tons

  —

  20

  5

  0

  10

  0

  4.

  Showmen's goods vehicles

  —

  12 cwt.

  12

  0

  0

  —

  12 cwt.

  16 cwt.

  13

  5

  0

  —

  16 cwt.

  1 ton

  14

  10

  0

  —

  1 ton

  1¼ tons

  15

  10

  0

  —

  1¼ tons

  —

  15

  10

  0

  1

  5

  0

  5.

  Local authorities' watering vehicles which are electrically propelled.

  —

  1¼ tons

  7

  0

  0

  —

  1¼ tons

  2 tons

  7

  0

  0

  3

  0

  0

  2 tons

  3 tons

  16

  0

  0

  15

  0

  3 tons

  5 tons

  19

  0

  0

  1

  0

  0

  5 tons

  —

  29

  0

  0

  —

  6.

  Local authorities' watering vehicles which are not electrically propelled.

  —

  12 cwt.

  12

  0

  0

  —

  12 cwt.

  16 cwt.

  15

  0

  0

  —

  16 cwt.

  1 ton

  18

  0

  0

  —

  1 ton

  2 tons

  18

  0

  0

  3

  0

  0

  2 tons

  4 tons

  30

  0

  0

  2

  0

  0

  4 tons

  5 tons

  46

  0

  0

  1

  10

  0

  5 tons

  —

  58

  0

  0

  —

  7.

  Goods vehicles not included in any of the foregoing provisions.

  —

  12 cwt.

  12

  0

  0

  —

  12 cwt.

  16 cwt.

  15

  0

  0

  16 cwt.

  1 ton

  18

  0

  0

  1 ton

  3 tons

  18

  0

  0

  3

  0

  0

  3 tons

  4 tons

  42

  0

  0

  4

  10

  0

  4 tons

  —

  60

  0

  0

  6

  0

  0

  PART V

  RATES OF DUTY ON VEHICLES CHARGEABLE UNDER SECTION 6 OF ACT OF 1949

  Description of Vehicle

  Rate of Duty

  £

  s.

  d.

  1.

  Electrically propelled vehicles

  9

  0

  0

  2.

  Other vehicles—

  (a) vehicles not exceeding six horse power, if registered under the Roads Act, 1920, for the first time before the first day of January, nineteen hundred and forty-seven

  10

  15

  0

  (b) vehicles exceeding six horse power but not exceeding seven horse power if registered as aforesaid

  12

  10

  0

  (c) vehicles not included in the foregoing sub-paragraphs

  15

  0

  0

  For the purposes of this Resolution weight, cylinder capacity, horse power and seating capacity are to be determined, and other expressions interpreted, in accordance with the Act of 1949.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.—[Mr. Lloyd.]

  The Committee divided: Ayes 345, Noes 205.

  Division No. 138.]

  AYES

  [5.4 p.m.

  Agnew, Sir Peter

  Cooper, A. E.

  Gower, Raymond

  Aitken, W. T.

  Cooper-Key, Sir Neill

  Grant, Rt. Hon. William

  Allan, Robert (Paddington, S.)

  Cordeaux, Lt.-Col. J. K.

  Grant-Ferris, Wg Cdr. R.

  Allason, James

  Cordle, John

  Green, Alan

  Amery, Rt. Hon. Julian (Preston, N.)

  Corfield, F. V.

  Gresham Cooke, R.

  Arbuthnot, John

  Costain, A. P.

  Grimston, Sir Robert

  Ashton, Sir Hubert

  Coulson, J. M.

  Grosvenor, Lt.-Col. R. G.

  Balniel, Lord

  Courtney, Cdr. Anthony

  Gurden, Harold

  Barber, Anthony

  Craddock, Sir Beresford

  Hall, John (Wycombe)

  Barlow, Sir John

  Critchley, Julian

  Hamilton, Michael (Wellingborough)

  Batsford, Brian

  Crosthwaite-Eyre, Col. O, E.

  Hare, Rt. Hon. John

  Baxter, Sir Beverley (Southgate)

  Crowder, F. P.

  Harris, Frederic (Croydon, N. W.)

  Beamish, Col. Sir Tufton

  Cunningham, Knox

  Harris, Reader (Heston)

  Bell, Ronald

  Curran, Charles

  Harrison, Brian (Maldon)

  Bennett, F. M. (Torquay)

  Dalkeith, Earl of

  Harvey, Sir Arthur vere (Macclesf'd)

  Bernnett, Dr. Reginald (Gos & Fhm)

  Dance, James

  Harvey, John (Walthamstow, E.)

  Berkeley, Humphry

  d'Avigdor-Goldsmid, Sir Henry

  Harvie Anderson, Miss

  Bidgood, John C.

  Deedes, W. F.

  Hastings, Stephen

  Biggs-Davison, John

  Digby, Simon Wingfield

  Hay, John

  Birch, Rt. Hon. Nigel

  Donaldson, Cmdr. C. E. M.

  Heald, Rt. Hon. Sir Lionel

  Bishop, F. P.

  Doughty, Charles

  Heath, Rt. Hon. Edward

  Black, Sir Cyril

  Drayson, G. B.

  Henderson, John (Cathcart)

  Bossom, Clive

  du Cann, Edward

  Henderson-Stewart, Sir James

  Bourne-Arton, A

  Duncan, Sir James

  Hendry, Forbes

  Box, Donald

  Duthie, Sir William

  Hicks Beach. Maj. W.

  Boyd-Carpenter, Rt. Hon. John

  Eccles, Rt. Hon. Sir David

  Hiley. Joseph

  Boyle, Sir Edward

  Eden, John

  Hill, Dr. Rt. Hon. Charles (Luton)

  Braine, Bernard

  Elliot, Capt. Walter (Carshalton)

  Hill, Mrs. Eveline (Wythenshawe)

  Brewis, John

  Elliott, R. W. (Nwcstle-upon-Tyne, N.)

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

  Bromley-Davenport, Lt.-Col. SirWalter

  Emery, Peter

  Hinchingbrooke, Viscount

  Brooke, Rt. Hon. Henry

  Emmet, Hon. Mrs. Evelyn

  Hirst, Geoffrey

  Brooman-White, R.

  Errington, Sir Eric

  Hobson, John

  Browne, Percy (Torrington)

  Erroll, Rt. Hon. F. J.

  Hocking, Philip N.

  Bryan, Paul

  Farey-Jones, F. W.

  Holland, Philip

  Buck, Antony

  Farr, John

  Hollingworth, John

  Bullard, Denys

  Fell, Anthony

  Hope, Rt. Hon. Lord John

  Bullus, Wing Commander Eric

  Finlay, Graeme

  Hopkins, Alan

  Burden, F. A.

  Fisher, Nigel

  Hornby, R. P.

  Butcher, Sir Herbert

  Fletcher-Cooke, Charles

  Hornsby-Smith, Rt. Hon. Patricia

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

  Forrest, George

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

  Campbell, Sir David (Belfast, S.)

  Foster, John

  Howard, John (Southampton, Test)

  Campbell, Gordon (Moray & Nairn)

  Fraser, Hn. Hugh (Stafford & Stone)

  Carr, Compton (Barons Court)

  Fraser, Ian (Plymouth, Sutton)

  Hughes Hallett, Vice-Admiral John

  Carr, Robert (Mitcham)

  Freeth, Denzil

  Hughes-Young, Michael

  Cary, Sir Robert

  Galbraith, Hon. T. G. D.

  Hulbert, Sir Norman

  Channon, H. P. G.

  Gammans, Lady

  Hurd, Sir Anthony

  Chataway, Christopher

  Gardner, Edward,

  Hutchison, Michael Clare

  Chichester-Clark, R.

  George, J. C. (Pollok)

  Iremonger, T. L.

  Churchill, Rt. Hon. Sir Winston

  Gibson-Watt, David

  Irvine, Bryant Godman (Rye).

  Clark, Henry (Antrim, N.)

  Gover, Sir Douglas

  Jackson, John

  Clark, William (Nottingham, S.)

  Glyn, Dr. Alan (Clapham)

  James, David

  Clarke, Brig. Terence (Portsmth, W.)

  Glyn, Sir Richard (Dorset, N.)

  Jenkins, Robert (Dulwich)

  Cleaver, Leonard

  Godber, J. B.

  Jennings, J. C.

  Cole, Norman

  Goodhart, Philip

  Johnson, Dr. Donald (Carlisle)

  Collard, Richard

  Good hew, Victor

  Johnson, Eric (Blackley)

  Cooke, Robert

  Gough, Frederick

  Johnson Smith, Geoffrey

  832

  833

  Jones, Rt. Hn. Aubrey (Hall Green)

  Morgan, William

  Smyth, Brig. Sir John (Norwood)

  Joseph, Sir Keith

  Morrison, John

  Soamee, Rt. Hon. Christopher

  Kaberry, Sir Donald

  Mott-Radclyffe, Sir Charles

  Spearman, Sir Alexander

  Kerans, Cdr. J. S.

  Nabarro, Gerald

  Speir, Rupert

  Kerby, Capt. Henry

  Neave, Airey

  Stanley, Hon. Richard

  Kerr, Sir Hamilton

  Nicholls, Sir Harmar

  Stevens, Geoffrey

  Kershaw, Anthony

  Noble, Michael

  Steward, Harold (Stockport, S.)

  Kimball, Marcus

  Nugent, Sir Richard

  Stodart, J. A.

  Kirk, Peter

  Oakshott, Sir Hendrie

  Stoddart-Scott, Col. Sir Malcolm

  Kitson, Timothy

  Ormsby Gore, Rt. Hon. D,

  Storey, Sir Samuel

  Lagden, Godfrey

  Orr, Capt. L. P. S.

  Studholme, Sir Henry

  Langford-Holt. J.

  Orr-Ewing, C. Ian

  Summers, Sir Spencer (Aylesbury)

  Leather, E. H. C.

  Osborn, John (Hallam)

  Sumner, Donald (Orpington)

  Leavey, J. A.

  Page, John (Harrow, West)

  Talbot, John E.

  Leburn, Gilmour

  Page, Graham (Crosby)

  Tapsell, Peter

  Legge-Bourke, Sir Harry

  Pannell, Norman (Kirkdale)

  Taylor, Sir Charles (Eastbourne)

  Lewis, Kenneth (Rutland)

  Partridge, E.

  Taylor, Edwin (Bolton, E.)

  Lilley, F. J. P.

  Pearson, Frank (Clitheroe)

  Taylor, W. J. (Bradford, N.)

  Lindsay, Martin

  Peel, John

  Teeling, William

  Linstead, Sir Hugh

  Percival, Ian

  Temple, John M.

  Litchfield, Capt. John

  Peyton, John

  Thatcher, Mrs. Margaret

  Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)

  Pickthom, Sir Kenneth

  Thomas, Leslie (Canterbury)

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Pike, Miss Mervyn

  Thomas, Peter (Conway)

  Longbottom, Charles

  Pilkington, Sir Richard

  Thompson, Kenneth (Walton)

  Longden, Gilbert

  Pitman, I. J.

  Thompson, Richard (Croydon, S.)

  Loveys, Walter H.

  Pitt, Miss Edith

  Thorneycroft, Rt. Hon. Peter

  Low, Rt. Hon. Sir Toby

  Pott, Percivall

  Thornton-Kemsley, Sir Colin

  Lucas, Sir Jocelyn

  Powell, Rt. Hon. J. Enoch

  Tiley, Arthur (Bradford, W.)

  Lucas-Tooth, Sir Hugh

  Price, David (Eastleigh)

  Tilney, John (Wavertree)

  McAdden, Stephen

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

  Turner, Colin

  MacArthur, Ian

  Prior, J. M. L.

  Turton, Rt. Hon. R. H.

  McLaren, Martin

  Prior-Palmar, Brig, Sir Otho

  Tweedsmuir, Lady

  McLaughlin, Mrs. Patricia

  Profumo, Rt. Hon. John

  Van Straubenzee, W. R

  Maclay, Rt. Hon. John

  Proudfoot, Wilferd

  Vane, W. M. F.

  Maclean, SirFitzroy (Bute&N. Ayrs.)

  Pym, Francis

  Vickers, Miss John

  McLean, Neil (Inverness)

  Ramsden, James

  Vosper, Rt. Hon. Dennis

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

  Rawlinson, Peter

  Wakefield, Sir Wavell (St M'lebone)

  MacLeod, John (Ross & Cromarty)

  Redmayne, Rt. Hon. Martin

  McMaster, Stanley R.

  Rees, Hugh

  Walder, David

  Macmillan. Rt. Hn. Harold (Bromley)

  Rees-Davies, W. R.

  Walker, Peter

  Macmillan, Maurice (Halifax)

  Renton, David

  Ward, Dame Irene

  Macpherson, Niall (Dumfries)

  Ridley, Hon. Nicholas

  Watkinson, Rt. Hon. Harold

  Maddan, Martin

  Ridsdale, Julian

  Watts, James

  Maginnis, John E.

  Rippon, Geoffrey

  Webster, David

  Maitland, Sir John

  Roberts, Sir Peter (Heeley)

  Wells, John (Maidstone)

  Manningham-Buller, Rt. Hn. Sir R.

  Robertson, Sir David

  Whitelaw, William

  Markham, Major Sir Frank

  Robinson, Sir Roland (Blackpool, S)

  Williams, Dudley (Exeter)

  Marlowe, Anthony

  Robson Brown, Sir William

  Williams, Paul (Sunderland, S.)

  Marples, Rt. Hon. Ernest

  Rodgers, John (Sevenoaks)

  Wills, Sir Gerald (Bridgwater)

  Marshall, Douglas

  Roots, William

  Wilson, Geoffrey (Truro)

  Marten, Neil

  Ropner, Col. Sir Leonard

  Wise, A. R.

  Mathew, Robert (Honiton)

  Royle, Anthony (Richmond, Surrey)

  Wolrige-Gordon, Patrick

  Matthews, Gordon (Meriden)

  Russell, Ronald

  Woodhouse, C. M.

  Maudling, Rt. Hon. Reginald

  Sandys, Rt. Hon. Duncan

  Woodnutt, Mark

  Mawby, Ray

  Scott-Hopkins, James

  Woollam, John

  Maxwell-Hyslop, R. J.

  Seymour, Leslie

  Worsley, Marcus

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

  Sharpies, Richard

  Yates, William (The Wrekin)

  Mills, Stratton

  Shaw, M.

  Montgomery, Fergus

  Simon, Rt. Hon. Sir Jocelyn

  TELLERS FOR THE AYES:

  Moore, Sir Thomas (Ayr)

  Skeet, T. H. H.

  Colonel J. H. Harrison and

  More, Jasper (Ludlow)

  Smith, Dudley (Br'ntf'rd & Chiswick)

  Mr. Edward Wakefield.

  NOES

  Abse, Leo

  Callaghan, James

  Edwards, Robert (Bilston)

  Ainsley, William

  Castle, Mrs. Barbara

  Edwards, Walter (Stepney)

  Allaun, Frank (Salford, E.)

  Chapman, Donald

  Evans, Albert

  Awbery, Stan

  Chetwynd, George

  Fernyhough, E.

  Bacon, Miss Alice

  Cliffe, Michael

  Finch, Harold

  Baxter, William (Stirlingshire, W.)

  Collick, Percy

  Fitch, Alan

  Benson, Sir George

  Corbet, Mrs. Freda

  Fletcher, Eric

  Blackburn, F.

  Craddook, George (Bradford, S.)

  Foot, Michael (Ebbw Vale)

  Blyton, William

  Crossman, R. H. S.

  Forman, J. C.

  Boardman, H.

  Cullen, Mrs. Alice

  Fraser, Thomas (Hamilton)

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

  Darling, George

  Gaitskell, Rt, Hon. Hugh

  Bowen, Roderic (Cardigan)

  Davies, G. Elfed (Rhondda, E.)

  Galpern, Sir Myer

  Bowles, Frank

  Davies, Ifor (Gower)

  Ginsburg, David

  Boyden, James

  Deer, George

  Gooch, E. G.

  Braddock, Mrs. E. M.

  de Freitas, Geoffrey

  Cordon Walker, Rt. Hon. P.C.

  Brookway, A. Fenner

  Diamond, John

  Gourlay, Harry

  Broughton, Dr. A. D. D.

  Dodds, Norman

  Greenwood, Anthony

  Brown, Alan (Tottenham)

  Donnelly, Desmond

  Grey, Charles

  Brown, Rt. Hon. George (Belper)

  Driberg, Tom

  Griffiths, David (Rother Valley)

  Butler, Herbert (Hackney, C.)

  Dugdale, Rt. Hon. John

  Griffiths, Rt. Hon. James (Lianelly)

  Butler, Mrs. Joyce (Wood Green)

  Ede, Rt. Hon. C.

  Griffiths, W. (Exchange)

  834

  835

  Grimond, J.

  Mallalieu, E. L. (Brigg)

  Skeffington, Arthur

  Gunter, Ray

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

  Slater, Joseph (Sedgefield)

  Hale, Leslie (Oldham, W.)

  Manuel, A. C.

  Small, William

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Mapp, Charles

  Smith, Ellis (Stoke, S.)

  Hannan, William

  Marquand, Rt. Hon. H. A.

  Snow, Julian

  Hart, Mrs. Judith

  Marsh, Richard

  Sorensen, R. W.

  Hayman, F. H.

  Mason, Roy

  Spriggs, Leslie

  Healey, Denis

  Mayhew, Christopher

  Steele, Thomas

  Henderson, Rt. Hn. Arthur (RwlyRegis)

  Mellish, R. J.

  Stewart, Michael (Fulham)

  Herbison, Miss Margaret

  Mendelson, J. J.

  Stones, William

  Hewitson, Capt. M.

  Millan, Bruce

  Strauss, Rt. Hn. G. R. (Vauxhall)

  Hill, J. (Midlothian)

  Milne, Edward J.

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

  Hilton, A. V.

  Mitchison, G. R.

  Swain, Thomas

  Holman, Percy

  Monslow, Walter

  Swingler, Stephen

  Holt, Arthur

  Moody, A. S.

  Sylvester, George

  Howell, Charles A.

  Morris, John

  Taylor, Bernard (Mansfield)

  Howell, Denis

  Moyle, Arthur

  Taylor, John (West Lothian)

  Hughes, Emrys (S. Ayrshire)

  Mulley, Frederick

  Thomas, George (Cardiff, W.)

  Hughes, Hector (Aberdeen, N.)

  Oliver, G. H.

  Thomas, Iorwerth (Rhondda, W.)

  Hunter, A. E.

  Padley, W. E.

  Thompson, Dr. Alan (Dunfermline)

  Hynd, H. (Accrington)

  Paget, R. T.

  Thornton, Ernest

  Hynd, John (Attercliffe)

  Pannell, Charles (Leeds, W.)

  Timmons, John

  Irvine, A. J. (Edge Hill)

  Pargiter, G. A.

  Tomney, Frank

  Irving, Sydney (Dartford)

  Parkin, B. T.

  Ungoed-Thomas, Sir Lynn

  Janner, Sir Barnett

  Pavitt, Laurence

  Wade, Donald

  Jay, Rt. Hon. Douglas

  Pearson, Arthur (Pontypridd)

  Wainwright, Edwin

  Jeger, George

  Peart, Frederick

  Warbey, William

  Jenkins, Roy (Stechford)

  Pentland, Norman

  Watkins, Tudor

  Johnson, Carol (Lewisham, S.)

  Plummer, Sir Leslie

  Wells, Percy (Faversham)

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

  Prentice, R. E.

  Wells, William (Walsall, N.)

  Jones, Dan (Burnley)

  Price, J. T. (Westhoughton)

  Jones, J. Idwal (Wrexham)

  Probert, Arthur

  White, Mrs. Eirene

  Jones, T. W. (Merioneth)

  Proctor, W. T.

  Whitlock, William

  Kelley, Richard

  Pursey, Cmdr. Harry

  Wilcock, Group Capt. C. A. B.

  Key, Rt. Hon. C. W.

  Randall, Harry

  Wilkins, W. A.

  King, Dr. Horace

  Rankin, John

  Willey, Frederick

  Ledger, Ron

  Redhead, E. C.

  Williams, LI. (Abertillery)

  Lee, Frederick (Newton)

  Reid, William

  Williams, W. R. (Openshaw)

  Lever, L. M. (Ardwick)

  Reynolds, G. W.

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

  Lewis, Arthur (West Ham, N.)

  Rhodes, H.

  Wilson, Rt. Hon. Harold (Huyton)

  Lipton, Marcus

  Roberts, Albert (Normanton)

  Woodburn, Rt. Hon. A.

  Loughlin, Charles

  Roberts, Goronwy (Caernarvon)

  Woof, Robert

  Mabon, Dr. J. Dickson

  Robinson, Kenneth (St. Pancras, N.)

  Wyatt, Woodrow

  McCann, John

  Ross, William

  Yates, Victor (Ladywood)

  MacColl, James

  Royle, Charles (Salford, West)

  Zilliacus, K.

  McKay, John (Wallsend)

  Shinwell, Rt. Hon. E.

  McLeavy, Frank

  Short, Edward

  TELLERS FOR THE NOES:

  MacMillan, Malcolm (Westen Isles)

  Silverman, Julius (Aston)

  Mr. Rogers and Mr. Lawson.

  MacPherson, Malcolm (Stirling)

  Silverman, Sydney (Nelson)

  7. Vehicles (excise): agricultural tractors, etc.
  Motion made, and Question,
  That for the purposes of section thirteen of the Finance Act, 1959, a vehicle of which the two front wheels are less than a specified distance apart shall be treated as a three-wheeled vehicle.—[Mr. Lloyd.]
  put and agreed to.
  8. Income tax (charge and rates for 1961–62)
  Motion made, and Question,
  That income tax for the year 1961–62 shall be charged at the standard rate of seven shillings and ninepence in the pound, and, in the case of an individual whose total income exceeds two thousand pounds, shall be charged in respect of the excess at rates in the pound which respectively exceed the standard rate by the amounts by which the higher rates for the year 1960–61 exceed the standard rate for that year.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the
  836
  provisions of the Provisional Collection of Taxes Act, 1913.—[Mr. Lloyd.]
  put and agreed to.
  9. Income tax (surtax rates for 1960–61)
  Motion made, and Question,
  That income tax for the year 1960–61 shall be charged, in the case of an individual whose total income exceeded two thousand pounds, at the same higher rates in respect of the excess as were charged for the year 1959–60.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913—[Mr. Lloyd.]
  put and agreed to.
  10. Income tax (dependent relatives)
  Motion made, and Question,
  That the amounts of two hundred and ten pounds and one hundred and thirty-five pounds specified for the purposes of section two hundred and sixteen of the Income Tax Act, 1952, shall each be increased by twenty pounds.

  837
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.—[Mr. Lloyd.]
  put and agreed to.
  11. Income tax (increase of relief for National Insurance contributions)
  Motion made, and Question,
  That the amounts specified in Part I of the Third Schedule to the Finance Act, 1960, other than the amounts of five pounds substituted by paragraph 2 of Part II of that Schedule, be increased as follows, that is,—

  (a) those specified in paragraphs 1, 3 and 5 by three pounds, and

  (b) those specified in paragraph 2, 4 and 6 by two pounds,

  but this Resolution shall not require any change in the amounts deducted or repaid under section one hundred and fifty-seven (pay as you earn) of the Income Tax Act, 1952, before the sixth day of July, nineteen hundred and sixty-one.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.—[Mr. Lloyd.]
  put and agreed to.
  12. Income tax (double taxation relief)
  Motion made, and Question,
  That provision be made—

  (a) whereby, as respects past as well as future periods, foreign tax is to be treated for the purposes of sections three hundred and forty-seven and three hundred and fifty of the Income Tax Act, 1952, and the Sixteenth Schedule to that Act, as payable if it would have been payable but for certain reliefs under foreign law;

  (b) for allowing credit for foreign tax under Part XIII of the Income Tax Act, 1952, on any income in respect of which such credit was allowed in a previous year of assessment;

  (c) for repealing the provision whereby for the purposes of the said Part XIII foreign local taxes are treated as not corresponding to income tax or the profits tax.—[Mr. Lloyd.]

  put and agreed to.
  13. Income tax (ministers' residences)
  Motion made, and Question,
  That in connection with exemption from tax under Schedule A for the official residence of a clergyman or minister of any religious denomination, it is expedient to modify the law relating to the taxing of rents and to maintenance reliefs.—[Mr. Lloyd.]
  put and agreed to.
  14. Income tax (capital allowances, etc. for motorcars)
  Motion made, and Question,
  That as respects vehicles of a type commonly used as private cars, provision be made for limiting capital allowances (with consequential amendments as to balancing allowances and charges), deductions from profits or gains or emoluments, and management expenses claims and maintenance claims.—[Mr. Lloyd.]
  put and agreed to.
  15. Income tax (assessments for Schedule E emoluments)
  Motion made, and Question,
  That—

  (a) assessments to income tax (including additional assessments) made more than twelve months after the end of the year of assessment shall be made, as respects emoluments assessable under Schedule E, in accordance with the practice generally prevailing at the expiration of the twelve months, but without prejudice to any change of practice occurring before the sixth day of April, nineteen hundred and sixty-one;

  (b) it is expedient to extend the time for making and amending assessments (including additional assessments) to income tax in respect of such emoluments received in the year 1955–56 or any subsequent year, and to make consequential provision for the purposes of Chapter II (expenses allowances) of Part VI of the Income Tax Act, 1952.—[Mr. Lloyd.]

  put and agreed to.
  16. Income tax (returns of interest payments by Industrial and Provident Societies)
  Motion made, and Question,
  That subsection (4) of section four hundred and forty-three of the. Income Tax Act, 1952, be extended so as to cover share interest as well as loan interest.—[Mr. Lloyd.]
  put and agreed to.
  17. Employers' surcharge
  Motion made, and Question,
  That provision be made for imposing and withdrawing surcharges on employers liable to pay flat-rate contributions under the National Insurance Acts or the corresponding enactments in Northern Ireland, so, however, that this Resolution shall not authorise a surcharge exceeding four shillings a week for each person for whom such a contribution is paid or the imposing of surcharges in respect of some, but not all, persons of any description relevant for determining the amount or aggregate amount of contributions payable under those Acts or enactments.—[Mr. Lloyd.]
  put and agreed to.
  18. Profits tax (increase of rate)
  Motion made, and Question,
  That as from the beginning of April, nineteen hundred and sixty-one, the rate at which the profits tax is to be charged by virtue of subsection (1) of section twenty-five of the Finance Act, 1958, shall be increased from twelve and a half per cent. to fifteen per cent.—[Mr. Lloyd.]
  put and agreed to.
  19. Profits tax (charges consequential on income tax amendments)
  Motion made, and Question,
  That it is expedient to authorise any charge to the profits tax which may result from amendments of the law relating to allowances, deductions or charges for income tax purposes.—[Mr. Lloyd.]
  put and agreed to.
  20. National savings stamps and gift tokens
  Motion made, and Question,
  That there shall be paid into the Exchequer any sums received by the Postmaster General from the sale of national savings stamps and national savings gift tokens, and that for purposes connected with such stamps and tokens it is expedient to authorise the issue of sums out of the Consolidated Fund and the borrowing in any manner authorised by the National Loans Act, 1939. of money for the purpose of providing or replacing sums to be so issued.—[Mr. Lloyd.]
  put and agreed to.
  Amendment of the law
  Motion made, and Question proposed,
  That it is expedient to amend the law with respect to the national debt and the public revenue and to make further provision in connection with finance, so, however, that this Resolution shall not extend to making amendments of the enactments relating to purchase tax so as to give relief from tax, other than amendments making the same provision for chargeable goods of whatever description or for all goods to which any of the several rates of tax at present applies.—[Mr. Lloyd.]
  5.22 p.m.
  Mr. Hugh Gaitskell: I rise in accordance with the customary traditions of the Committee to offer on behalf of all of us our congratulations to the Chancellor of the Exchequer on his Budget statement. These congratulations, again in accordance with custom, relate of course to the form and manner of its presentation.
  The Chancellor of the Exchequer has had an interesting political career. He is best known, I suppose, to the House
  840
  as a Foreign Secretary, with whom we did not for the most part agree. When he went to the Treasury there were those who said that this was not quite the right job for a man who had spent so much of his time on foreign affairs, but I recall very well the days when the right hon. and learned Gentleman was in opposition and we who are now on this side of the House were in power. He then certainly was, as a Conservative back-bencher, an extremely effective critic of financial policy. For my part, therefore, I was not surprised when he moved to the Treasury, and one expected from him a considerable display of expertise in his new post.
  There are always advantages in having a new Chancellor of the Exchequer, because at the very least he is not tied down by the mistakes of his predecessor. He is free to say what he likes about former Chancellors of the Exchequer, and there are many precedents for a Chancellor, on the Conservative side particularly, saying to the House rather unkind things about those who went before him. The right hon. and learned Gentleman is no exception.
  I could not have bettered the right hon. and learned Gentleman's indictment of the general state of the economy after more than ten years of Tory rule. Prosperity was definitely based on an insecure foundation and the situation in industry was most unsatisfactory. Our exports were quite inadequate, and there were many other things of a critical character which fell from the right hon. and learned Gentlemans' lips this afternoon. I agree with all that, but I think that he might have rubbed it in a little more.
  If we consider the situation with which we are confronted today, we have to recognise that for a year now there has been virtually no expansion whatever in industrial production and that since 1955 we have had only one year in which production was expanding, admittedly fairly fast during those 12 to 15 months. But we are now stagnant again, and what is even more serious—and this is what the Chancellor admitted—is that in 1960 we had a balance of payments deficit on current account of not less than £344 million.
  This is a very high figure indeed. One must contrast it with the aim repeatedly

  841
  stated by Chancellors of the Exchequer from the Conservative Front Bench that we should have a surplus of at least £300 million as an average figure over the years. But not only that. This deficit of £344 million took place in a year when conditions favoured us, when so far as the balance of payments was concerned the terms of trade were in our favour, not against us, as for instance they were so heavily against us in 1951. This took place at a time when production was not even expanding, and, therefore, one would not have expected on that account a rise in imports, which is indeed one of our problems.
  I therefore cordially share the Chancellor's anxieties about the present situation. I wish I could say that his analysis of the situation with which we are confronted was matched by the measures he put forward to the Committee, because I cannot feel on any ground that they are adequate to deal with the situation.
  Mr. William Ross: Or relevant.
  Mr. Gaitskell: Or indeed relevant They do not exist.
  What are the major problems? They are the expansion of exports, in a framework of rising productivity. Is there a single thing which in this Budget directly contributes to either of those? I cannot see it. There is no encouragement to investment here. It is all very well for the Chancellor to dismiss this in a sentence as not the only thing that matters. Admittedly it is not the only thing that matters, but it matters a great deal, and the fact remains that although manufacturing investment has been rising, though I have not had time to check the figures, I think it is now only about at the 1957 level. It ought to be much higher and much nearer to the level of our European competitors, and one would have thought that this year all efforts would have been concentrated on anything that would increase productivity. But not a bit of it.
  On the Chancellor's proposals, I can only give my first reactions. My right hon. Friend the Member for Huyton (Mr. H. Wilson) will develop our views at greater length and in detail tomorrow. The Chancellor has, first of all, proposed to give the Government power to vary indirect taxes throughout the year at any
  842
  time between Budgets, and also to impose, modify or take away what I suppose could be called a payroll tax. In my opinion it would be foolish to dismiss this idea out of hand as just another interference. Certainly we would not oppose in principle giving a power to act between Budgets. There is something slightly absurd about waiting each year for a Budget before one can take action in the fiscal field, but one would need to think very carefully, not only about the particular idea that is involved here, but also still more about any application that might be made of it.
  I would point out certain difficulties that seem to me to arise. First, on the proposal to vary indirect taxation, I do not see any special difficulty of a technical kind in varying the rates of indirect taxes. No doubt strong feelings would be expressed about this if and when the taxes were imposed, but I would have supposed that there would have been difficulties about varying Customs duty from time to time, apparently without any regard to any international obligation under G.A.T.T.
  Mr. Selwyn Lloyd Mr. Selwyn Lloyd indicated dissent
  Mr. Gaitskell: The right hon. and learned Gentleman says that is not so. Perhaps he would clear that up.
  Mr. Lloyd: That would be one of the specific exceptions which I made. It certainly cannot apply to any kind of import duty.
  Mr. Gaitskell: In that case it is a very big exception. Clearly, if one starts from the cases in which there are no duties at all today, they are ruled out from being affected by this. Nor could one do anything which was in conflict with the margin of preference which is allowed under G.A.T.T. The significance of this as far as Customs duty is concerned is, therefore, not very great. I am obliged to the right hon. and learned Gentleman, because it is important to clear that up.
  There seem to be two great difficulties about the payroll tax. The first is that the degree of employment and unemployment is not the same all over the country. It would be all very well to impose a payroll tax in what used to be called a red area, because there was a great shortage of labour in that area and one could anticipate that the result of such a tax would not be adversely to affect

  843
  employment. It would be quite another thing to apply such a tax—and it must be applied nationally—in development areas where there was already unemployment. This is one great difficulty.
  The second difficulty which I see is that when one imposes a tax of this kind, by its very nature, one must increase the costs of those industries which use proportionately a large amount of labour. It is not their fault that they do this. It is not the fault of the coal mining industry that wages happen to be a much larger proportion of total costs of production than they are, for instance, in the electricity supply industry, which is a capital intensive and not a labour intensive industry, or, as my right hon. Friend the Member for Battersea, North (Mr. Jay) points out, in the chemical industries. We shall certainly distort the price structure, which, as far as I remember, is something which Conservative Chancellors of the Exchequer have always been very hesitant about on previous occasions.
  This is, however, a matter on which I would not take a very firm line either way. One needs to know a great deal more about it and one would be guided in one's attitude to it by the way and the circumstances in which such taxes were imposed and modified and the use which was made of any revenue obtained from the tax.
  We welcome some things which the right hon. and learned Gentleman has done; we certainly do not object to them at all. It was common sense, as I think my hon. Friends agree, to increase the tax allowance in respect of National Insurance contributions. It is a flat-rate allowance and, therefore, since the National Insurance contributions have been raised, it is only right that the allowance should be raised, too. If the right hon. and learned Gentleman had not done that, he would certainly have been dealing very hardly with the vast majority of the population.
  We welcome, for what it is, the small increase in the dependants' allowance. The House as a whole will clearly welcome the tax relief to be afforded to those receiving compensation for suffering and loss incurred as a result of the Nazi régime. All those things are to be welcomed, and there are other minor
  844
  changes to which I do not think we object.
  When it comes to the taxation side, I must say outright that I am glad that at last the Chancellor has done something to deal with the problem of profits on television. He has imposed a modest tax on the advertisements of commercial television. It is something. It is the thin end of the wedge. But let him have no illusions; as far as we are concerned, the immense profits which have been virtually handed to these companies on a plate will still be very large, even after this tax has been imposed, not least because it is a tax not on their profits as such but on their advertising, and it may well be that they can pass a great deal of this on to the firms which advertise with them.
  We do not oppose the proposal for the increased tax on hydrocarbon oil. Like the tax on television advertisements, this has been part of the Labour Party's policy in recent years, and we are glad that this has been done. We think that there is a case for it, particularly in the light of the relationship between oil and coal to which the right hon. and learned Gentleman referred.
  Having said that, I must say that I regard the other main measures which the Chancellor has introduced as being both inadequate and unjust. I will comment first on business expenses. Are we to suppose that the people who get away with a great deal in this respect—and it is common knowledge that this is a scandal—will be terribly exercised because the annual depreciation allowance on a motor car, as I understand it, is to be increased from 9 per cent. to 12½ per cent. and the total amount which may be written off in a single year is to be limited to £2,000? No doubt a few people who run Rolls-Bentleys will be a little concerned about this, but nobody else will be much influenced by it. As I understand it, that is what the Chancellor proposed. If he imagined that his very harmless words about this whole matter would cause any despondency among business men, then he had only to look at the face of his hon. Friend the Member for Kidderminster (Mr. Nabarro) to see what are the true facts in this matter.
  I come finally to the major change which the right hon. and learned Gentleman has proposed, this very substantial

  845
  reduction in Surtax liability. I should like to make it plain that for many years we have taken the view generally that the taxation system was in great need of reform because it imposed an unduly high burden on those who earned their income and were subject to earned Income Tax as compared with those who got their money much more easily than either by the sweat of their brow or by their brains or in any way which is earned. On that account, we have repeatedly recommended a change in the whole situation by which speculative profits and capital profits would be made liable to taxation and the present evasion of death duties and inheritance taxation would be prevented.
  In opposing the Chancellor's proposal, I do not want there to be any misunderstanding. We are by no means satisfied with the present situation. If the right hon. and learned Gentleman had proposed a far-reaching measure of fiscal reform in the course of which he proposed to impose a capital gains tax which, whatever he may say, is long overdue in this country; if he had proposed a mere redistribution in the same income group between those who get their money very easily and those who get it in a more difficult way; if, above all, he had brought it forward in a year when we had not just had a long Parliamentary battle about the increase in National Health Service charges and contributions, there might conceivably have been something to be said for some relief to the Surtax payers, together with other direct taxpayers.
  But the facts are these: the right hon. Gentleman takes roughly, in round figures, in a full year, £60 million off Surtax. It is very close to the amount which he has imposed in the Health Service contributions and charges. What happens is that a man on £10 a week is to pay 10d. a week more in contributions and is to pay more when he goes to the doctor for his prescription, and the man earning from £2,000 to £5,000 a year is to be substantially better off. Nothing which the right hon. and learned Gentleman says can get away from that direct comparison.
  Furthermore, this is done at a time when immense capital profits continue to be made. I think I am right in saying that the rise in the average value of
  846
  Stock Exchange shares, of equities, in the last six months is at least between 10 per cent. and 20 per cent. It is at any rate very substantial. Of course, there are pauses; shares do not go up in value all the time. But if we take the figures, for instance, since 1953 we see that the increase in the index of equity shares is about 400 per cent. It is enormous. Even in the last couple of years the rise has been very substantial. Yet nothing is done about this. We all well know that it provides a very large increase in the available purchasing power to a very small number of people. It is high time that they paid their fair share of the contribution to the revenue.
  There is one other thing which I would say to the right hon. and learned Gentleman in connection with his proposals for relieving the Surtax-payers. In the early part of his speech he mentioned one danger which confronted the economy today; he was concerned about the tendency towards rising costs. He pointed to the fact that wages had been rising faster than productivity.
  I would make two comments on that. Whether wages rise faster than productivity depends not only on whether wages rise but also on whether productivity rises, and this is the trouble—that productivity has not been rising. For the last year it has almost certainly fallen, because we have a rather larger number of people in employment and we have a stagnant industrial production
  Secondly, over and above that, does the right hon. and learned Gentleman imagine that the organised workers will feel very disposed to respond to his appeal to exercise self-restraint when they are obliged to pay not only about £50 million more in Health Service contributions, but about £240 million more in the new pension scheme contributions, largely to relieve the Exchequer and at a time when the Surtax payer is being relieved to the tune of £60 million? The Chancellor of the Exchequer may say that all this is offset by Profits Tax, but the rise in profits in the last year alone fully justified a further small increase in Profits Tax.
  I sum up the Budget in this way. It seems to me that all Budgets should be tested by two criteria. First, will they benefit the economy as a whole? Will

  847
  they lead to an expansion of production and, at the same time, a favourable stable balance of payments? Secondly, will they distribute the income of the country more equitably?
  On both these counts this Budget is to be condemned. It does nothing whatever to stimulate production, nothing whatever to stimulate exports, and unquestionably, so far as it makes any changes at all, taking into account earlier changes—they must be taken into account, because they are a form of tax and should have been made at the time of the Budget—there can be no doubt that it makes for a more unfair distribution of income, and on that count alone is also to be condemned.
  5.41 p.m.
  Vice-Admiral John Hughes Hallett: The right hon. Gentleman the Leader of the Opposition began by saying that as was customary he would only criticise, or chiefly criticise, the manner in which my right hon. and learned Friend delivered his Budget statement. However, he devoted a good deal of his time to the substance of what was in the Budget. I am not sure that he entirely and correctly apprehended the precise nature of many of the proposals.
  This is I believe my maiden speech in a Budget debate. One great advantage when a non-expert is speaking is to be called first before the experts can be called and also at a time when, by tradition, fortunately most of my hon. Friends have gone to listen to further details from my right hon. and learned Friend the Chancellor of the Exchequer.
  I must say, for what it is worth, that I regard the Budget as one of great courage and wisdom. I am sure that very few people expected before my right hon. and learned Friend rose that he would propose an increase in taxation of no less than £80 million a year. I am equally sure that his judgment is correct and that that is the right thing to do. Having heard the Budget statement, I shall certainly soften some of the criticisms that it had been in my mind to make of the manner in which our economic affairs have been conducted in the past few years.
  I was also delighted to hear my right hon. and learned Friend say that he is
  848
  a firm believer in the value of administrative economies. Many of us on this side of the Committee have laboured, on the Estimates Committee, on the Public Accounts Committee and, when possible, in Estimates debates on the Floor of the House of Commons, to criticise the more detailed aspects of expenditure. We have had very little change in the past, because we have always been met by the argument that little can be done administratively and all depends upon policy.
  I was also pleased and relieved to hear my right hon. and learned Friend say that the main purpose of his Budget is to counter inflation. I remain convinced that that is the principal threat facing the country today, and indeed it is about that that I have really risen to speak. We must face the fact that my right hon. and learned Friend inherited a difficult situation. He has certainly made the best of it, although I daresay that he and many of his colleagues must now regret that they did not give more robust support three years ago to my right hon. Friend the present Minister of Aviation when he tried to rout the squander maniacs once and fox all.
  We must face the fact that the country has once again been spending too much. It does not matter in which quarter we look—the Government, local government, the nationalised industries and private industry are all to blame.
  Mr. George Thomas: Defence.
  Vice-Admiral Hughes Hallett: That is part of Government expenditure. I strongly criticise the increase of £49 million, or whatever the sum was, in this year's Estimates, but I hasten to add that that is a drop in the ocean compared to the general increase in Government expenditure.
  It is not only a matter of corporate expenditure. Almost every individual in the country who has been able to lay his hand on the cash has been spending too much. I say this notwithstanding the rise in the percentage of savings. It is the underlying reason for the adverse balance of payments situation. It is also the reason for the regrettable renewed rise in the cost of living.
  I very much doubt whether even after twenty-one years of this nightmare fall

  849
  in the value of money the effect it has on the tragic minority of people whose main income is a fixed one is sufficiently understood. We argue at great length about the rate of Income Tax. But how little that matters to the great majority of people compared to the cost of living. The present rate was fixed in the 1959 Budget when the index stood at roughly 110. Today the index has risen to 113.
  It is interesting to note that to a married man who retires on an income or pension of £750 a year the effect of the 3 point rise in two years is the same in round figures as if there had been an increase in the standard rate of Income Tax of 1s. 6d. in the £. In other words, even for those who enter retired life with well above the average income of retired persons, the comparatively small rise in the cost of living which has taken place in the last two years has had twice as much adverse effect as the benefit they gained from the large reduction in the standard rate of Income Tax which was made two years ago.
  I must be fair and admit that in the special case I have taken the £750 a year man has been approximately compensated by the rise in the rate of National Insurance pensions which we approved earlier this year. However, it is also only fair to say that that increase was made for very different reasons. It is largely fortuitous that that should be so.
  I invite the Committee to consider the effect of the change in the cost of living, small though it is often represented as being, on the more wealthy members of the community. Let us take the case of these young executives—they must be very brilliant—who earn £2,500 a year. If my calculations are right, the purchasing power of their net income has fallen by £46 a year in the last two years. The Surtax concession that they will enjoy from 1963 onwards is worth £40.
  For a short time—rather less than three years—it seemed that at last there was some hope that the value of the £ had been stabilised. That hope has now faded, and I very much doubt whether any one or any event will ever revive it. The prudent man will surely now abandon the expectation of living to see a stable currency, and will seek to order his affairs accordingly.
  850
  Let us, therefore, consider for a moment the causes and consequences of this state of affairs. Many experts enlarge upon the precise reasons for rises in the cost of living. They use economic jargon that I do not pretend to understand—I am not sure that they themselves always understand it. My own explanation, as a non-expert observer of the industrial scene, is simply that Britain has invented and perfected a method whereby new inventions that are in-intended to lower production costs have the reverse effect of raising them.
  I want to take an imaginary example. Let us suppose that some new automatic machine tool is invented to make car bodies. Let us suppose that, at a cost of £1 million, some manufacturer installs it in his works. He does so because he believes that it will enable the work now done by, say, 2,000 men to be done by, say, 1,000 men, and thus reduce the cost of the final product. But what happens, as we all know, is very different.
  To begin with, there is a redundancy dispute; probably the threat of a strike. In the end, it is agreed that instead of 1,000 men being discharged only 500 men will be discharged, leaving at work on the process 1,500 men of whom 500 will be employed gazing at machines perfectly capable of working without any human scrutiny at all.
  The next stage is a wage claim, starting from shop stewards of those 1,500 men and based on the argument that their productivity has gone up—a wage claim that is almost invariably conceded in whole or part. Then, of course, the shareholders who put up the capital expect higher profits and higher dividends. At the end of the day, the firm is fortunate if it succeeds in holding the cost of the product, let alone reducing it.
  That, however, is only the beginning of the process. If that were all, it would be rather hard to justify even mentioning it in a debate on our economic state. The fact that there has been a rise in the wage rates and earnings in one group in this part of the engineering industry sets off a kind of chain reaction and leads to a corresponding rise in the wages and salaries in every branch—
  Mr. Ellis Smith: The engineers had no rise in two years.
  Vice-Admiral Hughes Hallett: If I may say so, the hon. Member has interrupted me with a point that is not relevant to the general principle that I am describing. I am also surprised to learn that the engineers have not had a rise for two years.
  That is not the end of the process. The whole Committee knows that when there is one rise in one sector of the industrial team today it is followed by demands for rises in sympathy inside industry and, indeed, by automatic rises in the Civil Service, the fighting Services, and so forth, whose wage conditions are reviewed automatically at regular intervals by relation to the industrial wage rate.
  In an authoritarian State, I have no doubt that all this would be avoided by the control of wages and salaries, but that is something we know would be quite unacceptable and unwanted by anyone in this country. The alternative that we have so far seen is that Minister's appeal for restraint. I suggest that such appeals are a sheer waste of time and breath. The trade union leaders, the Ted Hills of this world, the men who speak for professional associations on various wage negotiating committees are not open to appeals of that nature. One and all, very understandably, they are out to get as much as they possibly can for their own members, and let the devil take the rest—
  Mr. Charles Loughlin: I am sorry to interrupt the hon. and gallant Member, but he must not make attacks like this on trade union leaders. Does he not recognise that a tremendous contribution has been made by the trade union movement to the increased productivity we have enjoyed over the last few years? Instead of simply attacking the trade unions, would it not be better for him to outline to the Committee how he would apportion the increased productivity arising from the introduction of new methods of production? We may be getting somewhere then. Otherwise, he is simply repeating that which has been said time and time again, to no purpose.
  Vice-Admiral Hughes Hallett: I can answer the last part of the hon. Gentleman's question at once. I should apportion the increased benefits of productivity to a progressive lowering of prices.
  852
  But the more interesting part of the hon. Member's intervention was his description of my observation as an attack. If he likes so to interpret it he is welcome to do so, but I was careful to say that appeals for restraint to those who take part in wage negotiations are a waste of breath because the job of those people is to secure the best possible return for their own members—
  Mr. Loughlin: Then why refer to Ted Hill?
  Vice-Admiral Hughes Hallett: Because, as I understand it, he happens at the moment to be the Chairman of the Trades Union Congress.
  I have explained why I am so much afraid that this disastrous process of rise in prices will continue. It is a process whereby those members of our population—that is to say, the majority of the population—who are in a strong bargaining position, because they are at work, ceaselessly improve their own standards of living at the expense of those on fixed income; that is to say, mainly at the expense of the elderly and the retired. There is nothing whatever new in all this. I can only say to hon. Members opposite that I am thankful to say that the process has been somewhat slower under Tory rule than it was in the six years immediately after the war when they were in power.
  What concerns us today is not the past but the future. What is likely to happen when people as a whole realise that there is no hope of stable prices? This matter was carefully considered in the First Report of the Council on Prices, Productivity and Incomes, under the Chairmanship of Lord Cohen, a Report that the Opposition derided so much but which, none the less, I venture to think had some very wise things to say under this head.
  I want to quote one or two sentences from paragraphs 96 and 98 of that first Report. It stated:
  "Once, however, a steady upward trend of prices came to be generally accepted and anticipated, something would have to be done to mitigate the rentiers' losses—otherwise the Government would cease to be able to borrow any money on fixed interest terms. In the summer of 1957 there were, indeed, signs that such a development was far from being merely an academic possibility."

  853
  Later in paragraph 98, describing what might be done, the Committee says:
  "Wages, salaries and pensions could be tied to some index of the cost of living. Even interest and principal of Government and other loans, and the premiums and benefits of insurance contracts could, in theory, be adjusted in the same way. It seems, indeed, highly probable that if the rise in prices is not successfully checked, sliding scale adjustments of this kind will naturally develop under the pressure of the groups who suffer most from the present regime."
  The Report goes on in the same paragraph to point out the dangers and disadvantages of any such pressure. It says that the most important result would likely be
  "that the upward movement of prices would cease to be slow."
  The final sentence in this paragraph, which we ought to note carefully, is this:
  "The final result might well be a situation so disastrous that a remedy would have to be sought at all costs, including perhaps heavy unemployment and distress."
  If that tragedy occurs, let no one blame the Government. The responsibility will rest fairly and squarely on both sides of industry and also on the leaders of the professional associations.
  I submit that the Government have a plain duty to help these people in fixed income groups, and to do so even if certain risks are involved. Besides that, we on this side of the House fought the last election on a pledge that elderly people should share in the growing prosperity of the country. So far that pledge has been honoured in part.
  Mr. G. Thomas: Fractionally.
  Vice-Admiral Hughes Hallett: It has been honoured more than fractionally in respect of those whose main income takes the form of National Insurance income. It is right that attention should first be paid to those of our fellow countrymen who are the worst off.
  Mr. Loughlin: The Surtax payers!
  Vice-Admiral Hughes Hallett: The millions who have retired on savings or who depend chiefly on an occupational pension are worse off, both absolutely and relatively to the working population, than they were at the time of the last General Election. The question I therefore ask is: how can they be helped? In the case of public service pensioners, who add up to an important proportion of
  854
  this body of people to whom I am referring, and in the case of retired employees of the nationalised industries, the answer is simple. The solution, one which lies within the power of the Government to introduce, is to lay down the principle that uniform pension rates should be introduced—uniform, that is to say, for any rank or grade and independent of the date of retirement.
  I am well aware that that has always been the claim of the various pensioners' organisations. I myself supported the Government in resisting that claim when we debated the Pensions (Increase) Act, 1959, because at that time I sincerely believed and hoped that we had at last stabilised the value of the £. I could not take that line again because I am now sure that there is no other equitable solution.
  Exactly the same can be said of those who depend upon occupational pensions paid by industry. To be fair, many private concerns have an excellent record in implementing the policy. But although the Government have no direct powers in this field, I fancy that they have a powerful weapon in the new graduated insurance scheme. Surely it would only be necessary to raise the upper limit of the earnings which attract graduated contributions, and in due course graduated pensions, in order to compel firms which run private schemes to make comparable adjustments.
  There remains the question of those who save privately, whether they do so by means of personal investment or through some life assurance policy. In neither case can anything be done retrospectively. But I for one support the idea of a special type of Government bond to help those people. I do not propose to go into the details because there are many forms which such bonds can take, but one thing they share in common. They are personal to the individual who buys them. They bear the date on which they are bought. They bear some index—I would prefer the average earnings index rather than the cost-of-living index—and the rate of interest which they pay varies during the life of the individual purchaser as the index varies. Such bonds are redeemable at par—no less, no more—during the life of the purchaser and they are compulsorily redeemable at his death.

  855
  Moreover, some relief to the Exchequer could be obtained by the issue of such bonds because I have little doubt that a lower rate of interest, rather than the current rate of interest, would attract many investors. I have no doubt that many people would accept perhaps 4½ per cent. today in exchange for a hedge against further inflation. Other countries, as I understand it, have long since adopted this expedient when they have come to admit that their currency is unstable, and, with great regret, I think that that time has now arrived in our own country.
  I have no doubt that these measures can and will be denounced as inflationary, and of course they involve the risks that the Cohen Committee foresaw, but so also does complete inaction. What is the alternative? What are commonly called the old middle-classes of this country who have already lost so much are not going to be fooled for ever and ever; neither are they going to give up saving and making provision for their old age. What they can do, and what I believe they will do, is increasingly to revert to the older methods of saving. That is to say, they will save in kind rather than invest. They will try to lay in sufficient stocks of durable goods to last them their lifetime. They will invest increasingly in bricks and mortar, and indeed they are doing so now. Finally, I dare say some would even prefer to save in the form of cash rather than risk its investment and subsequent reinvestment, thus possibly inflating the currency still further.
  Such a prospect should be taken very seriously by the apostles of an expanding economy, because unless we are careful, one important source of money for capital investment will be progressively cut off. Should that happen, I say again that industry itself will only have itself to thank because in the eyes of millions of people in this country an expanding economy has come to be synonymous with the progressive lowering of their own standard of living.
  My plea, therefore, is on behalf of those who live on fixed incomes. I am thinking not only of those who live on very small fixed incomes whom my hon. Friend the Member for Tynemouth (Dame Irene Ward) champions so often,
  856
  but people as a whole who live on fixed incomes. By all means let us do our utmost to increase the nation's wealth and productivity—and I am sure that we shall hear a great many platitudes on that subject during the course of this three-and-a-half day debate—but do not let us attempt this expansion at the expense of those deserving people.
  6.10 p.m.
  Mr. Ellis Smith: I believe that the immediate result of this Budget will be that the House will be presented with the most controversial Finance Bill for many years, and I am fortified in that belief by the excellent preliminary observations made by my right hon. Friend the Leader of the Opposition. I want to place on record my objection to the continual use of Parliamentary time in the way that it is used in this Committee. In my view, which is based on past experience, one does not achieve the best results from having a Budget Statement and then the debate on that and the debate on economic affairs at the same time. In my view, to obtain the best results, from the point of view, particularly, of our country's interests as a whole, it would be better to have two separate debates in two separate weeks so that adequate attention could be given in a comprehensive way to both finance and economic affairs. Moreover, the time has long since arrived when economic problems should be dealt with by a separate Ministry, not by the Treasury as they are now.
  I listened to the Chancellor with great care. I am very pleased that, at last, a Chancellor of the Exchequer has made a statement about the proposed action to deal with public expenditure. The right hon. and learned Gentleman went on to say that we must look five years ahead, and he is having a study made. I accept the first step taken in that direction but, if that is correct action, then it is logical also to expect similar action in economic affairs. I hope that this will be stressed more and more in the future.
  As a result of past experience, I suspect that nothing much will come out of the Plowden Committee. The Chancellor said that exports are disappointing, with consequent serious effect on

  857
  our balance of payments, and the position is not at all satisfactory. Any student of economic affairs will accept that. The right hon. and learned Gentleman then said that our Budget objective would be to increase exports and we should be able to gain for ourselves a larger share of expanding world trade. We must, he said, take into account future trends. My own view is that one or two of the proposals contained in the Budget will discourage exports and will not assist in our balance of payments problems.
  I welcome the Chancellor's acknowledgment that the tax system needs simplification and his statement that the difficulties would be examined before the next Budget. His proposed surcharge tax on employees is, in my view, a retrograde step. It will tend to discourage exports. It will tend to increase the cost of production and, therefore, to lower our competitive position in relation to other countries. Several of his proposals of that kind should receive very searching examination by all those who have any regard for the position of our export trade.
  This week, as I say, opens Parliament's annual review of our economic and financial affairs. For generations, the people have toiled to build up our great industrial Britain. I believe that it could become a greater Britain provided that we adopted the same policy in economic affairs as the Chancellor is at last proposing for financial matters. Britain could become much greater in this modern world if we planned and organised to enable us to fulfil his objective.
  If our resources were organised and regulated in accordance with plans prepared for the future, this would be consistent with several of the proposals which the Chancellor made for dealing with finance. In my view—this applies to this side of the Committee in particular—it is time we accepted the military limitations imposed upon us by the post-war contracted world and the emergence of the two gigantic Powers, and it is time we admitted—this applies to the whole Committee—that we cannot stand the colossal military expenditure for which we have been responsible for many years. It has gone up this year to £1,656 million. In my view, we have
  858
  lost fifteen years. We have still time, though not very much, to make up for those fifteen years.
  If any hon. or right hon. Member on either side of the Committee disagrees with anything I say, then I invite him to go to the Library and ask for the book entitled, "The Long Revolution". I invite him to study particularly the chapters dealing with Britain in the 1960s. Hon. and right hon. Members opposite should read pages 294 and 295. I ask my hon. Friends, particularly those who met in mansions after the last General Election and proposed to retreat, to read page 298, read it again, and then read pages 211 to 235.
  One of the most important needs in this country today is to have complete confidence that democracy can deliver the goods. Our country today, especially on the economic and industrial side, could be made just as dynamic to meet our peace-time needs as we made it in war time, provided that a correct policy of the kind I am outlining were adopted.
  Some of us remember the days when the Conservatives were completely discredited in the eyes of the people of this country. It was my hon. Friends, and, even more, the trade union movement, who were responsible for bringing about that fundamental change in our nation which led to the Coalition "Win the War" Government. I believe that we are slowly but surely moving towards a similar situation in economic affairs, and that is why I make my plea today. I am reinforced in what I say by opinion represented in growing measure on the other side of the Committee, particularly in large industrial organisations, which recognises that the time has arrived when we should be applying a policy more in tune with the 1960s in dealing with our economic affairs.
  I am reinforced in what I say by some of the most competent economic opinion in the country. For example, I have here an extract from a fine publication which deserves a much bigger circulation, namely, the quarterly publication of the National Institute of Economic Review. The key to understanding our present economic trend is to be found in a few extracts from it. The first extract that I wish to quote is this:
  "It seems unlikely that Britain can hope to do much more than balance her current

  859
  account this year. Britain's exports are still heavily concentrated in sterling area markets. She probably has less chance of keeping her present share there than of increasing it elsewhere. Taxation in Britain is not exceptionally heavy compared with other European countries."
  On page 18 there is this sentence:
  "Britain's poor export performance during last year was the more surprising because, for the first time for a number of years, the change in the area pattern of world trade was not unfavourable to her."
  I put a number of searching Questions to the President of the Board of Trade, to the Financial Secretary to the Treasury and to other Ministers in order to obtain from them statistical evidence to illustrate the correctness of the line that I was, and am now, taking. It would take too long to quote extracts from those Answers, which I should have liked to do in order to reinforce my case, but they are on record. Therefore, I will not take up time by quoting them.
  One of the greatest indictments of our past economic policy appeared in the Daily Mail of 13th March. It drew attention to a devastating letter which had appeared in The Times and then went on to make a critical analysis of the economic policy being pursued by the Government. I believe that what it said was correct. When one considers the position in the county from which I come and the great change which has taken place over the years, the inevitable question which arises is, are we putting too many of our eggs in one basket? This question arises mainly from the fact that we have an uncontrolled economy. There is no regulation and no planning of the economy, as the Chancellor is now proposing. I do not say that this is the complete explanation of today's problems, but I say that it is part of it.
  The proportion of Lancashire's cotton products which is exported today is 10 per cent. compared with 85 per cent. in 1912. More recently, the United Kingdom's share of an increasing volume of world trade in cotton and man-made fibre piece goods dropped from 23 per cent. in 1937 to 6 per cent. in 1959. There is no attempt to regulate or to organise our economy. We leave it to private enterprise. I am the first to give credit where it is due, but I say that the responsibility for and the organisation of our economy should be a
  860
  national responsibility so that we may attain the best export results possible from the great work which is being done by the manufacturing industries of this country.
  I have here a reply which was given by the President of the Board of Trade to a Question which I asked on 17th May last year. It concerned the export of manufactured goods from the United Kingdom, Germany, France, the United States, and Japan, among others. Here again, I wish to save time and therefore will not quote what was said, as I should have liked to do. However, any student of economic affairs is bound to be concerned at the continuous dwindling in our share of world trade as shown by official statistics presented by the President of the Board of Trade on 17th May, 1960. I could give reply after reply by Ministers on similar lines.
  The Economic Survey is further evidence of the need for a national plan. There is more need for a national plan in Britain than in any other country. The central Government have less influence on our economic affairs than that of any other country. We are more dependent on exports than any other country. Because of the high degree of skill of our workpeople and the techniques which have been developed—we have led the world in the development of patents and technology over the years—there is more good will for the people of our country and more demand for the products of our industry than for those of any other country. We should be capitalising on this and doing justice to our past in order to safeguard our future. At present, we are not doing this. The vested interests in this country exert a more powerful influence on economic affairs than they do in any other country. Therefore, instead of retreating from ideas, as some people do, I believe that there is more need for them than ever.
  This is an extract from the Economic Survey. The Government
  "…recognise the desirability of having a higher and steadier rate of growth, provided that this can be done without risk to the balance of payments, in order to encourage the sense of security and confidence in the future which are so important for business development".
  I accept that wholeheartedly. That is as sound an economic proposition as it is possible to get. In order to do justice

  861
  to the ideas in the Economic Survey, hon. Members should be approaching our problems in a twentieth century way. In order to be worthy of the people in the export industry, which is doing so well, we should be harnessing our national resources to more modern ideas.
  Some of us stand on good ground in this matter, because we have consistently and insistently advocated what I have been saying for many years. At last we are receiving increasing support—in many leading articles in newspapers, from many financial editors, from the Federation of British Industries, and from institutes concerned with economic affairs. We welcome the visitors from France to inform certain people in London of the results of their economic planning.
  On 6th April, 1961, the Guardian stated:
  "'it is axiomatic that the growth of the economy must be interlocked with the growth of exports'."
  The President of the Board of Trade will accept that. The question is, do hon. Members insist that the Government should adopt a policy following the lines of that quotation? The Guardian went on:
  "Endeavours by Government and industry to foster the growth of the economy will succeed only if they are designed to improve the country's competitive power. Growth and competitiveness can never be separated."
  After a long connection with large-scale industry engaged in world competition, I readily accept that, but when will the Government take action to implement suggestions of that kind? Exhortation has now been tried for fifteen years, but it has met with only limited success. We now need to take the next logical step forward in harmony with the Chancellor's new ideas about finance, and we have to be prepared to look ahead for five years to plan, organise and regulate the economy to get the best results.
  If that reasoning is accepted, there must be a national plan, and that would mean a Ministry of Production and Economic Planning. That would call for a programme of action and it would set before the country an objective for which we would all work together, as we worked together during the war. Such a Ministry would draw up a list of priorities and would have to show
  862
  more concern for the morale of labour than has been the case for the past few years. Highly-skilled men cannot be treated as they have been treated all my lifetime without there being some reaction sooner or later.
  Just as the world is contracting in a military sense, so it is simultaneously expanding as a result of a general desire to assist backward areas and under-developed countries and to increase co-operation. That should provide Britain, a great industrial country, with the greatest economic opportunity it has ever had.
  Because of these strongly held views, I asked the Prime Minister to consult other Heads of Government about holding a world economic conference this year. I followed that by asking whether the Commonwealth Prime Ministers' Conference would consider the need for an economic plan for the Commonwealth. The Prime Minister said that while he sympathised with the objective, he was not convinced of the usefulness of the method proposed. I went on to deal with the need for the Commonwealth to have a Commonwealth approach to economic problems. The Prime Minister said that he was entirely in agreement with what was suggested and that it seemed an irreproachable proposition. So many times I have heard sympathy expressed with views of this kind, but the time has arrived for action and the sympathy should be translated into concrete realities so that the country can work in harmony with modern twentieth century needs.
  For many years after the war, we did not have intense competition from Germany and Japan, so we had a good start. What is the explanation why we have been left behind since then? I hope that during our debates of this week it will be explained to us why we have not maintained our relatively strong position. For fifteen years all engaged in the exporting industries have made great and increasing efforts to increase exports. Why are we not now in a stronger position than we were?
  My own answers are, first, that we do not have a national objective. We are not working and striving for a common objective upon which we could all unite as we did to win the war. Secondly, we do not have an economic plan—we do not have an economic "General Staff".

  863
  Thirdly, for ten years we have subordinated our trade and economic needs to our foreign policy—I admit that that is a strong statement. Fourthly, the powerful vested interests in this country are better organised than they are in other countries.
  It is time that we worked out a policy to assist the growth of exports. The Economic Survey says:
  "United Kingdom exports may be expected to benefit from any expansion of world trade, but only if they are competitive in price and delivery…"
  Why have we not benefited more than we have in the last fifteen years? Our products are competitive in price. Why are we not adopting a national plan of the kind I have advocated?
  The Economic Survey goes on to deal with personal expenditure. My only comment on that is that the Federation of British Industries has complained of Government policy in the last two or three years that it is economic suicide based upon political expediency. The Economic Survey goes on to deal with the need for more fixed investment and says:
  "Investment by manufacturing industry, most of which is in the private sector, which had fallen during 1958…recovered…"
  I am sure that we all welcome that, but the Survey goes on to say that there was a substantial rise in imports and at the same time a relative reduction in exports.
  My view, based on experience and reinforced by the Chancellor's statement this afternoon, is that the time has arrived for certain imports to be controlled. We had a great success in this respect during the war when one of the most efficient Government Departments was the British Commercial Trading Corporation. Its object was to buy raw materials in all parts of the world to prevent the Germans from getting them and also so that we could continue the war, buying raw materials at the minimum cost and guaranteeing that we would keep industries going. The time has arrived for that to be done in peace.
  British exporting industries are paying more for raw materials, which are processed into exports, than are the exporters of any other country. The reason lies in the powerful trade associations which began to get a grip on the impart of
  864
  raw materials in 1931 and which, year after year, have increased their efficiency, their control and their grip, with the result that the hands of exporting industries are tied behind their backs before they even touch an ounce of raw material. It is time for that position to be altered. This is especially true for the engineering industries whose exports form a greater percentage of our total exports than do those of any other industry.
  My views may not be accepted for the time being, but I have sufficient knowledge of the country's history, and especially that of the labour movement, to know that anyone who has the courage to pioneer will find that his views may not be accepted in his lifetime. However, as sure as I am standing here, if our country is to become greater and we are to maintain and improve our standard of living and hold our own with the rest of the world, the kind of policy I have enunciated will have to be accepted.
  6.40 p.m.
  Mr. A. E. Cooper: I want, first, in company with other hon. Members, to congratulate my right hon. and learned Friend on what I regard as one of the finest Budget speeches to which I have listened in eleven years. There are some parts of the Budget which will not be to the liking of everybody, but generally speaking it is a Budget which will be applauded in the country. One of the significant points is that the three most important matters which arise out of the Chancellor's speech either do not appear in the Schedule of Budget Resolutions or will not be in this year's Finance Bill. I do not know how that has been contrived, but it seems to me to be very clever.
  I sometimes wonder whether the right hon. Gentleman the Leader of the Opposition is a politician or an economist. His speech today was overladen with political prejudice. The Labour Party, it seems to me, have become infected with this cult of universality and have a communal cookhouse mind; they have become so conservative in their approach to our problems that they are unable to look at them with a liberal mind. They must face the fact that high taxation, and certainly excessively high taxation, is not only a direct encouragement to tax evasion, tax avoidance and the business

  865
  expense account but is positively inflationary.
  I had hoped that, notwithstanding the difficulties of the present balance of payments situation, it would be possible to avoid any increase in taxation this year. It must be remembered that the Government's proposals increase the level of taxation by about 1·3 per cent. This is after many years in which the tendency has been the other way.
  Why has this situation arisen? Are we trying to do too much? Are we investing too much overseas in the underdeveloped countries? Unfortunately, in the world struggle against Communism in which we are engaged, we cannot afford to do less than we are doing, and in some way this money must be found for such investment.
  The present economic situation, both here and in Europe generally, is a direct encouragement to close ties being worked out between the United Kingdom, the Commonwealth and the rest of the free world, including the United States. When such an arrangement has been worked out we may well have to forgo some of our sovereignty, but in this tremendous struggle in which we are all engaged that is a cost which we may have to bear.
  I suggest that the basic problem for this nation is our export potential. Does the Budget help in that? It will be argued that it provides no direct incentive to industry as such but provides only incentives to the individual, and that is a valid criticism. It may be argued that the total result of the Budget is to increase industry's costs and thereby to make it more difficult for us to compete in markets overseas. Having regard to the fact that the increase in taxation is about £80 million a year and to the fact that the present national product is about £23,000 million a year, I do not think that this year it is likely to have very much of a deterrent effect upon our exporting industries.
  I submit that production is probably not our basic problem. If it were at present desirable, I have no doubt that production, taking industry as a whole, could be increased substantially within the limits of the existing plant and labour. Throughout the country there is still some short-time working, there is still under-employment of resources and
  866
  there are still far too many restrictive practices both in industry and, if I may say so without causing offence to right hon. and hon. Members opposite, within the trade unions.
  I have no doubt that tomorrow the right hon. Member for Huyton (Mr. H. Wilson) will give his league table its annual airing, garnishing it with a few merry quips at which we shall all laugh, and no doubt in consequence he will get a very good Press on Wednesday morning for a very witty speech. Generally, what he says is not very constructive when we consider our economic problems.
  Mr, G. Thomas: Wait until my right hon. Friend says it.
  Mr. Cooper: But the right hon. Gentleman's annual Budget speech is as certain, as regular and as obvious as night following day. We have only to look at last year's HANSARD to discover what he will say tomorrow. All he will do is to bring the figures a little more up to date. May I deal with the criticisms which the right hon. Gentleman will make tomorrow? If we are to produce more—and I do not believe that to be our basic problem—where do we sell it? This is something which never appears to occur to hon. and right hon. Gentlemen opposite. The easiest thing in the world is to produce. The most difficult is to sell. We can sell it quite easily in this country; that is not the problem. But if we do that and take all our production into domestic consumption in this country, our import bill will be increased substantially.
  Mr. Thomas: We cannot sell it if we cannot produce it.
  Mr. Cooper: I agree that there is a case for arguing on the line of the chicken and the egg, but I prefer it my way. We are probably one of the greatest international trading countries, and, as the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) rightly said, we depend for our very existence on international trade, and it therefore follows that we are affected directly and immediately by the vagaries of international trade. In the last year our problems have been accentuated by a shallow recession in the United States which led to a substantial decrease in the sales of motor cars. We also found that

  867
  trade in Europe was not quite as buoyant as in previous years, and that had its effect. Another important fact which my right hon. Friend did not mention but which has had some publicity is that in the primary producing countries, the prices of raw materials have declined during the past year, with the result that the sum of money available for imports into those countries has been reduced. This is starting to build up again. At the same time, the situation in the United States and in Europe is improving. The result is already showing itself in a certain buoyancy in our own economy. I do not think that my right hon. and learned Friend was at all incautious or pessimistic about the situation which may face this country later this year.
  I was particularly struck a week or two ago by the unemployment figure, which I believe was one of the lowest recorded in this country at the March count. It had no regard to the fact that we are about to enter the summer season, in which a substantial body of men and women who are not normally employed or are unemployed during the winter months find themselves at work. I think it not improbable that towards the middle or end of August we shall find ourselves with an unemployment figure ridiculously low to the point of danger.
  That may sound a heresy to some hon. and right hon. Gentlemen opposite, but what I mean is quite simply that we shall at that time have reached the position when virtually there will be no single soul left to be employed in this country. [Interruption.] If I may anticipate what the hon. Member for Glasgow, Govan (Mr. Rankin) will say, it is the question whether that applies to Scotland.
  Mr. John Rankin: Yes.
  Mr. Cooper: It may well be that there will be pockets in certain areas where what I am suggesting may not apply. He would be an extraordinarily brave, or perhaps a very foolish, man who would say that his remarks were applicable to the whole of the United Kingdom.
  Mr. Rankin: Does not the hon. Gentleman realise that in Scotland all the pockets have holes in them?
  Mr. Cooper: I do not know what that is intended to mean but, usually, when one has a hole in one's pocket, there is nothing there, and the situation in Scotland is not all that bad. It shows over the last few months a tendency to get very much better, and I suspect that as a result of the operation of the new export credit guarantees financial measures, together with the other provisions outlined by my right hon. and learned Friend the Chancellor today, some of the heavy industry in Scotland may well benefit over the next few months and years. Let us not always look on the black side.
  Mr. Rankin: I agree.
  Mr. Cooper: Last year, speaking about this time, I suggested to my right hon. Friend the Prime Minister that he should have consultations with industry on the management side to see whether a new export drive could be created, and whether we could do something to infuse new life into what has become—let us face it—a rather stagnant operation. I also invited the Leader of the Opposition and his hon. Friends, who, for all their little local difficulties, have very great influence with the trade unions, to see whether they themselves would take part in this exercise and would use their influence within the trade unions so that, if it were possible, we could get some of these restrictive practices reduced.
  As the hon. Member for Stoke-on-Trent, South has so rightly said in other words, if the nation prospers we all prosper, but if it fails we all fail, and nobody in this country will be insulated from such a debacle as that. There fore, I hope that hon. Gentlemen opposite will use the influence they have in the trade unions to see whether it is possible to reduce these restrictive practices in order to help management in this great struggle which affects the whole future so vitally.
  Mr. Ron Ledger: If the hon. Gentleman really wants us to help, I am sure that all my hon. and right hon. Friends will be willing to do so. Would he go further and give us one example of the way in which he wants to get rid of restrictive practices for which trade unions are responsible? I am asking him to give only one example,

  869
  so as not to put too large a burden on the hon. Gentleman.
  Mr. Cooper: I will not be drawn into a long discussion on restrictive practices, but we have had, for example, a considerable number of strikes in the shipbuilding industry which have been inter-union strikes.
  Mr. G. A. Pargiter: Where?
  Mr. Cooper: The Cammell Laird strike is notorious, and the troubles there are still not resolved. I say to the hon. Gentleman opposite that a lot of the difficulties in the shipbuilding industry—and this is the primary reason why we have lost orders—have been due to the inability of the industry to deliver. I believe that that has been due wholly to labour difficulties. That is just one industry in which these things can be put right.
  On the management side, we still have very many restrictive practices which have to be dealt with. I say to my right hon. Friend the President of the Board of Trade, whom I am glad to see here, that although the Restrictive Trade Practices Act is now working, in the view of many of us it is working far too slowly. There are so many industries which now have practices registered on the Registrar's books that it will be months, if not years, before they are dealt with. One difficulty is that it is still possible in present circumstances for new restrictive practices in management to be entered into.
  I must declare an interest here. One is the British Hotels and Restaurants Association, which has introduced a new credit card scheme, which has been accepted by the Registrar as being registrable. It has the effect of being a serious agreement in that it opposes the use of credit cards in this country by that organisation by American visitors coming here. This is the sort of thing which ought not be be permitted while there is a Restrictive Trade Practices Act in force.
  The task of our industry today is to produce goods in great quantity and great quality to satisfy an increasing population, which, nevertheless, is a decreasing producing population, with more children staying at school to a greater age, and an ageing population. The producing section of the community
  870
  is being compressed and is having to produce very much more. Coupled with this is the fact that we have lifted our standard of living in this country so high, and we intend to go further, that it demands a very large production to deal with our export requirements. The times in which we live are times of great opportunity, and also of great challenge. I believe that the incentives which my right hon. and learned Friend has introduced in this Budget will go a long way towards helping us to rebuild and revitalise our export trade, and I congratulate him upon them.
  6.58 p.m.
  Mr. John Rankin: I want to comment on one point upon which the hon. Member for Ilford, South (Mr. Cooper) touched. He referred to difficulties in industry and, of course, all of us on both sides of the Committee regret these difficulties.
  I think he was not quite fair, however, in stating the position as it is in the yards today, because if he were more familiar with what is happening, he would realise that a good many of these strikes arise from the fact that employers do not consult sufficiently with their employees. Today, we cannot treat men in industry as if they were chattels. They are refusing to be treated in that way and, consequently, when changes, of which many of them as individuals may not disapprove, take place, which may threaten their future employment, they naturally want to know what safeguards they are to have. When these things are imposed upon them, then the employer is looking for trouble, and he generally gets it.
  Looking at the Budget generally, I would say that it will be very popular with the Tories—
  It being Seven o'clock, The CHAIRMAN left the Chair, further Proceeding standing postponed until after the consideration of Private Business set down by direction of The CHAIRMAN OF WAYS AND MEANS under Standing Order No. 7 (Time for taking Private Business).
  Mr. SPEAKER resumed the Chair.

  TRUNK PIPELINES BILL
  Second Reading deferred till Monday next.

  WAYS AND MEANS
  Again considered in Committee.
  [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

  BUDGET STATEMENT

    AMENDMENT OF THE LAW
    Question again proposed,
    That it is expedient to amend the law with respect to the national debt and the public revenue and to make further provision in connection with finance, so, however, that this Resolution shall not extend to making amendments of the enactments relating to purchase tax so as to give relief from tax, other than amendments making the same provision for chargeable goods of whatever description or for all goods to which any of the several rates of tax at present applies.
    Mr. Rankin: I was just saying that the Budget will be popular with the Tories. The evidence for that was to be found in the welcome which hon. Members opposite gave the Chancellor today when he sat down. It was very different from the ones which he often received when he finished some of his performances on foreign affairs when he held the very important office of Foreign Secretary.
    The Budget fits generally into the growing attitude within the Tory Party that as much as possible of State expenditure covering social welfare and other national obligations should be transferred from the State and put on the shoulders of the individual. In my view, this is merely a beginning, and the process which has started today will be extended in further Tory Budgets.
    That view is reinforced by the fact that in the Budget the Government have taken two very wide powers. We are to some extent to be governed by Statutory Instrument. In my view, that hits at the idea of democratic government, because we cannot discuss a Statutory Instrument in the same way as we can discuss a Government Measure brought in in the usual fashion.
    The second power deals with the surcharge on employers, and that is one which may hit Scotland very badly indeed. If the provision for a tax of 4s. placed on an employer to cover those employees who might, in the view of the Government, be released for work elsewhere, is applied rigorously in Scotland,
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    it will merely result in increasing the numbers of those who are already unemployed. Because of that, I am sure that the new power will be regarded with great dissatisfaction among trade unionists and other members of the Scottish community.
    This attempt to transfer obligations from the Government to other sources is recognised in the White Paper to which the Chancellor referred, which covers the financial and economic obligations of the nationalised industries. I should like to ask the Financial Secretary whether or not the Ministry of Aviation is among the nationalised industries, because our airports are nationalised and yet there is no mention of them in the White Paper, and no reference to them in the table of financial results shown at the back of the White Paper. The charges at the nationalised airports—the landing fees and so on—are a matter which engaged the attention of the Minister of Aviation a few weeks ago.
    I hope that the Government will utilise this White Paper with the very greatest care. B.O.A.C. and B.E.A., in which I feel a special interest, and in which many hon. Members are also specially interested, are in a position somewhat different from any of the other nationalised bodies. They deal in a foreign market. All our other nationalised organisations are concerned largely with buying and selling on the home market. The two Corporations, one of them international, and the other European and extending somewhat beyond Europe to the Middle East, are, therefore, in a different position. And when we come to judge them we have to think not merely in terms of finance but in terms of the job which they have done.
    Those of us who are familiar with the work of B.E.A.—all of us, I hope—will pay tribute to the immense expansion which it has carried out during its fifteen years' existence. On my route, only fifteen years ago we were flying in the little D. H. Rapide from Renfrew to London, and the aircraft was able to carry only five, and that was then a crowd. On 1st April this year the Vanguard started, carrying 150–160 passengers. Whereas fifteen years ago it took us 3¼ hours to do the journey from Renfrew to London, now we are doing

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    it by Vanguard in an hour and five or ten minutes.
    All that new technique had to be introduced quickly because of the competition, about which hon. Gentlemen have talked so much, from places outside the United Kingdom, with the result that, having to spend so much on equipment, and having to spend it so rapidly, the Corporation had little chance to collect the resources on which the Chancellor is now basing what I do not deny is a legitimate demand.
    It had to equip itself quickly and expensively, and the latest addition to the fleet is a machine that costs £1 million. These things have to be kept in view. I hope that the policy enshrined in the White Paper will not be applied to harshly.
    The British Overseas Airways Corporation is in an even worse position. Up till recently, it was competing against American competitors who were being heavily subsidised. Pan American World Airways was granted about 100 million dollars each year by the American Government to gather up, off Cape Canaveral, the failures projected into the air in order to try to keep pace with Russia. That was a subsidy, and that is what B.O.A.C. had to compete against.
    B.O.A.C. is in an international market which is heavily competitive, but the balance of revenue account and the general reserves show that it is fighting back despite the difficulties of the past fifteen years, with the intensive competition not only from outside but the competition now being fostered by the Government in its Civil Aviation Licensing Act, which could also adversely affect the nationalised Corporations.
    If we are to subsidise the private operator, as we are doing indirectly, then we shall make it still more difficult for B.E.A. and perhaps B.O.A.C. to produce better figures. I do not think that anyone will dispute that the private operator is being helped, because the shipping companies are behind many private operators and the shipping companies are being subsidised by the Government. Today they were given a guarantee by the Chancellor that their subsidy would not be touched for at least another year. Whether we could regard that as a Budget leak I do not
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    know, but it is rather an unusual type of guarantee.
    The Chancellor spent some time in examining the scope of the economy during the past year. The Committee will have noticed that when the Economic Survey for 1961 was produced, the Economist described it as a
    "…curiously rambling and imprecise affair."
    The Spectator went a little further. It asked
    "have you ever seen such a frightening mess?"
    The New Statesman said
    "The Survey gives no hint that Mr. Selwyn Lloyd either plans or expects to do much to restore health to the British economy."
    If he cannot restore a measure of health to the economy by the enormous powers he is to take, then indeed the Government will be in much worse shape than they appear to be at the moment. The hon. Member for Ilford, South emphasised our complete dependence on one great country, the United States. It is a terrible thing that we should hear that from a Member opposite.
    Mr. Cooper: The hon. Member must not misrepresent me. I talked about the United States, Europe and the world as being trading associates. I said that if trade fell away in any one of them, it affected us.
    Mr. Rankin: The hon. Member should be glad that I misrepresented him. I apologise to him, but it gave him another chance of coming back into the debate. The Chancellor also had his say in the Economic Survey. Paragraph 28 on page 10 of the Survey says
    "…for a country in the international position of the United Kingdom, it is axiomatic that the growth of the economy must be interlocked with the growth of exports—otherwise the balance of payments situation is bound to frustrate growth and force a reversal of direction. Endeavours by Government and industry to foster the growth of the economy will succeed only if they are also designed to improve the country's competitive power. Growth and competitiveness can never be separated."
    A lot of speeches are contained in that paragraph, but I propose, for the satisfaction of both sides of the Committee, to make only one of them tonight. How has the growth of industry been carried out during the year since we heard the former Chancellor

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    present his last Budget? Whenever I look back at previous Budgets, I often wonder how much Chancellors really know about what will happen and how much they are chancing their arms. The figures of industrial growth are given in paragraph 29 on page 20 of the Survey.
    In the first quarter of 1960 the index figure was 120—taking 1954 as 100. In the second quarter it was 121; in the third quarter it was also 121; in the fourth quarter it was again 120. That was an average over the year of 120. Thus, industrially we finished 1960 exactly where we started it. In the last six years there has been an increase in production of 20 per cent. which, if my arithmetic is correct, is an average of 3⅓ per cent. per year. In Germany over the same period the increase was 62 per cent., in France 52 per cent. and in Japan 108 per cent. We neither had growth comparable with other countries, nor, lacking that, did we have the competitiveness which the Chancellor told us today was essential for the development of our industrial position.
    Mr. William Clark Mr. William Clark (Nottingham, South) rose—
    Mr. Rankin: I do not mind giving way provided I am not charged afterwards with making too long a speech.
    Mr. Clark: I am following the hon. Member's argument with great interest. Will he say, at the same time, whether those countries have full employment?
    Mr. Rankin: I cannot answer that question by producing statistics in the same way as I can produce statistics with which the Front Bench has kindly provided me. As far as I know, however, the industrial position in those countries—and I have been in two of them—concerning employment is, if not better than ours—
    Hon. Members: It is worse.
    Mr. G. Thomas: West Germany has full employment.
    Mr. Rankin: There is plenty of time. I am in no hurry if those on the benches opposite are in no hurry. My information is that the employment position in Germany is better than it is here. If that is wrong, I am sure that statistics
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    disproving what I say will be produced during the debate. That is the position as I understand it. Therefore, both on the growth of industrial production and on the issue of competitiveness, the Chancellor's case as presented in the White Paper has not materialised over the past year.
    Let me turn to another aspect which is shown on page 13 of the White Paper, where, to some extent, we are consoled for these failures because we are told that during the year wages and salaries have increased by £930 million. The White Paper, however, does not go far enough. It does not tell us how many persons were affected. We are shown by other Government returns that this number is nearly 25 million.
    When one brings that increase in salaries and wages down to figures per head per year, the average increase in wages, of which we have heard so much, works out at £37. When we recollect that within that wage and salary earning group are people earning salaries of £5,000, clearly there must be a considerable number of people in our economy at working-class level who have not had anything near the 15s. per week rise which the Government claim to be widespread.
    Another problem contingent upon the one with which I have been dealing concerns the other type of employee. This is dealt with on page 46 of the White Paper. These are the people who draw their incomes from self-employment and from rents and dividends. We find that during 1960, their gross increase was £359 million. When we realise that there are a million and a half of them and that on this basis the average increment for this section of the community works out at £240 a year, we see that not only do the Government in their survey show that they have failed to increase exports and failed in production and in competitiveness; they have also shown a lack of fairness in distributing with a reasonable measure of equity the resources which have been produced.
    Today, the Chancellor referred to investment. He used a careful phrase. He said that the rise in new house building, taking both public and private building together, had been quite good. If, however, we take public and private

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    house building separately, we are shown by table 9 in the White Paper that the output of public authority houses has fallen by £4 million. It is those authorities who, as in my constituency, are trying to house people who have been waiting twenty years for new houses. According to the White Paper, however, 1960 saw a fall of £4 million in the output of public authority houses, whereas the private speculator has increased his output by £56 million. It is not strange to me that the Chancellor lumped the two types of building together and said that the year had been successful. It has been a successful year for the private developer in house building.
    If we consider other new work, the public authorities have been compelled to reduce their output by £3 million, but the private developers, on the industrial side and in what is called the miscellaneous side, whatever that may be, have increased theirs by £79 million. Thus, not only is there a disbalance in the distribution of products; there is also a disbalance in regard to the purpose for which output of house building is being used. Both of these things are wrong. The Government axe carrying out a policy which rests upon the private individual whose aim is to make profit and to create wealth for himself and not for the community. The Budget will encourage that system to grow and it will grow at the expense of the rest of the people, most of them in the working class.
    Because of those reasons, because the Government are not governing on behalf of the country as a whole, this is a Budget which does not have my approval and a Budget which, I hope, we will oppose by vote when we come to decide about it on Thursday.
    7.29 p.m.
    Mr. E. H. C. Leather: I find it difficult to follow the hon. Member for Glasgow, Govan (Mr. Rankin). I listened spellbound by the incisiveness and clarity of his argument, but I found it a little difficult to get the point of it. As for the league table statistics which the hon. Member gave us, which, obviously, he has taken from the speech that his right hon. Friend the Member for Huyton (Mr. H. Wilson) is to give us tomorrow—
    Mr. Rankin: On a point of order, Sir William. Is it in order for an hon. Member to accuse me of theft? In fact, there is more to it than that. The hon. Gentleman is accusing me of the theft of something which has not yet materialised.
    The Deputy-Chairman (Major Sir William Anstruther-Gray): I did not take the hon. Member's remarks as going as far as that.
    Mr. Leather: I thank you for your protection, Sir William. I hope that I will not need to ask for it again.
    Mr. Rankin: It is I who need protection.
    Mr. Leather: The answer to the hon. Gentleman's point has been given on many occasions. He has used the production statistics of Germany, France and Japan. If he used similar statistics for countries like Canada, Australia and the United States of America, he would prove precisely the opposite. We know the situation. One starts from a different base. One starts with a devastated industry which a kind victor completely reforms and presents to one with written-off capital charges. I wish that somebody would set me up in a business like that. I would show him something then. The whole basis of comparison is wrong.
    I mean no personal disrespect to the hon. Gentleman but I could not help feeling that he, like the right hon. Gentleman the Leader of the Opposition, trotted out the old story about stagnation, and all those who use these figures must have carefully studied that great classic work in economics "How to Tie with Statistics".
    Mr. Rankin: I was using the Economic Survey for 1961 which was produced by the Government. If there are mistakes in my argument the mistakes are in the Survey.
    Mr. Leather: The hon. Gentleman misunderstands me. What I am talking about is not the arithmetic of the figures, but the conclusions drawn from them. That is where he is wrong. The Leader of the Opposition said, in reply to my right hon. Friend, that British industry was stagnating. He also said that we had more employment this year and that we would get lower production and,

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    therefore, the stagnation was worse. This is not true, for one simple reason. There are more people employed in British industry, but not in British manufacture. I put this point seriously to the hon. Gentleman, and, indeed, to my hon. Friend the Financial Secretary, because Ministers are sometimes inclined to give false impressions.
    I believe that the primary reason why these production statistics, which, after all, were designed ten to fifteen years ago, have, over the last two or three years in particular, shown up such a depressing picture, which is belied by the evidence of one's eyes every day of the week, is because they no longer apply to our situation.
    We have passed into what the Economist calls a service economy. We have passed the point, as the United States, Canada and Australia have done, where less than 50 per cent. of our population is employed manufacturing things. We have had a vast increase in the service industries which only the most highly developed and prosperous societies can afford. It is only when one becomes prosperous on a wide, national scale, as we have in this country, and no doubt even in Scotland, that one can afford many of the industries which we have nowadays.
    Consider the position in any town or city. The increase in the number of restaurants in the last two or three years has been fantastic. There are now more people providing services, and they are not shown in the production statistics. Experience in Western Europe shows that one reaches a point—which the United States of America reached about ten years ago and we reached two or three years ago—where the whole nature of the total value of the national product changes, and more than 50 per cent. of the people are employed profitably and make contributions in taxes to the welfare of the State, but not in manufacturing. The vast tourist industry is another good example, but none of these activities is shown in the production statistics. I therefore believe that the statistics give a false impression of the true state of affairs.
    My answer to anyone who talks about stagnation over the last few years is that one only has to look at one's constituents, at the new cars on the streets, at
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    the new shops being built and at the quality of the goods in people's houses, to know that that whatever else they were doing they were not stagnating. They were becoming more prosperous.
    Mr. Rankin: Does the hon. Gentleman not agree that those are the things which are causing the disbalance in our balance of payments position which causes the Chancellor of the Exchequer so much trouble?
    Mr. Leather: That is true to a certain extent. We would have no problem of balance of payments, and Britain would have the most colossal gold reserves anybody ever dreamt of if the living standards of our people had been kept depressed, but the party opposite cannot have it both ways. The hon. Gentleman and his hon. Friends have been making much of the dreary, dismal, state of the poor depressed people under this "wicked, exploiting" Tory Government. The hon. Gentleman now acknowledges my point. Our exports rise every year. Last year they rose by 6 per cent., which was a great achievement because of the setback in the United States of America. Our demands have risen even higher, and this is due to the immense increase in the living standards of the broad mass of our people.
    I turn now to one or two detailed points in the Budget. I welcome, and I am sure that we are unanimous in this, the reliefs which my right hon. and learned Friend has given to the victims of Nazi persecution. While, normally, I thoroughly disapprove of retrospective legislation, in this case I welcome most warmly and sincerely not only the gesture but the fact that it has been made retrospective. One feels that there is here a touch of warmth and humanity such as we have not seen from the Treasury since my right hon. Friend the Leader of the House left it a good many years ago. I can recall some friendly touches when my right hon. Friend was at the Treasury some years ago. We had all-night sittings, but he managed to do a number of kindly things and it is only fair to remember them.
    I am grateful, also, for the relief given to some of the clergy. I am sorry that the case of the Easter offering has not been put right, but I hope that hon. Members know how to deal adequately with that matter between themselves and their local vicar, as I have done for many years.

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    I am intrigued, and I confess that I did not entirely understand what my right hon. and learned Friend said about the overseas tax reliefs. I hope I understood him correctly, that in future tax reliefs given in overseas countries would be allowed in full by the British Treasury. This is something about which those concerned with investment and trade in Commonwealth countries have been annoyed for many years. My hon. Friend the Financial Secretary will remember that during our discussions on the 1956 Finance Bill I had the good fortune to move the Amendment dealing with overseas trade corporations, which first got some concessions out of the Treasury.
    To take the most striking case, the tax holidays allowed in the West Indies are affected by this. I want to refer to this, because the lessons to be learnt from this have so far gone over the heads of hon. Gentlemen opposite. The Governments of all the West Indian islands have the terrific problem of raising the living standards of their people and they have all been wise enough to realise that the best, the quickest, and the most economic way of doing that is to give every incentive that they possibly can to capital and management, which will then do the job for them.
    That is exactly what is happening. In most of the West Indian islands and other parts of the Commonwealth capital and management can get a deal that no Tory Government in this country would dare suggest. The party opposite would have apoplexy if it were suggested. They can get a ten years' tax free holiday. They can have the whole of their profits without paying tax for ten years. Why? Because the Governments know that that is the quickest and best way to attract capital, develop industry, and raise the living standards of their people.
    It has long been a complaint of ours that Whereas foreign companies going into the West Indies and other countries can get the whole benefit of this tax free allowance from money earned, in Jamaica, for example, and put it into their own pockets, and that this is an incentive, up to now the British Treasury has stuck by rigid principles and confiscated the lot in the interests of equality, so it says, but of a kind which has always eluded me.
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    I hope that I am right that the Clause in the Finance Bill which the Chancellor proposes will now put that right and that whatever is earned in an overseas country, and the overseas country does not tax it, the Treasury here will allow the company to get the benefit and not take it away from it and completely nullify the effect of what was intended.
    Mr. Sydney Silverman: The Chancellor did not say that?
    Mr. Leather: If he did not go all that way, I hope that my hon. Friend will tell us clearly how far he did go.
    The Financial Secretary to the Treasury (Sir Edward Boyle): We shall have a full opportunity to discuss these matters when we come to the Finance Bill, but I think that I ought, in fairness to my hon. Friend, to say that the Chancellor's proposal was more limited than the suggestion often made in this House, which my hon. Friend has just been putting forward.
    Mr. Leather: lam sorry to hear that. Perhaps my hon. Friend will mobilise his arguments for the Amendment which will be put down on the Finance Bill when it comes before us. Until that principle is admitted, particularly in dealing with associated companies instead of branches, many of us will not be content or will not admit that the Government have fulfilled the pledges given by the Prime Minister when he first agreed to overseas trade corporations legislation.
    Before I leave the argument of the hon. Member for Govan and the question of statistics and the size of the revenue I should like to say that, on balance, I welcome the Budget. I think that it is a good and courageous Budget and I am quite prepared to support it. It contains tax increases of about £80 million. I am not convinced that these tax increases are really necessary. We are now at a stage where we have a gross national product of about £26,000 million. We have a Budget of about £6,000 million and we are apparently budgeting for a surplus of over £500 million on current account.
    We are seriously told by experts from the Treasury, and by those who write for the Economist and the Guardian and other learned papers, which I do not

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    pretend to understand, that they can calculate to a nicety that £20 million this way or £30 million that way will be inflationary or deflationary. At the end of the year they have to admit that they cannot even get their sums right to within £300 million. If they cannot do that how do they know that £20 million, £50 million or even £80 million will have the slightest effect on the economy one way or the other? With the greatest respect to my hon. Friend, I suspect that this is expert humbug and I shall want a great deal of convincing.
    If we are to have tax increases at all these are comparatively pointless. I am not convinced that they were even necessary and I do not think that there is anything in the arithmetic to convince anyone Chat one can positively say that £80 million will be deflationary. I do not believe that even my hon. Friend knows, and I give him credit for a good deal of skill on this subject.
    Finally, I turn to what is, I think, the most controversial issue in the Budget, the main question of the changes in Surtax. My right hon. and learned Friend said early in his speech that the No. 1 priority which he had to face was the expansion of our exports. He said, later, that we needed to be kept in a keen competitive position. The Leader of the Opposition agreed with it. What can we do about this? If both sides of the Committee accept that better exports are what this country needs, and what we all want, how do we go about it?
    It was said by the hon. Member for Govan that we had long got past the stage when exhortations would do any good. We have had fifteen years of that and it has worn itself out. The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) spoke at length on what he chosed to call his national plan. I think that when he has succeeded in selling his national plan to the great vested interests, primarily the trade union movement, we can then perhaps discuss it seriously here. I do not think that wage control and those things inherent in what he said are taken seriously as ideas for increasing the country's exports.
    Whatever we do we cannot force foreigners to buy our goods. Therefore, I believe that the method of exhortation
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    is useless. The method of national planning, or of any kind of nationalisation or control, is quite irrelevant to this problem and cannot possibly contribute to the solution. What else can we do? We have the services of the Board of Trade and, in my view, most of them are extremely good. There is that excellent organisation, the Exports Credit Guarantees Department—to which some of us paid tribute again only last week—with its new measures. I have some personal experience of this and I believe that there is no serious criticism of them which can be made at this time. As I would expect, and I believe that most people would expect, the financial institutions in the City of London rose to match the new facilities of the Export Credit Guarantees Department and announced their new measures within 24 hours. But those things have been anticipated and steps taken.
    I am not one of those who believe that the Government can do more by practical help, by exhortations, credit or financial facilities. If anything more of substance can be done I have yet to hear of it, and I probably know as much about this subject as anyone else. I believe that the only practical step that the Government can take is the one which they have taken. The only big incentive is to allow people to keep the fruits of their own labour. There surely can be no argument about this. We have not heard today about the retired bachelor, who had £100,000 a year unearned income, who played such a famous part in our debates a few years ago—although, at the end of the Finance Bill, no one succeeded in finding out who he was.
    We are talking in this debate only about earned income. We are talking about the fruits of one's own efforts. Surely the basic position is clear. Hon. Members opposite are very keen on talking about social justice. If a man does a good and honest job; if he carries immense responsibility and works hard and displays a great gift of leadership; if he goes out and brings back hundreds of millions of pounds worth of business to keep the workers in his factory busy and to help the country, is it socially just to confiscate 50 per cent., 60 per cent., 70 per cent. or 80 per cent. of every penny he earns?
    Mr. S. Silverman: I am following the hon. Member's argument closely. He is defending the Surtax proposals as providing a just incentive to the export trade. I cannot understand why the Chancellor should limit his Surtax proposals to the export trade. If the proposal is to cover the whole range, why is it an inducement or reward to a man for devoting himself to the export trade rather than to the easier job of selling in the domestic market?
    Mr. Leather: Perhaps the hon. Member will put that very interesting debating question—to which he knows the answer quite well—to his hon. Friend the Member for Sowerby (Mr. Houghton), who is sitting on the Opposition Front Bench, and who will explain to him the great principles of equity in our tax system.
    Mr. Silverman: I am not talking about equity, I am talking about money.
    Mr. Douglas Houghton: I am grateful to the hon. Member for Somerset, North (Mr. Leather) for his reference to me, but I have nothing to explain to my hon. Friend. I am waiting for the hon. Member for Somerset, North to explain how he expects this relief which is coming to 350,000 Surtax payers with earned income to reflect itself in a boost to our export trade.
    Mr. Leather: I am doing my best to make the point clear. I am sorry if the hon. Gentleman does not get it.
    I prefaced my argument by saying that I believe the only course of action left open to the Government is in the sphere of personal taxation and incentive. The figures are thoroughly well known to everyone and have been for many years. In this country if a man is in a position of responsibility, earning £3,000, £4,000 or £5,000—for such positions I do not think that anybody will argue that that kind of remuneration is unfair; such work will not be done for less—and if he works harder and puts in a greater effort, he is lucky if he can keep 5s. or 6s. in the £ of the money he receives for his additional effort.
    Were he a German, an American, an Australian, an Italian, or a Frenchman he would get 8s., 9s., 10s. and perhaps as much as 12s. in the £ for his additional effort. In this country the money is confiscated.
    Mr. Houghton Mr. Houghton indicated dissent.
    Mr. Leather: I see the hon. Member shaking his head, but I have here the figures relating to earnings above £10,000 a year. The ordinary Englishman is allowed to keep 4s. 9d. in the £ of the next £1,000. The comparable figure for an American is 10s. and for a German 10s. 6d., which is more than double.
    Mr. Ledger Mr. Ledger rose—
    Mr. Leather: No, I cannot give way again. I have been interrupted a great deal and I do not wish to detain the Committee.
    I have talked about whether it is socially just to confiscate this amount. I do not believe that it is. But, to put it on a lower plane, from the point of view of sheer self-interest is it wise to do so? Do we really achieve anything of value by taking away so much of people's earnings that we deliberately put on a brake and make it difficult to find people to fill positions of responsibility?
    This concerns far more than the 350,000 people to whom reference has been made. It concerns all those others who ought to be sweating their guts out to achieve those kinds of positions. But many will slow down and say, "It is not worth it"—and one cannot blame them for saying that. They are not to be allowed to enjoy the reward for their labours. It seems to me that anything which allows them to keep a bit—not a substantial bit, but just a bit—more of the reward for their own labour is not only socially just by all the definitions used by hon. Members opposite, but is highly desirable in the interests of the country if we wish to get more dynamism and more steam into the British economy.
    My hon. Friend the Member for Ilford, South (Mr. Cooper) referred to us trying to do too many things at once. Undoubtedly, that is true and it has been acknowledged at various times by hon. Members on both sides of the Committee. It has been one of our weaknesses. We have all such great ambitions and desires that we have tried to do everything at once and that has frequently overstrained our economy. There have been substantial improvements in nearly

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    every Measure for the Welfare State over the last few years. Not enough, of course. It is never enough. We could always wish for better pensions, more public assistance and more schools. But surely it must be agreed that tremendous strides have been taken over the last ten or fifteen years and that Governments of both parties can share the glory.
    We all want to do more, and surely the best way to do that is to create greater wealth, which can then be shared. The more production we have, the more we can build up the strength of our economy, the more we shall be able to afford the welfare benefits which we should like to provide for the poor, the aged, and those who have fallen by the wayside. I believe that the measures which my right hon. and learned Friend has taken represent a substantial step towards giving our economy some dynamism which will produce more wealth, if we have patience for a year or two to enable the economy to get into top gear. Then we shall be able to do more and afford more with less effort from everybody, and that will be to the good of the whole country.
    7.56 p.m.
    Mr. G. A. Pargiter: I listened with interest to the peroration of the hon. Member for Somerset, North (Mr. Leather) about persons receiving the fruits of their own labour. That has been a good Socialist principle for a long time. The trouble is that so many people are living on the fruits of the labour of other people. When the hon. Member talks about someone who goes and brings back millions of pounds worth of orders and so on, we must remember that such a person does not now exist. What is achieved is part of the collective effort of industry as a whole. The individual cannot sell something which is not there or something which is of no use. His individual efforts are only part of the whole and the sooner we treat everyone as part of the whole and provide them with an adequate reward the sooner we shall see a considerable change in industry and in the economic structure of the country.
    It was interesting to hear the rather ingenuous way in which the Chancellor commenced his Budget speech. He gave us his idea of what he would like to do at the Treasury. But when he got there
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    he found how difficult it was to change things. He found that there were some things which could not be done. FOR example, he found that a capital gains tax would be far too difficult to apply. The fact that it has worked for years in America does not seem to have provided any lesson for this country. We can learn many lessons from America, but that does not appear to be one of them. But, of course, when it comes to the question of a payroll tax—something which might be thought very difficult to apply—it is surprising to find that it can be slapped on overnight.
    I do not accept these arguments that things cannot be done or that the structure of our Income Tax and Surtax could not be altered and simplified if the Treasury chose to do so. The fact is that there are some ingenious people at the Treasury, and, by and large, whatever a Government want as a matter of policy they can get—so we do not want to hear arguments that these things cannot be done.
    It was interesting to listen to what was said about this payroll tax, or employer's surcharge as it is called, because it is not an employer's surcharge at all. It will be a charge on industry. I do not know what effect it will have on British exports. Those of us who know anything of industry know that it is not possible to take people and drop them down in some place where there may be employment for them due to some temporary fluctuation in trade. That is fantastic. The hon. Member for Somerset, North referred to the number of people employed in providing services. The problem is that the structure and nature of industry is changing all the time. There will always be an increasing number of non-producers compared with the actual producers and it will be interesting to note the developments which will follow the imposition of this payroll tax.
    For instance, one cannot suddenly run a bus with less than two people operating it. One can try, but it will be a job to run a double-decker bus with less than two people. One can run a single decker bus with one person and a good deal of that is done. If the stand is to be taken that there will be a tax on the number of people employed, its effect will be not to decrease to a large extent

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    the number of people in the employment of any industry or firm. It will be to increase the general cost to the industry. Perhaps the Government will be satisfied with that, but it does not seem to tone with their exhortation and desire to cheapen the cost of exports so that we can more effectively export and compete with European countries.
    Mr. E. Fernyhough: This is a very roundabout method. If the Government were anxious at certain times to make wages costs rather higher, all that they would need to do would be to ask the trade unions to apply for an increase and the effect on employers would be precisely the same as the payroll tax.
    Mr. Pargiter: I do not think that the effect would be quite the same. The effect of a payroll tax is to bring some additional money into the Treasury. The effect of an increase in wages would probably be to increase expenditure to some extent, which I gather is another thing which the Government are not particularly anxious to do.
    It will be interesting to see how the novelty works, because I cannot see it achieving the object the Government have in mind. We are no longer at the stage in industry of having two or three people employed when one of them could be dropped quite easily. The complicated machine of production is such that it is not easy suddenly to say that in one week 5 per cent. fewer workers are wanted than were necessary the previous week. In places like Scotland, South Wales and certain other parts of the country, where they are probably employing men in some cases less usefully than they need, the tendency will be to increase the amount of unemployment. Where there is already a satisfactory labour market, the effect will be to increase the amount of unemployment. In areas where there is a scarcity, an employer will chance this impost and pay it. He will charge it against his product, if he can, and there will not be a change in the flow of employment. If underemployment exists, as it does in some cases, I am satisfied that the payroll tax will not change the pattern. The nature of industry in itself will prevent it doing so. I do not know whether it will have the effect of closing down some of the restaurants to which reference has been
    890
    made, but I do not regard that as a very serious matter with which we should be concerned.
    We have heard much about the necessity for incentives. We are told that Surtax is a tax on incentive. We have heard that the relief is to be limited to earned incomes. It will interest me, as I am sure it will interest the Financial Secretary, to know how long it will be before the clever boys get busy and decide how unearned income can become earned income. I can think of one or two ways in which it can be done. I have no doubt that some people will think of them much quicker than I did. It will not be long before we shall find that the amount of unearned income in these brackets will be considerably decreased and the amount of earned income considerably increased. I shall be interested to hear what measures the Treasury has to deal with that situation.
    We have heard about technicians and supervisors and all the people who help to get production going, but amongst the people who should receive some consideration are those in the £1,000 to £2,000 a year class, of whom there are vast numbers. They are vitally important in considering the question of incentives to production. They are more important than high-powered salesmen. A high-powered salesman has to sell what other people produce. Whether he does it efficiently or otherwise may have a marginal effect, but the fact remains that the article has to be competitively produced. If there is to be an incentive, it should be given to the people in the £1,000 to £2,000 a year class.
    At least the Chancellor of the Exchequer will go down in history as having broken the sound barrier of Surtax. His feat will not compare with the achievement of the Russians in their space flights, and I am not sure that it will be received with such universal approval. However, he has done this, and he has done it on specious grounds. He has done what people on this side of the Committee said that he intended to do. We said that his object in increasing the Health Service charges was so that he could nicely balance a reduction in Surtax. I have no doubt that that will be denied and disclaimed, but it is interesting that the figures so nearly

    891
    balance. They will satisfy the Treasury, at any rate. It has given away £58 million and has a compensating figure without any material trouble.
    My right hon. and hon. Friends and I think that it is completely immoral and wrong that people in high income groups should receive benefits because of the national conditions generally, whilst the poorest sections of the community are mulcted for further payments. It is one of the things which we on this side will be most strongly opposed to.
    There are other factors. For example, a vehicle tax on commercial vehicles is hardly an incentive to production. This is altogether apart from a vehicle tax on private cars. Transport enters very largely into costs of production. That is recognised on all sides. If the cost of transport is increased, the cost of production will be increased. If the cost of production is increased, the cost of exports will be increased and our chance of exporting more will be reduced.
    The underlying thought of the Chancellor of the Exchequer in this is that it is a long time since there was an increase in this tax. What an approach to taxation that is. The right hon. and learned Gentleman's argument is that, because it is a long time since there was an increase, it is time the tax was increased. It has not been examined from a proper point of view. It could well be argued that the relative positions of oil and coal have changed to such an extent that an increase in the tax on heavy oil is justified, but the same argument cannot be applied to an increased tax on vehicles. If the general desire is that costs should be kept down, it is surprising that this tax has been increased.
    Instead of the Budget being a general Budget of incentives, as we were led to believe was necessary in the country's interests, in order to encourage a greater measure of production and so that our export industry could flourish, there is virtually nothing in it which can have any material effect on the export drive. It is in direct line with the general Tory philosophy, which is to reduce direct taxation and increase indirect taxation. There is nothing strange about it. The
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    Chancellor of the Exchequer has not introduced any new principles from that point of view. He is merely pursuing a policy which will undoubtedly be applauded by hon. Members opposite and by his supporters in the country, at least to some extent, although I imagine that some of them will have second thoughts on the question of the 10 per cent. surcharge or rebate which is to be used as a matter of flexibility. Some Government supporters will want to learn a good deal more about how the 10 per cent. is to work.
    One of the problems of Purchase Tax and similar types of taxation is that of taxation on existing stocks. One of the great complaints about Purchase Tax is that when changes are made they have the effect either of increasing the value of stock or decreasing the value of stock at any one time. A 10 per cent. surcharge which could be slapped on all types of goods at any time, perhaps within a week, would certainly have a considerable effect upon trading turnover and the stocks carried by traders, especially as it would operate at the lowest level, at the point between the retailer and consumer. If it is not put on at that level, it will not be much good. It will be no good putting it on at any other level, because the Government will never be able to calculate how it will be paid. I am not sure now how the Treasury will calculate this tax and the amount to be paid if it is to operate quickly and efficiently.
    This is a most significant admission that the Government's monetary policy has failed. Their policy of high rates of interest attracts undesirable money to the City—hot money, unreliable money—which increases the overall burden on the economy by increasing the cost of investment and the cost to the nation of the service of the National Debt, which has again gone up by many millions of pounds. This is an admission that that method of dealing with our economic problems, and of deciding whether the economy is outrunning itself or wants stimulating, has failed.
    Instead of having restrictions on hire purchase, and the like, there is to be an imposition rising to 10 per cent. It is an interesting innovation, and I should like to know how it will work. I hope that we shall get a fuller explanation,

    893
    but this seems to be an extraordinary thing to introduce now.
    Our trade balance has worsened over the year, and there is nothing in these proposals that will mend it. Apart from the incentive to Surtax payers, the things that have been done would appear to lead to increases in the cost of production. If we are to have an increase in the cost of living of up to 10 per cent. wage claims will follow, and we shall not easily get rid of the inflationary spiral. As a result, I think that we shall see the complete bankruptcy of Tory financial management, and then, perhaps, we may return to saner days.
    8.13 p.m.
    Mr. T. H. H. Skeet: The hon. Member for Southall (Mr. Pargiter) denied the extraordinary impracticability of introducing a capital gains tax, and referred to the tax in the United States. I would point out, however, that in the United States the tax is operated without a Stamp Duty which, in the United Kingdom, brings in £59 million a year. I assume that that would have to be abolished. In addition, we are told in the Royal Commission Report that the next gain from the tax, taking into account profits and losses on the year, would be about £50 million.
    The hon. Gentleman also referred to the payroll tax on industry. Curiously enough, that has been introduced in order to provide economy of labour—[An HON. MEMBER: "Unemployment"]—no, not unemployment. If we look at the West German Republic today, where there is a payroll tax of 0·2 per cent., as has already been mentioned we find that there is now full employment although this was not so a little while ago—
    Mr. S. Silverman: Will the hon. Gentleman explain to me? Economy of labour means not employing more labour than one needs, and that means that there must be a surplus of labour. What becomes of it?
    Mr. Skeet: It may be desirable for industry to move labour around a little to that part of the economy—the export trades—whore it will be of the greatest value. That is perfectly true in a place like Birmingham—
    Mr. Silverman: Pure mysticism.
    Mr. Skeet: People are constantly talking about the miracle achieved in Western Germany. There they have achieved economy of labour in two ways. The first is by very heavy impositions on the employers for the payment of the national welfare charges. For example, for old-age pensions and disability insurance there is an imposition of 14 per cent. half payable by employers and half by employees. In respect of health insurance, each side of industry pays between 3½ per cent. and 4½ per cent., and there are other impositions. Coupled with that there is what is called the payroll tax or duty.
    As I see it, the payroll tax could be operated as it is in Australia. In order to encourage the export industry a rebate is made. Here if there is unemployment in certain parts of the country it may be necessary to have a rebate of the levy. After all, we have been told only this afternoon that there is to be a payroll tax. We do not yet know its form, but Her Majesty's Government have indicated that, above all else, they will continue to support a policy of full employment. When one has full employment then, as a temporary expedient, a tax like this may prove rather useful in getting mobility of labour—
    Mr. Pargiter: Do I understand from the hon. Gentleman that this tax will be so selective, and that such careful surveys will be made that in particular industries, or even sections of an industry, that the Chancellor will be able to put the tax on that section, and offer a rebate to another section of the same industry? That certainly does not appear from the Budget Resolution. In fact, the precise opposite appears to be the case; that it is in respect of all persons engaged in industry. I see that the Financial Secretary nods his head, and I am fairly certain that that is the intention.
    Mr. Skeet: I am obliged for that interruption. So far, we have been told what it represents only in broad outline. It can be selective, as in Australia, and one could have a rebate to give an incentive to the export trade. It might be quite practicable in the United Kingdom, where we have a tight labour situation in certain parts, to have a payroll tax in operation. Where there was current or potential unemployment in another

    895
    part, it might be possible to have a rebate of the tax. When we see the distinctive terms of the proposal we shall have a clearer view of its possibilities. The Leader of the Opposition said this afternoon that, apart from the one point that operated in his mind, such a tax should not be ruled out altogether.
    I want to emphasise that not just two but more countries have been experimenting with this idea, and an authority in the banking world, Sir Oliver Franks, said earlier in the year that it could be a valuable instrument for getting mobility into industry. It would also persuade many industries to automate more, to introduce fresh techniques, and so forth. Nevertheless, it is Her Majesty's Government's policy to have full employment, and with employment as it is now I do not think that, as a temporary expedient, a payroll tax could lead to any great disadvantage.
    The hon. Member for Southall taunted the Government with raising the Surtax limit, but my right hon. Friend plainly indicated that the cost of that would be offset by a heavier Profits Tax. Hon. Members opposite should refer on this subject to what has been said by the hon. Member for Bosworth (Mr. Wyatt), who is not now in the Chamber, and also to what Lord Lucas said in another place. I shall quote exactly what he said about this. He said:
    "I said from the Front Bench quite bluntly that I believed that one of the deterrents to any increase in the production of Great Britain"—
    Mr. G. Thomas: On a point of order, Dr. King. The hon. Member is proposing to read verbatim from the speech of a noble Lord in another place during this present Session. Is it in order for him so to quote?
    The Temporary Chairman (Dr. King): It is not in order for the hon. Member to quote, except from a Ministerial statement, in the other place, but he may give the sense of what the noble Lord said.
    Mr. Thomas: The hon. Member ought to apologise.
    Mr. Skeet: I apologise for reading the actual words used in a speech in another place. I certainly do not mind giving the sense of the words that I wanted to
    896
    quote, and it is this. It is that the young executives in industry do not have any strong incentive. I say to the hon. Member and his hon. Friends on the other side of the House that if they would only follow the principles which have been outlined by the hon. Member for Bosworth and by Lord Lucas, they would possibly understand why it is essential to give some encouragement on the export side of our affairs.
    I am not making my case on that basis alone. One could approach it in this way. In the first instance, this country is not the most highly taxed country amongst the leading nations. If we take the total tax paid in Germany, France, Norway and Sweden, the United Kingdom comes at the end of that list with a figure of 29·7 per cent. That includes direct and indirect taxes, taxes on capital and contributions to social security. In Western Germany, in 1958, the percentage was 34·7.
    There is another way of looking at this matter. The executives in the United Kingdom should be in the same position as executives in other countries. For example, in the United Kingdom on the lower earnings less tax is payable, while more tax is payable in the Federal Republic of Germany. But when we consider the higher brackets, more is paid in the United Kingdom and less in Western Germany. If we take earnings of £1,000, the percentage of gross income taken in tax at that level is 6 per cent. in the United Kingdom, 11 per cent. in France, 10 per cent. in the Federal Republic and 9 per cent. in Sweden.
    If we go to £3,000, the corresponding figures are: United Kingdom 24 per cent., France 23 per cent., Western Germany 21 per cent., Sweden 27 per cent., and the United States of America 15 per cent. The higher one goes up the table the heavier is the levy.
    I therefore say that it is time that we looked at this question of Surtax. The Chancellor of the Exchequer has considered it in its broader context. Listening to his speech today, what appeared to be uppermost in his mind was how we in the United Kingdom could achieve more exports. This can be done very simply. It can be done by economy in selectivity of investment, not by a system of controls. We have been told that investment has been

    897
    rising. We have learned that over the course of the years immigrant money into the United Kingdom from the United States has been valuable to this country. If we consider manufactured goods exported from Britain, American firms or subsidiaries here account for about 11·8 per cent. of the total. Further, if we take the export of goods from the United Kingdom to the U.S.A., the American subsidiaries account for just over 24 per cent. of the total. One of the things that we have done in the course of the years has been to give encouragement to immigrant capital.
    The other thing to bear in mind is the heavy rate of investment of overseas resident capital. The American companies have tended to invest more and more in the United Kingdom. In fact, they have ploughed it back rather than remit it home.
    Another course of action could be to reduce selected tariffs, allow European goods to come into the United Kingdom and thus encourage us to become more competitive. It seems to me that we have been trying more and more to satisfy the requirements of the home market. In fact, our trade has been oriented towards the home market. The traditional practice in past years has been somewhat broken.
    It is worth bearing these figures in mind. If we go back to 1913 visible exports were 22 per cent. of the gross national product. In 1938 they had dropped to 10 per cent. In 1950 up to the present day they have risen to only 17 per cent. of the gross national product. If we add in invisible exports there is not much improvement, because the figures have dropped from 37 per cent. to 15 per cent. and are now only 25 per cent. This country is thus doubly worse off. It has not got the necessary potential in the export field. It is also earning very much less from invisible exports which it had prior to the war.
    Bearing all these matters in mind one should consider what action the Chancellor had to take. He had to look for a little more taxation. He had to ensure relative stability. He had to bear in mind, too, that our share of trade in world manufactures has been going down over the course of years. He had to bear in mind that our share of trade in the sterling area had dropped. Have
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    we got what is essential in both investment, and also incentives to put this country back on its feet? Are we showing that dynamism that we had at the beginning of the century and earlier? The Chancellor has gone as near to it as he possibly can.
    We should remember what was done in February of this year through the President of the Board of Trade when certain bills of exchange were allowed to be discounted through the Bank of England, allowing fresh money to be utilised in export credits. Also, there are the recent proposals which have enabled the small exporter and the medium-term exporter, to have certain advantages. The advantage that I am particularly interested in is that of long-term borrowings through the E.C.G.D. to facilitate freer trade in capital goods and, if necessary, to operate with the advantages of loans through Section 3 of the Export Guarantees Act, 1949. These steps have been taken. I dare say that a lot of persuasion had to be used to get the Treasury to accept these proposals.
    But I come to one point which has caused me some anxiety. As soon as Mr. Robens of the National Coal Board starts a drive to popularise coal, we find the Chancellor of the Exchequer placing an imposition on the motor car industry and on the oil industry. It comes in this form—2d. a gallon on fuel and heavy oils. It was I think in 1909 that the tax on hydrocarbon oils was introduced, and it was probably as a result of some ingenuity that it was abolished in 1921. My right hon. Friend the Member for Woodford (Sir W. Churchill) initiated the tax again in 1928 and it has been with us ever since. The yield from this source from about 1939 to 1949 was approximately the same, about £57 million, and, if one takes all the receipts which come from oil, from licences and from Purchase Tax, they should well exceed £600 million.
    What is the purpose of these impositions? Is it to give assistance to the coal mining industry in its fight against oil? Is it purely and simply for collecting additional revenue? The way it will develop, I think, is this. Heavy oils in the form of Derv have a 2s. 6d. tax if used for road transport, but the rest, until 1947, were spared. That tax

    899
    has come back again. We have a precedent to which we may look. In Western Germany, the Bundestag decided to have a tax on heavy and light oils. The effect was rapidly absorbed and it did not greatly help the coal industry of Western Germany.
    What will be the position in the United Kingdom? It is the only tax raised this year, with the exception of Profits Tax and a small imposition on advertisers on commercial television.
    Mr. Fernyhough: And the poll tax on the sick.
    Mr. Skeet: That is not on the sick. I am talking about the Budget.
    Mr. Ledger: It should have been in the Budget.
    Mr. Skeet: Hon. Members are talking about the contributions which were discussed on another occasion. I thought they had in mind the payroll tax, and that is not on the sick.
    The principal target for taxation is the man buying a car. The £12 10s. per year has shot up to £15. I wonder whether the Chancellor read the observations of Professor Kahn in the Financial Times two days ago in which he recommended that very tax. Obviously, my right hon. and learned Friend has to read everything in the course of time, and perhaps he thought that this was a very good way of collecting revenue. But where will the tax on oil and motor vehicles end? If it is to be used as a milch cow over the years, we shall find it rising progressively.
    I welcome the Chancellor's decision to take power through Statutory Instrument to alter taxes during the course of the year. Both Purchase Tax and the duty on hydrocarbon oils fall inside that bracket, and I dare say that they can be moved up and down within the 10 per cent. range during the year. Will the tax on oils be raised further? I say no more about it now, but I am a little disturbed.
    I understand the predicament of any Chancellor of the Exchequer. He has to raise money for essential purposes, and no Budget will be popular in all parts of the Committee. People will construe what he does in different ways. The Budget as a whole is a balanced
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    one. My right hon. and learned Friend has in mind the central theme, which showed clearly from time to time: either exports must continue at a higher rate or we shall fall further into the mire. We have witnessed the revaluation of the Deutschmark, but I do not think that we in the United Kingdom will be inclined to revalue our currency. What we wish to avoid is a devaluation of the currency such as occurred during the Administration of right hon. and hon. Members opposite in September, 1949. Devaluation has not occurred under the Conservatives. As time goes on, we are taking the necessary steps to ensure that we have a steady and buoyant economy.
    I am happy to know of one or two further concessions which have been made. I have in mind particularly those who were persecuted by the Nazis during the war and who received compensation from Western Germany. If a man opted to receive a lump sum, he paid no tax. If, on the other hand, he agreed to receive an annuity, he was liable to United Kingdom tax. A legalistic argument developed, and I am glad that it is now to be thrust aside.
    I should like to see something done about Schedule A, for which, I think there is no justification. Also, I wish that there could be an increase in small income relief. The same applies to allowances for old age; I should like to see a little more done there. I dare say that one has to adopt a patient approach, considering all Budgets in the course of time as part and parcel of the whole, and I hope that it will not be long before some of the matters I have mentioned are considered. Personal allowances have remained as they were for many years at £140 and £240, and I feel that it might be a good thing to move them ahead. I hope that all those matters I have mentioned may be candidates for consideration before very long.
    8.35 p.m.
    Mr. Frank Allaun: This Budget stands condemned because it increases our fantastic expenditure on arms of £1,600 million a year by a further £48 million. The Government are now spending 6s. of every pound of taxation on war preparations. Eighteen shillings of every pound spent by the Government on research goes on so-called defence work. The best scientific

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    brains of our country are working in this field. I think that the British people would have rejoiced if the Chancellor of the Exchequer had come to the Dispatch Box today and said, "We will slash this expenditure by £600 million, starting with £100 million this year, a further £200 million the year after, and so on". Even if we cut this expenditure to £1,000 million a year we should still be spending far more than we were spending in the years up to 1950–51, when the figure was £770 million.
    What could not we do with this money? Instead of crippling the National Health Service, we could be extending it. Instead of raising pensions to the miserable figure of £2 17s. 6d. a week, we could be increasing them by pounds a week. Instead of the Government cutting council housing, more money could be spent on housing. I feel very strongly about this matter because five out of ten houses in my constituency have no bath, no hot water and no inside toilet. That will be the position for years as things are. Yet we could solve the housing problem if we were not wasting our substance in this way.
    Our export and production problems are also tied up with this. I believe that with the £600 million saved on armaments we could start to build
    "…Jerusalem,
    In England's green and pleasant land."
    In these circumstances, it is hypocrisy to talk about helping the underdog in Africa and Asia, where there are people who have not had a square meal in their lives and who are far poorer than the poorest in Britain, although there are plenty of poor people in Britain today. "War on Want" is just an empty slogan if we spend £1,600 million a year on arms and increase it each year by £48 million or similar sums. We tend to talk about this knowing in our heart of hearts that we cannot relieve poverty in the under-developed countries if we spend the money on armaments.
    Not only is this right but it is also extremely popular. If any party, whether Conservative or Labour, went to the country with a programme of this kind, it would sweep the polls and would deserve to do so. It could quite easily be done. After all, we have ended conscription, much to the pleasure of hon. Members on this side. This means that
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    220,000 fewer lads will go into the Forces. Surely some economies should result from that.
    It could easily be done from savings on nuclear weapons, where approximately £250 million a year is spent. We on the Labour side have our differences of view, but we are agreed that Britain should end its independent nuclear deterrent—all of us, from the Front Bench to the back benches. That would save £250 million a year, and it would solve the problems that the Chancellor has to face.
    The next point that I want to raise concerns Surtax. I believe that the Chancellor has committed an act of public indecency by reducing taxation on the very rich by £58 million a year at the very time when it has been increased on the poor by £65 million a year. This shows a lack of sense of public decency. An hon. Member earlier referred to social justice. Do not let us make any mistake about this. This will benefit not only those in the £2,000 to £5,000 a year class. It will benefit those in the top ranges of Surtax.
    Mr. Dan Jones: Those with £10,000 a year.
    Mr. Allaun: Yes, they will benefit far more than those earning between £2,000 and £5,000 a year.
    If hon. Members opposite are concerned about social justice, what about the engineering labourer? It may shock some hon. Members to know that the basic rate of the engineering labourer is £8 4s. 2d. a week and for the skilled engineer, £9 15s. 2d. It might be said that they can earn more by working overtime and getting bonus, but they have to put in the overtime and the hard work to get those extras.
    There are thousands of good, honest workers who work as hard in their way as the man who was talked about earlier who gets orders for the country. Many are in a position where they can earn no overtime or bonus. When they have paid their health, unemployment and pensions insurance, they take home £7 14s. a week net. When a man in hat position learns from tomorrow morning's papers that the Surtax payer is to be relieved of taxation in the way proposed by the Chancellor, what will he think? He will think that this is a

    903
    Government which stands for the rich and against the poor. He will be dead right. I believe that the right hon. Member for Woodford (Sir W. Churchill) once said this fifty years ago. Today, we have had an example of how right he was. The man earning £8 4s. 2d. a week will pay more for his Health Service, for his council house and for his pension, and those earning £5,000 a year will pay less. This is a case of Robin Hood in reverse.
    The payroll tax is an incentive to dismissals, an encouragement to cause unemployment. Do not let us forget that there are 300,000 men and women out of work at a time when we are supposed to be in full employment. Our efforts should be directed to finding them work and not finding unemployment for people who are in work. Things look very different when you are at the receiving end. Probably the Chancellor has never been in that position.
    I believe that the Chancellor has today made a bid for the leadership of the Conservative Party. In a number of newspapers lately, there has been discussion about who will succeed the Prime Minister. Most people, I suppose, have their share of ambition and the Chancellor is no different from any other man. He certainly hopes to please the backwoodsmen of his own party and to receive their backing in his bid for the premiership.
    Sir E. Boyle: I will give the hon. Member this point: that my right hon. and learned Friend will be more loyally supported by the whole of the Conservative Party than the Leader of the Opposition is supported by the hon. Member.
    Mr. Allaun: The Financial Secretary says that his right hon. and learned Friend on this issue will be unanimously supported by the Members on his side, and I am sure that he will be.
    Mr. Fernyhough: Is it not true to say that 90 per cent. of hon. Members opposite will get an immense financial benefit from these tax proposals?
    Mr. Allaun: I think that my hon. Friend is probably right and that the Financial Secretary will admit that what the Chancellor has done this afternoon will be received with delight by hon. Members opposite and by the whole of
    904
    the class which they represent. What he has done will be extremely popular among the Conservative Party hierarchy. There are many sincere hon. Members opposite—
    Mr. G. Thomas: There are only eight hon. Members on the benches opposite.
    Mr. Allaun: They confuse what is good for their own class with what is good for the country, and I can assure them that they are gravely mistaken. This will go down in history as a class Budget.
    8.46 p.m.
    Mr. Edward du Cann: I should like, first, to comment on a point made by the hon. Member for Salford, East (Mr. Frank Allaun) on the subject of defence. I agree that the burden of defence is extraordinarily heavy. I agree with him when he said, by inference, that we should do all we can to see that we are spending money wisely. But I, for one, do not grudge money spent on defence if it is wisely spent, any more than I grudge paying that part of my rates which goes to pay the police force which sees that I sleep securely in my bed at night. Indeed, I would go as far as to say that I do not care how heavy the bill for defence is in Britain provided that Britain stays free. That is all that matters to me and, I believe, to the country.
    I turn to the Budget and refer, in particular, to the speech of the Chancellor of the Exchequer. I think that in its content, quality and delivery it was outstanding, even as a Budget speech, and I was very struck and pleased by the note of confidence which my right hon. and learned Friend appeared to me to strike. This is a point of particular significance at this time, for in England we have suddenly become very Kennedy-conscious. We realise that in the United States a young man is at the head of affairs. I do not say necessarily that young men are the best at the head of affairs, but there is no doubt that Mr. Kennedy has infused the United States with a new sense and spirit of urgency, and there is no mistaking the fact that our economy has suffered from a certain sense of stale-ness lately and that we have urgently needed a new dynamic. It is probably

    905
    much too early as yet to say whether we shall get that new dynamic from this Budget. Personally, I regard it not as an entity in itself but as one of a series of Budgets, and I look forward to the further development of my right hon. and learned Friend's plans.
    I fed that the Committee has every reason to congratulate the Chancellor both upon his courage, whether hon. Members agree with him or not, and upon his imagination, again whether or not they agree with the measures which he has introduced. That is a very good sign.
    I should like to discuss shortly the size of the surplus for which he is budgeting, the almost horrifying large size of the surplus. We are to have a surplus above the line of £506 million, over £200 million more than his predecessor, Lord Amory, budgeted for last year, and a total deficit of only £69 million, by comparison with the £318 million for which Lord Amory budgeted last year or the £394 million which was the out-turn.
    I dare say that when we read our newspapers tomorrow, and particularly the economic pundits, we shall find that many of them say that the Chancellor has been over-cautious and has been pessimistic about the advance of 3½ per cent. in consumer demand and of 3 per cent. in the public sector to which he referred. They will say that he has taken very drastic action, so to speak, to contain the effects which this large volume of increased expenditure would be likely to have upon the internal purchasing power of the £ sterling. I remember precisely the same criticism being made of Lord Amory last year, when he budgeted for a smaller surplus than this.
    My views I can sum up very shortly. I would say again that I am prepared to trust the Chancellor's judgment. He may be right, he may be wrong, he may be over-cautious. I would not fault him for that. Where I should fault him would be if he took risks with our economy, or budgeted for a smaller surplus than in his heart he thought appropriate.
    I said when I began that I think it is probably right to construe this Budget as one of a series, and I would sooner that we budgeted for a larger surplus today in order to be safe, with the possibility, maybe, of future tax reliefs, than
    906
    that he should be profligate and incautious with the economy at this stage in our affairs.
    As to the individual proposals which my right hon. and learned Friend has for raising taxes, I say that I dislike them with impartiality. I loathe all taxes, and I hope that is the general opinion of the Committee. None the less, if revenue has to be raised, it is a matter of judgment whether to put it on petrol or on motor vehicle licences, on the Profits Tax, and so on. I do not think that in that respect my right hon. and learned Friend has done a bad job. I do not think that his choices are bad.
    The reduction in Surtax rates was a very much overdue reform. With great respect to those hon. Members on the other side who made the point, it is very easy to say that this is a class matter, and so on. That is an oversimplification, as everybody knows. The level of direct taxation and Surtax has been far too high for far too long. I do not fault my right hon. and learned Friend for having reduced this; I fault earlier Chancellors for having funked it. The need has been obvious for long enough. There has been a moral obligation upon a Conservative Chancellor to allow the people who earn their living honourably to keep more of what they earn, and I am glad that my right hon. and learned Friend has honoured that obligation.
    What is rather curious is that it has probably not yet been generally noticed—at any rate, it is not a point that I have heard made in the Committee—that, far from there being a shift from direct taxation to indirect taxation, precisely the reverse is the case. I am not in agreement with my right hon. and learned Friend upon that point, as I think that it is appropriate to endeavour to reduce direct taxation, and, if it is necessary to raise revenue, to raise it from indirect taxation.
    Mr. Fernyhough: Whenever the Chancellor does that, he puts it on the poor in order to give it to the rich.
    Mr. du Cann: That may be the sort of obvious reply which one may make, but I do not believe it to be altogether fair or altogether accurate. What matters, as I think my hon. Friend the Member

    907
    for Somerset, North (Mr. Leather) endeavoured to explain, is that we are increasing the prosperity of the country as a whole, and to do that we want to liberate incentives.
    It is a matter of judgment how we do it and where we do it. I personally have been familiar—and I think that hon. Members of the Committee in general may agree that this is not an inaccurate picture to paint—with the attitude of those who, when they have been offered promotion, have refused it, whether it was in the country's or the company's interests, because they said that the little bit of extra money they got was not worth it when so much went in taxation. That is a thoroughly bad state of affairs, and if we can encourage people to look for promotion, become managers and make the most of themselves, that is in the country's interests, and that is why I support the Surtax proposal.
    Mr. Stan Awbery: What we are worried about on this side of the Committee are the people on whom a greater burden is being placed in order to relieve others. An hon. Member from the other side, speaking in my constituency three weeks ago, stated that it would be impossible to alter the incidence of Surtax unless we put up the charges on prescriptions. If that is so—and from the speeches that we have heard today I think it is quite correct—the poorest people, the people who are actually sick, are having to pay increased charges for prescriptions, and the money is being used to relieve the Surtax payer.
    Mr. du Cann: I understand the hon. Member's point very well. I have as high an opinion of him as I hope he has of me, and, therefore, I hope that he will not hold me responsible for what my hon. Friends may say in his constituency. Suffice it to say that I would not agree with that in the least, because I do not think that that statement is an accurate or a very sensible one.
    To move on to the question of Surtax, there has been talk today, and no doubt there will be talk at other times, about what are called company expenses of one sort and another. I am the first to agree that in this matter there are scandals. I also think that sometimes the position is very much exaggerated. I was particularly pleased to hear my right
    908
    hon. and learned Friend say that there are certain things which he is going to do in regard to home allowances and the rest in attempting to save members of the British public who are abroad on business, endeavouring to do their duty, from being charged unnecessarily by the Inland Revenue.
    The whole point is that these scandals, such as they are—the fact that men prefer to run their motor cars on the firm, or dine out and sign the bill rather than pay for it out of their pockets—are very largely due to the high rate of direct taxation on incomes from which we have suffered far too much in recent years. My right hon. and learned Friend was right this afternoon to attempt to say by inference, "All right. I am reducing direct taxation. Now, you chaps, pay for some of these things out of your own pockets if you want to have them." That is an argument with which I sympathise and agree.
    There has also been talk on the subject of a capital gains tax, or capital gains levy, as I think it is very much better called. I speak now absolutely for myself. I am in sympathy with the argument which says that persons who make very large sums of money apparently rather quickly are in some way morally offensive to the rest of the community. That is probably true, and there is, I think, some distress in the community at large that this is a situation which is tolerated today.
    On the other hand, it is a situation which I believe is exaggerated. I would feel that it is a matter that has to be tackled sooner or later, and I think, on the whole, probably the sooner the better. I certainly do not agree with anybody who puts forward the opinion that here are persons who toil not, neither do they spin, that they make all this money by giving nothing or very little. Very often they make it out of ensuring that proper economic use is made of otherwise idle resources, and that is something that is to be encouraged rather than discouraged.
    The longer I am in the House—after having been here only six years I am still a comparatively new Member—the more convinced I am that there is neither black nor white in the world. It is all one shade or another of grey; it may be whiter or blacker, but, generally, most

    909
    things are grey. I am sure that everybody who pays attention to the affairs of this House realises that extreme points of view are rarely the most desirable ones. I should have supposed that, in spite of the difficulties, it would have been possible to make some arrangement in that respect, and if it should come I would certainly support it.
    With regard to the new instruments which the Chancellor has chosen, I think he is completely right to reinforce his position here. There is no doubt that the credit squeeze and the raising of Bank Rate have been blunt instruments and not altogether satisfactory. The sales tax—for such it is, in effect—I agree with, and I think it is sensible measure to have introduced. I am not so clear or sure about the payroll tax. If it is to be regarded as a threat, I can see the strength and the force of it, but it seems to me that it can bear very hardly upon firms where craftsmanship is put at a premium, or upon firms with small numbers of employees which are not the kind of firms which I assume my right hon. and learned Friend is attempting to affect. Consequently, I hope that a minimum will be set and that the payroll tax will not be all-embracing. For example, I would hope that a minimum number of employees would be set—say, 100—so that the tax should not bear on smaller firms.
    Mr. Ellis Smith: The hon. Gentleman is making a reasoned speech. I, also, am against the tax, but does he agree that once one begins to differentiate one does not know where one will get to?
    Mr. du Cann: I said that I was not sure about it. No doubt we shall hear more of the matter. I agree that it is a real difficulty, and it is something which all of us need to watch with very great care to ensure that, if it is effective, then it will be effective in the right place. I am concerned at the moment that it might not be effective. No doubt the Chancellor of the Exchequer will be able to explain it in due course.
    At the beginning of his speech, my right hon. and learned Friend talked a great deal about Government expenditure as a percentage of the national income. I wish that he had developed that theme further, because I believe that Government expenditure should be a fixed percentage of the national income. Until a Chancellor of
    910
    the Exchequer lays down a definite and irrevocable percentage, I do not believe we shall ever see the reduction in Government expenditure which we must have.
    It is all very well for successive Chancellors to berate the consumer or the public sector for spending more money and increasing consumer demand, or taking measures to slap down the consumer one way or another, but charity begins at home and it is up to the Government, whoever the Chancellor of the day may be, to ensure that the total of Government expenditure does not exceed a certain, and clearly defined in advance, proportion of the national income.
    I was heartened to hear my right hon. and learned Friend say that he is to introduce new accounting procedures. Although I now serve, with many other hon. Members, on the Select Committee on Estimates, I am bound to say that the way in which accounts are presented to the House always confuses me. What has disturbed me most since I became especially interested in this subject is the open-end situation which seems constantly to exist, when the Government do not know what total expenditure can be in any year—whether it is because of wage increases or token votes of £100 which may denote future expenditure of £250,000 or more. That is an unsatisfactory state of affairs. If I ran my business like that, I should quickly be bankrupt. Better forms of accounting are urgently needed.
    I criticise the Budget strongly in one particular matter. I shall here declare an interest, although it must already be well known to hon. Members. There is no incentive whatsoever in the Budget to savers. It is an astonishing omission, for the catalogue of what could be done is very long. I am tired of listening to Budget speeches which pay the most extravagant tributes to the National Savings Movement, in which I sincerely join, and at the same time do nothing to encourage any other form of savings. If it is right to exempt from Income Tax the first £15 of interest on deposits in the Post Office Savings Bank and the Trustee Savings Banks, why should not deposits in the Co-operative Bank, or in building societies, be treated in the same way? Why not have thrift banks like American companies?
    There are other things that we could do for saving. I have specified them on

    911
    several occasions, and I shall not do so again today, but saving and the habit of saving are vital. I note from a recent Gallup poll that about 30 per cent. of our people have no savings whatsoever. That is disgraceful, both in the national interest and in the personal interest of our people. It is up to the Government to do more, when opportunity offers, to encourage a greater degree and volume of saving.
    I thought that my right hon. and learned Friend to some extent glossed over the balance of payments position. Last year was our worst trading year for a decade. In 1959, we had a surplus on the balance of payments account of £51 million. In 1960, we had a deficit of £344 million. In other words, the change was about £395 million. I acknowledge that stocks rose greatly during last year and that exports went up by about 6 per cent., £202 million—not a bad achievement—but imports went up by £499 million. In other words, the shortfall on our merchandising account was about £366 million, which is not very far from our balance of payments deficit last year—about £22 million more. In other words, our balance of payments deficit last year was very largely caused by increased imports.
    There may be nothing wrong with that if the increase consists largely of a build up of stocks. Indeed, that may be to our eventual advantage. On the other hand, I was a little disappointed that my right hon. and learned Friend castigated exporters for not doing more. He retailed with pride—as he had every reason to do—the way in which the Government in general and the Board of Trade in particular had provided increased credit facilities for exporters.
    That is very good, but when the Chancellor said that this had been a bad year for world trade in general—that world trade had not particularly increased—it was not reasonable to castigate exporters for not doing better. Indeed, I go further and say that it is not reasonable to expect exports to rise by more 'than 7 per cent. in any year. I do not think that it can be done, but it would be right for something to be done which has not yet been done—to castigate importers for importing so much.
    I cannot understand why, supposing there are goods of comparable quality at
    912
    the right price and the appropriate delivery dates in British shops, importers should import from abroad merchandise which is competing with home-produced stuff and thus adversely affecting our balance of payments. Nor do I understand why the man and woman in the street should buy it in the shops. I do not advocate a blind policy of "Buy British"—far from it—but if British goods of comparable quality, and so on, are available, our people at home have a patriotic responsibility to look after British producers before they buy foreign produce.
    I have been very much impressed by what Lord Amory has been saying in another place and elsewhere. He has been calling for incentives for exporters. When he, with his recent and great knowledge of the position, can make a plea of that sort, I cannot see that it is not possible to provide financial incentives for exporters. Mere exhortation is not enough and never will be.
    A short time ago, I attended an investment conference at which I had to lecture on a subject which hon. Members will be able to imagine. I was struck by the way in which leading figures in the City—I do not fault them in this, for they were talking facts—were saying that in the choice of investment it was wiser not to choose an investment in a company which was a large exporter and that it was better to invest in companies in the home market because they were not exposed to the same winds of competition and would probably do better over the years. That seemed to me to illustrate precisely the difficulty which we are facing. Unless we can get some direct financial incentive to companies doing a good job with exports we shall not get the export drive which the United Kingdom so urgently needs.
    The trouble is that unless this position rights itself we shall be faced with the reimposition of import controls. That is a very serious matter and such a re-imposition would be a retrograde step. It is easy, with hindsight, now to say that the Government should not have reduced imports controls so precipitately in the first place, but at any rate they were stepping in the right direction, for Britain's chief interests depend on an increasing volume of world trade and upon people besides ourselves reducing import controls.

    913
    We have to set an example. I would be very sorry to see import controls come back, but I am afraid that there may be no alternative unless we seriously tackle this question of incentive for exporters and find some method of dealing with this. I am aware of all the difficulties—there is the Berne Agreement, from which we derive advantage—but, nevertheless, it is something which can and must be done. After all, other countries have done it successfully.
    Lastly, I should like to say a word about the Budget in general, and perhaps its social purpose. The right hon. Gentleman the Leader of the Opposition concluded his speech by saying that the Budget ought to have two objectives. First, it should benefit the economy as a whole. I agree, and the question whether this Budget will benefit our economy is a matter of judgment, and time alone will tell.
    I am satisfied with it so far as it goes. As I said, I look to it as being one of a series of Budgets, and I do not doubt that if the Chancellor brings to the Treasury the kind of imaginative mind which he appeared to demonstrate when he began his speech this afternoon Britain will not go far wrong.
    The right hon. Gentleman said that the second purpose of a Budget was to secure the equitable distribution of wealth. I believe that to be only partly true. I am thoroughly sympathetic towards any hon. Member who says, "Let us see that the people who cannot look after their own affairs to the best advantage because they are not young enough or strong enough to do so are properly looked after as a responsibility of the community". I fully agree with that. On the other hand, I do not believe in an egalitarian society—nor do the Russians, but that is another subject. I believe that we shall prosper only if we genuinely attempt to say to our people "Stand on your own feet. Make as much money as you can, and by the sweat of your brow earn promotion. By so doing you will bring credit to your families and to your country". I think that the Budget takes a step in that direction, and because of that I welcome it.
    The Temporary Chairman: I am trying to call as many hon. Members as I can, and it would help if hon. Members
    914
    would co-operate by making their speeches as short as possible.
    9.13 p.m.
    Mr. George Thomas: I have been present in the Chamber throughout the day, with the exception of the time when the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) was speaking, and I have, therefore, been able to hear almost every hon. Member who has spoken from the benches opposite criticise the Budget on some point or Other.
    The hon. Member for Taunton (Mr. du Cann) made a most interesting speech. If I may say so without patronage, he is a financier of considerable standing, or so I understand from reading the advertisements. He deals in the City, in that mysterious world where stocks and shares are understood. I thought that he damned the Budget with faint praise. He gave the Chancellor of the Exchequer a rough ride on some important questions.
    I was glad that the hon. Gentleman referred to my right hon. Friend the Leader of my party, because I warmly agree with what my right hon. Friend said about the general purpose of a Budget. It is, after all, the chief weapon of the Government in deciding the question of economic stability during the coming year, and also of ensuring that a fair share of the national wealth is received by all our people. We must examine the Budget from that point of view.
    I believe that the proposal to benefit the wealthy people of the community will be strongly resisted and criticised outside the House of Commons. It is indefensible to bring a proposal of that sort before the Committee within weeks of pleading the necessity of charging 2s. for a bottle of medicine. It is preposterous that the Chancellor of the Exchequer should tell the Committee that we can afford to give to people earning more than £2,000 a year the considerable relief which he is offering today, when we cannot afford to give to people on National Assistance rates even the miserable increase which the old-age pensioners have enjoyed.
    Mr. Fernyhough: And in a week when we shall be discussing a further charge on the orange juice and cod liver oil which babies receive.
    Mr. Thomas: I am very grateful to my hon. Friend.
    It is quite clear that the priorities of hon. Members opposite are vastly different from the priorities which we hold on this side of the Committee. This will be regarded as a rich man's Budget. The health of the Chancellor will be drunk in every rich man's house tonight, although not, I hope, in the same spirits that he drank before us this afternoon.
    I believe that the Budget is inequitable and will fail to provide the incentives for which so many hon. Members opposite have pleaded to increase our export trade. I shall say a word about that later.
    I wish that the hon. Member for Somerset, North (Mr. Leather), the hon. Member for Ilford, South (Mr. Cooper) and the hon. Member for Croydon, North East (Vice-Admiral Hughes Hallett), all of whom made speeches very critical of the workers, were in the Chamber to hear me say that I am "fed up" with hon. Members opposite admonishing the workers about restrictive practices when they know the practices which go on elsewhere, to which the Chancellor himself referred this afternoon, and about which he proposes to do nothing at all.
    I am sorry that there are certain omissions from the Budget. There has been no reference to post-war credits. I believe that the time is overdue for the Chancellor to look again at the question of the repayment of this national debt to our old people. I am sorry that no reference was made to those people who have lost so much money on war loans and whose patriotism has been exploited. No comfort is given to them, and no undertaking has been given to help them in any way. I notice that the man who buys a Bentley will have to pay £3 more tax a year, the same amount as the man who buys a Morris Minor. I believe that there will be a storm of reaction about this within the next few days.
    This afternoon the Chancellor referred to the fact that he is budgeting on the basis of a 3 per cent. increase in local authority expenditure. I believe that estimate to be hopelessly inadequate in particular in respect of education. We are lagging behind almost every European country in the proportion of the national
    916
    income which we devote to education. The Chancellor said that he hoped that we should not be short of technologists and technicians, but unless the money is available we are bound to find the education service breaking down.
    At present, a salary demand is being put forward by members of the teaching profession, very few of whom, if any at all, will benefit from the Surtax relief offered in the Budget. If they are on the basic scale teachers who have taught for forty years and are on their maximum salary will not even now be receiving £1,000 a year. It is clear that a substantial increase in teachers' salary is bound to come during the current year and that this will impose a burden on local authorities. I wish that the Chancellor had told the Committee that he is looking again at the whole question of financing local authorities.
    The rating system is unjust and socially indefensible. I believe that the right hon. and learned Gentleman ought to say that he will readjust the general financial formula on which Exchequer aid is given to local authorities. That is the only way, in my opinion, that people in local government service will get a fair deal. It will be increasingly difficult for teachers, and people like them in the public service, to negotiate with local authorities for a reasonable salary—in order at least to maintain their social balance with other workers in the community—if the main burden of the cost is all the time to fall on the ratepayers.
    I cannot say how much I believe that the general grant system of financing local authorities is proving a handicap. Already, it has manifested itself as a serious difficulty for local councillors. It will impede the expansion of the education service. Hon. Members will realise that all the Chancellor of the Exchequer had to say about our expanding economy will turn to dust and ashes if the education service fails. We cannot afford to cramp it in the manner in which it is cramped by the present financial system.
    I warn the Economic Secretary—I hope that he will convey the warning to his right hon. and learned Friend—that those whose one concern is the expansion of our education service, and the provision of facilities for further

    917
    education, are agreed that the red light is showing because of the general grant system.
    I earnestly hope that the Chancellor will watch the way in which this is proving to be a Government restrictive practice which ought to be abandoned. I want to see a return to the percentage formula. It is unreasonable to expect all local authorities, whether they are rich or poor, to make the same contribution to the financing of our education service. In any case, it is unreasonable to base a person's contribution to the expenditure of a local authority upon the type of house in which he lives.
    The taxation system may be disliked by us all. I suppose that every normal person shares the feeling of the hon. Member for Taunton, who does not like any taxes that he has to pay, but the others are much more attractive. At least, it is rough justice. A person pays according to his income and means. The rating system is entirely indefensible. The poorest people have the same demands as the richest people in the community. Our Welfare State has already been badly damaged, but if it is not to be damaged much more the time has now come when it is necessary for the Treasury to look again into the whole question of local government finance.
    I want now to refer to the people who are called public service pensioners. The hon. and gallant Member for Croydon, North-East spent a long time in dealing with these people. I think of retired Post Office workers, retired teachers, retired railway workers and all sorts of people who were in the public service and contributed to a pension, as in the case of teachers, which would have provided them with a reasonable income and maintained their general standards at 50 per cent. of their salary. People who retired in 1947 and before then are living in poverty. People who contributed 5 per cent. of their salary for years, and who were entitled to expect the State to honour this agreement and maintain their pension at a proper value, are being betrayed by the way in which Government after Government refuse to link pensions to the cost of living.
    I hope that the Treasury will realise that this is a matter for urgent consideration. The old guard have a moral claim on us to protect them in an in- 918
    Flationary society like this, because ever since the party opposite took office ten years ago, the £ has been shrinking in value. Never before in peace time was the £ worth as little in purchasing power as it is worth today. The people who suffer most are those on low fixed incomes. I hope that the Chancellor of the Exchequer will remember these people.
    I believe that the Budget ought to be used to strengthen our Welfare State and ensure that the strong help the weak and the rich help the poor. We have had a Budget today in which the poor help the rich and the weak buttress the strong. There is no incentive for the workers in export industries. The incentives are all kept for the people who, in any case, will not work any harder because of what the Chancellor of the Exchequer has done today. They will have more to spend without working any harder. It is unreasonable and unjust. I hope that when the time comes my right hon. and hon. Friends will vote at full strength against the Budget.
    9.29 p.m.
    Mr. William Clark: I listened to the speech of the hon. Member for Cardiff, West (Mr. G. Thomas) with interest. I am sorry that he spoiled his interesting speech by his endeavour, in his opening remarks, to give the impression that it was only his side of the Committee which was interested in the welfare of the people. The hon. Gentleman knows as well as anybody else that Conservative Administrations since 1951, and previously, have done more than any other political party in the history of the country for the welfare of the population. I am sorry that he spoiled such an interesting speech.
    I was glad that the hon. Member referred to War Loan. We all have a certain amount of sympathy with holders of War Loan, and I am delighted that my right hon. and learned Friend has at last agreed to alter the anachronistic state of the Government accounting system that has, apparently, gone on since the year dot. How one can get a capital item, such as Estate Duty, shown as a Revenue item I do not know. I should like my right hon. and learned Friend to consider in the future investing in this country by reducing our National Debt. One way of doing that would

    919
    be by repayment of Wax Loan for Estate Duty purposes subject, of course, to a limitation, so as to avoid speculation in War Loan.
    In general, I welcome the Budget. By his treatment of Surtax, I think that the Chancellor has introduced an incentive which, since 1920, has been progressively reduced. However, sufficient has been said already by my hon. Friends on this subject, so I shall not bore the Committee with repetition.
    One thing that rather worries me in the White Paper and, in fact, in the Budget—my right hon. and learned Friend himself referred to it—is the high pressure of demand, and the inflationary tendency that is creeping into our economy. We have seen the effects of inflation since the end of the war and, of course, those hon. and right hon. Members who are a little older than I have had even more practical experience of it. The danger of inflation, the high pressure of demand at home, and the danger it is to our balance of payments position requires that we should do something about this demand before it gets out of hand.
    The party opposite tried, by very high regressive taxation aimed at reducing the amount of money left in the hands of the taxpayers at all levels, to cut down consumer demand. That is one way. Another, which relates to our balance of payments, is to restrict imports. Neither of these ways do I accept as the right method for this or any other Government to adopt, but there is another way in which the Government can give a lead in cutting home consumption. I refer to savings, to which my hon. Friend the Member for Taunton (Mr. du Cann) referred.
    One of the most difficult things about savings is not how to get the money to save, but how convenient it is to save it. So often we find that people have very good intentions of saving, but cannot go through the rigmarole of effecting it. I should have thought that the P.A.Y.E. tax collection system, which now might be described as part of the heritage of the British working man, could be used as a savings medium.
    As all hon. Members know, each employee has a certain code number, and it should be quite easy for the Revenue to give a man a savings code number so
    920
    that he could save 5s., 10s., £1 a week—or whatever it might be. The Government would then have on tap as potential savers a working population of about 24 million, and I am sure that we all have had sufficient experience of people to know that what is taken at source is very much more readily given than what is taken after a man has received his pay. Consequently, I should like my right hon. and learned Friend to consider whether P.A.Y.E. machinery could be used to increase our small savings.
    In increasing our small savings we must be very careful to give sufficient incentive to save. Obviously, the 2½ per cent. that is paid on Post Office savings is an extremely low rate of interest, and I should have thought that 4 per cent. would be much better. If this were done through P.A.Y.E. we should have to make sure that a man did not save too much of his income. Otherwise, the wealthy man would be saving more than a man who was not so wealthy.
    Any money saved should carry with it a certain exemption for Income Tax purposes. Like my hon. Friend the Member for Taunton, I cannot see the difference between £15 interest in the Post Office Savings Bank or the Trustee Savings Bank and £15 investment income from any other investment. What is good for one is good for the other. There should be a total exemption of £15 a year on all investment income, to encourage saving in all forms.
    A matter that I regret—and I raised this point last year—is the absence of any reference to a reduction in Schedule A tax on owner-occupation. In the last Budget speech my right hon. and learned Friend's predecessor said, by inference—these are not his exact words—that when there was a reduction in taxation Schedule A would have its priority. I have a vested interest in this matter inasmuch as in company with other hon. Friends of mine at the General Election, and subsequently, I am committed to saying that Schedule A is an iniquitous tax. I very much regret that this year my right hon. and learned Friend has not made a start on the abolition of this tax.
    Obviously, to abolish Schedule A tax altogether would coat from £45 million to £50 million, and one might say that that is far too inflationary to add to the

    921
    consumer demand in this country. But it could be done. A start could be made. I have said that all savers should have the first £15 of investment income exempted, and I therefore suggest that the first £15 of net annual value should be exempted. This might cost £25 million, and my right hon. and learned Friend might say that that is too inflationary.
    Another method would be to endeavour to cut the amount of paper work in making maintenance claims for Schedule A purposes. I would remind the Committee that I am speaking only of owner-occupation. If the statutory repairs allowance were doubled, that would cost the Exchequer £13 million.
    Therefore, my right hon. and learned Friend has these methods. He could double the repairs allowance; and he could allow the first £15 of net annual value to be exempted, to bring it into line with Post Office savings. I cannot understand how anybody can say that a man who has put his savings into bricks and mortar is a less worthy saver than a man who puts his 30s. a week into the Post Office or Trustee Savings Bank. Both are equally good savers. As I say, I am committed on this matter, and I trust that I shall during the Committee stage of the Finance Bill have another opportunity of speaking about it.
    I come now to the subject of the inflation. In his Budget, my right hon. and learned Friend is raising the yield of taxation by about £80 million. With the increased allowance for the National Insurance contributions of £12 million, this gives a net increase in taxation of £68 million. If he were to adopt the principle that Schedule A should not necessarily be abolished, but that a start should be made, and if he started with double the statutory repairs allowance, that would account for £13 million, which would bring the net addition to taxation to about £55 million. As we have seen, the out-turn during this next year is an overall deficit of £69 million, and if £13 million were allocated for double the statutory repairs allowance on Schedule A, the out-turn would be £82 million deficit.
    Like my hon. Friend the Member for Somerset, North (Mr. Leather), I cannot see how, with total taxation at about
    922
    £6,508 million, anyone can say that £13 million, £23 million, or £43 million is, in fact, inflationary.
    Mr. Bruce Millan: The hon. Member will realise that some of us are in the same difficulty about this figure of £13 million, because it is approximately the amount which the Government will derive from increased prescription charges.
    Mr. Clark: That argument may be all right in some other debate, but surely the hon. Member is not trying to bring prescription charges into a Budget debate.
    Mr. Millan: Why not?
    Mr. Clark: Prescription charges have nothing whatever to do with the Budget. I thought that I was coming to the end of my discussion of Schedule A taxation. Why the hon. Member should try to kill my idea about Schedule A by bringing in prescription charges, I cannot understand.
    Just before I was interrupted, I was saying that I could not understand how any economist could say that an increased deficit of £13 million could be inflationary when set against total taxation. I have worked it out that £13 million out of total taxation of £6,508 million is one-fifth of 1 per cent. We have said time and time again that a start should be made, and I am sure that this is the moment to do it.
    We are a highly industrialised country. We had a rise in productivity in 1959. There was a slowing down during 1960.
    Mr. Fernyhough: Stagnation.
    Mr. Clark: Very well. It was the same throughout 1960, but hon. Members opposite will agree that there was a good rise in productivity during 1959.
    Mr. Fernyhough: After three years of stagnation.
    Mr. Clark: Hon. Members are very keen to get in these odd digs, but the productivity that this country has enjoyed since the Conservative Party came into office has been responsible for the highest standard of living that the country has ever had. It is a little unfair of them to say that this sort of thing is stagnation.
    Mr. Fernyhough: We are not saying that there has not been some increase in

    923
    productivity since the Conservative Government came in. What we say is that it is only half what it was under the Labour Government.
    Mr. Clark: It is extraordinary that, although hon. Members opposite say that we do only half as well as we should, nevertheless, in every section of the welfare services, we have doubled the rate of expenditure and doubled the benefits we give throughout the entire operation. Hon. Members opposite know that, as I know it.
    I wish to revert to the question of productivity. I said that in 1959 there was a huge rise in productivity. In 1960, it was static. Somehow, we must, in the next year, cut down consumer demand at home. We have to cut down the pressure on our economy. Only in that way will we be able to increase our exports and channel our goods into the export market, because it is on exports that the whole standard of living of this country depends. I believe that in certain respects the Budget takes a step in the right direction, and I hope that it will not be very long before the Government take further steps.
    9.45 p.m.
    Mr. Ron Ledger: I have listened to all the speeches in the debate. There has been a considerable diversity of opinion, particularly on the benches opposite, about how any benefits that there might be in the Budget should have been shared out. I was about to interrupt the hon. Member for Nottingham, South (Mr. W. Clark), and I will say why. He said that there was a considerable increase in productivity in 1959 and that there was virtual stagnation in 1960. I agree with him. If the Government decided that there should be a General Election in October this year, I am sure that we should see another spurt, with the Government doing everything they could to enable industry to expand and production to increase. The only difference between 1959 and 1960 was that in the former year the Government had an election to win and had to prepare the ground for it. There was no reason why they should not have done in 1957 or 1958 the things that they did in 1959, except that they were not at that time prepared to have a General Election.
    924
    From experts, which is what hon. Members call themselves, we have heard some fantastic things this evening. I agree that the Chancellor of the Exchequer presented his case very ably. I listened to what he had to say about the need for increased production. He said that exports were not increasing fast enough and that we had to give incentives. I agree with these things, as do my hon. Friends. However, when I read the Budget Resolutions, I wondered why he said the things that he did say. Certainly the measures that he proposes have little to do with expanding exports, providing incentives or curtailing home consumption, as was suggested by the hon. Member for Nottingham South.
    The remedies suggested by the Chancellor are concerned, not with the economic situation, but rather with the deep divisions and rifts within the Conservative Party. What he has done is to give in to the "wind and whiskers brigade" behind him. There have been deep divisions on the benches opposite concerning Africa and the need, they say, to reintroduce the birch. The right hon. and learned Gentleman has somehow to console these people for their disappointments and, therefore, he has attempted in this, the second Budget of the past two months—we debated a "budget" a little earlier—to cool them off.
    I should like to refer to one or two points made by hon. Members opposite this evening. For instance, the hon. Member for Somerset, North (Mr. Leather) said that the fallacy of the arguments advanced from this side of the Committee was that the statistics used were wrong, because fewer people are now engaged on profitable work. Those are not the exact words that the hon. Gentleman used, but I do not see what that has to do with it.
    Mr. Leather: With great respect to the hon. Gentleman, I did not say that at all. I did not say that the statistics were wrong. I said that the conclusions drawn from them were wrong. I did not say that that was because the work was unprofitable. I said that that was because the statistics were based on manufacturing work and the majority of our population is concerned with services, which are a quite different thing.
    Mr. Ledger: That is the whole point. What difference does it make how many

    925
    are engaged on services or on manufacturing work? The fact is that with the advances of technology, we expect that every person engaged in productive work will do more as the result of new and modern machinery. I listened to the argument of the hon. Member and I noticed that he was careful not to use any statistics to prove the points that he was making.
    The hon. Member for Ilford, South (Mr. Cooper) made the point that it was the easiest thing in the world to produce goods but that the difficulty was to export them, and he went on to talk about restrictive practices. We on this side get a little bit sick and tired of hearing this talk of restrictive practices. When I asked the hon. Member for an example, he said that Cammell Laird was a well-known case. It is well known because there are so few cases. That is the only case that the papers can get hold of to publicise.
    Mr. Leather: Rubbish.
    Mr. Ledger: When I asked the hon. Member for Ilford, South for examples, that was the best he could give. It is a fairly old example and it is doubtful whether it is concerned purely and simply with restrictive practice or whether it is concerned with the breaking of agreements by employers.
    The hon. Member for Somerset, North concerned himself with the problems of exporting and he said that he could not think what the real answer would be. He said that many things were being tried but that the question posed a problem for him. I have met a number of people in business who have been abroad in the past few years. One thing that impresses me is the number of people who go abroad on business expenses but who come back and say that they have not been able to arrange any business.
    I suggest that much of the problem that faces us is not whether the Chancellor should give more incentive to exporting firms, but whether within industry we have the ability to export. We have the "know-how" for making the goods, but certainly, when we see the way in which we are represented on the benches opposite, I doubt very much whether we have the people of ability to sell these goods abroad.
    926
    That brings me to the first point of criticism of the Budget. The Chancellor said that he expected an increase of 3 per cent. in public expenditure. As my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) said, this will mean little extra expenditure by local authorities on matters like education. In my constituency, as a result of Conservative legislation, we are years behind with our education programme. This is particularly bad at a time when we are in need of many more technical colleges. We need many more technicians. The Russians have been able to send a man into space. The only qualification for technical skill that the Government have is that they attempted to produce the Blue Streak. The whole thing was a failure.
    Vice-Admiral Hughes Hallett: The hon. Member said that, as a result of Conservative legislation, his constituency was years behind in education. To which Act of Parliament was he referring?
    Mr. Ledger: It is not a question of referring to an Act of Parliament, but simply to the fact that successive Chancellors of the Exchequer have effectively reduced the spending by local authorities on education.
    Mr. Leather: It has been doubled. The hon. Member cannot count.
    Mr. Ledger: It may have been doubled—I have no doubt that it has been—
    Mr. Leather: The hon. Member has just said that it has been cut.
    Mr. Ledger: If I may be allowed to finish—the amount of money may have been doubled due to inflation, I agree—
    Mr. Leather: Oh, no.
    Mr. Ledger: —but on at least three occasions, the programme for building schools in my constituency has had to be put back. For instance, the Church of England in my constituency has pressed me to make representations to the Minister of Education to include in this year's programme, 1960–61, a school which it had expected to complete in 1958. It is in these days, when we need more technical colleges, that the Chancellor of the Exchequer says that in the

    927
    next year we shall increase public expenditure by only 3 per cent.
    The main point which I want to make concerns Surtax, and the Economic Secretary to the Treasury knows what I want to say, because only a month ago, when we were debating the new Health Service charges and contributions, we made the point time and again that those charges should have been part of the Budget. We asked what was the significance of the fact that the Minister was raising £50 million when he needed only £5 million for the extra hospitals which he intended to build. Today we have the answer. The hon. Member for Somerset, North was not here in any part of those debates, nor were most hon. Members opposite, because on that occasion we were debating a poll tax on the poorer people of this country, and there were rarely more than two Conservative Members in the Chamber at any time. Now when the Chancellor is giving away £60 million or £80 million to Surtax payers, they are here to enjoy themselves.
    We asked the Chancellor on that occasion whether he was raising these contributions in order that he could give something away to the Surtax payers in the Budget, but we could not get an answer. There is a coincidence in the fact that the amount which is to be given away is about equal to the amount which has been collected from the Health Service contributions.
    The Economic Secretary to the Treasury (Mr. Anthony Barber): The hon. Member realises that the cost of the Surtax concessions in a full year will be £83 million but will not be a burden on the Exchequer until 1st January, 1963, and that this in large part will be met by the increase in Profits Tax which amounts to £70 million in a full year.
    Mr. Ledger: I appreciate that. In the same way, it was argued that the increase in contributions was for building new hospitals, but the additional expenditure was only £5 million and it would have taken ten years at that rate to use all the extra money collected from the extra contributions in one year. The point which I then made was that it was unnecessary to increase those charges. It would have been much simpler for the Chancellor today to have introduced a
    928
    proposal for a capital gains tax which would have made it unnecessary for the Health Service charges to be increased.
    I ask the Chancellor to consider increasing the amount of public expenditure so that local authorities can catch up with their school building programmes and so that we can build more technical colleges.
    Whereupon Motion made, and Question, That the Chairman do report Progress and ask leave to sit again.—[Mr. Finlay.]—put and agreed to.
    Report of Resolutions to be received Tomorrow.
    Committee also report Progress; to sit again Tomorrow.

  ROADS (M.1 EXTENSION)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Finlay.]
  9.59 p.m.
  Mr. John Farr: In the course of my studies for this short debate on the motorway it has puzzled me to find that apparently since the M.1 was opened, twelve or fifteen months ago, there has been no debate on the subject. I have searched all the records. There have been numerous Questions on the subject, but no debate. It has struck me many times that the motorway is a new conception in travel. It is a difference which can be compared with the difference between the stage coach and the motor car of sixty years ago.
  It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]
  Mr. Farr: I was saying that just now is as good a time as any, after the motorway has been opened for a year, to examine some of the effects that it has had on the national economy, possibly, some of the defects in the motorway itself, and, moreover, what a vast benefit it would be if it were carried on northwards from Crick, where it stops at present.

  929
  I ought to explain, before going any further, what qualifications I have for initiating a debate on the motorway. My chief reason for being here tonight, and speaking on this subject, is because as soon as it starts to travel northwards from Crick, for over 20 miles it will be in southern Leicestershire and in my own constituency. I know what a vast difference it will make to people who live in or near the route which it will take.
  Nationally, in my opinion, the extension of the motorway is vital, but it would also have its personal effect on those people who live in and near the villages which it will by-pass. Some of them will be helped, and some will be hampered, but all of them are convinced that if Britain is to have the road system which is due to her the motorway must be pushed forward as soon as possible.
  What are some of the facts and figures which, in the very short time available tonight, may be usefully given about the M.1? It cost, for its 72 miles, £24 million, or £330,000 a mile. How has the nation benefited, apart from the abolition of traffic jams on that road and speedier travel from point A to point B? Today, my hon. Friend the Joint Parliamentary Secretary has been good enough to inform me that about 18,000 vehicles a day use M.1 when the weather is fine. That figure has increased from 15,000, which was the daily average only three or four months ago in January, and it shows that the figure is rapidly increasing all the time.
  Another factor which, I think, well deserves attention by the House is the fact that the accident rate on the M.1 is only half that of the best type of other roads in the country. Moreover, heavy goods vehicles can make the round journey in about 50 minutes less than in the old days, and a motor car making the round journey on M.1 can do it in up to two hours less.
  The benefit does not end there. It spreads to the adjoining roads, like A.5 and A.45. If we look at the very valuable statistics which we have, we find that in the year since the M.1 was opened, the accident rate on these subsidiary roads fell by no less than 60 per cent. The journey time on these roads—A.5 and A.45—has been reduced by
  930
  20 or 25 minutes, and I am told that in terms of economic benefit to the nation the whole of the construction cost of £24 million will be repaid in about eight years.
  There are one or two other points of benefit which the M.1 has had for us. One is the point which has been brought to my notice by the manufacturers of heavy engines and vehicles. For the first time in this country, they have a long-distance road on which to test their vehicles in working conditions, not for a day of a few hours, but repeatedly. We all know that if British exports, particularly motor engines and chassis, are to stand up to competition, it is absolutely essential for them to be able to do these daily journeys up and down the autobahnen of Germany, or the main highways of the United States; and for the first time we have a first-class road which can be compared with any in those two countries.
  Another saving is in the carriage costs of goods from what is probably the industrial centre of England, Birmingham, to the coastal ports. They can get there quicker and cheaper; moreover, they can be guaranteed to get there on time far more than they could in the old days when the vehicles had to weave their way through the maze on the A.5 or the A.45.
  The sun is not altogether shining on the picture which I wish to put before the House. There are certain disadvantages. In the limited time available to me I want specifically to examine one big disadvantage. Thus trunk route goes through the heart of England, and then it is suddenly cut off dead, right there. This may be compared to the blocking up a river in midstream, or the blocking up of a drain; the water seeps out and permeates through the channels and, finally, finds its way to its destination. Exactly the same thing is happening in southern Leicestershire today.
  The M.1 stops at Crick. There are 18,000 vehicles using M.1 on a fine day. Half of them get to Crick and then enter southern Leicestershire, and the result is that the whole county is on some days, especially at weekends, absolutely congested. I hate to bring in the foreign tourist here as a gimmick, but what a shock it must be to a foreigner bowling along Britain's fine new motorway in the

  931
  space age and then suddenly getting to Crick and then having to enter and grope along the narrow lanes and bypasses of Leicestershire. If one enters Leicester City in the middle of any working day one will find it choked. If one enters Rugby, a little further to the west, on any working day one will find it choked.
  In my constituency we have the town of Blaby, of which we are very proud. Blaby—I worked this out on the map tonight—is about 15 miles north of the horrible bottleneck at Crick. In Blaby the other day a 12–hour census was taken of road traffic outside the social centre, and it was found that no fewer than 10,400 vehicles passed that spot in that period. If one compares that with the 18,000 vehicles using the M.1 on a fine day, one appreciates that through the narrow streets of rural Leicestershire passes an impossibly heavy load of traffic daily.
  There is also Lutterworth, which is about seven miles north of Crick. I had the pleasure of spending many months in Lutterworth about two years ago in a hotel room over Lutterworth High Street. The rumble all night kept the residents awake. During the daytime I, a fairly agile person, sometimes had to wait nearly five minutes before I was able to cross the narrow High Street, and I think that some hon. Members might have to wait up to half an hour before they could cross it on certain occasions.
  That is the position at present. What specific reasons have I for initiating the debate? I will deal with them very briefly. It has been said before in the House, and I repeat it, that M.1 has proved itself an undoubted success. It has been estimated by the Minister of Transport that it saves the nation about £3 million annually. Let us look at it in another way. What does it cost the nation annually not to go forward with the other half, running from Crick to north of Doncaster? That is a little more than 72 miles, which is the distance of the present M.1, and it is costing the nation annually at least £3 million for every year that its start is delayed. It is a thousand pities that the work was stopped at Crick when it was.
  Why is there such a delay in restarting the motorway? I have considered all
  932
  the usual reasons that are given to hon. Members seeking to find out the answers to awkward questions, and two reasons occur to me most. These are that the delay is because of shortage of money, or because of shortage of materials. If it is the farmer, then I suggest that the Chancellor of the Exchequer should be asked if he will allocate to this work the £25 million which he is to get this year by the increased Excise Duty licences which he announced today. That £25 million would meet the cost of the extension of the M.1 northwards to Doncaster almost exactly.
  I am very loath not to use British materials, machinery and workmen wherever we can, but if it is shortage of material that is holding up construction, and we really are stuck for material and the vast complicated mass of heavy machinery that is necessary, then I suggest that the Minister should hire them from abroad on Government account and so get cracking with the job.
  As a regular weekly user of the M.1, there are one or two points about it which I should like to bring to the Minister's attention. Why must the two carriageways run together parallel the whole time? I agree that, generally, this is the best thing to do on grounds of economy, but it has many serious disadvantages. I beg of the Minister that, when extending the motorway north from Crick, he makes use of alternative roads, enlarging them and widening them to provide for the north or south-bound lane, and then allowing the other lane to take an alternative course, perhaps diverging by as much as a mile.
  My reasons for making this request are threefold. In the first place, it tends to relieve monotony. The second reason is far more important, as any hon. Member who has travelled at night on the M.1 will know. One gets a terrific lot of dazzle from approaching vehicles. Diverging roads, with a field or wood between them, would mean that that would not happen.
  The third reason is that it has become noticeable in the—thank goodness—relatively few accidents on the M.1 that very often an unfortunate driver's tyre bursts. He skids across his carriageway straight into the path of traffic from the opposite direction. Many deaths are

  933
  caused, especially at high speed, by vehicles crossing the narrow verge between the two carriageways. With diverging carriageways that danger would be removed.
  I also ask my right hon. Friend to use his powers to ensure that no licensed premises are allowed on the motorway. While travelling at 45 m.p.h. it is possible to get away with missing a vehicle by a hair's breadth even if one's judgment is slightly impaired by one or two drinks, but one will never get away with it at 90 m.p.h., when the slightest mistake may be fatal.
  I congratulate my right hon. Friend the Minister and his Ministry for what they have done about the construction of this fine motorway. The Parliamentary Secretary was good enough to see me last December and then promised me an early start of the motorway in Leicestershire. I asked him now to be more specific and to promise to start the motorway within a year and to start it due north from Leicestershire.
  10.16 p.m.
  Mr. Albert Roberts: I am very glad that the hon. Member for Harborough (Mr. Farr) has initiated his debate about the London-Yorkshire motorway. I have asked many Questions about the motorway, and I am glad to have the support of the hon. Member. I appreciate that we cannot have a motorway in Yorkshire for at least three and a half years, but the blame for that must be laid on the Minister of Transport. When a motorway is first planned, it must be planned to serve the whole of the United Kingdom and I agree with the hon. Member for Harborough that for the motorway abruptly to end at Crick is not to get full benefit for money expended. I come from Yorkshire, which has 4½ million acres and 4 million people. The soonest that we can expect the motorway is in four years.
  I well remember the Minister's predecessor saying that that was because the authorities in Leicestershire could not make up their minds and that what was Yorkshire's loss was Lancashire's gain. It is an insult to the industrialists and other inhabitants of Yorkshire that we should be left like that. It should be brought to the attention of the public that hon. Members are doing their best
  934
  to serve the needs of the area east of the Pennines.
  The Minister of Transport must realise that if we are to make the best of these motorways and get the greatest economic advantage from them, they must serve industry where industry is situated. It does not need me to say what industry there is in South Yorkshire, with its heavy engineering, steel, its prolific coal fields, but it is a part of the country which is neglected just because the County of Leicester could not make up its mind, although at that time the Minister had power to deal with the problem. If the debate has done anything to expedite the construction of the motorway to the extent now planned, it will have been well worth while.
  There is some bias in these matters. I know that it is history that we had to fight for a ship canal in Yorkshire, but when one was wanted in Lancashire it was constructed. We are now fighting for a bridge over the Humber. Yorkshire is one county which, with its industries and agriculture, could maintain itself; and we are paying our share towards the nation's wealth. We have had a raw deal and I hope that the Parliamentary Secretary will give us a little comfort in response to the appeals which I have made to him about the London-Yorkshire motorway.
  10.20 p.m.
  The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Hay): I welcome the opportunity which this brief Adjournment debate gives me to say a little about the progress we are making towards the completion of the London-Yorkshire motorway which lies to the north of Crick.
  My hon. Friend the Member for Harborough (Mr. Farr) began by emphasising the importance to this country of the motorways and the very substantial economic benefits which we can obtain. On 25th January last, in answer to a Question by my hon. Friend the Member for Twickenham (Mr. Gresham Cooke), I gave the House a little information about the results of the operation of that part of the M.1 which goes from London to Crick. The House might like to know that the Road Research Laboratory published at the beginning of this year a technical paper, No. 46, which gives a survey of traffic and economics of the motorway thus far. I believe that

  935
  a copy is available in the Library. It is a most illuminating document.
  We are in no doubt that motorways are an excellent investment for the nation. A motorway saves time, money, and laves. As my hon. Friend said, the accident rate on the motorway so far is about half that on the best of the other roads which we have. We therefore want to press on with the extension of motorways, not just this one, but the others throughout the country, as quickly as we can.
  May I come now to the principal point raised, which is the extension of the motorway from Crick to Doncaster, and how quickly we can get on with it. My hon. Friend urged that we should speed the process as much as we can. We are in no doubt as to the desirability of this stretch of motorway. We are under constant pressure from hon. Members on both sides of the House, from the local authorities, and from many others to get on as quickly as possible.
  This was originally one of our main projects, but, as the hon. Member for Normanton (Mr. A. Roberts) reminded us, we met considerable difficulties in finding an acceptable line for the motorway. I hope to say something later about the statutory processes through which we have to go, but the first stage is to draw a line and decide where the motorway will go. I would refer the hon. Member for Normanton to the Adjournment debate on 11th November, 1959. During that debate I gave a full and comprehensive account of exactly what had happened in connection with drawing the line. It was certainly no fault of the Ministry of Transport that a line could not be found and established more quickly than it was.
  There was certainly no bias against Yorkshire. On the contrary, the very fact that we were unable to get on as quickly as we would have liked with the Crick to Doncaster section of the M.1 required the Minister to find some alternative. In fact he produced some additional assistance to Yorkshire and made one of his five main projects the improvement of the Great North Road and, as the hon. Gentleman knows, this is going on fast. Yorkshire has not completely suffered from this delay.
  936
  The result was that the Crick to Doncaster section could not be included in the five main projects, and it must now have a rather lower place in our order of priorities. The completion of the project and its prospects of speedy completion have to be viewed first in the light of the present road programme, and, secondly, the state of preparation of the various schemes which will be required to complete it.
  As regards the first point, my right hon. Friend the Minister of Transport has already announced that the funds available for long-distance improvements on our routes during the next five to six years must principally be devoted to the completion of these five main projects, but there is no doubt that funds should become available to enable a start to be made on the Crick to Doncaster section within the same period.
  I cannot make any greater promise than that at the moment, because the second point comes into play, namely, that there are these statutory processes to complete and the detailed engineering designs to be prepared. Since the first stage of establishing the line fell back for the reasons which I have mentioned, the other processes which are contingent on that had to fall back too.
  May I say a brief word about these processes, because we are frequently accused of dragging our feet and of being slow in the construction of motorways—indeed, in carrying out most major works on roads—but the fact is—and I have said this at Question Time and I must repeat it—that Parliament has laid on our shoulders obligations to carry through certain statutory processes in a certain time with certain time lags built into the system. We are therefore obliged to work to that time-table.
  The first stage on which we always engage is preliminary consultation with the various planning and agricultural interests owning or concerned with the land over which the road will run. That takes a considerable time, but we find that it pays, because if we can settle objections at that preliminary, early stage we save much more time later.
  The second stage is the making of the scheme which establishes the line of the motorway, and once the scheme is made in draft and is published there is an

  937
  objection period of three months which must expire before we can take any further steps. Following that, once the scheme is made and the line firmly established, there is a further Order which has to be made, again in draft, to deal with what are called the side roads—the roads which cross the line of the motorway—and things such as junctions. Here again Parliament lays down an objection period of three months which must expire before we can move another step. When we have completed the third stage we proceed to the acquisition of land, either voluntarily or, if need be, by compulsory purchase order. Here again there is an objection period, in this case of six weeks.
  One further point which I must stress is that if at any of those stages an objection is made by a local authority and it cannot be resolved by negotiation, then we are obliged to hold a public inquiry, with all the consequent further delay which that entails.
  Turning to Crick-Doncaster, the first big step, the making of the scheme to determine the line, was taken last October. The House will be interested to learn how we are getting on with the further statutory processes which I have mentioned in order that we may get on with the construction. By January of this year the consulting engineers had let us have their proposals for the necessary alterations for the side roads and the accesses in the two counties of Leicestershire and Northamptonshire. By the end of March we had completed all the detailed discussions with the local authorities and the other interests. The Northamptonshire draft Order will be published next week and the Leicestershire draft Order by mid-May. I assure the House that we have lost no time on this, in spite of our other commitments for motorways elsewhere. We could not have gone any faster than we have.
  That is only the start of this task. The proposals for the remaining counties along the road are promised by the consulting engineers very shortly. The first of the land plans to enable the district valuers to start negotiating for entry will
  938
  be with us by June, and throughout the rest of this year we shall keep this programme rolling along as fast as the engineers, the authorities and we in the Ministry can make it go.
  Having said this, I may be expected to say when we shall start building the road. Alas, that is something which I am afraid that I cannot do, for this reason—that objections can be made to our proposals at any stage from now on and these must be considered. Property owners and tenants have rights about which we must negotiate. We may have to hold a public inquiry. I should be rash if I tried to hazard a guess when all these processes, which affect 86 miles of new motorway, will be completed. But I assure the House that although we are not prepared to bulldoze our way through the rights of individuals—and the House would not support us if we tried—we shall start bulldozers along the motorway itself as soon as we can and we shall keep them moving quickly until this and many other motorways are completed.
  Mr. Farr: Is it possible to telescope some of the processes? We realise that they are all essential, but is it possible to telescope them?
  Mr. Hay: We have carefully considered that in recent months, because we were anxious to see whether there was some way in which we could expedite this procedure. I am afraid that we literally could not. Not only would fresh legislation be required but if we tried to do so we should lose more time than we should gain. There are all these bodies and all these interests which have to be safeguarded, and these people are only too anxious to complain and to object to what we want to do. We try to settle their problems as best we can. Our problem is to get on as quickly as we can, and I assure hon. Members that we intend to do that.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes past Ten o'clock.

EMPLOYMENT
  Western Isles
  Western Isles
  Youth Employment Service, Fife
  Youth Employment Service, Fife
  Blyth
  Blyth
AGRICULTURE, FISHERIES AND FOOD
  Potatoes (Market Support Fund)
  Potatoes (Market Support Fund)
  Iceland (Fishery Jurisdiction)
  Iceland (Fishery Jurisdiction)
  Horticulture (Dutch Auction System)
  Horticulture (Dutch Auction System)
  Fish (Supplies)
  Fish (Supplies)
  Scientific Station, Aberdeen (Employees)
  Scientific Station, Aberdeen (Employees)
PENSIONS AND NATIONAL INSURANCE
  Retirement Pensions
  Retirement Pensions
  Pneumoconiosis
  Pneumoconiosis
  Widows (10s. Pension)
  Widows (10s. Pension)
  National Insurance Offices, North Staffordshire (Clerical Staff)
  National Insurance Offices, North Staffordshire (Clerical Staff)
MINISTRY OF AVIATION
  R.A.F. Station, Lindholme (Civil Flights)
  R.A.F. Station, Lindholme (Civil Flights)
  Premises, Glasgow (Use)
  Premises, Glasgow (Use)
HOSPITALS
  Plastic Surgery Unit, Chepstow (Transfer)
  Plastic Surgery Unit, Chepstow (Transfer)
  Hospital Medical Staffing (Platt Report)
  Hospital Medical Staffing (Platt Report)
  Senior Registrars
  Senior Registrars
  St. Lawrence Hospital, Chepstow
  St. Lawrence Hospital, Chepstow
  Board of Governors, Hammersmith Hospital (Secretary)
  Board of Governors, Hammersmith Hospital (Secretary)
  Nurses
  Nurses
  Patient (Member's Letter)
  Patient (Member's Letter)
MINISTRY OF HEALTH
  Drugs and Alcohol (Deaths)
  Drugs and Alcohol (Deaths)
  Poliomyelitis (Oral Vaccine)
  Poliomyelitis (Oral Vaccine)
  General Practitioners' Assistants (Retrospective Payments)
  General Practitioners' Assistants (Retrospective Payments)
  Diphtheria
  Diphtheria
  Drugs and Driving
  Drugs and Driving
  Doctor, Essex (Terms of Service)
  Doctor, Essex (Terms of Service)
  GENEVA CONFERENCE ON NUCLEAR TESTS
  GENEVA CONFERENCE ON NUCLEAR TESTS
  ICELANDIC FISHERIES (AGREEMENT)
  ICELANDIC FISHERIES (AGREEMENT)
NATIONAL FINANCE
  Commonwealth and Colonial Territories (Stationery Office Agents)
  Commonwealth and Colonial Territories (Stationery Office Agents)
  Ottoman Guaranteed Loan, 1855
  Ottoman Guaranteed Loan, 1855
SCIENCE
  Medical Research (Arthritis and Rheumatism)
  Medical Research (Arthritis and Rheumatism)
GIBRALTAR
  Anglo-Spanish Relations
  Anglo-Spanish Relations
EDUCATION
  Sub-normal Children
  Sub-normal Children
COLONIAL TERRITORIES
  Overseas Services Resettlement Bureau
  Overseas Services Resettlement Bureau
GOVERNMENT INFORMATION SERVICES
  Libraries, Colonial Territories
  Libraries, Colonial Territories
SCOTLAND
  New Hospital, Coatbridge and Airdrie
  New Hospital, Coatbridge and Airdrie
  Smoking and Lung Cancer
  Smoking and Lung Cancer
WIRELESS AND TELEVISION
  Reception, Horncastle
  Reception, Horncastle

Preamble
The House met at two of the clock, The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Worcester

ROAD TRAFFIC BILL [H.L.]
2.5 p.m.
Debate resumed (according to Order), on the Motion for Second Reading moved on Thursday last by Lord Chesham.
LORD SHEPHERD: My Lords, I rise to resume the Second Reading debate on the Road Traffic Bill. Before I do so, I would, if I may, refer to the sad news that we read in to-day's papers regarding the noble Lord, Lord Gifford. It is not usual, as I understand it, to refer to a noble Lord who passes away, but the noble Lord, Lord Gifford, was due to speak last Thursday, and, unfortunately, he was not able to do so. I am sure I speak for noble Lords throughout the House when I express condolences to the family of the noble Lord.
My Lords, this is April, 1961; it is the month in which a man has gone into space. I refer to that to indicate the advances that we have made in the field of science. It is unfortunate, a sad commentary on our society, that we have not been able to make the same rapid advances in the field of social problems as we have done in science. We are to-day, in my view, discussing a Bill which deals with one of the greatest social problems, not only of this country but of any country that has a high density of population and, one might say, a high civilisation, with a large number of motor cars—if motor cars are a sign of civilisation. I think Parliament is at last waking up to its responsibilities. I certainly sensed that feeling last Thursday when we had the first day of debate on this Bill.
The noble Lord, Lord Chesham, when he introduced this Bill, I thought put the issue very clearly before your Lordships. He then said that in 1960 we had on our roads 6,970 dead, 90,000 seriously injured
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and 240,000 slightly injured. It is true that these figures do not compare with the terrible toll in the United States, but when one considers our own population they are very sizeable figures. The noble Lord, Lord Chesham, also said that during the 1960s, if the present trend continues, over a million men, women and children will die or will be seriously maimed on our roads. Out of a population of 50 million one million people are under sentence. These people will have no appeal; there will be no mercy for these unknown people. In fact, there may be one of us in your Lordships' House who, in the next ten years will be under sentence. We must remember that, when we consider the task that we have to face if we are going to reduce this terrible toll.
Financially, the figure of cost is enormous, not only in the cost of our hospitals but also in the loss of production; but purely for the sake of reducing human misery, human suffering, definite and drastic action has to be taken. I therefore would ask the question: when we look at this Bill, is drastic action likely? Because I believe that the country and the mass of the people, would accept drastic action, even drastic curtailment of the rights on the road which they have to-day, if it would reduce the number of people who are killed or injured on the roads. If the Government have produced this Bill—which I do not think has been welcomed very warmly from any section of the House—and feel that this is the best they can do with public opinion, then I think it is up to the Government and to Parliament to bring the issue clearly before the people. I am sure that if our people fully realised the position they would support the Government in whatever drastic action they took.
The noble Lord, Lord Lucas of Chilworth, said that most accidents in this country stem from one failure: impatience, intolerance, and he used the word "hoggishness". I am quite sure that is the case. I am sure that any noble Lord who drives will see flagrant acts of intolerance every day on the roads. It is surprising to me, because this is not the normal British human nature. The Britisher now will queue happily. He will do so not because it is regimented on him; he will do it because he believes it is an

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act of good neighbourliness. And yet he somehow changes immediately he gets behind a steering wheel.
There are some who say that speed in itself is the cause of accidents. I do not think that speed by itself is a cause, but when you take it in association with the state of our roads to-day undoubtedly speed becomes a prime factor. I would suggest that 80 per cent. of the roads of this country are quite unsuited, in safety, to speeds in excess of 40 to 50 miles per hour. It is to me complete madness that you can go out of a town, with its well-lit, wide roads, on which you have had to drive at 30 miles an hour, to go into what is nothing more than a lane, and there you are permitted to go at any speed you wish. I am a driver; I do a fair amount of driving. I believe that the majority of people could conform to a national speed limit, if they were required to do so. I personally should like lo see the continuation of the 30 m.p.h. speed limit in built-up areas. I should like to see a national speed limit of 50 m.p.h. But I would derestrict roads which have been constructed for, and are capable of taking, speeds in excess of 50 m.p.h. In other words, I am advocating a different approach, for at the present moment we derestrict all roads except those in built-up areas.
It is interesting to know that during previous holidays the Minister has designated certain roads to carry a 50 m.p.h. speed limit. These were trunk roads which in themselves were capable of taking high speeds. What was the result of that imposed speed limit? The noble Lord, Lord Chesham, gave it. He said that there was a reduction of 15 to 20 per cent. of accidents as against a rise over all the other roads, of 3 per cent. If, following a speed restriction, the effect is a quite big reduction in accidents on trunk roads, I ask what would have been the effect had we had a national speed limit of 50 m.p.h. on roads which, frankly, deserve a speed limit? But if it is not possible to have a national speed limit all the time, I hope the Minister will take powers to see that at week-ends and during the heavy traffic months of July and August we shall have a national speed limit.
We must face the fact that the number of vehicles coming on to the roads these days is tremendous. I see that in 1950 we had 4,409,000 vehicles on the
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roads, and in 1960 it is estimated that there will be 9,739,000. With all this increase in traffic, increasing regularly every year, with hardly any extension of road building, obviously something is going to happen. There will be a continuous rise in the accident rate. I would say about this Bill that it could not be regarded as an attack upon the motorist. I believe that this Bill provides as much protection to the vast majority of road users, motorists, as it does to pedestrians.
The debate last Thursday was dominated by the first two clauses, which we can call the drink clauses. Speaker after speaker expressed concern, not that the Bill went too far, but that it did not go far enough—it did not have sufficient "tick." The noble and learned Lord, Lord Denning, expressed concern as a Judge. It is true that the number of accidents arising from drink is, percentagewise, not a large one, although it represents quite a considerable figure in itself. But, in my view, the magistrates have not dealt with that matter as seriously as they should have done. In 1959 there were 3,721 convictions. Admittedly, 170 people were sent to prison. The average fine was one of £24. It is true that one could criticise magistrates and the courts for not using the powers that have been given to them by Parliament. But
I thought that the difficulty of the courts was very well put by the noble
Baroness, Lady Wootton of Abinger. She said that one of the difficulties of the courts was receiving hard, concrete evidence of an infringement; that there was a lot of dispute as to the evidence, and that therefore, whilst the penalties available to the courts were quite severe, they tended, because of the evidence, to give the benefit of the doubt. Therefore, if you regard the punishments available to the courts as deterrents, then these deterrents were not administered, purely on the question of the weight of evidence.
Therefore, when one looks at that matter and then at the Bill, one must ask oneself whether the Bill, as it now stands, will give this hard evidence that the courts require. I personally doubt whether that will be the case, and I would support the views of the noble and learned Lord, Lord Denning, and others that the Government should in this Bill make these tests compulsory.

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I was quite satisfied from what was said by the noble Lord, Lord Taylor, who speaks with considerable medical experience, that these tests would in themselves be fair to the driver. If they were compulsory we should then have the hard information and evidence, and the courts would be able to convict and to administer the deterrent. I should hope that the existence of this deterrent would reduce the number of people driving under the influence of alcohol, but I do not believe that it is possible for this evidence to come purely from these compulsory tests. I regard it as essential that there should be stated in the Bill a definite amount of alcohol which should not be exceeded by a person driving.
Personally, I should prefer to delete the first two clauses, but I would certainly have included in Clause 1 the word "impaired" and let it be well understood that that referred not only to impairment from alcohol but also to impairment as a result of a person having long periods of driving when he has become tired, and certainly when he is indisposed. There was a remarkable Report the other day on the effects of Asian 'flu on a driver, and any noble Lord who has had Asian 'flu will know its effect upon him. Persons who are indisposed are just as dangerous on the road as the man with alcohol, and therefore if one had a first clause containing the word "impaired" the courts could take such a condition into account if there had been an accident. I would certainly wish to see, as a second clause, provision for compulsory tests.
I do not wish to speak too long on this matter, but I want to say one word on Clause 3, which deals with disqualification. I do not quite know how the Government have divided the disqualifications between Parts I, II and III. I fully support all those cases in Part I for which obligatory disqualification is provided, but I wonder why in regard to some of the offences in Part II disqualification should be purely discretionary. For instance, the first is for dangerous driving. If it is a first offence, it is subject to discretionary disqualification and also a fine, but the noble Lord, Lord Chesham, explained to us how the courts have regarded this particular offence to date. During 1959 there were 7,177 convictions, but less than 50 per cent.
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of the drivers were disqualified; and the average fine was £15. Dangerous driving is obviously an offence that should have a pretty heavy deterrent, and I would definitely recommend that that particular offence should either be in Part I, which provides for obligatory disqualification for twelve months, or that there should be a different section under which there could be, if desired, automatic disqualification but for a lesser period.
Then in Part II there are provisions relating to careless driving. For this offence, again, disqualification is discretionary, but the maximum fine has been increased to £100; so obviously the Government recognise this as one of the serious offences. But during 1959 there were 55,000 convictions, in connection with which there were 3,000 disqualifications; and the average fine was £7. When one looks at the previous legislation and then at this new Bill, is there any reason to believe that the courts will take a different view of the matter after the passing of this Bill? They have not used their powers of
disqualification which this House has always recognised as one of the biggest deterrents to road accidents. I would therefore recommend that, apart from the obligatory disqualification for twelve months, there should be a Part which provides for obligatory disqualification for at least six months, and in which these serious offences should be included.
Disqualification should also be obligatory for the offence of being in charge of a vehicle while tinder the influence of drink or drugs. Under this Bill the fine for that offence Chas been increased to £100, with provision, also, for a term of imprisonment; but if the offence is so seriously regarded I would recommend that discretion should not arise there but that disqualification should be obligatory for at least six months.
LORD CONESFORD: My Lords, may I interrupt the noble Lord for a moment? I think that on this particular point he is being unfair to Her Majesty's Government. If he will look at item 4 of the First Schedule he will see that that makes disqualification obligatory in the case of drink.
LORD SHEPHERD: Did I not say "while in charge of a vehicle"?
LORD CONESFORD: That is only a short description.
LORD SHEPHERD: I was referring to the offence in Part II—being in charge of a motor vehicle.
LORD CONESFORD: I am sorry.
LORD SHEPHERD: My Lords, I want to say something about lights on vehicles. The Minister is taking power regarding headlamps. I am not quite sure whether he has power regarding indicators. Vehicles which are coming into this country, or which are being produced here to-day, have a very wide range of indicators. Some vehicles have an indicator built inside their side-lamps, and on many occasions when the indicator is being used during the day time it is hard to recognise whether the indicator is working or the lamp is faulty. Also, many of the indicator lights at the rear of vehicles are so large that they tend to blind the driver behind. Therefore, if the Minister has not power to regulate the size and power of the light, or the
position of the indicator. I think he should take such power under this Bill. If he already has that power I should like to know from the noble Earl who is to reply why he is not using it.
My last point concerns Clause 14 of this Bill, which deals with trailers. The Minister glossed over this when introducing the Bill. This clause makes it possible for the Minister to make regulations permitting a motor vehicle to tow two trailers. I do not know what is in the mind of the Government in this matter, but I certainly hope that it is not something similar to what one sees in Germany—a very heavy lorry towing two heavy trailers. Such a combination may be perfectly all right on the German autobahn, but the chaos that would arise on most of our roads in this country would be beyond belief. So I think the House should get from the Government a clear understanding of what they intend by that clause.
With regard to accidents, there are people who say that although some 6,000 people die each year, that total is not so high as in Germany or America; that it is approximately the same figure as in 1939, when there were only half the number of vehicles on the road. But when one sees personally the results of these accidents and learns, in many cases, of the madness which has caused them (because many, if not most, of these accidents need never occur), one realises that we shall never reduce these
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figures purely by legislation or in any way other than by the provision of better roads. Nevertheless, I hope that Her Majesty's Government will continue with their propaganda efforts. I believe that recently those efforts have been rather genteel. I remember the shock that was caused (I believe it was by the noble Lord, Lord Morrison of Lambeth) through the display of the poster about "Death on the Roads". But I believe that that is the only type of publicity and poster which will impinge itself on people's minds. I hope that the Government will continue to use television and the Press, and will concentrate their teaching efforts in the schools with children. It needs far more realism on the part of the people, and I hope that the Government will continue to press the people to drive with far more care, because it is only by care that we can reduce the accidents of to-day.
LORD AMWELL: My Lords, before the noble Lord sits down, may I put this point to him? I think it is a very important one. He said that certain things could be altered only by the provision of better roads. Did he forget the fact that there is also the point of view that provision of better roads is an encouragement to greater speed? Does he not agree that we must include some kind of speed control as well as provision for better roads if we want to reduce the number of accidents? There is a case, in the part where I live, of the famous Spaniards road, where a large number of people object to the taking away of a tollhouse that is quite art anachronism. Granted! But they realise that if that tollhouse is taken away, the wonderful road over the Heath, the Spaniards road, going right up to the Gate House at Hampstead, will be another racecourse for the type of motorist we have in mind.
House adjourned during pleasure, and resumed by The LORD CHANCELLOR.
2.32 p.m.
LORD SWAYTHLING: My Lords, after a full afternoon's debate on. Thursday, I think it could be readily acknowledged that practically every one of your Lordships welcomes this Bill as an attempt to make the roads of this country safer than they are to-day, but the majority seem to think that a great deal will have to be tightened up and

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altered on the Committee stage. I fully agree with that view. So much has already been said, and there are so many others who wish to speak, that there are only a few matters to which I wish to draw your Lordships' attention. It seems to me unfortunate to lay down in any Bill penalties which justices have to impose regardless of their own views as to the merits of each particular case, but I feel that we have reached a state of traffic in this country when compulsory disqualification may well be necessary for most of the serious offences such as are outlined in the First Schedule of this Bill.
Your Lordships may recall that prior to 1956 magistrates were able to limit disqualification to the type of vehicle involved in the offence. This was, I would submit, a useful power for the magistrates to hold. I will give your Lordships an example of a man who had a long and perfectly clean record of driving a van or a car for his living and then acquired a motor bicycle for his own use and pleasure when not at work. If he committed an offence while riding his motor cycle, an offence which probably was not a very serious one but one for which disqualification was justified, it might be thought the magistrates would consider that the correct thing was to disqualify him from riding a motor bicycle but allow him to continue to drive motor cars or vans, for which he had a long, clean record.
However, in 1956 this power was taken away and disqualification had to prohibit the use of any motor vehicle on the public road. Up to 1956 it was obligatory to disqualify a defendant found guilty of driving a motor vehicle while uninsured against third party risks, and numbers of the cases which came before the
magistrates worried them considerably. While it was well realised by magistrates how serious an offence this was, in case a motorist had an accident and could not pay compensation for the damage he had caused, frequently the defendant could produce mitigating circumstances which, while not coming under the category of "special reasons" as defined by the courts, led the bench to consider that disqualification should not have been imposed. After 1956 this obligatory disqualification for this offence ceased, and I know that many magi-
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strates welcomed this and, while still disqualifying in many cases, were able to use their discretion in each particular case. I am sorry to see that this offence is included in Part I and, therefore, disqualification again becomes obligatory.
I should like to support most strongly the point raised by the noble Lord, Lord Lucas of Chilworth, who pointed out that under the Bill a motorist can be found guilty, as a third offence, of a minor offence such as (he instanced) a side light going out, and have a compulsory disqualification of six months. I feel that this must be remedied at a later stage of the Bill. I should like to mention a curious provision in the law as it is at present, which seems not to be one that is generally known. The other day a motorist was found guilty of driving without due care and attention by the bench on which I have the honour to serve. After conviction, on inquiry as to the defendant's previous history we were told that he had first of all had a conviction for dangerous driving followed by one for driving without due care and attention. He had then been convicted again of dangerous driving and fined £30 and had to pay £30 costs and he was disqualified for three years. In the same month he had had a further conviction for dangerous driving and was sent to prison for four months and disqualified for ten years. The ten years had only just elapsed when the offence for which he was before the bench occurred again. But under the law as it is at present, in view of the fact that the last disqualification was more than three years previously, the bench were unable to disqualify him for more than one month. It had to be treated as a first offence of driving without due care and attention. I am glad to see that this Bill, when passed, will alter that.
I should also like to refer to the method of removal of disqualification as contained in Clause 4. I was very surprised to hear the noble Lord, Lord Chesham, say that he thought that 50 per cent. of those disqualified for a year got their disqualification removed. I should not have thought it was anything like that figure. I should not have thought it was even 50 per cent. of those who apply for its removal, and those who apply are only a proportion of those who are so disqualified. My experience

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on the bench has been that a driving licence is restored only in cases where the defendant can show a change of circumstance since disqualification and make out a very good case.
However, there is another reason for which I dislike Clause 4, where it is laid down that all such applications must go before quarter sessions. In some counties quarter sessions' lists are very overloaded already. If, as is assured, the number of disqualifications are considerably increased by this Bill, I feel that the calendar at quarter sessions might become swamped. In these days when there is a school of thought that certain work should be taken from quarter sessions and added to the work of the magistrates at petty sessions, it seems to me quite unnecessary to ask quarter sessions to deal with these cases when they know nothing of what occurred in the original offence. I agree with my noble friend Lord Airedale that it would seem to many unnecessary that power should be given to a defendant to come back to have his disqualification removed. While application can be made for the removal of disqualification, I feel strongly that it should continue to be made to the magistrates' court which originally ordered the disqualification.
During the earlier part of 'this debate mention 'was made of the 50 miles per hour speed limit which was imposed last summer on Saturdays and Sundays and Bank Holidays—the noble Lord, Lord Shepherd, has referred to it to-day. While not supporting him in his idea for what he calls a "national speed limit" applied continuously, I would say that if this 50 m.p.h. speed limit was successful, as many people have suggested it was, in reducing the number of accidents, the correct thing to do would be not to impose this limit as it was last year but to insist on a 50 m.p.h. speed limit on every Saturday, Sunday and Bank Holiday during the currency of British summer time, on all roads in the country. Under last year's method, vehicles on certain by-passes and new wide roads, where speed was very often safe, were limited to 50 m.p.h., but when they left these roads and entered older, narrower and more winding roads there was no speed limit. This seemed to me fantastic. The 50 m.p.h. Emit on Saturdays, Sundays and Bank Holidays in the summer
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should, if applied at all, be applied to all roads, but not, of course, to motorways or, I think, to dual carriageways. A certain number of the latter have, of course, already got speed limits.
The other matter that I wish to draw attention to may not strictly come under this Bill, but I very much hoped when I first read the Bill that there would be such a provision in it. I would remind your Lordships that during the time that the Road Traffic Bill was before the House in 1956 I moved an Amendment which would allow people who park their vehicles in lighted streets to do so without turning on the lights of their cars, as is now permitted in London. I suggested that any chief constable might prohibit this in roads where he thought it was dangerous to do so, and would have to mark the roads clearly with a recognised traffic sign.
In moving this Amendment I explained to your Lordships that many magistrates took exception to having to fine motorists who came before their bench accused of doing something that in some other places they were permitted to do. We have frequent cases before us on my bench where the defendant says that he did not know it was not all right to do here what he was allowed to do in London. I was informed the other day that on the outskirts of London there are roads or streets partly in the London area and partly outside it, so that it is perfectly legal for a motorist to leave his car without lights at one end of the street but not legal for him to do so at the other end of the street. I do not know if this is a fact, but the information came to me through a fellow magistrate, and I have every reason to believe that it is correct. It is difficult enough for people to be expected to know the law as it applies to the whole country, but for them to have to learn also the law in any and every neighbourhood or parish seems to me entirely unreasonable.
In resisting the Amendment in 1956 the noble Lord, Lord Mancroft, who was speaking for the Government, said that they had only just made their regulations the other way round, permitting chief constables to give permission for parking without lights in places where they thought it was suitable. He went on to say that there was something to be

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said for my Amendment, and added—I quote from the OFFICIAL REPORT, Vol. 198, col. 1183:
"Let us give the present system a chance to work. We may come round to the noble Lord's thinking on this matter, but I have consulted the police on the question and the majority of chief constables wish to try the scheme I have been explaining to your Lordships. In due course, if we find our fears are not fulfilled and the matter is working more smoothly, then we can, by regulation, come round to Lord Swaythling's proposals".
I know there is nothing in the present Bill to change the method round, but, in view of the very unsatisfactory way that the present method is working, I should like to hear from the noble Earl who is going to reply on behalf of the Government that they recognise that the time has now come to change round and to have a universal law concerning this matter for the whole country; and the chief constables who think that any particular piece of road should be excluded should contract out instead of, as at present, having to contract in. When they fail to do so—and I believe they have given permission in only a comparatively few cases—the motorist is left in ignorance of the true position, and is in great difficulty at present.
2.44 p.m.
LORD CONESFORD: My Lords, in this debate on the Second Reading I propose to deal mainly with two topics: the provisions relating to drink or drugs and the proposed changes in the law about disqualification. The provisions relating to drink are the subject of the first two clauses, the first providing a new definition of unfitness to drive and the second providing for the use of chemical tests. Both these clauses have been criticised, and will clearly require detailed examination in Committee. In general, I strongly support both clauses, though I believe that some Amendments are desirable, and I am confident that Her Majesty's Government will carefully consider them. When the new definition at present contained in Clause 1 is discussed in Committee, we shall, I understand, have the benefit of the advice of my noble and learned friend Lord Denning and other Law Lords. In these circumstances I do not propose to discuss the definition to-day, but shall proceed at once to Clause 2.
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My Lords, in my submission the case for chemical tests is quite overwhelming. Properly applied, these tests can substitute accuracy for inaccuracy and certainly for doubt. They can, indeed, provide the court with the best available evidence. Most of the English law of evidence is designed to secure that the best evidence shall be made available—hence, for example, our rule excluding hearsay. If the court is not to be allowed the benefit of chemical tests when available, then, in effect, the court is to be denied the best evidence. In my submission, the exclusion and not the admission of such evidence would be contrary to the principles of British justice.
I know that there are people, both in Parliament and outside, who are genuinely troubled by the idea that the admission of such tests may somehow conflict with the principle that an accused person should not be forced to incriminate himself. In my submission, this idea arises from a complete confusion of thought. The principle that a man shall not be required to incriminate himself means that a man cannot be required to testify against himself: the prosecution cannot put him in the witness box when they are bringing a criminal charge against him. The principle does not mean that the state of the man's body at a material time is something which cannot be given in evidence. Fingerprints are only one example to the contrary.
My Lords, may I mention, in this connection, a most interesting judgment of the Supreme Court of the United States in a case decided in the year 1957, and reported under the name Breithaupt v. Abram? The facts in that case were these. There had been a collision between a lorry and a car. The three persons travelling in the car were killed. The lorry driver was seriously injured, and had to be taken to hospital. A nearly empty whisky bottle was found in the glove compartment of his lorry. While he lay unconscious in the hospital the smell of liquor was detected in his breath, and the police asked a doctor to take a sample of his blood. This the doctor did while the petitioner, the lorry driver, was unconscious. The examination of the blood showed a proportion of 0·17 per cent. of alcohol. At his trial, an expert gave evidence that with this

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percentage he would be under the influence of intoxicating liquor. He was convicted and sentenced for involuntary manslaughter.
The case came before the Supreme Court, as a result of proceedings with which I will not trouble your Lordships, and the question arose whether the Due Process Clause of the Fourteenth Amendment of the Constitution had been violated. Counsel for the accused argued that taking the blood sample without his consent constituted "an unreasonable search and seizure", and that it "compelled him to be a witness against himself". The Supreme Court rejected this argument, and in a note it is pointed out that
"47 States use chemical tests, including blood tests, to aid in the determination of intoxication in cases involving charges of driving while under the influence of alcohol".
The Supreme Court was not unanimous, but the judgment of the Supreme Court was
given by Mr. Justice Clark, and with your Lordships' permission I wish to quote a few sentences. He said:
"The test upheld here is not attacked on the ground of any basic deficiency or of injudicious application, but admittedly is a scientifically accurate method of detecting alcoholic content in the blood, thus furnishing an exact measure upon which to base a decision as to intoxication. Modern community living requires modern scientific methods of crime detection lest the public go unprotected. The increasing slaughter on our highways, most of which should be avoidable, now reaches the astounding figures only heard of on the battlefield. The States, through safety measures, modern scientific methods, and strict enforcement of traffic laws, are using all reasonable means to make automobile driving less dangerous.
"As against the right of an individual that his person be held inviolable, even against so slight an intrusion as is involved in applying a blood test of the kind to which millions of Americans submit as a matter of course nearly every day, must be set the interests of society in the scientific determination of intoxication, one of the great causes of the mortal hazards of the road. And the more so since the test likewise may establish innocence, thus affording protection against the treachery of judgment based on one or more of the senses. Furthermore, since our criminal law is to no small extent justified by the assumption of deterrence, the individual's right to immunity from such invasion of the body as is involved in a properly safeguarded blood test is far outweighed by the value of its deterrent effect due to public realisation that the issue of driving while under the influence of alcohol can often by this method be taken out of the confusion of conflicting contentions."
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My Lords, I hope that the House will forgive me for having read that extract from the judgment. but I think it is more directly in point than any judgment at present available in our own courts.
I therefore strongly support the Government on the general policy of Clause 2, but I should like to raise three questions about it. I am particularly glad that my noble and learned friend the Lord Chancellor is in his place, in case he thinks these points worthy of further consideration. The first point is one that I know is worrying many motorists and their advisers, and even the motoring organisations. It will be observed that in line 17 Clause 2 says:
"… if it is proved that the accused, when so requested at any such time"—
that is, any material time—
"refused to consent to the taking of or to provide a specimen for analysis or measurement, his refusal may …"
and so on. The point to which I invite the attention of the House is this. The clause says "the accused, when so requested". There is no limitation of any kind on the circumstances of the request and on who may make it. If the police make it, refusal would, I suggest, be clearly unreasonable. But I should like the Government to consider whether there ought not to be some words of limitation in order to protect the driver from a wholly irresponsible request by some lay person. I know that there is at present in the Bill the provision that it would be open, to the accused to show reasonable cause for his refusal, but I think it is worth consideration whether we should not put into the clause something requiring that the request itself shall be a reasonable one.
The second question on this clause, which was raised by several noble Lords in the debate on Thursday, and also in the opening speech this afternoon, I think, is whether the test ought not to be compulsory. The Government have not made it compulsory, though refusal to submit to a test without reasonable cause may be given in evidence. This may, in effect, provide a considerable measure of compulsion. Let me say at once that, as at present advised, I have no strong views on whether the test should be compulsory, or whether the matter should be left as it is at present under this clause. I should only wish to say quite clearly

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that I should have no objection whatsoever to compulsion in the matter on any point of principle.
In the case in the United States which I have cited, there is an interesting note showing that the State of Kansas has passed a law declaring that any person who operates a motor vehicle on the highway there shall be deemed to have given his consent to submit to a chemical test of his breath, blood, urine or saliva for the purpose of determining the alcoholic content of his blood. If he refuses to submit, his operator's permit is suspended. I give that merely as an example to show that there are other indirect ways of securing compulsion if, for any reason, compulsion itself is not desired. However, I know of no principle against compulsory tests, but I think that what the Government have at present in the clause is not necessarily at all ineffective.
Finally, on this part of the Bill, a great number of noble Lords, on the last occasion, and the noble Lord, Lord Shepherd, to-day, have questioned whether it is not desirable that the Bill itself should give some guidance on the significance of any figures which the test may reveal. There is obviously a great deal to be said for that. I think I am right in saying that, as the Bill stands, though the percentage of alcohol in the blood or the urine can be shown by the certificate and given as evidence in court, there is nothing that will enable the court to take judicial notice and to say that these figures show the accused to be under the influence of drink. Therefore it seems to me that, as the Bill stands, in every case the expert evidence of a doctor will be required. There may be something to be said for that. But, equally, I could understand that many might think it far more convenient that some sort of guidance should be given to enable a lay court to interpret the figures which the examination revealed.
LORD HAWKE: My Lords, may I interrupt my noble friend? How is he going to make such figures practicable? It is a well-known fact that some people can get drunk on one glass of wine, but others do not get drunk on half a bottle of whisky?
LORD CONESFORD: My Lords, while the figure may be open to doubt, I think that the medical profession would have no difficulty at all in saying that more than a certain amount of alcohol in the blood proved beyond the shadow of doubt that a man's ability to drive properly was impaired. That is the significance of this definition. I quite agree with the point which I think my noble friend has in mind: that even if a motorist had not so much as that stated figure, other evidence might still show that he was unfit to drive a motor car; and other evidence would not be excluded. I would only point out that, as the clause stands at present, it would be necessary in every case to call medical evidence.
Before I leave Clauses 1 and 2, may I mention two smaller matters? I agree most emphatically with the noble Lord, Lord Taylor, about the absurdity of the clause saying "water" when it means "urine". When I first read this clause, I felt that Mrs. Grundy had joined either the Parliamentary Draftsmen's Office or the Home Affairs Committee of the Cabinet. I cannot say which of these alternatives struck me as the more improbable. If the Government do not put down an Amendment on this subject, I shall certainly support the Amendment adumbrated by the noble Lord, Lord Taylor.
There is also the point raised by my noble friend Lord Teynham, on which I can offer him some comfort and relief. He thought that the law was such that a motorist, who found himself unfit to drive on account of drink, and therefore properly determined to leave his car and hand it over to a responsible person, could be found guilty of being drunk in charge of a car. There was a time when the law suffered from that defect, but under the leadership of my noble and learned friend who sits on the Woolsack we put that matter right in 1956, and if my noble friend will look at Section 6 of the 1960 Act, he will find that the law is now what he wishes it to be.
I pass from the first two clauses to the very important matter of disqualification. There was some argument in the course of the debate last Thursday on whether disqualification is a penalty—and, indeed, the most effective deterrent among all penalties—or whether it is the withdrawal of a privilege to use a dangerous machine,

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a withdrawal justified in the interests of public safety, apart altogether from any question of punishment. That point was put most ably in an extraordinarily valuable speech contributed by the noble Baroness, Lady Wootton of Abinger, on the last occasion. I think that disqualification is quite clearly both. It is a deterrent, and in many cases the most effective of all deterrents. On the other hand, I entirely agree with the noble Baroness, Lady Wootton of Abinger, that apart altogether from punishment, it is frequently justified in the interests of public safety.
Nothing was made clearer than the value of disqualification in a series of speeches which my noble and learned friend on the Woolsack delivered in your Lordships' House in 1956, while the Act of that year was passing through this House. In a speech, which I shall not now quote but which has been frequently quoted, the noble and learned Viscount the Lord Chancellor gave the strongest possible indication that he thought that disqualification should be used in proper cases. Since that date, his speech has been quoted by numerous people who
take art interest in this subject in addressing magistrates. Magistrates were asked to mark his words, and in my opinion they certainly were beginning to do so at the time the present Bill was introduced.
I think that disqualification can be an admirable penalty. It is sometimes said that it is too severe where it interferes with a man's livelihood. That seems to me to involve a hopeless confusion of thought. Which of us would take that view if it were a question, we will say, of improper conduct by the pilot of an aeroplane? We rely entirely on the rules being absolutely observed by pilots of aeroplanes, and, if there were any misconduct by a pilot, who would say that his licence should not be interfered with on the ground that it would interfere with his livelihood? That is not a tolerable argument. But I agree with the noble Lord, Lord Swaythling, that in general it is not a good thing to remove the discretion of the court. There are certain cases where it might be justified, but in general I agree completely with the noble Lord that it is not a good thing to remove such discretion.
I have three criticisms to offer of what the Government are doing on the sub-
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ject of disqualification, and the third is much the most important. But let me give the others first. The first criticism is one which has already been made by the noble Lord, Lord Swaythling. I feel some doubt as to whether offence No. 7, using a oar when uninsured, ought to appear in Part I of the First Schedule. I do not propose to argue that point to-day. I agree, of course, that that can be a very serious offence, but it can also be an offence where many rather difficult technicalities are involved. The reason I do not propose to say anything more about it this afternoon is that my noble and learned friend Lord Goddard will give us the benefit of his wisdom and experience in this matter when the Committee stage is reached.
Further, I have genuine doubts about Clause 3 (3), which provides that a third conviction for an offence in Parts I or II of the First Schedule shall automatically involve disqualification and that magistrates shall have no discretion. I should not be in the least against the court being able, when deciding on the length of disqualification for a third offence, to take into consideration all previous offences, but I am very doubtful whether this compulsory disqualification on a third conviction in a particular group of offences will necessarily have the result that the Government desire. I do not, of course, wish to express a final view on this point until I have heard the arguments of Ministers upon it.
I now pass to what I regard as easily and beyond all controversy the worst feature of the present Bill. It is a feature of which the public were wholly ignorant at the time this debate opened. Nothing is said about it in the Explanatory Memorandum. Nothing has been said about it, I think, by the Minister in any interview which he has given—and he is not incapable of getting some publicity when he wishes. This particular matter, I think, was wholly unknown outside this House at the time this debate opened. Indeed, it is so hidden that it is unlikely it would have been discovered, except by a lawyer. I will tell the House at once what it is. The fault is this: that the Bill removes from the courts the power to disqualify in the case of a whole series of offences, for which the courts are now disqualifying, without any objection to what they are doing having been taken in any quarter.

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Perhaps it would be convenient if I were to tell the House how this comes about. If your Lordships look at the list of repeals at the end of the Bill (page 31) you will find in line 35 that one of the repeals is Section 104 of the Principal Act—that is, the Act of 1960. Disqualification at present takes place under Section 104 of the principal Act, and disqualification can be exercised for the offences set out in the Eleventh Schedule to the 1960 Act. The only way in which you can discover what powers to disqualify have now been withdrawn from the courts is to go through the list in the Eleventh Schedule, one by one, and see which offences have not been repeated either in Part I or Part II of the First Schedule to this Bill. That is the way in which numerous powers to disqualify have been swept away.
I am not going through them all, but I will mention three. I do not profess to know what, if anything, the Government had in mind in deciding on this wholesale removal of the power of the court to disqualify, but the reason cannot be that they wish to include everything that involves danger and nothing more, because one of the offences for which they have swept away the power to disqualify is, believe it or not, injuring persons by wanton or furious driving under Section 35 of the Offences Against the Person Act, 1861. Wanton or furious driving causing injury has been an offence since 1861, and when a motor vehicle is used to commit this offence there has been, very properly, a ground for disqualification. Then there is the question, on which I do not wish to add anything to what was said so admirably by the noble Baroness, Lady Wootton of Abinger, on the last occasion, of disobeying the conditions of the provisional licence. A most admirable penalty for that offence, as the noble Lady said, is a short sentence of disqualification to remind the learner at the very beginning of his or her career that there are rules that have to be obeyed.
The third example I give is of taking and driving away without the consent of the owner or other lawful authority. What an offence to choose to take out of the category of those for which you can disqualify! Taking away a car without the consent of an owner is often the precursor of other crimes: the car is
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perhaps to be used for theft; or it is to be used by a young man for driving a fast and powerful vehicle which he is wholly incapable of controlling. Of course, it is true that when he does this he may also do something else for which he can be disqualified, but, as the noble Lady pointed out, it is by no means certain. For instance, it is by no means certain that his insurance policy will not cover him, and therefore by no means certain that he will not be insured. But even if it were true that he will commit some other offence for which he can be disqualified, is that a ground for removing the power to disqualify for this offence? Why should two offences have to be charged in order to get disqualification?
In my submission to your Lordships, which I am confident will command some agreement, there is no reason whatever to remove any existing power of disqualification, unless it can be shown either that that power has been abused or that Her Majesty's judges have been consulted on this change of the law and have advised it—and I shall be very much surprised if I am given that information. I say that there is no justification for the withdrawal of these powers. I would submit respectfully to Her Majesty's Government that this change in the law, and this removal of the power to disqualify, which was condemned by the noble Baroness, Lady Wootton of Abinger, by my noble and learned friend Lord Denning, by my noble friend Lord Molson and by the noble Lord, Lord Lucas of Chilworth, on the last occasion, and to which I have developed some of the objections to-day, is wholly wrong. I believe that the Government themselves ought to put it right by appropriate Amendments in Committee, and I hope that we shall hear in the final speech to-day that that is their intention. But if the Government do not elect to put this matter right, then I hope that this House will do its duty. I will certainly, if no such Government Amendments appear on the Marshalled List, do my best to put down my own unskilful Amendments. That is all I wish to say on the clauses in the Bill, but there is one other matter, not in the Bill, to which I should like to allude.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, is my noble and learned friend leaving that point?
LORD CONESFORD: Yes.
THE LORD CHANCELLOR: I have listened most carefully to what he has said and I should like him to consider one point. He mentioned wanton and furious driving. What has worried me greatly for years is the question of the different degrees of negligence on which juries have to be instructed by my learned brethren on the Bench. My noble and learned friend will realise that one starts with civil negligence; one then goes to careless driving (I am ascending the scale), then up again to dangerous or reckless driving under the old Act; and then one has two other categories of wanton and furious driving, which he has mentioned, and manslaughter. Manslaughter has, in fact, practically gone, except in cases which are akin (I use that word in the broadest sense) to murder. As my noble and learned friend knows, the charge has been inserted, by the almost unanimous wish of this House, of killing by dangerous driving. I should like him to consider (and I hope he will understand that I do not intervene to oppose him, but simply to ask him to reconsider his point) that if you had this other wording of "wanton and furious driving" above reckless or dangerous, careless and ordinary negligence, you would be making the task of summing up enormously difficult. I hope that he will not mind my mentioning that point. I wanted to do it at once, so that he could consider it before the Committee stage.
LORD CONESFORD: My Lords, I am most grateful to my noble and learned friend on the Woolsack, and needless to say I will respond to his invitation. I wonder whether he will add to it by allowing me, if necessary, to have a word with him.
THE LORD CHANCELLOR: Certainly.
LORD CONESFORD: My Lords, perhaps I may say what is my immediate reaction to what my noble and learned friend has said. I can quite understand that a prosecution under the Offences
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Against the Person Act for wanton and furious driving is a very rare thing indeed. But supposing it does take place, and that there is a conviction, I can see no reason under the sun why the man should not be disqualified. That is my immediate reaction, though I will certainly respond to my noble and learned friend's invitation.
The last matter which I wish to mention, because I think it has some bearing on road safety, is traffic: signs. In this country traffic signs are grossly excessive in number; they are often obscure, and they are frequently unbelievably silly. In fact, for the number of traffic signs and their silliness, this country perhaps is now almost the worst in Europe, and possibly in the world. Any of us who have driven our cars in France know that the traffic signs there (there are quite a number of them, and you have to learn them), do not contain a great number of explanatory words, but they are well designed and are capable of being learnt. They always give clear information or instruction, and they are not excessive in number. I am absolutely astounded at the number of traffic signs of an obscure kind put up in this country.
When motoring in France, even in a district which I do not know, when I have reached a fork or a crossroads, I have never found myself taking the wrong turning. The sign has been absolutely clear. It is big enough; it appears at the right distance before the turning, and so on. In this country, even if you know the area, it is quite easy to take the wrong exit, even from a roundabout. And that is not put right by allowing a number of independent people to put a lot of new signs on the roundabout.
I do not wish to develop the full extent of the folly of some of this, but one of the follies is what I may call unnecessary letterpress. If you depict on a traffic sign a cow, most people of all nationalities, no matter how bad your artist is, realise that it is a cow. It really is not necessary to have underneath it, in small print, the word, "Cattle". If you do put in this unnecessary letterpress, people get the idea that the letterpress on any traffic sign can be ignored. Representations of children are also fairly clear on these traffic signs; nevertheless, they are labelled, "Children". The silliest of all

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signs, I think, is the curious sign, "Hazard ahead". The beauty of this sign is that nobody has the slightest notion of what it means, not only at the time when they see it but afterwards. If they drive with great care for the next mile they will not have a notion of what the man had in mind when he put up the sign, "Hazard ahead". For any good it does you might just as well put up the sign, "Fun and games".
I saw a particularly clear sign as I entered Oxford the other day. Believe it or not, the sign here was the glorious expression "Watch the filter". I consulted a few strangers visiting Oxford, and they thought it had been put up by the Minister of Health to guard against certain waterborne diseases. I was able to reassure my friends, and assert that what it really meant was that if you wished to turn along Long Wall you should get into the right traffic stream for that purpose, and if you wanted to continue down The High you should keep to the left. I very much doubt if any visitor to this country can procure a document which tells him what "Watch the filter" means. I would ask my very intelligent friends on the Treasury Bench, and the Lord Chancellor, to suggest to the Minister of Transport that he might diminish the number of our traffic signs enormously, and also make them less idiotic.
LORD CHORLEY: My Lords, before the noble Lord leaves that point, would he not agree with me that these signs which he has described as being used in France are, in fact, used throughout Western Europe, at any rate, and there is a great deal to be said for uniformity?
LORD CONESFORD: I believe that the noble Lord is quite correct. A great many of these signs are the subject of international agreement. The reason why I mentioned France is that I have had the actual experience of recently driving there, so I knew what I was talking about and could speak from firsthand knowledge.
LORD HAWKE: My Lords, my noble friend did say, did he not, that the silliest sign he had ever seen was Oxford?
LORD CONESFORD: It was in Oxford, but I promise him I will visit Cambridge, and I have no doubt I shall find the equal.
3.26 p.m.
LORD BEVERIDGE: My Lords, I have welcomed the chance of speaking on the second day of this debate because it has given me the opportunity of reading, in Hansard, the speeches made last Thursday. I have read them all, except one, that made by the noble Lord, Lord Chesham, in introducing the Bill, which I heard. I am content to have heard it as one of the most admirable speeches that I remember in my life. I wish to thank especially all the other speakers who supported or recommended particular matters. That will show where I stand, and where, I think I may say, most of my colleagues on the Liberal Benches stand—and, indeed, most people in the House to-day.
First, there was the support for chemical tests for alcohol. I noted specially what was said by the right reverend Prelate the Lord Bishop of Carlisle, and the noble Baroness, Lady Wootton of Abinger. The suggestion for making tests compulsory came also from the right reverend Prelate, the noble and learned Lord, Lord Denning, and the noble Lord, Lord Elton. Then it was suggested that, rather than fine or imprisonment, disqualification as a driver for a definite period should be the normal penalty on conviction. A fine is apt to be ineffective, and the possibility of imprisonment sometimes has the most unfortunate effect, in that juries do not wish to convict for imprisonment. But disqualification, as well as being a penalty, puts a dangerous man out of the power to do danger during that period. That was recommended by the noble Lord,
Lord Lucas of Chilworth, the noble and learned Lord, Lord Denning, and the noble
Baroness, Lady Wootton of Abinger. There should be no softheartedness whatever
about disqualifying, either because some people carry liquor better than others (I think that that was the point put again by the noble Baroness) or because disqualifying may stop a driver from earning. The noble Lord, Lord Elton, gave us a particularly grim instance of that, where the killer of a mother and two children

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was let off by a criminal court lest he should lose his earning power.
Then it was said that there should be no removal of disqualification before its named period on reconsideration either by the magistrates or the juries. My noble friend Lord Airedale put that point from these Benches. Then a request was made, for the guidance of drivers, for conversion of the alcohol content as expressed by statisticians, whether in blood or urine, into a published statement of the glasses of wine, beer or spirit that cannot be taken safely before driving. I think the right reverend Prelate, the Bishop of Carlisle, asked for that, and the answer was given in a quite invaluable technical speech
by the noble Lord, Lord Taylor. He gave what the necessary abstinence was, not only in terms of glasses and measures but also in time—three hours before driving. Let me go on just to thank the first speaker from this side, the noble Lord, Lord Silkin, for his view that excessive speed is a cause of accidents and for his suggestion of a limit, as in the United States of America. The Bill, though not doing that, gives increased power to the Minister to control speed. I should like, as the noble Lord, Lord Silkin, would like something further and stronger on that.
Your Lordships appreciate from these thanks that I welcome not only the speech made by the noble Lord, Lord Chesham, but also the Bill, though as something that could be made still better in Committee. There is any amount to be done in Committee, in some ways to make the Bill stronger, and in others, perhaps, to make it less strong. There may be some things that might be omitted. There are things that might, with advantage, be cleared up. Among the things that might be cleared up with advantage, I suggest, some of the points made by my noble friend Lord Airedale. He inquired, if the person is to be asked to submit to a test—that is, on the assumption that tests are not made compulsory—by whom is he to, be asked? Then he asked how we can make sure that driving test fees do not become a form of taxation. I do not know of anyone to whom one can apply for the answer to that question, except the Chancellor of the Exchequer, who is busy at the moment in another place.
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Another point for clearing up in Committee came from my noble friend Lord Swaythling; that is the law of disqualification, in relation to grounds for and removals of this penalty. He was for compulsory disqualification, as I am, but not for everything, not perhaps for a third trifling offence. That is all I have to say about other speakers.
I hope the House will forgive me if I still feel able to add something to all those speeches from personal experience or from the experience of friends whom I have consulted. My personal experience as a driver of cars covers 53 years, from 1908 to 1961. I bought my own car in 1909. Its maximum speed was 35 miles an hour, but that was also the minimum speed that I need go, because there were hardly any other cars on the road then. That is the difference between then and now. Perhaps I may add this, and I hope it adds to the force of what I have to say. In those 53 years I have never been in the hands of the police, though I occasionally only just escaped trouble about parking, and I have only twice lost the no-claim insurance bonus for things that were so trifling and so unimportant that I hardly claimed. But from my own experience and that of my friends, I can contribute something on what seem to me the three main causes of road accidents—drink, speed, and had behaviour—and finally, with a query, old age as a possible cause of danger to others as well as to oneself.
With regard to drink, on one occasion in my life I drove a car under conditions in which if I had been found by the police I should have been convicted under
this Bill, if in force. That was a 10-mile drive in the dark after an excellent dinner in the North of England. I remember well I had with me in another car another person, who was very distinguished. We both found it rather difficult to keep on the proper side of the road. But, fortunately, the road was empty, though dark, and we both reached our destination safely. So I was not Incapable of driving, but it may be said my ability to drive was impaired, and I should have been hit by the chemical test under this Bill. I am not afraid to report that experience because I do not think that at that time I was a Member of this House though I may have been a Member of another

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place. I was not incapable of driving, but what happened was an extremely salutary thing for me. My proceedings led to an excellent result—an instruction from my wife, which I observe rigidly to this day, that I must not drink anything at all just before I go driving. I observe that rigidly. The noble Lord, Lord Taylor, with his three hours, has lengthened my period of abstinence; but, on the other hand, he has made abstinence less total.
Having regard to some of the considerations that have been laid before me, I am bound to add that I have had from a friend concerned in the wine trade advice directly opposed to my wife's instruction about abstinence, with a legal opinion emphasising the difference between one man and another in reaction to alcohol and the injustice of trusting to chemical tests on which doctors disagree. I shall be willing to show these representations to any member of the Government who is interested. But I have had to reply to my friend on the lines that doctors often disagree, and that if I am going to err by taking a wrong doctor I would rather err on the side of unnecessary caution on the roads than on the side of danger. As a Liberal I desire freedom, but not freedom in using roads to which every other person has an equal right at risk of any unnecessary danger to them, whether through drink or through speed. Finally, on this drink question, as both a driver and a regular enjoyer of alcohol I know that I can enjoy all the alcohol I need and really want without breaking the rules laid down by my wife and Lord Taylor.
Like many others who have spoken in this debate, I want to strengthen this Bill, not to weaken it. Let me come to the question of speed. I find myself agreeing very closely with the noble Lord, Lord Silkin, on speed as a cause of accidents only less than drink itself. This Bill should be made, if it is not already, strong enough to impose a speed limit in the neighbourhood of 60 or 70 miles an hour on all but very few roads. It may have to be followed by checking the manufacture of very fast cars, particularly those with bodies so light as to unfit them for their speed.
Meanwhile, one of the friends whom I consulted—a most distinguished busi
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nessman and a constant driver—has made a proposal for relating speed to age in a somewhat unexpected way. His proposition is that the maximum speed allowed to any driver should be one mile per hour for every year of his own age. Up to twenty years old a driver would be limited to driving up to twenty miles an hour or less. He would have to be past thirty to get beyond the thirty mile an hour limit. The 100 miles per hour car, like the Jaguar, would come to be made only for centenarians. My friend's thesis is that the only people who want to drive fast are the young, and they would not be allowed to, and that the people who would be allowed to drive fast would not think of doing so in any circumstances. At 82 I know this by experience. I find that I once again must admit that, within the last few months. I have driven at 60 miles per hour continuously down the Great North Road, but that was very early on a Sunday morning, on an empty Great North Road when there were no lorries or anybody else about.
This brings me to my final point—age. I am sure that speed has to be dealt with effectively, but let me say at once that, to my knowledge, increasing age impairs one's skill with a car though not, I think, to the extent of making one dangerous to anyone but oneself. I find myself increasingly unable, as I believe most old people do, to park my car close to a kerb; I find it sticking out in the road and all the rest of it. I am unable to draw up to the kerb without several trials. I must say that I suffered the last damage to my car by turning round a bollard in the road near enough to scrape the door and the wings.
Let me come back to the final topic of bad behaviour on the roads as a cause of accidents—in Lord Lucas of Chilworth's words "bad manners, intolerance, hoggishness". One friend whom I consulted, who has driven about London a great deal, gave me as the most needed preventive of accidents the enforcement of the traffic laws by the police. In his experience he found cars continually 'pressing past him after he had stopped at the red lights, or getting out of line and pushing ahead of him. My own impression of London travel, based wholly on driving about in taxis, is pleasantly different—of the skill and the good manners and forbearance of

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taxi-drivers, knowing to a quarter of an inch just where their wings are, giving way to others, trained to make an awkward turn when others are trying to make awkward turns or to pass them.
I may add that only this morning in a taxi I had an exactly contrary experience with two non-taxi drivers, who held up my taxi—a block built up behind us—and one another, because they could not decide which of them ought to retire a short way in order to leave space for everyone to move on. In the end, of course, the man who ought to have retired did not retire, and the other man had to climb on to the pavement to get past him. That is hoggishness and bad manners. I wish that the police had more time to deal with had behaviour in the London streets., but that means having either many more policemen or that those we have would spend less time in checking the exact number of minutes during which a car has been parked outside either the Reform Club or some other institution of that sort. They must spend a lot of time there.
My Lords, this is a necessary Bill and a good Bill, though it could be made better in a few ways. I ask for, and I have the impression that the Government will give us, plenty of time in Committee to make it stronger, and also for some omissions. Let us to-day pass the Second Reading and make the Bill stronger in Committee for the prevention of accidents. Last year, as the noble Lord, Lord Chesham, told us, nearly 7,000 people were killed on our roads, 90,000 or so were seriously injured and 240,000 were slightly injured. Everyone is entitled to risk his own life if no other person cares whether he lives or dies; but the pleasure which any one man may gain by drinking intoxicants or by racing along a road is less important than the life of any other human being, whether man, woman or child.
3.47 p.m.
LORD MERRIVALE: My Lords, last Thursday and to-day I have listened with the greatest of interest to the speeches of noble Lords taking part in this debate, and I am therefore tempted to say a few words on the Second Reading of this Bill, the aims of which I agree with, but I must say I am not in whole-hearted agreement with some of its clauses. Members of
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the House seem mainly concerned with the provisions of Clauses 1, 2 and 3.
With regard to Clause 1, after hearing the noble and learned Lord, Lord Denning, refer to it as being largely ineffective, whilst the noble Lord, Lord Silkin considered it much too vague and the noble Lord, Lord Taylor expressed complete satisfaction with it, I feel inclined to add a few further remarks. Whilst purporting to lay down a standard of unfitness to drive, through drink and so on, it does nothing more than change the words "unfit to drive" to "unfit to drive if his, the driver's, ability to drive properly is impaired." It seems to me that there is really no definition there. For instance, to what extent is it permissible for the driver's ability to be impaired? Surely, it should be when it is impaired to such an extent as to be likely to cause danger to other road users. That is not specified in the Bill in any form whatsoever.
One's ability to drive properly—that is, with due regard for others—can be equally impaired by a number of causes. First of all I should like to mention tranquillisers. I presume—in fact I have no doubt—that those would be covered by Clause 1 of this Bill; but if I understood the noble Lord, Lord Taylor, aright, their effect would not be shown up by any of the tests to which he referred. Your Lordships are well aware of other causes of impairment. There is annoyance, anger, worry, tiredness, haste and such more temporary causes as carelessness, bad manners and, with some drivers, the need for competition when on the road. All those may "for the time being" (as mentioned in the Bill) cause the impairment of one's driving ability.
I feel, therefore, that it is important to keep a sense of proportion in these matters. On page 27 of the publication Road Accidents, 1959 we see that of road accidents in 1959, 264 fatal or serious accidents were caused by the negligent opening of the door of a parked or stationary car and that 282 accidents were due to illness, fatigue or a physical defect of the driver; whilst 281 accidents were caused by an intoxicated condition—rather similar figures. If this clause and Clause 2 are not more precisely worded, there may be a tendency for the courts to conclude in all cases

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where a test showed even a very small proportion of alcohol that this was the main contributory factor.
With regard to Clause 2, I should like to refer to the Medical Research Council Memorandum No. 38 and particularly an extract from its Introduction in respect of low levels of alcohol. It states:
"… the most striking feature to emerge from any review of the effects of alcohol on behaviour is the marked lack of agreement between authors, amounting, in many instances, to direct contradiction. This is especially true for the effects of smaller doses. Perhaps not surprisingly, doses large enough to produce clinical signs of intoxication, such as slurred speech and staggering gait, have been generally reported as resulting in deterioration of efficiency in almost all aspects of behaviour tested. For doses below this level, however, the picture is not clear."
Summarising their experiments, the authors of this Report say that they found two differences in the extent to which alcohol affected the accuracy, speed and control-handling of individual subjects.
On Thursday last the noble Lord, Lord Taylor, stressed the relationship that exists between body weight and alcohol concentration in the blood, as well as the importance of the period after ingestion. That is why I should now like to turn to Appendix C of the Medical Research Council Report, page 86, and consider test subjects Nos. 28 and 30. Both were given 0·2 grams of alcohol per kilogram of their body weight. If one of them had been of my weight that would have represented, I believe, just over a double whisky. Thirty minutes after ingestion the first man had 6 milligrams of alcohol per 100 millilitres of blood, whilst the second man had 60 milligrams per cent.; and two hours after ingestion the amounts had diminished to 1 and 4 milligrams respectively.
If I may say so with humility, I think the noble Lord, Lord Taylor, was right in saying that, with greater penalties, there was a greater need for scientific accuracy. I would therefore warmly support his plea for standardised tests; but I am forced to the conclusion, as I believe other noble Lords were, that even with scientific accuracy there remains the very difficult problem of correctly interpreting the finding according to the individual—in other words, the
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problem of correctly assessing its value in terms of impairment for each individual. That is why I am hoping that when the noble Earl, Lord Dundee, comes to reply he will be able to say something on that aspect of the problem—the assessment of the findings. At the moment, in view of the vague wording of this clause, I should opt, as have other noble Lords, I believe, for an alcohol-content figure to be stated in the Bill, as well as for compulsory tests, but not involving physical interference with the accused. I believe I am right in saying that the noble Lord, Lord Taylor, said the latest type of breathalyser could be considered as perfectly reliable. With a fixed percentage laid down in the Bill it would, in my humble opinion, be fairer to all. There would be no question of interpretation or assessment of the degree of impairment, so different in each individual. It would then be up to everyone to ascertain his or her degree of absorption of alcohol and adjust accordingly the period of time after ingestion during which he or she should not drive.
For instance, taking the second test subject to whom I referred earlier, if one considers the threshold of impairment to be 50 milligrams, one hour after ingestion the alcohol content of his blood had fallen from 60 milligrams per cent. to 46, and therefore he would have been below the 50 milligrams limit, if that were taken as the appropriate level; and in that case there would be a difference of only 30 minutes. Possibly the second figure quoted by the noble Baroness, Lady Wootton of Abinger, namely, 100 milligrams per cent., or that mentioned by the noble Lord, Lord Elton—150 milligrams—would be the correct one; but, whatever figure it is, I think it must be carefully studied. But as the noble Lady said, it should be one to which we could all conform provided it was a reasonable standard.
I do not wish to take up too much of your Lordships' time, but I should like to say a few words on Clause 3. At the outset, I should like to express my disapproval of this clause, for I feel that it will lead to a great deal of unfairness and hardship, as was stated on Thursday by my noble friends Lord Teynham and Lord Dement. Although I do not agree with all that was written by Robert Glenton in his article in the Sunday

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Express on March 26 last, it seems to me quite unjustifiable to withdraw a driving licence for six months for three technical offences committed within a period of three years. In all probability the offences would have nothing to do with road safety in so far as it is concerned with the saving of life. It seems to me, as it has done to other noble Lords, to be a particularly harsh stipulation that there should be automatic disqualification for some of the more minor offences such as, in certain circumstances, parking without lights. I believe that that comes under offence No. 23. Then there is every likelihood that this provision would hit particularly hard, and unfairly, the professional man and the commercial drivers. Their mileage increases and the risk of their committing a lesser offence increases.
I should now like to quote an extract from the Sunday Express article to which I referred earlier, though there may be a certain amount of imagery in the wording of this article:
"To-morrow you mistake a policeman's hand signal. Next August on your way to the seaside you discover too late that the market square of a Devon village has overnight been made one way'.
"Take Auntie to London for the Christmas shopping and get lost.
"Three times you have broken the traffic regulations."
The article continues by saying that, for that, the Minister of Transport
"says you must lose your licence for six months.
"He will argue that this sort of case was never in his mind. But there it is in black and white in … [the] Bill.
"He will say he is after the road hog. But for every wild driver, he will net many more who are slow, lost and confused.
"And no magistrate will have the power to prevent injustice."
My Lords, I welcome the Government's intention to impose in certain cases minimum speed limits with the purpose of improving traffic flow; and I presume that this will be done on certain traffic lanes of certain roads under the powers conferred by Clause 21. I would urge Her Majesty's Government seriously to consider appointing further "courtesy cops"; in other words, many more uniformed police on motor-cycles. The presence of police at danger spots and such patrols, the motor-cycle patrols, are two most effective road safety measures.
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During these last few years I have increasingly noticed their effect in France as the number of police, gendarmes and C.R.S. have increased.
I think there can be no doubt that some of the more stupid actions liable to cause accidents that one sees daily on our roads would occur to a lesser extent if there were the deterrent presence of the police or a caution were given. At the moment it is manifestly apparent that there are far too few uniformed police on our roads—and in our streets, for that matter. To take just one example, I would refer to Cromwell Road, where I live, and the extensive speeding that takes place there late at night. In conclusion, my Lords, I am hoping that the noble Earl, when he comes to reply for Her Majesty's Government, will be able to say something constructive with regard to the appointment of further police as a deterrent to bad driving.
4.4 p.m.
LORD FARINGDON: My Lords, I was unable to be present during the debate in your Lordships' House on Thursday last and I therefore crave the indulgence of your Lordships if I touch on points which were covered during the early part of the debate. I intend to raise only two or three points—which are really, I am afraid, Committee paints—but they concern matters on which I hope that the noble Earl, when he comes to reply, will give us some indication about the prospects of Amendments: how Amendments would be regarded by Her Majesty's Government.
On the whole I should like to say, first, that I think that the provisions as to the alcohol test are a very reasonable compromise. I personally should have been inclined to impose a compulsory test, but I appreciate the psychological difficulties into which the Government would have run had they done so. I think the solution they have found is an ingenious one which may well work satisfactorily. I agree with the noble Lord, Lord Merrivale, who has just spoken, in feeling that there should be laid down in this Bill a definite percentage of alcohol which would be regarded as culpable.
The Bill confers power to deal with lights, and I think there is also (though

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I cannot at the moment point to the actual subsection) further power to deal with traffic indicator lights. There is a reference to headlamps, but it is to the traffic indicators that I wish to draw particular attention. I feel that something should be done to control the power of these lights. I do not think that anybody who has driven at night has not had the experience of coming forward from behind a car and being blinded by quite excessively bright traffic indicator lights. I think that this is a point which the Government should have
in mind and which the Minister should take steps to control. Personally, I would say that it always seems to me that by far the 'best traffic indicator lights are those on taxis, which are on the roof on each side: they are visible from the front, from behind and from the side, and they would seem to me far the most effective and efficient type of light.
On the question of motor bicycles, I feel rather like the noble Lord, Lord Beveridge. My own feeling is that, far from allowing people further relaxation of controls—and there was a perfectly horrible suggestion made in another place a little while ago that even younger people should be allowed to ride smaller motor bicycles, apparently to get them into training for the larger ones when they were sixteen—riders of motor bicycles ought to be prohibited until they are 60. The road casualties for motor bicyclists over 60 are, I understand, quite nominal. That the most dangerous implement on the road should be considered a suitable one for the very young, to ride is something I cannot understand; and, certainly, so far from lowering the age, I would increase it.
Clause 14 has dismayed me. It is the clause which deals with a second trailer. I hope very much that something will be done about this clause. Indeed, I shall certainly move an Amendment, if nobody else does, to delete this clause, because I think nothing can be more terrifying than the thought of these road trains which one meets on some Continental roads, from which, perhaps, the defects of our roads have so far spared us. I hope that this power will not be given to the Minister.
On old age, with great respect to the noble Lord, I cannot agree with him.
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I am quite certain that I am nothing like so good a driver as I was when I was half my present age. One's reactions are certainly slower; and it is not only a question of parking. All I can say, speaking for myself, is that I am a very much more careful driver than I was 30 years ago, and I trust that caution will stand me in good stead and increase as I grow older. Personally, I would strongly urge that all of us, when we reach 60 or 65, and from then on at, say, five-yearly intervals, should have to pass additional tests. I think we become increasingly dangerous. Moreover, it is not only a small danger, such as the noble Lord, Lord Beveridge, pointed out, of parking too far out—which, I would point out to the noble Lord, is a danger not only to himself but also to other people. There are very few things on the road to-day which are a danger in themselves without being also a danger to other people.
On the question of speed, speaking frankly, I very much enjoy driving fast. On the othe hand, I think there is practically no road in England at all, with the exception of the M.1, which is suitable for fast driving. Personally, I consider that the building of motor roads is likely to have a beneficial effect on the general level of driving on ordinary roads. This I judge from my own reactions. I have driven quite a considerable amount on Italian and German motor roads, and the effect on me of driving down a road on which nothing can shoot out from around the corner and where I can see well ahead all the way is to make me infinitely cautious when I drive on an ordinary English road. Therefore I welcome the building of motor roads, and I believe that a by-product will be improved driving on ordinary roads.
I entirely agree with the noble Lord, Lord Beveridge, who said, I think, that bad manners are bad driving; and I would point out that we are among the of your Lordships' House, but private worst offenders—I do not mean Members drivers. If I might make a sort of list of those whose driving is normally good, I would say that lorry drivers come at the top; bus drivers pretty close, if not equal; taxi drivers; and then, well below comes the ordinary, private driver, who is, as often as not, ill-mannered and in-

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competent—and the two things go together. The only drivers that I know who are worse, perhaps, than the average, private driver are the drivers of small vans. As a rule, they are shocking, and the firms that employ them ought, I think, to be made to test their drivers. Private chauffeurs are "fair shockers"—I should have thought that, being professionals, they would have been good drivers. But they are not. They are, for the most part, I find, ill-mannered and pushing.
My Lords, I could not agree more with the noble Lord, Lord Beveridge, and the noble Lord, Lord Merrivale, that one would like to see the traffic laws enforced. How we can do it I do not know. I would suggest that the warden system should be expanded, and that traffic should more and more be handed over to traffic police who specialise in this particular kind of work. But certainly something ought to be done to control the manners of drivers and, therefore, the quality of their driving. One of the things which I believe would do most to speed the London traffic would be if the police or the wardens could be given power to see that vehicles remained in the channel of traffic to which they belonged. As anybody who has driven in Paris will know, if you get into a right-hand lane or into a left-hand lane and want to go straight ahead or to the off-side, you are just not allowed to, but must go with the lane of traffic you are in. After experiencing this once or twice, you are much more careful. I support this Bill. As your Lordships will have gathered, I feel that it has one or two defects, but I am sure that they can be put right, and I hope they will be.
4.1 5 p.m.
LORD SALTER: My Lords, in the middle of the second day of this debate, and conscious as I am that another speech on another subject is being made at this moment of rather more topical public interest than anything I can now say here, I shall try to avoid any repetition of what has already been said, and to confine myself to certain general considerations which seem to me appropriate to a Second Reading of a Bill as distinct from the Committee stage, in which we shall have an opportunity of discussing some of these questions rather more in detail at a later date.
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I propose to touch upon only two general questions, drink and disqualification. As regards the first, I welcome most warmly the fact that the Minister, in introducing this Bill, has given such emphasis as he has to the problem of drink in relation to road safety, and that he has brought forward the question of tests of blood and breath. I do not propose to discuss—indeed, I am quite unqualified to discuss—the technical aspects of that question, but I am convinced that alcohol plays an immensely greater part in the casualties on the road (as indeed the noble Lord who introduced this Bill said in his opening speech) than can be inferred from any of the statistics that are available to us.
I remember a remark made to me many years ago by a great Judge who had many years of experience in dealing with motor cases. He said "I am convinced that a very large proportion, something approaching a half, of all the accidents that have come before me would never have happened if the drivers had not drunk before they drove on the particular occasion. Not that they were 'under the influence' in the ordinary sense, or intoxicated in any ordinary sense of the word. The great bulk of them had not sustained any effect from alcohol which would have been either noticeable or reprehensible in any other aspect of life. But," he added, "they had had just enough to have two consequences: one, that, in assessing a sudden emergency they made a rather more optimistic assessment of the crisis ahead of them; and, secondly, that, in dealing with it, their reactions were somewhat slower". He believed—and I think that if we look at the evidence, including that of those with long personal experience, we shall come to the same conclusion—that if it could become a social rule of behaviour, universally accepted, not to drink before driving, or not to drive after having recently drunk, the effect upon the casualty figures would be sensational.
I remember that some years ago I was invited to a cocktail party in Sweden, where the tests are severe and the penalties are also extremely severe where the presence of alcohol is proved. As I looked round this cocktail party I noticed two things. First, the men there did not seem to be at all the kind of

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persons who were, on principle, teetotallers. Secondly, to my surprise all the men, but none of the women, were confining themselves to soft drinks—lemon-ade and so on. I inquired as to the meaning of this, to me, rather surprising phenomenon. I was told that what it meant was that the wives had insisted that their husbands should drive them home, and, therefore, that they were quite free at that party but their husbands were not. I thought that was an admirable rule, except that I should have liked to see a greater equality between the sexes than seemed to prevail in Sweden; I should have liked to see the habit of, let us say, alternation between the parties at which the husbands drank and the wives drove, and the parties at which the converse was the case. In any event, I am sure it is a very considerable part of the problem of road safety to find a way of encouraging the growth of this social habit of not drinking before you drive.
I come next to the question of disqualification. I regret very much that our motoring law and the practice of the law have so completely grown up within the framework and on the basis of the ordinary criminal law of the country, with all its traditions and implications. In some vital respects motoring offences are different from ordinary criminal offences. In the first place, in the ordinary criminal offence the offender has intended the result of his action. If a man kills another man, he has intended to kill him. That is not at all the case with a motor driver, even one whose driving amounts to criminal recklessness. It is at least true that he has not intended the result of killing.
In the second place, when you are dealing with any other offence you are presented with the fact that the offender can repeat his offence anywhere and that you cannot prevent him from doing so, except either by shutting him up and depriving him of all liberty, or, alternatively, by giving him the prospect of such penalty as will operate on his mind to induce him not to repeat the offence. In that respect, motoring offences are completely different. Motoring offences are not committed anywhere; they are committed only on the Queen's highway. Therefore, without depriving a man of his general liberty, and without
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finding, with very great difficulty, a sufficient deterrent to frighten or prevent a man from again committing the offence of which he has been guilty, you can give the public all the safety it needs by refusing a licence to those who have shown that they are either temperamentally, or through habitual recklessness, unfit to drive a dangerous instrument on the public highway.
I should very much like to see a driver excluded from driving a dangerous instrument on the highway without the implication that that exclusion is due to his having been found guilty of a particularly heinous criminal offence. Apart from the people who are criminally reckless, there are many people who are temperamentally unfit to handle a high-speed and dangerous car on the public highway, and whose conduct in an accident which may have happened, and whose record as then divulged, will clearly show that they are, and will be so long as they drive, a perpetual danger to the public.
In the same way, that may happen even in the case of people who are ordinarily good and careful drivers, as my noble friend Lord Beveridge said, as their years increase. Here I should perhaps declare a personal interest, but in the opposite sense to that in which it is usually declared. I think that it would be reasonable that after a certain age it should be prescribed that a licence should not be given for a period of three years, but at the most for one year; and that, when applied for, the application should be accompanied by a medical certificate to the effect that there had been no impairment in the meantime of physical ability, sight, or whatever it may be, as to have rendered the applicant an undue danger to the public. I would urge that some way should be sought of excluding certain classes of people, whether unfit by temperament, age or illness, from continuing to be a danger to the public, without disgrace or discredit. My Lords, those are the only two general points that I now wish to make. I propose to reserve any further proposals or comments till I can discuss them in greater detail which is appropriate to discussions on the Committee stage of the Bill.
4.27 p.m.
LORD HAWKE: My Lords, I have no interest to declare except that I

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am a driver occupied as such for some 250 to 300 hours a year, and hate nearly every minute of it. I want to deal with two matters only; the first is casualties, and the second concerns speed limits.
I think, in the first place, that we are rather apt not to give credit where credit is due for what has been done in the way of keeping down casualties on the roads. If one compares the present with the past, relatively the position is distinctly better. For instance, if we go back as far as 1926, we find, by comparison, that to-day the vehicles have quintupled, the population is up 15 per cent., and road deaths are up by one-third. The peak years for death were 1930 and 1934, not to-day; and at that time there were one-quarter the number of vehicles that there are to-day, and the number of deaths was still a little larger. Compared with the last year before the war, our population has gone up 10 per cent., our vehicles have multiplied by 2½ times, and our "kill" is down 1 or 2 per cent. Therefore, I think we can say that the efforts of the officials, the automobile engineers, the road engineers, the propagandists and the doctors have had a considerable effect over the last 20 years or so.
The booklet of statistics issued by the Ministry is interesting; and though I cannot always make the totals tally, I expect this is my fault. The figures must, to some extent, be academic, in that they were unaccompanied by the unascertainable figures of the vehicle mileage covered at each hour of the day or night, or the number of vehicles on the roads between each hour of the day or night. Nevertheless, browsing through the figures, I think that they confirm what one would logically expect, which is that most accidents occur when the most people are on the roads in the most hurry—in other words, during the morning and evening rush hours, the dinner break rush hour and the other subsidiary rush hour we have got between 10 p.m. and midnight, when all the amusements close down.
People seem to assume that the rise in accidents at that time of night, particularly on Saturdays, must be due to the effect of drink on drivers. But I would remind your Lordships that it is not only the pubs that close down; everything else closes down—cinemas, dance halls,
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private dinner parties and the like. And it may well be that some of these people have been to the Band of Hope whist drive. Saturday night is a great night for entertainments and all forms of parties, and I suggest that the number of vehicles on the road on Saturday night is likely to be heavier than it is from Monday to Friday during the same hours.
Undoubtedly there are drivers who have had too much to drink, but there is no evidence to show what proportion of all drivers these constitute. I did a rough arithmetical exercise. I supposed that we could get the number of accidents between 10 p.m. and midnight down to the level between 8 and 9 p.m., though I am not sure that that is a fair target, because from 10 to 12 are peak hours, and from 8 to 9 traffic is slacker. But I worked out that we might expect to save about 8,000 out of a total of some 300,000 accidents in a year. If the number of deaths came down in the same proportion, we should have a reduction of about 17 on nearly 600 per month. I do not belittle these figures but quote them 'to suggest that those who believe they are going to effect a complete revolution in the casualty figures by making drivers more sober than they are to-day may be a little optimistic.
We need a new word or term for "drunken" if we are to accept the theory that driving after consuming a small quantity of alcohol is to be an offence. I cannot suggest a word, but "drink taken" is the type of thing required. The whole problem bristles with difficulties, because men vary in their power of absorption of alcohol without ill-effects. They are different even in their reactions. We find, from page 59 of the Medical Research Council's Memorandum No. 38, that introverts are less affected than extroverts. Frankly, I do not know what is the proper way to tackle this question within the limits of the practicabilities within our reach. Blood tests and breath tests tell only one thing: how much alcohol has been swallowed. They do not give a clue as to whether a man is drunk or incapable of driving. So the protagonists of these methods have had to fail back on the generalisation that a man is not fit to drive after a specified quantity of alcohol has been taken. Well, that is a very

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wide and very rough formula. It is not an objective test in the least. To provide that, every person would have to carry round his own personal formula.
The only fair and proper test one could suggest would be some sort of reaction test on a machine that produced a written record. Even then, I have no doubt that the subject would be in a highly nervous state, after being dragged off to a police station and made to sit in an imaginary car or do whatever the test required. I am afraid, therefore, that I can contribute nothing constructive to the solution of this problem, because frankly I cannot see how to tackle it.
The other point I want to raise is on Clause 3 (3), which, combined with Part II of the First Schedule, provides for compulsory disqualification on the third offence under the Schedule. Disqualification is serious for everyone, but particularly serious for the professional driver. In Part II of the First Schedule, quite a few of the offences are rather technical ones—going down a street the wrong way by mistake, and that sort of thing—which I should hardly have thought were offences which could justifiably lead to ultimate disqualification.
This subsection raises particularly the question of speeding. I take that to mean not only exceeding the limit on restricted roads but also exceeding the limit on restricted vehicles. Whatever the merits of speed limits on restricted roads may be, we know that for many years the speed limit on restricted vehicles has been quite unrealistic, particularly on passenger coaches and the lighter forms of goods vehicle. I venture to think that there is no passenger coach or delivery van in the country which doer not exceed its limit of 30 m.p.h. for most of the time when road conditions permit. In fact, coaches are a menace on the road unless they keep up a speed considerably in excess of 30 m.p.h., and in many cases delivery vans and the smaller types of commercial vehicles have the same engine, the same chassis and the same brakes as private cars, and in the bulk of cases will not be carrying any more weight than a private car with several passengers.
I have lost track of the official argument for the 30 m.p.h. limit on these
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classes. Perhaps my noble friend will restate it. But, unofficially, I know that at one time it was alleged that the trade unions objected because they felt that any change in the speed limit would lead to an unwarranted stiffening up on drivers' schedules. Personally, I should be reluctant to see the schedules of commercial drivers stiffened up, because I believe that in a majority of cases they have a sufficiently long day as it is, but I do not believe that the trade unions are so incapable of looking after the interests of their members that there need be any fear of that happening.
I suspect that there is another reason in the background, which is that the Treasury, having fixed different rates of purchase tax on commercial and private vehicles, are extremely anxious not to throw away any difference between the two or to remove any obstacle to the buying of commercial vehicles by private persons for their own private purposes in order to save purchase tax. By providing compulsory disqualification for a third offence of exceeding the vehicle speed limit, this Bill is providing disqualification for an offence which is being committed all the time by all drivers. I think that the Bill brings the matter to a head.
It seems to me that the Minister has two choices. He can maintain that to exceed the vehicle speed limit is dangerous. In that case it is up to him to see that law is upheld and enforced, and in so doing it is clear that he will slow down the traffic of the country to a perhaps disastrous extent. Alternatively, he must alter the speed limits as being no longer realistic in to-day's conditions of automobile engineering and actual practice. For the Minister it is "the moment of truth", and I am anxious to know what he is going to do.
4.42 p.m.
THE EARL OF ARRAN: My Lords, I am afraid that I am in a minority of one, in that I do not like this Bill. We are faced with a great and a sad problem, and we had looked to the Government for a positive solution. What have we got? In the main, punitive and repressive
legislation. There is hardly one constructive idea in the whole of this document. The aim seems to be to stop and to intimidate.

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There are many things which could be done. For instance, insistence upon the standard fixing of safety belts by motor manufacturers. They save lives, as in aeroplanes; so why not make them compulsory? And really effective propaganda. My Lords, what sort of impact do you expect from 100,000 or 200,000 posters based on a play on the words "Be alive!"? What is needed is not epigrams, but epitaphs; photographs of the crudest and bloodiest of accidents in dayglow paint at every danger spot; more and more of those "gloomy widow" posters which upset the public so much ten years ago. These are the things which might do good. But they are small things. Nothing can cure this disease except the wholesale building of new roads and the improvement of existing ones. Anything else is merely a palliative. People are killed in thousands not so much because of bad driving, but because there is simply not room for the mass of swift, soft-
skinned vehicles which charge forward on roads never meant for them. It is as though you were to drive 4 million express locomotives along a series of branch lines.
What amazes me, indeed, is not so much the size of the casualty figures as their relative smallness. There are 10 million driving-licence holders in this country, which is about one in four of the adult population. Taking two to a vehicle, this means some 20 million persons at least on the roads. In 1960 the deaths numbered 6,900. Appalling, you may say. But are your Lordships aware that before the war things were considerably worse, although the number of vehicles on the road was much smaller? In 1934 there were 2½ million vehicles and 7,350 deaths; in 1939, 3 million vehicles and 8,300 deaths; and last year, 9 million vehicles and 6,900 deaths. Thus, though there were three times as many vehicles last year as in 1939, the death rate was one-fifth less. I ask your Lordships to ponder those figures very carefully and perhaps to take comfort in them, Then again, what about accidents in the home? As we learned last week, 8,000 people died last year as a result of these accidents. But we never, or hardly ever, hear about them. There is no indignation, no Press publicity, for they are not newsworthy; they just happen, and we wrongly accept them.
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My Lords, let us keep a sense of proportion about these things. Let us be shocked; and, indeed, deeply shocked. But if it is the people's wish to get speedily from one place to another, then I am afraid that under the present appalling conditions the price will have to be paid. A bad motor accident is a terrible thing: I have been in one, and I know —I had a broken back. The noise alone is something one never forgets; and the grief and suffering of the victims and their relations must be indescribable. Sometimes, of course, it is clearly somebody's fault: somebody was drunk, or showing off, or in too much of a hurry: the cause is obvious, the guilt inescapable. But I should say that in nine out of ten cases the accident would not have happened were it not for these cursed roads of ours.
LORD SHEPHERD: Is the noble Earl suggesting that where an accident occurs through the state or condition of the road, but also due to the attitude of the driver, the innocent should pay the price for our ability to move quickly from one place to another?
THE EARL OF ARRAN: I am not suggesting anything of the sort. I am simply saying that I do not believe these accidents would happen if the roads were in better condition. I would not go so far as the noble Lord says he thought I was going. What do the Government offer? A paltry £118 million for the roads themselves and a series of increased punishments for the motorists who offend against the highly complicated laws for our roads.
I am not concerned here with the major offenders. A drunk or drugged man has no business to drive a motor car—though Heaven knows how you are to decide who is fit to drive and who is not! Some people are unfit after one whisky and soda, while others can absorb much more without their judgment being impaired. What does worry me is the minor offender. Henceforth he is automatically to be debarred from driving if within three years he three times exceeds the speed limit, or goes up a one-way street the wrong way—an easy mistake to make—or if one of his tyres is regarded as worn-out, or a three-fold mixture of these or other offences. If the intention is to get the people off the roads as quickly as possible, then this

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is an excellent Bill. With any luck we should get rid of 10 per cent. of the motoring population in the next five years, although I fear that the remaining 90 per cent. may not be the best or the safest drivers. If the desire is really to limit the accidents, then limit the production of cars, and have done with it. Never mind the loss of revenue.
Think of the administrative difficulties this piece of legislation will bring about. Take speeding. Your Lordships may not know that there is at present no central register, no check on those who are convicted of breaking the speed limit. There used to be, but it had to be given up; not surprisingly, perhaps, because in 1959 there were 94,000 convictions on this count. How are these speeding convictions to be totted up henceforth? By endorsing them on the licence, apparently. But what is to prevent some scallywag from losing his licence and asking for a new one? He will have to sign a form stating that he has no endorsements. But he will know that if he lives in Essex and his endorsement came from Glamorganshire he will not be found out. To prevent this will mean more clerical work for the police. My Lords, the police are already overburdened with paper work; and they get things wrong.
Let me give one small example. Last month my son received a summons for an alleged parking offence in Oxford in June of last year. That seemed strange enough. But, in addition, under the heading of "Previous convictions", it was stated that he had been convicted of speeding in July, 1959. At that time he was on active service with his battalion in Cyprus. The conviction was, in fact, against myself. It seemed hard that the sin of the father should thus be visited upon the son. That was stranger still. But strangest of all was that the same conviction had quite correctly been brought up a week previously against me in another magistrates' court. In other words, the same conviction was used twice in two consecutive weeks against two different persons.
LORD HAWKE: Did the noble Earl say Oxford?
THE EARL OF ARRAN: If the noble Lord asks me to, I will specify the court, but I thought I would not do so. This
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is not a complaint against the police. Indeed, they showed extreme courtesy in the matter. It is an illustration of what can happen as a result of the overwhelming clerical burdens which they are asked to shoulder. And this Bill is going to make their burdens heavier still. My Lords, it is quite unfair. We should not do this to them. And if we are going to do it, we shall have to give them extra staff, either at headquarters on in the local constabulary. How many extra staff: 50,100 or 200? Perhaps the noble Earl will give us some idea. Whatever the number, it is going to cost a lot of money. But these are points which can be considered in Committee.
What worries me, my Lords, is the whole tone of the Bill. To me it is one of defeatism and despair. All the Government are saying, in effect, is: "There is absolutely nothing we can think of doing, so we will just make it harder for everyone." Motorists are not a class on their own: they are the public. The present Act says that the maximum fine for such-and-such an offence is £20. So the Bill makes it £50: and it does this six times or more. The present Act says that you may have your licence taken away if you exceed the speed limit three times. This Bill says that you must have your licence taken away, and it is not left to the magistrates. The present Act has no formal provision for clinical tests for drunkenness. The Bill introduces them with a threat of "or else …" Little but threats and penalties. The principle seems quite simply "Hang the lot!. I find this disappointing. I think someone might have thought up something a little more constructive and practical. In the last resort, the only answer is new and better roads. People are deeply worried about this business. We ought to be able to put it right; and, frankly, one had hoped for a little more than this rather barren Bill.
4.52 p.m.
LORD ALLERTON: My Lords, at this stage of a long debate it is difficult to bring any fresh thought to your Lordships' notice, especially in view of the large number of very able speeches to which we have listened. I feel that one can do little more than emphasise some of the remarks which have been made with which one is in agreement.

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The noble Lord, Lord Silkin, in his excellent speech, referred to the number of accidents due to drink, and remarked that the percentage was very small in proportion to the number of accidents as a whole, even though there may be many more accidents due to this cause than are revealed by the statistics. Great publicity has been given to the question of alcohol in the motorist, and it may well be for this reason that we are inclined to think that more accidents are due to drink than in fact is the case. The noble Lord also drew attention to accidents caused by fatigue. I am sure this is a real danger and must be the cause of a great many accidents, but I do not see that it is possible to legislate against it, other than with the drivers of commercial vehicles; and they are already provided for in this respect.
My own feeling is that many more accidents are caused by straightforward incompetence on the part of the drivers. Traffic conditions being what they are, a driver has to be very good if he is not to involve either himself or somebody else in some form of trouble. For this reason, I advocate more searching driving tests, and would even go so far as to call for periodic tests, as has been mentioned this afternoon. I also feel strongly on the subject of driving instructors. I consider that they should be at least up to the standard required by that admirable organisation, the Institute of Advanced Motorists. That is certainly not the case at the present time; indeed, I believe that it is possible to obtain a driving licence to-day and to set up as an instructor to-morrow. That cannot be right.
The Bill does not lay down what quantity of alcohol shall be treated as proving incapacity to drive, but it suggests that only a slight diminution of efficiency need be proved. The correct interpretation of the wording presents great difficulty, and there is a danger that we may be creating a new crime of what may be termed "academic drunkenness." There are many diverse opinions upon the value of the tests, and I have spoken to a number of doctors on the subject. It seems to me that these tests may corroborate the evidence of the prosecution. They may show the approximate amount of alcohol consumed by the accused, but they cannot show what effect, if any, or
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what degree of impairment, if any, that quantity of alcohol had on the accused. I realise that I am treading on dangerous ground, and that more scientific minds than my own would, and do, disagree. But I am sure that I am speaking for quite a large number of people who, though regular drinkers, do not get drunk and can still drive perfectly safely.
The Bill refers to "unfitness to drive through drink or drugs". May I ask the noble Earl who is to reply for the Government what tests will be applied for the detection of drugs? The noble Lord, Lord Taylor, has told us that drugs such as tranquillers and stimulants, the use of which, I regret to say, appears to be on the increase, can cause impairment. The detection of drugs can hardly be the responsibility of the police. So it would seem that the services of a doctor will still be necessary. Might not drugs produce symptoms akin to drunkenness and yet the tests not show any traces of drink? The test would not indicate that the accused was suffering from drugs. The legal aspect of that part of the Bill
which lays down that the refusal of the accused to submit to providing specimens for test may be construed as evidence against him seems to me wrong. But I had better leave that to better legal brains than my own.
The introduction of compulsory disqualification for certain offences as set out in subsections (1), (2) and (3) of Clause 3 seems to me to remove the common-sense discretion which magistrates now have; that is to say, to make the punishment fit the crime. This would mean that the purely accidental commission of three very minor offences could lead to a period of disqualification without any discretion on the part of the magistrates. Furthermore, the magistrates are now relieved of their right to remove disqualification. If magistrates hear a case and the whole of the evidence, and then decide to impose a disqualification, the same magistrates, who know the case and the surrounding circumstances, are surely the appropriate tribunal to hear any application to remove that disqualification.
The Bill proposes that all applications for restoration of a licence shall go to quarter sessions. Apart from the inevitable delay, this could cost £50 or more in legal expenses, and it seems to me to be unfair to assume that all holders of

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driving licences are rich men. Personally, I feel that it would be better if
suspensions were shorter and that no possibility of removal of disqualification were permitted at all. Then everyone would know exactly where he was. However, I can see no argument in favour of legislation which assumes that a court is competent to remove a licence but is not competent to restore, and that, as I understand it, is the position at the moment.
The Bill deals reasonably and competently with a number of subsidiary questions, such as the Minister's power to fix speed limits. Any rationalisation of speed limits is welcome. I also welcome the provisions with regard to driving instructors and the raising and lowering of age limits for drivers. But other matters are left untouched. One of these is enforcement. My noble friend Lord Teynham and others have already mentioned uniformed police patrols. With this I am heartily in agreement, for I am certain that these 'patrols do more to ensure good driving and good traffic manners than anything else. Prevention of accidents must be preferable to heavy fines and sentences after the accident has happened. I believe that the motorcycle police, although admirable in the summer, present some difficulty in winter, owing to the severity of the weather. Although no motor-cyclist myself, I should imagine that those machines are very difficult to control on frosty or slippery roads, and that they may result in a high rate of sickness in the police force through adverse climatic conditions and the state of the roads. I suppose that, as in all things, the questions of expense must come in; patrol cars are more expensive and we could not have so many of them.
I should like to see courts make more use of their powers for compulsory retest of drivers. There is provision for this in Section 3 of the Act of 1960, but I suggest that these powers are not used nearly so often as they should be. There is also nothing in the Bill with regard to the requisite state of health of an applicant far a driving licence. I suggest that there are people driving to-day whose state of health does not warrant their holding a driving licence at all. Some form of declaration has to be made on the form upon which one applies for a
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licence, but I imagine that, like a lot of other forms of that sort, they are signed in a fairly carefree manner. Would it be going too far to require that a medical certificate of health should accompany the application for a driving licence? Many people think so. It is done in the case of an application for a pilot's certificate, and I do not think it would be an intolerable imposition on a motorist.
The Bill gives no help to the motorist with regard to circumstances beyond his control. Drunken pedestrians and dangerous cyclists continue as before, and it would be foolish to assume that accidents are never caused by the careless, foolish and dangerous conduct of those other than motorists. I can give no figures as to the number of motorists who have been killed while trying lo avoid dangerous pedestrians and cyclists, but I believe that deaths have been caused in this way. The Report of the Road Research Laboratory on the accidents on December 24, 1959, made it clear that there was a considerable number of drunken pedestrians involved in accidents that night. The motorist was subject to heavy penalties whereas the pedestrians were not. The Bill does nothing to remedy this situation. The right honourable gentleman, the Minister of Transport, said in another place on July 28 last:
"We must get road safety into its proper perspective".
I agree wholeheartedly. He also mentioned that the deaths in 1960 were fewer than those in 1938 despite the fact that the number of vehicles had more than doubled. There are many bad drivers, but there are not many criminal drivers. I do not believe that prison is the proper place for a motorist, except in very exceptional cases. Suspension of licence is a much more fitting punishment. It, indeed, has the effect of removing the danger from the road. Incompetence must not be confused with crime. The drinking driver is not necessarily the drunken driver. I believe that more severe penalties are no substitute for better roads, the segregation of cyclists and pedestrians and the unselfish cooperation of all who constitute the traffic problem as it is to-day.
5.8 p.m.
LORD SOM̃ERS: My Lords, I hope I shall be forgiven if I repeat a good many remarks that have been made far better

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and more ably by those who have spoken before me. That, I am afraid, is the penalty of being one of those less significant Members of your Lordships' House who come at the end of the list. I must confess that I find this Bill not a very satisfactory one as it stands, lit has dealt with one very severe cause of danger on the road, and the right honourable gentleman the Minister of Transport has my entire backing in attacking that, but it has left many other real causes of danger absolutely untouched. I also feel that it is directed entirely towards the motorist, as the noble Lord, Lord Allerton, has said. The drunken cyclist, the drunken pedestrian, who are both real sources of danger, are left completely untouched. I hope that in future there will be some penalty for pedestrians and cyclists who cause danger on the road.
I do not think that any of us can doubt that we have an energetic and very enthusiastic Minister of Transport. He has obviously got his foot hard down on the accelerator towards road safety and he is going as hard as he can. But is it not just possible that somewhere in his enthusiasm he has taken a wrong turning and is now going at a high rate of speed in the wrong direction? I rather think he has. In some way he seems to have a remarkably one-tracked mind. When he first took office his one idea was to attack the parking problem in London, To him, the heaven-sent panacea for this was the parking meter, so he devoted all his energies to erecting as many parking meters as he could, or as the Treasury would allow him to. He has been so successful in that that it is now practically impossible to park anywhere in the centre of London.
However, having found that preventing people from parking their cars did not seem to reduce substantially the casualties on the road, he is now putting all his energies into attacking another problem, that of driving while under the influence of alcohol. I wonder whether this problem is quite such a simple one as he seems to think it is. One must first consider, as has already been mentioned by others, the great variety of reactions to a given amount of alcohol between individuals. Because of this great variety he will, of course, eventually have to decide upon some mean which is suitable presumably for the average
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person. But this is not mentioned in the Bill, and it seems to me that until it is mentioned the first part of the Bill is completely useless. What is that mean to be, and by whom is it going to be decided? That is another question I should like to have answered.
In any case, I wonder whether driving under the influence of alcohol is the greatest, or even one of the greatest, sources of danger on our roads. I think that a great many more accidents are caused by sheer bad-mannered driving. As I came up this morning—I drive 77 miles to reach your Lordships' House—I noticed on the way innumerable cases of people who were pushing past slower moving vehicles in front of them, regardless of whether it was safe to do so and sometimes blatantly going over the double white line. Those are the things that cause danger, and they are not necessarily due to drink at all; many of the drivers are completely sober. Bad manners are not so easily cured as one might think. According to modern psychological doctrine, from what I can make of it, it is simply not done to teach a child good manners, and if he has not acquired them by the time he leaves school he is not likely to have acquired them by the time he is driving a car. However, I must not diverge from the Bill too much.
We are not told, either in this Bill or in the principal Act, whether blood tests or other tests will be confined to cases where there has been an accident or where there is every reason to suspect from his behaviour that the driver is under the influence of alcohol. I think that point was mentioned by my noble
friend Lord Conesford. I will give your Lordships an instance of the kind of thing I mean. If the House has not risen until after 6.30 on Thursdays I generally start home at once and have dinner on the way home. Will it be possible, under the Act, that when I come out of the hotel, having consumed half-a-pint of ginger beer, I shall find a policeman standing beside my car, and that he will force me to have a blood test before I go any further?—and I say "force me" because, since my refusal will constitute evidence against myself, it really amounts to that. If that were to be the case, I think it is a pity.

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To turn to Clause 3, I should like to mention one thing that I find most satisfactory about it, namely, as has been mentioned by so many other noble Lords, the much wider use of disqualification as a penalty. It is so much more suitable than a fine, however high that may be. I have always been much in favour of making the punishment fit the crime. It is an obvious fact that no one who is in a financial position to own a car is going to mind much about a fine, even quite a heavy one; and, at the risk of arousing a torrent of opposition from those noble Lords who believe that corporal punishment is equivalent to the destruction of a man's soul, I would say that he would not even mind a few strokes of the birch provided he were allowed to go on driving.
I think disqualification is certainly the ideal punishment, but—and this is an important "but"—I think it should be confined, as it is not in the Bill, to those cases where the driver has caused danger to others. At the moment it is possible, though not compulsory, for him to be disqualified for driving at 32 miles per hour in a built-up area. Surely, that is out of all proportion. Equally, I think it most important that when a driver is convicted of driving dangerously the reason for his doing so should be ascertained. Sometimes this reason may be an obscure one. For instance, in cases of drunken driving the driver concerned may be someone who normally never drinks, but perhaps owing to some particularly unhappy event in his household or some great tragedy through which he has passed he has drunk more than is good for him, and, as a result, if convicted, would lose his licence. For a first offence disqualification should not be allowed, but after that it should be compulsory.
Looking at subsection (7) of this clause, I wonder whether the statutory driving test is itself satisfactory enough to warrant the cancellation of a disqualification order. I must admit that I have never had to pass the normal driving test because my licence dates from before it came into existence, but I have spoken a great deal to those who have, and what I have found out about it has convinced me that it is not a test which necessarily produces either a
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skilful or a conscientious driver. As the noble Lord, Lord Silkin, pointed out, it is often conducted entirely in a built-up area so that the driver never exceeds 30 miles per hour. He is then given a licence which enables him to drive a car which will travel at 150 miles per hour, but he has given no evidence of being fit to do so. I have heard something about the test for motor cyclists. This is nothing short of ludicrous, if it is true. I believe that the motor cyclist goes to his testing station; the examiner says "Go down that road, turn right, turn right again, go round the block and come back from the other direction." If the rider is still on his motor cycle when he comes back, he has presumably passed the test, although nobody has ridden behind to see whether he has driven properly.
A NOBLE LORD: Or whom he has knocked down.
LORD SOM̃ERS: Can one wonder that some motor cyclists are such a menace? There is another point. A driver can be tested on a car which has automatic transmission, and if he can pass the test he is qualified to drive any type of car. If that driver is put into a car which has not got automatic transmission he will become a source of great danger on the road. I therefore feel strongly that if a driver is disqualified he should be forced to pass some much stiffer test before he regains his licence.
I now turn to Clauses 7 to 10, which deal with the very vexed question of speed limits. Although the noble Lord, Lord Shepherd, is not here to hear me say it, I may say I disagree wholeheartedly with everything he said on the subject, and I hope he will not take that as being in any way personal. The question of speed limits has been discussed at length in your Lordships' House many times, and, whatever one may feel about them, one fact remains painfully obvious: that is, they are more honoured in the breach than in the observance. This is a fact which I believe needs to be looked into. As a whole, we are a law-abiding race and we do not necessarily become the opposite simply because we are sitting behind a steering wheel. The main reason for the constant ignoring of any law can only be that it is unreasonable. I am not by any means suggesting that all speed limits are unrea-

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sonable, for that would be absurd. The trouble is that so many of them are, and, as a result, motorists are beginning to regard them as simply another bit of legislation to which no attention need be paid. That is a bad thing because it tends to bring the law into disrepute.
I could quote many instances of the kind of thing I mean. For instance, on the A.30 just east of Camberley there is a long stretch—I should think nearly half a mile—of completely open road, certainly wide enough for three lanes if not four, and with no buildings whatsoever, but which is restricted. Why, and who observes the restriction? Speed limits, road signing and road marking, I agree wholeheartedly with the noble Lord, Lord Silkin, should be in the hands of a national advisory committee and should not be left to local government to decide. It would be quite simple to appoint this committee, consisting of road traffic experts from all parts of the country. The statement in the Bill that local governments must have the Minister's permission before they make any regulations really means little at all, because has the Minister ever refused permission to a local government desiring to impose a limit?
LORD STONHAM: Very often. Many local authorities fail to get their plans passed for the imposition of speed limits.
LORD SOM̃ERS: I am very glad and relieved to hear it and I wish the Minister would do that a little more often. In any case, I do not think it is right that responsibility for any decision of such an important nature should rest on the shoulders of one man. There should be a committee to deal with it. I do not wish by that statement to cast any aspersion on the present Minister, whom I know to be a responsible motorist and a capable man, but it does not follow that his successors will be; therefore I think it is a pity that in subsection (1) of Clause 9 he has shaken off even the necessity to consult the London and Home Counties Traffic Advisory Committee before making a new Order.
Clause 13 deals with the question of lights and if I may just take up your Lordships' time a little longer I should like to make one or two suggestions which I hope the right honourable
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gentleman the Minister will consider. One thing that I have always felt would be desirable is an overtaking signal, a green light at the rear of a car controlled by a push-button (to avoid any risk of leaving it on) because so often one does not get an overtaking signal from a car. Perhaps it is cold weather and the driver in front does not want to open his window, or he may just assume that you will pass him in any case. I believe such a signal would make for safety. Possibly the law might be tightened up to the point of making it a penalty to overtake without having had that signal, provided the fact can be proved. Then, I wish the Minister would establish a minimum candle-power for cyclists' rear lights.
SEVERAL NOBLE LORDS: Hear, hear!
LORD SOMERS: Innumerable times I have passed cyclists in dark clothes on country roads and have seen them long before I have seen their rear light. Cyclists should be made more aware of the fact that they also, and not only the motorist, are potential sources of danger on the road.
5.27 p.m.
LORD FOLEY: My Lords, I have listened with great interest to all the speakers in this very interesting and important debate. I well remember listening to the debate on motoring which took place in this House and in which I was privileged to take part some eighteen months ago, just after the opening of the M.1 Motorway. There are a few points I should like to raise. Some of them have already been extremely well covered by those who have spoken before me, but I should like to continue on sometimes parallel, sometimes divergent, lines. I am not altogether happy about this Bill because it raises some doubts, although with certain aspects of it I am in complete agreement—for example, the provisions relating to serious offences to do with dangerous driving, and so on.
The technical aspects, such as the differing effects of alcohol on various people and things of that nature, have been gone into very thoroughly, and I do not intend to cover that ground at all. I believe that serious driving mistakes caused by drink are well catered for, and those offences should be attacked most strenuously. But I am not

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very happy—and here I thoroughly agree with the noble Lord who has just spoken—about the possibility of disqualification for relatively technical motoring offences. I could not agree more with what he said. A motorist who exceeds the speed limit by a mile or two should not be disqualified. One realises that it is wrong to do that, but I should like to go a little further into this matter.
I have had a certain amount of experience of driving in other parts of the world, beside England, and one of the things one notices at once when driving to any extent in the United States, for example, is the entirely different feeling that exists there between the motorist and the police. With rare exceptions, the motorist in this country does not look upon the policeman particularly as his enemy. On the whole, if the motorist makes some small mistake the police are not waiting to pounce; but in America I would say they are Motorists there drive in fear and trembling of committing some small offence for which they will get a ticket. They are very nervous when they are driving, and a nervous motorist is never a good driver; he is frightened and keeps looking in his rear mirror and wondering if he is going to make a mistake. It may even be that he bolsters up his courage by a certain intake of alcohol because he is afraid of making that mistake. I do not want to see this state of affairs come to pass in this country through legislation aimed at the really dangerous and unthinking driver and rebounding, as it were, on someone committing a small technical offence.
A point which I raised when I spoke in the debate on motoring eighteen months ago, which I should like to raise again, and which I am very sorry to see has not been mentioned in this Bill, so far as I know, is the question of pedestrians. We have heard a great deal about motorists and the faults they commit, but in London, particularly, we have an extraordinary situation existing in which pedestrians, jay-walkers and people who cross against the lights, are not in any way apprehended or picked up for so doing. I drive constantly backwards and forwards across Oxford Street. What happens? The light goes green, but do the pedestrians stop? They do not. They continue to stream across, and if
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you hoot they look angrily as if you were in the wrong and they were right. This situation does not exist in any other city I drive in, and I have driven in most of the capital cities. Woe betide the pedestrian who does that in New York! A large policeman would come along and he would be fined on the spot, as he would in any other city in the world. This is a point the Minister must look into. Many lives and limbs would be saved, and a lot of strain would be taken off drivers, too, who, after all, have a complicated and reasonably difficult machine to control, especially if it is raining or if road conditions are not too good. The pedestrian, after all—and I am often one myself—has only to think what he is doing and watch the lights and behave in a normal way.
I fully agree with certain speakers who have already criticised driving tests and the way they are conducted. I think that the whole question of preparing a person to drive a motor car must now be streamlined in regard to modern needs. To see young people at the wheel of a motor car carrying "L" plates, flapping their hands in a kind of vague manner, is quite ridiculous. That is what traffic indicators are for. We have modern cars with them for that reason. I think that the really important aspects of modern driving relating to motorways and so on, such as lane discipline, which we in this country have not yet learned to appreciate, have not been explained to beginners at all. This is a question of people being prepared to drive a motor car. It is very difficult to deal with the points raised by the noble Lord, about automatic gear boxes, and of driving a small car and then switching to a big one. I do not think we can legislate for this. But I think we must very seriously consider the Highway Code and how we train the people who teach driving.
Now, at the risk of boring your Lordships, I would turn to the question of speed limits, which has been "hashed over" in no small way in this House. I should like to say right away that I am in disagreement with the noble Lord, Lord Beveridge, who is obviously a great advocate of speed limits. Speaking from considerable driving experience, I do not have a great belief in speed limits.

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They are very necessary in cities and built-up areas, but I think that to put them on the road as a panacea for all ills is a great mistake. It is slowly going backwards. If we were to have a small man with a red flag in front of motor cars restricting speed to five miles an hour there would be a great reduction of accidents. Doubtless, if we banned all jet aeroplanes no one would be killed in them. But progress would not go on. In a hundred years from now we shall have, I hope, a number of high-speed roads on which motors will travel at speeds we do not think about to-day, and motorists will take them as a matter of course. We have to go forward, and I think that speed limits are an example of defeat. They are an admission that our roads, our cars and our driving are not adequate for travel at higher speeds.
In America, speed limits are imposed on highways such as M.1, but the situation is rather different, because there most people drive motor cars of relatively equal power and they travel at relatively equal speeds. In this country, we have 90 per cent. of drivers driving small cars at a medium speed, and a few others driving very fast cars and going very quickly. Therefore, our whole position with regard to motorway speed limits is quite different. I am sorry to be "long-winded" about this subject, but I feel that it is an important point. Also,
American cars are mainly designed to be driven on a straight, flat road. If driven at high speed they are quite dangerous. Therefore I think that the Americans are very wise to put speed limits on their major highways. However, they are not entirely wise in other ways. For example, I remember driving across Oklahoma, where the State speed limit is 60 miles an hour. On their new super-highway, this is ridiculously low; but on certain little country lanes to which the speed limit applies, because it is an overall State limit, it is equally ridiculously high. It just does not make sense.
Also in America there is a curious situation, in that in States where the speed limit is high—if there is a limit of, say, 70 miles an hour—that limit is very heavily enforced, and if you travel at 72 or 73 m.p.h. and you are caught, you are pulled in and fined. But in States where the limit is low, as in California, where it is 55 m.p.h., you may drive at 70 or
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80 m.p.h., provided that you drive in a reasonable and competent way. If you observe lane discipline, do not weave in and out and do things you are not supposed to, you will not be stopped. The noble Lord who opened this debate said that the 50 m.p.h. limit which was imposed during holidays was effective and that the Government think that the figures of accidents were reduced. But any of your Lordships who has driven on busy, congested roads at Bank Holiday week-ends will know that there are very few occasions when it is possible to travel at 50 m.p.h. Cars are usually crawling along, bumper to bumper, at half that speed. I think we have to look at other ways of cutting down accidents.
In this respect I thoroughly agree with the noble Lord, Lord Silkin, that one of the major causes of accidents is the bad roads in this country. I think we have to go ahead and build new super-highways. If we are not in a financial position to do it, why do we not impose tolls? I have spoken about this before in this House, and if I may risk riding my hobbyhorse (though it may be dangerous to ride a hobbyhorse down M.1) I would say that tolls are a good idea. Any motorist would be delighted to pay for the opportunity of driving on a road such as the M.1, and it would serve the second purpose of tending to keep commercial traffic off the road. I think that this is desirable for two reasons. A road such as the M.1 is designed for high speeds, and lorries are not wanted on it. They go slowly and are a menace, and they cause the road to deteriorate. Let them go on the older roads, which would be freed of traffic, and let the motorists who are prepared to pay go on these super-roads which would be paid for by them.
My Lords, I believe that a very ruthless attitude must be adopted. We are going to have complete stagnation in this country if we do not do something very serious about it. And it is no good small vested interests kicking up a fuss and saying, "You are cutting through our back garden" or, "Our shop which we have owned for 100 years is to be pulled down." The answer is that last week we had an extraordinary scientific achievement: a man in space. I am not advocating the way of life that exists in Russia, but I think this was achieved by a certain sweeping aside of people who

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were obstructive, and by a certain ruthless approach. Shortly, we in this country are going to have a very difficult and dreadful situation which will cripple us economically; and it must be dealt with ruthlessly and, I suggest, by any means. The Minister must take the broad view and spend enormous sums of money, taking it from the motorists, or anyone you like, to see that we have roads. Instead of being behind in the world as we are to-day, we should have roads which are equal to any, or better than any, in any other country.
5.40 p.m.
EARL FERRERS: My Lords, we have heard a great deal about this Bill, and I shall try to be as brief as I can. At the outset, I should like to congratulate the Minister on producing the Bill; on producing something which he hopes will go in some measure towards the saving of lives. The fact that I disagree with some of the proposals by means of which he intends to reduce accidents does not minimise my pleasure in the fact that he has produced the Bill. The noble Earl, Lord Arran, rather castigated the Government. He said, I think, that he did not like epithets, but that he wanted epitaphs. In passing I would say that I can give him one epitaph of which I was told as a child and which I thought was rather clear and to the point. It was simply:
"Here lieth the bones of Emily Bright, Who put out her left hand and turned to the right".
In Clause 1 of this Bill we have the instruction that a person shall be taken to be unfit if his ability to drive properly is impaired. Like many noble Lords, I think that is far too loose a definition. The noble and learned Lord, Lord Denning, gave us on the last occasion a clear and concise account of why he thought it was too loose, and I would merely say that I agree with his view wholeheartedly. Clause 2 deals with the blood and breath tests. I find this clause a rather difficult one to accept wholeheartedly. I should like to see action taken against drunken motorists, but I feel that the inclusion of blood and breath tests is more an action taken against a person because he has been drinking than because he is drunk—and those are very different things. The action is being taken against him because
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he has been drinking, irrespective of the effects that that drink has had upon him. As we have heard, one man, having consumed a certain amount of drink, may be sober, whereas another man who has consumed the same quantity may be drunk. But what we have not yet heard, and what I think may well be true, is that the same level of alcohol can exist in the blood of one man when he is sober as exists in the same man when he is drunk.
To illustrate this point, I should like to recount a story which I was told by a friend of mine who is a doctor of high repute. He informed me that in one of the Scandinavian countries, where they take the blood tests very seriously, there was an eminent surgeon who had occasion to go to their equivalent of the local B.M.A. dinner, where, of course, he had his dinner and a certain amount of drink as well. Quite correctly, he hired a taxi and got somebody else to take him home. He went to bed, and he went to sleep. The next morning he got up and had his breakfast, went and collected the car out of his garage and drove down the drive. As he went out of his drive gate, he ran into a motor car, or the motor car ran into him. At any rate, there was an accident, and the police came along. They took the man to the police station, and took a sample of his blood. It was above the correct level, whereupon the surgeon was placed in gaol for 24 days, or whatever the period was. To my mind, that illustrates the difficulty of relying entirely upon the blood test; and also, indeed, of relying upon a categorical statement that where a person is found to be in default he should have a certain penalty placed upon him.
Now breathalysers are, I gather, inaccurate, and it would be difficult to accept the evidence of a breathalyser as conclusive evidence. Furthermore, the only really accurate one is very expensive: and not only is it expensive, but it is also difficult to operate. Again, the results of a breathalyser do not necessarily agree with the results of a blood test; they can differ up to a maximum of 24 milligrams per cent. in either direction. In other words, if you have a breath test and it is found that you have 100 milligrams per cent. of alcohol in your breath, your blood test can give a reading of anything between 76 and 124 milligrams per cent.—and that is a

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very considerable difference. I confess, I do not greatly like the fact that if you refuse to give a specimen of your blood or breath that fact is to be taken against you. Of course, it may well be argued that you would agree to have your blood or breath tested only if you knew that you were sober, and that by refusing to allow a specimen the accused is automatically admitting guilt; and that, I should have thought, is undesirable.
I should like to quote from the leader of the Sunday Times of March 26, which phrases the point very much better than I can. It says:
"Everyone has the right to decline to give evidence against himself, and it is unwise either to circumscribe this right or to define the presumption to be drawn from its exercise in particular spheres.
"But if, as is actually the case, the tests in question are suspect in both lay and medical circles, then to make them, in effect, compulsory, and to imply that the courts should accept them as certain evidence, is contrary to justice."
Indeed, even the police surgeons, I gather, are not very keen on this. The secretary of the Association of Police Surgeons was reported in the Daily Telegraph of April 10 to have said:
"The implications of the clause are that the law is unfairly biased against an accused person."
A number of people have suggested that these tests should be compulsory. I find it a little difficult to accept that they should be compulsory, but even if I do accept it, how can you compel a person to undergo a blood test if he does not want to? Short of strapping the man down while you take a sample of his blood, it would be very difficult to do. Again, the blood sample gives no indication of tranquillisers. You may say that that is unnecessary, but if a small amount of alcohol is taken and is followed by the taking of a tranquilliser, or what is commonly known as a "pep pill", I believe the effect can be disastrous, and can render that person completely incapable of operating a motor car and make him, in fact, completely drunk. However, if you took a sample from his blood it would contain only a very small proportion of alcohol.
A number of noble Lords have said that they regret the fact that there are no figures in the Bill as to what should be regarded as the maximum quantity of alcohol which should be taken when driving. If we are going to have these
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tests (which personally I would rather not see), then at least we should have some indication of what is supposed to be the dangerous level of alcohol in one's blood. I should also prefer to see magistrates retain the power to allow the punishment (as it were) to tit the crime. Many noble Lords have said that only 22 per cent. of the maximum fine has, on average, been imposed, but to my mind that is, in itself, a justification for retaining the power of the magistrates. If the magistrates, having been given all the facts and circumstances of a case, have, in their wisdom, decided not to levy the full fine, then surely that, in itself, is an argument in favour of then retaining that power.
I hope that if these blood tests are to be taken, they will not be allowed to be taken as proof when there is no other evidence of drunkenness, because under the Bill one mechanical test of an accused person, as I understand it, can, go against that person and may render him liable to a fine or to losing his licence, without any other aspect of the case being taken into account. There is also nothing in the Bill to prevent breath tests from being taken elsewhere than at the police station. If we are to have these breath and blood tests, there should, in my estimation, be something in the Bill to say that they can take place only at a police station, after a person has been taken there to be charged. There is nothing at the moment to stop an over-zealous policeman from standing, say, outside a public house or a cocktail party, or anywhere else, and, on seeing a person get into a motor car and about to drive off, going up to him and saying. "Blow into this machine". I am sure that is not the intention; but as the Bill stands at the moment it is possible that that could happen.
My Lords, I do not condone drunkenness in the slightest. A drunken driver should certainly pay for his drunkenness, and I should like to see heavier penalties. I agree with the noble Lord, Lord Lucas of Chilworth, who said that the one thing a driver does not want is to lose his driving licence; and, as I say, I should welcome heavier penalties. But I should not like to see a witch-hunt, as it were, against the drunken driver turn into a witch-hunt against the normal, average person, which I think under this Bill might be the case.

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I would say one last word which is connected with, or has a direct relation to, this Bill, and which the noble Lord, Lord Som̃ers, mentioned. I think it is an extremely important point. I should like to ask the noble Earl who will be replying whether the Minister has any power whatever to alter the regulations with regard to the rear lighting of bicycles. Such lighting is totally inadequate. The majority of bicyclists ride along, and providing they have something which goes by way of being called a rear light on the back of their bicycle, they feel quite content, irrespective of whether it is possible for anybody else to see the light. The moment an oncoming motorist appears with his headlights on he totally eclipses this light from the view of anyone behind it, and it is impossible to see it. The noble Lord, Lord Som̃ers, asked whether it was possible to regulate the candle power of rear lights. I think that is extremely difficult, but what the Minister could do—and I should like to know whether he has the power to do it, and, if not, whether the power could be incorporated in the Bill—is to make it a law that bicyclists should carry a rear light of at least 2½ inches in diameter. We may not be able to regulate the candle power, but at least we could regulate the diameter of the rear light, and I believe that would be of great assistance and would save a great many accidents.
LORD SOM̃ERS: My Lords, would the noble Lord forgive my interrupting him? There is just one point there, and it concerns bicycles on which the lamps are lit by a dynamo. If the bicycle is travelling very slowly, the lamp is barely visible.
EARL FERRERS: That is perfectly true. Worse still, if the rider has a dynamo fitted to his bicycle and wishes to turn to the right, he follows the Highway Code quite correctly and proceeds to the middle of the road. Then he stops to allow any oncoming vehicles to pass, and immediately his rear light is extinguished and he renders himself even more liable, so to speak, to the "death penalty". I would welcome an answer to that question by the noble Earl, because I think it is very important.
5.55 p.m.
LORD MONTAGU OF BEAULIEU: My Lords, rising, as I do, at the end of a long debate, I assure you that I shall not keep your Lordships long. There are, however, one or two points which I think have not been raised before and which I should like to bring to your Lordships' attention.
My first point concerns the question of clearways. Perhaps many noble Lords will not agree with me, but I feel that a person who stops his car at the side of a main road is committing just as serious an offence as if he was driving while drunk. In America and France it is an instinct in drivers not to stop at the side of a main road. This is not something about which one has to put up signs every quarter of a mile along National Route No. 7 in France, for example; it is absolute instinct to a French driver that he does not stop by the side of a main road.
Two years ago we were all delighted to see that the Minister had started a clearway system in this country; but personally, I am very disappointed that this has not been spread very much quicker than it has. I do not see why we have to experiment with this any longer. Surely this is a very basic, common-sense thing, and should immediately be spread to all main roads throughout the country. After all, one has a very serious situation arising now. People know they cannot stop on the M.1, but when they get on to another dual carriageway, on which they can go practically as fast, they are allowed to stop. This is entirely the wrong education, and the time must surely come when clearways become universal. I should very much like to see some legal provision in this Bill to give the Minister power to extend clearways very much more in this country.
The second question is that of provisional licences. One of the persons who is being much attacked nowadays is the young motor-cyclist who roars around the country. I believe the motor-cyclist has been made very much a whipping boy in recent months. Most motorcyclists are extremely good riders, and with the R.A.C. tuition scheme, which I am delighted to hear is being supported by the Minister, there is no reason why young motor-cyclists should not learn to

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ride a bicycle properly and pass the test. The ones really doing the motor-cycling movement the harm are those who get their "L" plates and go on from year to year without bothering to take the test. It is quite different with a motor car driver, because he always has to take someone with him; and sooner or later his parents or his friend will say: "You jolly well pass your test. I am not going out with you every time, because I am getting bored".
Surely the time has come to limit the provisional licence to a certain period, and to say that the holder of a provisional licence will not get another one until he or she has at least tried to take the test. It does not really matter very much whether they pass or fail at that time, but at least they are making a genuine attempt to pass a test. If that were the case, it would surely deter youngsters from going from year to year without taking it. I spoke to a young man the other day, now aged eighteen. He had been riding for a whole year without taking a test, and I asked him: "When are you taking your test?" He said: "My father is giving me a car when I am twenty-one, so I shall not bother until then, as it is a waste of time taking one now". I am sure this is something that should be looked into.
Two other small points. I am delighted to see that legislation is being introduced concerning the lights of vehicles. At the same time, I should like to ask the Minister to consider, at some time in the future, laying down, in the Highway Code some guidance for people with regard to the use of headlights, or indeed rear lights, for signalling. A great many different methods of signalling are used and, though I appreciate that this will be a very difficult thing to legislate for, perhaps some guidance could be given in the Highway Code as to what the flashing of lights really means. I was delighted to note that in, his excellent opening speech the noble Lord, Lord Chesham, applauded the work done by county councils in realigning roads and carrying out minor improvements, both of which have done much towards reducing casualties. In view of what he said, I hope that the Minister will once again reconsider the drastic cutting of county council grants, which has resulted, in many cases, in the stopping of minor
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work of this sort. In conclusion, I should like to say that, on the whole, there are many good things in the Bill, and I am sure that all of us concerned with road safety will wish to see it a success.
6 p.m.
LORD AUCKLAND: My Lords, in your Lordships' House five days ago, I initiated a debated on accidents in the home, and I wish to say that the emphasis which I placed on those accidents should in no way detract from appreciation of the seriousness of the problem we are discussing to-day. A grave responsibility rests on your Lordships' House in being the first of the two Houses of Parliament to discuss this vital Bill. I wish to confine my remarks to Clauses 15, 22 and 25. I would only say this about Clauses 1 and 2, which have already been fully discussed. I do not think that breath and blood tests are going to be effective, but urine tests may be. If there are to be tests on drivers suspected of being drunk, medical opinion confirms that urine tests will not only be the easiest to take but also the most effective.
I find Clause 15 extremely difficult to understand. As I see it, the proposal is that driving schools and instructors should be registered, but as has been pointed out by my noble friend Lord Northesk and other noble Lords, there is nothing to prevent a man from passing his driving test one day and setting up a driving school the following day. That seems to me to be absolutely wrong. I must declare an indirect interest, as I am a learner-driver. I have a first-class instructor, a man who had 20 years' experience at the Police Driving School at Hendon. I have discussed this Bill with him and he fully bears this out. A driving instructor should be able not only to drive but also to teach; and I submit that a man who has taken a driving test is not qualified to teach the following day.
I suggest to the Government a possible time lag of six months to a year before such a person is allowed to establish a driving school. At present there are a good many driving schools, and quite a number have started and, for one reason or another, "folded up". The noble Lord, Lord Molson, said that members of the general public can choose their own driving schools and instructors, and I agree. Nobody wants to

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have State driving schools or a kind of MI5 organisation to go into the character and ability of driving teachers. But I think that, since a driving instructor has to teach a pupil to control a lethal weapon on the roads, he should have a certain standard of proficiency. Organisations like the Royal Automobile Club and the Automobile Association, both of which have contributed so much to road safety, should be empowered to look into the character and ability of driving teachers.
I agree with everything that has been said about the holder of a provisional licence who goes out on his own being heavily punished. Obviously, he is going to be a danger on the road. But I would say that learner-drivers are not the prime cause of accidents; most of them are careful. I think that every learner-driver should have at least half a dozen lessons at a driving school, because a qualified driving instructor is a much better tutor than a parent. He does not necessarily know the foibles of his pupils and is more impartial. Whilst I know that it would be difficult to have legislation to make people go to driving schools, I think that it is eminently desirable.
Clause 22, which deals with dogs, has not been touched on in this debate, so far as I know. I am a dog-lover and have always had a dog in my home, but I recognise that on the roads they are a menace, and I am glad to see that power is now given to local authorities to compel people to keep their dogs under control on the highways. I do not know the figures for accidents caused by dogs but they are still very heavy. The other day, in Surrey where I live, I saw a dog nearly cause an accident which might have been serious.
Clause 25 deals with cyclists. I am fond of cycling—indeed, much fonder of cycling than of driving a motor car. Those cyclists—I saw some of them on Sunday while having a driving lesson—who cycle three, and sometimes four, abreast are a menace on the road. I believe that there should be much severer penalties for cyclists who are caught indulging in this practice. I think that in general cycling clubs enforce discipline effectively, but there are some who do not; and I should like to see much more control here. Again, cycling
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lanes are not always used. On the Kingston by-pass, there is a perfectly good track for cyclists. I travel frequently down that road and rarely see the track used. Kingston by-pass is one of the busiest roads in this country and there is nothing worse than to see two or three cyclists riding abreast and holding up a long line of traffic. Several noble Lords have touched on the question of lights on cycles, and I agree that many rear lamps are inadequate and that the number of cyclists out after dark with defective rear lamps is all too high.
I am in favour of speed limits generally, but what is extremely confusing—for instance, on the North Circular Road—is where you leave 30 m.p.h., go into 40 m.p.h., and then back into 30 m.p.h. This is particularly confusing for visitors to this country. I cannot help agreeing with my noble friend Lord Som̃ers that there are large areas where speed limits are not necessary; but there are also areas in the Home Counties where there are no speed limits and where there ought to be. I can name two or three places in my own area where there should be speed limits. I hope that the Minister will look into this question.
I feel that this is a very necessary Bill, but it is one which needs a great deal of tightening up, particularly so far as disqualification is concerned. I should like to see more disqualification and less fining. For example, taking a car away without the owner's consent is an extremely serious offence and should, I feel, be punished with a heavy fine, plus disqualification. Because not only does it cause great inconvenience to the car owner, but a youngster may be taking away quite a high-powered car, with little or no idea of how to handle it, and causing a nasty accident. But, as I say, this is a necessary Bill, and although I feel that in Committee a great deal of work will need to be done in tidying things up, I have no hesitation in supporting the Second Reading.
6.11 p.m.
LORD LATHAM: My Lords, we have almost reached the end of a two-day debate upon this Bill, which has been exhaustive and in which there have been a number of speakers. We have listened to many penetrating and informed speeches, quite a number of them of a critical character. I think

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we were all much impressed with the speech of my noble friend Lord Taylor when he dealt with the biochemical aspects of certain provisions of the Bill. The title of the Bill is the "Road Traffic Bill" and not the "Road Safety Bill". I felt that, excellent as otherwise was the speech of the noble Lord, Lord Chesham, in introducing the Bill for its Second Reading, he seemed to be more concerned, as, indeed, I submit the Bill itself is, with penalties than with taking preventive measures to avoid accidents and to reduce their number. That really should be the purpose of this legislation.
The problem of safety on the roads is, after all, as the noble Lord, Lord Lucas of Chilworth, said, a matter of behaviour, and this Bill is partially an exercise, as it were, in behaviourism. That means behaviour not only as motorists but as pedestrians, because, after all, all motorists are pedestrians and about a quarter of the adult pedestrians at the present time are motorists. So it really becomes a question of behaviour of ourselves as citizens, combining the two attributes, as it were, of pedestrian and of motorist. Let us be quite frank about it; as the noble Earl, Lord Ferrers, said, pedestrians are themselves not without blemish as regards the causing of accidents on the road. So many figures have been (may I say?) bandied about in the debate that I hesitate to add to them, but I believe it is the case that some 50 per cent. of the accidents can be properly ascribed to pedestrians. So it is as citizens, being pedestrians and motorists, that we should behave ourselves in the use of the highways of this country, which are supposed to be the inheritance of its people.
I do not think it is unfair to say that this Bill is a disappointing one in many respects. It really does not measure up to the need. This dreadful toll of death and mutilation on our roads and highways needs something more fundamental than the proposals contained in this Bill. As my noble friend Lord Silkin said on Thursday last, the majority of accidents are due to the inadequate, outmoded road system of this country. That has been said by people in authority and otherwise over the last 25 years, and yet, comparatively speaking, little has been done. Until we get an adequate road system of a modern
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type, I fear that this toll of death and mutilation will go on.
The Bill does not deal adequately, I submit, with parking, which is a growing scandal, where motorists are appropriating large areas of public highways as places to garage their cars not only during the day but at night. There are, I believe, something in the region of 30,000 cars standing out at night on the streets of a, relatively speaking, small central area of London. That, I submit, is an abuse of the use of the Queen's highway. I should have thought that in connection with parking there was a case for considering the imposition of further restrictions upon loading and unloading at certain hours. I notice that one of the provisions of this Bill is to relieve the Minister of the necessity of getting the consent of the London and Home Counties Traffic Advisory Committee. I was a member of that Committee from 1934 onwards, and I can remember as far back as 1938 when we were considering with the then Minister of Transport and the police the question of restrictions upon loading and unloading in certain areas of London. We stirred up a nice hornet's nest, but I do not think much has been done, notwithstanding that there has elapsed all the time between 1938 and now.
It seems to us that these proposals, excellent though some of them may be, do not go far enough to deal in an adequate way with the problem that faces us. I do not propose to go into any details as regards Clauses 1 and 2. I am disturbed, like other noble Lords, at the inference that the provisions of Clauses 1 and 2 may amount to a serious infringement of the principle of law in this country that a citizen is innocent until he is proved guilty. If we are to have these clinical tests, I think it would be less dangerous to that important constitutional principle if they were made compulsory and not selective, as is the case in the Bill, with really serious penalties for refusal. But if they are to be made compulsory, then it seems to me that there must be evolved—I gather my noble friend Lord Taylor to say that it is possible so to do—a standard test, so that each person is subject only to the same test and not to varying tests; and, also having regard to what my noble friend Lord Taylor said, that the tests should be applied by persons

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who are trained and skilled in doing that particular job and not generally, because I submit that there could be the most glaring inequities if that were not the case. I notice that in to-day's Times the point is canvassed as to whether it is possible for a standard test, as it were, to be devised of the level beyond which it can be assumed that there was an impairment of the ability to drive. The Times pointed out the difficulties of so doing, one of which—and perhaps the most important—is that alcohol can affect different persons in different ways. Whilst I have had no experience myself of drugs, I apprehend that drugs might do so also. But it is important to realise that these proposals really amount to an infringement of the principle of law as we know it in the country, and this is the second piece of legislation within the last six weeks which has done so. A similar provision was in the Affiliation Bill in regard to blood tests.
I do not doubt that some fundamental Amendments will be proposed to the Bill. A number of suggestions have been made in the course of the debate, and different speeches have been made critical of different aspects of the Bill. The Long Title is pretty comprehensive, and it seems to me that within it Amendments of far-reaching character, and additional provisions of a far-reaching character, would be in order. I myself should like to submit a proposal in respect of which I hope the noble Earl can give an assurance that it will receive the consideration of the Ministry and of Her Majesty's Government. The proposal is that the provisional licence which now terminates on passing the test, should continue, without the obligation for the driver to be accompanied by a licensed person, for a period of twelve months from the date of passing the test; and that during that period the provisional licensee should carry, on any vehicle which he is driving, in place of the "L" sign some distinguishing sign that he is, so to speak, an initiate driver whose only experience has been the preparation for his test. During that period he has been accompanied always by a person who is a licensed driver, often an instructor and, of course, in the end by the tester. The "L" sign is a notice to others using the highway that the person on whose vehicle it is dis-
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played is a learner, and as such it is a valuable safeguard, both to the learner and to other drivers, who are put on their guard to be ready for the unexpected and also, often, for the wrong action by the learner. Also—and this is no less valuable—drivers are generally considerate and patient towards the learner, as much in their own interests as in his.
The learner then passes the test and thereupon goes on to the highway with a vehicle, large or small, high-powered or low-powered, alone, without the company of an experienced licensed driver, and without any notice to other drivers that he is an initiate driver. He loses the consideration he formerly enjoyed from other drivers when he was a learner, the comfort and confidence which came from having a licensed driver with him, and also the knowledge that if he were going to do anything wrong he would be corrected and/or stopped by the person with him. But now, after he has passed his test, he is alone. When the learner takes the official test he is keyed up, and the tester will tell him to do this or that, but only when it is proper to do it—and that is important. That is a position which is quite different when the learner is on his own. He has no advice and no special forbearance from the other drivers which the "L" sign attracts; nor are the other drivers being specially careful because of the sign.
As I have said, he is alone in charge of a potentially dangerous weapon, amid a multitude of other like vehicles, including some being driven by learners, and the safeguard he had of the "L" sign is no longer available to him or to the other drivers. This is no reflection on a person who passes the test. It would be to his benefit to continue to receive the consideration and forbearance of other drivers during the time that he would be gaining experience on his own account of road conditions.
What kind of sign is a matter to be determined, but I suggest a letter "P", of the same size and character as the "L" sign. "P" would signify to other drivers
that the vehicle in question was being driven by a person who had passed his
test. If, during the extended period of twelve months, the holder were found guilty of a serious motoring offence—and

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I have left it in that vague way because it is a matter needing careful consideration—then he should revert to the position of the holder of an "L" licence, as part of, but not to the exclusion of, any other punishment. I ask the Minister to give his full consideration to this proposal.
I admit that it would be an important change in the licensing provisions, and there may be objections from holders, present and future, of the provisional licences, and from the motoring interests and their organisations. But we are dealing with a question of death and mutilation on our highways of a measure which is both indefensible and intolerable, and no personal or private interests, prejudice or pride, should be allowed to hinder our taking any proper steps if they be calculated to lessen this dreadful toll on our roads. I hope, therefore, that the noble Earl will be able to give your Lordships the assurance that this proposal, which has been very carefully thought out, will receive proper consideration. We will, of course, give this Bill a Second Reading, but the noble Earl is on notice that quite a number of important Amendments will be put down.
6.30 p.m.
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, I have listened without interruption for two full days to your Lordships' debate, and I have done so with very great interest, especially because this is the first time that I have ever had the duty, either in your Lordships' House or in another place, of speaking for the Ministry of Transport, a Department in which many of your Lordships have a great deal of administrative experience, but I have not. I should dearly love to range at length over the 29 speeches which I have heard, but I have a strong feeling that your Lordships are now satiated with the oratorical orgy in which you have indulged. I think, looking round, that more than half of the 29 noble Lords who have taken part in our banquet have either driven home or walked home or been carried home, I hope without danger either to themselves or to anybody else; and I think it would be a merciful course of action if I were now to conclude our proceedings, not with two or three glasses of heavy vintage port but with a very quick round of light refreshment which may have no
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adverse effect either on the blood or on the breath, not to mention any other tests which your Lordships might have to undergo—those of you who are strong enough to have remained until the final course.
LORD SILKIN: Would the noble Earl say how much that is?
THE EARL OF DUNDEE: How much what is?
LORD SILKIN: How much of that light refreshment one can take without impairment?
THE EARL OF DUNDEE: I was hoping that it might be so light that no one could possibly suppose it would have any effect on anybody's sobriety, to whatever kind of test he might be submitted. I think that the first prize for endurance must go to the noble Lord, Lord Latham, who, like myself, has also sat through the entire debate.
LORD LATHAM: May I interrupt the noble Earl, for the sake of accuracy in the Record? I must admit that I did not sit through the debate very long on Thursday, because I had a motor trade function that evening.
THE EARL OF DUNDEE: I am glad to see it has not had any of the untoward consequences which many of your Lordships apprehend as a result of this Bill. I agree with the noble Lord, Lord Latham, in describing this Bill as "a legislative exercise in behaviourism", as he called it; and of course I agree that pedestrians, as well as motorists, can be to blame, and we must do our best to be as fair as we can all round. He said that it was a disappointing Bill. I find it very difficult to imagine any legislative exercise in behaviourism which is not disappointing, at least to some people. One cannot prevent people in considerable numbers from killing each other on the roads, and any piece of legislation which is designed to reduce the number of accidents, and to deter people from doing it quite so much as they are doing it now, must contain some elements of disappointment, because nobody expects the legislation to cure the evil entirely, or quickly.
The noble Lord did not proceed to make a great many proposals which might have remedied the disappointing character of the Bill. He spoke for a

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little on the need for better parking regulations, particularly in relation to loading and unloading, in which I am sure he was well justified. I think these are matters which would not require legislation in order that better regulations might be made. But his main contention, like that of so many other of your Lordships who have spoken, was that the chief trouble was inadequate roads. That has been, in his case, and in the case of many other noble Lords who have spoken, the only remedy proposed for the present appalling size of the road accident figures.
Well, my Lords, I do not think anybody, whether in the Government or outside it, should ever be complacent about our roads. But in view of what both the noble Lord and so many other of your Lordships have said, I think it is legitimate to point out that we are doing now about ten times as much in road improvement as was being done even five or six years ago, and a great deal more than was being done if we go back a little further. In the financial year 1955–56 less than £9 million was spent on the road programme in England, Wales and Scotland. Next year the figure will have risen to £100 million, which is a more than ten-fold increase, and my right honourable friend has announced that major improvements and new construction, the total value of which will be £200 million, will be under way this spring. This is by far the largest road programme that Great Britain has ever seen.
The noble Lord, Lord Silkin, said there was no long-term planning for our roads. But in fact we announced last summer a Five Year "rolling" Programme for classified roads and, in effect, a Five Year Programme for motorways. So far as classified roads are concerned, the Government have decided for planning purposes that Government expenditure on classified roads should be fixed over the five-years beginning 1961–62 at £150 million for England and Wales, and £31 million for Scotland, and this programme will be rolled forward by one year annually, so that there is always in being a five-year forward programme. So far as motorways are concerned, we intend substantially to complete five major projects over the next five or six years and at least to start
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the Yorkshire Motorway in the same period. I think your Lordships will see that, in addition to an increase in the scale of the road programme, there has been also a notable change in the basis of forward planning.
LORD LATHAM: May I interrupt the noble Earl for one moment? Could he give us the figures on the basis of the value of the pound in 1951?
THE EARL OF DUNDEE: Yes, but it would take me two or three minutes to work them out, and there might be a rather tiresome hiatus whilst I was doing the sum. I do not think it is very difficult. Your Lordships can all do it on paper, if you take the trouble—£9 million in 1955; £100 million in 1960.
I will, of course, report to the Ministry Lord Latham's interesting proposal that there should be a kind of intermediate stage between the learner and the fully-fledged driver—a kind of chrysalis period of twelve months in which he is neither the one nor the other.
LORD LATHAM: I did not say that.
THE EARL OF DUNDEE: I was trying to summarise, perhaps a little lightly, what the noble Lord was putting forward. May I also try to summarise, very briefly indeed, one or two of the salient questions and points which have been raised in your Lordships' debate? I will do my best to leave out anything which can be more appropriately talked about in Committee.
Lord Airedale asked a question about Clauses 1 and 2 which I think was fundamental. He said, I think, that in the past it has always been a prerequisite of conviction for offences of this nature, driving when unfit through drink, that the person charged has shown unmistakable outward signs of intoxication.* If this Bill is passed as it stands, the Government do not envisage a situation arising whereby under Clause 2 a person having been tested for the alcohol content of his system may be convicted upon that evidence alone, irrespective of whether he has displayed any outward, unmistakable, visible signs of intoxication. I should like to make the answer perfectly plain: he cannot be convicted on the tests alone and, as has always been the case, if he is to be convicted of the offence he must have shown signs

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of intoxication, or of bad driving which seemed likely to be due to intoxication, before the test can be taken.
Of course, the test is only corroborative evidence; the scientific evidence of the analysis of the samples is not, and does not purport to be, conclusive evidence of the guilt of the accused person. It is strictly circumstantial evidence; as my noble friend Lord Conesford said, evidence which the court ought
to have if it is available but nothing to do with making the accused give evidence against himself. It is reasonable, circumstantial evidence—to show whether or not the accused had a high alcohol content in the blood—and it may contribute towards the establishment either of his innocence or of his guilt. It still remains for the prosecution to establish that the ability of the accused to drive properly was in fact impaired, and this can be done only by reference to the manner in which he behaved at some material time. I hope that is plain to your Lordships. My noble friend behind me, Lord Ferrers, was, I think, entirely mistaken in supposing that a policeman could take hold of someone and submit him to a test although he had not shown any signs of driving in a dangerous manner, and some other noble Lord suggested (I think it was Lord Som̃ers) that when he went out of this House he might be required by a policeman to have his ear pricked to provide a blood test. That is not so.
LORD SHEPHERD: My Lords, if the noble Earl will permit me to intervene, may I ask whether it is then the case that the police would not take a man for a test unless he were involved in an accident? For example, if a man leaves your Lordships' House reeling and is obviously going to his car, could a policeman say, "I wish you to come to the station"?
THE EARL OF DUNDEE: I do not think an accident would be necessary, but he would have to be in charge of a car; and he would have to be, as the noble Lord says, reeling about or driving a car from one side of the road to the other. The noble Lord may perhaps have heard about some fellow countrymen of mine who were driving from Dundee back to Glasgow. That is one oil' the straightest roads in Scotland.
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They were veering from one side of the road to the other, and the Dundee man who was sitting beside his Glasgow friend said, "For goodness sake, what are you doing?" The Glasgow driver drove into the side of the road, sat looking at his friend, and said, "Is it me that's driving, Sandy? I thought it was you." No accident was involved at all, but if they had been observed by a policeman he would have been entitled to ask them to come to the police station and, if this Bill is passed, to request them to submit to one of these tests.
EARL FERRERS: My Lords, do I understand the noble Earl aright, that you can be asked to submit to one of these tests only after you have been taken to a police station to be charged with some offence?
THE EARL OF DUNDEE: Yes, that is so. I hope that also answers the question of the noble Lord, Lord Silkin, who asked whether we were creating a new offence. We are not. All Clause 1 does is to change the present definition of what constitutes unfitness to drive for the purpose of Section 6 of the 1960 Act. Lord Airedale also asked by whom a request to a driver to provide a specimen would have to be made. We certainly do not
contemplate that it should be made by the driver of another car, which I think
was in his mind. We will look into the matter to see whether any further safeguards are necessary in the wording of the 'clause, but I do not think that will be likely. What the clause does is to provide a new definition of the offence which already exists under Section 6 of the principal Act: driving while his ability to drive is impaired.
Same of your Lordships have proposed that the definition should be a little more exact. The noble and learned Lord, Lord Denning, thought, and the noble Lord, Lord Taylor, did not agree with him, that the word "appreciable" should be introduced. Lord Taylor thought it was in order without "appreciable". The noble and learned Lord, Lord Denning, thought it would be clearer if "appreciable" were to be put in. That is a point we can discuss in Committee. I rather wondered whether Lord Denning would suppose, for instance, that the law relating to criminal libel would be much easier to administer if there were a statutory requirement that you ought to

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prove appreciable libel, or that the law relating to indecency would be easier to administer if you had to prove that there was appreciable indecency. It seems to me that the difficulty of explaining what was, or was not, meant by the word "appreciable" might be just about as hard as the difficulty of explaining what was, or was not, meant by the word "impaired".
There are two main criticisms which most of your Lordships, including the noble and learned Lord, Lord Denning, and the noble Lord, Lord Taylor, on Thursday, and a great many of your Lordships to-day, have made. One was that these tests ought to be compulsory; the other that some definite percentage of alcohol contained in the blood should be fixed, and that it should be laid down that anything over that would be wrong and that anything below would be all right. With regard to the possibility of making the tests compulsory, which I am sure we shall return to in Committee, I would point out to your Lordships that at present the only test which is used to any extent is the urine sample. I do not 'think there are many cases in which blood tests are taken, though possibly there may be a few; and there are no breathalysers at all at present.
With regard to the urine test, the noble and learned Lord, Lord Denning, who I think wanted to make it compulsory, said he had never known a case in which an accused person had refused. If that is so, it seems a little doubtful whether anything would be gained by making it compulsory. One objection to doing so which strikes me is that there may sometimes be circumstances in which the accused person is physically incapable for the time of providing a test, and if the law were that the test should be compulsory, that might possibly lead to misunderstanding. I think it is better to have it as it is in the Bill: that his refusal should be treated as supporting evidence given on behalf of the prosecution, et cetera, unless reasonable cause is shown.
Then, with regard to blood tests, the Bill specifically provides that these must be done with the consent of the accused person, and I do not think your Lordships would really desire that a blood test should be compulsory. Of course it
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does not mean, as the noble Earl, Lord Ferrers, suggested, that we should have to strap an accused person down to take the test. It would mean merely that if he refused he would be guilty of the offence of refusing and possibly could be prosecuted for that. The blood test, although it involves only a slight prick, might be painful to a sensitive person, and I believe it would be wrong to say that a person must by law be obliged to have a blood test.
With regard to breathalysers, which the noble Earl, Lord Ferrers, thought were extremely inaccurate and the noble Lord, Lord Taylor, thought were much the most satisfactory and accurate means of making any such test, I am afraid Her Majesty's Government do not know quite as much about this as either of those noble Lords, because there are no breathalysers in this country. We have not got the evidence we should like from abroad, from Canada and other places where they are used, with regard to their accuracy. In fact, the only reason why the breath has been brought into this clause is that my right honourable friend the Minister thinks it likely that in the course of a few years accurate breathalysers will be available, and he therefore wishes to provide for them in anticipation. But I feel it would be going a little too far to make the breathalyser test compulsory when we have not yet got any breathalysers and are unlikely to have any for some time; and, when we do, they will probably be only in big urban centres, and not immediately in all country districts.
A good many of your Lordships have raised questions about disqualification, and I should like to say how encouraged I was to hear the view expressed by the noble Baroness, Lady Wootton of Abinger, that disqualification should be considered not as a punishment but only as the removal of a privilege for which a driver had shown himself unsuited. Her Majesty's Government entirely agree with that way of putting it and I am sure that it is an entirely appropriate way of putting it in the present conditions of traffic on our roads. The noble Lady also asked about disqualification for causing death by dangerous driving and motor manslaughter. Both these offences are included in Part I of the First Schedule, and convictions for them

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will attract obligatory disqualification for not less than twelve months. The reason why the principal Act is not amended in relation to these two offences is because it retells only to the level of fines and imprisonment, and not to changes in disqualification.
There were two criticisms about disqualification, in opposite senses; one was that the Bill was too severe, in that it provided for disqualification for three minor offences committed within three years. My noble friend Lord Chesham, I think, has already dealt with that in advance by pointing out that we do not want to disqualify people but rather to make them more careful; and there is a certain presumption that even if a man commits three only minor offences within so short a space of time, he is a bit too careless to drive a car. If he knows he is going to be disqualified for six months on the third offence he will be more careful not to offend a third time. There may be a few odd cases of genuine bad luck, but that will be just too bad. I think that for the sake of the majority it is a good thing to have this provision in the Bill.
EARL HOWE: I do not agree at all.
THE EARL OF DUNDEE: The other criticism was that raised by my noble friend Lord Conesford to-day, and also mentioned by the noble Baroness, Lady Wootton of Abinger, and Lord Lucas of Chilworth, on Thursday last, with regard to the removal of the power of courts to disqualify for a number of offences for which they can disqualify under the principal Act.
EARL HOWE: And they do.
THE EARL OF DUNDEE: My Lords, the idea is that disqualification should be imposed only for offences which are likely to involve some kind of danger, but my noble friend gave two examples where danger might obviously arise. One was answered by my noble and learned friend the Lord Chancellor—about wanton and furious driving. I do not think I need go into that any further except to say, with respect, that, not having any legal training, I find it very difficult to see how anybody could drive wantonly and furiously without also driving either dangerously or carelessly, in which case he would be disqualified under the Act in any case.
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The other example which my noble friend gave we shall no doubt have another opportunity of discussing. That was the offence of taking away somebody else's car without permission. I will be quite frank with my noble friend: I thought he made a strong case. I cannot promise I shall not think of an even stronger one on the other side at the Committee stage. But, to be honest with him, it seems at first sight that his argument on this point is worthy of further consideration, and it will certainly be considered further by my right honourable friend.
BARONESS WOOTTON OF ABINGER: My Lords, before the noble Earl leaves that point, I wonder whether he would deal with the third case of removing power to disqualify for breaking the conditions of a provisional licence. Would he not agree that if, for instance, a young man takes out a motorcycle on the first day he uses it with a passenger on the pillion he is in fact a danger?
THE EARL OF DUNDEE: My Lords, certainly all these points and all your Lordships' arguments will be fully considered by my right honourable friend. I do not want to take up too much time by going into every one of them seriatim. My noble friend Lord Chesham has explained the simplification of the method of imposing speed limits which we think will be achieved by this Bill. There are one or two questions arising out of that. The noble Lord, Lord Silkin, asked whether we would consider imposing speed limits at week-ends as is done, for example, in France. Your Lordships will remember the 50 m.p.h. week-end speed limit which my right honourable friend imposed on certain roads at week-ends last summer. We are going to repeat that this summer on a major scale. Now, under the Bill, the Minister will be able to do that quickly, not only in the case of trunk roads but also on classified roads, and that will take place for 14 weeks between Whitsun and mid-September over a very large mileage.
VISCOUNT LONG: My Lords, I wonder whether I may ask the noble Earl one question on that point? He is referring to the speed limits which were imposed by the Minister over certain Bank Holidays, but will he tell us—and I ask

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this as a magistrate of 38 years' standing—how we can impose these speed limits when we have not the police to do it?
THE EARL OF DUNDEE: My Lords, I will say something about the police in a moment. Of course, we cannot catch everybody who breaks the speed limit, but the fact that they may be caught may sometimes be a deterrent. I was going to mention the criticism made by my noble friend Lord Derwent, that a speed limit might be hard on professional drivers of large lorries for which the speed limit is at present 30 miles an hour. He suggested that it might give rise to some hardship if people were disqualified from driving because they travelled faster than 30 m.p.h. I am sure that the professional driver is no less responsible; indeed, he is usually more responsible in his outlook on such matters than most of us.
But, my Lords, driving too fast is in itself dangerous, and if it is to be avoided we must have rules, even if they apply in a somewhat arbitrary way at times; and those rules must be observed. After all, as my noble and learned friend Lord Conesford said, if you are going to get on to an aeroplane would you not make sure that the pilot was observing all the rules? And would you think it a hardship if he had to look for some other kind of employment if he were found to have broken them? I think not.
LORD FOLEY: My Lords, I cannot agree with what the noble Earl is saying: that driving fast is of itself dangerous. Surely, driving fast is dangerous only when it is fast in relation to the conditions of the road. Driving down Oxford Street at 40 miles an hour is dangerous; but driving down the M.1 at 60 m.p.h. on a clear day is not dangerous. That should be borne in mind.
THE EARL OF ARRAN: My Lords, may I ask the noble Earl about the famous judicial ruling of, I think, 30 years ago, that speed in itself does not constitute a danger?
THE EARL OF DUNDEE: My Lords, I think that that is absolutely wrong. It is a matter of common sense. Sneed may not be the only cause of an accident, but how many fatal accidents are there which would not have been fatal if the cars had been going at 20 miles an hour? It is
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not a question which I think we can spend time in arguing now. But I should like to complete the point which I was making and which is this. If the speed limits are too low, which perhaps they are for these heavy vehicles, they can be revised; and the Government are at present considering the possibilities of revision of certain vehicle speed limits.
Your Lordships may be assured that we realise fully that one effect of the new penalty provisions in the Bill must be that speed limits which apply to all classes of vehicles must be realistic, taking the country as a whole, and must be observed, even in places where, to all appearances, it does not look as if drivers would do very much harm by going over the speed limit. I maintain that speed limits must play their part. Although, of course, the exact manner in which they are applied may be varied and may be argued about, we must have power to impose these speed limits if we want to reduce the number of deaths upon the roads.
My noble friend behind me, Lord Long, asked just now about police patrols, and several others of your Lordships have said that you would like to see some mention of this matter. I think that my noble friend Lord Chesham made it clear in his opening speech that we have no doubt that the mere sight of a uniformed policeman, or a police car or motor-cycle on patrol, does have a salutary effect; and for this reason we welcome any steps that police authorities may be able to take to make more police available for traffic patrol duties. It is not a matter that we can legislate about. We realise that there are not enough police. We hope that the recent increases in police pay will stimulate recruiting. There are other steps, such as having traffic wardens, which may relieve policemen of certain routine duties and set more free for traffic control and enforcement. We entirely agree that it is desirable to have many more police patrols on the roads than there are at present.
I think, although it is a small point, that the noble Lord, Lord Shepherd, might like me to meet his apprehension about Clause 14, which was supported by several other noble Lords. It is not proposed by my right honourable friend to allow vehicles to tow two large trailers behind them. The clause is drafted as it

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is only for a technical reason: that in certain exceptional cases what appears to the eye of common sense to be one trailer may legally be two. But my right honourable friend does not propose to authorise two completely separate trailers to be pulled by one vehicle.
LORD LATHAM: My Lords, would that be the case as regards what is known as the mechanical horse?
THE EARL OF DUNDEE: My Lords, I do not think I can go beyond what I have just said in reply to the point arising out of Clause 14. I should like to make a little more sure how that is related to the mechanical horse.
When my noble friend Lord Chesham moved the Second Reading on Thursday, in a speech which I think has been admired and appreciated in all sections of your Lordships' House, I was reminded by his introductory remarks of the debate on the first Road Traffic Bill to which I ever listened. That was the Bill of 1934 which was introduced in the House of Commons by Mr. Oliver Stanley. To refresh my memory I looked it up, and I found that Mr. Stanley began on much the same note as my noble friend did on Thursday. He said [OFFICIAL REPORT, Commons, Vol. 288, col. 167]:
"I wonder … if the ordinary man realises this one simple fact. It is now half-past three, and by the time Mr. Speaker, at Eleven o'clock, puts this Question. 'That the Bill be now react a Second time,' on the basis of the law of averages, 180 people will have met with injury on the roads of this country."
That was in 1934. I am not going to spend time in contrasting what it was like then with now, which many of your Lordships have done.
A NOBLE LORD: It was worse.
THE EARL OF DUNDEE: Compared with the number of cars on the roads it is better now, especially, as my noble friend Lord Chesham pointed out, in respect of children. And, as I think the noble Lord, Lord Shepherd, said to-day, it is better here than it is in the United States and in Germany. But, my Lords, it is far too high to be tolerable. These road casualties, which go on year after year, are greater in any one week than the casualties in any minor war. Then what Mr. Stanley went on to say in 1934 was this [col. 169]:
"I do not believe that there is any possibility of finding any real solution of this prob-
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lem unless all of us are prepared to bear burdens ourselves as well as to impose burdens upon others, and unless all of us are prepared in some degree to subordinate our personal convenience and our personal desire to the general need of public security."
I think your Lordships will agree that these words are as true now as they were then.
A good many of us may think, sometimes rightly, that we are exceptionally safe drivers, or, if we are not egotistical, we may think so of other people, especially professional drivers, whose experience and skill is so great that they can do with perfect safety things which, if they were done by average or indifferent drivers, might involve some risk of an accident. But, my Lords, we cannot have two Highway Codes, two sets of rules of safety, with different standards for good drivers and indifferent drivers. We must have one standard, and the good drivers must be prepared to sacrifice some of their freedom for the sake of the general safety. I think that any of your Lordships who is accustomed to use a shotgun will be conscious of the fact that conventional standards of safety which are commonly observed among people who use shotguns are very much more cautious and more meticulous than the, conventional standards of safety observed among people who drive motor cars on our roads. Yet a motor car incautiously driven on the road may be a far more dangerously lethal weapon than a shotgun.
When the Bill goes into Committee I hope—indeed I am sure—that your Lordships will bear in mind that this continuing slaughter on the roads can be reduced, materially reduced, only if we have much better manners, much more consideration for other people, and much greater caution in driving than we have now; and that these and the higher standards of behaviour which are required must have behind them the backing of Statute Law.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BIRMINGHAM CORPORATION BILL
Brought from the Commons; read 1a, and referred to the Examiners.
House adjourned at ten minutes past seven o'clock.