Sitting of 2 August 1962

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

EXPERIMENTS ON LIVING ANIMALS
Address for Return,
"of Experiments performed under the Act 39 and 40 Vict. c. 77, during 1961."—[Mr. Woodhouse.]

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Wolfenden Committee (Report)
    Mr. Ellis Smithasked the Chancellor of the Exchequer if Her Majesty's Government will now fully implement the Wolfenden Committee's Report; what progress has been made; and if he now intends to set up a National Sports Development Council.
    The Chief Secretary to the Treasury (Mr. John Boyd-Carpenter): I have nothing to add at present to the statement made on 8th May.
    Mr. Ellis Smith: While I admit that this Question is put down rather early in view of the new appointments which have been made at the Treasury, will the Chief Secretary ask his right hon. Friend to give his early attention to this matter?
    Mr. Boyd-Carpenter: We will certainly pay attention to this and, in the meanwhile—as the hon. Members knows —there is the statement, to which I have referred, about additional financial provision.

    Customs (Seized Goods)
    Mr. Longdenasked the Secretary to the Treasury how cigarettes and tobacco seized by the Customs are disposed of; if he is satisfied that these
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    methods obtain for the Revenue the maximum value of the seized goods; and what was the total sum raised by the disposal of such seized goods during a year ended on the latest convenient date.
    The Financial Secretary to the Treasury (Mr. Anthony Barber): Cigars are disposed by annual sales by tender. Cigarettes and pipe tobaccos are handed over without charge to Services Comforts Committees for personnel serving overseas, to Criminal Asylums for issue to inmates and, occasionally, at the request of the Medical Research Council, to medical workers engaged on cancer research. Unsound cigars, cigarettes and pipe tobaccos are destroyed.
    I am satisfied that the methods of sale adopted obtain the maximum value of the seized goods. The last annual sale of seized cigars, held in November, 1961, realised a total sum of £1,345 19s. 4d.
    Mr. Longden: Can the Financial Secretary say why cigarettes should be the exception to the general rule? How many were confiscated during that year and how many of those confiscated were disposed of in the way he has told us?
    Mr. Barber: I am afraid that I can-not, without notice, give the figures for which my hon. Friend asks, but, of course, there is a special reason for the difference in treatment of cigarettes and tobacco. By the time the Customs can legally sell such goods there must, naturally, be a waiting period. Cigarettes and tobacco are unlikely to maintain their freshness, while cigars remain fresh for a longer time and the Commissioners invite tenders for them.
    Mr. Longdenasked the Secretary to the Treasury what was the value of the watches and jewellery seized by the Customs during a year to the latest convenient date; how they were disposed of; if by public auction, what means of advertising such auctions are used; and what was the total sum they realised.
    Mr. Barber: Seized watches and jewellery are sold for the benefit of the Exchequer by competitive tender. Sales are advertised in trade journals and by circular letters sent to all known prospective bidders. Watches sold in the financial year ending 31st March, 1962,

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    fetched £86,634 exclusive of Purchase Tax, which is separately payable. Large seizures of jewellery are infrequent, and the last special jewellery sale was in July, 1960, realising £7,546, exclusive of tax. I cannot give any better figure for the total value of these seizures than the prices actually realised.
    Mr. Longden: Is everyone invited to tender, and can my hon. Friend say that there is no closed shop in this matter?
    Mr. Barber: I can certainly assure my hon. Friend that every step is taken to ensure that all those who would be likely to tender know about these sales, which are advertised in a trade journal called the Watchmaker, Jeweller & Silversmith. Everyone who inquires about the sales as a result of these advertisements, everyone who has tendered in the past and everyone inquiring upon hearing about the sales, is circulated with an invitation to tender.
    Mr. Watkins: Can the Financial Secretary say why the number of watches confiscated in the last few years has increased compared with, say, five years ago?
    Mr. Barber: I regret that, without notice, I cannot give the actual figures. If the hon. Gentleman will put down a question, perhaps when we next meet, I will be happy to provide him with the facts.

    Capital Gains Tax
    Mr. David Jamesasked the Chancellor of the Exchequer, if he will take steps to bring within the ambit of the short-term capital gains tax the net proceeds of political libel actions.
    Mr. Barber: No, Sir.
    Mr. James: Has my hon. Friend noticed that political libel actions seem to be increasing in volume all the time and that this must reduce the cut and thrust of politics? Furthermore, has he noticed that sometimes these actions appear to be distinctly speculative in their nature, and has he also noticed that the apparent damage, so far as the courts are concerned, of a chance adjective which is forgotten within a week, if it is ever read at all, appears frequently to be more than double the damage to anyone who suffers a permanent change
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    of character as a result of a motor car accident? In the light of this proposition, will my hon. Friend look at this matter again?
    Mr. Barber: The points made by my hon. Friend may or may not be with merit, but what he is suggesting is that his reputation should be treated as a chargeable asset liable to tax in the event of its disposal within six months of its acquisition. I think this is a somewhat difficult concept to grasp.
    Mr. Tapsellasked the Chancellor of the Exchequer if he is aware of the decline in the volume of business on stock exchanges throughout the country since the introduction of a capital gains tax in its present form; and what is his estimate of the consequential loss of revenue from Stamp Duty in the present financial year.
    Mr. Barber: Fluctuations in stock exchange business can be due to many causes. It is too early to estimate the effects of the short-term-gains tax.
    Mr. Tapsell: While accepting what my hon. Friend has said, that a number of political and economic factors have had an influence on this, will he not agree that all those who are in the best position to judge believe that the short-term capital gains tax has had a very substantial influence on the declining volume of business on the stock exchange? Is it not a fact that when potential investors know that they may have to pay away in tax almost 90 per cent. of any profit they may get, this does not merely tax capital gains, which I for one accept, but deters people from investing at all? Will he ask his right hon. Friend to keep this tax under review during the coming year with a view possibly to replacing the present arrangement by a flat-rate gains tax in the next Finance Bill?
    Mr. Barber: I am not sure that I would accept unreservedly all that my hon. Friend has said, because one would expect, in any event, a decline in business at this time of the year. There was a similar decline last year. Some stockbrokers have for a number of years given the advice "Sell in May and go away." Apart from that, I am sure my right hon. Friend will review all aspects of taxation in the course of the coming year.
    Mr. Callaghan: Surely the Financial Secretary will not endeavour to change the system if the result of it has been to deter speculative transactions? Was that not part of the object of the exercise?
    Mr. Barber: I do not think it would be fair to say that the primary object of the legislation was to deter speculative transactions. The object was to levy tax on transactions of a speculative nature which my right hon. Friend thought it was reasonable to do. We will certainly bear in mind all these matters in the coming year.
    Mr. Tapsellasked the Chancellor of the Exchequer whether he is yet in a position to estimate the revenue from the capital gains tax on transactions in stocks and shares in the present financial year.
    Mr. Barber: I would refer my hon. Friend to the reply given by my hon. Friend the Economic Secretary on 26th July.
    Mr. Tapsell: Is it not unusual for a major change in tax policy, and indeed a major tax innovation which many of our supporters in the country regard as contrary to Conservative principles, to be introduced without any estimate being made at all as to the likely tax yield?
    Mr. Barber: My right hon. Friend explained at some length in the course of our debate on the Finance Bill why it was not possible to make an estimate of the yield of this tax. As to the current year, to which my hon. Friend refers in his Question, he will, I am sure, appreciate that no assessments can be made until the returns showing the gains have been received, and those returns will not be due to be made until after the end of the current financial year. This is the reason why there will be no yield this year.
    Mr. Houghton: Can the hon. Gentleman say whether anyone has yet offered to pay?
    Mr. Barber: I do not think they have yet been asked.
    Mr. Tapsell: If the loss or reduction in yield from Stamp Duty exceeds, as is possible, the actual yield from the capital gains tax, will not the whole community suffer as a result?
    Mr. Speaker: The question is hypothetical and, therefore, out of order.

    Local Authorities (Foreign Funds)
    Mr. Callaghanasked the Chancellor of the Exchequer, to what extent United Kingdom short-term liabilities have been increased by borrowing of foreign funds by local authorities since July, 1961.
    Mr. Boyd-Carpenter: I regret that no estimate of the increase in our short-term liabilities attributable to this borrowing can be made.
    Mr. Callaghan: Is that really so? Is it not possible to inquire of the local authorities to what extent they are borrowing from Germany and other continental countries? Ought not the Treasury to do so? Is it not contrary to our national interest that local authorities should be borrowing for long-term projects at high rates of interest very short-term money which could substantially and adversely influence our reserve position?
    Mr. Boyd-Carpenter: On the first point, as the hon. Member may perhaps appreciate, a certain amount of this money will be borrowed through British or overseas banks, and the local authority which borrows from the bank will not necessarily know where the funds originally derived from. On the second part of his question, the hon. Gentleman will, no doubt, recall that the previous Chancellor of the Exchequer indicated that an appraisal of this was being undertaken.
    Mr. Callaghan: May I press the Chief Secretary on this? Is this not a most important matter to us in view of the amount of borrowing that is known to be going on? Does he say that it is impossible for the Government to make inquiries of the various financial institutions to find out how significant this factor is? Will he not, in order to avoid this—it is well known that it is going on—reopen access to the Public Works Loan Board so that local authorities can borrow money in this country at low rates of interest for social purposes?
    Mr. Boyd-Carpenter: The last part of the question plainly does not arise from the Question on the Paper. On the earlier part, I do not think any useful

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    purpose would be served by this very complicated investigation. On the general and, I accept, much more important question of short-term borrowing by local authorities for long-term needs, as I have already indicated, my right hon. and learned Friend indicated that an appraisal was taking place, and it is in fact doing so.
    Sir H. d'Avigdor-Goldsmid: Lest it should be thought that interest in this matter is entirely on the other side of the House, may I ask my right hon. Friend to give very great weight to this important piece of statistical information which is obtainable without too great difficulty simply by making inquiry from the various banks in London as to the extent of their transactions in this matter? I put it to my right hon. Friend that this is a piece of statistical information which is of the utmost value to him and his colleagues?
    Mr. Boyd-Carpenter: If it can reasonably be obtained without putting everybody concerned to excessive trouble, I am all for obtaining it, but certainly my present information is that the difficulty of tracing foreign money that has been re-lent by a bank or other financial institution in this country to a particular class of borrowers is a highly complex and unrewarding activity.
    Mr. Callaghan: But surely it is not right to say that—
    Mr. Speaker: Order. We must get on.

    National Economic Development Council
    Mr. Gresham Cookeasked the Chancellor of the Exchequer what consideration is being given by the National Economic Development Council to the problem of the extent to which it will be possible to increase the remuneration of those occupations which are generally recognised to be underpaid, and in which remuneration cannot be related to productivity, without claims for increased remuneration or the maintenance of differentials being made by other classes of the community including organised industrial labour.
    Mr. Boyd-Carpenter: The Council is not at present considering this matter.
    Mr. Gresham Cooke: While appreciating that the Council is still in its pre-
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    liminary stage, as it were, may I ask my right hon. Friend if he will put on the agenda of the Council the central problem of how under-paid classes such as nurses, probation officers, administrative workers and so on are to get a rise in pay without setting up a general reaction throughout the whole industrial community to keep their differentials?
    Mr. Boyd-Carpenter: The Council's main preoccupation and concern at the moment is how best and most effectively to increase the rate of sound economic growth. I think that for the present the Council must concentrate on that.
    Mr. Shinwellasked the Chancellor of the Exchequer what advice he has received from the National Economic Development Commission on the relation between wages and the cost of living, the need for growth in industrial production, and the organisation of industry.
    Mr. Boyd-Carpenter: None as yet, Sir.
    Mr. Shinwell: Is not this an astonishing Answer? Is not the right hon. Gentleman aware that the previous Chancellor of the Exchequer, in reply to a question which I placed on the Order Paper a few weeks ago about the functions of this body, informed me that it could deal with any economic subject, including all the items contained in my question and the nationalisation of industries, if it so desired? Is it not obvious that the functions of this body will conflict with the proposed functions of the National Incomes Com-mission, and, as this body is doing practically nothing, as the right hon. Gentleman admitted, what is the purpose of going on with this or the other body?
    Mr. Boyd-Carpenter: I am very far from admitting that it is doing other than the serious and important job of studying the implications of growth. That is a matter of major importance, and that is the point to which it is directing its attention at the moment.
    Mr. Callaghan: Why was a separate body constructed, in view of the question put by my right hon. Friend? Did the National Economic Development Council refuse to have anything to do with wages? Was that why it was necessary to construct the National Incomes Commission?
    Mr. Boyd-Carpenter: The different bodies were constituted because their functions are different.

    Treasury Economic Forecasts
    Dr. Brayasked the Chancellor of the Exchequer if he now proposes to publish the Treasury's economic forecasts: and if he will first give them to the House.
    Mr. Boyd-Carpenter: I have no proposals for any change in the present practice but would be glad to consider any suggestions which the hon. Member may wish to make.
    Dr. Bray: Is the right hon. Gentleman aware that on 12th July quite un-precedentedly precise economic forecasts were published? Does he not feel that if the Government are to encourage a more sophisticated attitude in industry towards forecasting and planning he should set a good example in this respect, and does he not feel that the forecasts should be announced in this House where they can be properly explained and their implications explored?
    Mr. Boyd-Carpenter: I do not think my right hon. Friends can be charged with taking insufficient opportunities to explain economic policy in this House. But I think it would be a pity to confine those explanations solely to this House and to the time when Parliament is sitting. As the hon. Gentleman will know, there are various official publications, which are very helpful, on these matters as well as constant replies to inquiries.
    Mr. Ellis Smith: In order to assist my hon. Friend, would the right hon. Gentleman consider the suggestion that when statements are sent to the Press, simultaneously helpful informative statements should also be sent to Members of this House?
    Mr. Boyd-Carpenter: That phrase "when statements are sent to the Press", I think, begs a good many questions. I would agree with what I believe is the spirit of the hon. Gentleman's supplementary question, that any major pronouncements particularly on policy matters ought in general to be made to this House, but it is not always physically possible.
    Dr. Bray: Does not the right hon. Gentleman feel that there is a basis of forecasting in the Treasury which is made the basis of very informed policy decisions by the Government and that not only this House but the country as a whole are unable to get at the underlying forecasts? Would it not be much better in the interests of us all if those forecasts were published?
    Mr. Boyd-Carpenter: I do not know whether the hon. Gentleman has had the opportunity to study the very considerable amount of material which we do put out on this matter. There is a very full supply of information. However, as I have said, if the hon. Gentleman has any particular aspect which he would like to take up with me further, I should be very glad to consider it.

    Public Works Loan Board (Loans)
    Mr. Frank Allaunasked the Chancellor of the Exchequer if he will state the total of Public Works Loan Board loans made in 1951, 1956 and 1960.
    Mr. Barber: In 1951, the Public Works Loan Board lent £390 million. In 1956 and 1960, it lent £156 million and £44 million, respectively.
    Mr. Allaun: Do not those startling figures show that such loans have virtually been killed by the double interest rates which reflect the market rates of interest? Will the hon. Gentleman ask the new Chancellor to consider seriously making special cheap housing loans through the Board?
    Mr. Barber: As the hon. Gentleman knows, our present policy in this matter was settled in October, 1955, whereby local authorities raise the funds they need, in general, on the market as far as they possibly can and the Public Works Loan Board is only used, as it were, as a lender of last resort. In considering the activities of local authorities, it is not fair to refer solely to the sums on loan from the Public Works Loan Board. The net outstanding debt of local authorities rose between 1950 and 1960 from something over £2,000 million to something over £6,000 million. This gives a much better indication of the level of their activities.
    Mr. Jay: Does the hon. Gentleman's answer mean that it is the policy of the Government to stop council house building and to drive local authorities bankrupt?
    Mr. Barber: Not in the least. The right hon. Gentleman will be the first to appreciate that the cost of borrowing is as much a cost of providing goods and services, council houses and other things as is the cost of raw materials and of wages, and a large proportion of that cost is in any event borne by the Government by way of grant aid to local authorities.

    Form C.1 Estate Duly (Timber)
    Mr. E. Johnsonasked the Chancellor of the Exchequer if Inland Revenue Form C.1. Estate Duty (Timber) has been reprinted since August, 1956; and if it has been amended in accordance with the undertaking given to the hon. Member for Blackley on 17th November, 1960, to substitute a list of persons, other than a commissioner for oaths, before whom this form can be sworn for a reference to certain Acts of Parliament, one of which has been repealed.
    Mr. Barber: Yes, Sir. This form was reprinted in May, 1961 with an appropriate amendment.
    Mr. Johnson: Is my hon. Friend aware that the old form is still being used? When does he expect that supplies will be exhausted, since it is inconvenient for people to have to try to look up Acts passed in 1881, 1891 and 1898, especially when they find, when they do look it up, that the last Act has been repealed?
    Mr. Barber: I notice that my hon. Friend's Question refers to a certain Act of Parliament having been repealed, but I have not been able to ascertain which Act this was. However, I appreciate the point which he makes and I will look into it further. I must remind him that stocks of the old form may well be held by some solicitors who have not appreciated that they can obtain new forms.
    Mr. Johnson: Does not my hon. Friend know that, if he searches the volumes in the Library, as I have done, he will find that it was the Revenue Act, 1898, which was repealed in 1919?
    Mr. Barber: I will go round to the Library immediately after Questions.

    Bank Rate
    Mr. Jayasked the Chancellor of the Exchequer whether he will now reduce the Bank Rate.
    Mr. Boyd-Carpenter: No, Sir.
    Mr. Jay: Is the Chief Secretary aware that these high interest rates are not merely holding back expansion but are making it more difficult for the United States Government to follow an expansionist policy? Is it wise for the two greatest importing nations of the world to be thus depressing and deflating economically the rest of the free world?
    Mr. Boyd-Carpenter: That raises far too large a question to be dealt with by question and" answer at Question Time. I have answered the right hon. Gentleman's Question with the only answer which I could give without surprising him.

    Teachers and Nurses (Pensions)
    Dame Irene Wardasked the Chancellor of the Exchequer, in view of the fact that the pensions provisions for retired teachers and nurses are such as to deter them from returning to their service when so requested by Her Majesty's Government, what action he is taking in the national interest to remedy this state of affairs.
    Mr. Boyd-Carpenter: I assume that my hon. Friend has in mind the provisions under which the pension of a retired teacher or nurse is reduced on re-employment if, when added to the new salary, it exceeds the salary at the time of original retirement. Such provisions are common to public service pension schemes generally, and the proposal made in her question raises very wide issues.
    Dame Irene Ward: In our consideration of, on the one hand, the occasions when it is essential in the national interest to ask people to come back into service, and, on the other hand, the making of redundancy payments, quite rightly, to those who have to sacrifice their jobs in the national interest, why should it always be those who are asked to come back in the national interest who have to take the "can"? It is always the old people who have to take the "can". Why is it only for

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    the new people that we can provide new legislation? Would it not be fairer to do it equally for both sections of the community and thus do justice to all people, not just to one section?
    Mr. Boyd-Carpenter: My hon. Friend's proposal, which would permit a public servant to retire at the minimum age for pension and then be re-employed on full pension and salary, would not seem to me to be fair to the community as a whole.
    Mr. G. Thomas: Is not the right hon. Gentleman aware that teachers who have retired have earned their pension and that, if they come back, they are not receiving charity but earning a salary for which they give good service? Why should he want to take their pension from them because they are meeting a tremendous need in our schools today?
    Mr. Boyd-Carpenter: I understand that the majority of teachers re-employed on a part-time basis do not have earnings bringing them up to the level at which they would be affected by the rule. On the hon. Gentleman's main point, I must point out that, although these pensions have been well earned, they have been earned subject to the provisions of the superannuation scheme, of which this is one.
    Mr. Grimond: This is a very widely felt, genuine grievance. The right hon. Gentleman says that it would be unfair on the community to do what the hon. Lady asks. Does not he realise that it is the community which is asking these retired teachers to return to work? The community is suffering a great deal because retired teachers feel that, if they are to do the job, this should not affect their pension which they have earned for doing the job in the past.
    Mr. Boyd-Carpenter: The right hon. Gentleman will appreciate that this rule does not, in fact, operate in a considerable number of the special cases of teachers about which he is concerned, but the evil effects which I described in an earlier reply would apply throughout the public service.

    Trustee Savings Banks (Cheques)
    Mr. Jayasked the Chancellor of the Exchequer whether arrangements have now been completed with the trus-
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    tee savings banks for the start of a limited cheque scheme.
    Mr. Barber: No, Sir.
    Mr. Jay: We have had that obstructive and evasive answer for three years now. Are not we now supposed to have a Government of vigorous and energetic young men? Are we to have nothing but the same tired old answers from the same tired old faces?
    Mr. Barber: The answer to the debating point the right hon. Gentleman makes is, "Yes, Sir". As regards the substance of his question, the facts are that, since the end of April, 1960, the initiative has lain with the Treasury for less than three months in all. It is only a fortnight since I had discussions with the joint stock banks, and the Government are now considering whether or not to introduce enabling legislation.

    Social Services
    Sir D. Walker-Smithasked the Chancellor of the Exchequer whether he will now advise the appointment of a Royal Commission to review and make recommendations upon the financing of the social services in the context of the United Kingdom's economic resources and the desirability of fair dealing for all.
    Mr. Boyd-Carpenter: No, Sir.
    Sir D. Walker-Smith: Is my right hon. Friend aware that, although that Answer has the virtue of clarity, it has very little other virtue? Is he not himself well equipped by long and successful experience both at the Treasury and in the social services to bring a fresh mind to bear on this constructive suggestion which I have been advancing for the past eighteen months? Will not he agree that the financing of our social services has grown up historically in a haphazard fashion and that a review could do much to improve it and also to bring better conditions for those who work in them?
    Mr. Boyd-Carpenter: I do not differ from a good deal of what my right hon. and learned Friend has said about the importance and the complexity of the problem with which he, too, is very familiar, but I feel that this is essentially a matter for the Government of the

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    day, in the exercise of their responsibility, and one which the Government should not seek to place away in the hands of a Royal Commission.

    National Incomes Commission
    Dame Irene Wardasked the Chancellor of the Exchequer if he will give an assurance that the proposed National Incomes Commission will not consist only of representatives of employers and the Trades Union Congress, but that professional interests and homemakers will be fully represented on it.
    Mr. Shinwellasked the Chancellor of the Exchequer when the Incomes Commission will be created; who will be the members; whether they will be employed full time; and to what extent the functions of the Ministry of Labour will be transferred to the Commission.
    Mr. Wyattasked the Chancellor of the Exchequer when he expects to announce the names of the members, and the starting date, of the National Incomes Commission.
    Mr. Boyd-Carpenter: It is our aim that the Commission should start work as soon as possible. But my right hon. Friend the Chancellor of the Exchequer proposes to hold further consultations with representatives of employers and trade unions before the Commission is appointed, and I have therefore at present no announcement to make about its membership or about terms of service. None of the functions of the Ministry of Labour will be transferred to the Commission.
    Dame Irene Ward: Is my right hon. Friend aware that his continual reference to employers and trade unions seems to eliminate all professional people, all the people who are suffering from the incomes policy and the women, who have a better idea of spending money than men? May I have an assurance that when the conversations take place they will not be with the same old employers' faces and the same trade union faces, but that he will bring in some new faces to infuse a good deal more enthusiasm and knowledge into the conversations?
    Mr. Boyd-Carpenter: My hon. Friend must not take me as indicating that we shall necessarily limit the field of selection
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    as she fears, but I am sure Chat she will agree with me, first, that we ought to have consultations with the bodies I have mentioned, and, secondly, that it would be quite wrong in advance of these consultations to give public indication of what we have in mind.
    Mr. Shinwell: Does it not appear, particularly with regard to the right hon. Gentleman's answer to Question No. 23, that the Government embarked on this project without haying the faintest conception of what this Commission's functions were to be, or who its members were to be; that they do not know who the members are, when they are to be appointed, or when the Commission itself will begin operations? Surely the right hon. Gentleman is mistaken in thinking that none of the functions of the Ministry of Labour will be transferred to this Commission, when the object of the Commission is to deal with incomes and also the possibility of arbitration.
    Mr. Boyd-Carpenter: I am afraid that I must disagree with the right hon. Gentleman on the question of any transfer of functions. The facts are as I have stated On his main point, I am perfectly certain that he would be the very first person to complain if we had announced the appointments without making the consultations to which I have referred, and the fact that we do so, in accordance with long-standing, and, I think, sensible practice, does not support the imputation which the right hon. Gentleman has seen fit to make.
    Sir G. Nicholson: In relation to the question asked by my hon. Friend the Member for Tynemouth (Dame Irene Ward), may I ask my right hon. Friend whether there is not a rather undesirable practice going on now of thinking that the membership of Royal Commissions and committees of inquiry should contain representatives of all interests involved, when it would be much wiser to recognise that the proper rôle of those people is to give evidence? Would not my right hon. Friend agree that what we want on Commissions are people with judicial training, rather than people with particular axes to grind?
    Mr. Boyd-Carpenter: I think there is a great deal in what my hon. Friend says.
    Mr. Wyatt: If this Commission ever comes about, which is very unlikely, will the Government refer to it the vexed question of the salaries of Members of Parliament so that it can be taken out of the arena of the House of Commons?
    Mr. Boyd-Carpenter: The hon. Gentleman began his question with a hypothesis and I suppose I should put his question in the hypothetical class. I think we had better get ahead first with the appointment of the Commission.
    Mr. Grimond: In reference to the last answer but one by the right hon. Gentleman, in which he seemed to agree that this Commission should not represent interests, will he clarify his answer? Is this Commission to represent the employers and the trade unions and other interests, or, if not, who is to represent them?
    Mr. Boyd-Carpenter: I think it would be very undesirable for me to give an answer to a question about representation or otherwise until we have had the consultations to which I have referred.
    Mr. Jay: Can the Chief Secretary say whether the Government intend to farm out any more of their responsibilities to bodies of this kind during the Summer Recess?
    Mr. Boyd-Carpenter: The extent to which we avail ourselves of the vast pool of wisdom which can be found in this country is one on which I feel it unnecessary to comment further at this moment.

    Betting (Taxation)
    Wing-Commander Bullusasked the Chancellor of the Exchequer what progress he is making with the review of betting taxation; and when he expects to make a statement.
    Mr. Barber: My right hon. Friend has no statement to make at present.
    Wing-Commander Bullus: While thanking my right hon. Friend for that reply, may I ask him if he is aware that, of the total global sum spent on betting in England and Wales, the recently legalised gambling games not subject to the tax are getting more than their fair share? May I also ask him if he has had an opportunity to read the paper
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    on the subject which I sent to his right hon. Friend the then Chancellor of the Exchequer in December?
    Mr. Barber: Yes, Sir. I have read the memorandum which my hon. and gallant Friend sent to the previous Chancellor, and Che contents of that memorandum will most certainly be considered in the course of the review to which I referred.

    Personal Wealth (Taxation)
    Mr. Wainwrightasked the Chancellor of the Exchequer if he will introduce in the next financial year a tax on personal wealth as stated in the following terms, namely, half per cent. on all personal wealth of £20,000 to £50,000, one per cent. tax on all personal wealth of over £50,000 to £100,000, two per-cent. tax on all personal wealth of £100,000 to £200,000, three per cent. tax on all personal wealth of £200,000 to £300,000, four per cent. tax on all personal wealth of £300,000 to £400,000 and five per cent. tax on all personal wealth of over £400,000.
    Mr. Barber: I could not anticipate my right hon. Friend's Budget.
    Mr. Wainwright: Could the Financial Secretary give far better reasons than he has done why he cannot anticipate his right hon. Friend's Budget statement? Is it not true that there is probably about £350 million to be raised from this source, and does not the right hon. Gentleman realise that if he cannot find the money to increase old-age pensions and pensions of widows in this country there is here a source from which he can easily obtain this money, especially from those with higher incomes?
    Mr. Barber: I do not think the hon. Gentleman is on very firm ground when he refers to the old-age pensions, if he has kept in mind their real value and purchasing power as compared with previous years. I can only say to him that he has made his point and that this is obviously a matter for the Budget, and that we must leave it there.

    United States Dollar (Valuation)
    Mr. Harold Daviesasked the Chancellor of the Exchequer what steps he is now taking to meet a possible devaluation of the United States dollar.
    Mr. Boyd-Carpenter: None, Sir.
    Mr. Davies: Is the right hon. Gentle-man telling the House that the Government are not even considering this possibility? Has he not been reading some of the most recent articles in the financial journals of repute pointing out this possibility? Have we no constructive alternative to give to the International Monetary Fund at its meeting in September, and is not the Minister aware that the dramatic slide on Wall Street readied a pitch on 28th May which was equal to the blackest days of 1929? Is he now telling the country that the Government have not even thought of the possibility of meeting this crisis?
    Mr. Boyd-Carpenter: I am not telling the country and the House anything more than I have said in answer to the hon. Gentleman's Question.

    Treasury Organisation (Review)
    Mr. Dalyellasked the Chancellor of the Exchequer if he will make a statement about the reorganisation of his Department.
    Mr. Boyd-Carpenter: The organisation of the Treasury has been reviewed in pursuance of the recommendation in paragraph 59 of the Report on the Control of Public Expenditure (Cmnd. 1432) by the Plowden Committee, which was appointed following observations made in a report by the Select Committee on Estimates. The purpose of the review was to consider what changes were called for to enable the Department effectively to discharge its heavy load of responsibility under modern conditions.
    I am circulating a statement in the OFFICIAL REPORT setting out the main features of the new organisation.
    Mr. Dalyell: Can the right hon. Gentleman assure the House that these new men in the Treasury, who may be the catalysts of economic action in our society, will turn their first attention to the financing of public works in areas of persistent unemployment, particularly in Bathgate, where there are 1,606 unemployed and 1,707 temporarily unemployed? This is one of the so-called growth points of the former Secretary of State for Scotland.
    Mr. Boyd-Carpenter: I note the hon. Gentleman's local point, but my Answer, of course, dealt with the far broader question of the reorganisation of the Department to take effective care of this and all other problems within its sphere.
    The statement is as follows:
    The Treasury has a dual function: it is responsible for the co-ordination of economic policy and the control of public expenditure: it is also responsible for the efficient management of the Civil Service and is concerned with the management of other parts of the public services. It has now been decided that each of these two functions should be supervised by a Joint Permanent Secretary who has no other major responsibilities. Below Permanent Secretary level the Department will be organised on a more functional basis than hitherto.
    The financial and economic side will be divided into three groups dealing respectively with:

    (i) financial and monetary policy;

    (ii) public expenditure and resources; and

    (iii) co-ordination of economic policy.

    The first of these groups, under a Second Secretary (Finance), will comprise divisions dealing with oversea finance, home finance, aid to territories overseas and the interdepartmental co-ordination of external economic policy. The second group, under a Second Secretary (Resources and Expenditure), will include divisions dealing with public income and outlay in general and, under broad functional headings, the main items of public expenditure, e.g. on defence, social services, agriculture, transport, etc. The third group will be concerned with the balance of the national economy as a whole, dealing with short-term economic trends, long-term reviews of resources, problems of economic growth and incomes policy. It will comprise divisions in which economists from the Economic Section, under the professional supervision of the Economic Adviser, will work together with administrators in an integrated staff. As a central part of the organisation it will provide services for the other two main groups, and it will work closely under the direction of the Joint Permanent Secretary in charge of the financial and economic work of the Treasury.
    The management side of the Treasury will also be organised on a functional basis. Under its Joint Permanent Secretary there will be two Third Secretaries dealing, respectively, with:

    (i) management services;

    (ii) pay and conditions of service.

    The first of these Third Secretaries will take charge of a new division responsible for developing management services on the lines recommended in the Plowden Report. He will supervise the Organisation and Methods work which has for some years been carried out by the Treasury. He will also have charge of a series of specialised divisions dealing with recruitment, training, manning and grading in the Civil Service.

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    The other Third Secretary will supervise a number of divisions dealing with the pay and conditions of the various classes of civil servants. Within the same group there will be divisions handling questions relating to the pay of staffs in other parts of the public service. In this way the Treasury's responsibilities for pay questions throughout the public service will be concentrated in a number of specialised and linked divisions.
    The new organisation is now being planned in detail and will be brought into operation before the end of this year.

    B.B.C. (Licence Fee)
    Mr. Grimondasked the Chancellor of the Exchequer if he will take steps to allow the British Broadcasting Corporation to be paid that amount of the licence fee that comprises an excise duty.
    Mr. Boyd-Carpenter: No, Sir.
    Mr. Grimond: Will the right hon. Gentleman say whether he has had any consultations with the B.B.C. about the financing of its future development?
    Mr. Boyd-Carpenter: I do not think that that arises out of this Question.

    Industrial Production, Unemployment and Taxation
    Mr. Callaghanasked the Chancellor of the Exchequer if he will introduce a second Budget with the objects of increasing industrial production, reducing unemployment and redistributing the burden of taxation.
    Mr. Boyd-Carpenter: No, Sir.
    Mr. Callaghan: Is the right hon. Gentleman aware that this is at least a change in view of the second budgets which we have bad regularly? Since steel production is running so far below capacity, textile production is below last year, cement production and brick production are down and the number of approvals for new factories is so much lower than last year, how does the right hon. Gentleman or the Chancellor of the Exchequer propose to stimulate the economy in view of the fact that there are now 400,000 unemployed in this country?
    Mr. Boyd-Carpenter: My right hon. Friend the Chancellor of the Exchequer dealt with this topic very fully when winding up the debate on Thursday night. I have nothing at this stage to add to his very clear and comprehensive review of the sitution and of our policy.
    Sir Harmar Nicholls: Is my right hon. Friend aware that the list of "downs" just named by the hon. Gentleman in no way truly represents the real prosperity of this country at the moment?
    Mr. Boyd-Carpenter: I fully agree with my hon. Friend.

    UNITED NATIONS (TREASURY SOLICITOR)
    Dr. Johnsonasked the Attorney-General whether the statement by Sir Harold Kent, the Treasury Solicitor and British Government's chief delegate at the United Nations seminar on judicial and other independent remedies against the abuse of administrative power, at Stockholm, to the effect that an Ombudsman on the Scandinavian model would not be acceptable in Great Britain, was made with his authority; and if he will make a statement.
    The Attorney-General (Sir John Hobson): Sir Harold Kent made no such statement.
    Dr. Johnson: Is my right hon. and learned Friend aware that many people who are interested in this matter will be reassured by his statement today in view of a misreport which was given undue prominence at the time? While congratulating my right hon. and learned Friend on and wishing him well in his new appointment, may I express the hope that it will be marked by the institution of this much needed reform?
    Mr. MacDermot: With regard to the subject matter of this Question, can the Attorney-General tell us when we may expect any comments from the Government on the report of the Committee of Justice which made a recommendation on these lines and which the Government said they were considering?
    The Attorney-General: I do not think that that arises out of the Question, but I can tell the hon. Gentleman that the matter is still being actively considered. However, I cannot give a date when the Government will announce their decision.

    LEASEHOLD PROPERTY OWNERS (INSURANCE)
    Mr. G. Thomasasked the Attorney-General whether he will introduce legislation to give leaseholders

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    who are owner-occupiers the right to select the insurance company with whom they insure their property.
    The Attorney-General: I am not aware that restrictions of this kind cause any serious inconvenience but if the hon. Member would care to bring any examples to my attention I will certainly consider them.
    Mr. Thomas: Is the Attorney-General aware that we expect much greater benefits from him than we had from his predecessor in this regard? There is a great sense of injustice among leaseholders that the ground landlords not only insist on the insurance company with which leaseholders shall insure their property, but are now going so far as to insist on the agent through which the transaction shall be conducted. Will the right hon. and learned Gentleman take steps to set the leaseholder free from these restrictions?
    The Attorney-General: As I have said, if the hon. Gentleman will give me examples showing that this is either widespread or is causing difficulty, I will be very anxious to consider them.
    Mr. Morris: Is the Attorney-General aware that this is an important matter in my constituency, Aberavon, and that the Church of England is one of the worst culprits?
    The Attorney-General: This raises one of the difficulties. The Jenkins Committee's Report on leasehold reform, while it recommended an alteration of the law in this respect by a majority only, pointed out that as far as it could see very little practical inconvenience was being caused to the average tenant but that for landlords of large blocks of property such as the Church of England it provided a very convenient administrative arrangement by which all the insurances could be carried out in the same office. This is a balance of convenience, and I shall be very anxious to consider it.

    NUCLEAR TESTS
    Ql. Mr. A. Hendersonasked the Prime Minister what reports he has received from his scientific advisers on the consequences of the latest United States high altitude tests on the ionosphere and on radio communications.
    The Prime Minister (Mr. Harold Macmillan): I have nothing to add to the reply I gave on this subject on 31st July.
    Mr. Henderson: In view of President Kennedy's statement yesterday that the Americans are to carry out three more high altitude tests and in view of Mr. Khrushchev's announcement of the intention of his Government to carry out high altitude tests, may I ask the Prime Minister whether any further proposals have been agreed between him and President Kennedy with a view to expediting the achievement of a nuclear test ban treaty and so end the need for these tests?
    The Prime Minister: We have very close communication on this subject which, as the right hon. and learned Gentleman knows, is now being discussed at Geneva. I hope that we may be able to make some valuable proposals.
    Mr. Gaitskell: Did not the right hon. Gentleman say on 24th July that the American test series had been concluded? Can the right hon. Gentleman confirm or deny the suggestion of my right hon. and learned Friend that there are to be further high altitude tests by the United States?
    The Prime Minister: I think that the American tests so far as Christmas Island is concerned are concluded.
    Mr. Henderson: Will the Prime Minister clarify that statement? Does not he consider it desirable to suspend all further high altitude tests until the results of the last high altitude tests have been evaluated?
    The Prime Minister: I understand that the Americans are to make some further tests owing to some of the original experiments having proved a failure. But at the end of these that series will be concluded.
    Mr. Gaitskell: In the right hon. Gentleman's statement on 24th July he referred not to the series of tests on Christmas Island being concluded but to the whole series being concluded. Can he explain the contradiction between what he said then and what he has said today?
    The Prime Minister: I now understand that the Americans have decided

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    to make some tests to take the place of those which proved a failure.
    Q4. Mr. Dribergasked the Prime Minister how many more nuclear tests are to be made in the present Christmas Island series; and if he will now estimate the approximate number of new cases of bone cancel and leukaemia and of genetic damage likely to be caused by these tests.
    The Prime Minister: As I said on 24th July, the series of tests conducted from Christmas Island is now completed. I am advised that there is not a sufficiently firm basis of knowledge on which estimates of the effects of the tests in the form proposed by the hon. Member could be prepared.
    Mr. Driberg: Since the Prime Minister has himself referred us to official estimates of figures in the case of previous test series, is it not dear that it is not because they are unobtainable that he cannot let us have these figures? Is it not rather because, as a humane man, he cannot bring himself to face the fact that by deliberate policy, but on a much larger scale, he is causing the same sort of human suffering as rightly shocks the House when it is caused by accident through the distribution of a drug?
    The Prime Minister: No, Sir. So far as our information at present goes, the short- and long-term fall-out will not reach any serious level as a result of these tests. But, of course, there will be the second report of the United Nations Committee some time in the middle of this month.
    Mr. M. Foot: Has the Prime Minister been able to consider the point which he told me last week he would consider, namely, that he would examine whether it was possible to publish a statement giving the full number of tests conducted both by the West and the Russians with an estimate of the fall-out dangers resulting from the tests on both sides? Has he been able to consider whether he would do this?
    The Prime Minister: Yes, Sir, I will consider that, but, of course, it is not possible to do it until very careful evaluation has been made, which takes some time to do.
    Mr. Gower: Is it not worthy of emphasis in relation to these tests that
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    in recent years Britain has set a wonderful example in the voluntary suspension of tests and that their resumption was something that we deplored?
    The Prime Minister: Not only Britain but the United States voluntarily suspended these tests for a period of three years, when the Russians suddenly, without notice, resumed them.
    Mr. Lubbock: How does it happen that we in this House are never able to be told what amount of bone cancer and leukaemia is caused by nuclear tests when the work by Mr. Herman Kahn, which is being done on behalf of the Rand Corporation in America, has resulted in an accurate estimate which has nowhere else been contradicted?
    The Prime Minister: I think I had better wait for the United Nations report.

    SCHOOL-LEAVERS (EMPLOYMENT)
    Q2. Mr. Prenticeasked the Prime Minister if he will appoint a special Ministerial committee to review the employment prospects and other economic and social problems arising from the large number of school-leavers this summer.
    The Prime Minister: No, Sir. These matters are under continuous review by the Ministers concerned.
    Mr. Prentice: Is the Prime Minister aware that the number of school-leavers this summer is more than 30 per cent. higher than it was a year ago and that the economy is more sluggish than it was then? In that situation, what hope can the right hon. Gentleman hold out, first, that there will be extra jobs, and, secondly, that there will be enough extra jobs with apprenticeship and training opportunities? Is it good enough to sit back and hope for the best, as the Government appear to be doing?
    The Prime Minister: There will be 35 per cent. more young people leaving school this year than in the corresponding period last year. The results so far this year axe very encouraging. In the first six months of 1962, nearly 12,000 more boys and 2,200 more girls entered apprenticeships than in the same period last year. In spite of this 35 per cent.

    789
    increase, the proportion of boys getting apprenticeships was the same as last year. I do, however, make an appeal to employers throughout the country to help us to overcome this peak. I am very hopeful that that will be satisfactorily dealt with.
    Mr. G. Brown: If the Prime Minister is suggesting that there is not a very great problem here, then he is totally out of touch with public opinion outside. Parents are very worried, particularly parents of those leaving grammar and technical schools, about the opportunities for their children. Unless the right hon. Gentleman can do something different about this, all this talk about a workers' charter has a very hollow ring indeed.
    The Prime Minister: I am only aware that, although there is this problem, the actual figures this year are very encouraging.

    EUROPEAN ECONOMIC COMMUNITY
    Mr. Edenasked the Prime Minister what communications he has received from the Heads of Member Governments of the European Economic Community, as a result of meetings held by them since 18th July, concerning their consultations with Her Majesty's Government before a political treaty is finally concluded between them.
    The Prime Minister: Communications between Heads of Government are of course confidential, but there have been no meetings of Heads of Governments of the Six since 18th July.
    Mr. Eden: Have not the Government made it quite clear that we are anxious to play our full part in the political future of Europe? Are we not, even now, us and the Six, all members of Western European Union? Why, then, are we being excluded from the political discussions of the Cattani Commission or similar body? Will my right hon. Friend make it quite clear also that our membership of the European Economic Community, if it comes about, will not automatically bind us to any decisions or conclusions that the Cattani Commission may reach?
    The Prime Minister: My hon. Friend has stated the position correctly. We welcome the efforts of the Six to achieve
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    closer political union. If the Brussels negotiations are successful, we shall wish to join wholeheartedly in the task of studying the basis on which such a union can be made.

    JOINT SECRETARY OF STATE FOR SCOTLAND
    Mr. W. Hamiltonasked the Prime Minister whether, in view of the many problems facing the Scottish economy, he will consider the appointment of a Joint Secretary of State as an additional member of the Cabinet.
    The Prime Minister: No, Sir.
    Mr. Hamilton: Does the Prime Minister recognise that the Secretary of State for Scotland is probably the most overworked member of the Cabinet—at least, he ought to be—and does he, further, recognise that whilst we have in Scotland about 10 per cent. of the population of the United Kingdom, we have 5 per cent. of the Cabinet membership? We also have 20 per cent. of the unemployment in the United Kingdom. Despite the embarrassment of the shortage of talent among his Scottish colleagues, does not the Prime Minister nevertheless accept the principle that we ought to have two Cabinet Ministers representing Scottish interests, so that we can solve this problem, which is causing increasing concern among the community?
    The Prime Minister: If I remember aright, we introduced the principle of the Minister of State for Scotland. After all, these problems affect all the Departments of the country as a whole and I am not persuaded that the proposal which is made, although I am sure it is made in good faith, would act in helping on the work that we have to do.
    Mr. Ross: Will not the Prime Minister consider handing over special oversight of this problem to the First Secretary, who is rather busy establishing a residential qualification to become the next Secretary of State for Scotland?

    COMMONWEALTH PRIME MINISTERS' CONFERENCE
    Mr. Turtonasked the Prime Minister what proposals he has now received for topics to be discussed at the Commonwealth Prime Ministers' Conference in September.
    Sir D. Walker-Smithasked the Prime Minister whether he will use the occasion of his meeting with the Commonwealth Prime Ministers' Conference in September to initiate proposals for revised and increased economic co-operation within the Commonwealth.
    The Prime Minister: Discussions at the Prime Ministers' Meeting are confidential and their detailed scope is for the Prime Ministers themselves to decide collectively. But it has already been agreed that the main purpose of the Meeting in September will be to discuss the Common Market, to which future economic co-operation within the Commonwealth would certainly be relevant. We shall also be making our customary review of world affairs.
    Mr. Turton: Will my right horn. Friend propose to his fellow Prime Ministers that this opportunity be used to work out a positive policy for increasing Commonwealth trade and influence?
    The Prime Minister: Yes, Sir. I think that will be our desire whether or not the Brussels negotiations succeed.
    Sir D. Walker-Smith: Will my right hon. Friend have in mind in this context and put before the other Commonwealth Prime Ministers for consideration the proposal put forward by my hon. Friend the Member for Worcester (Mr. Walker) and myself and contained in the booklet a copy of Which I have sent to my right hon. Friend?
    The Prime Minister: Yes, Sir. I am now engaged in reading the book.
    Mr. Gaitskell: As this is the last opportunity, may I ask the Prime Minister whether he can assure us that any proposals to be put to the Prime Ministers' Conference will be published in a White Paper so that all of us can be aware of what is proposed?
    The Prime Minister: I will consider that, but it depends to some extent on the progress of negotiations at Brussels during the next few days.
    Mr. Gaitskell: Would not the Prime Minister agree that it is extremely important that the British public as well as the Commonwealth Prime Ministers should be aware of what may be proposed and that in any event, if experience is to be any guide, leakages are bound to occur and it would be much
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    better to come quite out into the open and do what is suggested?
    The Prime Minister: I hope that we shall be able to make at least what I call a progress report in the shape of a White Paper.

    SENIOR CIVIL SERVANTS (RETIREMENT)
    Mr. Wyattasked the Prime Minister whether he will explain the reasons for the recent changes in appointments of senior civil servants.
    The Prime Minister: The present Joint Permanent Secretaries to the Treasury, one of whom is also Secretary of the Cabinet, will both be retiring shortly. It is necessary to fill the vacancies thus created.
    Mr. Wyatt: Why does not the Prime Minister give the real reason for the sacking and superseding of some of these civil servants, which is, of course, that they were responsible for the disastrous economic policy of the Government which led to the sacking of the Ministers as well? Would it not be a good thing to give up this farce of pretending that senior civil servants do not greatly influence Government policy and introduce something on the American model whereby more effective civil servants can be brought in to take the place of those who are tired and useless?
    The Prime Minister: If I may say so —I hope that the House will forgive me —I much resent these attacks upon the leading members of the Civil Service. What is said about Ministers does not matter; they can defend themselves. Sir Norman Brook, who has served the country as well as any other servant has ever served it, in peace and war, is about to retire on reaching the age limit at the end of the year, and I deeply resent an attack upon him.
    Mr. G. Brown: May I say that I do not always agree with the Prime Minister as against my hon. Friend the Member for Bosworth (Mr. Wyatt), but that on this occasion I do and, on behalf of the incoming Administration, may I say that we totally welcome the new appointments?
    The Prime Minister: When the right hon. Gentleman has arranged his alliance no doubt he will be all right.
    Mr. Wyatt: Would not the Prime Minister agree that in formulating particularly economic policy senior civil servants at the Treasury have a very great influence indeed in determining what that policy is and bearing it down upon the incumbent Chancellor of the Exchequer? If the policy is so wrong that the Chancellor of the Exchequer has to go, it also implicates those senior civil servants who recommended it.
    The Prime Minister: The hon. Member is making his case worse. Sir Frank Lee, an equally distinguished civil servant, who has served us well in peace and war, was about to resign towards the end of the year in order to take up at the end of his Civil Service life an important appointment in Cambridge. It therefore became necessary to make a new appointment. But we really must protect the position of our civil servants in this matter, which is the very foundation of our Parliamentary and democratic government.
    Mr. Gaitskell: As I happen to know the gentlemen in question personally, may I say that not only do I agree with the Prime Minister on the point of principle, but that we should pay tribute to the service rendered by Sir Norman Brook and Sir Frank Lee, and that for my part I warmly welcome the new appointments which have been made?

    HEADS OF GOVERNMENT (COMMUNICATIONS)
    Mr. Frank Allaunasked the Prime Minister if he will consult Mr. Kennedy and Mr. Khrushchev about installing direct telephone communication between their three countries for emergency use to lessen the dangers of accidental war.
    The Prime Minister: This suggestion appears in both the United States and Soviet disarmament proposals as part of a Stage I measure to prevent war by accident. The United States, with the support of Her Majesty's Government, proposed in Geneva on 19th July that such measures could be set up in advance of a treaty on general and complete disarmament. Discussions are continuing at Geneva and in the
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    circumstances I think it would be premature to approach Mr. Kennedy or Mr. Khrushchev direct.
    Mr. Allaun: While thanking the Prime Minister for that fairly sympathetic reply, may I ask whether he does not agree, since the growth in the number of nuclear weapons makes it likely that sooner or later an accident will occur and the hydrogen bomb land on another country, perhaps by miscalculation of an individual commander, that such direct contact could prevent immediate retaliation and the wiping out of mankind in another world war?
    The Prime Minister: There are two quite separate points, one, the proposals we have already made, and which, I hope, will be pursued successfully, and the other is the degree of command which is exercised by the various authorities on both sides.
    Mr. A. Henderson: In view of the fact that the House is going into Recess for almost three months, may we take it that the Prime Minister will carry out his previously expressed intention of keeping in personal contact not only with President Kennedy but with Mr. Khrushchev whenever he thinks it possible that some advance might be made in these disarmament negotiations?
    The Prime Minister: Yes, we will do all our best to forward the purposes about which I know the right hon. and learned Gentleman feels so deeply, and which I certainly share.
    Mrs. Hart: In view of the fact that this is almost the first admission in this House of Commons by the Government that there is in fact a danger of war by accident, in spite of the fact that this has been brought to the notice of the Government during the last eighteen months, will the right hon. Gentleman, in following up the suggestion of my hon. Friend and the suggestion made by Mr. Kennedy, undertake to look at other possible causes of war by miscalculation as they are outlined in the Mershon Report of the Rand Corporation on America?
    The Prime Minister: I do not know that this is the first admission. The United States Government, supported by Her Majesty's Government, have made some proposals which, I hope, the Government of the Soviet Union will accept.

PUBLIC MEETINGS (ORDER)
The following Questions stood upon the Order Paper:
Sir R. CARY: To ask the Secretary of State for the Home Department if he is aware that experience of the disorders following recent meetings and processions of certain organisations in London and Manchester shows that there is a danger of a breakdown of law and order on a wide scale if such incidents are repeated; and what action he is taking in the matter.
Mr. G. BROWN: To ask the Secretary of State for the Home Department whether, consequent on the representations made to him by right hon. Members within the last week, he will make a statement about Her Majesty's Government's intentions with regard to an amendment of the Public Order Act in order to make the preaching of, or incitement to, racial discrimination an offence.
The Secretary of State for the Home Department (Mr. Henry Brooke): I will, with permission, now answer Questions Nos. 59 and 65 together.
Hon. Members on both sides of the House will deplore the disorders which have recently occurred in London, Manchester and Dudley. The full reports which I have received and studied make it clear that, at any rate in the case of the meetings arranged by the Union Movement, the disorder did not result from any words uttered at the meetings by those who organised them, but from the determination of others to prevent the meetings from being held.
The extent and nature of the violence which has occurred, both at these meetings and in a different context in Dudley, is deeply disturbing. However much we abhor and despise certain views which, fortunately, commend themselves to only a tiny minority in this country, the use of physical violence as a means of preventing them from being expressed is not a reaction that can be tolerated.
Rightly, the police have taken firm and effective action to deal with the violence which has been occurring. They will continue to do so in any future situation, whoever the offenders may be, and in this I trust and believe that they
796
will have the support of the House and of public opinion.
So much for enforcing the law. As to the adequacy of the law as it stands, I intend to give the most thorough consideration to the representations that have been made to me about the Public Order Act and other matters, as well as to the content of the Bill which yesterday my hon. Friend the Member for Ilford, North (Mr. Iremonger) obtained leave to introduce, and to any other representations which may reach me from any responsible quarter. I intend also to study carefully the outcome, which may well be pertinent to this, of a case now pending in the courts.
The problem is, as I think the House will agree, how to preserve the right of free expression of opinion while effectively discouraging wanton incitement to racial hatred.
Sir R. Cary: While thanking my right hon. Friend for his courtesy in going out of his way to answer these important Questions today, may I ask whether he will agree with me that the paramount consideration in this matter is the maintenance of public order? These people, for the purpose of holding meetings, go to the point of assembly led by a band and drums—a Hitler technique in itself —one in Manchester on Sunday last went in close proximity to one of the greatest Jewish populations in this country and a settled coloured community of no fewer than 12,000 persons. That is taking a grave risk with public order.
In these circumstances, I ask my right hon. Friend whether he will send a strongly worded advice, within his prerogative as Home Secretary, to every chief constable and every watch committee, begging them to disallow such meetings in the concentrated areas of our cities? My right hon. Friend has the strongest possible motive for so doing, sometimes beyond the law itself: he has the united support of public opinion.
Mr. Brooke: I am obliged to my hon. Friend for what he has said. I think that my original Answer made perfectly clear my attitude towards the organisers of these meetings, but when my hon. Friend says that the primary object must be the maintenance of public

797
order we must bear in mind that freedom of speech also has to be preserved, and the Government—any Government in power—must seek the proper means to achieve the right balance. I intend to do all I can to do both.
My hon. Friend suggested that I should send a circular to chief constables urging them to prohibit such meetings from being held. There is, in fact, no power in the law to prohibit in advance meetings from being held, though the police have power to bring a meeting to a close as soon as it has started if it seems likely to promote a breach of the peace.
Mr. G. Brown: May I beg the Home Secretary not to repeat now the sort of things which were being said by the Government of the day before 1936? May I ask him to consult his right hon. Friend the Member for Sutton Coldfield (Mr. G. Lloyd)—I think it is—who, I believe, was then Parliamentary Private Secretary to the then Prime Minister, and whose report on the Olympia meeting was one of the factors which changed the situation in 1936 and led the Government to do what up to then they had been saying they could not do?
Is the right hon. Gentleman aware that in addition to protecting Her Majesty's citizens who, because of their race or their colour, are being subjected to gross and offensive provocation, first of all we have a duty to the police? May I dissociate myself from a speech made in the House last night about the police? May I ask whether the right hon. Gentleman is aware that all of us believe that the police, certainly in London, where I know what has been on, and, I suspect outside, have dealt with a patience and tolerance and a tact—
Mr. Ellis Smith: If my right hon. Friend had seen for himself he would not have said that.
Mr. Brown: —far more than I could possibly summon up, with a situation where, had they lost patience or tolerance, they would have been entitled to our protection? We ought to protect them from being put in that situation by allowing these things to happen.
Is the right hon. Gentleman aware that, in addition to the decent people who are being provoked, there is a hoodlum element involving itself in
798
this, that they ought to be severely dealt with when they go before the courts, and that there is some reason to doubt whether they are?
On the question of the Public Order Act, is the right hon. Gentleman aware that he has at this moment under the 1936 Act all the powers he needs to ban anything in the nature of a procession— as I understand it, what Sir Oswald Mosley is now doing, proceeding, no doubt by advice—
Sir K. Pickthorn: On a point of order, Mr. Speaker. Since we are all presumed on this occasion to be largely, if not mainly, concerned with the preservation of order, is there not a duty upon all of us to endeavour to preserve the rules of order of the House?
Mr. Speaker: That is a permanent duty on all right hon. and hon. Gentlemen which we are variously successful in performing.
Mr. Brown: If every time I rise the hon. Member for Carlton (Sir K. Pick-thorn) does that, it will not get my vote for him as your successor, Mr. Speaker.
I was on my third point. May I ask the Home Secretary whether he is aware that he has the power under the 1936 Act to ban anything in the nature of a procession? As the present form seems to be to drive up in a motor car to within 50 yards of the platform and walk the rest of the way, if this does not constitute a procession and thus enable the Home Secretary to ban it in advance, as he has the power to do, will he now accept our repeated representations that he should amend the Public Order Act so that meetings of that kind will fall into the same category as processions of that kind already do?
Mr. Brooke: I certainly can assure the right hon. Gentleman that in all my consideration of this extremely important matter I will keep in mind the position of the police. I am grateful to him for the tribute which he paid them, a tribute which I have had endorsed from many quarters.
Secondly, I am very well aware that there is a hoodlum element which attaches itself to troubles of this sort. It was very much in evidence in Dudley. I will consider, as the right hon. Gentleman said, the imperative necessity of

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restraining people of that kind who are simply out for trouble wherever it may be picked up.
Thirdly, I have undertaken that I will very thoroughly consider the terms of the Public Order Act. In fact, the Act as it stands, as I read it, does not empower the Home Secretary to ban processions on his own initiative. The initiative must be taken by the chief officer of police. But, as I say—I want both sides of the House to accept this from me—I am extremely anxious to use the next three months in examining the terms of the Act in relation to the situation of today, because that is the important thing.
Mr. Grimond: When the Home Secretary is examining the matter further, will he bear in mind the distinction between a genuine meeting designed to disseminate opinions, however unpopular or repulsive they may be, which must be protected from violence directed against it, and another form of meeting which is not really a meeting at all but a demonstration held in a particular area at a particular time and with particular methods, which is primarily designed not to spread opinions at all but to stir up race hatred and is simply an act of violence in itself?
Mr. Brooke: Yes, Sir; I will certainly bear that in mind. I think that it would be a grave act to put into the hands of the Executive the power to prohibit any meeting in advance regardless of what might take place at it. But I accept the conception that there are meetings obviously intended as meetings and that there are other things called meetings which are intended as demonstrations
Mr. Iremonger: May I ask my right hon. Friend to bear in mind, when he is considering whether he can amend the Public Order Act, that, although it may well be that the Act as it now stands covers incitement to racial hatred, it is not necessarily seen to do so by the people who are most anxious about it. and that if they have not confidence on this point they are, therefore, more disposed to be violent at public meetings than they would be if they knew that the police could intervene if their feelings were affronted?
Mr. Brooke: I will certainly take that point into account. I believe there is a
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widespread lack of apprehension of what the Public Order Act actually says.
Mr. W. Griffiths: Will the right hon. Gentleman take it from a Manchester Member on this side of the House that the views expressed by the hon. Member for Manchester, Withangton (Six R. Cary) are widely shared in the City of Manchester? Will the right hon. Gentleman take into account during the next three months—which seems a very long time in view of the programme announced by the National Socialist Movement and Sir Oswald Mosley himself—that one of the things that are the sheerest provocation is the marching by people who support a racial doctrine through areas where, as the hon. Member for Withington said, there is a settled Jewish or coloured population? If that is something about which the Government are not at the moment permitted to take action, the law ought to be amended as soon as possible.
Mr. Brooke: The law enables action to be taken to prohibit all public processions or particular classes of public procession for a period of three months, but the initiative lies with the chief officer of police, who must recommend it.
Several Hon. Members rose—
Mr. Speaker: Mr. Butler.
Mr, H. Butler: I am extremely grateful to you, Mr. Speaker, for calling me.
The right hon. Gentleman has now expressed some solicitude towards the people who have been worried about this matter. I recall when these troubles arose previously, going back to 1936 and 1937, when I was the mayor of a Metropolitan borough. Arising from this experience, may I ask the right hon. Gentleman whether he is aware that, in addition to his being able to ban such processions and make sure that they are stopped, it is also possible for him to say that no public meetings shall be held in areas like Ridley Road, the centre of a coloured and Jewish population?
This is the point which we want to deal with so that during the three months when we shall be in recess—it is a time when a number of such open-air demonstrations normally take place— some protection shall be accorded to the citizens, who are not politicians on

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either side, and so that traders in the area shall not be menaced by the thugs who go there to do damage at every opportunity. I ask the right hon. Gentleman to look at the question of banning processions and banning meetings in certain areas.
Mr. Brooke: The hon. Gentleman can be quite sure that I shall look at all these matters. I was deeply concerned about what happened in Hackney the other day. But I think that it is important for the House and the public to recognise what the law as it stands authorises and does not authorise. The law as it stands does not authorise anybody to prohibit a meeting from taking place, but it gives certain powers, on the initiative of a chief officer of police, for the banning of processions for a period of up to three months in a certain area. I emphasise that there is no power to prohibit meetings as such in advance.
Mr. Bottomley: Is the Home Secretary aware that in the early part of last year the Human Rights Commission of the United Nations unanimously adopted a recommendation calling upon Government to introduce legislation or take other necessary measures to prevent the spread of racial hatred? In these circumstances, ought not the Government to take more positive action than they have done already to stop the spread of racial hatred?
Mr. Brooke: I will certainly do anything I can to stop the spread of racial hatred. I think that the House knows that I have a constituency in which there might be inflammable incidents. However, I think I have said all that the House can expect me to say after 17 days in office about possible amendment of the Act.
Mr. Paget: Is the right hon. Gentleman aware that it really does not matter What these people say? After 6 million people have died in gas chambers, the appearance at certain times and in certain areas of people proclaiming themselves Fascists or National Socialists is of itself a wanton affront to racial and religious minorities. It is that which must be dealt with. Is not the necessity here to enlarge the Public Order Act to cover meetings as well as processions and to authorise the responsible police officer—with an appeal to the right hon. Gentleman or to the local authority if
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necessary—to ban all meetings which, in the circumstances and in the area, are such that they will of themselves, regardless of what is said there, constitute a wanton affront to racial and religious minorities?
Mr. Brooke: I will certainly take into account what the hon. and learned Gentleman has said. We hope to examine all these matters in relation to the conditions of the time. One of the significant facts here is that for the past two years the Union Movement and some of the other Fascist or psuedo-Fascist bodies have been holding meetings and there has been no disorder at all, and there have been recent meetings at which there has been very grave disorder.
rose—
Mr. Speaker: The intense interest taken in this matter is quite apparent to me, but we must get on.
Mr. Driberg: On a point of order, Mr. Speaker. Yesterday, in an attempt to expedite the Motion for the Adjournment for the Recess, the Leader of the House gave an undertaking that the Home Secretary would deal with the specific point of the meetings already booked for Trafalgar Square during the next three months. He has not done so.
Mr. Speaker: I think that that is a legitimate observation. Mr. Driberg.
Mr. Driberg: Thank you very much, Mr. Speaker.
The right hon. Gentleman has said repeatedly that there is no power to ban meetings in advance, but is he aware that this is not strictly correct, certainly of Trafalgar Square, where the Minister of Public Building and Works has power to allow or disallow a meeting? The Minister has already disallowed, for instance, a meeting of the Committee of 100, but he has given permission for a meeting by Mr. Colin Jordan's Nazis to be held there in September. Will the right hon. Gentleman tell the House whether these meetings are going to be allowed?
Mr. Brooke: I was very ready to answer this question about Trafalgar Square if the horn. Gentleman asked it. It is perfectly true that there is power to grant or withhold permission to hold a meeting in Trafalgar Square. In that respect Trafalgar Square is different from any other public place. It is not

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the case that the Minister of Public Building and Works has authorised Mr. Colin Jordan's organisation to hold a meeting in Trafalgar Square.
Mr. Driberg: Yes.
Mr. Brooke: This is another organisation. I know that it is confusing, but there are three different organisations which are operating in this field. Mr. Colin Jordan's organisation has made an application. I think for 19th October, which I am sure will receive the careful consideration of my right boo. Friend. The responsibility is his. He is here in the House. He has heard everything that has been said and I shall certainly discuss the matter of all these meetings with him.
Mr. Fletcher: Can the right hon. Gentleman, really explain how it serves the cause of freedom of speech to allow a meeting to take place in a particular place, which is calculated by provocative and inflammable statements to lead to a breach of the peace, if it is broken up after three or four minutes? Would it not be far better to stop the meeting taking place if it is known in advance that it is almost certain to cause a breach of the peace?
Mr. Brooke: I am sure that the ban. Gentleman realises that there are dangers in this. We do not want to create a situation where meetings planned by anybody can be frustrated by a newspaper or periodical announcing in advance that if the meeting is held it will be broken up. We cannot have that sort of thing.
Sir B. Janner: On a point of order, Mr. Speaker. We were told yesterday that one of the reasons for the speeches being curtailed in the debate on the Motion for the Summer Recess was that we would have an opportunity today of getting to the bottom of this matter, which is disturbing the people of this country. In the statements which have been made by the Minister, he has entirely excluded a very important matter. Not only does the law as it stands make it possible—and this has been so held by judges—(for him to stop these meetings, but, in addition, the common law gives no right at all to those who are perpetrating these outrages to continue.
Mr. Speaker: Order. This is very naughty, if I may say so. I can understand the hon. Gentleman's eagerness about this, but he rose to a point of order after I had indicated, in the realm of my responsibility, that we really cannot go on debating this matter without a Question before the House. As it turns out to be not a point of order, perhaps I may emphasise that we ought to go on to the next matter.
Sir B. Janner: Further to that, Mr. Speaker. We have been told this afternoon that the responsibility for Trafalgar Square lies in the hands of the Minister for Public Building and Works. Can you tell us how and when we can raise this question, so that we may know from the Minister what he is going to do?
Mr. Speaker: I evoke the hon. Gentleman's help in this. I think that I understand him. All the arguments about the powers of the Home Secretary in this respect are no doubt very important, but they do not raise points of order.

DR. SOBLEN
The Secretary of State for the Home Department (Mr. Henry Brooke): I will, with your permission, Mr. Speaker, and that of the House, make a statement about the case of Dr. Soblen.
When Dr. Soblen, who had been convicted of espionage in the United States of America and sentenced to life imprisonment, was on bail pending the hearing of an appeal, he absconded and made his way to Israel. He was expelled from that country, and was being returned by air to the U.S.A. when he stabbed himself.
When his plane landed at London Airport he had to be removed to hospital for the treatment necessary to save his life, though he was formally refused leave to land, and the airline were directed to remove him on the aircraft on which he had arrived. This was in strict accordance with the normal practice. Had he been fit to travel, this would have meant the immediate resumption of his journey to the U.S.A.
As soon as Dr. Soblen was fit to be moved from the hospital, he was taken to Brixton prison, where he still is.

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A habeas corpus application to the High Court failed, and this decision was upheld on appeal.
I have given anxious thought to this case, and to requests made to me about it, and to the representations of some hon. Members who were good enough to come and put their views to me.
There is no ground for granting Dr. Soblen political asylum here. He is not in danger of persecution in his own country for his political opinions or on racial grounds. Dr Soblen is a convicted spy, a fugitive from a sentence imposed on him by the courts of a country whose life is based on democratic institutions and constitutional guarantees.
I have concluded that my proper course is to re-establish the situation in which Dr. Soblen would have found himself on his arrival in this country but for his self-inflicted wounds. In that situation he would undoubtedly and properly have been refused leave to land, and the airline would have been required to remove him at once on the plane on which he arrived, which was bound for the U.S.A.
Directions are accordingly being given to the airline now for Dr. Soblen's removal to the United States.
Before reaching this decision I called for and studied medical reports on Dr. Soblen's health and gave the fullest weight to representations made to me that he should be sent to Czechoslovakia or some other country willing to receive him.
Dr. Stross: May I. first, establish two things in this case and will the Home Secretary agree that they are correct? First, that the treatment of Dr. Soblen at London Airport was with complete humaneness and efficiency and that every effort was made to see that his life should be saved, as it was. Secondly, that he has had the full processes of law of this country, which is something of which I personally am very proud.
When so much humaneness and compassion have been shown up to date to Dr. Soblen, why should this not be partially extended in the way I suggest— by the Home Secretary retaining him here for another month? There are two months available from the time of
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refusal of entry into the country, so the right hon. Gentleman could, therefore, keep Dr. Soblen here until the end of August.
This man is 62 and acknowledged by everyone to be suffering from leukaemia and, therefore, carrying a sentence of death on him as well as the imposed sentence of imprisonment for life. Is it unreasonable to ask that he should not spend the last year or two of his life—for this is probably all he has left —in a prison, but rather in a country that is willing to take him? [HON. MEMBERS: "Oh."] I am sorry. This is almost our last opportunity to speak before the Recess, and I beg the House to let me speak for thirty seconds more.
Would it not be reasonable to hold Dr. Soblen here for a week or two longer and consider whether, if India or Ghana would take him, he should not be allowed to go there or, in the last resort, to send him back where he came from —Israel—and not to the United States? The right hon. Gentleman has the power to do this.
Mr. Brooke: I am obliged to the hon. Gentleman for what he said about the humanity with which Dr. Soblen was treated when he arrived in a very ill condition, thanks to his self-inflicted wounds, at London Airport. I am also obliged to the hon. Member for his saying that Dr. Soblen has had the full opportunity of legal process in this country.
I have thought over this case very carefully, as I think the hon. Gentleman knows, and I have come to the conclusion that the right thing is to restore the position as it was before Dr. Soblen attempted suicide. The only country which is known to be willing to grant him an entry visa is Czechoslovakia. The hon. Gentleman mentioned Israel, but my information is that the Israeli Government are not willing to receive him. In the normal course of events, had he not sought to commit suicide, he would have continued on that plane back to the United States, and, therefore, it would not be right for me to interfere.
Mr. S. Silverman: Accepting that the decision in the High Court and the Court of Appeal must be recognised, and that

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the right hon. Gentleman has to recognise it and to act in accordance with it, would he explain why that requires him to make this man go back to a country which he does not wish to go back to? [Laughter.] I do not regard this as funny.
We have an extradition treaty with the United States, and spying is not one of the offences covered. Therefore, the Home Secretary is under no obligation, even if an application had been made, to send Dr. Soblen back to the United States. Surely the right hon. Gentleman's function is limited to seeing that the man does not remain here. Where he goes to from here is no responsibility of the Home Secretary. To put him on a plane bound for America against his will is really to assume jurisdiction which the right hon. Gentleman has not got and Which will be regarded as a shameful thing.
Hon. Members: Nonsense.
Mr. Brooke: I thought this matter over very carefully. There are only three countries to Which the law would allow me to send this man. One is the United States, of which he is a national, one is Czechoslovakia, because it is willing to receive him, and the third is Israel, because he came from there.
I cannot see that there would be any purpose in returning him to Israel, from which he has already been expelled and whose Government have subsequently said that they will not receive him. It would only cause unnecessary suffering if I were to have him sent back there only for him to be sent on, as he would be, to the United States.
I have come to the conclusion that in this case, which, as far as I am aware, is unprecedented, my right course is to restore the situation as it would have been had Dr. Soblen not sought to commit suicide.
Mr. Fletcher: Will the right hon. Gentleman clarify one point? Granted that this is a very difficult case which is probably unprecedented, and assuming that Dr. Soblen, as the right hon. Gentleman has said, is not entitled to political asylum, would the right hon. Gentleman say whether the last sentence of his statement means that if there ware sufficient medical grounds regarding Dr. Soblen's
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health, he would feel able to send him to any country, other than the United States, that would be prepared to accept him?
Mr. Brooke: I do not think that that question arises. I have had the best reports available to me on Dr. Soblen's health. He is suffering from leukaemia, but nobody can say what length of life lies in front of him. The disease is, at the moment, in a state of recession —I believe that that is the correct medical term—and is not flaring up. He is fit to travel and I think that I must act as I have said I will.
Mr. Speaker: Mr. Peter Thomas. Statement.
Mr. G. Thomas: On a point of order, Mr. Speaker. In view of the fact that only one day of the year is given on the Floor of the House for a debate on Welsh affairs—
Mr. Speaker rose․
Mr. Thomas: I am coming to the point, Sir.
Mr. Speaker: I am very anxious to get there so that I shall not infuriate Welsh Members who do not get into the debate. I am satisfied that getting on with the statement will most help towards that end.

UNITED ARAB REPUBLIC GOVERNMENT (FINANCIAL AGREEMENT)
The Joint Under-Secretary of State for Foreign Affairs (Mr. Peter Thomas): No one is more reluctant than I am to take up time which could be devoted to the Welsh debate, but with your permission, Mr. Speaker, and that of the House, I wish to make a statement on our financial discussions with the United Arab Republic Government.
I am glad to inform the House that agreement has been reached with the United Arab Republic Government on all the matters relating to the 1959 Financial Agreement that have been under discussion. The necessary documents have been drawn up. For technical reasons it has not yet been possible to sign them, but signature should take place within a few days.
The main problem has been the transfer of cash and bank balances up to the

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equivalent of £E5,000 as provided in the Financial Agreement. Arrangements have now been agreed upon to clear up this whole problem within a period which we hope will not exceed three years. The first £E1,000 of approved applications is to be transferred in future through the accounts of Her Majesty's Embassy in Cairo, the local currency being used to meet the Embassy's current expenditure.
As regards amounts in excess of £E1,000 and up to £E5,000, the United Arab Republic will provide approximately £2¼ million which will be available in London on specified dates so as to facilitate the completion of transfers as they are applied for. This includes an immediate payment of £357,500 Which will clear off the balances in excess of £El,000 due to those applicants who have already received the lower figure.
For their part, Her Majesty's Government will provide a credit to the United Arab Republic of £715,000 to be used to finance transfers in the immediate future. The amounts drawn under this credit will be repaid by the United Arab Republic Government over a ten-year period with a three-year period of grace and interest at the current standard rate. Arrangements have also been made to ensure that applications for transfer will be expeditiously handled.
In addition, we have reached agreement on a number of other points in the 1959 Agreement which have given rise to difficulty. Arrangements have been made for expediting and simplifying the release of the remaining British properties sequestrated in 1956. A more exact definition has been made of property to be regarded as "Egyptiandzed" for the purposes of compensation claims. Dividends which fell due for payment after 30th October, 1956, but were not distributed by companies that were "Egyptianized" will rank against the compensation fund. All available records will be furnished to enable claimants to establish claims with the Foreign Compensation Commission.
The United Arab Republic Government will pay Her Majesty's Government the equivalent in sterling of £E80,000 in respect of the balance of compensation for the officials dismissed in 1951. Effective instructions for the release of certain securities will be given.
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The exact liability of Egyptian Government pensions to Egyptian tax has been settled.
The documents on all these points will be published and laid before the House as soon as possible.
The agreements which we have now reached with the United Arab Republic Government on these matters are a sign of an improvement in our relations, which Her Majesty's Government warmly welcome. It is our hope that this development will continue.
Mr. Callaghan: It is a matter for regret that this important statement should be rushed in a half empty House. Does it mean that all persons whose property has been sequestrated or nationalised by the Egyption Government, up to the limit of £E5,000, are now to receive compensation in full? These are the small people who have suffered most.
Secondly, is the amount of £2¼ million in addition to the £27½ million which was agreed in the original settlement, and do I take it that in any case £62¼ million is to be financed very largely by means of a loan from Her Majesty's Government to the Egyptian Government, which sounds a very odd way of conducting this financial transaction?
Thirdly, can the Joint Under-Secretary explain the words, "that agreement has been reached on all matters relating to the 1959 Financial Agreement"? Is it not a fact that the total sum which has been lost by British nationals is now estimated by the Government to be upwards of £80 million? Are we to assume, if this is the final settlement, that British nationals are to lose about £60 million, without any recompense or redress, as a consequence of the folly of Suez?
Mr. Thomas: With respect, the hon. Gentleman has not quite understood the situation. One has to differentiate between compensation for British property which was Egyptianised after the Suez events and for which the United Arab Republic Government have already paid £27½ million, and the loss and damage to property which was sequestrated and released, which will be paid out of that fund of £27½ million.

811
As my noble Friend the Foreign Secretary said in another place, Her Majesty's Government intend to top up that fund to see that there is a fair and equitable settlement. The main point arising on the 1959 Agreement was the release—not payment but release— of up to £E5,000 to those people who had property in Egypt. Due to certain difficulties, the Egyptians had been unable to release more than £E1,000 in some cases. As a result of the agreement we have reached, all people who have property in Egypt will, we hope, soon be able to take their £E5,000 in full.
Mr. Callaghan: What does the hon. Gentleman mean by "top up"? There is a big difference between £27½ million and £80 million. What I am asking— and it is a simple question—is whether this loss is to be borne by the British subjects who have lost their property as a result of the Suez operation; or does the phrase "topping up" mean that the British Government are to make up the difference between £27½ million and £80 million?
Mr. Thomas: In the arrangements which we have been making in Egypt the only matter relevant is loss of and damage to sequestrated property. We have said that we intend to see that there is a fair and equitable settlement of claims for Egyptianised property. If that requires that Her Majesty's Government should add to the £27½ million, it has already been said that we shall do so.
Sir M. Lindsay: Does my hon. Friend's statement mean that at last, after eleven and half years, the U.A.R. Government are now ready to meet their obligations to make a settlement for those British officials who were summarily dismissed in 1951? As the statement was a little difficult to follow, will my hon. Friend briefly say how satisfactory the agreement is percentage-wise, or give the global sum which is being found for this settlement?
Mr. Thomas: There is a sum of £E80,000 which the U.A.R. Government have given by way of balance in settlement of these claims—I think that that is Article III (f) of the Agreement—but Her Majesty's Government are fully
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aware of the position of those 1951 officials and are considering exactly what that position is.
Mr. Dance: As a result of this settlement, will it be possible for Messrs. Toplis and Harding and other agents to be able to inspect property in Egypt belonging to British residents here?
Mr. Thomas: I hope that all agents will be able to inspect property in Egypt and that we will have a speedy settlement of the problems which have remained long standing.

NIGERIA (GIFT OF SPEAKER'S CHAIR)
The Chancellor of the Duchy of Lancaster (Mr. Iain Macleod): I beg to move,
That Sir John Vaughan-Morgan, Mr. A. Creech Jones and Mrs. Patricia McLaughlin have leave of absence to present, on behalf of this House, a Speaker's Chair to the House of Representatives of Nigeria.
I think that I need only add that the composition of this delegation has been arranged in consultation with you, Mr. Speaker. It will be accompanied by Mr. Charles Gordon, Fourth Clerk at the Table. I am sure that we all wish well to our colleagues, who will be reporting to us on their return.
Question put and agreed to.

MR. SPEAKER (MOTION)
Mr. Sydney Silverman: On a point of order. It is normal on Thursdays—and I know why we have not had one on this Thursday —to have a business question. Had there been a business question answered by the Leader of the House, what I have to say would more properly have been addressed to him.
Mr. Speaker: I can anticipate what the hon. Member for Nelson and Colne (Mr. S. Silverman) is about to say and I am certain that it is irregular and much too embarrassing for me to stop him, but I hope that he will go on.
Mr. Silverman: The point which I wish to raise, I hope legitimately, would be more appropriately addressed in other circumstances to the Leader of the House because you yourself, Mr. Speaker, are involved in the matter.

813
You will have noticed the Motion on the Order Paper in my name and that of three of my hon. Friends.
[That this House deplores the refusal of Mr. Speaker to afford the House of Commons the right to express its view on a Division after full debate, on the policy of Her Majesty's Government as to the Common Market.]
What I am wondering is whether you yourself have taken, or propose to take, any step to provide time for the discussion of that Motion before we disperse. In furtherance of what I am saying I have only one other sentence. Although there are only four names on the Motion, we regard the matter as of considerable importance, especially having regard to the circumstances and accompanying statements at the time, and we would like to have an opportunity of clearing up What, at the moment, is a very disagreeable incident.
Mr. Speaker: I can understand the hon. Member regarding it as important and I share his view that it was a very disagreeable incident. But neither of those factors enables me to allocate time for the discussion of this Motion.
Mr. Silverman: I was not suggesting that you should allocate time. I was suggesting that in some cases when an hon. Member, including yourself, is affected by a Motion on the Order Paper, he has the opportunity, publicly, privately, through the usual channels, or in some other way, to see that such a Motion does not remain on the Order Paper for too long without the opinion of the House being taken upon it. That is What I had in mind.
Mr. Speaker: I do not propose to take any steps about it. I do not think it right that I should.
Mr. G. Thomas: On a point of order. Would it be in order to ask the Leader of the House whether, in view of the limited time given to Welsh affairs, the debate which is now coming on can now be held over until after the Recess? It is an insult to Wales that we should have been so pushed around throughout this Session.
Mr. S. Silverman: Do not worry about that. We are insulting everybody nowadays.

WALES AND MONMOUTHSHIRE (REPORT)
4.39 p.m.
The Parliamentary Secretary to the Board of Trade (Mr. David Price): I beg to move,
That this House takes note of the Report on Developments and Government Action in Wales and Monmouthshire for 1961 (Command Paper No. 1643).
It is my task this afternoon to present to the House on behalf of the Government the Report on Developments and Government Action in Wales and Monmouthshire for 1961. As the House will agree, the Report is very comprehensive and covers the affairs of many Departments. I shall concentrate primarily upon economic and industrial matters, as becomes a Board of Trade Minister, although in so doing I shall inevitably trespass on the responsibilities of other Departments. My right hon. Friend the Minister of Housing and Local Government and Minister for Welsh Affairs will be winding up and will, in the course of his speech, refer to the wider implications of some of these matters.
In addressing the House from the Dispatch Box for the first time, it is a comfort to me to know that my right hon. Friend will be here to reply to the debate, and doubtless this will be a comfort to some hon. Members who may not find my speech very satisfactory. It is also a comfort to see so many Welsh faces round me. Welsh Members have the reputation of exceptional courtesy and good manners in debate. I assure the House that as an apprentice Minister I need all the courtesy and good manners which the House may in its generosity be prepared to extend to me. My anxieties in making my maiden speech from this Box are increased by the knowledge that I bear the common name of Price, and that I am to be followed by the hon. Lady the Member for Carmarthen, who bears the noble name of Lloyd George. However, I also bear the name of the Patron Saint of Wales.
I want to try to describe to the House the general economic situation in Wales as I see it, coming with a fresh mind, and yet, I hope, not an entirely uninformed one. I believe that we have a good story to tell. The developments in Wales over the last twenty years have

815
been impressive. Of course, there are still some areas with local unemployment problems, to which I shall refer during the course of my speech, but since 1948 Welsh manufacturing industry has been expanding at about double the rate of British manufacturing industry taken as a whole.
Let us look at current performance. I should like, first, to give some figures of employment. I know that statistics do not tell the whole story. Persistent unemployment anywhere is a human tragedy. It is no consolation to a man discharged at 50, or to a school leaver who cannot find a job, to be told that things might be worse, or that far fewer people are unemployed today than in the 1930s.
But figures do help to put things into perspective. In 1932, the unemployment rate in the area which became the South Wales and Monmouthshire Development Area was 41 per cent.—200,000 people. In 1937, it was 21 per cent.—over 100,000 people. Today, on the June figures, there are about 24,000 unemployed in the whole of Wales, and under 8,000 in the current development districts. Only a small part of the old South Wales Development Area is now a development district, so that exact comparison with pre-war figures is not easy, but the unemployment rate of about 2½ per cent. for the whole of Wales is a measure of the progress made since the 1930s.
The changes that have taken place in South Wales in the last twenty years is an achievement by any standards, and I am not making a party point here for Wales has trodden a fairly steady path towards prosperity ever since the war. Moreover, it is an achievement not equalled, unfortunately, by either of the two other development areas of the 1930s—Scotland and the North-East Coast.
Hon. Members will no doubt have seen the second leader in today's issue of The Times. I should like to quote one sentence from it:
"The industrial strength and prosperity of Wales has never been higher."
The importance of Wales to the British economy, can, I think, best be illustrated from the iron and steel industry. Although Wales comprises only 5 per cent. of the population of the United
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Kingdom, she produces about one-third of the country's output of crude steel and about one-quarter of the pig iron. In addition, the whole of the United Kingdom production of continuous mill sheet and virtually all the production of tinplate comes at the moment from Welsh mills. It is true that this position will alter when Colvilles strip mill in Scotland becomes operational, but even then by far the largest proportion of the output of these two products will be produced in Wales.
Coal mining is the traditional industry of South Wales. The South Wales coalfield, with an annual saleable output of about 17½ million tons, accounts for about 10 per cent. of the United Kingdom deep-mined production. Although geological conditions are difficult in many areas of the South Wales coalfield, particularly in the anthracite field, pit mechanisation, reconstructions, and new colliery developments in South Wales have raised the output per manshift figure to 22 cwt. in the first six months of the current year. A measure of the current increase in productivity is that despite a reduction in manpower of over 1,000, output in South Wales in these six months was nearly 3 par cent.—in fact, 2·8 per cent.—more than in the same period last year.
The reconstruction of the existing capacity and the opening up of new reserves is taking place side by side with the closure of capacity which can no longer make a contribution to the well-being of the mining industry. Over the last ten years collieries with a capacity of 2·4 million tons have been closed. There have been some local redundancy problems, but I am glad to say that they have been few, and as a whole the South Wales coalfield needs more men. The National Coal Board is pressing ahead with its capital investment programme and 18 schemes have been completed. Work on another 29 is still in progress. With these developments the Coal Board does not expect the closures which will be necessary over the next few years to cause any general problem.
Mr. John Morris: Can the hon. Gentleman give an assurance that even with the coming of Richard Thomas and Baldwins, at Llanwern, into production there is no danger of underproduction or under-employment at Port Talbot?
Mr. Price: As the hon. Gentleman knows, this will depend on the total demand for steel. If we have a period of expansion, we Shall need all the investment we have, but if we have a period of downward economic activity then, inevitably, some works will feel it. As the hon. Gentleman knows, the steel industry is operating below capacity.
I should like to concentrate on the period since the Local Employment Act came into force on 1st April, 1960. During the last two years we in the Board of Trade have approved new factories and extensions in Wales of over 7½ million sq. ft. providing 19,000 new jobs. Some of these have already accrued, and some have not, but I say with respect to hon. Gentlemen that this is not "pie-in-the-sky". It represents buildings which are up or going up. During this period other jobs have been lost, but it is not possible to put a precise figure on the numbers, though I have a fairly good idea what they are. Murphy, B.S.A., I.C.I. and some of the older steelworks have all recently announced closures.
Mr. D. J. Williams: Is the hon. Gentleman aware that the Murphy Radio Factory, at Hirwain, is closing down between September and December of this year and will make 600 people redundant? Has he any proposals to deal with this situation?
Mr. Price: I think that we are all aware of that. As I stall endeavour to show, we are doing our best to steer new industry to all these areas which are either development districts, or are nearly classified as such. These announcements of closures have hit the headlines, though the number of men discharged is only a fraction of those taken on by expanding firms, often within travel-to-work distance of the closures. It is also true that other firms are not recruiting as rapidly as we and they had expected.
I recognise that it is the net accretion of jobs which counts, and there has been a net accretion of jobs in Wales. We also have to recognise that these new jobs in new industries should be more secure and more productive than the jobs which have been lost. It is significant, too, that the additional jobs arising from
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the industrial development certificates issued for these new buildings represent an increase of 6 per cent. in the number employed in manufacturing industry. This is the highest increase anywhere in Great Britain. In London, the South-East and the Midlands, the increase has been below 1½ per cent.
What is more significant is the number of expansions which have taken place by firms already established in Wales. When a firm in London or the Midlands sets up a branch in a development district there is sometimes a fear that if, fox any reason, the parent company runs short of orders, the branch is the first to pack up. In the past this has sometimes happened. But when the unit of a firm in Wales has grown to a point where it is a vital part of the whole organisation we may look with confidence to its stability in Wales, and to the prospect of further expansion taking place there and not in other parts of the country.
Such has been the progress of Welsh industry that we can expect it increasingly to engender its own expansion. The expansions of firms already established in Wales are many and varied. I need mention only a few. There is Guest, Keen and Nettlefold, of Cardiff; Royal Worcester, at Tonyrafail; South Wales Swfitchgear, at Blackwood; Chance, Pilkington, at St. Asaph; Radio and Allied Industries, at Aberdare, and Greengate and Irwell, at Llanberis. Those are a few examples taken from different industries which are expanding in different parts of Wales. There are many others within the knowledge of hon. Members. These are the silent, undramatic expansions, which augur well for Wales's continued prosperity.
But we all have great sympathy with the natural anxieties of any community —especially an old and proud one— which fears the prospect of the closure of any important source of employment within its district. Equally, I am sure that we all accept that most of the closures which have taken place in Wales in recent years are a necessary consequence of industrial change—larger units, higher capitalisation per worker, and new methods—change which is aimed at strengthening the British economy and which, if successfully carried out over a wide enough range

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of industry, will lead us to that ordered growth which we all desire.
In a rapidly changing and competitive world industrial change is a necessary prescription for survival. Productive efficiency is hardly a popular slogan, but if we claim to care about the welfare of people we must convince them that productivity is the key to plenty. At the same time, we are all deeply conscious that industry is as much about people as is it about things, and, therefore, we do our best to encourage new plants to open up as old ones close down.
In our ordinary workaday world, as distinct from an ideal world, it is difficult to avoid transitional periods and problems between the old closing down and the new starting up. The Board of Trade—as I hope hon. Members know —is always ready to assist in situations where transition brings unemployment in its train. Where it is likely to be high and persistent we take steps at once to make the place a development district, where the full range of assistance under the Local Employment Act is available, whether in Wales, Scotland or the North-East.
Our duty to give priority to the development districts is laid down by Act of Parliament, and rightly so, because we must concentrate our efforts on the places where the need is greatest. But even in places where we do not foresee unemployment that is likely to be high and persistent, if the right sort of firm is anxious to come in—right in terms of the needs of the district—we welcome it and facilitate its arrival by the granting of an industrial development certificate. In deciding whether to put a district on the "active" development district list the Board of Trade has to consider whether unemployment is high and is likely to be persistent. If we were not guided by those considerations we would not be able to concentrate Government assistance upon the areas where the need is greatest.
As the House knows, we review the list from time to time, taking off and adding districts as local circumstances warrant. Districts which are not on our list but which have a problem of local unemployment must not feel that, thereby, their problems are ignored by
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the Board of Trade. I know that there are places like Merthyr Tydfil and Pontadawe, which would like to be restored to the list of development districts eligible for financial assistance. I can assure the House that whether or not Merthyr Tydfil and Pontadawe are restored to the list we shall do our best to steer industry there.
There are still pockets of unemployment in Wales. First, there is Llanelly and its hinterland of unemployment at Ammanford and Garnant. As a result of the closing down or contraction of some of the steel works and the closing of the Royal Ordnance Factory at Pembrey, we have restored Llanelly to the list of development districts, and are now able to assist any firm that wants to go there or expand there. Our treatment of Llanelly is a good example of the flexibility of the present system. We were able to assist the big British Motor Corporation developments there, and a good many others. Then, when it seemed likely that the recruitment by these firms would eventaully absorb most of the unemployed in the area we put Llaneflly on the "stop" list, and later removed it from the list. That enabled us to steer firms to places which had less good prospects. It would have been contrary to our policy and our duty to the people in the other development districts to have oversold Llanelly at that time.
Unfortunately, things now look less bright for Llanelly, and so, once more, we are offering our full range of assistance. As for Ammanford and Garnant, I know that the best anthracite in the world is produced there, and I understand that the Coal Board will be recruiting more labour, so the future seems hopeful. But the present rate of unemployment, especially among women, is high, and we shall try to steer suitable industry there.
Further west there is Pembroke Dock and Milford Haven. Pembroke Dock's prospects have brightened in recent months with the arrival of the Regent Refining Company, and with the letting of the advance factory which the Board of Trade constructed there. The first step that the tenant of that factory wanted us to take was to double the size of the factory. On the other side of the water, Milford Haven is less happily placed. With the ending of the

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constructional work for Esso, unemployment has risen, and there was natural disappointment when Fisons decided not to set up there. But I am hopeful that the Esso refinery will attract satellite industry around it—as the Esso refinery has done at Fawley, near my own constituency—and thus become the nucleus round which an expanding economic community will develop. Viewed in these terms, the eventual prospects for Milford Haven must be good.
I move on to North Wales. In Anglesey, which one might have expected to be one of the more difficult places to which to attract industry, we have had a substantial measure of success. The advance factory which the Board of Trade built there was quickly disposed of. Other firms have gone to the area. The new Wylfa Nuclear Power Station will be providing work for many years to come. Caernarvon has the new Ferodo works, which were opened recently by Princess Margaret, and for which recruiting proceeds rapidly. As my right hon. Friend the President of the Board of Trade told the House last week, we are proposing to put an advance factory in North-West Wales. We have no reason to suppose that we shall not find an early tenant for this factory.
There are other places in Wales where there is a difficult unemployment problem, notably the Rhondda, where there are so many disabled workers who cannot be expected to travel far from their homes to find other employment. If I do not list them all it is not because I am unaware of them or their problems.
Obviously, an important consideration in all these matters is the question whether there are employment opportunities, or prospective employment opportunities, within a reasonable "travel to work" area. I am well aware of the problem in the valleys. People cannot cross mountains daily to go to work. I believe that the new Heads of the Valleys Road will make the higher reaches of the valleys much more attractive to industry than they have been in the past. Good communications are essential to industrial development. I think, therefore, that the House will expect me to say something about the plans of the Government to improve the road system of Wales.
Mr. Tudor Watkins: How did the hon. Gentleman get to North Wales without going through Mid-Wales? Does he propose to leave this subject without saying something about Mid-Wales?
Mr. Price: I do not know whether the hon. Gentleman was a gunner in the war. A gunner does what is called bracketing. One round is put in front of the target and one short of it and the third rounds hits the target. Mid-Wales will be dealt with by my right hon. Friend. I should be quite happy to deal with Mid-Wales, but the hon. Member for Cardiff, West (Mr. G. Thomas) was complaining earlier that we had not enough time and I do not wish to detain the House because I know that there are many hon. Members who wish to speak.
In the past the communications of South Wales were centred on the coal trade, down the valleys to the ports and back again. Nowadays the most important lines of communication are the routes to the London area and the Midlands and it is our policy to improve these routes as rapidly as possible. The two most serious hold-ups on the route to London are the Severn estuary and the congestion at Newport. The Government's answer is a motorway from to South Wales, terminating in a by-pass at Newport and including a new bridge over the Severn.
Work on the Severn Bridge started last year and the contract for the superstructure was let this year. The total cost of the Severn crossing, including the bridges over the Severn and the Wye and the approach roads, will be about £16 million. The Severn Bridge will have the sixth longest span in the world. It is due to be opened in 1965 or 1966.
At Newport, two very important projects are in hand to relieve congestion in that busy industrial town. The first is a motorway by-pass. A contract has just been let for the bridge and tunnel works with the object of completing these more complicated sections at the same time as the main road works. The second is that work started recently on the new bridge over the River Usk, at George Street, in the centre of the town. This new crossing of the river is a classified road scheme earning a 75 per cent. grant from Government funds and

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should be of particular value to the Spencer steelworks, which will generate a heavy volume of industrial traffic.
The other main route essential for industry is between the Midlands and South Wales. The new motorway from near Birmingham and Tewkesbury, which was opened by Lord Chesham last month, provides, with the Ross Spur motorway, access as far as Ross. From Ross to Newport the road is earmarked for comprehensive improvement to dual carriageways. Work is already under way on the northern section of this route.
The Heads of the Valleys Road joins this road at Raglan and provides the most direct route between the Midlands and the west of South Wales. About 24 miles of this road are being comprehensively improved from Abergavenny to Hirwain at a cost of well over £7 million. When it is completed it will be of great value to industrial traffic to and from the valleys, and Swansea, and it will be a most impressive piece of road construction through difficult country. The first short section of about three miles, forming a southern by-pass of Abergavenny is due to be opened to traffic tomorrow. Hon. members on their way home will have the advantage of it.
In North Wales, our principal scheme is the improvement of the coast road to provide dual carriageways as far as Conway. This road will be linked with the Birmingham-Lancashire motorway. The new route will provide much better communications for both industrial and holiday traffic. The new Queensferry Bridge and by-pass was opened this year, other schemes are under way and many more are planned, some for the immediate future.
Very relevant to the future of industry in Wales is education as a whole. However—
Mr. James Callaghan: Before the hon. Gentleman leaves the question of communications, surely he proposes to say something on a subject which has been plugged for a long time by many of my hon. Friends. What is the attitude of the Government towards rail communications and the closing down of railways, and the complete failure of the Government to accept the Jack Report and to implement other
824
bus services to take the place of railways?
Mr. Price: As the hon. Member will know, my right hon. Friend the Minister of Transport gave a fairly long answer to that question yesterday.
On the question of the Jack Report, he went into considerable detail during the debate on the railways a few weeks ago, in which I took part in a slightly different capacity from my present capacity. My right hon. Friend the Minister for Welsh Affairs will deal more with the railways side and the rural districts. As I said at the beginning of my speech I do not wish to detain the House. That is not because of any lack of interest. I could take up the whole time of the debate because there is enough "meat" in this Report on each subject.
I was about to turn to education, which we all—
Mr. James Griffiths: I should like to make sure that the Minister for Welsh Affairs or the Parliamentary Secretary to the Ministry of Power, or someone, will say something about the proposal to build an oil-fired power station in South Wales and begin "carrying coals to Newcastle".
Mr. Price: My right hon. Friend will deal with that at the end of the debate.
I am still trying to get on to education, which I believe is very important to industrial development.
Mr. Morris: May I ask whether the Minister will deal with the question of rail closures?
Mr. Price: My right hon. Friend, through me, assures the House that he will.
I will now deal with education and I wish to refer to technical education. The Report of the Central Advisory Council for Education for Wales, published last year, and entitled "Technical Education in Wales", had much to say about the training of apprentices and the provision made in the Welsh technical colleges for technical education generally. It was, in a sense, gratifying to read in the Report that Wales has enough facilities for her existing needs in technical and higher education. In addition to the College of Advanced Technology in

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Cardiff, there is the Regional College at Treforest, Glamorgan, and there are other smaller colleges and institutes well placed to serve the needs of the community.
The difficulty, paradoxically, has been the supply of students rather than the provision of premises and teachers. I should like to remind the House of what the Report says:
"The facilities for training are available but industry, generally, although ready to grant its employees one day a week release to attend courses, seems reluctant to offer them the opportunity to attend advanced sandwich courses… the solution to the problem of providing industry with the increasing number of highly qualified people that it needs, lies to a large extent in industry's own hands."
It is good to be able to report that since this passage was written an improvement has taken place notably in the number of students attending advanced courses.
Thus, in the session 1958–59 there were 116 students in sandwich courses at the Cardiff College of Advanced Technology for the Diploma in Technology and for Higher National Diplomas. The number today is 148 Dip-Tech, students and 336 Higher National Diploma students—
Mr. Callaghan: How many from the nationalised industries?
Mr. Price: The number of students taking commerce courses in the colleges has also shown an encouraging increase in the current session. Even so a greater measure of support from employers would enable the College of Advanced Technology and the other colleges to establish themselves firmly as part of the national scene. Firms which are thinking of "setting up house" in Wales can be confident that they will have at their disposal—I trust that they will use them—technical education and training facilities as good as they will find anywhere—were I Welsh I should say "better". The colleges would be very willing to help in providing courses, where these do not already exist, in response to an established demand.
For myself, I cannot impress upon employers too strongly the need for them to take advantage of the educational and training facilities becoming increasingly available. We must maximise any potential talent in our young people. Even in terms of hard cash technical
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education and training is good business. Industrial success in the modern world is not just a matter of muscle power, it is a matter of brain power. Higher productivity in modern industry does not arise so much from sweating harder, but from organising work more intelligently, so we must encourage technical education and training which can turn potential brains and potential skills into effective brains and effective skills.
I wish now to say a word about the slate industry because otherwise I am sure someone will feel that I have omitted it.
Mr. J. Idwal Jones: The hon. Gentleman has referred to technical education in South Wales and the regional college at Treforest, and so on, but he has made no reference to North Wales. Is it part of the policy of the Government to have a regional college for North Wales? That was recommended some years ago and it also recommended by the Advisory Committee last year.
Mr. Price: My right hon. Friend will give a direct answer on that point when he replies to the debate.
Employment in the old-established slate industry in Wales has long been declining as a result of the development of other materials, and we must recognise that this trend is likely in the long run to continue, but the industry remains an important one in North Wales and roofing slates will be important for a long time to come. Hon. Members may have seen in The Times of 31st July that Welsh slates are being used for the roofing of Nos. 10, 11, and 12, Downing Street. I am glad to hear that a major firm in the industry is introducing new methods which should result in higher productivity and lower costs at the new quarry to be opened towards the end of this year at Marchlyn.
The House will not expect me to embark on the complex subject of agriculture in Wales, although no doubt in the course of the debate some hon. Members may do so.
The industrial changes which have taken place in Wales over the last fifteen to twenty years have revitalised the industrial Me of Wales. I believe that the prospects are good. All the same, we have to recognise that the fortunes of

827
Wales and of Welsh industry cannot be separated from the fortunes of the British economy as a whole. I am confident that Welsh industry is well placed to take advantage of the vigorous expansion of British industry for which we are all looking so eagerly—[Laughter.]—wait for it—and about which my right hon. Friend the Chancellor of the Exchequer spoke in the debate last Thursday.
May I give a word of advice to industrialists? With expansion round the corner—[An HON. MEMBER: "Round the bend."] I repeat, with expansion round the corner, now is the time for the far-sighted industrialist to start investing again and building for his expansion so that he will be in a position to take advantage of the future forward surge in the economy when it comes. If he lingers too long he will miss his opportunities. It is cheaper and more efficient to create new capital assets at the trough of an investment cycle than at its crest. So I say to industrialists, "Think of your future investment plans and come and discuss them with us at the Board of Trade". I can assure hon. Members who represent constituencies within development districts that if industrialists will follow my counsel we shall have the conditions under which we can steer new projects to their constituencies. Wales has much to offer the prospective developer. I am hoping to take an early opportunity to visit Wales and see the prospects on the ground for myself.
I can assure the House that the Government will press on with its policy of assisting areas with high and persistent unemployment. As evidence of our sincerity, I point to the Government's record. In little more than two years, under the Local Employment Act we have given assistance of about £7,800,000 to 46 projects providing 9,000 jobs. At present, we have 360 tenants in our factories in Wales, factories administered by the Industrial Estate Management Corporation for Wales. Those factories give employment to 63,000 people. That is no small contribution to Wales and it certainly is not the end of what the Government are prepared to do.
I see Wales as a land of opportunity whose greatest asset is the character of its people—skilled and industrious,
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passionately keen on education, dedicated to music and, above all, proud of being Welsh. I am confident that under the leadership of my night hon. Friend the Minister for Welsh Affairs and my noble Friend the Minister of State for Welsh Affairs the energies and genius of the Welsh people will, in the language of Dylan Thomas:
"advance for as long as forever is".
4.56 p.m.
Lady Megan Lloyd George: I begin by congratulating the Parliamentary Secretary to the Board of Trade on his promotion from the back bench to the Front Bench. We have always listened to his contributions to debates with interest because he has been extremely well-informed and has advanced original ideas. I hope that he will not lose his originality now that he has come to the Front Bench. I also congratulate the new Minister for Welsh Affairs. I hope that he will survive the course. I hope that he will not be compelled to walk the plank in mid-ocean as his predecessor was. I am sure that all of us, in all parts of the House, wish him well. He has a real job of work to do in Wales and I for one hope that he will do it.
I wish at the outset to make two protests. The first is that once again Welsh day is relegated to the fag-end of the Session, indeed this year it is almost beyond the fringe. That means that today, as on all previous occasions, we have had before the start of the debate a series of statements ranging far and wide. We have had a statement about the claims of British citizens in Egypt. We are perfectly prepared to listen to the claims of British citizens in any part of the world, but today happens to be the day, and the only day, when the claims of the Welsh citizens should attract the attention of the House of Commons. As my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) said it is an insult to Wales that we should be treated in this way and that our time should be consumed in discussion of matters which have no possible connection with the Principality. It is a contemptuous way of treating our country which has grave economic and social problems.
I want to make another protest. We are today for the first time discussing

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on the Floor of the House a Report on Government activity in Wales which is seven months old. I ask the Minister to consider a different arrangement, by which we could have a kind of Second Reading discussion at an early stage after the publication of the Report. That would be followed by debates in the Welsh Grand Committee, a Committee stage of the various aspects of the Report, and finally, a Third Reading debate on the Report as a whole. This would mean two days' discussion on Welsh affairs on the Floor of the House. But considering the amount of time that Scottish Members have, that would not be unreasonable. I make no complaint about the amount of time which Scottish Members have; indeed, I should not dare to do so with my hon. Friend the Member for Kilmarnock (Mr. Ross) present. I am glad that the Celtic front is still united but Scottish Members have a great deal more time than we have, and therefore I do not think that this proposal would be unreasonable.
This is one in a long succession of debates in which successive Ministers have told us how well we are doing in Wales, that a good time is coming, that expansion is round the corner and that boom conditions will arise at any moment in Wales.
The Parliamentary Secretary quoted the leader in The Times this morning which said that the industrial strength and prosperity of Wales has never been higher, but we have to look into the past before we can judge the present. We have a great deal of leeway to make up. For a long time Wales has been under the shadow of unemployment and depression, and the danger is that in judging the present position in Wales we set our sights far too low.
The Parliamentary Secretary spoke about unemployment. It is true that the latest figures show that there has been an improvement. We are, of course, in the summer peak months When the tourist industry is taking up a great deal of the slack. He did not quote the figures for the monthly average for the first quarter of 1962, which show an increase of 4,000 in unemployment over the corresponding figures of 1961. He did not say that average unemployment for 1960-61 was 32 per cent. compared
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with 2 per cent, for Great Britain as a Whole. In addition, there are high percentages of unemployment in various areas. In Anglesey it is 7·3 per cent. and in Llanelly and area 5 per cent. The position has deteriorated in Llanelly; only a very few months ago it was taken off the list of development districts. Now it has had to be re-scheduled because of the increased unemployment. At Milford Haven and Pembroke Docks the rate is 9·8 per cent.
As the Parliamentary Secretary pointed out, it is misleading to judge merely on the figures. The register is not a true reflection of the situation. There arc other factors to be taken into account. The Parliamentary Secretary pointed to the school leavers. This is a very serious matter, because when large numbers of young people leave the country it shows that there is a lack of confidence in the future of the country. In many parts, immediately the school leavers leave schools, they also leave Wales. We must deplore this but we cannot blame them. In many parts of Wales the opportunity is simply not there—in what the Parliamentary Secretary called the land of opportunity.
This does not apply only to school leavers. It applies also to older workers. Their names are not on the register of the unemployed. When pit closures took place a few years ago, miners left Wales. When the older mills in Llanelly and the area closed down, steel workers left Wales. Their names are not on the register of the unemployed.
We must also take into account that there are areas of temporary boom where important constructional works are taking place, which are at the moment employing many thousands of workers but which will shortly come to an end. There is the example of Festiniog—my hon. Friend the Member for Merioneth (Mr. T. W. Jones) will have something to say about that if he catches your eye, Mr. Speaker—where the pump storage scheme finishes this week. The Trawsfynydd nuclear power station employs many thousands of people drawn from a wide area but this number, too, will be considerably reduced by the end of the year. The R.O.F. at Pembrey is slowly running down. It has been given a short reprieve, but its ultimate fate is not

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uncertain. I am afraid it has already been decided. All these are factors which have to be taken into account in drawing a realistic picture of the position in Wales.
Will the Minister tell us, when he replies, what plans the Government have to absorb these workers? If there are no prospects they, too, will leave the country and go to the overcrowded labour markets of the South, of London and Birmingham. No doubt we shall then be told that the unemployment figures are not too bad and that Wales is prosperous. Of course, there has been expansion in certain parts of Wales, such as Monmouth and Glamorgan; we have the great steel mill at Llanwern, the Rover Motor Company in Cardiff, the B.M.C. in Llanelly, the development in Milford Haven, as well as new projects in Cynheidre and Abernant.
I am glad that the Minister is to make some comments on the proposal to establish an oil-fired power station in Milford, because it seems to me that at a time when competition between oil and coal is at its fiercest, for the Central Electricity Board to establish an oil-fired station near the heart of the Welsh coalfield is an incredible measure to take. We are all delighted that any new development should take place in Pembrokeshire where the unemployment figures are so high, but it is little wonder that the miners are up in arms at the prospect of this kind of development, right on their doorstep because the mining industry is still the economic backbone of Wales, with its weekly payroll of well over £1 million.
We all welcome the expansion which is taking place in various parts of the country, but the Government must not again try to run away from these hard facts. There are, as they well know, other areas which are virtually untouched, as the unemployment figures, the low employment figures and the depopulation figures show, particularly in the valleys of South Wales and, as my hon. Friend the Member for Brecon and Radnor (Mr. Watkins) said, in Mid-Wales, which is the heart of Wales.
I want to say this to the Minister: let us face it, there can be no prospect of getting industry into these areas unless the policy of distribution of in-
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dustry changes. This is the crux and the heart of the matter. The trouble is —do not let us run away from it—that in 1950 the Government stopped using the Distribution of Industry Act which had been used to such great effect by the Labour Government and which had transformed the face of Wales.
What has happened since? It is important for us to keep on rubbing these figures in. In a twenty to thirty mile belt round London the population has been increasing at five times and employment at about four times the national rate. Between 1952 and 1956 the population in the London region increased by 626,000. It is still increasing, though not at the same rate. This is in spite of the power which the Board of Trade has to refuse I.D.C.s. If this increase goes on at the present rate, it will lead to an increase in population in the London area of over 2 million by 1980. Between 1952 and 1959 there were 460,000 new jobs in the London region. The London region with only 27 per cent. of the population gained 45 per cent. of the new jobs available in that period. This is London alone, without taking any account of Birmingham and the other cities of the Midlands, to which I have no doubt that almost comparable figures apply.
This is not healthy development by any standards, whether they be social or economic, because housing, education and transport problems of immense magnitude are being created. What plans have the Government to arrest this concentration? What plans have they to readjust the balance so that in the national interest as well as in the Welsh interest, which is to us the national interest, there is a far fairer distribution?
The Parliamentary Secretary did not say anything about rail closures. He said that the Minister would deal with them later. If the Minister is to reply to all the questions which will be raised, he will be still here tomorrow morning. The proposed closures of branch lines will certainly not improve the prospects of bringing new industry into Wales. That is putting it mildly. Let us make no mistake about it that the possibility of these closures has introduced a very serious new factor which will weigh heavily against these areas. Hon. Members on both sides of the House know

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that many industrialists have already been discouraged from coming to certain parts of Wales because the rail facilities are inadequate. In many places they will not be inadequate but non-existent. No one objects to a process of speeding up on some of these railway lines, possibly closing halts and stations. I remember once making a journey from Llanelly to Criccieth, two vital points judged by any standards, a distance of about 140 miles. The journey took eight and three-quarter hours, and there were fifty stops. No one would defend a system of that sort. We are not suggesting that there should not be speeding up and modernisation of all kinds.
When this subject was raised in the Welsh Grand Committee the Parliamentary Secretary to the Ministry of Transport said that everybody is taking to the roads anyway and all those who had not already done so had better do so as soon as possible. Do the Government contemplate passengers and freight taking to the roads? The Minister of Transport is already getting cold feet about heavy freight on the roads. We were told yesterday that a considerable amount of heavy freight would have to find alternative transport. I do not know what other alternative transport it can find except on the railways. One cannot go to the Midlands by sea. Already this fear is growing.
The Parliamentary Secretary spoke about new roads which have been built or are projected in Wales. We welcome such developments but will they solve the problem? A survey was conducted by industrialists in Wales, the results of which were published a few months ago by the Industrial Association of Wales. These industrialists were assisted by local authorities and experts from the Ministry. Sixty-four industrial firms took part in a study of traffic generated by industry. The survey covered seven counties in South Wales, 450 miles of trunk roads and 600 miles of Class I roads. The report revealed that, based on present-day standards of traffic capacity, 47 per cent. or nearly one-half of the total mileage of rural trunk roads in South Wales was overloaded. It concluded that if the traffic growth continued at 5 per cent.—after all, that is a conservative estimate—the overloading percentage would itself go up by half as much again during the next ten years.
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The report was drawn up long before the Beeching proposals in regard to rail closures. The congestion which will arise as a result of railway closures will be on top of the estimate of congestion made by the industrialists themselves, the very people who will use the roads, the people who will be deterred from coming to Wales because of the lack of transport facilities.
Are the Government prepared to tell us tonight that, if railway closures on a substantial scale take place in Wales, the Government will consider sanctioning increased expenditure on roads, otherwise the idea of producing an adequate traffic system in Wales is absolute nonsense. After all, the test should be not whether this or that railway pays be': whether this ox that railway is an essential part of an economic and efficient system of transport—that is, an integrated system of road and rail. Until and unless the Government have control over long-distance haulage they cannot produce an efficient transport system.
It is very difficult to find out from the Prime Minister's speech last week or from the speech of the Chancellor of the Exchequer whether we are to pursue a policy of continued restriction or expansion. If the Government are going to pursue a policy of continued restriction, we know what to expect. Wales has always been among the first to feel the pinch, the chilly blast of any recession. If it is to be a policy of expansion, however limited, we want to know whether we shall have our fair and due share of that expansion, because we have not by any means had it in the past. Is Wales going to be equipped to take her full share in such an expansion?
I finish as I began, by saying that we must not set our sights too low. Let us set them high for Wales. We must not be content with just keeping our heads above the water or breaking even or saying, "We are very near the national average in unemployment. Is it not wonderful?" Do not let us be satisfied with that. Do not let us be satisfied with a standard of living lower than that enjoyed in England. Why should we be? Do not let us be satisfied with sub-standard housing, and lack of modern amenities in the towns and in

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the country. In many respects, Wales is an underdeveloped territory in regard to bath human and material resources.
We want to build a new prosperity in Wales to match a new age. It should be the resolve and purpose of all Welshmen in all parties that our people may find work, opportunity and the full life in their own native land.
5.21 p.m.
Mr. Raymond Gower: If I may say so with respect, this debate has been initiated with two very fine speeches but, listening to them, one would really wander whether the two speakers were talking about the same country.
Listening to the noble Lady the Member for Carmarthen (Lady Megan Lloyd George), one would really think that the problems and difficulties now confronting Wales outweigh the manifest achievements of the Principality. On the other hand, my hon. Friend, in initiating the debate, gave the impression of an industrial Wales which was not merely on the verge of great things but had already achieved a very great measure towards their accomplishment.
Opening a debate in the Welsh Grand Committee some two years ago, the right hon. Member for Llanelly (Mr. J. Griffiths) said:
"… while we warmly welcome the improvement that has taken place … we are still not yet out of the wood, and our main preoccupation is the livelihood of our people, and the prosperity of our communities."— [OFFICIAL REPORT, Welsh Grand Committee, 11th May, 1960; c. 5.]
Nobody felt able to take exception to those words at that time and it is just as hard to object to them today because, as the right hon. Gentleman then pointed out, there has been an improvement. I should describe it as a remarkable, a spectacular, improvement in the whole basis of the industrial economy of the Principality.
That improvement still continues. I submit to the noble Lady and to her hon. Friends that it is not incorrect for us to refer to a Welsh economic miracle in the post-war years. I do not believe that we should tire of emphasizing its size and its extent. What is particularly significant—and I say this in response to
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one point made by the noble Lady—is that the tendency towards industrial consolidation and expansion in Wales has continued even during the last eighteen months of some economic difficulty in the Western world.
That is borne out by the unemployment figures quoted by my hon. Friend, and by the figures published by the Ministry of Labour—only a week ago— on 26th July. They show a total number of unemployed of 26,542 in the whole of Wales—2·7 per cent. It is true that that is ·9 per cent. more than the United Kingdom average but, much more significantly, it is nearly 6,000 less than the 32,367 shown as unemployed in June of 1959. Such a reduction at a time of some economic difficulty is some evidence of the continuation of what I describe as the economic miracle of industrial Wales.
I recognise, of course—and the noble Lady was quite right to refer to it—that there are still parts of Wales with their special problems and that, in those parts, the proportion of unemployed is higher than the Welsh average, though I would emphasise that the numbers involved are not always as high as the proportions would signify. I hope that, fortified by the knowledge that in the largest part of industrial Wales there is now a high level of employment, my right hon. Friend will be able to give special attention to those problem areas to which reference has been made. He may also be encouraged by the fact that in several Welsh towns there are now many unfilled vacancies.
As I have said, in his speech two years ago to the Welsh Grand Committee the right hon. Member for Llanelly observed that we were not then out of the wood. That is still true today. Perhaps, in some degree, it will always be true— we will always have problems—but already there are signs that the problems will probably be those of an ever-changing society and of a dynamic, changing economy. We must certainly persuade our industrialists, executives, trade unions and workers that change is their ally as well as ours. On balance, it may fairly be claimed that in recent years industrial Wales has undergone the biggest transformation since the first Industrial Revolution.

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Above all, we are no longer wholly dependent on the old major basic industries of agriculture, coal mining, iron and steel and tinplate—and, of course, in North Wales, the slate quarries. Even some of these basic industries have been transformed and modernised. It is a matter of satisfaction to us all that South Wales and North-East Wales now produce such an enormous proportion of the strip mill sheet steel mentioned by my hon. Friend, and nearly all the tin-plate produced in the United Kingdom. Likewise, we must be encouraged to read in paragraph 45 of the Report that last year there were 120 cases of industrial growth as compared with 24 closures—a net gain of about 100.
Some of the matters causing anxiety, with which my hon. Friend is familiar, have already been referred to. There are particular difficulties in Pembrokeshire, Llanelly and parts of North-West Wales—and, indeed, in the Rhondda— [Interruption.] In this debate we are dealing predominantly with the industrial Wales. [HON. MEMBERS: "NO."] We have had special debates devoted to rural Wales, and I was advised that the Opposition wished today to concentrate on industrial Wales, and the employment problems of industry.
There is the undoubted fact that opportunities for would-be apprentices are fewer in Wales than in most comparable areas in the United Kingdom, and I hope that my right hon. Friend will give special attention to that. Does he not think that it might be desirable to extend Government-sponsored apprenticeship schemes for, at any rate, a limited time, until our new industries begin to create new opportunities of this kind? Although a good deal of anxiety has been expressed about the opportunities available for school leavers, I feel that some of these fears may have been exaggerated. Hon. Members will have been gratified by an Answer given to the hon. Member for Aberavon (Mr. Morris) by the Minister of Labour this week in which my night hon. Friend said that out of 303 pupils who left school in the Port Talbot area last Easter only six were unemployed in mid-July Last.
Mr. Morris: Is not the hon. Member aware of the anxiety now being
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expressed because of the coming bulge in school leavers?
Mr. Gower: I was saying that it must be encouraging to people who have expressed anxiety on this score to know that out of 303 pupils who left school last Easter only six were unemployed in the middle of last month. Evidently the economy of that part of Glamorgan has a remarkable power to absorb young people. Likewise, in the Cardiff area on 12th June this year, out of 1,852 unemployed, only 33 were described as boys and only 30 as girls. [Laughter.] Hon. Members may laugh, but I am referring to the classifications which are given in the official figures under certain headings. On the same date, according to the Ministry of Labour returns, there were about 2,000 unfilled vacancies in the Cardiff and district area.
Mr. Callaghan: Is the hon. Member aware that total unemployment in Cardiff on that date a year ago was about 1,800 but that it is now 2,500?
Mr. Gower: I was quoting figures for 12th June of this year, the latest figures I have received. They show a total of about 1,800 unemployed, including only 63 young people, boys and girls.
Mr. G. Elfed Davies rose —
Mr. Gower: I will give way, but I must make it dear that I am not trying to exaggerate anything or to make a partisan point. I am merely pointing out that it should be encouraging to know that young people are finding jobs, perhaps more easily than older people.
Mr. Davies: The hon. Member for Barry (Mr. Gower) seems to be giving the impression that there is no real problem and that all our fears are being exaggerated.
Mr. Gower: No.
Mr. Davies: The hon. Member said that the problem was being exaggerated. I would refer him to yesterday's issue of the South Wales Echo in which it is stated that—and this is reported as a result of a statement made by the Youth Employment Officer for South-East Glamorgan, Mr. Hubert Simlett—there is "hardly anything at all to be offered" in Barry.
Mr. Gower: I can assure the House that I was not in any way suggesting that the problem was being exaggerated. I was saying only that some of the fears could have been exaggerated, which is rather a different matter. I am producing figures to show that, certainly in West Glamorgan, school leavers were absorbed into jobs quickly.
When one considers the total number of unemployed in Barry, one must realise that out of a total population of 45,000 people there are a few hundred unemployed, while the number of unfilled vacancies is as great or even greater than the number of unemployed. That shows th extent of the problem in Barry. The number of unfilled vacancies in Cardiff is almost equal to the total number out of work
Mr. Callaghan: The hon. Member for Barry (Mr. Gower) really is exaggerating this. He is making too much of a partisan case. If the number of unemployed in Cardiff is one-third higher than a year ago and if the number of unfilled vacancies is halved, is the hon. Member for Barry surprised that people should express concern about the future? He knows that there are only half as many unfilled vacancies in Cardiff today compared with twelve months ago.
Mr. Gower: The fact remains that although certain fears were expressed last Easter, in two parts of the country those anxieties have been proved to be, to some degree at least, unfounded. It must also be remembered that an industrial undertaking in Cardiff, the great new Rover works, will add considerably to the number of jobs to be filled.
Paragraph 36 of the Report emphasises the high proportion of registered disabled persons in Wales; 11 per cent. compared with 7 per cent. for the rest of Britain. This is one of the more difficult problems which my right hon. Friend must tackle. There is another danger which continues to exist. Some areas are still too dependent on one or two industries. Driving through Merthyr Tydfil recently, I admired again the wonderful undertaking of Hoover Limited, but I could not help reflecting how much stronger the economy and industrial basis of Merthyr Tydfil could be made by the addition of a few more manufacturing industries, varying in character.
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In this respect the town of Caerphilly may well have provided a notable example to other parts of Wales. The Caephilly Council has prepared an industrial estate of its own, with essential services, and already this initiative has been rewarded by the creation in that area of new employing agencies. I am glad to see that a similar development is contemplated by the Barry Council, in my constituency. I should like to know what advice and encouragement my right hon. Friend may give to councils which embark on this sort of self-help because I feel that it should be greatly encouraged.
While the hon. Member for Carmarthen was quite right in calling attention to the very real problems which exist, I believe that those problems are outweighed by the magnitude of our achievements and the immensity of our opportunities. Wales, is, in many ways, a cause of envy among people resident in the North-East, in Scotland and in Ulster. They cannot understand why we have done so remarkably well in the years since the war. This has been a continuing process under successive Governments for which all hon. Members are entitled to a great deal of credit. However, I believe that all of this can be consolidated and extended. It would do us an ill-service to look only on the bleak side. Rather we should publicise these enormous achievements, not only in this country but overseas as well.
5.38 p.m.
Mr. Goronwy Roberts: I wish, first, warmly to congratulate the Parliamentary Secretary who made his debut so effectively on the Government Front Bench, but I warn him that now that he has discharged himself of that initial responsibility all privileges will henceforth be withheld from him. I wish, secondly, to welcome back among us my hon. Friend the Member for Carmarthen (Lady Megan Lloyd George), a constituent of mine, who made such an excellent speech. We are indeed proud of her and the high tradition which she wonderfully maintains in the House and in Wales.
The hon. Member for Barry (Mr. Gower) described what has taken place in Wales as an "economic miracle". I must confess that as a Welsh Presbyterian my own standards of

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the miraculous might be a bit higher. If the fact that there has been a decline in unemployment between 1959 and 1962 in Wales is an economic miracle, I wonder how the hon. Member for Barry would describe the increase of 6,000 in the number of Welsh unemployed since last year? I do not wish to lead the House into a divintarian argument, so perhaps the hon. Member for Barry will puzzle that one out himself.
Today's debate is one of a series which has taken place in the House in the past few weeks in which hon. Members representing constituencies in Scotland, North-East England, Northern Ireland and, now Wales, have taken part. All have deployed a common theme; the serious unbalance in the location of industry and population in Britain as a whole.
The Parliamentary Secretary to the Board of Trade said, quite rightly, that Welsh industrial problems cannnot be solved apart from those of Britain. This is precisely what we are saying, that until the imbalance of industry and population in Britain as a whole is solved by following a vigorous and consistent policy of distributing industry, Wales must be, as one of the traditionally depressed areas of the perimeter, one of the first to suffer.
The picture in Britain as a whole is that some areas are congested and others are being depopulated. Some areas have more industry than they can cope with —London and the South-East Region— and others are under-employed. Nearly one-quarter of the population of these islands now tries to live and work in London and the Home Counties, and the number is growing. The hon. Member for Bermondsey (Mr. Mellish) and his hon. Friends who represent London constituencies the other night kept up a gallant criticism of this Government on the subject of the tragic housing situation in London, with thousands of homeless, overcrowded schools and an intolerable traffic and transport situation.
This is happening at the time when, in Wales, Scotland and the North-east of England unemployment is twice or three times the national average. In part of my constituency it is about four or five times the national average, and that despite the fact that every year hundreds of our youngest and most virile workers
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have to go to London, Birmingham, Slough and Rugby to find work.
This imbalance and the evils which result from it arise from the Government's refusal to plan the distribution of industry. They either do not believe or are unwilling to admit that unless the country plans its industry, industry will plan the country. I travel between my constituency in Caernarvon and London twice a week. Almost every week, simply by looking through the train window, one can see evidence of the decline in Worth-West Wales and the increasing congestion of industry and traffic in the Home Counties. I sometimes feel that in a measurable time a vast conurbation extending from Daventry to Dover will have been created, leaving areas like North-West Wales and parts of Scotland as rural retreats for tired Manchester stockbrokers.
My right hon. Friend the Member for Battersea, North (Mr. Jay) gave some very interesting and disturbing figures to the House the other day on the subject of the imbalance of industry. Referring to the traditionally depressed areas of pre-war days, of which Wales was a melancholy example, he said that before 1939 these areas had been getting barely 5 per cent. of the total new factory space. He added that through the whole of the six-year period from 1945 to 1951 they got 30 per cent. I need not tell the House who was in power during the period 1945–51. London and the South-East Regions, which got about 50 per cent. of the factory space before 1939, had its proportion cut to 123 per cent. in those years after the war, and that turned the tide.
But what has been happening since 1951 when the party opposite came to power? The tide has turned back again and the share of the new factory space going to Wales and similar areas has dropped from the 30 per cent. which the Labour Government had secured for them to 18·6 per cent. in 1958, and the share of the new building in London and the South-Eastern Region, which had gone down to 12·3 per cent. under the Labour Government has now gone up to 21 per cent. So the tide is going the other way. In fact, the process is being intensified. These great office buildings continue to go up in London, accentuating the flow of labour and skill from

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Wales and the provinces; and we must remember 'that today office employment is numerically as important as factory employment in this country.
We want to know what objection there is to ceasing to allow these repellent egg-crate buildings to be put up in Kensington and Central London, and positively directing office employment to Wales on the analogy of the direction of the Ministry of Pensions and National Insurance to Newcastle and the Posit Office Savings Bank to another part of the country. Why should not that be done on an increasing scale so as to reduce the congestion and the difficulties which are already far too great in London?
Furthermore, all this vast office building is subject only to what one must regard as cursory planning control and is not governed by industrial development certificates. We suggest that, as a first step, office building should be brought within the I.D.C. system as factory building already is. Office building is just as much an industrial matter as factory building and ought to be subject to industrial development certificates.
It is not as if the Government lack the powers too check this Metropolitan expansion and the consequent denuding of the provinces and the countries of Wales and Scotland. There are considerable powers under the Local Employment Act, 1960. The trouble is that the Government are not using those powers. How has this Act worked in Wales? The Parliamentary Secretary has referred to the fact that 19,000 new jobs have bean created in Wales since this Act came into Operation. Why is it that during that period unemployment has increased in Wales? It has certainly increased since last year. The fact that the Act has not been applied with the requisite vigour and will leads us to believe that all it is doing is to conceal what is happening, namely an increase in unemployment, rather than to provide an aggregate increase in employment. But for this Act, there would be a greater increase in unemployment in Wales. That is about all we can say.
This 'brings me to the first of a number of suggestions that I should like to make. Let the Government apply with
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genuine vigour the provisions of the 1960 Act to the development districts which it is deemed to serve, and add to the schedule other districts in Wales where unemployment is a pressing problem. Let them also review the administration of the Act, simplify the process of application and cut out the repetitious and prevaricating techniques which the Board of Tirade too often uses in dealing with applications from small firms. Let them be a little more resilient and a little more generous in dealing with applications from small promising firms. One comes across examples of small firms which have been engaged for months in submitting facts and figures, often repeatedly, to the Board of Trade only to be told finally that nothing can be done, with no reason given. We think that there is a case for dealing with small promising firms rather less rigidly than the section of the Board of Trade responsible has so far done.
Secondly, in dealing with development districts like South Caernarvonshire, let the Government go ahead with a bold plan for advance factories. We have repeatedly urged the Government to use this technique in the kind of development districts we have in North and West Wales. It is peculiarly suited to those districts. The first six advance factories which were sanctioned, two of them in Wales, have according to the present Minister of Pensions and National Insurance, the Parliamentary Secretary's predecessor in office, proved completely successful. My hon. Friend the Member for Anglesey tells me that the advance factory set up in Holyhead was snapped up by an industrialist almost before the foundations were laid and it is today making a signal contribution to solving the unemployment problem of Holyhead and district.
I understand from the statement by the President of the Board of Trade last week that one more advance factory is to be sanctioned for North-West Wales. I take that to mean that the serious position in the area bounded by Pwllheli to the North and Ffestiniog to the South is engaging the Department's attention. My hon. Friend the Member for Merioneth (Mr. T. W. Jones) and I welcome this announcement, but we say— I know that my hon. Friend will say it in his inimitable way if he is called— that the problem here is not only one

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of a high and persistent level of unemployment but also one of scattered unemployment and difficulty of travel so that one advance factory in that rather elongated area may not have the impact which the Minister and the rest of us would like. We ask him seriously to consider sanctioning two advance factories for the area. I am sure that my hon. Friend will deploy the arguments in support of that.
The reference to travel difficulties brings me to support what has been said about railway closures. Of course, these methods of coming to the rescue of the traditionally depressed areas will be nullified if our railway system is abolished. At present, that is the threat. Practically every day we read about the intention almost to wipe out what railway system we have in North Wales. I very strongly support what my hon. Friend said about that. We understand that the Government propose to intervene in Scotland to stay Dr. Beeching's hand. If so, there is an equal case for their intervening in Wales to save the Welsh railway system, and not only to save it but to modernise and improve it so that it increasingly serves industry, both present and prospective, agriculture and our growing tourist industry.
It is said that the saving from all the ruthless railway closures in Wales will amount to about £1 million per annum. If these closures were avoided and a little more capital were spent on modernising and improving our railways, that £1 million would be more than made up by the gain in tourist traffic and, particularly, the gain in foreign currency which would accrue from a better railway system in the Principality.
I join in the plea made for not only retaining bus services in the rural areas but improving them and keeping fares down. Rural bus fares are climbing so rapidly and so high that they are becoming a charge on the worker and on industry. Constituents tell me that they now have to find up to £1 a week to travel from the villages where they live to their work in the nearest town four or five miles away. I urge that the Jack Report and other suggestions about maintaining the rural bus system and keeping fares down should be considered by the Minister.
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My concluding words I address to the new Minister for Welsh Affairs. We congratulate him on his appointment. We wish him well. We promise to cooperate with him in the interests of Wales. He has qualities which the Welsh, perhaps more than any other people, respect—a combination of integrity and intellect. I believe that he is prepared to listen. I hope that he is prepared to act. If he does, he will find that no people are more generous than the Welsh. If he does not, he will find that no people can be more implacable.
5.58 p.m.
Mr. W. G. Morgan: My first duty is a most pleasant one, to extend my warmest congratulations to my hon. Friend the Parliamentary Secretary to the Board of Trade on his promotion and on his admirable maiden speech from the Dispatch Box. I also extend my congratulations to the new Minister for Welsh Affairs. He, of course, is no stranger to us Welshmen in the House because, not very long ago, he was Parliamentary Secretary to his present Ministry. We are very glad to welcome him back in his higher status, and we have every confidence in him.
It was with some diffidence that I decided to take part in this debate because I had understood that it was to be devoted mainly, if not entirely, to industry in Wales. Since the constituency which I represent cannot, according to the usual meaning of the term, be described as industrial, I felt that I could not make any very effective contribution to our discussion today. However, I understand that the debate is rather more broadly based than I was led to believe at first, extending over the whole of the Government's Report. Indeed, we have been specifically invited to deal with one subject in particular, namely, agriculture.
At one stage, I feared that, by veering on to the subject of agriculture, I might be guilty of turning this Welsh day into a Welsh "saturnalia", as the late Professor W. J. Griffith characterised the Welsh day in the House because there was a tendency at one time to veer from one subject to another, leaving a rather formless impression at the end. I think it would be quite monstrous if this debate took place without any reference to that great industry, and also to

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the tourist industry as well. These are both industries of exceptional importance to Wales, and of paramount importance to my own constituency.
I do not propose to say anything with regard to the heavy industries of the south. I can leave that to the much more competent attention of my colleagues on this side of the House. [HON. MEMBERS: "Where are they?"] No doubt, their presence will be felt later when they will come back. No doubt, that matter will be dealt with very adequately by hon. Members opposite as well.
Before I go on to details, I want to make a few general observations, and, first, to associate myself very warmly with the cri de coeur of the hon. Lady the Member for Carmarthen (Lady Megan Lloyd George). I entirely agree with her, that it is most unfortunate that, on this one day in the year when we have the House of Commons to ourselves, our time should be truncated as it has been. This was no doubt unavoidable, and I shall therefore, try to apply to myself that self-denying ordinance that we are asked to observe from time to time in the Welsh Grand Committee. I shall be as brief as possible, in order to allow as many hon. Members as possible to take part in the debate.
Turning to the few general observations I want to make, first, I am very glad to read in the Report on Government Action which we are discussing that there are more jobs in Wales, that there is an increased demand for labour, and indeed, that, over the years, there has been a marked decrease in unemployment. However, I do not think that give us any grounds for being complacent, because there was plenty of room for improvement. Indeed, as the Report points out, one-third of those unemployed in Wales at the present time live in development districts, and the unemployment figures range from the modest percentage of 1·2 in Blaenau Festiniog, to the quite fearful percentage of 10·0 in other parts of North and South Wales. It appears that the comparatively low figure in Blaenau Festiniog is due largely to temporary works in the area. That is the impression I get from the Report, but perhaps the Minister could enlighten me in regard to this matter when he concludes the debate.
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I agree with the hon. Lady that because we have suffered such a high percentage of unemployment in the past, we are inclined to become unduly excited if our percentage of unemployment is only slightly more than the national average. We should be very excited indeed if the percentage came down to that level. I think that is an entirely wrong way in which to approach the problem. I do not think that we should down-grade ourselves, but that we should aim at beating the national average for employment.
I am particularly concerned with industrial developments in North Wales, which have already been dealt with to some extent by the hon. Member for Caernarvon (Mr. G. Roberts). I notice with interest that paragraph 44 of the Report contains two interesting but rather cryptic observations, on which I should like to hear more from my right hon. Friend. I would like to draw attention to them. The first reads as follows:
"Interest in the less industrialised areas of north and central Wales as a factory location was greater than at any previous time."
The second refers to—
"renewed interest in the industrial potentialities of the Principality."
I should like to know, in the course of my right hon. Friend's final speech in this debate, what the practical effect of this encouraging trend has been. I should be very grateful if he would enlarge on the Report in regard to that.
I am naturally very glad as a Member from North Wales to hear of the prospective developments there. No doubt, many would say that the achievements so far have not been other than modest. It is very easy to blame the Government for this, but I think there are two important matters which we should bear in mind, apart from the unavoidable misfortunes in regard to individual factories which are referred to in paragraphs 71 and 77 of the Report.
First, we must be absolutely frank and recognise that there is no easy solution to the problem of rural depopulation. Various panaceas have been put forward, particularly in Mid-Wales, such as new towns and that sort of thing. Personally, I think that the only way in which the problem can be tackled is by bringing small industries

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would could and would form the backbone of a rural community. I am thinking in terms of small industries employing not more than a score of workers, which could very well become the mainstay of a village community. Broadly speaking, it is much easier to introduce large industries into populous areas than it is to introduce small industries into thinly populated areas.
There is another point that I want to make in fairness to the Government, who have been subject to a good deal of unfair criticism in regard to this problem. It appears from such inquiries as I have been able to make that more use could be made of the Development Commission. The Government, I understand, are most anxious to help, but at times it is very difficult to find persons with initiative to introduce new industries, or, in some cases, to keep alive such industries as there already are in particular locations.
In this connection, there is one matter which I should mention, which was raised during the course of the Committee Stage on the Finance Bill by two hon. Members opposite—the hon. Member for Caernarvon and the hon. Member for Anglesey (Mr. C. Hughes)— and that is the question of investment allowances to attract industry into development areas. This was a matter most properly raised by them, and I was interested to see that my right hon. Friend the present Minister of Educacation, then Financial Secretary to the Treasury, expressed a certain sympathy with this idea. As I understood his argument, he turned it down for two main reasons.
The first was that it was unsuitable for new firms, because the essence of such allowances is that one must have income against which to set them off. He also said that, from the Revenue's point of view, they would be extremely difficulty to administer, especially when a place or an area was taken off the list. Dealing with these two points, I should have thought myself that such an allowance would be extremely attractive to a number of firms, anyway. Also I would not think it beyond the ingenuity of the Inland Revenue to devise a scheme whereby these allowances could be fairly administered. I am sorry to have to bring this matter up again, but
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in as much as sympathy was impliedly expressed by my right hon. Friend at the time, I am wondering whether this matter should not be considered again. It is a matter that should be looked into further, and I hope that my right hon. Friend will be able to persuade the new Ministers at the Treasury to reconsider it.
One last general observation, relating particularly to the industrial areas bordering on my constituency, and, to some slight extent, affecting my own constituency as well. It is an unfortunate fact, and we accept it, because the Local Employment Act, 1960 has to be rigidly administered, that the county of Denbigh has not benefited from it at all. The only area which, I suppose, could have hoped to do so was the Wrexham area, which, if I may quote an expression of the hon. Member for Wrexham (Mr. Idwal Jones), in the Welsh Grand Committee two years ago, failed by a decimal point to qualify.
It was suggested at that meeting of the Welsh Grand Committee, which, if I remember correctly, was the very first time the Committee met, that things were going to be all right an way, because there were to be developments on Merseyside which would deal with any unemployment problem in the area. I do not think that that, in itself, would be a very satisfactory solution, for the Wrexham area is a well-balanced industrial area at the present time; indeed, better than it has ever been in the past. It is not a good thing from the Welsh point of view, that there should be any planned migration from the area, which would certainly come about if, in fact, workers from that area were drawn to Merseyside. Let us not forget that for generations North Wales has been losing many of her best sons to the Merseyside area and that Central Wales and South Wales lost a very large part of its population in the same way during the years of depression before the war. This is something which we do not wish to see renewed. Indeed, I am sure that it is a trend that most of us would wish to see reversed.
I said earlier that I would say something about agriculture. I appreciate that we had a most interesting and instructive debate upstairs on this subject not long ago, and I do not propose to go over the ground which was covered

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then, but I think that I should make a few observations about this matter and stress a few important points.
I do not think that anyone could say the recent Price Review was well received in Wales or in the country generally. As I sought to say in the Welsh Grand Committee, in many ways it is defensible and in many ways has been unfairly criticised. It is certainly not open to the criticism to which the 1960 Price Review was. I myself felt very critical of that one. I am dealing with certain points of general application but of particular importance to Wales, a country of small farmers. What has caused a grievous upset is the reduction in the guaranteed prices of milk and eggs.
I quite agree—and this should be said in fairness to the Government—that we should not regard this Price Review on its own but should look at it in the context of previous Price Reviews. I cannot see that my right hon. Friend the Minister of Agriculture, Fisheries and Food had any course open to him other than to reduce the guaranteed price of milk in the recent Price Review. He made it clear that when a quite substantial increase in the guaranteed price was introduced in 1961 it was conditional on a scheme being devised and operated by the industry to avoid overproduction. Inasmuch as that scheme was not achieved, my night hon. Friend had no option but to reduce the guaranteed price.
There was a difficulty about eggs, because there had been a 5 per cent. increase in production in 1961, and a further 5 per cent. increase is expected this year. Thus, there was a grave danger of over-production of eggs as well.
One point on which my hon. Friend can perhaps help me is this. This is something which troubles the farmers in my constituency with whom I had an interview shortly after the Price Review at which certain criticisms were expressed. Although we are told about the dreadful consequences likely to follow from the over-production of eggs, there was a substantial importation of foreign eggs last year. What my farmers fail to understand—and I am bound to say that I fail to understand it myself— is this. If we are faced with a danger
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of over-production, why was there this quite substantial importation? If a satisfactory answer can be given to that question, it will be well received by the farmers in my constituency.
Another matter which will have been brought forcibly to the notice of the Government by a pronouncement of the National Farmers' Union on the recent Price Review is this. The Union published a booklet on the subject and made the point that the increased cost of Exchequer support to agriculture in 1961–62 was largely due to heavier imports, and it stressed that the events of the past year underlined the need for changes in the Government's import policy and the need for speedier recourse to the anti-dumping legislation which exists. I agree with that criticism and I hope that note will be taken of it.
It is, however, fair to make this observation. The Price Review is not wholly open to criticism. A great deal has been said about the reduction in the guaranteed price of milk and eggs, but it should not be overlooked that there has been in this Price Review an appreciable extension of the Small Farmer Scheme which has been of immense benefit to small farmers in Wales and elsewhere. The upper limit of the scheme has been extended to 500 man days, which, I understand, will mean that, whereas at the moment 6,200 farm businesses in Wales are helped under the Scheme, about 2,000 more will now come within its scope. That is a matter on which the Government should be congratulated.
Having joined in a criticism of the Government by the National Farmers' Union, may I say this in defence of the Government against the Union? I think that the Government were right to reject the request of the National Farmers' Union that the Small Farmer Scheme should be extended in another way, namely, by extending the acreage from 15 to 150 acres compared with the present 20 to 100 acres. If the upper limit is extended to 150, that is getting outside the scope of what is understood by a small farm. If the lower limit is decreased to 15, we are reaching the stage at which an agricultural unit is not viable.
A matter which I should like to bring as strongly as I can to the notice of my

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right hon. Friend is one that was raised at a recent meeting of the Welsh Grand Committee when my right hon. Friend was not Minister for Welsh Affairs. It is the question of an agricultural college for Wales. It is fair to say that the door was left ajar on that occasion by the then Parliamentary Secretary. This is something which should have fairly high priority. It is not a question of students not being able to find places in English agricultural colleges. The danger is that if they go to English agricultural colleges they tend to take jobs in England and they cannot be spared. That is a strong argument in favour of a Welsh agricultural college.
I appreciate that my time is limited, but I should like to say a few words about the tourist industry. This is one of our most important industries and one of our largest employers of labour. I was rather disappointed to see that there was not a special section in the Report dealing with this subject. The only thing I saw which excited me for a moment was a heading "Visitors to Wales", and I thought that this might be it, but it was not. This passage in the Report referred only to visits in connection with scientific and research establishments.
It would be impertinent of me to make detailed suggestions with regard to the tourist industry, because it is not one of which I have personal experience, but I think that I can usefully put forward two general suggestions.
The most important thing is that we should create a stronger image of Wales as a holiday centre. Holiday traffic in Wales is already substantial, but it is very small in relation to the country's potential. We are very short of the full development of our holiday potential. After all, we have a very much better chance than Scotland to attract tourists because we are situated much closer to the centres of population.
The second requirement is the need for good-class hotel accommodation throughout Wales. There has been some improvement over the last few years, but good-class holiday accommodation is concentrated round the coast, in some of the inland resorts and in a few scattered villages and towns in the hinterland of North Wales. If we tackle these two problems, it will be a good
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start in helping this most important industry.
I hope that I have not taken up an undue amount of time in making these few observations. I am sure that this will be a very useful debate. Indeed, all our debates, both in the House and in the Welsh Grand Committee, are useful. The criticisms raised are constructive and, on the whole, remarkably free from partisan bitterness. I hope that the new Minister will take note of the points put forward today as a means of maintaining and increasing our standard of prosperity.
6.19 p.m.
Mr. T. W. Jones: The hon. Member for Barry (Mr. Gower) opened his speech with the observation that Wales was a land of miracles. This is great news to me. The only miraculous thing about Wales is that Barry is represented in Parliament by a Tory. A Tory M.P. is a curiosity in Wales. Whenever I hear of anyone in Wales organising a bazaar, I advise the organiser to get a Tory Member of Parliament to open it to ensure attracting a crowd out of curiosity.
I am pleased to have this opportunity to take part in the debate, because it gives me an opportunity to bring to the notice of the House, and in particular the Parliamentary Secretary to the Board of Trade, a serious industrial outlook which is arising in my constituency. I apologise for the fact that on this occasion I am confining my remarks to my constituency, but I am prompted and encouraged to do so by the announcement made last week and repeated this afternoon by the Parliamentary Secretary to the Board of Trade that it is the intention of the Government to provide an advance factory in North-West Wales. He added that the exact location of such a factory would depend upon the availability of suitable land.
I support the appeal of my hon. Friend the Member for Caernarvon (Mr. G. Roberts) that the Parliamentary Secretary should go one step further and establish two advance factories. I am sure that it is his intention eventually to establish two or, possibly, three or four in Wales. If this is done now, I assure him that he will be worried no more concerning Caernarvonshire and

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Merionethshire. By deciding on one place in particular, however, for the advance factory which he promised, the Minister will split the local authorities of North Wales.
I remind the hon. Gentleman that Blaenau Festiniog is the only town in Mid-Wales which was designated under the Local Employment Act, 1960. Because of this, representation has been made by various authorities to establish an advance factory at Blaenau Festiniog. It was supported by the county council, the urban district council of the area, the Blaenau Festiniog Industrial Development Council and the Mid-Wales Industrial Development Association. That association was informed by the President of the Board of Trade on 14th February this year that the Government had no plans for providing advance factories. In that reply, however, the President of the Board of Trade stated that if the Government changed their minds and built advance factories, Blaenau Festiniog would most certainly be borne in mind. I am glad of the opportunity to remind the Parliamentary Secretary of that promise, because I sincerely believe that the President of the Board of Trade intends to fulfil it.
It would be natural for the local authorities and people to make a request, but I remind the Minister that even that large organisation, representing four counties, is equally enthusiastic to have this advance factory established at Blaenau Festiniog because of what we anticipate at the end of this year and next year due to the completion of two schemes.
This is what the chairman of that organisation wrote to the President of the Board of Trade on 17th March:
"I think you will agree that action is necessary at Blaenau Festiniog to meet the threat of unemployment following the completion of capital works schemes there in two years' time, but perhaps we have not made it sufficiently clear that in our view immediate and decisive action is necessary if this future problem is to be met and overcome. So far, all the agencies concerned have not succeeded in attracting industry to the Festiniog area and we feel that greater inducements will be necessary to stimulate the development which is so urgently required. We are not unaware of the difficulties but feel that your support of an advance factory project will be necessary if they are to be overcome."
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I am glad to have bean able to quote the chairman's letter to the President of the Board of Trade to have it on record.
I wish to deal with the facilities of Blaenau Festiniog. Let me point out first, however, particularly to the Minister for Welsh Affairs, that a desperate effort is made nowadays to preserve the Welsh language within the Principality and also to preserve the Welsh way of life. I know that colleagues of mine on these benches will argue that there is no such thing as a Welsh way of life, or an English or a German way of life, but I would ask them to go to Blaenau Festiniog. There, they will see that the difference between Blaenau Festiniog and, say, Manchester is infinitely greater than the difference between Manchester and Shanghai. Indeed, the Minister would have to take an interpreter with him. Welsh is the language which is spoken in every home. Welsh is heard on the street, in the church, in the chapel and in the schools —everywhere—and good Welsh it is, too, real Welsh. The Minister would find there the real Welsh way of life.
We want to preserve that community, and the only way to do so is to provide the people with employment.
The Minister for Housing and Local Government and Minister for Welsh Affairs (Sir Keith Joseph)The Minister for Housing and Local Government and Minister for Welsh Affairs (Sir Keith Joseph) indicated assent.
Mr. Jones: I am glad that the Minister concurs. That is the only way. Otherwise as my hon. Friend the Member for Caernarvon said, the people will go to Slough or to Luton—where I was speaking the other day, and speaking in Welsh. I made a prophecy, too, and I will repeat it. I asked who was the people's representative in Parliament, and they told me. I remarked, "I have heard of a faith that can remove mountains, but I have never heard of a faith that cannot remove a Hill." In a fortnight, he was removed. I assure hon. Members, however, that the Prime Minister never consulted me.
Let me point out to the Parliamentary Secretary to the Board of Trade that we have the land—12 acres—in Blaenau Festiniog. The land-owner is prepared to sell it tomorrow on condition that it is used for industrial purposes. Just

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where the land is situated, we have all the main services, including, of course, water. Whoever has heard of Blaenau Festiniog will not be surprised to know that water is there. There is a plentiful supply for all the demands of any factory. Right along that area we have main sewers within 50 yards of the site, and an 11,000 volt electricity line is within 150 yards. So there is every inducement to any industrialist to come to this part of Snowdonia National Park.
I am making my appeal in dead earnest this afternoon to the Minister seriously to consider an advance factory so that there will be no break up of that community, which was saved only three or four years ago because its people were generous enough to help the Government at that time to establish a pump storage scheme, even flooding some of their houses in order to provide electrical power to serve the nation. Now they are deserving of the best the Government can do, and whereas I am putting this from a constituency point of view I would ask the Minister to consider also the suggestion made by my colleague as well, that two factories be provided. If they are, I think he will have a report next year which will be worth reading.
6.32 p.m.
Mr. Ifor Davies: It is always a great pleasure to follow my hon. Friend the Member for Merioneth (Mr. T. W. Jones). I shall not compete with him in his claims for his constituency, but I shall be making some reference to mine later.
There is a popular theme that the problems of Wales industrially have beer solved, and especially in South Wales, but I want to deal with problems still with us. I want particularly to deal with Chapter II of the Report, the chapter dealing with employment and industrial development.
The Parliamentary Secretary referred to the "good story" he had to tell. I join with my hon. Friend the Member for Caernarvon (Mr. G. Roberts) in congratulating him on his appointment. We have had experience of the Board of Trade, and sometimes we have the image that it is the Goliath of resistance to our claims. Now that we have a David there I hope he will help us to cope
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with Goliath. As I said, the Parliamentary Secretary told us he had a good story to tell, but there is another story, and it is that other story to which I want to draw the attention of the House. The hon. Member for Barry (Mr. Gower) said that there was a miracle of a story. There is a miracle of a story of neglect to be told, too.
I draw attention especially to the problems of closures affecting our development districts. I have heard it said in the Lobbies that perhaps we were unwise to have chosen this subject for debate, because things have gone so well, but I want to draw attention to problems which I consider the Government have been far too complacent about. Indeed, in the speeches we have heard from the other side of the House so far in this debate, and in the speech of the Minister, too, there has been far too much complacency about the problems.
We have heard about the new jobs which have been created. Of course, there have been new jobs, but it is no use talking about new jobs unless we relate them to the jobs which have disappeared. Since figures have been mentioned I draw attention to the fact that since the war, in the last fifteen years, we have lost 100,000 jobs in the traditional industries in South Wales alone, so that the new jobs created have been offset by the jobs which have disappeared, a point brought out by my hon. Friend the Member for Carmarthen (Lady Megan Lloyd George).
This is revealed by the unemployment figures themselves. I do not propose to go into an argument on the unemployment figures. The statistics will speak for themselves. Paragraph 21 of the Report exactly states the fact that the unemployment figure for 1961 was lower than that for 1960. But what are the figures now? The figure for July—and it is official—is 26,000, which the hon. Member for Barry correctly quoted, and that figure has to be compared with the figure for this time last year, 24,000. Ten years ago it was also 26,000. It is 26,000 today. The grave consequences of the situation is brought home to us particularly in paragraph 22 of the Report and in a comment made by the hon. Member for Denbigh (Mr. Morgan). It is that nearly one-third of the unemployed in Wales live in the development districts. That is the issue confronting

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us. Whereas the unemployment figure for Great Britain today is 1·8 per cent. in the development districts it varies from 9 per cent. to 4 per cent. With the greatest respect to our Scottish friends—there was one here earlier, and I see another coming in, and I am glad to welcome him—the situation in some of our development distracts is quite as bad as that in Scotland, Indeed, with the continual closures of some of our older industries the position is even worse.
The Government are entitled to argue that they have made an effort by the introduction of the Local Employment Act. It was meant to deal with those areas, and it is relevant to this debate to remind the House of the main purposes of the Act. Here they are. First, to have regard
"to the proper diversification of industry".
That was the first, and the second was
"for the purpose of providing employment … appropriate … to the needs of the district."
I emphasise those wards, "appropriate to the needs of the district."
In the light of those noble purposes one would have thought that the Government, knowing that redundancies were to occur in the development districts, would have taken positive action. But what has happened in practice? The Minister mentioned a township in my constituency. He will forgive me for making a constituency point. The Government, since he referred to it in paragraph 55 of their Report, refer to the situation at Pontardawe and say:
"In view of the likely eventual closure of the steel works in this town …"
So the Government knew of the likely closure. What did the Government do? That likely closure is now announced as a fact, and this township will lose the last of its great industry, an industry which has made a tremendous contribution to the traditional steel history of this country. That industry will close at the end of this month—it will be a very sad day. There are delicate negotiations proceeding. I hope they will be successful. But the present situation is that that industry will close, and that will affect 400 men, but the point is that the Government knew it was likely to close. What did they do? Did they have due regard to
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the situation and did they have due regard to the unemployment which would arise? They took the wrong action, to my great regret. They took the area off the priority list. The attitude of Richard Thomas and Baldwins, which is involved in this matter, was very different. I take this opportunity of paying tribute to the company, Which has often been criticised in the House, for the humane way in which it has dealt with the situation. After the appeals last year, it continued the industry not only for a few months but, in face of great difficulties, for twelve months. I pay tribute to the managing director, Mr. Henry Spencer, for the very humane way in which he has co-operated and for the understanding that he has shown. No words of mine can praise his attitude too highly. I find a very great contrast between his attitude and the Richard Thomas and Baldwins board and the attitude of the Government in taking away the last kind of incentive to a possible incoming industrialist.
We sometimes belittle the opportunities given to areas through being on the list, but whatever we may argue about the value or otherwise of being on the list, I am certain that being on it is a factor which may weigh in the balance to an industrialist thinking of coming to an area. So I plead with the Minister to reconsider the present position in Pontardawe. The area is facing great difficulties, and I plead that it should be given this opportunity to encourage industries to go there. It ought at least to have the help of the Government in being put back on the list.
I turn to the development districts themselves, one of the great issues of this debate. The present serious situation calls for drastic action by the Government. Incidentally, I welcome the initiative taken by the chairman of the Welsh Board of Industry, Captain Davies, a constituent of mine, and the concern that he has shown about the seriousness of the matter through his act, according to a Press report, in approaching the chairmen of other boards over this matter over encouraging alternative industries to Wales.
But the Government, and especially the Board of Trade, must take more positive action themselves. Alternative jobs must be found for the redundant workers. This cannot be done as a last-minute effort, and we have a feeling that

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that is what is happening. We need to estimate the loss of jobs likely to occur, and plan accordingly, and such plans can be implemented only by a far more vigorous policy to provide inducement to firms to go to the Welsh valleys. The Government must put their words into action. They must have regard to the diversification of industry and the provision of employment in the development districts. The important words are:
"… the provision of employment appropriate to the areas".
Those are significant words, and they are the Government's words.
I have heard it said in many quarters by those who are themselves secure that people must be prepared to uproot themselves and go elsewhere. But many of the people concerned are middle-aged and many are owner-occupiers. Why should they be expected to up-root themselves? Why should the valleys of Wales, rich in culture, be destroyed? What right have the Government to stand aside and say, as some industrialists say, that those people should go to other areas? What the Government ought to do is to be extremely tough—I emphasise that word—in refusing to allow firms to set up establishments in London, the South and the Midlands. That would be extremely helpful.
Sir K. Joseph: I have not intervened before, and I do not do so now for any negative purpose. But hon. Gentlemen must recognise that the President of the Board of Trade is being extremely tough. If it were as easy as just being tougher, there would not be a problem. I hope that in their speeches hon. Gentlemen will take account of the real difficulty. I assure the hon. Gentlemen that we are being very tough.
Mr. Davies: I accept that—
Mr. Harold Finch: What about office buildings?
Mr. Davies: —but the facts and the statistics are before us and there are many areas where industrialists have not gone. The Board of Trade has power in its hands through the industrial development certificate procedure, and it must use its power more vigorously.
I very much welcome the fact that the Government have conceded the case
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for advance factories. I am very glad that Scotland is to have six. The South-East is to have two, but Wales is to have only one. My hon. Friend the Member for Merioneth (Mr. T. W. Jones) has made a claim for another, and I now put it on the record that I claim another.
The Toothill Report on the Scottish Economy has made an excellent case on the need for advance factories. What it says is very applicable to Wales. Paragraph 20 says:
"The customary arguments against the building of advance factories are that whatever size or type of factory is built, or wherever it is built, it is unlikely to match the particular needs of the particular industrialists who wish to expand at the time it is available, and that industrialists generally prefer a factory tailor-made to their requirements."
Its answer is that these are considerations, but:
"It is, however possible to design factories with sufficient constructional flexibility to be readily adaptable to a wide variety of use in terms of design and space, and we are satisfied that in many cases the availability of such a. unit can be a deciding factor in an industrialist's choice of location."
That case is equally applicable to Wales. Consequently, I repeat the claim for more advance factories in Wales.
There is another aspect of our unemployment problem and the situation referred to in the Report which we cannot ignore, and that is the almost forgotten army of disabled persons, about whom far too little is said. I invite the House to consider how serious the position is. Paragraph 36 of the Report confirms that the proportion of registered disabled persons who are unemployed in Wales is 11 per cent. compared with 7 per cent. in Great Britain. What is not sufficiently known is that there are two categories of disabled persons. The chairman of Remploy has asked for greater publicity to be given to this point. Section 1 consists of disabled people who can find employment in ordinary industry, but Section 2 consists of the severely disabled, the forgotten army, who cannot find employment except in special conditions. The latest figures show that 14 per cent. of the disabled unemployed in Wales are severely disabled. What real effort is being made to help them?

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I pay tribute to the disablement rehabilitation officers and the Ministry of Labour officials which do a great deal of work in this connection. I speak with experience as an ex-member of the Disablement Advisory Committee. But the fact is that there is only one organisation for employing severely disabled people—Remploy. There are only 13 Remploy factories in the whole of Wales. Between them they employ 1,000 people, and we still have 663 looking for work. At present they have no hope. What about the "miracle of recovery"? What about all this "boasting"? When we have 663 men with no hope of employment unless something is done about Remploy.
This is not criticism of Remploy. Remploy factories are a great success, and far too little is known about them. May I remind the House that last year Remploy sales reached the record figure of £5,557,000, am increase—and a challenge to other sections of industry—of 24 per cent. in two years. Equally significant is the increase of 27 per cent. in the net output per man from £328 to £448. Surely these remarkable figures justify more Remploy factories.
I should like to answer some criticisms made against Remploy in many influential quarters—criticism of its excess of expenditure over income. Severely disabled persons cannot be expected to equal the output of able-bodied persons, yet the products of Remploy have to be sold at commercially competitive prices. In monetary terms Remploy can never make a profit, but in terms of human happiness, it can never make a loss either, far its purpose is not profits but to give new life and new hope to those people. I ask the Government and the Minister to give new hope to these 663 severely disabled persons.
My last comment on the Report is that I share the concern expressed today and in the Report about the problem of youth employment and the provision of apprenticeships. Wales lags behind the rest of the United Kingdom. The average for the country is 38 per cent. but the percentage of Welsh boys securing apprenticeships is 28 per cent. We still have this low percentage despite the very excellent efforts of some of the larger firms, Richard Thomas and
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Baldwins, S.W. Switchgear and nationalised industries. I pay tribute to the National Coal Board in particular, which has an excellent record, and to the electricity and gas industries. But what about the smaller firms?
The chairman of the Welsh Board for Industry said at a meeting in Cardiff last week:
"… the larger firms were doing more than their share in taking on apprentices, but the smaller firms 'have not yet awakened to their responsibilities'".
We tend to forget the important part played by small firms in this matter. The fact is that 96 per cent. of the industrial firms of this country employ fewer than 500 people. Who will wake them up? Whose responsibility is it? Whose job is it to do this? The Government continually say that it is a job for industry. I say today that industry has fallen down on the job. The evidence points to the fact that industrialists have failed in the task and I hold the view that it is time that the Government intervened— I am not asking them to control, if they do not like the word—in order that we may have that new approach which I feel is necessary. I ask the Government to seriously consider the recommendations of its own Committee, the Central Advisory Council for Education (Wales). It states on page 51:
"Since the future prosperity of the country depends on, among other things, an adequate supply of competent craftsmen, the Council regards the responsibility of recruiting and training craft apprentices as a national one. The postion in Wales differs in many respects from that in many parts of England and in the opinion of the Council the only satisfactory solution would be the establishment of a national craft apprenticeship system."
That is a recommendation which I ask the Minister to consider.
This is not a matter which needs long consideration. I put it to the Minister that it is urgent. We are holding this debate at the very moment when school-leavers are at their highest peak. We have reached the high-water mark. The bulge today according to estimates is 36,000 boys and girls, an increase of 33¼ per cent. over two years ago. The transition from school to work, apart from the 11 plus examination, is the most important moment in the life of a young person. From the point of view of the individual, finding the right job and being properly trained is most important

865
to a boy or girl's future happiness, but from the point of view of the community the training of our youth is paramount if we are to use our human resources to the full. I say to the Government that there is no time to lose for industrial training lies at the heart of industrial efficiency and competitive power. The school bulge is a great challenge and it is also a great opportunity to secure the potential skill which we must have to safeguard our greatness as a manufacturing nation. I ask the Government to take note of this serious matter and to take action.
6.56 p.m.
Mr. Donald Box: My hon. Friend the Member for Denbigh (Mr. Morgan) referred to the tourist industry in Wales. During the earlier part of the debate today those courageous English and Scottish Members who ventured into the Chamber may have been put off by the very dismal and depressing picture of Wales which has been portrayed by hon. Members opposite. I would advise those who may have planned to spend their Recess or part of it in Wales not to go out hastily and cancel their bookings because I can assure them that that picture is altogether too depressing.
The hon. Member for Gower (Mr. I. Davies) referred to Remploy. I am sure that is a department of employment with which we are all sincerely sympathetic. We recognise that Remploy gives disabled people an opportunity to play a full part in the economy of Wales. We welcome any help that can be given to them in the furtherance of their occupations.
I join in the general welcome to my right hon. Friend the Minister for Welsh Affairs and the Parliamentary Secretary to the Board of Trade. I was particularly interested in my hon. Friend's observations during his opening speech when he told us that no fewer than 19,000 new jobs had been created in Wales since the advent of the Local Employment Act. I particularly remember this Act because one of the first debates to which I listened was that on the Second Reading of the Local Employment Bill, in November, 1959. I doubt whether at that time I realised the full importance or the true significance of that proposed legislation to the
866
unemployment situation in Wales; but I do now.
I now realise that the Local Employment Act has done much to resolve some of the knotty unemployment problems in certain difficult parts of Wales, and where it has not solved those problems it has provided the basis for a solution. It has done more perhaps in that direction than any other legislation this century, with the possible exception of the Special Areas Act, 1934, and the Distribution of Industry Act, 1945. I do not wish to be disparaging in any way about any one of those three pieces of legislation when I say that they can be likened to the cars of their day: the 1934 model, sometimes cumbersome, now considered almost vintage, but particularly appropriate to the time; the 1945 model that was definitely a utility job but which, none the less, was a courageous attempt to deal with the post-war unemployment problem of Wales; and now the 1960 model, the more up-to-date version, streamlined, with better acceleration and certainly a little more flexible on the steering. It is reasonable that we should consider the relationship of the 1960 model to Wales, to ascertain whether it is working satisfactorily and whether any modifications or improvements are required.
To say that the Act has been an outstanding success would be far too sweeping a statement, for that would mean that the pockets of chronic unemployment which unfortunately still exist had been eliminated, and that is not so. However, I think that the Act has gone a long way towards helping to resolve the unemployment problems in the more difficult parts of Wales.
We must remember that the redistribution of industry under the Act is a matter of friendly persuasion rather than out and out direction. While the president of the Board of Trade cannot compel an industrialist to go to an area of high unemployment, he can, by the deft use of what I call his two persuaders —industrial development certificates and financial and factory inducements—give industrialists a firm but none the less gentle shove in the right direction. In other words, by refusing to grant a certificate in an already congested area, or by offering financial or factory inducements

867
in areas where employment is urgently required, he can assert the powers given by Parliament in 1960.
It is fair to say that we in Wales would not be enjoying the employment opportunities that have been given or are to be given by such firms as B.M.C. at Llanelly, Pressed Steel at Swansea, and the Rover Works at Cardiff, had it not been for the workings of the Board of Trade in conjunction with this legislation.
I know that some hon. Members opposite would like to go much further and compel industrialists to go to areas of high unemployment. I think that it is fair to say that in the past some of them have flirted with the idea of the direction of industry. So far as I am aware, during their period of Government, however, they never took power to do so, but I see from their more recent policy statement that they have the intention, if re-elected, to direct industry to high unemployment areas.
Mr. Llywelyn Williams: Will the hon. Gentleman remember that my right hon. Friend the Leader of the Opposition, in the Scottish debate recently, disavowed completely the idea of directing industry?
Mr. Box: That is an extraordinary statement by the hon. Gentleman. In page 13, Signpost for the Sixties, the most recently published document of the Socialist party said
"In consultation with the Government Department concerned it would direct industrial expansion to areas where labour is available and where new work is needed."
The word "direct" is used there.
Mr. LI. Williams: By licensing.
Mr. Box: The hon. Member has a morbid preoccupation with direction. I prefer persuasion.
In using his persuasive powers, the President of the Board of Trade has to weigh up a number of matters in any situation. If he is putting up an expensive factory—and unfortunately today all of them are expensive —he has to make sure that not only will it be put to full and effective use but that its occupation will be as permanent as possible.
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I can conceive nothing worse than a series of Board of Trade factories, built at vast expense with the taxpayers money, standing empty and idle in various parts of Wales. It may sometimes happen that a manufacturer tries to develop a new industry or to extend an existing industry from one of these Board of Trade factories, but that owing to conditions which may be entirely out of his control, he fails and has to vacate the premises. Somehow or other, the Board of Trade has to have second-sight or a crystal ball, and be able to cope with this situation in advance.
The whole emphasis, therefore, must be on flexibility, for just as the Treasury and successive Chancellors of the Exchequer have indicated in the past that they intend to use the Bank Rate as a more flexible instrument in dealing with financial problems, so the President of the Board of Trade has power, under the Act to include an area where unemployment is high, to exclude it if the position subsequently improves, and then include it again if the position deteriorates.
Several hon. Members on both sides of the House have mentioned examples of this in South Wales at the present time. Llanelly was originally on the list, was subsequently, because new jobs were found, excluded, and now, as the result of the closure of some of the more outdated steel mills, is to be included again. That is what I mean by flexibility. Although I do not in any way intend to underestimate the hardship or the difficulties the area is going through, I do not think that, as a matter of policy, we should be too alarmed at the prospects of an area being put back on the list, provided always that to do so solves, or tends to solve, its unemployment problem.
Mr. G. Elfed Davies: We in the Rhondda are not so much concerned with what is going on and off the list. We are concerned with having been on the list throughout the period of the Act so far. We are worse off even than when it started.
Mr. Box: The Rhondda has always presented special problems. I am certain that the fact that it is on the list means that representatives of the Board of Trade do their utmost to provide new factories and new jobs for the people

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there. The main difficulty seems to me that, with the maximum amount of foresight and the best will in the world, the Board of Trade simply cannot conjure new industries out of thin air and at short notice.
For example, as we have heard, the total unemployment figure for Wales at present is in the region of 26 or 2·7 per cent. But at the same time the number of jobs unfilled and in prospect—by that I mean as a result of projects which have had governmental approval—more than equal the number of wholly unemployed in Wales.
Mr. George Thomas: It does not mean a thing.
Mr. Box: Perhaps the hon. Gentleman will be patient.
Unfortunately, as we all know, jobs and unemployment rarely pop up in the same place at the same time. There is considerable need for greater mobility of labour, particularly amongst the younger people. While some advance has been made in this direction, there is obviously still tremendous scope for further improvement. It will always be easier to get workers to jobs rather than jobs to workers, though we must always be trying to reverse the process.
Whatever the causes of unemployment in certain difficult areas, I am sure that the best way to aggravate the problem is to present a picture of gloom and despondency when referring to these less fortunate areas. We have heard, I regret to say, examples of this from hon. Members opposite today, but that is nothing compared with the sour and cynical remarks of the noble Lord, Lord Ogmore, when speaking on this subject in another place a short while ago. Apparently expressing the Liberal views of Wales, he said that the principality was dying and that there was complete anarchy and chaos in South Wales. What a complete travesty of the truth that is. During the rest of his speech he had not a single kind or encouraging word to say about Wales or the Welsh people. He paid no tribute to their courage, their integrity, their ability, their loyality, their versatility their tenacity and their pluck—just a final sneer at what he called their
"… neglect, sloth and materialism."
Mr. LI. Williams: On a point of order, Mr. Speaker. Is it in order to
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quote verbatim from a speech made in another place?
Mr. Speaker: It is quite in order.
Mr. Box: The speech went on:
"We see that through neglect, sloth and materialism … our nation is in grave danger."
Mr. G. Thomas: Further to that point of order, Mr. Speaker. Is it in order to quote and criticise speeches made in another place in the same Session? If it is, I should be pleased to have a chance to do so.
Mr. Speaker: I think that within limits we usually allow it now.
Mr. Thomas: Did you say "Yes"?
Mr. Speaker: I said that within limits we usually allow it now, but obviously to quote great tedious portions of speeches in debates in another place would be out of order.
Mr. Box: I should draw the attention of hon. Members to the fact that they did not escape. This is what the noble Lord also said:
"I am very proud of what the Labour Party did. I never denied that when I was a Minister of a Labour Government I am only sorry that they have departed from the high standard that they had then. I did not leave the Labour Party to be less radical, but to be more radical, because they were becoming so engrossed with the past."— [OFFICIAL REPORT, House of Lords, 2nd May, 1962; Vol. 239, c. 1026–29.]
The most charitable thing one can say about his efforts to decry Wales in this way is that the sooner he returns to live in Wales the sooner he will appreciate how inaccurate, mischievous and unjust his allegations were. I hope that hon. Members who represent Liberal interests will refute these statements when they have an opportunity to speak.
During the difficult transitional, and admittedly sometimes painful, stage of reorganising the rail, coal and to a lesser extent the steel industry, we recognise that there is bound to be some hard-ship and some redundancy. For this reason I welcome the announcement by the Prime Minister, made only last week, that legislation is in hand to provide contracts of service for workers in future. I should like to think that the nationalised industries and many big industrialists are already honouring this

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idea by negotiating redundancy payments where appropriate. When a nation is cutting its losses as we are cutting our losses in the coal and rail industries and those losses amount to many millions of pounds a year, it is surely worth negotiating a lump sum, perhaps in conjunction with and to be distributed in co-operation with the union concerned, in order to settle the matter once and for all without the acrimony, the bitterness and sense of injustice that invariably has prevailed in the past. I think that we are losing something like £12 million on the nationalised coal industry in Wales but if it were to cost £100,000, £200,000 or even £500,000 surely it would be worth while if we could settle the matter fairly and once and for all.
In spite of these upheavals, anyone who has lived in South Wales in recent times cannot help but marvel at the transformation which has taken place in conditions in recent years. Despite this, I believe that we are only on the threshold, only at the beginning of the real growth potential of Wales for the benefits from the industrial revolution which undoubtedly is taking place in South Wales at present must be to the ultimate benefit of Wales as a whole. I believe that there is an avalanche of investment money waiting to pour into suitable investment opportunities in Wales at this time. I hope that, as time goes on, more and more industrialists will endeavour to get their capital from these private sources rather than from the Board of Trade. This would not only encourage more private capital investment in Wales, but at the same time it would free the resources of the Board of Trade for the areas where those resources are most urgently required.
Whether this finance is provided from private or public sources, there is no doubt that industrialists who are expanding their businesses in Wales would be well advised to consult the Board of Trade earlier in their plans rather than later. They should take the Board's advice as to suitable location for industry in Wales at the beginning of their plans and not leave it to what I would call the industrial development certificate stage. With their specialised knowledge of the area, with their know-
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ledge of employment conditions and trends for the future the Board of Trade is in a special position to show the advantages and disadvantages of any particular area.
I believe that the advantages are likely to become more apparent as the tremendous road improvements to which my hon. Friend the Parliamentary Secretary referred, which are now well under way, are completed in the next year or two. As traffic speeds from the Midlands by motorway through South Wales to the West in a couple of hours or so and London to Cardiff becomes a three-hour journey by road via the M.4 and the Severn Bridge, so the lure of the West will prove irresistible to the great industrial giants of Great Britain. This trend will become more pronounced if Britain is successful in negotiating entry to the Common Market, for not only shall we then be able to offer these industrialists good sites, skilled labour and pleasant surroundings in which to live, but also we shall be able to offer them nearby port facilities from which to supply the Common Market.
It will then be possible to ship Welsh coal, slate, chemicals, cables, cars, cement, washing machines, refrigerators, aluminium, nylon and textiles—to mention only a few items—to Europe from any one of four or five South Wales ports within a radius of twenty miles or so, and in many oases very much nearer to the industrial centre. With the main European ports only a day and a half sailing away, this could open up a whole new era for South Wales ports provided they are prepared to forget past glories and get up to date and modern in their approach to the new situation.
A great deal of course depends on the reactions to the Rochdale Committee's Report, which is expected very shortly, on port facilities generally and, in our case, on port facilities in South Wales in particular. It depends on the reactions to that Report of the docks interests, the Transport Commission and the local authorities. In this respect some local authorities have been especially enterprising. I saw the right hon. and learned Member for Newport (Sir F. Soskice) present a little time ago. The local authority of Newport has been especially enterprising in attracting new trades to its port. I was equally glad

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to see the new ring road from Newport to the docks of Cardiff well under way last week.
The Rochdale Committee's Report may contain many unpalatable recommendations, but those must be examined in the light of the evidence of competition which we in Wales will experience and which we are likely to face both at home and abroad in future. I think we shall face that competition whether we are in or out of the Common Market. For this reason, we must modernise and improve our factories and equipment wherever possible. There are still some industrialists who stubbornly refuse to recognise the need for model factories and up-to-date equipment if they are to get the maximum production at really competitive prices. We must increase training facilities and make sure that we are able to make the maximum use of the natural skills of the Welsh working people.
In this regard, I welcome the establishment of a new training centre in Cardiff. I also see that a large training centre is being set up by the Steel Company of Wales at Margam. These are a start, but there is room for many more to follow this fine example.
We must encourage the establishment of more research laboratories in our industrial areas, for there are still far too many large companies which, while they have their production units in Wales, establish their research departments elsewhere, and that means that many of our best technicians, many of our best technological brains, have to leave Wales to find suitable employment elsewhere.
Lastly, we must attract back those Welsh men and women who left our country in the past because of lack of opportunity. We have to prove to them that great opportunities exist there for the future. I urge them not to be discouraged by the out-dated and old-fashioned Socialist and Liberal philosophies expressed on the benches opposite but to re-visit Wales and to see for themselves the far-reaching improvements which have taken place. If they do so, I know that they are bound to agree that Wales stands out as a land of expansion, progress and opportunity.
7.22 p.m.
Mr. Arthur Pearson: We are today rounding off the screening of Government action in Wales after full debates in Grand Committee on very important subjects. Those Grand Committee debates left Ministers bruised and battered. After that battering the former Minister of Housing and Local Government and the former Parliamentary Secretary to the Ministry of Agriculture were removed from their offices.
I should like to pay tribute to my hon. Friend the Member for Carmarthen (Lady Megan Lloyd George), who so ably opened our debate today. Tone and matter were excellent. We need to remember that she had to shoulder this responsibility of opening the debate after a recent illness.
The hon. Member for Cardiff, North (Mr. Box) referred to the depressing picture painted of things in Wales by hon. Members on this side of the House. I do not think that the picture has been over-coloured. The speeches of my hon. Friends have been most temperate and constructive. The hon. Member for Cardiff, North talked about not being able to conjure new industries out of thin air. With that approach I am afraid that nothing would have been achieved in the past. It is not fair to try to convey to the House that what has been achieved in Wales in industrial development has been achieved in the last four or five years. The hon. Member for Carmarthen paid the usual courtesies to the new Parliamentary Secretary to the Board of Trade, but the figures which he gave of unemployment in 1937 show that it has taken 25 or 30 years to bring about what we see today in Wales.
It is recognised on these benches, in considering industrial development in Wales, that certain areas have a wide range of diverse, lively and promising industries. That is undeniable. Government pressure and public finance, channelled through various agencies, have brought good results. Excellent supporting action came from local authorities and from voluntary organisations.
I have been impressed by the executives of these new industries, whose high quality, enthusiasm and enterprise are doubly welcome. They will, I feel sure, considerably influence our industrial

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growth in future years; together with the fine body of men and women in the factories whom they lead, they are at last giving reality to the slogan that Wales is a land of opportunity.
It is true that from time to time some of the industries are under a cloud and that a few have closed down, but the consequent difficult and daunting troubles fasten our eyes on the misfortune of lessened employment. This House cannot face these happenings with indifference. Unemployment, even in small pockets, brings a loss of dignity and suffering to the whole family. It is the stain which so often discolours the record. To those who suffer in this way, every sympathy is extended. I want the talents and the skills of the people now unused to be fully engaged, if possible within the localities in which they live. We must remember that the capital expended in those localities, in houses, in schools, in public health, in roadways, and in the relations which have been built up in those constituencies, is substantial. The labour is there and if possible it should be used on the spot, thus avoiding exhausting and expensive daily travelling to and from work. Whatever development agency may be brought to bear to bring effective help to those areas with heavy unemployment, let it have the concentration and urgency which the problem demands.
The point reached in our industrial development should engender a resolve to hold on to what we have and from there to thrust ahead. No one will say that this is an easy path, for it involves the hazards of the future. It calls for wise steps to be taken now so as to entrench the gains and to win new ones. Let us remember that a boy entering industry in 1962 will probably still be in industry in the year 2000. There is need to equip him adequately so that he can take his place in the pattern of the future. Present trends indicate that he should be guided, if he has the talents, towards the need for scientists, technologists and technicians.
Matching our wants in those directions is of the utmost importance. Hence I feel the need to bring into review Chapter V of the Report on Developments and Government Action in Wales in regard to the problem of research.
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We know that this is essential to modern development.
Is the promotion of research a tide flowing strongly enough? What percentage of qualified scientific staff does Welsh industry employ? The hon. Member for Cardiff, North said that many research departments for industries in Wales are situated outside Wales. He may have some instances in mind, but I remind the House that British Nylon Spinners has over 100 graduates in its research department alone and possibly more than that in other departments of its great undertaking. The Distillers Co. has 150. It costs these firms a goodly sum for each of these graduate personnel. A graduate in a research department possibly costs any industry £3,000, £4,000 or £5,000 per annum.
A sign of the times is that the Department of Scientific and Industrial Research has had a branch in Cardiff for upwards of eight years specifically to promote and push forward the application of research to trade and industry. Is it being nourished sufficiently? During its short period in Cardiff the pitifully small number of qualified staff in this Department have most usefully given their energies towards helpful forms of activity.
Paragraph 318 of the Report states:
"In addition to the normal activities of the office which include dealing with technical inquiries, visits to industry, collaboration with research organisations … the office was responsible for the conception and organisation of a two-day major national conference and exhibition held at Swansea …".
on the subject of "Science and industry —the problem of communication". This is an immensely important problem. The proceedings have been printed. Within its pages there is very good material germane to this debate on industrial development in Wales.
The question of industrial development has many facets. Before dealing with some aspects of the.Swansea Conference, I want to mention alleged weaknesses of many firms in Wales. In paragraphs 337, 338 and 339 of the 1961 Report reference is made to the Production Engineering Research Association set up in 1946 to help major firms to cut production costs and increase their output. There are four headings—
"(1) developing new and improved production techniques by practical research;

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(2) assisting members with specific production problems as they arise in their workshops;
(3) supplying members with information about the latest developments in production techniques throughout the world; and
(4) securing the most rapid and effective application of better production methods by visits to members' works, special training courses, practical demonstrations, etc."
These aims are very worthy. If they are ignored, we will not have the degree of development which Wales requires. Yet the Report states:
"Although P.E.R.A. has provided several firms in Wales with considerable assistance in raising productivity, only a very small number of Welsh firms are in membership."
Paragraph 339 contains this information:
"In one company, improved metal forming techniques have saved £100,000 in the production of one part alone. The turnover of another firm has increased by 300 per cent. …as a result of an intensive investigation into methods, equipment, factory layout, work handling and labour utilisation."
I want to spotlight this comment in the Report:
"Many other savings of this magnitude have been made over a wide field of manufacture and it is regrettable, therefore, that so few firms in Wales are taking advantage of the opportunities which exist for improving their competitive position;"
No satisfactory industrial development will take place unless the new concepts of production efficiency are applied as the result of the P.E.R.A's research into production techniques and equipment. For instance, the Welsh woollen industry is too slow in making use of research, as
"out of about 50 woollen mills in Wales only some half dozen are members",
of their Research Association. Paragraph 324 says:
"An offer by the D.S.I.R. Industrial Operations Unit to give a number of special appreciation courses in North Wales on the subject of methods study for the slate industry was turned down by the North Wales Slate Quarries Association."
We must find some way of ridding industries in Wales of this type of attitude of mind or it will develop into a disease and sterilise development.
I want to go back to the subject of the Swansea Conference on "Science and Industry—the problem of communication", where it was stressed that there was need for increased personal contact and liason work. I am sure that it would be a substantial gain for us in
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sending the roots of development down if, through the strengthened liaison efforts of the Department of Scientific and Industrial Research, by personal contact, by conferences and by contact on the shop floor, we could sufficiently nourish and fertilise, which is so very important, those elements of development in industry which rest upon the judgment that specific products will be really important in the years ahead, not necessarily now. On that judgment, through research and development, will depend largely the real successful development of industries in Wales.
There is need to be ever inquisitive as to whether there is adequate vocational training facilities for scientists, technologists, managers, technicians and craftsmen. It gladdened me when I read in the Western Mail only this week that for the first time in South Wales the Institution of Works Managers, in conjunction with chosen technical colleges, is to start training courses for works management. Wherever possible firms should, singly or in group schemes, take their share in the training of such vital personnel for the future. The risk, as I have heard in conference, of being parasitic on the training schemes of other firms is very great. There is room for more thought to be given to the identification, training and development of talents, so as to strengthen their technical skills by co-operation with research institutes, technical colleges and universities. In the advance of modern technology, the human being—the scientist, the engineer, the technician of every grade—is becoming more important than new plant.
The kind of industrial development that we seek for Wales requires the discovery of the fertiliser, or the compound fertiliser, that will encourage the degree of growth in the techniques of all types of firms. We must be prepared to identify our weaknesses and to do something about them—that is the big thing. The firm that is wholly parochial and self-complacent—yes, and very often traditional—is not likely to hold its place in the future.
The victory goes to the factory that carries on development on things that are thought will be really important in ten years' time. One day, perhaps, we

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will have a Government sponsored cooperative development company in Wales, charged with the management as well as with the finance of the process of development. I hope that industry will initiate research likely to lead to new inventions, and be supplemented by a development avenue for bodies that cannot achieve fully adequate development from their own resources.
I have dealt with certain facets of development in industry that, I believe, underlie the future needs of Wales. The least I expect is that one result of today's debate will be the stimulation of cooperation between all types of organisations touching on industrial development, so that Wales may reap the greatest possible benefit. That will be there to be harvested only if the Government encourage the zest and enthusiasm for achievement there is among our new generation of industrial executives, scientists, technologists, technicians— Welsh boys and Welsh girls—craftsmen and colleges. I hope that, with that, we will see a degree of co-operation in all those fine and lively industries in Wales that will bring us to a triumphant future.
7.42 p.m.
Mr. D. J. Williams: I welcome the opportunity to debate the economic situation in Wales. Wales has many economic problems, and some of them are very serious, indeed. Some of them have been with us for a long time, some of them are comparatively new. All of them are causing profound concern throughout Wales, and I want to refer to some as the most important of them.
It is impossible to discuss Welsh economic problems without some reference to coal. South Wales has literally been built on coal. For over a century, coal miming has been by far our largest industry and by far our largest single employer of labour. For a century and more, the whole economic life of South Wales has been based on the coal industry.
Forty years ago, more than a quarter of a million people in South Wales— over 50 per cent. of the insured population—were employed in coal mining. In the last few years the industry has gone through a very difficult period. It has had its share of crises, slumps,
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recessions and depressions—it has probably suffered more from those than has any other industry. South Wales has certainly had its full share of them, and all of them have left deep scars on our mining communities.
The latest crisis in the industry was no exception. In 1957 there was a sudden slump in demand. Almost overnight, we discovered that there was too much coal, that there were too many pits and, most ominous of all, that there were too many miners. The industry had to adjust itself to an entirely new post-war situation, and the Coal Board had to perform on it a very drastic surgical operation. Pits had to be closed, miners became redundant, and that created very serious difficulties both inside and outside the industry. I want to deal with some of the external effects of these developments.
One result has been a severe contraction of the industry in South Wales. Pits have been closed down all over the coalfield, and there has been a steep fall in the manpower employed. Since 1957, manpower has fallen by 27 per cent.; from 106,700 to 77,500—the lowest employment figure in South Wales mines since 1875. This contraction has had far-reaching social consequences for our mining communities, and it is too early yet to assess their true significance.
We cannot yet see the whole thing in perspective, yet two trends are already abundantly clear. The first is that in every mining community in South Wales the proportion of miners to total population has fallen rapidly, and the second and more important tendency is for the number of young miners—boys and youths—to decrease even more rapidly. In one village in South Wales a few years ago there were 200 miners —men and boys; now, there are fewer than twenty, and not one of them is under 21 years of age. At one time, in a certain mining village there were fifty miners in one street; there is not one now. This is not a static or an isolated situation, but a general trend that operates throughout all our South Wales mining communities, and it is bound to cause very serious problems for the National Coal Board in the immediate future.
There is another serious consequence of this contraction. In many cases,

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whole communities depended on the pits that have been closed down. Those communities were built on coal, were dependent on it, and lived on it. Now that there are no alternative means of providing employment there they are naturally asking what they will live on now. The problem is causing widespread concern in Wales. It is causing anxiety to local authorities, worry to the elderly people, and worry to middle-aged miners. Young people leave the industry and leave the community. Quite recently, my hon. Friends the Members for Brecon and Radnor (Mr. Watkins) and for Gower (Mr. I. Davies) attended a conference of local authorities in South Wales to deal with precisely this problem. Everyone there expressed profound concern about the present situation and grave anxieties about the future prospects.
The latest example of what can happen when pits close down is in Gwauncaegur-wen. This is a mining village in the constituency of my hon. Friend the Member for Gower. I was born there. I worked in East Pit and was a union official there for many years. Gwauncaegurwen is the heart and centre of the anthracite coalfields. It produced the finest anthracite in the world. It is a very old mining community. Coal was worked here in the seventeenth century. Deep mining was done in the early part of the nineteenth century when the first shaft was sunk in 1807 to a depth of 40 yards. It was, at that time, the wonder of the mining world.
From then on a succession of pits were sunk. Recently two of them have been closed down, Maerdy and Steer. East Pit is the last survivor, but it is to close next month and 450 men will be affected. Not only that; the closing of East Pit will mean that for the first time in 150 years this mining community will be without a colliery. For this long-established mining community the closure of East Pit means not only the end of a chapter. It is the end of the last chapter and the end of the book.
In my constituency I have a special problem, in the Dulais Valley. This, also, is an old anthracite mining area. There is no alternative industry. The Dulais Valley is the only mining valley in the whole of South Wales which has not had a new industry brought to it
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since the war. Recently a number of pits have been closed down and at the beginning of this year four pits were placed on trial for a certain period. There is better news now for the prospects of these pits, for we learn that they are not in immediate danger. Had they closed it would have been a major disaster for the valley.
The Dulais Valley has an overwhelming case for a new industry to be brought in to provide alternative employment, to save people from travelling long distances to work, as so many of them are now doing, and to provide the valley with a healthy and balanced economy.
In Hirwaun, another part of my constituency—as I informed the Parliamentary Secretary earlier today—the Murphy Radio Factory employing 600 people is to close down from September to the end of the year. This has caused a profound shock to hundreds of people in the area and I hope that the Parliamentary Secretary and the Minister of Labour will give urgent attention to this serious problem. I hope that something can be done to save this factory and to save the jobs of these 600 people. If the factory does close down these men will have to go on the dole and their prospects of obtaining alternative employment in the area are very grim indeed.
Wales has been very badly affected by the general stagnation of the British economy. This indeed is the root cause of most of our troubles. I have heard it said today that we should issue more industrial development certificates. What is the use of industrial development certificate when there is no industrial development? Wales has felt the full impact of the Government's deflationary policy. The country has been sadly affected by the credit squeeze, higher Bank Rate, cuts in capital investment and the pay pause. All these things have aggravated the situation in Wales.
In 1961, for example, the amount of new factory building approved was lower than at any time since 1952. This year the level of unemployment is much higher than it was last year. In July, this year unemployment in Wales increased by 44 per cent. compared with July of last year. In the same period industrial vacancies fell by 43 per cent.

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These are the statistics of economic stagnation.
This is clearly seen by the situation in the steel industry, which is traditionally an accurate barometer of the state of the economy. The steel industry is now working at about 70 per cent. of capacity. That means that production is being concentrated on the most modern and efficient units while the older and less efficient units are closed down. We have a few of these older units in Wales and this has created a serious problem of redundancy in many parts of West Wales.
The very policy which throws people out of work—the policy of stagnation —is the same policy which prevents new industries from coming to these areas. What Wales needs now, and this is my last word, is a dynamic policy of expansion for the British economy and a positive policy for bringing new industries to the places which need them. This is the only way to solve the economic problems which now face Wales.
7.58 p.m.
Mr. James Griffiths: I can assure my hon. Friends, who I know are anxious to speak, that I shall intervene for only a short while. I begin, therefore, by telling the Parliamentary Secretary —and I have informed the Minister of this privately—that I hope that we shall be able to meet to discuss the future arrangements for Welsh debates.
I again claim what I have claimed before—that next Session we should have six sittings of the Welsh Grand Committee and that we should have more than one day on the Floor of the House. It appears that every time we are given a day someone takes at least half of it away from us. In support of the claims I am making I put forward the problems affecting Wales which are likely to emerge and which will need our active consideration in the three months of the Recess and certainly before the end of the year.
Presumably before the end of the year the final proposals of the Local Government Boundary Commission will be placed before the Minister. If they arc anything like the first proposals and are of such a radical character we shall certainly need to discuss them in the House.
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I have been told that discussions are taking place in academic circles in Wales about the future structure of the University of Wales. Wales is unique in that we have one university but four constituent colleges. We have heard that there are proposals afoot to change this and to transform each of the colleges into a university of its own. I now notify the Government that we would regard such proposals as being rather more than a question of academic administration. A matter of real national importance and pride would be raised. We remember the history of the University of Wales. If any proposals of this kind are to be considered I urge the Government to remember that we want to hear about them long before any conclusions are reached.
I gather from the Report under discussion that at some time—and I should like to know when—we are likely to hear from the Council for Wales and Monmouthshire. It is certainly a long time since we heard from that body. I gather that the Council has been engaged in examining certain problems and is preparing a report. Will that report be published? I am a little concerned about the Council of Wales being transformed into a council to advise the Government privately. It was never intended for that purpose. It was intended to examine problems and to report to the country as a whole. I am told that the Council is now examining the tourist industry, the state of rural communications—
Mr. Watkins: It has reported to the Government on that.
Mr.Griffiths:I hope that the Parliamentary Secretary to the Board of Trade will take note of that remark by my hon. Friend. All that the Report says is that the Council is examining it. If the Council has reported to the Minister, perhaps we could see the report? This matter of rural communications is of vital importance. My hon. Friend appears to have information which has not been made available to me. Presumably he has got some other grapevine.
The third problem is that of the Welsh language, and fourthly agricultural matters. All these are subjects of great importance. There are, in addition, all kinds of other matters to be considered which affect our country. Therefore, I

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am staking a claim and saying that we must have adequate time next Session to discuss Welsh affairs; we want at least six sittings of the Welsh Grand Committee and more than one day on the Floor of the House of Commons.
I have the misfortune to represent in South Wales a constituency with the highest percentage of unemployment. May I say to the Minister, whom I believe I shall have an opportunity of welcoming to the Royal Welsh National Eistedfodd on Monday, that it is twenty-six years since I made my maiden speech in this House, and that was on the subject of closures. Twenty-six years later I am still talking about closures. As a member of a former Government, I played a part in the transformation that has taken place in Wales, and particularly in South Wales. But I do not want anybody to be complacent. What we have been doing over the past forty years in Wales has been to try to build a new economy to replace the old one that disintegrated.
The hon. Member for Cardiff, North (Mr. Box) always brings nationalisation into these discussions, but it was not nationalisation that destroyed Wales in the 1920s, nor was it public ownership, nor the Socialist Government. At the end of the First World War, in the early 1920s, three out of every five persons in Wales were either employed directly or were indirectly associated with three great industries—coal mining, steel and tinplate in the south, and the slate industry in the north. We have witnessed a disintegration of those industries.
It has taken far too long to replace the economy which has broken down. We still have not caught up with the position where we began the downward trend in 1921. The position of Wales in the United Kingdom has shrunk. From 1921 to 1961 the population of England increased by 5 million, but the population in Wales has gone down. There are now 27,000 fewer people living in Wales than there were in 1921. In nine of the administrative counties in Wales and in one of the four county boroughs the population is less than it was in 1921. Speaking for myself, and I hope for hon. Members in all parts of the House, I believe that we have not only to deal with the problems of
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unemployment as they arise but we have to try to rebuild our nation and to secure for our country a fair share in the industrial and economic life of this country. We are far from doing that.
We are discussing in particular the economic and industrial situation, and I should like to say a few words about the Government's chosen policy for dealing with the problem in the Local Employment Act. When that Measure came before the House I had very grave doubts about it, and my doubts have no yet been stilled. I believe that the concept that was embodied in Hugh Dalton's Act, the Distribution of Industry Act, with the scheduling of areas for development, was a much better concept and was much more suited to modern industrial development and to the rebuilding of an economy than this pre-sent Act. I regret the departure from the old concept, because that was an Act not only to develop areas but laid down as a basic principle that the distribution of industry and population in this country ought not to be left to chance, but should be guided and planned.
I am glad to see my hon. Friend the Member for Carmarthen (Lady Megan Lloyd George), my next-door neighbour, in the Chamber this evening. I congratulate her on speaking with so much vigour. This is the fifth debate that we have had, in which the discussion has centred around this one common theme. We have had debates on Scotland, Northern Ireland, the North-East and on Wales—four areas which had made an immense contribution to the industrial development of this country, four areas which in the nineteenth century helped to make Britain the workshop of the world. More than half the unemployed in this country live in those four areas, and each one has been struggling with this problem of how to build a new economy to replace the old which was shattered, for many reasons including economic and technological reasons.
During Monday night and Tuesday morning we were dealing with the appalling problem of housing in London. Those who listened to the debate cannot but feel shame about the situation. That problem cannot be solved except as part of a sensible planning and distribution of industry and population. This is a small crowded island of 50 million

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people. To crowd so many people into this small area is not planning of any kind. It is madness.
I should like to make one quotation. The Minister will recognise it. I invite hon. Members to listen to this as a problem for the next twenty years. The Town and Country Planning Association sent a memorandum to the Minister of Housing and Local Government and Minister for Welsh Affairs in December, 1960. It dealt with the problem of overspill. "Overspill" is a nice word to cover the lack of planning in the distribution of industry.
The Association stated:
"Earlier overspill estimates are now known to be gross under-estimates. By 1980, over one million dwellings must be built beyond the green belts, around the great urban centres for over three million people."
The Association sums up its advice to the Minister in one sentence which I am glad to repeat. I agree with the Association when it says:
"A massive expansion of planned dispersal is urgently needed."
This is the problem. Much as we welcome the improvements which have taken place, much as we look forward to more new industries coming in—and no one needs them more than we need them in my town of Llanelly—I urge the Minister to look at the machinery again.
Paragraphs 51 and 52 of the Report— I hope I paraphrase them not unfairly —suggest that the Board of Trade and its advisers have come to the conclusion that everything is now all right in Llanelly. This Report, of course, is for 1961. It was published in March, 1962. five months ago. Everything is all right, they suggest. Yet, before the ink was dry on this book, the Royal Ordnance factory which, only a few months ago, was employing 1,250 workmen, was under threat of closure. It is on the way out, and the present plan is that it shall be completely shut down by the end of next year. The Bynea steel works, with 750 men, is out.
Here, we see the Local Employment Act in operation. I use what has happened in Llanelly as an example because I know it so well. Unemployment becomes high. Then it goes down. After it goes down, the place is taken off the
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list. Shortly afterwards, the level of unemployment rises again. What is the machinery for assessing trends and prospects? Did the Board of Trade know, when it took Llanelly off the list, that the Royal Ordnance Factory was due to close? It is owned by the Government. Was there close association and liaison between the War Office and the Board of Trade? Was there close association and liaison between the Board of Trade, the Ministry of Labour and the Steel Board? Did they know that, first, Bynea and afterward, Pontardarwe were to close?
We welcome the new technological changes. None of us can go past the new Llanwern Works without a feeling of pride and thrill and—I say this to the hon. Member for Cardiff, North— all the greater thrill because it was built under public ownership. Long may it remain. But there is a question which worries us a good deal. Perhaps we do not talk about it much, but, if we do mention these problems, it should not be said that we are denigrating our country. When Llanwern comes into full production, what effect will it have upon the other units in the steel industry? That is the problem.
The conviction has grown upon me what we urgently need is some authoritative body which will bring together all the Government Departments concerned, perhaps bringing people in from outside, which will assess trends, keep in close touch with changes in industry and be able to obtain advance information as to what industries are likely to be affected by redundancies and what areas are likely to be affected, so as to take action before the closures actually come, not afterwards.
What happens now? Closures have come in my own town. How long will it be before all the machinery for bringing new industry reaches the stage of providing new work? This is what planning should do. Planning should anticipate. We need a policy for all these areas which prepares for eventualities instead of trying to tackle them after they have arrived.
We have had references to the disabled already today. I agree with all that has been said about them, but I must say a word about another group, and I ask the Minister to speak to the

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industrialists, as I have spoken to them, on their behalf. I take the Bynea steel works just as an example. Forty-five per cent. of the men who have lost their jobs are over 45 years of age. This is a problem of change, the most human problem of them all. At 45 years of age, these men lose more than their jobs. They have been engaged in the steel industry, working in the old-fashioned way, to call it that, highly-skilled, first-class craftsmen, first-class citizens and first-class men. Their works are closed because the industry has been transformed technologically and their craft and skill is no longer of use.
Are these men to be allowed to spend the rest of their lives without hope? The Parliamentary Secretary told us of the amount of public money being spent on inducing new industries to come to Wales. We are glad of what has been done and we want more, but, as one who has had a good deal of experience in industry, I do not accept the idea that a man of 45 cannot adapt himself to a new process. Is such a man a risk in employment? I should have thought that the finest thing for an industrialist is to have a balanced labour force from the point of view of age. These men of 45 and 50 still have a great deal to give to industry and the nation and they deserve of our best.
For forty years, our job has been to try to repair the damage done in the unplanned 'twenties and the unplanned and cruel 'thirties. We have achieved a great deal of success. There is a lot still to do to make our country again occupy its true place and take its rightful share in the life and work of our community. It has given a great deal. It has a great deal to give. We are not supplicants. What we want for our people is the opportunity to play, as they surely can, their full part in the future of our society.
8.17 p.m.
Mr. G. Elfed Davies: I congratulate the Parliamentary Secretary on his first excursion at the Dispatch Box, and I add my congratulations to my noble Friend the Member for Carmarthen (Lady Megan Lloyd George) on the admirable way in which she opened the debate from this side.
Wales is going through the second industrial revolution. The scars and results
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of the first Industrial Revolution are still to be seen in the industrial valleys of South Wales. There is no excuse for the same mistakes to be repeated in this age of supposed enlightenment.
During the past four or five years, it has become increasingly clear that the pattern of industry in South Wales has, intentionally or by accident, undergone a remarkable change. The miming valleys are being displaced as the hub of industrial activity as industry is more and more being sited on or near the coastal areas. With the continued decline in manpower in the coal mining industry, this is having a serious effect upon employment in our valleys.
No one in South Wales or in Wales in general will be other than pleased at the large and important developments taking place in the coastal areas. They are long overdue. Projects such as the new steel works at Llanwern, the Rover works at Cardiff and others in the Swansea district are all of great benefit, but the Government must realise that the establishment of these works offers no solution to the unemployment problems of the valleys such as Rhondda, Aberdare, Merthyr and others in Monmouthshire and West Wales.
If this situation is allowed to continue, without due regard being paid to the consequences which will inevitably follow, it will not be in the interests of the people of Wales or of the British nation. Over the years, these valleys have been the areas where Welsh culture has been found in abundance. Every village had its choirs—male voice choirs, children's choirs and mixed choral societies—its brass and silver bands, and its dramatic society. All this is threatened when unemployment raises its ugly head, and the responsibility for ensuring that these industrial communities are not allowed to wither and die is one that this or any other Government must accept.
I am not satisfied that the record of the Board of Trade in regard to its responsibilities under the Local Employment Act, 1960, is one of which this Government can be proud. The main purpose of this Measure was to promote employment in localities in England, Scotland and Wales where high and persistent unemployment exists or is threatened.

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During the debate on the Second Reading of the Bill on the 9th and 10th November, 1959, the then President of the Board of Trade, now Chancellor of the Exchequer, extolled at some length the advantages of this Bill over the provisions contained in the Distribution of Industry Act, 1959 to 1958. Here, in essence, he said, were the tools to do the job which had been denied to the Government up to that time
But the fact, indeed, was that the Government had never attempted to operate the Distribution of Industry Acts, 1945 to 1958. Up to that date, they had made no real effort to induce firms to set up in areas where they were most needed, but had allowed them almost complete freedom to go where they liked. There was no plan in existence to deal with this problem.
During that debate, on the first occasion on which I addressed this House, I stated that whatever may be the improvements in that Bill over the provisions of previous Acts, its passing would be in vain unless there was a strong, determined and purposeful effort by the Government to implement its provisions. The President of the Board of Trade and his predecessor have both failed to generate the vigour and the purpose to make a success of the challenge made to them by present-day conditions.
Let me quote some figures which I am satisfied will substantiate the charge that the Ministers of this Government have failed miserably in their task to meet the needs of the people of Wales in general and of the Rhondda, my own constituency, in particular. Let me confess to the House that I do not like dealing much with figures, because, having been a day wage miner for so long when low wages did not give me much practice in dealing with high figures I very often make mistakes.
In June, 1960, unemployment in Wales was 21,653; in June, 1962, it was 25,402, which was an increase of 3,749 after two years of operation of the Local Employment Act. Indeed, the figure has increased from June, 1962, to July, 1962—one month—by a further 1,140. In June, 1960, unemployment in the Rhondda was 1,346; in June, 1962, it was 1,384, an increase of 38 after two years' operation of the Local Employment Act.
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In June, 1962, the percentage rate of unemployment in Great Britain was 1·8, in Wales 2·6, and in the Rhondda 4·9, so that the Rhondda figure is nearly three times the national figure and nearly twice the figure for the whole of Wales. It must be remembered by this House that the Rhondda is one of the Development Districts scheduled under the Act. It makes one wonder whether it is not better not to be so designated.
The latest figures for unemployment among youths in the Rhondda are very disturbing. The divisional youth employment officer, in a recent report, states:
"The high level of registered unemployed in the Youth Employment Service in Rhondda, which began immediately after Christmas, continued up to the end of May."
In May, 1961 there were 28 boys and 17 girls unemployed, making a total of 45. In May, 1962, the figures were 90 boys and 38 girls, nearly three times the figure of a year ago. This is indeed a source of great concern and should be an impetus for the Minister for Welsh Affairs to take immediate steps to rectify it.
One of the most distressing features of unemployment in Wales and in the Rhondda in particular is the large number of disabled people who seemed destined, at the rate at which work is being provided for them, to spend the rest of their days on the industrial scrap-heap. These people, many of whom are disabled as the result of employment in the mining industry, while others are disabled as a result of war service, are entirely without hope. The figures are very revealing.
In June, 1961, the figure for Section 1, that is for those suitable for ordinary employment, was 368, and for Section 2, for those suitable for employment under special conditions, it was 59, making a total of 427. In 1962, there were 339 in Section 1, and 81 in Section 2, making a total of 420, so that in one year seven people have been provided with employment out of this group. These high figures, which show very little reduction in a whole year, are despite the fact that firms with more than 20 persons employed catered for a higher percentage of disabled people in Wales than in the rest of Britain; namely, 36 per cent. in Wales, against 3 per cent. for

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Britain as a whole. It must be remembered that there are many more people in our industrial valleys who are in this category but who have not registered because they see no hope of employment in this category.
What is the main hope we are given by the Ministry of solving this social problem? It is contained in paragraph 35 of the Report on Developments and Government Action in Wales and Monmouthshire, which reads:
"In Great Britain as a whole fewer people were registered as disabled under the Disabled Persons (Employment) Acts than in the previous year. In Wales the fall was from 42,979 to 41,667."
This is the significant sentence:
"The decline is likely to continue as more ex-Service disabled people reach retiring age."
What a hope for people who look on their position with despair. They can look forward under this Government to becoming 65 and then will go off the list! What a way to treat people who have served this nation so hard and so well. If this is the only way that the Government can deal with these victims of industry and war, they had better let someone else with a greater sense of responsibility get on with the job.
If these people are to be re-established in industry, a number of things need to be done. First, it must be understood that, while, to some degree, work outside an area entailing a little travel can be undertaken by fit people, disabled men and women are unable to travel long distances to work. If factories are brought into areas such as the Rhondda, some of these people will be able to have the lighter jobs which arise. What is happening now is that, when our people leave the valleys to work outside, the lighter jobs are being filled by people who live in those areas and our disabled people are left on the scrap heap in our industrial valleys.
I ask the Minister to urge on his right hon. Friend the Minister of Labour the need for the extension of the principle of Remploy factories. Why not have another Remploy factory in the Rhondda? We have been appealing to the Minister for some time for one and we believe that this is one of the solutions to the problem of our disabled people in the mining valleys. Cannot the Grenfell factories in the Rhondda,
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for instance, take on a greater number in an effort to assist? I am not satisfied that they are employing as many people as they can. I ask the Ministry to examine this matter to see whether it can do something about it.
The situation in the Rhondda which I have tried to outline is, I am sure, true of many other districts in South Wales. I emphasise, however, that the situation in the Rhondda would be very much worse were it not for the fact that a large number of workers are conveyed outside the Rhondda to work each day. The Rhondda Transport Company states that it alone conveys approximately 3,050 people per day, while British Railways estimate that their load per day is 1,427, making a total of 4,447, apart from the many hundreds who travel by private bus and private car.
The situation has not been improved by recent increases in bus fares and the recent closures of certain branch lines. This is why greater efforts should be made to bring work to districts of high and persistent unemployment. After the figures that I have quoted, no one can deny that the Rhondda is an example of this or that the Minister has a duty to perform now. No one can deny that there is high unemployment nor that it is persistent and has been persistent for at least the past two years.
The recent news that the factory which my horn. Friend the Member for Neath (Mr. D. J. Wiliams) mentioned, namely, the Murphy television factory at Hirwaun is closing, putting another 600 workers out of work in an area where jobs are already scarce, is a disquieting feature, not only to Aberdare but also to the Rhondda where a number of the employees live. It has been announced that early next year the I.C.I. plant at Dowlais is to close, causing another 500 workers to become redundant; and the B.S.A. guns factory in nearby Merthyr is also to close shortly.
This is the bleak future which faces the workers in and around the constituency which I have the honour to represent. It is not much use the hon. Member for Cardiff, North (Mr. Box) saying that we on this side are painting a bleak picture. We paint the picture as we see it, and it is indeed bleak and grim for my people in the Rhondda.

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My fervent hope is that the new Minister for Welsh Affairs, whom I welcome to his new office, will bring his undoubted talents to bear on the tremendous tasks which face him now and which will face him in the days to come. I warn him, however, as I warned his predecessors, that whatever talents he possesses will not solve these problems unless he is determined to use them relentlessly and with the utmost vigour so that these long-standing injustices may be removed. Only by so doing will the people living in the development districts of Wales be afforded the common right which is so much treasured by decent people—the right to work.
Finally, I should like to say a few words in relation to another Section of the Local Employment Act, 1960, to which great importance is attached by hon. Members on this side. I refer to Section 5, which deals with derelict land. That Section provides that where land in a development district appears to the Board of Trade to be derelict, neglected or unsightly and is likely to remain so for a considerable period, the Board can take steps to bring it back into use or to use it for improving the amenities of the neighbourhood. The land can be acquired by agreement or compulsorily where so authorised and the Minister of Housing and Local Government can assist local authorities by the provision of grants for this purpose. In Rhondda there is a crying need for action to be taken by both Ministers to give effect to Section 5.
The mining valleys of South Wales have too many scars resulting from past exploitation of coal seams beneath the surface. In Rhondda, many of these old collieries which are now closed have been left derelict, unsightly and, in some cases, dangerous. What, if anything, has been done in the past year, to effectively use the powers provided by the Act?
Many of these old derelict sites could, and should, be cleared to provide sites for buildings and to provide recreation grounds for adults and playingfields for younger children, both of which are sadly and badly needed in my constituency. I sincerely hope that the Minister will do something quickly in this respect and that when we next debate this matter.
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some at least of the complaints which have been brought before him today will have been rectified.
8.37 p.m.
Mr. Roderic Bowen: I desire to associate myself with the salutations and good wishes which have been extended to the two Ministers who speak from the Dispatch Box during this debate. To deal adequately with the topic which I intend to raise, new ideas and a new approach will be required. Therefore, I hope that these new Ministers will provide us with that new approach and new zest to deal with the problem which I should like to raise.
The right hon. Member for Llanelly (Mr. J. Griffiths) referred to the uneven-ness of industrial distribution and the social evils and problems resulting from it. I wish to refer to an area which illustrates in a particularly acute form the point made by the right hon. Gentleman The area which I select is Mid-Wales.
The hon. Member for Barry (Mr. Gower) seemed to think that it was irrelevant to discuss the position of Mid-Wales in this debate—
Mr. Gower indicated dissent.
Mr. Bowen: —as it concerned industrial development I should have thought that we are concerned with the presence or the absence of industrial development, and I am deeply concerned at the virtual total absence of industrial development in the Mid-Wales area.
I re-read this morning the reports of the Development Commissioners, particularly because the Government continually stress that if areas such as Mid-Wales are to receive assistance, they must look to the Development Fund and to nowhere else. There can be no doubt that the Commissioners are aware of the problem. They refer, for eample, to the need
"to arrest the social and economic decline which has affected this part of the Principality"
and they go on to refer to the need to build factories
"to counter depopulation rather than unemployment."
I have the greatest possible sympathy for those areas which have acute unemployment problems, but my plea

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tonight very briefly is that areas of acute depopulation should receive something like the same consideration and the same assistance which should be extended under the present powers to areas of high unemployment. The need to tackle this problem is conceded, I think; and indeed, there is general agreement as to the solution. The right hon. Member for Luton (Dr. Hill), when he was Minister, told us in the Grand Committee last May:
"Agriculture is employing fewer men. I believe that the solution is to be found in the bringing of small units of industry into Wales … this is something to which we are devoting a great deal of attention."—[OFFICIAL REPORT, Welsh Grand Committee, 30th May, 1962; c. 116.]
I want in a few moments to touch upon what action has been taken as the result of the attention which has been given to this problem.
The position in Mid-Wales is this. Between 1901 and 1961 Mid-Wales has lost 17 per cent. of her population, and that at a time when the population of England and Wales has gone up by 40 per cent. Mid-Wales is losing year by year—this is the latest figure I have been able to get hold of—560 every year of her population, and the sources of employment are dwindling. One I have already referred to, namely, agriculture. The more efficient our agriculture becomes the fewer the industry is going to employ. That is inevitable. We have got to face it.
We are told that forestry is going to come to the rescue. I do not want to disparage in any way the efforts of the Forestry Commission in the Mid-Wales area, but let us have a sense of proportion in the matter. The most optimistic figures given by the Commission in relation to its projects are that they will give employment during the next 10 years to 50 a year. These are the most optimistic figures I have seen—50 a year between five counties. So the contribution which the Forestry Commission will make to the solution of the problem of the depopulation of those areas is to employ another 10 men a year. It is quite clear that while we welcome the employment of an additional 10 men it really bears virtually no relationship to the problem as a whole.
What has been done up to date? As I say, from the point of view of Govern-
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ment assistance this area can only look to the Development Fund. If one reads the Report of the Development Commissioners published last year up to March, 1961, covering the period of 13 years, and if one then includes this year, to make the picture as complete as possible, making the period 14 years, one sees that the total amount spent by the Development Commission on industrial development in this area is some £270,000, that is to say, an average of under £20,000 a year between the five counties. That is what I have calculated. It is quite clear that an approach on these dimensions is certainly not going to provide any solution to this problem. To take my own country as an example, until last year we had had no industrial development assistance whatsoever from the Development Commission.
The problem is accentuated by the fact that areas of depopulation have to compete on unequal terms with other areas. They have to compete on unequal terms in the ordinary way, but particularly so with areas which are now in the development district list. What conceivable prospect have areas of depopulation in competing for industry with areas on the development district list? One difficulty is that the assistance which can be given by the Development Commissioners to Mid-Wales and comparable areas is far less effective than that which can be given to development districts under the Local Employment Act, 1960.
To give some illustrations, under the 1960 Act assistance can be given to industrialists to acquire their factories. But the Development Commissioners have no such powers; all they can do is build a factory and let it. Under the Act industrialists can be given assistance to train their workers. The Development Commissioners have no such powers. Under the Act industrialists can be given assistance to move their plant and machinery. The Development Commissioners have no such powers. This applies not only in relation to the powers of the Development Commissioners in dealing with industrialists. It applies equally to the powers of the Government in relation to local authorities. The 1960 Act clearly lays down that local authorities which are on the development district list can be assisted in the clearing and preparation of sites

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for industrial development. That power is not possessed by the Development Commissioners. I ask that the powers provided under the 1960 Act in respect of development districts should equally be available to the Development Commissioners who have to deal with areas of severe depopulation.
We have heard a great deal today about miracles. What the Mid-Wales area is asking for is something very modest. One of the difficulties at the moment is that the Development Commissioners do not come into the picture unless an approach is made by an industrialist, and experience in recent years shows that there is then a time-lag of about two and a half years before something effective happens, and by that time many industrialists have lost their enthusiasm for and interest in the project which they had in mind.
I understand that the Development Commissioners could provide funds for advance factories. We are not asking for large industrial developments. What would suit Mid-Wales better than anything else would be factories of about 5,000 sq. ft. costing about £25,000. If three or four of these could be established every year in Mid-Wales I am certain there would be a demand for them and they would steadily make an inroad into the difficulties which we face. I ask that a modest but effective start should be made in this direction. For example, I am certain that if an advance factory were established at Aberystwyth there would be no real difficulty about interesting an industrialist and getting a worthwhile project going.
The over-all problem will probably need something of a more ambitious character. I should like to see the Development Commissioners establish a development corporation for this area. But while more ambitious plans of that kind are being worked out, let something be done to give the Development Commissioners similar powers to deal with depopulation as the powers that exist to deal with unemployment. Let a realistic start be made in relation to the depopulation in these areas by carrying out a far more ambitious programme of advance factories.
The plain fact is that all the tinkering which has gone on during the last four-
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teen or fifteen years has made no impression whatever upon this problem. Unless we have a much more radical approach to it, the whole situation in Mid-Wales will get steadily worse. The Minister should be interested not only from his position as Minister for Welsh Affairs but from the point of view of local government as a whole.
In this area, local government services are costing steadily more in proportion to the number of people which they have to serve, and they have to be supplemented by grants in some form or another. It would help in that solution and also in relation to the great human problems if the powers that I have suggested were made available to Development Commissioners to assist areas of this kind.
8.53 p.m.
Mr. Desmond Donnelly: I intervene in the debate with some diffidence because this is the first time in the twelve years that I have been a Member of the House that I have spoken in a Welsh debate, and to that extent I am much in the same position as the new Parliamentary Secretary to the Board of Trade. I should like to take this opportunity of warmly congratulating him. Politics apart, I count him as a personal friend and I hope that his speech from the Dispatch Box was one of many that will be a preliminary for even greater distinction in our public life. I hope, because we are friends, that he will not take it amiss if I point out that I think that his tenure in his present office is likely to be brief, and, therefore, I hope that he will have a long holiday and put to good use the experience that he has gained even in this short period. The same applies to the Minister for Welsh Affairs and I also offer him my congratulations.
There is a brief point which I should like to make. I would not have done so but for the almost admirable speech of my hon. Friend the Member for Carmarthen (Lady Megan Lloyd George). I was very glad to see her back, looking miraculously even younger than she has done before. I say that her speech was almost admirable, with the exception of one charming preposterous statement about the would-be power station in my

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constituency; and I also heard the muttering of my right hon. Friend the Member for Llanelly (Mr. J. Griffiths). Both my right hon. Friend and my hon. Friend the Member for Carmarthen will appreciate it when I say to them that my constituents and I are all deeply indebted to them for things in the past and especially to my right hon. Friend the Member for Llandly who has done more for my constituency than almost any other single person in Wales. Nevertheless, this does not inhibit me, nor would he expect it to, from defending the position of my constituents which it is my duty to do.
What are the real facts concerning this proposed power station? The first thing to be said is that this is entirely an exploratory survey. Secondly, the Central Electricity Generating Board estimates that by 1969–70 the output of electricity in South Wales will be 2,300 megawatts, including the new Uskmouth Power Station. Thirdly, there is the proposed Aberthaw power station to add a further 1,500 megawatts to the output of electricity in the area.
The Board, in consultation with the National Coal Board, has said in a public statement that this new power station, which is not yet built, will take up all the available, suitable coal in South Wales in the foreseeable future, for many years.
I can well understand the feelings of the coal industry in South Wales. In Chat part of Britain, a community has been crucified in a fashion that is without parallel in the recorded social history of our country. The marks of the crucifixion and the nails which are still on the hands of the Welsh body politic are likely to remain there for many a long day. That is why although they will have a friendly welcome, members of the party opposite will get little in terms of votes in Wales, so long as the marks remain.
I recognise the feelings of the coal industry towards competition from oil and other sources of energy. But power stations are almost the one thing in which the coal industry need not fear competition from oil. In 1961, the Central Electricity Generating Board purchased almost 30 per cent. of the total output of the British coal industry. By 1970 it will be purchasing about 40 per cent. At the present time, it is pur-
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chasing 59 million tons of coal, some 8 million tons of coal equivalent in oil, some 2 million tons of coal equivalent in hydro-electric power, and some 2 million tons of coal equivalent in nuclear power. By 1970, the figures will be more likely 77 million tons of coal, 10 million equivalent tons of oil, 3 million equivalent tons of hydro-electric power, and 14 to 15 million equivalent tons of nuclear power.
So the real threat to the supremacy of coal in our power stations, as economics alter with the reduce rate of capital cost of atomic energy power stations, is much more likely to come from atomic energy than it is from oil.
Mr. Finch: I must question that statement immediately. I do not accept it. My horn. Friend quotes information that the threat to the British coal industry will be from atomic energy. The threat, however, is coming from the greater and greater demand for oil. The power station at Pembroke, using oil to generate electricity, will put many men out of work in the South Wales coalfield. I want a great deal more information before I accept that these power stations will be run much more on coal than they are on oil.
Mr. Donnelly: My hon. Friend is not following my figures. There will be an increase in the consumption of coal in the generation of electricity from 59 million tons now to 77 million tons in 1970. The proportion of oil is very small indeed, and is actually falling, according to unanimous estimates. Of course, there is a threat to oil in other ways, such as in industrial and home heating and in fuel for transport.
Nevertheless, my hon. Friend is being unnecessarily defensive. Coal has supremacy in the generation of electricity. The Aberthaw power station is to take all the available suitable coal in South Wales in the foreseeable future. If my hon. Friend thinks that expansion of South Wales industry must go on, he must also consider where the electric power is to come from. I am sure that he would not wish to limit the expansion of South Wales industry through lack of electric power.
The Central Electricity Generating Board has three choices. First, it could build a coal-fired power station in some

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other area where coal is available, perhaps in the Midlands, but that would pose problems of the feeding of electricity to South Wales and the loss of power on the way. Secondly, it could build a nuclear power station which possibly economically is one of the better bets, but, in view of the two oil refineries, this is the logical thing to do in Milford Haven. It would turn no one out of work in South Wales. If my horn. Friend feels like that he should have been attacking the nuclear projects and should have clamoured for Sir John Cockcroft, Lord Rutherford, and the others to have their ideas strangled at birth.
Mr. J. Griffiths: I do not know who informed my hon. Friend the Member for Pembroke (Mr. Donnelly), but do I take it that he is saying that the Aberthaw station will absorb all the coal available in South Wales? That means that all the other stations will be oil-fired.
Mr. Donnelly: All the available suitable coal. This is in the public statement of the Central Electricity Generating Board made in relation to the publication of the plans for the Aberthaw power station.
I see that the time is late. I undertook to sit down at nine o'clock. I am grateful for the opportunity of dealing briefly with this particular subject.
9.1 p.m.
Mr. Llywelyn Williams: It would be idle to pretend that there have not been some very disappointing features about this debate. We started off on the wrong foot because we lost in terms of time the equivalent of four speeches, which I am sure would have been very important. We were spending that time in discussing crooks and thugs, spies and Arabs and goodness knows what. That left a rather bad taste in the mouth of every hon. Member who represents a Welsh constituency, because it is natural for us on this one day of the year to feel entitled to portray the picture of contemporary Wales as we find it. I genuinely—and I emphasise that word—sympathise with my hon. Friends who had very important speeches to deliver and have not been able to deliver them because of the
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exigencies of time. This is about the only occasion on which my hon. Friends wish that they were Tory Members. Then, of course, they would have ample opportunities of deliver speeches.
We have not had a very packed House, but I am sure that all hon. Members appreciated the very charming and capable way in which my hon. Friend the Member for Carmarthen (Lady Megan Lloyd George) opened the debate from this side of the House. It was a real source of gladness to all of us to see her back among us speaking with that verve and capacity we always associate with her.
As one who is deputed to wind up for the Opposition, I offer my very sincere congratulations to the Parliamentary Secretary to the Board of Trade on his opening the debate so cordially for the Government. I sincerely wish to give him a very warm-hearted welcome to the Minister for Welsh Affairs. He started his duties most felicitously by appearing among us in the Welsh sports last Saturday. We were all very glad to see him. Next Monday he is going to the festival town of all the world, the town so wonderfully represented by my right toon. Friend the Member for Llanelly (Mr. J. Griffiths). It happens to be my home town. The right hon. Gentleman can be sure that he will be received very warmly there. To complete his education he must be in Cardiff Arms Park next January to see Wales beat England. As my right hon. Friend the Member for Llanelly comments, he will then be fully qualified to undertake the very important and onerous duties which will fall upon him.
I do not think that there are any new points which I can raise, and I shall mainly be dotting the i's crossing the t's and underlining here and there. First I wish to show my accord with the point made so pertinently by my hon. Friend the Member for Neath (Mr. D. J. Williams) when he said that the gloom in the picture which has been revealed in the speeches tonight is due almost wholly to the catastrophic economic policy pursued by the Government during the last year or two. It is the same story as usual; the periphery suffers much more than does the centre. May I give the figures for unemployment: London 1·1 per cent. and the Midlands 1·4 per cent.

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The further we move away from these centres, the higher are the unemployment percentages: North-West England 2·3 per cent., Wales 2·7 per cent., the North East 3·2 per cent., and poor old Scotland worst of all 3·3 per cent.—although I believe the figure for Ireland is about 7 per cent. This must offer a challenge to all sober-minded people and certainly to all of us who try to arrange our affairs so that the interests of our people are properly safeguarded. The fact that the periphery suffers so much more in any time of depression vis-à-vis the centre is a vary important point.
My hon. Friend referred to the fact that there had been this restrictionist and deflationary policy which had had a regrettable impact on our economy generally. The saddest part of the whole economic story is that our investment rate is at such a low level. I understand that it is declining. The investment industries will suffer inevitably. I understand that the immediate outlook for the steal industry, which is surely the linchpin of the whole industrial fabric of our country, is not propitious. I am quoting Mr. Rees Mogg, financial editor of the Sunday Times, who wrote in an economic review published by the Western Mail the other day that in the long-term we expect great things from the steel industry but that for the present and for the foreseeable and immediate future things are not so happy. This fills us with some foreboding.
I believe that there is an increase in production, and we are grateful for it. I believe that our export industry is improving and that our balance of payments is improving even though we are paying back substantial sums to the International Monetary Fund. I wan: to put these things to the Government's credit, at the same time reminding them forcibly of those things which fill us with foreboding.
An hon. Member such as myself is always concerned about the right approach to a debate of this character. In which spirit should one describe the contemporary industrial scene in Wales? It would, I think, be a disservice—I am speaking honestly and fearlessly—to Wales to indulge in one long moan and whine and to paint a picture in dark forbidding colours. I certainly do not intend to do that.
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I feel like one of the persons described in this very eloquent story. Two men —Mr. Jones and Mr. Williams—who were next-door neighbours went to the same church in South Wales one Sunday morning. They returned. Mrs. Jones asked Mr. Jones, "Well, John, were there many in church this morning?" He was a pessimist. He said, "It was half empty". Mrs. Williams asked Mr. Williams, "Were there many in church this morning, Bob?" He said, "It was half full". The same number had been in church, but it depends on how these things are viewed.
I shall not pull my punches when I think that punches should be delivered, but I do not know that I help my people and I do not think that I am helping to project the right—I use now the word which is so fashionable; it is used in the House every day—image, for "image" is the operative word; of Wales if I describe it as a nation just about to file a petition for bankruptcy. The industrial scene has materially improved and certainly should have improved in view of the shocking conditions with which some of us were so poignantly familiar in bygone days.
Take the unemployment situation. Let me start with this foundation. We have heard the figures, and I do not intend to weary the House with any more figures. In all conscience we have had enough figures today to drive the most ardent mathematician almost climbing up the wall. I shall not add considerably to the figures which have been adduced. I have them here, because I have worked on my speech. I am not delivering the speech I prepared! Nevertheless, I hope it will be a better speech. We have heard about the unemployment figures. We know that they arose between July 1961 and July 1962. Despite what the hon. Member for Cardiff, North (Mr. Box) said, the number of unfilled vacancies has gone down. When the number of unemployed rises and the number of unfilled vacancies goes down the picture is not as happy as he suggested.
Mr. Box rose—
Mr. Williams: I should like not to be interrupted because I am going to keep my word to the Minister to the split second. He will rise dead on 9.30. I

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give freedom to my hon. Friends sitting behind me to pull me down by the coat tails if I have not sat by then.
When we on this side talk about unemployment, when we reveal a concern about it, it is not because we claim to have any superior virtues over hon. Members opposite. We have not got more of the milk of human kindness than hon. Members opposite. In the moral sense we start from scratch: there is no superiority. There is an evocative connotation to the word "unemployment" which has a grip on the majority of hon. Members on this side—perhaps it would not be true of hon. Members on this side who are under forty, but for those who are more than forty, the connotation of the word is a haunting one. To the end of my days I shall never, never be rid of it. I know that there are some hon. Members opposite with deep, personal memories. I have read the debates on the situation in Scotland and in the North-East. The hon. Members for Newcastle-upon-Tyne, East (Mr. Montgomery), Glasgow, Pollock (Mr. George) and Cleveland (Mr. Proudfoot) have referred to the way in which they saw unemployment at first hand. For us on this side it is an indelible memory. At that time 400,000 of our fellow SouthWalesians had to leave. In the strict, legalistic sense there was no direction of labour but, metaphorically, they were driven by the scourge of economic circumstances to seek their livelihood away from their own homeland.
Being an odd creature, I sometimes like to look at these things in a homely context. My mind goes back to my boyhood, when three of us were pals, all of exactly the same age, and brought up in the same street on the fringe of the town of Llanelly. Fortuitously, I passed the scholarship, and my future was more or less determined by that. My two friends—and we were inseparable pals—well, one went to Enfield and the other to Watford. The one, I do not think I have seen since; the other I have seen about once since those boyhood days. They departed from their own home town, not because they wanted to—they were as affectionately involved in the wonderful community life of Llanelly as I was—but because they bad absolutely no choice.
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The inevitable thing happened—they married English women. Of course, there is nothing basically wrong in marrying an English woman. I confess that I myself married a Lancashire lass, and my night hon. Friend the Member for Llanelly went to Hampshire for his wife—
Mr. J. Griffiths: And a very good one.
Mr. L1. Williams: And a very good one, as he says—and a great inspiration to him throughout his life. Modesty and propriety prevent me referring to my spouse, but I am thinking as he has been saying.
But when this is multiplied, as inevitably it was in those years—and, indeed, is today by the migration from Montgomeryshire, Cardiganshire, Radnorshire, Anglesey, and even some parts of South Wales—the indigenous cultural communal life of Wales must suffer to some degree. That is why when we find that the unemployment percentage has gone from 1·9 to 2·7 some hon. Members opposite may ask, "What are they making such a song and dance about over such a small percentage increase as that?" But we on this side see those percentages in human terms and in human losses. They are very sobering considerations.
I was so glad that my hon. Friend the Member for Gower (Mr. I. Davies) referred to the disabled workers. I shall not dwell on that at length because he dealt with it so admirably, but I want to re-emphasise his point about the Remploy factories. Has there ever been anything more imaginative in post-war legislation than this conception of rehabilitating people who felt that they were on the scrap-heap? There is a Remploy factory in my constituency. It is the brightest thing in the whole of the valley; the pride those men have, with all their disabilities, that they can go day after day to their Remploy factory to do something and, on Friday night, to go home to the "missus" with a pay packet.
There is no describing the psychological value of such an enterprise, but what is so disheartening and so saddening is the knowledge that that enterprise has been almost sterilised. I remember taking part about ten years ago in a debate on the Remploy factories in

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Britain, yet, since then, there has been no change worth talking about in the influx of disabled workers into Remploy. I have the figures for Wales. We are employing six more now than we did last year. Only six. Is that really satisfactory? It is a pathetic story, and I urge the Minister to see if he can put some impetus into the system so that Remploy can be the great, noble and imaginative scheme intended by the late George Tomlinson and the late Ernest Bevin.
I refer with a great sense of joy, because I was privileged to serve on the Standing Committee which considered the Mental Health Bill, to the steps forward which have been taken in this connection. I am proud to think that this House saw these problems in a new light, and fully appreciated the stresses and strains of modern society in relation to the suffering of those with whom we were concerned. I was glad to read that a hundred of these people, long-stay patients in psychiatric hospitals, have now been satisfactorily employed.
That gave me a feeling that politics can, at its best, be a very noble pursuit and a wonderful opportunity, and I hope that the Minister, if he gets a chance, will strengthen this new orientation. After all, community care is the important thing for the mentally ill. Shutting them away in isolation in mental hospitals is not the answer. They must be brought back into the community, and the best way to do that is to follow the example set by the resettlement officers, of whose work any Ministry could be proud.
I wish to speak briefly about young people. This is the crucial, the bulge year, and I believe that after the Christmas and Easter terms these youngsters—who, by and large, we have been able satisfactorily to employ in our industrial set-up in Wales—will be leaving school in greater numbers. I am proud to relate that more and more of our youngsters are staying at school longer. If we cannot have a statutory increase in the school-leaving age we can be proud that parents, with the cooperation of their children, are urging youngsters to stay at school longer.
My hon. Friend the Member for Neath referred to the difficulties of the mining areas of South Wales in a graphic way.
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It is certainly true that things have changed. The industrial pattern of Wales is altogether different from not so long ago and I read an interesting article by Professor Brinley Thomas in The Times Supplement on Wales in which he told how the industrial pattern of our country is changing. He referred, for instance, to the employment of women and pointed out that while 94.000 women were employed in Wales in 1939, by 1960 the figure had reached 281,000, or 30 per cent. of the insured employees.
There are many arguments one could advance about women going out to work but, on balance, it is a fairly healthy sign because a woman has a full role to satisfy, not only in the home but in the world outside. In 1939 one out of every four persons employed in Wales was in coal mining. One out of every ten worked in general manufacturing concerns. Today it is virtually the other way round with 24 per cent. employed in general manufacturing and only 11 per cent. in mining. What we must aim for in Wales is a balanced industrial economy, with heavy, medium and light industries, extractive and manufacturing industries, producing consumer goods and export goods. I believe that we are moving in that direction because we now have a fairly diversified pattern, and it is only right that we should testify to that fact.
How did it come about? Some hon. Members may say that I am partisan, and perhaps I am. In pre-war years, very belatedly in 1930, the Government started the Treforest trading estate. That was the beginning of a diversification in the industrial pattern in South Wales which before then was completely dependent on coal and steel. During 'the war, because of evacuation from areas likely to be bombed—I do not know that there was any virtue in this; it may have been a necessity—we had the new estates in Hirwaun and Bridgend. From 1945 to 1951, armed with the powers of the Distribution of Industry Act, the massive contribution was made by the Labour Government. It was a transformation which was revolutionary in character.
Since then we have had the Conservative Government for eleven years. I do not want to take from them the credit

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for any achievements which they may claim, but I do not know that they implemented too well the Local Employment Act. I should like to refer to the Government White Paper which deals with the applications for assistance under Section 4 of the Act in respect of developments in Wales. There were 74 such applications of which 18 had been recommended by the advisory committee and 45 rejected, leaving 11 still under consideration. I do not know that that mounts up to a very good story.
My speech is necessarily disjointed because I want to keep my word to the Minister and allow him sufficient time in which to speak. Where gratitude is called for, I hope that we shall not be found wanting in that human virtue. There are many people to whom praise is due for the changed picture in Wales. Our trade union advisory committees have done very well, guided by people like Ron Mathias in the south and Tom Jones in the north. The Development Corporation of Wales has done a first-class job of work and it will be well worth reading their third annual report in which some very fine things are said. There is a very telling quotation from an English industrialist who came to Caernarvon and is now appealing to other industrialists to do likewise because of the satisfactory results which followed from his venture into Caernarvonshire.
I thank the Welsh Industrial Estates Corporation. I should also like to thank the local authorities and the local employment committees. Personally I should like to thank the Minister of State for Welsh Affairs who, in a personal sense, has never spared himself in trying to link up industrialists with the possibilities inherent in the Welsh situation.
I think that it would be churlish and mean of me or anybody to deny the Government their entitlement to their achievements. But we honestly and truthfully believe that we could do better. We would tackle these problems with a greater urgency. We feel that we are closer to the people. If at the General Election the Scots and the English only do what we have consistently done since 1922 we shall have a Labour Government which will start with the tremendous sense of mission
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which actuated the Labour Government of 1945–51 to perform the miracles which happened in Wales.
9.30 p.m.
The Minister of Housing and Local Government and Minister for Welsh Affairs (Sir Keith Joseph): I am most grateful for the kind welcome which hon. Members on both sides have been good enough to extend to me. As I expected, the speeches today have been fervent, forceful, and, towards me, conditionally friendly. I am grateful for the forbearance which has been shown. I am most grateful also for the presence beside me this evening of my right hon. Friend the Home Secretary who is showing once again further evidence of his deep personal devotion to Welsh interests.
For me, and, I am sure, fox my hon. Friend the Parliamentary Secretary to the Board of Trade, whom I, too, congratulate on his maiden speech from the Dispatch Box, this has been a very educational debate. It has been our first on the Welsh economy. I hope that it will not be my last. I promise that, whenever I discuss things Welsh, while I shall not minimise what is good, I shall not seek to palliate what is not so good. I hope to fallow the excellent example of the hon. Member for Abertillery (Mr. L1. Williams) who gave us a most balanced and sensitive speech of strong feeling. I hope that I can live up to that standard.
It seems to be commonly agreed today on both sides that Wales has reached a state of industrial maturity and diversity. I add to that—this has not been said today—that Wales has, through a strange mixture of good and bad fortune, had the good luck to achieve most of its industry in the electronic age, so that the vintage of Welsh industry is more modern than the vintage of either English or Scottish industry. To pick out one example of successful adaptation from many, I choose the coal industry, which, while it has been increasing the individual productivity of the miner, has succeeded, by careful and considerate management, in avoiding any large-scale redundancies. I adopt the theme which the noble Lady the Member for Carmarthen (Lady Megan Lloyd George) so excellently put when she said, "Whatever is good, let us set our sights higher". That, I think,

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is an objective which both sides can adopt.
However, it may be true that Wales has reached industrial maturity and diversity, but it is only too clear that there are places Where new jobs in prospect have by no means synchronised with jobs which have gone, and this despite the efforts of the Government and, in particular—I am grateful to the hon. Member for Abertillery for mentioning this—the constant and unceasing efforts of my noble friend the Minister of State for Welsh Affairs. Although unemployment is at an average of 2·7 per cent., there are areas where the figure is very much higher, and there is a good deal of uneasiness.
It seems commonly agreed, also, that there are several other matters which are not so good. We are all grateful to my hon. Friend the Parliamentary Secretary to the Ministry of Labour who has been assiduous in his attendance today and has listened carefully to all that has been said. I pick out three particular subjects which we can all acknowledge need more attention, possibly from the Government, certainly from some of those interested.
The first is apprenticeships. My hon. Friend the Member for Barry (Mr. Gower), the hon. Member for Gower (Mr. I. Davies) and several other hon. Members pointed out that Wales falls slightly behind the national average for apprenticeships. We all know that there are good reasons for this. The coal mining industry, the steel industry and some of the other older-established industries have methods of training which are not the same as in others. I am not yet sufficiently master of my subject—I have been in office for only two weeks—but I believe that there are explanations for the short-fall in apprenticeships. However, this should not stop us trying to raise the level. I believe that there is more which can be done. The Government are giving a lead. There is the apprentice training school at Cardiff. Together with my right hon. Friend the Minister of Labour, we shall see whether more can be done.
I very much agree with the hon. Member for Gower, the hon. and learned Member for Cardigan (Mr. Bowen) and the right hon. Member for
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Abertillery that we ought to look more closely at the state of the disabled. I am grateful to those hon. Members who have paid tribute to the work of Remploy. Of course, we would like there to be more disabled in work, but there are more Remploy factories in Wales per head of the population than there are in any other part of the United Kingdom. It is very hard to find employment for the severely disabled, and, despite my interest and my desire to help, and despite the efforts going on all the while by my right hon. Friend the Minister of Labour, I cannot promise results. But I will certainly study it and see whether anything more can be done.
The third subject on which I think we all agree that there is need for more attention, and on which I confess I have no idea how to help at the moment, is the plight which often befalls men over 45 or 50 when a change of employment is forced upon their area, and they have not the skill or energy to move to retrain. I do not know the answer to this; I do not know whether anybody knows the answer, and I do not know any country which has yet discovered the answer in a free society. But I do promise to study the problem.
Mr. Donnelly rose—
Sir K. Joseph: I have a lot of ground to cover, if the hon. Gentleman does not mind. In all these matters, politicians can initiate action, but we depend upon public servants and the goodwill of the public to help us to achieve our purpose.
The main theme of this debate has been the changing pattern of industry, agriculture and commerce in a modern society, and the implications of this changing pattern for the citizens. We have to accept that if we are to seek an improvement in our standard of living we must pursue change, because it is only by constantly changing our work and our products that we can keep pace with the demands of the world's markets on which, ultimately, we depend.
We have to produce what the world needs and we have to produce it competitively, but the changes that were spread over centuries in England have occurred later and faster in Wales, and

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that means that the pressures and strains caused by change are somewhat more severe in Wales than at the moment in some parts of England. These changes have other aspects. On the one hand, they offer an easement of life and a variety of choice, but, on the other hand, they can be a threat to a culture that has thrived in sterner times. I shall often have to speak of economics when I am speaking about Wales, but I hope never to forget the riches of character and of community which, despite the changes, we must try to preserve.
At the heart of Government action in coping with this changing pattern is the distribution of industry policy, and I think that hon. Members on both sides of the House have been quite riglht to identify this as the nub of the problem. I must confess at once that it is very much easier for the Government to mobilise industrial forces where they are most needed when industry is on the move— that is, in times of expansion. That is a platitude to anybody who has studied the subject. It is easy to say "Let the Government be tough," but when industry is not moving there is nothing to be tough about— in a free society. [An HON. MEMBER: "We want an expanding economy."] Certainly, we want an expanding economy, and over the years we have had it. But in an international trading community like ours, there must be fluctuations in the rate of expansion, and no matter how brilliant the Government or how well served by computers, fluctuation is unavoidable and inevitable.
The Government have many areas of human need to serve, and they must mobilise industrial forces not just in one area, like Wales, but between all the areas where there is unemployment. After a great surge— I think this point was made by my hon. Friend the Member for Barry— such as we have seen in industrial investment, and a great expansion in the steel and motor car industries, for instance, we must expect that there will be a pause of consolidation, so that demand shall catch up with the new potential of supply that has been created. This expanding productive capacity means that we have created a base for further expansion without inflation.
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A number of speeches have been made on individual constituency needs. I do not for a moment underestimate the poignancy and immediacy of these needs, but I do not think that it would be helpful to devote all my speech in reply to the debate to making comments on the needs expressed. Broadly, I agree with what hon. Members have said about the needs of their constituencies. I shall study them with my hon. Friends concerned, and we shall do all we can to mitigate them. I recognise that, although we deal in averages, 2·7 per cent. unemployment covers a very great variety of need and, I hope hon. and right hon. Members recognise, a very great variety of prospects, because in some areas there are enough jobs in prospect— I agree that they have not yet all materialised— to make the future not at all uneasy for particular localities.
I turn now to individual questions. I cannot possibly deal with all of them and I wish to reserve some time for returning to a particular subject which I hope it will be seen is of importance. A number of hon. Members have particularly challenged the Government about the problems of Mid-Wales. I hope that I shall not be accused of being evasive if I pick on this subject above all others because it comprises a number of constituencies. The hon. and learned Member for Cardigan (Mr. Bowen) and the hon. Members for Merioneth (Mr. T. W. Jones) and Caernarvon (Mr. G. Roberts) dealt at length with Mid-Wales. The hon. and learned Member for Cardigan put his finger on the point when he said that agricultural work is now much more productive than it used to be. We must welcome this, but, of course, it is at the heart of depopulation. Fewer people are doing more work, and the other people who live in the area have to seek work elsewhere.
I could mention forestry as a hope for the future; that is not an immediate hope. I could say that in those more properous towns serving a more prosperous agricultural region the service trades tend to flourish. I think that there is hope there. I could adopt the hope of my hon. Friend the Member for Cardiff, North (Mr. Box) and say that Wales has a much larger tourist potential than it is at present exploiting. I intend to do all that I can to help in developing

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this potential. Tourism brings some of what is called off-farm income to people who live in farming areas. But I recognise that, when all is said and done, these areas are left with an unbalanced age structure and that the young people tend to move.
Those who stay are, however, better off. Do not let us be too romantic about the glorious life on the farm in the old days. Many people did the work which few people do now. I recognise that there was a fine community culture, and I mourn that if it has passed, but do not let us be too romantic about the material blessings of those days. In Radnorshire, there are more motor licences per 1,000 of the population than anywhere else in the United Kingdom. But of course that means that it is tough on those who stay but who do not have a motor car.
I shall return to the Jack Report later and say what I think the next stage in the process of serving those left without much transport should be, but I stress that the depopulation is not caused by a lack of transport. When transport is little used because of depopulation, it falls as a heavy burden on the taxpayer, and the Government have to act as they have recently begun to act. The rail closures to which many hon. Members have referred are only the result of too little use being made of individual railway lines. Before there are any more closures, I assure hon. Members that there will be public announcements and a full procedure of consultation through the consultative committee, and the approval of my right hon. Friend the Minister of Transport will be required. My right hon. Friend has the power in his hands to require additional bus or railway services if he judges them necessary for social reasons.
That brings me back to the Jack Report on rural transport. The House will be aware that my right hon. Friend the Minister of Transport yesterday made a statement that he would see to it that surveys were made in one or two rural areas to try to ascertain exactly the need and how best to tackle it. No decision has been made by the Government about which areas are to be surveyed. Only a few are to be done, I undertake, however, to press my right hon. Friend to see that one of the areas
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shall be in Wales. [An HON. MEMBER: "Mid-Wales?"] I should not like to commit myself, but if that is where the need is greatest, there I hope it will be.
I apologise for being absent when the right hon. Member for Llanelly (Mr. J. Griffiths) was speaking. He asked about the Report on transport by the Council for Wales. It should be published in the autumn, and we expect to get reports on tourism and the Welsh language nearer the end of the year. We have not yet received the Report of the Local Government Commission, but we expect it in the autumn. There can be no publication of it, probably, before the New Year. The right hon. Gentleman made a number of bold suggestions about debates on Welsh affairs which I shall certainly discuss with my right hon. Friends concerned.
I now turn to what I thought, with respect to all other hon. Members, was the most notable speech of the debate. The hon. Member for Pontypridd (Mr. A. Pearson) put his finger on the things that, I consider— I say it with all humility after only two and a half weeks— are really what matter for the future of Wales. The hon. Members speech seemed to me to go to the heart of the Welsh problem.
Communities do not flourish or fade because of character of virtue or even because of brains, although all these factors help. They flourish because, broadly, they produce what the market needs and they produce it competitively. Who is the key to this successful service to the market, the market of their own fellow citizens, the market of all the citizens in their country and the world market? It is, it seems to me, the entrepreneur, the manager— I am talking of public as well as private enterprise— the technician, the scientist, the engineer, the inventor and the market research man. These are the alchemists of the twentieth century, the people who take a community and make it wealthy.
A debate about economics, industrial affairs and the future that does not spend most of its time discussing those people and linear work and the framework within which they operate does not get to the heart of the problem. The Government can do a certain amount about these things. They are open to suggestion and have their own ideas.

919
Only one of these was brought out, again, by the hon. Member for Pontypridd, when he mentioned the Department of Scientific and Industrial Research and its office in Wales. I know that the D.S.I.R. has in Wales only a very small staff— a staff, I am told, of high quality. I am further told that that very small staff is not kept busy, because Welsh firms and enterprises do not seem avid enough for the fruits of research. It is not necessary to have a great research laboratory to get the fruits of research. There are many libraries and technical services that feed from one industry to another, for a fee or not for a fee, the benefits of other people's work.
This is a subject which, with my right hon. Friends concerned, I shall examine as much as I can. I hope that as a result of all our efforts, we can bring home to Welsh enterprise, both public and private— and there are splendid examples, such as British Nylon Spinners, which was mentioned, and many others, particularly in steel, chemicals, the motor car industry and coal, which are attentive to research— and to Wales as a whole, that the fruits of the future can only be harvested by research, by development and by keeping up with the market.
That is a factor however one's economy is organised. It is a factor that is beyond and above parties. We may differ about how to achieve it. We on this side believe that the profit motive is a necessary stimulus to it. Hon. Members opposite do not regard the profit motive as being as important as we do. We all agree, however, that research and development are vital, and I think we all agree that there is not enough of these in Wales today.
I have been only two and a half weeks as Minister, but I asked early on, when discussing a programme of visits to Wales, that I should see Welsh businessmen, since it seemed to me that it would be Welsh businessmen— and again I am speaking of both public and private enterprise— from whom I should learn most about how to help Wales to get improved production, and that in this they would be of more assistance to me than others would be. I was told that I should meet many fine people, sensitive, cultured Welsh people, artists, teachers, doctors, traders, men and
920
women of faith, men and women of vision, but that I should not meet many Welsh business men, I should not meet many Welsh managers, and I should not meet many Welsh engineers. If this is true, it is a shame. These Welsh talents should be canalised in many channels, and it is in these channels that the Welsh can flower, too—
Mr. Bowen: They go from Wales to England.
Mr. J. Griffiths: Who told the Minister that?
Sir K. Joseph: If I am wrong, I must plead that the fault is my own, and I shall learn better. I hope I am wrong, but it seems to me to be a great shame that Wales should have to look across to England for innovators, industrial initiators, even managers. Wales should surely generate more of its own employment—
Mr. Griffiths: We produce teachers. Give them opportunities.
Sir K. Joseph: The right hon. Gentleman heard me pay a tribute to Welsh teachers, and teaching is the finest of the professions, but it only creates wealth indirectly and not directly. The direct creation of wealth is by the perception of need and the satisfaction of it. The right hon. Gentleman is falling below the level of this debate if he thinks that what are meant to be constructive suggestions I have made are a subject of quarrel. I meant no injury to any other profession when I said that Wales would benefit by those others as well.
However, as I see that the whole subject is not as widely acceptable as I thought it would be I will leave it and return to the safe refuge of the winder-up and deal with points raised in the debate till I come to my conclusion.
Hon. Gentlemen tested me, as a notorious townsman, on my knowledge of agriculture, and I should like to show off the very little I know of the subject, which I must study a great deal more and which I shall hope to study in Wales a great deal more now that I have some responsibilty for Welsh affairs. Since it is absurd to try to pretend otherwise I do not deny that I am a townsman and that I shall have to lean about this subject.
My hon. Friend the Member for Denbigh (Mr. Morgan) spoke with some

921
grief of the price of eggs last year. This is a subject with which I had something to do when I was at the Board of Trade. Of course, the great cry was, "It is eggs from abroad which are driving the market down at home". It is my belief that m fact it was the rise in the production of eggs at home which caused the fall in the price. The import; of eggs from abroad was really very small indeed in comparison with home production. I can assure my horn. Friend that the anti-dumping powers are vigorously used by and available at all times to my night horn. Friend the President of the Board of Trade.
Into the dispute about the exact fuel which will fire the future power stations of Wales I would not venture to enter, but I can remind the House that there are many power stations which are fired by coal and several more planned which will be coal fired, and indeed the demand for coal from the Central Electricity Generating Board in Wales is expected to increase substantiality. The Milford project is only at this stage a paper — a study— project, and any proposals would have to be put to my night hon. Friend the Minister of Power, and there would be ample chance to object, but it does not seem wholly absurd that a power station based at or near a port Where oil is pouring in should be considered for oil firing— though I repeat that a decision has not been made at this stage.
Finally, I will try to resume what I hope is common ground to both sides of the House. Wades now has a mature industrial economy, but as such it must accept the inevitable, the unavoidable, small fluctuations inseparable from change and inseparable, therefore, from progress. These fluctuations seem small enough from afar, but close to they loom— I do not deny it— monstrous large.
There are areas where new jobs— the new jobs that have come or the new jobs that will come— just do not coincide with the loss of work. I repeat that I shall study all that has been said. I shall do all I can to steer new industry to Wales. But we deceive ourselves and we deceive our respective constituents if
922
we think that there can be a great surge of new employment at all times evenly. There was a great surge of new employment to Wales over the last two or three years. It has abated— I do not deny it — but it will return again.
As my hon. Friend the Parliamentary Secretary said, there are to offset the closures that hit the headlines a continuous— not dramatic— score every few months of expansions of existing firms which add employment prospects to all parts of Wales. We cannot rely upon stable expansion, but we can rely on expansion and we can rely on a share of that expansion going to Wales. I repeat the hope that the Welsh will try to see the purpose of trying to generate some of their own new employment.
For me this is not the end of a debate. It is the start of a job of work. This job cannot be done by magic or by conjuring. It can be done only by persuasion, by co-operation and by reinforcing success. I shall have in this Che co-operation of all my right hon. and hon. Friends, and in particular the wholehearted efforts of my noble Friend the Minister of State for Welsh Affairs. We must between us seek out industrialists and persuade them of the virtues of Wales and the Welsh. We shall easily be able to give them references and suggest that they speak to their competitors, colleagues and friends who are already sucessfully working in Wales with the Welsh for the benefit of the Welsh economy.
I believe that this is a job which is infinitely worth doing and that it can be done, but I ask the House candidly to accept my conviction that it cannot be done overnight, cannot be done dramatically, cannot be done at a stable rate of growth; but it will be done— of that I am sure. There is very much success in Wales today, and a sound basis on which we can all try to build for an even more successful future.
Question put and agreed to.
Resolved,
That this House takes note of the Report on Developments and Government Action in Wales and Monmouthshire for 1961 (Command Paper No. 1643).

SECONDARY EDUCATION, BOURNEMOUTH
Motion made, and Question proposed, That this House do now adjourn.— [Mr. Chichester-Clarke.]
9.57 p.m.
Mr. John Eden: I am very grateful to you, Mr. Speaker, for giving me this opportunity to discuss the sorry history of this year's secondary education selection procedure in Bournemouth. As this matter concerns not only my own constituents but also those of my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. Cordle), I have asked my hon. Friend to join me in the presentation of the case, and I shall be grateful if you will permit him to follow me so that he may add further to the points that I shall make.
I want at the outset to tell my right hon. Friend the Minister of Education how much we both appreciate his presence here tonight. It is unusual for a full Minister— if I may so describe my right hon. Friend— to reply to an Adjournment debate. This demonstrates what a very serious view he takes of the situation which has arisen in Bournemouth. I should like also to say— and I am sure my hon. Friend joins me in this— how grateful we are to my hon. Friend the Member for Liverpool, Walton (Mr. K. Thompson) for the very great interest which he took in this matter and for the care with which he studied the representations made to him while he was Parliamentary Secretary.
It is not possible in this short debate to go over all the history. Inevitably, much detail would have to be omitted. Briefly, the facts are that since 1953, the Bournemouth Borough Council, as the town's local education authority, has been operating a two-tier system of selection for grammar school places. The examination consisted of two parts. Only those who achieved a certain standard in the first part were invited to sit for the second part. The standard of eligibility for the second part was made up of two distinct categories— those who secured 360 marks and those who secured less than 360 but not less than 340, provided that they also had the recommendation of their primary head
924
teacher that they were suitable for grammar school education.
It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed. That this House do now adjourn.— [Mr. Chichester-Clarke.]
Mr. Eden: This scheme was introduced for two reasons: to relieve the grammar schools of some of the pressure arising out of the increased numbers then coming forward and by introducing a G.C.E. course in the secondary modern schools to provide an alternative route to "A" level.
It is a fact that over the years many late developers have been able, on leaving their secondary modern school, to go on either to grammar school or municipal college to take their "A" level. Work in the secondary modern school was given a new sense of purpose and it is not by accident that Bournemouth can now boast of having some of the finest modern schools in the country. As the secondary modern schools have very properly drawn ahead, the grammar schools, in spite of the steadily increasing population, have remained fixed at one for boys and one for girls.
Out of a list of seventy local authorities showing the percentage of children in grammar schools, Bournemouth's name appears second from the bottom— sixty-ninth out of seventy. This is especially surprising in the light of the Moray House Report which shows that out of forty-seven local authority examined, the mean intelligence quotient of Bournemouth's children was the highest of all— Bournemouth being first out of forty-seven for intelligence, yet all but bottom for grammar school places.
With these figures as a background, it is not altogether surprising that the council was anxious to give further consideration to the selection procedure. Discussion and argument which extended over a considerable period, reached their climax on 1st May when it was decided to abolish Part II of the examination and to recommend that the education committee be instructed to make provision for grammar school education for those passing Part I— passing, in this context,

925
as made clear at a meeting of the secondary school Governors on 8th May, applied to all those who having taken Part] were eligible to sit for Part II.
Unfortunately the May resolution came right in the middle of this year's selection process. The children bad already sat for Part I and notices had gone out to those qualifying, inviting them to sit for Part II. With Part II cancelled, it was generally assumed that all those children who had been eligible to sit for it would instead automatically be offered places in the grammar schools. Indeed, they were encouraged in this belief by the discussion in council which made it perfectly clear that the main purpose in cancelling Part II was to increase this year's grammar school entry by about a further 160 or approximately 10 per cent. of the number who originally came forward for the first part of the examination.
When asked by the chief education officer, grammar school heads confirmed that in an emergency they could this year accommodate an extra 125 pupils— that figure being the forecast before the supplementary Part I examination had been taken, of those likely to be eligible for Part II but who had not got 360 marks. In the event, that figure was increased by nine making a total of 134.
The parents of these 134 children assumed, as indeed did their primary schools and opinion generally in the town, that they would go to grammar schools. But on the 5th June the council changed its mind: only those who had gained 360 marks in Part I were to go to grammar schools. On 8th June, the rest the 134— were offered G.C.E. courses in secondary modern schools.
You can understand, Mr. Speaker, that this came like a bolt from the blue. Without previous warning, without having made any effort to disillusion the parents— if, indeed, there had been any misunderstanding of the position— without a word of explanation, the authority informed them that their children would not, after all, be going to grammar school.
Uproar followed. The parents formed themselves into a special association. With commendable restraint but with very great tenacity they fought for their rights. They lobbied councillors, Mem-
926
bers of Parliament and Ministers against what they legitimately regarded as a flagrant breach of faith by the education authority. The council remained adamant. It refused to allow the 134 children to go to grammar schools even though the grammar schools were ready to take them.
On the 23rd July, it went one better and threw out the May resolution altogether, reinstating Part II. At only three days' notice, two of which were taken up with the town's annual school sports, the 134 were invited to sit for this crucial examination. Many flatly refused to do so but were subsequently given a second chance. One cannot blame them for their attitude. In the end, 113 out of the 134 finally took the examination, 56 of whom passed and have been offered grammar school places.
I feel sure that my right hon. Friend will agree that this has been a shameful episode in the history of education in Bournemouth. I am sure, also, that he will understand the parents' feeling of anger and bitter resentment not only at the reversal of the original decision, but also at the highhanded manner in which this whole affair has been conducted.
I put in one plea on behalf of those who have been diverted to G.C.E. courses in secondary modern schools. It is that instead of being dispersed throughout the schools they should be kept together so that they will be encouraged to maintain the highest possible standard of work and conduct. At any rate, I urge the Council to review the working of the transfer system at the earliest stages to make sure that the brightest children who did not succeed at 11-plus are given the opportunity as they progress to pass over to grammar school for their remaining school years, and I urge my right hon. Friend to speed on the establishment of more grammar school places, which are so clearly needed in Bournemouth.
There are lessons here for us all to learn. Perhaps most important of all is for the Authority to remind itself that it is not dealing with units or statistics but with human beings possessing feelings and emotions, and the Authority's sense of public relations needs to undergo a drastic reappraisal. The whole of the marking system is wrapped in mystery.

927
Why? Do not parents have a right to know? The whole method of selection must not only foe fair, but must be seen by parents to be fair.
The Council should set out in clear and unambiguous terms exactly what the selection procedure is to be. It should conduct an inquiry into the causes of this year's confusion and should now be taking steps to ensure that a similar situation cannot arise in future.
Finally, it would be a simple act of courtesy, if nothing else, if the authority were to write to parents apologising for the grotesque manner in which the selection procedure has been distorted this year. Will my right hon. Friend look into the whole question of grammar school provision in Bournemouth and do what he can to ensure that the selection processes are fairly conducted from now on?
Whilst the events of this year have understandably generated a most unfortunate atmosphere of distrust and hostility, my earnest hope— I am sure that it is also that of my right hon. Friend— is that if only for the sake of children harmony will speedily be restored. Let the parents now accept the position for this year and let the authority, profiting from its mistakes, act with greater frankness and greater humility in the future.
10.10 p.m.
Mr. John Cordle: I am grateful to you, Mr. Deputy-Speaker, for calling me as I am very glad indeed to follow in support of what my hon. Friend the Member for Bournemouth, West (Mr. Eden) has said. This matter has led to an untenable and deplorable situation. I am hopeful that this debate will bring about a satisfactory conclusion to the matter and that the wrong which has been done can be rectified, even at this late time.
This is no time to be mealy-mouthed. Unpalatable as it is to me, I feel that the sorry story of a council whose lack of wisdom and misunderstanding must be told, because so much unrest and unnecessary distress to both children and parents could have been averted by more careful thought and planning. It seems that complete absorption in an administrative wrangle at the expense of a small group of young children regardless of
928
the effect on those children has brought about the difficulty which we now have to face. Most regrettably through the muddle-headedness of the education committee the council has been brought into disrepute and the good people of Bournemouth have all but lost confidence in it.
One thing is very certain; it is most important that such a situation should not happen again. As there is no independent educational advice available to the education authority, it is not perhaps fair to lay all the blame on the council, but if there is a lesson to be learned it is that in the days to come the council must see that future policy within the Act is properly interpreted by the right men. This seems to call at once for changes in the borough education office. Without question Bournemouth is ripe for more grammar schools, and, as my hon. Friend has shown, there is a clear need for more grammar school places in Bournemouth. In support of this, I quote an extract from a letter I have received from the headmaster of St. Paul's School, Bournemouth who says:
"As a headmaster of thirty years wide experience I know how we have suffered under the peculiar Bournemouth scheme and all primary heads of experience, if honest with themselves, know this. Over these ten years many of our best pupils, real G.S. material, have been thwarted of their rights and directed to secondary modern schools."
A member of the staff, giving evidence recently before the education committee, said:
"While I, and I can speak for all my colleagues at Bournemouth Grammar School, would like to see an additional grammar school, or schools here, I wish to emphasise we are not in any way criticising or jealous of the excellent results obtained by the secondary modern schools and certainly do not wish to abolish G.C.E. streams in them. We think, and they very sincerely, that children capable of benefiting from grammar school education should receive it in a grammar school and that this should not depend so much on the town in which the parents happen to live."
It is obvious to me, and I am sure to this House, that the administration is at fault and that a certain power is standing in the way of this vital development. Our children in Bournemouth are entitled to these grammar school places. I hope that the Minister will take special notice of this tonight. I have very much on my mind the serious breach of good moral conduct by the authority in respect of seventy-eight children who,

929
having had the misfortune of not passing Part II of the examination, are now through the injustice of the council's ruling, to lose the opportunity of a grammar school education.
Even at this late hour, in my view something can be done for them. We know— and this my hon. Friend has said — that there are proper places available in the grammar schools, and all it needs is for my right hon. Friend to direct the council to implement its decision of 1st May and its obligation, redeeming itself and providing the places for these seventy-eight children.
If my right hon. Friend is unable to accede to this, may I ask him to support my hon. Friend's plea that these children should be kept in distinct groups. This, then, can well pave the way for a new grammar school, which is so urgently needed. But in any case, may I be assured that all the children's work will be closely reviewed at the end of the first year with a view to moving up to grammar schools? For those fifty-six children who have passed Part II, may I ask for the Minister's undertaking that they will not be required at any future date to undergo any further selection procedure or tests?
In conclusion, may I thank the Minister for the careful and close attention which he has already shown in our sad dilemma and, with respect, ask him in his wisdom to intervene even at this late hour and to proceed with an inquiry at once into the whole selection procedure as it is in Bournemouth and into the ability and competence of the officials in charge of education there?
10.17 p.m.
The Minister of Education (Sir Edward Boyle): I am grateful to my hon. Friends the Members for Bournemouth, West (Mr. Eden) and Bournemouth, East and Chrisrtchurch (Mr. Cordle) for raising, as they have properly done, the question of this year's secondary selection arrangements in Bournemouth. This was one of the first matters referred to me when I came to the Ministry. It is a matter to which I have given a certain amount of attention and thought, and I am grateful for this opportunity of speaking about it.
In the light of the lucid speech of my hon. Friend the Member for Bourne-
930
mouth, West— and I think that some of my hon. Friends present may well have been surprised at some of the facts which he gave us this evening— I do not think that I need rehearse the history of events in Bournemouth since last spring which have led to the need for this debate. I will simply say that at a critical point in time the Bournemouth Council took a decision affecting the future education of some 1,500 children. In my view, this decision was not sufficiently considered, and I am bound to conclude from the evidence which I have studied that it was not properly explained to those people, namely the parents, who had the best right to know what their authority was planning. In any event, I say quite categorically— and I shall return to it in my speech— that it was a decision which ought not to have been taken in mid-stream of this year's 11-plus arrangements. I realise that the results have caused a great deal of anxiety and unhappiness for the parents and the children concerned.
The parents affected reacted quite properly by organising themselves into a group, choosing spokesmen from among themselves, presenting their case publicly in a reasoned way and seeking redress from their Members of Parliament. I have met representatives of the parents. The meeting between us was confidential, but I should like to say that, having in my time received a good many deputations, I have never received a deputation who put their case in a more lucid and temperate manner.
I do not want to dwell too long on the past. During the last few weeks the Bournemouth authority has arranged supplementary tests for those children who were unexpectedly deprived of their chance to qualify for a grammar school, and in the end more children have been offered places in grammar schools than was earlier thought possible. But it remains true— as I realise— that some children were taking these tests at short notice after a period of uncertainty and in an atmosphere of worry, and this must leave some parents— those whose children did not get through the examination— with a sense that these tests were not carried out under ideal arrangements. I fully appreciate that.
Nothing can now altogether eradicate these feelings, but what has happened

931
has happened. There is, I believe, no way of eradicating history here, and I think that the important thing is to learn from it for the future.
I believe that a number of lessons can be learned. I think that they are applicable generally and not merely to Bournemouth. First and foremost, it is essential, in my view, that any decisions taken by councils affecting secondary education arrangements should not be brought into effect in the middle of one year's process of selection. I hope that these words will have a wider audience than merely Bournemouth, because this is a point of principle of great importance. What may appear a perfectly reasonable resolution of a council, taken by members in all good faith, can cause serious harm and an alarming loss of confidence among parents if it is carried out without regard to timing.
Further, decisions which directly affect parents, children and teachers must be fully, openly and carefully explained by those who take them, otherwise people are at the mercy of unreliable report and gossip, which in themselves add to the anxiety and loss of confidence. Do let us remember that the ordinary parent, understandably enough, is not all that well informed about selection procedures— the 11-plus and all that. This is a difficult subject— a subject, dare I say, where even in the House there is sometimes less than perfect information among hon. Members. How much more must this be true among the public at large.
My second general point is this. This year's troubles in Bournemouth have centred on the arrangements for the 11-plus test, but a wider issue lies at the back of all this, namely, the whole pattern of secondary education, the proportion of grammar school places, the provision of academic courses in the modern schools, and so on. These are very important issues.
I have noticed with interest what my hon. Friends have had to say about the grammar schools in Bournemouth and I am sure that the Bournemouth authority will try to look at all these issues calmly and objectively. They matter very much indeed to the parents and children of Bournemouth, and they must be regarded seriously. They are certainly matters
932
which I am very ready to discuss further with the Bournemouth authority.
In everything affecting education we must all be willing to learn from experience and to adjust our minds quickly. I am very conscious, returning to the Department after a lapse of time, that none of us can assert that we know all the answers to any educational question. The pace of change in our world is rapid, and we must be ready to be flexible in our approach to all these matters.
There is one other factor in educational planning to which we must pay increasing attention. Do not let us ever forget the ever-growing conscious interest which parents all over the country are taking nowadays in the educational system. Everything joins together to convince parents that success for their children depends on the education which they receive. Parents want to see good primary schools, good secondary schools and every kind of opportunity for further education after school. Parents may not be expert on the particular details of secondary school selection. They may not be interested in a particular organisation of schools or a particular set-up for secondary education. But all parents are profoundly interested in what the system offers to their own children and they want their children not to have just one chance but as many chances as they need to get as far as they can up the educational ladder.
These last few minutes I have digressed just a little from the particular difficulties in Bournemouth because I think that it is important to consider what general lessons there are to be learned from events in this one area.
For the last few minutes of my speech I will come back to Bournemouth. I said earlier that, although the authority had arranged that children who were ruled out on their first decision about this year's tests did in fact get a chance to qualify for a grammar school place, none the less there remained a number of children out of this group who had failed to qualify in either of the later tests and a few who did not take the tests, for one reason or another. Between 60 and 70 of these are children who were recommended by their head teachers. These children will be able to go to one of the secondary modern

933
schools in Bournemouth, with the opportunity of taking a course leading to the G.C.E.-"O" level and if they are successful they will be able in due course to transfer to the sixth form of a grammar school.
But I am fully aware, as my hon. Friends may tell, that some of the parents in this group are left with a sense of injustice, and I have considered this point very carefully. After all, these are objective matters to us in this House, but I can well understand and, I hope, enter into, the feelings of the parents concerned. It is with that thought in mind that I am asking the Bournemouth authority to take special steps to watch these children in their first year at the secondary modern schools so that in any case where it appears that a wrong decision may have been taken this year, the boy or girl is offered a transfer to the grammar school. This must, of its nature, be a rather informal and personal arrangement for this small group of children. None the less, I believe that what I have said is right, and I hope that the Bournemouth authority will take the special steps I have just mentioned.
There cannot, I must say frankly to the House and to those outside it, be any question of the results of this year's 11-plus tests being scrapped, and everybody starting again. Apart from anything else, a serious injustice would be done to the great majority of children were such a course to be entered on. But, having ruled out that possibility — and, I am sure, rightly ruled it out— on the one side, I repeat that it is of special importance that the Bournemouth authority should take special steps to watch the performance of these particular children whom I have mentioned.
I hope that having explained to the House how I view the matter, and having made myself perfectly clear on what, I agree, has been a distressing episode, I very much hope now that the children and the parents involved will be able to look to the future, and feel that their
934
case has been looked at in the Ministry with all the care we can offer. I would only like to add that I am sorry that my return to the Ministry should coincide with an episode that I personally regard with very great regret indeed.
On the whole, I think that our educational system works well. We have very much to be proud of in our educational achievements, but do let us remember that the success of our educational system must in very large measure depend on the work of the local education authorities, and on all those who, whether as administrators or councillors, have special interest in and concern for our educational system, looking carefully and objectively at the interests of the children, and being very careful never on any account to pass resolutions or take action that can lead to a sense of injustice.
I do not think that I ought to say more this evening, and I end by thanking my hon. Friends for raising this issue, as they have very properly done, and for acting in the finest traditions of the House as representatives for their constituencies.
Mr. Eden: I should like to thank my right hon. Friend very much for his reply, but may I ask him to clarify the position? Did he say that these children could be kept together in a single group, or in groups, or are they to be dispersed throughout all the secondary modern schools in Bournemouth?
Sir E. Boyle: I am sorry that I did not answer my hon. Friend on that point. I think that there would be very great difficulty in keeping them in a single group, or in two or three groups. I must simply stand on what I said earlier; that I am asking the Bournemouth authority to watch these particular children, and their performance in the first year in secondary modern schools. I have considered my hon. Friend's point, but I do not think that it would be practicable.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Ten o'clock.

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  London Local Government
  Easter
  Easter
  Licensing Act, 1961
  Licensing Act, 1961
  Probation Officers (Salaries)
  Probation Officers (Salaries)
  Remand Home, Kidlington
  Remand Home, Kidlington
  Probation Service (Negotiating Body)
  Probation Service (Negotiating Body)
  Metropolitan Police (Alsatian Dogs)
  Metropolitan Police (Alsatian Dogs)
  Open Prisons
  Open Prisons
  Homicide Act (Cases of Diminished Responsibility)
  Homicide Act (Cases of Diminished Responsibility)
  Fireworks
  Fireworks
NORTHERN RHODESIA
  Register of Voters
  Register of Voters
  Newsreel Films
  Newsreel Films
  Demarcation Commission (Report)
  Demarcation Commission (Report)
  Africans (Military Training)
  Africans (Military Training)
RHODESIA AND NYASALAND
  Financial Assistance
  Financial Assistance
NYASALAND
  Mission Education
  Mission Education
CENTRAL AFRICA
  United National Independence Party
  United National Independence Party
NIGERIA
  Commission of Inquiry (Statement)
  Commission of Inquiry (Statement)
MALAYSIA
  Federation
  Federation
EDUCATION
  School Leavers, The Hartlepools
  School Leavers, The Hartlepools
  Marriage Guidance Lectures
  Marriage Guidance Lectures
  Oversize Classes, Wales
  Oversize Classes, Wales
  Library Service
  Library Service
  Oversize Classes, County Durham
  Oversize Classes, County Durham
  Mathematics and Science Graduates
  Mathematics and Science Graduates
  Widows
  Widows
  School Transport
  School Transport
  School Children (Dentures)
  School Children (Dentures)
  Traffic Engineering
  Traffic Engineering
  School Dental Service, Hinckley
  School Dental Service, Hinckley
LOCAL GOVERNMENT
  Bournemouth Development Plan (Public Inquiry)
  Bournemouth Development Plan (Public Inquiry)
  Coal Exchange (Demolition)
  Coal Exchange (Demolition)
  London
  London
  Interest Charges, Glamorganshire
  Interest Charges, Glamorganshire
  Middlesex County Council (Agricultural Department)
  Middlesex County Council (Agricultural Department)
HOUSING
  Aluminium Bungalows (Replacement)
  Aluminium Bungalows (Replacement)
  Residential Property (Derating)
  Residential Property (Derating)
TRADE AND COMMERCE
  Textile Industry
  Textile Industry
  Funeral Expenses
  Funeral Expenses
  Company Law (Jenkins Committee)
  Company Law (Jenkins Committee)
  Linseed
  Linseed
  Children's Footwear
  Children's Footwear
  Industrial Development Certificate, Tiverton
  Industrial Development Certificate, Tiverton
ADEN
  Constitution (Talks)
  Constitution (Talks)
TRINIDAD AND TOBAGO
  Independence
  Independence
UGANDA
  Sudanese (Extradition)
  Sudanese (Extradition)
KENYA
  Immigrants
  Immigrants
SCIENCE
  Atomic Energy Authority (Civil Research and Development Programme)
  Atomic Energy Authority (Civil Research and Development Programme)
  Merchant Ships (Nuclear Propulsion)
  Merchant Ships (Nuclear Propulsion)
  Manchester and Liverpool Universities (Nuclear Reactor)
  Manchester and Liverpool Universities (Nuclear Reactor)
  Space Research
  Space Research
ROADS
  Bath Road (Improvement)
  Bath Road (Improvement)
SHIPPING
  Advisory Panel (Appointment)
  Advisory Panel (Appointment)
TECHNICAL CO-OPERATION
  Nyasaland (Teachers)
  Nyasaland (Teachers)
POST OFFICE
  B.B.C. (Licence Fee)
  B.B.C. (Licence Fee)
  Overseas Telegraph Operators
  Overseas Telegraph Operators
TELEPHONE SERVICE
  Swindon
  Swindon
  NUCLEAR TESTS
  NUCLEAR TESTS
  TRINIDAD INDEPENDENCE (GIFTS)
  TRINIDAD INDEPENDENCE (GIFTS)
  UGANDA INDEPENDENCE (GIFTS)
  UGANDA INDEPENDENCE (GIFTS)
  ROYAL COMMISSION ON THE PRESS (REPORT)
  ROYAL COMMISSION ON THE PRESS (REPORT)
ROYAL NAVY
  Stoker James Cuthbert
  Stoker James Cuthbert
AGRICULTURE, FISHERIES AND FOOD
  Land, Aberhosan (Sale)
  Land, Aberhosan (Sale)
ROYAL AIR FORCE
  Binbrook Camp, Grimsby
  Binbrook Camp, Grimsby
  Executive Aircraft (Beagle 206)
  Executive Aircraft (Beagle 206)
MINISTRY OF AVIATION
  Executive Aircraft (Beagle 206)
  Executive Aircraft (Beagle 206)
MINISTRY OF HEALTH
  National Health Service (Charges)
  National Health Service (Charges)
  Handicapped Children
  Handicapped Children
  Dentures
  Dentures
  Dentists
  Dentists
  Executive Councils, Greater London
  Executive Councils, Greater London
HOSPITALS
  Hospital Plan (Acquisition of Property)
  Hospital Plan (Acquisition of Property)
  ANGLO-EGYPTIAN FINANCIAL AGREEMENT
  ANGLO-EGYPTIAN FINANCIAL AGREEMENT
EMPLOYMENT
  Wages (Payment by Cheque)
  Wages (Payment by Cheque)
  Local Offices (Hours)
  Local Offices (Hours)
PUBLIC BUILDING AND WORKS
  British Museum Library Scheme (Architects)
  British Museum Library Scheme (Architects)
SCOTLAND
  Houses, Rosyth (Rents)
  Houses, Rosyth (Rents)
  Western Isles
  Western Isles

Preamble
The House mat at half past two of the clock. THE LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chester

THE "BELFAST" AIRCRAFT
2.35 p.m.
LORD STONHAM: 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 have now decided to place a further order for a version of the Belfast aircraft with Short Bros. and Harland, of Belfast.]
THE FIRST LORD OF THE ADMIRALTY (LORD CARRINGTON): My Lords, as I told the noble Lord in the debate on the Air Estimates on 4th April, it seems unlikely that Her Majesty's Government will have a requirement for more of the present version of the Belfast than the ten already on order for R.A.F. Transport Command. There is a Service requirement for a tactical transport aircraft to replace the Beverley and Hastings, for which Messrs. Shorts have offered a modified version of the Belfast. This requirement is now being examined; but I cannot say whether the modified Belfast will be found to be the best means of meeting the requirement. Her Majesty's Government are well aware of the importance to the aircraft industry of an early decision.
LORD STONHAM: My Lords, is the noble Lord aware that this matter has been under active consideration since last March, when Mr. Butler visited the works and announced that the matter was urgent and that a decision must be made soon? Is it not possible for the Government to make an announcement that an order will be placed, and that precise details will be announced later? If that were done it would have a tremendous effect on the morale, not only
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of the people who work there, but of the whole of the people of Northern Ireland.
LORD CARRINGTON: I am afraid that I cannot do that, my Lords; but I would emphasise to the noble Lord that the Government are well aware of the situation at Shorts, and we will try to give a clear indication of our future requirements as soon as possible.
LORD MORRISON OF LAMBETH: My Lords, will the noble Lord keep in mind that unemployment in Northern Ireland is, I think, higher than in any other part of the United Kingdom, and that Northern Ireland is a very loyal part of the United Kingdom? They might, incidentally, remember that it is all too loyal to the Conservative Party in House of Commons elections. May I ask him to give favourable consideration to doing anything that is possible to improve the industrial situation in Northern Ireland?
LORD CARRINGTON: Yes, my Lords, this is one of the considerations which will be borne in mind before a decision is reached.
LORD OGMORE: My Lords, as the Government must know what they require with reference to transport aircraft, could the noble Lord tell us what is the reason for the delay?
LORD CARRINGTON: There are other designs to be examined before it is settled which particular one we choose.
LORD REA: My Lords, in considering these general matters of unemployment, would the Government say what their opinion is about joining up the German firm of Krupp's with an English firm in order to help matters?
LORD CARRINGTON: My Lords, I should be extremely grateful if the noble Lord would put that Question down.
LORD WALERAN: My Lords, may I ask my noble friend the First Lord of the Admiralty whether Her Majesty's Government will take into account the great techniques that have been built up in Northern Ireland due to Shorts' Apprentice School? Not only have tradesmen learned a lot—you can see

403
that in what they do and in the manufacture of guided weapons—but the number of people they supply from their Apprentice School who become lecturers at universities is quite astonishing. I should like to put a point to Her Majesty's Government—and perhaps I might, by leave of the House, apologise for the rather hasty remarks I made in the Air Estimates debate in April about four propellers on the end of an aeroplane looking old-fashioned. Will the noble Lord realise that "handsome is as handsome does," and that if the thing does its job, even if it does look old-fashioned, it does not matter? The third point on which I would ask a question, is very simple. Could my noble friend tell me why he classes the Belfast as a tactical transport? I always understood that it was a strategical transport.
LORD CARRINGTON: My Lords, in answer to the last question of the noble Lord, Shorts have a modified design of the Belfast which is a tactical transport aircraft and which they say would suit the requirements of the Government. The sort of considerations that the noble Lord raised in his first two supplementary questions are, of course, and will be, borne in mind by the Government.
LORD STONHAM: My Lords, is the noble Lord aware that since 1958 repeated assurances have been given by responsible Ministers that it was the policy of Her Majesty's Government to continue Shorts as a viable progressive aircraft unit? Can he say if that remains the policy of Her Majesty's Government?
LORD CARRINGTON: I think it has been said—it was said by my right honourable friend the Minister of Defence—that it was the aim of the Government to do that.

AID FOR SPORTING ACTIVITIES OVERSEAS
2.41 p.m.
BARONESS BURTON OF COVENTRY:My Lords, I beg leave to ask the Question which stands An my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, as they are not in a position
404
to announce their decision on the establishment of a Sports Development Council until after the Summer Recess, this means that applications made by sports organisations for financial help in meeting travel expenses in connection with amateur sporting events overseas this summer will also have to wait consideration until then; and, if so, whether such consideration may be retrospective for events held this summer; and whether the Government will make an interim statement upon this aspect of the matter.]
THE MINISTEROF STATE, HOME OFFICE (EARL JELLICOE): My Lords, the statements already made, and those promised in your Lordships' House and in another place, concern Government assistance to sporting activities in this country, in the context of the recommendations of the Wolfenden Committee. The Government's hope is that sport and recreation in this country will, within the resources available, receive an expanding measure of public support, in recognition of their social importance in the community. Assistance to teams engaged in international sporting competitions is a separate matter, not covered by the Committee's recommendations. Any such assistance would need to be fully justified by the contribution which the teams would be enabled to make, as a result of it, to the relations between Britain and other countries. But this lis a matter which needs careful consideration. Individual cases will continue to be dealt with on their merits by my noble friend the Secretary of State for Foreign Affairs and my right honourable friend the Secretary of State for Commonwealth Relations and the Colonies.
BARONESS BURTON OF COVENTRY:My Lords, is the noble Earl aware that those organisations which have already sent in applications for such grants have had, I will not say a very curt reply but one which was quite useless and which informed them that no help could be given on this basis? May I also ask the noble Earl whether I am to understand from the Answer which he has now given me that if organisations send in applications for such financial help, they will be considered and the organisations will not be told

405
that this matter does not arise under the Wolfenden Report?
EARL JELLICOE: My Lords, I think I can give the noble Lady the assurance which she wants. Any individual cases would be considered on their merits.
BARONESS BURTON OF COVENTRY: My Lords, since the noble Earl seems to have given way just a fraction, may I ask him, in connection with those organisations which have had their requests turned down, I suggest without due consideration, whether these matters may be looked at again? Is the noble Earl aware that they have not been turned down on the grounds that they were not worthwhile applications, but simply because they do not at present arise on the matters under consideration?
EARL JELLICOE: My Lords, I think that I can assure the noble Lady that the particular individual applications to which she referred were carefully considered but it was not felt that the political dividends which would flow from giving a grant in these cases would outweigh the cost involved.
BARONESS BURTON OF COVENTRY: My Lords, in asking my third and last supplementary, may I say that that seems to be a most extraordinary statement from Her Majesty's Government? Is the noble Earl aware that obviously opinions will differ, not necessarily across the Floor of the House, as to the political dividends to be reaped? Surely this is a new concept in international amateur sport. Is the noble Earl aware that I shall take the greatest pleasure in putting down a Motion, for, I hope, a date after the Recess, when we can go into this extraordinary conception advanced by the Conservative Government?
EARL JELLICOE: My Lords, I do not think that there is a Party political issue at all here, but naturally I will await with interest the noble Lady's Motion.

DRUG TESTING
2.44 p.m.
BARONESS SUMMERSKILL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will ask the pharmaceutical industry to ensure that drug firms are reviewing the list of drugs that they sell and will submit to testing in at least three species of pregnant animal all those drugs which may be capable of producing some degree of human toxicity.]
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, I should like, if I may, to use the noble Lady's Question to put together certain facts about drug testing which I think will be of interest to the House. On the direct Question which the noble Lady asks, she will be glad to hear that my right honourable friend is seeking advice on testing new drugs generally through his Standing Medical Advisory Committee, which is the appropriate body. The noble Lady will not therefore expect me to pursue this matter further now. The noble Lady will also be aware of other studies of this which are in progress.
Since the recent events relating to thalidomide, I have myself made inquiries of the Medical Research Council on the rôle they can expect to play in advancing methods of testing. The noble Lady will have seen that the Medical Research Council have this week announced their intention to appoint a Committee, under the chairmanship of Sir Charles Harington, to study the methodology of toxicity testing. I attach great importance to the work of this Committee and I am sure the House will agree with me in wishing it all success.
It is not the Medical Research Council's responsibility to carry out routine testing programmes on drugs or other chemicals, from the point of view of either efficacy or toxicity. In promoting research likely to lead to the advancement of knowledge, they do, however, sponsor many clinical trials of new preparations of particular promise for specific purposes and have for many years undertaken fundamental research in the field of toxicology, especially with regard to the difficult methodological problems which arise in devising tests to demonstrate possible long-term

407
effects which may be produced, for example, by such substances as food additives.
The Council have a special responsibility, however, for advising the Ministry of Health on the scheduling of drugs under the Therapeutic Substances Act. Its rôle in this respect is limited to biological preparations and does not cover ordinary chemicals. The noble Lady will also have seen a well-informed article in The Times newspaper yesterday on the history of the introduction of thalidomide itself.
BARONESS SUMMERSKILL: My Lords, may I say how gratified I am that the noble Viscount the Leader of the House, in his rôle as Minister for Science, has thought it appropriate to answer this Question? Is he aware that, although what he has said, that the Medical Research Council is prepared to identify itself with the research, is highly desirable, the Council has already stated that it can only advise and not control? Is he also aware that he has not made one statement which could be interpreted in terms of practical action which will safeguard, not only the pregnant mothers in the community but also every individual who is consuming drugs? Is he aware that it was last year—I repeat, last year—when it was decided to withdraw thalidomide? All these months have passed. Drugs are going on the market every day, about which the Minister of Health has been warned of what has been happening. Now we are adjourning for the long Recess and all we are being told is that the Medical Research Council are setting up a Committee and that they will advise, whereas the time has come surely when the Minister of Health should direct these firms to examine the drugs which are still being distributed, in order that the population should be protected.
VISCOUNT HAILSHAM: My Lords, I hope that I made it clear from my Answer that I welcome the noble Lady's general interest in this important topic. Whether her particular suggestions have the slightest scientific validity is a matter upon which opinions might differ. It is not correct, of course, that the only thing contained in my Answer was the announcement of the Medical Research Council's Committee. The first part of
408
my Answer describes the action taken by my right honourable friend.
So far as thalidomide is concerned, I myself took careful steps to find out the history of this matter from my own advisers. They consulted a number of their expert advisers and found that there was general agreement that, in the existing state of knowledge, it is extremely unlikely that the most rigorous programme of screening tests would have suggested that an effect was to be expected on the developing human embryo. I must say this to the noble Lady, who, I think, rather over-simplifies this problem. One of the great difficulties in handling a question of this kind is that obviously a good deal of work needs to be done upon improving the methods of testing. If we have, as some countries have, a system like a sieve imposed by the Government on the issue of drugs, which tin effect gives a clean bill of health to drugs which get through the sieve, and if it is scientifically proved, as I am advised appears to be the case, that there is no sieve devised which could give an absolutely clean bill of health effectively to a particular drug, you might very well get a situation in which both manufacturers and clinicians tended to overlook their own responsibilities in the matter and to put forward drugs without taking adequate steps themselves; and this might very well be a worse state than that Which exists at the moment. It is very important, if I may say so, in dealing with matters of great human importance to follow the dictates of science as well as of the emotions.
BARONESS SUMMERSKILL: My Lords, may I ask the noble Viscount-he stood up in a most self-righteous manner and queried the scientific validity of my question—whether he has not been informed this week that my Question embodies the wishes of some of the most eminent doctors of the University College Hospital and has been echoed by the British Medical Journal this week? Has he not been informed of this important matter which I think in itself is significant, and can he query the scientific validity of one of the most famous teaching hospitals in London?
VISCOUNT HAILSHAM: My Lords, I will not, of course, endeavour to enter into a competition with the noble Lady

409
in the matter of self-righiteousness, but where scientific information is concerned all I said was that the scientific efficacy of this particular situation is precisely one of the matters which Sir Charles Harington will be inquiring into; and I am informed, at any rate, that there are two views about this matter, notwithstanding the noble Lady and the distinction of her Mends. All I would say about it is that my advice is that there is general agreement in the scientific world that, had her suggestion been accepted, it is not necessarily true that thalidomide would have come off the market.
LORD DOUGLAS OF BARLOCH:My Lords, may I ask the noble Viscount, having regard to his statement that pretesting of drugs does not necessarily ensure their safety, whether some steps can be taken, when clinical trials of drugs are made, to inform the patients that they are being subjected to an experiment the result of which is not certain?
VISCOUNT HAILSHAM: My Lords, I was seeking to make the first point myself: that these pre-clinical trials do not necessarily give assurance of safety. Of course clinicians themselves must exercise great responsibility, and I have no doubt they do. But the mere fact that complete security is not given by pre-clinical trials does not render pre-clinical trials any the less necessary.
LORD DOUGLAS OF BARLOCH: My Lords, with all respect, that was not my point. My point was that the patient who becomes the ultimate subject of the experiment should be informed that the treatment is experimental.
VISCOUNT HAILSHAM: My Lords, I
think that is very desirable but it is, after all, the responsibility of the physician or the clinician to tell the patient what, in his sense of responsibility, he thinks that patient ought to know about his own treatment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, may I ask whether the noble Viscount, the Leader of the House might be willing, as he is also the Minister for Science, to ask the drug manufacturers if they would make a substantial grant, perhaps of their profits from thalidomide, to Lady Hoare's fund for the victims of it?
VISCOUNT HAILSHAM: My Lords, that is another matter, and I should like to consider what the noble Viscount has said. I do not think myself that it is the appropriate duty of a Minister to suggest the particular directions of free donations given by any individual citizens, otherwise we might make a great number of suggestions to a great number of people.

UNITED NATIONS AND THE CONGO
2.54 p.m.
LORD BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper:
[The Question was as follows:
To ask Her Majesty's Government whether they will give assurance that instructions be given to the United Kingdom representative to the United Nations that no assent be given that any combatant action be embarked upon by United Nations' Forces in the Congo.]
THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF HOME): My Lords, Her Majesty's Government have constantly stressed to the United Nations the importance which they attach to the use of peaceful methods of achieving a solution in the Congo. In his message to member States yesterday the Acting Secretary-General himself repeated his determination to see a solution brought about by peaceful means through the process of conciliation and consultation. Her Majesty's Government's representative in the United Nations of course acts upon Her Majesty's Government's policy and from time to time is given instructions.
LORD BARNBY: My Lords, while thanking the Foreign Secretary for the reassuring statement, may I ask him, with regard to the United Nations armed troops in the Congo, whether he is able to give any indication, if there should be any change, that it would be in increased or in decreased numbers?
THE EARL OF HOME: My Lords, I am afraid I should need notice of that point, as it is not in the original Question.

BRITISH SUBJECTS' EGYPTIAN CLAIMS
2.56 p.m.
THE EARL OF HOME: My Lords, I told your Lordships on July 26 that I hoped to make a statement on our discussions with the United Arab Republic Government before the House rose. I am glad to inform the House that agreement has been reached with the Egyptian Government on all the matters relating to the 1959 Financial Agreement that have been under discussion. The necessary documents have been drawn up. For technical reasons, largely connected with printing, it has not yet been possible to sign them, but signature should take place within a few days. I think, however, your Lordships would like a statement now.
The main problem has been the transfer of cash and bank balances up to the equivalent of £E5,000 as provided in the Financial Agreement. Arrangements have now been agreed upon to clear up this whole problem within a period which we hope will not exceed three years. The first £E1,000 of approved applications is to be transferred in future through the accounts of Her Majesty's Embassy in Cairo, the local currency being used to meet the Embassy's current expenditure. As regards amounts in excess of £E1,000 and up to £E5,000, the United Arab Republic will provide approximately £2¼ million which will be available in London on specified dates so as to facilitate the completion of transfers as they are applied for. This includes an immediate payment of £357,500 which will clear off the balances in excess of £E1,000 due to those applicants who have already received the lower figure. For their part Her Majesty's Government will provide a credit to the United Arab Republic of £715,000 to be used to finance transfers in the immediate future. The amounts drawn under this credit will be repaid by the U.A.R. Government over a ten-year period with a three-year period of grace and interest at the current standard rate. Arrangements have also been made to ensure that applications for transfer will be expeditiously handled.
In addition we have reached agreement on a number of other points in the 1959
412
Agreement which have given rise to difficulty. Arrangements have been made for expediting and simplifying the release of the remaining British properties sequestrated in 1956. A more exact definition has been made of property to be regarded as "Egyptianised" for the purposes of compensation claims. Dividends which fell due for payment after October 30, 1956 but were not distributed by companies that were "Egyptianised" will rank against the compensation fund. All available records will be furnished to enable claimants to establish claims with the Foreign Compensation Commission. The U.A.R. Government will pay Her Majesty's Government the equivalent in sterling of £E80,000 in respect of the balance of compensation for the officials dismissed in 1951. Effective instructions for the release of certain securities will be given. The exact liability of Egyptian Government pensions to Egyptian tax has been settled.
The documents on all these points will be published and laid before the House as soon as possible. The agreements which we have now reached with the U.A.R. Government on these matters are a sign of an improvement in our relations, which Her Majesty's Government warmly welcome. It is our hope that this development will continue.
THE EARL OF LUCAN: My Lords, may I, on behalf of my noble friends, thank the noble Earl for his statement, and say that we welcome whole heartedly this development, which seems to promise some redress and some relief to the hardship which has been suffered by so many people who had property and interests in Egypt. We welcome also the paragraph about relieving the ex-Egyptian officials, who also have been suffering for many years. We welcome the fact that the Egyptians have promised to improve the machinery and provide facilities for all available documents to be accessible to the claimants, which, as your Lordships will remember, was a matter which caused very great delay and difficulty. We note, however, that this is going to take place over three years—one might say, a slow-motion operation.
As to the details of the settlement, I think it is impossible for us to arrive at a conclusion; but I must tell the

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noble Earl that on the face of it it does not look like a very good bargain. I am not a financier, but it looks to me as if we are paying the Egyptians to pay us, paying them with a ten-year loan, moreover. I hope that when the documents are published in a White Paper we shall find that the situation is rather better than it appears at first sight.
LORD REA: My Lords, I am sure that noble Lords on these Benches would like to endorse what the noble Earl has said, and are very glad to note the further progress made in solving problems which arose after the unfortunate Suez incident. In congratulating the Government on going forward with the settlement and pushing it well, I think the House would like to pay a tribute to the noble Lord, Lord Killearn, whose persistence has done so much for the people who suffered in this situation.
THE EARL OF HOME: My Lords, if I might answer the noble Earl, Lord Lucan, at once, of course this is only a partial operation. This facilitates the transfer of funds which the Egyptians have up till now not been paying or able to pay, and of course it does not affect the obligation I accepted the other day, that the Government would produce some more money over and above the £27 ½ million of the 1959 Agreement. I must make that clear; this is a limited, partial measure. But, nevertheless, I think it is valuable. It is true we have lent £715,000 to the United Arab Republic Government to help them to finance transfers for the first part of this £2 ¼ million deal; and so I do not think it is really a very bad bargain, and I think the people here will benefit from it.
3.3 p.m.
LORD KILLEARN: My Lords, I should like very much to thank the noble Earl for his statement. We know how hard he has worked on behalf of these unfortunate people, and I am personally very grateful to him. I do not pretend the statement meets all that we want. The thought went through my mind that, if such a thing were possible, it was a cross between a gift horse and a red herring. I do not know what that would produce. We must reserve comment, naturally, until we get the agreement, but what it does, so far as I can make out, is to help the Egyptians to carry out their long overdue obligations under
414
the 1959 agreement which they ought to have done years ago, since 1959. That is all to the good, but it is British money that is going to do it. There seems rather a curious smell about it, if I can put it that way; there really is a bad smell about the whole thing.
But the real point I am after, and have been after—being pigheaded and single-minded and, if you like, not a politician—is the shortfall, the topping-up. I must not make a speech—I have done it already once in last Thursday's debate—but it is perfectly obvious that the good faith of the Government is committed. It is the British Government's good faith that I plead for. Certain formal, definite promises have been undertaken on which the Government cannot be allowed to go back. I am after the shortfall. My Lords, I fear that, after all, I am making a speech; I am sorry. The shortfall amounts to £27½ million received from Egypt, as against claims for roughly £80 million outstanding. The difference between these figures is £52½ million. I do not want to get drawn into detail; obviously we must all await the actual terms of this agreement. But I would end by repeating that I do not want to seem ungrateful to the noble Earl. I know he has worked very hard for us and continues to do so, so that in a sense it is rather ungracious to get up and speak like this and I repeat that we are indeed grateful to him.
THE EARL OF HOME: My Lords, I am most obliged to the noble Lord. I never thought anything like this would come my way. I know only too well what the noble Lord is after; if I do not know, nobody does. He said it was a cross between a gift horse and a red herring and he did not know what that would produce. My noble friend the Leader of the House suggested Pegasus. If there is a smell at all it must be the smell of the red herring. This is, I think, an agreement well worth having. I also told the House the other day that my object was to improve relations between this country and the United Arab Republic, and I hope, too, in the near future we may be able to do something to facilitate trade between the United Arab Republic and this country, which has been very near stagnation lately.
LORD OGMORE: My Lords, the noble Earl says in the statement that
"The exact liability of Egyptian Government pensions to Egyptian tax has been settled."
Could he give any idea as to whether these claimants, if resident in this country, will be subject on this particular sum to British tax?
THE EARL OF HOME: My Lords, I think I should like notice of that question, I should like to look into it. I have never known the Treasury not subject anything to British tax. I would be very surprised if it were not.
LORD BARNBY: My Lords, we are all grateful for the sympathy we know, the Foreign Secretary has in this matter. He has just indicated that the settlement is contemplated over a period of three years. He has emphasised the hardship of the cases. Since his reply dealt mainly with the sequestration angle, may I ask this with regard to the Egyptianised section? Recognising the hardships that occur in that section where distribution is delayed to companies that have thousands and thousands of small shareholders, could he consider having a statement made shortly as to how soon a further distribution may he made of the amount available to the Egyptianised section to those feeling hardship?
THE EARL OF HOME: I do not know whether my noble friend was here a day or two ago, when I promised this was the next matter to which I would give my attention and would come before Parliament with a proposal on What is known as topping-up. The three-year period will clear off all matters concerned with the sequestrated property. I do not think it is very long. I have had my advisers looking at this very carefully, and we think this is a reasonable time in which to clear off for good all the claims which will be put forward.
LORD BARNBY: My Lords, I am grateful to the noble Earl for that. What I was referring to was the difference between the £27½ million which is admitted as the amount made available for this liability and the total amount of the distribution made from the fund up to date. In view of the Recess, could he give us any indication as to how soon there may be some further distribution,
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without arriving at the point Where it would be necessary to distribute the supplementary amounts which it would be reasonable to expect Her Majesty's Government to give?
THE EARL OF HOME: I think we are approaching the point of very nearly exhausting the £27½ million. Therefore, the next point will be how far the Government should top-up.

NAVAL COLLISION OFF ARRAN
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, I am sorry to see that the noble Lord the First Lord of the Admiralty has left. I have not been able to see him, I was wondering whether at some time during this last day before the Recess a statement will be made on what happened in the naval collision and how the people injured are getting on.
THE EARL OF HOME: My Lords, I will make inquiries. I am sure my noble friend will desire to say something, if it is at all possible.

BRITAIN AND THE COMMON MARKET
3.10 p.m.
Debate resumed (according to Order) on the Motion moved yesterday by Viscount Alexander of Hillsborough: That there be laid before the House Papers relating to the current negotiations with the European Economic Community.
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, doubts have been expressed and questions asked, in this House and outside, as to the effect that entry into the European Economic Community will have on our institutions, on Parliament, the Executive and, not least, on the jurisdiction of our Courts. I rise to address your Lordships in the hope that it may be helpful if I say something on these subjects now. For a considerable time these matters have been under consideration by my predecessor, my noble and learned friend Lord Kilmuir, by me in a former capacity, and by the present Attorney General. And it is right that I should add that we invoked the help of a number of eminent lawyers, to whom I

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should like publicly to express my thanks for the many hours of their time which they devoted to an objective study of the Treaties of the three European Communities—the European Economic Community, the European Coal and Steel Community and EURATOM, and the instruments they have made under those Treaties.
The language in which the Treaties are expressed is different from that to which English and Scottish lawyers are accustomed. It is often not as precise as the language of our Statutes, and it does not always fit our institutions and legal concepts. Sometimes, indeed, it is not easy to determine precisely the intended effect of a provision. Bearing this in mind, we have, to the best of our ability, considered the impact and effect of accession on our Constitution and system of jurisprudence; and the views I am about to express are not just my own opinions, but also those of my predecessor and of (he Attorney General, to whom, if I may, I should like to pay a special tribute for the work he has done. The Government intend to publish a White Paper which will state fully the conclusions which we have reached. At the moment, I will content myself by dealing with some of the major topics and major problems which arise for consideration, and I hope that what I have to say will, if it does not allay all the apprehensions that have been expressed, at least narrow the field of controversy and make the position clearer than it was before.
I have heard it said—not of course in your Lordships' House—that by joining the Six we Should be affecting, if not undermining, the position of the Crown. I wish to say, as emphatically as I can, that there is nothing in the Rome Treaty, or in the objectives for which it has been set up, which would in any way weaken the position of our Sovereign; and if proof of this were needed it can be found in the fact that two of the Six are constitutional Monarchies and a third is a Grand Duchy. In none of these States has the position of the Sovereign been in any way diminished or affected.
In the endeavour to achieve the objective of the Rome Treaty, of securing a large economic community in which trade flows freely and a person can
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exercise his skills anywhere, there must be some pooling of authority, so that the common policies can be universally and uniformly applied and effected. Some people have spoken of a supra-national community and of supra-national powers. I must confess that I am not enamoured of the word "supranational"—and I hope that I have my noble friend Lord Conesford with me when I say that. But the point I wish to make is that it is implicit in the Rome Treaty that there should be this pooling of authority—call it "supra-national authority" if you choose—to secure uniformity throughout the member States in the application of common policies. Further, I wish to stress that this pooling of authority is limited to the fields of activity covered by the Treaties.
The Rome Treaty, while leaving intact the separate existence of the member States and their constitutional organs, as my noble and learned friend Lord McNair pointed out yesterday, creates a Community, a new international person, with its own organs of Assembly, Council, Commission and Court of Justice. These organs on which, as a member, we should have United Kingdom representation, have in the spheres in which they operate, and in those spheres only, certain supra-national powers which override those of the national constitutional bodies, and Which also are incapable of challenge in the national courts of the member States. The Commission and the Council are given powers under various articles of the Treaty to make regulations, to issue directives and to make decisions.
There are three different types of action which the institutions of the Community are empowered to take, and it is most important to bear them in mind. First, they can make regulations which are self-executing—that is to Say, they become part of the law of the member States as they stand within twenty days of their issue, or on the date on which the regulation states it is to come into effect. I shall say something more later about these self-executing Regulations. Secondly, they may issue directives which are binding on the member States as to the result to be achieved, while leaving it to the member States to decide What steps shall be taken to implement the directive. Thirdly, in the administration of their policies they may take

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decisions, addressed to a particular person, firm or, possibly, a member State, which must be complied with by those to whom they are addressed. In other words, regulations lay down a code which becomes part of the law of each particular State; directives require the member State to take its own legislative or administrative measures for a prescribed purpose, while decisions are more concerned with detailed administration. Perhaps it might assist your Lordships if I gave an example of a decision.
The Commission may decide that a trading agreement between two firms restricts or distorts competition in inter-State trade and is therefore null and void. If the practice is not discontinued, following upon that decision, the Commission may by a further decision impose fines. Such decisions could not be challenged in our courts, but an appeal would lie from them, though only in the European Court. And if a fine was imposed, that would have to be enforced without question by our courts. In their respective fields—and I would emphasise only in their respective fields—therefore, the institutions of the Community exercise powers which would normally fall to the constitutional organs and courts of member States.
But, my Lords, I think it is essential to keep this exercise of supra-national powers by the organs of the Community in its true perspective. The policymaking and quasi-legislative functions of the Council and the Commission are closely defined in the relevant Articles of the Treaty, and their administrative functions are, of course, restricted to the same fields. None of these functions can be exercised for any purpose which falls outside the economic objectives for which the Community has been created. Your Lordships will remember that these objectives are set out in Article 3 of the Treaty. Thus there is no possibility whatever that, in the exercise of their powers, the organs of the Community could alter our criminal procedures, including the presumption of innocence or trial by jury. They could not affect our law of family relationships, of marriage and divorce, of landlord and tenant, of housing, of local government or police organisation.
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Their effect on the ordinary law of contract and tort will be negligible. Community law does not affect the laws of the Welfare State, nor does it take away the right of the Legislature to nationalise industries.
I venture to suggest that the vast majority of men and women in this country will never directly feel the impact of the Community-made law at all. In the conduct of their daily affairs they will have no need to have regard to any of the provisions of that law; nor are they at all likely ever to be affected by an administrative action of one of the Community institutions. With few exceptions, the obligations under the Community law will fall directly only on industrial and commercial concerns, long-distance carriers, and persons or firms engaged in the export of agricultural products.
My Lords, I now wish to turn to the relationship between the legislative acts of the Community institutions and Parliament. I know that some of the relevant provisions of the Treaty of Rome are causing uneasiness, particularly the provisions of Article 189, which require that regulations issued by the Council and the Commission shall be binding in every respect and directly applicable to each member Slate. I fully accept that such regulations would have to be given effect to in our law as they stand. Should they conflict with existing Statute or Case Law they would override it; and, as regards regulations which may come to be made after our accession, we should have to provide in advance that they should have effect as part of our municipal law. Similarly, where the Council and Commission issue a directive (which, as your Lordships will remember, differs from a regulation in prescribing the object only, while leaving the form of implementation to the discretion of member States) we should have to pass legislation to bring about the desired result. In this case Parliament would be free to decide on the form and the content of the Bill, but the result to be achieved by it would be prescribed by our Treaty obligations. In any subsequent legislation of our own we should have to take good care that it did not conflict with any Community regulations or directives.

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So, my Lords, to the extent I have mentioned, in the case of both regulations and directives, the legislative function of Parliament would have to give way to that of the Council and the Commission. But this does not involve our having to adopt anything in the nature of a written Constitution. That is quite unnecessary, and this is my answer to the point raised yesterday by the right reverend Prelate the Lord Bishop of St. Albans. If one subscribes to the objectives of the Treaties it follows that one cannot logically object to the degree of supra-national determination and administration necessary to secure the uniform application of policy throughout the member States to attain these objectives. In the issue of future regulations and directives we should, of course, exert considerable influence. We should have representatives on all the institutions. The present system of voting in the Council ensures that decisions cannot be taken against the wishes of one of the larger States unless that State stands virtually alone. The voting system will no doubt have to be adjusted in the event of our entering, but in any case it seems to me improbable that the Council would, on a matter of substance, readily override important interests of this country.
By agreeing to be bound by a treaty we, of course, commit ourselves to comply with the provisions of that treaty. But making a treaty does not constitutionally involve the surrender of any part of the ultimate sovereignty of Parliament. An Act of Parliament would be required to apply these Treaties (I think the noble Lord, Lord Morrison of Lambeth, asked a question about that yesterday) and to give effect to present and future legislative acts of the Community institutions. That Act of Parliament, like any other, could be repealed by a subsequent Act; and if this happened the Treaties would cease to be law in this country, and the power of the European Council to make regulations having effect as law in this country would come to an end. But while Parliament's power to repeal the Act applying the Treaty remains, and cannot be fettered, I am not implying that it would be right for us to repeal it. The Rome Treaty is not limited in duration, and there is no provision for its termination. Parliament could repeal the
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Act applying these Treaties; it cannot be prevented from doing so. But it must be recognised that, in International Law, such a step could be justified only in exceptional circumstances; and if it were taken without such justification, and without the approval of other member countries, it would be a breach of the international obligations assumed on entry into the Common Market. Just as a person does not contemplate divorce when embarking on matrimony (or, if he does, it is certainly a bad start to the marriage), so here, if we decide to join, we must, I submit, do it wholeheartedly and with the intention of playing our full part as a member of the Community in fostering its purposes and objectives.
My Lords, I now want to say a word or two, if I may, about the impact of the Community law on our courts. I have already mentioned that many of the provisions of the Treaty, and instruments made under it, are within the exclusive jurisdiction of the European Court of Justice and other Community institutions. To this extent the task of our courts in having to interpret and adjudicate upon Community Law would be considerably lightened. Moreover, where matters appertaining to the Treaty, acts of the Community institutions, and regulations made by them did come before our courts, the European court would be the ultimate court of appeal on all questions of interpretation and, in the case of acts of the institutions, on their validity.
This supervision of the European Court, which is designed to ensure uniformity throughout the member States, is imposed, as your Lordships will remember, by Article 177, which empowers all courts of member States, and requires their final courts, to refer such questions of interpretation or validity to the European Court. I myself do not believe that the occasions for such a reference would be very many, and I do believe that we could take steps, within our own system, to see to it that there would be consistent and expert interpretation of the Community law so that the need for reference will rarely arise in courts of first instance.
However, it is inevitable that our courts will find some difficulty in dealing with the Treaty and instruments in

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existence at the time of our accession. They are drafted in a phraseology alien to our courts, and take account of constitutional institutions and legal conceptions not our own. Moreover, the processes of legal interpretation, canons of construction, in Continental courts differ from ours. However, I am satisfied, and those who work with me are satisfied, that our courts should not find any insuperable difficulties in applying and construing the language of the Treaty and instruments. The difficulties will be lessened in relation to future Community instruments, because English lawyers will then be taking part in the preparation and drafting.
My Leeds, as I mentioned earlier, our courts would be called upon to enforce the decisions of the European institutions and the judgments of the European courts, but this we think does not present any great legal difficulties. The assistance of the courts might also on occasions be invoked for another purpose. The Commission may, in order to supervise compliance with the codes on restrictive practices and the nondiscrimination in transport charges, send inspectors to enter premises, inspect books or vehicles, or interrogate persons. If the inspector is denied access, the member State concerned is obliged to secure it for him. This could, I think, be done through the courts.
I do mot think that this is ever likely to become a matter of practical importance. The power of inspection has been very rarely used, and I see no reason for thinking that it will be used more frequently in the future. There will not be an army of Community snoopers, and I mention the point only because I know that the existence of such a power is likely to cause concern. In any case, there could be safeguards against any possible abuse. The relevant provisions contemplate that the Commission's inspector may be accompanied by a police officer or Government official of the member State concerned; and, where forcible entry is sought, I am confident that there would be no obstacle whatever in Community law to our requiring an order of the High Court backing the inspector's warrant.
Finally, we should be required under various regulations to impose and enforce
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sanctions of our own for breaches of Community law. This could present practical difficulties for our courts, because in many oases the offences would not be defined with the precision to which the courts are accustomed, but I think it is the case that, here again, steps can be taken to overcome the difficulties and to ease the task of our courts.
My Lords, may I now turn to the interesting speech made yesterday by the noble Lord, Lord Cohen of Birkenhead, who spoke with all the authority of his great experience, and with particular authority as President of the General Medical Council? He raised the question of mutual recognition of medical and other qualifications under Article 57 of the Treaty. This is part of a chapter dealing with freedom of establishment—that is the Treaty's term for it—and since there was no reason which the United Kingdom could advance at the outset of the negotiations why it should not comply with this chapter, the Government, as the noble Lord rightly said, did not at that stage seek to make any formal reservation on this Chapter, beyond recording that the United Kingdom might need additional time to bring its law and practice into line with the Community's programme. This programme envisages mutual recognition of qualifications by 1967. Article 57, of course, has to be read as a whole.
Under the first paragraph, the Council of Ministers may, by qualified majority vote, issue directives for the mutual recognition of qualifications. But they may do so only on proposals made to them by the Commission, and after consulting the European Assembly. We can bring no influence to bear on these procedures, unless and until we have joined the Community. But if we join the Community, it is highly unlikely that any such directives will have been issued by the Council before the date of accession, though drafts may have been published. But there are further safeguards. Directives under paragraph I can, in the special case of the medical, paramedical and pharmaceutical professions, be of no effect until conditions for the exercise of these professions have been co-ordinated.
Paragraph 2 of the Article provides that voting on those matters must be

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unanimous. Voting must also be unanimous on any matters which are the subject of legislative provisions in any member State; and, as the noble Lord said, that certainly applies to the registration of medical practitioners in this country. My Lords, I think these are substantial safeguards, and I hope, indeed I trust, I shall be forgiven for this rather technical recital, because the noble Lord, Lord Cohen of Birkenhead, himself was in some doubt about it. I need hardly say that the Government entirely understand the importance of this subject, and if we join the Community the Government will keep in close touch with the General Medical Council, and all other interested bodies, while playing our part in the Community's proceedings; and we will certainly have regard to the standards achieved in this country, as the General Medical Council have urged us to do.
My Lords, the main purpose of my intervention this afternoon has been to place the constitutional and legal implications of accession in their proper perspective. Some of these matters are by no means free of complexity, and there has been room for much confusion of thought and misunderstanding. Apprehension and suspicion are often bred by unfamiliarity, and I hope that I have been able to dispel some of these misgivings by my explanation. In seeking to explain these complex matters, I have naturally gone into the difficulties at length, and pointed out in some detail provisions which could have implications on our legislative and legal systems. I am sure your Lordships wanted me to do that. But I do wish to stress once again that, although I have not set out the relevant provisions fully, it would be quite wrong to attach any greater importance to these than they warrant in the context of the Treaty. As I have already said, the exercise of all the powers to which I have referred is confined to a limited field—the free flow of goods and services, and the free exercise of work and skills throughout the Community. Community law operates only in these fields, or in matters directly related to them.
My Lords, I have not dealt to-day with the problems arising under the E.C.S.C. and EURATOM Treaties which operate in rather different fields, and those will be fully dealt with in the White
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Paper which will shortly be published. In my belief, in the limited spheres in which the relevant provisions operate and entail a transfer of legislative, executive or judicial power, that transfer is no more than is required in order to achieve the objectives of the Community, to which, as a member, we should and would whole-heartedly subscribe.
3.39 p.m.
EARL ATTLEE: My Lords, I rise with some hesitation. My noble friend Lord Longford has pointed out that people of my age are quite out of date, our views are quite hopeless, and I have to accept that. But there is on this matter a great divergence of view in our Party, and in the Party opposite. T rather gather that those on these Benches who support the Common Market are in a considerable majority. Whether that reflects the views of the Party as a whole, I do not know. I should like to say a few words on why I take broadly the same point of view as my noble Leader, Lord Alexander of Hillsborough. I listened with great interest to the noble and learned Lord the Lord Chancellor, but far be it from me to try to deal with any of these legal matters. My noble friend Lord Silkin, who is speaking later, will be able to deal with them. But, of course, the point at the back of my mind on these things is the thought that, at the present moment, we are totally in the dark as to what our powers are to be under this Treaty. We do not know whether it is majority rule or any other sort of rule, or for how long.
I listened with great interest to the noble Earl the Foreign Secretary yesterday. I cannot say I was convinced. I read with great interest Mr. Butler's speech in another place. What struck me was that at every point he had to say, "But, of course, nothing has been decided". It seemed to me a mass of loose ends. It is extraordinarily difficult to judge at this time. Of course, it is an awkward time to have a debate of this sort, when these matters are still under consideration; but, sooner or later, there must be a debate, sooner or later there must be a decision; and one's general impression is that the Government have not been too anxious for a full discussion, nor have they been anxious to give very much information.

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I must say it is rather strange, considering the immense importance of this subject and considering we are going to change the whole policy of this country which has been carried on for years and years, that this should be done without any reference to the country by a Party that manifestly has not got the confidence of the country, judging by recent by-elections. And yet it is an entire change of policy from what we have been accustomed to.
It is a remarkable change which has come about in the Conservative Party. I have a document here in which the Conservative Party puts the Commonwealth first, expressing the view that, with the Commonwealth, we can maintain our position in. the world and can get a rising Standard of life. One of the misfortunes is that this subject was introduced in a general attitude of pessimism. We were warned we must go in for the Common Market; it would be so terrible if we did not: that we were going down the hill, losing markets; that we have stood still while others have advanced. Of course, that is perfectly true. Since 1951, unfortunately, we have stood still. A Government who believe in general hedonism, general contentment, have allowed this country to slip behind. The advance of the countries in the Common Market must be judged not merely from what they have done but from what has been neglected to be done in this country. The Conservatives came in on a general revulsion against the policies connected most closely with my friend the late Sir Stafford Cripps. We were accused of austerity. We refused to do the popular things, and we had the clamour that the public should be given every kind of thing—quite a difficult situation. Only now, after eleven years, are we told that we must have back some austerity—only now. I do not think this Government are likely to give us anything of the sort.
When I look at this as a proposal, it is really an extraordinary change. We used to put the Commonwealth first. It is quite obvious now that the Commonwealth comes second. We are going to be closer friends with the Germans, the Italians and the French than we are with the Australians or the Canadians. People are talking about what will happen thirty
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years hence: but, you know, twenty years ago I should never have imagined that we would be putting, as close friends, the Germans in front of the Canadians, the Australians, the New Zealanders, the Indians or anyone else. That does make for an. entire revolution. It is also an entire revolution in the historic position of this country. I am not putting it forward that necessarily old things are right: I should be showing my age too clearly if I did that. It may be they are right; but make no mistake: this is an enormous change.
THE EARL OF HOME: My Lords, would the noble Earl allow me to interrupt him for one moment? I think he is really misrepresenting our position—quite unintentionally, no doubt—when he says that we are deliberately putting our friendship with the Germans, with the French and with other Continental Powers in front of our friendship with the Canadians and the Australians. That is not so. Our motive in entering the Common Market is so as to be able to serve our old friends better by getting additional friends for Britain. He must not, I am afraid, misrepresent our purpose in that way.
EARL ATTLEE: I am afraid I cannot agree. The Government are carrying this country into a close link-up with a number of Continental countries. When we are submitting ourselves (as the noble Lord, the Lord Chancellor, was pointing out) to the whole code of law under which we are, with them, part of a single whole, to pretend that that is not putting a more favourable relationship between us and our Continental friends than between us and the Commonwealth is a complete delusion.
Yesterday the noble Earl used a curious phrase. He said that Britain should always be at the centre of markets and at the centre of power. Well, our geographical position put us in the centre of markets. That was one of the great strengths of our position. We did not have to look merely into Europe; we could look outside. We had our relationships with the Colonies overseas, later the Dominions; with the United States; with all continents, just because we were not tied up with the Continent of Europe. Now we are to be tied. It might be right, it may be

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wrong; but do not make any mistake: it is entirely different from anything we have had before. We are to become part of a larger whole, an appendage to Europe. It may be right now, but, historically, that has not been our position. We may have been at the centre of markets, but we have not bean in one market and out of the others. We have had to fight against hostile tariffs; we have had to keep our end up. We have never put ourselves into a position in which we were inside a ring-fence with a number of Continental Powers. Make no mistake: it is an entire change.
I do not quite know what is the meaning of, "being at the centre of power". We are apparently joining one power bloc. Here, too, the historic position of this country is that we do not, except in the case of a grave emergency like war, join ourselves with any one power bloc. We have kept aloof. I grant you, conditions are entirely different in the world to-day. We are right away from the days when we could do what we pleased, with the Navy at our back. We are in a very difficult world, a world of air-power, and a world of atomic weapons. I do not quite understand what the noble Earl meant by saying that we have to be at the centre of power. The two most powerful nations from that point of view are the United States and the U.S.S.R. We are not joining either of them. Is this a sort of third force which is to be built up?
That leads one right on to the political issues involved. Now one can argue a great deal about the economic advantages or disadvantages of the Common Market. I have heard a great deal on one side and on the other. I am bound to say that I found a good many of the arguments curiously unconvincing. I am told that to go in with certain European Powers would open a wonderful market to us, although they are countries highly industrialised, and they also have access to us. Whether we win or lose on that, I do not know. I am told, on the other hand, in regard to the newer developing countries, despite their great potential strength, "Ah, you must not think of them, because they are building up their own industries." Of course they are. But then the others have already built their industries. I cannot see the force of that argument at all.
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When we come to the political point, I confess I feel gravely disturbed. We are allying ourselves with six nations of Europe; it may be more, but six at present. Four of those we rescued only twenty years or so ago from domination by the other two. Now we go cap in hand to the people whom we thought we beat in war. I am all for having agreements with everybody. I am ail for getting on in the world with countries very differently organised to ourselves, capitalist countries, even Communist countries; but I am rather doubtful about these present proposals.
People keep talking to me about what is going to happen twenty or thirty years hence. Can anyone say what is going to be the position in Germany or France or Italy ten years hence, or even five years hence—countries which have extremely unstable Governments? France is under the temporary semi-dictatorship of General de Gaulle. Can anyone prophesy how long that is going to last or what is likely to eventuate? Germany at the present time is ruled by the Party of Christian Democrats. Their chief opponents are the Social Democrats. I grant you the Social Democratic Party is not like the old Junker Party; but is there not a danger that in Germany the tendency will be that all reactionary forces will well round those who are against the Social Democrats?
In Italy again it is very difficult because there is a strong Communist Party. It does not seem to me to be a very good tie-up for us; and if we are to go in irrevocably and tie ourselves up with other States, I think it is an extremely doubtful proposition for Britain. I think the political dangers are very great. Once you are in there, it is quite different from being in an organisation like NATO, which is a defence organisation directed against specific perils. It is a general link-up with Europe. You may find yourselves supporting irredentist aims in Germany. You may get some very queer bedfellows. We may find we are in association with General Franco and reactionary Spain.
My noble friend Lord Morrison of Lambeth rather suggested that it was a really good Socialist policy to join up with these countries. I do not think that comes into it very much. They are not Socialist countries, and the object, so

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far as I can see, is to set up an organisation with a tariff against the rest of the world within which there shall be the freest possible competition between, capitalist interests. That might be a kind of common ideal. I daresay that is why it is supported by the Liberal Party. It is not a very good picture for the future.
Now I said I was willing to join up with anybody. In my view, this joining up exclusively with Europe is a step backwards. The great advantage to the British Commonwealth is that it stepped out of the old idea of European dominance. We are full partners with India, Pakistan and Ceylon, and now the Government are adding Africans, Malaysia and the rest. It is the great strength of our Commonwealth. If we overstep these limits of race and locality, so far from this being a step towards World Government I think it is a step backwards to the old idea of a Europe apart from the rest of the world, and a Europe that I do not think contains the best elements of democracy. I would far rather have the Scandinavian countries than I would any of these. I am not making a claim that we have should have some kind of Socialist International, but we must have the democratic countries and our great democracies in the Commonwealth overseas. That does not mean exclusion. That does not mean we should not work as fully as we can with the countries of Europe. It does not mean we should not work as fully as we can with the United States of America; and I welcome the recent pronouncements of President Kennedy. But this will put us back, so to speak, to where we have never been. It will put us back as one of a collection of European States in the pretty close confinement of a political organisation. It seems to me a step backwards.
Further, I think that inevitably we are going to be confined in our powers of running our own affairs. I believe in an ordered progression. I believe in a planned economy. So far as I can see, we are to a large extent losing our power to plan as we want and submitting not to a Council of Ministers but a collection of international civil servants, able and honest, no doubt, but not necessarily having the best future of
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this country at heart. I do not want to see this country planned purely economically. When we were in office we took powers, which we implemented, to raise the standard of our agriculture. We wanted a proper balance between town and country. You must have a proper balance between different parts of the British Isles. You have to look after Scotland and Wales; and our plan was not just an economic plan; our plan was a social plan.
I think we are parting, to some extent at all events, with our powers to plan our own country in the way we desire. I quite agree that that plan should fit in, as far as it can, with a world plan. That is a very different thing from submitting our plans to be planned by a body of international civil servants, no doubt excellent men. I may be merely insular, but I have no prejudice in a Britain planned for the British by the British. Therefore, as at present advised, I am quite unconvinced either that it is necessary or that it is even desirable that we should go into the Common Market. We may get such terms as will make it worth while. The longer negotiations go on, the less likely it seems we shall get what we want. Ministers work hard. They return and say they put forward this and that, but they seem to return empty-handed. I hope that before anything is done further than exploring or making tentative agreements, there will be a full discussion in Parliament again in the autumn. I hope, too, that the matter will be submitted to the judgment of the country.
4.0 p.m.
LORD GRANTCHESTER: My Lords, I should like to thank the noble and learned Lord the Lord Chancellor for his very interesting and helpful exposition. I am glad that a White Paper is to follow. His words will be helpful to us and will be studied also by the Political Committee of the Council of Europe, which has been asked to make a Report to the European Assembly next month on the legal aspects of entry into the Community. The rapporteur on this subject is appropriately a member of the British Delegation. The noble Earl, Lord Attlee, has spoken with his usual forcefulness and sincerity, which we all respect. He has referred to the differences in his own Party, so perhaps

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I need not comment directly upon what he has said.
The need for greater unity in Europe is no new discovery. The signing of the Treaty of Rome was a notable step forward in a limited area of Europe. It was unfortunate, I think, that the words "Common Market" in the Treaty came into popular use as expressing the aim of the Treaty. As noble Lords are well aware, the aim of the Treaty was to build a European Community and one of the means to achieve this end was to be the establishment of a Common Market to remove the physical barriers at European frontiers. But the words "Common Market" caught on and created the unfortunate impression that "the Six" countries were concerned only with the flow and expansion of trade between themselves.
Until a year ago, very few people in this country had seen a copy of the Treaty of Rome. In signing the Treaty, the Six Governments realised that, if the Community they wished to build was limited to themselves, they had no right to the title "European". So the Treaty contained a clause calling upon other peoples in Europe who shared in their ideal to join in their efforts. The ideal was sat out, in the first sentence of the Preamble—namely,
"an ever closer union among European peoples."
Because of the popular use of the words "Common Market", and because the Treaty of Rome itself dealt only with the means in economic terms for furthering the union, many believed that we were being invited to join simply a free trade association. The early discussions which took place, even at governmental level, seamed to confirm this impression. It was not until recently that the Lord Privy Seal succeeded in making clear to the Ministers of the Six that, in the British view, European union must be political as well as economic and that, as members, we should want to strengthen the Community's political development. Until this had been made clear, the question of our possible membership in the Community which was being built had not really been brought within the orbit of practical politics. None of the Six was ready at any time to limit the commitments of any member to economic matters.
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In spite of the limited terms of the Motion before us, which refers only to current negotiations, I do not wish to say anything at the moment about these negotiations. If I may say so, the Lord Privy Seal has shown consummate skill and ability in presenting our case in all its aspects. I am sure that he has the complete confidence of those of us who support the Government's decision to apply for membership, and we wish him a very happy issue out of the many difficulties with which he has to deal. But if and when these difficulties are resolved, as I hope they will be to everyone's reasonable satisfaction, there still will be many problems to be faced.
I agree with what the noble Lord, Lord Robertson of Oakridge, said yesterday on changing our traditional attitude. I believe that the prospect opened up, if we work together with other Europeans, to be stimulating and exciting. Even if our most optimistic hopes of a wider union of European peoples is achieved, we must not forget, as the noble Lord, Lord Kennet, reminded us in his able speech yesterday, that we have no right even then to call it "European" unless we leave the door open to other peoples who share with us Europe's past achievements. We hope that they, too, will join us one day, to build a true and fully European Community.
I referred a few minutes ago to the great problems which will face us, even after the conclusion of negotiations at Brussels. The Lord Privy Seal indicated some of them in his speech to the Ministerial Council of Western European Union on April 10 last, printed as a White Paper in May. I wish that this could have been taken as the basis for to-day's debate. It deserves more attention than it has had. Personally, I shall be surprised if a treaty of political union between the Six is not signed during the coming autumn. I agree with what the noble Lord, Lord Robertson of Oakridge, said about any arrangements likely to be acceptable to the Six at the moment. They would not, I think, cause Her Majesty's Government any concern. But we must look ahead or, at least, think a little ahead. We know that the impetus behind the Treaty of Rome came largely from federalists, of whose work and aims the noble Earl. Lord Attlee, I understood, approved. Clearly

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it will be impossible to resist for very long the demand, which is very strong on the Continent, for the acceptance of majority decisions in the Council of Ministers.
Above all, we must make up our minds about the kind of Europe to which we are ready to give our loyalty, for if we enter a European Communty, we must loyally support that Community, which we shall be helping to build. Any special arrangements with the United States must in time become multilateral arrangements so far as the Community is concerned. Is it necessary, therefore, to make any stipulations, stipulations such as that before this happens the German problem must be resolved? On such a basis would the United States Congress give its agreement?
It is not wise for the United States to give advice, as hey have done on the admission of the so-called neutral countries, which was not sought or welcome. Congress will, perforce, have to deal with whatever political institutions Europeans consider desirable in the Community. These European institutions will express an independent view, as does the United States. Neither well be able to impose a view on the other, but both, we hope, will realise that any serious unresolved disagreement could be disastrous for both. I am quite sure that no European Parliament would be willing, as the noble Lord, Lord Kennet, suggested, to forgo its right to influence and approve policies for the defence of Europe. I also fear that with the spread of knowledge for peaceful purposes the use of that knowledge for the preparation of weapons will be increasingly possible. It has always been possible to misuse knowledge, and we must face this fact.
The noble and learned Lord, the Lord Chancellor, has given us a good deal to think about in his speech. May I indicate a few other more general matters upon which we have to think? Perhaps I might call it a holiday task for the British people? First, what sort of European Parliament should we like to see? How should it be constituted? We must not forget that its relations with the Commission are defined and circumscribed by the Treaty of Rome. Secondly, the Commission is a new and
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interesting experiment in Government, in some respects almost platonic in conception. We shall have to find our quota of perhaps some 400 or 500 European civil servants to work in this most important executive body. At present the Commission is ably staffed, for the most part by independent-minded young men from the Six who are dug in and experienced and who usually speak all the languages of the Community. There are also the other bodies created in the Community upon which we shall be entitled to representation. We have to think how suitable men and women can be found.
Thirdly, the Commission are charged with responsibility for regulations on matters such as patents, licences, restrictive practices and other important technical matters. They are proceeding with the issue of regulations with caution, trying, as they put it, to avoid creating two new problems for every one they solve. Fourthly, what about the study of languages generally? I listened to the Minister of Education in one country say recently that he was determined that by 1970 the new generation in his country should speak all the languages of the Community. But, before that can be achieved, teachers have to be taught. How far can the new methods of teaching help us to progress quickly; and what are we doing about it here? Fifthly, what about getting rid of passports? The requirement of identity cards as a substitute for passports, as is the case among the Six, is not really a great advance. But unity, if it is to be a unity worth anything, must mean something real to ordinary people, and that will not be the case while they are still held up by barriers at frontiers.
It is sometimes said of us that we speak with two voices: with a European voice when we are in assemblies with other Europeans, but with a narrow, national voice in our own Parliament; or that we are silent when we should speak. So, if I may, my Lords, I would end by repeating a few of the words that I used in the Assembly of the Council of Europe in May last. First, on the reason why we are devoted to Europe and all that Europe means to us. I said:
"Most of what we value in life in the world of the mind has been nurtured and shaped in Europe. In the preservation and spreading over

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the centuries of the standards of value and judgment which have sprung up from its soil, Europe has performed a unique and outstanding service to the world.
"We want to see a Europe united, and when we say 'united' we mean a Europe which speaks with political vision. If we are frank, we have to admit that the political field is the one in which the failure of Europe has been only too evident throughout its history over a thousand years and more of great achievements in other fields. There are few countries in Europe who can point to and be proud of having had political institutions which have stood the test of time. In spite of the long record of British Parliamentary evolution, we have to recognise that even our institutions were not sufficiently influential politically to restrain the destructive forces which Europe generated side by side with great constructive thoughts and works. It is as if all the liberal sentiments collected or created in Europe were concentrated upon the arts and science and all the illiberal sentiments went into politics. There are of course a few, but far too few, notable exceptions, and we should take warning.
"It would appear that in a developing civilisation, as in nature, there is action and reaction with which the mind of man must cope. It may be that it is not possible, or that it will be increasingly difficult in the future, to separate the potentially constructive from the potentially destructive; and that the answer must be sought in the minds of men rather than in political institutions. If this be true, it is all the more necessary that all of us in Europe should, as it were, grow together in association of mind and of experience."
There, my Lords, I think, rests the case of those who would see this country a part of a European Community.
4.19 p.m.
LORD BOOTHBY: My Lords, I will be brief for three reasons. First of all, I have already addressed your Lordships' House upon this subject on two occasions; secondly, I have very little to add to what I venture to call the superb speech delivered yesterday by the noble Lord, Lord Morrison of Lambeth; and, thirdly, because we are speaking while most delicate and difficult negotiations are actually in progress and, therefore, to some extent, in the void. In these circumstances, my Lords, one can speak only in generalities, and in terms which one must hope will aid rather than impede our very able team of negotiators in Brussels.
If, as the noble Lord, Lord Morrison of Lambeth, said, we are now batting on a rather sticky wicket, it is to some extent our own fault. Immediately after the war, when we were the only country in Western Europe that had been neither
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conquered nor occupied, we could have had the leadership of Western Europe on our own terms, on any terms we liked; they begged us for that leadership and we did not give it. Mr. Ernest Bevin, whose greatness as a man I do not impugn for a moment, would not look at it, nor would the Government of which the noble Earl, Lord Attlee, was the head; they would not play at that time. Lord Morrison of Lambeth's tenure of office as Foreign Secretary was too short to enable him to do what I think he wanted to do.
In 1951 we had another chance. Sir Winston Churchill had, for several years, been the strongest advocate of a United Europe. After the famous Zurich speech he asked for, and indeed demanded, in the Council of Europe the creation of a European Army "in which we should all play a worthy and honourable part". The noble Earl, Lord Kilmuir, whose absence from the Woolsack we all regret but whose presence in this House we still enjoy, came out to Strasbourg as Home Secretary and told the Consultative Assembly on behalf of the Government that there was no refusal on their part to participate.
That very night the noble Earl. Lord Avon, announced at a Press Conference in Rome that we would not participate in the European Army on any terms. Again, I would not wish to cast any doubts upon the tremendous services he has himself rendered to this country over the years; but this is the old, and I must say at all times a friendly, conflict between myself and him. I believe the noble Earl, Lord Avon, to be not only the architect but the creator of the Six; because it was that action on our part which forced M. Spaak to resign the Presidency of the Consultative Assembly, and which compelled him to advocate what was then called the "little federation" of the Six. It was due to the disillusionment of the Council of Europe with Britain at that time—and I was a member of the Council of Europe, and I saw it, and it was a horrible time to have to go through—it was due primarily to that reason, that the Six ever came into existence at all. As I have said, the noble Earl, Lord Avon, and I have been well aware of this conflict between us, and it has always been conducted on very friendly terms. But I feel that he ought not now

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to criticise too hard a Government which are doing their best, in far less favourable circumstances than those which confronted him, to retrieve a situation which he deliberately created. I shall come later to another point on which I think we shall find ourselves in substantial agreement, and that is on the question of Atlantic Union.
My Lords, there came another chance. The Strasbourg Plan, passed unanimously by the Consultative Assembly of the Council of Europe, sought to associate the Commonwealth closely and at the very outset with the economic development of Western Europe. It was transmitted to Her Majesty's Government with the simple and sole request that it should be submitted to the Conference of Commonwealth Prime Ministers for their consideration. It was never so submitted. It was poleaxed, as I have said before, by that dreadful Department the Treasury overnight; and this was before the negotiations for the Treaty of Rome had even begun. We had the chance then, with the full approval of all the European countries, without exception, of bringing the Commonwealth into the economic development of Western Europe from the very outset; a chance which President de Gaulle later took in respect of French territories in Africa.
I come now to the speech of the noble Earl, Lord Attlee, to whom we have listened, as we always do, with very great attention and almost with awe. But, my Lords, I hope the noble Earl will forgive me if I say he did really distort the facts in saying that Her Majesty's Government were now definitely preferring, or putting on a higher scale, the countries of Europe to the countries of the Commonwealth. I really do not think that is true. The noble Earl has devoted the last three or four years of his life to the cause of World Government. It is a noble cause. He has exhausted himself in his efforts on behalf of that cause; and I, for my part, admire him, because I am profoundly convinced that for the long run he is right, and that this is the ultimate and only solution for mankind.
Unless we can establish some form of World Government or order before the end of this century the doom of mankind is, in my opinion, sealed. The
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noble Earl spoke disparagingly of inter-national civil servants. If we are ever to have a World Government it will be pound to have international civil servants. I merely say that it cannot be lone now, for obvious reasons; and it certainly cannot be done in one single jump. If it is to be done at all, it must be done in stages and, to my mind, the first stage is the creation of a United Europe. In his message to the 21st Anniversary of Federal Union, the noble Earl, Lord Attlee, said:
"The real challenge for the future is how far we are prepared to surrender the old concepts of absolute national sovereignty."
He went on to say:
"Europe now has to serve the world. And the peoples of Europe must got together to put their long traditions to the service of humanity as a whole."
I confess I do not quite understand how he reconciles those statements with the speech he made to-day.
As I see it, the main hope, and perhaps the only hope, for the future lies first of all in the creation of a United Western Europe, by stages—not too much "supra-national" structures, not necessarily Parliaments—beginning with the Governments, but going much faster than lately. Secondly, in the development (and here I think I will carry the noble Earl, Lord Avon, with me) of a rather looser but still organic Atlantic Union, which will include Canada and the United States and a United Western Europe; I think that is an absolutely inevitable next stage, because it is on the march now; it is in the stars. Finally, of course, as the ultimate objective, there ought to be agreement between the mighty forces of the Communist world and of our world, each with the power to destroy each other or to negotiate, to liquidate not only the hot war but the cold war, and to establish, as the noble Earl, Lord Attlee, wants so much to do, some kind of world order. I think it may take a generation; but I think, if it is going to succeed, it has got to be a continual process, that we must not stagnate or stand still, sit back and say, "We cannot get on this way or that way at the moment", and do nothing. We have got to be getting on with it all the time.
I turn for a moment, and in conclusion, to the critical negotiations which

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are now taking place in Brussels. There is no doubt whatsoever that M. Spaak and M. Jean Monnet, who can justifiably be described as the practical pioneers of European union, want us to come in; so does Dr. Erhard; so does Dr. Hallstein; so do the Italians; so do the Dutch. The difficulty, we are given to understand, is General de Gaulle. I do not know to what extent this is true. President de Gaulle is not a very easy man; we all know that. The noble Lord, Lord Morrison of Lambeth, suggested yesterday that he might still have some bitter memories of certain arguments which he had to conduct with President Roosevelt and Sir Winston Churchill during the war; and, I have no doubt, from time to time, with my noble friend Lord Avon, although I also know that at all times he did his best to smooth things over. Who can tell? I think it may still rankle.
Nevertheless, anyone who heard his speech in Westminster Hall, who has read what he has written in the magnificent prose that he has written it in, and seen what he has done in Algiers, cannot fail to appreciate the essential greatness of this man. He is a great man. I had the privilege and the honour of lunching with him the day after he travelled to London from Bordeaux in 1940, and the day on which he made the broadcast speech which altered the course of history. Thereafter he was always a good friend to me. I do not presume to suppose that anything I now say can possibly influence his judgment or his actions; but in politics you can never be sure. A chance remark may make a difference. Therefore I would venture to appeal to President de Gaulle to make things a little easier for us, and not so much harder. If he did that, I am quite sure it would be for the benefit of all of us.
The only caveat that I would enter before I sit down is that, if we do go in such a mighty union as there will then be—over 250 million people, the richest and cleverest and the most prosperous people in the world—the union must be outward rather than inward looking. I think that this is tremendously important. We cannot become part of a prosperous and highly protected enclave in an impoverished world. If this union comes about, in one form or another,
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we shall have greater obligations and duties not only to the Commonwealth, but to all the underdeveloped countries of the world than we have at the present time; otherwise, in the long run, Communism will prevail.
There is, I think, in some quarters a tendency to regard this as a safe, highly protected, highly prosperous and self-sufficient organisation. It cannot be that. Over two hundred and fifty million people, the richest and most prosperous people on earth, cannot isolate themselves from the rest of the world. I should like to emphasise once again that if this comes off—and I think that it will come off—we shall have to make it quite clear that, for our part, we recognise that we shall have tremendous obligations and duties to the outside world as a whole. I think that, if we go in, our influence will be decisive in this particular matter.
On the question of sovereignty, there is little that can usefully be added to what was said yesterday by Lord McNair and to-day by the Lord Chancellor. I can only add that, in my firm belief, insistence on absolute national sovereignty has been the curse of what we call the free world ever since the war. It has held everything up; and it has been exploited by the Communists to the point at which it has become an intrinsic part of their own dialectic. This virulent nationalism throughout the East, in Arabia, in Africa and Asia, has worked against us.
Finally—this is my last word—I want just to say that I am a little worried about the timetable. We are now settling the future, not only of this country, or of the Commonwealth, or of Europe, but in fact of the world; because the future of the world will depend largely on what happens as a result of these negotiations. This really does not have to be done by July 31, or even by August 10. My final plea is simply this. These negotiations are most complicated and difficult. If a pause is necessary for further reflection and consideration on the part of all, let us have it, even if it takes us to September or October. We are not running a race. These things are far too important. There was a moment when one might have imagined, from what Her Majesty's Government were saying, that we had to get decisions taken before Parliament

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rose, and therefore by to-morrow. When you are deciding the future of the world such considerations are absolutely ludicrous. I would only suggest to your Lordships, if it becomes necessary to take a little further time to consider these enormously difficult and complicated questions, let the Lord Privy Seal have no hesitation in saying that we will have not an end to, but a brief adjournment of, these negotiations.
4.36 p.m.
THE EARL OF AVON: My Lords, it had not been my intention to intervene at all in the debate this afternoon. I am sorry that I did not hear the first words of Lord Boothby's speech. I got here as soon as I heard that he was speaking. I did not know he was going to refer to 1953–54 on the question of the European Army. If I intervene for a moment, it is merely because I think this point, which was quite fairly raised, is one that is germane to what we are discussing now.
Let us look for a moment at what actually happened; let us go back into that time. What happened was that E.D.C. eventually came before the French Parliament for ratification by them, and severe pressure was put upon France to ratify. We were urged, or asked, to give a number of guarantees, which we did give; but the principal pressure at that time came from the Americans, most eager that France should go into E.D.C., not eager that we should go into E.D.C. That was the American advice, and it was given, if I rightly remember the phrase, with an agonising reappraisal. So that was the advice. So let us look and see what happened. The French went through much Parliamentary travail. Long debates were held and, as I have said, assurance after assurance was given by us in the terms which they were asking. But eventually the French Parliament decided that they would not accept the European Defence Community. That was their decision. But was it a wrong decision? I do not think so.
LORD BOOTHBY: I think it was right.
THE EARL OF AVON: Then I do not quite see where our blame lies.
LORD BOOTHBY: If the noble Earl will forgive me for a moment, if we had gone in of our own accord from the beginning, without listening to the Americans, the French would have accepted it. It was our refusal that made them throw it out.
THE EARL OF AVON: That is presupposing that E.D.C. was a better arrangement than that which has now been arrived at. If the noble Lord will allow me to open up my argument, I am going to try to show him that the present arrangement is infinitely better than the E.D.C. could have been.
What is the difference? The E.D.C. would have been a compact Europe even without a regiment, but with the great military power outside it. What we did as a result (if I may I will come back to my story of the French refusal to ratify) was to say: "All right; if we cannot get agreement on a small European Army, the problem behind it is German rearmament. Let us have German rearmament where it is safest, not in a European Army but in N.A.T.O." That is what we did. I thought that was what was agreed. It was a fortunate solution and one extremely advantageous for the future of the world. In other words, if you can get an Atlantic solution it is even better than a European solution, and you take a European solution only if you cannot get an Atlantic one. Is there any noble Lord here this afternoon who would not infinitely prefer this problem if it were an Atlantic problem instead of a European one. Would anybody feel any real anxieties if we were moving towards a Federation across the Atlantic, including Canada and the United States? Not one of us. The difficult problem that we now have to settle is a more limited one.
My Lords, I intervened only to give my views on 1954. I should be sorry if I were led into a speech when I had not given any notice of my intention to do so. But I should like just to add this. I do not want to say anything about the current negotiations (I do not think that anybody can do that helpfully at this moment), except perhaps just to put this thought into the mind of the House. It may be that it would be wise, as the noble Lord, Lord Boothby, hinted, not to try to press the negotiations unduly.

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But there is a timing in these things which only those negotiating can feel.
There is one impression that I should like to correct. I read several reports in the newspapers over the week-end which spoke of a "crisis"; and one passage I noticed said that "the Government's negotiators were in a weak position." I do not quite know what that meant. I should like to say, as one with a little experience of negotiation, that I do not believe that is true. Because, my Lords, the British Government are asking for three sets of conditions which they themselves have laid down—and which are, I believe, supported by the great mass of the people of this country. There may be differences of opinion on whether we should be in or whether we should be out, but there is virtually no difference of opinion that those three terms on which the Government orginally went in must be substantially fulfilled. And, for my part I believe that in trying to get them the Government are speaking for the nation.

NAVAL COLLISION OFF ARRAN
4.42 p.m.
LORD CARRINGTON: My Lords, with the permission of the House I should like to make a statement about the collision which occurred last night between H.M. ships "Battleaxe" and "Ursa" off the Isle of Arran, while the ships were taking part, fully darkened, in an antisubmarine exercise. Both ships were fairly extensively damaged, and I regret that seven ratings aboard the "Battleaxe" were injured, three of them seriously. There were no casualties in the "Ursa". Both ships have returned to Greenock. A Board of Inquiry is being set up to investigate the reasons for the accident. The next-of-kin of the casualties have been informed.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am very much obliged for that statement. I am always anxious, of course, about the Navy. I am sure the relatives will be glad to know that an inquiry is being set up at once. In view of that I think we need ask no questions.

BRITAIN AND THE COMMON MARKET
Debate resumed.
4.44 p.m.
LORD SHACKLETON: My Lords, I should first of all like to say how pleased I am, as I am sure are your Lordships, to see the noble Earl, Lord Avon, in such good form and in such good voice——
SEVERAL NOBLE LORDS: Hear, Hear!
LORD SHACKLETON:—although I will not join in the particular controversy between him and the noble Lord, Lord Boothby.
LORD BOOTHBY: It is an old one !
LORD SHACKLETON: It is an old one, indeed. The fact remains that we have now moved, in a quite extraordinary way, into an almost totally different national frame of mind, and I think that the most striking thing about the debate we have had in this House is that, with the exception of my noble Leader, and the noble Earl, Lord Attlee, there has been virtual unanimity. So much so that I had rather hoped in this debate that we were over the hump and could concentrate, as the noble Lord, Lord Grantchester, the noble Lord, Lord Merrivale and other noble Lords, have done, on discussing some of the detailed consequences of our entry into the European Community.
My Lords, my noble friend Lord Attlee raised once again some of the arguments which I feel we have debated at great length and upon which many of us, after a good deal of hesitation, have come to a definite conclusion. I, for one, was in the past most reluctant in regard to the idea of a European Community, or even a European union. Indeed, once (and I may have said this in the House before) I even refused to join the World Government movement on the ground that I thought it would be dangerous to be associated with a purely earth bloc. But one of the strengths of our present situation is that at least somebody has gone thoroughly deeply into the matter, and put in a tremendous amount of work studying the sort of institutions that would be necessary.

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I would say, without any hesitation, as the noble Lord, Lord Gladwyn, said yesterday, that any approach to the Atlantic Community must have, as a first requisite, that Europe has, in fact, solved the main economic and, I would go so far as to say, political differences that divide us. As one who believes in the Atlantic Community, I regard this as an encouraging step; and furthermore, one that is clearly foreshown in the thinking and talking that has gone on. I do not believe for one moment that Europe is likely to develop an introverted approach at this moment: for there is a dynamic behind this which certainly is growing, a tremendous activity within the Community. But I believe that it will also be as outward-looking as the Foreign Secretary would like it to be.
There was one point on which I agreed with my noble friend Lord Attlee: I found the Foreign Secretary's historical analysis a little unsatisfactory. It has not, in my view, been true—and I think other noble Lords would agree—that it has always been the object of this country, the basis on which we achieved power in the world, to be at the centre of power. We have chosen to operate on the fringe. It seems to me to be the very essence of sea power, on which so much of our strength has been based, that you do not operate at the centre of power. But, my Lords, while allowing the Foreign Secretary a somewhat unsatisfactory analogy, I think that his main arguments, and his arguments with regard to the Commonwealth, were of a quite incontrovertible nature. I should have liked to say to my noble friend Lord Attlee that thinking has advanced to a rather more practical form than we knew in the past, when we thought about the Commonwealth as a rather abstract and exciting concept. The hard facts of our situation within the Commonwealth is that this country represents one-tenth of the developed population of the non-Communist world while the Commonwealth represents one-half of the underdeveloped part. The same thing applies in the field of income.
My Lords, it seems to me to be an incontrovertible argument, both in the interests of the Commonwealth, and, particularly, in the interests of those parts of the Commonwealth which are
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underdeveloped, and to which we all acknowledge an obligation, that we should strengthen our position, either by alliance or, if necessary, by going very much more closely into association, in order that that developed part, Europe, which is the centre of the development in which we should be associated, is able jointly to associate with us in the developments of the underdeveloped part of the Commonwealth. To use any arguments other than those hard ones would, to my mind, lead to our failing in a proper appreciation of what our responsibilities are to the Commonwealth.
One of the most dangerous aspects of our position in the world to-day, and one of the reasons we may not be able to play our part in the Commonwealth, is the permanent (as it seems to me) instability of our balance-of-payments situation. We debated this matter at some length earlier in the week, but we find ourselves in the position that our currency, which is the major reserve currency—more important than the dollar—to-day possesses an instability and lack of industrial base. This is a constant threat to the development of the underdeveloped part of the world, and we see within the Commonwealth the consequences of our own instability: the sudden imposition of restrictions; the stop-and-go policy for which we have criticised the Government so heavily.
This is not the time to go into the question (because we have already done so) of whether or not we should follow a more expansionist policy at the moment. I feel—and I am sure the noble Lord, Lord Boothby, would agree with me—that this is essential. But the fact is that we are still bedevilled by the insecurity of our balance-of-payments situation. If we go into Europe we shall not automatically solve that. Indeed, there will be a danger that whatever we do (there will be a danger if we do not go into Europe, as the noble Earl, Lord Longford, said) there may be a run on the pound. But if we go in we may also find that there is a flow of trade into this country which we may not be able to match as quickly as we should. But in the long run—and we must think of it in the long run—there is a chance, through the development of the banking institutions of Europe, of achieving a greater

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strengthening of sterling and, indeed, a greater strengthening of international currency operations. This, to me, is one of the major arguments in favour of our going into Europe. Anything that will solve these desperate problems of instability and balance of payments must be to the benefit not merely of this country but of our friends, relations and allies.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: It is a gamble.
LORD SHACKLETON: My Lords, my noble friend may say that it is a gamble, but we have seen the consequences of gambling in the last few years, with the "Stop and go" policy. There is an absolute obligation, in this peaceful competition with the Communist world, that we develop our production. Far more important than anything in the short run, from our point of view and from the point of view of our Commonwealth obligations, is that our economy must get going, and this will give us the necessary stimulus.
LORD BOOTHBY: My Lords, if the noble Lord will allow me to say so, sometimes you win a gamble.
LORD SHACKLETON: I know that the noble Lord, Lord Boothby, had a happy experience at Le Touquet, although subsequent results were not so happy.
I should like to turn again to the industrial argument. My noble friend Lord Morrison of Lambeth spoke yesterday about the fact that large-scale industry, certainly, is already preparing for the European market. It is a certainty that if we are outside the European tariff barrier large-scale industry in this country will move into the Continent and will establish factories and have activities there. This is not going to create flexibility and opportunities for employment in our economy, and we know that there must be a fairly unpleasant period of reorganisation one way or another. We are confronted by declining industries. But it will be far better for the workers, for the business people and, indeed, for the whole people of our country, if we are able to get industry on a really large scale, and with the economies of scale that the opening of the European market will bring. These are my main arguments, and there are
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many more that have been deployed by others, in favour of our entering the Common Market.
There are one or two smaller points to which I should like to refer. I would mention some of the consequences which I think we must wake up to fairly soon, particularly in the social and what might be called the industrial field. We shall almost certainly find ourselves committed to a policy of equal pay, and a number of employers and, indeed, trade unions who have pronounced on this subject in the past must face this written into the Treaty of Rome. We must face labour mobility, but this is not as alarming as some trade unionists and others have thought. It will operate under conditions of reasonable control, and there are some very forward-looking provisions in the Treaty of Rome and elsewhere on the training and social help of migrant workers. For a country that has successfully, to its great credit, absorbed as many immigrants as we have from the West Indies, that we should worry about European immigration, when do fact one of the serious problems in most of the countries is shortage of labour, seems to me to be quite absurd.
Nor should we worry about the effect on our Welfare State. Indeed, in certain respects I look to an improvement. In some countries the benefits available are greater than they are in this country. Old age pensions in Germany are related to the cost of living, and on a very much larger scale, and that is something that I should like to see introduced into this country. Indeed, if we had seen a rather better Bill from the Government on this subject, we should not have been so far behind. This is a matter in which we have got to catch up. It is arguable that we shall find it very difficult to pay family allowances at the rate they do in France, and there is no suggestion anywhere—and the noble and learned Lord who sits on the Woolsack made this clear—that our own institutions, such as the Health Service, will be damaged.
I was interested that the noble and learned Lord answered the point of the noble Lord, Lord Cohen of Birkenhead. One of our difficulties is that there is a great deal of detail in the Treaty of Rome that will need to be examined at rather more leisure than is afforded in

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the appalling rush of these present negotiations. I can well understand that the Government have a pretty strict timetable. They want to get the legislation through before the next General Election. Speaking as a member of the Opposition, I can see advantages for the Opposition, also, in getting the legislation through before the next General Election. But I would urge the Government at this stage to redouble their efforts towards consultation within this country. One of the good things this debate has done in both Houses has been to bring forward many of the issues which were lurking in people's minds. It is surprising to me that the noble Lord, Lord Cohen of Birkenhead, and his friends, had not pressed their points more heavily on the Government earlier. But we are all waking up a bit late, and this time must not be wasted. Discussions of this kind should take place.
We shall be confronted—and I do not know when the draftsmen hope to get this done—with a considerable mass of legislation, if we are to harmonise our factory and other legislation, as in due course we shall have to do, and as we shall have to do rather more quickly than the old members of the Community, if we are to catch up with them. There will be a need for a great deal of legislation. There is one suggestion I should like to make now, on the assumption that we are going in. At the earliest date. I hope we shall be allowed to sand observers to the Assembly of the Community. It seems to me that this is a trade in which we are already experienced—this trade of assembly, and so on—but we shall have to become familiar, as those of us who have corns into this House or another place have all had to become familiar, with the peculiar nature of the problems and the way of conducting business. The sooner we are in a position to make a contribution, and to understand what is going on, the better. The great advantages will be that, when matters come before our respective Houses, we shall have among us people who have heard and sometimes taken part in the discussions. The advantage was very obvious When we were debating the assembly of the North Atlantic Conference and heard a number of noble Lords who had been there
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and who were able to interpret what actually took place.
I think the time has really gone by for generalisation. The time has come when we must do a great deal of hard work. The noble Earl, Lord Attlee, mentioned that we ware dealing in vague generalities; but, my Lords, a great deal of very specific information is becoming available. As the noble Lord, Lord Merrivale, said, firms must now start thinking, and must be helped to think, about the consequences of going into Europe. Large-scale industry—I.C.I. and the others—are well equipped to do this, but small-scale business is not.
My Lords, I should like to return to one argument that was advanced both by my noble Leader and by the noble Earl, Lord Attlee. Reference was made to a Europe stretching from the Atlantic to the Urals, and to the danger of going into an irridentist Europe. I rather regretted some of the remarks of my noble friend Lord Attlee with regard to the European countries, the slight gibes about them, which I do not think are helpful at the moment. But if the argument is that Europe is not safe and is not to be trusted, than how infinitely more important it is that we should be there to make our voice heard. I do not feel the anxieties that certain people have on this matter. It seems to me that either Europe is safe and we go in, or it is not safe and it is even more important that we should go in.
We are faced with the most remarkable developments in Europe. The idea that there could be a Franco-German entente of the kind that exists to-day is something which I think very few people would have believed possible. I believe we ought to go into Europe even more on political grounds than on economic grounds. I believe it is essential, for the reasons that I have given, that we should embark on this policy, this development of union, which we hope will lead to greater union. The Treaty of Rome and the complexities of it, and the fact that it has come into existence, is to my mind a tremendous cause for optimism. That it is possible for mankind to co-operate and solve these highly technical difficulties seems to me to show signs that we are capable of cooperating; that we are capable, in the end, of avoiding blowing ourselves off the face of the world. I would say that

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I personally approach the European Community now with enthusiasm. I hop that we shall look at this as an opportunity; something that we do not go into grudgingly, but something in which the political skills which we as a country have developed over so many years will find full scope.
Those of your Lordships who have taken part in conferences abroad will know that, on the whole, British Members of Parliament and Members of this House stand up pretty well alongside their Parliamentary colleagues from other countries. It is indeed one of the most striking things that I have noticed at these conferences. We shall be going into Europe with our accumulated skills We ought not to fear that we are going to be tricked by the Europeans: we ought to have enough confidence in our very long experience. Furthermore, we shall be going in with friends, friends who will come in with us—some of the Scandinavian countries and Ireland—and there will be friends there waiting for us. I hope that the Government's efforts will be crowned with the success that it is quite obvious the great majority of your Lordships' House wish them.
5.3 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I am sure that all your Lordships must share the pleasure that I feel at having seen the noble Earl, Lord Attlee, once again in action, and would join with me in congratulating him on being restored to a state of health that allows him once again to take part in our debates with the vigour which he displayed this afternoon.
My Lords, I am conscious that the tide of debate has flowed strongly in one direction—and not particularly the direction in which I myself wish to go. But I would remind your Lordships that, though the tide of opinion may have flowed one way in your Lordships' House, there are many indications that the tide of public opinion outside is widely divided upon this particular issue. Most of the debate has taken place on the broad assumption that Her Majesty's Government are going to obtain the terms which they have said are essential for our entry. But in my remarks, I want to suggest that we should look rather more closely at what may be the alternative if such terms are not obtainable.
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There is a balance of economic considerations that will decide whether we do or do not enter the Common Market Arguments can be advanced powerfully both ways. Yesterday the Foreign Secretary, quite naturally, weighted his arguments in the direction that he particularly wished to do. The Foreign Secretary said—and these are his words [OFFICIAL REPORT, Vol. 243 (No. 114) col. 272]:
"… if we do not go in, nothing will ever be the same …"
My Lords, that is true, but it seems to me that the question which we must ask ourselves is: how different will they be if we do not go in? How great will be the advantages, or how great will be the disadvantages for this country, either in or out? I therefore welcome this debate, in which I shall endeavour, if your Lordships will allow me (and your Lordships are always very sympathetic to the expression of minority views) to try to show that there is a viable alternative, and that we should, I think, prepare ourselves for considering such an alternative. Because, I repeat, it is by no means certain that what Her Majesty's Government have said are essential conditions are going to be obtained.
I would submit to your Lordships two propositions on this alternative course. First, I would refute the unjustifiable assertions that if we do not go in we face inevitable economic disaster; that if we do not go in we shall-be in a position of almost hopeless future stagnation; that we shall, as it were, wither on the bough. That is not so. I believe, and in a few moments I hope to show, that there is no justification for such gloom; that, indeed, the economic loss effects of not going in are well within this country's capacity to accept; that the alternative to going in is not disaster, and that possible losses through not going in can be compensated for in other directions by gains and by the possible avoidance of losses of trade which will be inevitable in some directions if we do enter the Common Market. My second proposition is that there is an alternative to E.E.C. membership which can give us a future of expansion free from those political ties and consequent dangers in a Europe which is certainly unstable politically in France, in Italy and in Western Germany.

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My Lords, on the first proposition I think that the worst service which the enthusiasts for Britain's entry into the Common Market have done to their cause has been to build up this idea of economic ruin as an alternative to going in. Because facts do not support this contention. I take last year's broad pattern of trade. I know that the position has altered this year, but I like the broad pattern of trade for my purpose. Broadly speaking, 45 per cent, of our exports went to the Commonwealth and 25 per cent, to Europe, of which about 16 per cent, went to the Common Market countries. It is true that entry into the Common Market may increase the flow of trade between Europe and this country, but that will not necessary be to our balance-of-payments advantage. The noble Lord, Lord Shackleton, said that in the short term we may have to face difficulties, but that we must look far ahead. On the short term, we may suffer grave balance-of-payments difficulties. I quote to your Lordships a report on Britain's economic position which was made by France's Financial Counsellor in London, and which came out a comparatively few weeks ago. This is what he said:
"The dismantling of tariffs which will mark the U.K.'s entry into the Common Market will cause a brutal and massive increase of imports."
The report went on to describe this as,
"a salutary shock for the United Kingdom which may finally make the devaluation of the pound inevitable."
Next, I would ask your Lordships to remember that economists have pointed out that, by the removal of tariff barriers, the direct gains to the United Kingdom may be surprisingly small. I have here a quotation from Professor James Meade which came out in the Observer a few weeks ago. Professor James Meade calculated that if, as a result of our joining the Common Market, an extra 25 per cent. of our output was diverted from the home market to Europe in exchange for imports—and that is a truly gigantic figure of increase—the gain would be only about 2½ per cent. of our national income, or the equivalent of only one year's economic growth at our present limited rate of expansion. Against this gain must be offset the losses in direct Commonwealth
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trade and in our invisible exports—losses that will be inevitable if we lose a large part of our Commonwealth position as a price for entering the Common Market.
I suggest to your Lordships that the next question to be faced is: does our balance-of-payments position allow us to stay out of the Common Market? The advocates say, No. But I would again advise, if I may, a sense of proportion. Lot us assume that to pay our way this 40 per cent. of exports which Professor Meade spoke about goes to the Six. It is a gigantic rise we are assuming: about two and a half times the exports to the Six last year. But, my Lords, that represents little more than 6 per cent. of our national output. If we are outside the Common Market our goods will have to get over the hump of the Common Market tariffs, and prices will have to be reduced, probably, on an average, by about one-eighth—that is 12½ per cent. So, if one accepts that assumption, the total sacrifice of staying out will be no more than an eighth of 6 per cent., or substantially less than 1 per cent. I would thus maintain that economically on trade terms the dangers of being out have been grossly exaggerated.
I have said nothing at all of the political dangers, which I think are very real, of being minority members of a European organisation, with, as Lord Attlee remarked, an unstable France politically—no one knows what is going to happen when General de Gaulle goes —with a big Communist threat in Italy, and many dangers ahead in Western Germany. We should be, as it were, holders of a minority position in an Assembly governed by a majority of such nations as have that sort of Government.
LORD SHACKLETON: Would the noble Lord allow me to say this? He has twice referred to dangers and instabilities in Western Germany, and suggested that there is a political instability. What has he in mind?
LORD BALFOUR OF INCHRYE: I have in mind a very large growth, on the one hand, of an extreme Right wing Party and, on the other, the growth of the Communist Party on the Left. Nobody can call the position of Western Germany a stable one; nor can anyone

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look with much pleasure at the political prospects in France or Italy at the present time.
My second proposition is that there is an alternative to E.E.C. by which we can not only maintain our standard of living outside the Common Market but, I believe, provided that we make the necessary adjustments in home and overseas trade plans, susbtantially increase our rate of growth. The basis of an alternative policy rests upon the fact that the Commonwealth has a population of 600 million and that Europe has a population of 200 million. I know that the purchasing power per head is infinitely greater in Europe than it is in the Commonwealth, but one must look at two aspects of that. The first is: how much further expansion is there going to be in the Western European Market? Is it not a market which has been a booming market largely through the replacement of war shortages of capital goods and consumer goods, helped very much by American monies? If you look at the statistics to-day you will see the curve of demand is a flattening one in Western Europe, whereas the curve of demand in the Commonwealth is a constantly rising one.
If tariffs are put against Commonwealth goods—what I term the reverse preference—we are bound to lose our position. I personally deplore the conclusion of the agreement by the Lord Privy Seal on Commonwealth manufactures, because it means that after 1970 we shall be putting into action that reverse preference. Our Commonwealth trade is, globally, enormous. Industry by industry it is enormous; and examining it industry by industry one asks: can we afford to lose that trade? Let us take the motor car trade. 50,000 oars were exported to Europe last year; 300,000 to the Commonwealth. We cannot expect the Commonwealth to continue to give us preferences for our manufactured imports and our manufactured products if we ourselves are to put a reverse preference on their primary products.
Next, may I submit to your Lordships that our commerce is world-wide; that by tradition this country, unlike any other country in the world, equipped and manned for long-haul trade. In sterling trade, for every £1 we earn by
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selling goods overseas we are earning a further 8s. by the invisibles of transport, banking and insurance. Are we going to maintain that if we put a reverse preference on the Commonwealth and force the Commonwealth into a position of having to look elsewhere when hitherto they have looked to this country? Two-thirds of our trade with the Commonwealth is in British ships; two-thirds of our trade with Europe is in foreign ships. We risk these if we risk the Commonwealth position. Here, surely, my Lords, are foundations more solid than those in Europe on which to build a viable alternative to going into the Common Market. I should like to see the Prime Ministers' Conference in September have a different purpose than seems the likely one, of trying to persuade the Prime Ministers to accept the best terms Britain can obtain. I should like to see it change its direction from a defensive to an offensive: it should be a Conference proposing positive alternatives to Britain's entry into the Common Market.
My Lords, I believe that a call such as that would rally and inspire our people and give that response to leader-Ship which, if one reads the correspondence in the papers of the last few weeks, is obviously something which our ordinary folk are seeking. I like so much the words:
"At this crisis of history our Government should call together as a matter of high urgency a Conference of the British Commonwealth and Empire. With these, our kith and kin and our own people, we should prepare a plan of action to put before our friends in Europe".
Those are fine words—words spoken in London in 1949. The speaker of those words? The present Prime Minister.
I would say this: that in any alternative the Commonwealth countries must do their share, in a much bigger way than they have during recent years, to meet the new situation which we shall have to face. I should hope that we shall consider at the Conference amending the "no new preference" rule of GATT SO that we could enter into long-term bilateral commodity agreements with our dependent territories and the Dominions. The White Paper of the Lord Privy Seal's Statement on October 10, 1961, shows something of the value of our trade with Commonwealth countries. He said:

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"For example, among the dependent or newly independent countries, Mauritius sends 82 per cent. of her exports to the United Kingdom; Sierra Leone 70 per cent.; and Nigeria 51 per cent. Of the older Commonwealth countries, New Zealand is also heavily dependent on the United Kingdom market, sending 56 per cent. of her exports to us. The proportions of their exports which Australia, India and Ceylon send to the United Kingdom are of the order of 30 per cent."
These are valuable outlets for the Dominions and dependent Territories. A proposition of bilateralism, not to a degree that would imperil the industrialisation of the Dominions but such as would give security for their primary products and miscellaneous preferential advantages for us, is surely something worth considering, as of course, is the proposition often put forward of a Commonwealth Central Investment Bank. If we do not obtain these terms—and it may well be that we shall not—if, as my noble friend Lord Avon said, we do not obtain the three major points, Her Majesty's Government have declared their inability to join the Six. It may well be that, if we do not get them, EFTA and the Commonwealth will have to enter into new relations first with each other, then with the United States and, finally, with the Six.
Where do we stand on the pledges of what is the unacceptable? The pledges have been repeated in general terms but I seem to see that, bit by bit, in detail they are being whittled away. There is the new feature, which has been slipped in, of the transitional period up to 1970. We never used to hear that the Commonwealth was to have a preferential position only until 1970, but now it is general talk in Governmental circles that they have what they call a transitional period until 1970, when the reverse preference would come into operation. The conditions that were unacceptable in October, 1961, seem to be acceptable conditions in 1962. Mr. Heath said
"It would be a tragedy if our entry into the Community forced other members of the Commonwealth to change their whole pattern of trade and consequently perhaps their political orientation."
What has happened now? The very proposals for manufactured goods, apart from what are being negotiated now, embrace a complete change of trade for the Commonwealth. Mr. Heath said, as regards the manufacturers' agreement:
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"They would be seriously affected, not only by loss of preferences in our market, but also if their position were transformed into one in which the whole of their export trade was affected by reverse preferences in favour of the major industrial countries in Europe. Nevertheless we recognise that indefinite and unlimited continuation of free entry over the whole of this field may not be regarded as compatible with the development of the common market and we are willing to discuss ways of reconciling these two conflicting considerations."
That position has been surrendered by the manufacturing agreement.
That makes me worried as to whether there is a constant expression of the pledges in general terms, and a constant whittling down of the pledges in actual negotiation. Yesterday, the Foreign Secretary asked us not to use the expression, a "priority" as between the Commonwealth and Europe, but I think that the priority is there. It seems to me that the question is: do we follow a policy aimed at an increasing world trade based on maintaining an expanding Commonwealth trade and our EFTA partners, or shall we join a regional bloc behind tariff walls which, though we say we hope it will be an outward-looking organisation, shows every indication of being inward-looking and endeavouring to be self-contained. Which of these choices are we going to take? I believe that the final decision will have to be faced by Her Majesty's Government. I believe that the final decision may well be the terms demanded by the Six encroach too much into the pledges of Her Majesty's Government, and therefore we can no longer go forward in that direction. In that event, I hope that the few remarks I have made this afternoon may give some slight indication that there is a viable alternative if we are unable to negotiate entry.
5.26 p.m.
LORD PLOWDEN: My Lords, it is dear that negotiations in Brussels have reached a critical stage and no one should say anything that would make the task of our negotiators even more difficult, but as a supporter of the entry of this country into the Common Market I want to ask our Common Market friends not to be unreasonable, not to make things so difficult that we cannot join, because there is a point beyond which even the most ardent advocate

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of our entry would not wish to go. Obviously, it is impossible to give guarantees stretching many years ahead that would permit the sales of particular quantities of agricultural products to particular countries, but it should be possible to state clearly that the Common Market, enlarged to include this country, will so conduct its agricultural policy as to avoid serious damage to traditional suppliers, and that if, through miscalculation, such damage is caused to them, prompt action will be taken to put it right.
This means that Article 39 of the Treaty of Rome should not be so interpreted as to nullify Article 110—in other words, there should not be a price policy which allows the growth of cereal products in Europe, and this means in France—to a degree which would exclude not only Australian wheat but cereals from other additional suppliers, such as Canada, the United States and the Argentine. A policy which did this would so disrupt the pattern of world trade that it would have a most damaging effect, not only on the rest of the world but on the exporters of the Common Market itself. If the negotiations break down on this point, it will inevitably be interpreted in this country, in the Commonwealth and I think elsewhere, as being due to the selfishness of the Six, and of France in particular. The political effects might be very far-reaching, leading perhaps in this country to a strong desire to cut ourselves off from Europe, and possibly the wish to remove our troops from the Continent. Before a breakdown is allowed to happen, I hope that our friends in Europe will think carefully where it may lead us all.
I listened with great interest and attention to the speech of the noble Viscount, Lord Alexander of Hillsborough, and particularly to the early part that dealt with economic prospects, and it seemed to me that he dismissed this subject rather too easily. He said that he distrusted the judgment of economists and then went on to quote the economic judgment of Mr. Gaitskeill, referring to him as an economist, and to his economist friends, and said that in the view of these people, the economic effect of our entry would be "fifty-fifty". I am not an economist, but I have some
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contact with economists, and I think that the basic assumption made by all these economists whose views he quotes is that other things will remain equal—that is, that if we do not enter, changes to our advantage or to our disadvantage will not take place. This I believe to be the whole crux of the matter. The choice is not simply of joining or remaining as we are. The Common Market is here, and its existence is changing and will continue to change the world in which we live and trade. If we remain outside I suggest that quite radical changes will be necessary in our policies. In spite of the powerful speech by the noble Lord who has just spoken, I do not believe that the possibility of some close system of Commonwealth trade could come about in the present day, attractive as that may be. When such a suggestion was made in 1957 to Canadian Ministers their recoil was instantaneous, and I think that would be the case in all other countries.
It sometimes appears to be assumed by those in this country and in Commonwealth countries that we have obligations to the Commonwealth which must be fulfilled whatever the cost to ourselves. Before we accept this we must be sure that we are likely to be strong enough to fulfil these Obligations; and, with great deference to the noble Earl, Lord Attlee, it is not putting Europe before the Commonwealth; it is facing facts.
What are the needs of the Commonwealth? I suggest that they are capital; markets for their products; aid, both monetary and technical; defence—and all need this but some recognise it and some do not. For all or any of these things to be provided by the United Kingdom requires a strong economy. Can we expect this with our present policies and prospective patterns of trade? I suggest that it is most unlikely. Soon, as has already been said, if we do not join the Common Market we shall be the only great manufacturing unit who will not have a home market of something between 100 million and 200 million consumers, with all the opportunity which that gives for mass production and specialisation. It is, I think, extremely doubtful whether a market the size of the United Kingdom, even joined to that of the European Free Trade Area, is large enough to permit

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industries and firms to be big enough and specialised enough to compete in third markets with competitors based on these very large home markets. Efficiency alone is not enough. One must have the opportunity to exploit one's efficiency.
May I give an example from the manufacturing group with which I am associated? Amongst other things our group make over 80 per cent. of the bicycles made in this country, and of that total over 70 per cent. is exported. In 1951 this country exported nearly 300,000 bicycles to India. To-day in India companies associated with our group make over half-a-million bicycles and only token quantities are exported from the United Kingdom. Yet—and this is the point—we make a bicycle in Nottingham cheaper than we can make a comparable one in India. The same pattern is being reproduced in New Zealand, Africa and elsewhere. The recent duties imposed in Canada for balance-of-payments reasons will almost certainly prevent the export of bicycles from this country to Canada.
Of the total of over 70 per cent. that we export, over 35 per cent. go to the United States. Recently the Congress adopted a Bill, which substantially increased the already high duties to imported cycles with quite disastrous effects to our trade. We hope the Bill will not become law. Noble Lords will remember what recently happened in the case of carpets and glass. I think that this is not an untypical example and illustrates how an efficient industry can be prevented from exporting by clauses which have nothing to do with its own internal organisation and efficiency. A large market, and a market the size of which is not likely to be suddenly diminished for reasons entirely beyond our control, is really an essential part of economic efficiency.
It is now seventeen years since the war ended, yet our experience of recurring balance-of-payments problems remains. They are not caused by the laziness of the British working man or the inefficiency of the average management of British industry. I do not think we are either better or worse than other countries in this respect. They are, I
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suggest, a function of a maladjustment in our policy and a lack of appreciation of the change in our economic and political power. It is quite easy to understand. In 1945 we had just won a great war. I think it is true to say that on VE Day the British Empire had in contact with the enemy more divisions than, certainly as many as, the United States had. We still directly controlled the British Empire, people were tired and felt they deserved something; so they did. The country wanted a rising standard of living, a Welfare State, more leisure, more defence, the hydrogen bomb, a major say in the affairs of the world, maintenance of the Sterling Area, capital for Commonwealth countries, aid to underdeveloped countries, and so on.
All these things, desirable in themselves, were to come about at once and to come from the efforts and economy of a country as small and weakened by war as our own. For a few vital years our true economic position was hidden from the British people by a United States loan and Marshall Aid and gradually it seemed to many of us who should have known better that we could have had all we had before and more, too. My Lords, the fact is that for seventeen years we have been trying to do too much. Alone we can do some of these things, but not all of them. It is not to deprecate the great value of Commonwealth ties in this respect to say that the Commonwealth offers little help. It protects its industries; Imperial Preference is eroding away—it is less than half what it was before the War; it is a voracious consumer of capital; its defence effort is small. Canada, Australia and New Zealand, with higher standards of living than this country, devote, respectively, 4 per cent., 3 per cent., and 2 per cent. of their gross national product to defence compared to approximately 7 per cent. that we do.
Of course, we shall survive if we do not join the Common Market—no one sensibly supposes that we should not—but mere survival is not a very inspiring prospect and I submit that if we do not join sooner or later we should have to lighten the burden we have been trying to carry for seventeen years. How, and how soon, this will come about is of course impossible to tell, but I suggest

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that the main changes that would happen would be that we should reduce our defence programme, with less effort in Europe, the Middle and Far East; that ultimately we should not be able to bear the weight of sustaining the Sterling Area, and that it would break up, which, I think, inevitably would lead to bilateral trading arrangements and to an effort on the part of this country to be more self-sufficient; and I suspect that there would be a slowing down of growth, of the standard of living and of the policies of the Welfare State.
If we enter the Common Market, of itself it is obviously not going to solve our problems but it will give us the economic stimulus from competition that I think we need and it will give us the opportunity—and I do stress the word "opportunity"—of exploiting this large mass market which cannot be removed by political action. It will offer the chance of better co-operation in the use of currency reserves; greater specialisation in military matters, especially research and development; and cooperation Will give us better bargaining power in questions such as shipping; aid to Commonwealth countries would continue direct or through international agencies. My Lords, it should be remembered that at the present time France, Holland and Belgium devote a larger proportion of their gross national product to aiding underdeveloped countries than we do. To those who are fearful that our standard of living would be lowered by entering the Common Market, it is worth pointing out that the standard of living in Germany, France, Belgium and Denmark is already nearly as high as it is in this country and, at even the substantially lower rates of growth than have prevailed on the Continent in the last few years, will exceed ours within a decade unless our rate of growth is markedly increased.
I was particularly glad to hear the noble Lord, Lord Citrine, with all his experience, say yesterday that he felt that the prospect of full employment was greater if we were in the Common Market than if we were outside. To turn aside from Europe because the negotiations are difficult, or because the necessary adjustments would be hard to make, or because we do not want to get too close to foreigners would lose us the opportunity
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of helping to mould the new and vital things that are happening in Europe. But we could not escape from Europe. The history of the past 400 years from Philip of Spain to Hitler proves that.
Can we really contemplate with equanimity the growth in Western Europe of an enormous power bloc dominated by Western Germany, as undoubtedly it will be if we do not join? Western Germany is vitally interested in the unification of Germany for reasons that we can all understand and sympathise with, and it is not in any critical spirit that I suggest that she will be continually tempted by offers from Russia with promises of unification of Germany, which, if accepted, would lead to the break up of Western Europe and its unity. We could not escape from the consequences of any such developments by standing outside. But by not entering we should have forfeited nearly all possibility of influencing these events. Can we really believe that if we were members of the Common Market we would not add substantially to the strength and confidence of all the members, including Germany itself, and so be in a position to influence these developments in ways which I believe profoundly are in the best interests of its members and the Free World?
It is in Europe that the ideals in which we most believe were evolved: sanctity of the individual, the rule of law, democracy. This country, as much as, or even more than, any other took part in their evolution and certainly more than any other carried them round the world. Fundamental changes are beginning to happen in Europe both economically and politically. But our ultimate goal must be the even greater unity of the whole Western world. This country has a vital and essential part to play in all this, I believe a more important part than any we have played before, because without closer unity of the West we should hardly be able to stand against the Communist world.
None of this need be, or ought to be, a bar to close association, political and economic, with the Commonwealth. But to fulfil what the Commonwealth needs from us we must be economically strong, and I submit that to join the Common Market gives us the best chance of growing stronger. As the noble Earl the

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Foreign Secretary said yesterday, the Commonwealth needs us as much as we need them, and Europe needs us as much as we need Europe. For this reason I hope the Government will go on negotiating until they succeed in getting our entry into the Common Market.
LORD CITRINE: My Lords, I did not wish to interrupt the noble Lord in his very closely-knit and very logical address, but in reference to unemployment I made a very qualified statement, which I want to read. I said [OFFICIAL REPORT, Vol. 243 (No. 114), col. 336]:
"I cannot see, looking the problem in the face, that any single nation, however well disposed, can guarantee a permanent state of full employment, and I feel convinced that the prospects of ensuring full employment would be much greater if we joined with the members of the European Economic Community than if we remained outside."
There is a very big difference between the two.
5.45 p.m.
THE EARL OF LUCAN: My Lords, I had not intended to take part in this debate, but the exceedingly one-sided way it has developed makes me think that there is a danger in a debate of this kind being publicised over the world; it might give the impression that opinion in this country is as nearly unanimous as it has been in your Lordships' House yesterday and to-day. That I believe would be an entirely false impression because what has struck me in the last few months is the steady hardening of public opinion against the idea of the Common Market. It has not been tested, except possibly by the opinion polls; it could be tested only by an appeal to the country on this particular subject. But I find people of all classes and different Parties expressing more and more a deep uneasiness at the way the Government are leading the country now.
My noble friend Lord Longford, who I know cannot be here until later this evening, quoted a document put out by a certain section of the Labour Party, and I think he meant your Lordships to draw the conclusion from it that that represented the main stream of opinion in the Labour Party. But that, I must say, is not borne out by the resolutions that have been sent in for Annual Conference.
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It is very notable that a block of 50 or 51 Amendments has been sent in for debate at the Conference and of those only one expresses unqualified approval of the idea of the Common Market. All the others, in varying degree up to unconditional opposition, are in greater or less degree opposed to the idea. I quote that not as conclusive but as a piece of evidence, a fairly weighty piece of evidence, that in one Party in the State at least opinion is crystallising against the idea of the Common Market.
I suggest that the reason for this uneasiness in the country is not because of the floods of paper with which we have been deluged from various sources, for and against, and the highly complicated arguments of the economists—because economists of varying kinds take opposite views. We are bemused with figures which the layman cannot understand without training, and the ordinary man has given it up. I think he has also heard conflicting views of the extent to which sovereignty or the supremacy of Parliament is going to be compromised by our adhering to the Treaty of Rome. I noticed that even the noble and learned Lord on the Woolsack was forced to say that in a number of respects it was not possible to say straight out whether or not this country would be restricted in its activities. So there again the layman does not know what to think.
So I believe there is general bewilderment, and people are falling back on the simple question: Why has all this suddenly blown up? What has happened to us, or what has happened to the rest of the world, in the last few years? Remember, in 1959 neither political Party mentioned it in their programme. Remember, too, that the European Economic Community had been set up two years before that. Indeed, about 1959, Her Majesty's Government signed the EFTA Treaty in order, not to go into the Common Market but to set up our own competing or, if you like, our own alternative grouping and structure of States. From my memory, practically nothing was heard about the Common Market until early 1961. Then, suddenly, we were confronted with the fact that a decision would have to be taken for which the country was not ready, for

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which nobody was ready, because we had not the information.
I believe that part of the feeling of uneasiness is due to the fact that people are wondering what can have been the factors that so radically changed the situation between 1959 and 1961. Remember, as my noble friend Lord Attlee said, this is a revolution in British foreign and economic policy. Ever since I can remember, ever since the First World War, our foreign policy has been based on the United Nations and the Commonwealth; and it is an entirely new conception that we should adhere to Continental Europe, much less to a small section of it. What has happened? Anyone who has read the speeches of members of the Opposition over a number of years will know that we think that the Party at present in power have allowed this country to stagnate. By their mistaken policies they have prevented this country from enjoying the economic growth that other countries in Europe have had. If it has really got to the stage where we dare not stay out of the Common Market, our economy must be a great deal worse than even Mr. Harold Wilson and others have been saying. If we are the "Sick Man" of Northern Europe, and cannot stand on our own with our connections with the rest of the world, it looks as if the situation is worse than the Government will admit.
There was one other factor which may or may not have something to do with the decision. I think that at the beginning of 1961 there was the Commonwealth Prime Ministers' Conference at Which there was something of a Commonwealth crisis, in which it became clear that the non-white countries of the Commonwealth exercised predominant influence in the Commonwealth, and, it will be remembered, on the initiative of some of the Asian and African countries in the Commonwealth it became necessary for South Africa to leave the Commonwealth. Possibly that was an eye-opener to the Government: an indication that the Commonwealth was no longer such a friendly little family affair as it had been.
Then, lastly, the new Administration came into power in the United States. And there have been more than hints, there have been statements in the papers,
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that it is the urgent wish of President Kennedy and his Administration that we should go into Europe, in order, as one understands it, to strengthen Western Europe and to build up Western Europe as a bastion against Communism. For that reason, of course, they are not at all anxious that the neutral nations of Europe, of EFTA —Austria, Sweden or Switzerland—should take part, because they regard the Common Market as at least as much a defence organisation as an economic one.
I am bound to say that I think your Lordships would be deceiving yourselves if you thought that opinion in the country was to any large extent coming round in favour of joining. The country is filled with uneasiness and distrust. We have heard a great deal about the merits of going into the Common Market. They seem to me to be taken very much for granted, without much argument. In fact, until the noble Lord, Lord Balfour of Inchrye, spoke, hardly anybody had questioned the assumption that to form part of a market of 240 million people was automatically an advantage to British industry. But I would remind your Lordships that not all of these 240 million people are consumers; there are some most active and able industrialists on the Continent, and we should be exposing our industries to that competition. It is not a one-way traffic. It may, in the long run, work out as an advantage; but, equally, it may be a most serious disadvantage in regard to industry and employment in this country. I think it was the noble Lord, Lord Plowden, who said that it would be an "economic stimulus" to us; and the Prime Minister not long ago talked about a "douche of cold water". That is all very well if you like cold water, and if you can stand it. But it would be wrong and misleading to assume that it is bound to be an advantage to have a home market of that size. Let us face it, my Lords: it would not be a home market, beoause it would be trying to get into another market already fully supplied by European industries. So I think that that point is open to considerable doubt.
There is no doubt that the whole structure of the Community is based on a philosophy of free enterprise and free competition, with only such planning as

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will suit the growing industries of Europe. I do not see anything in it that would be favourable to what my noble friend Lord Attlee said he believed in—namely, planning the economy for the benefit of the whole community. So I, for one, cannot believe that a Government, elected by the electors of this country to bring in a new economic policy and a social welfare policy that was different from that prevailing in Europe, would be free to carry out the policy on which it was elected. Whatever the legal implications of the Treaty of Rome, as the Lord Chancellor has indicated them to us, there have been instances already of countries who have entered the Common Market wishing to set up certain marketing organisations, and being ruled out of order because the organisations were contrary to the regulations, to the doctrine of whatever organ of the Community it may be—the Coal and Steel Community, or the others.
Then there is the question of the harmonisation of social and taxation policies. How certain are we that our present policies would comply with the requirements of the Community? What about our subsidies? Last week we subsidised the building of fishing boats and engines. We have subsidised fishing; we have subsidised agriculture, and a good many other things too. Our social services are financed quite differently from those on the Continent. Are they consistent with the rules by which we should be bound if we signed this Treaty?
Finally, my Lords, how is this structure governed? What is the constitution of this Community? It strikes all of us who have seen the general structure of the Community, even without studying it in detail, that it is not what we should call democratic. I do not believe that there is the Parliamentary control over the Executive, over the civil service, which we have come to regard as essential in our own system. So I do not think we can say that we are going into a democratic system. As my noble friend Lord Longford said last night, the Socialists in Europe all want us to come in. Well, there are not many of them; the proportion in each country is, I think, about 20 per cent. of the
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voters. It is rather like going bathing, and hearing your friends, when they get in the water, shout, "Come on in: it's lovely". But it does not mean it is going to suit you; or, for that matter, that it suits them. It is just that they want some companions in their misfortune. So I do not think I would trust the appeal from the European Social Democrats.
My Lords, the whole case hangs on the balance of advantage or disadvantage that would flow from our signing this Treaty. To my mind, the advantages have not been proved; they have not even been argued convincingly. Whether it would strengthen our position and enable us to assist the Commonwealth is again something which has been stated, but never really argued.
Finally, there is the bigger question, which my noble friend Lord Kennet touched upon yesterday: that to call this "going into Europe" is utterly misleading. It is not Europe. It is half-a-dozen countries. I think it was rather unfair of my noble friend Lord Shackleton to say that my noble friend Lord Attlee was gibing at the European countries. They were not gibes, my Lords; they are facts. Moreover, it is surely indisputable that three of those countries are not models of democratic Constitutions; nor are they, in our view, very stable. To go back to the economic argument, we are always told how prosperous people are in Europe. But are they? We see pictures of the Pirelli building at Milan, the glossy shops in the big centres; but we do not know about the poverty in the rural areas and in the poorer areas, the unemployment, and the rest. I do not think we have seen the whole picture when we are told simply that all the Common Market countries are going ahead.
LORD SHACKLETON: To which particular unemployment in Europe is the noble Earl referring?
THE EARL OF LUCAN: Southern Italy.
LORD SHACKLETON: Is there unemployment in any other country, besides Italy?
LORD MORRISON OF LAMBETH: Northern Ireland.
THE EARL OF LUCAN: I do not know what the unemployment situation is in

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Marseilles, or in the industrial areas of France or Belgium. Not long ago we were told that Belgium had heavy unemployment. I do not know whether that is still the case, but we are given these statements that the people in Europe are all prosperous because they are in the Common Market; and I, for one, should like further substantiation of those statements.
I go back to the main point. The Community is not Europe. This is a selection of European Powers who have come together, driven together, I think, by fear of Communism; and if we joined them we should be freezing that permanent division of Europe, instead of leaving it as fluid as possible, hoping that the cold war will thaw, hoping that the walls will go down in Berlin and elsewhere. We are just building more walls and are reinforcing the small, reactionary bloc of Western Europe in order to perpetuate this cold war, which is the poison that is preventing the world from seeing peace.
For all those reasons, my Lords, I do not like the idea of joining E.E.C. I see no reason for urgency. I do not see, as my noble friend has said, why the Government should press on with such appalling haste. It cannot put Mr. Heath in a very strong bargaining position when there is this tremendous haste to get something finished. I would suggest to Her Majesty's Government that they stand firm on the conditions they have put forward, protecting the Commonwealth. Let the Community go on and then, in due course, in some years' time, if they want us in we can go in whenever we want. If they do not want us in, we can get in now only at an undue cost.
6.7 p.m.
THE EARL OF GOSFORD: My Lords, I shall resist the strong temptation to reply to the noble Earl who has just spoken, because I am sure he will be dealt with much more effectively by my noble friend when he comes to reply for the Government. There is one point on which the noble Earl is slightly out of date. I think he just now mentioned Southern Italy. He was out of date to the extent that, whereas Northern Italy used to get its working population from Southern Italy because of unemployment there, that is now no longer the case; in fact, Northern Italy is finding itself
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in labour troubles through the inability to got labour from Southern Italy.
I do not propose to re-rehearse my views on the Common Market, because I gave them to your Lordships in the debate on the Common Market which we had last year. I should, however, like to say this. I consider this is one step in the evolution towards World Government, as has already been mentioned in this debate. Even if it does not happen now it will happen later, probably less advantageously to ourselves, and anybody who thinks otherwise is, I take the liberty of saying, something of a Canute in this respect. In my previous speech in the earlier debate on this subject I asked Her Majesty's Government that our negotiators should be people who have a knowledge of Continental life, and I am very glad indeed, as no doubt we all are, to see what an admirable team of negotiators we have there, with the Lord Privy Seal as the leader. Like many of your Lordships, I send him my good wishes for the negotiations.
That brings me to the speech of the noble Lord, Lord Robertson of Oak-ridge, which I enjoyed hearing, and which I read with equal enjoyment again this morning. He had seemed to be pessimistic about the insularity of the inhabitants of this island, and he mentioned in particular the Armed Services. I think that, up to a point, what he said is true but is natural to the type of existence which the Armed Forces live; although I think that airmen speak on a common level to airmen of any nationality because it is a common danger which they share. But to come back to the insularity of our own people, I am not pessimistic when one thinks of the hundreds and thousands of Britons from all parts of the country who now visit Europe. Admittedly, many of them take their own beer with them, and some of them demand English beer, or even fish and chips, when they get there. I believe that in Majorca they are now wrapping the fish and chips in English newspapers. But all this is to the good. After hundreds of years of being cooped up in this island they will come in contact with people of other countries who, without any water in between them, have lived side by side with, and have become used to, people of other countries. There will be a need for our people to

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be educated out of our insularity, if and when we go into the Common Market.
This brings me to a point which the noble Lord, Lord Citrine, mentioned yesterday, and which I think he reiterated when he intervened in a speech this afternoon. He said that, in his opinion, full employment would be more likely to be maintained by our going into the Common Market than by our staying out. That may be so—and I must say I agree with him—but my experience in industry is that the working man is confused about the position. That is the fault of nobody in particular, but I would urge, as the noble Lord, Lord Citrine, and the noble Lord, Lord Robertson of Oakridge, urged, that some sort of education should be got across to the working man as to exactly what the position is. If the views of the noble Lord, Lord Citrine, are correct, that the working man will benefit by our going into the Common Market, then he must be told so. Surely, it would be to the benefit of the Trades Union Congress if they told the working man. Because it is the Communist who at the moment is putting out propaganda on the shop floor, that the Common Market is all "hooey", that the working man will suffer, et cetera. Many of your Lordships have mentioned during the debate, that the only man to gain from this confusion is Khrushchev. That is certainly so, and the Communists on the shop floor are taking full advantage of it. I would ask most sincerely that either the T.U.C. or the Government consider some way by which our working man could be educated and told where in fact his advantage lies.
6.14 p.m.
LORD STRANG: My Lords, there is no subject which is more fateful for the future of this country, and of the Commonwealth, than the question of whether or not we are to enter the European Economic Community; and there is none which is more complex, and on which it is more difficult to reach a reasoned judgment. It is not possible to review all these proceedings in a few brief minutes. I can only try to convey shortly, and in a general way, the misgivings which this whole operation continues ta arouse in my mind. I want to introduce a note of scepticism, an element
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of doubt, into what has been at times a rather starry-eyed debate.
The primary argument for our entry has been economic. I remember very well the sober and persuasive speech in which, a year ago, the noble Lord, Lord Plowden, announced his conversion. That speech made a great impression on me. I was also deeply impressed by what he said a few minutes ago. He is a master of the reasoned and appealing speech. Then there was the speech of the Foreign Secretary yesterday, and that was another of those masterly expositions which the noble Earl never fails to present to us. I confess that it came some way towards converting me, but not far enough. So, my Lords, I still cannot bring myself altogether to share the rosy views of our prospects, which so many noble Lords have expressed, or to dismiss the Commonwealth as cavalierly as one or two of your Lordships have done.
As the arduous course of the negotiations, so valiantly conducted by the Lord Privy Seal and his devoted staff, has brought the real issues to light, doubts have begun to arise; and, as I think the noble Lord, Lord Balfour of Inchrye, has shown, there are at any rate some economists of repute who are now not at all sure where the balance of economic advantage will lie. Of course opinions can be found on the other side, but those which I am about to quote are views which it would not be safe to ignore, even though the noble Lord, Lord Plowden, has discounted them in advance. What have they said? For example, Sir Donald MacDougall thinks that none of the economic arguments for our going in is compelling. His view is:
"We can prosper and grow more rapidly than in the past whether or not we take this decisive step. It is even possible that entry might aggravate our economic difficulties."
Mr. Colin Clark, who is in favour of our joining the Common Market, thinks that the economic advantages will be
"much less than is often claimed; "
and that the rapid growth of production and trade among the Six
"must be explained by factors other than their having joined the Community."
Sir Roy Harrod, who tells us that he has not yet finally made up his mind, thinks that in contemplation of world

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trade as a whole and, in particular, trade with underdeveloped countries, the Treaty of Rome was a retrograde step.
THE EARL OF LONGFORD: My Lords, I am sorry to interrupt the noble Lord, but surely he would agree that Mr. Colin Clark is in favour of joining the Common Market.
LORD STRANG: My Lords, that is exactly what I said, I think.
SEVERAL NOBLE LORDS: You did.
LORD STRANG: And to drive that point home, Sir Roy Harrod adds this:
"We must eschew any act which injures the viability or progress of our overseas friends. At the same time we naturally have regard to our own self-interest and this lies in the same direction."
If these cautious views should turn out to be well-founded, if the economic prospect is so uncertain, where are the advantages that are promised us? Where now is the argument that, by going into the Common Market, we shall strengthen ourselves and, by so doing, strengthen the Commonwealth; and what beneficial counterpart is left for the undoubted sacrifices which our entry would involve? Those sacrifices would be real. We should have put a heavy strain upon our economic and, maybe, our political relations with the other countries of the Commonwealth, particularly the countries of European settlement. We should have placed at risk a good part of our Commonwealth trade in both directions, which is still, in spite of everything, a very substantial part of our overseas trade—about 36 per cent. of the whole. There would, in the end, be Imperial Preference in reverse. We should take preferences away from the Commonwealth and give them to the Community. And let us note that about half of our own exports to the Commonwealth still enjoy preferences from 10 to 12 per cent.
My Lords, as we see the way these negotiations are going, we should be governed for years to come by the varying interpretations of a hard-fought and probably ambiguous diplomatic formula, by a sharply contested declaration of intent, and by the operation of a voting procedure as yet unsettled. In addition, we should have had to recast the
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organisation of our agricultural production in favour of a system the prime purpose of which seems to be the disposal of growing French surpluses.
Our food, too, would cost us more. How much more the Government, wisely, do not say. Economic analysts get out their slide-rules and calculate how many fractions of a penny this or that commodity will cost us more per head per week. But, my Lords, food traders, when fixing prices, do not use slide-rules. As for the argument that if we pay more as consumers, we shall, with the disappearance of the subsidy, pay that much less as taxpayers, Professor Parkinson has the answer to that. The money will not be saved, but will inevitably be used for something else. If that is so, justice would certainly require that it should be used for the alleviation of the hardships of those millions of humble people among us who are least able to look after themselves, and upon Whom the cost of food presses so heavily.
On the political side, too, there would be sacrifices. I like to quote, if I can, from those who favour our entry into the Common Market, rather than from those who oppose it. There is an excellent book called The Political Future of the European Community by Mr. Roy Price. Mr. Price is head of the London Office of the Joint Information Service of the European Communities. He is in the middle of the whole thing; he knows What he is talking about, and he writes carefully and honestly. This is what he says about the present set-up of the Community—that is to say, the Council of Ministers and the Commission, the bodies which we have now applied to join. He says:
"Under present arrangements the Community's affairs are in the hands of an irremovable and—in a certain sense—irresponsible executive; a state of affairs that would not be tolerated in any of the separate member countries."
In explanation of this judgment, he says:
"The source of all major decisions in the Community is virtually outside the range of parliamentary control … If national parliaments insisted on a close control of their ministers' actions in the Council, it would soon become extremely difficult to reach any decisions at all … In any case, a national parliament has no say in the preliminary—and decisive—work of the Commission, nor in

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the subsequent stages by which the Commission's proposal becomes law. As more and more decisions are taken by a majority vote, even the semblance of influence disappears.
Those, my Lords, are the conditions which we shall find in Brussels if we go in now, as the noble Earl, Lord Lucan, has rightly said. Of course, Mr. Price has the remedy for this—namely, the creation of a directly-elected Parliament with real legislative powers, and a single Executive for this "federally-orientated political group"; and he proceeds to adumbrate a scheme for this purpose. But we do not need to go into that. There is nothing here, my Lords, I think, that conflicts with the exposition, for which we are so deeply indebted, given by the noble and learned Lord who sits on the Woolsack.
In what I have said so far I have not said anything to disparage the European Economic Community as an institution designed to serve the special requirements of the Six highly-civilised States of Western Europe. It meets their particular needs in the post-war world. It is a signal manifestation of Western European resilience, self-confidence, political ingenuity and imagination; a unique structure erected upon the foundations established by Marshall Aid under the European Recovery Programme. Not only so; it has healed the wounds self-inflicted by Western Europe in the past, and, in particular, has sealed a reconciliation between France and Western Germany. But, as we know, the Six are not agreed as to what the future political shape of the Community should be. Within the Six there are two main theories about the future. An eminent Continental civil servant, now a member of the Commission, once said to me some years ago, in a moment of truth,
"Europe is an abstraction; the individual States are the reality "—
and that is what President de Gaulle now maintains.
"There is",
he says,
"no European reality other than our nations and the states which are their expression. To build Europe, there is no solution other than co-operation between nations".
According to his view, there should not be a Community but a Union of States. That is one side.
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The other view is that the aim should be to move gradually, step by step, towards a federal solution—that is to say, towards the creation of the United States of Europe. Monsieur Monnet's Action Committee for European Union, for example, has recently declared itself in this sense, with proposals which represent a departure from its original, more extreme, federalist ideas. This would not mean at this stage creating a central Government. Nevertheless, the objective, it is said, would be a partnership between a United Europe and the United States which would be
"a relationship of two separate but equally powerful entities, each bearing its share of common responsibility in the world".
The Lord Privy Seal looked forward to this same objective in his statement to the Council of Western European Union on April 10, 1962, when he said—and I quote:
"This new Europe will be a great power"—
note the words "great power", my Lords—
"standing not alone but as an equal partner"—
again, note the words "equal partner"—
"in the Atlantic Alliance."
President Kennedy, too, has recently spoken of the evolution of "a strong, closely-knit European entity "—the same word again—which would be an "equal partner"—again, an "equal partner "—with the United States.
My Lords, I believe that there is some illusion here. The point which I am about to make may seem to be somewhat esoteric, but I believe it is worth making. "Entity" and "great power" are brave words. If one thing is certain, it is that the European Community, whether enlarged by the accession of Great Britain or not, cannot become a "powerful entity" or a "great power" in any proper sense of the words, and certainly not a power equal in effective strength with the United States, on the basis of the Treaty of Rome or of any political instrument of the same or similar type such as that adumbrated by the Cattani Committee. President de Gaulle himself admitted as much in another connection at his Press conference of September 5, 1960. There were, he agreed,
"a number of more or less supranational bodies",

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and
"as long as nothing serious happens they function fairly well without too much trouble; but as soon as something dramatic happens and a serious problem has to be settled, it can be seen that no High Authority has political authority; it is only the states which have it."
So much for the Six as an "entity" or as a "great power". In truth, the Western European Community can become a great power only if it has a truly federal Government; that is to say, a Government organised according to a system by which, as classically defined, the
"powers are divided so that the general and regional Governments are each, within a sphere, co-ordinate and independent."
A great power properly so defined will have a central Government with certain defined powers in certain allotted spheres, and if it is a Parliamentary democracy its Government will be responsible to a central Parliament. It will have its own foreign policy conducted by one Foreign Minister through a single foreign service. It will have its own defence policy within its alliances, sustained by its own armed forces in concert with those of its allies. Even the old Austro-Hungarian Monarchy, imperfect as it was, had these things. The United States of America certainly has them, and so also should the United States of Europe. The evidence of history is that no mere confederate combination can be an effective unit in the rough and tumble of international life.
So, if we are ever to hope that Western Europe can become a great power in any true sense of the word, equal to the United States—-and this is what we say we want—it must became a Federation. Until it does, it cannot have a single, all-inclusive foreign policy or defence policy. Whether or not, even if the policy of France were to revert to that of M. Schuman, the Six could bring themselves, even step by step, to this result, I do not know. But of one thing I am sure: I cannot see Great Britain consenting, within a European Federation, while contributing to a central Government, to accept a status like that of the State of California, or tone Province of Ontario, or the State of New South Wales. That is what federal government means.
My Lords, that is all I have to say. There are many other points which I
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might have raised, but I will refrain. If I might put my conclusions in two sentences: first, there is, as I see it, an element of doubt about the advantage to us of our entering the Community; and if this is so, the price which we may be called upon to pay may be too heavy. Politically, the Community will not be fully effective as a vehicle of power comparable with the United States unless it becomes a Federation in the true sense of the word; and for us that is out of the question.
6.33 p.m.
LORD MCCORQUODALE OF NEWTON: My Lords, I am privileged to be the last Back Bench speaker in what I believe to have been a classic debate, comparable, in my opinion, to many of the great debates of the past held in this Chamber. Indeed, that is as it should be, for we have been considering affairs of the very first magnitude. I am sure all of us were delighted that in this debate two ex-Prime Minis-tens took part, both of whom we were delighted to see back in sufficient health to take a full and active part in the debate.
I hope that this debate will have done something, at any rate, to clear up the many misconceptions that there are in the country about the Community and the Common Market and the possibility of our entering it, for there is plenty of work still to be done by Her Majesty's Government and others to explain the facts to the people. There are very many nonsensical and mischievous stories being spread about by interested parties on what the Common Market may be. I have myself, for example, met on more than one occasion quite reasonable people who were firmly convinced that the loss of sovereignty that they read about so much in the Daily Express means that we shall have to dispense with our Sovereign and become a Republic. That has been quite a common misconception in certain quarters. I was delighted to hear Lord McNair yesterday say that he deprecated the use of (this rather stupid word "sovereignty". He suggested the word "independence" should be used in its place; and I fully agree with him. I hope everything possible will be done to clear up such misconceptions.
If I may, I should like to say just one or two words about my own reactions to

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this debate. It seemed to me that the results of the debate have been very much in line with the last few words which were used by Lord Morrison of Lambeth when he finished his very remarkable speech yesterday, which I thought impressed the House a very great deal. His last words were (col. 312):
"But that does not prevent my feeling that, if it be practicable, in principle it is right that the British should go into the Common Market."
And I believe that the general consensus of opinion in this House at the end of the debate is just that.
I was enormously impressed, if I may say so, with the speech of Lord Robertson of Oakridge, and especially with the way he summed up what I believe is the root of the matter. He said (col. 367):
"… there remains one plain, cold fact, and that is that if we do not join the Common Market, the Economic Community, the Community will go ahead without us; it will succeed without us; and it will grow in exclusiveness, to our detriment, because our voice will not be heard in its councils";
and I believe that that is very true.
I mentioned the speech we had from the noble Earl, Lord Attlee. I was rather sorry that he appeared to deprecate the work of the international civil servant during his speech. He seemed to imply that to be an international civil servant was to be a rather lower class of individual than a national civil servant. All I can say is that if anybody has met M. Jean Monnet or M. Robert Sahuman and thinks that either of them is inferior to any civil servant in the whole world, he is very much mistaken.
I should like to say a word or two, if I might, about the industrial and the political effects of joining the Common Market in so far as they would appeal to me, having spent nearly all my life in industry. I would say to Lord Strang, apologising to him for not replying to his speech, that I felt it was something of an elaboration of what Lord Attlee said, and what Lord Attlee said seemed to me to be in essence: "This is a new thing. We have never done it before. I do not like it."
It has always seemed to me to be of the greatest importance to the peace of the world that Europe, and Western Europe in particular, should be in
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balance, with no one nation able to exert domination over the rest. Indeed, this has been our classic foreign policy down the ages and for which we have fought two wars in our own lifetime. Fortunately, to-day, the mood of Western Europe is greatly different; it is towards friendship and collaboration—"interdependence" is the phrase now used—rather than the rivalry that existed for so long. But I think that we must recognise that this happy state of affairs is, at any rate to a very considerable extent, caused by the magnitude of the threat hanging over the world from the East. But surely if Britain stays out of this Community, so much the less is this balance likely to be permanent and stable. If we are in and play our full part, then it is unlikely, to say the least of it, that any one of the nations in the group will dominate the others. The balance of power in Europe will be strengthened and the urge to ever closer collaboration will itself be fortified.
I have always believed that we missed a vital chance in not joining the Iron and Steel Community when it was first set (up, but I do not wish to go into that at this late hour, though I believe that that, even more than what my noble friend Lord Boothby was quoting, was our great mistake in the post-war world. I hope and trust that we shall not miss this opportunity, because I believe that the results if we do not join the Community will be increasingly serious for ourselves, and even more serious for the whole permanent stability and balance in Western Europe and, therefore, for the peace of the world.
When we come to the industrial sphere, I am one of those who think that it is in the highest degree desirable from the industrial point of view, from the manu-facturing angle and from the employment angle, that we should join the Common Market. I am in close touch with employers' organisations throughout the country, and I believe it is a general view of industry, both large and medium-sized, that great advantage lies to us in joining the Community. Our great firms must be in the Market; of that there is no doubt whatever. And if Britain does not join, it means that they will join without Britain, by building their factories overseas in the Common Market, as some of them are doing

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at present. And, as I know full well, many others have great plans for doing so. This means that the employment, which otherwise would come to Britain, and all the overheads, which would otherwise be earned by Britain, will go overseas.
The United States is concerned with this tremendous surge of industry wishing to get into the Common Market. Many American firms have set up already in this country, expecting that we shall become a member of the Community and that they will be able to co-operate in the Community from here. But this mood is changing and more of them are setting up on the Continent because there is some doubt of our attitude. Let me ask your Lordships to consider the question quite objectively, as if, for example, you were in charge of the great Ford empire throughout the world. I hasten to say that I have no connection Whatever with the Ford empire, not even with driving one of their cars. Ford have great factories in Britain, at Dagenham and elsewhere, and great factories in Germany. The market in Britain is some 50 million and the market in the Community is already 180 million. Which factories are likely to be extended, if Britain does not join the Community? I think it will be obvious to noble Lords where Ford's first interest lies in selling their motor cars. I take Ford only as an illustration of what must be obvious to all those conducting great world-wide enterprises. This would have a sharp effect on our employment in this country.
I am sorry to say that there is a tendency in certain quarters, and not least in certain political quarters, to decry British industry, both management and employees. I believe that this is unnecessarily pessimistic. I believe that British industry is healthy and well able to stand up for itself. I know that even before the politicians got active, British industry had been actively studying the markets in Europe, its prospects if we do join the Community and its prospects if we do not. Practically every individual industry in this country has sent its team to Europe and studied the markets, the wage rates and fringe benefits, all the markets in which we shall be in competition or where we can find outlets. I believe that, by and large, Briish industry
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is ready for a step forward should we now take it.
At this stage I should like very much to welcome the speech which the noble Lord, Lord Citrine, made yesterday. I believe that it was of immense value. His experience of trade union affairs is of longer standing and more importance than that of any other living man in this country, and I hope that many trade union leaders will take parts of his speech and print them in their trade union journals, because I believe that that would do an immense amount to clear away misapprehensions.
I would claim that it is the overwhelming view of industry that we must be able to compete in this new huge mass market if we are to maintain, still more to increase, our prosperity here in this overcrowded little Island. I have little fear that we shall not be able to compete, with reasonable success, with our fellows on the Continent, in industrial affairs, in manufacture, in commerce and, indeed, in agriculture. As a nation which has a longer inherited series of skills than any other, it will be our own fault if we cannot compete. There will need to be very considerable adjustments, of course. Many people seem to be frightened of adjustments, but in industry we are making them every day to meet the changing needs of the markets. It is those firms and countries who refuse to make adjustments who go to the wall.
One adjustment which will have to be made and which is causing a good deal of heart-searching is that written into the Treaty of Rome, of equal pay for work of equal value. That has caused a great deal of heart-searching in Germany, Holland, Belgium and Italy. A number of amusing stories are going about of how they are getting round it. But there it is, and we shall be able to deal with it quite satisfactorily in industry when it comes along. We must be able to trade with this huge market on equal terms. I could not quite follow my noble Mend Lord Balfour of Inchrye in his arithmetical calculations by which a 12 per cent. tariff seemed to be reduced to ½ per cent., but no doubt I shall be able to follow it better when I read it.
I believe that we must be in. And for another reason. I am hopeful and indeed confident that, if we become

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members of the Community, the City of London will become the financial capital of the Community. There is no money market in the world, no experience of banking and insurance, so great as one finds in the City of London, and this should be an enormous gain to our influence and prestige as well as to the important point which the noble Lord, Lord Shackleton, emphasised: that of stability in our balance of payments.
There remains the Commonwealth, which seems to be a bugbear to a certain number of people. I must say that to me the overriding argument is that if the prosperity of Britain declines drastically, so also will the prosperity of the Commonwealth, especially that of what one might call the old, or white, Commonwealth. If, on the other hand, Britain prospers, and prospers more greatly, then I believe that the Commonwealth will prosper also. For they count on us not only as a market but also—and this is equally important—for capital. If they cannot count on us, the economic ties of the Commonwealth to us are bound to be loosened, because they will have to go elsewhere to look for their capital and therefore become tied up elsewhere.
By all means let us strive our utmost so that we obtain reasonable terms for associating the Commonwealth with the Community. I must say that I trust the Government and the Lord Privy Seal to strive to the best of their ability. And I believe the Commonwealth in the end will see, to use a homely phrase, on which side of this affair their bread is really buttoned, I hope, therefore, my Lords, to see the negotiations successful and Britain playing her full part, both politically and economically, in the future of Europe. I believe that for those of us in industry there lies open a great fresh field in enterprise, endeavour and skill, if we take our full share in this new venture.
EARL HOWE: My Lords, I do not want to make a speech but I want to ask a question. What is going to happen to British shipping if we go into the Common Market?
6.51 p.m.
LORD SILKIN: My Lords, I will not answer the noble Earl; he has not put his question to me. I should like to
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begin by associating myself completely with the opening remarks of the noble Lord, Lord McCorquodale of Newton, when he paid a tribute to the quality of the debate that we have had in this House over the past two days. I must say that I do not remember a better debate, of higher standing and with more eminent participants than we have had on this subject of the Common Market yesterday and to-day. It has been well worthy of the vitally important subject that we have been discussing.
The Foreign Secretary, in a speech with which I agreed 97 per cent., opened by reminding us that about a year ago we had committed ourselves to instructing the Government to negotiate with the European Community, subject to certain conditions; and I took that to mean that both Houses had really committed themselves to the principle of the Common Market, subject to our being able to obtain the conditions that we sought. Nevertheless, I would not complain that we are to-day having a further debate and that this debate is ranging over the whole question of principle once more. It is right, after a year's negotiations, especially in the light of the critical position which we appear to have arrived at in these negotiations, that both Houses should wish to have an opportunity of reviewing the situation before we part for nearly three months, because in that period there seems to be no doubt that the negotiations may break down completely or we may arrive at some kind of agreement.
I should like to say in passing that I completely agree with the noble Lord, Lord Boothby; and I think the noble Earl, Lord Avon, too, made the same point, that we should not rush this. I do not wish to be personal, but I am quite sure that the Lord Privy Seal must be a very tired man; and I do not think that tired men are the best negotiators. You cannot negotiate effectively by staying up half the night negotiating. I would much rather that we took this thing rather more leisurely, that we allowed the Lord Privy Seal to take a rest and that we even put off the Commonwealth Prime Ministers' discussions than tried to arrive at a hasty decision which we might regret. Nevertheless, it is right that we should have been discussing this matter yesterday and to-day, and I understand that a

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pledge has been given that, if it should be necessary, Parliament will be summoned before the appointed time.
Unfortunately, in discussing this question and in reviewing the situation the House is in possession of very few additional facts as compared with a year ago. We do not reality know what is the attitude of the various members of the Community to the problems which face this country in connection with our application to join them. I think it was the noble Lord, Lord Boothby, who made a guess at what were the views of the different Heads of Governments. He may be right or he may be wrong.
LORD BOOTHBY: Probably wrong.
LORD SILKIN: We know for instance that the Prime Minister went to see General de Gaulle some months ago. What the outcome of it was we were never told. We ware given one of those colourless statements which cover anything which could have happened. We just do not know. We have from time to time—and I want to pay a tribute to the Lord Privy Seal—been given progress reports, but what do they amount to? Generally speaking, a summary of the subjects he has been discussing, and I would defy most noble Lords to conclude from these summaries and these reports what has actually been agreed upon; there may be some who can, but I am not among them. The effect is that we just do not know. Broadly speaking, we are no wiser to-day than we were a year ago as to what is the present position and what are the real prospects of our arriving at a compromise on the various matters which are being discussed.
To a great extent I would say that there has been very unsatisfactory publicity about the whole of these negotiations. I think that the public might have been much better informed than they are. The noble Lord, Lord McCorquodale of Newton, was quite right as to the extraordinary, incredible ignorance which exists in many quarters as to What the Common Marked is all about. To-day I would say that it is probably the main topic of conversation wherever one goes. Wherever two or three people meet together, sooner or later they begin talking about the Common Market; and I am sorry to
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say that, apart from enlightened businessmen such as the noble Lord, Lord McCorquodale of Newton and others, by and large more people seem to be against the Common Market than for it; and when you come to discuss it with them you find that their objection is based entirely on ignorance. There is a tremendous educational task which this Government will have to undertake if they are going even to come to an agreement with the Six on the various conditions which we wish to impose, because to try to bring this Common Market into effect in the face of a reluctant, grudging, suspicious public would be fatal.
I would suggest to the Government, to the Foreign Secretary and to the noble Earl, Lord Dundee, in particular, that they really should make a very strong point of seeing that the public is really informed about all the issues and given as many facts as possible. I know that the Government have published one document, which I have tried to read myself. I must confess that I found it very heavy going. I think it was an objective document; I found nothing unfair about it; but it really was very heavy going. To expect the members of the public to read this document and to understand it is really asking too much.
I said that we have tried to express our views in this debate, Whatever they may be, in the light of wholly inadequate information. But, before I go on to the subject of the merits and demerits of the Common Market, I want to pay a tribute to the Lord Privy Seal. I feel free to do that, because this subject cuts right across Parties; there are opponents on both sides of the other place, and on both sides here, of the Common Market, and there are supporters, and I feel that a tribute is due to the skill, patience, diligence and dignity with which the Lord Privy Seal is carrying out these negotiations. I should like to emphasise dignity, because my noble friend Lord Attlee suggested that we might be approaching this matter with cap in hand. I do not believe that these negotiations are being approached in that spirit. I cannot think for one moment that Mr. Heath really is going with cap in hand on these negotiations.
I have criticised the Government for not giving us a clear picture of what is

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going on. I want to say that I understand their difficulties. When you are negotiating you cannot constantly be explaining to the public every step you are taking. You cannot have people looking over your shoulder all the time watching every step. There has to be a tremendous amount of give and take in negotiations. You give something there, you accept something in exchange. If you merely explain what you have given away you are criticised for that, and you find it very difficult to explain that you got something in return. Really, the only sensible thing, if one can get away with it, is to present the whole picture, what you have given and what you have got in exchange. And let us not be so foolish as to imagine we are going to get it all our own way in these negotiations; we are not. I agree with the noble Earl the Foreign Secretary: we are not negotiating from weakness; I do not think we are particularly negotiating from strength, either. But I think we are negotiating on equal terms, and on that basis one must expect to make concessions and to have concessions granted. All one can hope is that one is putting one's case fairly, forcibly, and ensuring that the people with whom we are negotiating really understand our position.
Nevertheless, for all that, and realising these difficulties, I do think that the House has welcomed this opportunity of having a final talk before we go into Recess, and we have had a most excellent debate. I think the case has been put extremely well from both sides. We have had the case against entering the Common Market most admirably presented by my noble Leader, and by my noble friend Lord Attlee, whom (I should like to echo the words of the noble Lord, Lord Balfour of Inchrye) we welcome back to our discussions, and we are delighted to see him in such good form. He certainly was in good form this afternoon, and I think he put up as good a case as could be put up against entering the Common Market. My only regret is that I completely disagree with him; but that is the way this discussion has been going all along.
I should like to make a few general remarks about the kind of debate we have had. What I feel is that all noble Lords who have opposed entering the
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Common Market have put up an admirable case. My noble friend Lord Lucan, who spoke at short notice, put up an admirable case against the Common Market. I think I could have done so, too, if I had selected my facts, ignored every argument in favour of the Common Market and merely produced the whole of the argument against. Of course you can put up a wonderful case. So you can in favour of the Common Market if you ignore all the case against it. The fact is that it is a very difficult decision to arrive at. Even the Government must have found it difficult to make up their mind as to whether or not they should recommend making application; I imagine so, otherwise they would have decided to enter the Common Market right at the very beginning, in 1956, when it was first under discussion. At that time they must have decided against it and they must eventually have come to the conclusion that the case for entering the Common Market is stronger than the case against. I am not at this stage complaining about it. Everybody is entitled to change his mind, and if one does so after due consideration and honest thought, all right. But it is and it has been a very difficult decision to make. One can argue both ways, and I have argued both ways to myself. But at the end of the day the position is that you have to decide either to go in or not to go in.
With great respect to the noble Lord, Lord Strang, for whom I have a great admiration, it is no good coming here and quoting the opinions of economists who are cautious and doubtful and not quite sure. You can find plenty of them. I would much rather take the view of the noble Lord, Lord McCorquodale of Newton, who is himself a great industrialist, who speaks from personal experience, not only his own but that of many with whom he is in contact, and who really believes that our entry into the Common Market would be of advantage to this country. I would much rather accept that than the views of 50 economists who cannot make up their minds and are cautious. But I think that in making up our minds we have to be quite certain we do not go to extremes in either case.
There are those who take, to my mind, the exaggerated view that if we do not

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join the Common Market we are virtually finished, that we are what somebody described as "an off-shore island", that our economy will inevitably break down and that we have no future before us. I do not accept that. I have come to the conclusion, of course, in supporting our entry into the Common Market, that it is definitely to our advantage. Nevertheless I am not prepared to say that if we do not join, all that faces us is ruin. After all, we have a population and we have skilled personnel; we have a vast know-how; we are still ahead in a great many industries; and I think somehow we should make a living, perhaps not as good as we have been able to do up to now, but we should survive.
On the other hand, it is wrong to give the impression that by joining the Common Market we automatically reap substantial and immediate advantages and that our economic difficulties are over. The benefits are going to be long-term, and they will depend upon our taking advantage of the opportunities offered to us rather than something that is going to be handed to us on a plate. If we fail to seize these opportunities we shall be no better off, and probably worse off. But I am confident that given the opportunities we shall accept them. I am tremendously encouraged by the spirit of this debate, by the various industrialists whom we have heard, who are already preparing and planning for the day When we may be joining the Common Market, and I believe many of our industrialists are doing the same. I have little doubt that we shall seize the opportunity and that our industrialists, and our workers too, will be equal to the occasion. These opportunities are there; they are immensely bigger, and afford a rapidly expanding market for our goods at lower prices.
I want to emphasise "lower prices". I think that is important. I believe "hat with a bigger market to serve we shall be able to lower our prices, and the result will be not necessarily a reduction in taxation—I do not know; I would agree with the noble Lord who spoke about Parkinson—but at least more money circulating. People will be able to buy more goods for the same amount of money and therefore there will be more employment and more prosperity.
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I do not want to elaborate on the advantages of the Common Market, because that has been done to a large extent during these two days. On the other hand, I do want to warn those who are against our entry that it is not right to say that to join the Common Market involves the end of the Commonwealth: it does nothing of the kind. I should be sorry to have it thought that the existence of the Commonwealth depends solely upon tariff preferences; it does not. In fact, tariffs are being reduced, preferences are being reduced. In some cases, there are no preferences at all. Even the trade between ourselves and the Commonwealth is less than it has been. I hope that it will increase again, but recently it has been on the decline. Our association with the Commonwealth, this great Commonwealth conception, is much deeper, something much greater, than merely a financial partnership.
I refuse to accept the fact that, by negotiating for entry into the Common Market, our relationship with the members of the Commonwealth will be in any way affected. We have come to believe that the Commonwealth are unanimously against our entry, but that is by no means the case. There are many members of the Commonwealth who take a different view and accept the fact that not only are we entitled to make our own decision, but that in fact it will benefit them as well as ourselves. In this connection an interesting statement was made only a few days ago by one of the leaders of the Commonwealth in Australia, when he said:
"I believe, on close factual analysis, that the potential effect of Britain's entry on the Australian economy has been greatly exaggerated. Politically, its implications are much more far-reaching. If Britain does enter, I do not believe the overwhelming majority of Australians will notice any change or be affected materially."
I would suggest that that is probably a true statement, and while I understand the Commonwealth Prime Ministers are trying to get the best possible deal, I believe, and cannot help thinking, that in their heart of hearts they must to a large extent accept this view.
Now I want to say a few words about two other conditions upon which we require to be satisfied: the position of the farming industry in this country, and of

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the European Free Trade Association. Naturally, the Farmers' Union are putting up a big fight, nobly assisted by my noble Leader, to maintain the status quo. To me, this is a sorry confession; it is a confession that the farming community is not capable of holding its own in the great European market and of competing with others. I always thought that our farming industry was highly efficient. It was necessary to subsidise it against certain natural advantages which some States might have—such as Poland, who were able to export to us pigs at a cheap price because of the state of their economy—but I thought, by and large, we were able to compete with any farmer in Europe. I believe that to be true. Given an equal chance with other farmers in the European Community, I am confident that we shall be able to compete and shall not need any subsidy or assistance at all. It shows a lack of courage and confidence to take the other view.
In any case, we have been assured that the position will be reviewed periodically, and if it should should turn out that I am wrong and that we are at a disadvantage as compared with the European farmer, then the matter can be reconsidered and something will be done about it. The same applies, of course, to the farm products, to the raw products which will be imported from the Commonwealth. I hope we can get something a little more concrete; but a periodic review and an undertaking that the matter will be looked at in the light of circumstances is, in my view, going a long way. There may have to be certain adjustments. We may have to reconsider the items which would most suit the European Market. But we have always been quite flexible in our farming operations, and I see no reason why we should not be again. Our technical equipment is as high, our wages are no less, no greater, than those of the farming communities in Europe; and I am quite confident that we shall be able to compete.
The other condition that has to be satisfied is that the members of the European Free Trade Association will be admitted. I agree that at one time there was a somewhat ambiguous statement made by Dr. Adenauer, to the effect that the European Community
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was already large and that he did not favour its becoming very much larger; and it was implied from that that there might be difficulties about the entry of various members of the European Free Trade Association. In fact, however, it applies only to two—Norway and Denmark. The other members of the EFTA —excepting Portugal—are neutrals: Austria, Switzerland and Sweden. They would not be eligible, if one takes into account the possible political implications. So, from the point of view of adding materially to numbers, there can be no real objection at all But I doubt whether Dr. Adenauer really had in mind members of the Free Trade Association at all. I understand that Norway and Denmark have made their application, the neutrals are discussing the possibility of some form of association, and I should imagine that no real difficulty will arise in that sphere.
The noble and learned Lord the Lord Chancellor gave us an address on the effect of the Treaty of Rome on our legal system, and, with all humility and respect, I should like to say that I agree with him completely. In this I am not merely relying on my own legal expertise; I myself have had investigations made by certain eminent lawyers, and there is no material difference between their view and his. So I am glad to say that on this we are ad idem. I would agree with him that they are not vital matters with which we are concerned. We have to hold a balance. We are really concerned about people who are going to break certain Articles of the Treaty and how they are going to be dealt with. A person who does not break any Article of the Treaty does not come within the scope of what the noble and learned Lord Chancellor has told us at all. If you do break any Article of the Treaty the question is, are you to be dealt with under English law, or under the law which is being laid down under the Treaty of Rome? I do not think that is a very vital matter which should affect our judgment in going into the Common Market.
Finally, I want to say a little about what is, to me, the most important aspect of our proposed membership—the prospect of a Political Union. The

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Treaty of Rome contains no direct provision for any form of political association at all, but it is implied that, as the nations get closer together, so some form of political association will become inevitable. It is impossible to get freedom from tariffs, free movement of capital, common services, provisions relating to the gradual raising of the standard of living throughout the Community, greater mobility of labour, and a variety of other things of that kind, without bringing into operation a closer association than a purely economic one. One has to recognise that gradually there will have to be some form of common law which will be applicable throughout the Community in relation to these various matters with which the Community deals. This has been put forward in some quarters as a sacrifice of sovereignty, and the noble and learned Lord who sits on the Woolsack has dealt with that, as bas the noble Lord, Lord McNair. But what it amounts to is this: that in entering into the Treaty of Rome you make some sacrifice of the right to decide a number of matters of that kind for yourself; and that is the price we have to pay. But I realise that we shall probably evolve some system of legislation covering the economic field provided for in the Treaty of Rome, and possibly even going beyond.
The noble Lord, Lord Strang (I am afraid that he has gone, but he is always interesting and exceedingly authoritative on these matters), suggested that the only practical form of political association was a federal one. I understood him to suggest that at the present moment, in view of the leadership of many of the countries of Europe in the Community, that was not practicable. He is probably right, but I have little doubt myself that sooner or later force of circumstances will force us into some kind of federal unity. The exact details, of course, it would be absurd to try to describe at this moment. But is there really any serious objection to the Community's having a common foreign policy, and even a common defence—within, of course, the larger scope of N.A.T.O.? It does not seem to me to be unthinkable. I certainly regard this aspect as perhaps the most valuable
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aspect of our membership of the Community.
We have to remember that for many centuries Europe has been a constant cockpit, with wars between one nation and another every few years. France, Germany and ourselves have generally been involved; we as part of the price we have paid for trying to maintain the balance of power; others, perhaps, trying to seize power. But we have constantly been involved in wars or threats of wars, and to-day it looks as if the day of wars in Europe, at any rate, is coming to an end. No one, as a number of noble Lords have suggested, could possibly have thought conceivable that France and Germany should be in an organisation together, and in harmony. But I feel that there is a possibility, certainly in the minds of a great many people, and even a fear, of one or other of these great States dominating in the Community—probably a greater fear of Germany than of France. I have no doubt that our entry into the Community would have the effect of holding the balance, and I do not think we need be afraid of the rest of the Community "ganging up" against us. There is, in fact, as I am sure the noble Earl the Foreign Secretary will appreciate, a built-in safeguard against "ganging up". On the important matters there has to be unanimity; and on others we can pretty well ensure that it would be virtually impossible for us to be out-voted on any important matter. Therefore, I particularly welcome the possibility of a move towards a European community, as a step, perhaps a small step, towards world government. My noble friend Lord Attlee takes a different view. I think that any organisation which brings nations together, and enables them to live in harmony and to work for a common purpose, is a step in the right direction. It may be a very halting step; it may be a long way off, but it is a movement in the right direction.
My Lords, in the determination of the policy of political integration, we have a vital part to play. We should therefore participate, if for that reason alone, in the tentative discussions that are about to take place on political union. I know that there has been some discussion as to whether we should be

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allowed to participate in these talks before we actually join, but I feel that it would be of great advantage that we take our place in these political talks, if we can, even before we actually join. In this matter, which transcends and cuts right across Parties, I personally wish the Government every success in their efforts, believing that they have it in their power to make an outstanding contribution to the happiness and welfare of this country, of the Commonwealth, and of Europe.
7.32 p.m.
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE): My Lords, the last time I had to wind up for the Government in a debate on the Common Market was in June, 1961, a short time before we began to negotiate. In that debate I had the great pleasure, which has been repeated to-night, of following the noble Lord, Lord Silkin, who wound up for the Opposition Front Bench. When I began my few remarks on that occasion, by telling the noble Lord, Lord Silkin, that I agreed with everything he had said, he interjected a little unhappily that that was not going to do him any good with his Party. I am very anxious not to do the noble Lord any harm, nor any others of your Lordships opposite. I would only say that I have taken careful note of what the noble Lord said, particularly about the need for giving greater publicity to the Common Market.
I will not say that I agreed with everything he said, and I shall refrain from emphasising the excellence of the speeches that were made by Lord Silkin himself, by the noble Earl, Lord Longford, and by the noble Lord, Lord Morrison of Lambeth, on the Front Bench, supported by the noble Lords, Lord Shackleton, Lord Huntingdon, Lord Peddie, Lord Citrine, and a great many others behind them. Just to make everything fair all round, I shall equally refrain from adverse criticism of the noble Viscount, Lord Alexander of Hillsborough, the noble Earl, Lord Attlee, and the noble Earl, Lord Lucan, because I always find that it is a good plan to keep an even balance among your opponents, when they are having a real "set-to" among themselves. Therefore, I would only say What wonderful speeches they have all made,
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very strong, powerful speeches against the Common Market, and equally good ones for it.
My Lords, the Conservative Party, too, is not altogether without merit in this ability to disagree with each other.
LORD BOOTHBY: What about the Cross-Benches?
THE EARL OF DUNDEE: We are able to show some modest amount of disagreement among ourselves. I am afraid we cannot compete with noble Lords opposite, and we cannot claim to have a Royal Flush in our hand. And we have not produced a Front-Bench speaker who has enough dialectical skill and ingenuity to perform the spectacular achievement of disagreeing in public with one of his colleagues in your Lordships' House, and another colleague in another place at the same time, but in different senses. The only Party which does not get any marks at all, is the Liberal Party. I think this is the first political discussion I have heard in 30 years, in which the Liberal Party have all completely and utterly failed to disagree with each other. My Lords, quite apart from the robust disagreement which he expressed against everybody else, I should like to say how glad we are to see the noble Earl, Lord Attlee. When he was in hospital not long ago, we all thought of him a great deal, and we are truly delighted to see him come back in such good form, and to hear him make a speech of such forthright vigour.
I must just take up one or two points with the noble Earl, Lord Lucan. I was so glad that he intervened. He made a most interesting contribution to the debate, but there were two things he said on which I do not think I can refrain from commenting. One was—if I heard him rightly—that we went into EFTA in order that we might not go into the Common Market. My Lords, I am afraid that the noble Earl cannot have been paying much attention either to myself, of which I do not complain, or to many of his colleagues. I had the duty of taking most of the debates on EFTA, and all the debates on the EFTA Bill in 1959 and 1960. This Bill was specifically chosen, not as a means of keeping us out of the Common Market but as a means of helping us to get in.

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I remember that, whenever we had a discussion or a question on the subject, the late Lord Pethick-Lawrence, and others of your Lordships opposite, used to press me and say: "You have got your EFTA now. What are you doing to press on to your ultimate goal of an economically united Europe?" I had to defend myself by saying: "We have had EFTA for only a short time. We are advancing towards this goal, but we do not want to bang on people's doors and rattle their windows". It was always understood, on both sides of the House, that the main purpose of EFTA, although we thought that it was a viable thing itself if we should fail to get any further, was to lead us to a wider association and to join the Common Market—not only ourselves, but with those other nations which we were bringing in.
The other point to which I want to refer, which the noble Earl, Lord Lucan, brought forward, is about the decline in prosperity or economic efficiency of Germany and France, about which I am afraid I am a little behind the times. I was not quite aware of it. Because every time I have heard the economic conditions of Europe discussed by noble Lords opposite, they have always presented me with a whole lot of what they call "league tables", showing how Ger many, France, Belgium and all the Common Market countries are racing ahead of us, with a gross national product which is increasing by a most satisfactory percentage each year, whereas we are limping behind with an average of 2or 3 per cent. It seems to be a very great pity, my Lords, that, just when we had decided to try to go in and join them economically, they should have suddenly encountered this sad economic decline, and I hope it is not going to last too long.
My Lords, there is one other thing that I should like to mention—in fact, I think it was really the most important thing in their speeches, on which the noble Viscount the Leader of the Opposition and the noble Lord, Lord Morrison of Lambeth, thoroughly agreed with each other. The noble Viscount said that he heartily supported the decision of the Labour Party to defer making up their minds on this matter until further information was available. The noble Lord, Lord Morrison of Lambeth, said in his speech, that he
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reserved judgment until the end of the day when we knew in fair detail what the proposition really was. I do not see how anybody can disagree with these observations. I do not see how we can expect any clear-cut and consistent division of opinion about the Common Market to develop or to crystallise until we have more information than we have now.
If the Government were to say, "We have now reached an agreement with the Six under which they have given us guarantees concerning the Commonwealth, agriculture and EFTA which we consider to be acceptable, and we therefore intend, after consultation with the Commonwealth, to ask Parliament for authority to sign the Treaty of Rome", then you would have a clear division of opinion between those who thought the Government were right and those who thought that they had not demanded or secured sufficient guarantees for the Commonwealth and the other interests concerned, and that these guarantees were not acceptable. Or, if it went the other way, if the Government were to say, "We have so far not been able to secure what we regard as the minimum acceptable conditions, and therefore we are bound to tell you that, until the Six modify their attitude, we cannot sign the Treaty of Rome", there would again be a division of opinion between those who thought the Government had done the right thing and those who thought that they had been too exigent in their demands.
There are, of course, a few people who think that we should go into the Common Market on any terms, and there are also a few who think that we should not join the Common Market on any terms at all. But I believe that the great majority of people are waiting, as the noble Lord, Lord Morrison of Lambeth, said, until they know in fair detail what the proposition really is. They cannot at this moment finally make up their minds—and I think that includes everybody like the noble Lord, Lord Strang, Sir Roy Harrod and Colin Clark, to whom he referred. Of course, I am only talking about a clear division of principle which may emerge on the general question whether we should sign the Treaty of Rome. There are a host of minor questions which cannot be settled until long afterwards, because they have

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not yet been settled, or even thought about very much, by the Six themselves—and if we do not go into the Common Market these questions will still not be settled by the Six, in all probability, for two or three years. The only answer you could make is that, if we do go in, we could help to settle them.
A great many of these questions were asked in the debate to-day. I will mention just one of them, which was shot at me by the noble Earl, Lord Howe, just before the noble Lord, Lord Silkin, rose. Lord Silkin said he was very grateful that he did not have to deal with it, and I think he was quite right to say so, because he could not have said very much, All he could have said was this: that the question of the future of British shipping has been raised in our discussions. The Minister of Transport is in close touch with the General Council of British Shipping, and will continue to keep them informed of developments of interest to them. But, as the Six have not decided on any particular policy about it, naturally we cannot know any more.
The trawler industry, also, we have been thinking about. It has a direct interest in the development of a common fisheries policy. That, too, has not yet been formulated by the Six, but I believe the Six may start talks upon it later in the year, and we shall certainly want to ensure that they are aware of our views and our desire to ensure to the fishermen a reasonable livelihood and proper working conditions, together with stable markets.
LORD BOOTHBY: My Lords, I must apologise for interrupting the noble Earl, but does he realise that if we are going to do that we must, by joint action, stop over-fishing of the North Sea?
THE EARL OF DUNDEE: My Lords, I would not have mentioned this question if I had realised that my noble friend Lord Boothby was listening to me so intently, as he evidently was. It is indeed injudicious to talk about fishing when he is anywhere within earshot. Personally, I agree with him very much that we shall have to stop the fishing.
VISCOUNT ALEXANDER OF HILLSBOROUGH: But, not on fishing but on the general remarks that the noble Earl is making, have there not been sufficient
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precedents already in decisions by the Common Market authorities that any advances or special helps we could show to our shipping industry can be regarded by them as distorted competition? The whole basis of the Common Market is cut-throat competition among the Six; and therefore any aids we may give, especially by rating reliefs or anything of the kind, can be said to be likely to be wiped out when you come to deal with it.
THE EARL OF DUNDEE: My Lords, I had not intended to pursue at great length the question of shipping or of fish, and I should like to get on because we are getting very late.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I thought you might find it difficult.
THE EARL OF DUNDEE: Several of your Lordships, including the noble Lord, Lord Boothby, and the noble Lord, Lord Sillkin, who spoke last, and the noble Lords, Lord Peddie and Lord Shackle-ton, have all talked about the timetable. They have argued that this question is much too important to be hurried. My Lords, I certainly agree that it is. Of course, one would like to get a broad outline of a possible settlement, if we could, before the Commonwealth Prime Ministers' meeting in September, and from many points of view, naturally, the sooner we got a satisfactory agreement the better it would be. But it is quite true that if it is not going as fast as you want, you cannot hurry it. I would emphasise to your Lordships that the current meeting does not present in any way a formal deadline. The fact that the newspapers have represented it as a particularly critical meeting does not in any way mean that everything has to be settled one way or another this week.
My Lords, I do not in the least complain about this debate being held at the present time, because I think your Lordships all wanted, or most of your Lordships wanted, to have an opportunity of expressing yourselves on this question before we rose for the Summer Recess. I never complain when the Government are pressed to give more information; and, when we do give it, and when our interrogators complain that it is indefinite, I think that is quite

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a legitimate complaint—it is indefinite. The unreasonable thing would be to go on demanding more information when everybody knows that, in present circumstances, it can only be information of an indefinite character. But I do not think your Lordships bave done that today. I believe it is generally recognised that, in the present stage of discussions, we cannot tell your Lordships any more Chan we have told you already, and we cannot be more definite than the result of the negotiations themselves in which we are engaged.
Of course, I am very anxious, as your Lordships will understand, to say as little as possible myself, not because I am in any way of a taciturn disposition but because, even if my remarks were the perfect masterpiece of correct analysis and of wise comment, I do not think that would add anything to your Lordships' knowledge at the present moment. Nor would it be any particular use in the negotiations at Brussels. I do not think it would be of any help to my noble friend the Lord Privy Seal. On the other hand, if I were to make any observation or to use any phrase which might be capable of being taken out of its context and misrepresented by some newspaper as being too provocative, on the one hand, or too compliant, on the other, that really might add a little to the difficulties which the Lord Privy Seal is contending against with such great perserverance, swill and devotion.
My noble friend Lord Balfour of Inchrye, in the course of a very powerful argument, said that he thought the disadvantages of going into the Common Market were exaggerated. On the other hand, yesterday some of your Lordships had an argument as to whether it could rightly be said that the breakdown of negotiations would be a disaster; or, if not a disaster, whether it might be called a tragedy. I understand that the Leader of the Labour Party, Mr. Gaitskell, has said that it would not be a disaster. I am not going to comment on any of these propositions, but I should like to tell your Lordships this: that the success of the negotiations would be regarded as a disaster by the Governments of the Communist countries behind the Iron Curtain. It is part of my duty to keep an eye on the great Communist propaganda machine which is active not only in Europe, of course,
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but in every continent, and in every part of the world. That machine is now all geared up to give priority to the Common Market above everything else, and to represent that it would be a disaster to the people if the Common Market were to succeed, and particularly if Great Britain were to enter it.
My Lords, the reason is not very difficult to see. The rulers of the Communist world are beginning to be afraid that the expansion and economic growth of the Common Market in Europe may finally prove the falsity of the old Marxist legend that free democracy cannot advance economically, and that the only way of advancing material prosperity is to have a dictatorship of the proletariat. That is the doctrine which they have been spreading not only in Europe but, with some considerable success, in all the new emergent countries, the underdeveloped countries, who are very apt indeed, considering their own poverty, to be deceived by the proposition that they can achieve material advancement and wealth only by adopting some dictatorial form of government.
Now the Communists are seriously afraid that these underdeveloped countries, these emergent countries, these uncommitted countries, will be led, by the example of the Common Market and its ability to help them, to see the falsity of the Communist doctrine. They are afraid that the people of Western Europe will be confirmed in their rejection of Communism, and they are afraid, too, that people behind the Iron Curtain, when they see what is happening on the other side, may begin to demand that they too should be allowed to have a share in this new prosperity and that the idea of peaceful coexistence should become more of a reality.
THE EARL OF LUCAN: My Lords, would the noble Earl explain whether that shows that it would be an advantage to this country to go in?
THE EARL OF DUNDEE: My Lords, I am not going to spend time in arguing whether the Communists are right in their appraisal of the situation; but that is what they are doing now, and I think I have given the right reason for it.
THE EARL OF LUCAN: It has no bearing on those countries.
LORD BOOTHBY: It has a lot of bearing on it.
THE EARL OF DUNDEE: It has more bearing on this country than on any other aspect of the question, because it is against the entry of this country that Communist propaganda is now being mobilised and launched. It is because they think that Britain may come in, and because they are afraid of the con sequences of that, that they are doing their best to stop it—
LORD SILKIN: My Lords, is the noble Earl suggesting that we ought to decide this matter on the basis of what the Communist countries are thinking?
THE EARL OF DUNDEE: Really, my Lords, I do not think that is a very sensible interruption. I think my argument is good, but it is not the only one. Why should it be thought that when I give one argument it is the only argument for doing something? I do not understand the way the noble Lord's mind is working at the moment. It is getting very late at night, I know. But I should like to say to your Lordships that I think that in this respect the Communist apprehension may be right, because it seems to me that the influence of the European Economic Community on the world may depend a great deal on whether Britain is able to join, and to provide, not in every case for association, but at least for the proper consideration of the economic needs of those countries overseas which are now dependent on the British market for their economic life. If the Community develops into an introspective and exclusive association for the protection of monopoly and the maintenance of high prices, it will not help the progress of the Free World; and it is the hope of liberal-minded statesmen throughout the Free World that the Common Market in Europe, together with the United States, will lead the rest of the world to a freer and more abundant exchange of wealth.
The noble Lord, Lord Morrison of Lambeth, yesterday made an appeal to the Governments of the Six. He said (col. 302):
"… I should like to make a very sincere appeal to the Governments, the nationals and the political parties of the Six European countries to understand the real problems and difficulties
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with which the British are faced in these negotiations …"
and I am sure all your Lordships hope that the noble Lord's appeal may be heard. The Six have agreed that there must be international arrangements which will provide a fair reward to the primary producers of the world based on expanding trade and growing purchasing power. We agree with that, but we do not think it is enough; and we are asking that special provision should be made for countries who, in spite of such arrangements, might suffer from changes in the pattern of trade which has grown up in the past on account of their association with us.
My Lords, we think this is a reasonable demand, because although it might not prove necessary in the event, it would be a bad thing for everybody if the confidence of these nations of the White Commonwealth in their own commercial future were to be adversely affected by our adherence to the Treaty of Rome, which ought to help them if it succeeds in its aims. These young nations—New Zealand, Australia and Canada—are European in stock and in tradition. They are, of course, predominantly British, but not entirely so. In Canada there is an ancient French Community which has been in the Province of Quebec since the seventeenth century. Their languages, their institutions, their civilisation and their religion are derived from the same origins as those of Western Europe, and if this great adventure in human history is to prosper economically and politically it must enjoy the friendship and the goodwill of the White Commonwealth, which must be enabled to co-operate with Europe in serving the cause of world peace and prosperity.
7.59 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I should like first of all to say that I am greatly indebted to all the Members of the House who have spoken in this debate, which, as so many people have said, has maintained such a high standard. I particularly want to thank my noble friend Lord Attlee who has spoken to-day for his kindness in coming along and supporting me as the first supporter to-day on anything I might have said yesterday. Not a single Member of your Lordships'

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House gave me any support whatsoever yesterday. I have been much more fortunate to-day, in that I have had two of my Front-Bench colleagues supporting me here, one eminent occupant of the Cross Benches and one courageous Conservative, in the person of Lord Balfour of Inchrye. I am grateful to all of them for that privilege. I have no complaint to make about any of the speeches which have been made against my point of view. I have a feeling, however, that when the rest of the Commonwealth read this debate, they will regard the general consensus of opinion expressed in favour of the Common Market as being a kind of vote of no confidence in the Commonwealth. The arguments which have been used about how urgent and necessary it is to go into the Common Market, because of the changed circumtances in the Commonwealth and the like, are a complete departure from the great demonstration of imperial policy issued from the headquarters of the Conservative Party, to which I referred yesterday. Nevertheless, this must be judged by the members of the Commonwealth themselves.
We are most grateful to the noble and learned Lord the Lord Chancellor for the careful summary he gave of the legal position, which we shall all have to study in detail with regard to our individual difficulties about the interpretation of the Articles of the Treaty of Rome. I think it might involve many industrial and commercial organisations in seeking legal advice, to see how the 200-odd Articles in the Treaty match up to their particular needs and difficulties. At the moment, I am unhappy about one or two things. I notice that in the local Labour Party submissions to the Labour Party Conference a great deal is made of this, not by an untutored Labour Party, by any means; it happens to be the Cambridge Labour Party and it possibly has a good deal of educated consideration behind it.
I am sorry that we did not have an answer from the noble Earl, Lord Dundee, in his reply, to the point of my noble friend Lord Attlee with regard
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to the argument of the Foreign Secretary, which I noticed received the headline in the London Times to-day, about the necessity for this country being in the Common Market because of the centre of trade and power. We did not get any real answer to what my noble friend said, but that must wait for a further occasion. However, I am glad to see that the Government propose to take notice of the timetable argument which has been used. I would remind the House, which has not perhaps forgotten all that happened yesterday, that I raised this at the beginning and pressed it upon the Government, and I am glad to see that it is likely to lead to the proper position. After all, when one reads in this morning's Press reports of the assumed happenings during Mr. Heath's conversations yesterday, it seems that there was no improvement. In fact, France seems to be trying a special block.
Once more I am reminded of the speech of M. de Murville on June 13, in which he said that perhaps something might be presented by the end of July, but more probably by the autumn. It would have been better not to present the general statement, which I think was in the mind of the noble Earl when he was speaking, unless we had a really firm acceptance, before the Commonwealth Premiers meet, of the unalterable conditions in regard to the Commonweallth which I understood from the Prime Minister was going to be arrived at before we could consider going into the Common Market. I will leave it at that for the time being.
I hope that the general tendency will be for us all to read the arguments carefully in the OFFICIAL REPORT and to make up our minds even more firmly. I would end by saying that I hold with conviction the view that all the experience of the last six weeks has hardened opinion in this country, not with those who wish to go in, but steadily against them. I beg leave to withdraw my Motion.
Motion for Papers, by leave withdrawn.

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