Sitting of 18 April 1962

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  LONDON COUNTY COUNCIL (GENERAL POWERS) BILL (By Order)
  Consideration, as amended, deferred till Tuesday, 8th May.
  LETCHWORTH GARDEN CITY CORPORATION BILL
  Mr. Corfield and Mr. Harry Randall discharged from the Select Committee; Mr. Boardman and Mr. David James added.—[Mr. Hughes-Young.]
ORAL ANSWERS TO QUESTIONS

  EUROPEAN ECONOMIC COMMUNITY
  Mr. Liptonasked the Lord Privy Seal whether he will insist, as a condition of Britain's entry into the Common Market, that Commonwealth products shall continue to enjoy their present freedom of access to this country or, alternatively, shall be offered other outlets by lowering Common Market tariffs or other means acceptable to the Commonwealth countries concerned.
  The Lord Privy Seal (Mr. Edward Heath): I would refer the hon. Gentleman to my statement of 10th October in which I suggested how the problem of Commonwealth products might be split up into its different components and how each of these might be treated if the vital interests of the Commonwealth were to be safeguarded. In reply to a Question on 7th March, I explained what progress we had made in dealing with the various groups of Commonwealth problems.
  Mr. Lipton: That was a long time ago. In view of the fears still being voiced, with good reason, by the Deputy-Prime Minister of Australia in London as recently as last night, is the right hon. Gentleman aware that any attempt to bulldoze, hoodwink or prejudice Canada, Australia or any other Commonwealth country will be regarded as a gross betrayal and will drag the Government's reputation down to an even lower level than it has already reached?
  Mr. Heath: There is no question of the Commonwealth being treated in the way that the hon. Member has just read out. We have given the fullest assurances to the Commonwealth and to Parliament to which we will adhere. The Deputy-Prime Minister of Australia was pointing out certain consequences that would follow if no special arrangements of the kind which I have described were arrived at. That, of course, is a different situation.
  Mr. Healey: Can the Lord Privy Seal assure the House that Her Majesty's Government will not accept an arrangement which is of a purely temporary and transitional nature and will insist on comparable outlets being assured for an indefinite period?
  Mr. Heath: I have repeatedly assured the House that in these negotiations we are dealing not only with the short or transitional period of the Community, but also with the long-term and Common Market period.
  Mr. Dempseyasked the Lord Privy Seal if he is aware of the damage being done to the export trade as a result of delay arising from discussion on the Common Market application by the United Kingdom; and when he expects to report to Parliament, with a view to facilitating exports.
  Mr. Heath: I am not aware that our export trade is being damaged in this way, though I realise that the outcome of the Brussels negotiations will affect the plans of all those in the United Kingdom concerned with exports. That is why I am anxious to press on with the negotiations as quickly as possible. I cannot yet say when their outcome will be sufficiently clear to enable me to report to Parliament.
  Mr. Dempsey: Is the Lord Privy Seal not aware that one of the largest exporting firms in Scotland has had its orders cancelled by a firm in one of the Common Market countries on the ground that entry will obviously affect prices? Does he not realise that the quicker the Government make up their mind and let the House and industry know what the position is the better it will be for Scottish exporters in general?
  Mr. Heath: I was not aware of the particular case the hon. Gentleman has mentioned. If it affected prices it could only, of course, be to bring prices down because of the lowering of tariff barriers. I hope all firms in this country will continue to use all their efforts in the export trade to Commonwealth countries, to the countries of E.F.T.A. and to third countries of the world, quite apart from any plans which they can make for exports to the European Community.
  Mr. Bowles: Will the Lord Privy Seal tell us—and take a little longer perhaps than usual—what is the real, overwhelming reason for the desire of the Government to join this Community at all?
  Mr. Heath: Perhaps the hon. Gentleman will read my statement of 10th October.
  Sir H. Harrison: Will my right hon. Friend not agree that our export trade depends on our goods being at the right price and of the right quality irrespective of whether we enter the Common Market or not?
  Mr. Walkerasked the Lord Privy Seal, in view of the recent official statement of Dr. Mansholt, a vice-president of the European Commission, on this matter, if he will give an assurance that he will not recommend the entry of the United Kingdom into the Common Market upon a basis whereby the major safeguards for Commonwealth interests are limited to a period of five years.
  Mr. Heath: Her Majesty's Government fully adheres to the assurances already given to Parliament and to the Commonwealth countries. I have therefore nothing to add to the reply I gave to a Question from my hon. Friend on 19th March.
  Mr. Walker: Would not my right hon. Friend agree that it is disturbing
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  to find that Professor Hallstein, Dr. Mansholt and the French Foreign Secretary have all gone on record as saying that permanent safeguards cannot be provided for the Commonwealth? Will my right hon. Friend take note of the words of the Minister of Trade for Australia last night when he said that the Commonwealth would not be satisfied with the tranquillisers of some temporary safeguards?
  Mr. Heath: I am fully aware of what my hon. Friend has said. I repeat what I said earlier—it is that in this matter we are negotiating both on short-term and long-term. Dr. Mansholt, when he spoke in London, was giving his personal views about certain aspects of agricultural policy. We are concerned with the Commonwealth interest over the whole field.
  Mr. Mayhew: Does not the recent speech of the Leader of the House, stating that Britain's entry into the Common Market would be the main issue at a General Election, provide a clear indication that the Government have decided to enter the Common Market on any terms? [HON. MEMBERS: "No."] Is it fair to the Lord Privy Seal that speeches of this kind should be made when he is negotiating with the Six?
  Mr. Heath: The speech by my right hon. Friend to which the hon. Member refers implies nothing of the kind. It is quite conceivable that there could be a General Election even if we were not able to negotiate arrangements to go into the Common Market.
  Mr. Holt: While there would bound to be changes in the pattern of Commonwealth trade with this country as a result of our going into the Common Market, may I ask whether the objects of the negotiations should not be to ensure that the Commonwealth has as great, or possibly a greater, opportunity of trade with Europe as a whole, including Great Britain, as it now has?
  Mr. Heath: Yes, Sir. The pattern of Commonwealth trade is changing all the time, quite regardless of the negotiations we undertake or whether or not we enter the European Economic Community. That is bound to happen with lively economies and developing countries. Naturally, we should like to see

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  the Commonwealth have greater opportunities in the European countries. If the proposals which I have put forward are acceptable, they will definitely widen the opportunities of Commonwealth countries in Europe.
  Mrs. Castleasked the Lord Privy Seal whether he is yet in a position to place in the Library copies of the final text in French of the agreement reached by the European Economic Community on agricultural policy, together with an English translation of the text.
  Mr. Heath: The final texts of the fourteen agriculture documents were approved by the Council of Ministers of the European Economic Community on 4th April. They will be published in the OFFICIAL JOURNAL of the Communities in due course. Meanwhile, advance copies of the French texts are being made available to us as quickly as the work of reproduction and checking permits. The texts of nine documents have ben received so far (together with two supplementary documents) and copies have been placed in the Library of the House. We expect to place the other five texts in the Library today. An English translation will be placed in the Vote Office as soon as possible.
  Mrs. Castle: While thanking the right hon. Gentleman for that reply, may I ask if the words "as soon as possible" in the English translation will not be extended to mean a matter of weeks but will mean merely a matter of days?
  Mr. Heath: I could not give an undertaking that it will be only a matter of days, but it will be very soon, and as each document is completed in turn we will make it available in the Vote Office.
  Mr. Swinglerasked the Lord Privy Seal what examination has been made by his Department of the probable effects of Britain's entry into the Common Market on the film industry; and if he will publish the conclusions reached.
  Mr. Heath: The European Economic Community has not yet adopted a common films policy. It is therefore not possible to judge at this stage what effect, if any, our entry into the Community would have on the British film industry.
  Mr. Swingler: Is the right hon. Gentleman aware that the fact-finding commission set up by the E.E.C. last year on the film industry has now reported to the Governments of the Six and that it has been published that the Governments of the Six have been asked within the next month to make their proposals about a common films policy of the E.E.C.? Would he, therefore, ask whether the Government may have a copy of this fact-finding report on which the policy will be based so that they may be able to put forward proposals in the negotiations?
  Mr. Heath: If this matter reaches a stage of proposals being formulated during the negotiations, I hope that we shall follow the customary practice in these negotiations so far, which is to obtain copies of the documents concerned and to express our views upon them.
  Mr. Swinglerasked the Lord Privy Seal if he will add to the delegation in Brussels which is negotiating about Britain's entry into the Common Market representatives of British film producers who are competent to advise on the measures necessary to safeguard the interests of the industry and to foster its growth.
  Mr. Heath: No, Sir. It would not be practicable to attach to the delegation representatives of all the many industries whose products are being or will be discussed.
  Mr. Swingler: In the light of the Answer given by the right hon. Gentleman to the previous Question, may we take it that the Government will now make representations to ensure that when the documents are brought out they are provided to them in order that the experts in the film industry in this country may have an opportunity in the next few weeks of being able to formulate some proposals to put forward?
  Mr. Heath: On the delegation at Brussels we have a representative of the Board of Trade, and the Board of Trade is in close contact with the British film industry over this matter. As for proposals, as I have said, we shall follow the normal procedure in these negotiations.
  Mr. Shinwellasked the Lord Privy Seal what is the minimum requirement

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  Her Majesty's Government are seeking in the negotiations with members of the European Economic Community in respect of preferential treatment for the entry of primary products from New Zealand, Australia and Canada, respectively, into the United Kingdom.
  Mr. Heath: No negotiator can be expected to announce in public his minimum terms for agreement on any particular subject.
  Mr. Shinwell: Is not there some indication that the right bon. Gentleman has not made up his mind about the minimum requirements? If he does not know how he stands in this regard, how can he negotiate successfully? May I have an assurance from him that he will allow neither himself nor his colleagues in the Government to be manœuvred by any of the members of the Six into a compromise which operates to the detriment of this country and of the Commonwealth?
  Mr. Heath: In his time the right hon. Gentleman has carried out a good many negotiations. I cannot believe that he ever announced in public what his minimum terms would be. Answering the latter part of his question, we have every confidence that we shall not be outmanœuvred in the negotiations.
  Mr. Shinwell: Is the Minister aware that when I entered into negotiations on behalf of any British Government with which I was associated, I was not prepared to compromise if the compromise meant any detriment to or deterioration of the prestige and power of this country?
  Mr. Heath: Every negotiation consists of a compromise of some degree or another, otherwise it would not be negotiation, it would be a series of ultimata. What we have to do is to look at the balance which we achieve on the whole solution.
  Mr. Zilliacusasked the Lord Privy Seal to what extent it is a condition of Great Britain's entry into the Common Market that British foreign and defence policy, including North Atlantic Treaty Organisation commitments, shall be co-ordinated with that of the Six.
  Mr. Heath: I put forward Her Majesty's Government's views on these
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  matters in the statement I made to the Western European Union on 10th April, copies of which are available in the Vote Office.
  Mr. Zilliacus: Can the right hon. Gentleman give an assurance that if we were to go into the Common Market the Government would be as free as they are today to pursue a foreign policy for a European settlement—for instance, through disengagement on the lines advocated by the Opposition—in spite of the known objections of their partners in the Common Market to any such policy?
  Mr. Heath: The Treaty of Rome has no effect on foreign policy. At the same time, the members of the three Communities have been discussing together what political arrangements should be set up alongside the Communities. I was dealing with that matter in my speech of 10th April. But the effect on foreign policy depends on the nature of the proposals reached by the Six.
  Mr. Mayhew: Can the right hon. Gentleman say when his speech became available in the Vote Office, and when it leaked into The Times?
  Mr. Heath: I understand that it was available in the Vote Office on Friday of last week.
  Mr. Chataway: Does my right hon. hon. Friend agree that, despite the failure of the talks in Paris, there is a need for closer political association between the countries of Western Europe, and that if we succeed in negotiating our way into the Common Market we should be keen to arrive at such a closer political association?
  Mr. Heath: Yes, Sir. I fully expressed this view in the speech I made to Western European Union. This is a matter for the members of the Six, whose Governments are taking part in these talks.
  Later—
  Mr. Heath: May I say, in answer to the point raised by the hon. Member for Woolwich, East (Mr. Mayhew) a few moments ago, that the text of my speech to Western European Union was released on Friday, but as the House had risen it was not available in the Vote Office until Monday?

  UNITED NATIONS SUB-COMMITTEE (COLONIAL MATTERS)
  Mr. G. M. Thomsonasked the Lord Privy Seal if he will instruct the United Kingdom delegates on the Trusteeship Committee of the United Nations to cooperate with the United Nations in its request for information about the situation in Southern Rhodesia.
  Mr. Healeyasked the Lord Privy Seal if he will make a statement on his talks with members of the United Nations Committee on the Liquidation of Colonialism.
  Mr. Wallasked the Lord Privy Seal if he will make a statement about Her Majesty's Government's discussions in London with the United Nations Sub-Committee on colonial matters.
  Sir Richard Pilkingtonasked the Lord Privy Seal the result of his recent official talks with the United Nations' Committee investigating the problems of colonialism.
  The Joint Under-Secretary of State for Foreign Affairs (Mr. Peter Thomas): I will, with permission, answer this Question and Nos. 25, 26 and 27 together, since I take it that in each case the hon. Gentlemen intend reference to the United Nations Committee of Seventeen and its Sub-Committee which recently visited us in London.
  Since my right hon. Friend's Written Reply of 11th April, the visiting Sub-Committee held a meeting with officials and one more with Ministers of the Crown, apart from informal contacts. I understand that the Sub-Committee is now preparing its report on the visit in New York. We believe that the visit has been useful in demonstrating our willingness to co-operate to the fullest reasonable extent with the United Nations in providing information on colonial matters and in bringing home the facts to the members of the Sub-Committee, particularly in regard to Southern Rhodesia.
  Mr. Thomson: Whilst welcoming the fact that the Government have met the members of the Sub-Committee in London, may I ask the Minister to bear in mind that Britain enjoys an immense amount of good will at the United
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  Nations, and deservedly, because of her record in advancing political progress in Colonial Territories? Will the right hon. Gentleman, therefore, seek to use that good will to influence the European minority in Southern Rhodesia to make the kind of changes that are necessary for a peaceful solution there?
  Mr. Thomas: Our wish to co-operate with the United Nations has been made clear and has been generally appreciated by the United Nations.
  Mr. Healey: Is the Joint Under-Secretary aware that the members of the Sub-Committee were somewhat disturbed at the refusal of Her Majesty's Ministers to make any gesture even towards meeting their views on Southern Rhodesia? Will he consult his right hon. Friends to see whether, even at this late date, Her Majesty's Government could not adopt one of the courses of action suggested to them by members of the Sub-Committee and at least give the lie to the statement by the Foreign Secretary in another place that Her Majesty's Government did not intend to be influenced in any way in their colonial policy by the views of the United Nations?
  Mr. Thomas: The information which was given, both here and in New York, on the facts of the situation in Southern Rhodesia in particular was very full. While expressing the concern which some of them feel, the members of the Sub-Committee made it clear that they recognised both the strict limitations upon the powers of Her Majesty's Government in Southern Rhodesia and the fact that the United Nations should not seek to arrogate to itself the responsibilities of government there.
  Sir Richard Pilkington: Has this Subcommittee paid any tribute to British colonialism for ending tribal warfare, slavery and witchcraft and for promoting law and order in so many territories?
  Mr. Thomas: The Sub-Committee certainly did pay a tribute to British colonial policy.
  Mr. Dudley Williams: In view of the enlightened policy which has been followed by the Prime Minister of Southern Rhodesia, does my hon. Friend think that this continual sniping by the

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  opposition in the United Nations can be anything but bad and the means of encouraging extremist elements, both black and white, in that territory?
  Mr. Thomas: I certainly agree that one cannot take just one side without knowing the full facts about both sides.
  Mr. Brockwayasked the Lord Privy Seal what is the policy of Her Majesty's Government regarding the decision of the Sub-Committee of the Committee of Seventeen of the United Nations to report on the constitutional position of Southern and Northern Rhodesia.
  Mr. P. Thomas: As has been made clear both in New York and to the recent visitors here from the Committee of Seventeen, we recognise the interest of members of the United Nations in the steady progress of our overseas territories. Our sympathy with this interest cannot, however, extend to sharing or shifting our responsibilities.
  Mr. Brockway: Yes, but did not the speech of the representative of the United Kingdom go rather further than that? Is it not now obsolete to try to suggest that the United Nations should not intervene in the affairs of dependent counties? Will not the hon. Gentleman give an assurance that the Government will take a more up-to-date view of this situation and adjust themselves to the new world?
  Mr. Thomas: I think the best thing I can do is to quote what my noble Friend said on this point in another place:
  "The United Nations is entitled to information, and we have said that we will give information to the relevant committees of the United Nations. We have also made it clear, however, that we cannot accept resolutions or recommendations, because colonial policy must be a matter for H.M. Government."
  Therefore, I would say that the United Nations is certainly not entitled to intervene.
  Mr. Healey: Apart from the juridical position, would not the hon. Gentleman agree that having support from the United Nations for British policy, which on the whole is extremely good in Africa in this field, is of the greatest importance if we are to achieve a peaceful transfer of power in these regions? Will
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  he not, therefore, answer the question which I asked him earlier—whether he will seriously consider carrying out some of the proposals that were made to him during the discussions last week by Dr. Jha?
  Mr. Thomas: All the conversations and discussions we have had with Dr. Jha and other members of the Sub-Committee will certainly be very carefully considered.
  Mr. Goodhew: Will my hon. Friend suggest to Dr. Jha and his Sub-Committee that they might look at countries in which the people are not moving towards self-determination in any way, such as Kashmir and the countries behind the Iron Curtain, rather than territories where great strides are being made towards this end?
  Mr. Thomas: I think that Dr. Jha and his Sub-Committee appreciate that the British colonial record is a good one, and, indeed, paid tribute to it.
  Mr. Fernyhough: Would not the hon. Gentleman agree that in taking this attitude Her Majesty's Government are guilty of double dealing? Does he not recall that when Russia cruelly suppressed the rising in Hungary, Her Majesty's Government joined with other nations in demanding that the United Nations should be given the right to go and see what happened? Does he agree that we have no right to demand that the United Nations should be given facilities of that kind in an Iron Curtain country unless we ourselves are prepared to accept the decision of the United Nations when it wants to investigate territories under British control?
  Mr. Thomas: I entirely disagree with the hon. Gentleman. The very fact that we were hosts to this Sub-Committee in London and gave it the very fullest facts indicates that we are perfectly prepared to discuss these facts and give the fullest information.

  SUDAN (FORMER BRITISH OFFICIALS)
  Sir J. Maitlandasked the Lord Privy Seal if he will make further representations to the Sudan Government to increase pensions payable to former officials of the Sudan Government.
  Mr. P. Thomas: I do not consider that further representations to the Sudan Government would serve any useful purpose at present.
  Sir J. Maitland: Really, that is a very unsatisfactory answer. Week after week we have the same sort of answer from the Government about this matter. Does not the hon. Gentleman realise that these men have served this country as well as the Sudan and that we have a very great responsibility for them?
  Mr. Thomas: As my hon. Friend does know, we have already made renewed representations to the Sudanese authorities on this matter and we have recently received a negative reply. Therefore, we have no hope that any further representation will have any success. We certainly agree with my hon. Friend in what he says about the services which these pensioners have given not only to the Sudan but to Britain generally.
  Sir J. Maitland: Then what are the Government going to do about it, if the Sudan Government do not do anything about it?
  Mr. Thomas: As has been said in this House on many occasions, the question of pension increase is a matter entirely for the Sudan Government.
  Mr. G. M. Thomson: Arising out of the last point made by the Joint Under-Secretary of State, would he have a look at the exchanges which have taken place in this Chamber between hon. Members on this side of the House and the Colonial Secretary and the Commonwealth Secretary about the whole pensions position being reconsidered and about the responsibilities of Her Majesty's Government for these pensioners being looked at in a new light?
  Mr. Thomas: Yes, I certainly have seen those exchanges, but I am afraid that I cannot add anything to what has been said by my right hon. Friends in those exchanges.

  FISHING VESSEL "RED CRUSADER" (INCIDENT)
  Mr. Hector Hughesasked the Lord Privy Seal if he will now make a detailed statement of the issues presented to the international commission of inquiry
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  into the "Red Crusader" incident, indicating the submissions made on each of them and the decisions of the commission, and the steps that are being taken on those decisions.
  Mr. P. Thomas: The Commission was requested to investigate the facts of the incident in the terms set out in the Exchange of Notes with the Danish Government of 15th November, 1961. The decisions of the Commission are set out in their report which, as my right hon. Friend told the House on 4th April, has been published by the two Governments and placed in the Library of the House. I should prefer not to comment on the Commission's findings while the report is still under consideration.
  Mr. Hughes: While thanking the Joint Under-Secretary of State for such details as he has given, may I ask him if he is aware of the more recent threats by the relevant Danish Minister about further shooting by Danish gunboats at trawlers in certain circumstances, and that therefore the details of that particular incident and of the issues laid before the tribunal and the findings, are of he utmost importance to the British fishing industry, fishermen and owners so that they may know exactly what their rights are and where they stand in their relations with Danish gunboats and the Danish Government?
  Mr. Thomas: I was not aware of any such threats. I should be grateful if the hon. and learned Gentleman will let me know what they are.
  Mr. Hughes: I will certainly send the hon. Gentleman particulars.

  GENEVA DISARMAMENT CONFERENCE
  Mr. A. Hendersonasked the Lord Privy Seal whether he will make a statement on the progress achieved at the Geneva Disarmament Conference.
  Mr. Prenticeasked the Lord Privy Seal if he will make a statement on the present position at the Geneva Disarmament Conference.
  Mr. Heath: There have now been altogether twenty-three plenary meetings of the Conference, three meetings of the

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  Committee of the Whole, and eight meetings of the Nuclear Tests Sub-Committee. The plenary meetings have mainly been occupied with detailed discussion of the preamble to, and the first article of, a draft treaty for general and complete disarmament. The United States Delegation have just tabled a large and detailed document, setting out basic provisions for a Disarmament Treaty. We are very glad that this full explanation of Western proposals has been tabled.
  The Committee of the Whole to discuss more limited measures has so far only discussed war propaganda.
  Discussion on nuclear tests has continued in the Sub-Committee and the plenary meetings. The Soviet Government still refuse to agree to any international verification. But new proposals have now been put forward by eight Governments represented at the Committee and are under consideration.
  Mr. Henderson: In view of the sympathetic comments by the Minister of State on the proposals put forward by the eight neutral delegates, can we be told that in the view of the Government these proposals constitute a satisfactory basis for a test ban treaty, and, if so, bearing in mind that the United States tests are due to begin at the end of next week, would the Government be prepared to join with the United States Government and the Soviet Government in an agreed treaty on the basis of the proposals of the eight neutral countries?
  Mr. Heath: In the Conference yesterday my hon. Friend the Minister of State and the American representative put a number of questions to the neutral countries which have drawn up these proposals for the purpose of clarifying them, and we must now await the answers from the neutral countries in order to be able to form a judgment on how satisfactory the proposals are.
  Mr. Prentice: Is the Lord Privy Seal aware that many of us, while having absolutely no sympathy with the Soviet attitude on verification, are a bit worried about the reactions to the neutral proposals? Can he tell the House on what sort of points the neutral countries, with their limited experience, can answer these detailed questions? Is the right hon. Gentleman aware that there is a danger of giving the impression that the
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  Western Powers may be stalling for time while the Conference goes into Easter recess with the Christmas Island tests due to start a few days later? Would it not be more satisfactory to give positive approval on the basis of the proposals of the neutral countries?
  Mr. Heath: There is no question of stalling in this matter, but they are very vital matters for the defence of the West and for our country. The questions put were put by the Minister of State and the American representative and were put as quickly as possible after these proposals were tabled, and they are basic ones about the operation of the proposals. I think the netural countries will be in a position to deal with them.
  Mr. Mayhew: While the Soviet rejection of the principle of verification is totally indefensible, is there really, in practice, any decisive difference between the British-American plan and the neutrals' plan? If the Soviet Union violates the agreement by continuing testing, would it not also violate agreed provisions for verification? Will the Lord Privy Seal represent to the Americans that it would be a terrible mistake to go ahead with new tests without first examining in the most careful and sympathetic way these proposals put forward by the neutral countries?
  Mr. Heath: I have indicated that we will give them the most careful consideration, and that was the purpose of the questions put yesterday by the two representatives.
  Mr. Henderson: Can we take it that this consideration will be of an urgent character in view of the fact that there is only a question of days?
  Mr. Heath: Yes, Sir. We shall give it urgent consideration.
  Viscount Hinchingbrooke: Will my right hon. Friend give an assurance that in the last resort neutral countries will not be allowed to determine the size, scope, nature and user of British armaments, including the nuclear deterrent?
  Mr. Heath: That is a separate question from this neutral proposal which deals only with tests.
  Mrs. Castle: Can we have an assurance that the American tests will be delayed

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  long enough to enable proper consideration to be given to this hopeful new initiative?
  Mr. Heath: I have given the House an undertaking that we shall examine the proposals with the greatest care and urgency. I cannot go further than that.
  Mr. S. Silverman: Does the right hon. Gentleman realise that what he has said is not an answer to the question asked by my hon. Friend the Member for Blackburn (Mrs. Castle)? Are we not to infer cleanly from what the right hon. Gentleman has said that the negotiations are still open, that the door is not finally barred and locked? If that is so, and since Christmas Island is a British territory, could not the right hon. Gentleman indicate that the facilities on Christmas Island would not be readily afforded for atmospheric tests which are those which do not require verification, by common consent? [HON. MEMBERS: "Speech."] Would not that be a reasonable thing to do? Is it not clear that once the tests have been made, negotiations thereafter would be extremely difficult?
  Mr. Heath: The position is that the Soviet Government have rejected entirely the principle of verification. These neutral proposals cover this matter and it is necessary to elucidate exactly what is involved in them. There is also the question of awaiting the Soviet reply to the neutral proposals, which has not yet been made. I cannot give further information to the House than I have already given.

  COMMONWEALTH PREFERENCE
  Mr. Russellasked the Lord Privy Seal what discussions he has had recently with the United States Government about the future of Commonwealth Preference.
  Mr. Heath: My discussions with the United States Government must remain confidential if they are to fulfil their purpose of providing an opportunity for a free and frank exchange of views.
  Mr. Russell: Will my right hon. Friend bear in mind that at the Montreal Conference only three years ago Commonwealth countries agreed that Commonwealth Preference was of benefit and should not be weakened or discarded?
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  Will he make that clear to the American Government and anybody else who asks for Commonwealth Preference to be abolished?
  Mr. Heath: Yes, Sir. The United States Government are now well aware of our views.
  Mr. Wise: Will my right hon. Friend bear in mind that the destruction of Imperial Preference has been a major object of American policy ever since Mr. Cordell Hull's abortive attempt to conspire with the Japanese in 1921? Will my right hon. Friend also lose no opportunity to make absolutely clear in negotiations with the Americans that we are not yet a colonial subject of the dollar empire and, by the grace of God, never will be?
  Mr. Heath: I know the views put forward by my hon. Friend are held by certain people, but I do not wish to comment upon them. These negotiations are not being carried out with the American Government. At the same time, one must recognise that if they are brought to a successful conclusion there may well be additional discrimination against American trade.

  EUROPEAN PARLIAMENT
  Mr. Shinwellthe Lord Privy Seal whether the decision of the European Assembly to describe itself in future as the European Parliament was supported by the United Kingdom delegates; and, in view of this decision, if he will take steps to arrange that the United Kingdom delegates are in future appointed by a resolution of the House and not through party machinery.
  Mr. Heath: Membership of the European Parliamentary Assembly, which at its recent Session decided to change its name to the European Parliament, is confined to representatives of the six member countries of the European Communities, and does not include delegates from the United Kingdom. The second part of the Question does not therefore arise.

  GERMANY

    Berlin
    Mr. Hendersonasked the Lord Privy Seal whether he will make a statement on the present situation in Berlin

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    with special reference to recent Soviet activities in the air corridors.
    Mr. Emrys Hughesasked the Lord Privy Seal what protests have been made to the Russian Government about metal foil alleged to have been found in East Germany and to have been used for the purpose of interfering with British radar
    Mr. Heath: Certain Soviet activities in the air corridors to Berlin, notably the dropping of metal strips which could endanger the safety of flight, have caused Her Majesty's Government concern. My noble Friend, together with the United States Secretary of State, consequently protested strongly against the dropping of metal strips to the Soviet Minister of Foreign Affairs before the opening of the Disarmament Conference in Geneva. This interference has now ceased. Her Majesty's Government were also concerned at the Soviet practice, which has continued until recently, of making flights in the air corridors which seem designed to hinder unrestricted freedom of flight to and from Berlin. In concert with their French and United States allies, they delivered a further Note on this subject to the Soviet Government on the 24th of March.
    Mr. Henderson: In view of the importance of maintaining the access routes into and out of West Berlin, may I ask the Lord Privy Seal whether Her Majesty's Government are in agreement with the proposal of the United States Government that an international authority of thirteen members should be established to supervise these routes, containing members both from West Germany and East Germany?
    Mr. Heath: We have been kept fully informed and consulted about the proposals which the American Government have in mind, and we agree with them.
    Mr. Hughes: Does the right hon. Gentleman still adhere to the story told in the House of Lords by the Foreign Secretary on 28th March that six Russian bombers had dropped this chaff and that the corridors were full of metal chaff for four to six hours? Does he still adhere to that story? It it true?
    Mr. Heath: That is the information which my noble Friend has.
    Mr. Mayhewasked the Lord Privy Seal what information he has received from the Government of the United States of America regarding the progress of the current United States-Russian talks on Berlin.
    Mr. Frank Allaunasked the Lord Privy Seal if he will make a statement on the latest stage of East-West negotiations for a peaceful settlement of the German problem.
    Mr. Heath: The United States Secretary of State held lengthy discussions with Mr. Gromyko when he was in Geneva last month on the subject of Berlin. In this he was supported by my noble Friend the Foreign Secretary. By common consent these discussions are now being pursued between Mr. Rusk and the Soviet Ambassador in Washington. The first meeting took place on 16th April. Her Majesty's Government are being kept fully informed of the conduct of these discussions.
    Mr. Mayhew: Is the Lord Privy Seal aware that the reported proposals of the United States Government seem sensible and constructive? Will he say whether the Government are abandoning the idea of associating the United Nations in some way with a Berlin settlement? Secondly, will he say whether the Government will not put forward more positive proposals regarding the Oder-Neisse Line, perhaps in connection with the proposals put forward, we understand, by the Americans for a non-aggression pact?
    Mr. Heath: We have debated this point on a number of occasions. My noble Friend and I have always said that we give full weight to suggestions of this kind which are made. At the same time, we cannot give information about specific proposals being discussed in talks of this kind.
    Mr. Allaun: While feeling that the new Western proposals, as "leaked" in Bonn, are a reasonable approach towards a settlement, may I ask whether the Minister will give an assurance that the British Government will not allow the West German Government to go on vetoing a settlement which the British Government themselves think is sound?
    Mr. Heath: The American Government is keeping in the closest touch with the British Government and the French Government in this matter, in which all have responsibilities, and with the Federal German Government, which is so obviously affected by it. The Federal Government has itself expressed its confidence in the conduct of these talks by the American Government.
    Mr. Gaitskell: May I ask the right hon. Gentleman whether he is aware that the suggestion that there should be international control over access to West Berlin, in which the East German Government could participate, is one that will be warmly welcomed on this side of the House? Can he assure the House that these proposals put forward by the American Secretary of State have the support of all the Western Powers?
    Mr. Heath: As I have already said, I cannot give details about specific proposals which are being discussed between the American Secretary of State and the Soviet Ambassador, but I have naturally noted the point which the Leader of the Opposition has made.
    Sir A. V. Harvey: Is my right hon. Friend aware that some of us feel that it would be better if Britain were taking part in these discussions? It is all very well to be kept informed, but, as a leading nation of the world, why are we not there playing our part?
    Mr. Heath: When these talks were held in New York and Washington in the autumn of last year, my noble Friend the Foreign Secretary took part, and again when they were continued in Geneva a few weeks ago my noble Friend played a very prominent part in them. It is a question of arrangements between the allies as to how they are best conducted at any particular time.
    Sir G. Nicholson: While I appreciate that these are very delicate questions, may I ask whether my right hon. Friend does not agree that it is highly desirable that an atmosphere of realism should be introduced, and that we should not cling nominally to aims that everybody agrees are quite unrealistic today, such as the Oder-Neisse Line?
    Mr. Heath: If I may give my hon. Friend a delicate answer, it is that I always believe in being realistic.
    Mr. A. Henderson: Would the Lord Privy Seal make clear that the reply which he has just given to my right hon. Friend the Leader of the Opposition does not go as far as his answer to me a few minutes ago, which indicated that Her Majesty's Government agree with the proposal that there should be international supervision of the access routes into Berlin? Did he not actually say that Her Majesty's Government agreed with that proposal?
    Mr. Heath: I said that it is obviously one of the means of dealing with this particular problem of access to Berlin.
    Mr. Mayhew: I was listening very carefully to the Minister. Did he not specifically say that the British Government supported this American proposal? Will he assure the House that that is so?
    Mr. Heath: Yes, Sir; that is quite true.

    Mixed Committee
    Mr. Haleasked the Lord Privy Seal (1) what was the date of the appointment of the British member to fill the vacancy on the mixed committee dealing with the dispersal of German industry; and what was the date of the most recent meeting of the Committee;
    (2) what progress has now been achieved in the deconcentration of the assets of Alfried Krupp, in accordance with High Commission Law No. 27, announced to the House on 4th March, 1953.
    Mr. Heath: The new British member of the mixed committee (Sir Sydney Littlewood) was appointed in December, 1961. The mixed committee met on 13th January and granted Herr Krupp an extension of six months, until 31st July, for the disposal of his remaining coal and steel assets.
    Mr. Hale: Is the right hon. Gentleman aware that this is no longer a question of the character of Herr Krupp but that it is a question of the character of the Bonn Government and of Her Majesty's Ministers? Undertaking after undertaking has been given to the House and we have now reached a stage at which these things are said with a snigger. We have certainly reached a stage at which Ministers come to the

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    House and make statements with their tongues in their cheeks, conveying the impression that no one has any intention of carrying this out. Will the right hon. Gentleman bear in mind that some of us who have seen the vision of a United Europe and who supported it are not very anxious to go into a Common Market dominated by Alfred Krupp, Marshal Juin and General Salan?
    Mr. Heath: The hon. Member has no justification for the sort of accusations which he made against Ministers in this matter. The mixed committee was set up to examine the position and to see whether the undertakings given in the Bonn Convention were being properly observed. On each occasion the mixed committee has recommended that the time period be extended. This happened in January of this year. The mixed committee is an independent body which is giving its own judgment about this matter.
    Mr. Hale—
    Mr. Speaker: Mr. Biggs-Davison.
    Mr. Hale: On a point of order. The Minister asked for the permission of the House to answer two quite separate Questions together, admittedly dealing with the same matter, but one about deconcentration and the other about the mixed committee. I have asked a supplementary question about the appointment of the mixed committee and I want to ask the reasons for saying that deconcentration is to be postponed, and whether any reasons were given. That arises out of the other Question.
    Mr. Speaker: If the hon. Member will forgive my saying so, it was one Answer. I do not desire to be critical in any way, but I was not very happy about the progress which we were making with Questions in general and with that Question in particular, and it was for that reason that I called the next question.

  NUCLEAR TESTS
  Mr. Zilliacusasked the Lord Privy Seal why the British plan for controlling tests, without on the spot inspections, through a string of Commonwealth posts in North America, the United Kingdom, Africa, Asia and Australia, was not sub-
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  mitted to the Disarmament Commission at Geneva.
  Mr. Heath: There is no United Kingdom plan of the kind described. What we have proposed is a world-wide network of control posts, as set out in the United Kingdom-United States draft treaty of April, 1961.
  Mr. Zilliacus: Were not proposals on these lines submitted by Sir Solly Zuckerman and Sir William Penny on a visit to Washington which they were satisfied would detect even minor underground tests? These were then opposed by the United States on the ground that they would not be acceptable to Congress and the whole scheme was then dropped and never put forward at Geneva.
  Mr. Heath: No, Sir. I cannot give any indication of the views expressed between scientists during their conversations in Washington.

  UNITED STATES UNDERSECRETARY OF STATE (VISIT)
  Mr. Turtonasked the Lord Privy Seal whether he will make a statement on his talks with Mr. George Ball, the United States Under-Secretary of State, on 4th April on the subject of Great Britain's negotiations for entry into the Common Market.
  Mr. Warbeyasked the Lord Privy Seal if he will make a statement on his discussions with Mr. George Ball regarding the conditions of British entry into the Common Market.
  Mr. Heath: I was glad to be able to take advantage of Mr. Ball's recent visit to London by inviting him to exchange views with me on a variety of subjects, including those concerned with international economic relations. Our discussions were confidential.
  Mr. Turton: Arising out of that reply, is my right hon. Friend aware that there has been considerable apprehension about these conversations? Will he give an assurance that the Government will not allow the relationship between Britain and the Commonwealth to be altered at the dictate of the United States Government?
  Mr. Heath: There is absolutely no need for apprehension about these conversations. It is absolutely right that we

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  should each have a full opportunity of expressing quite frankly to each other our Governments' views. Of course, there can be absolutely no question of Commonwealth affairs being affected by a dictate of the United States Government, nor is there any question of the United States Government attempting to carry out such a thing.
  Mr. Warbey: Have not the United States Government made it clear through Mr. George Ball that British entry into the Common Market will involve, after a transitional period, the disappearance of the Commonwealth system of preferences? Does the Lord Privy Seal accept that this is the case?
  Mr. Heath: No, Sir. Those are not the views that have been expressed to us, and the last part of the question therefore does not arise.

  SOUTH VIETNAM
  Mr. Warbeyasked the Lord Privy Seal what is the nature of the assistance which has been given by the British Police Mission in South Vietnam in the preparation and organisation of Operation Sunrise, through which South Vietnamese peasants in guerilla-controlled areas are forcibly moved from their settlements into fortified village camps, while their homes and food stocks are destroyed.
  Mr. P. Thomas: None, Sir.
  Mr. Warbey: Is the right hon. Gentleman aware that this operation, which involved the forcible movement of 123 families from their homes and the destruction of their homes, with most of the contents, before their eyes, and the burning of their food stocks, was described by the New York Times correspondent on the spot—[HON. MEMBERS: "Question."] I am asking a question. Is the Minister aware that the New York Times correspondent on the spot described this operation as being—[HON. MEMBERS: "Speech."]— based upon the plan operated by the British in Malaya?
  Mr. S. Silverman: On a point of order, Mr. Speaker. Would it be possible for you to bring about such conditions in the House of Commons as would enable us to hear what is being said?
  Mr. Speaker: I would be grateful if hon. Members would be more quiet. I wanted to hear if the hon. Member for Ashfield's supplementary question was going to be in order or no, but I could not hear it. So far, it appears to be an inquisition of the Minister by way of asking whether he is aware that some newspaper has reported something. I would like to hear the rest of the question, if the House will allow me.
  Mr. Eden: Further to that point of order, Mr. Speaker. I appreciate your difficulties, but is there not some way in which you can persuade certain hon. Members who habitually make speeches at Question Time to put more concise questions?
  Mr. Speaker: It is very much in the general interest that hon. Members should make supplementary questions short. I say so so often that I get very long in saying it myself. Would the hon. Member for Ashfield be good enough to repeat his question?
  Mr. Warbey: I would be grateful if hon. Members opposite would allow me to put my question. Is the hon. Gentleman aware that this operation, stated to be one in which 135 families were forcibly herded from their homes and their homes destroyed before their eyes, has been described as being based upon a plan operated by the British in Malaya? Can he give an assurance that the British Police Mission in Vietnam, on which £100,000 of taxpayers' money is being spent, has given no advice whatsoever on the conduct of this operation?
  Mr. Thomas: I am afraid that I cannot comment on the contents of Press reports. But, as I said in my original Answer, the British Advisory Mission is not concerned in the planning of any specific operations, including Operation Sunrise, which is the sole responsibility of the Vietnamese Government.

  EGYPT

    Cairo Radio Broadcasts
    Mr. Longdenasked the Lord Privy Seal if, in view of the mischief being caused in Africa, including the Colonial Territories, by radio propaganda from Cairo, he will give consideration to the severing of diplomatic relations with Egypt.
    Mr. Heath: Her Majesty's Embassy in Cairo has raised with the Government of the United Arab Republic on a number of occasions the question of offensive radio broadcasts. These have recently become somewhat less objectionable.
    Mr. Longden: Is my right hon. Friend aware that my Question should have referred to the mischief intended to be caused in our Colonial Territories in Africa? Does his Answer mean that Her Majesty's Government consider that the scurrilous matter being hourly broadcast by Cairo radio, referred to in the Lebanese Press as "empty trumpetings", is beneath contempt?
    Mr. Heath: We take the strongest exception to broadcasts of this kind. That is why our ambassador in Cairo has repeatedly protested. I was informing the House that there has been some amelioration of these broadcasts recently since the action we have been taking.

    British Property
    Mr. Danceasked the Lord Privy Seal, in view of the dissatisfaction and confusion in the minds of people who have property still in Egypt, if he will send a small delegation, consisting of representatives from the three parties, to Egypt to study the position regarding this property and to report back to him.
    Mr. Heath: No, Sir. I do not think that such a delegation would be able to achieve a useful purpose.
    Mr. Dance: I fully appreciate my right hon. Friend's difficulties here, but at the same time does not he think that some form of inspection of this sort would alleviate the concern in the minds of people who are implicated at the present moment by their property still remaining in Egypt and by not knowing whether it is still there or what condition it is in?
    Mr. Heath: We are naturally anxious to remove all their anxieties in the same way that we are anxious to remove the difficulties which exist in carrying out the Financial Agreement between us and the U.A.R. There is our Embassy in Cairo and agents of many of these people are also there. If we can be of assistance in a particular case which my hon. Friend has in mind perhaps he will write to me about it.

  INSTITUTE FOR UNIFICATION OF PRIVATE INTERNATIONAL LAW
  Mr. Mathewasked the Lord Privy Seal what financial or other contribution was made last year, and what contribution it is proposed to make during the coming year, to the International Institute for the Unification of Private International Law in Rome.
  Mr. P. Thomas: A contribution of £350 was made for last year. It is proposed to pay the same amount for the present year.
  Mr. Mathew: I am grateful for that reply, but will not my hon. Friend look at this matter again for next year, in view of the immensely valuable work, not least in this country, being done by this Institute? Will he ask his right hon. Friend to raise the sum to an amount more realistic and more compatible with the work being done in Rome?
  Mr. Thomas: The question of increasing our contribution is under consideration in the light of the proposals made at the Tenth Session of the General Assembly of the Institute.

  ANGLO-EGYPTIAN RELATIONS
  Mr. Sorensenasked the Lord Privy Seal what further steps are being taken to improve Anglo-Egyptian relations; and what are the main unsettled issues that impede improvement.
  Mr. Heath: We are trying to achieve a friendly and businesslike relationship with the United Arab Republic. Her Majesty's Ambassador saw President Nasser on 25th February and spoke frankly of our relations and mutual interests. The discussion helped to remove misunderstandings on either side and I hope that such exchanges will continue.
  Mr. Sorensen: Could the right hon. Gentleman reply to the last part of my Question and name specific issues which, in his opinion, are still impeding some kind of reconciliation?
  Mr. Heath: There are certain things such as the matter I mentioned in reply to my hon. Friend the Member for Bromsgrove (Mr. Dance), and the outstanding points about the Financial

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  Agreement of 1959, together with questions arising out of the nationalisation law of last July, affecting British citizens. There are also further questions arising out of the re-sequestration of some British property towards the end of last year. These are some of the practical matters which are causing difficulties between us. The Minister of Finance of Egypt was in London a short time ago, when I was able to have a full discussion with him about these points. I hope that this may lead to a settlement of the outstanding issues.

  UNITED NATIONS BONDS
  Mr. Prenticeasked the Lord Privy Seal whether Her Majesty's Government will increase the number of United Nations Bonds to be purchased by this country, in view of the decision of the United States Senate to make the purchase of bonds over the value of $25 million, up to a maximum of $100 million, dependent upon the United States' figure being matched by the total purchases of other countries.
  Mr. P. Thomas: No, Sir.
  Mr. Prentice: Would the hon. Gentleman agree that the policy of Britain on this matter could have an influence on the eventual purchases made by the United States and perhaps other Governments? Could he at least promise the House that the Government will keep this under review and make sure that no action of theirs will prevent the financial crisis in the United Nations being solved by adequate purchases of these bonds?
  Mr. Thomas: Yes, Sir. I am sure that our policy can and does have an influence on the United Nations. Our purchase of £12 million worth of bonds was one of the first to be announced, and it is still the second largest, the American purchase being the biggest. But it is the most that we are prepared to contemplate.
  Mr. Mayhew: Maybe this is the second largest contribution, but it is nothing like enough in relation to What we need to give to the United Nations in order to erase the impression that the Government are half-hearted in their support of the U.N.

  COMMUNIST PORTS (BRITISH SEAMEN)
  Mr. Mayhewasked the Lord Privy Seal what complaints have been received by Her Majesty's Government on discourteous treatment of British seamen visiting Communist ports.
  Mr. P. Thomas: Her Majesty's Government have received few such complaints in recent years: one this year from Odessa, and four in 1960 from Chinese ports.
  Mr. Mayhew: Has the Minister's attention been drawn to the walking-off by British crews from ships carrying grain to China? As this trade is in the general interest, will he not look into it and see what action can be taken?
  Mr. Thomas: Yes, Sir; my attention has been drawn to this report. I think that it would properly be a matter for my right hon. Friend the Minister of Transport.
  Sir C. Osborne: Is not my hon. Friend aware that as in China at the present time there is greater hunger than in any other part of the world, should we not do our best to get food there and not impede it?
  Mr. Thomas: I can certainly say that it is the policy of Her Majesty's Government to maintain and if possible to increase trade with China.

  N.A.T.O. (NUCLEAR WEAPONS)
  Mr. Frank Allaunasked the Lord Privy Seal if he will state the policy of Her Majesty's Government regarding the creation of a North Atlantic Treaty Organisation force armed with nuclear weapons.
  Mr. Heath: The North Atlantic Council is conducting a general review of strategy in the course of which it will no doubt consider suggestions of this kind. I would not wish to anticipate these discussions by making a statement now.
  Mr. Allaun: I appreciate that, but is it not vital that a ban on the spread of nuclear weapons should apply to N.A.T.O., as otherwise the West German generals would indirectly obtain them,

  503
  including 100 Polaris missiles? Can the Lord Privy Seal ensure that Britain opposes any such move at the N.A.T.O. Ministers' Meeting starting on 1st May?
  Mr. Heath: I know of no proposal that the control of such weapons should be given to other countries. The arrangements are the "key of the cupboard" arrangements by which they remain under American control.

MR. ZACHARIA AND MR. ARESTIDOU
Mr. Paget (by Private Notice)asked the Secretary of State for the Home Department whether, in the exercise of the discretion granted to him by Section 6 of the Fugitive Offenders Act, 1881, he will decline to return to the Government of Cyprus Mr. A. Zacharia and Mr. E. Arestidou, at present detained in Brixton Prison under that Act.
The Secretary of State for the Home Department (Mr. R. A. Butler): I am considering these cases, in the light of the proceedings yesterday in another place and all other relevant considerations. I shall make my decision as soon as possible.
Mr. Paget: What further facts does the right hon. Gentleman require in this case? Is is not common ground that these alleged offences took place during the period of the troubles, when these men were serving with us in concert with the Special Branch of the security forces; that they have been condemned to death by E.O.K.A., that six others have been murdered since independence, that two attempts have been made on the life of Mr. Zacharia, and that at his last appearance in a Cyprus court the policeman to whom he was handcuffed was shot dead?
Is not a proposal to return our ex-friends to our ex-enemies a somewhat excessive act of political contrition? Is it not a bit discouraging to our friends elsewhere? Is there an example of this other than Stalin's return of the German Communists to Hitler? What further information is required? In any event, will the right hon. Gentleman assure us that no decision contrary to the interests of these men will be taken without reference to Parliament and Parliament's reassembly?
Mr. Butler: Yes, Sir, I can give an immediate assurance in reply to the last part of the hon. and learned Gentleman's question. The period of fifteen days runs so that it overlaps Parliament's return, and if any decision unfavourable to the men were to be taken it would not be implemented before the House returns and I have had an opportunity of making a statement to the House.
On the other hand, I must make it clear that I do not accept the insinuations in the early part of the hon. and learned Gentleman's statement. A decision favourable to these men may be taken and implemented before the House returns, but I must make it clear that I may not be in a position to do that before the House returns. I am referring first to the unfavourable and then to the favourable decision.
No immediate decision has been taken because, although I certainly have views on this subject, it is reasonable for me to read the transcript of the proceedings in another place. The transcript is not yet available. I have read the full report in The Times and digested it, but I have not yet been able to read the transcript, which will not be available for me until tomorow. I must restrain my decision until I have considered the transcript.
Mr. Goodhart: Will my right hon. Friend remember that these two men have given very valuable information to British security in the past and that their surrender to the Cypriot Government might well strike a very hard blow at those who still work with British Intelligence elsewhere?
Mr. Butler: Yes, Sir. I am deeply aware of that consideration.
Mr. Hale: I am sure that the whole House will have listened to what the right hon. Gentleman has said with very keen appreciation of what he said and the way he said it. The Times today talks about fifteen days. There does not seem to be a limit on the number of days he must take over this decision. The judgment of the House of Lords was given some days ago and in the normal case the period dates from the date of judgment and not from the later date when the judges give their reasons.
Will the right hon. Gentleman extend his assurance and say that he may give

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a favourable decision, but that if he finds that that is not possible he will not take any action, or reach any unfavourable decision, which would be operative until there has been an opportunity to raise the matter in the House under Standing Order No. 9?
I had intended to seek to do that today, but, obviously, it would have been a very great inconvenience to the House and also premature while the right hon. Gentleman was considering the matter. I hope that we shall be able to protect our rights under Standing Order No. 9 and be able to raise the matter, although I also hope that the right hon. Gentleman will make a favourable decision.
Mr. Butler: I gave an assurance that an unfavourable decision would not be taken without the House being informed and having an opportunity to express its views. I think that that is the least we can do.
On the technical matter raised by the hon. Gentleman, in concluding its proceedings on 19th March the Appellate Committee of the House of Lords said that the time of fifteen days prescribed by Section 6 of the Fugitive Offenders Act, 1881, would not run until the House of Lords itself had dealt with the report of the Appellate Committee. The House of Lords dealt with that report yesterday and, therefore, it is technically from yesterday that the fifteen days run.

BUSINESS OF THE HOUSE
Mr. Gaitskell: May I ask the Leader of the House whether he will state the business for the first week after our return after the Easter Recess?
The Chancellor of the Duchy of Lancaster (Mr. Iain Macleod): Yes, Sir. The business for the first week after the Easter Adjournment will be as follows:
TUESDAY, 1ST MAY—Second Reading of the Northern Ireland Bill [Lords], and Committee stage of the Money Resolution.
Sea Fish Industry Bill: Remaining stages.
WEDNESDAY, 2ND MAY—Supply [14th Allotted Day]: Committee.
506
A debate will take place on Housing in England and Wales, on the appropriate Votes.
THURSDAY, 3RD MAY—Finance Bill: Second Reading.
FRIDAY, 4TH MAY—Private Members' Bills.
MONDAY, 7TH MAY—The proposed business will be: Consideration of private Members' Motions until seven o'clock.
Afterwards, Report and Third Reading of the Health Visitors and Social Workers Training Bill.
Mr. Gaitskell: Can the Leader of the House tell us anything more about the debate on the Central African Federation? Will it take place during the following week and, if so, what form will it take? Can he give us an assurance that whether or not particular Questions are reached tomorrow, the Prime Minister will make a statement on two things before the Easter Recess, namely, the state of the negotiations on nuclear tests and the Commonwealth Prime Ministers' conference?
Mr. Macleod: The debate on Central Africa will follow within a day or two of the business which I have announced. As the right hon. Gentleman knows, we are having discussions about the precise form it should take.
My right hon. Friend the Prime Minister will be answering Questions tomorrow and in answer to those, or by means of a statement, I think that he will deal with both points which the right hon. Gentleman the Leader of the Opposition has raised.
Dame Irene Ward: Am I to understand that on Monday we are to have only half a day on Report and Third Reading of the Health Visitors and Social Workers Training Bill? As most knowledgeable people concerned with the Bill entirely disapprove of its weakness, although agreeing with the principles involved, does the right hon. Gentleman think that half a day is sufficient? There is a good deal to be said.
Mr. Macleod: Yes, Sir. I think that it can be done in this time, but, of course, we shall suspend the Standing Order for that part of Monday's business and so not be limited to an hour or so.

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The Bill had only four sittings in Standing Committee and it is a Bill which, on balance at least, both sides of the House want to see on the Statute Book.
Mr. C. Pannell: Presumably in cooperation with you, Mr. Speaker, the Leader of the House proposes again to set up a Committee to consider accommodation. Will he consider having half a day to debate this subject when we return from the Easter Recess, as the new terms of reference for the Committee seem even narrower than the old, in that they are concerned with the development on the other side of the road and not with practical problems which will be facing us in the next few months?
I suppose that this building is to be extended and another storey added, but even then we do not know what allocation of accommodation will be made. Already, there is some discontent about the allocation of accommodation in St. Stephens, a discontent which should be aired. Does not the right hon. Gentlemen agree that the House could well devote two or three hours to its own affairs?
Mr. Macleod: The accommodation available on the Bridge Street site will not be available for some years, but I would think it right to ask the advice of a Committee of the House, and Mr. Speaker has agreed to this course. This is a complicated matter to discuss in this way. If the hon. Gentleman would like to come and see me, assuming that he can find his way to my room, I would be very glad to discuss this with him.
Sir C. Osborne: In view of the large number of hon. Members on both sides of the House who, unfortunately, were not able to take part in the Budget debate, would it be possible, because of the difficulties in which you, Mr. Speaker, may be placed on Thursday because of the number of hon. Members who want to take part in the Second Reading debate on the Finance Bill, for the time to be extended?
Mr. Macleod: I would not have thought that that was necessary because the ordinary business of that day is not subject to the usual rule.
Miss Herbison: Will the Leader of the House give further consideration to
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the time that he has allocated for the Social Workers and Health Visitors Training Bill? I ask that partly for the reasons adduced by the hon. Lady the Member for Tynemouth (Dame Irene Ward), and partly because the Leader of the House will no doubt be aware that during the consideration of the Scottish part of the Bill no responsible Scottish Minister was aavilable to deal with it, as he was tied up in a Committee on another Bill. Unless further time is provided, the only discussions that will take part on the Scottish part of the Bill will be in the late hours of the night or the early hours of the morning.
Mr. Macleod: I will consider the point made by the hon. Lady. My impression is that the business that I have announced for Monday, 7th May, could easily be taken that day, but I will be glad to consider the hon. Lady's point.
Sir A. V. Harvey: As the Chancellor of the Exchequer did not refer to the pensions of Service widows in his Budget proposals, is the Leader of the House now prepared to find time in the early future to debate the Motion which is supported by more than 200 Members?
[That this House, recognising the hardship suffered by retired officers, pensioned other ranks and widows of the armed services, especially those who are old, whose retired pay and pensions cannot be debated under Pensions (Increase) Bills and bear no relation to current awards, urges Her Majesty's Government immediately to improve the pensions of widows bereaved before 4th November, 1958, and to examine the conditions peculiar to all armed service pensioners and, as soon as economic circumstances permit, to introduce special provisions to improve their retired pay and pensions.]
Mr. Macleod: I am aware of the support for this Motion, but as far as announcing business is concerned, I must rest on my previous statement.
Dame Irene Ward: Up with democracy, down with the Executive.
Sir A. V. Harvey: Having tried five or six times to get this Motion debated, I beg to give notice that I shall raise

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this matter on the Adjournment at the earliest possible opportunity. [Interruption.]
Mr. Speaker: Order. We are consuming our own time by frivolous noises.
Mrs. Braddock: Can the Leader of the House say what happened arising out of his consultation with the Home Secretary about the possibility of seeing the film of the Orpington by-election count?
Mr. Macleod: I understand that the position there was that both the B.B.C. and I.T.V. transmitted it live, and that no film is in existence.
Mr. Stratton Mills: Has my right hon. Friend noted that since the creation of the Department of Technical Cooperation in July last year there has not been a debate on its functions? Will my right hon. Friend bear in mind that the publication of the annual memorandum by this Department last week could well provide a valuable opportunity for such a debate?
Mr. Macleod: I will take note of that. It seems an appropriate topic for a Supply Day or some other day.
Mr. S. Silverman: Has the right hon. Gentleman's attention been drawn to a number of Questions from both sides of the House to the President of the Board of Trade and the Minister of Labour showing a great deal of anxiety about the developing crisis in the cotton industry and in Lancashire generally? Does the right hon. Gentleman appreciate that there is grave public anxiety about this? Can he offer any hope of an early opportunity of debating this in the House?
Mr. Macleod: Apart from the opportunities available in Supply, which are considerable between Easter and Whit-sun, no.
Mr. Loughlin: Has the Leader of the House considered the possibility of finding time to discuss Civil Defence? He must be aware that it has not been discussed for a long time. It has recently been discussed in another place, and it is of prime importance that we should have a full discussion on it. Will he try to find the time to discuss this subject?
Mr. Macleod: Looking ahead in the period that I am covering with this business statement, I cannot see an opportunity for that.

TRANSPORT BILL
[2ND ALLOTTED DAY]
As amended (in the Standing Committee and on recommittal), further considered.

TRANSPORT BILL

  Clause 29.—(THE TRANSPORT HOLDING COMPANY.)
  3.45 p.m.
  The Minister of Transport (Mr. Ernest Marples): I beg to move, in page 27, line 5, at the end to insert:
  (7) It shall be the duty of the Holding Company to exercise its control over any wholly-owned subsidiary of the Holding Company so as to secure that the subsidiary does not engage in manufacture or production except the manufacture or production of things for use in their own business or for supply to a Board, or a wholly-owned subsidiary of any of the Boards or of the Holding Company, for use in their business.
  For the purposes of this subsection the expression "wholly-owned subsidiary" means a subsidiary all the securities of which are owned by the body of which it is a subsidiary, or by one or more other wholly-owned subsidiaries of that body, or partly by that body and partly by any wholly-owned subsidiary of that body.
  Last night I started on an explanation of this Amendment, and I should like to take up where I left off We had a discussion on Clause 13 which defines the powers of the four statutory boards. Under Clause 31 (6) three companies are transferred to the Holding Company, which, of course, is not one of the four statutory boards. Clause 29 covers the duties and responsibilities of the Holding Company.
  May I look at the three limited companies now owned by the British Transport Commission, but which under these proposals will be transferred to the Holding Company? May I look at their present position and what restrictions are placed on them, and then try to explain the Amendment in the light of what exists at the moment?
  Under Section 2 (4) of the Transport Act, 1947, there are two types of limitation on these three companies. The three companies are Star Bodies (British Transport Commission) Ltd., Bristol Commercial Vehicles Ltd., and Eastern Coachworks Ltd. Two of the limited companies make bodies and one makes chassis. At present they are subject to two types of restrictions. First, there are statutory limitations on the number of road vehicle bodies and chassis which

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  the companies can manufacture in any one year. These statutory quotas apply to the output of the three companies. I mention this because I believe that these limitations are unduly restrictive and ought not be retained, because if we have assets which we want to be used to their maximum it is surely better not to place restrictions on what they can produce. I therefore propose to alter in this respect the Act which right hon. and hon. Gentlemen opposite passed.
  The present limitation is unduly restrictive. First, under Section 2 (4) of the 1947 Act, it amounts to a quota on the manufacture of chassis, related to the actual position prior to nationalisation. It was frozen at a given figure for all time. The Commission cannot manufacture chassis for road vehicles substantially in excess of the total manufactured in a year by the undertakings that were acquired by the Commission, so that even if the assets were capable of being deployed more effectively this provision would prevent it because the basis of calculation is the year in which the largest number of chassis were manufactured out of the last three years before acquisition.
  The second limitation was on the manufacture of bodies, and that was made up of a proportion of one-fifth of the estimated annual requirements of the Commission plus the quota of bus bodies which the London Passenger Transport Board could have manufactured under Section 21 of the London Passenger Transport Act, 1933.
  The third restriction was a quota on the manufacture of bodies of vehicles other than buses, and was fixed at one-quarter of the estimated annual requirements of the Commission. The fourth restriction, which really was a great restriction on the output of these companies, was a ban on the manufacture of major components for road vehicles other than those required for chassis. These components are defined in Section 2 (5) of the 1947 Act as complete power units, complete transmission systems, complete suspension systems, complete steering gear, complete braking systems and complete axles. Those are the restrictions which now apply to these three companies, under that Act.
  Under that Act another restriction was imposed, namely, that the output of these
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  three companies cannot be sold in the open market, but must be sold within the Commission's organisation. The Amendment will alter the existing system to some extent. First, the restrictions on the output of whatever these firms produce—the quota system—will go. It will be replaced by a flexible Ministerial direction. If, for example, the right hon. Member for Vauxhall (Mr. Strauss) returned triumphant at the next General Election—[HON. MEMBERS: "Hear, hear."] I do not think that there is any hope of that, or I would not have used the phrase—but if he were returned, and became Minister of Transport, it would be his judgment that would replace this rigid quota system. Nothing could be fairer than that.
  The shackles which the party opposite placed on the companies will be removed. I hope that the right hon. Gentleman will apologise for putting shackles on those companies, and will accept the Amendment, which will help them.
  Mr. Ernest Popplewell: Will the Minister tell us what is the capacity of these three companies?
  Mr. Marples: If I have to go into details it will take a long time, but I am prepared to do so.
  Mr. Popplewell: It is so small that the proposal is ridiculous.
  Mr. Marples: It may be that the capacity is very small, but, in that case, why did the party opposite put on the shackles?
  Under the provisions of the 1947 Act the output of these three companies cannot be sold in the open market, and must be sold entirely within the Commission's organisation. The Amendment secures that the wholly-owned subsidiaries of the boards or the Holding Company—that is, these three companies, among others—shall not manufacture for sale in the open market, either home or export, but shall be able to sell only to the four statutory boards or their wholly-owned subsidiaries. Therefore, those three companies will be in precisely the same position as they are now in relation to the people to whom they can sell, but the onerous restriction of the quota will be removed.

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  Many outside pressure groups have asked me to continue the statutory quotas, but I think that that is wholly inappropriate, and that the assets should be used to the maximum. I have also been asked to write into the Bill a provision placing a duty upon the Holding Company to dispose of these companies. I have resisted that. The Amendment should, therefore, be welcomed by the Opposition. It removes the restrictive quotas, while maintaining the market which the party opposite thought right and proper in 1947. In view of the fact that we have very little time at our disposal, I hope that hon. Members opposite will quickly accept the Amendment.
  Mr. G. R. Strauss: As I understand the Amendment which is now before the Committee it has nothing to do with quota restrictions. Those are removed by other provisions in the Bill. If I am wrong about this the Parliamentary Secretary will correct me, but it seems to me that the Amendment merely ensures that the output of these companies shall not be sold outside the publicly-owned transport services. That is all that it does. It has nothing to do with quota restrictions. The reasons why these restrictions were imposed in 1947 were explained by me yesterday, and I do not wish to repeat what I then said. There were very good reasons in those days, which do not apply now. But we are not considering that.
  We are considering an Amendment dealing with the output of these companies, which produce very good vehicles and chassis. One of them has been producing some outstanding models. The Amendment provides that they shall not sell their products outside the publicly-owned sector of the transport industry. However good these models may be, and however profitable their sale might be in the private sector of the industry, they are not to be sold there.
  The output of these firms is minute compared to that of the chassis and body-producing companies. I cannot understand why the Government, who are so anxious that the publicly-owned transport system should maximise its profits—or reduce its losses, which comes to the same thing—should place this restriction on these small companies. As the Amendment is concerned solely with
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  this restriction I must advise my hon. Friends to oppose it.
  Mr. J. M. L. Prior: I have mixed feelings about the Amendment. One of the firms to which reference has been made operates in my constituency. I had hoped that these restrictions would not be placed on the industry. The coach-building industry is now going into a slight decline. Coaches which are built nowadays are of far better quality than they used to be, and last much longer. Furthermore, owing to the production of so many cars, fewer buses are required. If a coach-building firm is to run efficiently and properly it must try to maintain its output, and there is always a danger that this kind of restriction will result in these companies having to run down their commitments and output. From that point of view I am sorry that the Amendment has been moved. I would rather the Parliamentary Secretary had stuck to his guns, as he did in Committee.
  Having said that, however, it is clear that the removal of the restrictions laying down a quota is of some help in establishing the building of an integrated bus, as opposed to one with separate chassis and coachwork. I hope that the advantages of this group of companies—especially Bristol Commercial Vehicles Ltd. and Eastern Coach Works Ltd.—will be realised by the Committee. They are of great advantage to the Holding Company. When they were first started they were small companies, carrying out maintenance work, but they developed into production units. They belonged to the Tillings Group from the earliest days— long before the companies were nationalised—and they were on the production side of the group. They were considered part of the commercial enterprises of the Tillings group, and up to 1947 they worked in the open market.
  They exported to South Africa and other countries, as well as providing an outlet for the Tillings group of bus companies. Many advantages flowed from that arrangement. The bus operating companies were able to get the buses they wanted, of a standard uniform type, which helped in maintenance. Eastern Coach Works Ltd. and Bristol Commercial Vehicles Ltd. were able to

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  concentrate on production, knowing that they had a reasonable throughput each year, and did not have to worry too much about their commercial side.
  4.0 p.m.
  The Tillings group has taken practically all of the buses in recent years although one or two other parts of the nationalised industry did take a few. It has been stated in the Press that there is a movement to get rid of these companies and to offer them back to private enterprise—
  Mr. Gerald Nabarro: Hear, hear.
  Mr. Prior: —and I wish to examine this matter, because I think it important. I have already discussed it with my hon. Friend the Member for Kidderminster (Mr. Nabarro), and I know his views.
  We are in the position of having two small companies which have always been associated with the Tillings group. They were there before nationalisation and they were nationalised with that group. They were there for one reason, because the Tillings group, as a private enterprise firm, thought that these companies, Eastern Coach Works Ltd. and Bristol Commercial Vehicles Ltd., were necessarily a part of the group so that it could conduct its business properly. These companies were there for no other reason at all. It was a straightforward commercial enterprise. They were nationalised alongside—
  Mr. Geoffrey Wilson: My hon. Friend keeps talking about Tillings as being nationalised. In fact, it never was. The shares were sold voluntarily to the Transport Commission.
  Mr. Prior: I will accept that. The fact is that now it is nationalised and these companies still belong.
  Among the proposals which have been advanced—I am glad to say not by my right hon. Friend—is one that these companies should be sold off. What we are saying is that Tillings, which, in its wisdom as private enterprise operators, considered these companies necessary to its production, should be told by this House that because it happens that the companies make vehicles the present position is all wrong and that they are
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  no longer to do it. In other words, we shall place this nationalised industry, this bus operating group, at a disadvantage which the group has always appreciated, because otherwise it never would have gone into the manufacturing market in the first place.
  I hope that no direction will be given for denationalisation. Not because I think that these companies could not pay their way if they were denationalised —I think that they could do extremely well—but because we should be placing the nationalised bus companies, the operating companies, at a grave disadvantage, and I do not see why we should do that. If it happens that the chairman of the Holding Company is given a directive that he can offer these companies for sale there are certain conditions which I think that he ought to consider.
  First, the chairman of the Holding Company and the chairman of the Tillings group should be able to make representations to the Minister on this subject and should be able to show how the selling off of those companies would affect the operations of the bus companies and the smooth running of the group. Secondly, I should like the Minister to give an undertaking not to sell off these companies—
  Mr. Nabarro: No. May I make quite clear to my hon. Friend now that I want the Minister to do exactly the opposite and give an undertaking to sell these companies, in order that there shall not be an extension of nationalisation? Mine is the true voice of Toryism.
  Mr. Prior: I can assure my hon. Friend the Member for Kidderminster that I appreciate his view. It may be that he will allow me to state my view, and to finish my sentence.
  I was saying that I should like the Minister to give an undertaking that if he sells off these companies, if he even thinks of doing so, he will also give an undertaking to see that the company which comes in will at least maintain a continuity of employment in these firms. I believe that it is practically impossible for any private enterprise firm to give such an undertaking. That means that I do not really want them to go. I want to be perfectly straightforward about this. I do not regard it as

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  being anti-nationalisation, or anything of the sort. To me, this is purely a commercial enterprise and just common sense.
  I had meetings in my constituency during the election, at which I roundly condemned the nationalisation of steel and was in favour of denationalisation. But I certainly said nothing of the sort about Eastern Coach Works Ltd., and I do not intend to back out of that now. What does worry me is that there are still some restrictions to be placed on this company. But I quite understand this, because if a company is to use public money, and it is possible that this company will do so, regard must be had to the competition of private enterprise.
  Mr. Leslie Spriggs: Does the hon. Gentleman realise that he will have an opportunity of proving his words later that the test is in the Division Lobby?
  Mr. Prior: I should have thought that the hon. Member would know me well enough by now to appreciate that I do not stand here and say one thing and then do another thing. I resent the implication that I should not do the logical thing.
  Mr. Nabarro: Send for the Chief Whip!
  Mr. Prior: I hope that we may get some sense into this matter. The main point at issue is that these companies are now doing a good job. I think that I am right in saying that they have paid their way quite satisfactorily in recent years and that the bus operating side has not been the side of the industry which has been losing money.
  I hope that the Minister will resist any efforts to get rid of these companies on purely political grounds. That would be a mistake, and I do not think that it would be in the true interests of the Conservative Party, either. I say that in all sincerity. I feel that the Conservative Party is a party of common sense, and I hope that we shall remain one. I have no hesitation in saying that, on balance, I support the Amendment. Although I am a bit disappointed by it, I think that it is better than anything which we have had before.
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  I hope that the Minister will stick to what he has done so far and that Eastern Coach Works Ltd., and Bristol Commercial Vehicles Ltd., will have a prosperous life in the future.
  Mr. Nabarro: This is one of the rare occasions when I find myself completely in disagreement with my hon. Friend the Member for Yarmouth—
  Mr. Prior: The hon. Member for Lowestoft.
  Mr. Nabarro: I am sorry. The hon. Member for Lowestoft (Mr. Prior)—I knew that it was something to do with fish.
  Hon. Members: Wrong again.
  Mr. Nabarro: The right hon. Member for Vauxhall (Mr. Strauss) said that the output of these companies was tiny and, relatively, their output is very tiny. Last year these companies made about 2,200 units, out of a total output of commercial vehicles and chassis in the entire United Kingdom amounting to 463,000. Therefore, these companies made half of 1 per cent., or one two-hundredth part. In that respect their output is tiny. But there are matters of political principle involved. That is why I have been continuously engaged in conversation with my right hon. Friend the Minister about these principles as they are applied both to Clause 13 and to Clause 29.
  When the quantitative restriction was placed on the output of the three companies under the 1947 Act, it meant that, translated into the output of last year, the figure of production was about 2,200 units. If, under the terms of this Amendment, they are able to build vehicles and chassis for all the boards, their maximum output would be 6,000. The effect of this Amendment, therefore, is to treble the maximum potential output of the three companies. I am sure that my right hon. Friend would not quarrel with those figures.
  As it is trebling the productive potential of these nationalised undertakings, it represents, in this context, an extension of nationalisation. That is why I say to my hon. Friend the Member for Lowestoft, with the greatest sympathy for his constituency interest, that I am

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  concerned with the matter of principle. An extenson of nationalisation is anathema to me—
  Mr. Strauss: If the hon. Member for Kidderminster (Mr. Nabarro) followed the proceedings of the Committee, he would have noticed that the Parliamentary Secretary said that the present output of the three companies together amounted to about 90 per cent.—I have not the exact figure—of their capacity. I have the figures here, which I could quote.
  Mr. Nabarro: But that is a totally invalid argument, because although, today, output is 90 per cent. of their capacity, there would be, in the terms of this Amendment, nothing to prevent expansion of their productive capacity up to the total requirements of the boards, which is a total of 6,000. That represents, potentially, a trebling of the capacity of these firms, and, therefore, to me, a direct extension of nationalisation, to which I am vehemently opposed, not only in this context but in other contexts.
  I have always been very greatly opposed to nationalised undertakings engaging directly in the manufacture of productive equipment—[HON. MEMBERS: "Why?"] We had all these arguments ad nauseam on the Electricity Bill in 1957. When that Bill was first brought to the House, it provided for the Central Electricity Generating Board and Area Boards being able to manufacture their own equipment such as turbo-alternators, boilers, and electrical equipment of that sort. I fought a long battle in Committee to get those Clauses out of that Bill, and get them out of the Bill I did before it went on the Statute Book, because the majority of Conservatives take the view that nationalised industries should not engage in the manufacture of productive equipment or extend their productive capacity. These are matters of principle.
  I want now to address a word to my hon. Friend she Member for Lowestoft. I quite realise that he has here a strong constituency interest. It would be remiss, in a constituency sense, if he did not plead that interest here, but I could not accept that interest as overriding a matter of principle in my Conservative philosophy—[HON. MEMBERS: "Oh."] Yes, I am a man of stern principles;
  520
  that is all I am in this House for. Socialist hon. Members would not admit that there is any common sense in Conservative philosophy, but I am a man of stern principles as to Conservative philosophy.
  My hon. Friend had a majority at the last election of 1,489, and if I had a seat as marginal as that I might need to have a still greater regard to constituency interests—
  Mr. Prior: I should hate my hon. Friend to think that this is just a constituency interest. It is a matter of some considerable principle, because we are saying now that the Conservative Party for all time has to denationalise everything that has anything to do with manufacturing, regardless of whether or not that manufacturing interest is considered necessary for the proper running of something which is to remain nationalised. In the present case, here were private enterprise firms which had a manufacturing interest because it was considered necessary for their proper running. When they were nationalised, they were both nationalised together. We are now intending to split them, and I do not think that that is necessarily Conservative philosophy.
  Mr. Nabarro: We are putting a different interpretation on these matters. I listened very carefully to my hon. Friend, and he said that Tillings owns one of these companies. That should not be regarded as an excuse for the retention of the subsidiary to manufacture vehicles and chassis. Tillings was taken over after nationalisation, and I am informed by my hon. Friend the Member for Truro (Mr. G. Wilson) that the amount paid for it was £24 million.
  I do not want to denationalise just this one firm in my hon. Friend's constituency. If I had my way, I would denationalise all the firms engaging in manufacture named by my hon. Friend. I would denationalise all of them. I would do an S. G. Brown act on them all. I go further, and say, "Do not only sell the subsidiary, but sell Tillings, too." That would destroy my hon Friend's case at once—
  Mr. Prior: That would make much more sense.
  Mr. Nabarro: I agree, but I must not push my right hon. Friend the Minister

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  of Transport too far or too fast— [Interruption.] The hon. Member for Bolton, West (Mr. Holt) is, as usual, ill-informed, and has failed to do his home work. Had he read the statement made on the Bill by the Minister without Portfolio, Lord Mills, in another place, he would have noticed that the noble Lord said that this is not a denationalisation Bill. That is why my right hon. Friend is not denationalising these firms under this Measure, but, when the moment comes, he has the powers to denationalise, and my advice to my right hon. Friend the Minister is to sell these firms—get rid of them—as fast as ever he can.
  4.15 p.m.
  In the next Session of Parliament, when this Measure has reached the Statute Book, I shall harry him and pursue him, in that sense, to dispose of these manufacturing firms which, in my judgment, have no place in the national ised transport fabric—
  Mr. Archie Manuel: Is not the hon. Gentleman painting a slightly distorted picture?
  Mr. Nabarro: I am never distorted.
  Mr. Manuel: Is he not aware that the main thing is that Tillings voluntarily offered its shares, and voluntarily wanted to be publicly owned? The hon. Member now wants to force the firm back, in an undemocratic way, into the private enterprise economy, even though it voluntarily decided to go the other way.
  Mr. Nabarro: The hon. Member seems to be a trifle distorted in his views—
  Mr. Manuel: No, that is a fact.
  Mr. Nabarro: The plain fact of the matter is that, as between a willing buyer and a willing seller, a market value is established. If my right hon. Friend could sell Tillings for £24 million or more, I would be in favour of his selling it—which would include the subsidiary in my hon. Friend's constituency—but, in the context of these three small firms with an output representing one-half of 1 per cent. of the national output of commercial vehicles and chassis, I say, get shot of them as soon as possible. Then my right hon. Friend and myself will be friends again.
  Mr. R. Gresham-Cooke: The right hon. Member for Vauxhall (Mr. Strauss) and my hon. Friend the Member for Kidderminster (Mr. Nabarro) have very much underrated the size and importance of these three companies. A figure of 0·5 per cent. of total capacity has been mentioned, but what has not been mentioned is that the total production of double-decker buses is about 9,000. If the total requirements of all the boards—which would be about 6,000—were taken into account, these three companies could, between them, make over half the production of double-decker buses. That would be a very serious proportion of the national output of these buses.
  I well remember the negotiations that took place on this matter with the Labour Government in 1947. It was just by chance that these three companies fell into the nationalisation net. They were part of the Tillings group, which was nationalised, and which took with it these three companies. It was agreed that it was reasonable that the State should not expand these three manufacturing companies, that it would be unfair to do so and that it would be unfair to pour in State capital to make them much bigger. A quota was put on these three companies.
  Bristol Commercial Vehicles Ltd. had a quota of 1,250, the result of a complicated formula. Eastern Coach Works Ltd. had a quota of 750 and Star Bodies Ltd. had a quota of about 450. In fact, they are all making very nearly up to those figures at the moment. Bristol Commercial Vehicles is making rather over 1,000, Eastern Coach Works is fully up to capacity, and Star Bodies is making about 300. No one can say that the assets are being under-employed; they are being fully employed.
  As these three companies fell into the nationalisation net by chance, and as my right hon. Friend is asking private enterprise to give up a great deal in giving up the quotas which have been imposed on these three companies for the last thirteen years, creating the possibility of making them very big companies, I ask him to do two things. First, he should use his powers while in office, and his successors should use their powers, to maintain the production of these three companies at about the present size and should not

  523
  allow them to expand. It would be wrong to use State capital to expand them, first, because they might be operating at a loss without our knowing it, and that would represent unfair competition, and, secondly because it would be against the spirit of the original agreement.
  My right hon. Friend should make efforts to sell these companies back to private enterprise. That is the practical thing to do. I am not very happy about the Amendment, but if my right hon. Friend makes that statement he will meet the difficulties which many people feel about this. It is quite wrong for a Conservative Government to continue to hold these companies and to allow the Holding Company to build up a private empire manufacturing double-decker buses in this country. It is quite wrong and contrary to the spirit in which the Labour Government took these companies over and the spirit of the 1947 Agreement. I hope that my right hon. Friend will say that he will sell these companies in a reasonable time.
  Mr. Spriggs: Did the hon. Member vote against the 1961–62 Estimates on the use of public money for agriculture, involving £348 million, and the £30 million for the cotton industry, and the £8 million in connection with the distribution of industry?
  Mr. David Webster: On a point of order. Are the voting activities of my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) in order on this business?
  Mr. Speaker: The object of the intervention should be limited to elucidation of the speech being made. At present, I am not impressed by the process of elucidation, but we shall see.
  Mr. Spriggs: Hon. Members opposite, and particularly the hon. Member for Twickenham (Mr. Gresham Cooke), do not vote against the use of public money for private enterprise, but they refuse to agree that similar money should be used for public purposes.
  Mr. Gresham Cooke: Agricultural subsidies have nothing to do with this debate, in which we are discussing the extension of three manufacturing companies in the transport world.
  Mr. R. J. Mellish: The speech of the hon. Member for Kidderminster (Mr. Nabarro) is worthy of a reply, although at 4.30 p.m. we have to deal with this Amendment and a number of Clauses which we cannot possibly discuss adequately, if at all. The hon. Member has some admirers in the House.
  Mr. Nabarro: Very few.
  Mr. Mellish: Very few indeed. He does not hesitate to declare what he regards as the great principles. The fact that he and his hon. Friends hold these principles is a reason that they are doing so badly at the polls.
  What the hon. Member said earlier was that he would lend no encouragement at all to anything owned by Britain as a nation and that he would not encourage it to make profits, but would rather give it to private enterprise under any circumstances. This is the fundamental difference between him and people like him, on the one hand, and my hon. Friends and I.
  We have argued again and again that if it can be shown, as we honestly and sincerely believe it can, that by running what we call productive assets within a nationalised industry they make a profit for that industry and, we hope, for Britain, that should be done. The hon. Member for Lowestoft (Mr. Prior) was proud to point out that they are doing that in his constituency. In those circumstances we believe that we should not only encourage them, but should help them to expand and to grow.
  We make no apologies for that point of view. I am glad that the hon. Member for Kidderminster put his view on record. I am passionately fond of Britain, but I am getting a little sick and tired of the suggestion that anything owned by Britain must be sneered at and jeered at by the hon. Member for Kidderminster and people like him. We shall go into the Lobby and support what we believe to be in the best interests of the country.
  Mr. G. Wilson: The hon. Member for Bermondsey (Mr. Mellish) has misunderstood the Conservative philosophy as expressed by my hon. Friend the Member for Kidderminster (Mr. Nabarro). The point is that a trading concern ought to be prepared to take risks. If

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  it does not take considerable risks and chance making considerable losses, it is not doing its job. We had an example of that the other day in the steel industry where a company took considerable risks and lost.
  Conservative philosophy is that a nationalised industry ought not to be taking this sort of risk, because it is dealing with public money, and that it is not right for manufacturing concerns to be nationalised, because either they then do not take sufficient risks to do the job or they risk public money in a manner in which it should not be risked.
  Mr. Mellish: That is where the argument is so illogical and where my hon. Friend the Member for St. Helens (Mr. Spriggs) is right. No objection is raised by hon. Members opposite to pouring millions of pounds of public money into certain sections of the community. But when it comes to a nationalised industry, not a single penny must be given. That is the kind of attitude to which we object.
  Mr. Nabarro: Why did not the hon. Member vote in respect of the potato scheme last night?
  Mr. Wilson: It is not a question of profit, but a question of risking public money. If they are not taking risks they are not doing their job.
  I would point out to the hon. Member for Central Ayrshire (Mr. Manuel) that Tillings voluntarily sold out, but did so under threat. In their 1947 Act, hon. Members opposite provided that there should be area schemes to operate between road and rail, and it was intended under the Act to have some elaborate organisation which would bring the bus services under public control by indirect means. The three company groups which then existed— Thomas Tilling, Scottish Motor Traction and B.E.T.—took different lines about it. The first two sold out their shares because they were not prepared to fight this proposal, but B.E.T. hung on to its shares, and a partnership developed between B.E.T. and the railways. Scottish Motor Traction and Tillings sold all their shares to the railway companies and, therefore, disappeared as entities, although not as companies.
  In other Clauses of the Bill we have had a lot of trouble trying to sort out exactly what is to become of the shares of such companies resulting from the merger which took place with Tillings and Scottish Motor Traction, on the one hand, and the fact that B.E.T. remained separate and distinct, on the other.
  Question put, That those words be there inserted in the Bill:—
  The House divided: Ayes 242, Noes 200.

  Division No. 167.]

  AYES

  [4.30 p.m.

  Agnew, Sir Peter

  Bullard, Denys

  Emery, Peter

  Aitken, W. T.

  Bullus, Wing Commander Eric

  Emmet, Hon. Mrs. Evelyn

  Allason, James

  Campbell, Gordon (Moray & Nairn)

  Errington, Sir Eric

  Arbuthnot, John

  Cary, Sir Robert

  Farey-Jones, F. W.

  Balniel, Lord

  Channon, H. P. G.

  Farr, John

  Barber, Anthony

  Chataway, Christopher

  Fell, Anthony

  Barlow, Sir John

  Chichester-Clark, R.

  Finlay, Graeme

  Barter, John

  Clark, Henry (Antrim, N.)

  Fisher, Nigel

  Batsford, Brian

  Clark, William (Nottingham, S.)

  Fletcher-Cooke, Charles

  Baxter, Sir Beverley (Southgate)

  Clarke, Brig. Terence (Portsmth, W.)

  Fraser, Ian (Plymouth, Sutton)

  Beamish, Col. Sir Tufton

  Cleaver, Leonard

  Freeth, Denzil

  Bell, Ronald

  Cole, Norman

  Gammans, Lady

  Bevins, Rt. Hon. Reginald

  Collard, Richard

  Gardner, Edward

  Bidgood, John C.

  Cooper, A. E.

  George, J. C. (Pollok)

  Biffen, John

  Cordeaux, Lt.-Col. J. K.

  Gibson-Watt, David

  Bingham, R. M.

  Costain, A. P.

  Gilmour, Sir John

  Bishop, F. P.

  Coulson, Michael

  Glover, Sir Douglas

  Black, Sir Cyril

  Craddock, Sir Beresford

  Glyn, Sir Richard (Dorset, N.)

  Bossom, Clive

  Critchley, Julian

  Goodhart, Philip

  Bourne-Arton, A.

  Crosthwaite-Eyre, Col. Sir Oliver

  Goodhew, Victor

  Box, Donald

  Cunningham, Knox

  Gower, Raymond

  Boyd-Carpenter, Rt. Hon. J.

  Curran, Charles

  Grant, Rt. Hon. William

  Boyle, Sir Edward

  Dalkeith, Earl of

  Grant-Ferris, Wg. Cdr. R.

  Brewis, John

  Dance, James

  Green, Alan

  Brooke, Rt. Hon. Henry

  Digby, Simon Wingfield

  Gresham Cooke, R.

  Brooman-White, R.

  Donaldson, Cmdr. C. E. M.

  Gurden, Harold

  Brown, Alan (Tottenham)

  Doughty, Charles

  Hall, John (Wycombe)

  Browne, Percy (Torrington)

  Drayson, G. B.

  Hamilton, Michael (Wellingborough)

  Bryan, Paul

  Eden, John

  Harris, Reader (Heston)

  Buck, Antony

  Elliot, Capt. Walter (Carshalton)

  Harrison, Brian (Maldon)

  Harrison, Col. Sir Harwood (Eye)

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

  Seymour, Leslie

  Harvey, Sir Arthur Vere (Macclesf'd)

  Macmillan, Maurice (Halifax)

  Sharples, Richard

  Harvie Anderson, Miss

  Maddan, Martin

  Shaw, M.

  Hay, John

  Maitland, Sir John

  Skeet, T. H. H.

  Heald, Rt. Hon. Sir Lionel

  Manningham-Buller, Rt. Hn. Sir R.

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

  Hicks Beach, Maj. W.

  Markham, Major Sir Frank

  Smyth, Brig. Sir John (Norwood)

  Hiley, Joseph

  Marlowe, Anthony

  Spearman, Sir Alexander

  Hill, Mrs. Eveline (Wythenshawe)

  Marples, Rt. Hon. Ernest

  Speir, Rupert

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

  Mathew, Robert (Honiton)

  Stanley, Hon. Richard

  Hinchingbrooke, Viscount

  Matthews, Gordon (Meriden)

  Stoddart-Scott, Col. Sir Malcolm

  Hirst, Geoffrey

  Mawby, Ray

  Storey, Sir Samuel

  Hobson, Sir John

  Maxwell-Hyslop, R. J.

  Studholme, Sir Henry

  Hocking, Philip N.

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

  Summers, Sir Spencer (Aylesbury)

  Holland, Philip

  Mills, Stratton

  Tapsell, Peter

  Hopkins, Alan

  Montgomery, Fergus

  Taylor, Sir Charles (Eastbourne)

  Hornby, R. P.

  Moore, Sir Thomas (Ayr)

  Taylor, Edwin (Bolton, E.)

  Howard, John (Southampton, Test)

  More, Jasper (Ludlow)

  Taylor, Frank (M'ch'st'r, Moss Side)

  Hughes Hallett, Vice-Admiral John

  Morgan, William

  Teeling, Sir William

  Hughes-Young, Michael

  Morrison, John

  Temple, John M.

  Jackson, John

  Mott-Radclyffe, Sir Charles

  Thatcher, Mrs. Margaret

  James, David

  Nabarro, Gerald

  Thomas, Leslie (Canterbury)

  Jenkins, Robert (Dulwich)

  Nicholson, Sir Godfrey

  Thomas, Peter (Conway)

  Jennings, J. C.

  Noble, Michael

  Tiley, Arthur (Bradford, W.)

  Johnson, Dr. Donald (Carlisle)

  Nugent, Rt. Hon. Sir Richard

  Tilney, John (Wavertree)

  Johnson, Eric (Blackley)

  Oakshott, Sir Hendrie

  Touche, Rt. Hon. Sir Gordon

  Johnson Smith, Geoffrey

  Orr, Capt. L. P. S.

  Turner, Colin

  Joseph, Sir Keith

  Orr-Ewing, C. Ian

  Turton, Rt. Hon. R. H.

  Kerby, Capt. Henry

  Osborn, John (Hallam)

  van Straubenzee, W. R.

  Kerr, Sir Hamilton

  Osborne, Sir Cyril (Louth)

  Vane, W. M. F.

  Kimball, Marcus

  Page, Graham (Crosby)

  Vaughan-Morgan, Rt. Hon. Sir John

  Kirk, Peter

  Page, John (Harrow, West)

  Vosper, Rt. Hon. Dennis

  Kitson, Timothy

  Peel, John

  Walker, Peter

  Lagden, Godfrey

  Peyton, John

  Walker-Smith, Rt. Hon Sir Derek

  Lancaster, Col. C. G.

  Pilkington, Sir Richard

  Wall, Patrick

  Langford-Holt, Sir John

  Pitman, Sir James

  Ward, Dame Irene

  Leavey, J. A.

  Pitt, Miss Edith

  Watkinson, Rt. Hon. Harold

  Legge-Bourke, Sir Harry

  Powell, Rt. Hon. J. Enoch

  Webster, David

  Lewis, Kenneth (Rutland)

  Prior-Palmer, Brig. Sir Otho

  Wells, John (Maidstone)

  Lilley, F. J. P.

  Protumo, Rt. Hon. John

  Whitelaw, William

  Lindsay, Sir Martin

  Proudfoot, Wilfred

  Williams, Dudley (Exeter)

  Litchfield, Capt. John

  Pym, Francis

  Williams, Paul (Sunderland, S.)

  Longbottom, Charles

  Quonnell, Miss J. M.

  Wills, Sir Gerald (Bridgwater)

  Longden, Gilbert

  Ramsden, James

  Wilson, Geoffrey (Truro)

  Loveys, Walter H.

  Rawlinson, Peter

  Wise, A. R.

  Lucas, Sir Jocelyn

  Redmayne, Rt. Hon. Martin

  Wood, Rt. Hon. Richard

  Lucas-Tooth, Sir Hugh

  Rees, Hugh

  Woodnutt, Mark

  McAdden, Stephen

  Renton, David

  Woollam, John

  MacArthur, Ian

  Ridley, Hon. Nicholas

  Worsley, Marcus

  McLaughlin, Mrs. Patricia

  Roots, William

  Maclay, Rt. Hon. John

  Ropner, Col. Sir Leonard

  TELLERS FOR THE AYES:

  Maclean, Sir Fitzroy (Bute&N. Ayre.)

  Russell, Ronald

  Mr. Frank Pearson

  McLean, Neil (Inverness)

  Scott-Hopkins, James

  and Mr. McLaren.

  NOES

  Abse, Leo

  Davies, Ifor (Gower)

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Ainsley, William

  Davies, S. O. (Merthyr)

  Hamilton, William (West Fife)

  Albu, Austen

  Deer, George

  Hannan, William

  Allaun, Frank (Salford, E.)

  Dempsey, James

  Harper, Joseph

  Allen, Scholefield (Crewe)

  Diamond. John

  Hart, Mrs. Judith

  Awbery, Stan

  Dodds, Norman

  Hayman, F. H.

  Bacon, Miss Alice

  Driberg, Tom

  Henderson, Rt. Hn. Arthur (Rwly Regis)

  Beaney, Alan

  Dugdale, Rt. Hon. John

  Herbison, Miss Margaret

  Benson, Sir George

  Ede, Rt. Hon. C.

  Hill, J. (Midlothian)

  Blackburn, F.

  Edelman, Maurice

  Hilton, A. V.

  Blyton, William

  Edwards, Rt. Hon. Ness (Caerphilly)

  Holman, Percy

  Boardman, H.

  Edwards, Robert (Bilston)

  Holt, Arthur

  Bottomley, Rt. Hon. A. G.

  Edwards, Walter (Stepney)

  Houghton, Douglas

  Bowden, Rt. Hn. H. W.(Leics, S. W.)

  Evans, Albert

  Howell, Charles A. (Perry Barr)

  Bowles, Frank

  Fernyhough, E.

  Hoy, James H.

  Boyden, James

  Finch, Harold

  Hughes, Cledwyn (Anglesey)

  Braddock, Mrs. E. M.

  Fitch, Alan

  Hughes, Emrys (S. Ayrshire)

  Brockway, A. Fenner

  Fletcher, Eric

  Hughes, Hector (Aberdeen, N.)

  Broughton, Dr. A. D. D.

  Forman, J. C.

  Hunter, A. E.

  Brown, Rt. Hon. George (Belper)

  Fraser, Thomas (Hamilton)

  Hynd, H. (Accrington)

  Butler, Herbert (Hackney, C.)

  Gaitskell, Rt. Hon. Hugh

  Hynd, John (Attercliffe)

  Butler, Mrs. Joyce (Wood Green)

  Ginsburg, David

  Irving, Sydney (Dartford)

  Callaghan, James

  Gordon Walker, Rt. Hon. P. C.

  Janner, Sir Barnett

  Chapman, Donald

  Greenwood, Anthony

  Jay, Rt. Hon. Douglas

  Corbet, Mrs. Freda

  Grey, Charles

  Jeger, George

  Craddock, George (Bradford, S.)

  Griffiths, David (Rother Valley)

  Jenkins, Roy (Stechford)

  Cullen, Mrs. Alice

  Griffiths, Rt. Hon. James (Llanelly)

  Jones, Dan (Burnley)

  Darling, George

  Grimond, Rt. Hon. J.

  Jones, Elwyn (West Ham, S.)

  Davies, G. Elfed (Rhondda, E.)

  Gunter, Ray

  Jones, J. Idwal (Wrexham)

  Davies, Harold (Leek)

  Hale, Leslie (Oldham, W.)

  Jones, T. W. (Merioneth)

  528

  529

  Kelley, Richard

  Padley, W. E.

  Stones, William

  Kenyan, Clifford

  Paget, R. T.

  Strachey, Rt. Hon. John

  Key, Rt. Hon. C. W.

  Pannell, Charles (Leeds, W.)

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

  Ledger, Ron

  Pargiter, G. A.

  Swingler, Stephen

  Lee, Frederick (Newton)

  Parker, John

  Taverne, D.

  Lipton, Marcus

  Paton, John

  Taylor, Bernard (Mansfield)

  Loughlin, Charles

  Pavitt, Laurence

  Thomas, George (Cardiff, W.)

  Lubbock, Eric

  Pearson, Arthur (Pontypridd)

  Thomas, Iorwerth (Rhondda, W.)

  Mabon, Dr. J. Dickson

  Peart, Frederick

  Thompson, Dr. Alan (Dunfermline)

  McCann, John

  Pentland, Norman

  Thomson, G. M. (Dundee, E.)

  MacColl, James

  Plummer, Sir Leslie

  Thornton, Ernest

  McInnes, James

  Popplewell, Ernest

  Thorpe, Jeremy

  McKay, John (Wallsend)

  Prentice, R. E.

  Tomney, Frank

  McLeavy, Frank

  Price, J. T. (Westhoughton)

  Wade, Donald

  MacMillan, Malcolm (Western Isles)

  Probert, Arthur

  Wainwright, Edwin

  MacPherson, Malcolm (Stirling)

  Pursey, Cmdr. Harry

  Warbey, William

  Mallalieu, E. L. (Brigg)

  Randall, Harry

  Watkins, Tudor

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

  Rankin, John

  Weitzman, David

  Manuel, Archie

  Redhead, E. C.

  Wells, Percy (Faversham)

  Mapp, Charles

  Reid, William

  Wells, William (Walsall, N.)

  Marsh, Richard

  Reynolds, G. W.

  Whitlock, William

  Mason, Roy

  Roberts, Albert (Normanton)

  Wigg, George

  Mayhew, Christopher

  Roberts, Goronwy (Caernarvon)

  Wilkins, W. A.

  Mellish, R. J.

  Robertson, John (Paisley)

  Willey, Frederick

  Mendelson, J. J.

  Robinson, Kenneth (St. Pancras, N.)

  Williams, D. J. (Neath)

  Millan, Bruce

  Rodgers, W. T. (Stockton)

  Williams, LI. (Abertillery)

  Milne, Edward

  Ross, William

  Williams, W. R. (Openshaw)

  Mitchison, G. R.

  Shinwell, Rt. Hon. E.

  Williams, W. T. (Warrington)

  Monslow, Walter

  Short, Edward

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

  Moody, A. S.

  Silverman, Sydney (Nelson)

  Winterbottom, R. E.

  Morris, John

  Slater, Mrs. Harriet (Stoke, N.)

  Woodburn, Rt. Hon. A.

  Moyle, Arthur

  Slater, Joseph (Sedgefield)

  Woof, Robert

  Mulley, Frederick

  Small, William

  Yates, Victor (Ladywood)

  Neal, Harold

  Smith, Ellis (Stoke, S.)

  Zilliacus, K.

  Oliver, G. H.

  Sorensen, R. W.

  Oram, A. E.

  Soskice, Rt. Hon. Sir Frank

  Oswald, Thomas

  Spriggs, Leslie

  TELLERS FOR THE NOES:

  Owen, Will

  Stewart, Michael (Fulham)

  Mr. Rogers and Mr. Lawson.

  It being after half-past Four o'clock, Mr. SPEAKER proceeded, pursuant to Orders, to put forthwith the Question on an Amendment, moved by a member of the Government, of which notice had been given, to that part of the Bill to be concluded at half-past Four o'clock.

  Clause 34.—(TRANSFER OF STAFF.)
  Amendment made: In page 34, line 23, leave out from "subsection" to end of line 27 and insert:
  "may be reported to the Minister of Labour by any party to the agreement and, if a dispute so reported is not otherwise disposed of, that Minister shall refer it for determination by the industrial court."—[Mr. Hay.]

  Clause 55.—(THE NATIONALISED TRANSPORT ADVISORY COUNCIL.)
  Mr. Speaker: I call the right hon. Member for Vauxhall (Mr. Strauss) to move the Amendment in page 53, line 39, to leave out "advising the Minister on such" and to insert:
  "submitting to the Minister from time to time, as they think fit, a general review of transport problems and advice on".
  Mr. Strauss: On a point of order, Mr. Speaker. As Clause 34 has been
  530
  amended, does the House not have an opportunity of voting on the Clause as a whole if it so desires?
  Mr. Speaker: We are not in Committee. We do not have any vote on the Question, "That the Clause stand part of the Bill", on consideration.
  The next Amendment selected is that in the name of the right hon. Member, which I have mentioned. I assume that it would be convenient to discuss with it the following Amendment in page 53, line 40 to leave out "or any" and to insert:
  "of transport in the public interest or such".
  Mr. Popplewell: I beg to move, in page 53, line 39, to leave out "advising the Minister on such" and to insert:
  "submitting to the Minister from time to time, as they think fit, a general review of transport problems and advice on".
  I think that there is wisdom, Mr. Speaker, in your suggestion that we should discuss this Amendment with the Amendment which immediately follows.
  We are discussing the only Clause in the Bill which, by any stretch of the imagination, gives any power with a view to the chairmen of the four boards and the Holding Company meeting under the

  531
  chairmanship of the Minister to discuss any form of co-ordination or integration. This, we think, is a very weak Bill. The powers given to the National Transport Advisory Council as defined in the Clause are of a very negative character. We seek to put some teeth into the Clause and to define the powers of the Advisory Council, as outlined in the words of the Amendment:
  "submitting to the Minister from time to time, as they think fit, a general review of transport problems and advice on."
  Since the Tory Government were returned in 1951 we have had a spate of legislation on transport matters. In this Bill we are, in effect, seeing the turn of the full cycle. When we left office there was a transport undertaking in which there was a small Transport Commission and a number of executives, each responsible for a given form of transport. The Government which came in in 1951 destroyed that function and destroyed those executives. It established a very much enlarged Commission and empowered it to run the transport industry which had come under public ownership.
  Tory ideology has learned some lessons. It has found that the structure established in the 1953 Act is no longer workable. Therefore, the Government propose the establishment of four boards plus a Holding Company without the overall co-ordination of the Transport Commission looking at transport as a whole. In effect, they turn the full cycle and we get back to some extent to the old executives established under the 1947 Act, but with the great weakness that there is not overall control.
  4.45 p.m.
  The Bill establishes this infantile body, the National Transport Advisory Council, which will discuss with the Minister any items which he refers to it. This is a ridiculous position. The Bill says that the Council will advise the Minister on such matters
  "relating to the co-ordination, or any other aspect, of the nationalised undertakings as the Minister may refer to the Council."
  Taking the literal interpretation of the Measure, this means that the powers of this Advisory Council will be so circumscribed that it can do nothing unless the Minister suggests it in the first place.
  532
  In Committee, the Parliamentary Secretary made many references to the vertical structure of each of these boards and the Holding Company and disclaimed any desire for a horizontal linkup in the various structures, claiming that the Advisory Council would have the power to co-ordinate. The most ridiculous thing is that we find the Advisory Council has no power to make any recommendation unless the Minister refers to the Council.
  By any stretch of the imagination this cannot be termed a form of co-ordination. The Parliamentary Secretary has had to yield on a number of occasions and to say that the working agreements established under the 1928 Acts, although the parent agreements are destroyed, would still be operative.
  The Parliamentary Secretary to the Ministry of Transport (Mr. John Hay): I do not understand what the hon. Member is saying. Will he repeat that?
  Mr. Popplewell: During the Committee stage, when we were discussing this vertical structure, the Parliamentary Secretary got away from his brief and tried to claim that the working agreements established under the 1928 Acts would still be operative.
  Mr. G. Wilson: They are.
  Mr. Popplewell: The hon. Member for Truro (Mr. G. Wilson) may disagree with the Parliamentary Secretary, but I am quoting his words and the hon. Member can look them up.
  Mr. G. Wilson: I am saying that they are certainly operative.
  Mr. Popplewell: If the hon. Member would listen he would know that that is the point I have been making. First, the Minister claimed that there was a vertical structure very tightly wound round each of the boards. Then he had to shield himself by saying that the working agreements of the 1928 Acts would still be operative. He said that there would be co-ordination in so fax as the bus companies were concerned.
  Mr. G. Wilson: He also said that the parent agreement still subsisted.
  Mr. Popplewell: The hon. Member for Truro said that the parent agreement would be overthrown. In the Bill the parent agreement is overthrown.
  Mr. Hay: Will the hon. Member say where?
  Mr. Popplewell: Is it in Clause 12?
  Mr. Hay: I do not know.
  Mr. Popplewell: Perhaps I shall have an opportunity to look it up, but it is there. It is stated that the parent agreements under the 1928 Act—it will take a little time, but I shall hand it over to the Parliamentary Secretary later. He knows that it is there as well as I do.
  Mr. Hay: I do not.
  Mr. Popplewell: The hon. Gentleman is just shielding behind it.
  Mr. Webster: I should be grateful if the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) could explain.
  Mr. Manuel: My hon. Friend will give the information in a moment.
  Mr. Webster: Otherwise, we shall not know what he is talking about.
  Mr. Popplewell: I shall look it up and pass it across to the Parliamentary Secretary in a little while. In the meantime, let us consider this complete lack of co-ordination and the way in which the Minister is relying on these working agreements.
  The Parliamentary Secretary shielded himself by suggesting that the National Advisory Council would supply this necessary co-ordination. My argument is that, according to the definition contained in the Clause, the Minister will decide just what the Council will discuss. My hon. Friends feel that if the Council is to be worth anything at all it must have some clearly defined powers by which it can work effectively. Hence the Amendment which, we hope, will be accepted.
  If the hon. Member for Truro (Mr. G. Wilson) will study Clause 4 he will find that subsection (2) states that
  "The Railways Board shall not in exercise of the powers conferred by the said Acts of 1928 without the consent of the Minister—"
  Thus, before the 1928 parent agreement can be operated the Minister must approve what is proposed to be done. That is exactly the point I am making.
  Mr. Hay: The hon. Gentleman really must stop trying to mislead the House,
  534
  and I am sorry to have to use that phrase. He should have quoted the whole of that passage, which reads:
  "The Railways Board shall not in exercise of the powers conferred by the said Acts of 1928 without the consent of the Minister—"
  (a) enter into any agreement for the provision of services for the carriage of passengers by road …"
  That clearly refers to a new agreement and not to those which existed by virtue of the 1928 Acts and which were made a long time before. The hon. Gentleman made a wildly wrong point and I think he should withdraw it.
  Mr. Popplewell: When the Parliamentary Secretary gets away from his brief he goes wrong, as usual. The 1928 agreements referred to the carrying of passengers by road, because it was those agreements which enabled the railway companies to enter into partnership with the bus companies. As I say, when the Parliamentary Secretary leaves his brief he gets led astray very badly. I notice that even the hon. Member for Truro is not supporting him.
  Mr. G. Wilson: If the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) thinks that, I urge him to read subsection (2, b), which states:
  "… except in pursuance of an agreement under the said Acts (whether entered into before or after the passing of this Act) provide any service for the carriage of passengers by road …"
  that is, except for the 1928 Acts.
  Mr. Popplewell: Exactly. It refers to passengers by road, which is contrary to the basis of the intervention of the Parliamentary Secretary and, as I have said, the 1928 agreements cannot be implemented without the consent of the Minister. Therefore, there is absolutely no form of co-ordination in any shape or form in the Bill and we hope that the diehard Tory ideology that each section of the transport industry can be self-supporting unto itself.
  We all remember the strife in the railway industry between the wars, with each section of transport opposing the other in the courts, and we now say that some kind of co-ordination, such as that which operated for a brief span under the 1947 Act, is now required. Under that Act, for the first time for many decades, there was real co-ordination, although that policy was turned upside

  535
  down a little later. A return to that sort of strife is accentuated by the Bill. The taxpayer will have to bear a greater burden and my hon. Friends have tabled the Amendment to give the proposed new National Council the power to do a useful job of work.
  Mr. John Peyton: The hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) did not even begin to make out a case to support the Amendment. He certainly did not make a case for the wonderful transport system which he claimed was set up in 1947. No party has yet produced a wonderful system of transport. The Bill may be a step forward, but I do not share to the full some of the optimistic hopes that have been expressed.
  By his Amendment, the hon. Member for Newcastle-upon-Tyne, West is asking for a considerable extension, not only of the powers of another body—I think that we are calling it N.A.T.A.C. or some such set of initials—but he is wishing to change its species. The new body must be concerned with the nationalised transport undertaking, in which there is a great need of co-ordination. We have had many examples of unprofitable bus companies often competing with unprofitable railway services and this sort of thing is not good enough. I accept, therefore, that there is some need for a coordinating body of the kind proposed, but I absolutely fail to see why this body should be completely changed in character and set up as another judge of public interest.
  I believe that the Ministry of Transport has a job which has been fairly and squarely placed on its shoulders, but which the hon. Gentleman is now asking this changed body to do. It would not be right for my hon. Friend to even think of accepting the Amendment. Nevertheless, hon. Members have a part to play in this matter. We should not have a great many different organisations, of all sorts of hybrid kinds, judging the public interest when it is clearly the duty of the Minister and Parliament to fulfil this rôle. I hope, therefore, that the House will make short shrift of the Amendment.
  Mr. Manuel: I wholeheartedly disagree with the hon. Member for Yeovil
  536
  (Mr. Peyton), who seems to think that there already exists sufficient ability in the various fields of transport endeavour in the members of the railway boards. The capabilities of these people to undertake all the work that would come under the aegis of the Advisory Council is circumscribed by the Bill's limitations on the selection of those people.
  They may have knowledge of financial and industrial matters and of the organisation of labour, but my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Popplewell) indicated that we are considering an Advisory Council which will consist, in the main, of people with technical ability who will advise on transport problems.
  Mr. Peyton: That is exactly the point I was making; technical ability to advise on transport problems, but that they should not be set up as judges and arbiters of the public interest.
  Mr. Manuel: Public interest does not come into this part of the Bill. The hon. Member for Yeovil should not rush into the Chamber at the last moment and seek to state his views.
  Mr. Peyton: Nevertheless, I was making that point. The Amendment being discussed with the one moved by the hon. Member for Newcastle-upon-Tyne, West states:
  "… of transport in the public interest …"
  5.0 p.m.
  Mr. Manuel: The point I am making is that the Minister has agreed to the setting up of a Transport Advisory Council, according to the Clause—and I am arguing from the Minister's point of view. That is in addition to the Railways Board, and we know the kind of people whom the Minister hopes to recruit to that Board. I assume that the members of the Advisory Council will not have the same sort of qualifications.
  Possibly the Parliamentary Secretary can help us here. I presume that he has some idea of the type of person required. I assume, having some little knowledge of railways, that they should be able to advise the Minister on technical matters. The railway industry, however, is not an open book, the sort of industry where someone can be brought in from outside—and we are having too much of that at present. This

  537
  body advising on technical aspects of fairly obvious railway problems which may arise in, say, the next ten years would have a very valuable task to perform.
  I submit that the Amendment is a good one. The Minister does not necessarily have to accept the advice which is given to him by this body, but surely he will agree that it would be wrong to say to such an advisory body, "You must not have any mind of your own; you must not submit any problem that you think should be submitted to the Minister. You should not commit yourself to anything; you must wait until the Minister refers a matter to you for your consideration, on which the Minister will give his final decision."
  Surely we should allow the Advisory Council a little freedom. If it sees that something has gone wrong, it should have freedom to justify its existence and should be able to make to the Minister recommendations which it considers would be helpful to transport generally. In the final analysis it is the Minister who will decide whether to accept the advice. Therefore, the hon. Gentleman's point does not arise. He is protected, at any rate so long as we have a Tory Minister—although we cannot guarantee that that will always be the case. We would certainly welcome this extension of powers to the Advisory Council if there were a Ministerial change to someone of a different political complexion.
  Mr. Hay: I think that a lot of the trouble with which this Amendment seeks to deal arises from the fact that the hon. Members for Newcastle-upon-Tyne, West (Mr. Popplewell) and for Central Ayrshire (Mr. Manuel) have not appreciated that this Clause is concerned with setting up what we call in the Bill the Nationalised Transport Advisory Council, and not the National Transport Advisory Council. There were a number of slips of the tongue by the hon. Member for Newcastle-upon-Tyne, West. He persistently referred to this body as the National Transport Advisory Council, but it is not. It is a council which is advisory to the Minister and is concerned only with nationalised transport undertakings.
  In answer to the hon. Member for Central Ayrshire, the membership is not just a number of people chosen because
  538
  of their technical abilities; it is a number of people chosen because of the positions that they hold in the nationalised transport undertakings. If the hon. Member will look at Clause 55 (2) he will see that there is to be a chairman, a vice-chairman with five outsiders, if I may so call them, and then there will be the chairmen of the four boards, the chairman of the Holding Company, and
  "until the vesting date, the chairman of the Commission."
  As we have said so often in the course of our debates, the object of the Nationalised Transport Advisory Council—or "NATAC" as we have come to call it for brevity—is to create a forum in which the chairmen of all the boards and the chairman of the Holding Company can meet together with the Minister and with a few independent people from outside to advise the Minister on the various matters which affect not transport generally, not national transport—but the nationalised transport undertakings. That is perfectly clear from the concluding words on page 53 of the Bill, at lines 40 and 41. Having said that about the ambit of the Council—
  Mr. Ron Ledger: I am not clear about the interpretation which the hon. Gentleman has just given. The last two lines to which he has referred say that the matters on which the Advisory Council will advise the Minister will be those which the Minister may refer to the Council. Therefore, it would appear that the Council will have no right to promote a discussion of any kind. It will merely have to discuss matters which the Minister brings to its attention. Presumably, if he wishes to avoid discussion of any subject, he can do so by not referring it to the Council in the first place.
  Mr. Hay: I had that point in mind and I shall deal with it fully in due course.
  The effect of the Amendment would be substantially to enlarge the remit that we give to the Nationalised Transport Advisory Council. It would, as my hon. Friend the Member for Yeovil (Mr. Peyton) pointed out, give the Council a duty to submit to the Minister from time to time, if it should think fit, a general review of transport problems and give him advice on questions relating to

  539
  the co-ordination of transport in the public interest.
  Indeed, if we look at the specific words of the Amendment, the Council's remit would not be confined to transport in this country. If we were to accept the words in the Amendment—
  "… a general review of transport problems"
  it would be perfectly in order and open to the Council to consider and put to the Minister its views on transport anywhere in the world. I mention that, not because I imagine the Council would do that, but to point out the width of the words which the hon. Member for Newcastle-upon-Tyne, West is asking us to put into the Bill.
  We have always taken the view that the main task of the Council is to advise the Minister only on questions which arise from nationalised transport undertakings and particularly on the coordination of the services that they provide. The whole composition of the Council is designed for that purpose. While the Council will have regard to general problems which affect transport as a whole in this country, because they may well be relevant to the conduct of the nationalised transport undertakings, we think that it would be quite wrong to place upon the Council a statutory duty, as the Amendment would do, to review general transport problems in Britain.
  Mr. Manuel: Is not the hon. Gentleman being unfair? The Amendment in line 40 seeks to leave out the words "or any" and to insert:
  "of transport in the public interest or such"
  and it would go on to read:
  "other aspects, of the nationalised transport undertakings …"
  —not international and all the rest of it, as the hon. Gentleman has been saying in order to confuse the House.
  Mr. Hay: I am afraid that the hon. Member is as unfortunate in that intervention as he was in an earlier one. It is obvious that he has not even studied the Amendment in line 39 which is being discussed with the Amendment in line 40. The words of the Amendment are:
  "submitting to the Minister from time to time, as they think fit, a general review of transport problems and advice on".
  540
  Those are the words which the Amendment seeks to insert and that is the proposition before the House.
  Mr. Manuel: So is the other.
  Mr. Hay: I am entitled to dissect the Amendment and to point out the intrinsic ills that would flow if it were accepted. The hon. Gentleman must not be so naive as all that.
  Secondly—and I want to make this point very forcibly—we take the view that this Council should be what its name implies, an advisory council. It should not have of its own volition executive functions or capacities of any kind. Its job will be to help and advise the Minister. This is the answer to the hon. Gentleman who asked about the Minister referring matters to the Council. The whole point is that if the Minister has an advisory council, advisory to him, he should have the right to say what subjects he wishes to be advised upon. That is why we have put these words in line 41, page 53.
  We do not think that it is the job of this Council to do other than help the Minister by its deliberations. It should, therefore, confine its work and concentrate its attention upon those matters upon which the Minister requires assistance. For those reasons, I agree with my hon. Friend the Member for Yeovil that it would be quite wrong for the House to accept this Amendment. Our object is to have an advisory council, advisory to the Minister, concerned only with the nationalised transport undertakings, and one which will provide, as I have said frequently before, a place in which the whole subject of the coordination of the services provided by the boards, the Holding Company and their respective subsidiaries can be discussed. That is what we want and we must, therefore, resist the Amendment.
  Mr. Strauss: We have made it clear throughout our discussions on the Bill that we regard the Nationalised Transport Advisory Council, as proposed in this Clause, with the greatest suspicion, and that we do not think that it will be any effective substitute for the supervisory effective control which the British Transport Commission had over all the publicly-owned transport elements. We think that it is very largely a piece of camouflage put up in defence of the

  541
  accusation that the Government are in fact doing away with any proper co-ordinating authority.
  We are perfectly aware, as the Minister said, that in this Amendment we are trying to enlarge the authority and the work of this body. The Government have decided that such a body shall be established, and we have tried in Committee, and we are trying here, to give it a useful bit of work to do. In Committee, we suggested that it should be not only advisory but that it should have certain powers. That was turned down. Now we are suggesting that this body should not have any executive powers but should be something quite simple, and, I should have thought, obviously desirable—that is that it should advise the Minister and submit to the Minister its views on the general questions of co-ordination of transport both inside the nationalised sector and outside it.
  Mr. Peyton: Does the right hon. Gentleman think that it is right that a body of this kind, apart from any other question, should have the power to make general recommendations about transport matters if no one concerned with privately owned transport is on the body?
  Mr. Strauss: I shall come to that point in a moment. I was about to say that there is no difference between the hon. Member for Yeovil and myself concerning the desirability for further co-ordination of transport. He said in his speech that he considered that there should be much more co-ordination than there is at the moment. The question is who is to carry it out. The person with executive authority, and the only executive authority, will be the Minister. But he can do nothing without bringing a Bill before the House. Who is to advise him on these matters? It seems to us that the only body in existence, and the body best able to do this, will be the body proposed to be set up under the Bill, which will consist of the best authorities and the most knowledgeable people inside the public sector of transport—the chairmen of the boards, the chairman of the Holding Company, together with five people from outside whom the Minister may appoint. If this were really to be a body to give advice to the Minister on these wider
  542
  problems, there would be a case for putting among those five people representatives of private transport—a very strong case—and we would support it. The Minister has power to do that if he wants to.
  It seems to us that here will be a body which is authoritative and knowledgeable and its work should not be confined to advising the Minister on matters concerning the nationalised sector of the industry alone. It should be in a position to submit to the Minister advice—this is all we suggest— on co-ordination inside and outside the nationalised industry. In other words, we have the same objective as the hon. Member for Yeovil. We think that this body would be a good one to do it— we know of none better—and for that reason we suggest this Amendment not in the belief that the Government will accept it, but because we know that it is a very wise and sensible one.
  5.15 p.m.
  Mr. Arthur Holt: I feel that the National Transport Advisory Council will not—
  Mr. Hay: It is "Nationalised". The hon. Gentleman must get it right.
  Mr. Holt: What did I say?
  Mr. Hay: "National".
  Mr. Holt: The Nationalised Transport Advisory Council will not last long as a going concern in the form provided for in the Bill because, as the Minister himself said, it will have to be concerned with all aspects of transport in considering its own particular problems. I think that it will become apparent that the council could be an important instrument for taking a wide look at transport in this country as a whole in order to give advice to the Minister. There may be different views about the way in which the Council might be best altered, but I am absolutely sure—I made this point in Committee—that there is a job to be done by a transport advisory council covering all transport in connection with, for instance, the closing of uneconomic railway services and the possible closing of some uneconomic bus services.
  How the Government intend to deal with these matters on the social side has not yet been made clear. My own view

  543
  is that, where these services are no longer economic and we cannot, therefore, continue an obligation on the railways to keep them going, though the Government want them to be kept going, they should be put up for auction, it being made clear how much subsidy the Government are prepared to allocate for keeping some bus services running in, for instance, the South-West or the North-East.
  Matters of this kind will have to be considered by someone other than the Minister of Transport. I think that they must be looked at by a committee which does not take a purely local view but has regard to national policy in connection with transport. I do not see how such a committee can do its job without an expert staff in London where the committee will be sitting and also, I think, a small staff in the regions. It would probably be out of order if I were to develop some other aspects of the matter, but I think that this is tied up with future plans in connection with town planning, the location of industry and so on. I think that the Minister will eventually have to turn to an advisory
  body—some of the members probably being paid fees—which will look at the problem at a fairly high level.
  It is not entirely a matter of coordinating certain services. It is not even entirely a matter of reviewing the question of subsidy for unremunera services where it is necessary to keep them going for social or other reasons. There is also, in my view, a need to consider the proper development of the road system and the proper position of railways in modern society. There are even problems in connection with canals and so forth which should be taken into account.
  It is very disappointing that the Minister has not in the Bill taken a wider look at the problem and grasped the opportunity of providing himself now with a high-level advisory council covering the whole field instead of one just looking at co-ordination within the nationalised transport industry.
  Question put, That "advising the Minister on such" stand part of the Bill:—
  The House divided: Ayes 250, Noes 205.

  Division No. 168.]

  AYES

  [5.21 p.m.

  Agnew, Sir Peter

  Clarke, Brig. Terence (Ports, W.)

  George, J. C. (Pollok)

  Aitken, w. T.

  Cleaver, Leonard

  Gibson-Watt, David

  Allason, James

  Cole, Norman

  Gilmour, Sir John

  Arbuthnot, John

  Collard, Richard

  Glover, Sir Douglas

  Balniel, Lord

  Cooper, A. E.

  Glyn, Sir Richard (Dorset, N.)

  Barber, Anthony

  Cooper-Key, Sir Neill

  Goodhart, Philip

  Barlow, Sir John

  Cordeaux, Lt.-Col. J. K.

  Goodhew, Victor

  Barter, John

  Costain, A. P.

  Gower, Raymond

  Batsford, Brian

  Coulson, Michael

  Grant, Rt. Hon. William

  Baxter, Sir Beverley (Southgate)

  Craddock, Sir Beresford

  Grant-Ferris, Wg. Cdr. R.

  Beamish, Col. Sir Tufton

  Critchley, Julian

  Green, Alan

  Berkeley, Humphry

  Crosthwaite-Eyre, Col. Sir Oliver

  Gresham Cooke, R.

  Bevins, Rt. Hon. Reginald

  Crowder, F. P.

  Gurden, Harold

  Bidgood, John C.

  Cunningham, Knox

  Hall, John (Wycombe)

  Biffen, John

  Curran, Charles

  Hamilton, Michael (Wellingborough)

  Biggs-Davison, John

  Dalkeith, Earl of

  Harrison, Brian (Maldon)

  Bingham, R. M.

  Dance, James

  Harrison, Col. Sir Harwood (Eye)

  Birch, Rt. Hon. Nigel

  Deedes, W. F.

  Harvey, Sir Arthur Vere (Macclesf'd)

  Bishop, F. P.

  de Ferranti, Basil

  Harvie Anderson, Miss

  Black, Sir Cyril

  Digby, Simon Wingfield

  Hay, John

  Bossom, Clive

  Donaldson, Cmdr. C. E. M.

  Heald, Rt. Hon. Sir Lionel

  Bourne-Arton, A.

  Doughty, Charles

  Hicks Beach, Maj. W.

  Box, Donald

  Drayson, G. B.

  Hiley, Joseph

  Boyd-Carpenter, Rt. Hon. J.

  Duncan, Sir James

  Hill, Mrs. Eveline (Wythenshawe)

  Boyle, Sir Edward

  Eden, John

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

  Brewis, John

  Elliot, Capt. Walter (Carshalton)

  Hinchingbrooke, Viscount

  Brooke, Rt. Hon. Henry

  Emery, Peter

  Hirst, Geoffrey

  Brooman-White, R.

  Emmet, Hon. Mrs. Evelyn

  Hocking, Philip N.

  Brown, Alan (Tottenham)

  Errington, Sir Eric

  Holland, Philip

  Browne, Percy (Torrington)

  Farey-Jones, F. W.

  Hopkins, Alan

  Bryan, Paul

  Farr, John

  Hornby, R. P.

  Buck, Antony

  Fell, Anthony

  Howard, John (Southampton, Test)

  Bullard, Denys

  Finlay, Graeme

  Hughes Hallett, Vice-Admiral John

  Bullus, Wing Commander Eric

  Fisher, Nigel

  Hughes-Young, Michael

  Campbell, Gordon (Moray & Nairn)

  Fletcher-Cooke, Charles

  Jackson, John

  Channon, H. P. G.

  Fraser, Ian (Plymouth, Sutton)

  James, David

  Chataway, Christopher

  Freeth, Denzil

  Jenkins, Robert (Dulwich)

  Chichester-Clark, R.

  Gammans, Lady

  Jennings, J. C.

  Clark, Henry (Antrim, N.)

  Gardner, Edward

  Johnson, Dr. Donald (Carlisle)

  Johnson, Eric (Blackley)

  Morrison, John

  Speir, Rupert

  Johnson Smith, Geoffrey

  Mott-Radclyffe, Sir Charles

  Stanley, Hon. Richard

  Joseph, Sir Keith

  Nabarro, Gerald

  Stevens, Geoffrey

  Kerby, Capt. Henry

  Nicholson, Sir Godfrey

  Stoddart-Scott, Col. Sir Malcolm

  Kerr, Sir Hamilton

  Noble, Michael

  Storey, Sir Samuel

  Kimball, Marcus

  Nugent, Rt. Hon. Sir Richard

  Studholme, Sir Henry

  Kirk, Peter

  Oakshott, Sir Hendrie

  Summers, Sir Spencer (Aylesbury)

  Kitson, Timothy

  Orr, Capt. L. P. S.

  Tapsell, Peter

  Lagden, Godfrey

  Orr-Ewing, C. Ian

  Taylor, Sir Charles (Eastbourne)

  Lancaster, Col. C. G.

  Osborn, John (Hallam)

  Taylor, Edwin (Bolton, E.)

  Langford-Holt, Sir John

  Osborne, Sir Cyril (Louth)

  Taylor, Frank (M'ch'st'r, Moss Side)

  Leather, E. H. C.

  Page, Graham (Crosby)

  Teeling, Sir William

  Leavey, J. A.

  Page, John (Harrow, West)

  Thatcher, Mrs. Margaret

  Legge-Bourke, Sir Harry

  Pearson, Frank (Clitheroe)

  Thomas, Leslie (Canterbury)

  Lewis, Kenneth (Rutland)

  Percival, Ian

  Thomas, Peter (Conway)

  Lilley, F. J. P.

  Peyton, John

  Thompson, Richard (Croydon, S.)

  Lindsay, Sir Martin

  Pilkington, Sir Richard

  Thornton-Kemsley, Sir Colin

  Litchfield, Capt. John

  Pitman, Sir James

  Tiley, Arthur (Bradford, W.)

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Pitt, Miss Edith

  Tilney, John (Wavertree)

  Longbottom, Charles

  Pott, Percivall

  Touche, Rt. Hon. Sir Gordon

  Longden, Gilbert

  Powell, Rt. Hon. J. Enoch

  Turner, Colin

  Loveys, Walter H.

  Prior, J. M. L.

  Turton, Rt. Hon. R. H.

  Lucas, Sir Jocelyn

  Prior-Palmer, Brig. Sir Otho

  van Straubenzee, W. R.

  Lucas-Tooth, Sir Hugh

  Profumo, Rt. Hon. John

  Vane, W. M. F.

  McAdden, Stephen

  Proudfoot, Wilfred

  Vaughan-Morgan, Rt. Hon. Sir John

  MacArthur, Ian

  Pym, Francis

  Vosper, Rt. Hon. Dennis

  McLaughlin, Mrs. Patricia

  Rawlinson, Peter

  Walker, Peter

  Maclay, Rt. Hon. John

  Redmayne, Rt. Hon. Martin

  Walker-Smith, Rt. Hon. Sir Derek

  Maclean, Sir Fitroy (Bute&N. Ayrs.)

  Rees, Hugh

  Wall, Patrick

  McLean, Neil (Inverness)

  Rees-Davi, W. R.

  Ward, Dame Irene

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

  Renton, David

  Watkinson, Rt. Hon. Harold

  Macmillan, Maurice (Halifax)

  Ridley, Hon. Nicholas

  Webster, David

  Maddan, Martin

  Rippon, Geoffrey

  Wells, John (Maidstone)

  Maitland, Sir John

  Roots, William

  Whitelaw, William

  Markham, Major Sir Frank

  Ropner, Col. Sir Leonard

  Williams, Dudley (Exeter)

  Marples, Rt. Hon. Ernest

  Russell, Ronald

  Williams, Paul (Sunderland, S.)

  Mathew, Robert (Honiton)

  Scott-Hopkins, James

  Wills, Sir Gerald (Bridgwater)

  Matthews, Gordon (Merlden)

  Seymour, Leslie

  Wilson, Geoffrey (Truro)

  Mawby, Ray

  Sharples, Richard

  Wise, A. R.

  Maxwell-Hyslop, R. J.

  Shaw, M.

  Wood, Rt. Hon. Richard

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

  Shepherd, William

  Woodnutt, Mark

  Mills, Stratton

  Skeet, T. H. H.

  Woollam, John

  Montgomery, Fergus

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

  Worsley, Marcus

  More, Jasper (Ludlow)

  Smyth, Brig. Sir John (Norwood)

  Morgan, William

  Spearman, Sir Alexander

  TELLERS FOR THE AYES:

  Mr. Peel and Mr. McLaren.

  NOES

  Abse, Leo

  Dodds, Norman

  Houghton, Douglas

  Ainsley, William

  Driberg, Tom

  Howell, Charles A. (Perry Barr)

  Albu, Austen

  Dugdale, Rt. Hon. John

  Howell, Denis (Small Heath)

  Allaun, Frank (Salford, E.)

  Ede, Rt. Hon. C.

  Hoy, James H.

  Allen, Scholefield (Crewe)

  Edelman, Maurice

  Hughes, Cledwyn (Anglesey)

  Awbery, Stan

  Edwards, Rt. Hon. Ness (Caerphilly)

  Hughes, Emrys (S. Ayrshire)

  Bacon, Miss Alice

  Edwards, Robert (Bilston)

  Hughes, Hector (Aberdeen, N.)

  Beaney, Alan

  Edwards, Walter (Stepney)

  Hunter, A. E.

  Bennett, J. (Glasgow, Bridgeton)

  Evans, Albert

  Hynd, H. (Accrington)

  Benson, Sir George

  Finch, Harold

  Hynd, John (Attercliffe)

  Blackburn, F.

  Fitch, Alan

  Irving, Sydney (Dartford)

  Blyton, William

  Fletcher, Eric

  Janner, Sir Barnett

  Boardman, H.

  Foot, Dingle (Ipswich)

  Jay, Rt. Hon. Douglas

  Bottomley, Rt. Hon. A. G.

  Forman, J. C.

  Jeger, George

  Bowden, Rt. Hn. H. W.(Leics, S. W.)

  Fraser, Thomas (Hamilton)

  Jenkins, Roy (Stechford)

  Bowles, Frank

  Gaitskell, Rt. Hon. Hugh

  Jones, Dan (Burnley)

  Boyden, James

  Ginsburg, David

  Jones, Elwyn (West Ham, S.)

  Braddock, Mrs. E. M.

  Gordon Walker, Rt. Hon. P. C.

  Jones, J. Idwal (Wrexham)

  Brockway, A. Fenner

  Greenwood, Anthony

  Jones, T. W. (Merioneth)

  Broughton, Dr. A. D. D.

  Grey, Charles

  Kelley, Richard

  Brown, Rt. Hon. George (Belper)

  Griffiths, David (Rother Valley)

  Kenyon, Clifford

  Butler, Herbert (Hackney, C.)

  Griffiths, Rt. Hon. James (Llanelly)

  Ledger, Ron

  Butler, Mrs. Joyce (Wood Green)

  Gunter, Ray

  Lee, Frederick (Newton)

  Callaghan, James

  Hale, Leslie (Oldham, W.)

  Lever, L. M. (Ardwick)

  Chapman, Donald

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Lipton, Marcus

  Cliffe, Michael

  Hamilton, William (West Fife)

  Loughlin, Charles

  Corbet, Mrs. Freda

  Hannan, William

  Lubbock, Eric

  Craddock, George (Bradford, S.)

  Harper, Joseph

  Mabon, Dr. J. Dickson

  Cullen, Mrs. Alice

  Hart, Mrs. Judith

  McCann, John

  Darling, George

  Hayman, F. H.

  McInnes, James

  Davies, G. Elfed (Rhondda, E.)

  Healey, Denis

  McKay, John (Wallsend)

  Davies, Harold (Leek)

  Henderson, Rt. Hn. Arthur (Rwly Regis)

  McLeavy, Frank

  Davies, Ifor (Gower)

  Herbison, Miss Margaret

  MacMillan, Malcolm (Western Isles)

  Davies, S. O. (Merthyr)

  Hill, J. (Midlothian)

  MacPherson, Malcolm (Stirling)

  Deer, George

  Hilton, A. V.

  Mallalieu, E. L. (Brigg)

  Dempsey, James

  Holman, Percy

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

  Diamond, John

  Holt, Arthur

  Manuel, Archie

  546

  547

  Mapp, Charles

  Price, J. T. (Westhoughton)

  Taverne, D.

  Marsh, Richard

  Probert, Arthur

  Taylor, Bernard (Mansfield)

  Mason, Roy

  Proctor, W. T.

  Thomas, George (Cardiff, W.)

  Mayhew, Christopher

  Pursey, Cmdr. Harry

  Thomas, Iorwerth (Rhondda, W.)

  Mellish, R. J.

  Randall, Harry

  Thompson, Dr. Alan (Dunfermline)

  Mendelson, J. J.

  Rankin, John

  Thomson, G. M. (Dundee, E.)

  Millan, Bruce

  Redhead, E. C.

  Thornton, Ernest

  Milne, Edward

  Reid, William

  Thorpe, Jeremy

  Mitchison, G. R.

  Reynolds, G. W.

  Tomney, Frank

  Monslow, Walter

  Roberts, Albert (Normanton)

  Wade, Donald

  Moody, A. S.

  Roberts, Goronwy (Caernarvon)

  Wainwright, Edwin

  Morris, John

  Robertson, John (Paisley)

  Warbey, William

  Moyle, Arthur

  Robinson, Kenneth (St. Pancras, N.)

  Watkins, Tudor

  Mulley, Frederick

  Rodgers, W. T. (Stockton)

  Weitzman, David

  Neal, Harold

  Ross, William

  Wells, Percy (Faversham)

  Oliver, G. H.

  Shinwell, Rt. Hon. E.

  Wells, William (Walsall, N.)

  Oram, A. E.

  Short, Edward

  Whitlock, William

  Oswald, Thomas

  Silverman, Julius (Aston)

  Wigg, George

  Owen, Will

  Silverman, Sydney (Nelson)

  Wilkins, W. A.

  Padley, W. E.

  Slater, Mrs. Harriet (Stoke, N.)

  Willey, Frederick

  Paget, R. T.

  Slater, Joseph (Sedgefield)

  Williams, D. J. (Neath)

  Pannell, Charles (Leeds, W.)

  Small, William

  Williams, LI. (Abertillery)

  Pargiter, G. A.

  Smith, Ellis (Stoke, S.)

  Williams, W. R. (Openshaw)

  Parker, John

  Sorensen, R. W.

  Williams, W. T. (Warrington)

  Paton, John

  Soskice, Rt. Hon. Sir Frank

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

  Pavitt, Laurence

  Spriggs, Leslie

  Winterbottom, R. E.

  Pearson, Arthur (Pontypridd)

  Stewart, Michael (Fulham)

  Woodburn, Rt. Hon. A.

  Peart, Frederick

  Stones, William

  Woof, Robert

  Pentland, Norman

  Strachey, Rt. Hon. John

  Yates, Victor (Ladywood)

  Plummer, Sir Leslie

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

  Zilliacus, K.

  Popplewell, Ernest

  Swain, Thomas

  Prentice, R. E.

  Swingler, Stephen

  TELLERS FOR THE NOES:

  Mr. Rogers and Mr. Lawson.

  5.30 p.m.
  Mr. Spriggs: I beg to move, in page 54, line 38, at the end to insert:
  (8) As soon as possible after the end of each calendar year, the Council shall make to the Minister a report of their exercise of their functions during that year, with such comments (if any) as they consider appropriate, and the Minister shall lay a copy of every such report before each House of Parliament.
  Mr. W. R. Rees-Davies: On a point of order. Am I to understand, Mr. Deputy-Speaker, that the next four Amendments on the Notice Paper will be discussed with this Amendment? I had heard that that was so.
  Mr. Deputy-Speaker (Sir William Anstruther-Gray): We are a little way on. We are now discussing the Amendment in page 54, line 38, and discussing it, in fact, by itself.
  Mr. Spriggs: Clause 55 (7) reads:
  "The Minister may pay out of money provided by Parliament to the persons appointed by him under this section such remuneration and such travelling allowances and allowances in respect of out-of-pocket expenses as the Minister may, with the approval of the Treasury determine, and the Minister shall provide the Council"—
  that is, the Nationalised Transport Advisory Council—
  "with such officers and servants, and such accommodation, as appear to him to be requisite for the discharge of the Council's functions."
  The Amendment reads:
  "As soon as possible after the end of each calendar year the Council shall make to the Minister a report of their exercise of their functions during that year, with such comments (if any) as they consider appropriate, and the Minister shall lay a copy of every such report before each House of Parliament."
  I submit that this provision is vitally important. It would be completely wrong if this Council were to make reports which were secret in nature and which were not made available to Members of the House of Commons or were made available too late to be of any use to the House. With these few words, I commend the Amendment to the House.
  Mr. Hay: The hon. Member for St Helens (Mr. Spriggs) has moved this Amendment quite briefly, but it is one which lends itself to brevity. Its simple purpose is to place an obligation on the Nationalised Transport Advisory Council to make an annual report to the Minister on the exercise of its functions, and it can add whatever comments it thinks appropriate. The Amendment would provide that the report should be laid before Parliament.
  On the face of it, one would imagine that this was a perfectly reasonable proposition and that we ought to accept it. But I have explained why we cannot accept it. As I explained in dealing

  549
  with the last Amendment, the whole purpose of this body is to advise the Minister of Transport about the activities of the nationalised transport undertakings. It is not intended to have any executive functions of any kind. Therefore, any precedent that might be in the mind of any hon. Member of other nationalised industries which have similar advisory councils would be a false one simply because these councils have executive functions of various kinds. Moreover, as I explained in dealing with the last Amendment, the Minister takes the power under the Clause to sit as chairman of the Council. It may well be that the Minister will frequently exercise that function, and if the Council were then required to present, as the Amendment proposes, a report to the Minister, the Minister would be in the rather extraordinary situation of reporting to himself. Therefore, for that reason, we do not think that this would be a very good idea.
  There is, however, a more compelling reason which I wish to put to the House and one which I think should be treated as conclusive. It is bound to happen from time to time that the advice which the Council will have to give to the Minister will be based on matters which are confidential. It is bound to happen that the Council will be obliged to go into confidential matters in some detail and if it were to make a fair and honest report to the Minister and thence to Parliament it would have to state that it was unable to disclose what these confidential matters were.
  Alternatively, the Council would perhaps be in the position of having to consider and advise upon confidential matters and then, eventually, to make a report which would be published. In those circumstances its ability to deal with and handle confidential matters might very seriously be prejudiced because the Council would naturally say, "We must always bear in mind that we have to make a report to Parliament about this." For those reasons, I do not think that we can accept the Amendment.
  I realise the point which the hon. Gentleman has in mind, but if hon. Members will grasp the fact that the object of having the Nationalised Transport Advisory Council is simply and
  550
  solely for the purpose of assisting the Minister, to help him and to give him advice, but not to conduct an inquiry at large over the whole of our transport system, both public and private, then I think they will realise that there is no compelling reason why a report of this kind should be made either to the Minister or to Parliament. For those reasons I am afraid that I cannot advise the House to accept the Amendment.
  Mr. Popplewell: We on this side of the House are absolutely astonished at the Parliamentary Secretary's reply to the case for this Amendment. He says that the reason for his objection to the Amendment is because the whole basis of the Nationalised Transport Advisory Council is to advise. While, of course, we appreciate that, we want to know what advice the Council is going to tender. Under the present structure of the Transport Commission its accounts are presented to the House yearly. We are able to raise any matters that we care to on those accounts. We can probe and see what advice is being given. This Bill is taking away that privilege.
  Mr. Hay: I am very sorry to interrupt the hon. Gentleman, but he has omitted to point out to the House that the reports of the four boards and of the Holding Company, which will contain the sort of information that is now in the annual report of the B.T.C., will be published and laid before Parliament and will be debated by the House in the ordinary way.
  Mr. Popplewell: I have not overlooked that fact, but what the hon. Gentleman omits to say is that the Council, in fact, will have representatives from the respective boards that will meet the Minister. They will be above the board level completely and will be able to advise.
  Mr. Hay: They are the chairmen of the boards.
  Mr. Popplewell: Certainly they are the chairmen of the boards, but we shall be unable to investigate the advice which they will tender because it will not be made public. We shall not be able to investigate the working of the boards. At the moment we can investigate the working of the Transport Commission because it publishes a full account of

  551
  everything and there is no super body above the Commission. Here we are establishing a body, as it were, above the respective boards which are going to consult with the Minister.
  We are extremely suspicious about this because we have known of investigations taking place into the various aspects of the British Transport Commission's undertakings in which the Minister has shielded himself by saying, "This is a Departmental report, a committee report and although I must take note of the advice tendered to me because it is of such a grave nature, you in Parliament will not be able to have any information about it." That has been the position in the past. The Advisory Council is to be the coordinating link between the Minister and the four boards and the Holding Company on matters which the Minister refers to it. Surely Members of the House are entitled to the information that it tenders to the Minister.
  The Leader of the House is present. He jealously safeguards the interests of the House. I am sure that he will agree with what I have said. Since the Council will be the only co-ordinating link between the Minister and the four boards under the Bill, surely the right hon. Gentleman, as Leader of the House and wishing to safeguard our rights, will say to his hon. Friend, "If you do not propose to do anything about this matter now, ensure that something is done about it in another place so that the rights of Members of the House of Commons are adequately safeguarded."
  The Parliamentary Secretary says that certain matters with which the Council may deal may be confidential. I do not think that any other undertaking or service in the country has been subjected to as many inquiries, Departmental reports and investigations by Select Committees as the transport undertaking. Therefore, we say that any advice which a body with a say in the operations of this important service gives to the Minister should be made known to Parliament. We do not want to vote on this Amendment, because we wished to get on with other business, but, in view of the Parliamentary Secretary's attitude, unless we receive an assurance from the Leader of the House that he
  552
  himself will have a look at this matter to see whether something can be done to meet our wishes in another place, I think that we shall have to divide.
  Mr. Peyton: The hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) contrived to look spendidly surprised when my hon. Friend the Parliamentary Secretary rejected the Amendment. My surprise at the Amendment having been moved from the quarter from which it has been moved is far greater and far more genuine than the hon. Member's surprise at the rejection of the Amendment. I should not dream of admitting that any stupid Amendment is ever moved from the Conservative benches, but if such a thing were to happen this is just the type of Amendment which one would describe as a silly Tory Amendment.
  What the Amendment asks is that a nationalised undertaking should be compelled to air its domestic affairs in public to its own great prejudice. Had an hon. Member on this side moved this Amendment, the hon. Member for Newcastle-upon-Tyne, West would have been the first to say, "Here is another bit of Tory nagging, and we are not going to put up with it." I feel sorry for the hon. Gentleman. His enthusiasm for the last Amendment has, so to speak, washed on into this one. He is still bogged down by the misconception in his mind that we are discussing a national transport advisory committee, which is exactly what we are not doing. I should have thought, that those apostles of purity on the Opposition benches who commend nationalisation in all its aspects would have been with me to a man. I rejoice in such a happy occasion and advise them, in their own interests, to vote against what would be a very silly Amendment moved from any quarter, but which, coming from that quarter, is self-defeating and asinine.
  Mr. David Weitzman: At the risk of being called a supporter of a silly, stupid Amendment, I rise to support the Amendment. This may astonish the hon. Member for Yeovil (Mr. Peyton), but there is good reason to support it. It is often said that the powers of Parliament are being greatly diminished, that

  553
  matters are being kept secret and that disclosures are not being made to the House of Commons.
  5.45 p.m.
  Let us examine what this Amendment does, and what this Council is supposed to do. Under Clause 55 (1), the function of this Council is to advise the Minister
  "on such questions relating to the co-ordination, or any other aspect, of the nationalised transport undertakings as the Minister may refer to the Council".
  The Parliamentary Secretary says that the advice which the Council gives may often be confidential and he wonders how a confidential report can be laid before Parliament. He also says that the Minister will often have to take the chair and that it would be a delicate situation if the Minister had to report to himself. But the Minister often may not take the chair. Even if the Minister takes the chair, the advice and decision are by the Council. Why they should not be made known to the House, I do not know. If extremely confidential matters are dealt with, they need not be reported, or if a piece of advice is given
  which depends on information which is confidential it can always be said in the report, "These are confidential matters."
  The House of Commons has an administrative duty under this Bill. This Bill does certain things and the Council is charged with certain functions. The House of Commons is a watchdog in these matters. Every piece of information should be put before it unless it is so confidential that the House is not entitled to know about it.
  Why the Parliamentary Secretary should hide behind an argument about matters being confidential, I do not know. To cap it all, we had a speech from the hon. Member for Yeovil which did not contain a single argument against the Amendment. All that he could say was that the Amendment was stupid. I think that it is a good Amendment, and I hope that the Minister will accept it.
  Question put, That those words be there inserted in the Bill:—
  The House Divided: Ayes 200, Noes 246.

  Division No. 169.]

  AYES

  [5.48 p.m.

  Abse, Leo

  Edwards, Robert (Bilston)

  Hynd, John (Attercliffe)

  Ainsley, William

  Edwards, Walter (Stepney)

  Irving, Sydney (Dartford)

  Albu, Austen

  Evans, Albert

  Janner, Sir Barnett

  Allaun, Frank (Salford, E.)

  Finch, Harold

  Jay, Rt. Hon. Douglas

  Allen, Scholefield (Crewe)

  Fitch, Alan

  Jeger, George

  Awbery, Stan

  Fletcher, Eric

  Jenkins, Roy (Stechford)

  Bacon, Miss Alice

  Foot, Dingle (Ipswich)

  Jones, Dan (Burnley)

  Beaney, Alan

  Forman, J. C.

  Jones, Elwyn (West Ham, S.)

  Bennett, J. (Glasgow, Bridgeton)

  Fraser, Thomas (Hamilton)

  Jones, J. Idwal (Wrexham)

  Benson, Sir George

  Gaitskell, Rt. Hon. Hugh

  Jones, T. W. (Merioneth)

  Blackburn, F.

  Ginsburg, David

  Kelley, Richard

  Blyton, William

  Gordon Walker, Rt. Hon. P. C.

  Kenyon, Clifford

  Boardman, H.

  Greenwood, Anthony

  Lawson, George

  Bottomley, Rt. Hon. A. G.

  Grey, Charles

  Lee, Frederick (Newton)

  Bowden, Rt. Hn. H.W. (Leics, S. W.)

  Griffiths, David (Rother Valley)

  Lee, Miss Jennie (Cannock)

  Bowles, Frank

  Griffiths, Rt. Hon. James (Llanelly)

  Lever, L. M. (Ardwick)

  Boyden, James

  Grimond, Rt. Hon. J.

  Lipton, Marcus

  Braddock, Mrs. E. M.

  Gunter, Ray

  Loughlin, Charles

  Brockway, A. Fenner

  Hale, Leslie (Oldham, W.)

  Lubbock, Eric

  Brown, Rt. Hon. George (Belper)

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Mabon, Dr. J, Dickson

  Butler, Mrs. Joyce (Wood Green)

  Hamilton, William (West Fife)

  McCann, John

  Callaghan, James

  Hannan, William

  McInnes, James

  Chapman, Donald

  Harper, Joseph

  McKay, John (Wallsend)

  Cliffe, Michael

  Hart, Mrs. Judith

  McLeavy, Frank

  Corbet, Mrs. Freda

  Hayman, F. H.

  MacMillan, Malcolm (Western Isles)

  Craddock, George (Bradford, S.)

  Healey, Denis

  MacPherson, Malcolm (Stirling)

  Cullen, Mrs. Alice

  Henderson, Rt. Hn. Arthur (Rwly Regis)

  Mallalieu, E. L. (Brigg)

  Darling, George

  Herbison, Miss Margaret

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

  Davies, G. Elfed (Rhondda, E.)

  Hill, J. (Midlothian)

  Manuel, Archie

  Davies, Harold (Leek)

  Hilton, A. V

  Mapp, Charles

  Davies, Ifor (Gower)

  Holman, Percy

  Marsh, Richard

  Davies, S. O. (Merthyr)

  Holt, Arthur

  Mason, Roy

  Deer, George

  Houghton, Douglas

  Mayhew, Christopher

  Dempsey, James

  Howell, Charles A. (Perry Barr)

  Mellish, R. J.

  Diamond, John

  Howell, Denis (Small Heath)

  Mendelson, J. J.

  Dodds, Norman

  Hoy, James H.

  Millan, Bruce

  Driberg, Tom

  Hughes, Cledwyn (Anglesey)

  Milne, Edward

  Dugdale, Rt. Hon. John

  Hughes, Emrys (S. Ayrshire)

  Mitchison, G. R.

  Ede, Rt. Hon. C.

  Hughes, Hector (Aberdeen, N.)

  Monslow, Walter

  Edelman, Maurice

  Hunter, A. E.

  Moody, A. S.

  Edwards, Rt. Hon. Ness (Caerphilly)

  Hynd, H. (Accrington)

  Morris, John

  Moyle, Arthur

  Roberts, Goronwy (Caernarvon)

  Thornton, Ernest

  Mulley, Frederick

  Robertson, John (Paisley)

  Tomney, Frank

  Neal, Harold

  Robinson, Kenneth (St., N.)

  Wade, Donald

  Oliver, G. H.

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

  Wainwright, Edwin

  Oram, A. E.

  Ross, William

  Warbey, William

  Oswald, Thomas

  Shinwell, Rt. Hon. E.

  Watkins, Tudor

  Owen, Will

  Short, Edward

  Weitzman, David

  Padley, W. E.

  Silverman, Julius (Aston)

  Wells, Percy (Faversham)

  Pannell, Charles (Leeds, W.)

  Silverman, Sydney (Nelson)

  Wells, William (Walsall, N.)

  Pargiter, G. A.

  Slater, Mrs. Harriet (Stoke, N.)

  Whitlock, William

  Parker, John

  Slater, Joseph (Sedgefield)

  Wigg, George

  Paton, John

  Small, William

  Wilkins, W. A.

  Pavitt, Laurence

  Smith, Ellis (Stoke, S.)

  Willey, Frederick

  Pearson, Arthur (Pontypridd)

  Sorensen, R. W.

  Williams, D. J. (Neath)

  Peart, Frederick

  Soskice, Rt. Hon. Sir Frank

  Williams, LI. (Abertillery)

  Pentland, Norman

  Spriggs, Leslie

  Williams, W. R. (Openshaw)

  Plummer, Sir Leslie

  Stewart, Michael (Fulham)

  Williams, W. T. (Warrington)

  Popplewell, Ernest

  Stones, William

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

  Prentice, R. E.

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

  Winterbottom, R. E.

  Price, J. T. (Westhoughton)

  Swain, Thomas

  Woodburn, Rt. Hon. A.

  Probert, Arthur

  Swingler, Stephen

  Woof, Robert

  Proctor, W. T.

  Taverne, D.

  Yates, Victor (Ladywood)

  Pursey, Cmdr. Harry

  Taylor, Bernard (Mansfield)

  Zilliacus, K.

  Randall, Harry

  Thomas, George (Cardiff, W.)

  Rankin, John

  Thomas, Iorwerth (Rhondda, W.)

  TELLERS FOR THE AYES:

  Reid, William

  Thompson, Dr. Alan (Dunfermline)

  Dr. Broughton and Mr. Redhead.

  Roberts, Albert (Normanton)

  Thomson, G. M. (Dundee, E.)

  NOES

  Agnew, Sir Peter

  Digby, Simon Wingfield

  James, David

  Aitken, W. T.

  Donaldson, Cmdr. C. E. M.

  Jenkins, Robert (Dulwich)

  Allason, James

  Doughty, Charles

  Jennings, J. C.

  Arbuthnot, John

  Drayson, G. B.

  Johnson, Dr. Donald (Carlisle)

  Atkins, Humphrey

  Duncan, Sir James

  Johnson, Eric (Blackley)

  Balniel, Lord

  Eden, John

  Johnson Smith, Geoffrey

  Barber, Anthony

  Elliot, Capt. Walter (Carshalton)

  Kerby, Capt. Henry

  Barlow, Sir John

  Emery, Peter

  Kerr, Sir Hamilton

  Barter, John

  Emmet, Hon. Mrs. Evelyn

  Kimball, Marcus

  Batsford, Brian

  Errington, Sir Eric

  Kirk, Peter

  Baxter, Sir Beverley (Southgate)

  Farey-Jones, F. W.

  Kitson, Timothy

  Beamish, Col. Sir Tufton

  Farr, John

  Lancaster, Col. C. G.

  Berkeley, Humphry

  Fell, Anthony

  Langford-Holt, Sir John

  Bevins, Rt. Hon. Reginald

  Finlay, Graeme

  Leather, E. H. C.

  Bidgood, John C.

  Fisher, Nigel

  Leavey, J. A.

  Biffen, John

  Fletcher-Cooke, Charles

  Legge-Bourke, Sir Harry

  Biggs-Davison, John

  Fraser, Ian (Plymouth, Sutton)

  Lewis, Kenneth (Rutland)

  Bingham, R. M.

  Freeth, Denzil

  Lilley, F. J. P.

  Birch, Rt. Hon. Nigel

  Gammans, Lady

  Lindsay, Sir Martin

  Bishop, F. P.

  Gardner, Edward

  Litchfield, Capt. John

  Black, Sir Cyril

  George, J. C. (Pollok)

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Bossom, Clive

  Gibson-Watt, David

  Longbottom, Charles

  Bourne-Arton, A.

  Gilmour, Sir John

  Longden, Gilbert

  Box, Donald

  Glover, Sir Douglas

  Loveys, Walter H.

  Boyd-Carpenter, Rt. Hon. J.

  Glyn, Sir Richard (Dorset, N.)

  Lucas, Sir Jocelyn

  Boyle, Sir Edward

  Goodhart, Philip

  Lucas-Tooth, Sir Hugh

  Brewis, John

  Goodhew, Victor

  McAdden, Stephen

  Brooke, Rt. Hon. Henry

  Gower, Raymond

  MacArthur, Ian

  Brooman-White, R.

  Grant, Rt. Hon. William

  McLaren, Martin

  Brown, Alan (Tottenham)

  Grant-Ferris, Wg. Cdr. R.

  McLaughlin, Mrs. Patricia

  Bryan, Paul

  Green, Alan

  Maclay, Rt. Hon. John

  Buck, Antony

  Gresham Cooke, R.

  Maclean, SirFitzroy (Bute&N. Ayrs.)

  Bullard, Denys

  Gurden, Harold

  McLean, Nell (Inverness)

  Bullus, Wing Commander Eric

  Hall, John (Wycombe)

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

  Campbell, Gordon (Moray & Nairn)

  Hamilton, Michael (Wellingborough)

  Macmillan, Maurice (Halifax)

  Channon, H. P. G.

  Harrison, Brian (Maldon)

  Maddan, Martin

  Chataway, Christopher

  Harrison, Col. Sir Harwood (Eye)

  Maitland, Sir John

  Chichester-Clark, R.

  Harvey, Sir Arthur Vere (Macclesf'd)

  Markham, Major Sir Frank

  Clarke, Brig. Terence (Portsmth, W.)

  Harvie Anderson, Miss

  Marples, Rt. Hon. Ernest

  Cleaver, Leonard

  Hay, John

  Mathew, Robert (Honiton)

  Cole, Norman

  Heald, Rt. Hon. Sir Lionel

  Matthews, Gordon (Meriden)

  Collard, Richard

  Hicks Beach, Maj. W.

  Mawby, Ray

  Cooper, A. E.

  Hiley, Joseph

  Maxwell-Hyslop, R. J.

  Cordeaux, Lt.-Col. J. K.

  Hill, Mrs. Eveline (Wythenshawe)

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

  Costain, A. P.

  Hinchingbrooke, Viscount

  Mills, Stratton

  Coulson, Michael

  Hirst, Geoffrey

  Montgomery, Fergus

  Craddock, Sir Beresford

  Hobson, Sir John

  More, Jasper (Ludlow)

  Critchley, Julian

  Hocking, Philip N.

  Morgan, William

  Crosthwaite-Eyre, Col. Sir Oliver

  Holland, Philip

  Morrison, John

  Crowder, F. P.

  Hopkins, Alan

  Mott-Radclyffe, Sir Charles

  Cunningham, Knox

  Hornby, R. P.

  Nabarro, Gerald

  Curran, Charles

  Howard, John (Southampton, Test)

  Nicholson, Sir Godfrey

  Dalkeith, Earl of

  Hughes Hallett, Vice-Admiral John

  Noble, Michael

  Dance, James

  Hughes-Young, Michael

  Nugent, Rt. Hon, Sir Richard

  Deedes, W. F.

  Jackson, John

  Oakshott, Sir Hendrie

  556

  557

  Orr, Capt. L. P. S.

  Russell, Ronald

  Tilney, John (Wavertree)

  Osborn, John (Hallam)

  Scott-Hopkins, James

  Touche, Rt. Hon. Sir Gordon

  Osborne, Sir Cyril (Louth)

  Seymour, Leslie

  Turner, Colin

  Page, Graham (Crosby)

  Sharples, Richard

  Turton, Rt. Hon. R. H.

  Page, John (Harrow, West)

  Shaw, M.

  van Straubenzee, W. R.

  Pearson, Frank (Clitheroe)

  Shepherd, William

  Vane, W. M. F.

  Percival, Ian

  Skeet, T. H. H.

  Vaughan-Morgan, Rt. Hon. Sir John

  Peyton, John

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

  Vosper, Rt. Hon. Dennis

  Pilkington, Sir Richard

  Smyth, Brig. Sir John (Norwood)

  Walker, Peter

  Pitman, Sir James

  Spearman, Sir Alexander

  Walker-Smith, Rt. Hon. Sir Derek

  Pitt, Miss Edith

  Speir, Rupert

  Wall, Patrick

  Pott, Percivall

  Stanley, Hon. Richard

  Ward, Dame Irene

  Powell, Rt. Hon. J. Enoch

  Stevens, Geoffrey

  Watkinson, Rt. Hon. Harold

  Prior, J. M. L.

  Steward, Harold (Stockport, S.)

  Webster, David

  Prior-Palmer, Brig. Sir Otho

  Stoddart-Scott, Col. Sir Malcolm

  Wells, John (Maidstone)

  Profumo, Rt. Hon. John

  Storey, Sir Samuel

  Whitelaw, William

  Proudfoot, Wilfred

  Studholme, Sir Henry

  Williams, Dudley (Exeter)

  Pym, Francis

  Summers, Sir Spencer (Aylesbury)

  Williams, Paul (Sunderland, S.)

  Ramsden, James

  Tapsell, Peter

  Wills, Sir Gerald (Bridgwater)

  Rawlinson, Peter

  Taylor, Sir Charles (Eastbourne)

  Wilson, Geoffrey (Truro)

  Redmayne, Rt. Hon. Martin

  Taylor, Edwin (Bolton, E.)

  Wise, A. R.

  Rees, Hugh

  Taylor, Frank (M'ch'st'r, Moss Side)

  Wood, Rt. Hon. Richard

  Rees-Davies, W. R.

  Thatcher, Mrs. Margaret

  Woodnutt, Mark

  Renton, David

  Thomas, Leslie (Canterbury)

  Woollam, John

  Ridley, Hon. Nicholas

  Thomas, Peter (Conway)

  Worsley, Marcus

  Rippon, Geoffrey

  Thompson, Richard (Croydon, S.)

  Roots, William

  Thornton-Kemsley, Sir Colin

  TELLERS FOR THE NOES:

  Ropner, Col. Sir Leonard

  Tilney, Arthur (Bradford, W.)

  Mr. J E. B. Hill and Mr. Peel.

  Clause 56.—(THE TRANSPORT CONSULTATIVE COMMITTEES.)
  Mr. A. E. Cooper: I beg to move, in page 56, line 15, to leave out "or reduction".
  This is a small point. The House is entitled to have the Minister's views on the interpretation of the words which it is proposed to delete. It would appear that the transport users' consultative committees are being given power to consider a proposal by the Railways Board when a railway service is to be discontinued from one station to another or on any one line. The committees do not, however, appear to be given any such power if a service is merely reduced.
  What is the difference between a service which is discontinued and one which is simply reduced? It would seem that when there is a reduction in services, particularly in areas of considerable population, the users' consultative committee should be able to be consulted on the matter. I shall be glad to hear the views of my hon. Friend the Parliamentary Secretary.
  6.0 p.m.
  Mr. Hay: My hon. Friend the Member for Ilford. South (Mr. Cooper) has put something of a conundrum to the House but at the same time has moved an Amendment. My first task must be to tell the House what the effect of the Amendment would be if it were made. It would empower the transport users'
  558
  consultative committees to consider any question relating to reductions of services whether it be in respect of passenger or freight services, upon representations being received from objectors, at the committee's own initiative, or on reference to the committee by the Minister. And they would have to give consideration to these matters under subsection (4) as part of the procedure whereby committees are still empowered to look at what we call "quality of service" questions.
  At present the Clause, while it empowers the committees to consider quality of service questions, expressly debars them, by subsection (5), from considering charges or any question relating to the discontinuance or reduction of railway services, except as later subsections provide. Those later subsections relate to consideration of complete closures of railway passenger facilities, and that question in particular is dealt with by subsection (7).
  Under the Bill, the position is that the transport users' consultative committees have the general oversight of any closures of passenger services which are made. The Railways Board has the power to reduce the frequency of either passenger or freight services, and it also has the power to close freight services completely without the Minister intervening, and those matters do not come before the consultative committee. All that is retained as the job of the consultative committee is, firstly, questions relating to quality of service, and,

  559
  secondly, railway passenger service closures under subsection (7).
  Having regard to the general objective which the Government are aiming at in the Bill of conferring on the nationalised transport undertakings a wide degree of commercial freedom, I do not think that it would be right for us to place upon the Railways Board in particular any obstacle which would prevent it from reducing the services that it provides. No ordinary commercial undertaking is prevented from ceasing to provide for sale what it normally would wish to pro vide. The real reason why the railways in particular are in trouble is that people are deserting them and no longer using the services. I do not think therefore that we should place the Railways Board under a particular liability to have any reduction which it may make in its services—

ROYAL ASSENT
6.3 p.m.
Message to attend the Lords Commissioners;
The House went:—and, having returned;
Mr. SPEAKER reported the Royal Assent to:

1. British Museum Act, 1962.

2. West Indies Act, 1962.

3. International Monetary Fund Act, 1962.

4. Commonwealth Immigrants Act, 1962.

5. Zinc Corporation Act, 1962.

6. Royal Holloway College Act, 1962.

7. Australian Agricultural Company Act, 1962.

8. Whitehaven Harbour Act, 1962.

9. Saint Paul, Covent Garden, Act, 1962.

10. Royal Russell School Act, 1962.

TRANSPORT BILL
Question again proposed, That "or reduction" stand part of the Bill.
6.15 p.m.
Mr. Hay: When the House went to the other place I was saying that we could not take the view that it was desirable to confer upon the area transport
560
users' consultative committees the powers of overseeing reductions of service by, in particular, the Railways Board for the simple reason that the Board will be in no different position now that it is to have commercial freedom for any other transport undertaking.
After all, road haulage services and bus services which operate in competition with the railways are not being put under the handicap of having their activities and services reviewed by these committees, and I do not see any reason why if the Railways Board came to the conclusion for good commercial reasons and as a pure matter of management that its train services should be adjusted —that the number of trains run should be either increased or reduced—these are matters which ought to come within the purview of the consultative committees.
I have done my best to explain why we cannot accept the Amendment. I think that on reflection my hon. Friend and others who may have received points of view on this matter from a very distinguished body may themselves decide that this is not really a sensible Amendment to make. The whole point is that we want to give the railways commercial freedom, and the fewer controls that we have over their activities in these circumstances the better.
Mr. Cooper: In view of the very full nature of my hon. Friend's reply, which I hope will satisfy many people outside, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Mr. Hay: I beg to move, in page 58, line 9, at the end to insert:
(12A) Where for the purposes of subsection (9) of this section a committee decide to hear an objector orally, or to hear oral representations made on behalf of a Board, they shall hear the objector and the representations in public.
Mr. Speaker: I think it would be convenient to discuss with this Amendment the next one in the name of the right hon. Gentleman the Minister of Transport.
Mr. Hay: Yes, Mr. Speaker.
During the proceedings in the Standing Committee on 22nd March my right hon. Friend undertook, in response to suggestions made on both sides of the Committee in the discussion of an

561
Amendment moved originally by my hon. Friend the Member for Truro (Mr. G. Wilson), to consider what parts of the proceedings of consultative committees might be held in public. My right hon. Friend said—I think it was generally accepted on both sides of the Committee—that it would not be desirable to require a committee to hold the whole of its proceedings in public because, to use his words, this would make the procedure intolerable.
But since my right hon. Friend gave that undertaking he has consulted the chairmen of the area transport users' consultative committees, and the consensus of their views is that where a committee decides to hear oral representations in relation to a railway passenger closure either by an objector or on behalf of a board, they see no reason why this might not be done in public. Therefore, in the light of the views of the area chairmen, and after further consideration, we have drafted the new subsection (12A) in Clause 56 which will have the effect of requiring that where a committee decides to hear an objector orally or to hear oral representations which may be made by a board the hearing shall be in public.
I think that this meets the suggestion made by my hon. Friend the Member for Truro and the hon. Member for Oldham, East (Mr. Mapp) that not only must justice be done but that it must be seen to be done. I hope that the Amendment will be accepted by the House.
Mr. Rees-Davies: I strongly support the Amendment. It is important to bear in mind what is linked with this Clause, The Amendment relates to subsection (9), which provides the opportunity to objectors at public inquiries to put forward their objections before the appropriate committee. The grounds of their basic objections will be in relation to hardship, and I have little doubt that, in practice, these inquiries will become very like the town planning inquiries and that shortly some of us will have the opportunity to see how they work.
It is important that not only should they be in public but that the procedure —which lies in the hands of the Committees under subsection (13)—shall be in accordance with what has hitherto been laid down under Ministerial powers. We spent many days of anxious
562
debate on the Franks Committee's Report and subsequently on the admirable rules which followed, which have been very effective.
I want to see the same high standard from the Ministry of Transport and the Railways Board in future inquiries as has been set by the Ministry of Housing and Local Government. I am speaking to this Amendment for that reason. I am sure that it will be an important but not a difficult matter for the Minister, by administrative arrangement with the various consultative committees, to make sure that there is proper opportunity for fair hearing. That is what people want.
The case of the Ministry of Transport, of course, is slightly different from that of the Ministry of Housing and Local Government. In inquiries conducted by the latter Ministry, any person opposing an application has to be a party affected by the proposal under examination. But in the case of the Ministry of Transport everybody in the nation is affected. The Minister obviously cannot accede to a request that every person should be entitled to an oral hearing, otherwise he might be held up in these inquiries for twelve months or more. Those with powerful objections might gang up together and there might be 1,200 or 1,500 objectors, which would hold up the administrative work of the Railways Board.
The Minister of Transport must make sure that the consultative committees work out a system to give fair hearings to genuine objectors. When objections are heard publicly, and it is found that local alternative road services are being provided to replace a discontinued line, hardship is something which can be thrashed out. If one locks behind closed doors what appears to be hardship, one creates a grievance. If one drags the issue into the open, that is avoided.
Many people who have come to object at Ministry of Housing and Local Government inquiries have gone away satisfied after hearing the evidence. I believe that that will happen at many of these branch lines inquiries. The hardship would be seen to be not as bad as people thought. I feel that we might have written in stronger safeguards, but I commend this Amendment if it is

563
coupled with sensitive administrative procedure. It may be that we could not go further than this in the case of the Ministry of Transport, which has different functions from those of the Ministry of Housing and Local Government.
Mr. Hay: I speak again, by leave of the House, to welcome the support of my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies), but I would not want (him or the House to think that the type of consideration of closure proposals which the consultative committees at present carry out, and which they will continue to carry out under the remodelled procedure provided by this Clause, is completely analogous to planning inquiries. There are certain similarities, but I would not want my hon. Friend to imagine that they are absolutely on all fours. Nor would I want him to push too far the request to the Minister of Transport to act as does the Minister of Housing and Local Government in relation to planning inquiries.
The matters before the consultative committees are not in the remotest degree judicial. Planning inquiries are at least quasi-judicial. Indeed, in many things, as my hon. Friend knows, they become almost entirely judicial. There is a difference here, however. I make this point so that there may be no misunderstanding. Otherwise, I am obliged for the support of my hon. Friend.
Amendment agreed to.
Further Amendment made: In line 10, leave out from "to" to "every" and insert:
"subsections (12) and (12A) of this section". —[Mr. Hay.]

TRANSPORT BILL

  Clause 58.—(RESTRICTIONS ON CARRIAGE BY ROAD IN LONDON.)
  Mr. Strauss: I beg to move, in page 61 to leave out lines 15 to 23.
  I must briefly give the background to this Amendment. It concerns the position of the London Transport Executive —as it is today—and the London Transport Board—as it will be under this Bill. When bus and underground transport in London was brought under public ownership in 1933, there was a provision that the body running it—which later became the London Transport
  564
  Executive—should be a monopoly in the sense that it would be able to have complete authority concerning the running of services in the London area, and that where it found that anybody who wanted to operate in the London area was competing with and damaging London transport services it would be able to invoke the veto.
  That provision was essential because we had had in London a long history of pirate buses and of competition which did great damage to the transport services of the public. This monopoly situation was therefore proposed, and it was accepted by all parties. It has been operating ever since successfully and there has never been complaint about it.
  The London Transport Executive has not been niggardly and dog-in-the-manger about this. When an operator has come along and proposed running a service in its area, and where that service has not damaged the existing service or seriously interfered with its finances, the Executive has given permission. There have been about two dozen cases where that has happened, according to the Parliamentary Secretary.
  In this Bill, however, for the first time, the London Transport Executive's monopoly is taken away. No good reason has been given. The new Board will not be able to be master in its own house. It will not have the right to decide whether an outside operator should come into its territory. Any operator who comes along will, if permission to run a service in the London area is refused by the Board, be able to apply to the traffic commissioner. I do not know to what extent the Commissioner will have to take into account the overall injunction that the Board should make both ends meet and pay its way. He will consider the application. If the traffic commissioner says "No, the operator should not work in the London area," the operator can appeal to the Minister, and the Minister can override both the London Transport Board and the traffic commissioner and cam say that the operator can go into the London area.
  6.30 p.m.
  We suggest to the House that this is wholly undesirable, that it is wholly unnecessary, and that the position of the

  565
  London Transport Board—or Executive, as it has been for years past—has been wholly satisfactory, has given rise to no complaints and should not be changed. What are the reasons given by the Government for this change? They have given two reasons. They say that it may be that in certain areas outside London, the London Transport Board may want to operate, and that if it does, the traffic commissioner has to be consulted, and there is an appeal from the commissioner to the Minister, in a case in which the decision might be in favour of the Board. They say that if there is an appeal to the Minister from the traffic commissioner when the London Transport Board wants to operate outside London, the same sort of procedure should take place when a private operator wants to operate inside London.
  I do not see that that follows a bit. I do not think there is anything in that argument, because the whole purpose of establishing the London Transport Board, with the special obligation put upon it, was that it is a monopoly and must be master in its own house. This is an obligation, which the Railways Board has not got, to run adequate services in London, and we are told that special provisions were put in because it is a monopoly, because the Railways Board is not in this special position, and the London Board should be master in its own house.
  The other reason that we are told is that some operators on the fringe of London—private operators or others— might find it convenient and desirable to come over the border into the London area and operate there. The London Board might say, "This is wrong; we cannot accept it, because it will interfere with our normal services and will be upsetting," and will, therefore, turn it down. It has been suggested that the applicant should have the right of appeal to the traffic commissioner and from the traffic commissioner to the Minister.
  We cannot see any reason for that at all. We know by experience that the London Board, whose sole purpose is to provide the best possible transport service for London, either themselves or by anybody else, have always acted sensibly when it has been found incon-
  566
  venient to provide services in a certain area and has allowed someone else to do it.
  Why should it not do so? The London Board is not a private concern trying to make the maximum profit. Its purpose is to see that the people of London get the best possible transport service, and on many occasions it has willingly allowed outside operators to come into the London area.
  These are the two reasons given by the Government for this break in the London Transport Executive's established position, which has existed since 1933 and which has operated exceedingly successfully and in regard to which we say that there is no reason for interference by the Government. We are frightened. The Minister may tell us, as he did in Committee, that it is not proposed to destroy the real strength of the London Transport Executive to allow private operators to come to London, but we do not know whether it will be so or not.
  We do not know whether this Minister, or some other Minister with even a greater bias towards private enterprise operators than the present Minister has, might consider these cases and turn down both the traffic commissioner and the Transport Board so that these people can operate in London. They have always got a case, because one can always say that someone else can pick up some people better than others and provide a better service than there was before.
  We are fearful lest the strength of the London Transport Board is—not undermined—but damaged by breaking the monopoly which has operated so well for such a long period, without as far as I know, any complaint, whether from any public body or responsible person. We feel very strongly about this. We feel strongly that the present situation should be maintained, and that there is no reason for altering it. In view of what we were told in Committee, we have very little hope that the Amendment will be accepted, but we intend to press it, because we think that it is of the greatest importance.
  Mr. Hay: The right hon. Member for Vauxhall (Mr. Strauss) has addressed the House somewhat forcibly on this Amendment.
  Mr. Strauss: I feel strongly about it.
  Mr. Hay: The right hon. Gentleman says that he feels strongly about it, but he did not tell the House what the Amendment would do. His arguments were directed to an attack upon the whole idea of the Clause and the possibility of any kind of a right of appeal against the fiat of the London Transport Board whether or not a private operator could come into its territory. He has not told the House that the effect of the Amendment, and of the two consequential Amendments being discussed with it, would be simply to delete, at the end of the line, so to speak, the appeal from the traffic commissioner to the Minister. That is all we are concerned with in this Amendment.
  As the right hon. Gentleman has said, Clause 58 (1), in effect, provides that before an operator, other than the London Board, can run a bus service in the London special area, which is the centre of London, he must have the consent of the London Board itself. I must remind the House that the consent which is in question here is not a permit to operate. It is merely a consent by the board to allow the operator to apply to the traffic commissioner for a licence. Let us assume that the London Board refuses this consent. Under this Clause, there is then an appeal against the refusal of consent to the traffic commissioner.
  If the traffic commissioner turns down the applicant, there is a right of appeal, which the Amendment seeks to delete, to the Minister against the refusal of consent. If, at the end of the day, the Minister allows the appeal and grants the consent, then the operator has to start again. He then has to go to the traffic commissioner and has to prove need, and he has to go through the whole machinery of the licensing system, and may not then receive a road service licence.
  Mr. Strauss: Is the hon. Gentleman saying that if an applicant appeals from an adverse decision by the traffic commissioner to the Minister, and the Minister reverses the decision, the application to the traffic commissioner may again be turned down, although the Minister has rejected the decision of the commissioner?
  Mr. Hay: It seems, perhaps, that the right hon. Gentleman has not fully understood the situation, and there may have been some misunderstanding throughout the whole discussion of this Clause. If so, I must clear it up.
  The consent referred to in the Clause is merely a consent by the London Board which enables the operator to apply to the traffic commissioner for a road service licence. An appeal against the refusal of the traffic commissioner to grant a road service licence goes to the Transport Tribunal, so that it might well happen, to continue the example which I was just giving to the House, that the Minister may, on appeal, reverse the decision of the London Transport Board and give consent to the operator to apply to the traffic commissioner for a road service licence, and then, at the end of the day, when he has applied for a licence to the traffic commissioner, the operator might be refused. He appeals then to the Transport Tribunal, and may then be turned down once more. All this is perfectly feasible.
  In the light of this explanation, perhaps the right hon. Gentleman and his hon. Friends will not feel quite so violently about this matter as they formerly did. All we are saying is that if an operator has a case which he wishes to deploy to the licensing authority, which is the traffic commissioner, for running a service inside the London special area, he should have the right to do so, provided that he can persuade, first, the traffic commissioner and then, on appeal, the Minister, that he should have the opportunity of putting his case. That is all that this Clause does and, in these circumstances, I feel that the right hon. Gentleman and his hon. Friends are making altogether much too heavy weather of this matter. After all, by Clause 59 we are reproducing what is virtually the mirror image of the situation, as I described it in Committee, in respect of applications by the London Board to operate bus services outside its special area and in territory normally reserved to private operators.
  So far as I can see, that is all that I need to say about the Amendment. I hope that it will not be pressed, because if it is we shall once more have to waste a certain amount of time marching

  569
  through the Lobbies. I hope that in the light of what I have said it will be possible for the Amendment to be withdrawn.
  Mr. Strauss: I cannot understand what the Parliamentary Secretary is telling us. I think that he is misleading the House. Subsection (4), which we are moving to delete, says:
  "The applicant or the London Board may appeal to the Minister against the decision of the metropolitan traffic commissioner on an application … and on such an appeal the Minister may confirm, vary or annul the decision."
  How can it possibly be that if an applicant applies to the traffic commissioner, and the commissioner's decision is reversed by the Minister, the applicant can go back to the commissioner and find himself exactly where he was? What is the use of an appeal to the Minister if his reversal of the commissioner's decision has no effect?
  Mr. Hay: The position is as I explained. The Clause deals with the case in which the applicant wishes to operate in the London special area. Even under the existing law, the Transport Act, 1947, he has to obtain the consent of London Transport. That consent is a consent to enable him to apply for a road service licence. All we say in the Clause is that if London Transport refuses that consent, then there shall be a machinery of appeal and that at the end of the line will be the Minister. Having got to the end of the line, the applicant still has to get his road service licence in the same way that he would have to get it if he wanted to run a new service outside the London special area.
  Mr. Strauss: He will get it automatically.
  Mr. Hay: He will not get it automatically. That is what I keep telling the right hon. Gentleman.
  I must stand in a white sheet and apologise to the House for saying that the final appeal in the case of a road service licence is through the Transport Tribunal. It is to the Minister. I was wrong about that and to that extent the right hon. Gentleman has a good point. There are two separate and distinct processes, one the procedure for obtaining consent and the other the procedure for obtaining a road service licence.
  Mr. Norman Cole: Presuming the Minister's consent to lodge an application to the traffic commissioners, would it not still be open to the London Board to oppose that application?
  Mr. Hay: My hon. Friend is absolutely right. The railways would probably oppose it. All sorts of people oppose applications for road service licences, people of whom one has never heard and who suddenly emerge and lodge objections. There is a complicated and difficult process to be gone through by any applicant for a road service licence.
  Mr. Ede: This appears to be a game of snakes and ladders.
  Mr. Hay: The right hon. Gentleman is a very good judge of that game.
  Question put, That the words proposed to be left out stand part of the Bill: —
  The House divided: Ayes 250, Noes 187.

  Division No. 170.]

  AYES

  [6.44 p.m

  Agnew, Sir Peter

  Bishop, F. P.

  Channon, H. P. G.

  Aithen, W. T.

  Bossom, Clive

  Chataway, Christopher

  Allasen, James

  Bourne-Arton, A.

  Chichester-Clark, R.

  Arbuthnot, John

  Box, Donald

  Clark, Henry (Antrim, N.)

  Atkins, Humphrey

  Boyle, Sir Edward

  Clark, William (Nottingham, S.)

  Balniel, Lord

  Braine, Bernard

  Clarke, Brig. Terence (Portsmth W.)

  Barlow, Sir John

  Brewis, John

  Cleaver, Leonard

  Barter, John

  Brooke, Rt. Hon. Henry

  Cole, Norman

  Batstord, Brian

  Brooman-White, R.

  Collard, Richard

  Baxter, Sir Beverley (Southgate)

  Brown, Alan (Tottenham)

  Cooper, A. E.

  Beamish, Col. Sir Tufton

  Browne, Percy (Torrington)

  Cooper-Key, Sir Neil

  Berkeley, Humphry

  Bryan, Paul

  Cordeaux, Lt.-Col. J. K.

  Bevins, Rt. Hon. Reginald

  Buck, Antony

  Costain, A. P.

  Biffen, John

  Bullard, Denys

  Coulson, Michael

  Biggs-Davison, John

  Bullus, Wing Commander Eric

  Craddock, Sir Beresford

  Bingham, R. M.

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

  Critchley, Julian

  Birch, Rt. Hon. Nigel

  Campbell, Gordon (Moray & Nairn)

  Crosthwaite-Eyre, Col. Sir Oliver

  Crowder, F. P.

  Kerans, Cdr. J. S.

  Proudfoot, Wilfred

  Cunningham, Knox

  Kerby, Capt. Henry

  Pym, Francis

  Curran, Charles

  Kerr, sir Hamilton

  Ramsden, James

  Dalkeith, Earl of

  Kimball, Marcus

  Rawlinson, Peter

  Dance, James

  Kirk, Peter

  Redmayne, Rt. Hon. Martin

  Deedes, W. F.

  Kitson, Timothy

  Rees, Hugh

  Digby, Simon Wingfield

  Langford-Holt, Sir John

  Renton, David

  Donaldson, Cmdr. C. E. M.

  Leather, E. H. C.

  Ridley, Hon. Nicholas

  Doughty, Charles

  Leavey, J. A.

  Rippon, Geoffrey

  Drayson, G. B.

  Legge-Bourke, Sir Harry

  Roots, William

  du Cann, Edward

  Lewis, Kenneth (Rutland)

  Ropner, Col. Sir Leonard

  Duncan, Sir James

  Lilley, F. J. P.

  Russell, Ronald

  Eccles, Rt. Hon. Sir David

  Litchfield, Capt. John

  Scott-Hopkins, James

  Eden, John

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Seymour, Leslie

  Elliot, Capt. Walter (Carshal)

  Longbottom, Charles

  Sharples, Richard

  Emery, Peter

  Longden, Gilbert

  Shaw, M.

  Errington, Sir Eric

  Loveys, Walter H.

  Shepherd, William

  Farey-Jones, F. W.

  Lucas, Sir Jocelyn

  Skeet, T. H. H.

  Fell, Anthony

  Lucas-Tooth, Sir Hugh

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

  Finlay, Graeme

  McAdden, Stephen

  Smyth, Brig. Sir John (Norwood)

  Fisher, Nigel

  MacArthur, Ian

  Spearman, Sir Alexander

  Fletcher-Cooke, Charles

  McLaughlin, Mrs. Patricia

  Speir, Rupert

  Fraser, Ian (Plymouth, Sutton)

  Maclay, Rt. Hon. John

  Stanley, Hon. Richard

  Freeth, Denzil

  Maclean, Sir Fitzroy (Bute&N. Ayrs.)

  Stevens, Geoffrey

  Gammans, Lady

  McLean, Neil (Inverness)

  Steward, Harold (Stockport, S.)

  Gardner, Edward

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

  Stoddart-Scott, Col. Sir Malcolm

  George, J. C. (Pollok)

  Macmillan, Maurice (Halifax)

  Storey, Sir Samuel

  Gibson-Watt, David

  Maddan, Martin

  Studholme, Sir Henry

  Gilmour, Sir John

  Maltland, Sir John

  Summers Sir Spencer (Aylesbury)

  Glover, Sir Douglas

  Manningham-Buller, Rt. Hn. Sir R.

  Tapsell, Peter

  Goodhart, Philip

  Markham, Major Sir Frank

  Taylor, Sir Charles (Eastbourne)

  Goodhew, Victor

  Marples, Rt. Hon. Ernest

  Taylor, Edwin (Bolton, E.)

  Gower, Raymond

  Mathew, Robert (Honiton)

  Taylor, Frank (M'ch'st'r, Moss Side)

  Grant, Rt. Hon. William

  Matthews, Gordon (Meriden)

  Thatcher, Mrs. Margaret

  Grant-Ferris, Wg. Cdr. R.

  Mawby, Ray

  Thomas, Leslie (Canterbury)

  Green, Alan

  Maxwell-Hyslop, R. J.

  Thomas, Peter (Conway)

  Gresham Cooke, R.

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

  Thornton-Kemsley, Sir Colin

  Grimond, Rt. Hon. J.

  Mills, Stratton

  Tiley, Arthur (Bradford, W.)

  Gurden, Harold

  Montgomery, Fergus

  Tilney, John (Wavertree)

  Hall, John (Wycombe)

  More, Jasper (Ludlow)

  Touche, Rt. Hon. Sir Gordon

  Hamilton, Michael (Wellingborough)

  Morgan, William

  Turner, Colin

  Harris, Reader (Heston)

  Morrison, John

  Turton, Rt. Hon. R. H.

  Harrison, Brian (Maldon)

  Mott-Radclyffe, Sir Charles

  van Straubenzee W. R.

  Harrison, Col. Sir Harwood (Eye)

  Nabarro, Gerald

  Vane, W, M. F.

  Harvey, Sir Arthur vere (Macclesf'd)

  Heave, Alrey

  Vaughan-Morgan, Rt. Hon. Sir John

  Harvie Anderson, Miss

  Nicholson, Sir Godfrey

  Vosper, Rt. Hon. Dennis

  Hay, John

  Noble, Michael

  Wade, Donald

  Heald, Rt. Hon. Sir Lionel

  Nugent, Rt. Hon. Sir Richard

  Walker, Peter

  Henderson, John (Cathcart)

  Oakshott, Sir Hendrie

  Walker-Smith, Rt. Hon. Sir Derek

  Hicks Beach, Maj. W.

  Orr, Capt. L. P. S.

  Wall, Patrick

  Hiley, Joseph

  Orr-Ewing, C. Ian

  Ward, Dame Irene

  Hill, Mrs. Eveline (Wythenshawe)

  Osborn, John (Hallam)

  Watkinson, Rt. Hon. Harold

  Hirst, Geoffrey

  Osborne, Sir Cyril (Louth)

  Webster, David

  Hobson, Sir John

  Page, Graham (Crosby)

  Wells, John (Maidstone)

  Hocking, Philip N.

  Page, John (Harrow, West)

  Whitelaw, William

  Holland, Philip

  Pearson, Frank (Clitheroe)

  Williams, Dudley (Exeter)

  Holt, Arthur

  Peel, John

  Williams, Paul (Sunderland, S.)

  Hornsby-Smith, Rt. Hon. Dame P.

  Percival, Ian

  Wills, Sir Gerald (Bridgwater)

  Howard, John (Southampton, Test)

  Peyton, John

  Wilson, Geoffrey (Truro)

  Hughes Hallett, Vice-Admiral John

  Pilkington, Sir Richard

  Wise, A. R.

  Hughes-Young, Michael

  Pitman, Sir James

  Wood, Rt. Hon. Richard

  Irvine, Bryant Godman (Rye)

  Pitt, Miss Edith

  Woodhouse, C. M.

  Jackson, John

  Pott, Percivall

  Woodnutt, Mark

  Jenkins, Robert (Dulwich)

  Powell, Rt. Hon. J. Enoch

  Woollam, John

  Johnson, Dr. Donald (Carlisle)

  Prior, J. M. L.

  Worsley, Marcus

  Johnson, Eric (Blackley)

  Prior-Palmer, Brig. Sir Otho

  Johnson Smith, Geoffrey

  Profumo, Rt. Hon. John

  TELLERS FOR THE AYES:

  Mr. J. E. B. Hill and Mr. McLaren.

  NOES

  Abse, Leo

  Boyden, James

  Davies, Ifor (Gower)

  Ainsley, William

  Braddock, Mrs. E, M.

  Davies, S. O. (Merthyr)

  Albu, Austen

  Brockway, A. Fenner

  Deer, George

  Allaun, Frank (Salford, E.)

  Brown, Rt. Hon. George (Belper)

  Dempsey, James

  Allen, Scholefield (Crewe)

  Butler, Herbert (Hackney, C.)

  Diamond, John

  Awbery, Stan

  Butler, Mrs. Joyce (Wood Green)

  Dodds, Norman

  Beaney, Alan

  Callaghan, James

  Driberg, Tom

  Bennett, J. (Glasgow, Bridgeton)

  Chapman, Donald

  Dugdale, Rt. Hon. John

  Benson, Sir George

  Cliffe, Michael

  Ede, Rt. Hon. C.

  Blackburn, F.

  Corbet, Mrs. Freda

  Edwards, Rt. Hon. Ness (Caerphilly)

  Blyton, William

  Craddock, George (Bradford, S.)

  Edwards, Robert (Bilston)

  Boardman, H.

  Cullen, Mrs. Alice

  Edwards, Walter (Stepney)

  Bottomley, Rt. Hon. A. G.

  Darling, George

  Evans, Albert

  Bowden, Rt. Hn. H. W.(Leics, S. W.)

  Davies, G. Elfed (Rhondda, E.)

  Finch, Harold

  Bowles, Frank

  Davies, Harold (Leek)

  Fitch, Alan

  572

  573

  Foot, Dingle (Ipswich)

  MacColl, James

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

  Forman, J. C.

  McInnes, James

  Ross, William

  Fraser, Thomas (Hamilton)

  McKay, John (Wallsend)

  Shinwell, Rt. Hon. E.

  Gaitskell, Rt. Hon. Hugh

  McLeavy, Frank

  Short, Edward

  Ginsburg, David

  MacMillan, Malcolm (Western Isles)

  Silverman, Julius (Aston)

  Gordon Walker, Rt. Hon. P. C.

  MacPherson, Malcolm (Stirling)

  Silverman, Sydney (Nelson)

  Greenwood, Anthony

  Mallalieu, E. L. (Brigg)

  Slater, Mrs. Harriet (Stoke, N.)

  Grey, Charles

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

  Slater, Joseph (Sedgefield)

  Griffiths, David (Rother Valley)

  Manuel, Archie

  Small, William

  Griffiths, Rt. Hon. James (Llanelly)

  Mapp, Charles

  Smith, Ellis (Stoke, S.)

  Gunter, Ray

  Marsh, Richard

  Sorensen, R. W.

  Hale, Leslie (Oldham, W.)

  Mason, Roy

  Soskice, Rt. Hon. Sir Frank

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Mayhew, Christopher

  Spriggs, Leslie

  Hamilton, William (West Fife)

  Mellish, R. J.

  Stewart, Michael (Fulham)

  Hannan, William

  Mendelson, J. J.

  Stones, William

  Harper, Joseph

  Millan, Bruce

  Strachey, Rt. Hon. John

  Hart, Mrs. Judith

  Milne, Edward

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

  Hayman, F. H.

  Mitchlson, G. R.

  Swain, Thomas

  Henderson, Rt. Hn. Arthur (Rwly Regis)

  Monslow, Walter

  Swingler, Stephen

  Herbison, Miss Margaret

  Moody, A. S.

  Taverne, D.

  Hill, J. (Midlothian)

  Morris, John

  Taylor, Bernard (Mansfield)

  Hilton, A. V.

  Moyle, Arthur

  Thomas, George (Cardiff, W.)

  Holman, Percy

  Mulley, Frederick

  Thomas, Iorwerth (Rhondda, W.)

  Houghton, Douglas

  Neal, Harold

  Thomson, G. M. (Dundee, E.)

  Howell, Charles A. (Perry Barr)

  Oliver, G. H.

  Thornton, Ernest

  Howell, Denis (Small Heath)

  Oram, A. E.

  Tomney, Frank

  Hoy, James H.

  Oswald, Thomas

  Wainwright, Edwin

  Hughes, Cledwyn (Anglesey)

  Owen, Will

  Watkins, Tudor

  Hughes, Hector (Aberdeen, N.)

  Padley, W. E.

  Weitzman, David

  Hunter, A. E.

  Pannell, Charles (Leeds, W.)

  Wells, Percy (Faversham)

  Hynd, H. (Accrington)

  Parker, John

  Wells, William (Walsall, N.)

  Hynd, John (Attercliffe)

  Paton, John

  Whitlock, William

  Irving, Sydney (Dartford)

  Pavitt, Laurence

  Wilkins, W. A.

  Jay, Rt. Hon. Douglas

  Pearson, Arthur (Pontypridd)

  Willey, Frederick

  Jeger, George

  Peart, Frederick

  Williams, D. J. (Neath)

  Jenkins, Roy (Stechford)

  Pentland, Norman

  Williams, LI. (Abertillery)

  Jones, Dan (Burnley)

  Plummer, Sir Leslie

  Williams, W. R. (Openshaw)

  Jones, Elwyn (West Ham, S.)

  Popplewell, Ernest

  Williams, W. T. (Warrington)

  Jones, Jack (Rotherham)

  Prentice, R. E.

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

  Jones, J. Idwal (Wrexham)

  Price, J. T. (Westhoughton)

  Winterbottom, R. E.

  Jones, T. W. (Merioneth)

  Probert, Arthur

  Woodburn, Rt, Hon. A.

  Kenyon, Clifford

  Proctor, W. T.

  Woof, Robert

  Lawson, George

  Pursey, Cmdr. Harry

  Yates, Victor (Ladywood)

  Lee, Frederick (Newton)

  Randall, Harry

  Zilliacus, K,

  Lee, Miss Jennie (Cannock)

  Rankin, John

  Lever, L. M. (Ardwick)

  Reid, William

  Loughlin, Charles

  Roberts, Goronwy (Caernarvon)

  TELLERS FOR THE NOES:

  Mabon, Dr. J. Dickson

  Robertson, John (Paisley)

  Dr. Broughton and Mr. Redhead.

  McCann, John

  Robinson, Kenneth (St. Pancras, N.)

  Clause 59.—(SPECIAL RESTRICTIONS ON GRANT TO LONDON BOARD OF ROAD SERVICE LICENCES.)
  Mr. Hay: I beg to move, in page 62, line 39, to leave out from "that" to the end of line 40 and to insert:
  "the relevant provisions of those subsections should not apply in relation to the proceedings specified in the certificate".
  In many ways this Amendment relates to the situation that we have just been discussing in connection with the Amendment to Clause 58. Subsections (1) and (2) of Clause 59 set out the procedures under which the traffic commissioners will deal with applications from the London Board for road service licences for bus services outside the London Passenger Transport area.
  Subsection (3), to which this Amendment relates, sets out the occasions when the procedures do not apply. Paragraph (c) exempts from the procedures those cases in which the Minister certi-
  574
  fies to the traffic commissioners that there are exceptional circumstances which make it desirable that a licence should be granted, or that the conditions of a licence previously issued should be varied. It was intended that the exceptions under paragraph (c) should, amongst other things, cover the provisions of Clause 8 (1, c) which gives the board power to carry, with the consent of the Minister, beyond the 10-mile belt round the London Passenger Transport area boundary. Under the procedures of Clause 8 (1, c) the Minister can empower the board to operate bus services outside these limits, but only if he is satisfied that there are exceptional circumstances which make it desirable for the Board to so operate.
  The Minister's consent to the operation of these services is a prerequisite to the application for a licence. I must emphasise, as I explained in connection with the previous Amendment, that consent does not amount to an actual

  575
  authority to operate services. This has to be obtained through the normal road transport licensing machinery, and it is important that the Minister should not take away from the traffic commissioners their statutory discretion to grant or refuse a licence. But Clause 59 (3, c) as it stands imparts a somewhat wrong flavour because, by using the words
  "desirable that the licence should be granted"
  it could be read as fettering the discretion of the traffic commissioners. The Minister would not be just giving the board consent to apply for the licence; he would be giving a very broad hint to the commissioners that the Board ought to be given a licence regardless of what the commissioners might think are the merits of the case.
  The purpose of the Amendment is primarily to substitute words which we consider to be more appropriate for these circumstances than those which I have quoted. There is no other change in this context, because the provisions will still exempt the London Board from the special procedures outlined in the earlier part of Clause 59. The board will still require the Minister's consent to apply for a licence, and discretion to grant or refuse a licence remains with the traffic commissioners.
  Amendment agreed to.

  Clause 62.—(TEMPORARY SUSPENSION OF LIABILITY TO MAINTAIN INLAND WATERWAYS.)
  Mr. Hay: I beg to move, in page 64, line 34, after "waterway", to insert:
  "or part of an inland waterway which was not".
  Mr. Speaker: I imagine that it will be convenient to discuss with this Amendment the next two Amendments, in line 35 and line 41.
  Mr. Hay: I gave the sort of explanation that I ought to give on this Amendment, which relates to the moratorium on actions against the Inland Waterways Authority, I should be bound to go beyond seven o'clock, at which time the Third Reading of the Bill is due to start.
  I think that the words of the Amendment are self-explanatory. They are intended to deal with the situation which would otherwise arise where the right of navigation against which the moratorium
  576
  is intended to operate could be applied to a very small vessel instead of to a very large one. What we have in mind is that the Inland Waterways Authority should be protected against actions claiming the right to navigate on canals as a result of an attempt to navigate by a very small craft such as a canoe. If the Amendment were not made, the Authority would be obliged to restore canals to navigation by very large vessels indeed.
  That is briefly the effect of this and the other two Amendments. I am sorry that I must give the House an extremely brief explanation. It is one which I am sure does not commend itself to the House, but I must, none the less, commend the Amendment to the House.
  Amendment agreed to.
  It being Seven o'clock, Mr. SPEAKER proceeded, pursuant to Orders, to put forthwith the Questions on Amendments, moved by a member of the Government, of which notice had been given, to the remaining part of the Bill.
  Further Amendments made: In page 64, line 35, leave out from beginning to "time" in line 39, and insert "at any".
  In line 41, at end insert:
  "; and, in any proceedings against the Commission or the Inland Waterways Authority which are brought for that purpose before the end of the year nineteen hundred and sixty-seven as respects an inland waterway or part of an inland waterway which was to any degree navigable in the said period of six months, the defendants shall not be required to secure its maintenance in a condition which is, in matters affecting navigation, better than it was in at any time in that period, but if there has been any deterioration since the end of that period the court may, if satisfied that it is in the interests of navigation, require the defendants to secure its maintenance in the condition in which it was at any time in the said period".
  In page 65, line 11, at end insert:
  Provided that this subsection shall not prevent the court from awarding any sum in respect of defects in the inland waterway if it is shown that it was without any of those defects at some time in the period of six months ending on the second day of November, nineteen hundred and sixty-one.
  In page 66, line 7, at beginning insert:
  "This section shall not affect section eighteen of the British Transport Commission Act, 1956 (which imposes certain liabilities as respects the Kennet Waterways), but".
  In line 7, leave out from "of" to "and" in line 8 and insert "that Act". —[Mr. Marples.]

  Clause 74.—(COMMISSION'S POWER TO DEVELOP LAND.)
  Amendments made: In page 81, line 19, leave out from "that" to "it" in line 21.
  In line 23, leave out "that Act" and insert "the Transport Act, 1947".
  In page 81, leave out lines 26 to 32.— [Mr. Marples.]

  Clause 75.—(THE COMMISSION'S SUBSIDIARIES.)
  Amendments made: In page 81, line 37, leave out from beginning to "sections" and insert "Notwithstanding anything in".
  In line 39, leave out from "1956" to "the".
  In line 44, at end insert:
  (2) If as a result of a transfer of securities effected by the Commission at a time when the Commission hold carriers' licences for vehicles owned by a subsidiary, the subsidiary becomes a wholly-owned subsidiary of a company (hereinafter referred to as "the company") which is itself a wholly-owned subsidiary of the Commission—

  (a) any such licence for a vehicle then owned by the subsidiary shall thereafter have effect as if granted to the company;

  (b) for the purposes of section one hundred and eighty of the Road Traffic Act, 1960 (which relates to carriers' licences for the vehicles of a subsidiary), the company shall be deemed to have made the application for the licence and to have signified to the licensing authority their desire that the section should have effect as respects the subsidiary; and

  (c) subsection (8) of section five of the Transport Act, 1953 (which relates to the duration of carriers' licences for vehicles owned by a company all the securities of which are disposed of under that section), shall not apply in relation to the transfer.

  (3) It is hereby declared that if an application is made before the vesting date for the issue of a licence in substitution for an existing licence which is due to expire on the vesting date by virtue of subsection (4) of section two of the Transport (Disposal of Road Haulage Property) Act, 1956 (which relates to carriers' licences for vehicles owned by certain subsidiaries of the Commission and provides that they shall expire on the date when the subsidiary ceases to be under direct or indirect control of the Commission), and on the vesting date proceedings are pending before the licensing authority on that application, the existing licence will under subsection (3) of section one hundred and sixty-nine of the Road Traffic Act, 1960, continue in force until the application is disposed of.
  In page 82, line 12, at end insert:
  (4) In this section "carriers' licence" means a licence under Part IV of the Road Traffic
  578
  Act, 1960 (including one issued in pursuance of Part II of the First Schedule to the Transport Act, 1953).—[Mr. Marples.]

  Clause 82.—(DISQUALIFICATION FOR MEMBERSHIP OF HOUSE OF COMMONS.)
  Amendments made: In page 88, line 7, leave out "incorporated in pursuance of" and insert "referred to in".
  In line 16, leave out from first "Company" to "the" in line 17 and insert "referred to in".
  In line 18, leave out from "the" to end of line 20 and insert:
  "following companies, that is to say—

  Caledonian Steam Packet Company (Irish Services) Limited.

  Railway Sites Limited.

  British Road Services Limited.

  B.R.S. (Parcels) Limited.

  B.R.S. (Pickfords) Limited.

  Atlantic Steam Navigation Company Limited.

  First Schedule.—(THE BOARDS, THE REGIONAL RAILWAY BOARDS AND THE HOLDING COMPANY.)
  Amendments made: In page 98, leave out lines 10 to 16 and insert:
  (1) The Holding Company may act notwithstanding a vacancy among the directors.
  In page 98, line 17, leave out from second "the" to end of line 21 and insert:
  "procedure of the Holding Company, including the quorum at meetings of the Holding Company".
  In line 24, at end insert:
  (3) If and so far as the procedure of the Holding Company is not regulated by an order under the last foregoing sub-paragraph, it shall be such as the Holding Company may determine.
  In line 34, at end insert:
  (4) Every document purporting to be an instrument issued by the Holding Company and to be sealed as aforesaid, or to be signed on behalf of the Holding Company, shall be received in evidence and be deemed to be such an instrument without further proof unless the contrary is shown.—[Mr. Marples.]

  Second Schedule.—(TRANSFER OF COMMISSION'S STATUTORY FUNCTIONS.)
  Amendment made: In page 101, leave out lines 9 to 15.—[Mr. Marples.]
  Seventh Schedule,—(TRANSITIONAL PROVISIONS.)
  Amendment made: In page 118, line 46, after "(11)", insert "and (12A)".— [Mr. Marples.]

  Eleventh Schedule.—(REPEALS.)
  Amendments made: In page 136, line 41, column 3, leave out "Sections one to eleven".
  In page 136, leave out lines 45 to 47.
  In page 140, line 34, at end insert:

  "4 & 5 Eliz. 2. c. 56.

  The Transport (Disposal of Road Haulage Property) Act, 1956.

  The whole Act."

  In line 51, at end insert:

  "8 & 9 Eliz. 2. c. 16.

  The Road Traffic Act, 1960.

  In the Seventeenth Schedule, the amendments of the Transport Act, 1947, and of the Transport Act, 1953."

  —[Mr. Marples.]
  7.4 p.m.
  Mr. Marples: I beg to move, That the Bill be now read the Third time.
  We have come to the end of a rather long road. I am sure that hon. Members opposite will agree that the Bill has emerged as a carefully thought out Measure on which there has been a wide degree of consultation. At any rate, they will probably agree that the White Paper, which first announced the Government's intentions, was published as far back as December, 1960. Vesting day under the Bill is January, 1963, which means that we have given an immense amount of time to our consideration of this Measure, which is an important one.
  The Government will wish to introduce some Amendments in another place. For instance, we shall seek to change the name of the Inland Waterways Authority. That would have taken about fifty minutes on the Floor of the House, and we thought that if this was dealt with in another place it would save time.
  I am grateful to hon. Members on both sides of the House for the care and attention which they have given to the Bill, both on the Floor of the House and in Committee. We have debated in full matters of principle and detail. I do not wish to be controversial and to discuss the timetable Motion, because very little has not been discussed in Committee. We had one session in hand when we finished, which means that it could not have been such a severe Guillotine.
  580
  Although some changes have been made the principles contained in the Bill are still practically the same as mentioned in the White Paper. They are three in number.
  Mr. Spriggs: The Minister has said that we discussed the Bill in full. But we did not. Many Clauses were not discussed, because of the Guillotine.
  Mr. Marples: I did not wish to be controversial, because it is not my nature. I am being provoked into being controversial by the intervention of the hon. Member, when I wish to be peaceful. This is an intolerable situation for a pacific Minister.
  Mr. Spriggs: Let us have the truth.
  Mr. Marples: The hon. Member has asked for the truth. The Bill has 91 Clauses and 11 Schedules, making a total of 102. The 1947 Act had 127 Clauses and 13 Schedules, making a total of 140. In other words, the 1947 Act was one-third larger than this one. We have had 35 Committee meetings on this Bill, whereas we had 31 on the 1947 Measure. I did not wish to say all this, and I am only doing so in deference to the wishes of the hon. Member for St. Helens (Mr. Spriggs). The number of hours spent in discussing this Bill in Committee was 95, whereas there were 76 hours of discussion on the 1947 Measure. That means that we have spent 25 per cent. more time on this Bill, although it has fewer Clauses and Schedules.
  The number of Amendments guillotined and not selected in this Bill was 62, whereas it was 279 in 1947, which means that four and a half times as many Amendments were guillotined or not selected in 1947. The number of Clauses not discussed amounted to seven, whereas the total was 35, and seven Schedules, on the 1947 Measure. It was only the provocation of the hon. Member which caused me to give these figures. I was trying to be as favourable as I could to the Socialist Government of 1945, but I have not been allowed to do so. I ask my hon. Friends to acquit me of any responsibility for this digression. It was forced on me.
  Mr. Spriggs: Now get on with the Bill.
  Mr. Marples: The hon. Member has told me to get on with the Bill. I would have done so in the first place if he had not interrupted me. There are three principles in the Bill, and they were all set out in the White Paper. First, each undertaking must have a clearly defined task within a set field. From this follows the second principle, that each undertaking must have a proper financial structure and be vested with its own assets and be responsible for its own capital debt and financial performance. Thirdly, each undertaking must, as far as possible, be freed from outdated statutory restrictions, such as common carrier liabilities, and be given greater commercial freedom.
  In spite of all the debates that we have had neither the Government nor their supporters have been shaken into changing their views on one cardinal point. The British Transport Commission was too big. It was running not only the railways but a wide variety of other undertakings and its task was too large to be performed by any single undertaking. That was the cardinal factor.
  Mr. Spriggs: Who decided that?
  Mr. Marples: The Government of the day decided, after prolonged consideration. I am certain that if they are not careful, hon. Members opposite will make the fatal mistake of thinking that size, by itself, is a virtue. That is not necessarily so. If an organisation gets too large, one does not get efficiency.
  Mr. Jack Jones: What about I.C.I.?
  Mr. Marples: The hon. Member for Rotherham (Mr. Jack Jones)—who knows so much about the steel industry —asks, "What about I.C.I.?" I.C.I. would be lost in this organisation, which is much bigger in every respect. I.C.I. is nothing like as large as this organisation, which employs over half-a-million people. So far as I can gather it is the biggest single undertaking in the world, including America. It is too big. That was the basic mistake. We have tried to alter that and I am sure that in our endeavour we carry with us the hon. Member for Rotherham.
  There is a deep cleavage of views between the two sides of the House. The
  582
  Government have tried to be practical. We have adopted an empirical approach. The idea of four statutory boards and a Holding Company has received a wide measure of support. For the first time since 1948 there will be a body which, in the words of the Select Committee, on which there were representatives of the parties on both sides of the House—I do not think that included a representative of the Liberal Party—but at any rate, in the words of the Select Committee it has the single minded task of running the railways.
  In my view the task of running the railways is about the most difficult job anybody can have in this country. We all ought to be sympathetic rather than critical of those who are trying to do it. On the financial reorganisation we have written off a great deal of the debt for obsolete railway assets, and that had support from hon. Members on both sides of the House. But I must remind hon. Members that although the debts are written off, the taxpayers will still have to find the cost of servicing the debt and will have to bear the burden. It has been shifted from the railways to the shoulders of the taxpayers. Therefore, in spite of what has been written off, which represents a huge amount by any standards, we must not under-rats the difficult task confronting the Railways Board and the Waterways Authority if they are to achieve financial viability in five years. It will be necessary to review the financial position as the situation develops.
  I turn now to the problem of commercial freedom about which there has been a great deal of discussion. It is fundamental to reorganisation. Fears have been expressed about the removal of control over railway fares outside the London area. Within the London area certain machinery is to be kept in being, but outside there is not this machinery. I think that those running the railways will use good sense in this respect. We have to make up our minds that it is not the British Transport Commission nor will it be the Railways Board, as it will exist in future, which is responsible for closing railways. The people who decide to close railways are those customers who decide that they do not want to use the railways any longer.

  583
  Recently, I met a deputation from South Wales on the subject of railways being closed. There the railways were carrying 7 per cent. of the passenger traffic and 93 per cent. went by road. Many years ago the proportions were reversed. If only 7 per cent. is now carried by rail, it is pretty clear that the customers' preference is not for railways but for some other form of transport. I do not blame the customers for that. But I do not think that they can choose some other form of transport—scooter, private car, or bus—and still say, "You must keep going a form of transport to which I do not now wish to subscribe."
  Mr. S. O. Davies: The Minister has mentioned my country. Will he not admit that the British Transport Commission contributed substantially to the fact that these railways have lost money? Nothing whatever has been done to bring the railways up to date. They are precisely the same railways as were being operated 60, 70 or 80 years ago. Nothing has been done to modernise them.
  Mr. Marples: The hon. Member for Merthyr Tydvil (Mr. S. O. Davies) is quite right. If conditions were the same today as they were 60, 70 or 80 years ago, these railways would be making huge profits because there would be no alternative form of transport. But there has been a technical change in the methods of transport. The mass transport of the nineteenth century, when a thousand people went in a train from one fixed point to another fixed point at a given time, has been replaced by a situation in Which there is individual transport from one mobile point to another mobile point at any time. That is a cardinal difference. Under the conditions which obtained sixty and seventy years ago, railways were bound to succeed. But they cannot succeed now because of the competition. I think that outside London, with the transport users' consultative committees, and inside London, with the new procedure, we shall find that there are adequate safeguards for the traveling public.
  During our debates upon this Bill a number of controversial points have been raised and one of the most controversial concerns coastal shipping. I
  584
  should like now to say a few words about coastal shipping, confining myself, as I must, to what is within the Bill. I should like to say something about matters which are not in the Bill, but to do so would be out of order.
  I have given a great deal of thought to this difficult problem, as have my two Parliamentary Secretaries and the officials in my Department. Throughout I have had special regard to the user and to the taxpayer. I have discussed this at innumerable meetings with the Commission and with representatives of the coastal shipping interests. I have tried to hold the balance between the railways on the one hand and coastal shipping on the other. That is my responsibility as Minister. The position of the railways is no longer what it was. The competition from the roads entitles them to a greater freedom in respect of charges than is allowed under the present arrangements. On the other hand, coastal shipowners fear two possibilities. First, that on long hauls—for example, if coal is being brought from Newcastle to London or to Bristol—the railways will use the Government subsidy which they are getting to undercut the coastal shippers and take business from them. That is a quite justifiable complaint and one which merits great attention.
  The second fear of the coastal shipowners is that on short hauls the railways will raise their charges. For example, if a pit is producing coal which has to be taken by rail five miles to a port, in order to be conveyed by coastal shipping, the shipowners fear that the railways will raise their charges to an extremely high level and put the coastal shipping people out of business.
  During the Second Reading debate my right hon. Friend the Home Secretary explained that I was having discussions about this whole problem. I hope that the many discussions which took place, and which led to a Government Amendment to Clause 53, will go a considerable way to allay the fears of the coastal shipowners. The effect of the Amendment is to provide protection for coastal shipping from railway competition in two ways, in relation to long hauls and short hauls. The charges for long hauls, to which I must apply myself as Minister if complaints are received, are such as appear to the Minister to be inadequate

  585
  having regard to the full cost of affording the service or services for which they are made, and which are made while the railways are in receipt of grants to meet a deficit on revenue account. In other words, for long hauls the railways have to quote a figure which is adequate, having regard to the full cost of affording the service. In defining that criteria by which railway charges should be judged we have accepted the form of words desired by the shipping industry and contained in the Amendment.
  Mr. Bruce Millan: The Amendment to which the Minister is referring was guillotined yesterday and we did not discuss it. There is quite a difference between the Bill as it is drafted and what the Minister said during the Committee stage discussions. He said that it would be required that railways would not recover the direct cost but would make a significant contribution to the indirect cost. Why has the Minister introduced these quite different words which place a far more onerous obligation on the railways? Will the right hon. Gentleman explain that more fully?
  Mr. Marples: I discussed this with a leading firm of chartered accountants which looked at the figures of the Transport Commission. I also discussed it with the coastal shipping interests which stated that they preferred this form of words and, therefore, as the accountants advised me that this was reasonable and fair—providing that this criterion should be applied not only to the long haul but to the short haul—I was prepared to accept it. After all, if it is fair on the long haul for the railways to charge what is called the "full cost" it is fair on the short haul, too. For that reason I was prepared to accept it, as long as the principle applies to both the long and the short hauls and, I might add, the medium hauls as well. For those reasons, I accepted the wording which the coastal shipping industry thought was desirable to protect its interests.
  Mr. Charles Mapp: It is important to get this clear. In Committee we understood the Minister to mean, if he did not use the actual words, that something beyond the direct costs—a noticeable or important contribution to the indirect costs—would be
  586
  involved, but that the present words "revenue account" mean considerably more. I understand that "revenue account" will include not only the revenue receipts but the whole of the central charges, including profits and subsidies. This is a significant difference.
  Mr. Marples: I should be out of order if I went over everything that was said in Committee, but the right hon. Member for Vauxhall (Mr. Strauss) said in Committee that he thought it should be the full cost. By the Amendment I have got the B.T.C. and the coastal shippers to agree—and I thought that I had done a brilliant job, but, from the remarks that have been made so far, it appears that I did not do as well as I had thought.
  Therefore, regarding charges on short hauls I must consider those which appear to be excessive, having regard to the full cost of offering the service. Regarding the short haul—and this is a significant point which appears to have escaped many people, including most of the Press—that provision remains in force after the railways have ceased to be in receipt of a grant to meet the deficit on revenue account Thus, on the short haul, the protection remains, even though the railways are not in deficit.
  I want to explain how I propose to deal with this matter during my tenure of office as Minister. I do not know how long that will be but I think it will be for a long time.
  Mr. Jack Jones: A short haul.
  Mr. Marples: When complaints are made I propose to appoint an accountant of very high standing to investigate impartially and then to report to me. The railway costs in relation to the charges proposed would be analysed by him before his report was made. It will be like an inspector of taxes considering a company's affairs who will always want an auditor's certificate. I will want one in this case.
  Mr. Popplewell Mr. Popplewell rose—
  Mr. Marples: Only three and a half hours remain for the Third Reading debate, and if I keep giving way I will be cutting down the time during which other hon. Members will be able to speak.
  Mr. Popplewell: I admit that the Minister is on a good point in trying to adjust the charges between coastal shipping and the railways, but has he considered road haulage? Has any approach been made to the Road Haulage Association in an effort to get reasonable rates to prevent unnecessary competition?
  Mr. Marples: No.
  Mr. Popplewell: Why?
  Mr. Marples: I did not want to. We believe in an entirely different philosophy. We believe that the consumer should decide the way by which he wishes to send his goods—whether by road, rail or sea. The consumer must assess which one is to his advantage and I prefer to allow the customer to be free to make his own assessment and choose which method he prefers. I do not wish to be a dictator like some hon. Gentlemen opposite. [HON. MEMBERS: "Shame."] That is the last thing I want to be. Therefore. I hope that we have met the coastal shipping point of view.
  On many occasions hon. Members have raised the question of the powers of manufacture, particularly of the Holding Company. My noble Friend Lord Mills said in the House of Lords on 7th November, 1960, that there was no intention that the Bill should be a denationalisation Bill. This is not a Bill to denationalise what is already there. It is to reorganise—we have said this from the beginning—the main function of British Railways—its structure —and to concentrate management on the railways. We alter the organisation but not the national ownership. As I say, it is not a denationalisation Measure.
  Of course, there are powers in the Bill, as in previous Measures, to direct. There is no specific provision to dispose of any particular asset and no such direction is written into the Bill. It is primarily a matter for management.
  My hon. Friend the Member for Lowestoft (Mr. Prior) made a quiet, sensible and reasonable speech which was empiric in its approach. He mentioned three companies which have been the subject of some controversy—Star Bodies (B.T.C.) Limited, Bristol Commercial Vehicles Limited and Eastern Coach Works Limited. I can inform
  588
  my hon. Friend that there is nothing to prevent them from being sold off nor to force them to be sold off in the Bill. I think that the test is this: is what these companies are doing the main purpose and duty of a board or is it ancillary to it? If it is the main duty then we have no intention of selling them off, but if it is ancillary we have the right to do so. That is reasonable enough in all conscience because the main purpose of these transport undertakings should not be disturbed.
  Mr. Frank McLeavy: What will be the position if they are complementary to the boards?
  Mr. Marples: If it is a major part of a board, that is one thing, but if it is ancillary, then that is another. The business of the Holding Company is to administer and control, but there is no need for the Holding Company's group to develop manufacturing activities either for purposes of its own activities or for sale generally. These three companies engaged in the manufacture of road motor bodies and chassis are, therefore, in this sense, anomalies, but to prohibit them from manufacturing would destroy their purpose and seriously affect the value of the public investment in them.
  They must, therefore, be allowed to continue on more or less their present scale. In fact, we have allowed those activities to be free, by use of the Minister's discretion, instead of by fixing a limitation on them. They do not need to sell outside the nationalised transport field. In fact, they cannot do so under the Commission's present structure, and the Amendment to Clause 29 does no more than continue this restriction.
  There is no need, on grounds of public policy, to keep these three companies in national ownership if an acceptable price is offered for them. Indeed, if a good offer is received I should be ready to see them disposed of. There is no purpose in saying that an offer which was at a knock-out price would be accepted, because it would not be. Any offer I would accept would have to be examined by an independent firm of accountants. If an offer were received and it was for £½ million more than the accountant thought it was worth, I would think that it should be accepted

  589
  On the other hand, if the offer were £½ million less, I should say that it should not be accepted.
  I distinguish between the main purpose and duty of the Board and what is ancillary to it. I think that manufacturing is ancillary to the running of our transport system and I hope, therefore, that I have made the position clear. I can inform the hon. Member for Lowestoft that more than the price would have to be considered if a satisfactory offer were received. The terms of employment, continuity of business, and so on, would have to be taken into account.
  Mr. Popplewell: The right hon. Gentleman is offering them three times what he offered road haulage.
  Mr. Marples: No, there is going to be no forced sale about this.
  On the question of the transport users' consultative committees, we have tried to clarify the procedure so that those committees consider the hardship that is caused to passengers. When they are considering hardship I am particularly anxious that they should at the same time consider alternative methods of transport. They may consider that extra buses or larger buses or different types would be suitable. These Amendments —we made some to the inland waterways and pipe-lines provisions—do not vitiate the principle of giving commercial freedom to the undertakings.
  There are a number of people to whom I should like to express my gratitude. First, I should like to thank the Chairman of the Standing Committee, my hon. Friend the Member for Stretford (Sir S. Storey). I think that Stretford is a wonderful place. I was brought up there. I am sure that we were all grateful to him for the way in which he conducted the Committee proceedings.
  I should also like to thank the right hon. Member for Vauxhall because Whenever he was under great provocation he never lost his temper once, though I nearly lost mine several times. I am grateful to him for the reasoned way in which he brought forward all the points he had in mind. We must remember that there is a deep cleavage in principle between the two sides of the House on this matter, and, considering that deep cleavage, it is remarkable that
  590
  tempers were as even as they are in the House.
  I should also like to thank my hon. Friend the Parliamentary Secretary. I had read Lord Attlee's book on delegation by Ministers to their Parliamentary Secretaries. I took it to heart; I delegated to my hon. Friend a good deal, and he has been well worthy of that delegated power. He has been sorely tried at times, but he, too, kept his temper. He keeps the temperature down whereas I sometimes tend to raise it. The one function that I cannot be expected to delegate to him is the raising of temperature, because by nature I seem to be well fitted to do that anyway.
  Now I come to the final word that I should like to say about the future of the railways. When I first became Minister of Transport I hoped—it was a vain hope—that, as has often been said by the hon. Member for Bermondsey (Mr. Mellish), we should stop using the railways as a political shuttlecock. [HON. MEMBERS: "Oh."] That is exactly what happens whenever one mentions it. I have given up that hope now. But it is not really a political problem. It is a technical and social problem. Indeed, several new factors have crept in. First, there are new competitors. There are road and air travel. What about air travel from London to Glasgow and Edinburgh? They make an immense difference to the future of the railways. On social grounds people have decided that they want cars or scooters. They have opted for cars or scooters. They may be right or they may be wrong.
  The third factor is that it is going to be a shrinking business, and therefore it is going to be difficult. It is easy enough to manage an expanding business —it is too easy for words—but when it is bound to contract it is difficult. It is contracting because of its competitors. At the same time, let us face the facts of life. The railways must find their true rôle in this country. They have a future, but it is not the future they thought it was 20 or 30 years ago. It is a different future.
  We have got to get the right size and shape, and the quicker we get that size and shape and get the suitable traffic to carry, the better it will be. Until we do, it is no good thinking that an organisation structure by itself will make it pay. It will not pay unless we have the

  591
  men to manage and work it. If we can get the right sized shape and structure, and modernise it we shall have fewer men employed in it looking after those who are redundant.
  I have paid special attention to that; and I am certain that we have got to get the right management. We have a difficult task—the most difficult in the country—but I think we shall get the right leadership.
  I shall do my best to make the industry pay. I know that I shall be criticised, whatever I do, but I say in all sincerity that I shall do my best. I can promise the House that. The difficulties are simply enormous, but that is no reason why they should not be tackled.
  In that spirit, I ask the House to give the Bill a Third Reading.
  7.35 p.m.
  Mr. Strauss: I endorse the tributes paid by the Minister of Transport to various Members. I am excluding myself, of course. He was quite right to pay tribute to the hon. Member for Stretford (Sir S. Storey), who was Chairman of the Standing Committee, and to the Parliamentary Secretary, who certainly kept his temper throughout the proceedings and whose general behaviour was most acceptable to both sides of the Committee. I believe that the Minister of Transport would have done the same if he had been there. But he was there so seldom that it was not difficult for him to keep his temper.
  Before I proceed to deal with the various points which the right hon. Gentleman has raised, I want to pick out one thing which he said, as otherwise I may forget it. I refer to the alarming comments that he made about the prospects of these three vehicle-building companies which we discussed earlier in the day. It is clear from what he said —we were not told this when we were discussing the Amendments—that it is the desire of the Minister to sell these companies if possible. His only interest is to ensure that they go to the highest bidder.
  Therefore, the hon. Member for Lowestoft (Mr. Prior) and others who are interested must realise that the Government are continuing their Conserva-
  592
  tive policy, and that just as they sold off the profitable road haulage section, or as much of it as they could, they are now going further as a result of the pressure which we know has been put upon the Minister, particularly by the hon. Member for Kidderminster (Mr. Nabarro), and are determined to sell off these three very successful and profitable small companies as soon as possible to the highest bidder.
  I emphasise that fact at the beginning of my remarks as it shows how Tory policy is continuing in connection with the transport problem. The Minister talks about ignoring politics and dealing with these problems purely factually, jammed in between highly political statements based on Conservative philosophy. We cannot accept the suggestion that he or anybody else can consider the transport policies of the country devoid of political ideas. It cannot be done. We do not pretend it is possible, but the Minister does.
  The Bill emerges from its Committee and Report stages practically unaltered. It is as bad today as it was when we first saw it. There were very large numbers of Amendments on the Notice Paper on Report, and some hon. Members might have come to the conclusion that they were concessions to requests made by the Opposition in Committee and that the Government were meeting us. Nothing of the sort. They were merely examples of the inefficient drafting of the Bill which the Government have now put right. The Government have given practically no concessions to us as a result of our long and arduous discussions in Committee. The Bill today is exactly the same as it was when we first saw it.
  What does the Bill propose to do? The Minister has outlined the three essential proposals which are embodied in the Bill and which represent the Government's transport policy. The central factor is that the railways are losing substantial sums of money—£150 million a year—and it is that which has driven the Government to seek to rectify that state of affairs. We do not blame the Government for doing so. The problem we have to consider is whether the steps that the Government propose will be effective and what damage to the

  593
  nation will be done by permitting commercial freedom and all that it implies to the railways.
  The Government are tackling this problem in three ways. First, by breaking up the existing structure of publicly-owned British transport into various elements on the ground that the Transport Commission, as it is, has too heavy a task. We have never quarrelled with that statement. What we say is that abolishing the executives which had the separate tasks, as the Conservative Government did in 1953, and putting all the executives into the Transport Commission was an error. If the Transport Commission today has too large a responsibility that is the fault of the Conservative Party, and it could easily have been remedied without the complete disintegration on which the Government are now embarked.
  We believe that this aspect of Government policy, the breaking up the Transport Commission, will do an ill service to transport and an ill service to the nation. We have not had any argument from the Minister or from anybody else as to how the breaking up the transport services into a number of separate watertight compartments, loosely integrated by an Advisory Council, which is going to meet now and again, will be in the interest of any transport service or of the public. I would have thought that it was obvious to everyone with a knowledge of transport that we needed a high degree of co-ordination and integration, We cannot see how the proposed disintegration can possibly do any good; and it certainly cannot improve the finances of the railways.
  The Government's other proposal— and it is a very important one—is the financial reorganisation. The Government, here, are doing what we think to be right. They are taking a realistic view of the situation. We have been advocating something of that sort for a considerable time and we have no quarrel at all with the proposals that the Government have put forward. But we give this warning. At present, the working loss of the railways is about £90 million a year and interest charges are about £50 million, making altogether about £140 million. The interest charges
  594
  will grow, and in the next five years they will be £50 million higher. So in five years' time the deficit is likely to be about £190 million a year.
  Anyone who believes that it is possible for the railways, however much fares are raised and expenses cut, to make up that deficit in five years' time is living in a dream world. I repeat what I said at an earlier stage, that the problem for the Government and the country today is not to try completely to eliminate railway losses. That just cannot be done, any more than in most of Europe and a large part of America. The problem, with the national interest as a whole in mind, is to what extent the losses can be properly cut down, to what extent this burden can be borne by the rail traveller, and what proportion should be paid by the State. That some proportion will have to be borne by the State is certain.
  The other thing—and this is really the most important thing that the Government are proposing to do in trying to reduce the serious losses falling on the railways—is giving the railways what they call commercial freedom. What does that mean? Commercial freedom to do what? In fact, it means commercial freedom to cut down the railway services on a scale hitherto never contemplated, doing great damage to a very large section of the community and putting up fares right and left wherever it is possible; in short, eliminating completely all pretence of public service from the country's railway system.
  The Government have admitted that. The Minister, in yesterday's debate, said that the railways "could no longer be regarded as a milch cow torn between considerations of public service and profitability." What he meant by that is that profitability is the only thing that will matter in the future. Public service is to be eliminated. All the people living in constituencies such as that of the hon. Lady the Member for Tynemouth (Dame Irene Ward) will suffer very much as a consequence.
  Dame Irene Ward: If the right hon. Gentleman will forgive me saying so, I do not intend to give up the fight.
  Mr. Strauss: The hon. Lady never gives up any fight. She has never been known to do so.
  I was telling her that damage to her constituents will arise from the fact that the directive of the Government to Dr. Beeching is, "Be quite ruthless. Run only those services which are profitable. Public service does not matter at all— only profitability." If we accept that point of view, which the Government have accepted, it will be very serious for the nation's needs.
  Mr. Charles Loughlin: Will the hon. Lady vote against the Bill?
  Mr. Strauss: My hon. Friend says that he hopes that the hon. Lady, in view of her militant attitude, will vote against a Bill which will lead to the closing of many of the services in her area.
  Dame Irene Ward Dame Irene Ward indicated dissent.
  Hon. Members: Running away.
  Mr. Strauss: It would not be the first time that the hon. Lady had revolted against the policy of the Government and voted with us against them.
  The Government say that unprofitable services have to be eliminated. To do that they propose various remedies. It is entirely wrong to suggest as the Minister did, that in any transport service, whether public or private, the idea of public service is absent. It is not. When a bus operator gets a licence from the traffic commissioners they insist that he should run some services in unprofitable areas, which is a public service, as a condition to being allowed to run in profitable areas. That is really acknowledging that anyone who runs a transport service is willingly running it, or is forced to run some part of it as a public service. We see no reason why the railways should be the one exception.
  One of the ways in which the Government hope that the railways will pay is, of course, by putting up fares as rapidly and as much as the traffic will bear. It will not bear very much on freight. We know that when freight charges are put up to any significant extent the traffic drops and there is a net fall in revenue, so there is not much scope there. We can raise all passenger
  596
  fares sharply, but as we put them up fewer people travel on the railways. The railways may gain something in revenue, but they will lose in passengers. We were told that the recent rise in fares imposed by Dr. Beeching meant that if everybody continued to travel on the railways the revenue would be increased by £12 million a year, but as many would go by road instead it would rise by only £9 million. Many people who used the railway services before will in future use the roads.
  The point that I want to make is this. When the Government operate their railway policy, either by closing services or putting up fares, what they ought to do, and do not do, is to look at the picture as a whole and the broad national consequences. One of the national consequences of putting up fares is that people such as commuters, and a large number of others, go on to the roads instead. The roads become congested. There is a demand, which becomes insistent, that road improvements should be made and that urban highways should be built, often at the cost of considerable destruction of amenity.
  There is an enormous financial cost as a result of diverting large numbers of people from the railways to the roads, and there is a great social cost in the waste of time of those who suffer delay as a result of traffic congestion on their way to work. That is an aspect of the Government's policy which should be considered. What will be the effect on the roads? What will be the demand for building new roads and widening existing ones which will inevitably follow if railway fares are raised to any considerable extent?
  The Minister says that the railways are not a monopoly. It was right, when they were a monopoly, to insist that they should perform some form of public service but, he says, they are not a monopoly now, but are operating in competition. This is only a half-truth. The railways are a monopoly in certain very important ways. For the transport of heavy goods, the railways are a monopoly; these goods cannot travel by any other means. It is not practicable for a very large part of the freight tonnage to be carried except on the railways. The Minister told us that 17,000 million ton miles of freight went by rail last year. A

  597
  large proportion of that must go on the railways, and to that extent the railways are a monopoly.
  Millions of commuters travelling to and from the big towns every day must go by rail. They could not possibly go by road. The roads would be completely blocked if they tried. To that extent the railways are still a monopoly over a very wide field. Because they are a monopoly they should be prohibited from levying excessive or punitive charges on their customers just as any other monopoly. Therefore, to say that the railways, because they are no longer a monopoly, should not be subject to control in regard to fares or should not be asked to operate as a public service is, I suggest, nonsense.
  The Minister, says, also, that "the test of public need is what the customer will pay for". Again, this is a half-truth. The Minister supports that contention by a reference to what the Select Committee said, but the Select Committee did not say that that was the only test. It is one of the tests. There are very many circumstances where it cannot be the test. A community, perhaps a large community, may depend on a railway service. A large section of the community may no longer use the railway service because many find it more convenient to use some other form of transport, and, therefore, that particular railway service does not pay any longer. Nevertheless, very many people still must use it.
  Then the test of the need for the railway is determined not by whether the remainder, which may consist of tens of thousands of people, are prepared to pay excessive fares, but by whether it is performing a vital social service. In our view, where there is such social need, there should be an effective railway service, which should not be discontinued as Dr. Beeching proposes to do under the general directive given to him by the Minister of Transport to eliminate everything which is not profitable.
  It seems to us that the Government's basic policy for the railways, "Put up the fares as much as possible and cut services wherever they do not pay" is wrong. It is a foolish policy which may, though we doubt it, bring short-term benefits but which, in the long term, will cause grave harm to the country. I am
  598
  sure that it is not recognised generally in the country, and is not fully realised even in the House, to what extent the policy of the Government is likely to interfere with existing transport arrangements. The railway services are an essential part of the social structure of the country, and interference with them to any marked degree must change the habits of life of millions of people and put burdens on them which they never expected to have to bear and which no one has the right to call upon them to bear.
  I have been reading all the literature I can about the prospects of railway closures, fares, and so forth. The more I read the more am I alarmed. For example, to quote only one source, there was what seemed to be a very authoritative article in the Observer on 1st April by an expert on the railways.
  Mr. Hay: It was wrong.
  Mr. Strauss: If it is wrong, I shall be glad to hear the Parliamentary Secretary say so. The writer's name is Alan Day. He said that the logic of what Dr. Beeching is doing and what, inevitably, he will have to do, is this:
  "Most of the remaining branch lines outside suburban areas will almost certainly go, which will mean that some quite large towns, such as Mansfield or even Lincoln, may lose their rail services … Towns like Yeovil, Scarborough and Inverness are likely to have to learn to do without rail services, either for passengers or goods."
  If he is wrong, I shall be delighted. He gives examples of the sort of thing which will happen throughout the country. Services will be cut to an extent which is not yet appreciated.
  A report of a very authoritative statement appeared on the tape this evening. It was an extract from a speech made by Mr. Green, the General Secretary of the National Union of Railway-men, made to the Scottish T.U.C. today. Mr. Green is a most responsible person and he would only say this after meeting Dr. Beeching, as we know he has, and discussing the matter with him. The report of what he says is:
  "One hundred and fifty thousand railwaymen's jobs are in jeopardy. Of 2,750 trains running in Scotland only 750 pay, and Dr. Beeching is determined to get rid of the 2,000".
  This is a most serious situation.

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  Of course, the Government can succeed in eliminating some, though not all, of the losses on the railways by drastic cuts of this sort, but what will the social consequences be? In a proper contemplation of the problem, should not a balance of advantages and disadvantages be made and the social consequences of any action carefully considered? From all we have heard from the Minister, the answer is that that is not being done. Social consequences do not count. Profitability is the only criterion which will count in the future. To pave the way for that sort of policy, we have the Bill now before us. We think that, on the whole, it is bad and dangerous. Its consequences will be serious for the country. It will impose damage on industry and it will impose damage on the public, far more than ought to be imposed or is necessary even in present circumstances.
  For those reasons, we propose to go into the Lobby and vote against the Bill tonight.
  7.58 p.m.
  Colonel Sir Leonard Ropner: In the Second Reading debate I was glad to take the opportunity to congratulate the Minister of Transport on the skill with Which the Bill bad been drafted and for introducing it. Tonight, I add my congratulations to my right hon. Friend and to the Parliamentary Secretary for having, with great ability and considerable patience, brought the Bill to its present stage.
  I propose to make a short speech dealing only with Clause 53. It is no good disguising the fact that coastal shipowners and those engaged in this not unimportant section of the shipping industry have held the view—the opinion has been shared by some hon. Members —that the Minister of Transport has been biassed in favour of the railways when considering the far from easy problem of ensuring fair competition between the heavily subsidised railways, on the one hand, and coastal shipping on the other.
  Having said that, however, I am glad to add that the Amendments tabled by my right hon. Friend yesterday on Recommittal do, to a considerable extent, meet the views of hon. Members who have tried to help him to find a solution to this problem. But, in my view—and
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  I know that it is shared by other hon. Members—those Amendments do not carry out to the full what we considered was an undertaking given by the Minister during the frequent and fairly intensive discussions over the last few days.
  As my right hon. Friend pointed out this afternoon, the trouble is that it will be extremely difficult—I am not sure that it will not be impossible—accurately to calculate the charges which can fairly be assessed in the case of both the short hauls and the long hauls. The charges for the long hauls may be inadequate and the charges for the short hauls may be excessive. My right hon. Friend the Minister recognised this difficulty and gave an undertaking that he would appoint a highly qualified accountant as an independent arbitrator to advise him.
  My right hon. Friend repeated that pledge today, and I am glad that he did. But, of course, he speaks only for himself unless the appointment of the arbitrator is written into the Bill. I should be out of order on Third Reading if I discussed further amendment of the Bill, but what I think I can say is that we can fairly assume that my right hon. Friend will not be Minister of Transport for ever. Indeed, in giving a promise to appoint an independent arbitrator he limited that pledge to his own tenure of office. Some day we may have a Minister of Transport who is wholly sympathetic towards the railways and totally uninterested in coastal shipping. Such a Minister could dismiss the independent arbitrator at a moment's notice. Since my right hon. Friend intends to appoint an arbitrator, because apparently he believes that it is an essential part of the necessary machinery to bring fair competition between coastal shipowners and the railways, steps should be taken to make such an appointment obligatory on his successors.
  It seems to me that it is not unfair to expect that coastal shipping should receive this measure of security and be confident of the future. It should not remain dependent on the whim of some future and unknown Minister of Transport who may be biassed in favour of the railways and who may not come within miles of the degree of ability which has been displayed by my right hon. Friend, the incumbent at the Ministry of Transport.
  8.5 p.m.
  Mr. Walter Monslow: I do not propose to speak at length, but there are one or two points that I desire to make arising out of the Minister's speech. The right hon. Gentleman mentioned the question of redundancy on which I feel we need some clarification. I sincerely hope that the Parliamentary Secretary will deal with this aspect of the human problem at greater length when he winds up. We have talked about protection for coastal shipping and for certain other interests purely on a materialistic basis. We have not had much regard to those engaged in the industry.
  I wish to ask the Minister about the regulations to which reference is made in Clause 78, which in the original Bill was Clause 79. The Clause reads:
  "The Minister shall by regulations contained in a statutory instrument require the appropriate body as defined in this section to pay, in such cases and to such extent as may be specified in the regulations, compensation to persons who are at the passing of this Act officers or servants of the Commission and who suffer loss of employment or loss or diminution of emoluments or pension rights, or whose position is worsened, in consequence of the reorganisation effected by this Act."
  If I may say a word or two in retrospect, those of us who have had a very long association with the railway industry will recall the Railways Act, 1921, when the four railway companies were amalgamated. As a consequence of the terrific reorganisation which took place, there was redundancy which affected the staff very seriously. This involved not only the loss of men's livelihoods but the breaking up of homes. Large numbers of drivers and firemen had to transfer, for example, from Scotland to Birmingham and from Birmingham to Bristol. The cleaners who were then employed were dismissed the service.
  I should like to know exactly what is meant by "compensation" under Clause 78. There is no indication in the Bill that there is any serious intention to deal with this problem in a way that one would expect. Under the 1921 Act, directors who became redundant were compensated in a very liberal way, whereas the staff received no compensation whatsoever. There was discrimination in the payment of compensation. The white collar workers—I do not use that term in any derogatory sense—received
  602
  reasonably generous compensation whereas the operating grades, the drivers, firemen and cleaners, received no compensation.
  Can the Parliamentary Secretary indicate whether there is to be discrimination as between grade and grade when compensation is paid under the Clause and what will be the basis of it? The Minister is nodding his head as though he is trying to convey that something will be done about this matter. I know it has been said that there will be consultation with the trade unions. I believe that that is necessary. But I think that we should have a clear declaration tonight that there will be no discrimination as between grade and grade when the basis of compensation is determined. It should be much more liberal than it was under the Acts of 1921, 1947 and 1953.
  The Minister indicated tonight that the size of the railways is likely to shrink still further. It will shrink if the suicidal policy which has been pursued in recent years continues.
  Road saturation has reached the stage that it is impossible to move on some roads and certain heavy traffic holds up the private motorist. The Minister says that the customer should have the right to choose how to send his goods. I do not want to deny him that right, but we should consider everything that is involved when he gets it. With road saturation at its present level, the number of deaths on the road alone should mean that any Government who believe in the philosophy of safety first, which is preached continuously, should direct certain heavy traffic off the roads and on to the railways. This would enable us to say that we had resolved the problem by facing it realistically.
  Mr. Hay: I am sorry to have to revert to the earlier part of the hon. Member's speech when he spoke about Clause 78, but I wish tonight to give him whatever assurance I can and I should like to be a little clearer about his meaning in referring to discrimination between grade and grade. Can the hon. Member elaborate?
  Mr. Monslow: Perhaps I may refer to the circumstances which prevailed in the old days under the 1921 Act. In saying this, I make no reflection upon

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  any organisation within the railways. I am dealing with the matter on the basis of equity and justice. Suppose that an engine driver had done forty-five years' service on the railway. His son might have had only ten years' service on the railways, but in his conditions of service relating to holidays and redundancy provisions, for example, he had a far greater measure of protection than his father who had done treble the son's length of service.
  I am asking that there should be no discrimination as between, say, the Stationmaster and the railway fireman or cleaner. The basis of compensation should be one of equity as between the respective grades within the railway service. I know that there is to be consultation with the unions and I believe that the best will be done in the circumstances. My right hon. Friend the Member for Vauxhall (Mr. Strauss) has dealt with the social implications of the statement by the General Secretary of the National Union of Railwaymen. It was dealt with also by my hon. Friend the Member for Central Ayrshire (Mr. Manuel) on Second Reading and by other hon. Members who have directed attention to the social implications of policy.
  Whatever may be said about the Bill, it has gone through all its stages in this House without being altered one iota in principle. To argue whether or not it is a denationalisation Measure is merely playing with words. In my view, the crisis in the railway industry will be a recurring one unless we have a policy of integration and co-ordination whereby all forms of transport—road, rail and canal—work in conjunction to achieve the results that we desire.
  8.14 p.m.
  Mr. Grant-Ferris: I should like to say a few words of godspeed and good will to the Bill on its passage to another place. It has had a long and arduous course. We began early in December and, apart from the Christmas Recess, we have been hard at it ever since. It is probably the longest and most difficult Bill which most of us have had to tackle.
  Two things have struck me about the conduct of our proceedings in Committee which redound very much to the excel-
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  lence of Parliament generally. I refer, first, to the extraordinary good will and good temper of everybody in the Committee. Hon. Members opposite who feel extremely deeply about these matters, have conducted themselves in a wholly admirable manner and have put their case in a way in which they were entitled to do and with the utmost good temper and good feeling all round.
  I have appreciated very much the kind and generous treatment which I and those who support the inland waterway interests in the Bill have received from my hon. Friend the Parliamentary Secretary. The amount of time of my hon. Friend and of the civil servants in his Ministry which our interest has taken up has, perhaps, been out of proportion to the importance of the subject vis-à-vis the railway system.
  This is, however, the first time that we have been able to do anything in a big, comprehensive way for the inland waterways. I am pleased to say that we have done a great deal. I am deeply grateful to my hon. Friend for the time he has given to hearing us and for the interviews which he has given to us, to our legal advisers and to all concerned. He has taken a great deal of trouble. I also thank my hon. Friend for his kind letter to me in which he thanked us for what he regards as a useful contribution in helping him and his Department to improve the Bill. All this tends to show up Parliament in an excellent light.
  I should like also to say—and this is not said patronisingly but with admiration and respect—how much I have admired the leadership by the right hon. Member for Vauxhall (Mr. Strauss) of his side of the House and the Committee. Whenever he rose, I always saw a man who truly had claim to the name "statesman". After a few years in this House, I think I know what that sort of man looks and sounds like. Those are the two things which I have noticed and appreciated most in our proceedings in Committee.
  There is no doubt that the Bill can be a godsend for the inland waterways. The great thing that we have been struggling for years to get is an independent board responsible entirely to the Minister and in no way subservient to any other branch of transport. That we have got.

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  Indeed, the whole system can, and, I sincerely hope, will, benefit greatly from that. We also have the necessary money to do the job and to do it well. With £10 million of grant to be spent over the first five years and a further £11 million, in practice, of loan powers, the new board should be able in that time to make a very good showing. With the advent of the pipe-lines and the most perfect right of way which the canal towpath offers for them we shall be making very soon a substantial profit on the new board.
  I am reliably informed, and it may surprise the House to know, that on the pipe-line from the docks in the estuary of the Thames to Birmingham, along the Grand Union Canal, the annual profit should be as much as £250,000. When one considers that the whole deficit on the inland waterways system is under £1 million a year one realises how that can be changed into a profit when on one route alone a profit of £250,000 can be made.
  Unfortunately, some people outside the House think that my right hon. Friend managed to secure the sum of money which he has been able to obtain from the Treasury only in order to close down waterways. I do not think that they are justified in making that suggestion, because even the Treasury should know that it is more expensive to close waterways than to rejuvenate them. I prefer to judge my right hon. Friend on what he does rather than what he says.
  In saying that I have my right hon. Friend's own words for it, because in the main debate on Clause 10, my right hon. Friend said in Committee:
  "I was a little puzzled on Tuesday when my hon. Friend the Member for Nantwich (Mr. Grant-Ferris) said that the Government had given no word of encouragement to those who have the future of the inland waterways at heart. I wonder if that statement really bears examination. It is not so much what a man says, as what he does."
  Hon. Members then said, "Hear, hear," and my right hon. Friend went on to say:
  "I shall explain what we have done. As Dr. Johnson said, we cannot pry into the hearts of men but their actions are open to observation." —[OFFICIAL REPORT, Standing Committee E, 22nd February, 1962; c. 848.]
  This is what we shall look for from my right hon. Friend in the months that lie
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  ahead. We shall look for action by him speaking louder than his words, and we shall look forward to having a board which will have the confidence of everyone who understands the problem.
  If my right hon. Friend provides this, we shall give him and the board such enthusiastic support that this wonderful heritage of the inland waterways will be transformed into something not to be ashamed of but into something of which we can all be proud. I would not contemplate for a moment what would happen if this did not take place. An hon. Member opposite said something rather controversial the other night about the canal authority, but we have not yet got moving. I believe that the Minister will do what we want him to do and what is the right thing to do. If he does, he will have a great wave of enthusiastic support behind him and eventually we shall have something of which we can be proud.
  8.24 p.m.
  Mr. Manuel: I do not intend to make a long speech, but I think that I should say something on Third Reading after following the Bill through Committee as often as I could, although, at the same time, I had to attend another very important Committee dealing with the Housing (Scotland) Bill.
  We have felt great concern on Second Reading, in Committee, on Report, and now again on Third Reading about the anomalies which we think will accrue through the operation of the Bill. We on this side of the House cannot claim to have been in any way successful in altering the Bill from what it was when the Minister presented it. Nevertheless, on Third Reading we should take the opportunity to reiterate that the sole purpose of the Bill is to establish the principle that railways should operate where profitability can be proved.
  Under the direction of the Minister, Dr. Beeching has undoubtedly had his instructions to present a report which will lay down the economic argument applying to British Railways. This economic reappraisal will be based on conclusions concerning the closing down of certain branch lines and sections of main lines for economic reasons.
  In the bouts that we have had on this topic, especially applying to Scotland, we have been unable to wring from

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  the Minister or the Parliamentary Secretary exactly how they will approach the question in the political sense, quite apart from the economic aspect of Dr. Beeching's reappraisal. We cannot in any way say that Dr. Beeching is not carrying out the job he has been appointed to do, but I would emphasise that a great responsibility now rests on Parliament, and I hope that the Minister will allow Parliament to assume its responsibility and make decisions. This responsibility will rest on Parliament following Dr. Beeching's report to the Minister.
  I have in mind particularly vast stretches of the railways in Scotland, including the main lines stretching into the crofter counties, which are very busy during the restricted summer holiday period in Scotland, but are not paying, when I say that I should like the Parliamentary Secretary to tell us that Parliament will have some say about their being lopped off. It should be borne in mind that already about 30,000 workers migrate from Scotland to England and abroad every year. I am concerned that the cutting down of railway services in Scotland will cause a further exodus of population, especially from the Highland counties, because there will be no livelihood there for the people concerned. It certainly will mean the exodus of all the railwaymen there, for it will mean the closing down of depôts.
  I do not know whether English or Irish Members of Parliament are anxious about the problem. I hope that they are and that they recognise that this House has an obligation to outlying districts as well as to the large aggregations of population where lucrative trade can be an inducement to better railway services. I hope that the Parliamentary Secretary will be able to reassure us that, following Dr. Beeching's report to the Minister, Parliament will have an opportunity to decide what areas ought to be kept open, in spite of the fact that the services there are losing money, because of the social consequences which would follow closure. The problem applies not only to Scotland. Large areas of the country west of Bristol and right into Wales will also be affected.
  The Minister rather glibly answers us
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  by pointing to the Post Office occasionally when we draw a comparison. A 3d. stamp has to take a letter to all the outlying areas, from Ross and Cromarty down to Argyllshire and various other parts of Scotland. The postman has to go to isolated Highland crofts to deliver letters on which is a 3d. stamp. The Minister says that this argument does not apply to the rail-ways, however, because the Post Office is a monopoly and the railways are not.
  The right hon. Gentleman is quite wrong, however. In many respects, as my right hon. Friend said, the railways are a monopoly in certain areas. Indeed, in more and more areas are they becoming a monopoly. For the edification of the Parliamentary Secretary, I will explain, having been a working railwayman, how in some parts they have a complete monopoly of certain goods traffic. There are also many areas where, because of uneconomic returns, the bus services have been withdrawn so that the only transport available is the railways. That means a monopoly in passenger traffic.
  Mr. Hay: Can the hon. Gentleman tell me of any part of Britain, even in remote parts of Scotland, which has railway lines but no roads? Private transport can travel on the roads.
  Mr. Manuel: That would be a very good argument if everybody were earning a salary similar to that of the hon. Gentleman and could own a car. But there are many thousands of poor Scottish fishermen and Highland crofters and many thousands of people in Wales and other areas which are to be denuded of transport who cannot afford a scooter, far less a car.
  That sort of thing must be recognised. We have between 8 million and 9 million workpeople still earning £9 a week or less. A man cannot run a car on that wage. Indeed, it is difficult enough to keep a family on it. There are many people in steady employment who are, nevertheless, almost on the National Assistance line. That is the position under the Tory Government. It is another side to the picture, and I hope that the hon. Gentleman will look at that as well.
  I said that I would make a few remarks about monopoly in traffic. Our

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  various steelworks produce very heavy castings. I have taken many trains out of Glengarnock, in Ayrshire, carrying 60 ft. steel rails for export. Does the hon. Gentleman say that they should go by road? Could they go by road? If they cannot, is not their carriage a complete monopoly for the railways?
  Mr. Mellish: If they are not economic loads for the railways, they will have to go by road.
  Mr. Manuel: That is so. I hope that the Parliamentary Secretary will recognise that, in certain respects, the railways are in a monopoly position for the carriage of certain goods. It is with this aspect that I am concerned.
  Much has been made of the possibility of pipe-lines being laid alongside our railways. There could be a good economic return to the Railways Board in laying and owning pipe-lines for the conveyance of oils or other effluents over fairly lengthy distances. In Committee, I expressed my hope that there would be a protective Clause in the Bill in connection with this, but the hon. Gentleman said that we should wait for the Pipelines Bill, which is now in another place. I have not studied the implications of that Bill yet, but we must bear in mind the importance of pipe-lines in this context.
  We have in many areas—I think everywhere where there are railways—local authority sewerage pipes or water mains on railway embankments, and, in many cases, crossing the railway lines. If we have an important pipe-line going through, it will possibly cause some disturbance, so that the compensation aspect of this matter from the point of view of the local authorities should be kept in mind. I do not think that these old customers, if I can call them that, should be treated as if they did not matter. We ought to be polite about this, take them into consultation, if we are to have these pipe-lines, and make certain, as I think we could, that the whole thing is carried out in a harmonious manner.
  My hon. Friend the Member for Barrow-in-Furness (Mr. Monslow) has referred to compensation arising from various aspects of redundancy. I dealt with that at some length at Committee, and I do not want to go over it again
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  now. Undoubtedly, as I see it, Mr. Sidney Greene might not be far out in the estimate, which he made today in speaking at the Scottish Trades Union conference in Aberdeen, that 150,000 jobs will be redundant. We do not know the length to which Dr. Beeching's economic reappraisal will go, or how the Minister will apply it. This is a mystery. We have not been able to probe the greater minds who are dealing with this problem, but there will undoubtedly be dismissals. There will undoubtedly be many thousands of men who will have their grade position worsened, and it is these men about whom I am concerned.
  We might have a man reduced from being a locomotive driver on a main line to a fireman on a lesser one, and having to shift his home because his former locomotive depot has closed down. I do not know how we shall face the question of the provision of houses. There will be great hardship. Clause 78 of the Bill makes provision for any worsening in a man's position, but if a man is moved down from being a top driver to receiving the bottom rate of pay in that grade, and possibly losing £2 or 30s. a week, or whatever it may be, I think that he ought to be compensated if it is a direct result of the operation of the Bill, or because of a contraction through Dr. Beeching's economic reappraisal.
  Mr. Hay: I am sorry to interrupt the hon. Gentleman again, but a very clear distinction is made in the Bill between people whose position is worsened as a consequence of the reorganisation effected by the Bill and people whose position may be worsened as a result of any contraction of the system which is due largely to operating, financial, economic and other causes. What we do here is to take power for the Minister to make the regulations under Clause 78, as was done in the case of the 1947 Act, to deal with cases in which people's position is worsened simply and solely because of the reorganisation effected by the Bill.
  Mr. Manuel: I appreciated what the Parliamentary Secretary has said, but this will be very difficult. I know what happened after the 1921 and 1947 Acts.
  Mr. G. Wilson: I have been listening very carefully to what the hon. Member has said. He can remember the 1920s,

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  as I can, and what happened in the railway service. Is he not exaggerating this matter, because in the 1920s there was heavy unemployment and contracting industries throughout the country, whereas today the reverse is the case. These men, who are highly skilled, might very possibly find bettter paid jobs than they now have.
  Mr. Manuel: But a locomotive driver is not like a solicitor, who can move from one office to another and get a job in another type of business, possibly dealing with pipe-lines or conveyancing. That is very easy to do, but if a man has been driving locomotives for forty years he cannot go into another job as easily as that. His job is part of him; it is his life. I have been dabbling in politics all my working life, and have possibly been attending meetings for as long as I have been working on the railway. Nevertheless, I say quite seriously that this would be a very serious thing indeed for a driver who has been in the railway service for forty years and who cannot expect to get another job. I hope that that will be considered.
  I hope that when the regulations are brought in to deal with the various facets of redundancy arising from reorganisation, all this will be considered. I want the regulations to be flexible enough to allow the trade unions to be able to prove whether that is so. We have already had an assurance from the Parliamentary Secretary, in Committee, that when the regulations are introduced, under the affirmative Resolution pro, we will have an opportunity to debate them and to strengthen them if we can manage to do so.
  My right hon. Friend the Member for Vauxhall (Mr. Strauss) mentioned the policy that thought success could be achieved merely by putting up fares and getting a return large enough to make operations worth while, even though several thousand more railway customers were lost. That is happening whether we like it or not, because of the competition of air travel. The railways are having their largest percentage losses on routes between Scotland and England because first-class travellers have found that it pays them to fly to London and spend an extra day here. I do not blame them. We must recognise that this traffic will not return to the railways.
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  A constituent wrote to me last week and pointed out that he lives near Kilmarnock and travels to London by rail as a first-class passenger. He is one of those who prefer to stick to the railways. The first-class return fare from London to Kilmarnock is £11 17s. Kilmarnock is one hour short of Glasgow, two hours short on the return journey, but the first-class return fare from Glasgow is £10 16s., a guinea cheaper. My constituent remonstrated about this and found his loyalty as a railway passenger was strained to the utmost. He was told that because of the competition of air travel from Glasgow, the railways had had to lower their fares from Glasgow.
  That was not much of an answer. Nor was it very realistic, because the first-class air return fare from Glasgow to London is £18 and I would have thought that there was a large enough margin between that and £10 16s. or £11 17s. for the railways to be able to compete. My constituent wrote to the area railway manager and said that he objected to paying the extra guinea. He asked whether it would be all right if, when he was in Glasgow on business, he bought a ticket for £10 16s., but joined the train at Kilmarnock, thus saving a guinea. He was told that that would be permissible. In fact, he was advised that he could do it. That is a completely ludicrous situation.
  I should like Parliament to give an impetus to the trial of a cheap fares policy. It has never been tried, but I am convinced that thousands of people who come from Aberdeen, Glasgow, Dundee and Edinburgh to London by bus every summer do not do so because they like coming by bus, but because it is cheaper than coming by train. If we could compete with the buses by having cheap fares, I am sure that we could draw passengers back to the railways. I hope that we shall approach the future in that sort of spirit rather than in a spirit of contraction of services and higher fares, which, inevitably, can only lead to smaller and less profitable railways.
  8.45 p.m.
  Mr. John Howard: I do not wish to follow the hon. Member for Central Ayrshire (Mr. Manuel) in his comments on the respective merits of fares from Kilmarnock

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  or Glasgow to London, but I think that we all note the point made by him. We admire his athletic prowess in serving on two Committees upstairs and in being able to get from one Committee Room to another to register his approval or disapproval from time to time on various Amendments.
  In his opening remarks the right hon. Member for Vauxhall (Mr. Strauss) said that the Bill was practically unaltered. I want to restrict my comments to Clause 53 which has been materially altered by the Amendments which my right hon. Friend tabled and which have been incorporated in the Bill. Until these Amendments were incorporated in the Bill, coastal shipping was open to the full blast of unrestricted competition from the railways. The old safeguards in the old 1921 Act had been swept away and coastal shipping was left virtually defenceless.
  The question now arises, particularly on Clause 53 as redrawn, whether the present provisions will prevent coastal shipping from becoming a casualty, or whether it will be able to continue to operate competitively with the railways. If we are examining the new provisions, we must look at the formula which the Minister enunciated this evening, the formula for dealing with the particular problems which the coastal shipping interests have put to him.
  I make no apology for devoting the whole of this time to coastal shipping because it is an aspect of transport which has been neglected in the debates on this Bill. There has not been the same opportunity to speak about it as about railways, but from reading the reports of the proceedings upstairs I think that the most telling speech on this subject was made by my hon. Friend the Member for Brighton, Kemptown (Mr. David James) who outlined the problems with which coastal shipping would be faced if Clause 54 as it was, and Clause 53 as it now is, went through without Amendment.
  There are certain tests which I think we should at this stage apply to Clause 53 if we are to express an opinion on whether it has achieved its objective. The first test that I apply is to ask myself whether there are means of preventing the railways from taking freights from coastal shipping on the long haul by quoting
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  rates which are unrealistically low. In other words, can the railway companies be prevented from quoting unrealistically low rates, rates which would ignore, or partially ignore normal overheads, interest and depreciation, together with additions for the replacement of assets in the normal course of business? These are normal items which must feature in the costing of any commercial and competitive undertaking, and coastal shipping falls within that definition.
  As I read Clause 53 (2, a), the Minister may make directions if the charges by the railway on a long haul are
  "inadequate having regard to the full cost of affording the … services"
  which are the subject of those charges. I hope that the word "may" which has appeared instead of the word "shall" does not indicate any lack of determination on the part of my right hon. Friend to make directions if the case is proved.
  Mr. Popplewell: Does the hon. Member agree that it would also be in the best interests of safeguarding our coastal shipping—a very important feature of our national life—that some discussions should take place with the road hauliers, who are also very severe competitors of coastal shipping?
  Mr. Howard: I observed the hon. Member's intervention when the Minister opened the Third Reading debate, and I know his views. I do not intend to be drawn into that aspect of consultation, although I hope that there will be a degree of consultation between the coastal shipping industry and the railways on the subject of freights, thus perhaps avoiding the need for any arbitration, or any necessity for the referee to intervene, so that the problem of deciding what full charges are may never have to be asked.
  The second test which applies to the short haul can best be expressed by asking this question: does the Bill prevent the railways from making excessive charges on short hauls—that is to say, where the railway has a monopoly? A classic example is the track connecting a coal mine to a port. The pit to port charges may be monopoly charges, and if the railways raise their freight charges to unrealistically high figures the coastal shipping freight rates must be adjusted to take account of the railway

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  charges which coastal shipping must incur in collecting freight, especially coal freight, from the pit.
  Mr. Manuel: If there is a monopoly.
  Mr. Howard: Exactly—where a monopoly exists on that stretch of track.
  The same formula seems to be applied, with the exception that in this case the test is whether or not the full cost of affording the services is excessive in relation to the conveyance of coal freight from pit to port. I notice that the short haul, as defined in the Bill, is restricted to the haul from the original destination, from the pit to the port, and does not cover the journey from the port to the ultimate destination of the cargo—in other words, at the far end of the journey, when the coastal ship discharges at the port and then has the task of delivering the cargo to the customer. I do not quarrel with my right hon. Friend for omitting this section of the journey from the provisions of the Bill provided he is satisfied that alternative means of transport are available at this end of the journey, thereby avoiding the creation of the monopoly situation to which the hon. Member for Central Ayrshire has just referred.
  The third test of the adequacy of my right hon. Friend's Amendments to Clause 53 hinges on the way in which the formula for the full cost of affording those services is to be operated. The formula seems quite reasonable, and the decision to ask accountants to apply it also seems acceptable. I must declare an interest in that I am an accountant—
  Mr. Ellis Smith: A very good job, too.
  Mr. Howard: —and I can see that it should be possible to work a formula Which incorporates this phrase, the fall cost of affording a service. I should like to make one proviso. This formula can be worked only if the information about railway costs and freight rates is available. It must be available to the accountant, or the referee, or whoever it may be who has the task of applying the formula, before he can determine the full cost.
  There is a further qualification, that of time. The Minister's intervention, his
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  decision to make a direction where there is cause for such a direction, must be rapid. Otherwise the freights which are the subject of the dispute will be lost to the railways, by coastal shipping. They will be lost not just for that journey but for ever.
  In the original Clause 53, to which I must not now refer, some reliance was placed on the introduction of a referee. I should like to know that the introduction of accountants covers this desire— a very necessary desire—for a referee, not only to obtain information from the Railways Board but also to interpret and apply it to the freight rates which may be in dispute. Certainly, as I have already intimated, accountants would be acceptable to me provided prompt action can be taken when recommendations are made to the Minister and also on the assurance that there will be full information available to enable the accountants to carry out their work.
  All hon. Members interested in coastal shipping will make a careful study of what the Minister said earlier in this debate. The right hon. Gentleman mentioned the need to decide on the size and shape of the railways. It would be disastrous if, in achieving a right silhouette for the railways we swept out of existence another industry, a private enterprise industry, such as coastal shipping. Clearly it would be quite wrong if by ignoring proper commercial costs a nationalised industry was enabled to compete unfairly with a private industry, particularly one with the fine traditions of coastal shipping, which provides its own finances and which has to face the commercial facts of life.
  The Amendments to Clause 53 provide the minimum safeguards, and it is to be hoped that the coastal shipowners and seafarers—because they are at one in their approach to this problem—will receive what they desire, namely, fair trading conditions. If that has been achieved by the Amendments, I feel that the industry will be satisfied.
  Mr. Mapp: I am anxious that the coastwise shipping trade should have a square deal. But it is the fact that operators in that trade are also interested in trade to the Continent and in other forms of trade. Would the hon. Member be prepared to ensure that the

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  freight rates for the coastal trade carried out by these people—many of whose vessels are foreign-owned and operated —have no built-in subsidies? Would he be prepared to agree that their rates should be examined as closely as he is asking that the rates of the Railways Board should be examined?
  Mr. Howard: I think that the point there is that the coastal shipping rates are publicly quoted. It is not possible to obtain quotations from the railways, otherwise railway rates would be disclosed not only to competitors in coastal shipping but also in road haulage. However, I appreciate the point made by the hon. Member for Oldham, East (Mr. Mapp). It may well be that there is a case for examining the whole of the coastal shipping operations not only in relation to trade round our coasts but also trade on this and on the other side of the Channel by vessels operated from Continental ports. I thank my right hon. Friend for his Amendments to the Bill which certainly goes a good way towards meeting the Amendments which some of my hon. Friends had originally proposed.
  9.0 p.m.
  Mr. Spriggs: The most significant aspect of the Committee stage was that the Minister refused to accept any Amendments. There were thirty-odd sittings at which hon. Members exerted great patience and as a result of which they were obliged to take their meals often late in the evenings. I regret that the Minister put in very little time in Committee, but threw the burden on the Parliamentary Secretary who, on a number of occasions, found it difficult to answer questions put to him.
  Both the Minister, when he attended, and the Parliamentary Secretary said in Committee that the Government's intention was to give the boards greater commercial freedom. I regret that their interpretation of that phrase is not in line even with the views of hon. Gentlemen opposite. If the same kind of commercial freedom were offered to the Minister's personal friends and hon. Gentlemen opposite they would soon tell him and the Government where to get off, for they would not have it.
  I wish tonight to refer to certain figures which I mentioned only briefly
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  in Committee. It must be remembered that when the Minister refers to commercial freedom he had, by the terms of the Bill, put himself in such a position that none of the boards may take a major decision without first referring their proposals to him and gaining his permission, apart from that of the Holding Company.
  Just what will the Holding Company take over? In an attempt to answer this question, I will consider What happened between 1955 and 1960. I could consider other years but I do not wish to weary the House. The figures for 1955 to 1960 are very telling and they provide the reason for the Government's action and also for the wording of the Bill, particularly Clause 29 (9). I have taken from the Fourth Schedule the names of seventeen undertakings which will go over to the Holding Company, including provincial and Scottish bus companies, the Tilling group and the Scottish group. I am sure that these figures are correct, but if any hon. Member wishes to contradict them I will willingly give way.
  In 1955 £7,400,339 was received by the British Transport Commission by way of receipts from investments. In 1956 the total was £6,645,130 and in 1957—and I am taking the same companies—the figure was £6,243,679. In 1958 the figure was £7,214,038; in 1959 it was £7,878,136; and in 1960 total receipts from investments in these same undertakings amounted to £7,833,934.
  When one looks at these very healthy investments one can see the motive for wording subsection (9) of Clause 29 as it appears in the Bill. Let me read this subsection, because it is very important.
  "(9) The Holding Company's surpluses may with the consent of the Minister, given with the approval of the Treasury, be retained for the purposes of the conduct of their business, and, except so far as they are so retained, shall be paid over to the Minister and be paid by him into the Exchequer; and so much of the sums so paid into the Exchequer as is of a capital nature shall be issued out of the Consolidated Fund at such times as the Treasury may direct, and shall be applied by the Treasury in redeeming or paying off debt of such description as the Treasury think fit."
  If the Government had any principles at all they would withdraw the Bill now. The Minister and other hon. Members today referred to the deficit being written off. I say to the Minister and to his

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  hon. Friends that if the railwaymen had received fair wages for their labours over many years the deficit would have been far larger. The reason why the deficit is not much larger than it is today is that much of the railway work of the transport services has been carried on the backs of railwaymen who have been sadly underpaid. When the Minister talks of commercial freedom one has to look around to see where that freedom is.
  Criticism has been made of the British Transport Commission losses. As a railwayman who has played a leading part in trying to get justice for railwaymen, I also want justice for the railway management. It is unfair to talk about the use of public funds for publicly-owned industries. If we look at the 1961–62 Estimates of aid to private industry by way of grants, subsidies and so on, it is interesting to see what the railways would get if they were given 50 per cent. of what is given to private industry. From what the Minister told us this afternoon, it would seem that the railways constitute the biggest industry in the world, employing over 500,000 men who have suffered for years. The Minister now refuses to accept the principle of Guillebaud in future wage negotiations. Here we have the railwaymen rapidly falling behind the rest of the industrial workers in their standard of life.
  Let the House consider the effect of treating the railways only half as well as private industry is treated. We are in favour of putting money into industry to revitalise it. We do not say to the farming fraternity, "You are not entitled to this." We are in favour of it. We support the development of industry. We will vote with any Government which will keep the various industries on their feet and keep the workers fully employed, giving our craftsmen the ability to show that British workmanship is the finest in the world.
  If there could be agreement to subsidise the railways as freely and without repayment of any kind as we do those industries to which I have referred that would greatly help the industry. Agriculture receives £348 million a year. If we gave the railways half as much, that would be £174 million a year. If we
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  took half the amount which we give to the distribution of industry, which was a total of £8 million, the railways would have a further £4 million. If we took half of what we give by way of grants to the aircraft industry, a total of £8 million, that would be a further £4 million to help this great transport industry of ours. Research and development in the aircraft industry receives £160 million. Only half that amount would be £80 million for the railways. A further £10 million is given for the development, improvement and production of transport aircraft, half of which would be £5 million a year for the railways. Are we asking too much for this great transport undertaking?
  I submit to the House that hon. Members opposite today have proved beyond doubt that they believe in discrimination to the disadvantage of publicly-owned industry. Back benchers on the Government side have stated that they have no qualms about Tory philosophy. Clause 29 (9) was referred to this afternoon, and one hon. Member opposite stated that his right hon. Friend should not hesitate to sell off these very lucrative undertakings. We took notice of the very important statement of the Minister when he followed up his hon. Friend by referring to the selling off of these undertakings. There is no doubt at all that there is room for serious disquiet in the railway industry. I believe that we have a duty to look at the reason why the holdings which are listed in the Fourth Schedule, in lists A and B. should remain in the hands of the Railways Board when this Bill becomes law. They represent the income of the Transport Commission until such time as the Bill becomes law. From that date onwards the Holding Company will collect all these profits from investments and will hand them over to the Minister who in turn will hand them to the Exchequer.
  If this is commercial freedom, as the Minister calls it, I believe that we should give publicly-owned enterprise, no matter what it is, through the boards that are to be set up, commercial freedom. Commercial freedom should mean freedom and not the empty, meaningless words which we have had poured out in Committee upstairs and later yesterday and today on the Floor of the

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  House. There is no intention of giving publicly-owned enterprise any commercial freedom. If the same standards were to be applied to private industry, hon. Members opposite know that they would not have commercial freedom. They know that the Minister's statement is nothing less than a lot of humbug and hypocrisy. He is covering up this very important Clause 29. In Committee, we opposed Clause after Clause for months, but, of all the Clauses in the Bill, Clause 29 is the most important. The rest of it is dressing to cover up what, in my opinion, is the first step towards denationalising the publicly-owned railway undertaking.
  9.15 p.m.
  Mr. Prior: I cannot agree with the hon. Member for St. Helens (Mr. Spriggs) in much of what he said. He referred to the wages paid to railway workers. I am sorry that the hon. Member for Norfolk, South-West (Mr. Hilton), who represents the National Union of Agricultural Workers, has gone out. He will know that for years I have been saying that the only way to ensure that agricultural workers are paid a decent wage is to get a lot of men off the land and run the farming industry efficiently and economically. I am sure that the same applies completely to the railway industry. We must get men off the railways in order to pay those who are left a proper decent wage. Once that happens, we shall have a far better railway service than we have today.
  Mr. Popplewell: Good heavens.
  Mr. Prior: Anything which we say to the contrary is plain bad economics and will not help the very men that the Opposition always say they want to help. I am firmly convinced that that is so. However, that is not my main purpose in rising to speak. I wish to discuss Clause 29 and to examine the principle underlying the possibility of selling the manufacturing interests.
  I am not against the denationalisation of anything. I do not believe in nationalisation and, therefore, I cannot possibly object to denationalisation. I think that it was wrong in principle to allow the nationalised industries, with their opportunities of borrowing or obtaining credit from the Government,
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  and with someone else standing their losses, to manufacture in competition with private enterprise. I accept that entirely, but I think that in the case of Bristol Commercial Vehicles and Eastern Coach Works a rather different principle is at stake.
  In this case we have the principle of a private enterprise company, as a matter of prudent investment and management of its affairs, using these two companies to build its commercial vehicles, the companies having been nationalised along with the bus operators under the 1947 Act and continuing in that way. In this case, I think it is a mistake to think of selling off those companies and leaving the bus operators separate from them. Since they were part and parcel of the organisation, they should stay in that position.
  I took the Minister's words tonight not quite in the way that the right hon. Member for Vauxhall (Mr. Strauss) took them. I understood from what my right hon. Friend said that he is willing to direct, or will direct, the Chairman of the Holding Company that he may sell off the three manufacturing companies if he receives offers which independent accountants regard as reasonable and good. I do not think that I can object to that, but we want a guarantee that if those companies are sold the price paid for them will be a good one and that the advantages to the Holding Company in selling those undertakings are greater than their loss would be if they lost them. I hope that the Chairman of the Holding Company and the Chairman of the Tilling Group will be closely consulted before any such move is made.
  I wish to examine the attitude of the workers in the factories concerned. My opinion is that they have nothing to lose. They will either go on working for the Holding Company or, if the companies are sold, they will be working for private enterprise. I do not think that there will be any disadvantage to them in working for private enterprise because the Chairman of the Holding Company will have received a sum for those companies which will mean that the factories will have to be worked in much the same way as they were before because the companies which bought the Eastern Coach Works Limited or Bristol Commercial Vehicles Limited would lose a

  623
  lot of money which they could not afford to do. I am assuming that they would be sold at a very good price. Provided that happens, the workers would not suffer in any way.
  There are, however, certain conditions which should be fulfilled in fairness to the workers. From now on, they will undergo a period of some uncertainty. They have now a full order book and future employment for them for the next year or two will be no trouble. But they will feel from now on that there is a chance that they will have a fresh management. This period of uncertainty should be as short as possible. I hope that my right hon. Friend, when he winds up, will say that he will not extend this period of uncertainty any longer than he thinks is absolutely necessary. If, for example, he says that from vesting date he will allow a year for a decision to be reached and that after that time the Holding Company, if the companies are not sold, will have full powers to carry on under Clause 29, that will be fair to the workers. However, at the moment, I feel that the workers need have no fear, and I am glad about what my right hon. Friend said on the decision that he hopes will be reached.
  Clause 9, which sets up the Docks Board, will have a considerable bearing on my constituency. I am not sure what powers the Board will have to sell ports if it wishes to do so. My own port of Lowestoft, mostly a fishing port, has recently had considerably increased charges levied on it by the British Transport Commission. There is a feeling in the fishing industry that the port is not being run as efficiently as it should be run and that these charges are rather higher than is necessary. I am wondering whether when the Docks Board is in being there will be an opportunity for the fishing industry or for some other corporation to buy out the harbour and to run it. I wonder what my right hon. Friend would have to say about that.
  All these things apart, I think that the Bill is a good Bill. Change is unpleasant for everyone. We always like to keep the status quo. I am, however, certain that these changes have to be made and will be to the great advantage not only of those who travel, not only of the taxpayers who foot the bill, but also, in the long run, of those who, cer-
  624
  tainly in my eyes, are most important— that is, the people who work daily on the railways, on the roads and in the workshops. In the long run, these measures, although they may seem unpopular now because they involve change, will be to the advantage of those people.
  9.25 p.m.
  Mr. Mapp: In reflecting on the Bill, I wish to make a comment on the speech that we have just heard from the hon. Member for Lowestoft (Mr. Prior). Star Bodies, one of the three firms that seems to have occupied the attention of the House—and bearing in mind the big picture with which we are involved, these relatively small firms do obviously useful work for the appropriate parts of the Commission—is located in the town part of which I represent. I can say unreservedly that any assurances concerning the movement from general employment within the nationalised industry to private enterprise will not afford these people any satisfaction.
  I happen to belong to the same kind of organisation of Transport Commission employees as they do. In saying that I have, perhaps, declared an interest in that I was recently with the railways. Having said that, however, I want to think aloud a little because we have now reached the stage when, before long, the Bill will become an Act.
  When I reflect on the causes which have given rise to the Bill I am bound to say that it is a problem which has been forced upon the Government. It is not a decision arrived at by rational thinking. The Bill is born of necessity. The Minister and his Government cannot in any way feel that it represents constructive thinking to meet the new age and the new pattern of railways that we shall want.
  Let us be quite frank. The Bill is the result of two major problems. One is the tremendous financial liabilities that have overtaken the Commission over the last six years. I do not want to be too political, but it is obvious that those financial liabilities have coincided with the present Government and their predecessors. That is a statement of fact. I do not wish to draw any great significance from it apart from moving away from the political field to new

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  directions in which most of us—I do not confine myself to either side of the House—consider that we must move.
  Allied with the financial problem, the Government were faced with industrial difficulties arising from the fact that railwaymen were underpaid, as they have been for many years and are likely to be for some time. I understand the lives of these people well enough to know that the Government, therefore, will not necessarily have a contented labour force. One hopes otherwise. I would be the last to do other than try to get a happy and contented team. I beg the Minister and others to be careful in those relationships. What has happened was accentuated by the fact that two years ago the Prime Minister himself had to intervene. We now see the long-drawn-out consequences.
  The Bill contains nothing apart from the generous recognition and writing off of the financial liabilities of the past. Any Government would have had to face this. It should then become necessary, however, for the Ministry of Transport as a result of its researches to indicate the lines of strategy by which the losses of the past can be avoided.
  The Bill is full of hopes and promises, but there is not one economic yardstick in it which will show to the Railways Board how it can obtain a better financial return in the next five years. The Minister and the Government this year and next year are to put in the hands of a railways head, with not much more than a few month's experience, an Exchequer grant of £150 million a year over which the House will have practically no control. The out-turn next year which the Chancellor will meet is not a figure which the House will be able to decide at all. It will be decided by the B.T.C. this year and by the Railways Board and the Inland Waterways Board the year after. Is this the kind of financial scrupulousness that one would expect from the other side of the House? I am always interested in making sure that financially both ends meet, but we have here, as I said in Committee, an open-ended subsidy which has latent dangers, as everyone will recognise.
  I tried in Committee to make a suggestion which represented a minority view. I wish to have applied some yard-
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  stick by which subsidies could be measured in future. I should like the railways to become viable. I doubt whether that is possible on this crowded island, but I am sure that the House will agree that what subsidy is paid should be as small as possible, having regard to the fact that railways are a national service and we want efficiency throughout the system. I believe that before long the pundits will reach a conclusion which I reached long ago. The Parliamentary Secretary said that the railways were losing their public, who were preferring some other means of transport. But to say that is to beg the whole question. Eight out of nine people depend upon shanks's pony, public transport or a bicycle. All people do not own motor cars. We have been neglecting those who have to rely upon the more elementary forms of transport. We must provide for them.
  Anyone who costs transport by rail in terms of movement of freight traffic, and similar transport by motor fleet on the roads, finds before long, politics apart, that road freight traffic travelling one-third of the time empty and two-thirds of the time reasonably loaded does not pay anything like its share towards the maintenance of the roads, which are provided free, and towards the cost of policing them. The Minister will have this headache in the autumn. It would be useful during the next few months, without prejudice, to find a fair basis of costing between railway movement and road movement, particularly on the freight-carrying side.
  Invariably, when we discuss railway finances we are presented with the figures for the private motorists, who must always be permitted to have their own choice, though it is noticeable, in passing, that three-quarters of the private cars are not owned by those who use them. The business world is itself finding motor cars useful for its executives and salesmen. Consequently, the railways have to face this menace.
  The basic costings of the direct overheads falling on railways as opposed to freight road operators are uneven, let alone the operations of the Chancellor of the Exchequer. It is not just a question of people deserting the railways. Let us be analytical about this. People are deserting the railways because of the

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  cost. The chief considerations affecting the choice of a means of transport are speed allied with comfort, safety and cost, and in the long run the cost factor prevails.
  The basic costs have been uneven ever since we have had railways. The railways have to carry all their own track costs, policing costs, and so on. When in the autunm the very nebulous statements about the costings of freight and other types of traffic on railways are put forward by Dr. Beeching, I hope that every hon. Member will try to appreciate what is happening. First, these costings are based on insecure basic costings to start with. Also, there is involved in this picture of unfair costings something which anyone in transport recognises, and that is the problem of the rigid track as against the road. These are some of the problems.
  As to the problem of track costing, I hope that from the subsidy will be allocated a sum—this sort of thing is regularly done on the railways—to the Railways Board to meet its track maintenance needs and safety precautions which we insist upon to a greater degree in respect of the railways than we do on the public thoroughfares.
  If the House is prepared to face what is already faced in many other countries, we shall have a yardstick which will enable us to measure and which can be tied to a given cost. This will help us to deal with the vexed problem of branch lines. I am not one of those who argue that branch lines must be retained in every case because history is that way. My view, frankly, is that once we have allocated to the branch lines a fair share of money from the public purse to deal with their tracks and policing and we find that the public are not using certain lines, those lines should be closed. Do not let us be afraid of moving into the new world.
  I would say, in passing, that I do not lack the courage to tell my railway colleagues that we must begin to visualise the country station of the future, and even stations for towns of 10,000 or 15,000 inhabitants—with all the toilet facilities, booking offices and other things that we have been used to in the past—in a different form. The time is coming when tickets will be bought on
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  the trains and when only in the major centres will a central booking office be justified. I hope that my brother railwaymen will not be afraid of this sort of development. The railways should not be expected to put in toilets and weighbridges, any more than are bus companies. I see no reason, in this new era, why all trains should be moved under the custody of two people—the driver and the guard.
  My last point concerns the position of the Minister himself vis-à-vis the proposed Advisory Council. I have felt throughout that this proposal was a piece of window-dressing. I should like to feel that that is not the case, but the Bill destroys the very close and defined links between the British Transport Commission and its various associated bodies. The Bill does not give many teeth to the new Council, although I am still prepared to hope that the right hon. Gentleman will see the light.
  The Minister could get that Council to do a real job of work. Not many Clauses of the Bill deal with the Council, and not a lot has been written into the Bill prohibiting the Council from doing a big job of work. Obviously, much will depend on the Minister. If he merely uses it as a tool for achieving what he wants to achieve, following the political dogma of his party, then the Advisory Council will become illusory.
  On the other hand, if we have a Minister interested in giving Britain a transport system able to do the necessary job of work, and one who is prepared to give the Advisory Council a first-class backroom staff and allow it to initiate ideas and thoughts, it may be able to do something worth while. But if the Minister, as the Bill more or less implies, makes sure that the Council thinks only of those things he wants it to think about, it might as well not be born.
  There is still, of course, hope that time and tide will change. There is a chance for the right hon. Gentleman to introduce into the Advisory Council not only the chairmen of the respective boards but also people from outside—from industry and the unions and elsewhere. I beg him not to take in yes-men but the type of man who is, perhaps, not too interested in politics but is concerned with seeing that the sinews of movement for people

  629
  and goods shall be responsive, efficient and effective. The right hon. Gentleman can bring that about. I trust that he may live up to that hope.
  9.44 p.m.
  Mr. Popplewell: We are now coming to the end of what has been a hectic time for many of us. There have been 35 sittings of the Standing Committee, filling about 1,829 columns of HANSARD. That shows the amount of work which has been done in Committee on the Bill.
  I want to join with the Minister and my right hon. Friend the Member for Vauxhall (Mr. Strauss) in paying a compliment to the Parliamentary Secretary. These will be about the only words I am going to say during my contribution to this debate which will be palatable to that side of the House. Although we have opposed the Parliamentary Secretary vehemently during the passage of the Bill, we on this side of the House realise the terrific task which he has had to undertake, and how he has had to take the full weight of the Committee stage on his own shoulders.
  The Minister himself came into the Committee only every now and then, entertaining us with some witty observations, but evading the real issues, while the Parliamentary Secretary has nobly defended the position on an extremely sticky wicket, to say the least. Though the Parliamentary Secretary may not like it, we on this side are quite sincere in the observations which I have made about him.
  Having said that, I also agree with the Minister that the Bill illustrates the very wide difference of opinion between the two sides of the House. We both accept that, and we approach the whole matter from that point of view, but when he tries to tie that up with his regret that there should be political interference in transport matters, and suggests that there should be a more reasonable line of approach, I think that this is very odd, especially when the right hon. Gentleman is the sponsor of such an atrocious Bill as this.
  The Tories seem to suggest that this matter should be approached in a non-political way. They do that not only in transport, but in many other things, provided that everyone accepts their point of view. It is then all right and becomes
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  a non-political question. What a lot of nonsense this is. We have seen since 1951—and I do not hesitate to repeat here what I said in the Second Reading debate—23 attempts to legislate on transport matters since the Tory Party took office. Not all of them have been official Tory Party Bills. Many have been private Members' Motions, but 12 have reached the Statute Book and this is the thirteenth in ten years.
  The Minister talks about approaching this matter from a non-political point of view. The whole essence of what has taken place during these ten years indicates the political nature of the line of approach of the Tories on transport questions. First, they attempt by purely doctrinaire measures to break up a system which has been developed efficiently and which was paying its way, in spite of the attempts of the Conservative Central Office, Ministerial handouts and propaganda points made by Tory back-benchers to suggest that the 1947 Act was a failure.
  The 1947 Act was a complete success, for not only did the railway system pay its way, something which was never done in transport in the years between the wars, not only did it meet all obligations, but it made a profit. It is since the Tory Party took control in 1951 that we have had this accumulated deficit of £850 million, which the taxpayer is having to meet.
  Alongside this, we have had a spate of transport legislation. The first major Measure of hon. Members opposite was the 1953 legislation which tried to denationalise the transport system. The Minister has made great play with the fact that a noble Lord in another place said that it was not an attempt at denationalisation. But who else has said so? We have said that it was an attempt to cripple the publicly-owned transport system. The 1953 Act broke up many parts of the publicly-owned system and left the holding companies and subsidiaries wide open to take-over bids from any Mr. Clore.
  The hon. Member for Lowestoft (Mr. Prior) has shown some concern for the works which have been mentioned, but he must not under-estimate the significance of what the Minister said. The hon. Gentleman said that selling off vehicle construction companies would

  631
  not mean that the workers would suffer, because they would simply be working for a new private company. Surely he is not so naïve as to believe that. Surely he realises that if these little irritants prove to be a sore in the side of big business, big business will willingly buy them up and close them down and concentrate activities in another area. That is the sort of thing that has taken place all over the country. In my own area at the end of the war big undertakings came along and set up small offshoots, but when the first breath of ill-will came, they closed them down. The hon. Member's constituents are liable to receive the same treatment.
  Mr. Prior: I do not think that they are little irritants. They are something bigger than that. If they were little irritants, there would be no case, for they would be inefficient. In fact, they are not inefficient. As private enterprise will be made to pay a very good price for them, it will have to keep them going.
  Mr. Popplewell: I appreciate what the hon. Gentleman says. Three firms are involved and their output capacity is about 2,000 vehicles—about 750 bus bodies and most of the rest road haulage vehicles. That is to be compared with the production of 474,000 vehicles throughout the country during the year.
  As I have said, we have now reached the ridiculous position when the nation has to subsidise the railways to the tune of £150 million a year. This has been brought about through the ineptitude of Government policy, not only in connection with transport, but in connection with high interest charges and the whole mixture which goes into the orbit. It has arisen because of the Government's ridiculous policy in its Bills of 1957 and 1959 when it instructed the British Transport Commission to go to the open market and borrow money at 6½ per cent. to pay interest charges on money which had already been borrowed at far lower rates of interest. That is the topsyturvy sort of legislation which has been introduced, and I believe that the Parliamentary Secretary assisted in piloting through the 1959 Bill.
  Mr. Hay Mr. Hay indicated dissent.
  Mr. Popplewell: We are now faced with a deficit of £850 million which the taxpayer has to pay to an undertaking
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  which was previously showing a profit. But that is not the whole story. Even the Minister said that his five-year estimate of £450 million investment from vesting day was much too low a figure. He and the Financial Secretary to the Treasury admitted that in about two years they would have to ask the House to reconsider the situation.
  We have been reduced to a ridiculous state of affairs. We see in the Bill almost a complete circle of events. My right hon. Friend the Member for Vauxhall referred to the various Executives set up under the 1946 Act and abolished in the 1953 Act, and now we are again setting up separate boards plus a Holding Company, but without the umbrella of the British Transport Commission to co-ordinate their work.
  There is this big difference. The 1946 Act set up the Transport Commission consisting of nine members, with 45 members to deal with docks, the railways, inland waterways, hotels, and so on, making a total of 54 members, Under the 1953 Act the Transport Com-mission was increased to 14 members, and the number of members on the other authorities was increased to 61. What is the position today? The number of people to be appointed to the Railways Board and the other authorities is 125.
  Mr. H. Hynd: Jobs for the boys.
  Mr. Popplewell: Absolutely.
  The Bill provides an additional 71 jobs for the boys. This state of affairs has been deliberately created by hon. Gentlemen opposite, and at the same time they are asking the taxpayers to foot a bill of £150 million, or to use the words of the Parliamentary Secretary, to pay 8d. in the £ by way of Income Tax.
  The Bill perpetuates the weaknesses that were discovered in the transport system betwen the wars. On more than one occasion in Committee upstairs the Parliamentary Secretary referred to the vertical structure of the Bill. He said that each board had to be a self-contained unit. The hon. Gentleman completely ignored the lessons that we learnt before and during the war.
  It is impossible to regard the various branches of transport as separate

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  entities. If we want an efficient transport system, we must forget the idea of keeping roads, railways and inland waterways separate from one another, and regard transport as a whole, and then decide on the best means of moving traffic or people from point A to point B. If we could be assured that the Tory Party will make a genuine attempt to look at the situation from that point of view, there might be some way in which we could get a reasonable line of approach to the problem.
  Instead of regarding transport as a whole, we are putting the clock back. We are returning to the old cut-throat days when railwaymen who were receiving £2 a week were asked to accept a voluntary pay reduction of 5 per cent. That was the type of structure which was responsible for the various Transport Acts during the war, which insisted upon the safety of loads, and upon lorry drivers keeping log sheets. That is the situation to which the hon. Member for Twickenham (Mr. Gresham Cooke) wants to return. If his constituents approach him because of a closure of a branch line, or any cutting down in railway services, that is the type of answer he should give them.
  Mr. Gresham Cooke: The hon. Member seems to forget that the square deal for the railways was produced in 1947, in an effort to obtain fair competition between road and rail.
  Mr. Popplewell: The square deal was proposed at that time because of the cut-throat competition. It is well known that the railways and lorry owners were opposing each other by making applications for licences before the traffic commissioners.
  Mr. G. Wilson: The square deal campaign was the result of a demand for the freeing of railways from restrictions, Only later was it diverted to an attempt to restrict road competition.
  Mr. Popplewell: That only enforces my point. Since then we have managed to reach a reasonable state of coordination, but hon. Members opposite want to lead us back to the old days.
  The consequence of their policy has been a tremendous curtailment in railway services. I was astonished when the hon. Member for Lowestoft said, in
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  effect, that the best way to make the railways pay was to reduce the staff, in the way that agriculture had been mechanised and made more efficient.
  Mr. Prior: No.
  Mr. Popplewell: That was my interpretation of the hon. Member's observation. Let us see what has happened.
  Since the closures began there has been a reduction in railway staff of about 163,980, and we understand that in discussions at the consultative meeting on Monday Dr. Beeching intimated to the trade unions concerned the fact that there might be a further reduction of 100,000 in railway personnel. It is against that background that the Minister deliberately insulted the railwaymen, when, in effect, he said there were none of sufficient calibre to fill the higher appointments under the terms of the Bill. At the following meeting of the Committee he tried to contradict what he had said. He blamed the acoustics of the room. But all those who were in Committee know that the Press reports at the time were quite correct.
  Only today we were told that 148 shopmen have received their notices at York; 62 at the North Road shops, Darlington, and 22 at Faverdale. This is all linked up with what we understand to be the policy of Dr. Beeching, which is to close one-third of the railway system. What does this mean? It would appear that in future there will be no railway services west of Plymouth, or west of Carmarthen, or east of a route along the East Coast. If the present policy is pursued to its logical conclusion there will be no railway services at all north of a line from Glasgow to Edinburgh. In that area of Scotland it is likely that there will be no railway services.
  There have been 467 closures of parts of the railway service and this includes not only branch lines, but large sections of the railway track. We are fold that this is only the beginning. The policy which is being carried out by Dr. Beeching at the direction of the Government disregards the need to provide a social service. The criteria for the successful operation of the rail transport system is to be the profit and loss account. It is possible that sur-

  635
  burban traffic may pay its way but big losses are building up in the commuter services and a drastic curtailment of such services is possible.
  The hon. Member for Tynemouth (Dame Irene Ward), and other hon. Members representing constituencies in the North-East, are upset at the proposed closure of the North and South Tyneside electric service. Other hon. Members are concerned about what may happen to commuter services in their constituencies. I suggest to the hon. Lady the Member for Tynemouth and other hon. Members opposite that when their constituents approach them on these matters, they should not shuffle off their responsibilities but rather they should say, "I am responsible for this because I supported a Government which deliberately brought about this state of affairs."
  I agreed with the Parliamentary Secretary to share the last three-quarters of an hour of the time of the House and I have come to the end of the time alloted to me. I wish to conclude by saying that we regard the Bill as a shocking Measure, but look upon it as temporary legislation. Let there be no misunderstanding of the fact that when we are returned to power, as we shall be after the next General Election, one of the first tasks of a Labour Government will be to establish a co-ordinated, integrated transport system based on the need to provide a service for the community and to meet the requirements of the nation.
  10.8 p.m.
  Mr. Hay: On one thing the hon Member for Newcastle-upon-Tyne, West (Mr. Popplewell) and I agree. We are both rather glad to come to the end of this very long road. The hon. Member is lucky in some respects. I suppose that now he may have a well deserved rest for a little while. But as soon as the House reassembles after the Easter Recess my right hon. Friend and I must turn our attention to the Road Traffic Bill and that again is a Measure which is likely to lead us along a rather long road—[HON. MEMBERS: "Resign."]— we are not prepared to resign. We are prepared to carry on with the job which we know has to be done.
  I wish to say one other thing before replying to the debate and I say it on
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  behalf of my right hon. Friend as well as myself. We are extremely grateful, as I am sure is the House as a whole, to those behind the scenes who have assisted us with this Measure. The House will realise the vast amount of work involved behind the scenes, and my right hon. Friend and I are grateful for the help we have had.
  I would take the attention of the House back to the start of the Bill. Why did we decide to introduce a Measure of this kind? It is essential to go back to the situation we found when my right hon. Friend was appointed—a situation which was outlined to a large extent by the Report of the Select Committee on Nationalised Industries dealing with British Railways. We discovered that three major things were wrong.
  First, the financial situation of the British Transport Commission. The accumulated deficits at present amount to no less than £625 million and this figure does not include the capitalised interests. If one takes British Railways alone, the accumulated deficits since nationalisation, since 1947, have mounted until they are now £700 million. That was the first thing we had to deal with.
  Secondly, we had to look at the structure of the B.T.C. It is true that in 1953 alterations to that structure were made but, nevertheless, basically the structure of the B.T.C. today is the same as it was in 1947 when the party opposite nationalised it. It is still a large, unified structure, very cumbersome and, as our colleagues on the Select Committee found and stated clearly in their Report, one in which the attentions of those in charge were divided—on the one hand between those things which were socially desirable and which they felt they must try to fulfil in the light of the statutory duty placed on them and, on the other, those things which were economically right.
  The third thing we found was that the B.T.C. was saddled with a whole mass of commercial restrictions, things which prevented it from making a profit out of its undertaking, things which have their origin way back in the early history of the railway industry and things which were imposed by Parliament in the interests of the Community on an organisation which then had a virtual monopoly of transport—such things as the control over fares and charges and the common

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  carrier obligation. These things were said by those who know anything about the railways to be inimical to any kind of economic operation.
  We turned our attention to these problems and we produced this Bill, the provisions of which I will describe and which deal with each of these problems. The hon. Member for Newcastle-upon-Tyne, West, the right hon. Member for Vauxhall (Mr. Strauss) and other hon. Members opposite, have complained today that in Committee and on Report few, if any, of their Amendments were accepted. Really, they can hardly be surprised at that, because they have, in the same breath, often told us that they are dead against this Measure, that it is a wicked and improper one and that it is founded on a political policy which is entirely different from their own. In those circumstances, they can hardly expect us to accept the Amendments they put forward, many of which, frankly, were in the form of wrecking Amendments.
  Mr. Spriggs: What an excuse!
  Mr. Hay: Where reasonable Amendments were put down by hon. Gentlemen opposite we have sought, where we could, to meet their points. There are quite a number of them, but I will not rehearse them now. In other cases we have given assurances and, in others, we have tried to do what we can to meet the problems raised in some other way than by legislation.
  I come to the details of the Bill. Regarding the financial problems I have outlined, few hon. Members have emphasised the tremendous nature of the financial reconstruction which is being carried out by the Bill. It is an essential part of the Bill because we are writing off, remember, £475 million of accumulated deficits. At the same time, we are placing to suspense between £650 million and £700 million. These are very large sums of money indeed, and I am surprised that we have not heard a little more from some of the financial purists, of whom there are quite a number in this House, about these proposals. Nevertheless, we have got through successfully so far, and I hope that we shall succeed.
  Next let me say a word about the structure. As I said, we discovered that
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  the British Transport Commission structure was cumbersome, top-heavy and out of date for the sort of job that the nationalised transport undertakings today have to do. Therefore, what we sought to do, as the hon. Member for Newcastle-upon-Tyne, West reminded the House just now, was to divide the undertaking into its component parts. Whereas we find today that the British Transport Commission is a horizontal structure, the Bill will provide for a vertical structure to divide up the undertakings into their component parts—the railways, London Transport, the docks, the British Waterways Board and the Holding Company, which is a new concept in nationalisation in this country.
  To each of these boards we have given a set task in a clearly defined field, and it is our intention that the boards and the Holding Company should stay within their set task. We have been obliged to resist Amendments from hon. Members opposite which would have sought to enlarge the scope of each of these boards because we want them to concentrate on the job that they have to do and not find themselves back in the same situation as the British Transport Commission has done.
  I should like to say a word on the regional railway boards, a matter of some importance. The right hon. Member for Vauxhall and others asked questions about the extent to which there would be delegation of functions by the Railways Board to the regional railway boards. As I have said on a number of occasions, we have deliberately not written into the Bill any precise provisions of this kind simply because we believe that the interests of the undertakings will best be served by the maximum degree of flexibility. Moreover, until the Railways Board itself is established and the regional boards, too, we shall not be in a position to have the benefit of their views upon the subject.
  During our debates in Standing Commitee the Opposition pressed for the disclosure of information on the way in which the Railways Board would delegate functions to the regional boards under the provisions of Clause 2 (4). The right hon. Member for Vauxhall and the hon. Member for Oldham, East (Mr. Mapp) participated in a discussion

  639
  on this subject on 30th January last. They will remember that I undertook to consider then what we should do about it.
  Our conclusion is that it is desirable for Parliament and the public to be informed about the Railways Board's delegation to the regions. After the Railways Board has been set up and the initial decisions have been come to, my right hon. Friend will take a suitable opportunity of acquainting the House of them. This might be in an answer to a Parliamentary Question or by way of a statement. We shall see.
  We shall also see that the Railways Board's annual report will include each year a specific reference to this point, which again will enable Parliament to review the policy which is involved. As the House knows, it can debate these matters in any debates that take place on the Railways Board's report and accounts from time to time.
  My right hon. Friend, moreover, has consulted Dr. Beeching about these matters, and I can tell the House that Dr. Beeching, who will be Chairman of the Railways Board, agrees to our proposals and he will, of course, be in a position to ensure that the undertaking I have given about the annual Report will be fulfilled.
  May I next say a word about a point which was raised by the hon. Member for Barrow-in-Furness (Mr. Monslow) about Clause 78, because I am talking about the reorganisation side of the operation that we are undertaking. He was concerned, as indeed were other hon. Members in Standing Committee, lest under Clause 78 there might be some discrimination between the different grades of staff who might suffer a worsening of their position as a consequence of the reorganisation, and who might, therefore, get differing amounts of compensation.
  I must make it clear to him, as I did in an intervention in the speech of the hon. Member for Central Ayrshire (Mr. Manuel), that Clause 78 is concerned only with the situation where a person in the employ of the Commission at the moment suffers some loss as a result of the worsening of his position directly resulting from the reorganisation. We
  640
  do not in that Clause, nor anywhere else in the Bill, take power to deal with the case of people who are redundant as a consequence of the ordinary operational changes in the undertaking. If, for example, a branch line is closed, that is not a consequence of the reorganisation effected by this Bill. It is part of the operational change in the railway system. So far as the cases falling directly under Clause 78 are concerned, I can give the hon. Gentleman the assurance that there will be no discrimination in the way I understood him to make the point.
  The third thing that we are trying to do by this Bill is to give the railways in particular and, indeed, all the undertakings a greater degree of commercial freedom. I hope that it will be understood and appreciated by the House, as it certainly must come to be appreciated by the public as a whole, that the railways in this country no longer operate in monopoly circumstances. Indeed, the very fact that throughout the country there are other forms of transport or other media of transport is in itself an adequate check against any possible abuse by the railways of the commercial freedom that we are conferring upon them by this Bill.
  It is all very well for the hon. Member for Newcastle-upon-Tyne, West, the right hon. Member for Vauxhall and other hon. Members opposite to say that all the troubles of the railways today, all this accumulated deficit, losses and so on are the direct consequences of Conservative Party policy. [HON. MEMBERS: "They are."] It is easy for them to say that, but it is very far from the truth. Those of us who know anything about these matters know perfectly well that the reason why the railways in particular are in difficulty today is simply and solely because, over the last fifty years, there has been a steady and recently a quickening movement from rail to road, both for personal transport and the transport of goods.
  At the same time, to complicate the issue still further, there has been a drift from public transport of all kinds to private transport. It is a combination of these two things—the drift from rail to road and from public to private transport—which has put the railways in the mess in which they are today. It is that

  641
  which is really responsible. If, in fact, as obviously will be the case, railway lines have to be closed, it is simply and solely because they just do not pay.
  We must ask ourselves: why do they not pay? The answer is a simple one. Because they are just not being used. That is to say that already people are deciding how they want to travel. They have decided that they want to go by road and, where possible, in their own private transport. This is the decision that the public is making, and the job of the railways is to accommodate itself to that situation.
  As we see it, we have a clear choice We can follow the course that the Opposition have urged upon us from the time we debated the White Paper right the way through until tonight, that is, to retain as much as possible of the present system virtually intact on the ground that we need a railway system of that sort and shape because of social needs. Hon. and right hon. Members opposite have made no bones about this. They have said that we need to maintain our railways on social grounds.
  There may be an argument—I concede this point—that we should have railways in some parts of the country on social grounds for passengers. But I ask the Opposition: do they carry this argument about social needs to the extent of saying that we should have a railway system of its present size and shape for freight? If that is what they say, let them remember how costly this would be and how costly it has been.
  In 1955, the railway deficit was £38 million. In 1958, it had risen to £97 million. In 1961, it was £151 million. If we are to maintain our railway system as a social service and meet the cost out of the taxpayers' pockets, where do we stop? What is the point at which the cut-off would come? Do we go on subsidising our railways to the tune of these many millions of pounds and many more, indefinitely, not just for the benefit of passengers, but also for the benefit of those who send their goods by rail? We must remember that all this money is not fairy gold. We are talking about money which has to be found by the taxpayer.
  Mr. Mapp Mr. Mapp rose—
  Mr. Hay: I ask the hon. Gentleman to forgive me. He knows that I usually give way, but time is rather short and I am speaking against the clock
  The alternative course we can take is the sort of course to which the Bill itself is a signpost. As I have explained, we seek by the Bill to do three things: first, to reconstruct the nationalised transport undertakings; second, to impose upon them some degree of financial discipline; third, to give them commercial freedom to an extent which is justified and which is, indeed, vital in these modern days.
  Of course, in all this we do not ignore the social needs of the country. We do not blind ourselves to the social consequences. What we say is that the test of what the consumer is prepared to pay should be the correct and proper test for our railways and for the other transport undertakings with which we are here concerned.
  I do not pretend, and we have never during all the debates pretended, that the Bill will solve all our problems. It is not intended to solve all our problems, and, in the nature of things, it would not do so. What I do claim firmly is that it will provide us with a framework for the necessary action which we must take to give these great transport undertakings, particularly the railways, and those who work in them a new deal in modern conditions.
  We on this side of the House have approached the whole problem from a strictly practical point of view. We have not approached it in any spirit of dogma. We have not said that, because these undertakings are nationalised, we should approach them in a hostile spirit. We conceive it to be the duty of the Government and of the Conservative Party, in the middle of the twentieth century, to deal with these problems in a practical way. The contest between the two sides of the House is not about more nationalisation or less, but about how those industries and services which are nationalised can best be made to work. I do not pretend that the Bill is a final solution. I claim that it is a useful and necessary Measure which we must have if these undertakings are to be given again an opportunity to serve our nation as it should be served.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 277, Noes 206.

  Division No. 171.]

  AYES

  [10.29 p.m.

  Agnew, Sir Peter

  Forrest, George

  Maclay, Rt. Hon. John

  Aitken, W. T.

  Foster, John

  Maclean, Sir Fitzroy (Bute&N. Ayrs.)

  Allan, Robert (Paddington, S.)

  Fraser, Hn. Hugh (Stafford & Stone)

  McLean, Neil (Inverness)

  Allason, James

  Fraser, Ian (Plymouth, Sutton)

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

  Amery, Rt. Hon. Julian

  Freeth, Denzil

  Macmillan, Maurice (Halifax)

  Arbuthnot, John

  Gammans, Lady

  Maddan, Martin

  Ashton, Sir Hubert

  Gardner, Edward

  Maitland, Sir John

  Atkins, Humphrey

  Gibson-Watt, David

  Manningham-Buller, Rt. Hn. Sir R.

  Balniel, Lord

  Glover, Sir Douglas

  Markham, Major Sir Frank

  Barlow, Sir John

  Glyn, Sir Richard (Dorset, N.)

  Marlowe, Anthony

  Barter, John

  Goodhart, Philip

  Marples, Rt. Hon. Ernest

  Batsford, Brian

  Goodhew, victor

  Mathew, Robert (Honiton)

  Baxter, Sir Beverley (Southgate)

  Gough, Frederick

  Matthews, Gordon (Meriden)

  Beamish, Col. Sir Tufton

  Gower, Raymond

  Mawby, Ray

  Bell, Ronald

  Grant, Rt. Hon. William

  Maxwell-Hyslop, L. L.

  Berkeley, Humphry

  Grant-Ferris, Wg. Cdr. R.

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

  Bevins, Rt. Hon. Reginald

  Green, Alan

  Mills, Stratton

  Bidgood, John C.

  Gresham Cooke, R.

  Montgomery, Fergus

  Biffen, John

  Grimond, Rt. Hon. J.

  More, Jasper (Ludlow)

  Bingham, R. M.

  Gurden, Harold

  Morgan, William

  Birch, Rt. Hon. Nigel

  Hall, John (Wycombe)

  Morrison, John

  Bishop, F. P.

  Hamilton, Michael (Wellingborough)

  Mott-Radclyffe, Sir Charles

  Black, Sir Cyril

  Hare, Rt. Hon. John

  Nabarro, Gerald

  Bossom, Clive

  Harris, Reader (Heston)

  Neave, Alrey

  Bourne-Arton, A.

  Harrison, Brian (Maldon)

  Noble, Michael

  Box, Donald

  Harrison, Col. Sir Harwood (Eye)

  Nugent, Rt. Hon. Sir Richard

  Boyd-Carpenter, Rt. Hon. J.

  Harvey, Sir Arthur Vere (Macclesf'd)

  Oakshott, Sir Hendrie

  Boyle, Sir Edward

  Harvie Anderson, Miss

  Orr, Capt L. P. S.

  Braine, Bernard

  Hay, John

  Orr-Ewing, C. Ian

  Brewis, John

  Heald, Rt. Hon. Sir Lionel

  Osborn, John (Hallam)

  Brooke, Rt. Hon. Henry

  Henderson, John (Cathcart)

  Osborne, Sir Cyril (Louth)

  Brooman-White, R.

  Hicks Beach, Maj. W.

  Page, Graham (Crosby)

  Brown, Alan (Tottenham)

  Hiley, Joseph

  Page, John (Harrow, West)

  Browne, Percy (Torrington)

  Hill, Mrs. Eveline (Wythenshawe)

  Pearson, Frank (Clitheroe)

  Bryan, Paul

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

  Peel, John

  Buck, Antony

  Hirst, Geoffrey

  Percival, Ian

  Bullard, Denys

  Hobson, Sir John

  Peyton, John

  Bullus, Wing Commander Eric

  Hocking, Philip N.

  Pilkington, Sir Richard

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

  Holland, Philip

  Pitman, Sir James

  Campbell, Gordon (Moray & Nairn)

  Holt, Arthur

  Pitt, Miss Edith

  Carr, Compton (Barons Court)

  Hope, Rt. Hon. Lord John

  Pott, Percivall

  Cary, Sir Robert

  Hornby, R. P.

  Powell, Rt. Hon. J. Enoch

  Channon, H. P. G.

  Hornsby-Smith, Rt. Hon. Dame P.

  Price, David (Eastleigh)

  Chataway, Christopher

  Howard, John (Southampton, Test)

  Prior, J. M. L.

  Clark, Henry (Antrim, N.)

  Hughes Hallett, Vice-Admiral John

  Prior-Palmer, Brig. Sir Otho

  Clark, William (Nottingham, S.)

  Hughes-Young, Michael

  Profumo, Rt. Hon. John

  Cleaver, Leonard

  Irvine, Bryant Godman (Rye)

  Proudfoot, Wilfred

  Cole, Norman

  Jenkins, Robert (Dulwich)

  Pym, Francis

  Collard, Richard

  Jennings, J. C.

  Quonnell, Miss J. M.

  Cooper, A. E.

  Johnson, Dr. Donald (Carlisle)

  Ramsden, James

  Cooper-Key, Sir Neill

  Johnson, Eric (Blackley)

  Rawlinson, Peter

  Corfield, F. V.

  Johnson Smith, Geoffrey

  Redmayne, Rt. Hon. Martin

  Costain, A. P.

  Jones, Rt. Hn. Aubrey (Hall Green)

  Rees, Hugh

  Coulson, Michael

  Joseph, Sir Keith

  Rees-Davies, W. R.

  Craddock, Sir Beresford

  Kerans, Cdr. J. S.

  Renton, David

  Critchley, Julian

  Kerby, Capt. Henry

  Ridley, Hon. Nicholas

  Crosthwaite-Eyre, Col. Sir Oliver

  Kerr, Sir Hamilton

  Ridsdale, Julian

  Crowder, F. P.

  Kimball, Marcus

  Rippon, Geoffrey

  Cunningham, Knox

  Kirk, Peter

  Robson Brown, Sir William

  Curran, Charles

  Kitson, Timothy

  Roots, William

  Dalkeith, Earl of

  Langford-Holt, Sir John

  Ropner, Col. Sir Leonard

  Dance, James

  Leather, E. H. C.

  Russell, Ronald

  Deedes, W. F.

  Leavey, J. A.

  Scott-Hopkins, James

  de Ferranti, Basll

  Legge-Bourke, Sir Harry

  Seymour, Leslie

  Digby, Simon Wingfield

  Lewis, Kenneth (Rutland)

  Sharples, Richard

  Donaldson, Cmdr. C. E. M.

  Lilley, F. J. P.

  Shaw, M.

  Drayson, G. B.

  Lindsay, Sir Martin

  Skeet, T. H. H.

  du Cann, Edward

  Litchfield, Capt. John

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

  Duncan, Sir James

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

  Smyth, Brig. Sir John (Norwood)

  Eccles, Rt. Hon. Sir David

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Soames, Rt. Hon. Christopher

  Eden, John

  Longden, Gilbert

  Spearman, Sir Alexander

  Elliot, Capt. Walter (Carshalton)

  Loveys, Walter H.

  Speir, Rupert

  Emery, Peter

  Lubbock, Eric

  Stanley, Hon. Richard

  Errington, Sir Eric

  Lucas, Sir Jocelyn

  Stevens, Geoffrey

  Erroll, Rt. Hon. F. J.

  Lucas-Tooth, Sir Hugh

  Steward, Harold (Stockport, S.)

  Farey-Jones, F. W.

  McAdden, Stephen

  Stoddart-Scott, Col. Sir Malcolm

  Farr, John

  MacArthur, Ian

  Storey, Sir Samuel

  Fisher, Nigel

  McLaren, Martin

  Studholme, Sir Henry

  Fletcher-Cooke, Charles

  McLaughlin, Mrs. Patricia

  Summers, Sir Spencer (Aylesbury)

  Tapsell, Peter

  Turton, Rt. Hon. R. H.

  Whitelaw, William

  Taylor, Sir Charles (Eastbourne)

  van Straubenzee, W. R.

  Williams, Dudley (Exeter)

  Taylor, Edwin (Bolton, E.)

  Vane, W. M. F.

  Williams, Paul (Sunderland, S.)

  Taylor, Frank (M'ch'st'r, Moss Side)

  Vaughan-Morgan, Rt. Hon. Sir John

  Wills, Sir Gerald (Bridgwater)

  Teeling, Sir William

  Vosper, Rt. Hon. Dennis

  Wilson, Geoffrey (Truro)

  Thatcher, Mrs. Margaret

  Wade, Donald

  Wise, A. R.

  Thomas, Leslie (Canterbury)

  Walder, David

  Wood, Rt. Hon. Richard

  Thomas, Peter (Conway)

  Walker, Peter

  Woodhouse, C. M.

  Thorneycroft, Rt. Hon. Peter

  Walker-Smith, Rt. Hon. Sir Derek

  Woodnutt, Mark

  Thornton-Kemsley, Sir Colin

  Wail, Patrick

  Woollam, John

  Tiley, Arthur (Bradford, W.)

  Ward, Dame Irene

  Worsley, Marcus

  Tilney, John (Wavertree)

  Watkinson, Rt. Hon. Harold

  Touche, Rt. Hon. Sir Gordon

  Webster, David

  TELLERS FOR THE AYES:

  Turner, Colin

  Wells, John (Maidstone)

  Mr. Chichester-Clark and Mr. Finlay.

  NOES

  Abse, Leo

  Hayman, F. H.

  Owen, Will

  Ainsley, William

  Healey, Denis

  Padley, W. E.

  Albu, Austen

  Henderson, Rt. Hn. Arthur (Rwly Regis)

  Paget, R. T.

  Allaun, Frank (Salford, E.)

  Herbison, Miss Margaret

  Pannell, Charles (Leeds, W.)

  Allen, Scholefield (Crewe)

  Hewitson, Capt. M.

  Pargiter, G. A.

  Awbery, Stan

  Hill, J. (Midlothian)

  Parker, John

  Baird, John

  Hilton, A. V.

  Parkin, B. T.

  Beaney, Alan

  Holman, Percy

  Pavitt, Laurence

  Bence, Cyril

  Houghton, Douglas

  Pearson, Arthur (Pontypridd)

  Bennett, J. (Glasgow, Bridgeton)

  Howell, Charles A. (Perry Barr)

  Peart, Frederick

  Benson, Sir George

  Howell, Denis (Small Heath)

  Pentland, Norman

  Blackburn, F.

  Hoy, James H.

  Plummer, Sir Leslie

  Blyton, William

  Hughes, Cledwyn (Anglesey)

  Popplewell, Ernest

  Boardman, H,

  Hughes, Emrys (S. Ayrshire)

  Prentice, R. E.

  Bottomley, Rt. Hon. A. G.

  Hughes, Hector (Aberdeen, N.)

  Price, J. T. (Westhoughton)

  Bowden, Rt. Hn. H. W.(Leics, S. W.)

  Hunter, A. E.

  Probert, Arthur

  Bowles, Frank

  Hynd, H. (Accrington)

  Proctor, W. T.

  Boyden, James

  Hynd, John (Attercliffe)

  Pursey, Cmdr. Harry

  Braddock, Mrs. E. M.

  Irving, Sydney (Dartford)

  Randall, Harry

  Brockway, A. Fenner

  Jay, Rt. Hon. Douglas

  Rankin, John

  Broughton, Dr. A. D. D.

  Jeger, George

  Redhead, E. C.

  Brown, Rt. Hon. George (Belper)

  Jenkins, Roy (Stechford)

  Reid, William

  Butler, Herbert (Hackney, C.)

  Jones, Dan (Burnley)

  Reynolds, G. W.

  Butler, Mrs. Joyce (Wood Green)

  Jones, Elwyn (West Ham, S.)

  Roberts, Albert (Normanton)

  Callaghan, James

  Jones, Jack (Rotherham)

  Roberts, Goronwy (Caernarvon)

  Castle, Mrs. Barbara

  Jones, J. Idwal (Wrexham)

  Robertson, John (Paisley)

  Chapman, Donald

  Jones, T. W. (Merioneth)

  Robinson, Kenneth (St. Pancras, N.)

  Cliffe, Michael

  Kelley, Richard

  Rodgers, W. T. (Stockton)

  Corbet, Mrs. Freda

  Kenyon, Clifford

  Ross, William

  Craddock, George (Bradford, S.)

  Key, Rt. Hon. C. W.

  Shinwell, Rt. Hon. E.

  Cronin, John

  Lawson, George

  Silverman, Julius (Aston)

  Cullen, Mrs. Alice

  Ledger, Ron

  Slater, Mrs. Harriet (Stoke, N.)

  Darling, George

  Lee, Frederick (Newton)

  Slater, Joseph (Sedgefield)

  Davies, G. Elfed (Rhondda, E.)

  Lee, Miss Jennie (Cannock)

  Small, William

  Davies, Harold (Leek)

  Lever, Harold (Cheetham)

  Smith, Ellis (Stoke, S.)

  Davies, Ifor (Gower)

  Lever, L. M. (Ardwick)

  Snow, Julian

  Deer, George

  Lewis, Arthur (West Ham N.)

  Spriggs, Leslie

  Delargy, Hugh

  Loughlin, Charles

  Stewart, Michael (Fulham)

  Dempsey, James

  Mabon, Dr. J, Dickson

  Stonehouse, John

  Diamond, John

  McCann, John

  Stones, William

  Dodds, Norman

  MacColl, James

  Strachey, Rt. Hon. John

  Donnelly, Desmond

  McInnes, James

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

  Dugdale, Rt. Hon. John

  McKay, John (Wallsend)

  Swain, Thomas

  Edelman, Maurice

  McLeavy, Frank

  Swingler, Stephen

  Edwards, Rt. Hon. Ness (Caerphilly)

  MacMillan, Malcolm (Western Isles)

  Taverne, D.

  Edwards, Robert (Bilston)

  MacPherson, Malcolm (Stirling)

  Taylor, Bernard (Mansfield)

  Edwards, Walter (Stepney)

  Mallalieu, E. L. (Brigg)

  Thomas, George (Cardiff, W.)

  Evans, Albert

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

  Thomas, Iorwerth (Rhondda, W.)

  Finch, Harold

  Manuel, Archie

  Thompson, Dr. Alan (Dunfermline)

  Fitch, Alan

  Mapp, Charles

  Thomson, G. M. (Dundee, E.)

  Fletcher, Eric

  Marsh, Richard

  Thornton, Ernest

  Foot, Dingle (Ipswich)

  Mason, Roy

  Tomney, Frank

  Forman, J. C.

  Mayhew, Christopher

  Wainwright, Edwin

  Gaitskell, Rt. Hon. Hugh

  Mellish, R. J.

  Warbey, William

  Ginsburg, David

  Mendelson, J. J.

  Watkins, Tudor

  Gordon Walker, Rt. Hon. P. C.

  Millan, Bruce

  Wells, Percy (Faversham)

  Greenwood, Anthony

  Milne, Edward

  Wells, William (Walsall, N.)

  Grey, Charles

  Mitchison, G. R.

  Whitlock, William

  Griffiths, David (Rother Valley)

  Monslow, Walter

  Wigg, George

  Griffiths, Rt. Hon. James (Llanelly)

  Moody, A. S.

  Wilkins, W. A.

  Griffiths, W. (Exchange)

  Morris, John

  Willey, Frederick

  Gunter, Ray

  Moyle, Arthur

  Williams, D. J. (Neath)

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Mulley, Frederick

  Williams, LI. (Abertillery)

  Hamilton, William (West Fife)

  Neal, Harold

  Williams, W. R. (Openshaw)

  Hannan, William

  Oliver, G. H.

  Williams, W. T. (Warrington)

  Harper, Joseph

  Oram, A. E.

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

  Hart, Mrs. Judith

  Oswald, Thomas

  646

  647

  Winterbottom, R. E.

  Wyatt, Woodrow

  TELLERS FOR THE NOES:

  Woodburn, Rt. Hon. A.

  Yates, Victor (Ladywood)

  Mr. Short and Mr. Rogers.

  Woof, Robert

  Zilliacus, K.

  Bill accordingly read the Third time and passed.

HOUSE OF LORDS REFORM
Resolution of the House [28th March] relating to the appointment of a Joint Committee, and so much of the Lords Message [10th April] as signifies their concurrence in the said Resolution, read.
Select Committee appointed to join with a Committee to be appointed by the Lords to consider whether any, and if so what, changes should be made in the rights of Peers of England, Scotland, Ireland, Great Britain or of the United Kingdom, and of Peeresses in their own right, to sit in either House of Parliament, or to vote at Parliamentary elections, and whether, and if so under what conditions, a Peer should be enabled to surrender a peerage permanently or for his lifetime or for any less period having
648
regard to the effects and consequences thereof:
Mr. F. M. Bennett, Mr. Edward du Cann, Mrs. Evelyn Emmet, Mr. Gordon Walker, Mr. Leslie Hale, Mr. Gilbert Longden, Mr. Mitchison, Sir Charles Mott-Radclyffe, Mr. Charles Pannell, Sir Kenneth Pickthorn, and Mr. Donald Wade:
Power to send for persons, papers and records, and to report from time to time:
Five to be the Quorum.—[Mr. Hughes-Young.]
Message to the Lords to acquaint them with such of the Orders as are necessary to be communicated to their Lordships, and to request them to appoint an equal number of Lords to join with the Committee appointed by this House.

Mr. Grimond added to the Committee of Privileges.—[Mr. Hughes-Young.]

FRACTURED GAS MAINS (DEATHS)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. M, Hamilton.]
10.41 p.m.
Mr. Charles Mapp: This is a sad story involving the loss of three adult lives in Oldham due to a gas escape from a street main to a house powered exclusively by electricity and without any gas fittings of any kind. During the course of my inquiries I found that the renewal policy of the North Western Gas Board was to a large extent linked with the tragedy, and I shall seek to establish that, while its policy of continual vigilance against possible leakages is vigorously administered, its renewal policy nevertheless rests on the assumption that the pipes are both safe and effective, and that there is no planned policy in which age, age defects or other weaknesses, including soil, play a leading rôle.
On Sunday, 31st December last, Mr. and Mrs. Fletcher, of 29 Marion Street, Oldham, invited four friends, Mr. and Mrs. Beasley and Mr. and Mrs. Knott, to share an evening meal and a little jollity in preparation for celebrating the New Year. Their house is a typical terraced house in a pleasant working class area, No. 29 being at the end of the street, with the gable end abutting to the pavement of Emma Street. The house was clean and well kept, electrically powered, and had concrete floors in all downstairs rooms.
It is known that they sat down to a meal about 8 p.m., that they enjoyed an odd glass of sherry before midnight and that Mr. Fletcher apparently let the New Year in. Late in the evening of the following day, 1st January, their niece, anxious about them, called at the house and found the newspaper in the door, the lights full on and the curtains drawn, and immediately returned to her mother, who thereupon visited the house and, hearing groans from the living room, telephoned the police and succeeded in forcing an entry through the back door. In the event, of the three men in the front room Mr. Fletcher and
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Mr. Knott were dead and Mr. Beasley unconscious, and in the other room Mrs. Fletcher was dead and the two other ladies were unconscious.
The evidence given at the inquest indicated that these six people had, following their meal, complained to each other about feeling unwell and, in the absence of any other reason, thought it might be due to the meal that they had had. As gas was not supplied to the house, the thought of gas did not enter their minds and the survivors say that no one even suspected gas. Technical evidence at the coroner's court indicated that gas had escaped from the main at the gable end of the house 5 ft. to 6 ft. from the wall and had found its way underneath the house. At 9 p.m. the following day, that is, 1st January, the gas engineer identified a gas smell in the neighbourhood of the stairs in the house.
Upon opening the street main later, it was found that a fracture had occurred in a cast iron pipe of three inches diameter which was laid 2 ft. 7 ins. below pavement level. The crack was round the circumference of the pipe which had been laid in 1910, and it was said that the subsoil was loose below frost level. I should say that about and before this date the weather was very cold and readings show that the temperature in the Oldham area remained below freezing point from 26th December onwards, reaching 14 degrees of frost on the 27th and 6 degrees to 12 degrees on the nights of 30th and 31st December.
There were no direct ducts into the house and it was thought that gas had escaped to the foundations of the house, bearing in mind that to some extent frost had sealed the normal ground surface. At the inquest the gas engineer stated that the normal expectation of life of this pipe was 100 to 120 years, though that may be startling to the ordinary layman, as it was to me. It was also added that subsidence might have been caused by percolating water.
Marion Street was reported to stand on the site of the old Honeywell Colliery, and also a reservoir, and in the opinion of the gas engineer the fracture of the pipe had probably been caused by ground movement. Following corre-

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spondence with the North Western Gas Board, I was told in a letter:
"Because it has been conclusively established that the age of the main or service pipe is not in itself any indication of its liability to fracture, the programme of replacement is based upon the information maintained on street record cards which embrace the whole of the Board's Area and which show the condition of mains and services and of the surrounding subsoil. The information on these cards is brought up to date whenever a main or service pipe is exposed by the Board for any reason and whenever any major street works are undertaken by local authorities or public utilities. The same reporting system applies to minor street works of any nature which come to the knowledge of the Board's distribution staff. Any defects are dealt with immediately."
Following correspondence with the Minister, the policy of the Gas Board was confirmed, and in a significant paragraph of his letter of 15th March the Minister stated:
"More work is being done and no final answer has yet been found, but the industry is alive to its responsibilities and is making a serious effort to reduce the danger."
This street, as I have said, is at the top of an old coal shaft and I find that in 1932 a 13½-ton road roller fell into a cavity in the street when the old shaft, 10 ft. in diameter, was revealed. The shaft head was 7 ft. 6 ins. below the street level. More recently, water mains were repaired on 15th May, 1961, outside this house. I gather that the defects which caused this tragedy were dealt with on 13th January, but I am not sure whether by repairs or renewal. My information, second hand so far, is that it was by renewals.
I have had the opportunity of discussing the general question with the Chairman and the Secretary of the Gas Council. I gather that there are 100,000 miles of street gas mains, that it costs between £5,000 and £10,000 per mile for renewal and that in 1961 32 people lost their lives in circumstances where they had not in any way been negligent. We—that is the representatives of the Gas Council and myself—did not differ for one moment on the vigilance—and I underline this—which the gas boards bring to their task of ensuring safety to the 12 million users, but it is clear that there is a wide divergence of view about the importance of age in relation to maintenance and safety when renewals
652
are being scheduled. This is the real point of difference.
It seems, too, that the thinking in the gas industry itself has some reservations about the renewal policy, and I call in aid the postscript to a letter in the Manchester Evening News, some time in the middle of January, in which an official of the North Western Gas Board said:
"… age of gas mains is not a prime cause of fractures. The real cause has been unsuitable soil conditions leading to subsidence at the beginning of a frost or in the thaw afterwards. Age is a factor where this subsidence acts on old type mains which do not have the modern flexible joints. We now satisfy ourselves about soil conditions before we lay new mains. The Victorians did not. To combat this we have inspection units out every working day of the year concentrating on older areas in the winter."
In quoting this statement, I understand that in the old days, whether the soil was suitable or not, it was used in the filling up process, whereas the present method is to examine such soil and to supply appropriate packing soil if this is found necessary. Secondly, I gather that the old joints are now condemned so that in this case there continued to appear to be two built-in defects, apart from the age of the pipe and the fact that the area had formerly been a coal shaft.
The real point at issue is, of course, the importance which the gas boards attach to age and the defects of age in respect of gas pipes. At present, they regard age as a minor contributing factor when considering replacement, and it is my submission that this case illustrates not only special conditions in the way of old coal workings, but that the mains were over-ripe for renewal, based both on age and subsoil conditions.
True, the question of finance must enter into this problem when the gas boards are faced with it. They are rightly jealous of their concern for public safety, but this case illustrates the need for an improved and altered policy in regard to main renewals. It is doubtful whether cast iron pipes can be expected to have an expendable life of over 100 years when laid below ground, and if we accept that contention knowing that the pipes are, in fact carrying lethal agencies, and we also assume that vigilance as

653
such is the answer, in 1962 we are surely condoning tragedies that should be avoided.
The Minister must clearly be anxious about this problem. Sympathy in this kind of case is, naturally, universal and widespread. I have brought the matter to the House because I believe that we have a duty to question and to improve the renewal policy, to invest in the best brains to solve this anxious problem, and not least, if in fact the solution lies, as I think it does, in the direction of renewal with age playing a much more important consideration, face the financial adjustments that that will involve.
In these circumstances, in the light of what I have said—and I have tried to lift the matter to a higher plane, and not keep to a narrow constituency basis —I ask the hon. Gentleman to be forthcoming on the issue and to allay the public anxiety which has rightly arisen by agreeing to try to get the boards to give a higher degree of priority to the problem of age in relation to the renewal of these old service mains.
10.56 p.m.
Mr. Stan Awbery: This problem applies not only to Oldham, but to all our large cities. Two years ago a similar explosion occurred in Bristol, fortunately without killing anybody. I suggest that the time has come for us to search for a remedy for this state of affairs, and that that remedy is to be found in the age of pipes. If the gas authorities took a census of old pipes they would know when they were due for renewal. They would be able to ascertain whether existing pipes were safe. Other difficulties arise which could cause explosions, apart from the age of pipes, but that is certainly a contributory factor, and I suggest the Minister should take up the census question with the gas authorities.
10.57 p.m.
The Parliamentary Secretary to the Ministry of Power (Mr. J. C. George): The hon. Member for Oldham, East (Mr. Mapp) has approached this human and technical problem with care, caution and responsibility. He has not overstressed the human aspects, but has painted a clear picture of a very painful tragedy. We are all sad when lives are prematurely ended, and a true earnest of our regret
654
is provided by the steps taken to ensure that all contributory causes for which we carry some responsibility are closely examined. After weaknesses are found remedies must be devised to minimise, if not eradicate, the possibility of a recurrence.
The hon. Member readily and kindly accepted the anxiety of the North Western Gas Board to provide a safe system. He welcomed the widespread inspection system for the detection of leakages recently introduced and vigorously developed by the Board. I am grateful to him for his well-balanced comments on these matters. But even with an acceptable inspection system, tragedy can strike, as it did in Marion Street, Oldham, last New Year's Eve. The details have been accurately related by the hon. Member and I will not repeat them. The cause was the escape of gas from a hair crack in a three-inch cast iron main, running parallel with and some distance away from the gable end of No. 29.
In frostbound conditions, for a variety of reasons, line fractures are more numerous than under normal weather conditions. Furthermore, the leakage resulting—again due to the effect of frost—is frequently forced into unexpected channels of escape. In this case leakage entered from under the floor, as the hon. Member said.
Following the incident the crack which was discovered was sealed effectively with a substantial collar. An extended examination showed the main to be otherwise in good condition, with no material defects, and no corrosion. Later some suspicion of further leakage was reported in Marion Street, and examination revealed the presence of minute quantities of carbon monoxide. To allay all fears rather extravagant remedial measures were taken—service pipes were removed and renewed. This is the story of this sad and regrettable affair.
From the theme of the hon. Member's speech I assume that the collaring of the cracked pipe, rather than the renewal which he thought had taken place, will not have his approval. Renewal, and only renewal, will meet his idea of effectively preventing a recurrence. I will just say that the North Western Gas Board's engineers are men

655
of high ability and long experience. They are fortified by the Code of Practice of the Institution of Gas Engineers, and while respecting the fears and anxieties of the hon. Gentleman, I ask him to accept that this type of repair has over the years been proved to be completely effective in thousands of cases throughout the country, and that there is no reason to expect it to be less successful in this case.
This main which was fractured was not one which had been neglected or ignored. A thorough examination by the inspection experts had been carried out in July, 1961, only six months before, and no defects were recorded. Therefore, we must assume, as the hon. Gentleman himself said, that either severe weather conditions or unusual earth movements caused the fine crack in an otherwise sound main line. A close watch will be kept, although there is every confidence that conditions are now safe and sound.
I turn now to the broader aspects of the problem. Deaths from fractured gas mains generally are the subject of this debate and I should like to remove a fairly widespread but erroneous impression that incidents of this type are responsible for a high proportion of the total deaths from accidental gas poisoning. We all regret that there are any deaths from this cause, but the actual position is that deaths from fractured mains in England, Scotland and Wales added together were: 1956, 3·3 per cent.; 1957, 2.6 per cent.; 1958, 2.2 per cent.; 1959, 2.5 per cent., and 1960, 2 per cent.
Mr. Mapp: Would the Minister be good enough to translate these percentages into numbers of people involved? It would be more helpful.
Mr. George: I had intended to do that next.
The percentages give the true proportion of total deaths caused by fractured gas mains and show that it is a relatively small percentage. The numbers were: 1956, 27; 1957, 21; 1958, 20; 1959, 24; 1960, 20. The year 1961 was not good and 32 deaths have been recorded, but we have not the actual percentage as the other accident statistics are not available. That puts this problem in its true perspective.
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The hon. Gentleman has been very fair all the way along and he has evidently formed the strong impression that the principal causes of fractures are age, rigid jointing and poor soil conditions. He urges, first, that a plan for systematic renewal of old pipes be devised; secondly, that we invest in the best brains to solve this anxious problem; and, thirdly, that we face the financial adjustments involved.
Let us deal, first, with the dangers of age. Recently, Sir Charles Ellis, Scientific Adviser to the Gas Council, investigated this matter. His inquiries showed that not more than 10 per cent. of all fractures occurring during 1958, 1959 and 1960 could be fairly attributed to the pipe being weakened through age. The remaining 90 per cent. were caused by exceptional events which could not be anticipated.
Indeed, the quotation which the hon. Gentleman made from a mid-January Manchester Evening News began with the statement that the
"age of gas mains is not a matter of prime importance."
I have with me a copy of the publication Gas Age which I will later hand to the hon. Gentleman. Ten photographs are reproduced showing cast iron gas mains in excellent condition after periods of service ranging from 103 to 128 years. Therefore, while it may have shocked the hon. Gentleman, as he said, to learn as a layman that cast iron pipes could be safe after 100 years, here is the actual evidence brought before us. There is abundant evidence that age alone is not a sound criterion on which to base a policy of renewal.
The hon. Member stated that he gathered that old joints are now condemned. I can find no confirmation of that from gas engineers. What was termed an old joint by the hon. Member is still being installed with absolute confidence in major trunk mains. It is true that flexible joints are now in common use and playing an important part in ensuring a safe distribution system. But it would be quite wrong to assume that mains with old type joints are significantly more dangerous and, therefore, due for replacement urgently.
The third major point made by the hon. Member, and supported again by a quotation from the well-informed, but

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anonymous official of the North Western Gas Board, referred to the laying of old pipes many years ago without regard to the suitability of the soil surrounding them. I agree that today pipes are laid with great care and attention to infilling, and that frequently these precautions were neglected in the long past. But it would be wrong to think that all old pipes were badly laid or that nothing is done to correct the faults of other days.
Throughout their life, old pipes, for many reasons, are exposed for inspection, and whenever soil defects are observed they are remedied. Where deficiencies are observed it is not uncommon for the work to be extended beyond the original length fortuitiously exposed. Soil deficiencies are being remedied, but I would not deny that weak spots still remain to be discovered and corrected. All gas boards are vigilant in seeking out weaknesses and the situation will improve steadily. If I have convinced the hon. Member that his fears about age and joints are unjustified, I should not imagine that he would advance soil weakness as a factor demanding this widespread and costly renewal of old pipes.
I hope that some of the worries of the hon. Member have been reduced if not removed. But while I have advanced arguments to show that widespread renewals are not required, that is not to say that a programme of reasoned renewal is not a permanent part of the policy of all gas boards. In England. Scotland and Wales the boards provide heat service for 13 million consumers through nearly 100,000 miles of mains. The industry is alert to its responsibilities. But transport and distribution for such
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distances in varying conditions means that an element of risk is ever present. I suggest that 0·3 deaths per annum for every 1,000 miles of main demonstrates that we are not condoning tragedies that should be avoided. Of course there is need for vigilance and no room for complacency.
In the North-West there are 13,000 miles of main at risk every day. Sixteen teams of three men using 16 special vehicles loaded with drilling equipment and elaborate gas detectors ply around their beats, giving special attention to areas of subsidence. They check the mains, drilling holes every 10 feet and lowering the gas detector to check leakages. Soil conditions are also checked by the drill holes. Since 6th April, 1958, over 3,300 miles of mains and 468,000 service mains have been surveyed in this way.
It is from actual conditions revealed by these surveys, plus all the information gained from the condition of pipes exposed for whatever purpose, that the plan and programme of replacement is drawn up. In this way last year 26 miles of pipe were "taken out of risk" in the North-West area alone. This work never ceases. Nothing and nobody is allowed to hinder or hamper it. The Board is conscious that there is much to do. The best brains are applied to the problem. Finance is generously provided, and I give the hon. Gentleman and the House the sincere assurance that neither vigour nor vigilance will be lacking in the drive to obtain results and to reduce pain and anxiety.
Question put and agreed to.
Adjourned accordingly at eleven minutes past Eleven o'clock.

  EUROPEAN ECONOMIC COMMUNITY
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  CONGO (UNITED NATIONS EXPERTS)
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Preamble
The House met at two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Salisbury

BARONESS BURTON OF COVENTRY
Elaine Frances Burton, having been created Baroness Burton of Coventry, of Coventry in the County of Warwick, for life—Was (in the usual manner) introduced.
LORD FRANCIS-WILLIAMS
Edward Francis Williams, Esquire, C.B.E., having been created Baron Francis-Williams, of Abinger in the County of Surrey, for life—Was introduced, making the Solemn Affirmation.

EGYPT: DISTRIBUTION OF COMPENSATION FUND
2.27 p.m.
LORD KILLEARN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government—

(1) How much of the £27½ million received from Egypt has been distributed by the Foreign Claims Commission; and how much therefore still remains;

(2) How much has been paid to claimants whose property has been

(a) nationalised

(b) sequestrated

respectively; and

(3) How much tax has been levied up to date on this Fund.]

THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, up to March 31, 1962, the Foreign Compensation Commission had distributed
834
£11,641,367 7s. 8d. Of this sum, £10,754,399 14s. 0d. was in respect of 528 claims for property which had been Egyptianised, and £886,967 13s. 8d. was in respect of 835 claims for sequestration and other losses. £15,858,632 12s. 4d. of the £27½ million received from the United Arab Republic therefore still remained to be distributed. Up to March 31 of this year £959,619 had been paid as income tax.
LORD KILLEARN: My Lords, I should like to thank the noble Marquess for his full, informative and very helpful reply. It will take a little digesting. May I ask him one supplementary? Are the Government mindful of the fact that these unfortunate claimants were thrown out of Egypt neck and crop over five years ago, and would he not agree that it is high time that these claims were equitably settled?
TILE MARQUESS OF LANSDOWNE:
My Lords, as the noble Lord is well aware, Her Majesty's Government are doing everything in their power to ensure that these payments are made as quickly as possible. I can give the noble Lord my absolute assurance that we are very much exercised over this matter and doing everything we can to expedite it.
LORD KILLEARN: I should like to thank the noble Marquess for that assurance and I hope the pressure will continue to be exercised.
LORD HENDERSON: My Lords, may I press the point which the noble Lord has raised? These people have been waiting at least five years now, and I gather from the noble Marquess's reply that only about half has been distributed. How many more years have to pass before this matteer is settled? These people are waiting. I do not think they can be expected to be satisfied with an assurance that Her Majesty's Government are doing all they can to speed up matters. Five years is a long time. If they have to wait another five years, it will have been ten years before they get satisfaction.
THE MARQUESS OF LANSDOWNE:
My Lords, this matter was very closely debated, as your Lordships remember, on December 20 last. I think that perhaps in answer to the noble Lord I

835
should point out that of the 5,328 applications received to date 2,587 remain unformulated, and assessment of many formulated ones is being held up by lack of evidence. I think the noble Lord is aware that there is a judicial procedure to be gone through, and it is not in consonance with British practice for this judicial procedure not to be thorough and absolutely complete. That is one of the difficulties we are up against.
LORD HENDERSON: My Lords, may I ask the noble Marquess this? I think there is a Committee handling these things. Are they giving all assistance to claimants to enable them to speed up their applications on the basis that the noble Marquess has just mentioned?
THE MARQUESS OF LANSDOWNE: My Lords, we have in fact increased the number of Commissioners and we have also sent out two special representatives to Egypt; and I think this is helping. Of course, as the noble Lord is well aware, there is the bottle-neck in Egypt itself.
THE EARL OF LUCAN: My Lords, the noble Marquess gave us the figures of those claims that had been formulated and of those that had not. If I took down his figures aright, 1,300 claims have been dealt with and satisfied and 2,600 have been made and formulated or substantiated; so now only 50 per cent. of the live claims have been dealt with. Can Her Majesty's Government give us hope of anything better?
LORD BALFOUR OF INCHRYE: My Lords, can the Minister give us any hope that the Egyptian Government's conduct is becoming more resilient and helpful as compared with its conduct in the past?
THE MARQUESS OF LANSDOWNE:
Yes, my Lords, I can give a rather more optimistic report. As some of your Lordships are already aware, the Egyptian Minister for Economy and Finance, Dr. Kaissuni, came to this country last month; my right honourable friend the Lord Privy Seal had a long, detailed and frank discussion with him about outstanding difficulties arising out of the 1959 Financial Agreement, and subsequently a memorandum was handed to Dr. Kaissuni giving our principal
836
points of complaint. I am happy to be able to inform your Lordships that Dr. Kaissuni was most sympathetic and cooperative. He has, in fact, appointed a new Sequestrator General, and I have every reason to hope that, from the Egyptian end, we may have rather more favourable and rapid results than we have had before.
THE EARL OF LUCAN: My Lords, could the noble Marquess answer the question I asked him—namely, whether it is a fact that only 50 per cent. of the formulated claims have so far been dealt with?
THE MARQUESS or LANSDOWNE: I do not think that the noble Earl's question is quite so simple as it appears. I should like to look into it a little more rather than to give a snap reply. As the noble Earl is well aware, this is a complicated subject, and I should like to have a further look at that question before giving an answer.

H-BOMB DISCUSSION AND ILLEGAL DEMONSTRATIONS
2.33 p.m.
LORD KENNET: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they endorse the opinion expressed by the Joint Parliamentary Under-Secretary of State, Home Office, in this House on April 5 last, viz.:—
That to describe the effects of a hundred megaton weapon and to discuss the effects of Civil Defence policies on the East-West balance of deterrence is to encourage illegal demonstrations.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (EARL BATHURST): My Lords, the noble Lord appears to have misunderstood the purport of my remarks. The Government welcome informed discussion on all the matters to which he refers.
LORD KENNET: My Lords, I have two points to make which, if I may, I shall make in two separate supplementaries. If I am in order to quote from

837
the speech of the noble Earl in the Civil Defence debate, I would point out that he said [col. 316]:
" But, what is much more dangerous, the noble Lord, Lord Kennet, and his friends persuade young people in this country to go sitting in the streets, fearing that nothing else can be done."
This was said in the Civil Defence debate. I should like to ask the noble Earl whom he considers to be my friends, with the rider that I am not connected with the Committee of One Hundred, and never have been; and specifically to ask him whether he has in mind the "Pugwash" Conference of Scientists, with which I am connected and may he publicly identified, since these Conferences are attended chiefly by the senior scientific advisers of this country, the United States, the Soviet Union and France?
EARL BATHURST: Unfortunately, I have not had the pleasure of the acquaintance of a great number of the noble Lord's friends, and When I used that remark I meant it in the widest possible sense, referring to those who hold or express the same views that the noble Lord expresses. I am perfectly aware, of course, of the "Pugwash" Conference; but I hope that your Lordships will agree with me that the views that the noble Lord put forward in the Civil Defence debate in your Lordships' House are really quite different from the views of the eminent scientists who take part in that Conference.
LORD KENNET: My Lords, I accept the noble Earl's affirmation that he does not know who my friends are in any case; so that settles that. The second point I wish to make is this. To quote once more, if I may, from the noble Earl's speech in the debate, he said [col. 315].
" In the view of Her Majesty's Government—and I think it must also be the view of anybody who thinks about it seriously—millions would survive an attack on this country. The noble Lord, Lord Kennet, does not like that."
I should like to ask the noble Earl whether he considers this to be Parliamentary language, because I am certain that it is inhumane language.
EARL BATHURST: My Lords, when I used the term that "the noble Lord, Lord Kennet, does not like that", I meant—and I think that when one reads
838
the OFFICIAL REPORT it is clear—that the noble Lord does not agree with our belief that millions would survive. If in any way I appear to have meant that the noble Lord was inhumane or anything of that sort. I will withdraw the remark but what I meant to say was that the noble Lord does not agree with the principle that millions would survive.
LORD KENNET: My Lords, I am sorry to take up the time of the House yet a third time. To quote from my own speech in the debate, in answer to the point that I do not accept the principle that millions would survive, I said [col. 297]:
" however horrible a nuclear war might be, there would obviously be some people in some areas whose lives could be saved by a good Civil Defence programme."
EARL BATHURST: My Lords, it looks as if the noble Lord and I are getting rather closer—I only say "rather closer "—than otherwise would appear to be the case. I still hold to the principle, as do Her Majesty's Government, that millions would survive.
LORD KENNET: My Lords, I accept this principle, and I did so in my speech.
BARONESS WOOTTON OF ABINGER: My Lords, would the noble Earl explain on what evidence he bases the statement that the noble Lord persuaded either his friends or his enemies to take this action of sitting down?
EARL BATHURST: Will the noble Baroness repeat the last word?
BARONESS WOOTTON OF ABINGER: On what basis does the noble Earl base his statement that the noble Lord, Lord Kennet, persuaded his friends, or, if he wishes, his enemies or persons he did not know, to take this action of sitting down to deter nuclear action?
EARL BATHURST: My Lords, I think I made it quite clear—and it is clear, I am sure, in the columns of Hansard—that it is the ideas that the noble Lord and his friends or enemies express that persuade people, and in particular young people, to carry out illegal actions. I apologise to the noble Lord if he thinks that I meant that he himself purposely

839
encourages these actions. I think that is quite clear in my reply to the noble Lord's friend, Lord Longford.
LORD KENNET: My Lords, I hardly know what to say. What ideas of mine or of my friends persuade people to take illegal action? That is the question to which we wish an answer.
EARL BATHURST: My Lords, I do not think that the noble Lord would want me to prolong this rather personal debate in your Lordships' House; but I think that the entire essence of what the noble Lord and his friends, or enemies, say with regard to Civil Defence and nuclear warfare in general—and, so far as I can see, what the noble Lord, Lord Kennet, said—is quite different from what his noble friend Lord Lindgren said when he instituted that debate.

AGRICULTURE AND THE COMMON MARKET
2.38 p.m.
LORD WALSTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government when the official translation of the agreement on agricultural policy reached by the European Economic Community in January, 1962, will be available.]
THE MARQUESS OF LANSDOWNE:
My Lords, the final texts were approved by the Council of Ministers of the European Economic Community on April 4. They will be published in the Official Journal of the Communities in due course. Nine texts comprising six regulations and three decisions have been received (together with two supplementary documents) and have been placed in the Library of your Lordships' House. We expect to place the remaining five texts there this afternoon. An English translation will be made available to noble Lords in the Printed Paper Office as soon as possible.
LORD WALSTON: My Lords, I am grateful to the noble Marquess for that information. I wonder whether he could amplify in a little more detail than he did in his answer to the first
840
Question from the noble Lord, Lord Killearn, what is meant by as soon as possible" in this context. I think it is slightly simpler to be more precise when it is a question of translating from French and not of disposing of Egyptianised assets.
THE MARQUESS OF LANSDOWNE:
My Lords, I should like to be precise on this, but it is quite a tricky piece of translation, as I am sure the noble Lord is aware. We have set to work on the translation. I cannot give your Lordships an exact date, but I hope that it will be soon after Easter.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I happen to have been the recipient of a promise, some months ago, in regard to the simple task of supplying Parliament, which ought to be informed as to what happened, with a plain and official English translation. What on earth is the matter with the Minister's Department? If it is a tricky translation, what are you "tricking" with? Can we not have a plain translation of what was in the agreement?
THE MARQUESS OF LANSDOWNE:
My Lords, I should very much like to help the noble Viscount, the Leader of the Opposition. The point is that the translation which we give to your Lordships must be the translation of the final and substantive document. We have the French version and are going to translate from the French. In the Library your Lordships will find the copies to which I have already referred, and the five others that are coming; they will all be there, in French, in the Library. We are now going to set to work to put them into English, which will be done as quickly as is humanly possible.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, there may be some phrases used in this House which are still in Norman French. I am not ashamed of having been to a board school and of having worked ever since I left it. There is no reason at all why your Lordships' House should not have a translation of this important document within days, not within months. It is quite unreasonable that information is apparently being withheld from Parliament.
THE MARQUESS OF LANSDOWNE:
My Lords, with great respect to the noble Viscount, I think he has misunderstood the situation. We have only just received these documents; therefore, it has not been possible for us to translate them sooner.
LORD HENDERSON: My Lords, when British Ministers attend meetings with the Six they do not speak in French, I presume, but in English. Therefore, their speeches do not need to be translated. Is it not possible to have their speeches issued direct for public consumption, instead of merely handing a précis to the Press for publication?
THE MARQUESS OF LANSDOWNE:
My Lords, that is quite another question. What we are dealing with now is the texts of decisions and regulations, which are in French—they are in fact in French and will be issued in other languages, but the language from which we propose to translate is French. If your Lordships care to look in the Library you will find them there in French. They are all very highly technical—
VISCOUNT ALEXANDER OF HILLSBOROUGH: Thank you very much.
THE MARQUESS OF LANSDOWNE:
That is all we can do for the time being, my Lords.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I think that the Government's action in this matter deserves a hearty vote of censure from all sides of the House.
LORD KILLEARN: My Lords, I have not been to any of these international meetings for quite a long while now, but there used to be a good old rule that French and English were equally binding. If that still applies, how does it come about that these documents are in French and not in English as well?
THE MARQUESS OF LANSDOWNE:
Because these are documents which have been discussed among members of the Six.
LORD STONHAM: My Lords, is the noble Marquess aware that there is a real point involved here? It takes the Six three months to decide what they mean in French. What precautions are being taken by Her Majesty's Govern-
842
ment to make quite sure that the translation, when we get it, means exactly the same in English?
THE MARQUESS OF LANSDOWNE:
My Lords, what the noble Lord has said is very helpful. There have been, as your Lordships are perfectly aware, a number of texts, provisional and now final, which have had to be carefully Checked and cross-checked. In order to hurry the thing up, we are working both from the provisional text and from the final French text, and I can assure the noble Viscount he should not be angry with us, because we are doing this as fast as we possibly can.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I will go off and count up the number of days you have had since you made the promise, and I will come to you again.
THE MARQUESS OF LANSDOWNE:
It is not physically possible to translate a text that you have not got.
VISCOUNT ALEXANDER OF HILLSBOROUGH: It would not be impossible for a really up-to-date and enterprising Government, who would have obtained the text much earlier, as between friends.

THE ECONOMIC SITUATION
2.45 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH VISCOUNT ALEXANDER OF HILLSBOROUGH rose to call attention to the Economic Situation; and to move for Papers. The noble Viscount said: My Lords, I have one very great regret in moving this Motion, and that is that I have to move it instead of our old friend Lord Pethick-Lawrence; I cannot help thinking about him as I rise to undertake this task. My Lords, whatever opinions are now held about the general economic situation in the country, one thing is certain. The Conservative Government, after ten and a half years of office, must take the responsibility for the present economic condition of the country. When I was thinking over who was responsible, my mind flashed back to a speech (which I am sure was made in the hearing of many Members of this House who were then Members of the other place) which was the greatest indictment of a Government I have ever

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heard in my Parliamentary life. It was made on October 5, 1938, by Sir Winston Churchill against the Chamberlain Government. Sir Winston used these words, which I quote [OFFICIAL REPORT, Commons, Vol. 339; col. 366]:
" So far as this country is concerned …"
this was in relation to the crisis of 1938—
"… the responsibility must rest with those who have had the undisputed control of our political affairs …"
So whatever I say this afternoon about the situation, I would adopt that first of all.
The country, apparently, is also concerned about it. This morning we can see in the Press the results of the first by-election after Mr. Selwyn Lloyd's Budget, and therefore what the voters think about it. This great and powerful Conservative majority Government receive far less than a quarter of the total votes cast by the electorate in North Derby within a week or so of the Budget—a Budget which was to deal with the economic and financial position in which we find ourselves to-day. I think there can be little doubt about that. If that is so in the case of North Derby, it has been almost continuously so since the first great shock to the Conservative Party at Orpington. Obviously to-day, when we come to discuss the economic situation of the country, the country at large has confidence neither in Mr. Macmillan nor in the Conservative majority Government. They do not seem to be able to use the election opportunities which are given to them.
The Economist newspaper—which I suppose would pride itself upon being a more or less independent paper on financial and economic questions; but which to my mind, at any rate, is often guilty of being especially anti-Labour—has been very interested in our general economic position. Just before Mr. Selwyn Lloyd's Budget there appeared in that paper a particularly carefully drafted article, to which I will come in a moment. Broadly speaking, what they wanted was a loosening up of the economy in order to try to find some remedy for our present difficulties of stagnation in production and repeated crises in exports and balance of pay-
844
ments. But, when they came to write their article last week, they had a comment to make on Mr. Selwyn Lloyd's Budget. I need not quote the article in detail, but two things stand out in it.
The first is that they regarded the Budget as depressing. The other thing—and this, of course, is not a charge against the Government in this case—is that they said the one thing they thought they could praise, apart from the promise of a change in the Schedule A tax in the future, were the taxes to be imposed—now known as "lollipop" taxes—upon children's and old age pensioners' sweets and soft drinks. No wonder,they regarded the Budget of the Chancellor of the Exchequer as depressing, if that is the best comment they could find to make about it!
There was, of course, something to be said for the promise that was made to repeal next year for owner-occupiers the present Schedule A tax, but I think most owner-occupiers would have preferred to have something in hand rather than to wait for it. I would not go so far as to use the words of a Member in the other place, who said, "You might wait till next year, some time, never." I think they would be bound to fulfil this promise, seeing that they are fulfilling the promise they made last year to relieve the sur-tax payer by £83 million. But certainly it does very little to help those who are in just as much difficulty as the owner-occupier; those who, since the Government's Rent Act, have had constantly increasing rents to pay, and who are facing the results of a new assessment and valuation, having already suffered rent increases far greater than the actual amount of the Schedule A tax upon the apartment or house they rent. I should say that, judging by the estimates I have seen, the burden on those tenants and properties would be at least half as much again as that on those involved in owner-occupation, if not nearly double. So there is little hope and help for them there. I think, therefore, that we can pretty well leave out the Budget from anything we consider as being effective in relation to the general economic situation of the country. It means almost nothing in its contribution to improving the situation—almost nothing at all.
But there are some things revealed by a study of accounts, as to how some prophets have come to judgment. I have noticed from time to time in the Conservative speeches in the other place, and sometimes in the country, that they are very concerned about the general state of expenditure under the Conservative Government, and about its effect upon the national economy, so we produced some figures brought up to date with this last Budget. Before I quote them, may I just say this: that during the 1959 General Election tour of Mr. Macmillan, the Prime Minister, he warned the country that if the Labour Party were elected their costly measures would cause Government expenditure to rise by the end of five years by £1,000 million in a year. I would point out that the Conservative Government have managed to get to that position in half the time. I will give the figures if I may.
In 1959–60 the Budget estimate was £4,495 million for Supply Services expenditure the actual expenditure was £4,502 million. In 1960–61 the Budget estimate was £4,907 million: the actual expenditure was £4,989 million. In 1961–62 the Budget estimate was £5,187 million: the actual Exchequer issues for that year were £5,368 million. The Budget estimate submitted for this year is £5,612 million. So, my Lords, instead of being £1,000 million up in five years, they are over £1,100 million up in about two and a half years. That is one prophet come to judgment, anyway. If that is the basis upon which Conservative appeals are made to the country to try to sway the electors' opinions, I should have thought that the sooner they revised their methods the better it would be. I readily admit that gat Election times, when Party feeling is running high, there may be quite wild speeches made here and there; but they should not come in that manner from the Prime Minister.
In the next breath, I should like to refer to Mr. Macmillan's comments in the 1959 Election with regard to something which is in the Budget, the taxation of capital gains. Mr. Macmillan toured about 2,000 miles in the Election campaign, and in his first tour he was opening up at Bradford. After generally attacking Mr. Gaitskell's reliance
846
upon a tax on capital gains and business expenses, he said:
" The truth is that this vast Eldorado, these vast millions to be found so easily and so painlessly, simply do not exist. The plain fact of the matter is that Mr. Gaitskell has been rattled and is running around in circles."
That was said at Bradford, according to the Daily Telegraph of October 1, 1959—two and a half years ago. This Budget adopts what we on our side believe to be a very unsatisfactory method of taxing capital gains. But it is adopted—another prophet come to judgment.
Then there were references in the same tour of Mr. Macmillan to the stupidity of talking about getting money from taxation of business expenses. I need only say to your Lordships that those of you who have any connection with business know as well as I do that there is already a revision by this Government of the basis of taxation of business expenses, and that they seem to get money from it—another prophet come to judgment. I could go on with quite a number of other cases to prove the same thing, but I will quote only one more speech of Mr. Macmillan, made during his Kent tour. He said, in dealing with Labour's taxation proposals on capital gains and business expenses:
" Mr. Gaitskell has apparently discovered a new golden path to success—taxation of expense accounts and capital gains. The truth is it is a fake. It is the last desperate throw of people who know they are not going to win the election."
LORD STONHAM: That is why they are doing it now.
VISCOUNT ALEXANDER OF HILLSBOROUGH: But the Prime Minister won the Election, and he has adopted both. Fake business expenses and capital gains! Is it any wonder that the country loses confidence?
These things can be carried to an even later stage than that, beause if your Lordships look at column 821 of the Hansard Report of the other place for April, 17, 1961 you will find that the Chancellor of the Exchequer, Mr. Selwyn Lloyd, dealt with the suggestion from some quarters that remissions on surtax should be accompanied by a capital gains tax. He went on to explain that he had carefully examined it all,

847 and at the end of that particular paragraph he said:
" 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."
My Lords, it has been thought worth while in the Budget which has just passed, although intervening between those two was the occurrence of the "little Budget" last July, when Mr. Selwyn Lloyd said, with regard to this tax:
" It would involve a new and complicated drain on the administrative resources available. We should find that all the best brains in the country would be concentrating at once on how legally to get round it. We should have a limit, and we should have exceptions We should have to have a sliding scale; and in my view—I look at this from a purely practicable point of view—I do not think it would be worth while".
That was what he said even when dealing with the "little Budget", which was to be an interim measure for getting rid of the difficulties that had occurred in the progress of our economic situation. But it is in this Budget.
The only criticism one can make about it at once, perhaps, is that he has gone as far as the can to leave all the loopholes there for those people who want to escape it to do so. For short-term profits they need to hold an investment for only one or two days longer than six months in order to escape it; and on properties, they can also manage to escape taxes of the same character by manipulation. In calling attention to the economic situation, my Lords, I do really think that we might ask the Government to look at their past record in this matter to see whether they could not be a little more certain as to what they are saying, as to whether they can carry it out, and in ensuring that the country will not be misled.
There is one other matter I should like to refer to, which is the tendency nowadays for all political Parties to say, "We are in favour of dealing with this matter by way of planning and controls." There, again, is a most extraordinary change of behaviour and opinion. During the evening of the Stockton by-election I listened in very carefully to all the television shows that were put on and to the opinions which were being obtained from Liberals and Conservatives.
848
One Liberal candidate or past candidate—I think one speaker was the prospective Member and another was a past Member for Middlesbrough—claimed that his Party could present to the country a proper five-year plan to get rid of all the present difficulties. He was a representative of the Liberal Party, which I have always associated in my mind with those in complete support of what is called absolutely free trade, absence of controls: every man for himself and the Devil take the hindmost! The same night the defeated Conservative candidate, speaking I believe from the steps of the Town Hall, indicated that the Government's planning which they intended for the future would of course lead to better times and would be coming to fruition in time for the Tory Party to be returned at the next Election. They are all in favour of planning now.
When the Conservatives came to power in 1951 on the basis that it was necessary to set the people free from planning and controls, you would never have believed that they would come to the situation that they have reached now. First of all, they often complain of our referring to the league table, but they stand practically at the bottom of the league table in production, especially industrial production. In that regard, there were two boom years—strangely enough, they were the Election years, 1955 and 1959. Nevertheless, taking an average over their whole 10½ years in office, production has not expanded more than an average of 2 per cent. But in the case of the Election years, it was 4 per cent. or nearly 5 per cent. in 1955, and that figure was boosted to 9½ per cent. in 1959. That was brought about largely by Budget manipulation and also by increasing productive output, not so much for export or to correct our balance of payments, but by providing, in advance of production, more spending money for the people for the time being in the Election year. No wonder that even some Conservative Members of Parliament say that they are tired of seeing Governments offering bribes to the electorate! That is the state of the nation, which we want honestly and sincerely to see improved.
One reason Why we want to get back to a sound basis of planning and control is that there can be no shadow of doubt

849
that one of the great handicaps to keeping up a steady growth of production, which is what this country needs, has been the "Stop-Go, Stop-Go" policy of this Government over the last ten years. This has led to very great anxiety and a great lack of confidence in various of the industries concerned. I should say that the actual direction of investment has probably been greatly handicapped by the lack of an adequate lead or of fiscal measures to support investment in the right industries for the right purpose, together with a guarantee at the same time that these would be no restriction against the bolding of skilled labour in certain districts where it ought not to be held because it is required elsewhere for the general economic benefit of the whole country.
My Lords, you cannot arrange things of this sort without planning, and you cannot arrange them without control. You can speak and argue and plan all you like about political Party policies for a redistribution of industry into the areas where you can thereby undo unemployment or expand the overall production for the country; but you must also ensure that you stop this continuous and undue flow of people who are enticed into industries in areas such as London and its neighbouring parts, or centres like Birmingham and its nearby districts, which leads to an unequal distribution of labour in relation to the skilled requirements of the nation. It is very important that that should be seen to.
Then, I must complain about the manner in which even the beginnings of a plan by the Government seem to he put into operation. One of the things which has obviously been very much in the mind of Mr. Selwyn Lloyd ever since last July is the pressure of some policy which was called the "pay pause". Of all the stupidity, politically, of introducing it in the way it was introduced at such a time, in the light of relief of surtax, and holding up the legitimate cost-of-living increases which were due, some of them under quite normally operated agreements which made it clear that they were due for reconsideration! And if I may bring your Lordships up to date, there was also that extraordinary answer yesterday by the noble Lord, Lord Newton, with regard to the position of nurses. It is the same thing. Yet all this was suddenly launched arising out
850
of the "Little Budget", and there has been a great deal of difficulty since.
Organised labour in this country is always at the service of a Government, of any colour; and it is asked for its advice, after consultation, upon what is best for the industry of the country. I could quote, if I looked them up, any number of cases where organised labour has been called in on such occasions as that. But then, to set up a National Economic Development Council—which was immediately labelled Neddy "—before there was anything like a basis of agreement as to how it should function between employers, the Government and the employees' organisations, is something I cannot fathom. I certainly cannot admire either the wisdom or the political discretion of those who were responsible for that approach; and up to the moment it has not done any good in this matter. Yet I should like to see an organisation of that kind really succeed, if the matter were soundly approached, with the responsibilities both of labour and employer, as well as the Government, in actual planning to bring about the results we want. But, like nearly everything else this Government have touched, from Suez to "Neddy ", they make unhappy mistakes, rushing when they ought not to and hesitating when they ought to go forward, and going down in history as the Government of continuous blunders. And they blundered on this one.
However, I should like to see an attempt made to get a planning organisation with a proper view as to what is the basis of fair remuneration. On the other hand, I should like to put to the House what is very often said in this country, as if it were only so in this country—that there is not the proper relation between wages and the actual growth of production, which is really at the base of what Mr. Selwyn Lloyd seeks when he asks for a pause. It is not true to suggest that our 'position in the league table of production internationally is due to the fact that higher wages are paid in this country. If you see some of the claims in the United States, you will see that the average wage to-day, for a shorter week, is nearer £40 than £30 per week. We have no such wages in general use in this country as there are in the United States.

851
Or, if you come to examine the position in relation to the Common Market countries—the Six countries which noble Lords, or many of them, are so anxious to join, so as to get, in some miraculous way, out of the present economic dangers in which the country finds itself—do you find wages there in any better relation to production than here? If you look at the facts, I think it will be agreed that that is not so. What a comment that was in the London Times, when the O.E.C.D. Economic Survey came out! They said:
" This contains all the information that ought to have been given in our own Economic Survey".
But it was not given. They thought very poorly of the Economic Survey in this country. The O.E.C.D. pointed out that the hourly wage earnings in manufacture are as follows. These are the figures from 1953 to 1960 (I have not the figure for 1953–61): in Italy, 137; in the United Kingdom, 155; in West Germany, 158; in the Netherlands, 167; in France, 182. That is the measure of the increase in wages which has taken place. How can it therefore be said that there is an undue handicap to our exports to those countries, when in fact there is not any such obstacle? Because I think that if you watch the export figures (I have not got them with me, but I look at them from time to time) of this country, compared with the Common Market countries in the last two years, you will see that those figures have steadily increased, whereas they have not been increasing in some of our best-known markets of the world. I could quote other examples, but I have not the time to do so.
But I will say to your Lordships that what this country needs at the present time is the right sort of growth. It needs a growth of industry all the way round. I am very much in favour of planning, so that we give all the necessary favours to export industry in order to correct the frequent tendency in our balance of payments, and therefore bringing pressure on the pound. But, my Lords, I am not in favour of so putting on this "Stop and go" that you very often stop something in home production which is, in fact, of very great assistance to our export trade. Any businessman who has been engaged, as I am sure many
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of your Lordships have, in industries which are vertically organised—and therefore you are in it from the primary production right up to the final distribution—would say that, if it were not for the proportion of overheads on your export goods which are carried along on your home production, you could not get the markets you are getting to-day. And to make these sudden stops and starts, which very often fall penally hard on your home producers, is not right.
I am naturally very interested in agriculture, and I have a paper here which will show what I mean. Let us state the position that agriculture has taken up on this difficult question of balance of payments. It has been of enormous service in holding off the worst aspects of the balance-of-payments crises through which we have been going, involving hundreds of millions a year. Let us take one of the things which has happened in relation to the home industry—the enormous increase in machinery ordered by the British farmer. Speaking from memory, I think it has not been as much in the last twelve months as it was before (some years have been better than others), but there is a continuous purchase of agricultural machinery. Anyway, the value of machinery ordered by farmers in this country in 1961 was £214,500,000, or 17 per cent. of the whole of the agricultural purchases for the year.
Then I look at the exports, and I find that the export of farming machinery in 1961 has been no less than £134 million. How much does the costing of these two parts of trade go together? I must say, for the benefit of the noble Lord, Lord Mills, who just before Christmas drew attention to the Government's view that one cause of our situation had been far too much pressure upon our resources for the home market, that we have to examine all these matters carefully, because to cut deliberately products X, Y or Z in home production may do inordinate damage to their export trade. It needs to be planned and it needs to be controlled—two words which were anathema to the Conservative Party in 1951. I am very anxious to see this put right, whoever does it, because I want to see my country prosperous, I want to see the workers not only employed but also properly

853
paid and I want to see the better spending of money.
In studying the figures of the way in which money is spent, one of the most shocking things I find is the extent to which money is being spent, encouraged by the moral outlook of the Government, on gambling. The Conservative Government have given a special cachet to the people to think that gambling is all right, by a special Bill, by setting up betting shops and by having Premium Bonds, with special competitions arising out of them. The amount spent on these forms of gambling runs into something like £790 million a year. About £440 million is spent or racing. I notice that the money spent on the pools has decreased from £111 million to £100 million. The amount spent on Premium Bonds is £13½ million. The way in which a country can be made to appear as if the people "never had it so good" is fantastic. Everybody is anxious to get more money and will risk anything in any sort of gamble to get it.
I want to see better production and better wages and a better use of the nation's money. I want to see demands being made which will help not only our own country, which is a prime necessity, but also to keep together people who have been under British influence, who have been given British ideas and some idea of freedom and of coming together in future to co-operate for production, trade and development. At present, I am entirely dissatisfied with the state of the national economy, and I am even more dissatisfied with the efforts the Government have either made or not made at all. My Lords, I beg to move for Papers.
3.24 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD MILLS): My Lords, I have listened with rapt attention to the skilful political speech which the noble Viscount the Leader of the Opposition has made. I am not going to follow him into the many statements and misstatements in which he has indulged. I am going to ask him to be patient and wait for my noble friend the Leader of the House, who, I am sure, will be much more capable of that task than I am.
LORD SHEPHERD: My Lords, I suppose that the noble Lord thinks that the noble Viscount is more answerable.
LORD MILLS: Your Lordships must draw your own conclusions about what I think. The noble Viscount referred to the fact that the late Lord Pethick-Lawrence was no longer with us. It is nearly a year ago since he opened a similar debate in your Lordships' House. On that occasion my noble friend Lord Dundee said that his criticisms of the Government were always fair, reasonable and consistent. I am not saying that the noble Viscount's criticisms also are not as fair as he can make them, but Lord Dundee's statement was true and we shall remember our late noble friend with great respect and affection, not only for his many qualities but also for the friendly criticisms to which he submitted the Government and the wise advice he gave us.
Last year in the economic debate he said that there had been some bright periods and on the other hand a good deal of cloudy weather. He then proceeded to describe the most depressing factors—first, the balance-of-payments position, and secondly, the growth of the gross national product. Because our noble friend had the faculty of putting his finger on the things that matter, I should like to draw your Lordships' attention to the present position of the balance of payments.
The balance-of-payments position recovered substantially last year. The account as a whole was much better. For the balance of imports and exports alone—because that is what is most important for the years ahead—the visible trade balance improved from a deficit of £391 million in 1960 to a deficit of £135 million in 1961. In the second half of last year, the deficit was only £23 million. The balance improved because imports were lower and exports were higher. But we still have to secure the substantial rise in exports that we must have Ito get the balance of payments on a sound foundation, so that we can meet all our oversea commitments and pay for the extra imports that an expanding economy needs, without falling back into a fresh crisis. Of course there has been a price for the gains we have secured since July. There has been some loss of industrial production, though the latest figures of industrial production, which were produced to-day, show a rise of two points between January and February.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, should I not be correct in saying that the actual percentage increase for the whole of the year was only 1 per cent.?
LORD MILLS: My Lords, I thought that I had already indicated that there had been a price, in a standstill in industrial production. However, production seems to be coming forward again. But the price in terms of inflationary pressure, both at home and abroad, and in the balance of payments, would have been far higher if we had not made a determined attack on the problem last summer. There is an old saying,
" Look not into the past: it comes not back."
But the noble Viscount invited the Government to look into the past and see what their record had been. I believe that we are entitled to look to the past if only to profit from its lessons, so long as we also look into the future and try to ascertain what it has in store for us. So for a short time I would crave your Lordships' indulgence while I review what has been the record of this Government since they came to power in 1951.
Britain has taken the lead in reducing barriers to trade; the pound has been made convertible, import controls have been lifted, and negotiations have been started for entry into the Common Market, after we had been responsible for forming the European Free Trade Association. We have agreed to reduce import duties on many goods by 20 per cent. in the G.A.T.T. negotiations. Since 1951 the annual value of United Kingdom exports has increased from £2,582 million to £3,682 million in 1961. In volume this represents an increase of over 25 per cent. and has been achieved in the face of growing competition. As a result of Government encouragement and higher savings, Britain is now investing more than twice as much as in 1951 in new factories, plant, equipment, roads, houses and schools. Large-scale modernisation of British industry has been carried out. The net investment by companies has risen from £267 million to £835 million in 1960, and about £1,000 million in 1961.
So far as production is concerned, in the past eleven years it has risen by
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more than 30 per cent. The emphasis of industrial production has of course shifted from the old to the new industries. One of the fastest growing industries, as your Lordships know, has been the motor industry, in which production of motor vehicles has risen from under 500,000 in 1951 to over 1 million in 1961. Steel, engineering, electronics, plastics, electricity and television have all shown great expansion. The aircraft industry's exports have more than trebled since 1951. I would remind your Lordships that the first nuclear power station in the world was opened at Calder Hall in 1956, and eight more nuclear power stations are being erected.
Full employment has been maintained even when the world recession reached Britain. Unemployment has not reached the 3 per cent. figure which Mr. Gaitskell defined as full employment. The number at work to-day is 1¾ million greater than it was in 1951. The noble Viscount referred to the question of the distribution of industry. I would remind him that special measures have been taken under the Distribution of Industry Act and the new Local Employment Act to deal with pockets of unemployment. As a result South-Wales and Merseyside are being transformed into flourishing industrial areas.
The average standard of living in this period has risen by over 30 per cent.—more than in all the previous 40 years put together. There has been a big rise in the consumption of practically all types of goods. By far the greatest increases have been in motor cars, motor cycles and other durable goods. Allowing for the rise in prices, we are spending to-day about seven times as much on motor cars and motor cycles as we were eleven years ago. On other durable goods expenditure has risen by 50 per cent. and weekly earnings since 1951 have risen by 85 per cent.
I should now like to say a word about taxes. Despite the cost of greatly improved social services, the Government are taking only about 26 per cent. of the gross national product in taxation compared with 32 per cent. in 1951. The standard rate of income tax, as your Lordships know, has been reduced in that period from 9s. 6d. to 7s. 9d.; the personal allowances have been improved; and special reliefs have

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been given to those on fixed incomes and to encourage savings. Even this year, when the Chancellor of the Exchequer had to introduce a Budget which really offered no rewards—I could almost call it a tough Budget—he extended the tax reliefs, to the benefit of nearly 500,000 people, in his proposals for the age exemption and the small income relief. Purchase tax has been reduced several times, and the maximum rate is now down from 100 per cent. to 45 per cent. The entertainments tax has been abolished, and the duties on beer and wine have been cut. In 1951, 52½ per cent. of companies' undistributed profits and nearly 75 per cent, of their distributed profits went in income and profits tax. To-day the figure is about 54 per cent.
Then we have record savings. The return of the Conservative Government in 1951 restored confidence in the future. There has been a remarkable increase in personal savings. In 1961 alone we saved over £2,000 million. I suggest that these are achievements which are worth consideration when we talk about the record of this Government. Since the war British investments in and aid to under-developed countries have totalled well over £2,500 million. Since 1956 Government aid has more than doubled, increasing to about £180 million in 1961–62.
But, in the face of these substantial advances, there have been great improvements, too, in the social field. Retirement pensions have been raised four times by over 90 per cent. The real value of the single pension is 15s. more than it was in 1951. With regard to education, we have built over 5,000 new schools, and provided 2,750,000 more school places. On housing, over 3 million houses have been completed, including over 1 million for home ownership. Almost one family in five has moved into a new house since 1951. Then on the health side there has been a fourfold increase in the amount of money spent on hospital building. It was £9 million in 1951, £36 million in 1961 and, as your Lordships know, a new £500 million ten-year programme has been launched. There has also been a big expansion in local authority health and welfare services.
In the face of these great achievements, why have we been faced with
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balance of payments difficulties, inflation and higher costs, in spite of the great scientific and technological advances which have characterised recent years? During and after the war inflation was analysed in terms of excess demand—too much spending was pulling up prices and incomes tried to keep pace. We tried to deal with this problem—not only the Socialist Government but the Conservative Government too—by fiscal means. Now it is recognised that inflation is also caused by a rise in costs not primarily due to the pull of excess demand, but by increases in incomes not justified by events. The pay pause and the incomes policy, which the noble Viscount mentioned and which are set out in the White Paper, represent an attempt not only to grapple with the problem itself but also to bring home the fact that an incomes policy which goes beyond fiscal controls is essential if we are to be competitive and really to improve our standards.
I suggest that we have made a good start on this incomes problem. Since last July the index of hourly wage rates has risen by less than 3 per cent., and much of that was due to pre-pause commitments. In the same period in 1960–61, the increase was nearly 5 per cent. This is a real gain and there are fairly clear signs that we are already seeing some benefit in the trends of prices, apart from food prices which have been hit by the bad weather and the comparative shortage of potatoes. But this is only the beginning and it is crucial to get money incomes into a proper relationship with production.
Now as to the future. I said that we must look to the future and try to assess what it holds for us. Let us look at both the short-term position and the longer term. First, what are the prospects for the next financial year, 1962–63? Though our exports have risen comparatively little for some time, the conjunction of conditions both at home and abroad is favourable now. Exports to Europe and to North America have been rising strongly. Indeed, between 1960 and 1961 our exports to the members of the Common Market rose more quickly than did their trade among themselves, and there seem good prospects of a recovery of demand for imports by the primary producing countries, who take about half our exports. Generally

859 our casts are now more competitive. We believe there is a prospect of a substantial rise in exports as a whole in the course of this year. Indeed, the latest figures suggest that it may have begun. Exports have increased in the last three months and in March they were some £312 million. Plainly, we must safeguard the opportunity if we are to increase our exports; we would not foster it—on the contrary, we should damage it—by trying to boost our home demand too fast. We need to get the economy more export-minded and to be less tempted by an easy home market. That was the theme to which the noble Viscount referred and about which I was talking last December.
To look ahead over the coming year, there is in prospect not merely rising demand from overseas but more demand from home. In the public sector, investment is rising at an annual rate of 5 per cent., and current spending on goods and services by Government, both central and local, is rising at about 3 per cent. In the private sector, though there may be further falls in investment by manufacturing industry after the immense boom up to the third quarter of last year, the level of investment will still be high. There is also an increasing investment in distribution and in the service trades. The pattern of events suggests that stockbuilding may well be low this year. It seems likely to rise, however, before the end of the year and we must allow for such a demand on current output.
I have given your Lordships a pretty cheerful picture. Let us assume that events do not turn out as we foresee. The Government have now a wide range of powers, both monetary and fiscal, at their disposal to adjust the course of demand. We have developed new tools in the last few years—notably the system of special deposits and the indirect tax regulator for which the Chancellor of the Exchequer is seeking renewed powers. Such new powers, added to the existing more conventional powers, provide the way of adjusting the economy to changing events more flexibly, more quickly and in a less discriminatory fashion than in the past. I suggest to your Lordships that this is an important step forward.
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Now, the longer-term prospect. We have made a good start towards establishing the conditions which are necessary if we are to achieve and sustain a higher rate of growth. I would just refer to the National Economic Development Council. I do not think the noble Viscount has given it a chance yet. I think actually it has had one meeting; but its staff are working hard to get the information upon which they can make judgments.
I should like to highlight four points for the future. The first is the need for a sound balance of payments. I think now there is a growing appreciation that we need a steady and significant export rise as the dynamic element in economic growth. The second point is the balance of claims on resources. We need a better balance between the demands made on the economy and the resources we have to meet them. Too sudden and rapid an upsurge in demand, outstripping the rate of growth in the capacity of the economy both in equipment and in manpower, leads to delay in deliveries, rising costs and damage to our balance of payments. It leads inevitably to restraints to get the economy back in balance. I believe there is a growing appreciation of these factors. We want a steadier course, fixing our policy in the light of prospective developments so as to avoid the "Stop and Go" type of economy and to avoid abrupt changes of direction.
The third point is incomes policy, but I do not propose to add anything to what I have said about that. The fourth point is investment. There has been a considerable rise in the proportion of our resources devoted to fixed investment over the years. The ratio of fixed investment to the gross national product has risen from 17¼ per cent. in 1958 to just over 19 per cent. in 1961. Though the share of our resources devoted to investment at home remains rather lower than, for example, the proportion in Common Market countries, it seems to me clear that over the last decade we have been increasing our share, despite all the other claims on our resources, more quickly than they have. In manufacturing industry alone investment last year was 40 per cent. higher than in 1959. Manufacturing investment accounts for only about 28 per cent. of

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all fixed investment. It will remain at a high level, and other investment, for example in power, road and transport, also continues to rise.
Now just one word about the Common Market and then I shall be finished. In opening the debate last year on the economic situation Lord Pethick-Lawrence referred to the Common Market and said that if proper terms were found it might be to our great advantage, both economically and politically, if we took part. That is the view of Her Majesty's Government also. We have never disguised what our views are in this respect. We have entered into negotiations with the Six because the opportunities in a market of a further 170 million people should be very great for our industries. With no tariff barrier on British goods we should be able not only to sell more but to increase our share of this expanding market. Whatever develops, we shall find ourselves in a new society. To hold our own in the domestic market and exploit the chances across the Channel will be a major test for our industries.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am sorry to interrupt the noble Lord, but I think it would be very interesting if the noble and learned Viscount later on would say something about the reports which have appeared, in The Times especially, of Dr. Erhard's defence of his Budget and reports of difficulties in the economies of other countries in the Common Market. I did not think the Common Market would be discussed in quite so much detail, but what these countries have done in increased production over the last few years has been boosted up so much and there has been no mention of what view is taken of the pause in the economies of those countries in the Common Market.
LORD MILLS: My noble friend who has just listened to the noble Viscount has murmured something about the "league table". so no doubt he will enlarge on that.
Finally, the future offers opportunities on the economic front, provided we adjust ourselves to the changing circumstances of world trade. We must not think, or continue to think, in terms of
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what we have known; we must think in terms of what is actually happening and is likely to happen.
3.58 p.m.
LORD SHACKLETON: My Lords, the noble Lord, replying to the noble Viscount the Leader of the Opposition, said that my noble friend made a skilful political speech. I will not throw any such gibe at the noble Lord, but his speech makes me absolutely despair. It is a tragedy that, year after year, we hear speeches from those Benches—although there are some warning voices from time to time, pointing to the fact that all is not as well with the British economy as it might be—yet the noble Lord's speech was apparently a record of achievement. He said we have lowered trade barriers, we have achieved convertibility, and we are talking about going into the Common Market. The position so far as the security of this country as a base for expansion is concerned is that it is still as weak as it was when, for instance, the noble Viscount, Lord Bruce of Melbourne, and others were criticising the Government for the same sort of complacency as we have had to-day. Despite the blinding light that appears to have flashed with regard to inflation—it had flashed a little earlier among some Government supporters—the fact remains that this Budget and Government policy still make no real attack on the basic problem of maintaining a balance in our economy so that we can go forward to expansion.
Ever since the War we have been afflicted by the modern successor of the old trade cycle, namely, a cycle, sometimes of two or three years, of an excess of demand in regard to currency and an imbalance in regard to exports and imports; and we are nowhere nearer solving it now than we were five or, indeed, ten years ago. The situation that precipitated the particularly acute crisis in 1950–51 was, of course, the change in the terms of trade. For the last few years the Government have had a pretty easy time with regard to commodity prices. There has been none of the disturbance that almost overnight turned the favourable balance from one year to another by several hundred million pounds.
When we analyse the situation—and I am sorry that the noble Lord did not

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do it—we find that there have been certain changes, some of which are certainly not the fault of the Government, but which they have failed to take into account in their planning of budgetary policy, in their presentation of the economic facts to the country. Certain of these difficulties have arisen, I think, from good intentions; I think the intentions in this country in regard to the export of long-term capital have perhaps exceeded our capacity. I think we all applaud the fact we are doing this, particularly in regard to under-developed areas. We have had, especially lately, the acute problem, a new one in recent years, of the balance of payments in regard to the maintenance of our Forces in Germany. We have, in recent years particularly, the decline in trade in the sterling area; and when the Government boast about our achievements in the Common Market, it is worth noting that it is met by a decline elsewhere; perhaps our Common Market competitors were busy in that area. We shall know better about this when, as I hope, we go into the Common Market. My noble friend and I are perhaps not in full agreement on this.
Against this also we have the decline in invisibles. I am staggered that we had no explanation of this. In the past our invisible earnings have been one of the most important parts, the saving grace, of the balance-of-payments situation. We find a really shocking decline in invisible earnings in the last two or three years, sometimes by as much as nearly £200 million, in one year, and we see that the earnings from shipping, which used to be such a standby in this country, declining at a quite deplorable rate. Again, that is, to some extent, affected by the world trade situation and the fall in freight rates and so on. When we look at this position and see the difficulties—and these are genuine ones, not all of the Government's making—we are bound to wonder how it is that the noble Lord can come to make a speech full of easy optimism without any suggestion as to the course we should follow.
It really is not good enough to give a list of the improvements in this country without comparing them with those in other countries. I do not doubt that
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the noble Viscount, Lord Hailsham, may wish to murmer "league tables again". I am sorry that we do not have visual aids in this House so that those of your Lordships who have not read the report of the Organisation for Economic Cooperation and Development—and I do not doubt the Government will give a sigh every time this document is mentioned—could look at the relative position of this country; and I urge noble Lords who have not done so to look at page 10 of this document. We see that over the last ten years the increase in the gross national product, averaged year by year, has been exceeded by practically all the countries, indeed all the main industrial and other countries in the West except Ireland. When it comes to increase in individual productivity per man-hour we are at the bottom the Irish beat us with regard to this.
I really fail to see how it is that the Government can be as content as they appear to be. In looking at our export position and at the difficulties we are in in this country and then at the achievements of other countries, we see how unfavourable is the comparison even allowing far the basic insecurity that we have always recognised because of our dependence on raw materials from abroad for imports. I have the figures here in the United Nations digest; I will not bother your Lordships with them. When we look at the achievements of countries like Germany and France and other countries, we see how their exports and imports have risen at a prodigious rate in, comparison to ours. And they appear to have achieved it with only minor disadvantages, although I agree that there are warning signs at the moment as wage rates rise so fast in Germany. When we look at the growth of our economy, then it is certainly worth quoting what this document says:
" The rate of growth of gross national product in the United Kingdom was about half the rate achieved in the member countries of the European Economic Community."
It is probably reasonable to have expected a greater rate between 1950 and 1955. There was the tremendous rate between 1945 and 1950, during the days of the Labour Government. I am not claiming the credit for that; it was part of the post-war recovery which came later in Europe. The growth of gross national product per head of employed

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population was nearly three times faster on the Continent up to 1955 and twice as fast subsequently.
The noble Lord boasted about investment. But the figures on investment are pretty depressing. We have referred before to this 'matter, and particularly to the failure of the Government to provide the right circumstances for stimulating confidence among private investors. Certainly, except when the Government have seen fit to cut them off rather suddenly or to cut them back—or, as they say, to delay completion—there have been investment programmes in the nationalised industries. The position in private industry is worrying. I think the noble Lord, Lord Ritchie of Dundee, has been rather maligned, particularly by his supporters on my side of the House when they said the City was at the end of its tether. It has not been purely a question of whether or not the Government taxed the rich too much; it has been the absence of any clear-cut Government policy on any long-term approach to the problem.
The Government have very largely ignored the advice of the Radcliffe Report, which I admit was not as clear as it might have been. They have used precisely those instruments they were advised not to use. They have gone in for excessive use of the bank rate, variations of which may be of slight significance in industry but they have an effect on confidence and, among other things, attract a large amount of short-term capital of a very dangerous kind to match our long-term capital invested. It is no wonder that those people who are concerned with the future progress of this country begin at times to despair.
The balance-of-payments problem is not one that is going to be at all easy to solve. It seems to me that the Government, confronted by this basic dilemma, confronted by the problem of rising costs and the pull of home demand, can find only one solution, and that is restriction; their analysis of the problem always leads them to apply the restrictive solution instead of an expansionist one. Yet the surprising thing is that from 1956 to 1958 the yearly rise in industrial production was little over 1 per cent. more than was achieved in 1955. Home costs per unit of output rose by 16 per cent. and the volume of
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exports by only 4 per cent. Then in 1959–60, when the Government took the lid off (I will not say whether it was connected with Elections, but, at any rate, they did) the economy was allowed to expand and industrial production rose by 13 per cent., home cost nor unit of output by 4 per cent., and exports increased by 9 per cent.
Our criticism is that the policy of the Government, and their Budget in particular, is quite irrelevant—I am not concerned with questions of a confectionery tax—to the needs of our present situation. It fails to provide encouragement for economic growth, even among those who believe most passionately in private enterprise. The Government are rightly concerned with wage levels. To-day no Government can ignore incomes as a factor. It is worth noting that in the last year profits have risen 25 per cent. more than wages, and since 1957 they have risen twice as much. It is against this background that we look at Government policy. They introduce the pay pause; they ignore Radcliffe; last year they introduced a pay roll tax which they quite clearly did not understand. A pay roll tax could, as a long-term instrument of planning, be of some use; but the Government brought it in with the idea of its being a short-term regulator, until they were laughed out of it and, quite properly, dropped it this year. Their sole contribution during the last two years, to a proper and relevant understanding of the problems of this country and the urgency of raising our standards of living as a basis for the security of the Western world has been the introduction of commercial television. This seems to me to be the height of irrelevance and frivolity against the real needs of the part that we ought to play.
When considering what has gone on in the by-elections, I would say only that it is quite obvious that the country is now wanting another lead. Whether or not they want the Labour Party I do not know; but I am quite sure they will not, when the time comes, want the Liberal Party. However, it is quite obvious that the people of this country would like something rather more in the way of leadership; and while we do not want to go back to that sort of austerity and controls, at least in the day of

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Sir Stafford Cripps there was some leadership, some purpose and determination to arrive at proper priorities. This Budget is no stimulus to invention, to exports, to output or to consumption. In fact, the only thing the Government are achieving is perhaps a limitation on consumption.
Here we find their figures confusing, because they talk about an increase in productivity and that income and consumption must not exceed that increase; yet they are expecting a bigger increase in consumption. What they have done now is to decide that they will "pass the buck", and will hide behind the National Economic Development Council—"Neddy", as it is called. I am entirely in favour of this Council, and am delighted that the trade unions have gone into it. The fact that they did not go into it before was because the Chancellor of the Exchequer refused to talk to them, except on one issue—namely, control of wages. If we are to have a national policy we need much more stimulus, much more direction and a new climate of opinion. The trade unions and employers, with the Government, since the Government themselves refuse to govern, need to look and see how this problem of incomes and production can be tackled.
There are some things that could be done. The O.E.C.D. Report—I will not bother your Lordships with reading it in detail—again refers to the need for long-term solutions as opposed to the short ones that we have to-day. Clearly, there is a need to get labour rather more mobile. The Government do little to stimulate mobility. Here, a lead for the introduction of rational redundancy arrangements for industry would be of real help. Few firms have them. Some of the most progressive provide them, but they are pathetic in comparison to the real need to get people moved out of an industry. This is going to be even more necessary if we go into the Common Market.
Secondly, and perhaps most important, we in this country need rather more of an atmosphere of social justice. Although noble Lords may have laughed at some of the remarks of my noble friend and Leader with regard to the
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" gambling State ", the fact is that most people to-day are looking for the easy way to make money. The speculative gains tax, although of some significance—I would not write it off entirely—is still small in comparison to the need for achieving a proper taxation of that section of earnings, namely, capital gains, which, at the present moment, are untaxed. I cannot, for the life of me, see how a Conservative Government who have not normally suffered from doctrinal restraints can find themselves unable to introduce this tax which would have a really considerable effect in changing the atmosphere within this country.
There are two or three things that could be done urgently now. The time has come when we must stop playing around with mere exhortations to exporters. Other countries have gone further. The Labour Government in the past, and now the Conservative Government, refuse to give real incentives. I think it is necessary that finance should be available—I do not mean export credit guarantees, admirable though they are for their rather limited purpose—at low interest rates. It is no good our worrying about the fact that there are exporters who do not directly export, and therefore will probably go out. Somehow, we have to improve the very poor performance in comparison to that of other countries of the exporters of this country. It is poor because it is more difficult to export. There are all sorts of dangers and hazards in it. I think that if we are to have an incentive society, and have to rely on incentives, some incentives should be given. There are other things that could have been done again this year. We could at least have had some improvement in depreciation allowances in industry.
I hone that we shall not think of this discussion simply in terms of an attack on the Budget. This is a fundamental problem that is affecting our country. The country is tired, and it will remain tired until some leadership is provided. We have such vast commitments, both internationally and at home, that we must get at least somewhere near the promise (which does not seem likely to be fulfilled) of Mr. Butler, when he talked about doubling the standard of living in 25 years. Whether or not

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we double our standard of living, certainly we have to increase our production at a much higher rate. At the moment we are noticeably failing to achieve this increase.
4.18 p.m.
LORD POOLE: My Lords, I listened with the greatest respect to the speech of the noble Viscount, Lord Alexander of Hillsborough, who initiated this debate, and also to the speech we have just heard from the noble Lord, Lord Shackleton. I hope they will not think me discourteous if I say that I disagreed with almost everything the noble Viscount said, and with a good deal of what the noble Lord, Lord Shackleton said. I shall confine myself to certain other aspects of our economic problem which have not been fully dealt with this afternoon.
The noble Viscount is quite right to consider the economic situation to-day against the background and light of the Budget which was introduced last week, and to consider the extent to which it meets the immediate economic demands of the country without, as I am afraid has happened in the past, prejudicing the long-term position. But it seems to me that, before we can really assess the effect of the Budget, whether it meets the needs of the country at this time, we must be clear in our own mind whether the Budget should have been an inflationary or a deflationary Budget.
Here, I find myself in complete disagreement with the noble Viscount, Lord Alexander of Hillsborough, and also I think, with the noble Lord, Lord Shackleton. For the ordinary people in this country it is extremely difficult to determine, when the economy is fairly nicely balanced, what should be done. For example, the noble Viscount quoted the Economist—and I am very glad he should have done so, because, as perhaps some of your Lordships know, I am associated with it. But Mr. Wincott, in the Financial Times, said this:
"… the one way to have ensured yet another crisis for Britain before 1962 is out would have been to pump another £150–£200 million of purchasing power into the economy."
Last Sunday, Mr. Lawson, writing in the Sunday Telegraph, said:
" But perhaps the most extraordinary Treasury decision of all was that the British economy on 9th April, 1962 required a dose of disinflation."
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It is therefore very difficult for the ordinary reader to know which to follow. The only conclusion to which one can really come is that they cannot both be right. I take the exact opposite view to that taken by noble Lords opposite. I believe that at this time what was needed was a Budget that was deflationary, and I do not agree that the Budget was irrevelant, because I think it was a great deal more deflationary than some people have been led to believe. If I come to this conclusion, I am greatly influenced by the fact that, in my opinion, inflation is endemic in the whole economy of the free countries of the world, particularly in Europe and the United States; and whereas it is fairly easy to inflate the economy, it is extremely difficult and laborious to have to deflate, should that be necessary.
As the noble Lord, Lord Shackleton, said, we have the advantage of having the O.E.C.D. Report to guide us. I have it here, too. I hope that he will forgive me if I quote from it, and perhaps the passages I quote will not carry quite the same connotation as those he quoted. This, of course, is always likely to happen. Contrary to what was, I think, the general impression in the newspapers—and certainly contrary to what has been said to-day—my general conclusion from this Report is that it completely supports the Chancellor of the Exchequer in the view he has taken. If your Lordships will turn to page 30. in the Conclusions (I usually find it easier to read the Conclusions because, as a rule, they are shorter than the rest of the Report), you will see that paragraph 47 says:
" But it is equally important that full advantage should be taken of the breathing space thus provided to set on foot the more fundamental adjustments the economy requires."
I maintain that that was exactly what the Chancellor intended to do in this Budget.
LORD SHACKLETON: Lollipops!
LORD POOLE: I will argue lollipops with the noble Lord if he wishes, but I thought he said he did not want to do so.
This Report gives the most thorough examination of our present economic condition, but there is nothing very new

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in it: there is nothing that has not been said before and is known to most people. It gives (and noble Lords opposite are quite justified in calling attention to it) rather depressing comparisons with the economic situation and growth in other European countries. But I do not think one can ignore all the factors that have led to it. I feel that it is perhaps a danger of debates on economic situations that one tends to confine oneself entirely to economic matters, when in fact there are many matters, which are not purely economic in themselves, but which have a very great impact on the economic life of the country. For example, few people in this country think that economic conditions are really the be-all and end-all of what we are trying to do, and the objectives of economic policy must be consistent with other objectives, such as the maintenance of personal liberty, social justice, freedom, in regard to all of which I should have thought Great Britain has an excellent record, under any Government during the last 25 years, in comparison with many other countries in the world.
Nor is the raising of the standard of living the only objective of economic policy. I think that full employment (and the noble Lord, Lord Mills has drawn attention to this) ranks with many people in this country as high as greater wealth. It certainly does with people like myself, who started work in the early thirties. I do not think that this should be forgotten. Unemployment in Britain has varied between 1·1 and 1·2 per cent. over the last few years, and it has never been up to 3 per cent., whereas in other European countries—which we have had quoted as to their productive success—unemployment has been consistently at a level of 5 per cent., or more. I think that noble Lords opposite, when they quote these figures and are stoning current productivity, should say whether they would be prepared to accept that level of unemployment.
LORD SHACKLETON: My Lords, I am sorry to interrupt the noble Lord, but may we be told which countries have had consistent unemployment of 5 per cent.?
LORD POOLE: Yes.
LORD SHACKLETON: Portugal?
LORD POOLE: I am quite prepared to be quoted against myself, but I have not these figures with me. I had in mind Italy and France.
LORD SHACKLETON: No.
LORD POOLE: Yes.
BARONESS WOOTTON OF ABINGER:
My Lords, would the noble Lord explain the high level of unemployment in Northern Ireland?
LORD POOLE: I am merely saying—and I am not going back on my point—that these countries, whose productivity is considered to be so superior to ours, have in most cases a level of unemployment greatly in excess of ours. If I have made a miscalculation I will apologise to the noble Lord, Lord Shackleton, and withdraw. It does not, however, alter the purpose of my case.
LORD STONHAM: My Lords, is the noble Lord aware that under the Labour Government we had much higher productivity than the other countries of Europe, and also a lower level of unemployment?
LORD POOLE: My Lords, I think that if the noble Lord had listened to Lord Shackleton he would have heard him mention the different circumstances which obtained at that time. I consider that these are very important points.
Another objective, I think, is the avoidance of great inequalities of wealth; and although no one would say that has been completely achieved in this country, nor would it be argued that inflation does not cover up great patches of poverty. I do not believe that there is anybody who would say that the situation in this country does not compare very favourably with many other countries. I am glad the noble Lord, Lord Shackleton, referred to our contribution to the under-developed countries. I would say that Britain has contributed as much—I was going to say more, but I do not wish to be corrected by the noble Lord again—in relation to its resources as any other country.
LORD SHACKLETON: Will the noble Lord allow me to intervene again? France has made a bigger contribution.
LORD POOLE: I said "as much as" other countries. We should remember these points, and we should emphasise

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these achievements. The great problem—I accept this from noble Lords opposite—is that it is difficult to do this and strike the right balance without appearing to be complacent, for which there is no possible justification.
There is another great illusion, I think, and that is that economic and productive growth is influenced only by economic factors. It is a mistake, in my opinion, to assume that there is a direct relationship between capital investment and productivity. I think the O.E.C.D. Report makes this mistake on page 18. For example, Norway has invested a larger proportion of its national income than most other countries, and has in fact a rather lower than average growth rate. Mr. Odd Aukrust, who has made a detailed study of the economies of Norway, Finland and the United States of America, concludes in his article in the Productivity Review for February, 1959, that the human factor—better organisation, better management, better labour relations—matters more than mere additions to capital or size of the labour farce. I would agree, inasmuch as this was said by the noble Lord, Lord Shackleton, that these factors are just as important as making a capital investment or having statistics which are drawn from one book or another.
But, my Lords, having said all this, having achieved so much, we must seriously ask ourselves: what has gone wrong? I agree With the noble Viscount, Lord Alexander of Hillsborough, that the factor which has hindered us most is that When the economy has expanded as rapidly as it did in 1953 and 1958 we have almost at once run into a balance-of-payments crisis or, as in 1957, a speculative run on the pound, and the Government have been obliged to take restrictive action. I believe that the reason for this is rather different from What has been suggested.
It is wrong to underestimate the difficulties of managing a currency like sterling, which, like the dollar, but unlike the European currencies, is an international reserve currency. As an example of this, in 1938 the ratio of the sterling area's reserves to trade was 72 per cent.; in 1955 the ratio was 25 per cent. Put in another way (and this is referred to in the O.E.C.D. Report), in 1959 Britain's foreign liabilities were more than three times its reserves, where-
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as the reserves of the European Six were five times their liabilities. I think that this fact simply cannot be overlooked.
I am convinced that we are never going to solve this problem—and the noble Viscount, Lord Alexander of Hillsborough, rightly criticises this "stop and go" economy—unless there are very real adjustments made fairly soon to what is loosely called "world liquidity". A start has been made, but not nearly enough has been done. The results of the discussions in Vienna were, to me, extremely disappointing. We have had the views of Mr. Tryffin, Professor Bernstein and Mr. Stamp; and I will say at once that I am in no position to put forward the merits of any one of their views, because I do not fully understand them. But they are authoritative proposals, and, so far as I know, none of them has been adopted by any Government concerned.
I would urge Her Majesty's Government to give immediate and serious attention to this problem. Because, my Lords, however much we increase exports, it is an absolute illusion to think that we can increase them so quickly, so much, that this vast gap which I have disclosed will be filled—at least in any circumstances which we can foresee. In fact, it can be demonstrated that an increase in exports, without an increase in reserves, makes us temporarily more vulnerable to fluctuations and, particularly, to delays in settlements made from overseas. We are in exactly the same position as a company which is consistently and regularly over-trading, which is being exhorted to over-trade more; and I think that no one can view this situation without the very gravest concern.
LORD SHEPHERD: My Lords, I hope that the noble Lord is not suggesting that we must not increase our exports at the present stage.
LORD POOLE: No, my Lords, but I am suggesting, and I am suggesting quite seriously, that it is quite wrong to assume that in the circumstances as we see them, or are likely to see them, we can increase exports indefinitely, without equally bearing in mind that we are running exactly the risk which I have described. This must be borne in mind. The Government can help exports, and I certainly agreed

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when it was said that the Government should not do so only by exhortation. There is really nothing more infuriating than that. But various things can be done, such as the provision of medium-term credits, as has been suggested, and of additional finance. But all of these things are extremely difficult to do when, in fact, our resources are inadequate.
It has been suggested that the Government should give direct incentives to help exports. I find it difficult to make any such recommendation myself because I am hesitant to know what exactly the Government should do. Do the people who make these suggestions say that we should have a turnover tax, as in France and Germany, and replace our taxation system? Do they suggest that we should perhaps ignore, or appear to ignore, some of the arrangements which are made at G.A.T.T.? I really do not know. But, in my opinion, there is no doubt that anybody who lightly makes suggestions of this kind, bearing in mind the effect they are bound to have—and I certainly do not say this regressively—should have a very clear idea of what exactly he is proposing.
I would suggest that Her Majesty's Government might consider urging our Embassies abroad to be a little less aloof on trade. If you try to sell, particularly in Latin American countries, you find that your principal opponent is only too often the accredited representative of some other country; whereas our own Embassies appear—at least, to those of us who struggle—to take the rather high attitude that it is beneath them to help. I believe that, if that point could be taken up, it would be helpful.
But far and away the most important thing the Government can do to help exports, is to keep our precarious economy on an even keel; and they must do this by the use of the Budget. Fiscal and financial measures are no real alternative. If the Budget does not restrain the inflation which, in my opinion, is endemic in our situation, and is generated to a great extent by Government expenditure, whether above or below the line (and when people talk about expenditure rising let them say quite clearly which they would like to see cut), then tighter monetary controls and higher interest rates are no alterna
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tive. My Lords, I would end where I began. In my opinion, this is exactly what the Chancellor had in mind; this is exactly what he has done. He had to create conditions under which the National Economic Development Council could start to function.
I am extremely glad that the noble Lord, Lord Mills, referred to Europe. I was a little disappointed that in the debate in another place last week there was not much reference to Europe. It is surely a matter that is in the minds of most of us, whether we are in agreement with it or not; and some of us expressed our views on that on another occasion. But it is certainly a primary duty of the Chancellor of the Exchequer at this time to have our economy in a form that will enable us to enter the Common Market in the most advantageous circumstances possible. I consider that the Chancellor has done this. It is considered in some quarters that what he has done is dull. It is always dull to tell people that there is no easy panacea which can be brought in to solve all the problems; and, of course, so far as the Press are concerned it is more exciting to have tremendous pieces of news. I believe, therefore, not only that this was a Budget conceived in exactly the right terms, but that in the present circumstances—which have been much referred to by noble Lords opposite—it was, on the part of the Chancellor. a courageous Budget. I hope that it will have the support of the majority here in your Lordships' House.
4.40 p.m.
THE MARQUESS OF READING:
My Lords, in rising to address your Lordships for the first time, may I start by requesting you to extend to me the indulgence which is traditionally shown on these occasions? Your Lordships are, of course, aware that there are certain occupational hazards which confront anybody who rises to his feet in your Lordships' House. In my own case, there is an additional and, I venture to suggest, unique hazard to which am liable to be exposed: for, my Lords, I may confidently assert that none of your Lordships (nor, indeed, of your Lordships' predecessors) has been liable, on rising to his feet, to find himself subjected to step-grand maternal

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surveillance from the Cross Benches. It so happens, my Lords, that the noble Baroness, Lady Swanborough, left the country by air this morning. This was entirely coincidental, and was arranged long before she or, indeed, I myself had any idea that I should be speaking this afternoon.
My Lords, the noble Viscount opposite who opened this debate depicted the economy in what appeared to me to be somewhat sombre hues, and I am not entirely persuaded that this sombreness was justified. Surely over the past decade there has been a considerable improvement in general standards of living throughout the country, despite the onerous burdens imposed upon us by the sacrifice of our overseas investments and the heavy additional obligations incurred during the war, upon which is now superimposed the high current level of expenditure upon defence. This, surely my Lords, is no mean achievement in the circumstances. But, of course, the stresses and strains developed in the process have erupted in the form of inflationary pressures which have not only introduced serious distortions in the home economy but also played havoc with the balance of payments. So it is that, every time there has been an attempt to expand the economy, sooner or later—and it is usually sooner—drastic restrictive measures have had to be introduced for the defence of the pound.
My Lords, if poverty in the midst of plenty was the tragedy and paradox of the pre-war era, might it not be true to say that prosperity in the midst of crises is the distinguishing feature of more recent times? We have had to endure for some years the disconcerting experience of riding upon this monstrous economic switchback. It so happens that, at the present time, we are being granted a respite and breathing space, while the driver seeks to determine whether the next stage requires an upward or a downward movement of his regulalator. Meanwhile we can be thankful that he has resisted the temptation to release the brakes immediately; for your Lordships do not need me to remind you that on previous occasions, when other drivers have prematurely released the brakes, their subsequent and abrupt reapplication has proved singularly uncomfortable.
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I confess that, contemplating the last decade or so, and the monotonous regularity with which the same treatment of credit restriction, high bank rate, and so on, has been prescribed time after time, I find myself irresistibly reminded of a phrase from the saga describing that famous amphibious expedition which I suppose would nowadays be designated "Operation Snark". Perhaps I should make it clear at this stage that in what follows no direct or indirect reference to my noble and, learned Leader is implied. The verse that keeps recurring to my mind is the one that goes:
"This was charming no doubt,
Though they shortly found out
That the Captain they trusted so well,
Had only one notion for crossing the ocean,
And that was to tinkle his bell."
My Lords, it is surely high time that we devised some new notions. The stock treatment has proved no more than a palliative, and the basic disorder remains to be remedied.
Any doubts which may linger as to the accuracy of this diagnosis should have been dispelled by the O.E.C.D. Survey, which has been mentioned by more than one of your Lordships, and I shall not risk inducing any sighs by quoting further from it. But, my Lords, I should like, if I may, to say this. I can think of no more complete vindication for my right honourable friend the Chancellor of the Exchequer's insistence upon the supreme importance of a national income policy than the analysis and conclusion presented in this document. Moreover, there is an unmistakable note of urgency underlying the recommendations, which state that it is imperative that a start should be made at once if the temporary respite, gained as a result of the measures introduced last July, is to be turned to more lasting advantage. This crucial problem has been submitted to the National Economic Development Council, and if that body can evolve, with reasonable despatch, a policy which conforms broadly to the recommendations of the O.E.C.D. Survey, and proves acceptable to the country, it will have rendered a conspicuously valuable service.
I warmly welcome the formation of this important body, and my right honourable friend surely deserves the greatest credit for the initial proposal

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and for the patience and perseverance which he displayed in what was undoubtedly a difficult and long-drawn-out accouchement. My only regret, and it is a mild one, is that this important body—I suppose as a result of our passion for initials and portmanteau words—is now familiarly known as "NED"—a name which, for all its charm, is more generally associated with a domesticated, but asinine, beast of burden. This is both inappropriate and somewhat unfortunate.
Last summer, my Lords, an outstandingly informative and constructive Report was produced, on the Control of Public Expenditure by the group presided over by the noble Lord, Lord Plowden. Among other things, it lays great stress upon the importance of building up an informed body of public opinion. May I quote from the penultimate paragraph of that Report? It says:
" The best system and most up-to-date techniques will succeed only if public opinion is actively stimulated and enabled to take a balanced view of the alternative uses of national resources that are posed, and to bring to the consideration of public expenditure and resources the same qualities of common sense and realism that the average household shows all the time in handling its own financial affairs."
This is an important aspect of the economic scene which perhaps has not received as much attention as it deserves, for there is a considerable way to go before public opinion arrives at the stage at which it is able to fulfil this important function.
My Lords, I make no claim whatsoever to be an economist, but I frequently find myself verging on despair after reading some of the comments upon the economic situation and upon economic questions which appear in the newspapers. I am not talking about editorial views; I am talking about the reporting of views expressed by various individuals and groups in this country. Not only do they often appear to reveal a staggering ignorance of the most elementary economic facts of life, and thus are frequently irrelevant, but they also reflect an archaic approach to these subjects.
My Lords, I cannot see how we, as a country, can ever develop our full earning power so long as these mental
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attitudes remain so widely prevalent. It may well be that the rather abstract nature of the principal threats to economic stability in this modern world—such things as inflation and balance of payments—makes them appear far removed from most people's daily lives, so that the danger is not taken seriously. This may, perhaps, explain the depressing predilection which I have noted of certain economic "Don Quixotes" to dissipate their time and energies in furiously tilting at notional windmills, thereby distracting attention from much more real and pressing dangers.
A basic and popular misconception which must be removed is the suggestion that profits are disreputable, and, indeed, even immoral. My Lords, where else can we find the means which are required to double the standard of living of the people of this country? This is getting near to advocating capital punishment for the goose that lays the golden egg, and represents a truly appalling confusion of thought. I do not underrate the need for an equitable basis of distributing profits; nor do I overlook the relationship between this important consideration and the extent to which the economy can be expanded. I therefore accept the basic proposition that short-term gains should be brought within the ambit of the tax authorities, although I have serious reservations about the further and future implications of the specific proposal, and also about the powers which it is proposed the authorities should be given to obtain information from banks and other agents.
My Lords, how can we get the basic priorities right, when fundamental misconceptions, such as those that I have tried to outline, are so widely, and often so vociferously, held? The noble Lord designate (if that is the proper way of referring to him), Sir Oliver Franks, in his last statement as Chairman of Lloyds Bank, drew attention to the dilemmas that may result from attempting to pursue ethical and economic objectives at one and the same time, and to the tendency to judge proposals, not by whether they will increase production, but by whether they are fair. Sir Oliver stated, of course, that he is all for fair play, and that distributive justice is a

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vital part of social morality. He proceeded to observe:
" There has been too general an acceptance of the idea that the economic system exists to produce jobs rather than goods ".
This may not be an ideal state of affairs, but surely we must, at all costs, face up to realities and avoid emulating the posture of the ostrich in these matters. Our constant endeavour must be efficiently to deploy the resources that are at the country's disposal, and to ensure that our economic policies and our fiscal arrangements, at least, do not hinder the employment of these resources to the greatest advantage of the community. I wonder whether we are doing all we can in this direction. Could not greater incentive be provided, for example through depreciation allowances, to install the most up-to-date and efficient productive equipment available in our factories, thereby assisting industry to maintain and strengthen its competitive position? And in this context, surely the continued existence of the tax on fuel constitutes a deplorable blot upon the fiscal landscape.
I also cannot help wondering whether, in surveying our resources, sufficient thought is given to improving our sadly depleted invisible account. The highly developed financial and trading machinery of this country, and the experience and skills which exist in the City of London, are immensely valuable assets. They have the great advantage that, since they make minimal demands upon manpower, and virtually none upon other resources, they must have the highest conversion factor that it is possible to achieve. To what extent, my Lords, are we directing our thoughts to preparing for a European financial community, parallel with the Common Market in goods? May there not be immense opportunities for us in these directions if we are ready to grasp them?
A small, but discouraging, omen is the absence in the Budget proposals of the repeal of the 2 per cent. stamp duty on transfers of securities. I should declare my interest as a member of the London Stock Exchange; though I hasten to add, particularly with my noble friend Lord Ritchie of Dundee sitting almost next door to me, that I do not presume to speak in anything other than
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my personal and individual capacity. The existence of this tax is now literally driving away business, particularly from Continental countries, which would otherwise come to London; and perhaps I might add that it seems somewhat at variance with the principles of a property-owning democracy.
My Lords, I hope that in what I have said I have not made myself appear pessimistic about the economic prospects of this country, because I am very far from being pessimistic on this score. I believe that, given the right leadership and the right forms of organisation, we can establish our economy upon strong and sound foundations, that we shall do so, and will proceed to create steadily improving standards of living throughout the country.
5.0 p.m.
LORD WALSTON: My Lords, it is a particular pleasure for me to follow upon the noble Marquess, Lord Reading, and be the first to congratulate him on his maiden speech, because many years ago he was my fag, and I should like to take a little credit for the admirably restrained and disciplined manner in which he spoke to-day. We both started our debating career in the same debating society, which was the nursery of such ornaments of your Lordships' House as the noble Earl, Lord Arran, whom I saw look in and look out again a little while ago, and the noble Viscount, Lord Stonehaven. I feel that he has not only maintained such reputation as there may be for that place, but has greatly enhanced it.
I do not think that the noble Marquess will expect me to agree with every word he said, and I certainly do not, but I did agree with the emphasis in his speech upon the need for expansion in our economy. I think that that really is the king-pin of the whole debate. What we have to face at the moment is that the policy of this Government is a policy of failure. One can produce figures of one kind and another which will substantiate or minimise that, but it is not a happy thing for anybody to do, because it is not only the Government who have failed but the country which has failed also, and that is far more serious. No matter what paper one reads or what expert or ordinary

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person one listens to, one realises, however ardent a defence the noble Lord, Lord Mills, put up and I am sure the noble and learned Viscount will also, that there is not a single person in the country, let alone in your Lordships' House, who is in any way satisfied with the economic situation of the country to-day.
No reference has yet been made to some significant figures which have just appeared in to-day's paper and which underline that point. I refer to those of industrial production. It is perfectly true that the figures in the Index of Industrial Production for February rose by two points over the figure for January—from 111 to 113; but, without going into any statistical details, the important thing to remember is that the figure for the three months. December, January and February, are exactly the same as they were for the three previous months, September, October, November. In other words, there has been no improvement, no increase in our total industrial production during that period, and that is an extremely sad and serious fact. What is even more serious is that if we compare the industrial index for December, January, February, 1961–62, with the same months in 1960–61, we see that we are now one point lower than we were at that time. That should be sufficient to convince any doubters that all is not well with our economy.
At this point, I should like to take up something which the noble Lord, Lord Poole, said, even though he is not in the Chamber at the moment. He quoted, perfectly fairly, from the conclusions of the Economic Survey of O.E.C.D. Perhaps the noble Lord was a little over-honest when he said that he found it easier to read the conclusions than the whole document. Sometimes, when you read the whole document, you find that you do not agree with the conclusions. On page 30, in paragraph 47, it says:
" It is equally important that full advantage should he taken of the breathing space "—
that is, the pay pause—
" thus provided to set on foot the more fundamental adjustments which the economy requires. The experience of the economy in the 1950s suggests that the restriction of domestic demand is not a sufficient condition for achieving the desired combination of a more rapid rate of growth, stronger external position and a more stable price level,"
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I think that that is the significant part of the conclusions of that document. We cannot continue as we have been in the past, carrying on at this low level of production, maybe going up one point, maybe coming down one point. We have to make use of the breathing space which the pay pause was supposed to give us in order to make some radical overhaul of our economy. I was going to quote some more figures from this document which have not been quoted yet, but the gist of them has been given, so all I will say on that score is that, by comparison with other countries in Europe, we have been doing extremely badly. And that is not a happy thing for any Englishman to have to say, either in public or in private.
In looking at the future, may I remind your Lordships of some figures in today's Times newspaper concerning the issuing of industrial development certificates, which should be some indication of the amount of industrial development that is likely to take place in future? For the three months, January, February and March of this year, 474 certificates were issued for schemes covering an area of 10 million square feet. That may sound an impressive amount, but if we compare it with the three previous months (October, November and December, 1961) we see, in place of 474 certificates, 487; so we have dropped in those three months, and the area has also dropped from 11·5 million square feet to 10 million square feet. It might be said that this is purely a seasonal matter. One would naturally expect a smaller number of schemes to be initiated in the first three months of the year. But if we compare the figures I have given with those for the first three months of last year, we find the difference is even greater. There were 640 schemes then in place of 474 and the total square footage was 17·6 million in place of 10 million. So the prospect does not look any rosier, to put it mildly.
Turning to the most important problem—which is, the actual amount of production, whether for export or not—I would at the outset remind your Lordships of another factor which has not so far been mentioned—that is, that in spite of our bad showing in international trade over the past ten years, we have

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been enjoying what we refer to as favourable terms of trade during that time. Again I have some figures but I do not want to overload your Lordships with them. If we look at the last three years, 1959 to 1961, and compare this country with other industrial countries of the world, we see that the export of manufactures from the other industrial countries has risen by 10 per cent. per annum, quite a substantial rise, whilst ours has risen by only 5 per cent. I admit that our exports have risen, but they have risen only half as fast as the exports of other countries. When we turn to the share of this country in world trade in 1955, we find we had managed to retain 20 per cent., but to-day it is down to 15 per cent. Again, that is a sorry picture.
Why is it that we have experienced this general failure all through over the past ten years in the whole of our economic efforts, whether it is at home or in exports? The fault primarily must be laid at the door of the Government; it must be a failure of Government policy. But it is not entirely due to Government policy, because, after all, in industry, in manufacturing and in exporting other people beside the Government are concerned. There are the manufacturers, the exporters themselves, those whom one might call management: and there is labour. Unless they all play their part we shall never achieve success. It is always easy to throw blame about, and there are certainly exceptions to any general blame, but I suggest to your Lordships that a large measure of the blame for this failure must, in fact, lie with management.
If your Lordships look back over the years, it will become clear to you that there are scarcely any managers in industry to-day (and I refer to "management" in the widest sense) who have had really tough experience, particularly when it comes to dealing with labour. During the 'thirties we had unemployment and there was always a large reservoir of labour waiting to he employed. That is not a good training ground for getting the best out of labour if you are a manager. So long as you know that there are other men waiting to take the jobs which some men may not be doing properly you do not have to study the technique of management so
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carefully as if there were not this reservoir of labour. There was the period before the war when there was little need to work hard at this and give thought to it, and little opportunity for gaining experience at it. After the war there was no reservoir of labour. But there was a large reservoir of unfulfilled demand, and when demands were made by labour for higher wages or better conditions there was no problem there for management: all they had to do was to put up wages, put up the prices and pass it on to the consumer, because there was this large unfulfilled demand. That, again, meant that management was not forced to meet the challenge of its job. To-day I believe we are suffering from that lack of training over the past twenty or even thirty years. We find that also in our exports—again with honourable exceptions, as there are, of course, in what I have already said. But there is no real incentive to go out and find fresh export markets.
However, it is not only management that is at fault; labour also has many things to answer for—though I should always put the blame more on management for having failed to create the right conditions for labour than the other way round. And, above all, the Government have failed. They have failed because they have not established the right atmosphere for read co-operation between management and labour, and the feeling that it is something that the country needs, as well as simply something from which the individual may benefit. The I'm all right, Jack" slogan is not without significance here.
But when one talks about this question of establishing the right atmosphere the question arises: what have the Government done, or failed to do, in order to accomplish this? Many of your Lordships have received an extremely interesting, useful and very nicely prepared document called Interests and Dividends upon Securities Quoted on the Stock Exchange, London, 1961. If your Lordships look at that document you will see that dividends in 1959 amounted to £715·9 million, and in 1961 to £956·3 million. In other words, taking 1959 as 100, by 1961 they had risen to 133. If you look at wages (this is in the Annual Abstract of Statistics, the official figure) you will find that, taking 1959 as 100,

887 by 1961, wages had risen to 107. So that you there have the picture of wages going up 7 per cent. and dividends going up 33 per cent. in the last three years, then, on top of that is the imposed wages pause, on the one hand, and, on the other, the surtax concessions in the last Budget. I suggest that when that sort of thing is going on it is extremely difficult even for the best management in the world to maintain the right sort of relationship with labour, or for the most effective, efficient and co-operative trade unions in the world to tell their members that the national interest must come before their own personal interest.
Therefore it is not surprising, when one looks back over the last ten years of Conservative Government, to see what has been happening in industrial disputes. Again (and I think this is the last set of statistics with which I shall weary your Lordships, but they are not without their significance), in the years 1951 to 1955, the annual average loss from industrial disputes was 2,362,000 days: and in the next period of five years, 1956 to 1960, that figure nearly doubled, to 4,450,000 days. In other words, it has become increasingly hard to persuade the workers of this country that they are receiving justice: and from that the country itself has suffered. I suggest to your Lordships that this is one of the main reasons why our actual industrial effort has been [putting up such a poor show compared with the industrial effort of all other manufacturing countries and other countries in Europe.
But why has our export market been doing so badly at the same time? I do not think there is any need to tell your Lordships, who have much greater experience in this than I have, that exporting if, not, as some people say, just "fun". Exporting is an extremely arduous job. There is no doubt whatever that it is much easier for any businessman or manufacturer to sell at home; and he much prefers to sell at home, provided he can get rid of his products.
What the Government do, in over-simple terms, when we have trouble with our balance of payments, is to say that we must export more, and therefore they restrict home demand by various fiscal means. But the effect of
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that is not immediately to push into the export market all production that otherwise would have gone on to the Home market. This cannot be built up in a matter of weeks or months. If it were going to be a really long-term policy, and if the Government were prepared to say: "For the next ten years we are going to have austerity in this country, and we shall restrict home demand by various means ", I believe that manufacturers would know that it was worthwhile making an effort to go out into the export markets themselves. But they know perfectly well—and the experience of the last ten years has shown us—that this restriction on home demand is a purely temporary thing. Whether it is relaxed because of economists' theories, or because of by-elections or General Elections is another matter. But after a matter of eighteen months or two years, at the most, the restriction on the home market is relaxed, and back will come the demand surging in; and the manufacturers know that perfectly well.
So the only effect of this "stop—go" policy is not, as the Government would have it, to divert efforts into the export market, but to make sure that a certain amount of necessary and desirable capital investment is postponed—which is bad for the country—and that such money as has been invested already is not fully used; that we have surplus industrial capacity but, because the market at home is not there, and the market abroad has not been built up, we are not using our previous investment to the full. It further has the highly undesirable effect of encouraging manufacturers to hoard labour. They know, as I say, that this is not a long-term policy over the next ten years and there would be no demand for that particular line of goods unless they switched to export. If that were so they would either switch to export or they would get rid of labour, which would go into more potentially productive export. As it is, they know that they have only to wait for a few months, or a year. They put their labour on to short-time: industrial production falls, and nobody benefits from this policy.
I submit that, in spite of the comforting directors' report which the noble Lord, Lord Mills, has already given to

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us, assuring us that the country is in a fine position and that there is nothing we need worry about, we have had long enough of this particular prospectus over ten years to be quite certain that it cannot work. We are not getting our increased production, and we are not getting the exports we need. We must have a policy of expansion, but we must also have a policy which ensures that at least some of that extra production is channelled into exports.
It is not very difficult to devise an expansionist policy at home. There is no need to dwell on that at this stage. It is much harder to devise a policy which is going to encourage exports. My noble friend Lord Shackleton put forward some suggestions. Other noble Lords also have done so, and the noble Lord, Lord Poole, made mention of them in broad outline. I myself do not see how any form of preferential tax on exports is likely to work. I do not think it can in itself, and I think it would be grossly unfair to many of those industries, including agriculture, which are import savers. So I should not like to see that so far as I am concerned. General tax relaxation, while expansionist so far as the whole economy is concerned, does nothing to direct our products into export.
We have seen over these years that the laissez-faire policy of the Government, coupled with bank rate, surtax concessions, credit squeeze, and all the rest, has got us nowhere. The only way we are likely to get anywhere in this crucial problem is by abandoning any doctrinaire abhorrence we may have of such things, and by considering in all seriousness a policy of allocation of raw materials to our essential industries based on their export performance. It is not an easy thing to set up. It has been done under a Labour Government, and it had considerable success. It need not be in any way restrictionist; it can easily be expansionist. I believe that, by such means, we shall be able to make sure that our economy increases, and increases as rapidly as that of any of our competitors, and at the same time our exports will also go up, and the home market will not absorb everything.
We were told that the pay pause—and the noble Lord, Lord Poole, reminded us of it—was there to produce a breathing space. But a breathing space is of
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no value whatsoever if nothing comes out of it except hot air. I am very much afraid that that is what has been happening since it was introduced last July. The National Economic Development Council has been set up. It is a good thing; but again, as my noble friend Lord Shackleton said, it must not be a cloak for the failure of the Government or the Chancellor of the Exchequer. The Government and the Chancellor between them have the responsibility for running the economic affairs of this country. If they cannot do it, then they should get out and leave somebody else who can to do it. They cannot set up a new Council simply to take over that responsibility from them. Let it advise them by all means, though they have plenty of advisers already. Let it co-operate with them if the Government are doing the right thing, but it can do no more at all than that. I hope the Government will now make progress not only with a wages policy but also with a whole incomes policy, which is an essential if we are to proceed in any orderly way without the law of the jungle supervening.
Then, one short word about the Budget, which, as noble Lords have said, should be the means by which our national economy is annually directed, The recent Budget must be regarded as a lamentable one if we consider that expansion is what this country needs; there is nothing of any kind in the Budget which encourages expansion. Certain emergency powers were taken last July, and those powers have now been incorporated into our general Budget, simply raising the cost of living, raising the cost of exports and, above all, as the noble Marquess, Lord Reading, said, increasing the cost of fuel. Not only has that been incorporated into our Budget as a permanent part of our tax system, but further power has been taken to superimpose a further 10 per cent. in the next year on whatever the Chancellor may wish. That is not a great encouragement to expansion; it is surely a restrictionist attitude.
The speculation tax, or whatever it is called, is derisory. It can have no effect either on raising revenue or on satisfying those people who have been asked to submit to a pay pause and restrict their wages and their wages claims. As for the Schedule A announcement, that

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can be nothing more, surely, than mortgaging the future—giving away money of which a future Chancellor of the Exchequer might have had the disposal, before we have the money there. Finally, there is the sweets tax, which, rightly, has received practically no attention at all, because it can have no effect on the expansion of our economy. If a target for the Budget should be, as I am sure is, expansion, you do not hit the bull's eyes by taxing them.
5.28 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I should like at once to associate myself with the remarks of the noble Lord, Lord Walston, in congratulating the noble Marquess, Lord Reading, on his humorous, well-delivered and forceful maiden speech. I am sure it is the wish of your Lordships in all quarters of the House that we should hear the noble Marquess on many occasions in the future.
I take up at once the point which was made by the noble Lord, Lord Poole, which is that there can be no reality to any economic debate at the present time unless it bears some relation to the greatest economic issue which faces our country at the present time, our possible entry into the Common Market. Let me hasten to assure your Lordships that it is not my intention in any way to debate this evening the merits or demerits of such entry, because we shall do that at a later date on more appropriate occasions when we have in front of us information which is at present lacking. The Chancellor of the Exchequer in another place, I think rightly, avoided giving any view as to whether we shall or shall not join in the future, admitting only that, whatever the circumstances, we must be competitive. But, apart from the Chancellor of the Exchequer, I think the position is becoming increasingly confusing, both economically and politically, when we read the speeches of various Ministers, and particularly the sayings and speeches of the Lord Privy Seal. And we must ask ourselves, "Are we or are we not at the present time virtually committed to entry into the Common Market?"
I understood that the position was as stated by the Prime Minister, that we as would make the Party opposite look
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had applied for entry, and were now negotiating, but that we had laid down certain unalterable conditions which must be met for Commonwealth trade, both present and future, and for British agriculture. It is on the basis of these unalterables that many of us wait to see further details, and there is no need at the present time to campaign fiercely as would be necessary if the unalterables were amended. But some of Her Majesty's Ministers do not seem to have that open view; they do not seem balanced in their considerations, but have become most ardent propagandists and appear to assume that we are virtually already in the Common Market. They certainly assume the successful outcome of negotiations and talk as if they do.
On the one side, we are offered a glorious new vista, often described in picturesque language. I note that the Observer of last Sunday, alluding to a speech of Mr. Brooke, said:
" If Britain stays out of the Common Market our economic troubles will multiply and our ability to help the Commonwealth will dwindle if we join 'the prospects ahead will be more exciting and rewarding than we yet conceive '."
Referring to a speech of the noble and learned Viscount on the Woolsack, the reports says:
" if Britain joined the Common Market 'a great new field of opportunity would be open to our industry and commerce.' but that if we stayed outside ' our economic growth would be faced with much greater difficulties …."
They may or may not be individual views of Ministers, but I feel that Her Majesty's Ministers, having told us that there are certain unalterables—and we do not yet know whether these unalterables will be achieved—are ardent propagandists. On the one side the great vista; on the other side gloom and trouble. If I may say so, they over-painted the picture of the difficulties that lie ahead if we cannot negotiate.
As the Prime Minister and Chancellor of the Exchequer have both said, it may be that the price will be too high. We must face that possibility. It seems to me, then, that one of two courses is open to us. Either we reduce what we have hitherto been told are the unalterables—and if that occurs there would be such a political split in both Parties like a band of brothers out for a Sunday

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march; the alternative would be for us to buckle to and re-look at our economic policies with the Commonwealth and refuse to be daunted by, or afraid of, a Common Market tariff, because it may well be that the Common Market countries want us rather more than we want them.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, as the noble Lord has mentioned me, and in view of the form his speech has taken, I think it ought to be made clear that in the speech of mine which he quoted I said that our joining was subject to three conditions: one, safeguards for the Commonwealth; two, safeguards for agriculture; and, three, safeguards for our partners in the European Free Trade Association. I do not know about Mr. Brooke's speech, but I have never made a speech without stating that. The House heard me speak on the Common Market last July and I do not take back a word of what I said then. I have always said that in every speech I have made on the subject.
LORD BALFOUR OF INCHRYE: My Lords, I am more than grateful to the noble and learned Viscount on the Woolsack. I was, of course, quoting only what the newspaper had said and, of course, many newspapers take particular points of view that suit them. Therefore, I am sure that the House and the whole country will take note of the inadequate report which I have quoted of the speech of the noble and learned Viscount on the Woolsack.
If the price is too high, economically or politically (and I am not arguing that question politically at all tonight), such Ministers as are committed to Europe as a great new vista and, What I will term, the "gloomsters" for a life of this country outside Europe will all quickly have to go into reverse. But some of them, such as Mr. Heath, Mr. Thorneycroft and Sir David Eccles, according to their speeches, are deeply committed. I think it is pretty hard on them, because it will be too much to expect them to continue serving a policy Which they have damned and continue in the disappointments of a policy that they have not succeeded in putting across. I feel that it will be tough on them. They would probably feel it incumbent not
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to continue. We should say: "We don't want to lose you, but we know you want to go." They really must be cautious about this assumption that we already have a commitment. I suggest that some Ministers take a few steps backwards from the unjustified, and, I must say, irritating, bland assumption that entry is a foregone conclusion.
The only other point that I want to make is this: whether we do or do not go into the Common Market, we are told in general terms that we must be very competitive. I hope that the noble and learned Viscount the Leader of the House, in his reply to-night, will be so good as to tell us how we become more competitive. Is it by lower wages? No. Is it by working longer hours? No. Is it by lower raw material costs? We cannot see that happening in the world at the present time. Is it by lower industrial taxation? I do not see any prospect of that from the present Administration. Is it by special export incentives? Those have been rejected by the Chancellor of the Exchequer. Moreover, general talk of working harder is not of any use. Let us be told then, clearly and concisely, how we can make ourselves more competitive, because I think it is a question which merits a simple answer.
No Government can prosper unless it gives a lead. As the noble and learned Viscount the Leader of the House so clearly said, in a speech to the Conservative and National Union Association at Church House:
" You cannot lead the Conservative Party from behind, like the Duke of Plaza Toro; and you cannot lead it in bad English rich in platitudes and violating every principle of good grammar."
How right he is! I agree with him. And I think the country is showing that it is tired of a diet of a mixture of what I would term economic pap and political bromides, such things as "As a nation we tried to do too much too quickly", or "As a nation we are consuming too much"; and then "We must export more"; and finally, and worst of all, "Exporting is fun"—that really was the worst we have ever had. How right the Leader of the House is when he says that the country will respond to a clear and definite call; and that, whatever difficulties the country is faced with, so

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long as it is told frankly, harshly, and maybe dramatically, the country will respond.
I entirely agree with the noble Lord, Lord Poole, and others, that the Government's economic policies are sound—I am thinking of the pay pause, and the Chancellor's income policy, which has been so well endorsed, not only in this country but in the O.E.C.D. Report. They are the right policies, though the presentation is sometimes dull, drab and unimaginative. I hope that Her Majesty's Government may feel that their good works have been too much hidden hitherto, and that in the future they will make very clear, in terms we can all understand, the economic policies that are justified for the present, and the economic policies, at present unknown, for the future, for which we wait with considerable anxiety.
5.43 p.m.
LORD STONHAM: My Lords, the noble Lord, Lord Mills, in his speech, which I think we might call the economic state of the nation, was far more than a ray of sunshine; he was a whole shaft of sunlight. While listening to him I glanced at The Times Review of Industry for April.
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, I am sorry to interrupt the noble Lord hut, as he knows, there is to be a Royal Commission in a short time. It is, of course, for the House and the noble Lord to say whether it is more convenient for them and him for the noble Lord to make half his speech before and half afterwards. We should be delighted to listen to him in that form. Otherwise, if the House would prefer to take it, if I may so put it without disrespect, in one dose, I suggest that we should now adjourn during pleasure till the Royal Commission.
LORD STONHAM: That, of course, would suit me very well and would be much better, and that is what I thought had been arranged through the usual channels.
VISCOUNT HAILSHAM: They are rather blocked.
LORD STONHAM: That would suit me very well.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
6.0 p.m.
The following Bills received the Royal Assent:

British Museum,

West Indies,

International Monetary Fund,

Commonwealth Immigrants,

Zinc Corporation,

Royal Holloway College,

Australian Agricultural Company,

Whitehaven Harbour,

Saint Paul, Covent Garden,

Royal Russell School.

House adjourned during pleasure.
House resumed.

THE ECONOMIC SITUATION
Debate resumed.
6.15 p.m.
LORD STONHAM: My Lords, I got almost halfway through exchanging a pleasantry with the noble Lord, Lord Mills, in that I commented on the fact that in his economic report on the nation he had been far more than a mere ray, indeed was a positive shaft, of sunshine. It so happens, however, that I this morning received The Times Review of Industry for April and this records that Lord Mills on May 7 will open the new engineering and building centre at Birmingham. Unfortunately, the headline of this report on industry in the Midlands says:
" Gloomy outlook in all sectors ".
So I most sincerely hope that the noble Lord will convey to our manufacturers in the Midlands that happy outlook which he has tried to pass on to us to-day.
We all have to examine, and no doubt we shall continue to examine, these

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official reports, and extract from them just those figures which suit our own case, but I submit that, no matter how one juggles the figures, the Government cannot escape responsibility for the proven fact that over recent years Britain's industrial and economic record is worse than that of any other major industrial nation in the world. I give it as my opinion that there are two reasons for this. The first is stubborn adherence to doctrinaire beliefs long after they have been proven false, and the second is the major dependence by the Government on a wide variety of distinguished economists who have only one thing in common: they have no practical knowledge of industry.
I must confess that I myself was trained at the London School of Economics and naturally have a great affection for my contemporaries. Indeed, I have a great admiration for the fact that they now command the attention of the nation, and no doubt large fees, in expounding views the exact opposite of those which held us in thrall 30 years ago. But I myself, for the last 35 years, have been responsible for the day-to-day running of a small manufacturing business, and therefore, to some extent, have worked the L.S.E. out of my system. I hope, therefore, that such theory as I assimilated which is unstable has been replaced by basic practical truths.
One of these is that maximum output tends to lower costs per piece, whereas restricted output raises them. This basic truth is, in fact, confirmed in the Economic Survey. In paragraphs 11 to 13, for example, it is recorded that in 1961 demand slackened, total production fell, but prices continued to rise. The Survey also records that, although home demand fell, there was no increase in exports or in output per head. In the Survey this last is attributed to a reduction in the working week; but practical experience would have told the experts that it was nothing of the kind. Every manufacturer knows the psychological effect on his workers of full and not-so-full order books. It does not matter how much you exhort them; it does not even matter if it means less earnings for them: the chaps do not work so well and output is not so good if they know—and they always do know—that the order position is not so good.
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In my own firm, for example, recently, because of the good order position, output has increased with a shorter working week.
Unhappily, although correctly stating the facts in the Economic Survey, the experts have apparently persuaded the Government to draw the wrong conclusions from them. Because the Government are proceeding on what I regard as the false assumption that if you cut down home demand it is easier to sell abroad. They speak of regulating home demand so as not to compete with exports. Then, in the same breath, they declare that export opportunities will be missed if export goods are not competitive. How can they be when the Government, by their policy, deliberately increase manufacturingcosts?
In paragraph 23 of the Survey there is the blind declaration that our foremost aim must be to maintain conditions in which United Kingdom exporters can take advantage of the opportunities open to them. Speaking as a manufacturer, I say that we do not need any incentive to sell where the opportunity really exists. For the manufacturers know, if the Government do not, that the prime objective in any business—and this comes before profit—is to keep plant working at the most efficient level; and then, if you have done your other sums right, your profits will come.
I say that it is for this reason that all experience shows that you get maximum exports when you have maximum home production. In the Economic Survey the Government put the cart completely before the horse by insisting that exports must be increased before home demand is allowed to rise. I know the other difficulties, and no doubt the noble and learned Viscount, if he does in any way comment on anything I say, will point them out. I am aware of those other difficulties; but, as the T.U.C. so rightly point out, we must first have expansion as a foundation for an export drive.
My Lords, there must be stability. The noble Lord, Lord Poole, made a great point of this, and I nodded my head very vigorously when he said it. There must be stability; there must be an end to this policy that my noble leader referred to as "Stop and go"—the traffic-light economy. I should like to illustrate this

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from the effects of Government policy upon a single important industry which I have studied—the consumer durable goods industry. This is an industry in which, in fact, the Government pursue, not a "Stop and go" policy but a "Yo-yo" policy, because the sharp ups and downs of the production graphs always follow the Government's sudden, panic, fiscal changes.
In these industries, particularly domestic appliances, this is all the more deplorable because they are among those which have the largest growth-potential in the whole economy. They are among the best equipped and the most efficient; and, given the right conditions, they could greatly increase their exports. Yet over the last ten years the Government have subjected them to an unbroken series of senseless actions, resulting in grievous loss and utter frustration. For example, the expenditure on cars and cycles, furniture, radio and electrical consumer goods, accounts for only 8 per cent.—that is, less than one-twelfth of total consumers expenditure—but this one-twelfth of industry, because of the Government's policy, is made the scapegoat for what I regard as the Government's financial follies. Apart from bank rate changes, which affect all industry, and which are, of course, a major instrument of policy, this narrow front is always made to bear the brunt.
We expect industry to have the "know-how" and to provide the necessary capital investment for expanding, efficient production. In turn, industry has the right to expect the Government to provide a stable framework in which it can plan ahead. In domestic appliances, the size of the market is largely determined by the selling price and the conditions under which the industry is allowed to sell. These, of course, are determined by the levels of purchase tax and of the hire-purchase initial deposit. Inevitably, sudden, frequent changes in these conditions have a disastrous effect upon sales and production, and it is thus the Government and not the manufacturers who, in fact, decide the pattern.
Now, my Lords, in the last eleven years there have been no fewer than sixteen complete changes in the levels of purchase tax and hire-purchase de-
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posits on these goods, thirteen of those changes in the last seven years—an average of one every six months. I have here some graphs which show the result. They show the extreme peaks and the valleys of the "Yo-yo" policy; and against every peak and every depression I have marked the particular change which took place at the time, so one can see cause and effect. Every single, violent change has been the result of the Government's policy—a policy which, for example, during the period, has put purchase tax as high as 66½ per cent. and as low as 25 per cent.; which has put initial hire-purchase deposits as high as 50 per cent. and as low as nothing. The industry has learnt, from bitter experience, to fear the artificial booms as much as they fear the artificial slumps. Yet twice, against their strong advice, there has been no deposit at all. The Government have just ploughed suicidally ahead, regardless of the voice of experience.
My Lords, the resultant upper and lower limits of demand, when you have studied them, are quite staggering—and I shall be pleased to give the noble and learned Viscount these graphs, so that he can check for himself. But, if you know anything about industry at all, imagine trying to plan the manufacture of, say, refrigerators when, largely through Government action, sales in a three-month period can be forced down as low as 20,000 or up as high as 480,000; or of washing machines, sales of which may be as low as 40,000 in a quarter and as high as 340,000; or vacuum cleaners, as few as 80,000 a quarter and as many as 430,000. Those low levels of demands for output are directly attributable to 60 per cent. purchase tax and 50 per cent. initial hire-purchase deposit, and the high levels to no deposit at all. If these things are not recognised or are in any way disputed, I shall be delighted to hand over the evidence, and the noble and learned Viscount can see for himself cause and effect.
In particular, I would ask the noble Viscount to consider the results of the most recent exercise in this field. In October, 1958, for the second time in recent years, hire-purchase controls on these goods were completely removed. Naturally, demand boomed. As a result,

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to quote one example, in 1958 British manufacturers sold 450,000 refrigerators—twice as many as in 1957. In 1959, demand doubled again, and in 1960 home manufacturers' sales were not far short of a million. That is virtually a four-fold expansion in three years. The noble Lord, Lord Mills, knows something about industry, and he will know the effect of changes like that. Even then, the manufacturers could not satisfy the demand, so imports came flooding in. My Lords, in 1958 we imported 2,000 refrigerators; in 1959, 125,000; and in the first six months of 1960, 152,000. That is a 150-fold increase in imports in less than two years. It was much the same story with washing machines. The imports in 1958 were only 22,000; in 1959, they were 125,000.
My Lords, with imports increasing at this rate, and encouraged—virtually invited—by the Government, we naturally ran into balance-of-payments problems, so in April, 1960, hire-purchase restrictions were reimposed, requiring a 20 per cent. deposit. Overnight the manufacturers discovered the deposit had risen from nothing to 20 per cent. From beginning to end the whole cruel, stupid tragedy was manufactured entirely by the Government. There are some who say—and this has been mentioned in the debate to-day—that the Government created an artificial boom deliberately in order to win the 1959 Election. I cannot believe that any British Government would, for such a reason, deliberately jeopardise British industry. But then we are faced with this dilemma that if the Government are acquitted as knaves, they stand convicted as fools. I do not think there can be any argument about that.
Just think what they have done to this particular, quite important, consumer-durable industry. Although they counselled against "no deposit" trading, the 1959 demand induced manufacturers to increase, at great cost, their production capacity. Apart from the capital outlay—and these people do know their business—the "know-how", the obtaining of money, and the additional factories and machines, it takes at least a year to build up output. Therefore, by the beginning of 1960 the manufacturers were geared to cope with the increased demand. It was precisely at this point that the severe hire-purchase restrictions were
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reimposed, largely, as I have said, because of foreign imports, which Government policy had encouraged. Demand fell dramatically. The "Yo-yo" fell; and for the last two years this industry has struggled with all the extra costs which have arisen from a capacity greatly in excess of demand, and from rising production costs. The industry has done all it could, but stocks are much higher than they should be; and even so the industry has had to resort to short-time working.
Unhappily, also, the increased costs arising from decreased production have affected the industry's ability to export. I know that my noble friend Lord Walston made some suggestions to the Government about increasing exports, but the absolute first essential is costs. A very important factor in getting costs down is the level of your production, and the extent to which, and the efficiency with which, you are using your plant. There cannot be any argument about that. But the Government still stick to the fallacy that if they make it more difficult to sell at home they make it easier to sell abroad. Usually, and certainly in the industries about which I am talking, it is just the reverse.
These are the facts. In 1960, when the industry was still under the influence of phenomenal demand at home, it exported £8 million worth of refrigerators. Last year, with savagely reduced home demand, exports were down to less than £6 million; and so far this year they are lower still. And this despite the fact that the manufacturers have reduced the prices of export models, and, in the hope of holding export markets dearly won, are actually selling at less than cost. The exports are shown on these graphs in front of me, and they are selling at less than cost. "Such fun", says the Prime Minister. And the right honourable Member's son, Mr. Maurice Macmillan, says of exporters: "Give them more stick". In this particular industry, I think, they had had "stick" enough from the Government. It is about time they were treated with common sense and some regard was had for the important contribution they make to the economy and to the exports of this country. Even now, when they are hanging on by their eyelids, Mr. Erroll, who helped to create their difficulties, tells them—as did the noble

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Lord, Lord Mills, to-day—that 1962 export prospects are great. It is just like telling a drowning man: "This is a good time to learn to swim". These people are selling at a loss in order to hold the markets, in the hope that eventually they will be able to increase production, get their costs down, and so sell under more favourable conditions. I often think—
LORD MELCHETT: My Lords, I wonder whether the noble Lord could help me. I am very interesed in what he has been saying about the volume of exports, but I understood him to say that, now these manufacturers have reduced their prices in the hope of maintaining their volume of exports sales, nevertheless the volume is down. I do not quite follow him in saying that if there had been a bigger home demand this would have helped them in keeping up their volume of export sales, since their prices are down in any case.
LORD STONHAM: My Lords, that is an extremely important point, and one with which I am going to deal. It is an example of the kind of thing that my noble Leader mentioned in opening the debate, of industries whose exports are carried on the home market. In many industries—perhaps where the situation is not quite as bad as this—I think the noble Lord will find, as will anyone with experience, that once your plant is working you are quite likely to be able to obtain export orders even if the prices are below those which would be acceptable for your whole business. In other words, you can, with a comparatively marginal sale of perhaps 10 per cent. of your total sales, afford to have them carried by your home market. But if your home market is very much reduced, or your bulk sales are very much reduced, then your overheads percentage goes up and your costs rise. That is the point. I am bound to say that if I try to expound that at greater length, my speech will be of intolerable duration, and I therefore hope that the noble Lord will excuse me from going into it further.
I realise the great experience of the noble Lord, Lord Mills, and the noble Lord. Lord Poole. Many a time I have thought, when reading some of the speeches which are made and the things
904
that people in high positions in the Government say, "If only one member of the Government spoke and acted as if he knew what he was talking about!" When we come to exports, and the things politicians say about them, as a manufacturer, and as one who for 35 years has had to bear the heat and burden of the day and assume responsibility, that is the kind of feeling I get.
My Lords, what is to be done? I would say that the first essential is to restore shattered confidence. If we are to increase exports, the industry must be given a firm guarantee that, if it invests in research again, in the development of new products, and in the development of overseas markets, which is a long and expensive business, history will not be repeated. Because you cannot go out abroad and sell if you have one eye looking behind you, waiting for the stab in the back at home, as these people have had. Secondly, the Government must act in the knowledge that, when you restrict the expansion of these growth industries, you create inefficiencies and high costs, thus reducing their ability to compete in world markets. In these goods, price is the barrier to export sales. Frankly, we are about 5 per cent. better in quality and performance, but about 20 per cent. higher in price, than are the Continentals.
If we are to reduce costs and prices and use the large plants to the full—and we cannot reduce costs without doing that—we must increase production. That requires an increase in home sales which, in some lines, are now the lowest for six years. It is beyond dispute that the 20 per cent. deposit on hire purchase is too high to allow sales to reach a level which will permit the industry to operate efficiently and to reduce prices. Although the 25 per cent. purchase tax is a burden, frankly, it is not a major deterrent to home demand. It is the size of the deposit which is the dominant factor in influencing demand and it is urgently necessary to reduce it to 10 per cent. and promise to keep it there, for this is an important industry and it cannot carry on much longer making little or no profit at home and losing money abroad. It is imperative that this change is made soon, so that we can recover lost ground and get ready for the challenge of the Common Market,

905
whether or not we go into it. I submit that the facts are beyond dispute and I hope that we shall at least be given a promise that the case will be urgently considered.
I have dealt in the main with one industry, but I believe that the lessons to be drawn from it apply in a major measure to nearly all. The greatest need is for a settled and stable policy. The restraints from which this and other industries are suffering are the direct and inevitable product of the past excesses permitted by the Government, of the 1959 excesses and the 1954 excesses which 'preceded them. I think that the Government have made so many mistakes that they are afraid to move; but, for Heaven's sake! let there be an end to this miserable and hopeless 1 or 2 per cent, production advance. Restricted production increases costs and reduces exports. Let us at least be equal to the Continent and plan for a 4 to 5 per cent. production advance every year. I submit that, as a priority, the N.E.D.C. should consider setting up subcommittees for each major industry, and that each sub-committee should decide what it must do to achieve its share of the target; and, when they have decided, let them get on with it, with the guarantee that this time they will not be ordered to stop as soon as they have started to go.
6.43 p.m.
LORD CONESFORD: My Lords, perhaps as a Back Bencher I may add, at the outset of my remarks, my tribute to the noble Lord, Lord Pethick-Lawrence, who so often initiated our debates. He had for long been my friend in another place and here, and it was in a debate which he initiated that I had a chance of making, my maiden speech rather over six years ago.
The all-important question of the Budget is that which was put by my noble friend Lord Poole, to whose speech we listened with so much interest. That is: what is the general nature of this Budget and ought it to be inflationary, deflationary or neutral? As my noble friend said, this question is much disputed by the experts. I do not profess to be an expert but, so far as I understand the various comments, I certainly should not be prepared to say that my noble friend's view that, on the
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whole, the Budget in this respect was right was not a correct view. Certainly I do not mean to dispute it. I do wish, however, to comment on a few of the proposals in the Budget.
First of all, I shall deal briefly with two points of which I approve: the taxing of sweets and the taxing of soft drinks. It seems to me obviously wise of my right honourable and learned friend the Chancellor of the Exchequer to tax sweets. As a result of the medical reports on the effects of smoking, particularly of cigarette smoking, and the speech of my noble and learned friend the Leader of the House the other day, we must certainly contemplate as a possibility that in due course there will be a much diminished yield from the existing taxation on tobacco. In those circumstances, I think that the Chancellor of the Exchequer would have been extremely negligent had he not put some tax on sweets. I also think that an incidental advantage is gained because excessive consumption of sweets is deleterious to the teeth and health of our children. I also think that there were good reasons for putting soft drinks within the scheme of purchase tax. I do not take the view that the Chancellor of the Exchequer imposed this tax because he thought that this was the sort of thing that Liberals drank.
I come to the Budget proposal of which I do not approve and which strikes me simply as foolish; that is, the short-term gains tax. Let me say at once that of course I agree there are serious arguments for and against a capital gains tax. These arguments were well stated some years ago by the Royal Commission on the Taxation of Profits and Incomes. On a point on which I agree with Her Majesty's Government, I much prefer the Report of the main body of Commissioners to the Minority Report of the three Commissioners who dissented. Nevertheless, there are serious arguments for and against a capital gains tax. The tax of my right honourable and learned friend as imposed in this Budget is not such a capital gains tax, on his own admission, as was there discussed.
In my opinion, the result of the Budget proposal is to produce a tax which can please no thinking person at all. The tax will be immensely complicated. It

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will involve many people in a great deal of work. And apparently it is not expected, even by Her Majesty's Government, to produce much revenue. In fact, the Chancellor of the Exchequer said that he was comparatively indifferent about whether it produced revenue or not. I take the old-fashioned view that, in proposing taxation, the Chancellor of the Exchequer should, on the whole, desire to raise revenue by it. It may be an old-fashioned doctrine, but I think it is a good doctrine.
Nevertheless, one must be fair and deal with the argument on which the Chancellor of the Exchequer advocated this tax. He advocated it on the ground of fairness among taxpayers. I confess that a question of fairness or justice always makes a great appeal to me. I have always had a feeling, I hope, for justice, though I have never understood what precisely was meant by social justice. On the whole, I have come to the conclusion that social justice bears the same relation to justice as social credit does to credit.
Let us examine the argument of fairness put forward in justification of this tax. Under the Budget proposal, if a very rich man whose income is taxed at the highest level buys shares and sells them at a profit within six months, he has to pay 17s. 9d. in the £ on his profit; but if he retains them for one additional day, he pays nothing. I should be grateful if somebody who has been able to detect the great principle of justice behind this astonishing proposal could explain it to me. The tax will not, of course, injure any investor very much. Its principal effect, in my opinion, will be on the efficiency of the market. It will reduce turnover and make the market, particularly the gilt-edged market, less efficient. That will slightly raise the price for every borrower on the London market, and that is not, I should have thought, a very good thing for a trading nation to do on the eve of possible entry into the Common Market.
But the real damage done by this proposal is through its appalling revelation of the Government's capacity for irrelevance. This may be the last Budget before we enter the European system and the Common Market. If
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ever there was a time in which every new tax proposal should have been judged on its real merit, this is that time. It seems to me that Her Majesty's Government have preferred to abandon a great principle—because the difference between capital and income is a great principle—and to do so for no compensating advantage whatsoever. I believe that the explanation of this tax is quite simple. It is intended to please those who regard all profits, except, of course, those derived from the football pools, as basically immoral.
That brings me to the constantly repeated request by Her Majesty's Government for restraint in profits and dividends, which was made last, I think, in paragraph 14 of the February White Paper on Incomes Policy. Whenever I see this request I am reminded of a character in a book by the late G. K. Chesterton, who remarks to another character:
" It may be a literary prejudice, but I feel that you must mean something ".
I feel precisely the same towards the Government when they call for restraint in profits and dividends. I wonder whether Her Majesty's Government ever pause to consider with precision and clarity what precisely they mean by this request. May I ask the House to consider the matter in a little more detail? Clearly we must consider profits and dividends separately, for they are not the same thing. Let us take, first, profits. Let me explain (I have often done so before) my own attitude about profits. I have always been opposed to inflation. I have always wished the Government to get rid of inflation and thus to make profits infinitely more difficult to gain. I have also always thought that profits were a proper subject for taxation. But is it right to tell people not to try to make profits, or to restrain their efforts to make them? I should have thought that was the precise opposite of what was in the public interest.
The noble Lord, Lord Shackleton, mentioned invisible exports, and I agree entirely with him about their great importance: they used to make, and I hope they will make again, a great contribution to our balance of payments. Think of how we benefited by the earnings of our shipping companies and our insurance services. Are the Government

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really frightened to-day that the P. & O. may make too big profits? Is that what keeps them awake at night? Is it not a fact that Her Majesty's Government, in their saner moments, wish very much that the profits of our shipping and insurance companies and our earnings from the rest of the world were much bigger than they are now? Of course they must have such a wish. If, however, they wish that profits were much larger, is it not rather unfortunate that they are always publishing statements to say how they wish people would use more restraint in earning profits? They really cannot desire simultaneously that profits should be larger and that they should be smaller: that should be impossible, even in the Treasury.
LORD STONHAM: My Lords, is it not the case that the Government are always urging restraint on the payment of dividends?
LORD CONESFORD: No.
LORD STONHAM: Is it not also the case, in regard to shipping that in the Budget the Government have introduced a measure which it is expected will benefit shipping companies?
LORD CONESFORD: If the noble Lord who has just intervened had listened to me he would have heard me point out that the Government were urging restraint in profits and dividends; I went on to say that these two things were not the same, and that, therefore, I was dealing with them separately. At the moment, I am dealing with profits, and I say it is most unfortunate that the Government are always urging retraint in making profits if what in their saner moments they desire is that profits should be much bigger. That is a quite simple thought. It may be that I have gone mad; it may be that there is an overwhelming answer. But it seems to me wrong at one and the same moment to say that you want profits to be bigger and that you want profits to be smaller, because that cannot be.
My next question to the Government on the subject of profits is a quite simple one. I want to understand the policy of the Government so as occasionally to be able to advise one of my friends in industry who asks me what the Government mean. What is a company to do which wishes to
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obey the Government's request for restraint in profits but fears that its profits are increasing? What do the Government desire that it should do? Of course, one obvious way in which it can comply with the Government's request is to make itself so much less efficient that instead of making a profit it will make a loss. That would be one way of getting restraint in profits. I give the Government credit for not desiring that. I want my noble and learned friend to tell me precisely what a company is to do which wishes to comply with the Government's request for restraint in profits and fears that its profits are increasing. It is not, apparently, to make itself deliberately less efficient. Somebody may say: "Why not reduce the prices charged to the consumer?" That would be a possible answer. But, of course, it is no answer: because what would happen if the only effect of reducing prices to the consumer were to increase trading profits, as it might well do? If my noble and learned friend has studied the history of the first Henry Ford, I think he will agree with me.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, the only way to follow that last argument would be to look at the present situation and the price cutting going on through the consumer service, which means putting the cost back on the consumer. The consumer would get on his bus to a centre, serve himself, carry it back and destroy all the service given. There is no other way of making profits out of price cutting.
LORD CONESFORD: I did not say there was. The noble Viscount the Leader of the Opposition will realise that I was putting a question to the Government. I was considering the possible answers. I do not know the answers. I remind the noble Viscount that the problem is this oft-repeated request of the Government for restraint in profits. I am asking how the Government themselves desire that this request shall be met in the case of a company that wishes to do what the Government want, but fears that its profits are in fact increasing. That is my question. I suggested the possible answer of reducing prices, but I do not differ from the view

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of the noble Viscount the Leader of the Opposition that that will not necessarily have the desired effect at all.
LORD PEDDIE: My Lords, can we assume from that that the only way of dealing with higher industrial profitability is by the paying of higher dividends? Are we right to assume that the only way is to pay higher dividends to shareholders?
LORD CONESFORD: I have not made any statement of the sort. If only noble Lords opposite would do me the honour of listening to what I say, they would realise that I have not yet reached dividends. I started by saying that I was dealing with the Government's request for restraint in profits and dividends. So far I have been dealing with profits, and have put a perfectly definite series of questions to Her Majesty's Government.
Now I will come to the distribution of dividends. Let me say that there may be admirable reasons for not paying out dividends, or for paying out smaller dividends, or for not paying out bigger dividends. There may be excellent economic reasons for building up reserves, or for modernisation or re-equipment. There may be all those admirable reasons for not paying dividends, or not paying bigger dividends. But, if none of those considerations applies, it is, to my mind, a complete illusion to think that any public purpose is served by not distributing dividends which are not needed in the business. I wonder what advantage anybody, whether he is a Socialist, a Liberal or to whatever Party he belongs, thinks will result from having a company retaining profits which it does not need, and which it could distribute to the shareholders.
VISCOUNT ALEXANDER OF HILLSBOROUGH: The employees might get some.
LORD CONESFORD: In my maiden speech I ventured to quote to the House the considered conclusion of the Royal Commission sitting under my noble and learned friend Lord Radcliffe. I will read the passage again. It is paragraph 536 of the final Report of the Royal Commission on the Taxation of Profits and Income, and it says:
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" The mere retention of profits cannot be rated as an economic advantage; on the contrary, it would better serve the public interest that the company should be encouraged to distribute those profits which it cannot put to fruitful use, in order that there may be a chance that they may be invested effectively elsewhere. Nor is it advantageous for the economy that the level of dividends should be kept down. Whatever other considerations bear upon the problem, the market value of shares in industrial and commercial enterprise is artificially depressed and an obstacle placed in the way of raising new capital."
I believe that those considered words of the Royal Commission—and these were words with which nearly all the Commissioners agreed; there was only one, I think, who dissented from that paragraph—deserve some attention by Her Majesty's Government. If they think that my noble and learned friend Lord Radcliffe and the Commissioners did not know what they were talking about, surely they should give us some reason for taking that view.
The only explanation I can see of this extraordinary attitude to the payment of dividends on profits already made and not needed by the company in question is that the Government, in a fit of absentmindedness, share the view expressed by a former Socialist Chancellor of the Exchequer—now alas ! no longer with us—who complained of profits being "dished out to the shareholders." That reminded me very much of a legal story, which will be familiar to my noble and learned friend the Leader of the House, of a complicated will case involving many parties which was being tried in the Chancery Court. At the end of the third day, while two practitioners were walking hack together to Lincoln's Inn, one was heard to remark, If this case is settled, the whole estate will be frittered away among the beneficiaries." That seems to be the attitude of Her Majesty's Government to the payment of dividends.
Since I am giving my own views which perhaps do not command universal assent, although I think they command a good deal, may I say a word about the suggestion, which so often is made, that if the Chancellor of the Exchequer says that he desires no increased distribution of dividends, the directors of companies in this country are under some sort of obligation to obey him? Taking the view that this country is a democracy which believes in the rule of law, I would

913
say that the duties of a director are to be derived from the Statutes passed by the Sovereign Parliament; they are to be derived from a study of the Companies Act, and the duties that are stated by judges in decided cases. They are not to be decided by the wish or desire of any Minister. I am not saying for one moment that a director of a company is not entitled to pay great attention to a request by the Chancellor of the Exchequer. But he must make up his own mind bona fide as to its wisdom, and if he comes to the conclusion that the advice of the Chancellor of the Exchequer is foolish and he does not share that view, then he should be governed by what he understands to be the company law and the duties of directors as defined in the courts, and he is under no duty whatsoever to obey the wishes of Her Majesty's Government.
VISCOUNT HAILSHAM: My Lords, whilst it is obvious that directors of companies are not bound to observe expressions of opinion by any Minister, does my noble friend consider that part of the duties of directors of public companies is to pay some regard to the public interest, or what they conceive to be the public interest?
LORD CONESFORD: Certainly I agree with that, and if I did not make it clear before, I make it clear now. I say it is certainly their duty to make up their minds principally as to the public interest. I am in complete agreement with my noble Leader on that. But it must be their own genuine opinion of the public interest, and the view of a Minister is not decisive.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I take it that the noble Lord would agree—I am not being hostile—that at the same time as an expression of opinion is being put up by a Chancellor of the Exchequer, the same freedom should be given to the leaders of the trade unions. If you are proposing a pay pause and proposing a more conservative policy in "dishing out" dividends, then there must be freedom to both sides, both on the labour side and on the directors' side.
LORD CONESFORD: I have never questioned for one moment that every trade unionist must make up his mind where the public interest lies, but if the
914
noble Viscount the Leader of the Opposition thinks I am admitting a direct connection between wages and dividends, then let me say I am not. I will tell him why straight away. No wage earner would be content to make his right to wages contingent on the profits of the company. Of course not. He demands and gets, subject to the bargaining of the market, wages in accordance with his work. He would demand that wage, quite rightly, if the company made no profit at all. There may be a case on profits and dividends, but it has nothing to do with the case on wages. They are totally different considerations. In answer to the direct question put by the noble Viscount, of course I give that freedom to trade union members. I am happy to say that I have had a good number of them as my friends and I do not think any of them has doubted that that was my attitude.
To sum up this part of my argument, there are dozens of good reasons why it may be wrong to distribute a dividend. The money may be required for reserves, for modernising the industry or for other purposes. There is, however, one reason which would be a rotten reason for not distributing dividends, and that is that you think it is bad for the shareholders. Courtaulds Limited not so long ago reduced a dividend because they thought they would please their employees by demonstrating their loathing of their shareholders. It was not a very successful operation and subsequent events made them very much regret it.
I must say that I found myself in some sympathy with a part of the speech of the noble Viscount the Leader of the Opposition on certain thoughts he had about gambling. I do not object to premium bonds, but there were passages in that part of his speech with which I found myself in more sympathy, perhaps, than most, but what I find so strange is that he can have that attitude to sheer gambling, which he does not propose to make illegal, but feels apparently some horror if those who invest in British industry derive increased profit from that investment. I would remind him in this connection that the shareholders, of course, are not

915 only rich men, but trade unions, pensions funds, the Church of England and many others.
I have tried to explain—I will not repeat the reasons—why I think that the Government request for restraint in profits and dividends should either be abandoned or stated with much greater accuracy and precision. In fact, I think they should indulge in accurate thought on the whole subject before they speak or compose statements of policy. My noble and learned Leader the other day made a similar suggestion in a speech which he made, to which my noble friend Lord Balfour of Inch rye has already alluded. My noble and learned friend went so far as to suggest that Ministers should actually use good English. What he advocated differed so widely from the practice of some of his colleagues that his speech was widely cited as evidence of a Cabinet split. I even saw a suggestion that there was something disloyal about his suggestion that Ministers should use the English language.
I repeat his advice. The Government have everything to gain by using the English language with accuracy and precision. May I give a couple of examples? I think that fourteen years ago to the day, at the request of Ivor Brown, who was at that time editing the Observer, I wrote an article in that paper on the first edition of the book of Sir Ernest Gowers. I ventured there to comment on the then popular and slightly absurd use of the word "break-down" to mean analysis or classification. The example I then quoted was something I had seen in the Press about the break-down of the European Services of the B.B.C., not meaning that these services had broken down but meaning apparently the relative number of broadcasts the service had made to France and Germany respectively. I ventured to prophesy that, if this rather silly habit persisted, it would cause trouble. It was persisted in. My fate is that of a Cassandra; nobody ever takes the least notice of what I say, but it gave me the greatest pleasure to see in the American Press an allusion to "the population of the United States broken down by age and sex".
The other example that I venture to give to the House is the use in almost every Government Speech and in every
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Government White Paper and Blue Book of what has become easily the most useless word in the English language, and that is the adjective "overall".
LORD STRABOLGI: My Lords, I am sorry to interrupt the noble Lord. I know he is quite an expert on modern English usage—a kind of up-to-date Fowler—but may I ask him, with respect, what this has to do with the economic situation?
LORD CONESFORD: I think, quite a lot; and I do not think the noble Lord who has interrupted me will find it too difficult to follow if he listens to my next two or three sentences. It has everything to do with it and I will tell him why. At the time that Ernest Gowers wrote his book, the adjective "overall" generally meant nothing whatever; that is to say, you could omit the word completely without having any effect whatsoever on the meaning. But, if it did mean something, it could have meant any of fourteen different things. Now I ask the noble Lord who interrupted me to concentrate on this simple thought. The word "overall" is now used indiscriminately to mean "average", "maximum" and total". If he studies economics, I am sure he will come to the conclusion that "average", "maximum" and "total" are three different conceptions and to use the same word when it may have any of those three meanings leads to the greatest confusion. In any Government White Paper the chances are that the word "overall" means nothing, but in cases where it means something it may mean any of those three things. The reader does not know which it means and he suspects that the writer does not know either. Indulging in ill-considered exhortation in sloppy language can injure the Government's reputation. The case is well known at the Temple of a leading counsel who addressed a jury in a very difficult case with these words, "Members of the Jury, my client talks like an ass and he looks like an ass; but, do not be deceived, he is an ass". My Lords, may this never be said of Her Majesty's Government.
7.20 p.m.
LORD MILNE: My Lords, I should like to associate myself with the remarks of noble Lords with regard to the very interesting maiden speech of the noble

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Marquess—may we often hear him here—and also with the remarks made concerning the late Lord Pethick-Lawrence, whom we remember to-day and of whom we were very fond.
I should like to congratulate the Chancellor of the Exchequer on the results of last year's "housekeeping" as disclosed by the Economic Survey. Personally, I should like to add something else. Whether or not one agrees with his policy, I think he has shown considerable courage in pursuing what was obviously something very unpopular in the face of widespread opposition. if the quality of the results was somewhat fortuitous, I feel that one is entitled to ask why, if things were going so well, there was need for a 7 per cent. bank rate. The fact seems to be that our country is pursuing two operations at the same time, one trading and one banking; and both lack capital, the banking operation to such an extent that it hinders the trading side.
If John Bull were a private citizen he would by now probably have received something of the following advice: "Separate out the two activities, both accounting and management. Secondly, strengthen your bank, and in the meantime do not overtrade. Finally, do not let your prosperous trading business suffer for the sake of the banking side." Clearly, what applies to an individual does not necessarily follow for a nation. Nevertheless, it appears to me that there is some need for something like a differential bank rate. We are justly proud of our role as bankers to the sterling area and custodians of the pound sterling. But are we really clear in our minds on the price we are paying for it, or are we confusing business with sentiment? For so long as sterling occupies the position of an international currency, so long must we expect the pressures and alarms to which such currencies are heir and, in avoiding them, the consequent damage to our home development in present circumstances.
What is the other side of the coin? Starved of capital and stunted by banking medicine, industry struggles along trying to anticipate events. Instead of receiving praise for the strides made since the war by our exports in bridging the gap of lost invisibles, industry is now the whipping horse, even in the O.E.C.D. Economic Survey. I know that
918
we have a lot to learn in business, but in a highly industrialised country such as ours productivity is usually synonymous with modern plant and extra capital. Even if he can get it, no businessman is likely to embark on such a project unless he has confidence in the home market. This is precisely where our banking operation impinges on our trade. Just when industry begins to expand, along comes what is really a banking crisis; up goes the bank rate; down must go overdrafts, and a potential expansion eventually ends as a contraction. In such circumstances the product cost would rise without any movement in wages whatsoever. No wonder our plant is out of date, our productivity low, and dissatisfaction general.
How can we get out of the rut? First of all, I suggest that we should do some basic economic re-thinking; and, with the Common Market in the offing, now is the time. There are indeed signs of it already. Foreign spending has been cut, arrangements have been made to strengthen the reserves, and "Neddy" has been formed. Nevertheless, with the demand for capital ever on the increase, it would be a brave man who would forecast any considerable or sustained improvement in the general balance of payments. It follows that we must in our faith to the trading side and do everything to encourage increased productivity and, with it, exports. Viewed in this vital context the Budget seems to me irrelevant. Was it too much to expect that company taxation might be reorganised to help exporters and yet satisfy the rules of the GATT; or possibly a more realistic view be taken of capital allowances? But no, my Lords; instead we received barley water and a capital gains tax which was really a sop for Cerberus.
7.26 p.m.
LORD AUCKLAND: My Lords, first I should like to apologise to the noble Viscount who leads the Opposition for the fact that, due to a prior engagement, I was not able to be present to hear his speech. I should like to congratulate my noble friend the Marquess of Reading on a most forthright and convincing maiden speech and I associate myself with all the tributes which have been paid to my noble friend from all parts of this House.

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I should like to deal primarily with specific proposals in the Budget. I would congratulate the Chancellor of the Exchequer for bringing in what has for the most part, I think, been a realistic Budget. It has been described in various circles as a mouse Budget, an insipid Budget, and an uninspiring Budget. I would say that in some respects the last adjective is not entirely unjustified, but, as one who is not an economist, I have often wondered what constitutes an inspiring Budget. An inspiring Budget must, surely, in the long run be one that seeks votes, and I think that, whatever shortcomings the recent Budget may have, it is certainly not a vote-catching Budget, to the forthcoming electors either of West Derbyshire or of West Middlesbrough.
I would congratulate the Chancellor of the Exchequer on the measures which he is taking regarding the Schedule A property tax. This is going to be of great value to property owners, of whom there are many in this country—not all of them wealthy people—and they are saving the local authorities a good deal of money. Whilst it is always possible to recoup a considerable portion of what one pays on Schedule A, nevertheless the outgoings can hit hard on many people, particularly those living on fixed incomes. So I congratulate the Chancellor on this proposal, and hope that vigilance will be exercised to make sure that the proposals are expedited.
Set against that there has been this tax on confectionery, ice cream and soft drinks. Being a non-smoker, I am fond of confectionery and, like the Chancellor, I have a daughter, who is only a few years younger than his. She is not entirely pleased at this tax. But the dentistry and medical professions have for a long time been concerned with the state of children's teeth, and I do not think that a child to-day will suffer much hardship from an increase of 1½d. on a shillingsworth of sweets, which is what this will amount to.
There was an interesting article in the Sunday Telegraph last week-end by Mr. Michael Woolf, who was discussing the financial cares of to-day's young man. This article instances how a young man of 18 spends his money. The youths who were interviewed in this particular
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matter were all of about the age of 18; they worked on building sites and earned something like £20 a week. The article begins:
" I cannot live on £18 or £20 per week,' said a boy who had got into trouble with the authorities."
Much is made of the fact that young married couples have difficulty in setting up home; that mortgages are too high; that properties generally cost too much, or that land costs too much. But I suggest that perhaps, for these young lads, an expenditure of £3 10s. per week on entertainment is rather high, as is £1 10s. per week on cigarettes, even though the Chancellor may derive some benefit from this. In the criticisms being directed towards the Chancellor's Budget and the economic situation generally I think that there is some substance in questioning whether young people particularly are being hit as hard as people make out.
I was disappointed in the fact that the Chancellor had not given many concessions to the old people. I think the figure up to which an old-age pensioned couple can earn without being taxed is now £480 per year. I feel that that figure could have been raised. Another suggestion, made in a number of circles, was that the Chancellor could give tax relief to season ticket holders. I think there is some substance in that suggestion. Many people who have to travel to London to their place of work are not making much money per week. Again, many are living on fixed incomes. We are told, on the other hand, that there are too many cars coming into London with only one person travelling in each car. That is true; I think it is a fair argument. But the time will soon come when some concessions should be given to those who have to travel to London and to other cities from country areas. It is all very well to say that they can live nearer to or in London; but the price of property in these areas is very high indeed.
LORD LINDGREN: My Lords, before the noble Lord leaves that point, what about the worker who does shift work, and therefore has to pay a high rent in order to live near his work and get to work at 4, 5 or 6 o'clock in the morning? Is he to be given tax relief on the excessive rent which he has to pay in

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London, as compared with those who live 20 or 30 miles out?
LORD AUCKLAND: My Lords, I think that those who hold early morning workers' tickets should get relief on them. I do not know whether that is what the noble Lord is suggesting.
LORD LINDGREN: Many workers in London do shift work, having to start at 4, 5 or 6 o'clock in the morning. They have to live in London. Their rents are excessive, compared with those of persons who start work at 9 or 9.30 and can afford to live 25 or 30 miles on either side of London. If tax relief is given on railway fares, it must be given on the excessive rents paid by those who have to live in London.
LORD AUCKLAND: My Lords, I can see the substance of the noble Lord's argument. But I would point out that, so far as wages are concerned, the people whom the noble Lord mentions are often a good deal higher paid than the insurance or the bank clerk. The noble Lord shakes his head, but that is a fact.
I think the City, where I have the honour to work, has behaved with great restraint over the past few years. The insurance companies are continuing to give good service and to earn more and more dollars. It is interesting to note that national savings are continuing to increase. The building societies are continuing to advance more money, despite the difficulty of mortgages. Nobody is going to pretend that the economy of this country is in wonderful shape, but. I often wonder as I listen to the speeches from the Party opposite—I listened to a number of them during the Budget debate—whether things are really as bad as they say, especially when one reads articles such as that from which I have just quoted in the Sunday Telegraph. I am not for one moment denying that many sections of the community, particularly the old-age pensioners, are not, in many cases, in difficult straits, although they have been given more benefits in the past five years than in previous years. But for young people, particularly, the years ahead are going to be years of some opportunity. In face of present circumstances, I think that the Chancellor has produced a courageous Budget.
7.40 p.m.
LORD PEDDIE: My Lords, I regret the fact that I had not the privilege and the pleasure of hearing the earlier speeches, because I was engaged upstairs in a Select Committee, whose proceedings went on a little longer than I anticipated. This, of necessity, will narrow the range of my comments in this debate. At this late hour, I am sure that that will be appreciated by the House. In addition, I am anxious to ensure that I do not inflict any repetition of argument upon this House.
The noble Lord, Lord Auckland, says that he considers the Budget to be a realistic one. Well, we have had some very interesting and pleasant exchanges on the subject of definitions. I hope that I may have the privilege at some time of borrowing the noble Lord's dictionary, in order that I may be able to understand what he believes to be the meaning of "realistic". My own view is that the Budget was both pathetic and timid in its approach to the economic affairs of the day. If one looks upon it as a contribution made by the Government towards the stimulation of the national economy, I would go so far as to say that it was disastrous.
Several noble Lords, including the noble Lord, Lord Conesford, have made reference to the taxation upon sweets, ice cream and soft drinks. There may be some justification for that on medical grounds. But if we look upon it from the point of view of a nation needing a vigorous approach upon the problems of the day, one can see that it is bad psychology that the Chancellor should concern himself with something of that description when what is required is something far more fundamental. Apart from the very necessary function of raising revenue, which we expect from a Budget, I would say that there are two fundamental requirements. One is to adjust the fiscal system to ensure that incentives are given where they have the greatest effect on productivity. In this Budget one fails to see any indication of encouragement in the way of incentives likely to stimulate productivity.
The second requirement, I would suggest, is to give an appearance of equity. In this particular Budget there is more

923
appearance than equity. The Chancellor of the Exchequer may claim that he has done something to achieve this appearance of equity in his treatment of the speculative gains tax; but, quite frankly, it is merely a façade. He may have admitted the principle—and that I concede is tremendously important; but it is generally acknowledged, even by the financial Press, that this tax will have very little impact upon capital gains. So much then for the Budget.
Last July the Chancellor of the Exchequer outlined several objectives. I want to deal with one or two of them in the light of experience over the past few months. His objectives were: to increase exports and industrial production; to reduce or curb the rise in retail prices; and to curb Government expenditure. In the light of experience over the past few months Government policy has been conspicuous by its failure.
Let me deal first of all with exports. I will not inflict on the House many statistics, because I am quite sure that other speakers have quoted them earlier, but, for the purpose of my argument, it is necessary to quote figures from the Economic Survey. They show that the value of exports has declined from £1,965 million in the first half of last year to £1,898 million in the second half. In total value our exports for the full year were £128 million, or 31 per cent. higher than in 1960. But in volume there was very little change between the first quarter and the end of the year. If we examine comparative tables which are quoted for the whole period of Conservative Administration, we see there that Britain shows the lowest increase in exports of any Western European nation.
My noble friend Lord Stonham referred to the Government's view, which was recently stated in another place, that if home demand is held in strict check industry will automatically seek additional export markets. I agree with the arguments that have been advanced by my noble friend, and indeed one can refer to our experience in 1957 when industry did not seek additional markets abroad and exports did not rise after 1957. They did not, in fact, rise until home demand started to go up and
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expansion occurred again in this country. Over the last eight months this has again been true: exports have not responded to the check in home demand.
What has been the effect of the restriction of home demand? Production has fallen, and in consequence there has been a substantial increase in the unit cost of production. In my opinion the completely obstinate pursuit of what I believe to be the fallacious idea that there is a fixed (and I emphasise the word fixed) relationship between restricted home demand and export development is partly responsible for the difficulties we have experienced of late. I agree that there is no formula upon which the relationship between home sales and exports can be expressed, but it is certainly positive that an increase in exports is not in direct ratio to restriction of home demand. Because, as has already been said, the greatest single factor in the determination of our costs, which has a tremendous bearing upon our export capabilities, is our cost of production. That, in turn, is determined by the volume of production, which in its turn, has an influence upon the unit cost.
In support of this particular point, and also to draw the attention of the House to the policy of the Government, which has had an adverse effect on our exports, I should like to refer to recent statements made by the chairman of one of the leading radio manufacturers in this country on the subject of the influence of purchase tax upon foreign trade. The Chancellor of the Exchequer said recently that purchase tax leads to a distortion of the pattern of consumer spending, and hence of investment. That is perfectly true, and in consequence it is not without its influence upon exports. So far, I fail to see any indication in the policy of the Government that they accept that point of view. The statement of the chairman of one of the leading radio and television manufacturers, to which I have referred, and which I should like to quote to your Lordships, was that his industry
" has been one of the main targets for purchase tax, and the situation has become serious in recent years. Fiscal measures have been introduced by the Government which have had a paralysing effect on the industry. Purchase tax is not only a source of revenue but a means of regulating the economy. The changes in the rate have been violent and frequent."

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He then goes on to say that
" most of the ups and downs, it is on the export market where most of the harm is done—by neglect."
A feature of purchase tax, he says, is that it has an effect on quality, and here again it acts as an export disincentive. He goes on to make what is, to my mind, a very important statement, when he says that manufacturers in this country have had to play down their sets to a price that will be acceptable to the public after purchase tax is paid. The only way to get them down to that price is to put in cheaper materials and minimal specifications.
But, my Lords, on the Continent high-quality finish is required, and generous specifications are vital. What is the result? According to this chairman, the consequence is that two production lines have to be maintained: one for the home market and one for the export market; and, as a result, costs are higher and there are less exports for this country. That again indicates that the Government itself has had a serious adverse effect upon exports, at least in that particular industry, although I aim quite sure that it could be applied also to many other industries. I could at this stage go on to make reference to the question of imports. Here again we see a substantial increase in imports which has worsened the situation. However, I will leave that, and will turn to the question of industrial production.
Measures suggested by the Chancellor of the Exchequer for the resuscitation of British industry, which were announced in the "little Budget" have meant not merely stagnation but an actual decline in our industrial production. When the Chancellor's measures were announced the Official Index of Industrial Production stood at 116 (I think the base was 100, in 1958) but by January it had fallen to 111, its lowest for 23 months. What is the position to date? No one can make political capital out of the situation to-day, but I quote from nonpolitical sources. The Economic and Social Review recently made the statement that it expects that spare
" Whilst the home market is able to ride industrial capacity will be as much at the end of this year as it is now, and that unemployment will be higher. It went on to point out that over the past two-and-a-half
926
years the growth of the United Kingdom economy was only 1½ per cent. per annum—lower than that of any other country in Western Europe.
I turn now to the Federation of British Industries, which could never be accused of putting forward arguments which, in their opinion, were calculated to support the opinions which we express from this side. Their recent inquiry showed that the present mood of industry is distinctly pessimistic. Their last survey showed that nearly 60 per cent. of the firms were working below capacity, mainly because of lack of orders. Steel industrial production is at 70 per cent, of capacity; and unemployment increased from 259,000 in July last year to 452,000 in March. Incidentally, that is not the full story, because I know only too well that many firms in this country are retaining a measure of labour for obvious reasons—for the time when there is an adequate supply of orders to keep them all busy. But this slowing down in the tempo of industrial production is even more significant than people realise; and something drastic must be done. It is not merely a question of declining wealth; it is also effecting a worsening of our relative competitive strength, as compared with other countries.
One can turn to prices, but I understand that those have already been quoted so I make no further comment on them, except to indicate that, following the statement of the Chancellor of the Exchequer that he would endeavour to keep prices down, they have, in fact, risen. There was a more substantial increase between July and March than at any period since the inception of the Index. As regards Government expenditure, there again we have substantial increases, all indicative of the fact that, for some reason or other, the Government were unable to pursue a policy which would assist our own industry, although they declared only a matter of eight months ago that their policy was calculated to be of assistance in the development and resuscitation of British industry.
On all four counts the Government's economic policy has failed in its objectives. I know that the supporters of the Government complain that the man in the street does not understand what the

927
Government are doing; and they endeavour to secure some satisfaction from the fact that these policies must be right because they are unpopular. I have heard that view expressed many times. The Government seem unable to consider the possibility that they may be paying the penalty for doing the wrong things too often. I think that that idea has been reflected in more than one quarter to-day. It is my firm belief, my Lords, that the Government cannot understand the current mood of the British people. They fail to recognise the sign of injustice that is inevitably created by imposing, for instance, a pay pause within months of announcing a substantial surtax concession. How can they expect to stimulate and develop the interest of workers, to try to persuade them to work harder, when, at the same time, they pursue a policy of that kind?
I know that the Government have been successful to some extent in checking the rate of increase of certain incomes by setting aside established methods of negotiation, mutilating the authority of arbitration courts, and, in consequence, creating bitterness among teachers, civil servants, nurses and the like. Let me make it clear that many of us, including those of us on this side of the House, would endorse any effort that related income to productivity. That must be realised in the future.
The noble Lord, Lord Conesford, made a good deal of reference to the question of profits and dividends. While he was speaking, I took the trouble of looking up the relation between the two. At a time when the Government have suggested that there should be some restriction on the upward trend of wages by means of the pay pause, what do we see with dividends? The noble Lord, Lord Conesford, was probably expressing publicly what so many other people are thinking privately: that there should be far less restriction upon dividends. But whatever appeal has been made for restriction of dividends, what has been the experience? The Economic Survey itself states that dividends were 71 per cent. higher in 1961 than they were in 1960. The Financial Times, incidentally, does not agree with that figure; they say that they increased by 12 per cent. The Stock Exchange say
928
that the figure is 6 per cent. You take your pick. But, in any case, that shows quite a substantial increase. Who earns all these dividends?
One thing that can be established, is that dividends are 30 per cent. higher than they were two years ago. We are not going to grumble too much about that, except to say that during that same period production has hardly risen, and that is the real point at issue. It is not a fact that we deprecate an increase in profits. If profits are truly related to increased national wealth, to a welling-up of production, and to an increase in the general standard of life for the community, well and good. But here we are having evidence of increases in dividend payments at a time when the Government themselves will recognise that there is very little increase in general productivity.
Now dividends, like wages, must of necessity be related to production. There is clear evidence here that there is no question of any relation to productivity. I was very interested in the noble Lord's refreshing comment that the directors should decide in their own interests, even against the interests of the State, whether there should be restraint in profits and whether dividends should be abandoned. I wonder what he would think if that general principle found universal expression among trade union leaders. I am sure there would be a great outcry from the Government Benches. We get many appeals for a recognition of national loyalty, and an emphasis upon our need to recognise the interests of the State and the nation—which we do. Quite frankly, comments of that description are not likely to excite the interest of the worker; nor are they likely to encourage the efforts of some trade union leaders—indeed, many trade union leaders—who are just as much conscious of their national responsibilities, or more conscious of their national responsibilities, than those who express the statements that we have heard about this afternoon.
I would end on this note, my Lords. I feel that, to-day, one of the most regrettable political circumstances is the public confusion over planning. Years ago the Conservative Party successfully created the public illusion that planning was synonymous with irksome restriction and unnecessary control, and to-day

929
they are hoist with their own petard, because it is recognised—and recognised by both sides of the House—that there is an absolute necessity for the orderly planning of our resources if we are to develop this nation along proper lines. I would just say this: that, quite apart from the merits or demerits of the Common Market—and I make no comment upon that at this stage because, personally, I feel that before one makes any positive utterance it would be as well to know the precise terms of entry—there is a growing opinion among the people of this country that the Government are seeking an entry into the Common Market in the hope that they may find an escape from the chaos they have created at home: and that is not the sort of atmosphere in which one can impartially consider that most important subject. My Lords, I apologise for speaking at length, and I sincerely hope that I have not, because of the fact that I was out of the Chamber at the early stage, repeated any arguments that have been previously advanced.
8.2 p.m.
LORD MELCHETT: My Lords, I will try to be brief, as we have already had a long debate this afternoon. I should first of all like to associate myself with what other noble Lords have said about how much we miss the late Lord Pethick-Lawrence. He was a person of great charm and kindness in debate, and when I first came to your Lordships' House and took part in these. debates I was always most grateful to him for the way in which he encouraged those of us who were new to the House. I should also like to say a word of congratulation to my noble friend Lord Reading on his maiden speech. It is a happy occasion for me to be able to do that, as we are first cousins; and I hope he will be heard in your Lordships' House very often in the future.
This debate has covered quite a large field, and I think a great deal of the criticism which has been levelled at Her Majesty's Government from the Opposition Benches, and to a certain extent from my own side of the House, has really been based on less than a fair assessment of the success of the Government's policy. When one looks at last year, 1961 (which is very fresh in everyone's mind because it was a year of crisis
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and difficulty, a year in which there was a special Budget and a year in which new taxes were introduced in the middle of the year), I think one has to bear in mind that some of the things that caught up with the British economy during that period were not entirely of our own making or as a result of the success or failure of our own policies. It was a year in which the American dollar came under very heavy pressure. The dollar was weak; and, following on this, we had the revaluation upwards of the mark and, to a lesser extent, the guilder. This had a reaction on sterling which created a very severe, technically difficult position for sterling. As it happened, this was coupled at the same time with balance of payments difficulties of our own.
The Government were faced with what amounted to a severe crisis, and crisis measures were necessary to bring things under control. Whatever has been said in criticism of the Government, one must be clear that the measures that were introduced have been highly successful. First of all, the inflationary pressure inside this country was brought under control; confidence was restored in sterling; and we finished the year in an altogether more favourable balance of payments position than one could possibly have hoped for during the situation in the middle of the year. I think it is absolutely undeniable that the combination of strong fiscal policies in the field of taxation and the energetic use of the monetary controls was successful and entirely vindicated the way in which the Government handled the situation during last year.
Of course, the respite thus gained will be of little avail to us if steps are not taken to improve the longer-term trends; and this afternoon many noble Lords, particularly noble Lords on the Opposition Benches, have cast doubts on the Government's ability or intention to do anything effective about the longer-term position, and have compared our performance in an unfavourable light with that of other industrial countries. Now it was the Government themselves who pointed out last July that the respite they could gain by the severe measures then introduced would be effective only if they could improve the longer-term trends: and, of course, they have proceeded to do this very thing. I am

931
going to say a word or two about that in a moment; but, before doing so, I should like to refute some of the suggestions that have been put forward about the gloom and difficulty in which we now find ourselves.
Actually, my Lords, as a result of the stronger position in which we are and which I believe is very largely due to the wise and severe policies which the Government pursued during last year, the prospects now are really rather good. Our prospects for exports to Europe and to the United States and Canada look better for this coming year than they have done for some time; the earnings of the under-developed or the primary producing countries, the less industrialised countries, are expected to improve during this year, and therefore our export prospects to those areas are also likely to improve; and, finally, the basic balance-of-payments position, the overall position as disclosed in the statistics, looks as though it will improve in the course of the year. All this leads one to feel that the picture which has been painted of the economy staggering under terrible restrictions, of our position being almost untenable and of other countries around us in Europe overtaking us economically, really does not match up to the situation.
We have still a long way to go to get the balance-of-payments situation in an entirely satisfactory state, but, of course, this is not something which can be done quickly. We may need another decade to recover from all the difficulties of the post-war years. I am certainly not one of those who attach any particular blame to the management of our affairs by the Labour Party, particularly in the 1951 crisis, because I think there were events then (the Korean War, of course) and there have been events since which, from time to time, have made our position as the managers of the largest clearing currency of the world extremely difficult. Our reserves are insufficient: and I do not believe there is a short, quick solution to these balance-of-payments problems when they are constantly linked, as the noble Lord, Lord Mills, pointed out, with the problem of managing sterling at the same time.
Now, may I, for a moment, turn to the Government's proposals—and I will try here to be brief—as far as the Budget
932
is concerned? The Budget has been tremendously criticised as being uninspiring, neutral and failing to produce any new ideas or new incentives. I should have thought that this was exactly what was required at the moment. The measures that the Government have used to bring the economy under control and to improve the position have, as I said, been successful. For once we have used a combination of fiscal and monetary controls, and we have achieved quick and reasonable success. Surely it would be the very last thing for which anyone would ask that, having obtained some measure of success, we should immediately start relaxing and reinflating.
Noble Lords on both sides of the House have, for many years past now, constantly complained of the "Stop-Go" policy; and the noble Lord, Lord Stonham, has complained about the effects of that policy in regard to one particular industry. It seems clear that, if the Chancellor of the Exchequer's assessment of this coming year is reasonable, we are going to get a steady increase in consumption, in demand, and in production, without any steps being taken at this stage to produce greater demand by relaxing either in the fiscal or in the monetary fields. If we did relax at this stage, the chances are that, by the end of the year, we should once again be faced with the depressing and discouraging process of reimposing some form of restraint. Therefore, my Lords, I conclude that this Budget is absolutely what was required. I think it is also just about the easiest Budget there could be to criticise, because everyone has some theory or other as to how the situation could be improved a little, and if a Budget comes out which has nothing very startling in it by way of new proposals, or taxes, or incentives, or suggestions, then more people are disappointed by it than probably are when more interesting proposals are put forward.
I was going to say a little about export incentives, but I think it is too late to go into much detail. However, I would just say this. I am sure that the function of Government here should not be to try to find clever gimmicks and incentives for any particular part of the economy which they feel

933 requires stimulating. I believe that the function of Government should be to provide the financial and economic springboard from which the whole of the industrial and business community should take off. To try to find individual cures or stimulants for particular problems is, in the end, only going to create as many problems as are solved. The investment allowances are a case in point. The investment allowances have never persuaded anybody to invest. People invest in new plant or equipment because they think that, when they have built it, they will be able to sell the output at a profit. If you have some form of export incentive, people will not export as the result of that incentive; they will export if they can sell their goods in satisfactory markets overseas and collect the money which is owed to them. The incentive would be nothing more than something from which one would benefit if all the other factors necessary were present. If those factors were not present, I personally am doubtful whether the export incentive would really be of much avail.
Perhaps I may pass on from that to say a word about the O.E.C.D. Report. Many of your Lordships, and many people outside your Lordships' House, have read into this Report, or drawn from it, many conclusions which, frankly, I feel are quite unwarranted. I think that this is a very valuable document, and many of the comments and suggestions which are written into the Report are of the greatest value. As I think the noble Lord, Lord Poole, mentioned earlier this afternoon, they are, on the whole, an absolute vindication of the Chancellor of the Exchequer's and the Government's policy, both in general and in particular: in particular in the setting up of the National Economic Development Council, and in general in announcing that the Government are going to have a positive policy towards wages. I think it was the Financial Secretary to the Treasury, when speaking in another place on the Budget debate, who said that he felt this was one of the most important departures in general Government policy that had been made since the Government took the general responsibility for full employment at the end of, or just after, the last war; that this departure of
934
taking a positive policy attitude towards wages could be considered in the same light.
To turn back again to this Report, my Lords, the inference has been drawn that we are performing very poorly when compared with other countries. If noble Lords really wish to draw the inference that, because Germany and France (who I suppose are our two largest industrial competitors across the Channel) have increased their gross national product at a higher rate than we have during the decade of the 'fifties, therefore we are falling behind, then in looking at these tables they will be forced to the conclusion that the country we should fear most is Greece because in fact Greece is second in the league tables. Such a proposition is obviously perfectly ludicrous. What one has to realise is that these tables show the rate of growth of gross national product and they depend on the starting point. Obviously, Greece starts at a very low point.
Similarly, one noble Lord on the Opposition Benches (I am afraid I cannot remember who) quoted Ireland as leading in productivity. Of course, Ireland has done relatively well, and, I think, slightly better than we have; but anybody who knows the Irish Republic knows that the productivity per worker there must be very low. It is not an industrialised country but a country of small farms, and largely inefficient farms, and, of course, any increase shows up immediately. This is a point which seems to have been completely missed, and therefore I consider that the interpretation put upon these figures is most misleading.
So far as France and Germany are concerned, the German population to the extent of about 30 per cent. is still employed in agriculture. They have had a constant flow of refugee labour from the East. They have also had a major currency reform which gave them the starting point to this expansion. In France there are similar factors. They have a large agricultural population which is still only beginning to be drawn into industry. We were in a completely different position in 1950, the base year for these figures. I am not sure what the position was in 1950, but to-day we have only about 5 per cent. of our working population employed in agriculture,

935
and in the circumstances it would have been quite impossible to expect us to have performed at the same level of expansion as other countries.
Your Lordships will find that we have done nearly as well as the United States: the differences are very small. We have increased our gross national product to the extent of just under 3 per cent. per annum, and the United States. I think, have increased theirs by just about 3 per cent. Some of the more advanced Scandinavian countries, like Denmark. Norway and Sweden, have increased theirs by just under 3½ per cent. So the differences are very small. I think the indications, contrary to what some noble Lords have suggested, are that really we are doing extremely well—extremely well in view of the heavy defence burden which we carry as well as the major responsibility of managing the sterling area, and, of course, the fact that we also have a much larger investment programme overseas in our Commonwealth, in Colonial territories and in helping the underdeveloped areas.
I do not want to detain your Lordships any longer. However, I feel that to some extent an altogether too depressing note has been struck by some of my noble friends on this side of the House. I myself believe that, if the Government are open to any criticism, it may be the criticism which my noble friend Lord Balfour of Inchrye touched on: perhaps they have not put across their case quite as well as they might. I think they have a very good case, a good story to tell, and I look forward to this year being a prosperous one.
8.20 p.m.
BARONESS WOOTTON OF ABINGER: My Lords. I must confess that at this stage of the debate I feel very like the member of the American population described by the noble Lord, Lord Conesford—that is to say, broken down by age and sex. I suppose that many of your Lordships will have the feeling that everything that has been said in the course of this debate has been said many times before on similar occasions over a number of years. Nevertheless, I am extremely grateful to the noble Marquess, Lord Reading, for the contribution he made, in his delightfully phrased and informative maiden speech
936
this afternoon, because I think that the noble Marquess summed up perhaps better than anybody the situation so far as it concerns Government policy. The noble Marquess said that what is needed is new notions, and I find myself in the happy position of being, for once, in complete agreement with a noble Lord on the opposite Benches.
I should like also strongly to support the plea made by the noble Lord, Lord Balfour of Inchrye, that the Government should tell us precisely just how we are to become more competitive. Most of the methods that are advocated generally have been discarded, and we are left wondering what the recipe is to be. I myself could not help being reminded of one of the many occasions when the Government had been pressing for greater output—this was at a time when I happened to be a professor in the University of London. Conscientiously we held a departmental meeting to consider how we could increase our output. Three alternatives were presented. The first was that we should condense 10 per cent. more matter into each of our lectures. The second was that we should compress each of our lectures into 10 per cent. less time. And the third, and most popular, was that we should repeat ourselves 10 per cent. more often. Maybe the noble and learned Viscount who is to reply may have some more constructive proposal than any of those.
The noble Lord, Lord Mills, gave us what I might perhaps call a rather complacent picture, though in sombre tone, of what is sometimes described as the affluent society. Personally, I would rather describe it as the top-heavy society, for it is affluent only at one end. I think that the noble Lord drew this picture by the simple device of taking credit for all the good things that had happened and omitting to mention all the bad ones.
VISCOUNT HAILSHAM: My Lords, surely this is only the obverse of the Opposition's case. They mention only the bad things and give credit for none of the good things. That is the game.
BARONESS WOOTTON OF ABINGER: My Lords, the noble and learned Viscount is giving an excellent exhibition of a philosophy which I did not think he held—the Marxist contention that

937
truth emerges from the .synthesis of thesis and antithesis.
VISCOUNT HAILSHAM: My Lords, I entirely agree with the noble Baroness, but it was by Hegel, before Marx.
BARONESS WOOTTON OF ABINGER: My Lords, I am sure that we shall agree to give the credit to Hegel.
The noble Lord, Lord Melchett, carried this one stage further by mentioning some things—notably revaluations overseas—which he said were inevitable, while the good things were the product of the Government. The noble Lord, Lord Mills, for example, took credit for the extensive school building that has taken place in the years we have had a Conservative Government, but he omitted to mention the drastic cuts that are now being made in the proposals for school building, and the cuts now proposed in the expenditure on universities. He mentioned with some complacency our progress in exports, but failed to mention, as my noble friends Lord Walston and Lord Peddie pointed out, how we had fallen back in our comparative position, and I do not think that this falling hack is entirely answered by the comparison which the noble Lord, Lord Melchett, used. He pointed out that if a country starts from a low level, it is in a strong position to make a large percentage increase, and quoted the example of Greece. That explanation does not explain away our failure to maintain our share in the total of world trade.
Similarly, the noble Lord, Lord Poole (I am sorry that he is not now in his place) was disposed to take credit for the comparatively low level of unemployment which has prevailed now for over ten years. But he failed to mention that in Northern Ireland the level of employment runs consistently at four or five times the level in Great Britain. Either this is due to circumstances which are beyond the power of the Government, in which case they are not quite so efficient as they make out, or they are due to some extraordinary meanness which causes them to be unwilling to impart the secret of their success in Great 13ritain to their colleagues in the Government of Northern Ireland.
I think that far and away the best defence of the Government's policy came
938
from the noble Lord, Lord Melchett, if I may say so. But he posed his defence mare in the future than in the past. He spoke not of achievements but of prospects. Jam yesterday and jam to-morrow, but never jam to-day! But Governments are judged by "jam to-day." But let us be honest. There is one new element in the Government's economics policy. Though perhaps your Lordships will forgive me, having said that, if I point out that it is not quite so new as some noble Lords opposite might like to claim. The new element is the proposal: that we should have a new incomes policy. If I may quote from a book which was published some seven years ago, we find this passage:
" The pattern of income distribution is essentially a political question. It embodies social valuations which affect the whole community and in which conflicting interests are involved, and the issues raised by these conflicts are germane to the differences which divide political Parties so long at least as those differences can claim to be the expression of alternative social philosophies or designs for achieving alternative social ends. The place for the discussion of wage policy is on the agenda of political conferences."
My Lords, when I wrote those words seven years ago I had the impression, from the reaction which was provoked, that I had, so to speak, used a dirty word; and your Lordships can therefore imagine the pleasure with which I welcome the publication of a Government White Paper actually entitled, Incomes Policy—for Government White Papers are not usually essays in pornographic expression.
We find reinforcement of this attitude in the O.E.C.D. Report, which has also called attention to the problem of evolving in this country
" a more permanent system for the determination of money incomes, which is accepted as just and reasonable by the community as a whole."
So we were full of hope, and the Chancellor of the Exchequer in another place told us that this incomes policy was necessitated by certain facts about recent changes in distribution. He mentioned that between 1960 and 1961 there had `been a 5 per cent. increase in wages and salaries; a 6½ per cent. increase in other personal incomes; a 20 per cent. increase in gross dividends, and a 3 per cent. increase in production. He said, "These figures do not make sense." We on these

939
Benches would, I think, endorse that statement, though not necessarily for quite the same reason. So we embarked upon a pay pause—stage one of the new economic policy.
Credit was taken by the Chancellor of the Exchequer in another place for the fact that during the pay pause, from October to February, weekly wage rates rose by only 0·8 per cent. He did not mention that during the same period retail prices rose very nearly twice as fast, suggesting that this is not a very effective cure for inflation. Nor did he mention the fact that during the same period production had actually declined. I fail to see why the Chancellor of the Exchequer was so pleased with the policy of the pay pause, and, indeed, from his own point of view, so ready to abandon it in favour of the second stage. For, as the noble Lord, Lord Mills, said, the pay pause was to be only the beginning.
So we pass from the stage of the pay pause to the stage of the positive policy; and I think we all had considerable sympathy with the Chancellor in another place when he said that finding a positive policy was not quite so easy as it looked. A positive policy is described in the White Paper as the next step. Let us see what the positive policy is. The positive policy, the White Paper tells us, is not to take so much notice in wage negotiations of the cost of living; it is not to take so much notice in the determination of wages of shortages of labour in particular industries or firms: it is not to take so much notice of the comparabilities of one wage with another, although these have a part to play. We then turn hopefully to find what we are to take notice of; but at that point the White Paper comes to an untimely end. And when we ask what we are to do about other incomes—not wages or salaries—we find no mention of these until the final paragraph.
The essence of the policy seems to be, in fact, a standstill at, if I may so describe it, a slightly raised figure, to allow a kind of flat 2½ per cent. to 3 per cent. all round with no questions asked as to priorities or anything else. Today, in Question Time, the noble Marquess, Lord Lansdowne, said—and I think we all accepted it—that it is not possible to translate a text that you have not
940
got. Nor is it possible to interpret a policy that you have not got. Yet, in time, I am sure we shall come to see that there is a place in this community for an incomes policy. A real incomes policy would be an extremely radical thing, and it would have to ask a number of questions and challenge a number of assumptions in our existing economic system. It would have to ask questions about priorities: about priorities within the professional field; about priorities as between the professional field and the manual working field; and about priorities, also, within the manual working field itself. It would not, I think, be content with the flat 2 per cent. or 3 per cent. all round, which simply means that existing relativities are standardised for ever and no one who has been unfortunate enough to get left behind in the race has any hope of making good.
The noble Lord, Lords Mills, spoke with pride and pleasure of the rising standard of living—and we accept with gratitude and share in his delight that the standards have risen most significantly in the period since the war. But a real incomes policy would raise the question whether we are content that, in spite of what is often referred to as the high level of wages, just short of 10 per cent. of the adult males who are in full-time occupation take home earnings of less than £10 a week: that, not 10 per cent. but 87 per cent. of the adult females who are in full-time employment take home less than £l0 a week; and that barely less than one-third of the households which are living in poverty, as we used to judge it—that is to say, slightly above the subsistence level—are households in which the head of the household is in full-time employment. In other words, there is a long tale still of low wages, which are to be frozen, apparently, by the universal formula of not more than 3 per cent.
I think perhaps we shall have to admit, too (I say this with some trepidation in the presence of my trade union friends), that a real incomes policy would challenge some of the assumptions of some of the doctrines that have long held sway in this country. It might have to challenge even the doctrine of the divine right of collective bargaining—or, perhaps I should say, of the divine rightness of every collective bargain. It might have to challenge the tradition

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that has grown up in this country that in industrial arbitration we use not the common British judicial system, but the Chinese. This, I think, is now recognised in the White Paper, which suggests that we move from the Chinese to the British system. For I understand that when there is a dispute in China it is the custom not to try to settle it by having some objective standard of what is fair between the parties, but to cast around for something which will cause the parties to give up their quarrel, something to which they will agree.
But, above all, a real incomes policy must deal with the structure of incomes of all kinds from top to bottom and not simply apply to them a blank formula. Let me remind your Lordships that in the past ten years there have been most disproportionate changes in the total volume of different types of income, and it is quite impossible to contemplate an incomes policy Which deals with wages and salaries alone. In the past ten years the increase in total wages has been of the order of 87 per cent.; the increase in total salaries has been of the order of 119 per cent.; and the increase in gross dividends has been of the order of 145 per cent.
The Government's economic policy, as we have heard it to-day, is essentially restrictive, but it is effectively restrictive only in certain cases. The noble Lord, Lord Conesford, was very worried about what directors of companies were to do with the dividends which they did not think it honourable to distribute. But I do not think his worry is necessary. In the first place, there is very little sign that the occasion of this concern will arise, since there is to be, apparently, no effective restraint on dividends. But, if their consciences do prick them too severely, they can put their dividends away, thereby enhancing the capital value of the stocks of their concern, and thereby giving opportunities for capital gains which will escape the speculative gains tax.
The policy, as we have heard it, is not only restrictive but seems to lack any consistent leadership or direction. As the noble Lord, Lord Balfour of Inchrye, painted out, it is not even clear whether we are assuming commitment to the Common Market or whether we are still assuming that we shall "go it
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alone". As the noble Lord, Lord Stonham, pointed out, similar inconsistencies have pervaded the Government's attitude in the regulation of home demand, until unfortunate manufacturers are driven crazy by these perpetual changes in the taxation to which they are liable, and by the alternate expansion and restriction of their credit opportunities. It looks a little as if the policy Which we now have is that of a driver who gets into a cart and harnesses to it two horses, but unfortunately does not appreciate that the two horses are pulling, most of the time, in opposite directions. It also seems (I do not know whether it makes the situation better or worse) that each of the two horses is a little old and tired.
8.42 p.m.
VISCOUNT HAILSHAM: My Lords, the noble Baroness who has just resumed her seat rather strangely referred to herself as broken down by age and sex. I think the whole House would agree that she is not broken down by age, and most of us find the other thing more stimulating than disintegrating. At any rate, it is a pleasure to follow the noble Baroness, who, whatever may be said of my colleagues, certainly does not fall into the trap of vapidity, the criticism of which was levelled at us by my noble friend Lord Balfour of Inchrye. She expresses herself charmingly and with great clarity and distinction of language.
After very nearly seven hours of oratory, I must, I confess at the end of the day, describe myself as "bloody but unbowed". The debate has been, I should have said, on the diffuse side. Every year we have a debate just after the Budget, and every year we have another debate when the Finance Bill reaches this House. It would be very nice indeed to debate with the Party opposite the factor of growth in our economy, the "league tables", and so on; it would be very nice to debate export with a number of noble Lords who have referred to it; it would be very nice to debate the actual Budget proposals with those who have discussed them; and the O.E.C.D. Report which has been repeatedly referred to in our discussions to-day would also be an

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admirable subject for debate. But, like the character in the Beggar's Opera,
" When they all tease me together, to none a word will I say,
But fal-de-lal-de-la-dee."
I find it impossible, at this hour of the evening, to deal with so many different subjects and, therefore, I must select.
My noble friend Lord Balfour of Inchrye said that it was on the whole desirable that the Government should be responsible for forthright statements. I agree with him. It is, of course, generally accepted as one of the more prized rights of the British to criticise their Government, but I have noticed that they are apt to be a little shocked when a member of the Government ventures to hit back. The attitude the public expects from its Governments is that of a spaniel rebuked by its master, on its back, paws up and bent, a general attitude of submission and ingratiation. But I do not feel like a spaniel.
LORD SHACKLETON: You do not look like one, either.
VISCOUNT HAILSHAM: The House will forgive me if I do not adopt this supine position towards the criticisms which have been levelled at the Government. The first criticism I must answer is that which was levelled by the noble Lord, Lord Shackleton, at the speech of my noble friend Lord Mills. I happen to agree with my noble friend Lord Melchett, that the noble Viscount who leads the Opposition opened his speech in unduly sombre terms. He took too gloomy a view of the situation: he was painting too black a picture. Now, of course, one understands that in the fury of Party debate one is tempted to do that sort of thing. But if one takes too gloomy a view of the situation, one can neither diagnose the character of the disease nor hope to prescribe an adequate remedy. Therefore, it seemed to me that my noble friend Lord Mills was perfectly right to remind the House, as I shall be reminding it in due course, that there are in fact some very solidly bright parts of the present picture, and I think my noble friend Lord Melchett was perfectly right to refer to them.
It was a little less than just of the noble Lord, Lord Shackleton, to say that that kind of thing made him almost despair.
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You cannot have it both ways. You can charge a Government with being complacent if you like, but only if you have not overpainted the picture in dark colours just before you do so. It seemed to me that the speech of my noble friend Lord Mills was a useful corrective to the undue pessimism of the speech of the noble Viscount who introduced this debate.
The second criticism which is made was that my right honourable friend's Budget was a dull Budget—" almost meaningless "the noble Viscount called it;" uninspired "was another phrase which has been used. In one respect I sympathise with the critics. The annual Budget year by year has been built up into something bigger than it ought to be in our total economic policy. If I were working in the Treasury and valued the reputation of any Chancellor of the Exchequer, I would burn that box of Mr. Gladstone. It is the first thing I would do. Burn Mr. Gladstone's box, and you would get a lot less nonsense talked about the annual Budget. Each Chancellor of the Exchequer appears in a ghastly photograph holding the beastly thing up as if it contained the bequeathed goatskins of the Ark of the Covenant. It is the most frightful nonsense, because the Budget is a relatively small part of our national economic policy, important as it is. In the modern age this sort of thing ought to be brought to an end.
But I am bound to defend my right honourable friend's Budget against the charge of being dull. This, I think, is wholly to misunderstand the nature of the appreciation which he has made of it, and this appreciation has been rightly emphasised both by my noble friends Lord Poole and Lord Melchett in their respective speeches and, I think, by the noble Marquess, Lord Reading, in what I thought was a most effective and welcome maiden speech.
When the Chancellor brings in his Budget nowadays, he is not doing the kind of thing that Mr. Gladstone with his original box was trying to do. The rightness or wrongness of a Budget in these days depends less upon the merits or demerits of particular proposals than upon the correctness or otherwise of the Chancellor's appreciation of the economic situation as a whole. I feel

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bound to say, in parenthesis, that if this Budget is to be attacked as a dull one, I have never seen a Budget which occupied more columns of the Press on the following day—a whole page in the Daily Telegraph. On the whole, newspaper men know what it pays them to put in their newspapers. I have never seen a Budget in recent years with better Press coverage. Even though it be dull, that does not seem to have been the appreciation of the Press. But its dullness or otherwise does not depend upon that. If the Chancellor considers the situation basically inflationary, he has to impose harsh measures of taxation and, maybe, supplement them by monetary or other controls.
Last year, for instance, the present Chancellor budgeted for a big surplus, and fortified his Budget with discretionary powers which he later used for imposing further imposts during the financial year. Mr. Thorneycroft and Mr. Amory, who succeeded him, pursued in many ways the same policy in 1957 and 1958. My Lords, a Chancellor who does this may not be popular, but he is seldom called dull. If, on the other hand, the Chancellor considers the underlying movement of trade is towards recession, he will, presumably, budget for a deficit; he will make numerous popular taxation concessions; he may even, in parallel, persuade the Governor of the Bank of England to reduce the bank rate and generally stimulate the economy. Mr. Amory (as he was then) did this in 1959, and to some extent in his previous Budget. A Chancellor who does this, in my experience is never called dull or uninspired. Indeed, in answer to my noble friend Lord Auckland, this is what I should describe as an inspiring Budget.
But it is possible, of course, that a Chancellor may think that neither of the two alternatives of restriction or reflation meets the needs of the moment. That is what my right honourable friend has done this year. Admittedly he thinks the total burden of taxation should remain approximately where it is, and, admittedly, if this basic appreciation of the Budget is wrong, the Budget is, of course, itself wrong. If what we want is reflation, the Budget is wrong. If what we want is a new dose of restriction to a greater degree, which would, I
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feel, lead to deflation in the light of current demand, this Budget is wrong. But if my right honourable friend is right that the present situation must be held a little longer, then the Budget is basically sound and criticism is really limited to questions of detail. Complaints in this context that the Budget is meaningless or irrelevant are, to my mind, at any rate, futile and meretricious. The question is whether the appreciation upon which the Budget is founded is a sound one. If it is sound, the Budget is a good one. If it is unsound, it is not irrelevant but had. It is therefore this question which we must investigate a little further.
In passing, however, I make this comment upon some of the political judgments of the noble Viscount who leads the Opposition. He, at any rate, made the suggestion—although I think his noble friend Lord Stonham retreated from it—that these past Budgets to which I have referred have a direct relation to the sequence of General Elections which take place in this country every four years or so. It is said that in the year before an Election we have a favourable Budget, and that sonic time after we have an Election we have a Budget in which financial controls are imposed and taxation raised. I think I have been fairly close to the centre of things since about 1956, and I wish to give my own testimony that this charge is wholly false—as indeed I think the noble Lord. Lord Stonham, admitted it to be.
The short answer, my Lords, is that no Government, whether it is acting in the middle of a Parliament or acting at the beginning or end of a Parliament, likes to do unpopular things; and there can be no mistaking that even the very modest measures of control that we imposed in 1957–58, and again in the summer of 1961–62—very modest, that is, in comparison with those of the late Sir Stafford Cripps and his predecessor—have been very unpopular. In passing, may I say this: that whilst I associate myself very sincerely with all that has been said with regard to the noble Lord, Lord Pethick-Lawrence, I myself could not help thinking in the course of the debate of the loss which the House has sustained in the death of the late Lord Dalton, the predecessor of Sir Stafford Cripps, to whom I was referring. The

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functions of this House did not permit formal tributes, but I think that, when the time has come that this controversial figure can be assessed, he will be remembered as a man who loved youth and favoured learning. And these are qualities of which any man may be proud at the end of a long life of public service.
None the less, however little the Government of the day may appreciate unpopularity, when a Government has to choose between a run on the pound and its own popularity, it has only one choice it can make. It makes it unwillingly. It must face unpopularity; loss of by-elections; and even, if need be, defeat at a later General Election. This is the price of responsible government. And it therefore is a matter of great joy and hope, at any rate to me and I think to my colleagues, that the very unpopular policy which was referred to in many terms, beginning in July, 1961, and undertaken with great courage by my right honourable friend the Chancellor of the Exchequer, is already showing, as my noble friend Lord Melchett pointed out, many signs of success.
Numerous references were made to the O.E.C.D. Report. I shall be referring at a later stage of my remarks to the use made by various noble Lords of that Report, but it is strange, in view of the care with which they have evidently read it, that they did not, at the same time as they quoted other passages, mark the very favourable references to the wage pause at the top of page 31, in which both its success and the way in which it had been carried out were favourably commented upon.
Each time we have acted, we have acted against our will but out of necessity to deal with an economic situation which we had to face. When, in 1958 and in the early months of 1959, we acted to reflate the economy we were faced with what appeared to be a quite serious recession in world trade. The result was that we pursued the second of the two courses I have described. We did so because, first, at that time (that is to say in the early months of 1958) there appeared to be—and nobody was more ready to point it out than the Party opposite—the beginnings of what, by post-war standards, was quite sizable unemployment, partly a result of a world
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movement of trade; and, secondly, because the policy of restriction which we had courageously, in my opinion, undertaken in 1957 had already restored confidence in sterling, as my right honourable friend's measures in July, 1961, have already restored confidence in sterling. We are (and, indeed, I think both sides of the House would support us in this) a Government of expansionists, and we restrict only to the extent that we feel necessary to combat inflation and to maintain the value of our currency.
Of course the crisis in 1961 was, as the noble Lord, Lord Melchett, just pointed out, sparked off by the revaluation of the mark, undertaken by the West German Government without a great deal of consideration for our vulnerable position. Let anyone who is interested in these things plot the flow of short money out of this country against the events of last summer in the international field, and he will not be disposed to blame that crisis on the Government, following as it did a year of rising pressure of demand, an excessive rise in money incomes and a weakened balance of payments. Our economy and currency are unduly vulnerable, for reasons which are not discreditable to us, to fluctuations in international confidence. But it is this very question of vulnerability which does concern us as a Government and as a nation.
It is true that our material prosperity is higher than ever before, but it is also too precarious; it is too dependent upon the will of others. A part of this problem is slowness of expansion, and the slowness of expansion and our vulnerability are therefore, in more ways than one, a function of our failure to achieve an incomes policy. Again, in passing, I think it is quite extraordinary that noble Lords opposite who have been so ready to refer to the O.E.C.D. Report did not, apparently, attach any importance to the diagnosis which that Report places upon this nature of our vulnerability. It said clearly that the principal cause of our vulnerability is the uncontrolled increase in money incomes, which had the effect of doing the very thing to which the noble Lord, Lord Stonham, drew attention—namely, to increase unit costs, so limiting our power to export. I was delighted to hear the noble Baroness who wound up the debate for

949 the Opposition—a voice, I fear, in that Party crying in the wilderness, but still a voice to which I pay considerable respect, and to which I attach a great deal of importance—admitting the necessity for a national incomes policy. In that the noble Baroness and I are on the same side of the barricade.
I am sorry to labour this point, as I am afraid I have now done in your Lordships' House since I first answered for economic affairs in the summer of 1957, but until it is accepted it cannot be too often said, The choice for this country lies between three policies: one is devaluation and dishonour; one is deflation and unemployment, and the third is a rational and just incomes policy, however many by-elections have to be lost in the process of achieving it, and however often we are driven by the non-co-operation of people who ought to know better—and some of whom certainly do know better—to impose for a short time, I hope very short periods of time, odious and at times unjust inequalities on groups and professions who deserve better of their fellow-countrymen.
LORD SHACKLETON: My Lords, if I may intervene, would the noble Viscount care to tell the House the names of the individuals he is referring to who are unwilling to co-operate with the Government?
VISCOUNT HAILSHAM: My Lords, I think at this stage of the evening the best plan is "No 'names, no pack drill ". To them I would only say that we hate doing this only a little less than such groups hate being at the receiving end. Those who are most and worst affected would thank us little at the end of the process if, for the sake of satisfying them as groups, we were to commit ourselves as a nation to courses which led to devaluation or compelled us to adopt deflation as an alternative.
In answer to the noble Baroness, in her most interesting remarks upon the same subject, I would say that we do not for an instant believe or desire to insist that a flat universal and permanent figure of 21 per cent. or 3 per cent. should be imposed upon the population. What, however, we are bound to say is that until productivity does rise, then the aggregate amount of income which is receivable from all sources shall not
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exceed the extent of the productivity. And, as I shall point out rather later in my remarks, that is precisely the conclusion of the Report from which noble Lords opposite have quoted.
It is in this general context, I think, that the Budget must be read. Of course, once one has accepted the general appreciation of the economic content one sees that my right honourable friend was inevitably limited to a small number of detailed proposals. But I should have thought that they were extremely interesting and imaginative proposals. In those circumstances, the Budget's theme was, of course, the gradual reform of our taxation system. There are many people who believe that our taxation system is ripe for reform. The Liberals, who I am afraid have not contributed to this debate to any very great extent, are, I believe, among their number. But no one who is at all acquainted with the immensely complex system that we have can fail to realise the truth of two propositions. The first is that a level of taxation as high as it is quite certain to be in the foreseeable future under any conceivable Government is quite certain to be complex. Only a low level of taxation can yield a relatively simple system, and this is because the anomalies, injustices and opportunities for evasion which a simple system yields are tolerable only when the rate is so low that anomalies and injustices are not resented and opportunities for evasion are not embraced.
The second proposition is that a change to a reformed system of taxation cannot be undertaken in a single step. Supposing, for instance, we wished to move, as many people urge, in favour of a few fairly obvious "starters" in the race for a reformed system; supposing, for instance, we wanted to introduce a consolidated single progressive income tax-cum-surtax in place of the two taxes which are now separately levied; supposing we wanted to move in favour of a consolidated corporation tax to include profits tax and company income tax; supposing we wanted to achieve some rational purchase tax to take account of the ordinary facts of family budgeting, as, for instance, allowed for in the cost-of-living index, instead of a system rapidly becoming irrelevant which attempts to distinguish between necessi-

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ties and luxuries; and supposing we wanted to move, as some people do, in favour of a legacy or succession duty in place of estate duty, we should still have to go very cautiously at first to remove anomalies, and so build the foundation for changes, which at their inception would almost certainly involve us in serious losses of revenue.
The third general criticism which is levied against the Budget is that there should have been more about exports, more to encourage exports. As my noble friend Lord Poole, and, I think, my noble friend Lord Melchett, pointed out, this is a criticism which is really worthless unless it condescends to detail. The real arguments against export incentives which their supporters must overcome are not so much the international obligations which we have willingly undertaken but the absolute certainty of retaliation by countervailing duties and competitive subsidies by our commercial rivals if we embark on this course. In my opinion, at any rate, there is no easier way of throwing money down the drain than a competitive subsidy race. None the less, suggestions for fiscal reforms—and we have heard several from various quarters of the House during this debate: I think from the noble Lord, Lord Milne, and the noble Lord, Lord Melchett among others—are always welcome. But if those who think that there is a future in what are euphemistically called "incentives"—because of course subsidies, which is the same thing, is a naughty word—would condescend to detail, I can asure them that there is one Minister at least who would look at them very carefully.
It must also he remembered that the recent Report by the Federation of British Industries which examined this particular subject found that it was to the interest of British business and industry to discourage these practices in other people. We can hardly do that if we are deliberately indulging in them ourselves. Unlike my noble friend Lord Conesford, I was personally delighted by the new Case VII income tax, and I have no patience either with those critics who deride it as nugatory or those who condemn it, as my noble friend did, as revolutionary or breaching what he described as a sound principle. It is some-
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thing which has been recommended, in one form or another, as long ago as 1920, when the Royal Commission reported. I remember that when my father was Attorney General and concerned with revenue cases in 1925, he told me that something of the sort was then long overdue. I am glad that my noble friend Lord Reading endorsed this principle, although he criticised the detail.
I do not agree with my noble friend Lord Conesford that it breaches a principle. I do not consider that it taxes capital at all in that form; indeed, I would equally join issue, although from the opposite point of view, with the noble Viscount who opened the debate, who committed himself to the view that this was nothing better than an ineffective capital gains tax. In my view, it taxes income and not capital, and therein lies the secret of the Case VII and the justification for it. The difference between income and capital is one which has to be examined very closely in relation to actual practice before one claims that it is in any set of cases a matter of principle. If devices are discovered which can evade its spirit and not its letter, doubtless then the resources of civilisation are not exhausted to defeat them.
I was also delighted (in this I have the pleasure of agreeing with my noble friend) when my right honourable friend decided to tax sweets and soft drinks. I knew, of course, that an attempt would be made to work up some sentimental popular prejudice about taxing the kiddies' sweets; but if there is one thing as certain as that lung cancer is, or can be, caused by cigarette smoking, it is that dental caries is caused by excessive sweet-eating. It is no coincidence that our children have the worst teeth and the highest sweet consumption in the world It is a first-class measure of dental health—although I am afraid my noble friend was not so pure minded about that as I would have had him be.
I was glad that not one speaker in this debate criticised my right honourable friend for not increasing the tax on cigarettes. I particularly noticed that the official speaker of the Labour Party on television expressly supported my right honourable friend's decision in that respect. But I would make it quite clear that the fact that my right honour-

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able friend did not accept this particular recommendation of the Royal College of Physicians does not mean that the Government are not as determined as ever to get across to the public the dangers of excessive cigarette smoking. Even now a careful investigation is being made of what can legitimately and usefully be done without paternalism.
think it is a little late to welcome the end of Schedule A, about which I thought that the noble Viscount opposite was rather at a loss to present reasonable criticism. I mention in passing the issue of profits and dividends, make no particular complaint of the fun which my noble friend Lord Conesford legitimately poked in my direction on this subject. I think his points were neither basically humorous nor merely stylistic, but they were concerned with genuine, logical difficulties with which, from time to time, I must tell him I have tried to deal in these debates. The truth is that when people talk about profits they are in fact referring to a number of quite different types of pecuniary advantage, different in every case from dividends, which are the distributed portion of trading profits, and all of which are quite different again in character and economic and social function from the wages, salaries and professional emoluments with which they are often emotionally and unthinkingly compared.
I do not in the least mind my noble friend's drawing attention to the nonsense, born of confusion of thought, which is often talked about those things—occasionally, no doubt, by Ministers, in common with other people—but I feel I must insist upon what is really a basic moral condition of an effective incomes policy, upon which I have often agreed that the Labour Party are entitled to insist, and that is that if you are going to ask people who derive their livelihood from wages, salaries or professional emoluments to exercise some restraint in what they get, there must be parallel action in other spheres, which affects in one way or another the effective incomes of those who derive their livelihoods from trading profits, capital profits or dividends.
It may be, and indeed is, the case that the field is much smaller. After all, wages and salaries count for, I think, the largest single part of all
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income. I saw in another place when they debated this subject that 93 per cent. was mentioned as a figure. I could not necessarily endorse that. But it may be that the word restraint is not appropriate to both. It is certainly true, as I have repeatedly insisted, that the methods appropriate to one are inappropriate to the other, largely owing to their different character. But at the end of the day there is really no denying that the belief, often unfounded but always emotionally upsetting, that particular classes, such as land speculators, owners of investment income, investors in rented property, even those who enjoy profits by trading, are completely free from the consequences Government action, is one of the big practical bars to any successful incomes policy. In fact, of course, my right honourable friend is always seeking ways in which to achieve a more equitable arrangement.
At the moment I think the problem is not such a real one as my noble friend seems to have thought. No one, I believe, supposes that individual measures against particular businesses can be contemplated. Company profits have been falling almost continuously since 1960, and following the Government's present measures profits in the second half of 1961 have fallen 7 per cent. on those in the first half of the year and 12½ per cent. on those in the first half of 1960. But perhaps I should, in passing, deal with a question which I think was raised in one form or another both by the noble Lord, Lord Walston, and by one other noble Lord, I think perhaps the noble Lord, Lord Peddie. In comparing dividends with wages it is not always useful to compare rates of percentage increase. Percentages are funny things to quote in statistics. If you have a dividend on £100 investments of £5 a year, and raise it up to £10 a year, your extra income is £5; but the rate of increase percentage-wise is 100 per cent. That is a very different thing from raising wages by £10, which of course is a quite small percentage rise in the wage level of the year. I think that noble Lords who quote these figures should be much more precise about the nature of the base upon which they are calculating their percentage.
LORD WALSTON: My Lords, I do not think the noble Viscount was in the Chamber when I quoted these figures. I gave a specific figure which was something like £700 million or £700-and-something million, up to £900-andsomething million. So I think that the particular error, which is common, was one into which, fortunately, I did not fall, in spite of the absence of the noble and learned Viscount.
VISCOUNT HAILSHAM: My Lords, I was not absent in fact when the noble Lord quoted the figures, but the only part of what he said that I managed to get down was 7 per cent. against 33⅓ per cent. I turn back again to the issue of expansion—
LORD CONESFORD: My Lords, if my noble friend is leaving this subject, I should like to know whether he can answer one specific question I put to him on profits—namely, what do Her Majesty's Government wish a company to do which wishes to do what they want, and finds its profits in danger of increasing. That is the first question. The second question on dividends is, do the Government entirely reject paragraph 536 of the Report of the Royal Commission?
VISCOUNT HAILSHAM: My Lords, I do not think I want to spend a great deal of time on this subject, because I think my noble friend was, with respect, making some difficulties for himself. First of all, the request for dividend restraint was, like the request for wage restraint, a temporary measure, and therefore the question does not arise as a permanent question. But I do not think my noble friend had really pursued this matter sufficiently far, or he would have reflected that there are things that you can do with profits other than spending them on dividends and even other than spending them on increased wages. You can build a new works canteen. I am not saying that this is, or is not, in any way a desirable thing to do. You could spend a little more on market research, especially in the form of a suggestion in the O.E.C.D. Report. You can reduce your prices,
as he has said. He claimed, I think wrongly, that that would have led me into an illogical difficulty by way of
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redress, but I do not agree. If more profits are earned as the result of a reduction in prices, the prices can be reduced again. This might be a way of dealing with the subject. I do not think myself that the difficulty which my noble friend was raising was in fact as genuine as some of the logical difficulties he sees often are.
So I return to the question of expansion and I say, without qualification, as I said before, that this is by conviction a Government of expansion. It has been so since Mr. Butler announced his target of a doubled standard of living in 25 years, and the only priority we put above expansion in the ordinary field is the prevention of inflation, coupled with the achievement of a sound balance of payments. But I think we have to go a little more carefully since it is very easy to talk nonsense about expansion. It is easy to postulate an expansion which would lead us straight into Carey Street. You cannot talk simply in quantitative terms about expanding production without entering into a close discussion of what margin there is for expanding production, what qualitatively you are going to produce, where you are going to sell it and what you are going to get in return.
There seems to me to be some confusion about what growth really is. It is certainly not, as some people appear to think, pushing up demand so as to achieve the maximum ultilisation of all our productive resources, regardless of cost and efficiency in production. It is for this reason that, although I would count myself an expansionist, I have never wholly subscribed to what I can only call the growthmanship which is sweeping through the dry stubble of the economic underworld like a prairie fire, with this talk of league tables and a lot of other bunkum. It is no disrespect to a famous popular newspaper to say that I simply do not believe that the mere fact that on Saturday one prints ten more copies of the Daily Mirror or makes a couple of thousand more cigarette cartons makes anybody much better off, yet they undoubtedly enter into the figures of production.
Therefore, although I am an expansionist—and this is in answer to what the noble Lord, Lord Balfour of Inch-rye, was asking me—I should prefer to

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raise the banner of efficiency and progress rather than of growth as such. Like so many other desirable things in life, I believe that growth pursued primarily for its own sake and all round is quite capable of leading to disaster. As I say, my view is that it is efficiency rather than growth as such that I should wish to see this country pursue; and being by conviction an expansionist, I believe that if we do in fact achieve efficiency the other thing that matters in this field, desirable growth, will be added unto us.
But it seems to me that we have a very long way to go before we achieve the kind of efficiency we are looking for. It means a very great deal more than expenditure on capital plant, as one noble Lord pointed out by drawing attention to the figures for Norway. It may mean closing down obsolescent plant and freeing labour for more hopeful products. It may mean deliberately contracting the inefficient. It certainly will mean a very different outlook towards apprenticeship and it will mean, perhaps, that fewer industries than heretofore will be able to look to taxpayers' money by way of subsidy. It will mean fewer restrictive practices. It will mean more aggressive salesmanship, a more scientific study of markets and the requirement of the consumer. It will mean a spirit of restless dissatisfaction in management and a little more willingness to face change in organised labour. A cold wind is blowing to sweep away some of the comfortable assumptions of economic life in this country. It is a wind which will blow equally strongly whether we are in, or whether we are not in, the Common Market. Old ways, old techniques, old plants, inefficient designs will be blown away in it and by and large those who look to protection from Government rather than their own efficiency will be disappointed.
This final point leads me to say something about the O.E.C.D. report, to which reference has been made by many speakers in the course of this debate. In common with Lord Poole the most startling thing that I have found in the debates following on the Budget is the use put by Opposition speakers elsewhere and in this House of this report on the United Kingdom economy. As my noble friend Lord Melchett said, this seems to me to be an admirably lucid
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document. It accurately pinpoints the weaknesses of our economy; it diagnoses the fault and prescribes a definite remedy. The noble Viscount who leads the Opposition seems to me to have picked out from their context the phrases which pinpoint the weaknesses and to have ignored the diagnosis and the remedy; and he proceeded to draw a moral of his own which defies all the evidence and to prescribe a number of medicines which quite certainly would aggravate the complaint. With respect, this is partly due to the fact that the noble Viscount has unfortunately felt himself compelled to paint all the features of the situation black, and has been quite unwilling to take into account the favourable and hopeful features in the economic situation.
My Lords, quite rightly stressing the sluggishness of our rate of growth, the vulnerability of our balance of payments, it seems to me that noble Lords opposite ignore the fact that, despite these adverse factors we still maintain a higher standard of living than any of the countries which are held up as examples to us. The individual comparisons with Italy, France and Germany have often been exposed in debate, certainly by my noble friend behind me, and I myself dealt with these in the debate on the Queen's speech in November. These comparisons are inadequate, and Lord Melchett in particular pointed out the absurdity of the conclusion to which this childish reference to league tables really leads one. The truth is, as was pointed out by an honourable friend of mine in another place, Sir Alexander Spearman, that a true examination of the league tables, apart from other factors, shows two groups of countries: one broadly on the same scale as ours; and the other countries, like France, Germany, Italy, or even Greece, to whom quite different kinds of consideration really apply. I would go into those in greater detail if it had not been more fully done by my noble friends.
Our critics also ignore the added responsibilities which we bear: the difficulty, as Lord Poole said, of maintaining a world currency, of sustaining our Army in Germany, Government investment in underdeveloped countries, the inelasticity of our labour force, which cause

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many of our problems and make many others intractable. The Report is sound on these points, but it comes down to a fairly clear diagnosis and offers a prescription for action which is in essence the same as that of my right honourable friend the Chancellor of the Exchequer. I do not wish to quote extensively from the Report at this late hour, but it does say that the slowness of our rate of growth and the vulnerability of our balance of payments are both related to the slowness in the rate of growth in our exports, and this in turn is due to the pressure for higher money incomes which has been permanent in the United Kingdom over the period of the 1950's and has resulted in increases which cannot be absorbed without increases in unit costs. The remedy prescribed in the conclusions is almost precisely the opposite to that prescribed by the Labour Party to-day and elsewhere. It is not controls; it is not even a reduction in Government expenditure, although that may be for other reasons most desirable. It is not subsidies or incentives to export. It is not in the Socialist sense planning.
Since the primary aim must be to strengthen our balance of payments, it is considered "unlikely in 1962" that the Government will be able "to relax the measures now restraining the growth of internal demand." That was the conclusion of the Report to which reference has been made, and this is the role of my right honourable friend's Budget, which is under criticism to-day from those who have quoted the Report; and the criticisms which have been levelled at it—that it is irrelevant, dull and unimaginative—have been cast at my right honourable friend's head precisely because he has pursued the remedy which the Report recommends.
It is true, of course, that the Report goes on to say that this is not enough; that escape from the impasse of the alternation of restrictions with inflation and balance-of-payments difficulties could lie only in the achievement, as it says, of
" a steady and significant export rise as the major dynamic element in new economic growth."
But it goes on to say that this rise in exports, demanded by the Report as the condition of escape from the impasse,
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is to be achieved "in the first place" by requiring that
"money incomes should henceforth rise no more than the growth of productivity over the economy as a whole"—
in other words, my Lords, by the very policy of wage pause and wage restraint which has been so bitterly denounced, and not by the various quack gimmicks and panaceas being peddled from various quarters. My Lords, this policy is not, of course, part of the Budget, but it has been an essential complement to it. Therefore I wholly disagreed with the noble Lord, Lord Shackleton, when he said that the Budget and the Government did nothing to improve expansion. Of course, the wage pause has come to an end—successfully, as the Report emphasises. But a more lasting policy must succeed, and this, as offered by the Report, is the precise policy of wage restraint now being advocated by the Government. It says "Such a system will entail that the Government adopt a more positive attitude than in the past to the process of income determination".
My Lords, I am sorry to have had to speak at such length. I spoke, to begin with, about the diffuseness of this debate. But it is easy to state a fallacy in ten seconds, it is rather more difficult to unravel the fallaciousness of the argument, and I felt that I owed it to the House to deal with some of these criticisms at length. The House will forgive me if I have made a rather firm answer to some of the criticisms which have been made this afternoon. I think that they reflect public opinion accurately. Public opinion is sometimes right and it is sometimes wrong, but my feeling is that there are only two things wrong with the British at the present time. One is the growing chips on their shoulders which ought never to be there, and the other is their inveterate habit of self-deception. One of the most dangerous delusions the British people harbour at the present time is that the economic and spiritual malaise from which they are currently suffering is the fault of the Government, and that it can be cured by fiscal and political measures of the kind called "bold and imaginative—"preferably at other people's expense. My Lords, we are becoming a nation of bellyachers, and what the country needs at the present time is not an excuse for political gimmickries but a renewed sense of

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patriotism and individual responsibility. We shall not get that by peddling any changes in the Budget.
9.34 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we have had the type of oratory which is usual on such political occasions as we have been dealing with to-night. Much of it was sheer oratory, and, obviously, much of it had been prepared even before any speeches had been heard. Perhaps that is why at least half of my speech has not been answered. A charge has been made and no attempt even has been made to refute it. There is no need for me to start all over again, after that somewhat lengthy display of the noble and learned Viscount's natural oratory—and we always like to hear him speak. But I must say that I have never heard a more imperfect answer to the case which was submitted to be answered.
The only thing that remains to be said is this. I should like to thank, as we always do on such occasions, all who have taken part in the debate. There were speeches from the Government Benches, the Cross Benches, as well as from our side, and I am much obliged to all noble Lords. I am very grateful to my noble friends, and especially to the noble Baroness, Lady Wootton of Abinger, for the way in which she has wound up to-night. I should like to
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say this to the noble and learned Viscount about my colleague here: that she is perhaps one of the greatest economic brains in the country, but for many years now she has kept as far away from economics as possible because of her sociological urges to do something for the people. But I was so much in need of her services that she came in to wind up for me in the economic debate, and that is saying a very great thing. She is one of our great economists, and I expect that before very long I shall have her assistance again to refute some of the extraordinary things of which the noble and learned Viscount has made use to-night. In the meantime, I would thank everybody who has taken part in the debate and I ask leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

SCOTSWOOD BRIDGE BILL [H.L.]
Reported, with Amendments.

SOUTH STAFFORDSHIRE WATER BILL [H.L.]
Reported, without amendment.
House adjourned at twenty-four minutes before ten o'clock, until Tuesday, May 1, 1962.