Sitting of 26 July 1962

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

PRIVATE BUSINESS
PORT OF LONDON BILL
Lords Amendments considered and agreed to.
LONDON BRIDGE IMPROVEMENTS BILL [Lords]
Read the Third time and passed, with Amendments.
LONDON COUNTY COUNCIL (IMPROVEMENTS) BILL [Lords]
[Queen's Consent, on behalf of the Crown and the Duchy of Cornwall, signified.]
Bill read the Third time and passed, with Amendments.
SCOTSWOOD BRIDGE BILL [Lords]
SOUTH STAFFORDSHIRE WATER BILL [Lords]
Read the Third time and passed, with Amendments.
LEITH HARBOUR AND DOCKS ORDER CONFIRMATION BILL
Considered; to be read the Third time Tomorrow.

ORAL ANSWERS TO QUESTIONS
  TRADE AND COMMERCE

    Board of Trade Journal
    Mr. Ellis Smithasked the President of the Board of Trade to what extent the circulation of the Board of Trade Journal has increased since the improvements were introduced.
    The President of the Board of Trade (Mr. F. J. Erroll): Despite the improvements which have been made, I am sorry to say that the circulation of the Journal has in the past year slightly fallen.
    Mr. Ellis Smith: The Journal is a specialised document, and that is understandable. But now that great improvements have been introduced, and because also it is not only of a technical but of an informative nature, should not steps be taken to make it better known among those who would benefit from it?
    Mr. Erroll: Yes, we are taking these steps and have a direct mail campaign in progress at the moment. I think that one reason for the fall in circulation is the fact that we used to keep titbits of information for the Journal which we now release to the Press without waiting to keep them for the Journal.

    British Trade Magazine
    Mr. Ellis Smithasked the President of the Board of Trade if he will publish a British trade magazine like the publication issued by the Italian Foreign Trade Ministry especially catering for the export trade.
    Mr. Erroll: This matter has been carefully considered on several occasions and I have consulted my Export Publicity Council. The conclusion has always been that taking into account the great range and complexity of British exports, better results are achieved by the present method of distribution of material to the overseas Press through the official information services.
    Mr. Ellis Smith: I have no doubt the right hon. Gentleman has, but has he seen the Italian publication? It is a very fine document which is bound to stimulate great interest among all who read it. Now that we are setting out to increase our exports—and we need to increase them more—should not something on these lines be done?
    Mr. Erroll: Yes, they send me a copy to my constituency address and I therefore look at it fairly closely. But, having looked at it closely, I still think that our present arrangements are better because a Government-sponsored publication of that sort, besides competing with the excellent range of British specialist weekly and monthly periodicals, might savour of propaganda.
    Sir Harmar Nicholls: Would my right hon. Friend look again at this question? Would he consider the possibility that

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    the advantage of the magazine is that it has rather more permanence than the daily issue of news to the normal periodicals and dailies?
    Mr. Erroll: I have thought of the point raised by my hon. Friend, and I think that our methods get the story across to potential buyers probably more effectively than the magazine of the type suggested.
    Mr. W. Yates: Will the Minister, by the time the House assembles for the winter Session, give us a more favourable reply?
    Mr. Erroll: I cannot say that I will give a more favourable reply, but I will certainly examine what has been put forward in supplementary questions this afternoon.

    Scandinavian Trade (North-East Scotland)
    Mr. Hector Hughesasked the President of the Board of Trade what steps he has taken during the last two months to encourage trade between north-east Scotland and the Scandinavian countries.
    Mr. Erroll: The export services of the Board of Trade are always at the disposal of exporters in north-east Scotland, as in all parts of the United Kingdom. For our trade with Scandinavia the outstanding event of the last two months has been the British Exhibition and Trade Fair held in Stockholm from 18th May to 3rd June.
    Mr. Hughes: As one of the survivors of the recent Front Bench wreck, does the Minister remember that last February White Paper No. 1626 solemnly promised
    "a more vigorous development of our export trade"?
    Does he realise that that has not taken place in the north-east of Scotland? What is he doing about it? Does he realise that there are complaints from Aberdeen Chamber of Commerce and other authoritative bodies about it, and will he take urgent steps to remedy this deficiency?
    Mr. Erroll: The development of exports is, of course, a matter for the private trader, helped by Government
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    export services wherever appropriate. I am glad to say that the majority of private traders in Great Britain as a whole have been contributing to an increase in exports every month this year.
    Lady Tweedsmuir: What active steps is my right hon. Friend's Department taking to encourage North-East and Scottish traders to take part in the "Gateway to Britain" Exhibition in Scandinavia and also in the Scotsman Exhibition, particularly devoted to Scottish products? What has my right hon. Friend done particularly to encourage and interest manufacturers in Aberdeen?
    Mr. Erroll: The Board of Trade is in touch with, and giving advice on request to, the organisers of the Scotsman Exhibition and also the Dundee Chamber of Commerce, which plans to hold an exhibition in Oslo in the spring of 1963. Our assistance to exporters is on a national basis and is not directed particularly to any one city or town.

    Advance Factories, Aberdeen
    Mr. Hector Hughesasked the President of the Board of Trade what steps he has taken during the last two months to promote the building in Aberdeen of advance factories.
    Mr. Erroll: None, Sir. I am at the moment considering whether more advance factories should be built, however.
    Mr. Hughes: Does the Minister realise that he has given that kind of answer for months past and that nothing has come of his consideration? Does he realise that there is urgent need for advance factories in Aberdeen and that there are plenty of sites and space? Will he now give up considering and take urgent steps to remedy this injustice?
    Mr. Erroll: There are a number of places elsewhere in Scotland where the need is greater.
    Lady Tweedsmuir: In view of the fact that my right hon. Friend said the other day that he would establish a factory— or, rather, an industrial site—in the north-east of Scotland to serve the

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    whole of that area, can he say whether it will be near enough to be of any use to the unemployed of Aberdeen?
    Mr. Erroll: No, Six. I could not so say yet.

    Machines (Import)
    Mr. Dugdaleasked the President of the Board of Trade what alteration he intends to make in the duty chargeable on the import of machines unobtainable in this country.
    Mr. Erroll: None, Sir.
    Mr. Dugdale: Is the Minister aware that my constituents know that a duty is charged, and that firms in my constituency, like those in the constituencies of other hon. Members, are trying their best to break into the export market? While they are perfectly willing to use British machines if they are available to make these goods, is it not extremely hard if they are not available to have to pay an import duty on the machines for making products for exports?
    Mr. Erroll: In the case of machine tools, the duty was reduced from 17½ to 10 per cent. in exchange for our no longer operating the duty remission scheme. It was a matter of averaging out of different interests, and I think that the change was generally welcomed by users of British machine tools in this country as well as by the producers.
    Mr. Dugdale: Was not that done some time ago and is it not possible to take further steps to abolish this duty altogether?
    Mr. Erroll: If representations are made to me, I will, of course, be glad to consider them. I was, however, under the impression that the situation was regarded generally as satisfactory.

    Hong Kong Knitwear Products
    Mr. Dempseyasked the President of the Board of Trade if he is aware of the concern felt by knitwear manufacturers in Scotland at the advantage afforded to knitwear products from Hong Kong; and if he will take steps to improve the trading position of Scottish manufacturers.
    Mr. Erroll: I am aware of the concern of the Scottish knitwear firms over
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    the increased imports from Hong Kong. As I told the hon. Member for Kilmarnock (Mr. Ross) on 17th July, I can hold out no hope of action to restrict these imports.
    Mr. Dempsey: Is the Minister aware that since he told the hon. Member for Kilmarnock that decision on 17th July one factory in the town of Coatbridge has closed and we have lost 60 jobs in an area that has a high rate of unemployment? Does not the President of the Board of Trade believe, therefore, that the circumstances are reaching a grave stage and that his Department should take action to protect the trade against unfair competition, on the one hand, and to protect the employment position, on the other hand?
    Mr. Erroll: British production generally in this field has been rising and the 1961 total production of about £200 million was nearly 4 per cent. greater than in the previous year. I do not think that the closure of this factory, which I naturally regret, should necessarily be linked with the importation of small supplies from Hong Kong.
    Sir C. Osborne: In view of the fact that the Hong Kong mills work seven days a week three shifts a day, and in view of the fact that wages there are 10s. a day, which is a very good wage for Hong Kong, what on earth can my right hon. Friend do to protect British workers with such a high rate of return as they get at the present time?
    Mr. Erroll: These imports are on a small scale as compared with the British product, which is, of course, much desired by the British public.

    Coatbridge and Airdrie
    Mr. Dempseyasked the President of the Board of Trade how many additional jobs will be provided in Coatbridge and Airdrie and North Lanarkshire, respectively, during the second half of 1962.
    Mr. Erroll: Within the next twelve months between 2,000 and 3,000 jobs are likely to arise in North Lanarkshire from new building and other developments reported to the Board of Trade. Of these, over 500 are in Catbridge and Airdrie. I cannot estimate how many of these will arise in the next five months.
    Mr. Dempsey: Is the Minister aware that this is one of the consistently high-rated areas of unemployment? Does he realise that in some parts of the constituency we have as much as 11·5 per cent. of the labour force unemployed? Does he not agree that there is need for an even greater effort than is being made to attempt to resolve the shocking unemployment situation in this part of the country?
    Mr. Erroll: We are making the best efforts we possibly can in this important matter. North Lanarkshire is a single closely-knit travel-to-work area and, therefore, there is room for a certain amount of movement of workers to new factories from their present places of residence. In North Lanarkshire itself, there are nearly 7,000 jobs in prospect: so we are having some success in this difficult area.

    Commonwealth and European Trade
    Sir L. Plummerasked the President of the Board of Trade what proportion of imports from Commonwealth countries enter the United Kingdom duty free, distinguishing manufactured goods, raw materials and agricultural products.
    Mr. Erroll: Over 99 per cent. of manufactured goods and raw materials and 100 per cent. of agricultural products enter this country from the Commonwealth free of protective duty.
    Sir L. Plummer: Will the President of the Board of Trade have a conversation with his right hon. Friend the Chancellor of the Exchequer and ask whether he will have a revised edition of the booklet "Britain and the European Communities" containing information of that kind, so that those of us who read these documents could get the true facts?
    Mr. Erroll: If a revised edition should be prepared, we will, of course, take into account suggestions made by hon. Members.
    Sir L. Plummerasked the President of the Board of Trade the totals of United Kingdom exports in 1960 and 1961 to Commonwealth, European Free Trade Association and European Economic Community countries, respectively, referred to in the publication Britain and the European Communities.
    Mr. Erroll: To enable comparisons on an identical basis to be made with trade by other countries the 1960 figures for United Kingdom trade in the publication Britain and the European Communities are the imports (c.i.f.) of the receiving countries. I regret that equivalent figures for 1961 are not yet available. Information about United Kingdom exports and re-exports (f.o.b.) in 1960 and 1961, is, however, available from the December, 1961, issue of the Trade and Navigation Accounts.
    Sir L. Plummer: I am sorry to press the Minister again, but, once more, does he not agree that this is an example of where this publication evades the important points and that up-to-date statistics should have been included instead of vague references being made?
    Mr. Erroll: I am sorry that my Answer inevitably bad to be rather complicated. I think, however, that when the hon. Member studies it a little more carefully he will see that it is the very thing that we have been trying to do, namely, to be fair and to provide a comparable basis for comparisons of figures and not to give one-sided figures which might appear to distort the picture.

    Life Insurance Policies (House Purchase)
    Mr. Cleaverasked the President of the Board of Trade whether he will introduce legislation to prevent misleading advertising indicating that 100 per cent. mortgages can be obtained by insurers who have held policies for three years.
    Mr. Erroll: I am making inquiries about the particular case of which my hon. Friend has sent me details, and I would prefer not to comment at this stage. I have received no other complaints of this kind.
    Mr. Cleaver: Would not my right hon. Friend agree that it is quite scandalous that young married people should be induced to take out insurance as a result of misleading advertisements in the Birmingham Press, which give the impression that they will be entitled to 100 per cent. mortgages on the value of the house which they purchase or up to 100 per cent. of the insurance which they

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    have taken out, whereas they are entitled to an advance only up to the insurance company's valuation of the property? In view of the unhappiness which is caused when the truth comes out, will] my right hon. Friend do something serious about this?
    Mr. Erroll: I am sure that my hon. Friend would not wish me to comment on his supplementary question while I am investigating the whole matter.

    Singapore (Export)
    Mr. Boydenasked the President of the Board of Trade what assistance his Department rendered to the Harwich firm which recently exported 12 cases of bingo tickets to Singapore; and what contribution this deal, described by the Board of Trade Journal as a recent export achievement, made to Britain's balance of payments problem.
    Mr. Erroll: The company concerned uses Government services to exporters from time to time, but did not call upon us in this instance. All exports, large and small, contribute to our overseas earnings; I could not isolate the contribution made by an individual transaction.
    Mr. Boyden: We must be grateful for small mercies, but is the right hon. Gentleman aware that there is in England a large body of opinion which is disturbed by the Government's encouraging gambling? Will he consider boosting coal exports instead of boasting about bingo ticket exports?
    Mr. Erroll: It is not a matter of boasting about bingo ticket exports. It is a matter of showing in the pages of the Board of Trade Journal what a very wide range of British products is exported, and because many of the smaller firms have the erroneous impression that we are interested only in big exports, we do include a selection of small exports in the same pages. As for coal exports, Government services are available to coal exporters, and the Coal Exporters Federation are happy at the services which they receive. If they wish particular features of coal exports to be publicised, I am only too wiling to consider that.
    Mr. Nabarro: Is it not a fact that the first prerequisite of all sound exporting trade is that the quality should be good and the price right? Is it not a fact that these bingo tickets were of good quality and at a competitive price, neither of which desiderata applies today to British coal exports?
    Mr. Erroll: I am told that it is also important to have a sound home market before one can mount an export drive.
    Sir J. Vaughan-Morgan: Are we to understand that British coal exporters are missing many opportunities in Singapore?
    Mr. Erroll: I am sure the Federation is alive to all opportunities for coal exports.

    European Economic Community
    Sir C. Osborneasked the President of the Board of Trade if, as a result of further negotiations, he will now state which main British industries, at present protected by tariffs, will lose that protection if Great Britain enters the Common Market; how many people they employ; if he is satisfied that they are efficient enough to compete without tariff protection; and if he will make a statement
    Mr. Erroll: If we join the European Economic Community all tariffs on imports from other Member States will be eliminated in step with the elimination of tariffs on our exports to the rest of the Common Market. These cuts in the British tariff would affect all industries; but the effects would vary from one to another and from product to product, and it would not be practicable to go into detail. British industry as a whole welcomes the prospect of a single market in Western Europe.
    Sir C. Osborne: It seems the Minister has not given me the information I asked for. May I ask him this; if we do not go into the Common Market, as seems to be getting likely—[HON. MEMBERS: "Oh."]—can he say, in view of the Answer he gave to Question No. 8, that 99 per cent. of Commonwealth imports to this country come in free, what negotiations are taking place with Commonwealth Governments to see that

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    our products can go to their markets free of duty, just as their commodities come to our market free of duty?
    Mr. Erroll: We are not having negotiations at the moment along the lines suggested by my hon. Friend because we are in the middle of a negotiation for entry into the Common Market. The details of this negotiation axe, of course, discussed in this House from time to time, and I would ask my hon. Friend to address Questions about it to my right hon. Friend the Lord Privy Seal.
    Mr. Gresham Cookeasked the President of the Board of Trade if he will now give an up to date estimate showing the total gains and losses of exports and the total increases or decreases in imports expected on an annual basis if the United Kingdom enters the Common Market.
    Mr. Erroll: It would not be possible to make a detailed estimate of the kind suggested.
    Mr. Gresham Cooke: As the British public has to study this momentous question in the next two or three months, would it not help it to have a breakdown of the figures of our expected exports and imports into Europe and from Europe? As most trades, by now, can estimate what they are to do in the future, would it not be possible and helpful to produce an overall figure of exports and imposts to and from Europe?
    Mr. Erroll: If sufficiently accurate figures could be prepared, I agree with my hon. Friend that they would be helpful, but changes in the level of imports and exports if we enter the Common Market would depend on a very wide range of factors, including the level of demand and prosperity, both at home and in our overseas markets. At present, before we enter the Common Market, our exporters are doing well in the countries of Western Europe, and that bodes well for the future.
    Mr. Jay: If the President of the Board of Trade is unable to give such an estimate, which is somewhat surprising, would he refer his hon. Friend to some of the estimates made by independent experts, such as Sir Donald MacDougall, and will he and the Lord Privy Seal study these estimates?
    Mr. Erroll: I should be glad (to look at any contribution of a constructive nature towards this matter.
    Mr. P. Williams: May I ask my right hon. Friend how, if it is impossible to get an exact computation of the balance of advantages and disadvantages, it is possible to say that there are advantages in our going in at all?
    Mr. Erroll: It is one thing to say that it is not possible to arrive at an exact computation or forecast about the many uncertain ties of the future, but it is quite another to give a firm opinion about the advisability of our joining the Common Market; but British industry on the whole welcomes the prospect of a single market in Europe, and British firms have been increasing substantially their sales, both last year and this year, in respect of the countries of the Six.
    Mr. Jay: Can the right hon. Gentleman give a rough estimate?
    Mr. Erroll: A rough estimate would have the disadvantage of not being accurate.

    Widnes (Minister's Visit)
    The following Question stood upon the Order Paper:
    Mr. MACCOLL: TO ask the President of the Board of Trade, if he will make a statement on the recent official visit of the Parliamentary Secretary to Widnes; and what assistance he will give towards the rehabilitation of derelict and unsightly industrial land in the town.
    Mr. MacColl: On a point of order, Mr. Speaker. I should apologise to the House for being caught up by the progress of events, since this Question refers to a Minister who is now the Minister of Pensions.
    Mr. Erroll: I have been caught up by the progress of events, too. The main purpose of my right hon. Friend's visit to Widnes was to open the Ditton Industrial Estate. He also visited some of the new developments in the Merseyside area. As Widnes is not a development district the powers provided by the Local Employment Act, 1960, for the rehabilitation of derelict or unsightly land cannot be exercised there.
    Mr. MacColl: Will the right hon. Gentleman confirm that what he is saying is that nowhere in Lancashire can this assistance be given for clearing derelict sites? Will he consider, with the hon. Gentleman the Member for Preston, South, whether he thinks it is desirable, in an area which is extremely anxious to get rid of the effects of years of capitalist neglect in the past, to assist it to get industry and to get it on to new and decent sites?
    Mr. Erroll: Assistance for this desirable purpose can only be given in accordance with the terms of the Local Employment Act, 1960. Such assistance can be made available to development districts or to areas which are adjacent to development districts which can help the development districts themselves. In other cases, it is a matter for the local authorities in consultation with the Minister of Housing and Local Government.
    Dame Irene Ward: Does my right hon. Friend realise the extent of his reply? Is he aware that a great many people think that the Local Employment Act needs reconsideration and reconstruction because a great deal of it is really out of tune with what might be done? Why should an unsightly site in an area draw grant and another in another area not draw grant? Ugly things are ugly whatever area they are in.
    Mr. Erroll: The purpose of the Act is to help employment in what are defined as development districts. It was thought there should be powers to remove unsightly heaps and the like in such areas as an inducement to attract industry to those areas. To remove every ugly sight throughout the country goes very much wider than the Act.

    Vacant Factories
    Mr. Gordon Walkerasked the President of the Board of Trade if he will seek powers to inform himself when any factory becomes vacant with a view to finding a tenant for it.
    Mr. Enroll: No, Sir.
    Mr. Gordon Walker: I hope that the right hon. Gentleman will reconsider this point. Is he not aware that there is a disturbing new development and
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    that even in the middle of the prosperous Midlands factory sites are now standing empty for quite considerable times, particularly in and around my constituency? This is a new development which is disquieting and needs attention, and I do not see how the President of the Board of Trade can give attention to it unless he takes powers to collect the facts about it.
    Mr. Erroll: We do keep registers of vacant factories in development districts, and all the resources of my Department are devoted to securing occupants for those factories. It would be quite another matter to get a nation-wide register of all vacant factories. Some of them remain unoccupied for long periods in prosperous areas because the owners stand out for higher prices to get the best possible value for them and I.D.Cs are not required.
    Mr. Gordon Walker: Is the right hon. Gentleman aware that I am not asking him for a register of every factory but to take powers to do this where there is a new and rather disturbing development which was not anticipated, of the kind now going on in my constituency?
    Mr. Erroll: No, but informally we have a pretty idea of what sort of factories are becoming vacant all over the country.
    Mr. Loughlin: Will the right hon. Gentleman agree that it is equally desirable to have a list of vacant factories in areas which, while not scheduled as development districts, are areas in which his Ministry will give industrial development certificates?
    Mr. Erroll: No, I should not like to go further than what I have already said today. I think we should concentrate on our efforts to get vacant factories in development districts filled as soon as possible.

    Consumer Protection (Report)
    Mr. Darlingasked the President of the Board of Trade if he will arrange to publish the Report of the Committee on Consumer Protection, or a summary of the committee's main recommendations, before the Ballot for Private Members' Bills is held in the next Session of Parliament.
    Mrs. Barbara Castleasked the President of the Board of Trade whether, in view of the need to restore confidence in the future of the Lancashire cotton industry, he will publish immediately the recommendations of the Molony Committee on the marking of cotton textile piece goods, household textiles and apparel with the country of origin.
    Mr. Erroll: The final Report of the Molony Committee on Consumer Protection was published yesterday.
    I would like to thank Mr. Molony and his Committee for their hard work in preparing this very interesting Report.
    Mr. Darling: When I put this Question down I thought it would be published next week. Do I understand that it has been brought forward so that the Prime Minister can talk about it this afternoon? In view of the fact that the right hon. Gentleman has had it in his possession since April, I should like him to explain the reason for this long delay. I should like him to tell us, now the Report has been published, whether the Government intend to carry out the main recommendations in the next Session of Parliament? Will these recommendations take precedence over the Weights and Measures Bill which is urgently needed?
    Mr. Erroll: I am sorry to say that there were some delays in printing the Report. We have tried to press on with it as quickly as possible and get the Report, published, if practicable, before the House rises for the Summer Recess. As I have been criticised earlier for failing to do so, I had hoped to be thanked for having got on with the job this time. As regards the recommendations in the Report, there is a very large number of recommendations which affect a large number of trades and businesses, and we are going to study the reactions of all parties affected before finally concluding what we should do.
    Mrs. Castle: Is the right hon. Gentleman aware that the Molony Committee's discussion of the point in my question is perfunctory and unconvincing? Is it not a fact that the public are unaware, when they buy cotton goods with famous names like Horrocks, they are in fact buying imported cloth? Will he take steps immediately to amend the Merchandise Marks Act to ensure that
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    the country of origin of the original cloth is displayed on all finished articles and on all made-up textile cotton cloths?
    Mr. Erroll: The Molony Report, in effect, recommends no change in the relevant part of the Merchandise Marks Act. This is a very complicated question, and a number of divergent interests are affected, but if the industry, as well as other parties affected, makes representations to me, I shall be very glad to consider them.
    Mr. Jay: Have the Government deoided whether to accept the main recommendations of the Report or not?
    Mr. Erroll: There are far too many recommendations in the Report for me to be able to give an answer to that question now. I have noticed speculative articles on the subject in the last day or two.
    Mrs. Slater: Will the right hon. Gentleman consider doing with the Molony Report what the Government did with the Pilkington Report, and that is letting us have their ideas about it so that we shall know where the Government stand on the recommendations of this very important Report?
    Mr. Erroll: I will bear in mind what the hon. Lady has said.

    Weights and Measures (Legislation)
    Mr. Darlingasked the President of the Board of Trade if he will now introduce a Weights and Measures Bill.
    Mr. Erroll: I hope that the hon. Member will hear something about the Government's intentions on this matter later today.
    Mr. Darling: Does the right hon. Gentelman realise that 11 years have elapsed since the Hodgson Committee suggested and urgently appealed for a new Weights and Measures Act? Does he realise that this is the third Parliamentary Session in which the Government have faulted to carry out their promises? If it is the intention of the Prime Minister to give further undertakings this afternoon, will not the right hon. Gentleman agree that those undertakings ought to toe measured against this incredibly bad record of broken promises?
    Mr. Erroll: I think the hon. Gentleman will be able to decide for himself in the light of what may be said later today.

    Fife
    Mr. W. Hamiltonasked the President of the Board of Trade if he is aware that the two coal mines in the village of Kelty in Fife, employing approximately 1,700 men, are likely to close within the next two years and that there is no alternative employment availaible; and what steps he intends to take to ensure that employment opportunities will be available in Fife in good time.
    Mr. Erroll: I understand that the National Coal Board hopes to offer many of the men employment in other Scottish collieries. As regards the second part of the Question, I will continue to use to the full my powers under the Local Employment Act to encourage the introduction and expansion of industry in Fife.
    Mr. Hamilton: While it may wed! be true that some of the men will be redeployed in other areas, is the right hon. Gentleman aware that great numbers of them will not be able to get work in other districts because most of the pits in that part of Central and West Fife are to close down? Will he therefore consider the Kelty area for the provision of an advance factory, and can he give an undertaking that, in regard to the Donibristle site, which is within travelling distance of Kelty, no delay will occur between the acquisition of the site by the Board of Trade and the transfer of the land to the Management Corporation?
    Mr. Erroll: As regards the Donbristle site, I think the hon. Gentleman has a Question latter on the Order Paper this afternoon about that. In case it is not reached, I can tell him that we are pressing on as rapidly as possible. In regard to the provision of an advance factory, I would ask the hon. Gentleman to await the announcement which may be made later today by means of a Written Answer to a Question.

    North Lanarkshire and Shotts
    Miss Herbisonasked the President of the Board of Trade what are his proposals for 'alternative industry for the
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    Newmains, Cleland, Harthill, Salsburgh, Shotts area and for the Caldercruix, Plains area where there have been pit closures and where further pit closures are proposed.
    Mr. Erroll: Projects already secured for North Lanarkshire and Shotts are estimated to be providing nearly 7,000 jobs, and I shall continue to encourage new industry in this area. Workers can conveniently travel from one part of the area to another, and it would be neither practicable nor desirable to try to steer industry to individual villages within it.
    Miss Herbison: Is the Minister aware that the 7,000 jobs of which he spoke will scarcely take up the number who are already unemployed in Lanarkshire at the present time? Is he also aware that this part of Lanarkshire is going to be very severely hit by further pit closures? Is he further aware that no one has ever asked him at any time to provide separate industries in separate villages? This Question asks him about a very wide area which has already been badly hit and will be badly hit in the future. Can he finally tell me if one of these industrial sites about which we are told will be in this area?
    Mr. Erroll: I am aware of the seriousness of the problem in this area, but while there may be further pit closures in that area it is not absolutely definite that there will be. In the event of any closures taking place, I understand that the majority of the displaced miners could probably be redeployed in the area over a period. As regards an advance factory, I ask the hon. Lady to look at the announcement to be made by means of a Written Question and Answer later today.

    Bicycles
    Mr. Warbeyasked the President of the Board of Trade what steps he is taking to protect the British bicycle industry against the effects of the proposed doubling of the United States tariff on imported cycles of the curved tubular frame type.
    Mr. Erroll: I am watching this very closely. The British Embassy in Washington have made strong representations at all stages of the Bill now

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    before Congress, and we shall lose no opportunity of pressing our views on the United States Government.
    Mr. Warbey: Is the right hon. Gentleman aware that the imposition of this extra tariff would lead to the loss of valuable exports and would produce serious unemployment in the bicycle industry in Nottingham and Birmingham? Wild he strengthen his representations by pointing out that if this kind of unilateral action is taken by the Americans, we shall be compelled to impose tariffs upon American manufactured goods coming into this country to compete with those goods which we can manufacture perfectly well ourselves?
    Mr. Erroll: At present, this is a Bill going through Congress. It has not yet been made law, but if it does become law, the President of the United States will have the power to veto it. We shall certainly make strong representations should the Bill become law. If the President fails to veto the Bill, we will discuss urgently the question of adequate tariff compensation.

    Cotton Yarn
    Sir J. Barlowasked the President of the Board of Trade if, in view of the fact that United Kingdom cotton yarn attracts a duty of 33⅓ per cent. on entry into Eire, he will take stops to impose a duty on cotton yarn entering the United Kingdom from Eire.
    Mr. Erroll: No, Sir This would be in breach of the Anglo-Irish Trade Agreements of 1938 and 1948.
    Sir J. Barlow: Is my right hon. Friend aware that that answer is very unsatisfactory in that there is great injustice when those goods come here free whereas we have to pay a duty of 33⅓ per cent.? Can he give any evidence that Irish goods coming into this country are subsidised?
    Mr. Erroll: I have no evidence other than the representations made by the British Spinners and Doubters Association made on 23rd May which I am urgently examining. In the meantime I have also been in touch with the Irish authorities on this question.

    Blyth
    Mr. Milneasked the President of the Board of Trade what is now the policy of Her Majesty's Government in regard to industrial expansion and the provision of employment in those areas, such as the Blyth constituency, where there is a shortage of work.
    Mr. Erroll: Our policy continues to be to promote employment in those localities, of which Blyth is one, in which high and persistent unemployment exists or is threatened.
    Mr. Milne: Is the right hon. Gentleman aware of the pleasure being expressed in the North-East at the announcement of the intention to build an advance factory in Durham and one in Northumberland and that our people are still watching his Department with very keen interest and hope to have some signs of progress before the House returns in October?
    Mr. Erroll: I am grateful for the hon. Member's remarks. I gladly give him and other hon. Members an assurance that we shall do our best to help the north-east area.
    Mr. Popplewell: Is the President aware that the announcement made by his hon. Friend in reply to the debate on Tuesday night about only two advance factories in Durham and Northumberland has caused widespread dismay that there is not much greater activity by his Department to provide jobs for some 40,000 people in the area who are unemployed?
    Mr. Erroll: We have done a great deal in addition to providing advance factories, as the figures demonstrate.

    United States Trade Expansion Bill
    Mr. Jayasked the President of the Board of Trade if Her Majesty's Government has considered the opportunities offered to British exports by President Kennedy's Trade Expansion Bill, whether or not the United Kingdom joins the European Economic Community; and if, in the interests of developing trade, he will discuss with the United States Government the possibilities of a joint policy based on this Bill.
    Mr. Erroll: I have of course considered the potential significance for international trade of the legislation which President Kennedy has proposed to the United States Congress, and I shall be glad to join in discussions about it at the appropriate time.
    Mr. Jay: Are the Government seriously and realistically considering the possibility of a policy based on that important Bill? Does not the President understand that our bargaining position in Brussels would be much stronger if we were known to be considering alternative policies?
    Mr. Erroll: The Bill has been passed by the House of Representatives but still has to be considered by the Senate. [Interruption.] Therefore, any detailed discussion of the matter would be inappropriate. [Interruption.]
    Mr. Speaker: I wonder whether the Minister would be good enough to repeat that answer, Which was difficult to hear because of the interruptions.
    Mr. Erroll: As I could not hear myself speaking, Mr. Speaker, I am not quite sure what I said. I think I said that the Bill has been passed by the House of Representatives but still has to be considered by the Senate, and therefore I think it would be inappropriate for me to answer the question asked by the right hon. Gentleman.

    Burntisland Shipyard
    Mr. Gourlayasked the President of the Board of Trade if he is aware of the recent redundancy in Burntisland shipyard; and when the buildings at Donibristle will be available for alternative industry.
    Mr. Erroll: I am aware of some reduction in the numbers employed in the Burntisland shipyards in the course of this year, but there has fortunately been no corresponding increase in unemployment. If all goes well the advance factory at Donibristle should be ready for occupation by the middle of next year.
    Mr. Gourlay: Is the right hon. Gentleman aware that the local population is very largely dependent on the Burntisland shipyard? In view of the present state of the shipbuilding industry, will he give an undertaking that the greatest
    1720
    possible inducements will be given to industry to occupy the factory at Donibristle when it is ready?
    Mr. Enroll: We shall certainly do our best to secure early occupation of the factory at Donibristle. It is encouraging to find that unemployment in the Burntisland shipyard area has not increased.

    Monopolies and Restrictive Practices
    Mr. R. Carrasked the President of the Board of Trade what progress has been made by the departmental committee inquiring into the question of monopolies and restrictive practices; when this inquiry is due to be completed; and how soon he expects to be able to make a statement of policy as a result of its findings.
    Mr. Erroll: My Department are making good progress with the review of policy and legislation on these subjects. A number of statements have been received as a result of the invitation of 20th February, and these are being thoroughly studied. The review also includes mergers in all their aspects, and a study of practices in comparable trading countries.
    I am watching closely the progress of this review, but I do not think it will be possible to complete it before the end of the year.

    HOUSE OF COMMONS DEBATES (TELEVISION)
    Ql. Mr. Donnellyasked the Prime Minister whether he will move to set up a Select Committee to consider the televising of the debates upon the Common Market in the House of Commons as an experiment.
    The Prime Minister (Mr. Harold Macmillan): No, Sir. I have had no indication that this would be the general wish of the House.
    Mr. Donnelly: In the absence of any such decision, what alternative proposal has the Prime Minister for informing the public of the implications of this very important issue?
    The Prime Minister: The proposal is that the proceedings of the House should

    1721
    be televised. The only alternative which I have proposed is that they should not be televised.
    Mr. Gresham Cooke: Is my right hon. Friend aware that already a hundred Pressmen in the Gallery are watching and reporting our every gesture, that hundreds of members of the public who file through the Public Gallery watch us, and that at our request there is already an edited radio programme "Today in Parliament" at 10.45 p.m.? Would it really make any difference to have a discreet television camera to give exerpts from the proceedings in the House?
    The Prime Minister: I have made clear to the House that I do not hold very strong views about this matter, but I feel that it is a matter which the House should decide, and from the inquiries that I have been able to make— I think this applies to others—it seems that the general view is that the House would not wish this to be done.
    Mr. Jay: Has the Prime Minister considered arranging for private meetings of the Conservative Party at the Savoy Hotel to be televised?
    The Prime Minister: I have known the right hon. Gentleman do better than that.

    ATLANTIC PARTNERSHIP
    Mr. A. Hendersonasked the Prime Minister whether he will now consult President Kennedy on the implications as affecting this country of his official proposal for an Atlantic partnership and the steps to be taken to make it a reality.
    The Prime Minister: President Kennedy said in his speech on 4th July that it would be premature to do more than indicate the high regard with which the United States would view the formation of an Atlantic partnership. He went on to say that the first step in this direction must be the creation of unity in Europe. As I said in answer to the right hon. and learned Gentleman on 12th July, it has always been our policy to work towards the ever-closer union of the free world. Our immediate task is to try to bring the negotiations at Brussels to a successful conclusion.
    Mr. Henderson: Is it the Prime Minister's view that President Kennedy was putting forward long-term ideals rather than short-term practical proposals on this matter?
    The Prime Minister: Yes, Sir. I think these are views which many people on both sides of the Atlantic have been thinking about, but these are perhaps, as the right hon. and learned Gentleman says, in the more distant future.

    MINISTER OF PUBLIC BUILDING AND WORKS (RESPONSIBILITIES)
    Mr. Prenticeasked the Prime Minister if he will define the responsibilities of the Minister of Public Building and Works in relation to the balance between housing and other forms of building; and whether these will include control of the location of new office buildings.
    The Prime Minister: As the extension of the title of the Minister in charge of this Department implies, I have decided that it is necessary to review the responsibilities of Ministers in relation to building and especially to building by public authorities. I shall decide the precise boundaries of responsibility between my right hon. Friends concerned in consultation with them. My right hon. Friend the Minister of Public Building and Works will, of course, encourage and facilitate maximum productivity in the construction industries to provide for rising programmes, including housing. The location of new office buildings is a matter for the machinery of planning for which my right hon. Friend the Minister of Housing and Local Government remains responsible.
    Mr. Prentice: Is the right hon. Gentleman aware that his reply is very disappointing in regard to the control of office building? Is he aware that about 15,000 new jobs in offices have been created in London in the last few years and that the failure of the Government to have any strategy about it has aggravated London's housing problem and frustrated the Government's puny efforts in regard to the distribution of employment elsewhere?
    The Prime Minister: The hon. Member may hold those views, but this is

    1723
    really a matter of planning. The Question was about the building for which the Government are responsible.
    Mr. Dugdale: Is the right hon. Gentleman aware that in my constituency, as in many others, there is a very grave housing shortage and the principal thing which makes it impossible to overcome it is that so many building workers are engaged in putting up offices nearby?
    The Prime Minister: These are, of course, matters of balance, but the general housing progress is very great.
    Mr. Gaitskell: Is it not clear, in view of the appalling traffic congestion and the slow rate of slum clearance, that what is needed is effective co-ordination between the Board of Trade, which is responsible for the location of industry, including office building, and the Ministries of Housing and Local Government and Transport? What is the Prime Minister going to do about that?
    The Prime Minister: That is exactly the co-ordination that is now going on. [HON. MEMBERS: "How?"] Through the ordinary machinery of Government. This is really a question of the more extended responsibilities of the old Ministry of Works, particularly with regard to the increase in productivity and the new methods developed in the building industry, through which there is a great deal we can still do.
    Sir T. Moore: Will my right hon. Friend bear in mind that the system of brake and accelerator in the building industry is almost as destructive as discontinuing the production of bricks and other necessary materials?
    The Prime Minister: The acceleration since 1951 has been going at a pretty good rate.

    LOCATION OF INDUSTRY
    Mr. W. Hamiltonasked the Prime Minister whether he will appoint a Minister to deal exclusively with the problem of the location of new industry.
    The Prime Minister: No, Sir. This complex and serious problem is necessarily of concern to a number of Ministers.
    Mr. Hamilton: Is the right hon. Gentleman aware that the President of the Board of Trade, who is primarily concerned, is showing all the evidence of being a very tired Minister? Does the Prime Minister recognise that this is probably due to his right hon. Friend's increasing frustration over his failure to solve this problem, particularly in Scotland? Does the Prime Minister also recognise that we would very much appreciate it 'if a Minister were specially devoting himself to the solution of this very difficult problem?
    The Prime Minister: This again is a matter of the best machinery of Government. I think that the Department which deals with industry in multifarious ways is by far the best one to be charged with responsibility for location of industry.

    PIT CLOSURES, SCOTLAND
    Miss Herbisonasked the Prime Minister 'in view of the dereliction which has already taken place in parts of the Scottish coalfield, and the prospects of further deterioration resulting from the proposed pit closures, if he will take steps to ensure that no further expansion of industrial and office development takes place in the London and South-East region, and the Midlands region until Scottish unemployment is reduced to the level of the United Kingdom; and if he will set up publicly-owned industries in the worst hit areas.
    The Prime Minister: No, Sir. We are already using to the full our powers under the Local Employment Act to secure that as many of the new industrial projects as possible go to the areas of greatest need. No industrial development is approved in the Midlands or South-East which might reasonably be undertaken in Scotland. Office building, which presents difficult problems, is not similarly controlled.
    Miss Herbison: Surely the right hon. Gentleman must be aware that the use of powers under the Local Employment Act is not solving the problem with which we are faced in Scotland? Surely he must also be aware that our very high degree of unemployment is indeed drastic, and that it is only by drastic measures that the Government can ever

    1725
    hope to solve Scotland's problems? Is he not ready to use measures which have not been used before in order to bring work and hope to Scotland?
    The Prime Minister: We have done a great deal and hope to do more. In the last two years we have put into projects in Scotland, under the Local Employment Act, £43 million of public money which is estimated to be producing nearly 32,000 new jobs. In addition, there are another 33,000 jobs in prospect from new building and other developments.
    Mr. Woodburn: Is the Prime Minister aware that the last three questions are all related and that a solution of the problem of the location of industry would relieve both the congestion in London and the Midlands and the tragedy of unemployment in Scotland?
    The Prime Minister: Of course we are aware of the importance of this matter. That was why we introduced the Local Employment Act and the measures taken under it already. We shall do all we can to promote further measures in the future.

    EUROPEAN ECONOMIC COMMUNITY
    Mr. H. Wilsonasked the Prime Minister if he will move to set up a Select Committee of this House to consider the implications for our Parliamentary institutions and procedure of possible intry into the European Economic Community and, in particular, the provision in Article 189 of the Treaty of Rome which provides that regulations made by the Community automatically become the domestic law of member states.
    The Prime Minister: No, Sir. Her Majesty's Government recognise that membership of the European Economic Community carries with it an obligation to give effect to the legislative acts of the Community institutions either, as in the case of regulations, by accepting them as they stand, or, in other cases, by passing implementing legislation. The implications not only for Parliament, but also for the Executive and the Judiciary, have been carefully examined. The conclusions we have reached will
    1726
    be at the disposal of the House and there will be opportunities at the appropriate time for a full debate.
    Mr. Wilson: Does not the right hon. Gentleman recognise that in the last debate in June this point was made strongly on the best legal and constitutional advice available to us, but that not a word was said in reply by the Government? Has he really considered whether regulations and decisions can become the law of this land without requiring special legislation by this House? What would be the position of Statutory Instruments and of Prayers? What would be 'the position of this House? Should not this House have a chance of examining this matter through a Select Committee?
    The Prime Minister: I do not think that a Select Committee would be the best method. We have been considering all these points. I thought that the balance in this matter was extremely well put at the end of that debate by the right hon. Member for Belper (Mr. G. Brown) when he dealt with the claims of sovereignty on the one side and of co-operation on the other. We are working on all these technical points and at a suitable moment we shall give the House full information.
    Mr. Wilson: But does not the hon. Gentleman realise it is not a question of how well the point might have been put in winding up the debate? Specific points were put about effects on this House of our joining the E.E.C. If the Government are, as we are told, giving a great deal of thought in reaching their conclusion to how this part of the Treaty would be carried out, will the Prime Minister now assure us that next time we have a full debate there will be a full statement by the Minister concerned, so that the House can share in information which the Government have?
    The Prime Minister: I cannot say that the statement will be ready by the next time we debate this matter, because I do not know when that will be. But I will consider publishing a White Paper at an appropriate moment, perhaps at a later stage in the discussions.
    Sir D. Walker-Smith: Will my right hon. Friend look again at this matter, because what is raised by the Treaty is

    1727
    no mere technical matter? Does he appreciate that Article 189 is, on the face of it, inconsistent with the basic constitutional principle of the sovereignty of Parliament?
    The Prime Minister: All that is being inquired into. This is a question of the best moment and the best method by which we should have the information. I do not believe that a Select Committee would be appropriate. I would hope to have something ready for the House earlier than such a committee could report.
    Mr. S. Silverman: In view of the well-known constitutional doctrine that no Parliament in this country has power to bind any subsequent Parliament, what possible authority does the Prime Minister conceive that he has to negotiate a treaty, the intention of which would be to bind all subsequent Parliaments?
    The Prime Minister: We shall no doubt debate all these large issues, but the hon. Member's view seems to me to be somewhat reactionary, because in practice it would make almost any movement towards world organisation impossible.
    Mr. Gaitskell: This is a matter of considerable urgency. If the Government have made up their mind and have reached dear conclusions on this matter, it would be far better for those conclusions to be announced in the debate which, I understand, is likely to take place next week. Will the Prime Minister see to it that the Government spokesmen in that debate are fully briefed and can explain the position?
    The Prime Minister: I will look into that, but I did not say that we had completed the examination. I said that we had all these matters under examination.

    BRITISH INFORMATION SERVICES (MINISTERIAL RESPONSIBILITY)
    Mr. Berkeleyasked the Prime Minister if he will transfer responsibility for British information services overseas to the Minister without Portfolio.
    The Prime Minister: No, Sir.
    Mr. Berkeley: While appreciating the decisiveness of that reply, and while not disparaging the admirable work being done by my right hon. Friend the Secretary for Technical Co-operation, may I ask the Prime Minister to consider whether there is not perhaps a conflict in our right hon. Friend's two rôles—the presentation and co-ordination of British propaganda overseas and the provision of technical aid for under-developed countries? Will the Prime Minister reconsider this matter, since the Minister without Portfolio, who is responsible now for co-ordinating home information services, has an undoubted flair which might be employed in presenting Britain's case overseas?
    The Prime Minister: This is a matter of organisation, and it is always difficult to reach the right answer. I have considered this matter, and this seemed to be the most suitable arrangement. Overseas Ministers are responsible, and must remain responsible, for the information work of their Departments and the necessary co-ordination activities seemed to me to fit well in with the responsibilities of the Secretary for Technical Co-operation. There is also the advantage that much of his time is necessarily spent overseas, and this enables him to keep contact with the appropriate organisations abroad.
    Mr. Mayhew: Is the Prime Minister aware that, quite apart from Departmental Ministers who have their own responsibilities, there are four Ministers —the Secretary for Technical Co-operation, the Minister without Portfolio, the Economic Secretary to the Treasury and the Financial Secretary to the Treasury —who are specifically concerned with the co-ordination of Government information? Who co-ordinates the co-ordinators?
    The Prime Minister: I try to.

    LEONARDO DA VINCI CARTOON
    The following Question stood upon the Order Paper:
    Mr. LIPTON: TO ask the Prime Minister, if he will make a statement on his recent official conversations with the

    1729
    President of the Royal Academy about the public appeal for funds to purchase the Leonardo da Vinci cartoon.
    The Prime Minister: No, Sir.
    Mr. Lipton rose—
    Mr. Speaker: I did not call Question No. 8 because of the time.
    Mr. Lipton: But the Prime Minister answered Question No. 8.
    Mr. Speaker: That may well be, but I did not call it.

BUSINESS OF THE HOUSE
Mr. Gaitskell: May I ask the Leader of the House, whether he will state the business of the House for next week?
The Chancellor of the Duchy of Lancaster (Mr. Iain Macleod): Yes, Sir. The business for next week will be as follows:
MONDAY 30TH JULY—Committee and remaining stages of the Consolidated Fund (Appropriation) Bill.
There will be debates on Southern Rhodesia, and on the Case of the Former Chairman of the Birmingham (Mental B) Hospital Management Committee, which it is thought may last for half a day, and be followed by subjects which hon. Members may wish to raise.
TUESDAY, 31ST JULY—Debate on a Motion to take note of the Memorandum on the Report of the Committee on Broadcasting, 1960.
WEDNESDAY, 1ST AUGUST—Debate on the Common Market, on the Motion for the Adjournment of the House.
THURSDAY, 2ND AUGUST—Debate on a Motion to take note of the Report on Developments and Government Action in Wales and Monmouthshire, 1961.
It is hoped that the House will rise for the Summer Adjournment on Friday 3rd August.
Mr. G. Thomas: In view of the importance of the business on Thursday, will the Leader of the House endeavour to see that there is a House here to listen to the debate?
Mr. Grimond: Will the Leader of the House ensure that when the Lord Privy Seal makes his further statement on the
1730
Common Market next Wednesday, he is also in a position to inform the House what the situation will be during August and September, and that if there is no conclusion about the heads of agreement next Wednesday we shall be informed finally and definitely how the public and the House are to be informed about the progress of these negotiations when the House is not sitting?
Mr. MacleodWho are to be the Government speakers in the debate will depend on the progress of the negotiations in Brussels, because the negotiations may be at such a point that it would not be possible for my right hon. Friend the Lord Privy Seal to speak on Wednesday, in which case my right hon. Friend the First Secretary of State would make the main speech from the Treasury Bench and give the House the fullest information on these matters that we could.
Mr. F. M. Bennett: My right hon. Friend will recall that last Wednesday night he kindly promised to appraise the House of the result of certain representations arising from the debate in Committee on the Uganda Independence Bill and that he said that he would definitely give the House the result of those representations to the Prime Minister of Uganda before the House rose. How and when will he implement that undertaking, bearing in mind that a Question of mine to that effect was unavailing in eliciting any response?
Mr. Macleod: I made it clear to the House that that information would be conveyed by my right hon. Friend the Secretary of State. In the light of the Answer to my hon. Friend's Question on the Uganda situation, I will discuss it again with him.
Mr. L. M. Lever: In view of the widespread and overwhelming opposition to altering the law on abortion and euthanasia, may I ask the Leader of the House whether the Government will resist all suggestions to alter the law in that direction?
Mr. Bellenger: Will the Leader of the House say whether, in relation to Questions which were put to the Prime Minister earlier this week, it has been decided, following the Commonwealth Prime Ministers' conference, to issue a White

1731
Paper if decisions had been reached far enough in the negotiations about our entry into the E.E.C.?
Mr. Macleod: No final decisions can be taken on these matters until we see how the present crucial negotiations are concluded, but we will keep the House and the country as fully informed as possible.
Sir C. Osborne: Emergencies apart, can the Leader of the House say how long the Recess will be and when we are likely to come back?
Mr. Macleod: I expect to make a statement on that some time early next week, probably on Tuesday.
Mr. Lipton: Are we to understand from the right hon. Gentleman's statement on business that it is not the Government's intention to proceed to by-elections in South Dorset, Chippenham and Daventry until some time in the winter? If so, does not that mean that many thousands of innocent electors will be deprived of Parliamentary representation?
Mr. Macleod: I do not think that we will have any announcement on those three by-elections to make next week.
Mr. P. Williams: Can my right hon. Friend say what progress is being made with the issue of Lords reform, so that certain noble Lords presently sitting in the second row of the Gallery may rejoin us here?
Mr. Warbey: Can the Leader of the House say on which day is it proposed to take the Motion for the Adjournment for the Summer Recess?
Mr. Macleod: Tuesday or Wednesday, probably Wednesday.
Mr. Brockway: In view of recent events and the expressions of public opinion, will the right hon. Gentleman reconsider his decision not to provide opportunities for my Bill against racial discrimination? Has his attention been drawn to a leaflet, now being widely distributed in London—[Laughter.] I think that the right hon. Gentleman recognises this as a serious problem— and saying:
1732
"Hitler was right!
… Jewish Control
National Decline
Racial Ruin"
issued by the National Socialist Movement, with a photograph—
Mr. Speaker: This is very difficult on a number of grounds. It does not seem to relate to next week's business. What the hon. Member is saying appears to be a verbatim quotation from a document.
Mr. Brockway: I am asking for an opportunity to discuss the Bill, introduced by me and supported by a number of Members, against racial discrimination and incitement. I am asking that, in view of its importance, an opportunity be given to discuss it next week. I am asking the right hon. Gentleman, in view of the racial incitement against communities in our country, more serious than individual slanders and libel, whether he will introduce legislation to make this a criminal offence.
Mr. Macleod: Of course this is an important matter and I have always treated it as such. The hon. Member knows my view about the Bill to which he has put his name. But so far as next week's business is concerned, which is all I can deal with now, there are two possible opportunities for discussing such matters, one the traditional occasion on the Committee and remaining stages of the Consolidated Fund Bill, on Monday, and the other, although the subjects have not yet been announced, the Summer Adjournment debates.
Mr. F. Noel-Baker: In view of Tuesday's debate on the Pilkington Report on broadcasting, will the Leader of the House accelerate the publication of Appendix E of that Report, which contains the evidence, which is still not available to hon. Members and which should be available before the debate?
Mr. Macleod: I do not know whether anything can possibly be done on that matter in time, but I will look into it straight away.
Mr. G. Brown: May I ask the Leader of the House whether he is aware that one hon. Member on his side of the House is to seek an opportunity on Wednesday to introduce a Bill under the Ten Minutes Rule? In the event of the

1733
House giving that Bill a Second Reading, will the Government provide opportunities to facilitate its passage?
Mr. Macleod: It would not be a Second Reading. An opportunity might be sought to introduce it, but, clearly, there would be no conceivable prospect of it going through in the time available.
Mr. Woodburn: Will the right hon. Gentleman elucidate the statement that he made about the debate on the Common Market on Wednesday? As I understand, if there is something to be said the Lord Privy Seal will say it, but if there is nothing to be said the First Secretary of State will say it. Is this a tribute to his right hon. Friend's eloquence in saying nothing?
Mr. S. Silverman: Reverting to the question asked by my hon. Friend the Member for Eton and Slough (Mr. Brockway), may I ask whether the Leader of the House realises that on the occasion of the Consolidated Fund Bill it is not possible to deal with any matter which requires legislation? Does he further realise that the agitation that is being feverishly worked up is becoming a really urgent matter and becoming daily more dangerous to public order? Does not he think that the promulgation of this poison has gone far enough and that the House should now take some steps to prevent it, if possible before the end of the Session?
Mr. Macleod: The hon. Gentleman is quite right on the point that he made about not being able to refer to legislation on the Consolidated Fund Bill, but this is, of course, a matter which could come before the House if any hon. Member wished to raise it—perhaps for a comparatively short time, I would hope, because it would cut into another debate —on the Motion for the Summer Adjournment.
Mr. Donnelly: May I return to the question asked by the right hon. Member for Orkney and Shetland (Mr. Grimond)? It appeared to me that the Leader of the House did not answer that question. As I understood it, the right hon. Gentleman was asking whether it was the Government's intention to make a statement about what specific steps would be taken to keep the House informed, when it was not sitting, about the Common Market negotiations, because the Lord Privy Seal cannot come here to make a statement. What are the Government's plans to keep us informed of their policy when the House is not sitting?
Mr. Macleod: I thought that I had answered that earlier. We shall give the fullest information that we can as part of the opening speech on Wednesday.
Mr. Frank Allaun: If the Leader of the House cannot meet the request of my hon. Friend the Member for Eton and Slough (Mr. Brockway), will he give the House a promise that next Session he will either grant facilities for the House to consider my hon. Friend's Bill, or introduce a Government Bill on similar lines?
Mr. Macleod: No, Sir, because I am dealing only with the business for next week and not for next Session. My view, which I have stated frankly to the House, is that from my own studies I do not believe—
Mr. Brockway: Would the right hon. Gentleman look at it again?
Mr. Macleod: I should be glad to, but I have never been convinced that this is a matter which can be effectively dealt with by legislation.

DISSOLUTION OF PARLIAMENT
3.44 p.m.
Mr. Hugh Gaitskell: I beg to move,
That this House declares that Her Majesty's Government no longer enjoys the confidence of the country, and accordingly calls upon the Prime Minister to advise Her Majesty to dissolve Parliament so that a General Election can be held.
This debate takes place in the shadow of the sensational events of 20th and 21st July. The terms of the Motion are their direct consequence, for what happened then was the most convincing confession of failure which could have been offered by the Government, and the most complete vindication of the charges and criticisms put forward by the Opposition.
Of course, in all Governments incompetent Ministers are from time to time dismissed. In all Governments some older men retire. In all Governments reshuffles occur and resignations on political and personal grounds sometimes take place. But in all the flood of comment which has appeared since 20th July I have not seen a single suggestion that there is a precedent for the removal of no fewer than seven Ministers, one-third of the whole of the Cabinet, the curt dismissal of the Chancellor of the Exchequer, the man who had previously held the other highest office in the State under the Prime Minister, that of Secretary of State for Foreign Affairs, together with eight other Ministers in the Government.
Quotations from Kipling are popular nowadays, and I offer hon. Gentlemen opposite another to describe their feelings. It is from the "Song of the Dead":
" If blood be the price of admiralty,
Lord God, we ha' paid enough!"
Hon. Members: "in full".
Mr. Gaitskell:
"paid in full".
How and why did all this happen? As to why, there is really no doubt that this was the act of a desperate man in a desperate situation, and the desperate situation was the steady, remorseless and steep decline of the Conservative Party's fortunes in by-election after by-election.
1736
How is this decline to be explained? Some hon. Members and others outside have put it down to bad publicity. The policies, they say, were all right, if only they could get them over, and this point of view has been supported by some newspapers. For instance, the Daily Telegraph of 14th July said:
"Public relations inevitably come under fire when the Government does badly at by-elections. As Dr. Hill has been responsible for Government information since 1957 the tendency was to forecast that he would be dropped."
The Daily Sketch said this of the new appointments:
"Mr. William Deedes, an old Fleet Street columnist who is to take charge of Government information services at home, has perhaps one of the toughest assignments of all.
He has to get over to the electors the new image which the Prime Minister hopes he has created by his tough day's work yesterday."
The Economist, referring to the new Cabinet Minister's tasks, said that one of them would be tactfully to co-ordinate the considerable publicity resources of the Conservative Central Office with those of the Government. It is hardly surprising that the same newspaper went on to question whether these functions are really an appropriate rôle for a Cabinet Minister. Indeed, the question must be asked, for hitherto it has always been understood that party propaganda and party propagandists were not paid for out of public funds.
Our suspicions about the Chancellor of the Duchy of Lancaster were expressed in the House in 1957, when my hon. Friend the Member for Dundee, East (Mr. G. M. Thomson) asked the Prime Minister this Question:
"Could the Minister be a great deal more precise about the exact duties of his right hon. Friend? Is he, in fact, to be a public relations officer for the present Government, whose job will be to whitewash the policies of the present Government? Is the Prime Minister aware that this appointment is a very serious break with all peace-time precedents in this country?"
The Prime Minister replied:
"No, I think it is a very good arrangement, and I think it will be very valuable in the realm of information. It has no connection with any party propaganda. There are hon. Members … who think we ought to go back to having a full Ministry of Information. I do not share that view, but I do think that co-ordination of the work done by the P.R.O.s of the different Departments, especially in regard to our overseas work, is a very useful thing." — [OFFICIAL REPORT, 24th January, 1957; Vol. 563, c. 394.]

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Now the overseas work has been given to the Secretary for Technical Cooperation. What, then, is left for the new Minister to do, except to advertise for the Government and do propaganda for them; except to do a job for which he should not be paid out of public funds? Even the fig leaf that existed before, and covered the former Minister of Housing, when he was Chancellor of the Duchy of Lancaster, has now been removed, and a naked breach of constitutional principle is clearly exposed.
Whether or not the former Chancellor of the Duchy of Lancaster did his job, I do not believe that any failure there was the reason for the by-election catastrophies. For these there is no need to look beyond the social and economic record of the Government. The facts and figures speak for themselves. A year ago I spelled them out as they were then. In the economic debate on 18th July, 1961, summarising the position, I said:
"We have the worst export record in the past ten years, or the past five years, of any industrial country in the world. We have a steadily declining share of world trade. We have almost the worst production record, and we have almost the highest rise in prices."— [OFFICIAL REPORT, 18th July, 1961; Vol. 644, c. 1072.]
All that needs to be done today is to bring the facts up to date.
It is true that the short-term crisis which occurred last summer was comparatively swiftly brought to an end. That was bound to be the case, as soon as we managed to borrow about £500 million from the International Monetary Fund. It is true that, in the ensuing months, there was a slight decline in imports, on account of destocking by producers. But imports are now rising again, fairly quickly. There has been a slight improvement in exports, but we cannot possibly say that we are anything like within sight of the target of £300 million surplus on current account which has always been accepted by successive Conservative Chancellors of the Exchequer.
For this modest result what a price we have paid! Unemployment is up by 130,000 compared with last year; unfilled vacancies are down by 130,000; production has been falling for about six months, and is only now back to where it was this time last year—only
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now, indeed, back to where it was two years ago; there has been a decline in investment and a sharp fall in industrial building projects; there has been a sharp rise in excess capacity; prices are up by 5½per cent., and wage rates, despite the pay pause, are up by 3 per cent., so that, for many living standards have declined. [An HON. MEMBER: "What about dividends?"] I am asked about dividends. The answer is that dividends have gone up, too, although profits are down.
But something else has happened during the last year. Not only have people become aware of the deplorable record of the country over the last years; not only do they feel that what has happened in the last twelve months shows no indication that we are really overcoming our fundamental difficulties: they are also increasingly conscious of our failure to solve the major social problems which confront the country. I will mention only two today—housing and education.
In housing, it is now well known that the slum clearance programme is a long, long way behind schedule. We should, in the first five years, have cleared 375,000 houses. In fact, we have cleared 250,000. The result is that 2½ million people are still living in dwellings which were classified as slums in 1955. In the 50 largest cities where most of the slums are concentrated, in the first half of the period only one-seventh of the slums were cleared. At this rate, the job will not be done until 1991 in those cities. In Birmingham, it will take another thirty-eight years if the same pace is continued. In Manchester, it will take another forty-five years, and in Liverpool it will take another ninety years—Liverpool, discovered by the former Minister of Housing; and well he might have discovered it! I only hope that his successor will see some of the other cities where slums still exist.
The programme put forward in 1955 is now universally recognised to have been aimed too low. In fact, in report after report—the latest one being the report of the Civic Trust Committee'— it is made plain that we must substantially increase the target of slum clearance. It is increasingly realised, too, that the whole idea of the new towns, which was carried out by the Labour Government, has for many years been

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allowed largely to lapse. Indeed, the rate of building in new towns has fallen by a half. This As the picture presented of this social problem, and the way in which it is not being solved today.
In education, too, more and more people are dis-satified with the continued overcrowding of classes. It is simply not good enough that a quarter of OUT primary school classes and two-thirds of our secondary school classes should be more crowded than the very modest standard laid down by the Ministry. We know why this is so; it is because the supply of teachers is inadequate, and has been increasing far too slowly. The Ministry's own Council on Teacher Training has recently pointed out that we are getting new teachers at no more than half the rate required—and required merely to cope with the overcrowding. We shall be about 50,000 short in 1970. Over and above all this, it means that there is no hope of raising the school-leaving age to 16—a course strongly recommended by the Crowther Committee, three years ago.
Then there is the sixth form scandal —the situation in which the number of boys and girls in the sixth forms has risen, as we are all glad to know, by about 60 per cent., and yet the number of university places planned has increased by only 25 per cent.
Than, in addition, we have the deplorable decision to cut the University Grants Committee's recommendation. Is it surprising that Sir Geoffrey Crowther should have said, speaking of the university decision—and the fact is that it is easier today for a boy or girl in Spain and Portugal to go to university than it is for a boy or girl in Britain—
"Can we conceive that the economy of the 21st century will be adequately run by a generation of whom only one in 25 has reached even a first degree? Is not this a formula for a national decline?"
Indeed it is. Indeed, the formula could be generalised as a description of where we are today, and of what the country is facing today.
Why has all this happened? What are the causes of this situation? No doubt there have been cases of ministerial incompetence, and no doubt errors of judgment have occurred. But these are not the main reasons. The
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main reasons are simply the Government policies which have been conceived and carried out. We are in this position because the Government willed it. They decided it. Why is slum clearance proceeding so slowly? It is because the Minister of Housing—or the one who was in that office for most of the time and has now been promoted to Home Secretary—did not want any more slums to be cleared.
In speech after speech at that Dispatch Box the right hon. Gentleman defended the decisions of the Government and his own decisions as Minister. And what sort of help did he give to the local authorities in overcoming obstacles?— [HON. MEMBERS: "What help did you give?"] Everybody knows perfectly well that the rate of municipal house building today is half what it was seven or eight years ago. Is that an accident? Of course not. It was the deliberate decision of right hon. and hon. Gentlemen on the benches opposite.
To make quite sure that it should be kept down we have had the intolerably high interest rates—6¾ per cent.—charged by the Public Works Loans Board. We have had the appalling rise in land prices, the direct result of Government policy; the direct result of the introduction of the so-called free market and the abandonment stage by stage of the Town and Country Planning Act provisions created by the Labour Government.
But was this the fault of the right hon. Gentleman the Member for Luton (Dr. Hill)? At least, as I have said, he did discover the slums of Liverpool. It was not his fault. It was the fault of his predecessors and his colleagues. It was the fault of the right hon. Gentleman the Home Secretary. It was the fault of the right hon. Gentleman the Secretary of State for Commonwealth Relations. It was the fault of the Prime Minister himself.
If we consider the position of education, are hon. Gentlemen opposite going to say that they have not willed that situation? And, if they say that, how do they explain it? Do they simply say that it is the result of the foolishness and the stupidity of the former Minister of Education that there are not enough teachers coming forward? They cannot

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say that. They know that it is not so. They know that these were deliberate decisions. They know that the cut in the proposals of the University Grants Committee was not made by one Minister. Indeed, in all probability the Minister of Education fought hard against it. It was not even defended by him; it was defended by the new Home Secretary. And, of course, it was approved by the Government as a whole. All of them are responsible for these things that have happened. All of them are responsible, because they will not give such things as housing and education the priority which they should have in our national life and our national economy.
Of course, we all agree that we are bound to be limited in what we can do in this and in other fields by the rate of our general economic expansion and I turn to that particular phase of policy. First, a word about the pay pause. I will say this of the former Chancellor of the Exchequer. Although I do not think that he carried out his policy well—I do not think the policy itself was wise—the right hon. and learned Gentleman has done one thing. He has brought out into the foreground, again, that there is a problem of an incomes policy. We all knew that there was in the 1940s—until the problem was swept under the rug by the present Chancellor of the Exchequer and the first Chief Secretary, who pretended that it had not existed for all these years.
If we are to have an incomes policy, there are four essential conditions which have to be fulfilled. First, it must be based on expanding production and expanding productivity. Precisely the opposite has happened in this last year, and the inevitable consequence has, of course, been a rise in labour costs. Secondly, it must be on the basis of agreement by both sides of industry with Government. Thirdly, it must be comprehensive, covering not merely wages but all incomes. Indeed, all sources of spending. Not only wages, but salaries, capital gains, rents and interest. Fourthly, it must be fair as between the sections of the community. It is the tragedy of the former Chancellor's policy that all these four principles were broken and in consequence, inevitably, the pay pause is in ruins today.
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But was this the policy of the right hon. and learned Gentleman alone? Was it not accepted by the rest of the Government? Was it not supported energetically by hon. Members opposite? Did not the Minister of Health take a very firm line when we were asking him to give the nurses a little more than a miserable 2½ per cent.? Even the Minister of Power, in his way, even the Minister of Labour, in his way, at least did their best to work with and carry out the policy. Nobody suggests that they did not believe in it. If they had not believed in it, if they had discarded it, they might perhaps have done some other things. None of them, none of the hon. Members opposite, opposed it in any way. On the contrary, they actively and enthusiastically supported the introduction of higher Health Service charges and contributions. They actively supported the concession of £80 million to Surtax payers within a few weeks after that. They were fully committed to these policies, which, more than anything else, made an incomes policy quite impossible in the months that followed.
Did any of them ever suggest that there should be a real capital gains tax? Why, they even objected to the miserable sham and substitute which we were offered in the Budget this year. Did any of them suggest that dividend control might be necessary? Not a murmur. Not a whisper from the benches opposite. Hon Members opposite were wholly with the former Chancellor—
Sir Cyril Osborne rose—
Mr. Gaitskell: I am sorry. I cannot give way.
Now I come to the question of the general economic policy—
Sir C. Osborne: I advocated statutory dividend control and a capital gains tax.
Mr. Gaitskell: Very well. I will exempt the hon. Member, if he wishes to be in a class by himself.
Then there is the question of the general economic policy. Is the former Chancellor wholly responsible here? I think we must agree that undoubtedly he inherited a difficult situation. It is rather well put by Mr. Harold Wincott, in the Financial Times—
Mr. Gerald Nabarro: I did not know that the right hon. Gentleman read that.
Mr. Gaitskell: When I saw an article headed "Betrayal of Selwyn Lloyd" I thought that it might be interesting— and it was.
I will remind the hon. Member for Kidderminster (Mr. Nabarro) that what Mr. Wincott says is this:
"Mr. Selwyn Lloyd became Chancellor of the Exchequer in July, 1960. The date is significant … With the wisdom of hindsight, we can see that the Amory policies of 1958 and 1959 proved disastrous … Of course the policies won the election for the Tories in October, 1959, but already by that time they had put our balance of payments once again in the red. On top of these measures, during the 1959 campaign the Conservatives promised largesse wherever they thought it necessary"—
Hon. Members: Oh.
Mr. Gaitskell: Wait a moment—
"and the bills, for around £250 million, mostly fell on Selwyn Lloyd's doormat."
Sir Godfrey Nicholson: What did the right hon. Gentleman promise?
Mr. Gaitskell: That was the fate of the right hon. and learned Gentleman when he took over the office of Chancellor of the Exchequer.
The right hon. and learned Gentleman then proceeded, when faced with a crisis, to carry out exactly the same policy as his predecessors—the outs in public expenditure; the credit squeeze; the rise in interest rates; the general deflation; higher taxation, and the rest of it. We had it all before and we have had it again. And ail of them agreed on this. There is only one difference between hon. Gentlemen opposite when it comes to the question how to handle an economic crisis and what kind of economic policy to pursue.
There are some who say—the right hon. Member for Flint, West (Mr. Birch) is the most notable exponent of this view—that these policies of deflation have never been carried far enough. In the old days the present Minister of Defence was a supporter and associate of the right hon. Gentleman. They say, "Go on toeing tough. Don't let up. Never mind about electoral prospects." But they are in a small minority. The
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others say, "Go on for the time being, but, far heaven's sake, stop in time so that we can get the votes." In fact, of course, neither of these policies solve, or could solve, our long-term problems. They need far more drastic changes than right hon. and hon. Members opposite are likely to contemplate.
This brings us to two vital questions. Was there a dispute about economic policy before the massacre of 20th July, and is there now to be a change? Was there a dispute? Until the former Chancellor's dismissal there certainly was no suggestion of this. All were united. The Government were quite monolithic on the subject. It is only since the dismissal of the Chancellor, not by public utterance but by whispers, by rumours, by leaks, that the story has got around that there were disagreements in the Cabinet, that the Chancellor wanted to stand firm for a tougher policy and the others said, "No it is time that we let up."
The letter written by the right hon. Member for Flint, West to some extent gives countenance to this theory. Hon. Members will remember it. He said:
"Sir,
For the second time the Prime Minister has got rid of a Chancellor of the Exchequer who tried to get expenditure under control.
Once is more than enough."
That suggests that there was a disgreement. Is it so? If it had been so I wonder how we are to explain the attitude today of the present Minister of Defence and the present Minister of Health who, with the right hon. Member for Flint, West, resigned on the first occasion. I wonder how we are to explain the attitude of the two former Treasury Ministers, the Home Secretary and the new Minister of Education. All four of them have done very well out of the Government changes. Did they abandon their friends and their policy?
It may be so, but, if that had been the case, my view is that events would have taken rather a different course. There would have been discussions in the Cabinet. There would no doubt have been a special sub-Committee of the Cabinet set up to discuss the matter with the Chancellor of the Exchequer. I can imagine the Prime Minister saying, "I am not satisfied with the advice you get from the Treasury and the economists who advise them. Why don't we call in

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Sir Roy Harrod, an old friend of mine and an expansionist?" Then there would have been three possible outcomes. Either the former Chancellor would have won the argument and they would have agreed to stand firm; or he would have lost the argument but nevertheless accepted it and we would have had a change of policy; or he might have lost but resigned. But he did not resign, so I do not think that there was any dispute of this sort.
I think that the story is probably a different one. I do not believe that the former Chancellor expected his dismissal for one moment. I do not think that he even realised that the Prime Minister disagreed with him at all. On the other hand, the newspapers told us that the Prime Minister had been thinking about this for some time, but that he had kept his counsel and raised no objection. He even congratulated the farmer Chancellor at the Cabinet meeting on that fateful Thursday morning and on Thursday, at six o'clock in the evening, he curtly dismissed him.
That is, of course, one of the two possible explanations. We should all be interested to hear which is correct, but if the second one is correct it still leaves unexplained the reason for the right hon. and learned Gentleman's dismissal To that I shall come back in a moment, but before I do so there is a second vital question. Is there to be a change of policy? We know from the letter sent by the Prime Minister to the farmer Chancellor that that is not in his mind. He said:
"Your courageous policies at the Treasury have always commanded the support of your colleagues. You can rest assured that we intend to continue on the path that you have prepared. I am certain that this is the only way in which we can, in your own words, build growth upon a sound basis."
However, we are rather accustomed to the Prime Minister saying one thing and doing another. So it probably means that there is to be a change of policy.
Perhaps we could have some answers to specific questions. First, on the pay pause and the incomes policy we hear rumours of some now board which is to be set up. It is difficult to comment until one hears further details. Is this to settle wages and salaries, is it to override decisions reached voluntarily in
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industry? What is the idea? What is the new piece of machinery which the Prime Minister has in mind? In introducing it, are the Government standing by the White Paper on Incomes Policy, surely one of the most absurd documents ever issued from the Treasury? Do they still believe in it?
Do they recognise that the time has come when, in view of the state of the economy, we must have some positive encouragement to expansion? Are they prepared now to say that they will not go on waiting indefinitely and hoping and relying entirely on increased exports to get that expansion? Does the new Chancellor contemplate, for instance, encouraging demand, which is now worrying industry a good deal, by reducing interest rates still further? Is he going to remove the surcharges in order to encourage consumer demand? Is he even contemplating a new Budget in the autumn? At least, it would be a change to have a Budget for expansion in the autumn instead of a budget for dealing with a crisis. Are we to have any attempt to deal with the long-term problems of the economy, which have been so shamefully neglected? What is to be done about research and the deplorably low level in the major part of British industry? What is to be done towards encouraging investment? It is still, in this country, far below most of our industrial competitors. What is to be done about apprenticeship and the need to increase the supply of skilled labour? Are the Government coming forward with changes in this field, or are they waiting for "Neddy"?
In the field of housing, do the Government intend to continue to defend the present rate of municipal building as the best of all possible rates, or are they going to say, "Yes, it is time that we had some more council houses": and if they say that, how will they encourage the local authorities to build more? Will they offer them specially low interest rates? Will they give them some help in tackling the problem of land prices, or do they stand on the previous policy that it must be a free market no matter how high prices go or how great are the fortunes made?
Are the Government prepared to do something about the supply of building labour? Are they prepared to contemplate the effective control of office

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building so that flats—places where people can live instead of in slums— will be built in priority to offices and shops? On education, are we to have a change on the university grants position or do they still stand where the Home Secretary stood the other day—that although the sixth forms will be overflowing, there must be a quarter, perhaps a half, of the boys and girls going into them in the next few years who will not be able to go to the universities though they are willing, anxious and able to go.
Then there is the famous cat in the bag, whose existence was disclosed by the Leader of the House. I have wondered, during the last few days, whether it was the tiger which was let loose on that famous Thursday, or is it a rather sleepy, gentle, harmless pussy cat, something for the consumers, the Molony Report? [An HON. MEMBER: "Baloney."] Someone said, "Baloney". That may be, after our experience with the Weights and Measures Bill. I expect that we shall be having a No. 3 Weights and Measures Bill before long. Are the Government doing something about redundancy? If they are, they might well support the Bill of my hon. Friend the Member for Gloucester (Mr. Diamond). It would be interesting to know whether Ministers are to be covered by redundancy payments, too. All these are useful things, but they will not solve the nation's problems.
We come to the other alternative—that it was not a question of policy but simply a need for new men which led to the changes. Was it the beauty treatment solution which the Prime Minister had in mind? According to this theory, it dawned upon the Prime Minister one day that his colleagues ware tired. That was no surprise to us. The Leader of the House was so enthusiastic about this that as Chairman of the Conservative Party he sent out a circular ramming the point home. In this circular he said of the Conservative organisations:
"Many, unfortunately, display all the signs of tiredness that are not surprising when we have been in office so long."
He went on, rather blandly I thought:
"You may find that some people who were admirable leaders a few years ago have lost much of the zest that must be an essential part of our appeal. I'm sure, too, you will agree that it is only right that you should
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apply the same standard to yourself and to the other officers of your association."
That is a very good recommendation which might be applied to the other members of the Government, too.
If this is the explanation, there is one question which follows: why did the Prime Minister stop at seven? What about the Leader of the House himself? He does not always strike us as being flowing over with buoyancy and ebullience. Or the new First Secretary of State? To tell the truth, I must say that the former Chancellor of the Exchequer looks far more ruddy and healthy and wide awake than any of these Ministers. But perhaps we have not finished. Perhaps before long some of the others will be told that they are tired. There is the Minister of Labour. I understand that he even thought of resigning, but was fairly easily persuaded not to.
There is the Minister of Power, who had a narrow escape. There is even the Minister of Agriculture; though a little more youthful-looking than some of the others, he certainly should not regard himself as quite safe. One of these days they may go down the trap, finished, out of sight for good, just like the other seven who have recently left us.
But we must take them as they are today, the new team, forward-looking, brilliant, modern and progressive. Very high up in the list is the new Lord Chancellor, to give him his title, Lord Dilhorne of Towcester, that radical reformer whose appointment was greeted with such acclamation by the Bar, whose sparkling performances from that Box we all recall and which no doubt will be received with even greater enthusiasm in another place.
There is the new Home Secretary, that enthusiastic reformer whose first performance at the Box heralded the new liberal era at the Home Office. At least, however, he was able to make it plain that he was not to blame for all these cases, but that it was his predecessor who had left him all these babies. Nevertheless, we have the splendid success of his negative policy on housing and his negative policy at the Treasury to assure us of the reforms which lie ahead for the Home Office.
There is the new Minister of Defence. He is not exactly a new face, but at

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least he has been out to grass for some time. He is familiar with the game of snakes and ladders. Perhaps he is even immunised by now from any dangers from the Prime Minister. But there is one question of policy in which we are all interested. In his resignation speech in 1958 he complained that it was no use trying to maintain at one and the same time the Welfare State and Britain as a nuclear Power. Which one of these will he now abandon?
There is the new Chancellor of the Exchequer, not exactly a new face, if I may say so to him, but able, intelligent and likeable, his talent at last uncovered after all these years. The only point is this: he will be remembered particularly, as President of the Board of Trade, for the great success with which he conducted the Free Trade Area negotiations. Now he will be able to lend a hand in Brussels—although I wonder whether the Lord Privy Seal will be greatly encouraged by this prospect I wonder whether the new Chancellor of the Exchequer will quite live up to the standard of enthusiasm for the Common Market recently laid down by the First Secretary.
And there is the First Secretary himself. One of his ambitions has been achieved. After being the assumed acting Prime Minister he is now officially Deputy Prime Minister—the best Deputy Prime Minister that we have. But new, fresh? Hardly. He and the Foreign Secretary are the only two relics of the Chamberlain Government.
There is one other, younger man, the Minister of Education, an endearing personality whose speeches we always enjoy. I cannot but help a certain regret at the loss of Sir David Eccles. He was not the most tactful of men at times, but he was not incompetent; nobody would say that he was. He must be reflecting a trifle bitterly on his famous remark, "Treat 'em mean, keep 'em keen". Perhaps he is wishing that he had been even more accurate—"First back 'em, then sack 'em".
So we come to the Prime Minister, the leader of the new team—and the leader of the old team as well; the old team which was so bad, so tired, so worn out, so ineffective, all chosen by him, whose policies have led us to this pass—all approved by him. For no Government
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has ever been so much presented as the creation of one man. Colman, Prentis and Varley saw to that, even though the hon. Member for Peterborough (Sir Harmar Nicholls) thinks that they oversold him a bit at the last General Election. I give the hon. Gentleman the prize for the understatement of the year.
July has left him still more on his own, no longer able to share the cartoons with the former Chancellor of the Exchequer, which he did for so long, first as Foreign Secretary and then as Chancellor of the Exchequer. Of course, all this has been a continuing process. It is said that the right hon. Gentleman became Prime Minister at the beginning of 1957 on the votes of his former colleagues in Lord Avon's Cabinet. How many of the old comrades who voted him into power now remain? Six out of nineteen. Not since Stalin liquidated the old Bolsheviks has there been such a successful process of elimination.
But if some of these old comrades from their places of exile—Lord Salisbury, Lord Avon, Viscount Head and the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd)—feel a little bitter and angry, and even a little lonely, they can reflect that the man who got rid of them all is now perilously alone, too, his friends gone and the Deputy Prime Minister, whom he elbowed out of the succession at the time of Suez, breathing down his neck.
Why is it that this Government is a Government of which nobody—not the House, nor the country, nor, I think, the Conservative Party—is particularly proud? It is not merely their dismal record of failure. It is not merely the pursuance of policies which are neither just nor wise. There is another reason. The great Governments of the past have often been composed of men of different views and outlook, but they have been bound together by some common purpose. Prime Ministers who have lived in history have set more store by their policy objectives than by the time they remained in office. This was true of Peel, of Gladstone, of Churchill, of Attlee. It was true of Lord Avon, however mistaken we may think the policy was.
It is not true of the right hon. Gentleman the Prime Minister. His Government will be remembered not for the

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leadership they gave the nation, but as a conspiracy to retain power. Men and measures have been equally sacrificed for this purpose. That is why we call it a Government of gimmicks, an Administration of ad-men. I believe that this is a very grave weakness today. No doubt when things are easy and no response is needed from the people they can get away with it. But today it is clear that we cannot solve our problems as a nation without a deeper sense of national purpose. Such a purpose is not created when evasion is regarded as a virtue and double talk is regarded as a duty.
If the Prime Minister had proclaimed a policy and chosen a team and stuck to them, we could have respected him, even though we profoundly disagreed. It is because he can do neither that he and those with him have lost the confidence of the nation. Let him do this last service to the people—give them the freedom to choose a new Government.
4.33 p.m.
The Prime Minister (Mr. Harold Macmillan): The right hon. Member the Leader of the Opposition, in moving the Motion, has dealt partly with personalities and partly with policies. I am bound to say that he did not say much about policies. He soon came back to the personalities. No doubt he found it much easier.
Mr. William Hamilton: So did the Prime Minister.
The Prime Minister: I congratulate the right hon. Gentleman on his being so persistent a reader of the gossip columns. I am not at all abashed by the accusations of disloyalty or lack of courage or panic. These taunts are natural. Obviously, they are very easy to make, but, curiously, two exactly opposite attacks have been made on me since I became Prime Minister. I have been accused during my years in office of excessive loyalty to old friends and colleagues and unwillingness to introduce new blood into the Government. I have also been accused of a detachment amounting almost to disdain. Now I am accused of taking violent action in a moment of panic.
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These contradictory accusations do not move me. I am content to be judged by those with whom I have worked during nearly fifty years of active life—in the Army, in business, here in the House of Commons and in Government.
But what has distressed me is having to make a number of decisions which are unhappily necessary from time to time, affecting long friendships. My right hon. and learned Friend the former Chancellor of the Exchequer has worked with me in close partnership for six years. He has held the high offices of both Foreign Secretary and Chancellor of the Exchequer. We all recognise the courage, single mindedness and patriotism that he has shown. Last July, with my full support, he embarked upon an operation made necessary by the fierce pressures on sterling which were then being developed. That phase of the battle is over. We have achieved a sound basis for growth and we must confirm that and move to a new phase.
I have decided that for this new phase there must be some new commanders. These decisions are, as all those who have held this office know, one of the greatest burdens that fall upon a Prime Minister. I can assure the House that they are much easier to evade than to make. There is no inconsistency in all this. To take the decision and to face its consequences does not detract in the slightest degree from the sincerity of my tribute to the work of my right hon. and learned Friend, which, I believe, will be shared by all hon. Members on this side of the House.
The reconstruction of the Government has also involved my parting with other colleagues, many of them very old friends. But in any Government changes have to be made from time to time. The reconstruction of a Government is, at the same time, more necessary and more difficult when a party has been so fortunate as to receive on three successive occasions the support of the electorate and to have governed for a period of nearly twelve years. I have no doubt that we shall be faced with a similar problem in 1966 or 1967. So much for the personalities.
The only clear policy that the Leader of the Opposition seemed to recommend is the dissolution of Parliament. But before that we have a lot to do and we

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mean to do it. I would have thought that an Opposition demanding an election would perhaps have given some indication of their own policy. Suppose we take the right hon. Gentleman at his word and the Opposition had an election on Europe. What would happen then—still on the fence? The right hon. Gentleman's attitude throughout has been prudent but not very inspiring.
Then there is the question of defence, to which the right hon. Gentleman referred. My right hon. Friend the Member for Woking (Mr. Watkinson) has done a very fine job. [HON. MEMBERS: "You got rid of him."] My right hon. Friend informed me some time ago of his willingness to make way in any reconstruction of the Government when it was made. He can be proud of the fact that during his period of office he has presided over the most difficult of all operations, the transition of the Armed Forces of the Crown from a compulsory to a voluntary all-regular basis. We believe that the recruiting figures will justify his policy. He has maintained a firm unity on defence policy between ourselves and our partners, the United States, and in N.A.T.O., and the Defence White Paper which he presented in February had the full support and has the full support, of the Cabinet.
As to the question of the deterrent, there has never been any change in the Government's view, but what the Opposition's policies are to the deterrent would need a very specialised student of political history to find out.
What about economic policy? There, we had just a little bit of the professor, as usual, but not very convincing. The Opposition accept the need, I am told now, for an incomes policy in principle, but they have done their very best to frustrate it and undermine it in practice. In the debate last December, they were challenged as to what their incomes policy would be. It was the same cry, "Wait and see. Wait until we have worked one out, and then we will tell you about it at the General Election." So we must not have the General Election too soon.
As I say, before we have an election there are a number of things we mean to do which we believe to be in the national interest, and which will, we
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think, lead to further progress. Meanwhile, I must remind the House, as the right hon. Gentleman has done, of the progress that has been made. The right hon. Gentleman gave an account of Britain over the last eleven years which, I think, would be unrecognisable by anyone who really made an objective study of the country. His was not a history, but a caricature. Let me give my own picture, which is much closer to the actual facts.
The standard of living in this country has risen more in the past ten or eleven years than it did in all the previous half-century. That is not what the man in the street calls stagnation. It has been achieved at a time when we have been devoting an increasing proportion of the national income to social services, capital investment and, I am happy to say, to overseas aid. On the average, the level of unemployment since the war has been lower than, I think, that in any other industrial country with, perhaps, one excepted. As a measure of confidence in our administration, personal savings have risen twentyfold since 1950. That is what the ordinary people think about the Government. That is helping to finance our present great programmes for the modernisation of industry, transport and commerce.
Our exports have reached a record level, largely due, I agree, to the firm measures taken last year. They have expanded every month this year and, of course, the pay pause has helped to make our costs competitive. It has helped us to expand our exports and preserve full employment and, as a result also, our gold reserves have risen by about £350 million. We have beaten off last year's attack, and although we have continued our aid to the full, and our other overseas expenditure, although we have played our part in the arrangement for giving financial help to Canada at a critical moment, we have been able to pay off a large part of our emergency borrowing.
The social services have expanded during this period rapidly and continuously. Expenditure on them— [Interruption.] We have had the caricature, so hon. Members opposite may as well have the true picture. Expenditure on the social services in the past ten years has nearly doubled in

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money terms, and has gone up by at least 50 per cent. in real terms. As for housing, I really never thought that the Opposition would ever taunt me about houses. During all those years we have averaged 300,000 houses a year, a figure that was described by the opposite side as being neither desirable nor possible. Of course, there is still a great need, and we are driving forward for this last clearing of the slums, and so forth. If ever there was a story of which the party of which I am the leader had a right to be proud, it is the story of housing.
Let me come to education. An extraordinary desire always to denigrate this country seems to fill the right hon. Gentleman. We are spending on education more per head than any other country in Western Europe except, perhaps, Sweden. We have managed to cope with the birth-rate "bulge" without resorting to the shift system in education which most other countries have had to adopt. Large and necessary expansion is going on at every level, from primary school to university. We are getting better value for money through improved design, and an interesting figure is that building costs per school place, owing to this great skill shown, were less per place last year than in 1949.
The hospitals and local services have been greatly improved. The hospital service has been transformed by the new building programme, and the elderly are sharing, as we always intended that they should, in the prosperity they helped to create. Pensions have not merely been raised to meet rising prices, but today have 50 per cent. more purchasing power than they had eleven years ago. The elderly need care as well as cash, and our programmes have provided for a growing number of suitable homes and services in the home, as well as looking to their special needs in hospital treatment.
That is the true story of the eleven years of the Administration—[Interruption.] Inevitably, the speed of our advance has developed stresses—personal and public, economic and social, national and international—which must be remedied if they are not to hinder expansion and future progress. At the same time, there has come about all
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over the country a growing awareness that a high standard of living cannot be our final goal, that it carries with it obligations to the outside world which we have in these years, with all our difficulties, done our best to meet, and which we are determined to meet on an increasing scale in the future; and that we must find a way—because that is what the old world must do—to redress the economic balance of the new.
All this can only be achieved, and the right hon. Gentleman knows it, from a firm economic basis at home, and this the Government are determined to maintain. Through the establishment of the National Economic Development Council we have taken an important step forward to find ways of achieving a steadier and more rapid rate of expansion. We are giving full support to the firm, though sometimes painful, methods and measures by which the nationalised industries must improve their efficiency.
Yet there still remains—and the right hon. Gentleman just touched on it, and only just touched on it—the great economic question today, the problem that faces ail advanced countries today. The four main objectives are really the same; I imagine we all share them. They are full employment, steady prices, a strong currency and expansion, or growth. In a country like ours, where there is, broadly speaking, full employment—or, at any rate, where there are no massive reserves of manpower as there are in some of the European countries, or have been—expansion can be achieved only in two ways—by the rapid transfer of manpower where it is available from declining to expanding industries, and by the removal of any obstacles to growth.
Secondly, we must make sure—and for this we look to the National Economic Development Council for vital assistance—that the most efficient use is made by management and labour of all the vast complication of machinery and techniques which modern science has made available. For example, if the nation as a whole pays itself in increased wages, salaries and dividends more than is justified by increasing production, it is surely accepted that costs will rise and exports fall. In that event even the increase in individual incomes will be but Dead Sea fruit, for they will not

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realise their true value. I should have thought that that was self evident.
An incomes policy is, therefore, necessary as a permanent feature of our economic life. It is not, of course, the only element in our economic policy but it is an indispensable element in the foundations on which to build a policy of sound economic growth. If costs rise exports will fall and the weight of imports will correspondingly increase and lead to a balance of payments crisis, so that the rise in prices will inflict great injury on those whose incomes are in fixed terms or cannot be readily advanced to meet the rising prices.
How to reconcile an incomes policy in a free society means digging right down into the roots of our philosophy. [Interruption.] I should like the House to consider this matter seriously, for this is the reason why we have been considering what form the next step should take. I will now answer the questions put to me by the right hon. Gentleman the Leader of the Opposition. Even in war —with controlled prices, rationing, the direction of labour, 100 per cent. Excess Profits Tax and post-war credits to reduce the impact of increasing wages and the rest—we did not have a wholly successful incomes policy. One of the results is the immense debt we now carry.
Even after the war, when the Labour Government of the day inherited this highly-controlled system which had been brought about by the siege economy inevitable to an island in war, they found themselves baffled by the same problem. Many of us remember how they resorted, as we have, to appeal and exhortation and many of us remember the immense energy and enthusiasm which Sir Stafford Cripps devoted to this purpose. [HON. MEMBERS: "Hear, hear."] But even he was not successful and now that we have a much freer economy it may be that the task is more difficult. I freely admit that.
But that is not to say that the efforts of successive Governments have altogether been in vain. Public opinion—and the debate we had the other day showed this —has developed over the years. People are beginning to understand much more readily what happens if one sector tries to gain some undue advantage over the
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rest and how fatal will be the result if all together insist on pursuing increasing incomes without regard to their real value. We can claim that our actions over this past year have given the economy a real advantage and have helped to keep our costs reasonable compared with other countries. What we need now is a new machinery or mechanism and a new advance.
In a free society an incomes policy cannot, in my view at any rate, be imposed. It can come about only by general acceptance, and if it is to be a permanent feature and not a temporary thing in a difficult crisis, as I believe it must be if we are to achieve our four objectives, then it must be regarded both as necessary and as fair. This is the problem to which the whole House must address itself. It must not, as a permanent feature, be rigid. A temporary measure must necessarily be somewhat rigid and sometimes unfair. A permanent policy, however, must be flexible so that it can take account of the different conditions and needs of different services and industries and of the intervals that may have elapsed between the last increase and a new claim.
It must have regard to better ways of working or new responsibilities. It must be capable of providing a workable system of adjustment of pay, not only in those occupations where the ordinary forces of the market apply but in the wide area of the public service where they do so to only a limited extent. First of all, the Government must continue to inform the country from time to time as to the rate of increase in total incomes which is compatible with the growth of total production.
This does not mean that the general figure will be the appropriate figure in every particular case. For example, there may be a need to increase rates of pay in a particular industry to build up its manpower relative to other industries, or some special increase may be justified by the fact that workers in a particular industry are able to make a special contribution to greater productivity and efficiency. And, as I have said, the history and timing of earlier pay increases may properly need to be taken into account.

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What is essential, however—and we may as well face it or otherwise we shall fail to obtain our four objectives—if we are to meet the national interest is that every case should not be regarded as a special case and that the broad matching of incomes and production should, in fact, take place. Our experience over the past year has shown clearly that it is not enough for the Government to offer guidance in general terms. What we need is an impartial and authoritative view on the more important or difficult pay questions given by a body which can see these questions both as they affect individual interests and the nation.
To fill this need we have decided to set up a National Incomes Commission. This, of course, will be a permanent body. Before I describe its functions I should like to say this. There is no intention to deprive any man of his right in a free society to sell his labour or hire other men's labour as he may wish. It is inherent in our plan that free negotiation shall continue and that the right to withdraw labour or withhold employment shall remain unimpaired. Nor is there any intention of dismantling or abandoning the machinery of arbitration. The present working of the wage-council system will continue. The wage-council system is the modern form of a machinery developed over a great number of years which protects those classes of workers who, for various reasons, are least able to protect themselves.
The main features of the Commission will be these. It will be given terms of reference requiring it to inquire into and to express views on claims of special importance. In so doing it will take into account not only the circumstances of each claim but also the wider considerations of national interest such as the need for increases in incomes to be matched by increases in production. It will carry out this work, so far as possible, in public. It will publish its findings and its reasons for them in full and this is important, for one of our main needs today is to mobilise and inform public opinion.
Much that happens now in the sort of dim industrial twilight might well be brought into the clear light of day. The Commission will deal not only with prob-
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lems in industry but also with public and other services, the value of which cannot be measured by purely commercial considerations.
Mr. E. Shinwell rose—
The Prime Minister: If the right hon. Gentleman will allow me to finish this passage I will give way. As our society develops, more and more of the population work in such services, and this is a mark of progress, for in a primitive society most people are engaged in merely keeping alive. The more advanced and complex the society the more compact is the base and the more elaborate is the superstructure. It must be clear that while the Government are able, and indeed may feel obliged, to enforce their views upon the public services for a limited period, it would not be tolerable that a widening gap should develop between rates of pay in the public and private sectors. Therefore, the Incomes Commission must have regard to both forms of employment.
It will function broadly like this. First, let me take the private sector, with which I group for present purposes the nationalised industries and those public services, in local government for example, for which the Government have no direct management responsibility. Here the Commission will consider specially important pay claims or disputes which may be referred to it by the agreement of the parties concerned. But there may well be cases from time to time in which, although one side or the other is reluctant to agree to the reference of a claim to the Commission, the Government may nevertheless form the view, on representations from one of the panties, or on wider grounds, that the Commission should consider the question in the public interest.
I cannot believe that in practice the parties would not give weight to the Government's expressed view, and I cannot believe that either side would disregard it. But if it did, the public would form its own conclusion. But the question whether any formal provision is desirable to cover cases of this sort is, I adroit, a difficult one, and before we take a final decision we shall have more detailed consultations than have so far taken place with representatives of employers and trade unions. In the

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public services the procedure would be the same. The Commission will be there to examine important claims referred to it by both parties. Arbitration will, I repeat, be respected.
Now let us consider a settlement reached in the private sector which appears to the Government ox to the Commission itself damaging to the national interest—damaging either because the increase in pay is excessive or because the repercussions on other industries are likely to be harmful, or for any other reason. Then the Commission will, at the request of the Government, have the right and the duty to carry out a retrospective examination of the settlement. It will not alter the settlement. The terms will stand. But it will be considered, and the report will be positive and constructive.
For example, it might well draw attention to the level of efficiency in the industry concerned, both of management and of labour; to the increase in prices, especially in a sheltered industry, which would follow the settlement; what would be the effect upon exports in the unsheltered industries; and also whether there were questions of restrictive practices on either side of the industry. In other words, it should be not merely restrictive but positive, not negative but constructive, and should be able to make positive proposals for improvement. It must act rapidly, as courts of inquiry set up by the Minister of Labour have shown themselves able to do.
Many of our industrial weaknesses— for instance, restrictive practices—are very difficult to remedy by any general law. But they can be influenced by public opinion if the public are allowed to know what is going on. In effect, this instrument will bring these issues to the bar of public opinion. Apart from claims for higher wages and salaries that are put forward from time to time, often following in the wake of an increase in the private sector, there are already in existence in the case of certain professions and services—the higher Civil Service, doctors and dentists—independent committees which provide the Government with advice on pay. The Government have entered into certain undertakings in relation to them. It will be desirable in due course to consider, in consultation both with the advisory com-
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mittees and the representatives of the professions concerned, what form of association with the Commission could usefully be developed for the future.
It has also in the past—and this is another whole field for its operations— been the practice of all Governments to refer from time to time the question of pay or status of particular classes of public servants to Royal Commissions or committees appointed for this purpose ad hoc. There are a number of such. While the reports of these bodies have been valuable, the procedure is in this sense unsatisfactory, for each inquiry is undertaken entirely on its own without regard to anything except the problems of a particular service. An ad hoc committee, therefore, has little opportunity to see these problems set against the wider background. We intend that special inquiries of this type shall be undertaken at the Government's request by the Incomes Commission.
As I say, since the Commission will not be merely negative but positive, it should also benefit some of those whose special claims are sometimes overlooked in the struggle between the great organised forces. The Commission must, therefore, be so constituted as to work largely by influence and by the steady growth of its authority, and that is similar to the development of many of our institutions.
I should inform the House that in recent weeks there have been purely informal contacts on this policy between the Government and representatives of trade unions and of employers. This morning I saw representatives of both sides and gave them an outline of the Government's proposals. Of course, there will be further full discussions with all concerned both in the public and private sector—[An HON. MEMBER: "They are not with you."] That may be so, but this is a great national question, and I would ask them to give it serious thought.
I realise that there are people who will feel that such a Commission has no place in the highly-developed system such as we have got of industrial bargaining. But to accept that view would be to abandon an incomes policy and to resign ourselves to the inevitability of the old classical method of monetary policies, stop and go—call it what you will. There

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are others who will say that the Commission has insufficient power, that it should have the right to assess and impose wages. In my view, that is wholly contrary to the concept of a free society, and I hope that the House and She country will feel that we have struck about the right balance.
Mr. W. Hamilton: Tell us about dividends.
The Prime Minister: I shall come to that. Just be patient.
I have spoken of increases in wages and salaries. But I am not unmindful of the widespread and natural feeling that restraint in profits and dividends is no less important. It is vital that people should not feel that their acceptance of the restraint implied in a national incomes policy is merely going to give someone else a larger profit or dividend. This As to a large extent in the hands of the Government, and the Government will, by fiscal or any other appropriate means, restrain any undue growth in aggregate profits which might follow from restraint in wages and salaries.
In most economies, I think the right hon. Gentleman will agree, profits are usually drawn hand-in-hand with rising wages; and restraint in wages and salaries would be accompanied by falling profits. Nevertheless, I give this formal pledge.
As the House will see, a national incomes policy is to be considered not as one of the methods of temporary restriction if our economy outruns its strength, such as we have had to take from time to time. In my view, it is the essential foundation and support to a policy of expansion, for if we can be sure that full expansion will not result in running into all the dangers of inflation, then we shall have solved one of the major problems of the age. We shall have the means of meeting the large annual increase in Government expenditure which a modern society demands on schools, universities, roads and all the rest, and we shall have the means of meeting them without injury. The consumers will gain, for it is they most of all who have suffered from the inflationary rise in prices and who most of all feel themselves ground between the millstones of the powerful forces on both sides of industry.
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The pensioners and the old people will gain; indeed the whole nation will gain. For the strange paradox is that this prize is there to be won, and if as a democratic people we have the self-control to operate over the years such a policy then there is the prize, with injury to none and with gain to all. All this we can, and must do, for ourselves. We intend to do it. But in economic policy, as in so many other spheres, we cannot think only of ourselves as if we were an isolated island.
Our economies are interdependent, and we must make sure that the mechanism of international exchange are adequate to serve the needs of mankind. I do not need to say much about this problem now; perhaps my right hon. Friend the Chancellor of the Exchequer will refer to it. The great post-war expansion was largely financed, in its early stages at any rate, by the exceptionally generous foreign aid programmes of the United States. Now that the United States themselves are feeling pressure on the dollar, we must look for other solutions. The financial basis on which international trade rests is determined by the financial policies of the countries administering the principal currencies of the world, primarily the dollar and sterling, but increasingly also the other European currencies, such as the deutschmark, the franc and the lira. The plans put forward at Vienna by Mr. Jacobsson, the Managing Director of the International Monetary Fund, have produced—I admit it and we all admit it— arrangements Which help to mobilise additional resources if the need arises.
But I must be frank and say that, speaking for myself, I do not believe that the ultimate solution can be found only in these measures. A solution can be found only by international co-operation and imagination, and, I must say this, by whatever means the nations of the world decide to seek a solution, they will not find Britain holding back. [Interruption.] The President and I have discussed this in great detail I mention it only because I do not think that it is right to discuss an economic debate without some reference to this matter. We have made some progress in the last year but not, in my view, enough.
Apart from this immediate policy— these long-term benefits—there are some special proposals which I am afraid I

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must detail to the House. First, as regards the consumer and, second, the general status of the employee whether in the factory, the office or the shop.—[Interruption.]—Of course, the consumer—the the right hon. Gentleman asked questions and I am afraid he must put up with the answers; not that they were not prepared already, I admit that—is an interested party in all wage settlements today. In the old days, a wage dispute was just a matter between the employer, on the one hand, and the employees, on the other. They were the only parties that were involved. It is very different now. The general public is a third party in all these struggles—the whole of the economy of the nation is in it—and it is up to now very rarely represented. But apart from this general interest there are other ways in which we can help the consumer.
The Report of the Molony Committee was published yesterday. The right hon. Gentleman has read it and does not seem to think much of it. He must have skimmed through it; it is quite long. The Government have decided to accept the proposal to set up a consumers' council. We are reviewing the legislation relating to monopolies and restrictive practices in the light of experience in the past five years, including mergers, and legislation in the field of consumer protection will come next Session. Then, of course—this is an important part of it—the steady reduction in tariffs is in itself a protection for the consumer.
Now for conditions of work. As regards factories, I have seen many Factory Bills in this House but, broadly speaking, our legislation is satisfactory although there are some Amendments which I should like to see in due course. I reaffirm the Government's undertaking that the Shops and Offices Bill will form part of our legislative programme next Session.
Now I come to the more important question—the question of the status of the worker. I am well aware, from many years' experience in the House of Commons, of at least one reaction that there will be to what I have to say about security for those who find themselves unemployed at short notice. I would just say that the conditions under which Government business has to be conducted with regard to foreign and home
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affairs and the need for rapid decisions make it necessary for Her Majesty's servants to accept this basis of employment, that when changes are made they are made rapidly. Only so can the collective responsibility of the Cabinet be maintained, and only so can it maintain any decisions that sometimes have to be taken at a few hours' notice.
But I am thinking of the millions of our countrymen who are affected by the hazards of industrial life, particularly in the changing pattern of industry. We think that the first need is for contracts of service which provide for a reasonable period of notice. For a long time it has been our aim to encourage employers to move towards this. Contracts of service to provide for substantially longer periods of notice are already provided, I think most people would agree, by many if not the majority of progressive firms. I was much impressed by what the President of the British Employers' Confederation said about this recently.
This should become a general practice and in due course we propose to introduce legislation to lay down a statutory minimum period of notice. We shall provide for this to come into effect at a forward date so that employers and unions will have time to make voluntary arrangements which suit their circumstances and which are not less favourable than the rule. At the same time, we shall legislate on contracts of service generally. I mean the right of a man to know precisely what are the conditions of his contract.
I want to say a word on the problem of the training of young people and adults, to which the right hon. Gentleman referred. First, apprenticeship. More apprentices have been taken on by employers during the last two years. But the quality of much apprenticeship training falls short of the needs of modern industrial techniques and five years' apprenticeship seems to me at any rate rather longer than it takes to learn the skills of many trades. Efficiency for a nation starts with the education and the training of its young people; and, whether we join the Common Market or not, the real struggle that British industry has to wage and win is that of competitive efficiency.

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Accordingly, we intend, either through N.E.D.C. or through direct talks with employers and trade unions, to study urgently together how we can improve both the quality and the quantity of young people being trained for their future in industry. We also intend to expand the adult training schemes which are designed to fit workers for the inevitable changes of employment that the greater economic flexibility and the changing patterns of modern industry make very necessary today. We cannot afford the waste which is involved, apart from the human aspect.
Prosperity—and we have had great prosperity—has brought this nation many problems, just as depression does. We are conscious that these personal and private anxieties do come in one form or another to most families, and this is why the measures I have outlined, measures covering the whole field of incomes policy and measures to get a better system throughout for our people, will, I think, be acceptable and regarded as wise. I appeal to those who will have to deal with them at least to study them and think about them before making their final decision.
I believe that these measures will go far to check the abuse of power by either side of industry and to provide a just and more stable basis for advance than the incomes race which has proved so exhausting and not really of such great benefit to individuals or the nation.
The Motion takes the form of a Motion of censure. I hope that the House will forgive me if I have repelled it to the best of my ability in part of my speech only and have tried also to give the House as clear an indication as I can of the plans which we mean now to pursue. My right hon. Friend who will speak at the end of the debate will be able to answer particular questions and, of course, there will be further full consultations before all our plans come into effect.
Having said that, I confidently ask the House to reject the Motion. Since its return to power in 1951, the Conservative Party in office has faithfully carried out its programme. It was elected to office in 1951, and its mandate has twice been renewed and fortified. With the
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support of the House, we intend to carry on and complete our work.
5.22 p.m.
Mr. E. Shinwell: Owing to some murmurs of protest around me, some of them, I gathered, verging on the acrimonious and many of them derisory, I was unable to hear the whole of the Prime Minister's speech, but I was profoundly disappointed at what I did hear.
The right hon. Gentleman developed various economic themes. This was to be expected, since from a perusal of the Press we gathered that his intention was to embark on a new and, apparently, adventurous economic policy. Having heard what the Prime Minister said, I wonder why it was necessary to change the Government. We had a reference to an incomes policy. We have heard about that for quite a long time. In a few minutes, I shall develop the original source of what is, apparently, a new idea to the Prime Minister. There was a reference to expansion. That is common form. Also, of course, we heard a succession of familiar platitudes about the intention of the Government to create a new economic climate for the people of this country.
More than thirty years ago, I sat somewhere on the benches in this Chamber —it may have been on the Front Bench —and listened to the right hon. Gentleman making speeches from a seat below the Gangway on this Slide of the House. He was then not the Prime Minister, nor did anyone imagine that he ever would become the Prime Minister.
Mr. Nabarro: There is hope for us all yet.
Mr. Shinwell: Indeed, it was much more likely that, because of the opinions he then held on economic policy, his expulsion from the Tory Party was imminent. When I contrast the speech to which we have just listened with the speeches made by the right hon. Gentleman thirty years or so ago, and, in particular, when I contrast his outline of a new and allegedly adventurous economic policy with what the right hon. Gentleman wrote at that time, I confess frankly that I am astonished, and I say to the night hon. Gentleman that, if he believed in what he then said and wrote, he has, having regard to what

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he said to us today, grossly betrayed the principles and convictions which he then expressed.
I think that it might be as wall to place on record now what the right hon. Gentleman did write at that time so that not only the House but the country may know. If I may say so, almost in parenthesis, I am less concerned about political irrelevancies and castigating the Prime Minister or about the changes in the Government than I am about the future of the country. I do not for a moment suppose that this approach is peculiar to myself, nor do I suggest that there is an absence of sincerity or integrity on the other side of the House. What we have to consider is not mere platitudinous utterances, or intentions however eloquently exposed, but—to put it very simply—the facts of the situation and the plight in which the country finds itself.
The right hon. Gentleman has made his Government changes. There is a lesson to be derived from what has happened in this crisis, a lesson particularly for the politically immature on the benches opposite. The right hon. and learned Gentleman the former Chancellor of the Exchequer was dismissed and, in spite of all the promises of the Prime Minister about redundancy, time for consideration and a lapse of time before redundancies are implemented, the right hon. and learned Gentleman was dismissed without even a week's notice.
Sir C. Osborne: Like the Minister of Fuel and Power in the Labour Government.
Mr. Shinwell: The hon. Gentleman is mistaken. He ought to make himself acquainted with the record of the time. However, I am not concerned with the hon. Gentleman I make this suggestion to ambitious back benchers opposite— [Interruption.] Even the hon. Member for Kidderminster (Mr. Nabarro) might take advantage of what I suggest.
Mr. Nabarro: Not likely.
Mr. Shinwell: The hon. Member for Kidderminster (Mr. Nabarro) has an excess of ambition. It is not a crime; it is quite laudable.
Let ambitious back benchers opposite contrive to become junior members of the Government and then contrive to
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be dismissed, and they will achieve a popularity out of office which they never achieved in office. That is precisely the position of the right hon. and learned Gentleman the ex-Chancellor of the Exchequer. While in office he was condemned and denounced repeatedly by hon. Members opposite. Now he has achieved a popularity in excess of anything accorded to the Prime Minister, who is now about to depart from the scene.
Mr. Nabarro: He has had enough.
Mr. Shinwell: Hon. Members opposite may, if they wish, interrupt me. I am quite capable of dealing with silly interruptions. They will not prevent me from expressing views that ought to be expressed in the House and made known to the people of the country.
What about the Prime Minister's writings?
Sir C. Osborne: He has not gone, you see.
Mr. Shinwell: I ask hon. Members to note this. The Prime Minister then wrote about the inevitable tendencies of capitalism towards collectivist construction, which he applauded. Does the right hon. Gentleman recall that? How does one compare that quite definitive statement, arising no doubt from his convictions, with the sort of piffle and waffle which we have had from him this afternoon? The right hon. Gentleman said more than that. He said:
"Nothing short of national organisation"—
"national organisation" let it be noted—
"of our import and export transactions will be adequate if we are to hold our position in competition with other countries."
The right hon. Gentleman then informed his readers that
"capitalism will transform itself by normal evolutionary processes"
and agreed that at the time capitalism was in dire distress.
The Prime Minister: Almost all the things which have then distressed me have now been cured. There are not now three million unemployed. There is not a situation in the world of a competition in deflation. There is not the terrible threat with which we were then faced. We have now all sorts of national plans. In fact, looking through some

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of my old writings, which I admit were, perhaps, immature, I am surprised how many of these things have come about.
Mr. Shinwell: If that is what the right hon. Gentleman really believes, he misconceives the whole purpose of economic planning. Of course there have been improvements. No one denies that. Is it suggested that any improvement that has developed during the course of the last fifty years is attributable to the present Tory Government or Tory policy?
Mr. Nabarro: Most of it is.
Mr. Shinwell: Not at all.
I now address myself to the Motion of censure, which is completely and absolutely justified. However, I have a reservation about the Motion. I am not quite certain whether it is desirable, or even practicable, to have an early General Election. I am not certain that that is the desire of anybody in the House. It is not the time of year for that sort of thing. But as to the rest, the condemnation of the Prime Minister and of the Government, that is surely justified in the circumstances.
I say this to the Prime Minister. If what he has said about the achievements of the Government in Ms time and of successive Tory Governments in the last ten years is true, how does he account for a rather peculiar phenomenon which has manifested itself in the country, namely, the lack of confidence in the Tory Government as exemplified by the result of recent by-elections? Is there any indication that the Government's policy has been endorsed? Of course not. Certainly not in the country. But let it be understood that while we condemn the Prime Minister and his Government, hon. Members on the back benches opposite who endorsed the ex-Chancellor's pay pause policy and deflation policy are as much to blame as the Government themselves. They cannot escape the liability which they accepted when they applauded the ex-Chancellor at the time when he introduced the original pay pause policy.
Mr. Nabarro: A jolly good policy, too.
Mr. Shinwell: I suggest that there is no particular need for a General Election. I think that if we give the Government enough rope and let them
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demonstrate the futility of the continuance of the pay pause—[An HON. MEMBER: "They will hang you."]—restraint on investments, on consumer demand and all the other piffling devices and nostrums of Tory policy, they will get what they deserve when the General Election comes.
Sir C. Osborne: That is what the right hon. Gentleman said in 1957, and he was wrong.
Mr. Shinwell: Incidentally, to expose the views of others than myself on this matter of a change in economic policy, I would direct attention to what appeared in the leading article of The Times. No doubt hon. Members opposite will be ready to accept what The Times declared. If not, then I can only assume that their reading matter is confined to the Daily Mirror—not that there is anything wrong with the Daily Mirror, but it is more their standard, perhaps, than is The Times. The Times said:
"Conservative back-benchers would put it differently."—
that is, the suggestion about a return to inflationary policy—
"They believe that what the nation demands of the Government is a policy of expansion. All these are palliatives. They may temporarily put the temperature of the British economy up or down a little. They do not touch the things that really matter. Even expansion is no panacea, if forced in the wrong sectors and in the wrong way."
What they demand, although they use very vague and ambiguous language, is a complete change in the economic purpose contained in the policy of the Government.
These problems of economic decline and the lack of confidence are not confined to this country. Even President Kennedy has discovered that he is not as popular as he once was. In last Sunday's Sunday Times I find the following observations from its Washington correspondent:
"President Kennedy is faced this weekend not only with new and nagging questions about his own and his party's political future, but by even deeper doubts about the Government's capacity to conduct the public's affairs in these times."
So the problems with which we are confronted now, and with which we have been confronted for many years, are not peculiar to this country.

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Let us look at the record of the Government. My right hon. Friend the Leader of the Opposition outlined the lack of achievements of the Government in the sphere of education, housing and in many other directions. What has happened? Over the last ten, or even twelve, years of Tory rule we have had 23 changes in the Bank Rate. Axe we to understand that these variations, these fluctuations, indicate stability in our economic policy? During the last twelve years we have had booms alternated by slumps. Is that denied? Does that indicate economic stability? Of course not. That is the kind of situation which satisfies hon. Members opposite, but it does not satisfy hon. Members on this Slide, and, as indicated by by-election results, it does not satisfy the people of this country. All the vague talk that we have had this afternoon about promoting stability in future is just a lot of poppycock, and the Prime Minister knows that quite well.
Mr. Nabarro rose—
Mr. Shinwell: During the last twelve years, 25,000 industrial firms have gone into voluntary or compulsory liquidation —25,000 bankruptcies in this so-called best of all economic societies, the best of all capitalist worlds. A very large number of investors have lost millions of pounds during the last twelve years of Tory rule. These are facts which cannot be denied.
Mr. Nabarro rose—
Mr. Shinwell: I am not bothering with the hon. Gentleman. The Prime Minister refused to yield to me when I ventured to intervene. I am about to tell him what I wished to say to him. I did not mind when he interjected.
I think that it is wise in debate to hear what the other side has to say, and that is why, when the Prime Minister was speaking, I was inclined to remonstrate with some of my colleagues for raising their voices. We must hear what others have to say and we must never underestimate the intelligence of our opponents, although there are some Members opposite whose intelligence we exaggerate—for example, that of the hon. Member for Kidderminster.
I wish to come to the question of future policy. Does anyone really
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believe that the measures outlined by the Prime Minister this afternoon will cure existing ills? Take the question of a National Incomes Commission. I cannot understand why it is necessary to indulge in this redundancy. The ex-Chancellor of the Exchequer created the National Economic Development Council. I understood the terms of reference of that Council were to consider all aspects of economic policy—planning, production, incomes related to the cost of living, the standard of living, and so on—and to offer advice to the Government. If the ex-Chancellor of the Exchequer repudiates what I say, no doubt he will correct me. Now we are to add to "Neddy" a Commission to do precisely what was included in that Council's terms of reference.
Where did this idea come from? It is by no meals original. It was suggested many years ago. It was considered by the Labour Government. It was considered, as the ex-Chancellor of the Exchequer knows, as the result of a memorandum which I submitted. [HON. MEMBERS: "Oh."] It so happens that the right hon. and learned Gentleman understands. I do not expect other hon. Members opposite to bother very much about matters of this sort, but that is how it happened. What was the purpose behind the suggestion? [HON. MEMBERS: "Tell us."] If hon. Members, listen, I shall tell them. It might illuminate their minds. Goodness knows, that is needed very badly. The purpose was to have a body to relate the cost of living to wages and wages to production and to make recommendations and, if possible, to direct labour and industry. Of course, without the direction of industry there is no case for the direction of labour.
All these suggestions were made at the time. They were unacceptable for reasons which I have never been able to understand. They may be unacceptable now. If they are unacceptable, I venture the opinion that whatever Government happen to be in power refuse to go to the root of the matter. My right hon. Friend the Leader of the Opposition, when he was denouncing the Government, said that a more drastic policy was required. He did not go into detail. Perhaps there was not time for that, or perhaps this was not the

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occasion on which to do it. But, obviously, all these nostrums and devices employed by Tory Governments for a long time do not go to the root of the matter. Something much more drastic is required.
I will tell the Government what will happen. There will be an economic shot in the arm. There will be a period of relief for the Government, because the people, and certainly hon. Members opposite, will advance the claim that the Government, and particularly new members of the Government, should have the opportunity to deploy their ideas and to engage in activities of advantage to the country. That is common form. But after the shot in the arm has had its effect, what will follow? The Prime Minister spoke about an incomes policy and said that it had to be fair, but the night hon. Gentleman, if he will allow himself to pay attention to what I am about to say, said nothing about ironing out inequalities in wages and salaries under the incomes policy.
It is no use deploying an incomes policy through a Commission on incomes, or in any other fashion, unless we start with an understanding of the basic principles of equality. I do not suggest that overnight or in a few years we can iron out all the inequalities, but as long as glaring and gross inequalities exist in a society in which, according to the Ministry of Labour, 7 million people still have less than £10 a week—[An HON. MEMBER: "Including girls."] Whether it is girls, boys or adults is beside the point.
There is a great deal of insecurity and unemployment in various parts of the country with no prospect of relief for some considerable time to come. That is a problem which has not been tackled. As long as a situation like this exists, what right have others on what is called the salary side to expose their pretensions to higher salaries? There acre far too many people who have too little and too many who have too much, and that situation must be corrected.
Sir C. Osborne: Can the right hon. Gentleman say why the very sensible and profoundly sound suggestions which he put forward, I understand, in 1947, concerning the control of prices, direction
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of labour and of industry, and so on, ware rejected by the then Socialist Cabinet?
Mr. Shinwell: Because it was thought at the time undesirable to implement them.
Since the hon. Gentleman has asked a question, let me contrast the Labour Government's position with the Tory Government's position over the last twelve years. Let it not be forgotten that when hon. Members opposite came to power in 1945 this country, in the words of the late Lord Waverley, previously Sir John Anderson, Chancellor of the Exchequer in the Coalition Government, said, not in this Chamber but in the Chamber across the way, that this country would be bankrupt at the end of the war. Indeed it was, so much so that it had to resort to an American loan which was spent before we received it.
These were not conditions of our own making. We had a rationing system which had been in operation during the war. I must not disclose Cabinet secrets, but I can say that when cargoes of grain were being exported from Canada and the United States to this country we had frequently to divert them to Burma and India because of threatened and actual famine. Conditions have been different during the last twelve years, yet a success of piffling and pettifogging devices has been employed which failed to go to the root of the matter.
Take what the Prime Minister said about his hopes that both sides of industry would accept the principle of an incomes policy and would work it out to the satisfaction and advantage of all concerned. Why is it that the T.U.C. is reported in the Press as objecting to a wages policy which is imposed and prefers to continue the policy of collective bargaining? We will never have a satisfactory egalitarian incomes policy unless we start by understanding that there cannot be an incomes policy that is static, or one that is related only to occasional changes in the cost of living. There will only be an incomes policy that is satisfactory to the T.U.C—and, in the long run, to the electors, whether Conservative, Labour or Liberal minded—if it is based on a higher standard of living and a better status for the workers.

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What is the use of saying that we have an Incomes Commission and the Government accepting the proposals of that Commission that wages should be related to productivity or to the cost of living if those wages remain too low? There must be a complete change in the standard of living that modern conditions justify and the resources of the world can provide.
I am not concerned about all the palaver about resignations or impending resignations. I am not concerned about personalities in the Government. There are, however, things that bewilder me. I cannot understand, for example, why the former Minister of Defence was dismissed. Not so long ago, Field Marshal Montgomery, speaking in another place, ventured the opinion that he was the best Minister of Defence that this country had had for years. As an ex-Minister of Defence, I accept that willingly. I remind myself, however, that the Prime Minister was at one time a Minister of Defence. The former Chancellor of the Exchequer was an ex-Minister of Defence. Why dismiss this man, whom one of our greatest soldiers, one of our military experts, has declared to be the best Minister of Defence that we have had?
Nor do I complain because a number of young Members have been injected into the Government. The more we have the better, although I am far from ready to admit that it is always the young who have young ideas. Sometimes people accuse people like myself of being old-fashioned Socialists. Far from being old-fashioned, I have the most modern conceptions, one of which I offer to the Prime Minister. I make him a gift of it. It is that he should carry out a complete reorganisation of the public school system and iron out its inequalities. I speak as one who had no education at all, or practically none, and who left school before I was 11. That was not my fault. Speaking as one who had vary little education, I want to see every child with aptitude and talent given the opportunity to go to the best scholastic institutions.
I have already remarked on the need for a complete change in working-class status and in the standard of living. Much requires to be done. Therefore, I do not worry about the young men being
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in or about the old men going out. That does not matter. What matters is policy and not personalities. Change the Government. The more things change, the more they remain the same, to use the English equivalent of a French proverb.
I challenge hon. Members opposite, particularly back benchers. It is they who have the power to force the Government in the right direction. Let them try to understand the needs of the economy—
Mr. Nabarro: That is what we are doing.
Mr. Shinwell: —and the basis of our economic policy.
Mr. Nabarro: Give us the chance to do it.
Mr. Shinwell: Back bench Members opposite are not doing anything of the sort. They are just fooling around with a lot of silly nonsense.
Mr. Nabarro: On a point of order. Has the Chair any control over garrulous back bench Privy Councillors?
Mr. Deputy-Speaker (Sir William Anstruther-Gray): So long as the Privy Councillors keep in order, there is no need to control them.
Mr. Nabarro: Further to that point of order—
Mr. Deputy-Speaker: Order. There is no further point.
Mr. Nabarro: This is a new point of order. [HON. MEMBERS: "Sit down."] Have you observed, Mr. Deputy-Speaker, that the right hon. Member for Easing-ton (Mr. Shinwell) has already occupied 36 minutes—
Mr. Deputy-Speaker: Order, The hon. Member for Kidderminster (Mr. Nabarro) knows well that the Chair has no control over the length of speeches.
Mr. Shinwell: I do not mind hon. Members having a little fun and games, but it so happens that I am serious about these matters. I do not want fun and games any longer. I have a social purpose and I want to see it implemented.
Although I am no astrologer, I will forecast future events. There will be an economic shot in the arm. We will

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resort to modest inflation, and for a while it may cover up the cracks. Then, we shall face another slump. That is as sure as the noon-day sun, because the goods that we produce may become unsaleable, either because of competition, the price level, or whatever reason it may be. Then we may cut off the head of another Minister, or even the Prime Minister, or we may, as an alternative, as seems likely, rely on hopes which spring from association with the European Economic Community. I have ventured before to express the opinion that this is an escape from reality—that is all—from facts that confront everybody who thinks about these problems. And so we shall fail and fail again.
I want, in a sentence or so, to offer a word of advice to my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), who will wind up the debate from this side of the House. I beg him not to accept these nostrums, not to accept this miserable social reform. I beg him to demand from the Government—and to tell the country—that a thorough-going reorganisation of our economic policy is essential.
5.57 p.m.
Mr. John Biffen: The House jealously accords a maiden speaker a great deal of tolerance and I trust that I shall not strain it when addressing myself to what is so obviously a controversial subject. I should probably begin, as my constituents would wish, essentially non-controversial, with a tribute to my predecessor, Sir David Ormsby-Gore. Whatever opinions and divisions we may have in this House, there will, I think, be general agreement that our relations with the United States are of the utmost importance and all would unite in sending him their best wishes for the work he is doing there.
This debate has naturally turned on economic matters, to which for a short while I should like to address myself. Perhaps the right hon. Member for Easington (Mr. Shinwell) will bear with me if I do not follow some of the rather interesting points which he elaborated in his speech. I should, first, like to record that I count it a privilege during my eight months in the House to have supported the economic policies of my right
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hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd). To my mind, those policies were carried out courageously and with tenacity. I suspect that in some ways almost a guilt complex swept over the nation with the considerable sympathy that was accorded to my right hon. and learned Friend a few days ago.
In saying that I would add my best wishes—if it is not arrogant to offer my best wishes to the new Chancellor of the Exchequer. I believe it is an appointment which will be widely welcomed in industry. I think that in this sense it is a change which could have welcome effects, because one of the difficulties of our present situation is undoubtedly a serious lack of business confidence, and while I welcome the news that the policies enunciated last July are in their essence to be continued, I hope that we may see a return to business confidence, which I believe is necessary to stimulate the economy and improve our situation. I am sure the Government have been conscious of the importance of business confidence, and they certainly have benefited from the experience of the Kennedy régime in the United States of America where I think the unfortunate clash between the business community and the Administration has had very real lessons for Governments throughout the West.
I now return to the support which I offered to my right hon. and learned Friend the Member for Wirral as the previous Chancellor. I believe that very few Chancellors in post-war Governments have found many friends when they have been fighting inflation. I think that industry has found inflation a fairly cosy aid to profits, and the trade unions—and heaven knows, one cannot expect otherwise from their leaders—through inflation have been able to get good rewards. I do not blame them. It is the job of their leaders to do their best for their union members and to get all the rewards they can.
However, I do not think that the public arbitration system has been of any particular assistance in the situation in which the Government have been operating. There is a curious predisposition on the part of the public to regard arbitration as some kind of sacred cow which must not be tampered with. I do not share that opinion, and I am confirmed

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in this view by some recent remarks of Mr. Henry Smith, the Vice-Principal of Ruskin College, who in a Hobart Paper, "The Wage Fixers", says:
"The task of arbitrators is to ensure as far as possible that a similar wage is paid for identical work. If this tends to increase inflationary pressure, the prevention of inflation is the responsibilty of government."
I must say that I thought this a very fair expression of view about arbitration, and I noticed from the remarks of the Prime Minister that public opinion will be relied upon in the new policies. Undoubtedly the sanction of public opinion is very important, but to my mind it can never be a substitute for Government action and Government policy and Government resolve.
I was interested to see the speculation in the newspapers, notably in the Financial Times, which suggested that younger Members of Parliament differ from their elders in being more reflationary. If I may quote the Financial Times—in reading which, I notice, I am in very distinguished company—I would quote from the issue of 19th July, which says:
"To some extent the division between the two views runs along the lines of age. Broadly it is the older members who are the sternest supporters of"—
my right hon. and learned Friend's—
"policies in the belief that they are essential for sterling. But younger M.P.s take a distinctly more expansionist line."
It has been said that only a few, such as my right hon. Friend the Member for Flint, West (Mr. Birch), are serious opponents of inflation.
I think that is absolute nonsense. If there is one thing which unites these benches it is the determination that we have to counter the inflationary pressures. It is not a question of being hardhearted economists but of being concerned with social problems, for just as before the war unemployment was the great social scandal so today it is the inflation which we have had in the last decade and a half which has created no less a social problem than unemployment did in the interwar years. Before the war one could point to Jarrow and South Wales and say that that was something shocking and disgraceful which ought to command the attention of the Government, but in the post-war years, because of the spread of inflation ail over the
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country, the public conscience has been dulled on this issue, so that no Government in tackling this issue has had that support from public opinion which they might have expected. Some of us would take the view that the approach to the post-war problems has far too often been dominated by concern with pre-war conditions.
I turn now to the remarks of the right hon. Member for Easington (Mr. Shin-well), who chided the Prime Minister for still not holding the same views that he held thirty years ago. I think it would be absolutely disastrous if our economic policies were dominated by the kind of thinking provoked by mass unemployment in the inter-war years. I hope I do not sound pedantic or like a lecturer, but I would say that the present concern with the fashion of growth has been a thoroughly bad thing. I certainly found highly entertaining the remarks by Colin Clark about growth-manship, in his Hobart paper. To my mind, of the various forms of fixed investment normally associated with growth appears too indiscriminate an approach to our problems. Certainly the best kind of investment for long-term growth is education In that connection, I thoroughly welcome the new team at the Ministry of Education.
May I just very briefly return to the policies enunciated last July. They were referred to by the Leader of the Opposition as being some sort of colossal failure. I hope I am not being too controversial, but I must say that I really do part company from that point of view. After all, the right hon. Gentleman elaborated a number of factors which he believed showed the disastrous failure of the policies of my right hon. and learned Friend the Member for Wirral, but he did not mention the recent rise in exports which have risen for five consecutive months. I would have thought that rising exports, while I willingly concede that they reflect the growing buoyancy in world trade, also reflect an increasing cost-consciousness in British industry, and I believe that the measures taken by my right hon. and learned Friend and the Government last July have been beneficial. This was conceded by the Leader of the Opposition when he admitted our imports had fallen and the balance of payments had

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improved. But for the measures taken last July the pressure on sterling would have been completely uncontrollable and any consequential devaluation would have been disastrous to the Commonwealth at the crucial time of the Brussels negotiations However, the Leader of the Opposition only made a passing reference to the Brussels negotiations. The Leader of the Opposition claimed that our imports were now rising.
It seems to me an extraordinary exaggerated claim. In the second quarter of this year imports were at a monthly rate of £369 million compared with a monthly rate of £367 million in the first quarter. This is an increase, but it is only just the barest perceptible increase. I also think that the right hon. Gentleman dismissed rather casually that the index of industrial production was showing an upward trend. I believe that there is already a healthier attitude towards costs, and I believe that by far the most eloquent commentary on the work done by the Government and by my right hon. and learned Friend the Member for Wirral is contained in remarks by Mr. E. Russell Eggers of the Chase Manhattan Bank, who said recently:
"British industry is a lot more competitive than a lot of people think just now."
He said that the competitiveness of our industry
"will be one of the delightful surprises if Britain joins the Common Market."
This kind of remark makes up for many of the taunts we have so often heard on this subject.
Naturally as a Tory—I hope, a reasonably progressive one—I tend to favour expansion. I think the timing must still largely be dependant on the American situation. I think the present view of industry, to which I referred earlier, and the definite lack of confidence, must be taken into account although I believe that part of that lack of confidence is due to industry now operating in a much healthier climate where inflationary costs cannot just be handed on. Naturally this has provoked a reaction. Nonetheless, if we are to give the country a general stimulus, I think that there is a need for something more than action on consumer spending, and I hope that something will be done about industrial
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costs. I have in mind a reduction of fuel costs. To my mind, in this present situation, an obvious factor is the buoyancy of Government expenditure. I believe that it has a natural, and, as some would say, a depressing tendency to rise, and I think it certainly will rise.
In this context, perhaps I could make a special constituency plea. I have not referred to my constituency—the Oswestry division—previously, but, while it is largely agricultural, it has in the town of Oswestry railway workshops, and the railways loom very large in the economy of my constituency. To my mind, if we are to face the problems of the 'sixties, we should not merely accept but actually desire changes in the railways system which will release a large amount of valuable labour for employment in growth sectors of British industry. The same is probably true of the coal mines, though I will not be so provocative as to follow that line of argument.
May I suggest that the Government should accept the chance that is presented to them by the new railway structure as a chance to give an imaginative lead in redundancy schemes? In the Economist last week, it was tentatively suggested that Dr. Beeching's proposals in regard to redundancy would cost between £15 million and £20 million, and, on the other hand, there were the tentative proposals put forward by the Secretary-General of the National Union of Railwaymen, which would cost something between £60 million and £80 million.
It would be quite improper for me to go into detail now about that, but it seems to me that the changes in our railway structure should come, and should come soon, and that, therefore, this additional cash in the form of redundancy payments should be one factor which I hope the Chancellor of the Exchequer will bear in mind when determining the level of buoyancy in public expenditure. I believe that whatever terms are accepted should, at least, be equal to the best provided by private industry. I think we owe it to the railwaymen, who, I believe, have been a woefully underpaid body of men in the decades since the war.
I hardly know whether the ordeal of making a maiden speech is greater than

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the ordeal of fighting a by-election. I was described as indistinguishable from the Labour candidate by the Sunday Express, but worse was to follow, because the Guardian referred to me as "an impeccable Liberal". It was meant as a compliment, though I could not accept it as such because, to my mind, there is in all parties of the Left an element of escapism, though I would not presume to follow that line of argument.
There are two main challenges for the Government. One is the successful pursuit of an incomes policy which will restore public and foreign confidence in sterling, and I believe that confidence in sterling to be the prime concern of good Government. The second I believe to be an approach to the new Europe in a spirit of enterprise rather than of pessimism. It was quite extraordinary to find that a speech from the Leader of the Opposition which was designed to indicate to the nation that we should have a General Election in order to replace this Government did not contain anything other than a passing and quite irrelevant reference to the problems which my right hon. Friend the Lord Privy Seal is facing in Brussels. Is it suggested that anyone can make a case for changing the Government without any reference to the negotiations now going on? Is it seriously thought on the Opposition Front Bench that there is anyone there who can be classed as half equal to the Lord Privy Seal?
I realise that I have been a little controversial, and I apologise. It is probably just as well that at this juncture I should conclude my speech. For me, it is the Government who have accepted the challenge that confronts us in the 'sixties, and it is the detractors of the Government on all sides who shrink from the opportunities and realities of the situation.
6.15 p.m.
Mr. J Grimond: It is my very pleasant duty, on behalf of the House, to extend our congratulations to the hon. Member for Oswestry (Mr. Biffen). We very much enjoyed his maiden speech. If, as he himself suggested, it was controversial in part, it was ambidextrous, so to speak, in that I discovered some rather oblique shafts at his own Government, as well as at the Opposition.
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I sympathise with the hon. Member when he expresses his regret at the departure of his right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), and we share the good wishes which he extended to his predecessor. I only wish that, when he said that the Government are determined to stop inflation, their determination could be said to have met with better success.
We have at last heard the much-heralded speech from the Prime Minister. It was the speech of an exhausted man. What did he have to say? He told us in all seriousness that we must think about apprenticeships and about contracts of service—after eleven years of Tory government. People have been thinking about these things for the last fifteen or twenty years, and what is needed is some action. The Government did not come into power yesterday; they were elected eleven years ago.
The right hon. Gentleman also told us that we are to have another Commission. We have had enough Commissions. We had the "Three Wise Men" to tell us what wages ought to be. We have waited for the Government to make some of the decisions which lay on them about the state of our economy and the amount of growth we expect, and to right the situation in which 2 per cent. of the total adult population own 46 per cent. of the personal wealth. It will be impossible for the Government to get a wages policy until the Government themselves govern, and make this society fairer than it is.
Why, in any case, is this being done now? We are told by the Prime Minister that this is because we have a sound basis for the economy. We all know quite well what the real reason is. It has been spelled out across the country from Orpington to Leicester. Another difficulty of the Government is getting the trade unions or anyone else to accept their policy. It is well-known that it is not that the Government have been converted to economic sense, but that they are terrified of their electoral prospects. On top of this this policy is instituted when they have done the maximum damage to good relations by the insanities of last year.
We are asked to consider a Motion of censure, but no Motion of censure

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which the House can pass can be nearly as devastating as the vote of censure passed by the Prime Minister on his own Government. Whatever else may be said about the sacking of one-third of the Cabinet, it is a devastating vote of no confidence. We are told that the Prime Minister must be a good butcher, but good butchers kill the right animals at the right time and in the right way. They do not conduct an all-round slaughter in a state of panic.
Let us look at what has happened. The Prime Minister now tells us that suddenly he found that the basis of the economy was sound and that this was the reason why he decided that his colleagues who had made it so sound must go. It was a sudden flash of lighting which came to him, "The economy is sound. Sack the Chancellor of the Exchequer." If the Prime Minister disagreed with the Chancellor of the Exchequer, the time to say so was last autumn or last winter. But the Prime Minister said nothing of the sort; he supported the pay pause and the rest of the Chancellor's plans.
We are told that another reason why this had to be done in this extraordinary way arose from the doctrine of Cabinet responsibility. This puts a new gloss on that doctrine. Apparently "the responsibility of the Cabinet" means that when one has made up one's mind to sack one's fellows one goes on having Cabinet meetings and discussing the business of the day as though nothing was wrong.
"Alas, regardless of their doom
The little victims play
Nor sense have they of ills to come,
Nor care beyond today."
They were all meeting on the Thursday before they were all sacked. Had they fears? they were all preparing to go out to their public meetings; and what were they going to say? They were going to praise the Prime Minister, the Chancellor of the Exchequer and the Minister of Defence, and, indeed, play a little on that popular theme in the Tory Party now—that of loyalty. I understand that the Tory Party has been drawn together again on the theme of loyalty. I wonder when the Prime Minister really made up his mind for this slaughter. Is this really the conduct of a good butcher? It is not the
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conduct of a butcher at all; it is the conduct of the Borgias, on one of their more unsavoury evenings.
We are told now that the way it is done does not matter; we are told that what matters is what happens in the future and that the method does not matter. But it matters very much. It matters very much indeed how affairs are carried on at the head of this nation. The slaughter of last Friday week has confirmed the view of many people who thought that politics was a cynical profession and that it was concerned largely with keeping one's own head and taking off others. The Government have done immense damage not only to the Tory Party, but to politics in the country. On top of this, after an exhibition which would have been thought a bit extreme in a thieves' kitchen, we got several Companionships of Honour handed out.
What is the position now? We have been assured that the policies of the Government will not be changed. This has been met throughout the country with well-merited derision. As Mr. Christopher Hollis wrote in Punch:
"Prime Ministers are like deterrents. If they are to be effective they must be credible."
The Prime Minister has become incredible, and we have become incredulous. Everybody knows that in due course the Government will change their tune and that we shall have a little reflation—not for the good of the country, but for the good of the family fortunes of the Tory Party.
But it is less than a month since we had the Third Reading of the Finance Bill in this Chamber, and the Government then pledged themselves to the policy of the right hon. and learned Gentleman the Chancellor of the Exchequer. The present Minister of Education went out of his way to defend that policy. He said:
"It is untrue that the Budget was too deflationary."
He also said:
"My right hon. and learned Friend based his Budget not just on a view over the first few months, but over the year ahead, and I do not believe that there is any reason to make significantly different assessments of our prospects because of what has happened during the last two or three months."
Did the Prime Minister know that this was being said? Did the approve of it?

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Did he make any protest about its being said?:
"I see no reason at all to go back on the forecast which my right hon. and learned Friend gave in his Budget for consumer spending over the financial year."—[OFFICIAL REPORT, 6th July, 1962; Vol. 662, c. 898–9.]
Then we have had hints of a new defence policy. It is true that the Minister of Defence, at the time of his resignation as Chancellor, said that we could not have a British nuclear bomb and the Welfare State at the same time, but in a recent broadcast on television he said that if we dismantle the deterrent—meaning the British nuclear deterrent—we must have conscription. He is clearly implying Chat the alternative to conscription is to keep our nuclear weapons to make up for our lack of men. We could not have a more dangerous policy, and we could not have one more inconsistent with what the right hon. Gentleman said previously.
Most of the new team are the old cards reshuffled. These are the people who have been supporting the old policies now said to be wrong, supporting them up and down the country and in this House. But there are one or two new faces, and two of them, in particular, were prominent in criticising the Commonwealth Immigrants Bill. Have they received a pledge that the Act is to be repealed?
Sir C. Osborne: I hope not.
Mr. Grimond: I am sure that the hon. Gentleman hopes not, but I should like to know whether members of the Government hope that it will be. I know only too well what the hon. Gentleman the Member for Louth (Sir C. Osborne) thinks.
Mr. Nabarro: Would the right hon. Gentleman repeal it?
Mr. Grimond: I would repeal it, certainly. Of course I would.
I now turn to the mystery of the appointment of the First Secretary. In this interesting reshuffle, the former Home Secretary has been promoted and made First Secretary and Deputy Prime Minister. At the same time his direct deputy, the Minister of State, Home Office, has been sacked. He was a man who did a lot of work, and not very pleasant work. He was a man who spoke very intelligently, and in that was
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somewhat of a contrast to his superior, and we often had to look to the hon. and learned Gentleman to tell us what was really intended. But he is out.
We must suppose that the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) fought like a tiger against this. He cannot possibly have acquiesced in the sacking of his Minister of State while he himself was promoted. I take it that there must be very cogent reasons for this, and that we shall hear something about them in the debate. It is hard to believe that all this is going through without that being done.
It is not a question, candidly, of the Government recovering the confidence of the country, because they will not do it. It is a question of rescuing the politics of the country from the way in which the Government have been managing its affairs during the last few years. The most regrettable casualty of the last three weeks has been public confidence in the processes of the government, public confidence in the decency of politicians, and public confidence in any belief that any party has any principle except the principle of sticking to office through thick and thin.
I will tell the House why the Government have lost so much confidence in the country. It is not because of the pay pause. It is because they have never told the country the truth. They have tried to avoid every decision. They came out of Suez with a determination to keep the Conservative Party in office by sweeping every ugly matter under the carpet and hiding every awkward discussion from the public.
Take the Common Market. At the last General Election the Tories want to Liberal constituencies in the West Country and said, "The Liberals are in favour of going into the Common Market. This will be the ruin of British agriculture." Do they believe that now? What are they tailing the country now about the political implications of the Common Market? Not a word. We do not know what the Government's view on this is. They have deliberately played down the political implications of the Common Market. Have they told the country that our forces in Germany are under-armed and under-strength? Have they told

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the country that our so-called independent nuclear deterrent cannot be used by us alone? Have they ever tried to lead the country to an understanding of its true economic position until after being defeated in a series of by-elections?
All this talk about an incomes policy, about the new Commission, about contracts of service and about redundancy anises now—eleven years after their first electoral victory. Have the Government been talking to the unions about it? Yes, they started at twelve o'clock this morning. Even Lord Avon, like the ghost of the late King in "Hamlet", arises on the battlements to remind them of where this all started. It started at Suez. The Government have now come to the end of the road, and no number of gimmicks will get them out of their difficulties. The people have had enough Tory pigs in a poke for a decade—and, indeed, enough "cats in the bag".
The Conservative Government have lost the confidence of the country. They are in grave danger of losing the confidence of the people in the whole political system as well as the confidence of the country. They should get out and allow the country to make up its mind once again.
6.30 p.m.
Mr. Robert Carr: We have now received on this side of the House the two barrels of the censure Motion. There were, perhaps, two notable things in common about the speeches of the right hon. Gentleman the Leader of the Opposition and the right hon. Gentleman the Leader of the Liberal Party. First, there was an evident contempt for the British electorate. We are told that the Conservative Government have failed to tell the people the truth, have bribed them before every election. Since we have won three elections running, one can only presume that the electorate is supposed to be so foolish, so easily taken in, that it falls for these bribes and untruths. I simply do not believe it. I suspect that until both parties opposite learn to trust the people a little more themselves, they will remain on that side of the House.
The right hon. Member for Orkney and Shetland (Mr. Grimond) talked about the need for a fair society. Why do we not have a fair society today?
Mr. Jeremy Thorpe: Because of eleven years of Toryism.
Mr. Carr: It was because, a century ago, the political predecessors of the right hon. Member for Orkney and Shetland were in power. Who were the supporters of the ultra-doctrine of laissez faire, or the supporters of the ultra doctrine of free trade, which brought unemployment, if not the Liberal Party of long ago? Who are the Liberals to talk about a fair society? Clever men in politics are usually proved by history to have been wrong.
The right hon. Gentleman the Leader of the Opposition pleased himself. I doubt, however, whether he will have pleased the electorate, because I doubt whether that electorate at this time wants to hear purely party boxing. I suspect, on the contrary, that it would like to hear, as it did from my right hon. Friend the Prime Minister, some ideas about how we should now conduct our affairs. The electors are perfectly able, when the time comes, to make up their own minds about whether the policies put before them are right or wrong. They are perfectly able to make up their own minds about the rights and wrongs of the conduct of affairs since the previous election.
Of course, all has not been right in the conduct of those affairs. I do not support every action taken by the Conservative Government since the last election, but I do support the main lines of their policy. I do at least know that we have a further policy to put before the country, but, having listened to the Leader of the Opposition and the Leader of the Liberal Party, the electors can have no idea of the alternatives the two claimants for their favours would put into operation.
During the next few years, the country has to face some of the most critical challenges and changes to befall it in peace time. First and foremost there is the question of the development of European unity. Whether we are able to join the Common Market, as I hope, and as the Government hope, or whether we eventually cannot achieve satisfactory terms and stay out, as some of my right hon. and hon. Friends and others in the country would like, the development of European unity confronts us with a situation totally different from

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anything either in politics or economics that we have had to face before.
Similarly, the development over the years of our policy of bringing independence to the Commonwealth and other political events—including the rise in power in the last two decades of Russia and the United States—mean that if we are to maintain the Commonwealth as a force, and not just as a name in world affairs, we have to develop a far more vigorous and far-sighted Commonwealth policy than we have ever had before.
That, also, is true whether we are in or out of a European union. I am convinced that to join a European Union would be a pro-Commonwealth policy, and not anti-Commonwealth, because I happen to believe that it is perhaps the only way in which, both politically and economically, this country can retain the influence and status without which, as head of the Commonwealth, it cannot maintain the Commonwealth as a live and virile institution.
However all this turns out, a very big challenge faces us abroad in the next few years, while at home we shall be faced with the task of bringing us level socially with the great developments of material prosperity which have taken place since the war. The obvious examples are the need for a new sweep forward in housing and education policies and performance.
In world affairs generally, many people are concerned about the size of British influence, about the purity of British sovereignty. Personally, I am more concerned about the effectiveness of British influence. Britain no longer has on its own decisive power or wealth, and we can now only exercise great influence in the world when we try to do it in combination with other independent countries both within and without the Commonwealth. But the extent of this influence depends, more than anything else, on our being successful and effective in running our economy and in building up our trade and investment throughout the world.
For all these reasons—Commonwealth affairs, European affairs, world affairs and the social ideals to be fulfilled at home—we need an economy which is both expanding and stable. Hitherto, we
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have had either one or the other. Only for very short periods have we had both expansion and stability.
Here I want to say how much I agree with my hon. Friend the Member for Oswestry (Mr. Biffen), who made such an excellent maiden speech and will clearly be a worthy successor to his distinguished predecessor, Sir David Ormsby-Gore. I agree with my hon. Friend when he says that stability is what matters most. I want growth, as he does, but if we can only have one or the other, then I am sure that stability is the more important of the two. But it is both that we want and it is both that we have so far failed to get. We must ask ourselves how we are to do better in the future.
There are many aspects of a policy which are designed to encourage expansion and stability. I can only deal with one or two of them, and, in particular, I want to deal with one which has attracted most attention in the last year —the problem of incomes, all sorts of incomes. The need for a national incomes policy is clearly vital, and in fairness it must be seen to embrace all forms of personal income. If it is to be successful, it must meet two needs. First, it must meet the need of confining the total increase of salaries and incomes of all kinds within the increase in national production. That is the overall and vital need. But it must also possess flexibility and fairness so that, within the total permissible increase, there can be changes in differentials between one section of income earners and another and with allowances for fairness, and, therefore, adequate reward, for those sections of our people who are in service industries and occupations whose incomes cannot be tied to actual production.
It is natural to look at the machinery by which our incomes are settled, and this afternoon the Prime Minister has announced a very important new piece of machinery. I should like to welcome the National Incomes Commission. Along with everybody else inside and outside the House, I think that we need to know more about its terms of reference, its composition and how the Government intend to make use of it before we can form our final judgments. There may be some who think that it is

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a weak suggestion and that we need something more vital, but I do not see how, in a free society, we could have that.
It seems to be a worth-while attempt to try to bring the actions of employers, both public and private, and the trade unions and others who seek wage increases, their motives, their claims and counterclaims, to the bar of public opinion. Such a piece of machinery has been sadly needed in this country for a long time and I hope that no section of the community, employers or trade unionists, will dare to flout public opinion and refuse to co-operate in the use of this machinery. [HON. MEMBERS: "The unions do not like it."] We will see. I believe that the trade union movement is highly responsible. If this machinery is used, as I am sure that it will be, as a means for bringing claims clearly and completely to the bar of public opinion, the trade union movement will not object to it, and it will not find that it has anything to lose by doing so.
While I welcome this, I am sure that more is needed. The time has come when we ought to take a new look at the wage negotiating machinery of both the public and private sectors. The Whitley Councils and Burnham Committees, to take the public sector, are long-established and hallowed institutions, and a wonderful job they have done ahead of similar institutions in almost every other country. But they were set up a very long time ago when the conditions and the scope of the public service were entirely different.
Similarly in industry; the structure of the negotiating machinery in private industry—and nationalised industry for that matter—the methods of negotiation and arbitration were all developed at a time when conditions were totally different from what they are today. When they were developed, the dominant fact was unemployment and a vast excess of labour compared with the jobs available. Today, the dominant fact is full employment and a critical shortage of labour in most industrial areas. I cannot believe that the same machinery which was needed in one set of conditions is best for the second.
We last had fundamental inquiries into industrial negotiating machinery a long
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time ago. The Whitley Committee was nearly fifty years ago and the Mond Turner talks were more than thirty years ago. Surely the time has now come for a new inquiry to see whether our traditional methods can be improved to meet modern conditions, in the interests not least of those whose incomes are settled by free collective bargaining.
I have pressed in the House many times for such an inquiry, and I remind the Government that they themselves spoke about it about four years ago. I recall that when the present Leader of the House was Minister of Labour, in February, 1958, he opened a debate on industrial reflations and referred to this need and to the fact that previous inquiries into our systems had been long ago and had taken place in conditions which were fundamentally different.
As I know that this proposal will meet with suspicion from trade union quarters, I should like to stress that in my view —and I am sure in the view of my right hon. Friend when he mentioned it four years ago—an inquiry is as much needed into the structure of the organisation and methods of employers, both public and private, as of the trade unions. The inquiry I have in mind would mot mean any trade union witch-hunting body. It would be a genuine inquiry to see whether we could improve and build on our existing methods to meet the conditions of full employment in a free society.
But no improvements of machinery can solve all our problems. The whole pressure of Government policy must also be working in the right direction, and closely related to the question of incomes policy is the shortage of labour. Here, again, I strongly agree with what was said by my horn. Friend the Member for Oswestry. The shortage of labour in our main industrial areas has been the chief cause of our having to give up each burst of expansion which we have attempted since the war. It is the chief cause of inflationary increases in earnings.
We are far too concerned with national negotiations about wage rates. The real inflationary element in our economy in industrial areas occurs in those areas where there is an acute shortage of labour and where earnings go up without relation to nationally negotiated

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wage rates. How else can one explain the level of earnings in certain areas in the Midlands and London and the South-East compared with the rest of the country? If we could persuade the trade unions to hold back every single claim for increases in wage rates, and if there were still conditions of acute shortages of labour in the main industrial areas, we would still get inflationary increases in those areas as employers, desperate for labour, bid up the prices, bribing labour up and down the road from one works to another.
A prime object of Government policy —and I hope that my right hon. Friend the new Chancellor of the Exchequer will give close attention to this over the year—must be to encourage the maxi-mum use of the labour available to us. Without going into details, I suggest Chat he must try to reconstruct our taxation system—and this is quite different from the total burden of taxation—to encourage capital intensive industries and discourage extravagant use of labour.
I hope that various Ministers will actively pursue a location of industry policy. I do not believe some of the theoretical economists who point to the paper inefficiency of industry going to outlying parts of the country. Of course, there are cases where that is true. A heavy industry could not consider putting a great steel works at John O' Groats, but when I was Parliamentary Secretary to the Ministry of Labour I went near to John O' Groats and saw remarkably thriving and efficient industries, thriving in their narrow ambits, in spite of distances from their main markets, because of the efficiencies which they got, for example, from an ample and stable labour force.
Similarly, I hope that the Government will not be mean in the funds they employ for helping labour to move to where jobs exist. However vigorously we try to encourage industry to go to the areas where there is unemployment, the main need will still be to get labour to move to where many jobs are already waiting. I suggest to my right hon. Friends that in future, when they disperse public funds on industry, they will do more good to the country and to the people if they give generous assistance for redeployment and retraining rather than
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provide sums of money to prop up industries which are declining, and which if we are truthful, we all know must continue to decline.
I beg them to look at the problems facing the coal and railway industries, to take two examples, and to make sure that there are generous facilities for redeployment and retraining, because money spent there wall bring results not only in terms of human aid but also in efficiency to the economy as a whole, whereas money spent on keeping open inefficient services—inefficient for whatever reason—will be money wasted. To spend money in redeployment and in helping people over the great human difficulties of redeployment will not only give them more help in the long run, but provide far more help to the economy as a whole.
Mr. William Ross: The hon. Gentleman is making an excellent speech, but will he consider the position in Scotland and say what redeployment and retraining will mean there? We still do not have the industries to take the retrained men. Is this the Tory solution—to move Scottish labour to England?
Mr. Carr: I must not fall into a debate about Scotland, but I thought I had made it clear that I wanted the Government to pursue a vigorous policy to bring industties to the areas where there were people, as well as to help people to move to areas where industry was available. I believe that both policies have to be carried out if we wish to help constituents both here and in Scotland. Hon. Gentleman opposite will do their constituents no good if they resist both processes being applied.
Mr. Ross: Is the hon. Gentleman aware that we are losing people at the rate of 25,000 a year?
Mr. Carr: That is why I am asking the Government to continue to be as vigorous as possible in their location of industry policy, but both forms of help will be needed. The overall shortage of labour affects most of our industries, but the shortage of skilled labour is particularly acute. I had the honour to be chairman of a committee which is always referred to by my name, although as chairman I did little of the work. It was

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the committee which considered apprenticeships in this country and reported a few years ago. I therefore particularly welcome the signs given by my right hon. Friend the Prime Minister today when he said that a new drive was to be made to increase the amount of training of young workers, and also the training of adult workers.
My committee basically supported the traditional system of apprenticeships in this country. I believe that it was right to do so at the time, and I would not go back on tit now, even looking at it with the wisdom of hindsight. But, equally, I am sure that encouragement of the existing system will not be enough on its own, and I would, therefore, be the first to welcome any new step to bring other methods into play to train more people to meet this critical shortage of workers of all kinds.
Last, but perhaps most important, I come to the status of the worker, to which my right hon. Friend referred. At last—and I must admit that I agree with the criticism of the Leader of the Liberal Party—we are to have something done about a workers' charter, and I cannot forbear from reminding my right hon. Friend the Chancellor of the Exchequer that the Conservative Party Conference at Brighton, in 1947, adopted the Motion which he proposed and which I had the honour of seconding. We have had to wait a long time to see our intentions brought into action, not just because of apathy on this side— although I would not make us blameless —but largely because of opposition within industry from both employers and trade unions. I am glad to think that at last this opposition may be overcome, or if not overcome, in this case overridden.
In conclusion, I hope that the Government will also do their best to encourage industry not only to give the security that will come from a contract of service and that kind of thing, but to give more information to those who work in it about the affairs of their industries and companies. I do not believe that we can expect the best from people in industry unless they know what is going on, and why. It is a matter of right that shareholders in a company are told what is happening. It is also a matter of law
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that they should be told about the affairs of their company. In my view it is equally a matter of right that those who work in a company shall be told what is going on, and the results of their activities. I think that it is at least open to question whether it ought not also to be a matter of law.
In a free society the Government have severe limitations. There are no magic buttons to press. The main task is to make sure that every aspect of Government policy presses in the same direction. We must try to appeal to the nation as a whole. There is a dangerous tendency to think too much of sectional interests and to divide the nation into categories—trade unions, employers, farmers, housewives, pensioners, and so on—as though we were a lot of different species of plants each requiring our own specialised fertiliser or weed killer. In the end we are all first and foremost citizens of one nation whose individual interests must stand or fall together, and if the Government approach the people in that spirit, as I think my right hon. Friend was doing today, then I do not much mind who wins elections because I know that this country will flourish.
6.57 p.m.
Mr. Desmond Donnelly: The hon. Member for Mitcham (Mr. R. Carr) made an eloquent appeal for an approach to a one-nation policy. This is an extraordinary appeal at this juncture in our political affairs. The hon. Gentleman was replying to a Motion of censure which has been tabled in the most extraordinary political circumstances of modern times. He is asking the House of Commons and the country to condone a state of affairs which, as my right hon. Friend the Leader of the Opposition pointed out, is without parallel. He is asking us to condone the present state of affairs and to retire for the Summer Recess with one-third of the Government having been dismissed. In parenthesis, may I say that I am delighted that not all the retiring Ministers are proposing to deliver resignation speeches, because if they did they would seriously curtail the Summer Recess.
The hon. Gentleman is asking us to close our ranks as a nation when a large number of junior Ministers, many of

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whom were unknown to me and, I am sure, unknown to the country, have suddenly gone. He is asking us to turn our eyes away from a most extraordinary constitutional situation in which a Chancellor of the Exchequer who has introduced two Budgets has for two long years conducted an economic policy apparently without the knowledge of the Cabinet or without the concurrence of the Prime Minister. He was the most remarkable Chancellor in our history, and I warmly congratulate him. The hon. Gentleman is asking us to turn our eyes away from all this and to carry on in the next year as we have done in the last five.
I listened carefully to the Prime Minister this afternoon. The first part of his speech was a recital of how well the country had been doing. We had a catalogue of improvements in housing, education and so on, which was all very superficial. It struck me as a third-rate by-election speech made by a second-rate candidate. He went on to produce this mangy cat out of a bag. Any hon. Member with any sense of objectivity or any grasp of modern affairs will realise that the record of the last five years has been a record of the industrial decline of this country as compared with others. Any hon. Member, from either side of the House, who challenges that statement should question his own premises. Stage by stage and bit by bit each section of our industry has been declining in comparison with our competitors in other industrial countries.
I give an example. My hon. Friend the Member for Edmonton (Mr. Albu) recently pointed out that we have now reached a situation in which the shipbuilding industry—which was one of our leading industries—is now employing less than 100 university graduates. In another five years with this present policy it is possible that we shall have no shipbuilding industry at all.
This is the sort of thing that has been happening, and this is the sort of thing which hon. Members opposite are asking us to condone today. We are not discussing merely the fate of the Government or of the Prime Minister; we are discussing the central problem—which we will go on doing for a long time, because this is the beginning of the great debate—of the way
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in which this country can so order its affairs that it will remain a leading industrial nation into the 21st century. This debate goes far beyond any question of party politics or of individual retention of power.
What are the essential requirements for revitalising our economy? First, we must have capital. This is a necessity, not a term of abuse. Any Government in any country must have capital. It is the knowledge in men's minds and the tools in their hands, as it has been over the centuries. The only way to obtain capital is out of savings, and the only way to obtain savings is by having the courage to tell the country, "We cannot have jam today; only a long time hence." That is the first moral requirement for the authority of any Government.
The second requirement is to look at the organisation of our industrial affairs. The industrial cycle, in a complicated society like ours, begins with research and goes on to development, production and, finally, to profits. The problem of the Government is to canalise and to bring into a correct balance the right proportions of research, development and production. This is the practical organisation problem. Of the money spent on research—£500 million a year—roughly one-third goes to the atomic energy industry and another third to the aircraft industry. Both industries have a limited earning capacity. The rest of British industry has to make do with the remaining third. That is why we are lagging behind.
As for development—it is probably more difficult in this country than in any other country to get a new idea off the ground, and to secure the successful development of a new invention. The record under this Government in the last ten years, which we are being asked to support, is a record of one good idea after another being left undeveloped.
The third primary requirement is industrial vitality. The next problem today is the question of obtaining industrial vitality. In crude terms this means getting people to work sufficiently hard. A large proportion of this nation, in the boardroom no less than on the factory floor, is not working. Until this situation is radically altered this country will continue to decline.

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But none of these things can be altered without moral authority being exerted by the Government. That is the central issue of the debate. It cannot be done without effective economic planning, and without public ownership of some of the commanding heights of our economy. It is because I believe this that I am a Socialist. It cannot be done, in time, in any other way. The situation cannot be allowed to drift any longer. It cannot be done unless the Government is in tune with the electorate, and has that kind of moral authority which is drawn from a sense of spiritual union with it. This Government was elected in 1959 on a bogus company prospectus. That is what the by-elections have been about. That is why hon. Members have been losing their votes; that is why many more will lose their support in the next General Election, and that is why there is a sense of public disillusionment.
This situation cannot be remedied without a radical change in the sense of relationship between Government and people. This cannot be done by a Prime Minister who is so closely associated with policies which have been shown to have failed so abysmally since 1951. It cannot be done by a Chief Secretary and Deputy Prime Minister who have been associated with every Conservative Governmental failure from Munich to today. It cannot be done by a Leader of the House who is also one of the chief apologists of appeasement in international affairs, judging by his biography of Mr. Chamberlain. It can be achieved only by an attitude of mind which gains the respect of the electorate. It cannot be done unless right hon. Members on the Government Front Bench recognise that they have a duty to submit themselves to the judgment of their fellow men. That is the only way in which they will be able to regain the support of the electorate.
Speaking in this House on 5th October, 1938, in the famous Munich debate, the right hon. Member for Woodford (Sir W. Churchill) talked about
"the last five years"—
five years have also elapsed since the Prime Minister took office—
"five years of futile good intention, five years of eager search for the line of least resistance,
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five years of uninterrupted retreat from British power, five years of neglect of our air defences … when I think of the immense combinations and resources which have been neglected or squandered, I cannot believe that a parallel exists in the whole course of history. So far as this country is concerned the responsibility must rest with those who have the undisputed control of our political affairs."—[OFFICIAL REPORT, 5th October. 1938; Vol. 339, c. 366.]
I say to the Prime Minister and the Government, "Go, while you retain a single vestige of respect from your fellow countrymen."
7.9 p.m.
Mr. Aidan Crawley: I crave the indulgence of the House. Not having intervened in a major debate for eleven years, I hope that I may legitimately ask for a little indulgence. Having been away for so long, and having returned only so recently, I confess that I have been looking at the events of the past week with considerable awe, and also with a good deal of detachment. I have not shared in the deep personal loyalties or antipathies which hon. Members have developed while they have been trying to promote the interests of the nation during the last decade.
Some of the feelings which these events have aroused seem to me to be exaggerated. The right hon. Member for Orkney and Shetland (Mr. Grimond) said that Prime Ministers have to be butchers, and it does not seem to me to be a bad thing that our Prime Minister has adopted modern methods of mass production. It does not mean to me any of the melodramatic things mentioned by hon. Members opposite, but simply that Conservatives are not afraid of change, and change on a large scale.
Nor, for the same reasons, can I take the Opposition Motion seriously at its face value. It implies that, because the Tory vote in by-elections has dropped, the Conservative Government have lost the country's confidence, but by-elections are a very fickle barometer of public opinion. In several of them, the Labour vote has slumped markedly as well, and the reasons given by those who have temporarily transferred their allegiance to the right hon. Member for Orkney and Shetland and his friends are so various and contradictory as to make it quite impossible to draw any long-term conclusion from them.

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I really do not believe that the Leader of the Opposition put down this Motion because he wants an election now. Since he rejected the advice proffered to him by his hon. Friend the Member for Bosworth (Mr. Wyatt) and will not even entertain the idea of an alliance with his Liberal friends, it seems to me most unlikely that he would wish to risk an election at a time when the result could possibly be, not victory for himself but a possibly enlarged but still tiny Liberal Party holding the balance of power. Therefore, I think that he had a more subtle reason for putting down this Motion. It was that he wished to postpone the election and consolidate the position of my right hon. Friend the Prime Minister. We on this side can be grateful to him for that, and we can also be grateful to him for giving us an opportunity to conduct a grand inquest on the nation's affairs.
Inevitably, hon. Members opposite pick out all the black sports in the state of the nation and present, as my right hon. Friend said, a parody of what the country looks like. It is an error, however, for either party to mistake for a really deep discontent the irritation which some of the electorate are undoubtedly feeling. It is something quite different. It is an impatience arising from the fact that, for almost everybody in the country, life has been much easier in the last decade, and they therefore expect much more.
That this is so was borne in on me in a very interesting way in the recent by-election. I was warned that the cost of living would be the most troublesome issue to deal with. Of course, if prices creep up, as they have been creeping up, it creates great hardship, particularly for the old people and for those living on fixed incomes and pensions. In passing, I must say that I welcome what has already been done to help those people, and what it is intended to do, and I believe that for old people on pension we have to do more.
But I do not think that for most people it is the cost of living that is the real source of discontent. I was immensely struck by the number of married couples, both middle-aged couples and young occupies with children, who suggested, quite openly and publicly, that they would be prepared
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to accept a reduction in children's allowances if the money could go to help the old. These were all working people —the wives of railwaymen, quarrymen, and others.
They said it because, as they made quite clear, they felt that they were bringing up their children in conditions so infinitely batter than those in which their parents had brought them up that they really were not feeling the pinch; that they could supply the education, the clothes, and the rest, that their children needed, and would like to make that contribution. They were taking the small increases in prices in their stride.
What they were looking for was greater opportunity to earn more money; and what we all want, if we are honest about it, is expansion. The differences between us are how we can accelerate expansion, and make it continue. I am one of those who agree with hon. Members on either side who believe that the only true basis for expansion is a gradual rise in home demand. I do not think that it can be confined to an increase in exports, but the problem is how to bring about that rise in home demand without causing an inflation that will, in the end, cut the expansion altogether.
This problem has been with us for many years, and what strikes me every time it is discussed is the terms in which it is discussed. Under the Labour Government, we had a wages policy, and for several years we also had a wages freeze, in which I believed. At the moment, we are talking about incomes policy, and we have had a pay pause, which I also believe to have been necessary.
But our policy is always expressed in the sense that we must see that incomes do not outrun production. I have never heard it suggested that we might have a policy which made production outrun incomes, yet that has already happened in many other countries. It has happened in Sweden; it has happened in Japan; at times it has happened in Germany. I believe that at present it is even happening in Italy.
I have noticed, reading past debates, that although almost everything else to do with production is mentioned—new capital investment, stock piling, incentives to exports, fiscal policy—the word

1807
"productivity" hardily ever occurs. I believe that we avoid a really detailed discussion of productivity because we all know in our hearts that that is where our real weakness lies.
Why is it that production in this country is rising more slowly than it is in other industrial countries? The Opposition say at once that lit is because Government policies have failed, but, in fact, the Government's policies have produced greater stability of prosperity in the last decade than we have ever known—but they have not produced the rate of increase that we want.
The causes go much deeper. They have quite recently been set out in this little booklet produced toy the British National Productivity Council, which announces a productivity year. I do not know how many hon. Members are aware that such a year is to be launched this autumn. Until I began to prepare for this debate, I did not know it myself, and all the hon. Members I have asked have told me that they did not know anything about it either. My case is further supported by the fact that although there has already been a debate on this subject in another place, I do not think that any such debate has taken place in films House at all.
All these reasons, all the problems which the National Productivity Year is designed to face, have a horribly familiar ring. There is, as usual, talk of the lack of new machinery, improper use by management of skilled men, the lack of training of foremen, lack of communication between management and factory floor, poor salesmanship, lack of knowledge of foreign markets, restrictive practices, the fact that most of our workmen are on only a week's notice. And all those shortcomings which this productivity year is designed to cure have been with us for years.
As many hon. Members know, ever since the war we have had difficulties of demarcation in the shipbuilding industry. Ever since the war, the unions in that industry have been trying to amalgamate, but I am told that it is only now, after twenty years of discussion that they may even begin to broach the subject seriously. Ever since the war, our salesmanship and our servicing of goods abroad has suffered by comparison with
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that of other people. Ever since the war, the whole pricing system of new jobs in the engineering industry has been geared, if not to the slowest at least to the slow worker, with the result that the best men cannot give the output of which they are easily capable.
Ever since the war, the value of scientific work study has been available, and could have been applied to an enormous range of British industry. In that respect, the Government and the publicly-owned industries are setting something of an example. As a result of work study, British Railways have saved £26 million in quite a short time, but the study covered only 10 per cent. of their employees. Some of the Service Departments have made great savings, and so have some local authorities. I.C.I., one of the pioneers in this field, has probably extended work study more widely than any other firm. As a result of that company's covering almost every one of its employees by work study, a saving of £2 a week has resulted in the case of every person studied.
It is, I think, a mistake that the benefits of work study should always be expressed in terms of saving, because it really results in the workman receiving more money for doing less arduous work in the same time. In fact, I.C.I. has found that if a man earns £9 for a normal week's work, he automatically receives an increase of one-third in his basic rate if he accepts the measures proposed by the work-study team. The increase in earnings for local government employees who have accepted work-study arrangements is as high as 16 per cent. and the incentives for piece work are as high as 30 per cent.
Despite this, work study has been applied in only a fraction of the industries in Britain and, despite the enormous improvements that can be brought about, we are still inclined to think that the National Economic Development Council is optimistic in believing that a 4 per cent. increase can take place in our productivity in any year. Why, when we have had this knowledge available for so many years and when examples of what can be done by work study are plentiful, is this method not more generally applied?
I believe that the answer is quite plain. It is a failure in human relations. Man

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for man we are co-operating less effectively than the peoples of other industrial nations. We have failed to slough off the fears of the pre-war era and we are still suspicious and jealous of each other. If we continue in this spirit we certainly shall not catch up on productivity our industrial rivals. With great courage one hon. Gentleman opposite has said as a trade unionist that it was high time that the whole idea of strikes as part of the industrial negotiation machinery was abandoned. Of course he is right. If we are to achieve that abandonment every hon. Member, particularly hon. Members opposite who are influential in trade union circles, must throw themselves behind it and we must do much more than merely launch a production year through a productivity council about which many people, I suspect, know very little.
The Government must also take a direct part. I do not know whether it falls within the scope of the N.E.D.C. or the proposed new National Incomes Commission, but I feel that it should be the responsibility of a Minister, perhaps the Minister of Labour. Traditionally he takes the part of umpire. I believe that his rôle should be changed. He should become an apostle of production. At present he does the job of umpire very well but in this changed rôle he could launch and sustain a campaign to increase productivity, making all the facts clear in every industry and factory. The world will not wait for us to bring our production up at our own leisurely speed.
This brings me to my last point. I believe that the underlying cause of this failure in human relations was largely our attitude to the outside world. For the past ten years I have been seeing these problems from afar, comparing our attitude with that of other countries. I find that our attitude is often incredibly narrow and insular. There are many minor examples of this—our failure to adopt the metric system or to drive on the right of the road, for example—but perhaps the most graphic is our method of teaching languages.
In the modern universities of Africa all modern languages are taught only by ear. Every desk is equipped with a two-way radio set so that each pupil is in direct communication with the teacher.
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In this way almost any African can learn a modern language and can speak it quite well inside twelve months. In this country we still teach languages as we did fifty years age—as dead languages. When children come out of British schools they have some knowledge of grammar but they are unable to write or speak a single fluent sentence.
This insular and narrow attitude is also adopted by many hon. Members and others about the Common Market. I was delighted to hear what the Prime Minister said on this subject, for I believe that his decision to apply to join the Treaty of Rome stands him as a man of vision and courage. If, as I pray, he succeeds in leading this country into the Common Market on the terms on which he is negotiating he will have launched on a path as exciting and adventurous as any we have known for two hundred years.
I do not propose to go into the economic merits and demerits of these negotiations. Like hon. Members opposite, I, too, share their concern for our agriculture and our obligations to the Commonwealth. Rut what has surprised me, having listened to the debates and having read newspaper articles on the subject, is the horror any suggestion of any political association with the Continent of Europe seems to arouse in so many people. It seems incredible that, after 1,000 years of war between the nations of Western Europe, now that they are beginning a more fruitful form of collaboration than any they have known in the past, we, who have been closely associated with them throughout this period of history, can conceivably stand aside.
Do hon. Members really think that this country, which has set a political example to all its European neighbours and in so many respects has been their political mentor, will contract out and take no leading part? Obviously the question of political association is many years ahead. If, from the start, we take the point of view that we are going to have as little as possible to do with it, we are not only betraying our whole history; we are throwing away the chance of increasing our influence in the world in a way I hope it will be increased.
Many hon. Members say, "What about the Commonwealth?" I am not

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sure that it is not considered almost treasonable to speak objectively about the Commonwealth. I have visited every Commonwealth nation bar two in the last ten years, and I know the value of this very loose association of nations which can vote on vital matters against each other in the United Nations but which, nevertheless, can meet here in Britain to try to obtain a wider and closer understanding of the different problems.
Although the whole economic relationships affecting the Commonwealth are changing and while most Commonwealth countries are extending their trade with other countries faster than with each other, we still have many mutual benefits to preserve and obligations we must honour. But when I hear some people speak about the Commonwealth or when I read articles they have written, it seems sometimes that they are in another world. The newly-independent countries of Africa and Asia are determined to assert their independence and are seeking new groupings and forms of federation which out right across the old imperial lines which were drawn. They also cut right across racial and tribal differences. In the Cameroons, for example, exists a federation of people who speak African languages, French and English. A new generation of leaders in Africa is seeking entirely new alignments from the old. They all want neutrality and some of them prefer a closer association with the Soviet Union and Communism.
If one is frank one accepts the fact that most of the new nations regard the Commonwealth quite legitimately—and in my opinion sensibly—as an organisation from Which they will draw a great deal, which will help them to develop as wholly independent people and which will help them to form these new federations and groups—at the same time leaving them free to associate themselves in any other way they like. The idea that these countries have the same loyalty to the Commonwealth idea as Australia and New Zealand is a myth.
Even the old Commonwealth is changing. To pretend that the Commonwealth in any shape or form is an alternative to the new developments in Europe is to condemn this country to a
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minor rôle and to lessen its influence in the world. These new groupings in the Commonwealth combine the legacies of many European countries. It is not to one European country that they look. They look to Europe as a whole. It is only through playing a leading part in Europe that we can contribute to help them. They look to Europe as a whole.
I think it is because we are in danger of failing in these wider human relationships that we are still failing in our industrial relations at home. We cannot insulate ourselves from what is going on around us. Unless we learn to share what our neighbours have, unless we learn from them, we shall neither match their productivity nor achieve an incomes policy in which production outruns income and incomes go up.
It is because I believe that the Prime Minister has shown the imagination and grasp to lead the country into the new Europe, and through Europe to play a leading part in the world, that I support him in opposing the Motion.
7.32 p.m.
Mr. A. G. Bottomley: Like the hon. Member for Derbyshire, West (Mr. Crawley) I, too, recently returned to this House following a by-election. The Prime Minister said that the public were behind the Government and their policy. Ail I can say is that recent by-elections do not support that opinion.
I returned to the House following a by-election in Middlesbrough, East where the Labour vote was increased and where the Conservative percentage of votes fell more than it did at Orpington. This victory was fortified by the success of my hon. Friend the Member for Middlesbrough, West (Dr. Bray) where what was regarded as a safe Tory seat was won by Labour; and not even Stockton-on-Tees, with the Prime Minister's attendance, stopped the rot. It will be said that, of course, I am bound to say this, but let me refer to the Daily Telegraph which said the other day that since the Neville Chamberlain Government and the last days of his premiership never has a Prime Minister's stock fallen so low.
That is the position of the Prime Minister and the Government today. I think I shall command the support of

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both sides of the House if I say that in 1940 we were led by a statesman, the right hon. Member for Woodford (Sir W. Churchill). We certainly hope that he recovers from his illness. But he was ably assisted by another great statesman, Lord Attlee, who also had the most difficult task of taking the country through the post-war years. I think we are living too near history to appreciate the true work that was done during the period of the Labour Government when freedom was given to India, to Pakistan and other countries and the Welfare State was developed.
Then we had another Prime Minister, Lord Avon. In my judgment, as Leader of the Conservative Party he was certainly a more honourable and more positive leader than the present occupant of that office. We shall never know the truth about Suez. One can only conjecture. My conjecture is that the noble Lord Salisbury had something to do with the right hon. Member for Saffron Walden (Mr. R. A. Butler) not getting the leadership. That may be because Lord Salisbury remembered what was said by the Prime Minister on an earlier occasion. He said:
"The conception that property and political power must go hand in hand is a traditional Tory doctrine."
The Prime Minister of today is not a statesman. Certainly the Prime Minister was not called to high office because of his great success in his Ministerial appointments. He boasted this afternoon about 300,000 houses being built when he was Minister of Housing and Local Government—a political stunt. What he did not say was that because of that policy we failed to get factories schools, hospitals and other necessary requirements with the result that the economy today is in a worse state than it would have been if we had made proper use of our resources at that time instead of concentrating on what was a political stunt to achieve the completion of 300,000 houses.
If anyone were to ask what the right hon. Gentleman did at the Ministry of Defence, I think there are many who have forgotten that he was ever there. At the Foreign Office he was quite undistinguished because he was only an assistant to the Prime Minister, Lord Avon. He went to the Treasury, and
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as Chancellor of the Exchequer he was neither distinguished nor distinctive, unless he can claim that the issue of Premium Bonds introduced gambling into the Treasury.
I think it can be shown from the speech of my right hon. Friend the Leader of the Opposition and from the support that he has that our present Prime Minister's tenure of office has been disastrous in the application of the policies which the party opposite have forced through the House. I do not think anybody can deny that under his leadership our economy has been shattered. Many people are prepared to say that we are facing econmic disaster almost equalling the military disaster of 1940. We must face this situation seriously. I agree with hon. Members on both sides of the House who have said that this is a vital national question and must be treated as such.
One of the reasons we believe that there should be a General Election in the near future is that we are confident that the kind of plan and policy necessary to give drive and to build up the country's economy are not forthcoming from the benches opposite. If we press for an election I am aware that the Prime Minister will choose the time. In our Parliamentary system there is nothing wrong in that. It is the right of the party in power to hold an election at the time that it thinks will be to its advantage.
There is, however, another consideration, and that is the national interest, and I believe the national interest demands that a General Election should be held now. Our troubles certainly will not be solved by changing Ministers. "Hunt the scapegoat" is a fascinating game, but it does not get us out of our difficulties. Minister-making is a very personal business, as we have seen. The Government reflect the ideals and principles of a Prime Minister. The Prime Minister picks from his party a team which commands the respect of the House on the basis of the personal and political forces within the majority party. This, however, is no longer the case after the recent upheaval in the Government.
The Prime Minister has always professed his belief in the concept of "one nation", but in practice under his

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leadership the gulf between the wage-earners and the privileged sections of the community—I do not mean the professional and administrative workers; I mean the Clores, the Cottons and the landed gentry—has widened, and those latter people to whom I have just referred have benefited whilst the mass of the income-earners have suffered. Indeed, the unearned incomes of the privileged sector have zoomed upwards. No incomes policy commission will stop this.
I could not help noticing this afternoon how gloomy the Minister of Labour looked. Well may he have reflected that his hon. and gallant Friend the Member for Knutsford (Sir W. Bromley-Davenport) who received a stab in the stomach got a much bigger cheer than the men who have been stabbed in the back. Clearly this incomes commission can only do the work that the Ministry of Labour has been doing already. Why not give the Ministry of Labour the opportunity to carry out its job and allow the arbitration machinery to do its job as it has always done in the past until this Government interfered?
The Government now talk of planning, of new ways to balance our economic growth, with targets set in proper relation to output, exports and incomes. This was precisely the policy followed by the late Sir Stafford Cripps and my right hon. Friend the Leader of the Opposition when he was Chancellor of the Exchequer. If the Conservative Party had given their support in those days, as they should have done, we would not have these recurring economic crises.
At the time of the Labour Government the party opposite made planning a dirty word. Tory planning is unethical; it does not concern itself with morals; it has no connection with any philosophy. It is simply a gospel of grab. The word "Tory" is old English for the less glamorous type of highwayman. Let me say at once that there are some hon. Members opposite whom I would claim as friends. There are some honourable exceptions, and there are some dupes. The real leaders of the party opposite— and this we must keep in mind—are those who hold the money strings, those who want to be rich, and those who want to be bosses. They are prepared to do
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anything to achieve their objectives. I believe that the reorganisation of the Government has been planned by them to fool the public once more.
It is only ten months since there were what the Press called "drastic Government changes". Perhaps I ought to refresh the memories of hon. Members opposite. As a result of those Government changes we had a new Leader of the House, a new Chief Secretary to the Treasury, a new Minister of Housing and Local Government. What did the Press have to say about that? It said that this was a new look. The Economist of 14th October, 1961, stated:
"Changes signal the arrival of a new Tory generation at the doorstep of power."
All I can say is that that generation has been very short-lived.
Mr. David Webster: Who is the Leader of the House?
Mr. Bottomley: If the hon. Member does not know, I can only tell him that ten months ago there was a change of leadership. There was a new Chief Secretary at the Treasury. If the hon. Member does not know what goes on in his own party it confirms what I have said, that there are some dupes on that side of the House.
Now just ten months later, the Economist states that the reason the Prime Minister had to act was:
"The Prime Minister has felt impatiently that he was living in a cabinet amid a landscape of exhausted volcanoes."
I would say in conclusion that when Governments fail to persuade and cease to carry conviction, as this Government do, they fail to govern and cease to be Governments. I think that the by-elections have shown that the Government no longer have the confidence of the country. They are a house divided. It is time for them to go.
7.46 p.m.
Mr. John Henderson: I am indeed grateful, Mr. Speaker, to have been fortunate enough to catch your eye and to be able to make a short speech on this very important occasion. I happen to have the honour of being the Chairman of the Scottish Unionist Committee in the House of Commons and I am sure that the House will forgive me if I begin by paying a

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personal tribute to my right hon. Friend the Member for Renfrew, West (Mr. Maclay) who prior to the change was the Secretary of State for Scotland. He is a most genial Member of this House, most considerate and possessed of an extremely kindly nature, and those qualities have made him esteemed and admired by almost every hon. Member, irrespective of political differences.
Secondly, I should like to say as a Unionist of Scotland in this House, without commenting on any of the other changes which the Prime Minister has seen fit to make, that far from forfeiting the confidence of Scotland and of Scottish Members, as the Opposition invite us to declare, the Prime Minister has considerably enhanced it. I am confident that when the time comes, which I believe will be in the distant future, the people of Scotland wild record in an unmistakable manner their confidence in the present Prime Minister.
The right hon. Member for Orkney and Shetland (Mr. Grimond), in an extremely interesting and very forthright speech, mentioned the fact that sometimes a Prime Minister had to act as a butcher. I do mot know why the right ban. Member for Orkney and Shetland should go to the slaughterhouse for an analogy. I would far rather go to the realm of sport, because, like many hon. Members, I am interested in football. I enjoy watching a good game of football. But what happens when a team is on the slide—
Mr. Ellis Smith: Sack the manager.
Mr. Henderson: The Government, perhaps, according to the by-elections were on a bit of a slide. The manager goes to the transfer market and buys players. He makes changes. If these changes are successful, the doom or the threat of relegation passes away and again the team climbs up the league. The Prime Minister has just done that. He thought it necessary that the team should be changed in certain positions and these changes have taken place. I have not the slightest doubt that in the immediate future many valuable points will be secured when the country has a General Election.
To come to the Motion, I was greatly interested, and I am sure the whole
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House was, in the speech of the Leader of the Opposition. It was an amazing sight to sit here and watch hon. Members on the benches opposite. They had a good time; they thoroughly enjoyed it. From the beginning to the end of his speech there were broad smiles, loud laughter and everyone on that side of the House thought that it was a very fine performance. But it was made in the wrong place. It should have been made in the Victoria Palace or in the London Hippodrome. It was by no means the speech of a statesman, in strong contrast to the speech of the Prime Minister.
I should like to say one or two things about the record of the Government. This Motion of censure is a condemnation of what has taken place under Tory Government. Years of Conservative Government have transformed the life and prospects of the whole nation. Our living standards are at the highest level ever known. This cannot be contradicted. We are investing, producing, exporting and earning more than ever before. We are doing more for the old, the ill and the infirm than ever before in our country's history. We are modernising our factories and making great progress with our roads and the reorganisation of our railways.
Mr. R. J. Mellish: Tell that to Londoners.
Mr. Henderson: The Government have set up the National Economic Development Council, and they are negotiating to join the Common Market in order to stimulate fresh endeavours.
During the past eleven years, Britain has shouldered a defence expenditure of about £1,000 million a year—
Mr. E. G. Willis: That is an underestimate.
Mr. Cyril Bence: More like £1,500 million.
Mr. Henderson: —and has played a leading part in the defence of the free world.
It is remarkable that when any hon. Members opposite speak there is seldom any interruption, but it is the habit of horn. Members opposite continually to try to interrupt any speaker from this side of the House. All we ask and all

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we expect, from Scottish Members at least, is a sense of fair play.
The Government have taken the initiative in international moves for peace and disarmament. Our Prime Minister is unceasing in has efforts to secure world peace. Recalling that, a year ago, he had described the international situation as one of international anarchy, the Foreign Secretary said yesterday, in a very able speech in another place, that
"with some obstinate exceptions, there is some improvement on the position as it was, when I spoke a year ago".
He said that when he went to the S.E.A.T.O. Conference eighteen months ago, war
"was so near that it could have turned on the spin of a coin … and Britain would once more have been engaged in a world war … I hope that the British people realise that situations of this kind are not resolved by luck. We cannot pretend that we do not see them and just hope for the best. They depend for their solution on deliberate policies being adopted by the British Government, and the British Government's determination to see those policies through."—[OFFICIAL REPORT, House of Lords, 25th July, 1962; Vol. 242, c. 1029–31.]
I invite right hon. and hon. Members opposite to remember that, when the Prime Minister changed the Foreign Secretary and appointed the Earl of Home, this change was bitterly opposed by almost every member of the Opposition, and yet today he is held in high esteem in every country of the world and is playing a tremendously important part in the making of peace throughout the world.
Aid to the under-developed countries during the past eleven years has risen from £61 million to over £180 million. Yet we have a Motion of censure against the Government for their activities in this direction. Steady progress has been made in bringing colonial territories to full self-government and independence, for example, in Ghana, Malaya, Nigeria, Sierra Leone, Cyprus and Tanganyika.
We are proud of our record. Controls have been lifted during these past years. Road transport and the iron and steel industry were denationalised. Industrial production has gone up by 30 per cent. Savings have soared, and net capital investment has doubled. Sterling has been made convertible. We joined the
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European Free Trade Association and now—without expressing any opinions about whether it is right or wrong—we await the final decision regarding entry into the Common Market. Government assistance to exporters has been improved, resulting in £10 million worth of goods now being exported daily. Our standard of living has gone up as much during the past eleven years as during the previous forty years.
I think it right to put the following figures on record. Agricultural production during the period of the Conservative Government has risen by 23 per cent. Britain's exports have risen by 26 per cent. during the same period. The average annual rate of house building has risen by 80 per cent. [HON. MEMBERS: "Where?"] I am speaking from a United Kingdom point of view. Expenditure on the social services has risen by over 100 per cent. Personal savings have risen by 1,400 per cent. The standard rate of Income Tax is down by 22½ per cent.
This is a record of which any Government might be proud. The Motion of censure will be defeated tonight by an overwhelming majority, and the Labour Party will be where it has been all along.
7.56 p.m.
Mr. Charles Pannell: I always think it one of the worst things one can do when speaking in a debate in the House to say that one will not attempt to follow the hon. Member who has just sat down. To do so shows a lack of respect to those who speak before oneself. The hon. Member for Glasgow, Cathcart (Mr. J. Henderson) took the analogy of a football team in speaking of his Government. I thought that it was a very good analogy. He said that they were in danger of relegation. He could not have put it better, and I think that his opening sentences very much belied his stirring peroration. The only good word he had was for the Earl of Home who is the outside right of his party.
The hon. Gentleman reproved my right hon. Friend the Leader of the Opposition for joking, saying that his performance would have gone down very well at the Victoria Palace. That is more than can be said for the Prime Minister, who would not have been a

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howling success in the Crazy Gang or anywhere else.
The curious feature of this debate is that it is on a Motion of censure, yet ban. Members opposite have been talking this afternoon as though it were on the Ministry of Labour Estimates. What they have said has had nothing whatever to do with the real subject of the debate. The Prime Minister began by saying that he would not talk about personalities. But this is what the debate is about. It starts with personalities.
I have been very touched during the past few days when, as I went about the building, some of my Conservative friends have said to me, "You ace making a mistake, old boy, in putting down a vote of Censure. You ought to let the sore fester. You ought to let the wound remain open and the trouble rankle. The Opposition are doing themselves a great disservice." I find all this solicitude by Tory back benchers for the fortunes of the Labour Party extremely distressing. However, such objections as those only go to prove that we are right. When I think of the sort of advice I have received, I think also of the former Attorney-General who goes to another place as keeper of the Queen's conscience and who, I presume, will now sit on the "Bull-sack".
The curious thing is that the weaker the Government side becomes—and it has been weak this afternoon—the more the Opposition are supposed to run away. But this is not an occasion for "gamesmanship" or "one-upmanship". This is the occasion for a frontal attack, for the Opposition to say that, as a result of the very things which have happened during the past fortnight, the Government have forfeited the confidence of the country. I take my stand very much where the Leader of the Liberal Party took Ms stand, on the principle that the coinage of politics in this country has been debased by what has happened. I feed physically sick about this sort of thing.
I want to say this, and the Tories had better understand it. When we talk about Ministers, they are not only Tory Ministers. They are Her Majesty's Ministers, and we on this aide should be able to take some pride in them, too. I must be honest about this. I do not like to see the Prime Minister
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make the sort of bankrupt speech which he made at the Dispatch Box this afternoon. It was one long waffle from start to finish. He met representatives of the T.U.C. at twelve o'clock today. He tried to sell them this curious idea about a wages commission, and, of course, they did not fall for it. He could not dispose of the T.U.C. as he disposed of the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd). We had a long dissertation from the Prime Minister about a wages council. One would have thought that that was what this debate was all about.
I say this about the Chief Secretary to the Treasury, whom I wish to congratulate. The Prime Minister has shifted him from the Ministry of Pensions and National Insurance after all these years. I am sure that the right hon. Gentleman is as relieved about that as we are. What happens to his doctrine of Cabinet responsibility when the Prime Minister gets rid of one-third of the Cabinet? Obviously, he is responsible for this, but we must bear in mind that he cannot do it again. He is the prisoner of his own Cabinet. He has lost the freedom of manoeuvre. We know that Prime Ministers get rid of sluggards and dead-beats from time to time, but this is a massacre. We now know that he cannot sack anyone else.
In the last few days I have been reading a rather topical book by a Mr. Anthony Sampson called "Anatomy of Britain", from which I should like to make a few quotations. He has interviewed most of the leading figures in this comedy. He interviewed Lord Kilmuir and asked him,
"Who really runs the Conservative Party?"
The question was carefully shrouded in mystery, but Lord Kilmuir said:
"Loyalty is the Tories' secret weapon."
I find that pretty good!
He also interviewed the Prime Minister, Who said:
"The fact is that you can't be a Prime Minister unless you are prepared to stay up late."
The right hon. and learned Member for Wirral found that out.
"A great deal of the hard work does not begin until the evening. What it all adds up to is that in these days the Prime Minister must have the constitution of an ox. It is no longer just a question of intellectual and mental capacity."

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We have suspected that for a long time. It was illustrated by the right hon. Gentleman's speech this afternoon.
In last weekend's Press we had the hon. Member for Kidderminster (Mr. Nabarro) saying, "Poor Selwyn; he has been badly treated." He may have been, but he looked rather better than the Prime Minister looked this afternoon. I thought that the right hon. and learned Gentleman was extraordinarily buoyant, whereas the Prime Minister looked as if he was on the way out. One can only imagine the sort of conversation which went on, with the Prime Minister saying, "Selwyn, you have got to go", and the right hon. and learned Member saying, "What, me? I have been with you since Suez, man and boy. I have been through all the offices in the Cabinet."
I was a delegate to the N.A.T.O. Parliamentarians about the time of Suez. The complicity of the right hon. and learned Member for Wirral and the present Prime Minister with Sir Anthony Eden was a commonplace of conversation. One would have been laughed out of court if one suggested that there was no complicity. They were all in it together, except that the Prime Minister was the first in and the first out, and he sold the then Prime Minister, now Lord Avon, down the river. The undertones and overtones of that were in Lord Avon's speech last weekend. He remembered the double-cross, and, of course, his sympathies were with the man who was left out.
There have been some funny things about this business. I happen to have a great regard for the hon. Member for Bradford, North (Mr. W. J. Taylor), who was the Under-Secretary of State for Air. Being an engineer, I happen to know something about the problems of his Department, and, when I heard that he was leaving Bradford to visit the Prime Minister, I thought that the right hon. Gentleman was about to inject some good, honest, Yorkshire common sense into the Board of Trade. But he did not; he gave the hon. Gentleman the sack. But his immediate boss, the Prime Minister's son-in-law, was elevated. The right hon. Gentleman does not have much time for his friends, but by God he sticks by his relations! To none of us here has the present Minister of Aviation proved
1824
that he is up to any job, or that it was anything but a piece of nepotism which put him there. He again was a discard of fine Suez group, but he is up and poor Selwyn is down.
Another thing which I welcome about these changes is this. We are to have no more humbug about the great Liberal Home Secretary. Thank goodness he is now the First Secretary of State. He used to say, "You know how good I am". He never finished a peroration without the phrase, "God be with us to the end". What was his last act? It was to sign on the dotted line a deportation order against the spirit of which he pledged himself before this House. At least it can be said of the present Home Secretary, who, by the way, I discovered from the book to which I have referred owns the copyright of "Silent Night"— [Interruption.] I knew that that would please the non-conformist conscience of the hon. Member for Glasgow, Cathcart.
At least the Home Secretary has made one good decision, even though he dropped his predecessor in the dirt before the House. I count it as one for righteousness, because in his capacity as Minister of various Departments I know of no man in this country who has brought more misery to others in the last ten years than the Home Secretary, with that wintry smile of his.
I was rather intrigued to notice this morning that The Times kicked off with a quotation from Bagehot. I did not think it was very good, so I tried to see whether I could do better. This is what Bagehot says on Ministry changes:
"It almost never happens that the ministry-maker can put into his offices whom he would like; a number of placemen are always too proud, too eager, or too obstinate to go just where they should."
Later he says:
"Lastly, a sudden change of ministers may easily cause a mischievous change of policy. In many matters of business, perhaps in most, a continuity of mediocrity is better than a hotch-potch of excellences."
I do not know what we have got at the moment, but I do know that if there is one newspaper which is supposed to reflect Government thinking it is the Daily Telegraph and the Sunday Telegraph group.
We occasionally have "leaks" in our party. We do our thinking aloud.

1825
Apparently there was a "leak" from the Conservative Party last weekend, and this is what it said:
"… a number of Conservative back-benchers have told me "—
that is, the Sunday Telegraph's lobby correspondent—
"that Mr. Butler has been emphasising in private conversation last week that he knew nothing of the Prime Minister's plans until a day or two before they were announced."
I can imagine the few disloyal words that he scattered around.
"This view is not, however, shared by some of the victims. One deposed Cabinet Minister gave me this account of his impressions of the events; 'Rab has been in it, behind it and yet detached from it. His main current rival for the succession, Mr. Selwyn Lloyd, is now out and he has achieved what he fought for in the Cabinet changes a year ago, recognition as Deputy Prime Minister. I doubt if he and Iain Macleod threatened to resign, they are not the resigning sort.
Two things played a decisive part in precipitating the dismissals, the leakages into the Press of the Premier's intentions and his miscalculation of Selwyn Lloyd's reaction.'"
I only want to say this about the reaction of the right hon. and learned Member for the Wirral. He was the figure more than any other whom we watched with interest and sympathy this afternoon. Sometimes he smiled when the Prime Minister was speaking and at other times he nodded, but when the Prime Minister got into his dissertation on the Ministry of Labour Vote, I thought that the right hon. and learned Gentleman would fall asleep.
Everybody who knows this business knows that it will unfold itself with time. People in politics will not be proud of what has taken place. I happen to be proud to be a politician. I do not apologise for it in the American sense. I do not believe with the Americans that the straight politician is a politician who is fixed and stays fixed. I happen to believe that politics is the essence of power. It is the exercise of power. It calls forth from all the hundreds and thousands of people who send us here, on both sides of the House, a great fund of voluntary service. I am never one of those who sneer at people in political life when they get an honour, on one side of the House or the other, because we have to bear the heat and burden of the day. We have to face the electorate because, fundament-
1826
ally, in this House of over 600 extroverts, a few megalomaniacs and no introverts, we believe, in the main, that we do things for others rather better than they do for themselves.
I am rather proud of my trade. Looking across to the other side of the House of Commons, I hope I have a House of Commons sense in the sense that I like to feel proud even of those Members on the benches opposite who do their duty as they see it. Not one hon. Member opposite can look into his mind during the past weekend, certainly no one from the benches opposite who has spoken to me in the Lobbies, can be proud of what has been done by his Front Bench. It has been a mean and paltry thing. In the main, it will only lend currency to those organs of the Press who suggest that this is a mean place, full of mean people who are meanly housed, meanly paid and meanly esteemed. Recent events will give an image of the House of Commons that only a Labour Government can blot out.
8.13 p.m.
Sir Alexander Spearman: When I read the severity with which the Opposition couched their Motion of censure, I thought that we would have a powerful, if misguided, attack upon the economic policy of the Government. Instead of that we have had a series of quips on personalities.
Mr. C. Pannell: That is what it is all about.
Sir A. Spearman: When they are uttered by anyone who has such a light touch as the hon. Member for Leeds, West (Mr. C. Pannell), it delights the House, but I do not believe that it will cut much ice in the country. I think that in two or three months' time the country will be not as interested in the changes that my right hon. Friend the Prime Minister has made, but in the result of the policies from the Government. Even the Leader of the Opposition spent nearly all his time and nearly all his wit on personalities.
Mr. C. Pannell: That is what it is all about. There would have been no debate, but for this clash of personalities. Does not the hon. Member know that one-third of the Cabinet has been kicked out for some reason? There must

1827
be a reason for it. The hon. Member should not try to be so high-minded about this sort of business.
Sir A. Spearman: I have no more responsibility than has the hon. Member for the changes that the Prime Minister has made, but for policy we all have some responsibility, because we can vote and sometimes speak. Therefore, it is the policy that we should talk about and not the personalities. It would almost look as if the Opposition, like the proverbial lawyer with a weak case, who shouts loudest, have nothing to complain against in the Government's economic policy.
However, the right hon. Member for Huyton (Mr. H. Wilson) made a semi-serious attack in The Times the day before yesterday and the Leader of the Opposition today began by implying that the Government's economic policy was not entirely to his liking and had, perhaps, been rather too deflationary. If the policy of the Government had been too deflationary, if the last Budget had not been right, would we not have mass unemployment? The unemployed figure is today 370,000, which is much less than in 1959, when the country gave the Government an overwhelming vote of confidence. The amount of overtime worked in February this year was 14·1 million hours, which is a good deal more than the year before, and the latest figure is 14·3 million hours.
Production has never been higher. During the last quarter, it has risen by two points, representing an increase of about 7 per cent. a year. As has been said in this debate, exports are rising steadily and substantially. In fact, the financial measures taken by the Government have not caused heavy unemployment. What they have done is to bring about acute competition. The result has been that it is much more difficult for employers to raise their prices, so that they have to give wage increases either out of profits or by releasing men they do not need.
It is the job of trade unions to push as much as they can to get better wages and terms for their men. I make no complaint of that. It is the job of employers to make profits. These two can well go together. It was, I believe, the first Henry Ford who said, "I pay
1828
higher wages than anyone in industry, I sell cheaper cars than anyone else in industry and I make bigger profits than anyone." It is the Government's job to see that the attempt of trade unions to get higher wages and of employers to make big profits does not harm consumers by raising prices. There is a vested interest in inflation in both trade unions and employers. This was made clear in the remarkable speech of my hon. Friend the Member for Oswestry (Mr. Biffen), who today made one of the most penetrating maiden speeches that I have ever heard in this House.
For the last twenty years, ever since the war, industrialists have been living in a hot house. Now that they have had to come out into a healthy atmosphere, they do not like it and they are feeling the draught. The result has been that the efficient ones have cut their costs. I know two of the largest companies in the country who have made drastic reductions in their costs and are far more able to compete than they were.
Today, we are much better able to compete abroad and much more able to expand at home than we have been for a very long time. Professor Paish, who, I believe, has a record of being more right in his forecasts than anyone else I have known during the last few years— I hope that the right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) is nodding his head in agreement—says in the forthcoming issue of the Westminster Bank Review:
"In a number of ways the present economic position of the United Kingdom justifies more optimism than at any time since the end of the war."
So much for the past. Now to the present. We have now got a certain amount of surplus capacity, too much in certain directions, and perhaps too little in others, but, by and large, I would have thought just about right. I would accept that it is about 5 per cent. or 6 per cent., which is just what it was in the period 1958 when, for eighteen months, we had stable prices. But all the time there is a growth in the economy which I reckon is about 3½ per cent., which means that we can expand from this level.
The Chancellor's problem as I see it is this. If there is no increase in demand,

1829
then there will be waste and unemployment, unless he stimulates the economy, because the surplus capacity we now have will automatically get greater, owing to the growth which takes place annually; but if, on the other hand, we are to get the increase in spending which was anticipated in the Budget, then, if he were to stimulate the economy as well, we should get inflation, and we should be back with rising prices and balance of payments problems in as bad a position as ever.
I personally should like to say to him that I believe that we shall get an increase in demand without any further stimulation by him, and for these reasons. First, there is quite certain to be a considerable increase this year in Government expenditure on goods and services, however determined and skilful my right hon. Friend the Chief Secretary may be. We shall go on getting increases in Government expenditure so long as almost every Member of the House, how ever much he may call for economy, presses the Government to spend more on his particular fancy. It is very probable that we shall get an increase in demand through exports which appear to be running about £150 million to £200 million higher than this time last year.
It is likely—I think more than likely —that we shall now have price stability as a result of the measures which my right hon. and learned Friend took. Incomes have been rising steadily this year, but they have been mopped up by a rise in prices. Incomes will, of course, go on rising, but if prices are stable, then, unless there is some revolutionary change in the saving habits of the country—that one has no reason to expect—demand must go up. Therefore, I hope that my right hon. Friend will give an assurance that demand will go up to the extent of the automatic growth of 3½ per cent., but that he will not take any action to stimulate it at this time.
Now for the future. I accept completely—and this is said very often on the other side of the House—that it is only by increasing growth that we shall raise the standards of living, and by increasing growth we shall, of course, make the incomes policy far easier. If we can get so much growth that it is
1830
practicable without inflation steadily to increase incomes every year there will be much less friction.
I believe that it is an absolute myth that we have to choose between growth and stability. I would go further and say that it is only possible to get maximum growth in conditions of stability when there is no excess demand. It is often suggested, particularly by those Who, dm industry, like an easy time, that it depends entirely on the amount of investment, and that industrialists will only invest if they can sell everything they make. Of course, investment is vitally important. We cannot get growth without it, and the Conservative Government's record on that is fairly good.
In real terms, it is 80 per cent. higher than ten years ago. In 1951, we were spending 15 per cent. of the gross national product, now we are spending 19 per cent. of it, on investment; but— and this is not, perhaps, always agreed —I am quite sure that investment by itself is not a panacea for all our troubles. I have heard that point made by the hon. Member for Grimsby (Mr. Crosland), who so often interests us in economic debates. I repeat that I believe that it is quite impossible to get maximum growth in conditions of excess demand.
First, we are getting the wrong sort of investment. We get industrialists investing in that sort of machinery which will maximise their profits, instead of machinery which will minimise their costs and release skilled labour which is so urgently needed elsewhere. So much of the new machinery today does not release labour, and is not, therefore, in the country's interests.
Secondly, excess demand and conditions of inflation must discourage the mobility of labour, on which so much depends. I entirely support my hon. Friend the Member for Mitcham (Mr. Carr) when he urges that the Government should spend money not in propping up declining industries, but in encouraging expanding industries by helping redeployment and facilitating the retraining of men. I have often wondered whether the Government have done all that they should have done in that direction.
Thirdly, excess demand encourages the efficient people to stay in business. The

1831
hon. Member for Derbyshire, West (Mr. Crawley) talked about our failure in human relations causing a slowing down of productivity below what we could achieve. He did not tell us why it happened. I believe that it happens very largely because of excess demand, because at is easy to make profits and to keep jobs when there is not sufficient competition to stimulate them to the effort that will get the results.
In conclusion, I should like to give my very best wishes to my right hon. Friend the Chancellor of the Exchequer. Since the war, Chancellors of the Exchequer have had the heavy responsibility—unlike any of their predecessors —of regulating the speed of the economy with weapons which, perhaps, were not altogether adequate for the job. In the time I have sat in this House, I have known eleven Chancellors. I believe that my right hon. Friend, because of the condition of the economy as a result of the courage and determination of his predecessor, and because of my right hon. Fniend's own talents, which, as he must know, I have admired for many years, has the opportunity of being one of the great Chancellors of our time, and I wish him well.
8.28 p.m.
Mr. G. A. Pargiter: There seems to be a conspiracy on the other side of the House to turn this debate into a sort of super-economic debate, not to go too much into what may have happened in the past, which is the reason for the Motion which we have submitted, but rather to raise the tone and get a nice, calm sort of atmosphere far away from the facts of life. It is just as well Chat we should come back to the facts of life, and come back to what has been happening to the Tories throughout the last few years.
I recollect that when the present Prime Minister took office he was not very popular for quite a long time. He used to say, "What have I done? Where have I put a foot wrong?" He has got past that stage now. He has reached the stage in which he has not just put one foot wrong, because he realises that he has jumped in with both feet, and, therefore, to avoid the consequences, he has to think up, from time to time, a new gimmick. That is, perhaps, the best thing that we can say about him.
1832
Why is it that the Government have lost popularity? Let us take a look at recent history. Over the last three years, the cost of living, in spite of the fact that import prices have remained relatively stable, has gone up by 10 per cent. Over the last five years, the cost of living has gone up by 15 per cent. It may be argued that wages have also gone up; in other words, that those people able to fight and look after themselves can get something back. But what about the other classes who are not able to help themselves? It is about these people that the Prime Minister and the Front Bench opposite have been shedding crocodile tears. This does not mean that they have any great interest in them, because if they had, they would have shown it long before this. It is because they see the writing on the wall and say to themselves, "How do we now get out of this?" We are told that we are to have an incomes policy, a Commission, and so on.
I can imagine the Prime Minister sweating over this at Chequers and saying to himself, "What sort of story can I put over, something which will carry me over to the next election?" When it comes to getting his own supporters behind him, he has only to say, "Well, boys, you know the answer. If you do not like it you can have a General Election." That is enough to bring Tory Members to heel. At present, not many of them are prepared to face a General Election. Therefore, the Prime Minister is bound to get a vote of confidence in any policy put forward, whether it is Tory Party traditional policy or a new look.
As I listened to the Prime Minister, I could not help thinking that the old walrus was dressed in a new coat. I thought that the coat looked a little threadbare, but it might just about last out to the next election. But in view of the way in which by-elections have been running against the Tory Party, I do not think the Tories will get away with it to the extent they think. Talking about a national incomes policy to deal with wages and salaries will no longer satisfy people. They want not only a salaries and wages policy but a real incomes policy if this country is to do anything.
The Prime Minister says that the Chancellor will have the necessary means to

1833
the end. But the Chancellor had them previously. He raised the incomes of Surtax payers very substantially. That is the sort of "brake" that the Tories have been able to apply. In trying to rectify the situation in this case, they merely imposed more taxation upon those who could not afford it. These are the sort of things which have built up, and there is nothing which the Tories can do which will save them.
It is easy for the Prime Minister to say to the Leader of the Opposition, "We have not heard much about your policy". This is not the occasion for a statement of Labour Party policy. When right hon. Gentlemen opposite were sitting on this side of the House and attacking the policy of the Labour Government, they put nothing before the House but merely said, "You have got the country into a mess. We are the people to get it out of it." What have they done? What was the cry of the Conservatives when the Labour Government were trying to hold down home consumption in order to build up exports, at which we were fairly successful? Our exports then ran at a rate not achieved under a Tory Government. We put Britain ahead of the world in the exports race, but the Tories have been steadily losing that race all the time they have been in office.
Sir A. Spearman: Surely that is hardily a fair comparison. After the war we were exporting to a devastated Europe.
Mr. Pargiter: If we were able under the Labour Government to get away to a flying start, why have the Tories not followed it up? They have failed, and that is because of their fundamental belief in free enterprise. They are now being forced to plan because their policy of free enterprise has consistently failed and they are in trouble. When the Labour Government tried to plan, it was constantly under attack. When the Labour Government tried to hold down home consumption, the constant cry of the Tories was, "The people deserve better than this". All the time they were trying to force the Labour Government into expanding the home market at the expense of the export market. They said, "Under a free economy we should be able to do all this. Everything will be all right."
1834
Yet, what have they done? Under the Conservatives we have staggered from crisis to crisis, and the crises have been greater than those under the Labour Government. Now the Government say that we are to have an incomes policy. Having been a member of a trade union for a good many years, I can tell the Government that the unions will not accept a policy to deal with only one part of incomes. They will not accept a policy which will leave the property owner free to profiteer and the rentier class free to charge what rents it can get, irrespective of ability to pay. We are not going to stand for these things, which are beloved tenets of Tory Party policy.
If the Government want an incomes policy, then let them "come clean" and give us one. But they must not ask us to accept an incomes policy which will not also squeeze many people who have done well out of the Tory Party. It is no use the Prime Minister asking the unions to talk to him about an incomes policy under which wages and salaries will be affected while dividends are left to the vagaries of the wind and the desires of the Chancellor of the Exchequer.
I am surprised that we have not heard today about a property-owning democracy. Evidently, that has gone by the board, Which is not surprising in view of the interest rates and the price of land. No doubt we shall hear about it later, however, as the General Election comes nearer.
We have heard eulogies of the former Minister of Defence. Apparently he was a very good Minister—he maintained that we had a fully independent nuclear deterrent fully integrated into the American system. I am not surprised that he got the sack, but he applied himself to his job. Apparently he was so good at the Ministry of Transport that he had to be shifted to the Defence Ministry.
We have heard hon. Members opposite speak of education. Yet, in proportion to our population, we are training far fewer graduates than are either Russia or America. That is not the way to put us on top. We have heard about expanding our universities and the teacher training colleges, but we are as

1835
short of teachers as we have ever been. There are still many classes with between 40 and 50 children.
These are the things that really matter. They are the sort of things that the public is beginning to understand and to lay the blame where it lies—at the door of the Tory Party. That is why I shed no tears for the Ministers who have been axed. I shed tears only for the fact that the Prime Minister, having done what he did, did not sadly look around him and then go to Her Majesty and say, "It is time I axed myself." The sooner he does that, the sooner the country can give its verdict on the policy it wants for the future. The sooner that happens, the sooner we will get back to some degree of sanity.
The Government produced the European Free Trade Association, which was to be the answer to everybody's ills. That was the way that we were going to counter the Six. But E.F.T.A. was found to be a weak reed, so then the Government told us that we must get into the Common Market. The hope is that a lot of advantages will come to us. But Europe is in a more competitive economic position than we are. Many of its factories are far better equipped than ours. Far more investment has been put into them, proportionately. In addition, the owners are content with lower rates of profit than are owners in this country.
It seems that the Prime Minister is calculating that, with a bit of luck, there will be the glamour—perhaps—of our joining the Common Market without the economic consequences which may flow from that. The Government's attitude is that if the Commonwealth is sold down the river by our joining, that will be too bad. Yet all that will be just one more act of the cynicism which we have grown to expect from the Prime Minister, and the country has had enough of it.
8.40 p.m.
Mr. R. Gresham Cooke: I was sorry to hear the hon. Member for Southall (Mr. Pargiter) casting some doubt on whether trade unions would co-operate with the National Incomes Commission, for if the Commission works as outlined today, it will be of great benefit. Although we have yet to hear the full details, when we
1836
do I hope that both sides of the House will think it something with which we can be satisfied.
Mr. Stan Awbery: Is the hon. Gentleman aware that for twelve months the Government have done all they could to destroy trade union negotiating machinery and to nullify the awards of arbitration courts and conciliation committees? Does he think that trade unions will now have any confidence in the suggested Commission?
Mr. Gresham Cooke: I shall deal with some of those questions as I go along.
I have the honour to represent the constituency of Twickenham, a constituency of business people, of administrative clerical workers and public servants, not an industrial constituency. I have been interested to analyse the reasons for the loss of popularity of the Government, albeit transient, in the Home Counties, and to see whether it has been justified. One interesting factor is that the fall in popularity of the Government dates back to February and March, 1961, if the Gallup polls are to be believed, when there were increases in the National Health Service charges and contributions. That was a decision which was the responsibility of the whole Government. It was a perfectly correct decision and one which the public now accepts. It will be a sad day for the the British public when it thinks that it can get something for nothing, or get all the benefits of the National Health Service from general taxation without being personally involved.
The next watershed was the little Budget, or the pay pause, again promulgated by the whole Government but put forward and defended by the then Chancellor of the Exchequer with great courage, for which we were all grateful. It certainly had my support at the time. But, being an Anglo-Saxon people, the British people have one great characteristic which we must not overlook and which is their keen appreciation of social justice.
If instead of falling, as it did in the early stages, on school teachers and public servants and to some extent on clerical and administrative workers, the pay pause had been introduced by an Act of Parliament and had imposed a

1837
pause on all industrial wages and all salaries and all dividends and all rents —if that could have been done physically, and I do not think that it could—the whole operation would have been seen to be more fair and therefore more acceptable to the country. There might have been a more immediate outcry, but in the long run it would have been more popular.
The business community reacted against the little Budget, because it thought that it was a manifestation of the stop-go policy. We know that the increase in the Bank Rate at that time greatly improved our balance of payments and that the hire-purchase and credit restrictions damped down imports, to the benefit of the country and all of it economically essential. But trade and industry like to plan two yearns ahead and alterations in hire-purchase and Purchase Tax rates are always most disturbing whenever they are put on. For instance, while I defend the 15 per cent. Purchase Tax on sweets and soft drinks and so on, imposed in the last Budget, I am bound to admit the great disturbance throughout those trades which was caused. For instance, I believe that there are thirty-seven different wholesale prices for ice-cream powders and that even such a thing as Pepsi-Cola has nine different wholesale prices.
All those things are calculated to cause annoyance in the business community, however good they may be for the community as a whole. Therefore, if we are to obtain the co-operation and confidence of the business community, these changes in Purchase Tax, and so on, must be made as sparingly and as infrequently as possible. But having said that, I must add that the little Budget of July, 1961, was unfairly criticised, and criticised beyond its deserts, and much of its unpopularity was undeserved.
The central problem which we have to face is that industry and the trade unions are not only expansionist in spirit but inflationist at heart. All industrialists like to see larger turnovers and larger profits which they can plough back to expand their businesses, and as a corollary trade unions naturally like to see that because it creates more jobs and makes it easier for their officials to ask for higher wages. When the Ford
1838
Motor Company increases its profits from £15 to £20 million, it makes the task of the trade union officials so much easier.
On one side of industry, in the trade unions, we have perhaps 15 million people who do not fear inflation, but on the other side we have pensioners, public servants, nurses, probation officers, and so on, who do actively fear it, and the problem therefore is how to prevent certain rapidly expanding industries getting out of step with the rest of the community. The problem with regard to what I call the underpaid classes—probation officers, nurses, service personnel, and I am using this phrase in the sense of ancillary industries—is to get them an increase without the industrial classes claiming to keep the differential between themselves and the service personnel.
To put it crudely, if the nurses get an increase of £1 or 30s., the stoker at the hospital must be content with that and not claim that because his differential has been narrowed he should automatically get an increase.
Mr. Awbery: Why not?
Mr. Gresham Cooke: Because we agree that many of these classes, nurses, and so on, are underpaid in relation to the rest of the community and ought to be given an increase without everybody else claiming that the differential should be maintained.
Having done that, the second phase of the operation would be to give the service personnel a share of the increasing cake from time to time. My solution was to put this problem on the plate of the National Economic Development Council, but as my right hon. Friend said, perhaps it would be more correct to place it before the National Incomes Commission, because it has to give positive guidance. We must accept as a principle that ancillary workers should get, as a percentage increase, the average increase in the industrial wage. I am not suggesting that this should be done every year, but they should keep in step with the increase in industrial wages, and the unions must accept this. The whole snag to this is that if there is to be an overall increase of 4 per cent. in the community, if somebody gets 8 per cent. one year other classes have to go

1839
without any increase in that year if we are to keep the figure down to 4 per cent., as we hope to.
Another reason why the Government have suffered somewhat from unpopularity among the middle classes in the last few months in that they have not grappled with the problem of industrial relations. There have been strikes, both official and unofficial, and I was therefore particularly pleased to hear that the Government intended to tackle by legislation what I think is a fundamental problem in industry, that of the period of notice under which employees work. It is absolutely wrong that some men should be on hourly notice, or even on weekly notice, especially if they have been employed in an industry for a long time. Weekly notice has been a bugbear for years. It has meant living from hand to mouth, and with the fear of sudden changes. I suggest that employees in industry should start on a basis of one week's notice in the first year, working up to four weeks' notice, say, after ten years' service.
Mr. Awbery: It is reasonable that when a man becomes redundant he should be given an adequate period of notice. No doubt the Prime Minister will put that into operation, but we must remember that on the very day that this was suggested the Prime Minister sacked one-third of his Cabinet for doing what he himself had decided was right. Will the hon. Member answer that point?
Mr. Gresham Cooke: The hon. Member has no understanding of politics whatsoever. If he has read the book by my right hon. Friend the Member for Woodford (Sir W. Churchill) he will know that Prime Ministers have to be ruthless from time to time.
If men work on a basis of receiving more than one week's notice is will provide a way of dealing with redundancy in future. I hope that it will also give the men a feeling of increased responsibility, and a greater incentive to stick to the agreement which are made on their behalf by trade unions.
As part of these arrangements I should like to see trades unions voluntarily rewrite their rule books—
Mr. Jack Jones: What the hell has it to do with you?
Mr. Gresham Cooke: I should like to see them insert a provision for the holding of secret ballots before strikes are called. The bishops are revising the Prayer Book 300 years after the Act of Conformity, and I do not see why the old and out-of-date rule books of many unions should not also be brought up to date. Incidentally, it is time that agreements made between employers and employees for the settlement of disputes were also revised. They are very vague and long-winded.
If we are to advance with confidence into the 'sixties we should positively encourage the amalgamation of trade unions. At present we have 350 of them, whereas there are only twelve main unions in Germany. Industry is making itself more efficient by mergers and amalgamations, and a similar tendency should be operating throughout the trade unions.
Mr. Harry Randall: Why do not you mind your own business?
Mr. Gresham Cooke: Because I happen to be a Member of Parliament, and I have to take some interest in the affairs of the nation. The organisation of trade unions and the settlement of trade disputes is a matter of the greatest importance to the whole community. Following what my right hon. Friend the Prime Minister said today, I suggest that there is a great chance for one man in industry to take the lead, as has happened in Sweden and Switzerland. I would look for an industrialist—someone like Sir Alfred Mond, thirty years ago, who showed how to improve industrial relations.
As for the wider economic field with which the Chancellor has to deal, some industries are now beginning to move into a depression—steel, radio and television, bicycle manufacturing, and so on. Without encouraging over-stretched industries, such as the building industry, to expand any further, we have to find ways of giving selective treatment to those industries that might be on the verge of a depression this autumn.
The economy is distinctly patchy at the present time. When the Daily Mail asked fifty stockbrokers what they thought of the future, twenty-five of them

1841
said that shares would go up and twenty-five of them said that they would go down, which exactly reflects the public's impression of what will happen in the next few months.
It is easy to be wise after events and one might have put forward some of these ideas earlier—although my hon. Friends and I have from time to time put some of them to the Government, and it is satisfactory to note that they are now being adopted. As a supporter of the Government, I must say that I think that the Government have made mistakes, some of them being sins of omission, such as not tackling the problem of trade relations, but there are three fundamental questions before us tonight.
First, we are in the middle of Common Market negotiations which must be brought to a conclusion one way or another. Secondly, the Prime Minister has told us today that he has a new incomes policy. I want to see how it works out, and I want to play my part in developing it. Thirdly, if the Government were to resign, and if, by any mischance, the party opposite were to take over, there is no doubt that that Socialist Government would bring about devaluation of the £. For those reasons, despite what I have said, I shall continue to give my support to the Government.
8.57 p.m.
Mr. James Callaghan: I congratulate the hon. Member for Twickenham (Mr. Gresham Cooke) on managing to get through his speech without once saying that he had any confidence in the Government which he supports. That is what the Motion is about. That he has not confidence in the Government is quite clear from what he says. He supports them because he thinks that that is the only way in which he can preserve his seat and the seats of other hon. Members on the benches beside him.
That underlines a very great deal of the support that the Government hope to get tonight, but not a single Conservative speaker in the debate has expressed confidence in them. Indeed, the debate has been noteworthy for the way in which they have all endeavoured to turn it from a debate on whether they believe in the personalities and policies
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of the Government into a discussion on the economic weaknesses which they believe the Government should correct. Rarely can there have been a debate in which less has been said in favour of the Government.
I agree with those of my right hon. Friends who have said that this should not be a debate on personalities, but on policies. It is fair to say 'that the electors now have no confidence in the present Administration. Since the pay pause was introduced by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) there have been 16 by-elections, in which 535,000 votes have been cast. The Tory Party has managed to get 154,000 of them—29 per cent. It is true to say that at any time when the people can find an excuse for voting for anybody but a Tory—not matter whom —they will do it, and they have been doing it regularly during the last twelve months.
Those who heard the Prime Minister this afternoon will agree that, in essence, his plea was that of the convicted criminal. What he said was, "Give us another chance. Give us a reprieve. We shall try to do better. We have a number of new ideas that we propose to introduce, and when we introduce them you will see that we are reformed characters and have turned over a new leaf."
I do not know where the Prime Minister is. He does not have to account to me for his whereabouts, but I hope that he has not resigned yet. The debate is not concerned with the personalities involved in the Home Minister's purge. The retail issue is that there is a general lack of confidence in the Government's policies. There is a feeling that the Government are tired and that since they have been with us for so long and have so far failed in their policies they should go. In none of the speeches made by hon. Members opposite was anything said to dispel that impression.
In a number of simple, human ways the Government have failed the people. The Prime Minister boasted about (he record of the Government over the provision of houses. Any hon. Member who conducts a "surgery" in his constituency knows that countless thousands of people are living in misery because they are either unable to purchase a house or

1843
to get on to a council housing list so that they might live normal married lives. Everyone knows this.
We have had eleven years of Tory rule and we are entitled now to say that if, at the end of this period, the housing situation is as serious as we know it to be—and I know from the cases which have come to my attention that it is this serious—they have failed the country and should go. Everyone knows the genuine hardship that has been caused by the Rent Act to countless thousands of citizens. Everyone knows that much remains to be done about housing, despite the boasts of the Prime Minister about the Government's record.
My right hon. Friend the Leader of the Opposition spoke about schools. Everyone knows that whatever the Government may claim to have done, their efforts have been inadequate. They have not been able to solve the problems of overcrowded classrooms, of getting an adequate number of teachers, of securing adequate apprenticeships for our young people when they leave school and sufficient university places for all those capable of making use of them. They have been an office for eleven years and since there is no denial of their shortcomings on these issues they must accept that they have failed the nation and that they must go.
Prices are rising faster than wages and since the pay pause was introduced the standard of life of the average family has gone down. Wages have not risen as fast as prices and I am sure that that is agreed between us. In that sense, too, the Government have increasingly lost the confidence of the public both in respect of their capacity to keep prices down and to maintain a steadily rising standard of living, equally and fairly distributed among the people as a whole.
As for industry, everyone knows the loss of confidence in the Government that has taken place. A questionnaire issued by the Federation of British Industries is in itself a damning indictment of the Government's record in this matter. There was a suggestion that the resignation of the Prime Minister was already in hand. I am glad to see him in the Chamber, at any rate until the end of the debate. The questionnaire to which I referred asked:
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"Excluding seasonal factors, is your present level of output below capacity?"
The answer "Yes" was given by 64 per cent. of the country's industrialists, an increase of over 20 per cent. on the number the previous year.
To the question,
"If you are working below capacity, have you more, or less, unused capacity now than four months ago?"
23 per cent. said that they had more unused capacity than four months previously, and the figure is steadily increasing. To the question,
"Do you expect to authorise more, or less, capital expenditure in the next 12 months than you authorised in the past 12 months on plant and machinery?"
it was stated by 43 per cent. that they expected to authorise less than they had in the previous 12 months. In this field, too, there is no doubt that the Government have lost the confidence of industry. That is on one front.
On the national front there is deep-seated concern, doubt, mistrust about the Government's behaviour. I take a number of examples. Whatever the arguments that may be adduced for or against the Common Market, there is one argument that, I think, betrays a basic mistrust by the Government in the British people. It is the argument that is advanced that we cannot expect the people to discipline themselves and to face the competitive world unless they are faced with the disciplines of going into the Common Market. A Government who discuss the problem in these terms, in my view, are refusing to face up to the challenge of the people because they are trying to slide off on to another authority the problems that we ourselves must face in this country if the people are to continue to be great.
There is a deep-seated mistrust— indeed, it is a conviction—that the Government are favouring some sections of the community at the expense of others. The Surtax concessions have bitten more deeply than hon. Members opposite have ever cared to acknowledge. There is a conviction that the Government are much too tender to the land and property speculators. There is a loss of confidence in the Government because of that. There is a feeling that big business is getting too big for its boots and that there is no

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restraining hand on the part of the Government on its activities. There is a feeling in the country that the Government are too subservient to the Americans and that, instead of sharing a partnership with them, we tend to follow their lead much too often.
It is on these issues, quite apart from the simple failure of the provision of basic human needs that the people have begun to entertain a deep mistrust of the Government, which is reflected in the 16 by-election results to which I have referred. There is a feeling of lassitude about our rôle in the world. The Government have disposed of the Colonies. They have utterly failed to replace the disposal of the Colonies and of our Empire by any positive idea or adherence to the idea of the Commonwealth.
Without discussing personalities, there are two former members of the Government to whom I wish to refer: first, the right hon. and learned Member for Huntingdonshire (Mr. Renton). I very much regret that he has left the Government to be replaced by Earl Jellicoe. It seems to me that during his term of office he did a very great deal and carried a very heavy burden of legislation, much more than a junior Minister ought to have been expected to carry. He carried it with courtesy and with skill, and I say to the Deputy Prime Minister that I believe that if he had reached out his hand he could have saved him and his place in the Government.
I have only one other personal reference to make, and that is about the former Chancellor of the Exchequer. I very much regret the blow that fell on him unexpectedly. But I would be hypocritical if I were to pretend that I am sorry he has gone. My complaint is not that he has gone, tout that the others have not gone with him. Let me be quite clear. I do not speak personally— the right hon. and learned Gentleman knows that—but I believe that his policies were disastrous. They were ill-conceived. I do not believe that they have had the results that the Prime Minister has claimed for them.
However, they were supported by the whole Government. Indeed, it is fair to say that they were the child of the present Prime Minister. It was not the
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right hon. and learned Member for Wirral who was the author of the pay pause or of the concept of holding back production. It was not he who invented this policy of damping down the economy. It was the Prime Minister, when he was Chancellor. What the former Chancellor was doing was carrying on the policy invented by the Prime Minister when he himself was Chancellor. I have no doubt that the Prime Minister is right when he says that he fully supported the Chancellor of the Exchequer in all that he did. I have no doubt at all about it. Just as I believe that the former Chancellor was disastrously wrong, so I believe the Prime Minister will be disastrously wrong if he adheres to the policies which he himself adumbrated and says he supported.
Look at the difficulty in which the new Chancellor is placed. I believe that these policies were wrong. I believe that there should be a relaxation at the present time and that At should have come some time ago. I believe that there should be a stimulus to the economy.
Sir William Robson Brown: How?
Mr. Callaghan: Perhaps I may be forgiven for not going into that now. We have had a whole series of debates on the Finance Bill in which we covered all these points. The right hon. and learned Gentleman, at least, must be weary of hearing of what we would do on this subject, so I would prefer not to go into that now.
I come to a more serious point. The new Chancellor has been put in a most invidious position. If he starts to relax the economy, as in my view it should be relaxed, no one will know whether he is doing it because it springs out of a genuine economic conviction that it is right or whether it is part of a pre-election boom. No one will know.
The problem that he will be faced with is this. If the Chancellor adheres to the existing policies, he knows perfectly well that we are in for a continuing depression in industry. He must depart from them, and if he departs from them he will be accused immediately of doing it for electoral reasons. What is worse is not whether we shall think this, but whether overseas bankers will think this. [Interruption.] The right

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hon. Member for Flint, West (Mr. Birch) has always been very particular and concerned about the opinions of overseas bankers in this matter. He knows as well as anybody else in the House that the flight from the pound last year and the loss of our reserves was caused by a feeling of lack of confidence in sterling in this country, arising out of the policies of Her Majesty's Government.
The present position of our economy and our reserves—and the whole House should face it—is that we are so much in the hands of the central bankers today that if they got the feeling that the relaxation is for electoral reasons we shall get another run on sterling. Hon. Members opposite should recognise this; they know that it is true.
I say to the new Chancellor that, in my view, one of his major tasks is to take advantage of the existing strength of sterling in order to try to enter into more favourable arrangements for our reserves. It is ironic that when the dollar is under attack sterling is strong. Sterling is strong today because of the activities of the dollar speculators and because interest rates in this country are much higher than in the United States. If the position is changed and the attack on the dollar ceases, or eases off, sterling will come under strain again.
If sterling comes under strain again, we start to get into balance of payments difficulty. It is these balance of payments difficulties which lie at the root of our failure to get our economy growing at a steady and regular pace. When the Labour Government, after the Second World War, proposed to the Americans that we should endeavour to get some international monetary mechanism, their Government repudiated it. Now, with the dollar under pressure, it may well be that they will be more amenable to entering into arrangements of this sort.
I believe that the Chancellor now has an opportunity of trying to create a situation in which the two major trading currencies in the world are not subject to the speculators, and that runs on them are not the consequences of what the speculators think is the relative weakness or strength of the domestic policies in each country. I hope that the Chancellor will take up that point.
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I now come to the pay pause. Last year, despite what we on this side suggested, the Government practically destroyed the fabric of mutual confidence in which wage negotiations are woven. We told them that they were running into difficulties on this but we got no response from them at all. If the Prime Minister really wanted to be ruthless, he should have changed the occupancy of the Ministry of Labour. In my view, the advice which the Ministry gives today is bad and its strength is poor. The Government seem to know nothing about the fabric of wage negotiations. I do not know where they get their advice, and I do not know what responsibility the Minister of Labour has for the policies which are adumbrated.
I can only say, on the experience we have had of the pay pause and of the feelings of deep resentment which were aroused among millions of white collar workers and public servants in every walk of life, that the Government cannot have had good advice before it was rushed in a year ago.
Today, we have another half-baked notion. I hope that everyone will do what the Prime Minister asked, that is, look at the issue carefully, but I must say that it would have been far better if this suggestion had not been introduced as a gimmick at the opening of a debate on a Motion of censure.
I do not believe that the collective bargaining system is perfect. I know of very few people who do. Obviously, it has not reached the full peak of development which it should reach. However, if we are to replace it by something else, or if we are to modify it, this can be done only with the consent of those who are actively engaged in wage negotiations. The Government cannot impose these things. They must learn the lesson, and they ought not, as a reaction to electoral considerations and in response to governmental difficulties, to produce half-baked notions of this sort out of the hat—kittens out of the bag, or whatever the phrase is. They will raise a great bow tide of resistance because the ideas they bring forth have not been properly worked out or adumbrated. By introducing the idea at this stage, and in this way, the Prime Minister has done a great deal of harm to the prospect

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of getting any reform in the collective bargaining system.
Of course there is a case for an incomes policy. Of course there is a case for relating production and productivity to the increase in incomes. But there is a case for relating all incomes to these things. Why does the Prime Minister, in his proposal, separate wages and salaries and think of sending them to the new National Incomes Commission while retaining profits for examination and consideration by the Government themselves? Does not he realise that he is laying himself open to the charge, which has already been made, that he is trying to shuffle off on to other shoulders the difficult part of the Government's policy, trying to create an organisation which will "carry the can" for the Government?
There would be a very good case, if a National Incomes Commission is to be set up, for sending the profitability of a number of companies to it for examination. It would be a good thing if there were an exposure of their trading practices. We might learn a great deal about the way they conduct their affairs and maintain efficiency. But none of this is proposed. All this sector is kept for profits taxation by the Government themselves.
The Prime Minister is quite wrong in assuming that profits go up after wages have risen. Every trend and every statistic shows that wage rates rise after profits have risen. If he wants to do something about profits and if he wants to convince the trade unions that he is in earnest and serious about this, he should adjust the Profits Tax in advance on the basis of the forecasts of profitability which can be made and which are pretty accurate.
The Government's economic policy has been based on strength through stagnation. It has been a failure. Above all, their basic failure has been that have not selected their priorities and have not assembled the means of fulfilling their priorities and therefore our social and economic system has got into the present chaotic state. We cannot solve our transport problem, we cannot build hospitals that are necessary, we shall not clear the slums and we shall not build the schools unless we select priorities and fulfill them. The Government regard
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planning only as a gimmick, and they will utterly fail because they refuse to take the idea of central planning seriously. I have no doubt—and I believe that this view is increasingly held in the country—that the concept of central planning and the selection of priorities and their fulfilment has come to stay and will need to be practised if the Government are to succeed. Because they have failed to do this, their policies cannot succeed.
I come to one or two other matters which the Prime Minister selected this afternoon, some of the other gimmicks. There is this question of consumer interest. The Weights and Measures Bill which we are promised was first introduced into the House of Lords on 22nd November, 1960. It came to the House of Commons on 14th February, 1961. On 28th June, 1961, the Government made a statement to the effect that they would not proceed with the Bill but would introduce a No. 2 Bill to take account of further views and proposals. This No. 2 Bill had its First Reading on 17th July, 1961. It lapsed when the last Session of Parliament finished, and it has never seen the light of day since.
On 11th December, 1959, my hon. Friend the Member for Greenwich (Mr. Marsh) introduced an Offices Bill, which we were promised by the Prime Minister this afternoon. That Bill was passed by this House on 1st April, 1960, and it was to become effective in January, 1962. The Government said that they would consult the T.U.C. and would prepare and lay regulations by January, 1962. The First Secretary of State made a statement in July, 1960, saying that the Government proposed to introduce a Bill of their own and that no steps would be taken to lay the regulations. The then Minister of Labour said on 1st November, 1961, that there was no time for proper parliamentary examination and that a new Bill would be introduced the following Session.
Why should we assume that the measures which the Prime Minister announced this afternoon will be legislated on and will become effective? Why is the country entitled to assume that the Government mean any more now than they meant when those statements were made?

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I have here the "Industrial Charter". It says:
"To the worker we offer a new charter giving assurance of steady employment, incentive to test his ability to the utmost and status as an individual personality. To the consumer we offer the ultimate restoration of freedom of choice and protection from restrictive practices. To the owner and the shareholder we offer confidence in the future and a share in Britain's prosperity."
I agree that the last is true, but what is the date of this document? It is July, 1947. Fifteen years later, the stale, hoary ideas are trotted out as part of the new deal by a tired and defeated Government.
Why should the Government feel that they are entitled to the confidence of the country when they can only reproduce, fifteen years afterwards, ideas that they adumbrated as long ago as 1947? I do not know whether hon. Members opposite have any confidence in the Government. I have no doubt that the Prime Minister will get their votes, but does he have their confidence? [HON. MEMBERS: "Hear, hear."] As far as I could tell from those cheers, he has the confidence of about one-third of the Members of the House.
There is a case for a dissolution of Parliament and the Prime Minister knows it. The case for a dissolution of Parliament rests not merely on the fact that the Government and or the Prime Minister can command a majority in the House. It also rests on the fact that there is a good constitutional case for dissolution when the Prime Minister can show, and it is shown to him, that the opinion of Parliament and the Legislature is out of line with opinion in the country.
It could be argued that at the beginning of a Government's life they are entitled to say, "We need a period in which to fulfil our policies and, therefore, any temporary unpopularity is something that we can withstand." But the Government have been in office for eleven years. If one thing is clear, it is that the opinion of the Legislature as it will be expressed tonight in the Division Lobbies is out of line with the opinion of the country.
I do not know how long the Prime Minister will remain in office. It may be
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thought by hon. Members opposite that if they support him tonight, they can spirit him away quietly during the Christmas Recess. [HON. MEMBERS: "Now."] No, not during the Summer Recess. They will leave it for six months. The Christmas Recess is the danger point for the Prime Minister. Let us watch and see what happens. I want the right hon. Gentleman to remain as Prime Minister of this Government. He is a great electoral asset to us.
I warn the Prime Minister, however, of what Stanley Baldwin said about the Tories, "They can be merciless." The Prime Minister came to power on the votes of the Tory Right wing. He was selected because it was thought that the Tory Right wing would not make as much trouble as the Left wing if he were selected. Does the Tory Right wing believe that the Prime Minister has upheld the causes in which they believe? He has betrayed the Right wing of the Tory Party. He has betrayed the Chancellor of the Exchequer. He is against the Right wing of the Tory Party now. He is the Prime Minister; he can afford to throw them overboard and he has done so consistently.
Everybody knows that it was the Deputy Prime Minister who was tipped confidently as the new Prime Minister when Lord Avon went, but because it was said that the Suez rebels would make trouble the Prime Minister got the job and he has betrayed the Tory Right wing ever since he got it.
I would say one further thing to the Prime Minister, and it is this: we need a Prime Minister—and we need a Government—who will command moral authority in his party and in his country. He has no moral authority in his party, he has no respect in the country. The Government as a whole are believed to be tired, to have been with us too long, and to have failed.
I say one final thing, in conclusion— [HON. MEMBERS: "Time."] I shall wait till hon. Members have finished shouting. The Prime Minister and the Government will get their majority tonight, and, by a really ironical twist of fate, the bigger the majority they get in the Lobby tonight the bigger will be the discredit which the Tory Party will suffer in the country tomorrow.
9.31 p.m.
The Chancellor of the Exchequer (Mr. Reginald Maudling): I should like to start by congratulating my hon. Friend the Member for Oswestry (Mr. Biffen) on a very remarkable maiden speech. We all hope that we shall hear from him often again. Then I should also like to congratulate my hon. Friend the Member for Derbyshire, West (Mr. Crawley) on has second maiden speech.
We have had from the Opposition Front Bench two very vigorous speeches in the course of today. They had one element in common, that they contained nothing positive whatsoever from start to finish. There the resemblance ended. The right hon. Gentleman the Leader of the Opposition contented himself with mere quips about personalities—not quite so good as the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) usually makes, not as good as those by the hon. Member for Leeds, West (Mr. C. Pannell); but he confined himself to personalities. At least the hon. Gentleman the Member for Cardiff, South-East (Mr. Callaghan) confined himself to policies, which is surely what we are dealing with, and that is what, unlike hon. Members opposite, I intend to deal with in answer to the hon. Gentleman.
He talked about schools, for example, and how little we were doing about schools. In fact, in the last ten years expenditure on education has more than doubled. In fact, we are spending a greater percentage of our national income on education than any European country except Sweden. I have very good confirmation today from a newspaper cutting, "Britain takes front place for schools". It says:
"Experts from 53 nations met yesterday to pool ideas on building schools more quickly and more cheaply. The country they chose for their meeting was Britain because it is now in the world's front rank for school building."
Hon. Members: Then why sack the Minister of Education?
Mr. Maudling: The hon. Member for Cardiff, South-East made a serious speech to which I should like to reply. I hope I get a chance of doing so. He dealt also with the relation between wages and prices. He said that in the last few months prices had been going
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up faster than wages. This is true just marginally, but it comes after ten years when wages have been rising a good deal faster than prices, in contrast to the days of the Labour Government when they went the other way. He talked about investment in industry and a lack of confidence, but investment in industry in real terms is 80 per cent. above ten years ago and in manufacturing industry 60 per cent. [Interruption.]
Hon. Members: Then why sack the Chancellor?
Mr. Maudling: There are many people on the benches opposite who think that noise is a substitute for argument.
The hon. Member for Cardiff, South-East talked about a remarkable failure in the provision of basic human needs. What rubbish. Look at the figures of living standards, of consumption and the increased levels of pensions and National Assistance. In every case, they are up by 50 per cent. or more on ten years ago. That sort of argument is not worthy even of the Opposition we have got, and that is saying a lot. The hon. Member talked about the present state of the economy, and I want to say a word or two about that, and how I see the prospects at the moment.
Mr. Ross: How did you come to lose a deposit in West Lothian?
Mr. Maudling: I feel that West Lothian, important as it is, is less important than the national economy. My predecessor predicted this year a substantial expansion in the economy. This was based upon an increase in exports, an increase in public expenditure, a restocking movement and the growth of consumption over the year of about 4 per cent. The present position is that exports are rising, and rising well, that public expenditure is also rising, and rising vigorously. In regard to consumption, the rise which we have anticipated has fallen a bit behind what we thought. [Interruption.] The reaction of the Opposition to the facts is what one would exact of them.
There is, at the moment, and it is quite clear, spare capacity in industry, and a lack of confidence in some parts of British industry. It is unwise to exaggerate either the degree of spare

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capacity or the effect of a lack of confidence. Spare capacity cannot be measured solely in physical capacity. What is also of vital importance is the supply of skilled labour, and I think that that is a good deal closer to the total demand than the physical capacity of our factories. As for the absence of confidence, the point is not whether it arises from increased competition, as some of my hon. Friends say, or to difficulties at home and abroad. If there is an absence of confidence this is bound to influence the level of investment and through that the level of total demand. We have to weigh these factors, and my own judgment is that it is still by no means certain that our estimates will be falsified.
It may well be the case that the growth of consumption in the second half of this year and the arrival of the re-stocking movement will produce the vigorous expansion in the economy for which we are looking. If that does not happen, we shall do something about it. [Interruption.] It is always the policy of the party opposite to do what is necessary before it need be done. In fact, it is their desire to act too soon. I have no intention of putting more impetus behind the economy until I am convinced that that can be done without prejudicing the prospects of steady growth in the future, particularly in exports.
We are facing considerable difficulties in the international field today. The hon. Gentleman referred to these, and I want to answer some of the things he said. There are, certainly in America and in many Western European countries, business activities which are growing, but there are difficulties. Commodity prices are worryingly low, and the performance of Wall Street recently clearly gave rise to concern. These are matters which are not entirely within our control, but there are some things that we can do about them. For example, there are commodity markets. In the past, we have been prepared to take part in international commodity schemes based in each case upon the particular problems of any individual commodity—the Wheat Agreement, the Tin Agreement and the Commonwealth Sugar Agreement, all of great importance to our economy.
1856
But we have reached a time when we must look at the whole problem again and make a fresh attempt to secure new and revised agreements on commodities. The work is going on in respect of coffee in New York, and projects for a cocoa agreement are being considered. I hope that we shall make a new advance and a new approach to the general problem of commodity agreements because the low price of commodities certainly threatens the balance of international trade, and is a very serious problem for many underdeveloped countries.
The other problem is the availability of means to finance international transactions. I want to answer the serious point made by the hon. Member. The fact is that under present arrangements there is heavy dependence upon the two key currencies of sterling and the dollar, and if these two reserve currencies are to fulfil their rôle of expanding international trade they must be held to an increasing extent by other countries, and external liabilities on them will, therefore, grow. If this happens quickly, it can create distrust over the future value of the reserve currencies, with difficulties that we can all foresee. We know from experience the constraint that this danger can impose on our domestic policies. The United States is now experiencing something of the same constraint. If it is to be alleviated and world trade is to expand as we wish, it is desirable to improve and extend the arrangements that already exist for international co-operation in support of the key currencies.
We have also done a great deal in past years by extending the resources of the International Monetary Fund through increases in the quotas and through the borrowing schemes, and these additional resources and support for the Fund are of great value to the reserve currencies. But I have a good deal of sympathy with the view, which the hon. Gentleman shares, that what has already been done is not in itself sufficient. We must continue to look for some method of settling international deficits without either promoting world inflation or throwing an undue burden on the reserve currencies. In this there are financial, technical and political difficulties. But it is my intention to take the initiative in discussing with representatives of the other main

1857
countries involved what positive measures we can take in this field and related fields, including aid, which is of great importance, to ascertain whether more can be done to share the common burden.
Those are the main international problems. The other great international problem which is bound to create uncertainty in our economy and in investment is our relation with Europe. The basic fact is that the creation of the European Common Market has brought to our economic prospects and policies something which is permanently and profoundly different The creation of a new economy across the Channel on the scale of the United States but with our levels of wages is something entirety new.
Whether we go in or stay out, things will never be the same as they were before the creation of the Market. If we succeed in reaching an agreement which will enable us to enter the Market, as I emphatically hope we shall succeed —[Interruption.]—the difference between me and the Liberal Party is that, whereas it wanted to join the Common Market first and try to change it afterwards, I want to see safeguards for our vital interests before we join.
But if, as I hope, we do succeed in joining the Common Market, then we shall face a new wave of competition and a new surge of opportunity on a scale that we have not seen before. It is of vital importance that our economy should be enterprising enough and flexible enough to face that competition and to accept the opportunity.
If we should not succeed in joining the Common Market, however, we shall still survive. We have the whole of the rest of the world to make our living in. Nevertheless, even if we remain outside the Common Market, we shall still face an adjustment to our economy—to our trading conditions, to our whole business outlook—on a major scale with the growing competition in new world conditions. Whichever way it goes, there will be great effect on our economy, and it is clearly in the interests of business confidence and of investment in this country that this matter should be brought to a head as soon as possible, as my right hon. Friend the Lord Privy Seal is so valiantly trying to do.
1858
Now I turn from overseas problems to problems at home. They centre on the difficulties that lie in the way of expansion without inflation. This is, after all, the basic argument. It is the basic criticism of us that we have not succeeded in achieving a system whereby we can have steady and rapid expansion of the economy without inflation. This is true. We have not found the answer, but nor has any other free democracy that I know of.
It is, indeed, the challenge to our whole democratic system that, whereas Communist countries can apparently achieve a fairly steady advance in their output and production, none of us in the West has yet succeeded, under conditions of freedom and democracy, in finding how to ensure steady expansion without inflation. That is the problem to which we are addressing ourselves now.
Fundamental to this problem, and to the solution upon which so much of our future depends, is the problem of incomes policy. One thing which we in this House and this country have learnt in the last ten years is that without an incomes policy we cannot have expansion and growth without inflation. The main inflationary element in our economy for years has been the fact of incomes growing faster than production —and I include in "incomes", wages, salaries, dividends, and profits. This is the main inflationary element still remaining.
If we cannot deal with that, we cannot deal with our real problem. If we can deal with it, we shall establish a basis on which we can build a better life for our people and, what is perhaps equally important, play the part which we should play in the immense task of ridding the world of the poverty which is so terrible.
I do not regard an incomes policy as something negative but as something positive. That is the fundamental point to make. The purpose of an incomes policy is not to keep incomes down but to ensure that they rise only as fast as the national economy can bear. If they rise faster, the result is disaster. If we do not have some safeguard against inflation, if we have income competition leading to rip-roaring inflation, it means that incomes will not rise in real terms

1859
as much as they possibly could. The purpose of an incomes policy is not to restrain but to ensure steady growth commensurate, and fully commensurate, with the capacity of the economy.
Wages and salaries are the biggest single element in this problem. I will deal with profits and dividends later. It is, I think, universally accepted now that the general rise in incomes must be kept in line with the rise in output. How can this be done in a free society in a way which recognises the just claims of some people to go above the average without destroying the average itself and our purpose? The problem is now to reconcile the interests of individuals with the interests of the community. That is. after all, the basic problem of political organisation.
Some form of discipline is clearly essential. There is the old discipline of deflation and unemployment effective on the total level of wages, but wholly unfair to individuals and completely contrary to prospects of national economic growth. That is the old discipline which we have discarded and which no one. wants to see come back again.
Then there is the discipline of Government dictation. One or two hon. Members on both sides of the House have said that the Government must take decisions. Do they want us to take decisions about the level of wages in one industry or the other? I do not believe it?
Mr. W. Hamilton: But they have done it.
Mr. Maudling: If they want us to take decisions about the level of incomes in the private sector of the economy, while that might be effective in theory—it works in Communist States—it would be intolerable in the free society which we are trying to preserve while achieving growth and avoiding inflation.
There is only one alternative. If we do not have the discipline of deflation and unemployment, and if we do not have the discipline of Government dictation, the only alternative is the self-discipline of a mature democracy. [Interruption.] If the party opposite will not face this, it will not face the 1960s,
1860
and it has never faced them. We can have only one of four things—no incomes policy and inflation followed by deflation and stop and go and the rest of it, permanent deflation, Government control of wages, or a system whereby the self-discipline of a mature educated democracy works itself to ensure that wages and salaries and incomes as a whole keep in line with the productivity of the nation.
This is what we are aiming at. This is the purpose of the Commission. If this process is to succeed, it cannot be left solely to the interested parties to a particular dispute, who have their duty to their own people, for the unions and the employers have the duty to put their own peoples' point of view. Somewhere there must be some forum where the interests and views of the public and the nation as a whole must be put forward, not merely in general teams, but in dealing with particular wage claims. The purpose of this Commission is not to impose any new discipline on an industry, but to allow self-discipline to work on impartial advice in the light of a fully-informed public opinion. Surely this is the way for our democracy in tine 1960s to deal with this fundamental problem.
The Commission will be considering not only the interests of the community, but the interests of individual claimants. I hope that it will help in resisting in the national interest excessive claims based solely on crude bargaining power. I hope that it will protect the just claims of other people with less bargaining power who might otherwise be swamped by the crude application of a general average or general deflation. In this way we have an opportunity of reconciling, as we have not reconciled, the claims of individuals with the claims of the community, and doing it on a basis acceptable to a free society. That will be the Commission's main purpose.
Its second purpose will be to conduct ex post facto, retrospective, examinations into settlements which have been reached —except by arbitration—which may appear to be contrary to the public interest, to inquire whether they are contrary to the public interest, whether prices will rise, whether a sheltered industry which has given a particular wage increase ought to be subject to more competition, whether an industry is

1861
efficient enough, or whether there are too many restrictive practices on both sides of the industry. All those things should be brought before public opinion and made known to the people. That is the purpose of the National Incomes Commission.
I come now to the very important question of profits and dividends. The principle that incomes should not rise faster than national productivity of course applies to all incomes, including profits and dividends. Equally it is true that the method of application will vary, and I will explain why. Sometimes, profits may have to rise faster than wages because sometimes, as at present, profits are falling while wages are rising. Wages are fixed in advance by negotiation. Profits depend on results achieved in the market.
Wages are by and large fixed over certain industries as a whole, but within industries, whereas wages are consistent, profits and dividends are not. We want to see bigger margins between successful and unsuccessful firms. We want to see efficient firms getting higher profits and paying higher dividends, so long as the less efficient firms got less and pay less. There is a margin or differential which does not exist in wages.
Finally, and most important, I think that hon. Gentlemen opposite are a little mistaken in talking about the National Incomes Commission in this connection, because the Government have power over the total level of profits and dividends which they have not over the total level of wages. Through profits taxation we have a direct power to impinge on excessive levels of profits. Does the party opposite want the same to apply to wages? Does it want wages and profits to be treated on the same basis? Does it want the Government to have the same power of taxation over wages?
My right hon. Friend has made it clear that the processes of collective bargaining, the freedom of man to hire his labour, and the freedom of man to employ and to pay wages, are not affected by our policy. The purpose of the National Incomes Commission is to ensure that public opinion is focussed clearly and closely on this vital problem. The purpose of the Commission is to see that the claims of individual interests and the claims of the nation
1862
are put together and looked at together in a single forum. The treatment of profits and dividends must be on the same principle as that of wages. The principle that applies to one, must apply to the other, but the method clearly is different, and the direct power of the Government over the level of profits is far more stringent than their direct power over any level of wages.
I have endeavoured to deal with most of the problems raised—so far as any problems were raised by the party opposite. The other factors for combating inflation are the credit policy and the level of Government expenditure. As regards credit policy, I am sure that we have done much to eliminate the demand-pull type of inflation. We must have a credit policy that permits expansion but does not encourage inflation. We have had one experiment too many in the process of bringing down long-term interest rates by artificial inflationary means.
I am convinced that Government expenditure must be treated on a more positive basis. Government expenditure is essential, but it must be limited to what the economy can carry, and to a proper proportion of the national income. Within that we must concentrate expenditure on what yields the biggest return to the nation.
These are the main purposes of our policy. We have been presented with a Motion of censure backed by witticisms about personalities, backed by much culling of the gossip columns of newspapers, but with an absolute absence of any solid arguments, and no reference whatever to what the party opposite would do. I am sure that the House will reject this Motion, just as the country will reject the party opposite, because fundamentally there is not much joy in Socialism in Leicester at the moment. The party opposite will be rejected because fundamentally it is out of date— because hon. Gentlemen opposite still try to solve the problems of the forties with the ideas of the 'twenties. They have not seen that the 'sixties have crept up on them. The country will reject the party opposite because it presents no possible alternative, just as I am convinced that the House will reject this Motion.
Question put:—
The House divided: Ayes 253, Noes 351.

Division No. 261.]

AYES

[9.59 p.m.

Abse, Leo

Griffiths, Rt. Hon. James (Llanelly)

Monslow, Walter

Ainsley, William

Griffiths, W. (Exchange)

Moody, A. S.

Albu, Austen

Grimond, Rt. Hon. J.

Morris, John

Allaun, Frank (Salford, E.)

Gunter, Ray

Moyle, Arthur

Allen, Scholefield (Crewe)

Hale, Leslie (Oldham, w.)

Mulley, Frederick

Awbery, Stan

Hall, Rt. Hn. Glenvil (Colne Valley)

Neal, Harold

Bacon, Miss Alice

Hamilton, William (West Fife)

Noel-Baker, Francis (Swindon)

Baird, John

Hannan, William

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

Baxter, William (Stirlingshire, W.)

Harper, Joseph

Oliver, G. H.

Beaney, Alan

Hart, Mrs. Judith

Oram, A. E.

Bellenger, Rt. Hon. F. J.

Hayman, F. H.

Oswald, Thomas

Bence, Cyril

Healey, Denis

Owen, Will

Bennett, J. (Glasgow, Bridgeton)

Henderson, Rt. Hn. Arthur (Rwly Regis)

Padley, W. E.

Benson, Sir George

Herbison, Miss Margaret

Paget, R. T.

Blackburn, F.

Hewitson, Capt. M.

Pannell, Charles (Leeds, w.)

Blyton, William

Hill, J. (Midlothian)

Pargiter, G. A.

Boardman, H.

Hilton, A. V.

Parker, John

Bottomley, Rt. Hon. A. G.

Holman, Percy

Parkin, B. T.

Bowen, Roderic (Cardigan)

Holt, Arthur

Paton, John

Bowles, Frank

Hooson, H. E.

Pavitt, Laurence

Boyden, James

Houghton, Douglas

Pearson, Arthur (Pontypridd)

Braddock, Mrs. E. M.

Howell, Charles A. (Perry Barr)

Peart, Frederick

Bradley, Tom

Howell, Denis (Small Heath)

Pentland, Norman

Bray, Dr. Jeremy

Hoy, James H.

Plummer, Sir Leslie

Brockway, A. Fenner

Hughes, Cledwyn (Anglesey)

Popplewell, Ernest

Broughton, Dr. A. D. D.

Hughes, Emrys (S. Ayrshire)

Prentice, R. E.

Brown, Rt. Hon. George (Belper)

Hughes, Hector (Aberdeen, N.)

Price, J. T. (Westhoughton)

Brown, Thomas (Ince)

Hunter, A. E.

Proctor, W. T.

Butter, Herbert (Hackney, C.)

Hynd, H. (Accrington)

Randall, Harry

Butler, Mrs. Joyce (Wood Green)

Hynd, John (Attercliffe)

Rankin, John

Callaghan, James

Irvine, A. J. (Edge Hill)

Redhead, E. C.

Castle, Mrs. Barbara

Irving, Sydney (Dartford)

Reid, William

Chapman, Donald

Janner, Sir Barnett

Reynolds, G. W.

Cliffe, Michael

Jay, Rt. Hon. Douglas

Roberts, Albert (Normanton)

Corbet, Mrs. Freda

Jeger, George

Roberts, Goronwy (Caernarvon)

Craddock, George (Bradford, S.)

Jenkins, Roy (Stechford)

Robertson, John (Paisley)

Cronin, John

Johnson, Carol (Lewisham, S.)

Robinson, Kenneth (St. Pancrae, N.)

Crosland, Anthony

Jones, Rt. Hn A. Creech (Wakefield)

Rodgers, W. T. (Stockton)

Crossman, R. H. S.

Jones, Dan (Burnley)

Ross, William

Jones, Jack (Rotherham)

Cullen, Mrs. Alice

Jones, Jack (Rotherham)

Royle, Charles (Salford, West)

Dalyell, Tam

Jones, J. Idwal (Wrexham)

Shinwell, Rt. Hon. E.

Darling, George

Jones, T. W. (Merioneth)

Short, Edward

Davies, G. Elfed (Rhondda. E.)

Kelley, Richard

Silverman, Julius (Aston)

Davies, Harold (Leek)

Kenyon Clifford

Silverman, Sydney (Nelson)

Davies, Ifor (Gower)

Key, Rt. Hon. C. W.

Skeffington, Arthur

Davies, S. O. (Merthyr)

King, Dr. Horace

Slater, Mrs. Harriet (Stoke, N.)

Deer, George

Lawson, George

Slater, Joseph (Sedgefield)

Delargy, Hugh

Ledger, Ron

Small, William

Dempsey, James

Lee, Frederick (Newton)

Smith, Ellis (Stoke, S.)

Diamond, John

Lee, Miss Jennie (Cannock)

Snow, Julian

Dodds, Norman

Lever, Harold (Cheetham)

Sorensen, R. W.

Donnelly, Desmond

Lever, L. M. (Ardwick)

Soskice, Rt. Hon. Sir Frank

Driberg, Tom

Lewis, Arthur (West Ham, N.)

Spriggs, Leslie

Dugdale, Rt. Hon. John

Lipton, Marcus

Steele, Thomas

Ede, Rt. Hon. C.

Loughlin, Charles

Stewart, Michael (Fulham)

Edelman, Maurice

Lubbock, Eric

Stonehouse, John

Edwards, Rt. Hon. Ness (Caerphilly)

Mabon, Dr. J. Dickson

Stones, William

Edwards, Robert (Bilston)

McCann, John

Strachey, Rt. Hon. John

Edwards, Walter (Stepney)

MacColl, James

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

Evans, Albert

MacDermot, Niall

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

Fernyhough, E

McInnes, James

Swain, Thomas

Finch, Harold

McKay, John (Wallsend)

Swingler, Stephen

Fitch, Alan

Mackie, John (Enfield, East)

Taverne, D.

Fletcher, Eric

McLeavy, Frank

Taylor, Bernard (Mansfield)

Foot, Dingle (Ipswich)

MacMillan, Malcolm (Western Isles)

Thomas, George (Cardiff, W.)

Foot, Michael (Ebbw Vale)

MacPherson, Malcolm (Stirling)

Thomas, Iorwerth (Rhondda, W.)

Forman, J. C.

Mallalieu, E. L. (Brigg)

Thompson, Dr. Alan (Dunfermline)

Fraser, Thomas (Hamilton)

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

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

Gaitskell, Rt. Hon. Hugh

Manuel, Archie

Thornton, Ernest

Galpern, Sir Myer

Mapp, Charles

Thorpe, Jeremy

George, Lady Megan Lloyd (Crmrthn)

Marsh, Richard

Timmons, John

Ginsburg, David

Mason, Roy

Tomney, Frank

Gooch, E. G.

Mayhew, Christopher

Wade, Donald

Gordon Walker, Rt. Hon. P. C.

Mellish, R. J.

Wainwright, Edwin

Gourlay, Harry

Mendelson, J. J.

Warbey, William

Greenwood, Anthony

Millan, Bruce

Watkins, Tudor

Grey, Charles

Milne, Edward

Weitzman, David

Griffiths, David (Rother Valley)

Mitchison, G. R.

Wells, Percy (Faversham)

Wells, William (Walsall, N.)

Williams, Ll. (Abertillery)

Woof, Robert

White, Mrs. Eirene

Williams, W. R. (Openshaw)

Wyatt, Woodrow

Whitlock, William

Williams, W. T. (Warrington)

Yates, Victor (Ladywood)

Wigg, George

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

Zilliacus, K.

Wilkins, W. A.

Wilson, Rt. Hon. Harold (Huyton)

Willey, Frederick

Winterbottom, R. E.

TELLERS FOR THE AYES:

Williams, D. J. (Neath)

Woodburn, Rt. Hon. A.

Mr. Bowden and

Mr. G. H. R. Rogers.

NOES

Aitken, W. T.

Dance, James

Hopkins, Alan

Allan, Robert (Paddington, S.)

d'Avigdor-Goldsmid, Sir Henry

Hornby, R. P.

Allason, James

Deedes, Rt. Hon. W. F.

Hornsby-Smith, Rt. Hon. Dame P.

Amery, Rt. Hon. Julian

de Ferranti, Basil

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

Arbuthnot, John

Digby, Simon Wingfield

Howard, John (Southampton, Test)

Ashton, Sir Hubert

Donaldson, Cmdr. C. E. M.

Hughes Hallett, Vice-Admiral John

Atkins, Humphrey

Doughty, Charles

Hughes-Young, Michael

Balniel, Lord

Drayson, G. B.

Hulbert, Sir Norman

Barber, Anthony

du Cann, Edward

Hurd, Sir Anthony

Barlow, Sir John

Duncan, Sir James

Hutchison, Michael Clark

Barter, John

Eden, John

Iremonger, T. L.

Batsford, Brian

Elliot, Capt. Walter (Carshalton)

Irvine, Bryant Godman (Rye)

Baxter, Sir Beverley (Southgate)

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

Jackson, John

Beamish, Col. Sir Tufton

Emery, Peter

James, David

Bell, Ronald

Emmet, Hon. Mrs. Evelyn

Jenkins, Robert (Dulwich)

Bennett, F. M. (Torquay)

Errington. Sir Eric

Johnson, Dr. Donald (Carlisle)

Bennett, Dr. Reginald (Gos & Fhm)

Erroll, Rt. Hon. F. J.

Johnson, Eric (Blackley)

Berkeley, Humphry

Farey-Jones, F. W.

Johnson Smith, Geoffrey

Bevins, Rt. Hon. Reginald

Farr, John

Jones, Rt. Hn. Aubrey (Hall Green)

Bidgood, John C.

Fell, Anthony

Joseph, Rt. Hon. Sir Keith

Biffen, John

Fisher, Nigel

Kaberry, Sir Donald

Biggs-Davison, John

Fletcher-Cooke, Charles

Kerans Cdr. J. S.

Bingham, R. M.

Forrest, George

Kerby, Capt. Henry

Birch, Rt. Hon. Nigel

Foster, John

Kerr, Sir Hamilton

Bishop, F. P.

Fraser, Rt. Hon, Hugh (Stafford &Stone)

Kershaw, Anthony

Black, Sir Cyril

Fraser, Ian (Plymouth, Sutton)

Kimball, Marcus

Bossom, Clive

Freeth, Denzil

Kirk, Peter

Bourne-Arton, A.

Galbraith, Hon. T. G. D.

Kitson, Timothy

Box, Donald

Gammans, Lady

Lagden, Godfrey

Boyd-Carpenter, Rt. Hon. John

Gardner, Edward

Lambton, Viscount

Boyle, Rt. Hon. Sir Edward

George, J. C. (Pollok)

Lancaster, Col. C. G.

Braine, Bernard

Gibson-Watt, David

Langford-Holt, Sir John

Brewis, John

Gilmour, Sir John

Leather, Sir Edwin

Bromley-Davenport, Lt.-Col. Sir Walter

Glover, Sir Douglas

Leavey, J. A.

Brooke, Rt. Hon. Henry

Glyn, Dr. Alan (Clapham)

Leburn, Gilmour

Brooman-White, R.

Glyn, Sir Richard (Dorset, N.)

Legge-Bourke, Sir Harry

Brown, Alan (Tottenham)

Godber, J. B.

Lewis, Kenneth (Rutland)

Bryan, Paul

Goodhart, Philip

Lilley, F. J. P.

Buck, Antony

Goodhew, Victor

Lindsay, Sir Martin

Bullard, Denys

Gough, Frederick

Linstead, Sir Hugh

Bullus, Wing Commander Eric

Gower, Raymond

Litchfield, Capt. John

Butcher, Sir Herbert

Grant, Rt. Hon. William

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

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

Grant-Ferris, Wg. Cdr. R.

Lloyd, Rt. Hon. Selwyn (Wirral)

Campbell, Sir David (Belfast, S.)

Green, Alan

Longbottom, Charles

Campbell, Gordon (Moray & Nairn)

Gresham Cooke, R.

Longden, Gilbert

Carr, Compton (Barons Court)

Grosvenor, Lt.-Col. R. G.

Loveys, Walter H.

Carr, Robert (Mitcham)

Gurden, Harold

Lucas, Sir Jocelyn

Cary, Sir Robert

Hall, John (Wycombe)

Lucas-Tooth, Sir Hugh

Channon, H. P. G.

Hamilton, Michael (Wellingborough)

McAdden, Sir Stephen

Chataway, Christopher

Hare, Rt. Hon. John

MacArthur, Ian

Clark, William (Nottingham, S.)

Harris, Frederic (Croydon, N. W.)

McLaren, Martin

Clarke, Brig. Terence (Portsmth, W.)

Harris, Reader (Heston)

McLaughlin, Mrs. Patricia

Cleaver, Leonard

Harrison, Brian (Maldon)

Maclay, Rt. Hon. John

Cole, Norman

Harrison, Col. Sir Harwood (Eye)

Maclean, Sir Fitzroy (Bute &NAyrs.)

Collard, Richard

Harvey, Sir Arthur Vere (Macclesf'd)

McLean, Neil (Inverness)

Cooke Robert

Harvey, John (Walthamstow, E.)

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

Cooper, A.E.

Harvie Anderson, Miss

Macleod, John (Ross & Cromarty)

Cooper-Key, Sir Neill

Hastings, Stephen

McMaster, Stanly R.

Cordeaux, Lt-Col. J. K.

Hay, John

Macmillan, Rt. Hn. Harold (Bromley)

Cordle, John

Heald, Rt. Hon. Sir Lionel

Macmillan, Maurice (Hallfax)

Corfield, F. V.

Henderson, John (Cathcart)

Macpherson. Rt. Hn. Niall (Dumfries)

Costain, A. P.

Hendry, Forbes

Maddan, Martin

Coulson, Michael

Hicks Beach, Maj. W.

Maginnis, John E.

Courtney, Cdr. Anthony

Hiley, Joseph

Maitland, Sir John

Craddock, Sir Beresford

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

Markham, Major Sir Frank

Crawly, Aidan

Hill, Mrs. Eveline (Wythenshawe)

Marlowe, Anthony

Critchley, Julian

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

Marples, Rt. Hon. Ernest

Crosthwaite-Eyre, Col. Sir Oliver

Hirst, Geoffrey

Marshall, Douglas

Crowder, F. P.

Hobson, Sir John

Marten, Nail

Cunningham, Knox

Hocking, Philip N.

Mathew, Robert (Honiton)

Curran, Charles

Holland, Philip

Matthews, Gordon (Meriden)

Currie G. B. H.

Hollingworth, John

Maudling, Rt. Hon. Reginald

Dalkeith, Earl of

Hope, Rt. Hon. Lord John

Mawby, Ray

1866

1867

Maxwell-Hyslop, R. J.

Redmayne, Rt. Hon. Martin

Temple, John M.

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

Rees, Hugh

Thatcher, Mrs. Margaret

Mills, Stratton

Rees-Davies, W. R.

Thomas, Leslie (Canterbury)

Miscampbell, Norman

Renton, Rt. Hon. David

Thomas, Peter (Conway)

Montgomery, Fergus

Ridley, Hon. Nicholas

Thompson, Kenneth (Walton)

Moore, Sir Thomas (Ayr)

Ridsdale, Julian

Thompson, Richard (Croydon, S.)

More, Jasper (Ludlow)

Rippon, Rt. Hon. Geoffrey

Thorneycroft, Rt. Hon. Peter

Morgan, William

Roberts, Sir Peter (Heeley)

Thornton-Kemsley, Sir Colin

Morrison, John

Robertson, Sir D. (C'thn's & S'th'ld)

Tiley, Arthur (Bradford, W.)

Mott-Radclyffe, Sir Charles

Robinson, Rt. Hn. Sir R. (B'pool, S.)

Tilney, John (Wavertree)

Nabarro, Gerald

Robson Brown, Sir William

Touche, Rt. Hon. Sir Gordon

Neave, Airey

Rodgers, John (Sevenoaks)

Turner, Colin

Nicholls, Sir Harmar

Roots, William

Turton, Rt. Hon. R. H.

Nicholson, Sir Godfrey

Ropner, Col. Sir Leonard

Tweedsmuir, Lady

Noble, Rt. Hon. Michael

Royle, Anthony (Richmond, Surrey)

van Straubenzee, W. R.

Nugent, Rt. Hon. Sir Richard

Russell, Ronald

Vane, W. M. F.

Orr, Capt. L. P. S.

St. Clair, M.

Vaughan-Morgan, Rt. Hon. Sir John

Orr-Ewing, C. Ian

Sandys, Rt. Hon. Duncan

Vickers, Miss Joan

Osborn, John (Hallam)

Scott-Hopkins, James

Vosper, Rt. Hon. Dennis

Osborne, Sir Cyril (Louth)

Seymour, Leslie

Wakefield, Sir Wavell

Page, Graham (Crosby)

Sharples, Richard

Walder, David

Page, John (Harrow, West)

Shaw, M.

Walker, Peter

Pannell, Norman (Kirkdale)

Shepherd, William

Walker-Smith, Rt. Hon. Sir Derek

Partridge, E.

Skeet, T. H. H.

Wall, Patrick

Pearson, Frank (Clitheroe)

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

Ward, Dame Irene

Peel, John

Smithers, Peter

Watkinson, Rt. Hon. Harold

Percival, Ian

Smyth, Rt. Hon. Brig. Sir John

Webster, David

Peyton, John

Soames, Rt. Hon. Christopher

Wells, John (Maidstone)

Pickthorn, Sir Kenneth

Spearman, Sir Alexander

Whitelaw, William

Pike, Miss Mervyn

Speir, Rupert

Williams, Dudley (Exeter)

Pilkington, Sir Richard

Stanley, Hon. Richard

Williams, Paul (Sunderland, S.)

Pitman, Sir James

Stevens, Geoffrey

Wills, Sir Gerald (Bridgwater)

Pitt, Dame Edith

Steward, Harold (Stockport, S.)

Wilson, Geoffrey (Truro)

Pott, Percivall

Stodart, J. A.

Wise, A.R.

Powell, Rt. Hon. J. Enoch

Stoddart-Scott, Col. Sir Malcolm

Wolridge-Gordon, Patrick

Price, David (Eastleigh)

Storey, Sir Samuel

Wood, Rt. Hon. Richard

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

Studholme, Sir Henry

Woodhouse, C. M.

Prior, J. M. L.

Summers, Sir Spencer

Woodnutt, Mark

Prior-Palmer, Brig. Sir Otho

Talbot, John E.

Woollam, John

Profumo, Rt. Hon. John

Tapsell, Peter

Worsley, Marcus

Proudfoot, Wilfred

Taylor, Sir Charles (Eastbourne)

Yates, William (The Wrekin)

Pym, Francis

Taylor, Edwin (Bolton, E.)

Quennell, Miss J. M.

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

TELLERS FOR THE NOES:

Ramsden, James

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

Mr. Chichester-Clark and

Rawlinson, Sir Peter

Teeling, Sir William

Mr. Finlay.

BUSINESS OF THE HOUSE
Proceedings on the Lords Amendments to the Local Government (Records) Bill and the Lotteries and Gaming Bill
1868
exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. lain Macleod.]

ORDERS OF THE DAY

  LOCAL GOVERNMENT (RECORDS) BILL
  Lords Amendment considered.
  Clause 9.—(Short title, saving, commencement AND EXTENT.)
  Lords Amendment: In page 4, line 40, leave out "which is contained in" and insert "made by or under".
  10.13 p.m.
  Mr. Nicholas Ridley (Cirencester and Tewkesbury): I beg to move, That this House doth agree with the Lords in the said Amendment.
  This Amendment was moved by my noble Friend, Lady Elliot, in another place. It is in response to a point made by the Law Society that certain aspects of the Bill—which is otherwise accepted, I think, by all hon. Members—were not quite clear in regard to the question of access to local government records and documents by solicitors and others in the course of their duties. The point was raised by my hon. Friend the Member for Crosby (Mr. Graham Page) on Third Reading, but I was fortunate, perhaps, to dodge the battle which was fought over this and, as I say, it was also fought in another place.
  I believe that the Amendment makes the position perfectly satisfactory to the Law Society and covers the difficulty about which there was some doubt, as to whether as drafted the Bill made it possible that local authorities could withhold information which they otherwise would have had to give with regard, first, to searches relating to property and, secondly, to actions which might be taken.
  Question put and agreed to.

  LOTTERIES AND GAMING BILL
  Lords Amendments considered.
  New Clause A.—(Payments at entertainments NOT HELD FOR PRIVATE GAIN.)
  Lords Amendment: In page 2, line 25, at end insert:
  NEW CLAUSE A
  A. In sub-paragraph (ii) of paragraph (b) of section twenty of the Betting and Gaming Act, 1960 (which provides that, in relation to gaming to which that section applies, section sixteen of that Act shall have effect as if for the condition set out in paragraph (c) of subsection (1) thereof there were substituted the conditions set out in subsection (1) of section four of the Small Lotteries and Gaming Act, 1956) for the words "the condition set out in paragraph (c)" there shall be substituted the words "the conditions set out in paragraphs (b) and (c)".
  Read a Second time.
  Motion made, and Question proposed, That this House doth agree with the Lords in the said Amendment.
  Mr. Eric Fletcher: This seems to be quite a substantial Amendment. I should not have thought this House ought to have agreed to it without some explanation of what it means.
  Mr. John C. Bidgood: I am very happy to give the hon. Gentleman the explanation that he requires.
  Very simply, it was discovered that there was an error in the Betting and Gaming Act, 1960. In other words, paragraph (b) should have been superimposed for paragraph (c). This was drawn to my notice and to that of my noble Friend in another place, and we thought that this would be a suitable opportunity of remedying that error.
  Question put and agreed to.
  Remaining Lords Amendments agreed to.

  HOSPITAL BEDS, EAST ANGLIA
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]
  10.19 p.m.
  Mr. J. M. L. Prior: I should like to start by paying tribute to the predecessor of my hon. Friend the Parliamentary Secretary to the Ministry of Health and to thank her for her courtesy, help and hard work. I should also like to wish my hon. Friend the present Parliamentary Secretary every success in his new appointment.
  The object of this short debate is to draw attention to the need for greater provision for acute bed accommodation immediately in the Eastern Regional Hospital Board area and to the long-term plans for hospitals which were published in A Hospital Plan, Cmnd. 1604. I certainly do not say this in any carping spirit because I am sure that East Anglians will be gratified to know that it is estimated that 18s. 5d. per head of the population will be spent this year on new hospitals or improvements as compared with 6s. 5d. in 1959 and 2s. 7d. in 1949. This is a remarkable improvement, and is the fulfilment so far of the Conservative election pledge given to improve and to start rebuilding our hospitals.
  The standards of hospital provision are within limits to be laid down for the first time. At present, the ratio of beds to population varies widely between different areas, and the Report goes on to state, in paragraph 9, that
  "detailed study is necessary to determine the right scale of local provision."
  It is this scale of local provision that I wish to examine.
  Perhaps I should say at this stage that my hon. Friend the Member for Eye (Sir H. Harrison) wished to take part in the debate and has asked to be associated with the remarks that I am making.
  I think that, like all good East Anglians, the Eastern Regional Hospital Board has been thrifty and careful in spending its money. For this it should
  1872
  be encouraged and certainly not penalised. I am led to believe by what I have been told that it has been penalised because it has not been ambitious enough, and this is rather confirmed by the Report appearing in one of the local newspapers, the Eastern Evening News of 19th July, which quotes Mr. C. W. Guillebaud, a member of the Board, as follows:
  "When the Ministry had asked if the Board's ' Further Look' estimates of expenditure for the next 3 years were realistic it had been possible to show that they were unrealistic in the sense that, trying to keep to the 2 per cent. level of increase laid down by the Ministry, the Board had under-estimated its real need. An increase of 3 per cent. to 4 per cent. was required."
  The past pattern of hospital development has resulted in many inequalities. Some areas have always been better off than others, and it is very important to sec that these inequalities are not perpetuated in the new plan. The Eastern Regional Hospital Board has the lowest number 3·0 per 1,000 of acute beds and by 1975 under the new hospital plan it will be 2·9 beds per 1,000.
  I would point out to my hon. Friend that in an adjoining area like Colchester and north Essex, which he will know well, and which is very similar in the type of development in the area generally, will have 3·4 acute beds per 1,000 under the new hospital plan. At present, the Eastern Regional Hospital Board area is 11 per cent. below the average for the country and by 1975 will be 15½ per cent. There are no adequate grounds on age structure, death or illness rates for supposing that the Board should have a bed ratio of 11 per cent. to 15½ per cent. below the rest of the country.
  The recent investigation carried out by the Nuffield Provincial Hospitals Trust suggested the need for about two beds per 1,000 of the population. This was carried out at Norwich. I think that these figures are low, and it is surprising how much more a service is used once it is properly available. For example, at the new biochemistry laboratory at Ipswich the laboratory increased its work in the first year by 100 per cent. Medical experience suggests that the Minister's figure of 33 beds per 1,000 is about right.
  When the Health Service began, the standard of hospitals for acute medicine

  1873
  in East Anglia was very inadequate. East Anglians have had a healthy—or perhaps unhealthy—contempt for hospital treatment, but this is changing very rapidly with better communications, higher education, and so on. Although the hospitals are greatly improved, much remains to be done. Over the last ten years, capital expenditure in the area has put the Board about half way up the league table of capital expenditure. That was good news, but I have tried to show how much remains to be done. The financial summary in Appendix C of the Hospital Plan shows that the East Anglian Region will drop to lowest place in the table.
  I raised this debate tonight to give my hon Friend an opportunity for saying that this is not the final stage in the ambitious Hospital Plan and that the needs of East Anglians will be properly safeguarded. If he has good news for us, I hope that he will give it and earn the undying gratitude of all East Anglians.
  10.26 p.m.
  Mr. Dingle Foot: I associate myself with what has been said by the hon. Member for Lowestoft (Mr. Prior). Whatever the reason may be, the fact is that East Anglia is, and apparently under the Hospital Plan will continue to be, less well equipped with acute beds than any other region.
  On page 3 of the Hospital Plan we read:
  "The variations between regions are considerable. For instance, there are 3 acute beds per 1,000 population in the East Anglian Hospital Region and 5.6 in the Liverpool Region."
  Of course, one appreciates that there may be differences of need between one region and another, but that is a great disparity. It is difficult to understand why, except for historical reasons, the number of acute beds per 1,000 of population should be so much smaller in East Anglia than elsewhere.
  As the hon. Gentleman has pointed out, under the Hospital Plan as we have it today this situation will continue. Even in 1975, East Anglia will come at the very bottom of the league table—a position to which we are not accustomed in Ipswich and Suffolk.
  In my submission, the figures for acute beds given in the Hospital Plan are to some extent suspect. For example, on
  1874
  page 80 several figures, including the numbers of acute beds, are given. But those include 40 beds at Chantrey Park, Ipswich, and 55 at the Suffolk Convalescent Home, Felixstowe. Those are convalescent beds, and it is at least questionable whether they ought to be included in the category of acute beds.
  There is great dissatisfaction in Ipswich and Suffolk about our present situation not only in respect of acute beds, but in respect of geriatric facilities and the general hospital provision. We think that we are poorly used compared with other parts of the country, and we consider that the situation ought not to be allowed to continue.
  10.29 p.m
  Mr. Kenneth Robinson: I congratulate the Parliamentary Secretary on assuming his new duties and I wish him well in the Ministry of Health.
  What the hon. Member for Lowestoft (Mr. Prior) and my hon. and learned Friend the Member for Ipswich (Mr. D. Foot) have said about the situation in East Anglia confirms what I said about the situation nationally during the recent debate on the Hospital Plan. It seems that the Ministry have not done the research studies into acute bed need that should have been done before bringing a plan of this size forward.
  I wonder whether the hon. Gentleman could reply to a point which I made then and to which the Minister did not reply, and that is, what basis of revision is to be undertaken in this plan? We are told that it is to be revised annually, and the hon. Gentleman expressed the hope that it would be as far as East Anglia is concerned. But how are the revisions to take place? We are very anxious to know, and we should like more details than have been vouchsafed to us hitherto.
  10.31 p.m.
  The Parliamentary Secretary to the Ministry of Health (Mr. Bernard Braine): I should like, first, to thank my hon. Friend the Member for Lowestoft (Mr. Prior) for the kind reference that he made to my predecessor, a tribute, I am sure, to which all of us in the House would readily subscribe.

  1875
  May I thank him, too, and the hon. Member for St. Pancras, North (Mr. K. Robinson) for their kind references to myself?
  I am very glad that my hon. Friend has had the opportunity to raise this important question at this particular time. Coming as I do to my new office with some trepidation, I recall the old Latin proverb, "Ad sanitatem gradus est novisse morbum," which, I understand, means, "It is a step towards health to know what the complaint is." I know, of course, that in raising this matter my hon. Friend, and also the hon. and learned Member for Ipswich (Mr. D. Foot), are voicing anxieties which exist in parts of East Anglia in regard to the hospital provision in that region —but, in doing so they furnish me with an opportunity to remove certain misconceptions and to put the matter, I hope, into clear perspective.
  I fully appreciate that publication of comparative figures in the ten-year Hospital Plan of provision for the country as a whole may have given rise to anxiety in East Anglia that it will not receive its fair share of the resources available and that, as a consequence, the people of the region may get a service inferior to that available elsewhere. In particular, it may well have given rise to the fear that the number of acute beds will continue to be significantly below the average.
  I concede straightaway that the provision of acute beds in East Anglia has traditionally been and still is below the national average. It is true that in present circumstances variations between regions are considerable. That is borne out in the plan itself. As the hon. and learned Gentleman said, there are three acute beds per 1,000 of the population in the East Anglian Hospital Region and 5·6 per 1,000 in the Liverpool region, and the numbers elsewhere vary between those two figures.
  It seems that these variations are largely due to historical reasons though they sometimes also reflect differences in morbidity, social conditions and in the scale of local authority services. There are also great variations in the average stay of patients in hospital. Those of us who live in East Anglia
  1876
  know that it is a particularly healthy part of England and this may be a fact of consequence.
  I go further. I do not think Chat the Hospital Plan implies that these variations will always obtain and must continue in the future. The point should be made that bed ratios per 1,000 are not meaningful in isolation. In short, the plan is not rigid and final; it is an indication of what can be achieved within a given period. Its figures are not sacrosanct, and its significance cannot be measured in terms of the number of beds.
  For example, the total estimated cost of hospital building schemes expected to start in East Anglia in the period from 1960–61 to 1970–71 is £22 million. Included in this are major projects such as new general hospitals at Ipswich and Great Yarmouth, a new hospital for the mentally sub-normal at Fulbourn, substantially remodelled hospitals at Norwich, King's Lynn and Peterborough and major developments at Wisbech, Stamford and Rutland and Saffron Walden.
  During that period, however, there will be a great deal of upgrading of existing accommodation and much better provision of supplementary services, so that the average number of persons treated per bed may be expected to increase. As the hon. Member for St. Pancras, North, who specialises in this subject, knows very well, new hospitals cannot be built at short notice. Indeed, if we are to provide the kind of hospitals of which we can be proud in the future, embodying all the latest techniques, there must be careful long-term planning. That is being undertaken now.
  If that is so, then the short-term solution lies in making much better use of existing facilities. In this, the East Anglia Regional Board is acting with all urgency and vigour. One cannot be precise, but a great many of the small schemes that are now taking shape or are envisaged in the near future, while small in themselves, are expected in total to have a major effect on the improvement of the service in the region as a whole.
  I have a particular case in mind. The House will understand if I do not identify it at this stage, because so many

  1877
  schemes are in course of preparation and may be modified. In one corner of the region, it is hoped that minor adaptations, changes in the use of accommodation and extensions, which have been formulated since the plan was published, will add over 40 acute beds which are not included in the plan. In fact, a continuous process of modernisation and remodelling is going on ail the time with a view to making the service more adequate to the needs of the region. I should like to dispose of one point raised by the hon. and learned Member for Ipswich. We are concerned here with the shortage of acute beds in East Anglia. Geriatric provision, to which the hon. and learned Member referred, will be above the anticipated national average level, while maternity provision will be at about the national average.
  I well understand why a cursory glance at the comparative figures in the Hospital Plan might lead one to the conclusion that the ratio of acute beds per 1,000 of the population provided for East Anglia is lower than it ought to be in relation to the rest of the country. Paragraph 9, on page 3, of the Hospital Plan is careful to warn against drawing wrong conclusions from the figures. It points out that in estimating the needs in 1975, the ratios are valid only in relation to large areas and detailed study will be necessary to determine the right scale of local provision. As the hon. Member for St. Pancras, North has mentioned, the plan suggests a ratio of 3·3 beds per 1,000 of the population as the normal maximum of requirements. This is not, however, to be taken as a national minimum or as an absolute standard to which all regions and all areas within each region must conform. Comparisons between one area and another can be highly misleading without full knowledge of local conditions.
  I should like to pursue that argument a little further. Paragraph 10 of the plan rightly makes the point that
  "In arriving at these ratios it has not been possible to take full account of the potential development of services outside the hospitals or of the scope for increased efficiency in the hospitals themselves. On these grounds alone, therefore, if on no others, it would be right to look for reduction in these ratios as time goes on, unless new and unforeseen needs for hospital treatment should arise."
  It is clear, therefore, that the comparative figures which have given rise
  1878
  to the anxiety voiced by my hon. Friend the Member for Lowestoft and by the hon. and learned Member for Ipswich are themselves tentative and approximate. It follows that there will have to be considerable discussion of all major schemes by the regional hospital boards, local authorities and other interested bodies. These discussions may well modify the content of particular schemes. For example, they may lead to the provision of acute beds at the earlier stages where, in the plan, geriatric or maternity beds have been suggested.
  Moreover, the 1975 figures are not final in another sense, for in a number of oases only the first stages of new or redeveloped hospitals will be completed by 1975. Thus, the Hospital Plan shows no acute beds at the new Ipswich Hospital and only 120 at Great Yarmouth by that date, and these, of course, are two major projects, very exciting projects to which we are looking forward, but they will not contribute their full potential of acute beds till after 1975.
  My hon. Friend the Member for Lowestoft suggested that there is a view in some quarters that the Hospital Board ought to have pressed its case more vigorously, that it should not be penalised now—and I think that was the thought at the back of his mind— in the allocation of resources simply because it had been provident in the past and had made do with what facilities it had. I can assure him that there is absolutely no foundation for this, and would like to emphasise that the Board has not lacked skill in presenting its case, or wisdom in the way in which it has been improving and staffing its services. The Board can be assured that the good husbandry and worthy restraint it has exercised in the past will not result in the region being penalised now or in the future.
  My hon. Friend also mentioned a recent statement in the Press attributed, I think, to a distinguished member of the Board, Mr. Guillebaud, as to whether the estimates of the hospital boards are realistic or not. I am advised that Mr. Guillebaud was referring to the revenue estimates of hospital boards for the next year or two. These have been discussed quite recently with

  1879
  representatives of the Ministry, and we hope to give an indication much earlier than in previous years of what boards may hope to receive next year and the year after. I hope that this news will be welcome to my hon. Friend and to the hospital boards.
  I ought to say in passing that we have to be realistic not only in regard to what boards think they can do if they get more money but also in regard to the share of the nation's resources which can be devoted to the hospital service as a whole.
  My hon. Friend represents his constituency interests with great vigour and he may wish me to say something about the situation in his own area. Admittedly, the existing services in Lowestoft and Great Yarmouth are scattered and inadequate, and both development and concentration are needed. We believe that the best solution is the creation of a new district hospital, at an estimated cost of £4½ million, on the sites of the Northgate and Estcourt Hospitals in Great Yarmouth and a provisional starting date of 1969 has been agreed with the Board. Ultimately, I understand, it should be possible to dispense with the Great Yarmouth General Hospital altogether.
  I am fully aware that this lies very much in the future, but we are not waiting till then to improve the pro-
  1880
  vision of acute beds in the area. We hope to secure a more rational distribution of services on a functional basis by the completion of a new medical unit at a cost of £114,000 at Northgate Hospital. This unit is already under construction. It will comprise 50 beds for acute medical cases, so sited that it can be fitted eventually into the framework for the new general hospital. Moreover, the provision of this new unit will enable much more flexible use to be made of the Gorleston Hospital.
  I hope that I have been able to make it clear that we are not making inadequate provision for East Anglia in relation to the rest of the country. The figures given in the Hospital Plan are tentative. They represent merely a stage in the achievement of a hospital service designed to match the real needs of the future. In other words, the Plan is subject to review, and present priorities might well be changed where experience shows this to be justified.
  I am happy to give any hon. Friend and the hon. and learned Gentleman an assurance that there is no intention of permitting the provision of acute beds in East Anglia to fall below the level that experience in the next ten years shows to be necessary.
  Question put and agreed to.
  Adjourned accordingly at a quarter to Eleven o'clock.

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Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Exeter

VACCINATION AGAINST FOWL PEST
3.5 p.m.
EARL FERRERS: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government why, if they have decided to abandon the slaughter policy for fowl pest, vaccination is not to be made compulsory.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (LORD ST. OSWALD): My Lords, our very large poultry population is spread over many holdings and changes frequently and rapidly. Individual birds are difficult to identify, and it is not possible always to say whether individual birds have been vaccinated or not. For these reasons, and because of the shortage of veterinary manpower, it would be quite impossible to enforce any system of compulsory vaccination. In addition, some counties are comparatively free from fowl pest and we should not be justified in requiring owners in such areas to vaccinate their flocks.
EARL FERRERS: My Lords, I thank the noble Lord for his reply and I feel that I ought, in fairness, to declare that I have an interest in this matter, as on two occasions my poultry have suffered from this disease and have all been slaughtered; and I have been duly compensated. But would the noble Lord not agree that the vaccination individually of large quantities of birds is grossly impracticable, and that for the Government to move from a position of compulsory slaughter to voluntary vaccination can have only one effect, which is to increase very rapidly the incidence of this disease?
LORD ST. OSWALD: No, my Lords, our hope and expectation is exactly the contrary, and we do not see, as my noble friend does, the difficulty in egg producers carrying out the operation of vaccinating their own flocks.
LORD MORRISON OF LAMBETH: My Lords, could the noble Lord give me an assurance, as a ratepayer, that the local authority is not obligated to inspect all these birds to find out whether they have been vaccinated or not?
LORD ST. OSWALD: My Lords, I think my original Answer made it clear that we should not expect that of a local authority.
EARL FERRERS: My Lords, is the noble Lord also aware that this disease is transmittable to man; and that, indeed, my manager got fowl pest? Is he further aware that I suggested to him that he be slaughtered and I be duly compensated?
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, may we understand a little more clearly what the objective of the Government is in the change that they have made? Is it merely to save the State from having to pay the compensation, or is it really to provide other means of effectively controlling this dreadful and spreading disease? We have had no clear statement on that matter. There are farmers all over the country who buy birds, say, at point-of-lay stage, perhaps a thousand, two thousand or three thousand at a time—I have never done that myself although I have taken a hundred—and they have found them within twenty-four hours to be infecte with fowl pest and the whole lot have had to be slaughtered. There are much bigger numbers even than that. If you are not going to have vaccination, what is going to prevent the spread of this disease?
LORD ST. OSWALD: My Lords, precisely this. The Government are subsidising vaccination to an extent which will bring the cost down as far as the farmer is concerned to a halfpenny or less per bird vaccinated. We hope to have the full co-operation of all egg producers, it being so much in their interests, and we look upon this as the best method of bringing fowl pest under control.
EARL FERRERS: My Lords, is the noble Lord aware that under this system birds may not be vaccinated until they are two weeks old; before they get full immunity is another two weeks; and in the case of broilers, whose life is about ten weeks, they spend nearly half their life unvaccinated and are therefore prone to disease, and thus prone to spread it?
LORD ST. OSWALD: I am afraid my noble friend has in fact punctured my own limited expertise An saying that; but I will took into the matter, and if I find that he is right in his assumption I will let him know. I did not know that the limit was two weeks; I had understood it was possible to vaccinate before. But my noble friend may be right.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, might I ask whether the Government will undertake that at the end of twelve months they will examine what the experience has been and if the incidence of the disease is spreading they will reconsider the policy?
LORD ST. OSWALD: My Lords, what I can give the noble Viscount is an assurance that we will, of course, be watching very carefully and closely the results of this policy.
LORD STONHAM: My Lords, will the noble Lord say how the Government will be able to watch the results? If, as I understand it, compulsory slaughter is going to be ended, will there be continued registration of the incidence of fowl pest? Otherwise the Government's watching will not he very effective and one will not know twelve months hence what the incidence is.
LORD ST. OSWALD: My Lords, certainly we expect to be in touch with farmers to know the results of this policy. We anticipate no difficulty in getting such information as we want.
LORD OGMORE: My Lords, as ratepayers will foe interested in this problem, may I ask how much it is expected it will cost, as compared with the previous system of slaughter?
LORD ST. OSWALD: It is anticipated that it will cast about £1 million a year instead of £10 million.
LORD STONHAM: My Lords, is the noble Lord aware that when fowl pest has occurred and there has been compulsory
1118
slaughter, an inspector has had to be notified? Does it now mean that notification will continue? Because if it is abandoned the Government will have no check upon the incidence of fowl pest.
LORD ST. OSWALD: My Lords, I think I have answered that question. We intend to keep in very close touch with farmers in order to observe and note the result of this policy.

MOLONY REPORT ON CONSUMER PROTECTION
3.12 p.m.
BARONESS BURTON OF COVENTRY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will now state the date of publication of the Molony Report on Consumer Protection.]
THE MINISTER OF STATE, HOME OFFICE (EARL JELLICOE): My Lords, it will not have escaped the noble Lady's attention that the final Report of the Molony Committee on Consumer Protection was published yesterday. I should like to take this opportunity of expressing the Government's gratitude to the Chairman and the members of this distinguished Committee for their valuable Report.
BARONESS BURTON OF COVENTRY: My Lords, while the noble Earl will be aware that I left my Question on the Order Paper quite deliberately, might I ask him whether he realises that I did so because I was under the assumption that I should be given some indication as to when it would be advisable to put down, I think, my fifth Question. Could the noble Earl tell me what went wrong?
EARL JELLICOE: I had surmised that the noble Lady had left her Question on the Order Paper quite deliberately. I think the position, as I understand it, was as follows: as soon as the exact date on which the Commission's Report was going to be published was known, it was decided that it was advisable to inform Parliament. This happened to be a Friday when this House was not, in its

1119
wisdom, sitting. But I understand that my right honourable friend the President of the Board of Trade took immediate steps to bring the date and fact of publication to the noble Lady's attention.
BARONESS BURTON OF COVENTRY: That is quite right; I have no wish to labour the point. As the noble Lord will realise, it was too late for me to put down my Question. Might I ask the noble Lord whether he realises with what fascination I would sit in the other place to-day, watching to see how electorally attractive the Government nave found my clothes? I nope they will borrow a lot.
EARL JELLICOE: I quite appreciate that, but I am sure the noble Lady will not wish me to anticipate any statement which may, or may not, be made in another place.
LORD MORRISON OF LAMBETH: My Lords, I think this was the case where I asked the noble Lord then in charge of this business—whether it was the same noble Lord or another I cannot remember, because there have been rather extensive Government changes—that my noble friend should be told when she could put her Question down in time to get the Government to say when this Report would be published. It rather sounds as if that has not been kept, and if my noble friend was not told in time to put the Question down for the appropriate day, I feel that she has been let down a little bit.
EARL JELLICOE: My Lords, I have endeavoured to explain the position that occurred, and I think the noble Lady said—and it was her Question—she did not wish to labour the point.
LORD MORRISON OF LAMBETH: It was my supplementary.

SPORTS DEVELOPMENT COUNCIL
3.15 p.m.
BARONESS BURTON OF COVENTRY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are now in a position to announce their long-delayed decision
1120
on the establishment of a Sports Development Council and, if not, when they will be able to do so.]
EARL JELLICOE: My Lords, I hope it will be possible to make a statement on this matter very soon after the House resumes after the Recess.
BARONESS BURTON OF COVENTRY: My Lords, I would pay the noble Earl the compliment of hoping that he is as dissatisfied as I am with that reply. Might I ask him whether he does not agree that this really is procrastination at its worst? And while I appreciate that a lot might have been lost at Admiralty House last weekend, a lot of other things happened before that. Might I ask him whether he realises that it is not only the House which wants to know this decision but the sporting organisations, who have been most disappointed? Does he further realise that it is quite obvious, although the Government have not said it, that no help whatsoever is going to be given to sporting organisations this summer.
EARL JELLICOE: My Lords, I appreciate the points which the noble Lady has made; but as she herself has pointed out, a good deal of water has flowed under the Treasury bridges in the last week or so. But, in all seriousness, I do not feel that her supplementary question quite takes due recognition of the increased allowances, the increased starts for sports expenditure or expenditure on sporting activities, which were announced by the former Chancellor of the Exchequer on May 8. Total starts this year on public projects for sport and recreation will, I gather, total £27 million.
BARONESS BURTON OF COVENTRY: Might I put one final question? I will not take that up with the Minister now, but leave it for the next Session. Might I ask him, seeing we are all in this mood and nobody wishes any discourtesy to me, whether he would tell me when to put down a Question so that the announcement on the Sports Development Council may be made in answer to that Question when we reassemble?
EARL JELLICOE: I will undertake to do so and endeavour to see that there is no slip.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, what I cannot quite understand is why we have had no explanation at all of the reason for this long delay.
EARL JELLICOE: My Lords, I think the reason for this delay is the very great number of weighty considerations involved here.

NARCOTIC BAITS FOR WOOD PIGEONS
3.17 p.m.
EARL FERRERS: My Lords, I beg leave to ask the Second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will allow the use of narcotics for the destruction of wood pigeons.]
LORD ST. OSWALD: My Lords, we have been experimenting for some time with narcotic baits in field trials against wood pigeons. The results have shown that these birds can be successfully narcotised but the method involves risks to protected and game birds, and the Government cannot at present authorise their use apart from these field trials. Further research is now in hand to see how far these risks can be reduced.
EARL FERRERS: My Lords, is the noble Lord aware that the damage from these birds is immense, and can he give any idea as to when these narcotics will be used?
LORD ST. OSWALD: My Lords, we are very well aware of the damage done. At the moment we cannot give a date when a narcotic of the necessary safety will be evolved.
LORD SHACKLETON: My Lords, may I ask the noble Lord what advice he is taking on this question? Are the Nature Conservancy and other bodies being consulted? And may I ask him also to bear in mind the strong views that were expressed in this House about the danger of using chemicals of any kind on nature without regard to the consequences? I should like to add that I support very strongly the Government's cautious approach.
LORD ST. OSWALD: My Lords, perhaps I did not point out clearly enough in my original Answer that these field trials are very limited and carried out entirely by the scientists of the Ministry. Therefore their scope, until a narcotic satisfactory in every way is found, will remain in the hands purely of the scientists, each of whom has to be issued a special licence by the Ministry.
LORD CONESFORD: My Lords, might I ask the noble Lord whether he used the word "narcotise" and, if so, why and what he thought it meant?
LORD ST. OSWALD: To knock out with a narcotic.
EARL FERRERS: My Lords, is the noble Lord aware that in Poland they use peas soaked in whisky and they are achieving a similar result? If the Government Will not allow the use of narcotics, will they consider abolishing the tax on whisky for this purpose?

THE SUMMER RECESS
EARL ST. ALDWYN: My Lords, I beg to inform the House that it is proposed to adjourn for the Summer Recess at the conclusion of Business on Thursday next, August 2.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, do I take it that we still have to live in expectation of being recalled during the vacation, maybe sometime about September 18, or later than that?
EARL ST. ALDWYN: My Lords, I hope to be in a position to make a statement about recall next week. But that, of course, would apply to the normal recall, and not to any special recall.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I am not quite sure what that means. I understood that after the Meeting of the Commonwealth Premiers it was anticipated that Parliament would be called together, to approve, if the Government decided to enter the Common Market, that entry.
EARL ST. ALDWYN: My Lords, there is certainly nothing that I can say now, neither do I expect to be able to say anything next week, about a recall in

1123
September. The passible date that I am referring to is when we should normally be coming back, some time in October.

BRITISH TRANSPORT COMMISSION BILL
3.21 p.m.
Read 3a, with the Amendments, and passed, and returned to the Commons.

PIPE-LINES BILL [H.L.]
Returned from the Commons, agreed to with Amendments: the said Amendments to be printed.
ROAD TRAFFIC BILL [H.L.]
Returned from the Commons, agreed to with Amendments: the said Amendments to be printed.

STANDING ORDERS OF THE HOUSE
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FORSCIENCE (VISCOUNT HAILSHAM): My Lords, I beg to move the Motion standing in my name: that Standing Order No. 44 be amended by leaving out the words, "shall not any longer appear among the Bills in Progress and". The Motion gives effect to a recommendation of the Procedure Committee embodied in their First Report which the House agreed yesterday. The existing Standing Order No. 44 states:
"When a Bill brought from the House of Commons shall have remained on the Table of this House for twelve sitting days without any Lord giving notice of the Second Reading thereof, such Bill shall not any longer appear among the Bills in Progress, and shall not be further proceeded with in the same session, except after eight days' notice given by a Lord of the Second Reading thereof."
The Committee recommended that a Bill which is subject to this Standing Order should not be removed from the Bills in Progress as it sometimes causes confusion when a Bill which has been removed reappears in the Minutes of Proceedings. The Committee therefore proposed that the Standing Order should be amended by leaving out the words which I read out when I first rose. If this Amendment were made the Bill
1124
would appear in the Bills in Progress as
"Waiting for Second Reading subject to Standing Order 44."
My Lords, I beg to move.
Moved, That Standing Order No. 44 be amended as follows:
Leave out the words ("shall not any longer appear among the Bills in Progress, and").—(Viscount Hailsham.)
On Question, Motion agreed to: the said Standing Order amended accordingly.
SMALL FARMER (ENGLAND AND WALES AND NORTHERN IRELAND) SCHEME, 1962
3.24 p.m.
LORD ST. OSWALD: My Lords, I beg to move that this Order be approved. It is proposed to make the Small Farmer (England and Wales and Northern Ireland) Scheme, 1962, which is the second scheme to be made under the Agriculture (Small Farmers) Act, 1959. This Order is similar in most respects to the existing one which it replaces. Apart from a number of small amendments, the major difference is that the new Order raises the upper limit of the man-day requirements for the Small Farmer Scheme from 450 to 500 standard man-days a year. This implements the decision announced at the last Annual Review.
As your Lordships will be aware, the purpose of the Small Farmer Schemes is to make small farm businesses more profitable by giving the farmer advice on a plan to improve his business over a period of three to five years and by providing him with grants to help him to put that advice into practice. Under the existing schemes an eligible small farm business is defined by reference to the acreage of the farm, which must be not less than 20 nor more than 100 acres of crops and grass, and by reference to the standard labour requirements. These are the annual requirements of manual labour needed on average for the production of crops and livestock with an addition for essential farm maintenance and other necessary tasks. They are expressed in terms of "standard man-days" per acre of crops or per head of livestock. A standard man-day represents 8 hours manual work for an adult male worker under average conditions.

1125
At present a farm business must have not less than 250 standard man-days on application, or toe capable of 275 standard man-days on completion of a plan, and it must not have more than 450 standard man-days on application.
Under the new schemes the upper man-day limits will toe raised from 450 to 500. We do not propose to raise the upper acreage limit at the same time, since we consider that priority should toe given to those farmers who, while farming only a small acreage, have by their own exertions increased their cropping and stocking to such a high level that they are outside the present standard man-day limit.
The lower limits for the schemes will also remain the same. We could not reduce the lower limit of the standard man-days test, since the Agriculture (Small Farmers) Act, 1959, provides that grants should toe made only for a farm business capable with reasonable management of giving an adequate return to a person carrying it on as a full-time occupation. Any lower standard man-days limit would not be consistent with this requirement. Nor do we wish to reduce the lower limit on the acreage of the farm, since this would bring into the Scheme some very small enterprises which might not prove to toe viable in the long run and would mean a wasteful dispersal of the available advisory services.
The only change in the eligibility tests in the new Schemes, therefore, is the increase in the upper standard man-day limit to 500. This makes eligible a further 13,000 small farmers. The Ministry estimate that the additional cost for the United Kingdom will be about £2½ million in a full year. The total additional cost over the whole life of the Scheme is expected to be about £10 million. About 66,000 farmers are eligible under the existing Scheme. Extending the Scheme will therefore bring the total up to 79,000 farmers, an increase of about 20 per cent.
The only other important difference between these Schemes and the existing ones is that farms on which there is an uncompleted improvement scheme under the Hill Farming and Livestock Rearing Acts, 1946–56, will no longer be excluded from assistance. This ban was originally imposed because there seemed a
1126
danger that we might pay double grant on items included in both a farm business plan under the Small Farmer Scheme and in a Livestock Rearing Improvement Scheme. However, we are now satisfied that we can prevent double grants toy administrative means without this sweeping prohibition and the ban should therefore be lifted. Except for the changes I have mentioned, and a few other minor and consequential alterations, the new Schemes are in all respects the same as the existing ones.
May I refer here to the Report of the Special Orders Committee and ask my noble and learned friend on the Woolsack to speak to your Lordships about this later, as it is on a purely legal point that it will have to be considered. These new Schemes will be brought into operation on 1st August, and will extend for five years from that date. The last date for approving farm business plans under the existing Schemes will be 31st July. All approvals after that date will be under the new Schemes. This does not mean, of course, that we are revoking the existing Schemes, since payments under them will continue for about five years, but only that the Schemes will be closed so far as new applicants are concerned.
Your Lordships will be pleased to hear that the Schemes have so far been successful, although it is still too early to make an overall judgment. Farmers have responded to the scheme very well, and by May 31 this year 40,809 farms had entered the scheme in the United Kingdom and £13 million had been paid out in grants. When the farm business plans already approved have been completed they will receive a total of over £29 million in grants. The progress being made on the approved farm business plans is very satisfactory, and in some cases has even exceeded expectations.
Some farmers have not been able to carry out their plans, but the proportion that has had to be cancelled is gratifyingly low, being only about 6 per cent. The main reasons for these cancellations have been changes in the occupancy of farms or the farmers' ill-health and only a very small minority are cases where the farmer has not carried out his work properly or has lost interest. In

1127
general, the progress achieved so far shows that the schemes are likely to prove successful in making a large number of small farms more efficient and more profitable, and it also shows that the schemes have been welcomed by the small farmers, who recognise that this help is really worthwhile. I hope your Lordships will agree that we should extend the benefits of the scheme, and that you will approve these Orders to put this change into effect. I beg to move.
Moved, That the Small Farmer (England and Wales and Northern Ireland) Scheme, 1962, be approved.—(Lord St. Oswald.)
LORD WISE: My Lords, before the noble and learned Lord on the Woolsack replies, I am quite sure that on this side of the House we welcome this Scheme. The Minister has given us much helpful information, and it was interesting to hear that the Scheme as at present in vogue has been successful. The noble Lord, Lord St. Oswald, also dealt with a point I was going to make, the question of the change of tenancy; but as he has dealt with it I do not wish to mention it further. I do not wish to raise any point on what has happened in regard to the Special Orders, in view of what is to take place in a moment or so; but, generally, we on this side of the House welcome the Scheme and wish it success.
LORD CONESFORD: My Lords, I should like to add my protest at the language of the Ministry of Agriculture. I did not follow all the statement made by my noble friend, but the Government, I gather, have been unable, so far, to form an "overall judgment". What on earth is an "overall judgment"? I believe that the word means absolutely nothing, but is in accordance with this modern habit of distributing the adjective "overall" over the whole of English prose Whether it means anything or nothing. Then I think I heard for the first time the word "occupacy" of farms. Is this another example of the language of the Ministry of Agriculture, or is it a bold bid for the illiterate vote?
3.35 p.m.
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, I think it might be for the convenience of your Lordships
1128
if I dealt with the points raised by the Report of the Special Orders Committee; and I shall endeavour to do so without making new inroads into the customary use of the English language. The first point to which I wish to draw the attention of the House is that under the Act itself, the Act of 1959, there is power given to the Minister, by Section 1, to make
"payment of grants to any person for the time being carrying on a small farm business of any such class or description as may be specified in the scheme …".
The words "small farm business" are defined by Section 6 as a business which "does not exceed 150 acres" and which
"falls within such other limits as may be specified in the scheme in. question".
So when one looks to see what payments can be made one must turn to the Scheme. But no Scheme made under this Act could enable the Minister to make payments in respect of farm businesses exceeding 150 acres in extent. There is that limitation of the power to make grants cleanly and emphatically stated in the Bill.
The Report of the Special Orders Committee has drawn attention to the words of the Scheme, and states:
"The Committee are of opinion that the draft scheme purports to enable the Minister to pay grants to a person who at the time of the payment is no longer carrying on a small farm business."
The reason, if I understand it correctly, for the expression of that view, is that, in paragraph (4) of that Scheme, the definition of "a small farm business" for the purposes of the Scheme is linked to the time of application for the grant; and paragraph 5 makes provision for payment to a person carrying on the business. I would respectfully submit to your Lordships that the Scheme cannot enlarge the Minister's powers as prescribed by the Act of Parliament, and that, therefore, there can be no question of the Scheme's giving the Minister a power to make grants to farms in excess of 150 acres. If I may say so, I think the Special Orders Committee has served a very useful purpose in drawing attention to the wording of this Scheme. It follows the wording of the previous Scheme, to which my noble friend, Lord St. Oswald, referred.
I have discussed this matter with my right honourable friend the Minister of

1129
Agriculture and I have received his assurance that, if any further Schemes have to be prepared under this particular Act, the wording will be very carefully considered in the light of the Report made by the Special Orders Committee. No one, I think, can say that the Scheme in its present language is not capable of some improvement. I hope that what I have said will satisfy your Lordships that the Scheme cannot, in fact, operate so as to enable the Minister to make grants in respect of farms exceeding in acreage 150.
LORD GODDARD: My Lords, might I put to your Lordships for a moment the point which influenced the Special Orders Committee on which I served—the question of the vires of this Order. Paragraph 4 of this singularly dull and unattractive Order provides that:
"A small farm business to which this scheme applies is a trade or business consisting in, or such part of any trade or business as consists in, the carrying out of agricultural operations on land comprised in it where on the day on which a farm business plan is submitted to the Minister for approval the amount of that land … is not more than one hundred acres. …"
Then in paragraph 5 it is provided that:
"Subject to the provisions of this scheme, where the person carrying on a small farm business to which this scheme applies has … submitted to the Minister for approval a farm business plan … the Minister … may pay in connection with the carrying out of the plan … grants. …
The point is this, my Lords. On the day on which the farmer submits his plan he may be carrying on a farm business of only 80 acres. He therefore will qualify for a grant. But supposing between the time he submits the plan to the Minister and a time when the Minister is considering whether to approve it, and so on, the farmer has bought or agreed to buy an extra 100 or 150 acres. There is no provision in this Order which makes him disclose that. I quite agree that if the Minister knows he has increased his holding to over 100 acres, he will not, of course, pay the grant. But supposing he does not know that, the man gets the money. He has done nothing illegal. The whole trouble is caused by the insertion in the Order of the words:
"on the day on which a farm business plan is submitted to the Minister …".
It is very significant that in the Scots
1130
Order, which is the next Order for your Lordships' consideration, those words do not appear. If those words were left out the Order would be unobjectionable from the point of view of vires. I venture to think that there is a loophole here, which I daresay no one will take advantage of, and that is the reason why the Special Orders Committee thought that they were bound to call your Lordships' attention to the doubt which they had.
3.41 p.m.
LORD OGMORE: My Lords, it seems to me very undesirable, in view of what the noble and learned Lord, Lord Goddard, has just told us, and also in view of what the noble and learned Lord on the Woolsack has told us, to pass this Order at all to-day. If there is something in it which is palpably—I will not say incorrect but open to misunderstanding, it may very likely mean that there will be legal proceedings as a result of it. We do not know. I think the position is very unsatisfactory when the House is told by the noble and learned Lord on the Woolsack that these words could be improved and, in fact, that the Minister of Agriculture has promised him that in any future Order they will be improved. I have never heard a statement like that before from the Government Benches, or from the Woolsack. It is not the noble and learned Lord's fault at all; he has had to try to put right something that his colleague has done. But it seems to me a highly unsatisfactory state of affairs.
I should like to ask the noble Lord, Lord St. Oswald, whether it is possible for him even at this late stage to withdraw this Order and to get it right. People are always complaining about the state in which legislation comes up here. I think it is appalling if it goes away from here as bad as it comes. One of our main tasks is to be a revising Chamber. Let us revise for once, and ask the Government to withdraw it and bring back an Order in proper form.
THE LORD CHANCELLOR: My Lords, by leave of the House, I should like to say a word in reply to what the noble Lord has just said, and to the noble and learned Lord, Lord Goddard. Lord Goddard has drawn attention to the reasons why the Special Orders

1131
Committee made its Report, and I am grateful to him for the explanation he gave of those reasons. The noble Lord who has just spoken suggested that this Order should be withdrawn and redrafted. I must say that I do not myself see that there is any need for that. I would have thought that the Order could be worked, as indeed the previous Order has worked, without any trouble. I rose before, on the purely technical points, to submit to this House my view that the language of the Scheme, to which the noble and learned Lord, Lord Goddard, referred, cannot and does not enlarge the Minister's powers under the Act. The Minister will in fact be acting ultra vires if he makes a grant to someone who at the time is carrying on a small farm business in excess of 150 acres. Therefore, while, as we often find when we bring in amending legislation, one could improve the wording, and while the wording of this draft Scheme, or of any future Schemes, could be improved in the light of the report made by the Special Orders Committee, I would suggest to your Lordships that there is really no good reason for its withdrawal at the present time.
LORD GODDARD: My Lords, I do not suggest that the Minister's powers are being increased under this Order. The difficulty is that if a man applies on a particular day, and he is only farming under 100 acres, he is within the scheme. He applies on the footing that he is farming 100 acres. However, before he gets his grant he may have bought another 150 acres and, if the Minister knows that he has done that, then, of course, he will not give him the grant. But if the Minister does not know that he has done it, and still gives him a grant on the Scheme that has been put before him, there is no earthly means by which to get back that money. That is the point.
On Question, Motion agreed to.

SMALL FARMERS (SCOTLAND) SCHEME, 1962
THE MINISTER OF STATE FORSCOTLAND (LORD CRAIGTON): My Lords, I beg to move that the Small Farmers (Scotland) Scheme, 1962, be approved.
Moved, That the Small Farmers (Scotland) Scheme, 1962, be approved.—(Lord Craigton.)
On Question, Motion agreed to.

NATIONAL ASSISTANCE (DETERMINATION OF NEED) AMENDMENT REGULATIONS, 1962
3.46 p.m.
THE MINISTER OF STATE FORFOREIGN AFFAIRS (THE EARL OF DUNDEE): My Lords, on July 3 I made a statement to your Lordships, describing briefly the increases proposed in National Assistance scales. Your Lordships now have in your hands the Statutory Instrument which will give effect to these increases, and the Explanatory Memorandum upon it. The principal change is the increase in the scale for husband and wife from 90s. to 95s. 6d., and the increase for a single householder from 53s. 6d. to 57s. 6d. There are corresponding increases, as your Lordships Will see from the Explanatory Memorandum, for other classes of recipients and, particularly, for blind persons and persons undergoing treatment for tuberculosis. The scales are all tabulated on page 2 of the Explanatory Memorandum. These new scales, of course, like the former ones, are exclusive of rent which is paid in addition by the National Assistance Board.
The main purpose of the new scales is to restore the real purchasing power of the increases which were made in April, 1961. Those increases represented a certain advance in real value on the previous scales. The new ones broadly compensate for the increase in the cost of living which has taken place since then—rather more so, in fact, in the case of the single householder. The date at which the new scales will become effective will be September 24, which is the earliest date that is administratively practicable. The numbers of people affected will be about 2½ million, and the cost, as I think I told your Lordships the other day when I made the statement, will be about £20½ million. I beg to move that the new Draft Regulations be approved.
Moved, That the National Assistance (Determination of Need) Amendment Regulations, 1962, be approved.—The Earl of Dundee.)
3.48 p.m.
BARONESS SUMMERSKILL: My Lords, on the face of it we are being asked this afternoon to approve a very simple provision—namely, an increase in the rates of National Assistance. I want to address myself to the increase in the rates for a single person and for a married couple—namely, 4s. a week for a single person, and 5s. 6d. for a married couple. I am quite sure that this afternoon there will be no division on either side of the House on this matter; but what we must ask ourselves, I feel, is: are we fulfilling our obligations to those in the greatest need? Surely this is the criterion by which a society is judged. Bearing that in mind, do these sums—and I will repeat them, so that your Lordships can remember precisely what we are asking these people to live on; namely, £2 17s. 6d. for a single person and £4 15s. 6d. for a married couple—meet this test in an affluent society? Again, I would remind your Lordships that of the 2½ million people whom the noble Lord has mentioned as being affected, 1 million—that is one-fifth of all retirement pensioners—seek National Assistance; 73 per cent. of the men are over 70, and 70 per cent. of the women on National Assistance are widows. There are also the deserted wives and their children. The doubts I have entertained, about what I consider is the niggardly treatment of these people, are confirmed when I read the Minister's definition of need.
When this matter was debated in another place quite recently the Minister was asked what was the basis of need, and he said [OFFICIAL REPORT, Commons, Vol. 662 (No. 144), col. 1683]:
"… need is an interesting philosophical question …",
and he took the view
"… that need is not an absolute concept but that in a society of rising standards the concept of need is a rising one. Relativities as well as absolutes come into this".
My Lords, that is a piece of sophistry which has surely been unequalled by a Government speaker in a debate concerned with the simple human needs of the aged, the chronic sick, the widows
1134
and the deserted wives with children. I was certainly not surprised when the Member for Sowerby rose up, lost his patience and cried, "To the devil with statistics! Let us have a picture of how these people live".
I agree; the Minister was baffled. Is there any Minister in the new Cabinet who knows how these people live? Other honourable Members asked that the House should be given a picture—not statistics: they asked for a picture. I should like to suggest to the Minister, who I hope will read this (and it is a new Minister), that he visits a poor area and finds a seat supplied for the aged by the local authority in a London borough. That is a poignant sight. On every day that I come to this House I pass one of these seats. There they sit, gazing apathetically at the traffic. I think that if the Minister went there just once, or even sat on that seat, he could form an opinion of what these people have available for clothing (they are uniformly shabby), for transport and, let us say, for modest entertainment. The Minister could learn that poverty to-day has certainly a relative and an absolute concept.
Now it may be said—and the noble Earl could say it to me—that on the top of this there are discretionary allowances for those who are capable of applying for them. Each noble Lord here may know some person who is in the position of having to apply for extra help. Many of these people do it, but it calls for a certain amount of courage, and it calk for the ability, the energy, to visit the office, or the ability to write a letter to the office to describe their need or to ask somebody to call. Despite these difficulties, 51 per cent. of these people receive discretionary allowances; and for those noble Lords who are not aware of this I would tell them that a discretionary allowance may be an extra 3s. for laundry, perhaps 4s. a week for domestic help and 2s. 6d. for a special diet. Before these sums are granted (and quite rightly) a National Assistance Board officer—and I cannot speak too highly of these men and women; they are a very fine body of people—must call and assure himself that the applicant cannot do the washing or cannot do the cleaning.

1135
The pattern of this scheme was introduced by the Labour Government in 1948, and I had the honour to administer it for about a year and a half in 1950. But like many Acts concerned with social services, it must be adjusted to changing circumstances, and it is quite futile for Ministers in another place to say, "Ah!; eleven years ago you established a pattern ". We accept that, of course. But it seems clear that the revision of National Assistance scales to-day is quite inadequate to meet changing circumstances. I would say that the whole National Insurance Scheme needs reexamination in order to provide adequate pensions, because we did not envisage that the National Assistance Board would be mainly concerned with supplementing the National Insurance Scheme. I may be told by the noble Earl that the graduated scheme in the distant future may help; but, of course, that will operate long after the people we are concerned with to-day have passed beyond material assistance. I am pleading to-day for those who can be helped to-day, and I would ask the Government: why cannot they agree to raising the National Assistance rates to £3 8s. for a single person, with rent, which they get already, and £5 7s. for a married couple? Is that asking them to be too generous?
The Parliamentary Secretary in another place said that this would be a very large figure indeed. It would be, my Lords—£50 million. But I would remind your Lordships that in the last Budget those in this country who pay surtax were relieved of £83 million. Surely, some of that could have been directed to the poorest in the country, the 2½ million who are inarticulate, powerless, without any kind of pressure group in this House or the other place. I would say that the Parliamentary Secretary spoke with more humanity and understanding of the needs of the poorest than the Minister. She agreed that the deserted wives and their children are treated in an uncivilised way. She did not attempt to equate the immediate needs of the poorest to some philosophical concept. I must say, my Lords, that I am sorry that the Prime Minister has not grown out of his misogynist phase and promoted the most brilliant of his younger Ministers—who is, of course, the Parliamentary Secretary to this Ministry
1136
in another place. However, this is too much to hope in the penultimate stage of the Prime Minister's development.
Now I just ask the Minister this. Later on, he is going to consider giving a grant from the Treasury to businessmen who worked in Egypt. The Treasury, I know, is faced with pressure from different Departments. I ask him whether, before he gives unqualified approval to this demand later on this afternoon, he will consider at this stage increasing the rate of assistance, so that these people, who have not many years—and let us hope that those people in a similar position in years to come will benefit from a graduated scheme—may benefit. Will he at this stage grant this increase? The Government have failed, I believe, after eleven years in office, to devise a scheme which will ensure adequate benefit as a right, and not subject these people to two tests of means: the first for National Assistance and the second for discretionary allowances. May I remind your Lordships that even men who have been injured in their work or who perhaps have contracted some industrial disease are also subject to the two means tests of National Assistance and discretionary allowances. May I ask the noble Earl, therefore, whether he will have second thoughts; whether he will go to the Minister and plead for these people, in order that we can improve the lot of the poorest and the most helpless in this country?
On Question, Motion agreed to.

NATIONAL HEALTH SERVICE (SUPERANNUATION) (AMENDMENT) REGULATIONS, 1962
4.0 p.m.
LORD NEWTON: My Lords, I beg to move that these draft Regulations be approved. The draft Regulations for Scotland are similar, and it may therefore he convenient to your Lordships to discuss both together. If that suggestion meets with your Lordships' approval, then my noble friend Lord Craigton will move the Scottish Regulations formally. The main provisions are contained in Regulations 3 and 4. Regulation 3 provides for early retirement with accrued pension and lump sum benefits in two circumstances: in

1137
the event of redundancy, and in the event of an officer's retirement in the interests of the efficiency of the National Health Service.
When we debated the Hospital Plan for England and Wales earlier this year, I explained that, as the Plan is carried out, it should rarely be difficult to find other employment for displaced staff within the Service. Indeed, special arrangements have been made for cooperation between employing authoirties to help to ensure that displaced staff are absorbed elsewhere. Nevertheless, it is only right that provision should be made to meet any exceptions which may occur. Accordingly, Regulation 3 secures that, Where an officer has 'had ten years' service and has attained the age of 55, he shall be able, if retired on the ground of redundancy, to receive at once his accrued pension and the lump sum payment to which he is entitled. The line of 55 years of age has been chosen because it is in accordance with the general practice of the public services, where 55 is the minimum age for paying pensions of this kind.
The pension and the lump sum benefits will not be subject to an actuarial reduction to take account of the earlier age at which they are paid. They will, however, be reduced to take account of the redundancy compensation which has been paid. This seems to be both logical and fair. The same provisions will apply in the case of officers who are retired early in the interests of the efficiency of the Health Service. Such cases should not be numerous, but if an elderly officer finds that the strain of coping with his work is too great, it will be an advantage to him and to the Service that he will be able to retire earlier on pension. The fullest safeguards will be applied, including the right to a personal hearing by the employing authority in the presence of two assessors, one of whom will be appointed by the Minister. The Minister will make the final decision, after receiving a full report from the employing authority and the views of the assessors, if there has been a hearing.
Regulation 4 provides for an improvement in the scales of benefit in respect of service as a practitioner. In 1955 the Government Actuary reported that the superannuation contributions of practitioners who had entered at the normal
1138
age were at a higher level than was necessary to finance their superannuation benefits. At that time, the great majority of practitioners in the Health Service had entered at later than normal age. Since that time the proportion of normal age entrants has increased substantially, and the Government consider that the relationship between contributions and benefits should now be corrected. That being so, two alternatives are open: to reduce the contributions, or to increase the benefits. The professions are unanimous in preferring the latter, and that is what this Regulation does. It provides that, as from September 1, the pension of a practitioner will be at the annual rate of 1¾ per cent. of his total remuneration. The existing rate of l½ per cent. will apply to the remuneration paid up to that date. The lump sum benefits will be raised equivalently.
Both these Regulations, Regulations 3 and 4, have been fully discussed with the professions concerned, and one or two modifications have been made to meet some of their points of view; we have not been able to meet all of them. However, these Regulations are very much to the advantage of those who contribute to the Health Service Superannuation Scheme by giving entitlement to pension in new circumstances and by providing better benefits for practitioners. Therefore I commend them to your Lordships. I beg to move.
Moved, That the National Health Service (Superannuation) (Amendment) Regulations, 1962, be approved.—(Lord Newton.)
4.7 p.m.
LORD BURDEN: My Lords, the noble Lord has explained these draft Regulations in his usual lucid manner, and I do not propose to object to or to oppose the Regulations. Indeed, so far as they go, they are to be welcomed. But I would suggest to your Lordships that they have to be considered in relation to the problems of redundancy in the National Health Service arising from the Hospital Plan. Here I agree with the noble Lord. As I know from my own experience, every effort is being made in the Service to reduce redundancy to a minimum; but these draft Regulations indicate that some redundancy appears to be inevitable. I will

1139
not develop that point, but I happen to have heard opinions which indicate that it is possible that redundancy, despite every effort made to avoid it, will occur.
I do not propose to discuss the general provisions for redundancy as outlined in a recent administrative circular, except to say that officers in the National Health Service are both alarmed and worried that the new Regulations in the administrative circular are, on the whole, a definite worsening of the terms which have applied to the National Health Service since its inception until two years ago. So far as the present draft Regulations are concerned, I welcome the reduction to 55 as the age when superannuation, in the circumstances outlined by the Minister, may be drawn. I know, of course, the arguments for the age of 55; but, bearing in mind what I have said with regard to the general worsening of all conditions in the administrative circular, it is quite possible that an officer may have had or given 24 or 25 years of loyal and devoted service, and had that to his credit, but if he happens to be under the age of 55, and should his post be declared redundant, he would be entitled, as I understand the position, merely to a refund of superannuation contributions and the terminal allowance, if there happens to be no appropriate post for him in the National Health Service. This does not appear to me to be very satisfactory. In fact, it seems to be both unfair and unjust, bearing in mind what I have said in regard to the worsening of conditions as outlined in the administrative circular.
I do not wish to comment on the second point raised by the noble Lord—that of compulsory retirement for inefficiency—as the Minister in another place gave what seems to me to be fairly satisfactory assurances on the manner in which these cases would be considered, especially the assurance that the officer concerned could be accompanied at the inquiry by a friend or trade union representative, if he or she so desired. We have always to bear in mind that inefficiency may not be due to any inherent weakness on the part of the officer concerned, but to stress and strain and ill-health arising from those conditions.
1140
Finally, while expressing appreciation of the draft Regulations so far as they go, I am bound to say, again speaking from my own knowledge, that there is both apprehension and dismay in the Service at what has been rightly described as a parsimonious worsening of the general provisions for dealing with redundancy as a whole. I agree that the draft Regulations before us make some slight improvement. Of course, we cannot discuss the broad problem on these Regulations, but I thought it only fair and right, knowing the position, that I should bring before your Lordships the fact that while staff and associations accept these Regulations, and although, as the Minister said, the regulations do not concede all that they require, they are fully conscious of the serious apprehension in the Service as a whole about the worsening of conditions which, so far as the National Health Service is concerned, have obtained from its very inception.
LORD NEWTON: My Lords, I am very glad that the noble Lord, Lord Burden, has admitted that these draft Regulations are an improvement. Of course they are, and they could not possibly be represented as anything else. He made some observations about redundancy generally and about compensation for redundancy. I suppose he was talking about the system of terminal payments. But, of course, these Regulations have nothing to do with that, except in one or two minor respects.
LORD BURDEN: They will apply, of course, to a man who is under the age of 54?
LORD NEWTON: My Lords, the Regulations are concerned with officers who have reached the age of 55, which is another way of saying what I was saying before the noble Lord interrupted. In my opening speech, I explained why the line has been drawn at the age of 55. It is in accordance with the general practice of the public service. Wherever one draws a line, in some sense it is arbitrary, and in the opinion of Her Majesty's Government 55 years is the right line at which to draw in these regulations. I hope that with that explanation your Lordships will see fit to agree to these Regulations.
On Question, Motion agreed to.

NATIONAL HEALTH SERVICE (SUPERANNUATION) (SCOTLAND) AMENDMENT REGULATIONS, 1962
LORD CRAIGTON: My Lords, I beg to move that the National Health Service (Superannuation) (Scotland) Amendment Regulations, 1962, be approved.
Moved, That the National Health Service (Superannuation) (Scotland) Amendment Regulations, 1962, be approved.—(Lord Craigton.)
On Question, Motion agreed to.

MINK (IMPORTATION AND KEEPING) ORDER, 1962
4.17 p.m.
LORD ST. OSWALD: My Lords, I beg to move that the Mink (Importation and Keeping) Order, 1962, a copy of which was laid before your Lordships' House on June 28, be approved. I think that it will be for your Lordships' convenience if we consider this Order and the similar Order about coypus together. These two Orders are short and to the point. They extend the provisions of the Destructive Imported Animals Act, 1932, to coypus and to mink. This Act was passed to make effective the measures the Government were then taking to deal with musk rats that had escaped from fur farms and established themselves in considerable numbers over some 700 square miles in Shropshire and adjoining counties, and about 150 square miles in West Sussex, Surrey and Hampshire. The measures proved successful and by 1935 the country was virtually free of musk rats and some 3,000 had been destroyed. So far as we know, there are now no musk rats in captivity or at large in this country.
Wisely, the Act, as drawn, allows us to apply its provisions by Orders to "non-indigenous mammalian species with destructive habits". Both coypus and mink come within this class.
The main provisions of the Act are designed to prevent escapes of these creatures from captivity and to facilitate the recapture or destruction of any which do escape. Under the Order my right honourable friends the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland will be
1142
empowered to prohibit the importation or keeping of coypus and mink absolutely or to allow them in under licence. We are proposing that the importation of mink should be permitted under open general licence, because we have no wish to impede the importation of these creatures. We do not think that coypus are being imported now and a licence would be needed to import them. We are in consultation with the Fur Breeders' Association as to what conditions we should attach to licences for the keeping of mink and coypus. The Act also requires occupiers to notify the Departments of the presence of coypus and mink at large on their land. It is essential to the success of the campaign that we should know where these creatures are so that we can make sure that they are either recaptured or destroyed.
These are the main provisions of the Act and I should mention that there are penalties ranging from £5 for failure to notify the presence of coypus or mink at large, to £20 for importing or keeping them without a licence. But I should make it clear that although these powers and penalties will be available should the need arise, we hope to achieve our purpose by willing co-operation.
I should like to explain why we need these Orders. Large numbers of coypus are established in the wild in Norfolk and Suffolk and are damaging crops and waterways. These coypus were introduced into Great Britain about 1930, and by 1939 they were bred on some forty farms for their fur. When the war came most of those farms shut down and the coypus escaped. At first they did little but good by keeping down aquatic vegetation, but by 1960 farmers and river boards were complaining about the damage they were causing to river banks and crops, and particularly to sugar beet. To meet this situation, the Minister announced in July, 1960, that rabbit clearance societies in the eastern counties could claim 50 percent. grant on their expenditure on destroying coypus. These societies have been extremely active in co-operating with river boards and drainage authorities in control measures, and between them something like 100,000 coypus have been destroyed. Individual farmers, land owners and farm workers have destroyed many

1143
more. I should like to take this opportunity of paying tribute to these societies and others for their efforts against the coypus. Unfortunately, it has become clear that the present rate of destruction, heavy though it is, is not reducing numbers fast enough, and the coypus are gaining ground.
The Government have, therefore, decided that additional steps must be taken to speed up the campaign. As a "once and for all" measure we are organising a co-ordinated drive against the coypus in East Anglia under the direction of experienced officers who will work systematically over the entire area of infestation. I should make it clear that we do not consider it possible to exterminate the coypus completely, but we feel that the plans we have made will, in two or three years, enable the coypus to be reduced to really small numbers and contained in a few isolated areas. The national agricultural organisations have promised full support for the campaign and I know that we can rely on individual farmers, landowners and workers, as well as on rabbit clearance societies and other bodies, to continue their active co-openation in making the campaign a success.
Now I should say a little about mink. Mink were first farmed in Britain in 1929. There are about 600 known mink farms in Great Britain. The majority of these farms are well run and I should not wish it to be thought that this Order is in any way a reflection on the members of this industry. Nevertheless, mink have escaped in recent years and some of them are reported to be breeding in the wild on the Hampshire Avon, in Devon on the river Teign, and on the Teifi on the borders of Carmarthenshire and Cardiganshire. In the wild state these mink can do serious damage to poultry, fisheries and bird life. There is a history of similar escapes and breeding in the wild in Scandinavia where escaped mink have been allowed to increase over large areas. We feel that we should take steps to prevent this from happening in this country. I hope that I have said enough to convince your Lordships that we need these Orders to enable us to deal with the situation created by these escaped animals, and that we are proposing to use the powers reasonably and effectively. I beg to move.
Moved That the Mink (Importation and Keeping) Order, 1962, be approved.—(Lord St. Oswald.)
4.23 p.m.
LORD WISE: My Lords, I should like to say from this side of the House that we welcome this Order, as we welcomed the previous Order this afternoon. What the noble Lord has said about East Anglia being overrun by these coypus is perfectly true. Our chief pest troubles at the moment are with coypus and pigeons. Considerable damage has been done to crops, river banks and streams and will no doubt continue to be done unless these coypus are kept under restraint. I am one of the lucky ones, because I have never seen a coypu on my land; I do not want to see any, and for that reason I hope that the operations will be successful.
The noble Lord referred to penalties under a previous Act, and I understand that these penalties are fairly embracing. I do not know whether it is possible, when information is circulated to farmers, for some notice to be given of the penalties which may be incurred. I was interested to note in an article in my county paper that the Ministry of Agriculture are in Norwich advertising for qualified operators for employment in an intensive campaign to destroy coypus in Norfolk and Suffolk. This is an excellent advertisement, and I hope that it will be successful in obtaining the skilled operators who are required. There is one matter that I should like to raise which perhaps the noble Lord can deal with, and that is the cost of destruction. If this is carried out by one of these operators from the Ministry, is there any cost to the farmer, or is it borne entirely by the Ministry? With those few remarks, I wish success to the Order and I hope that it will be effective in dealing with these pests.
On Question, Motion agreed to.

COYPUS (IMPORTATION AND KEEPING) ORDER, 1962
LORD ST. OSWALD: My Lords, I beg to move.
Moved, That the Coypus (Importation and Keeping) Order, 1962, be approved.—(Lord St. Oswald.)
On Question, Motion agreed to.

UGANDA INDEPENDENCE BILL
4.27 p.m.
Order of the Day for the Second Reading read.
THE EARL OF DUNDEE: My Lords, I have At in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of She purport of the Uganda Independence Bid, has consented to place Her Majesty's Prerogative and interest so far as they are affected by the Bill at the disposal of Parliament for the purposes of the Bill.
THE MINISTER FOR COLONIAL AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, I beg to move that this Bill be now read a second time. The object of the Bill is to provide for the Independence of Uganda. I am sure that your Lordships will be pleased to know that it was the unanimous wish expressed at the Independence Conference that Uganda should remain in the Common wealth and be under the sovereignty of Her Majesty the Queen, as Queen of Uganda. It so happens that it is almost exactly 100 years since the explorers Speke and Grant discovered the headwaters of the Nile and it was from this date that our association with Uganda began. It is now 68 years since the Protectorate was first declared. During these years Uganda has been growing into a nationhood. Its peoples have been learning to work together to create a stable and happy country. There is a growing spirit of co-operation in Uganda and in recent years a read basis of political unity has been worked out. The Munster Com-mission (which your Lordships will remember was the Relationships Commission) did much to promote this spirit of unity, and I should like to record the gratitude of Her Majesty's Government to the noble Earl, Lord Munster, who led the Commission, and to his distinguished colleagues Professor Wade and Dr. Marshall.
At the Independence Conference which was concluded on June 29 at Marlborough House, arrangements were agreed which offer a permanent solution to many of the long-standing problems which have faced Uganda. The most important and baffling of these problems
1146
has been the welding of the traditional kingdoms of Buganda, Ankole, Bunyoro and Toro into a modern structure of Government The Report of this Conference is contained in Command Paper No. 1778, which was recently laid before Parliament. Uganda, perhaps more than any other British territories in Africa, has been notable for the exceptional strength of its tribal loyalties and institutions. Buganda, with its central position, with its highly developed system of Government, its Kabaka, and its traditional Council the Lukiko has tended to overshadow the rest of the country. The other kingdoms and districts have also been equally concerned to preserve their individuality. They have all, however, been willing to make sacrifices in order that the new Independent Uganda should have sufficient strength and cohesion to play its part in the affairs of the modern world.
The difficult question of the position of Buganda was to a large extent solved at the Lancaster House Conference last year. The work of the Independence Conference last month was greatly facilitated by this preparatory work. A federal relationship between Buganda and the Central Government had then been agreed, and a satisfactory relationship has now been worked out between the other Kingdoms and districts and the Central Government. Noble Lords will remember that the Central Government, under the leadership of Mr. Obote, has been in office for less than three months. None the less, during this short time much constructive work has been done.
The success of the Independence Conference was in no small part due to the confidence which Mr. Obote and his Ministers were able to inspire in the delegates from all parts of the country. Having myself sat for many hours in the Constitutional Committee, I was able to see this for myself. I should like to pay my tribute to the painstaking care and obvious sense of responsibility with which the Uganda delegates set about their task. I am bound to say that again and again during the course of the Conference regional interests were pressed; but equally, my Lords, when there seemed some danger that these regional interests were being over-emphasised, the good sense of the delegates prevailed, and they reminded themselves that their

1147
purpose was to achieve a Constitution which would benefit Uganda as a whole.
There was one issue at the Conference which proved incapable of solution by agreement. This was the dispute between the Kingdoms of Buganda and Bunyoro over the so-called "lost counties". As your Lordships will remember, the Prime Minister appointed a Commission consisting of three Members of your Lordships' House, under the chairmanship of Lord Molson, assisted by Lord Listowel and Lord Ward of Witley, to advise the Government on this difficult question. Those of your Lordships who have read their report will, I am quite certain appreciate the immense care and close consideration of all the facts with which they discharged their task.
Like the Munster Commission, Lord Molson's Commission treated the problem of the "lost counties" as a political question and not as a juridical one. Their report, your Lordships will remember, recommended that two of the counties, Buyaga and Bugangazzi, should be transferred from Buganda to Bunyoro. We entered upon the Independence Conference with the conviction that this would be the best solution to the problem, if the two Kingdoms could be brought to agree to it. But, my Lords, in the event, Buganda were adamant that there should be no transfer of territory. They maintained that the territory concerned was lawfully theirs, and, furthermore, that Lord Molson's Commission had to a very large extent acquitted them of charges of discrimination.
As there could be no agreement, my right honourable friend had to weigh very carefully the consequences of an imposed decision. He took fully into account the Commission's warnings of the risk of serious disturbances in the future if nothing were done. He also accepted their view that the atmosphere was quite unsuitable for holding a referendum in the short time available before the promised date of independence. He therefore decided upon a solution which gave the responsibility of the administration of the two counties to the Central Government for a period, and with it the responsibility to give the people who live there the opportunity by a referendum to decide their own future
1148
in conditions of peace and security. It is our belief that this solution will give security to the peoples concerned, and should greatly reduce the threat to peace and good order at this crucial period in the life of Uganda.
As your Lordships know, the view was urged in another place that there should be written into the Constitution a date before which the referendum must be held, or, at least, that a public declaration should be made in Uganda that a referendum will be held, without necessarily putting a date to it. An undertaking was given that these views would be put to Mr. Obote and this has been done. Mr. Obote is now embarking upon discussions on the practical implementation of the Conference's decisions. I am sure that your Lordships would not wish that by anything we say here to-day we should complicate the issue in Uganda.
My Lords, turning to the Bill itself, Clause 1 is in the normal form and provides for the fully responsible status of Uganda. Clause 2 deals with nationality matters consequent upon the attainment of independence by Uganda. The provisions here are similar to those for Tanganyika. Clause 3 deals with consequential modifications to other enactments. Clause 4 enables loans to be made to the East African Common Services Organisation under the Colonial Development and Welfare Act, 1959, after the Independence of Uganda. This follows the precedent in the Tanganyika Independence Act. Clause 5 interprets the words "existing Constitution Order", which means the Uganda (Constitution) Order in Council, 1962, which was made on February 26 this year. Clause 6 is the short title of the Bill.
My Lords, I think we can look back with pride at the period of the British protection over Uganda, and I feel sure that your Lordships will endorse the sincere thanks of Her Majesty's Government to the British civil servants who have contributed so much to Uganda's progress. We are particularly glad to know that the Government of Uganda is anxious to retain their services after independence, and that the arrangements made under the Overseas Service Aid Scheme have made it possible for many of them to decide to stay on. I think it is right that at this time we should also

1149
remember the part played by explorers, traders, members of the professions, doctors, lawyers, and the like, and above all the missionaries, whose work has been so particularly successful in Uganda. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(The Marquess of Lansdowne.)
4.40 p.m.
THE EARL OF LUCAN: My Lords, I should like to thank the noble Marquess for the clear and concise way in which he has moved the Second Reading of this Bill. My next task is to apologise to your Lordships on behalf of my noble friend Lord Listowel, who has had to go abroad and, to his great regret, has been unable to be hare. He particularly wanted to be here, having been, as your Lordships know, a member of the Commission of which the noble Lord, Lord Molson, was Chairman.
Looking at Uganda on a map of Africa, one is struck by its geographical situation. It abuts on the Congo and the new State of Ruanda-Burundi; on the Sudan in the North; and with the East African Territories; and one is impressed by the enormous importance of stability in Uganda, with its dangerous elements on several sides where disturbances have already taken place. If Uganda can continue to be, as it has been far the whole period of British occupation, an oasis of calm and stability, then we can see this Independence Bill go through with a good conscience and with good hopes for the future. I was speaking only a few months ago with a Canadian friend who had been travelling on United Nations business all round Africa. He said that it was at Kampala that he was struck more than anywhere else by the racial harmony and the general air of tolerance and good feeling, and we can hope that this state of affairs will continue.
The noble Marquess has referred to the unanimous wish of all Parties taking part in the Conference that the independent State of Uganda should continue to be a member of the Commonwealth. I think we can welcome that, and, as the noble Marquess says, we can welcome the spirit Of compromise that was shown by the parties taking part. One could, however, wish that that spirit had gone just a little further. I have seen it said
1150
in a letter from the Ruler of Bunyoro that "compromise is quite unknown to Africans. Yet," he said, "we willingly accepted the compromise proposed by the Molson Committee." The tribal loyalties are there held with great intensity and great feeling; and that tempts one to put over a more general idea: if we look around Africa to-day it is really deplorable to see how the epidemic of nationalism which is sweeping the whole of the world has taken hold of Africa. The fragmentation of that country, more particularly since the colonial Powers left, really puts obstacles in the way of the peaceful future for the continent and gives one cause for alarm.
On a smaller scale we have a manifestation of it in the case of the "lost counties" that are in dispute between the Kingdoms of Uganda and Bunyoro. The Commission of which the noble Lord, Lord Molson, was Chairman went into this subject in great detail and came to a unanimous conclusion—and I can say on behalf of my noble friend Lord Listowel that he was entirely in agreement with the Report of that Commission. They recommended a certain course to Her Majesty's Government, and the noble Marquess has explained that Her Majesty's Government also thought that that would be the best solution; but we have to face it that when they saw that they could not get agreement with this solution they decided against imposing a solution while Her Majesty's Government was still in control. Remember, my Lords, that the Act says, in line 14 of the first page:
"… as from the appointed day Her Majesty's Government in the United Kingdom shall have no responsibility for the Government of Uganda or any part thereof."
I and my friends feel that Her Majesty's Government have shirked the responsibility which was theirs of deciding on the solution which they themselves thought was the best. They decided that it would be dangerous to leave things as they are and that a referendum was impossible in the time they had available. Delay, surely, will be dangerous. Two years' delay before there is a referendum will give opportunity for feelings to be inflamed and for passions to be played upon, with every risk that they will lead to a situation which cannot be settled peacefully. A

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referendum when carried out by an independent State cannot be supervised by outside impartial authorities.
The changes in the Constitution and territorial changes in the new State have to be passed by a two-thirds majority. Everything depends on the two-thirds majority. At the moment I understand that Mr. Obote is leading a Coalition Government and his principal supporters are the Buganda Party. The Buganda Party have gone on record as saying that they are irreconcilably opposed ever to giving the control of any of the disputed counties to another kingdom. That is what leads one to look on the situation with some alarm. We think that Her Majesty's Government have taken the wrong decision and have shirked their responsibilities. There is hope that the peoples of Uganda who, after all, have recognised the value to them of a peaceful combination to make the new State a success, may see that, no matter what they feel now, some compromise by both parties to the dispute is inevitable.
But that sort of attempt requires mutual confidence on both sides, and the confidence of the smaller of the two disputants, Bunyoro, is not likely to be forthcoming when you get threats expressed like those reported in The Times of July 19, when the acting Buganda Premier said:
"The Kabaka's people had been prepared to invade Bunyoro if Britain had ordered any of the Lost Counties to be transferred."
That is not the kind of language calculated to permit of a peaceful settlement. We can only hope that more moderate counsels will prevail; that the future will be assured; and that this country, which has been, as the noble Marquess said, such a good example of a Protectorate under the British Crown, thanks to the devoted efforts of the British Colonial servants, will continue on its path of independence. We hope that the dispute between these two component parts is settled peacefully. I would extend our warmest wishes to the peoples, all of them, of Uganda.
4.50 p.m.
LORD OGMORE: My Lords, on behalf of noble Lords on these Benches I very much welcome this Bill. I also appreciate the language that was used by the noble Marquess in moving the
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Second Reading. It was a little warmer than that which some Ministers have used in this House in the past on independence Bills. I have sometimes felt that we have missed a great opportunity, in that they have been treated in a rather doleful way, when, from their point of view, this particular period in their history is, of course, a very joyful one. The noble Marquess mentioned one particular class of people who in my experience are very rarely mentioned; and yet in Uganda, particularly, they have had a tremendous effect upon the happiness and wellbeing of the people. The sequence of British association in Uganda has been like this: first of all the explorers; secondly, the missionaries—those are the people that I was glad to hear the noble Marquess mention; thirdly, the civil servants, and fourthly the businessmen.
So far as the first are concerned, the explorers, the noble Marquess mentioned Speke. It may be of interest to your Lordships to know in this very month in Jinja there is a big celebration in honour of Speke. The poor man certainly did not get much honour in his own country; be was called liar and cheat, and all sorts of things, when be was alive. It is a very good thing that after his death, 100 years after the finding by him of the beginning of the Nile, his great achievement should be recognised. When I was in Jinja a month ago I said to them, "I am very glad you are recognising Speke; it is time he was recognised. But there is one memorial to him already; it is a few hundred yards from my residence in London—I refer to the obelisk that is erected to him in Kensington Gardens". But for some reason it is singularly uninformative, since the only inscription on it is, "Speke. Victoria, Nyanza", which cannot give very much information to the people, nursemaids and others, who visit Kensington Gardens.
Then we come to the missionaries. I said that they had performed a great service. When I visited Uganda about fifteen years ago there was an old lady still living there, an old French or Belgian missionary, who 50 years before had walked all the way from Mombasa, through the bush, in peril of wild animals, and wilder men, to Uganda. In fact, of course, the reason the railway was first developed through Kenya was

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to take the products of Uganda down to the sea at Mombasa. Then, finally, we have the civil servants, who, as the noble Marquess quite rightly said, played a great part, and the businessmen who have also played their part in the development of this country. I should also like to pay my tribute to nine Uganda Development Corporation, under its chairman, Mr. Simpson, who have made a tremendous contribution to the economic development of the protectorate.
My Lords, I feel that the prospects of Uganda are bright, because, unlike so many countries whose independence we celebrate in this House, it is economically viable. It has a small population for its size—only some 6 million or 7 million in a country the size of Britain—and it has a rich soil, with many natural resources. There is no large settler element there and there is no large racial minority. Such racial minorities as are there are badly needed in the development of the country; and I am sure—indeed, I know—that this fact is understood by the African leaders. Politically, therefore, so far as those problems are concerned—problems which are so acute in other parts of Africa—there is no difficulty in Uganda.
They also need, as the noble Marquess said, and as I know from personal discussions with the African leaders in Uganda, the assistance of the European expatriate officers. Unhappily, I do not feel that they are going to get it; because in Uganda, as in every other country to which we grant independence, at the moment of granting independence we commit an act of extreme folly in bribing the officers who are most needed for the development of the territory to leave it. Just at the moment when their skill and their expertise, their advice and wisdom, are most required they are off, bribed by the British Government. Moreover, a great deal of the money which is at that moment granted by loan or grant to the country from Britain has to be applied to the compensation of the officers, so that money is not available for the development of the country.
I have mentioned this point to your Lordships on many occasions on these independence Bills. The situation has not altered. What should be done, of course, is to do for the civil authority
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what the Army does. If the Army seconds officers, as it does in large numbers, it does not expect them to lose all their pension rights or anything of that kind. They remain as officers in the British Army, under the War Office, and when they have finished in the other countries they come back. These civil servants of whom I am speaking should be part of the Home Civil Service. They would normally work not at home, but overseas where they are needed. But the mere fact that they are part of the Home Civil Service, pensionable as home civil servants, would avoid this problem of having to get rid of them and compensate them for exercising their right to leave the territory at this very delicate moment.
With regard to the Uganda Independence Conference last month, there is just one minor matter I would mention: it does not affect your Lordships, but it might cause a little confusion later on. When the noble Marquess kindly made a reference to myself in the course of the proceedings on the Jamaica Independence Bill he said that I had been the adviser to the kingdom of Toro at this Uganda Independence Conference last month. In fact the people who had the advantage, or disadvantage, of my advice were not the Kingdom of Toro but, as it is now to be called, the Territory of Busoga. I mention that because it might lead later to some misunderstanding.
I have been on a number of these Independence Conferences and I am sure that, above all, one has to have boundless patience, especially with Africans. You cannot hurry them; they must know the reason why. They must be satisfied with what is happening; they will take nothing on trust or for granted. It is not often that I have the opportunity of congratulating Her Majesty's Ministers—usually I have to criticise them—but I should like to say that the noble Marquess, Lord Lansdowne, who was, as be has just told your Lordships, the Chairman of the Constitutional Committee, on which I also sat, showed boundless patience and no and of courtesy. In fact, sometimes when we had been sitting from 9 in the morning until about 11.30 at night, I thought his patience was a little too boundless; but, at all events, it was a fault on the right side.

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How do we harmonise the need for a strong central Government with the tribal feeling and the attachment of these small territories to their own kingdoms? The noble Marquess said, quite rightly, that this was the main problem at the Conference. It is particularly so in Uganda, because they have such strong attachment to their local kingdoms. On the whole, I think that the solution found at the Independence Conference was the right one, and that there is enough power in the centre, and yet enough authority in the various kingdoms and districts and the territory of Busoga, to allow for the needs both of a strong central Government and of tribal attachments to their own particular districts and kingdoms and territory.
I think we have to understand the difficulties of African political leaders. Your Lordships occasionally read and hear rather flamboyant statements from various leaders, although I am glad to say that this does not apply to the Uganda leaders. These statements are made because to a large extent they are entering what is to them a new world, and there is no comfortable body of political and constitutional doctrine to fall back on, as there is in this country or in the United States, where politicians who are in doubt can always call up some precedent from something that has happened at some time. These people cannot do that. As I say, they are really entering a new world without any of the guide posts which in well-established democracies are always present—sometimes, some of us think a good deal too much present. Therefore, you will find unco-ordinated speeches and you will find rather inflammatory speeches, but I am quite sure that they must not be taken too seriously.
As the noble Marquess said, the acute problem was over the lost counties. Originally, there wore six, and now, as the result of the Report of Lord Molson's Commission, that is cut down to two. There were three courses which we at the Conference thought that the British Government might take. The first was to give the two counties to Bunyoro; the second, to allow Buganda to retain them for all time, as it were; and the third was to do nothing. After some experience of Her Majesty's Government, I must admit that I was
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afraid they would take the third course and do nothing. It seemed to me highly important that they should do something. It was quite beyond reason to expect a young Uganda Government to handle a problem of this kind which was, in any case, sixty years ago the responsibility of Her Majesty's Government, and on which nothing has been done ever since.
So I was very glad indeed that they took action and did take a decision. It was quite an unexpected one—namely, that the Central Government should administer these two counties for a period of not less than two years, after which the decision should be taken by a referendum organised by the National Assembly of Uganda. I thought that was quite an imaginative proposal. It was a decision which was accepted by the Uganda Government. It was a great step forward. Mr. Obote, with great courage I may say, accepted the decision, and I think it may well be that it will be found in time to be the right one. The only question in my mind is whether there should be a maximum period as well as a minimum one—in other words, whether the referendum must be held within a certain period of time. But, on the whole, I think it is perhaps just as well not to include it in the Constitution. If a declaration can be obtained from the Uganda Government, so much the better. All these things will be in the hands of the Uganda Government, and I personally have every confidence in Mr. Obote. I think he is a remarkable man and, so far as he is concerned, I am sure he will carry out any obligations to the letter.
So far as Clause 4 of the Bill is concerned, I am pleased to see that the Colonial Development and Welfare Act will be made applicable to the East African Common Services Organisation, after Uganda Independence. This is definitely a step in the right direction. As your Lordships know, the East African Common Services Organisation took over responsibility from the East African High Commission and they administer a number of common services, such as the railways, the posts and aviation. I am certain that this tendency will increase as time goes on. In fact, quite recently Mr. Mboya said, on a future East African Federation, that the three territories—that is Uganda,

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Kenya and Tanganyika—and Zanzibar could no longer shy away from the question. He said:
"They not only have so much in common, but are so interdependent that it would be futile for any leader to ignore the logical consequence of this interdependence. Call it a federation or anything else, but it must be a workable and viable unit, formed by courageous leadership, far-sightedness, and the ability to accommodate the sensitivities, weaknesses and legitimate interests of the various sections of our community."
I feel sure that we should all support Mr. Mboya in that expression of view.
There is only one other point I should like to raise, and that is on the future of the East African. University. As your Lordships know, this is spread over various colleges throughout the three territories. The main one, and of course the largest one, is Makerere in Uganda. It is beautifully sited, and I think it is quite likely that, after independence, the headquarters or part of the headquarters of the University will move to Entebbe. That again is a beautiful little place, and in every way suited for the headquarters of a university. But beauty does not in itself, although it is a valuable constituent in a university, mean that the university is going to be successful; and I urge the United Kingdom universities to give all the help they can to the new University of East Africa. The University certainly needs it. In my opinion, it is vital that university development should be on a large scale in the next decade, because there is a great shortage of African professional men—technicians, managers, administrators and so on. This can be made good, in my opinion, only by an expansion on sound lines of the University.
Finally, I fed that the future for Uganda is particularly bright; and I must say that for the rest of East Africa I feel that the clouds have a silver lining. I am sure that with our help and sympathy, and the help and sympathy of the United States, of various international organisations, and other European countries, like Switzerland and West Germany, we can really help to develop this vast, undeveloped and under-populated area of the world. The blue-print for progress is there. It needs to be put into operation. There is a great deal of moaning in this country over East Africa, much of it unnecessary.
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Only to-day I had a vast sheaf of paper posited to me. This conitinually happens. This one starts off in a most lugubrious way:
"There must be few who have any illusion left about Kenya now."
This is by a man who claims to know a great deal about it. Well, I do not think there is any need for pessimism about any of these territories. What they need is help, support, and encouragement, not people going around the City of London, Wall Street, Zurich, and so on, running them down. In my view, if we in this country and the people in the United States and elsewhere do our part, then they will do theirs, and their future will be a happy one right throughout East Africa. My Lords, we on these Benches send our best wishes to Uganda for a most happy and prosperous future.
5.12 p.m.
VISCOUNT WARD OF WITLEY: My Lords, may I begin by asking for the customary indulgence which your Lordships extend to those who are addressing the House for the first time? To-day, I join that growing, but I hope still select, band of Peers who have the distinction of having made two maiden speeches in the same Chamber. Indeed, it was almost from exactly this same seat that I made my first maiden speech in January, 1946, when your Lordships' House was temporarily another place and when these Benches were the Opposition Benches. I am glad to note that the little red button which, in my nervousness while waiting to speak, I detached from the upholstery, and which I have preserved in my stud box till to-day, has been replaced by another. I only hope that I shall not now receive a bill for it from the Treasury.
My Lords, I have never regarded myself, and certainly no one else has ever regarded me, as an expert on Colonial Affairs, and I ventured to intervene briefly in this debate to-day only because I was one of the three Privy Counsellors, under the leadership of my noble friend Lord Molson, who, at the request of the Prime Minister, visited Uganda last January to inquire into and report upon the long-standing boundary dispute between Buganda and Bunyoro. Anyone who has once been to Uganda will, I believe, always take a close interest in its future development. For one cannot

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fail to be captivated by the beauty of the country and by the kindness and charm of its people; nor can one fail to recapture much of the magnetism which compelled the great Victorian explorers to return there again and again, determined, in spite of immense hardship, danger and disease to uncover the wealth of secrets it held.
So, my Lords, I am glad to welcome this Bill which gives Uganda her independence as a sovereign Power within the British Commonwealth. I believe, like other noble Lords who have spoken before me, that Mr. Obote and his Government will guide the future progress of their country with wisdom, courage and statesmanship, and I wish him every success. I should like also to add my own warm tribute to all those members of the British Civil Service whose wisdom and devotion to duty over so many years have brought Uganda quickly and smoothly to independence. Many have elected to stay on; and their knowledge and experience will still prove to be invaluable to the new Government.
But, my Lords, even in a maiden speech which I know must not be too controversial, I cannot refrain from expressing my disappointment that it was not found possible to get agreement between Buganda and Bunyoro over the lost counties dispute before the date of independence. As the noble Marquess has said, our Commission recommended that two of the counties should be returned to Bunyoro and that the other four should remain in Buganda. We also recommended that Mubende Town should be placed under the administration of the Central Government. Those recommendations were accepted without reservation by Her Majesty's Government and, I think, by Her Majesty's Opposition as well. The Omukama of Bunyoro, although disappointed that we had not recommended the return of all the territory, generously agreed to this compromise in the interests of peace, stability and the unity in Uganda as a whole, and he renounced all claim to the four remaining counties. And if there could have been an equally magnanimous gesture by the Kabaka of Buganda, the problem would have been solved and the dispute settled for all time. But, unfortunately, the Kabaka, doubtless
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with the Kabaka Yekka breathing down his neck, refused to cede any territory at all.
This put my right honourable friend the then Colonial Secretary into a very difficult position. Whether or not he left himself enough room for manœuvre; whether or not our Commission was appointed too late; whether or not this nettle might have been grasped earlier and linked with the date of independence—all these are matters of argument which I prefer not to develop now, but to leave to other noble Lords if they wish to develop them. In any case, it is always easy to offer advice with the benefit of hindsight, especially from the back seat. But the point is that the Molson Commission recommended a solution which was welcomed by the Government as being fair and sensible, and which depended upon obtaining the agreement of both parties to the dispute before the date of independence. It is very disappointing indeed to me that the agreement of one Of these parties was not forthcoming. However, all that is now water under the bridge and the important thing is what is going to happen in the future.
As we know, my right honourable friend produced an alternative solution Which was agreed by Mr. Obote, but, unfortunately, by neither the Kabaka nor by the Omukama. It is that these two counties of Buyaga and Bugangazzi should be placed under the administration of the Central Government for a minimum period of two years and then a referendum held at some appropriate time to determine the wishes of the people. I have read carefully the arguments put forward in another place that there should be a maximum period within Which the referendum must be held as well as a minimum cooling off period, and I must admit that I have some sympathy for the views expressed; but I very much doubt whether it would really be practical politics. One reason (and I think my noble friend Lord Molson will agree) Why our Commission was so anxious to get this matter settled before the date of independence was precisely because we felt it would be impossible to bind the Uganda Government to settle it after the British had gone. And, of course, the same thing applies here. One cannot bind them to stick to a maximum period.

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It may be asked: "If you lay down a minimum period, why not a maximum one?" But, of course, they readily agreed to a minimum period. As every Chief Whip knows, there is no difficulty about agreeing to speak for a minimum of ten minutes; but to promise to limit one's speech to a maximum of ten minutes is quite a different matter. In any case, I am sure Mr. Obote wants to get the matter settled. Indeed, I believe that both the major political Parties in Uganda want to gat the matter settled, although I am not so sure about the Kabaka Yekka, which unfortunately holds the balance of power. But, certainly, Mr. Obote will be in the best position to judge the right moment to hold a referendum, and certainly in a better one, I think, than we are now at a distance of two years away.
Whether or not a referendum will work at all depends largely upon the kind of administration which the Uganda Government establishes in the two counties in the next two years. Certainly, it would not work now. As we said in our Report:
"a referendum would inevitably fan the flames of tribal feeling, would invite intimidation, and would create a situation in whch no lastng settlement could be expected. At worst it could lead to bloodshed."
I cannot help feeling considerable doubt whether this will not be equally true two years from now. Certainly, Mr. Obote is shouldering a very great responsibility. There will be—and I am sure he realises it—much preparatory work to do in the selection of local chiefs, for example, and insistence upon absolute impartiality in their administration. Supervision must be both independent and strict. Security arrangements must be efficient and unbiased.
In that connection, I wonder if I might ask the noble Marquess, when he replies, whether he can give us any idea of the position with regard to the two companies of King's African Rifles in Uganda; whether he is satisfied that they are properly equipped and there in adequate numbers to deal with any troubles that may arise; and, if not, whether he will assure us that the Government will give them all the help they can. Much will depend upon the two tribes themselves. Any needling of one another, and, particularly, any acts of lawlessness, will tend to perpetuate an
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atmosphere in which a referendum is impossible. But we can only look on the bright side and hope that things will change considerably in the next few years.
My Lords, having said all that, and I hope I have not been too controversial, I should like to congratulate my right honourable friend now the Chancellor of the Exchequer, and also the noble Marquess, on the success of the Constitutional Conference. There were, as the noble Lord, Lord Ogmore, pointed out, many difficult problems to be resolved other than that of the lost counties. That they were resolved was due not only to the skill and diplomacy of my right honourable friend, but also to the spirit of co-operation shown by the Uganda delegates. This augurs well for the new Sovereign State, for sit is only by a determination to build a united Uganda, in which the nation comes first and tribal loyalties second, that the people of that fascinating country can look forward to the happy and prosperous future they deserve.
5.25 p.m.
LORD TWINING: My Lords, may I congratulate the noble Viscount, Lord Ward of Witley, on his maiden speech? It was a felicitous speech, and I listened to it with great pleasure. Although he dealt with this intractable problem of the lost counties, he was able to speak with sympathy and with authority. I am sure your Lordships will wish to hear the noble Viscount on many occasions in the future in your Lordships' House.
My Lords, it was my privilege to serve in Uganda from 1923 to 1938, first in the Army and then in the Administration. I know the country well, and I count among my friends many Uganda Africans from the most lowly to the highest in the land. As the noble Viscount has said, anyone who visits Uganda must be struck by the beauty of the smiling countryside which has been so wall endowed by nature. This is reflected by the happy look on the faces of those who live there. They are an intelligent and well-mannered people, who go about their business with a dignified poise suggesting a natural pride in their land and their way of life. If during the last few years there have been political stresses and strains, most of these have been resolved by the mature

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good sense of the people and the statesmanship of their leaders.
Uganda is notable for the strength of the monarchical system. The Kingdoms of Buganda, Bunyoro, Toro and Ankole cover a large part of the total area of the country. I have always thought that the British Administration tended; to underestimate how deeply rooted monarchy is in the minds and the loyalties of the people. In Buganda the Kabakaship is regarded as being sacrosanct. It is the outward and visible sign of their history and of their sense of nationhood, while at the same time it carries with it a certain undefinable but, nevertheless, powerful mystique. I have known two Kabakas, and can testify to the devotion and loyalty shown by their subjects, both to their office and to their person. The same is true of the other Kingdoms. It is therefore not surprising, though it is none the less gratifying, that they accept our gracious Sovereign, not only as Head of the Commonwealth but as Queen of Uganda.
Uganda possesses a peculiar geographical feature, which I believe is to be found in only one other part of the world, in Central Asia. There are parts of the country, on its western extremities, which are situated 1,000 miles from the sea in every direction. I mention this to emphasise that the country suffers from the disadvantages of being both landlocked and remote. This makes the transportation of imports and exports a very costly business. Nevertheless, it has prospered, but it is dependent on a lifeline, which is the railway to the coast. This is a single-line mountain railway, climbing to over 10,000 feet above sea level before descending to the port of Mombasa. Uganda has contributed substantial sums to the development and equipment of the railway and the port. Both are extremely well equipped and efficiently operated.
Uganda has always been unenthusiastic about any proposals for a Federation of East Africa, or even for any form of closer union. Her people have feared domination by Nairobi. But, being sensible and realistic, they recognise that some form of association is essential to their wellbeing, and they are prepared to make the best bargain they can. They would, I believe, like to see the port of Mombasa neutralised, so that it would
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be under the control of no one East African Government. They have accepted the East African Common Services Organisation, and it is certainly in their best interests that this form of inter-territorial co-operation should continue.
But, my Lords, because of their remoteness we may expect to see, in the course of time, a development which could make Uganda one of the most prosperous countries in Africa, an industrial country serving the interests and exploiting the potentialities of the Lake Victoria basin. Within a radius of some 250 miles of Lake Victoria lies a huge area which rises from some 1,800 feet above sea level on the Uganda-Sudan border to over 10,000 feat in the Kenya Highlands. In this area almost any crops requiring tropical or temperate conditions can be grown. Within this area, too, is a large and rapidly-increasing population which provides a source of labour and a considerable and growing consumer market. Hydro-electric power is available at the source of the Nile at Jinja in almost unlimited quantity. There are natural communications provided by a great system of waterways which have been linked by man, by air, by railways and by a splendid road system. Here are the makings, my Lords, of a future common market in the centre of Africa.
Much has already been done by far-sighted British administrators, and I should like particularly to mention the names of Sir John Hathorn Hall, Sir Andrew Cohen and Sir Frederick Crawford. But future development will require an immense amount of capital and technical resources. I believe that Uganda and its six neighbouring countries can in time provide a sufficient number of efficient and well-qualified technicians, but large-scale financial aid and capital investment will be needed from outside. It is therefore of the greatest importance that independent Uganda should earn a good name for political stability, and as a safe place for capital investment. Given proper planning and the right conditions, this part of Africa could be transformed during the next 25 years. If, as is likely, Uganda turns to us for help, I hope that we shall not be backward in showing our confidence in this new member of the Commonwealth.
In the meantime, the short-term prospects seem to be favourable. The

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Government has shown already that it has a strong sense of responsibility and is facing up to its problems with moderation and a sense of purpose. The only cloud on the horizon is the problem of the "lost counties," which will require good statesmanship to solve, but I will not dwell on that as it has already been touched upon. I should like to pay a tribute to the work of the missions, as did the noble Marquess. To-day, Uganda is largely a Christian country. It is true that in the past there has been strong rivalry between the Protestants and the Roman Catholics, and even today this tradition persists to some extent in the political field. But a Christian spirit prevails which can continue to play a vital part in the life of the country. It is this spirit and the maturity of the people that give one confidence that the country's course is "set fair," and that it can exercise a stabilising influence in this part of Africa. I am sure that your Lordships will wish to join in an expression of sympathetic good will to this, the latest of our former colonial territories to gain independence and to become a member of the British Commonwealth of Nations.
5.33 p.m.
LORD MONTAGU OF BEAULIEU: My Lords, though I have not the unequalled experience of the noble Lord, Lord Twining, of Uganda, I am very fond of the country and know its people well. Therefore, I should just like to say how much I welcome this Bill, and to congratulate Her Majesty's Government, and the Uganda delegations, on the successful outcome of the Conference. The road to independence has not been altogether smooth, but it has been a great deal smoother than in the case of many of the other States in Africa which have found, or are about to find, independence. It has, in fact, escaped many of the unpleasant events which have occurred along its borders.
There is one fact, however, which is not always remembered about Uganda; that is, that when we arrived there were many political institutions which were then in existence, and had been for many years. We did not have to teach them the idea of a Parliament. Although their Parliament may have been more like this House than the other, it nevertheless existed. It was because these
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institutions existed that Her Majesty's Government chose to use them, and have used them, with indirect rule, for many years most successfully. That is perhaps why peace has, on the whole, reigned over the past years. When I was last in Uganda a great deal of concern was expressed that Her Majesty's Government might seek to destroy those institutions and put in their place a modern Constitution. They felt that this would be entirely contrary to what they would expect from the United Kingdom, whose traditions and whole way of life are based on existing institutions. Therefore, it seemed only right and proper to build on the existing institutions. To destroy them and impose a Westminster Constitution would have been entirely alien to the African world. In fact, it has not always worked in other parts of Africa, as we well know. If changes are to be made, let them be made by the Africans now, through their own institutions.
My Lords, I wanted merely to say, briefly, how pleased everybody is that the Conference succeeded so well. I am certain that, in the future, not only will Uganda be a shining example to those countries on their west, in the Congo, and also to their east, in East Africa, and in Tanganyika, but that it will also be a concrete example of our good intentions towards the independence of our colonial territories.
5.36 p.m.
LORD MOLSON: My Lords, like every other speaker to-day, I welcome this Bill, and I hope that it will inaugurate a period of happiness and prosperity to Uganda when the country obtains its independence. I am also very happy to congratulate my noble friend Lord Ward of Witley upon his admirable maiden speech, which gave me special pleasure after the long and agreeable association that we had on the Commission.
But, my Lords, I should not have risen to say those two things if I did not feel bound to make certain remarks about the settlement which has been imposed in the lost counties dispute. I do not intend to speak on the merits of our Report. I think that I am justified in saying that it has been accepted as fair and reasonable by everyone except the parties to the dispute. I share the

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disappointment that the appeal that we made in our Report to Buganda to make a generous move towards a settlement has not been accepted. As my noble friend has said, our proposal was that, of the six counties, two, Buyaga and Bugangazzi, where the Bunyoro were in a large majority and were obviously very much attached to the Omukama in sentiment, should be returned to that Kingdom, and that the other four should continue to remain with Buganda. My Lords, we did not recommend a referendum. We thought it unnecessary, and we thought that it was likely to be extremely dangerous, likely to inflame political opinion and likely to lead to intimidation and violence.
In view of the refusal of Buganda to accept these proposals, my right honourable friend who was then Secretary of State for the Colonies felt obliged to impose a compromise. I feel that this compromise is unduly favourable to Buganda, which is the more powerful of the disputants, and is unfair to Bunyoro. It is, of course, arguable that it is desirable that there should be a referendum in those two counties in order to ascertain what I think is already quite obvious—namely, that they wish to be returned to the Kingdom of Bunyoro. I cannot think, however, that it is reasonable to lay down that that referendum should not take place for two years, without any firm assurance that it will take place at any time.
My Lords, I will certainly heed what was urged by my noble friend Lord Lansdowne: that nothing I say should complicate the issue. Our desire was to act as peacemakers in this dispute, and I am still hoping that peace may come as a result of the compromise that has been imposed. My Lords, we said that it was most desirable that this dispute should be settled before independence. We foresaw that there was a great danger that under the 1961 constitution the Prime Minister of Uganda would be dependent upon a bloc of representatives from Buganda, and we said in paragraph 103 of our Report
"that the Federal status in an independent country, which Buganda is to enjoy from October 9, 1962, would make it relatively easy for the Kabaka's Government, if it so desired, to obstruct the implementation of a settlement."
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And we said in paragraph 105 that
"if a Prime Minister of an independent Uganda were dependent upon the Buganda bloc for staying in office, he would find it difficult to support any concession to the Bunyoro."
My Lords, that is exactly what has happened. The 21 representatives of Buganda are all nationalists, and Mr. Obote is dependent upon their support for remaining in office. It therefore appears to me to be important that the demands which were made by both Parties in another place should be heard, and that an assurance should be given by the present Government of Uganda that the referendum will be carried out at a reasonably early time. I share the doubts expressed by my noble friend Lord Ward of Witley, that the passage of time may not necessarily lead to an assuaging of these passions, but that in fact the feelings may become more inflamed as time passes. I am quite sure, therefore, that the next thing which should happen to make a settlement likely would be that some assurance should be given that the referendum will in fact be held.
The noble Lord, Lord Ogmore, was not quite correct when he said that Buganda had accepted this compromise. It is said in paragraph 69 of the White Paper that, at the final plenary session, the Buganda delegation stated that the decision of the Secretary of State was wholly unacceptable to them.
LORD OGMORE: My Lords, I am grateful to the noble Lord for that correction, but if I said "Buganda", it was a mistake, a slip of the tongue. I meant to say that the Uganda Government accepted it, not the Buganda Government. I was there at the time and I knew very well that Buganda had not. I apologise if I made a slip of the tongue.
LORD MOLSON: My Lords, I am much obliged. The slight difference between the words "Buganda" and "Uganda", however familiar one is with them and their etymological origin, sometimes makes it difficult to hear which is actually said. But the fact that, up to the end, this compromise was not acceptable to the Government of Buganda, makes it all the more desirable that an assurance should be given by the the Government of Uganda that this

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referendum will be carried out at a reasonably early date. My Lords, there is a great opportunity open to Mr. Obote and to his Government. Whatever I may have said in criticism of Her Majesty's Government for this compromise, it has this outstanding merit: that it leaves open to the Government of Uganda, and to Mr Obote in particular, a great opportunity even now of settling this matter, and of making sure that the independence of Uganda brings about a settlement of this ancient and distressing dispute.
5.45 p.m.
THE MARQUESS OF LANSDOWNE: My Lords, although, perhaps, the speeches which have been made in your Lordships' House this afternoon will not be so closely scrutinised in this country in view of other speeches which are being made at the same time to-day, it is quite certain that they will be very closely scrutinised in Uganda. It is for that reason that I should like to thank all noble Lords who have taken part in this Second Reading debate for the Wholehearted welcome that they have given to the approaching independence of Uganda; and, furthermore, I should like to thank them for the thoroughly justified praise, if I may say so, that they gave to all members of the Uganda delegation in London, and, in particular, to Mr. Obote, the Prime Minister.
The noble Lord, Lord Malson, speaks with the weight of great authority and experience, and, of course, it is natural that he was, as indeed all of us were, disappointed that the solution which he and his Commission thought out so carefully was, in the event, beyond application. I am not going to go into the details of the negotiations which led my right honourable friend the previous Colonial Secretary to reach the decision to which he came. But I can tell your Lordships this: he did not reach this decision without the most careful consideration, and without long and patient discussion with the panties concerned. I have taken note, of course, of what noble Lords have said about the question of an assurance that the referendum should be held.
May I be allowed to add my very sincere congratulations also to the noble Viscount, Lord Ward of Witley, on his speech? I was interested to hear how he
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had considered the question of the minimum and the maximum periods, and, in the end, had decided to reject the idea of a maximum period. The noble Lord, Lord Molson, although he criticised the decision to which Her Majesty's Government have come, said this—I hope I shall not misquote him:
"it does leave it open to the Government of Uganda to make this great contribution itself towards the future peace and prosperity of its country."
My Lords, I suppose it must truly be said that we in fact failed to reach the answer. We tried, but it appeared to be beyond our reach; and, after all, politics is the art of the possible. We had to think very seriously whether we might not, by a solution to which we were very much drawn, in fact inflict upon Uganda a dreadful wound. And so it was that my right honourable friend reached the decision to which there has been reference this afternoon.
It is, of course, the earnest desire of us all—those of the Commission and all of us in this House—that this decision will, in the end, be proved to be right. I, for my part, have a very considerable degree of optimism that it will so turn out, for the reasons which have been so admirably stated by other speakers in this debate this afternoon: that there is among the people of Uganda a clear sense of nationhood; a realisation that if their country is to continue to be, as I think the noble Earl, Lord Lucan, described it, an oasis of calm and stability, it will be necessary for them to work together in a spirit of compromise. The noble Lord, Lord Twining, with his great knowledge of the country, referred to the necessity for political stability in order to attract the necessary development capital. Here again it has been our hope that the actions of Her Majesty's Government will indeed ensure the political stability which is so necessary for the attraction of investment capital to Uganda.
The noble Viscount, Lord Ward of Witley, asked me a specific question about the King's African Rifles in Uganda. I am informed What the 4th Battalion of the King's African Rifles, consisting of three rifle companies and a headquarters, will become the nucleus of the Uganda Army on October 9. Britain has undertaken to meet the cost

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of this force from then—that is, the date of independence—until March 31, 1963. This would be at the cost of about £200,000. We are doing our best to ensure that the weapons and equipment of the Battalion are handed over in good condition and complete to the regular scale.
I must apologise to the noble Lord, Lord Ogmore, for having inadvertently the other day, when we were discussing Jamaica, described him as the legal adviser of Toro. Of course, this was a slip of the tongue. I knew perfectly well that he was advising the territory of Busoga. I should also like to thank him for his kind remarks about my chairmanship of the Constitutional Committee of the Conference, and to apologise to him for the effect of my patience upon him.
There was a point that the noble Lord, Lord Ogmore, raised, with which I think I must clearly state that I disagree; it was on the subject of overseas officers. In fact, we do not bribe the overseas officers to leave these territories at the moment when they can render such useful service. The Overseas Service Aid Scheme, to which I referred and upon which the noble Lord is well informed, is specifically designed to encourage our overseas civil servants to remain in these territories, and I am happy to say that it is having its effect. The latest reports available show that slightly more than one-third of those concerned in the territory of Uganda have given their notice. I should like to point out that they receive compensation, whether they stay on or not. Of course, there is a small advantage if they stay on—and that is the purpose of this scheme: they can commute an additional one-sixteenth of their pension every year. I think that it is true to say that this Overseas Service Aid Scheme is being effective and is encouraging our valuable overseas officers to continue in their work.
I have no doubt that the good wishes of the noble Lord, Lord Montagu of Beaulieu, who knows the country well, will be well received when they are read in Uganda. In conclusion, I should like to add my own words in praise of Mr. Obote. The solution which Her Majesty's Government have decided upon was a great test of Mr. Obote's
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courage. Other noble Lords have referred to this. It will require courage for him to carry out the responsibility which he has assumed, the responsibility of the administration of the two lost counties. At this very time he is engaged in conversations on the practical application of the decisions of the Conference, as I said in my opening remarks. We have drawn his attention to the anxieties which have been expressed in another place, and I will see to it that he will also be informed of the anxieties which have been expressed in your Lordships' House this afternoon. I do not think there is anything further that I would wish to add, except once again to thank noble Lords for their generous attitude and to add my sincere good wishes to the people of Uganda and to the new Central Government.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

TRINIDAD AND TOBAGO INDEPENDENCE BILL
Read 3a (according to Order), and passed.

BRITISH SUBJECTS' EGYPTIAN CLAIMS
5.57 p.m.
LORD KILLEARN LORD KILLEARN rose to move to resolve: (1) That, as it is now nearly six years since British subjects were deprived of their property and means of livelihood in Egypt, it is fully time that their claims were finally settled; (2) That, since it is clear (from the figures already given in Parliament by Her Majesty's Government) that the £27½ million paid in compensation by Egypt in February, 1959, falls very far short of what is required to meet the claims already agreed and those still to be made, Her Majesty's Government should now carry out the pledges made in both Houses of Parliament, by the grant in aid forthwith of sufficient funds to meet the assessed claims, mindful that it was on the strength of these pledges that Parliament accepted the Financial Agreement with Egypt of February, 1959. The noble Lord said: My Lords,

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I rise to put before your Lordships the Resolution standing in my name on the Order Paper. Before I get down to discussing its terms, I would apologise for bringing up such an old, old subject. Your Lordships must be tired and weary of this thing. It goes on for years and years, and never seems to get much forwarder. Yet it is a cause which some of us feel deserves all our support and pertinacity, even if it does sometimes weary your Lordships. This is the eighth debate we have had on this subject—eight solid, full-blown debates. And the Parliamentary Questions on it are like the stars in Heaven. I have counted up to at least 30, and I should think as many in the other place. And still we have this question with us; and, so far as I can make out, it is going to be with us for all time. That is why I put this Resolution down, to bring it up, as I hope, with a round term.
That brings me to paragraph 1 of the Resolution, which simply says in plain English:
"That, as it is now nearly six years since British subjects were deprived of their property and means of livelihood in Egypt, it is fully time that their claims were finally settled."
I cannot believe that in any quarter of this House there can be any dissent on the principle which I there enunciate. Before I go on to paragraph No. 2, here is an extract from a letter which I have only just received. Oddly enough, it comes from Kenya. The writer was one of the pillars of the British community in Egypt all through the war, and now, with his wife, he is living in Kenya. He says this:
"We ourselves have not had even a pocket handkerchief released from Egypt, and our present funds are frozen there and undergoing a sharp drop in value at the hands of Nasser."
That is only one of dozens of letters; we are all getting them. These are miserable and heart-rending cases.
That leads me to make this observation. I find it difficult to speak on this subject without a certain degree of emotion. I am not frightfully emotional—none of us is. But for 12½ years I lived, with my family, with these people in Cairo, in fair times and foul times, and throughout the war. A more loyal community I defy you to meet anywhere. That is, I suppose, in a sense, a sort of commonplace; you expect to find that.
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But they are not always put to the test of a war within 30 miles of their gates. I can tell your Lordships from personal experience that we had Rommel within 30 miles of us; we could hear his guns but there was not a quiver among my community. That is saying something.
Many of these people with whom it was our privilege to work put large funds into British Government securities; in fact not only substantially but morally they helped to maintain a stable basis for the British troops operating in the desert. Those are the people on whose behalf I am speaking. Some of them were poor; others were rich. But the time came when, owing to the failure of British policy (I personally backed that policy) these people were thrown out, neck and crop, with not a thing—many of them with not even a toothbrush: property, stocks and shares, houses and everything else were seized. At that time, I am glad to say, public opinion here was very much roused about it, and the Government did a certain amount. There was the noble Lord, Lord Colyton, and his Commission, and many of these people were placed. But, by and large, the matter remained, and still remains, outstanding.
Your Lordships may remember that during the war we used Egypt's harbours, ports, lights and what-have-you; and it was arranged at the end of the war (I think very generously; but I was not there then) that we should pay Egypt £400 million sterling for the privileges which she had given us. As I say, that was for saving her national existence. It seems a curious thing for us to pay for; but, never mind, we did it. Anyway, they had here credits of £400 million sterling. The years go on, and we come to the events at Suez. By that time these sterling credits, as we called them, had been reduced to roughly £100 million sterling. I obtained from the noble Earl, Lord Dundee, some weeks ago, a figure which showed that in February, 1957, the amount standing to the credit of Egypt was £93 million.
Now, my Lords, I should like to read the second paragraph of my Resolution.
It says:
"(2) That, since it is clear (from the figures already given in Parliament by Her Majesty's Government) that the £27½ million paid in compensation by Egypt in February, 1959, falls

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very far short of what is required to meet the claims already agreed and those still to be made, Her Majesty's Government should now carry out the pledges made in both Houses of Parliament, by the grant in aid forthwith of sufficient funds to meet the assessed claims, mindful that it was on the strength of these pledges that Parliament accepted the Financial Agreement with Egypt of February, 1959."
I take your Lordships back to the sterling credits. When the events at Suez occurred there was a contain amount of pressure brought to bear that these funds, which were perfectly good sterling in this country, should be held as security. There was a lot of fal-lal (if I may use that word) that it was contrary to bankers' practice, and I do not know what. Anyhow, on May 16, 1957, the then Foreign Minister used these words in the House of Commons [OFFICIAL REPORT, Commons, Vol. 570, col. 584]:
"The blocked accounts are our security for the claims of British subjects against the Egyptian Government. We have no intention of whittling away that position. The House can be sure of that."
Well, my Lords, I could not have asked for a more explicit assurance. I would remind your Lordships that alt that time these funds stood at £93 million, according to the statement of the noble Earl, Lord Dundee, I come back to paragraph (2) of the Resolution, under which we accept in full and final settlement from Egypt the sum of £27½ million. I will just read to your Lordships what the Treaty says:
"The Government of the United Arab Republic shall pay to the United Kingdom the sum of £27½ million sterling in full and final settlement."
So we have not another kit coming out of Egypt; we cannot go back and say that we want any more; that is full and final settlement, and we have taken the £27½ million.
Against that we have (I can give a rough estimate) what I may call the short-fall, the difference between what we received and what I am asking for. The Foreign Compensation Commission are a very estimable body, of whom one hears nothing but good. It is through them that these claims have to be put forward—in fact, they have to do the distributing of the £27½ million; and they are proceeding to do so. They have on their files (that is, they have accepted agreements) claims for Egyptianised
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property—property which has been nationalised in Egypt—of between £60 million and £65 million.
Then there is the outstanding claim, which is, I know, the difficulty, of the sequestrated property. I am afraid that I am not being very clear, my Lords, but I hope that I am not getting too confused. Under the Treaty the property of British subjects was divided in two different classes. There was the property which Egypt nationalised and took over, which included all the bigger companies, of course, the things that were worth while; and there was the sequestrated property, which belonged to the smaller firms, and which, under the Treaty, was to be restored to its owners. The £27½ million, just to remind your Lordships, was to cover two things: it was to cover all claims in respect of property referred to in paragraph (c)—that is, the Egyptianised property; and, secondly, all claims in respect of injury or damage to property, the sequestrated matter, which under the Treaty was to be restored.
LORD PEDDIE: My Lords, could the noble Lord give any indication of a breakdown of those figures?
LORD KILLEARN: Which figures?
LORD PEDDIE: The amount in the corporate bodies and the amount due to individuals.
LORD KILLEARN: I obviously cannot do that; and I doubt whether the Government can do it.
THE EARL OF HOME: My Lords, I think that I might be able to help there.
LORD KILLEARN: I hope so. I have not got the sources. What it comes to is that the bulk of the bigger corporations have been nationalised. Shell is on a seperate basis altogether; I believe that they made a separate arrangement, and they do not come into this question at all.
I have here a long list of assurances of all kinds which have been given at different times by the Government. I will not quote many, because they are very tiresome. But on April 11, 1957—this has been quoted before and I quote it again—the Prime Minister said

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[OFFICIAL REPORT, Commons, Vol. 568, col. 1296]:
"It is the policy of Her Majesty's Government to secure from the Egyptian Government restoration of those assets in full, or alternatively complete compensation."
That sentiment was echoed here, and we presumed that it was sincerely meant. How one is to reconcile that with the acceptance of the signature of the Treaty of 1959, I completely fail to see. I am skipping a bit now, but, various things happened in the interval. There have been ex gratia loans up to a certain amount to keep these poor people alive. Then in 1959 there was the Financial Agreement negotiated I think, by the Treasury, under which the Egyptian Government agreed to pay this £27½ million.
In due course this Agreement came before both Houses of Parliament. And in both it had a very chilly reception. It was accepted by this House, certainly—and I think also by the other House—only because of the assurances from the Prime Minister, among others, by which it was accompanied. In fact, if your Lordships read, as I have recently read again, the debate at the end of March. 1959, you will find it clearly set out that that, and that only, was the reason we allowed it to go through. Many of us said: "Thanks toe we have not to vote on this thing! We could not possibly vote for it, and we are devoutly thankful that we are not forced to vote against it. The reason we are not forced to vote against it is because of the assurances given by the Prime Minister and others" (and here I come back to my thesis) "about the shortfall." That is, the difference between the £27½ million and the totality of the claims. I am afraid that that is all rather involved, and perhaps not very clearly put.
I can quote the Prime Minister's promise again. On March 16, which was two days before our debate, they had a debate in another place and these words were, of course, quoted here [OFFICIAL REPORT. Commons, Vol. 602, cod. 150]:
"While we will not here and now pledge ourselves to make any fixed addition to the total of £27½ million, as has been suggested in the debate, I can say now that the Government will watch how this works out and will play their part in reaching a settlement which will be reasonable and fair, and we do not
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exclude a further contribution from public funds."
That was a pretty guarded statement, it is obvious. I can anticipate the answer I shall receive on this matter: that it is not right or sense to ask the Government to take on an unknown liability. They said that before, and they will say it again. They said it in another place a couple of days ago. To my mind, that means that this shortfall is postponed until the Greek Calends. Why? Because claims have to be presented to the Foreign Compensation Commission here, which has its rules, and which insists on proof of ownership before it will register and accept a claim for assessment.
So far as nationalised claims are concerned, they go through fairly easily, because it is not difficult to prove the ownership of these big corporations. But for the unfortunate individuals, it is in many cases quite impossible. I can quote thousands of cases of men whose property is in Egypt, and they just cannot get the papers. In some cases they are burnt and non-existent. In other oases it is just Egyptian slowness, shall I say? At any rate, the net result is that these unfortunate individuals, these de-sequestrated people, if I may use the phrase, are not in a position to put their claims in to the Foreign Compensation Commission for registration. So far as I can see, they will go on until the end of time. So if the noble Earl tells me that it is totally unreasonable to ask for compensation without the papers, he must tell us what we should do. My answer is that you cannot get the papers.
After ail, a Government governs. The Government have the machinery and can do the whole thing. I feel, and have felt for a long time, that some body should be set up, if it cannot be the Foreign Compensation Commission—I do not know if it can or not—empowered to finalise these claims. After all, it is six years since this happened. These people are dying off, just like the rest of us, and eventually the problem will solve itself. I am callous enough to believe that that is the intention. I know the heart of my noble friend, Lord Home, is in the right place, and so is mine, I hope. At any rate, it seems to me that the answer given is completely

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fatuous. Your Lordships know the expression of the Greek Kalends. I do not suppose anybody thinks of that now. It means forever and ever. These people cannot get the papers—it is a physical impossibility; therefore they cannot present claims; their claims cannot be totted up, and so on.
Let me come down to bedrock. As stated in my second paragraph, we have received £27½ million. On the same day, for reasons best known to ourselves, and nobody else, we released £41 million, which was the residue of these credits. We took £27½ million in full and complete discharge of every liability, and we released £41 million, which was our only security. Madness! Absolutely crazy! If it had been a case of a trustee who had done this sort of thing, where would he have found himself? Honestly, I cannot find the right Parliamentary language to describe the situation. So my Resolution, as put down, is that the Government should at long last get in and somehow finalise this charge. Do not be held up by the Egyptians and the follies of their courts. Really, this is too much. Are we a Government or are we not? Cut across it. Finalise what the shortfall is. According to my information, we have got £27½ million. The Foreign Compensation Commission have accepted nationalised properties up to £60 million to £65 million. Those interested, that is to say the owners of de-sequestrated property, reckon the damage to their property at another £15 million. Add £15 million to £65 million, and you get £80 million. Take away £27½ million which we have already, and the shortfall, which I am talking about, ends up at £52½ million. Now I have finished. I hope that I have managed to make an extremely complicated question clear. It is very involved and a difficult thing to understand. I beg to move.
Moved to resolve, (1) That, as it is now nearly six years since British subjects were deprived of their property and means of livelihood in Egypt, it is fully time that their claims were finally settled.
(2) That, since it is clear (from the figures already given in Parliament by Her Majesty's Government) that the £27½ million paid in compensation by Egypt in February, 1959, falls very far short
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of what is required to meet the claims already agreed and those still to be made, Her Majesty's Government should now carry out the pledges made in both Houses of Parliament, by the grant in aid forthwith of sufficient funds to meet the assessed claims, mindful that it was on the strength of these pledges that Parliament accepted the Financial Agreement with Egypt of February, 1959.—(Lord Killearn.)
6.20 p.m.
THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF HOME): My Lords, I am very grateful to my noble friend Lord Killearn for raising this subject once again. The only thing that I think he got really wrong in has speech was that he was likely to be able to anticipate my reply. I should be very surprised if he had any idea what I was going to say, and I tope he will feel after I have finished that things are rather different from what he anticipated. A year ago I told your Lordships that I would try to find a settlement to these matters which the noble Lord, Lord Killearn, has raised; first of all, a settlement of all those things which were unresolved in the Financial Agreement of 1959; and, in addition, I would do my best to recommend a solution to the whole problem in due course which would mean Chat compensation for damage to property, both sequestrated and Egyptianised, would, in all the circumstances, be fair.
As the noble Lord has told your Lordships, there are really two related problems here. We have to ensure that the 1959 Agreement is rapidly and properly carried out and, at the same time, that when the Egyptian Government have met their obligations, Her Majesty's Government see that no undue hardship is suffered by those who were not sufficiently provided for by the Agreement of 1959.
I think there is no difference between the noble Lord and myself on the analysis of this problem. He and my noble friend Lord Salisbury and some other of your Lordships have from time to time asked me to try to devise ways and means of getting Egypt to pay across the exchanges the monies due to those claimants whose property has been sequestrated, because if they wanted to realise their property they were not in

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the event able to take their money out of Egypt and therefore could not enjoy it here. I have a great deal of sympathy with the plea made by the noble Lords, and I hoped that to-day I should be able to came to this House and report agreement with the Egyptian Government on this matter. The fact that I am not able to come and report agreement is not that there is any matter of principle in dispute between the Egyptian Government and ourselves, but, as your Lordships know, it takes a good deal of time to prepare documents which are very complicated, and this has taken a few days longer than I expected. And I would ask your Lordships not, at present, to take the Press accounts of what may come out in a few days' time as accurate, because they are not accurate at all. But when I am able to come to the House, and I hope lit will be before we rise, I believe that your Lordships will find the solution of this particular pant of the problem satisfactory.
I will say what the objectives are that I now have in mind in this Limited part of the settlement. The settlement should ensure, first of all, that all monies due for transfer under the Financial Agreement of 1959 are paid as applications are approved; secondly, that all problems arising out of the Financial Agreement of 1959 should be cleared up in a specific time; and that it should not be long; thirdly, that improved machinery should be set up both in Egypt and in this country to speed the matters up so that the claims can be approved as quickly as possible; and in that I have a good deal of sympathy with what my noble friend Lord Killearn has said. I hope also that this new arrangement will cover the speedy production of papers which are necessary for the assessment of claims and things of that kind.
But, of course, the main point of the settlement that I have in mind is that the transfer of cash and bank balances within the limit of the £5,000 in each case should be quickly settled; and I can forecast that, if I am able to sign this Agreement with the Egyptians in a short time, the settlement I have in mind will achieve all these objectives which I have now outlined to your Lordships.
I first raised this matter with Dr. Fawzi after some debates in your Lordships' House, and the Lord Privy Seal
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took it further with Dr. Kaissouni; and our conversations with the Egyptians have borne fruit. I must report to your Lordships that I am pleased with the spirit that has been shown on both sides in the discussions and that our working relations with the Government of the United Arab Republic have been very good. I am now quite convinced that both Governments share the desire that all matters concerning the Financial Agreement of 1959 should be cleared up and should no longer be an impediment to the development of good relations between the United Arab Republic and ourselves. There are certain matters of nuts and bolts, as I have said, but I hope to give your Lordships news shortly which I think your Lordships will approve, because this is what a number of my colleagues have been pressing on me for a good long time.
I want to say one word, which my noble friend Lord Killearn did not say, about the officials who were dismissed in 1951. I think it is known that Her Majesty's Government advanced £100,000 after the signature of the Agreement of 1959. Six months ago we advanced another £100,000, and the balance of compensation to be paid to officials which will be set against the recent advances by Her Majesty's Government are at present under discussion in Cairo. Again, I hope before very long to report some progress. Therefore, what I have spoken about so far is the 1959 Agreement; and I look forward to the possibility of settling all the problems under that Agreement in a comparatively short time.
LORD KILLEARN: Under that Agreement?
THE EARL OF HOME: Under that 1959 Agreement; because I am now coming on to the other.
The next matter to be settled then is the claims of those individuals and companies whose claims have not been met in full but have suffered loss to their property, as the noble Lord has said, in that they were either Egyptianised or sequestrated. The 1959 Agreement was not perfect, but it was the best we could get. It was better than no agreement and, although I know my noble friend does not like it, Parliament thought it was better than no agreement because

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it approved it. Both Houses approved that Agreement, although a good many noble Lords had reservations. As the noble Lord said, he himself had reservations, and so did a good many others. But the 1959 Agreement and Parliament's approval is one of the basic factors of this situation. It altered the situation that prevailed before, and the ministerial statements that had been made before were superseded by the statement of the Prime Minister, which the noble Lord, Lord Killearn, has read. Nevertheless, it was recognised that this Agreement was not entirely satisfactory; and, in so far as it was not satisfactory, the Government accepted the fact that at some point they would have to find more money. And I will repeat what my noble friend has already said—the statement of the Prime Minister that
"The Government do not exclude a further contribution from public funds over and above the sum of £27½ million provided in the Financial Agreement."
The Agreement itself, therefore, and the Prime Minister's statement govern these claims, and the Government accept that more money will have to be found.
In order to assist the House—and the noble Lord, Lord Peddie, asked a question about this—and to measure the problem in what I call the next and, I hope, the final round of settlement, I will give the House one or two facts. Up to now over 83 per cent. of the claims before the Foreign Compensation Commission are receiving 90 per cent. of the assessed losses. Over 83 per cent. of the claims are receiving 90 per cent. of the assessed losses. Thus, over four-fifths of all the claimants have received nine-tenths of their claims. I know there are still hard cases, and where there are hard cases I hope that the machinery for mitigating them is fully and immediately used. These figures I have given to the House may seem very odd—particularly that four-fifths of all claimants have received nine-tenths of their claims—but it will become apparent why it is so when I tell the House that one of the claims is something round a figure of £17 million and that three others amount to over £3 million, and so there are a number of very large claims still to be assessed.
THE MARQUESS OF SALISBURY: Could the noble Earl say what are the
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names of the people who made these very large claims? Are they individuals? Are they great firms?
THE EARL OF HOME: I suppose it is legitimate to say Who they are; in fact they are large firms and one of them is a bank. The British-American Tobacco Company have the claim of about £17 million; the Tunnel Portland Cement, £3½ million; and Barclays Bank, £3¼ million. Those large claimants have had something like 25 per cent. of their claims, and even that, as the noble Lord, Lord Peddie, will see, runs into a good many millions. I give these figures really to help your Lordships and myself to consider what the next step should be, because what I think the House will be interested in are the claims of individuals, and in particular the claimants for comparatively small sums and those in the lower and middle ranges of claims. I am certain it is for those claimants that the House will feel very concerned, and it is to those people and their claims that I will direct my attention in what I would call the next and I hope, as I say, the final round.
LORD LLOYD: My Lords, if I may intervene, while the noble Earl is on figures, there is one other piece of information which he may be able to give us. Of the claims that have been settled, what proportion is in respect of Egyptianised claims and what proportion is in respect of sequestrated property? In other words, has the bulk of the money been paid out on one class of claims as opposed to the other?
THE EARL OF HOME: I think my noble friend Lord Dundee has those figures and he will give them. Therefore, when we consider this sort of case in which there are very large claims still ahead of us, I think your Lordships would wish to apply two criteria; one is the criterion of hardship and the other the criterion of equity, and that would be right, bearing in mind that the people who have to find any extra money which has to be found are, of course, the taxpayers of this country. I am very much aware of the hardships that individuals suffer when they are caught up in events over which they have no control.
To some extent, as the noble Lord has said, this is a risk run by those who live and make their work outside this country. And Her Majesty's Government

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could not, in all circumstances, all over the world, accept in general that in all such cases they should be the residual risk bearer. But I am afraid that this is all too often in this modern world the case, that British residents cannot get all the exchange that they wish out of a foreign country. We always do our best in these cases to minimise loss in every way.
But in this particular matter which is the subject of this Motion I would sum up in this way. Her Majesty's Government accept the obligation to supplement the monies available under the Agreement with further sums to prevent hardship and to promote equity. What I have said amounts to this. I hope that before the House rises next week I shall be able to make an announcement which will clear up once and for all the differences between us and the Egyptian Government over the 1959 Agreement and enable the transfer of monies to take place. Then I hope we shall consider the topping up, as it is known, and make it, in all the circumstances, fair and equitable.
I stand by the pledge which the Prime Minister gave in 1959. I want us to get on with the job, to do it as quickly as we possibly can, because I want as much as the noble Lord does to see this matter liquidated once and for all. These are subjects, as he says, which arouse emotion and we should not be human if they did not arouse emotion. I do not in the least object to his Motion on the Paper, because I share the objectives and I want to give these people a fair deal. In due course, therefore, I will come before your Lordships' House with a definite proposal on the residual obligation that we have accepted.
I do not know what response my noble friend will make to this reply which I have made to his Motion. I do not know whether he will go into the Lobby. I must say, I rather hope not. In a few days I am going to be able to announce something for which noble Lords themselves who are interested in this matter have been asking me for a long time. I have promised to apply my own mind and the Government's mind as fast as we may to settling the other problem, which is the topping up of the £27½ million. I say to your Lordships something more. When I saw Mr. Fawzi, the
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Foreign Minister of the United Arab Republic, I really did so because I believed it was high time, after many years of bad relations, for us to mend our relations with Egypt, and he reciprocated that sentiment. I believe that if we can make this financial settlement which I have outlined, that will be a start in better relations with the United Arab Republic, which is one of my objectives. Therefore, I hope the noble Lord will not divide the House; but if he does, I would ask my noble friends who share these objectives that I have had and who want to see a fair deal for the people here and also the start of an era of better relations with Egypt to support us in the Lobby.
6.38 p.m.
THE EARL OF LUCAN: My Lords, the first thing I should like to say is that most of us in this House, I think, feel an unbounded admiration for the noble Lord, Lord Killearn, for the energy and persistence with Which he is pursuing this campaign on behalf of the people he knew so well when he was serving in Cairo. I think many of us go a long way with him in his campaign and in his feelings and his determination to right what he considers is a grievous wrong to a number of British subjects, although not all of us, perhaps, certainly not all my noble friends on this side, would go to the length of following him into the Lobby on the exact terms of his Resolution. I would congratulate him on this occasion because his persistence has been rewarded and he has drawn from the noble Earl the Foreign Secretary something that seems to me really worth while—something which is "jam tomorrow", but it is not a very distant to-morrow—and it looks as if the deadlock that has persisted over these many years has been broken.
In thinking of this problem I should like to go back to the debate we had on the Financial Agreement of 1959. I notice that the noble Viscount, Lord Hailsham, in moving the introduction of that debate, said that the right course would foe to wait until we saw what emerged from the return by the Egyptian authorities of the sequestrated properties, and the work of the Foreign Compensation Commission. Apart from the question, of what the noble Lord, Lord Killearn, calls the short-fall, the difference between the total claims and

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the total payments toy Egypt under the Agreement, I think the most important thing is the question of the former sequestrated properties.
What has now been the result of the Agreement? Bow have the different Articles been carried out? I think we can take it that Article II, by which Her Majesty's Government undertook to remove the Exchange Control and in fact to release the sterling balances, was carried out promptly. In Article III the Government of the United Arab Republic undertook, immediately on the signature of the Agreement, to terminate all the measures which had been taken under the Emergency Regulations of 1956, and to return all British property. If your Lordships look at Annex B, which details the method of carrying out Article III, your Lordships will see that
"The Sequestrator-General shall ensure that within three months after the date of the receipt of each application … the property concerned be released and handed over by the Sequestrator-General."
My information is that that undertaking has never been carried out. In fact, I am told that the average time between the receipt of the claim and the signature for the release was over one year. Nevertheless, nearly 5,000 claims had been forwarded or submitted by the end of last year—I think that that figure was given in another place. As the time limit in the Agreement was twelve months, and no claims were admissible after twelve months from 1959, presumably there are no more. Of those 4,960 claims, I am told that at the end of the year 3,300 agreements to release had been signed or were awaiting signature—that is, three-quarters or more. But that is only one stage in the restoration to these British subjects of their property.
The next stage is the application for the release of the £E5,000, which was later amended to £E1,000. The only figures I have seen show that 260 people applied for the £E1,000, and in 231 cases the applications were approved. I hope that the noble Earl who is to reply will be able to say whether or not these figures are correct and perhaps bring them more up to date. But the enormous difference between the total of 3,300 agreements to release signed and only 260 applications for the £E1,000 seems to me to require some explanation.
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Is it, as the noble Lord, Lord Killearn, has told us, that the formalities required by the Egyptian Government are so complicated, and the workings of the administrative machine in Egypt so slow, that all these 3,000 people have had their property theoretically released but are not yet in a position to claim the money? I should be glad to know whether it is due to friction in the works, so to speak, or whether there is any other explanation.
My Lords, the figures I have been mentioning relate to those whose property has been de-sequestrated and who wish to realise as much of it as they can. In regard to the claims for loss or damage during the period the property was sequestrated, I have been told that by November of last year, 777 claims, totalling £1,600,000, had been put in, and those were assessed. There were, in addition £2½ million worth of claims not yet assessed. That makes £4 million in all. At the same date, £600,000 had been paid out in satisfaction of the £1,600,000 worth of claims put in. Can we be told whether those figures have changed by now? We believe that a great deal more than £4 million represents the amount of damage suffered by sequestrated property. If that is so, we should like to know how the process of putting in the claims and getting them dealt with is progressing.
I should like to raise one other aspect of this matter—namely, the general economic position of the Egyptian Government. We were told last year that Egypt had appealed to Her Majesty's Government, and pleaded inability owing to shortage of sterling to meet the full £E5,000 on each claim which they had agreed to release under the Agreement. Her Majesty Government accepted that, and also the fact that each claimant could realise only £E1,000 worth of his property. What I should like to ask is whether Her Majesty's Government were satisfied that there was substance in the plea of the Egyptian Government. Were they really satisfied that the Egyptian Government had not the sterling needed to realise the sums agreed? Had they no other foreign currency? Could they not call on some other resources? We read in the papers of other activities of the Egyptian Government. It is hard to believe that

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they were, as they said, unable to allow the release of this amount of £E5,000 on each claim.
Egypt has been receiving dollar aid on a pretty large scale. I understand that some 600 million dollars have been paid to Egypt in the last ten years by the United States, and I am told that the new agreement in process of negotiation with the United States provides for another 600 million dollars in the next three years. That is a substantial amount of money, and if they have obtained all these dollar assets, surely they can meet a sterling claim of a comparatively small amount. It has been said, and I do not know whether it has ever been disproved, that a large amount of the American dollar aid has gone into the purchase of arms from the Soviet bloc, and that such purchases are going to amount to some £100 million between 1961 and 1964. The Egyptian arms budget is going up this year, by about 15 per cent., to a figure of £138 million. Finally, there was a report in The Times last Monday with the title "Egypt tests Rocket Missiles at Desert Site". Cairo Radio stated that Egypt had now joined the ranks of the rocket-producing countries. The Egyptian newspapers were delighted, President Nasser was delighted, and the journalists, many of them from the Soviet bloc, were shown these rockets which were displayed as proof that Egypt had joined the ranks of the rocket-producing Powers.
In view of those factors, Which cannot have escaped the attention of the Foreign Office, I wonder what steps Her Majesty's Government have taken to persuade the Egyptian Government to honour the Agreement. The noble Earl, Lord Home, told us just now that he has in fact had considerable success. I would suggest that people in this country "who read their newspapers expect that Egypt should be persuaded to act a good deal more generously, and to be much more prompt in honouring the Agreement to which they have put their signature, than they seem to have been hitherto. We shall look forward with great interest to the noble Earl's statement which he hopes to give us before we rise next week. I note with great satisfaction that Her Majesty's Government accept (I think the word was) the obligation to supplement the change under the Agreement.
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In view of that, I would suggest to the noble Lord, Lord Killearn, that he has gone a good long way towards his objective, and I, personally, should not feel it was worth dividing the House on this question.
6.53 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I differ from my noble friend Lord Killearn only on one matter in his speech, and that is on his apology for bringing up this matter again, because I think that your Lordships in all parts of the House admire the noble Lord for his persistent efforts on behalf of these handly-treated British nationals. Although the hour is late and the House is thin, I am sure we all agree that Parliament is ever willing to receive the pleas of, and to give consideration to, oases of individual or collective unfairness or distress.
My Lords, the speech of the noble Earl, the Foreign Secretary, for which I would thank him, is certainly helpful, and an advance. But if I may make one criticism of it, it is this. It seemed to me a speech in which the positive statements were in the direction of helping the Egyptians and aiding the facilities for them to implement the 1959 Agreement. The basic responsibility which many of us feel that Her Majesty's Government have for the citizens, particularly the hard-pressed ones, is still not clearly admitted. The Foreign Secretary foreshadowed the culmination of the settlement he promised to your Lordships a year ago. He said he hoped to arrive at some agreement with the Egyptian Government in a few days, and that that agreement would allow the transfer of all funds to settle the approved applications under the 1959 Agreement in respect of the sequestrated persons. That is my interpretation of what he said.
My Lords, that may be very satisfactory, but it does not cover the desperately important point that so many of these people are unable to get their claims approved. They can never get to that stage because of—and I regret to use the word—the intransigeance of the Egyptian authorities and their resistance in so many different directions. The 1959 Agreement gives almost endless opportunities for bureaucratic delay and obstruction, and there is nothing in the speech of the Foreign Secretary, except

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that some better administrative machinery will be devised in this country and Egypt. There was nothing in the Foreign Secretary's speech to give an assurance that Her Majesty's Government will bring strong pressure to bear upon the Egyptian Government to introduce a system which will approve claims—a system very different from that which has hitherto persisted.
THE EARL OF HOME: I think, my Lords, that we must wait and see what the terms of the Agreement are; and I cannot reveal them. The noble Lord will have noticed that I said we wanted to improve the machinery on both sides in dealing with this matter, and also that we would deal with it in a specified time. I cannot tell him exactly what the time will be, but that does make a lot of difference.
LORD BALFOUR OF INCHRYE: Indeed, it gives a degree of reassurance, which is welcome.
My Lords, the other defect, if I may be allowed to refer to it in that way, of the Foreign Secretary's speech, was this. We know that there is going to be a shortfall, and we know that Her Majesty's Government have said they will look favourably upon a payment towards that shortfall. But I do not see—unless the new procedures are so very different from what we have suffered in the past—that it will be possible, in any reasonable time, to define the shortfall in exact terms of money, which of course is necessary before the Treasury can sanction grants. My Lords, the Foreign Secretary used a disappointing phrase which I took down. He said that he was sorry Her Majesty's Government could not accept direct responsibility for compensation of those (and these were his words) "caught up in events over which they had no control." It would have been fairer to say, "caught up in events for which Her Majesty's Government's policy was directly responsible." There is a very considerable difference there. This is a unique case of a claim for compensation for which responsibility is on Her Majesty's Government.
I shall not weary the House in any way by repeating the reasons for the Suez policy, to which I did give, and do
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give, full support. But we went into Suez to protect the lives and property of Britishers. If we went in to do that then, surely it is not unreasonable to ask Her Majesty's Government to accept direct responsibility now for the action they took then. There is no need for me to re-argue the case in detail, as has been so ably done both to-night and on other occasions by the noble Lord, Lord Killearn, and other noble Lords. All I would say is that, while grateful to the Foreign Secretary, I am disappointed that Her Majesty's Government still will not accept direct responsibility for the compensation of these British nationals, who have suffered from our own policy and our own actions; and that Her Majesty's Government, while showing good will and the general intention to do something, will not come down to the House to-night and say that they are determined to accept the responsibility for proper compensation, and then go to the Egyptians and get what they can out of Egypt. We used to be told that the more the British Government gave to British nationals, the more it encouraged Egypt to do less. That argument is fallacious now—it has gone. To-day we know exactly how far Egypt will go; and, my Lords, we should like to know how far Her Majesty's Government will go, in a direction more positive and further than that which the Foreign Secretary indicated to-night.
7.3 p.m.
LORD LLOYD: My Lords, I do not want to detain your Lordships very long, particularly as much of what I would have said has already been said by others, probably better than I could have put it. I have rather mixed feelings, if I may say so, about what was said by my noble friend the Foreign Secretary. I think we know that he would like to help us over this matter, and I have always felt that he used his best endeavours to that end. I think we are all glad to hear that positive steps are being taken initially to get the Egyptians at least to observe their obligations, and that is certainly the first step. I would agree with the noble Earl there. Of course, as has been said by other noble Lords, one of the most important things is to try to get these claims formulated, because so long as the Government's attitude is that they cannot even consider

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assisting these people any further until they know what the total bill is, and as we can never know what the total bill is until all the claims are in, we obviously remain in a state of complete impasse. I do not know how successful the Government are likely to be with the Egyptian Government in this respect, or how long it will take, but certainly I would agree that that is the second priority.
There are other aspects which I should like briefly to touch upon. May I say a word about the 1959 Agreement? The noble Earl the Foreign Secretary said, perfectly truthfully, that Parliament and noble Lords accepted the 1959 Agreement. The 1959 Agreement was the best we could get, although it was imperfect. It is true that we accepted it, some of us rather reluctantly, but I think some of us accepted it because we had been given assurances by Her Majesty's Government that, in view of the imperfections of the Treaty—this, at any rate, is the way I understood it—they would do something positive at a later date, which quite reasonably at that time they felt they could not be very precise about, not merely to rectify the financial injustices of the 1959 Agreement—because, after all, £27 million in settlement of debts worth £80 million cannot be regarded by any standards as a very satisfactory Agreement—but to deal with the actual defects of the Agreement itself.
The main defect, about which I should like to remind your Lordships if I may, is the very real injustice between the two classes of claimant, and I think this is so important that I must say a word about it again. It was purely fortuitous, whether you were Egyptianised or sequestrated. In point of fact, on the whole the big companies were Egyptianised and the small man was sequestrated, and, obviously, the worse of the two was to be sequestrated. So it was the small man, the poorer man, who got the worse deal. As I say, that was purely fortuitous, and I think the Government's theory all along has been that it was perfectly fair compensation if you gave a man back his property in Egypt, you de-sequestrated, and you gave him cash in sterling for the damage that had been done to his property in the meantime. I do not think that that is remotely fair.
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Let us take two men with virtually equal properties. Let us say that they each have £100,000. The man with £100,000 who is Egyptianised gets paid £50,000 cash sterling in this country. The man who has the misfortune to be sequestrated gets the damage up to the date of the Treaty, and not a penny after that. His property may remain sequestrated for two years or more after that. He gets that in sterling, and he than is left with an asset which is probably virtually valueless and, at any rate, frozen. If the noble Earl the Foreign Secretary is successful, and the property is still worth £5,000, he may in a year or so be able to get £5,000 out of Egypt. I cannot feel that that is fair as between these two sets of people, and I think it is all the more inequitable since it so happens that the people who are the hardest hit are the smaller people.
I noticed particularly that the noble Earl said in his speech that the Government wanted the settlement to minimise the hardship and to be equitable. That is not an exact quotation, but I think it is the sense of his words. I think that is what we all want. But I do not think the Government can do that unless they are prepared, in dealing with this question of compensation, to remove a very real injustice which was built into the 1959 Agreement. I do not know whether that is going to be possible or not. I find it encouraging that the noble Earl has renewed the pledge given by the Prime Minister that additional funds will be made available—we do not know on what sort of scale and, above all, we do not know how these funds are going to be applied after they are made available. I am encouraged by that, but I still feel, like my other noble friends, that it is a pity that the Government could not have gone further and said that they have a real responsibility, and realise their real responsibility for these people who, in the opinion of some of us, were the victims of Government policy. I do not think there is any more I need say about that, except that there have been rumours of the possibility of sterling loans to Egypt. I saw that in the paper. It would be most unfortunate if any form of sterling loans were made to Egypt, until this issue had been resolved.
7.10 p.m.
THE MARQUESS OF SALISBURY: My Lords, I do not intend to keep the House more than a very few minutes this afternoon. This subject has been discussed so often that it is not necessary to recapitulate the arguments at any length. I should just like to sum up the position that has been taken up by my noble friends and myself. All of your Lordships have heard the arguments a hundred times over, and I hope that you have all formed your own conclusions about the situation of the many Suez claimants; and not only of the great firms, of whom the Foreign Secretary spoke this afternoon, but, in particular, of the individuals. many of them retired people, old people, too old to start life again, who have been largely ruined as a result of the Suez operation.
My Lords, I supported the Suez operation. I was a member of the Government that embarked upon it; and I still think that they were right. But I cannot hide from myself that these people are casualties of those operations just as much as if they had actually been wounded in battle. Indeed, again and again the Government have given clear indications that they recognise that the Suez claimants have a right to be compensated. The Prime Minister himself has used words that leave no doubt of that. As the House has been reminded again and again, as far back as 1957 he stated in the other place [OFFICIAL REPORT, Commons, Vol. 568, col. 1296]—and it was quoted in your Lordships' House last week:
"It is the policy of Her Majesty's Government to secure from the Egyptian Government restoration of those assets"—
that is, the assets of the claimants—
"in full, or alternatively full compensation".
Yet, two years later, on 1959, the Government signed an agreement with the Egyptian Government which made it absolutely certain that the claimants would not receive full compensation from the Egyptians. Indeed, the Prime Minister himself seems to have recognised this, for at the time that Agreement was debated in another place he made a statement in which he said (the Foreign Secretary has quoted it this afternoon) that he would not exclude a further contribution from public funds. Behind that declaration, if they will forgive me for
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saying so, the Government seem to some of us to have sheltered (I can use no other word) ever since.
My Lords, 1959, 1960, 1961 and 1962 have passed; and each year it has become more obvious to any ordinary, rational man that the Egyptian Government do not intend to pay one penny more than they are forced to do. They have been putting every conceivable dicuffilty in the way Of de-sequestration of the property. Even when property has been de-sequestrated, it is often re-sequestrated; and, in any case, it is almost impossible for many British owners of assets in Egypt to get those assets, even in liquid form, transferred out of Egypt. Each year we have drawn the attention of our Government to this fact—a fact which I should have thought had become crystal clear to everyone—and each year we have had the reply, given with the utmost courtesy, as it was given to me by the Foreign Secretory the other day and repeated this afternoon, that the Prime Minister had made it clear in 1959 that he did not exclude a further contribution from public funds. Though this time, I must confess, the noble Earl went one step further and added that the Prime Minister had this matter very much in mind.
My Lords, as I listened to him I had a vision of exactly the same reply being given by the Foreign Secretary of the day—and I expect we should all hope that it would be the noble Earl, Lord Home—in 1972, in 1982 and in 1992, on and on, year after year, until such time as all the claimants were dead. I do not think any of us has any doubt of the Foreign Secretary's own sympathy in the matter. He has shown it on numerous occasions in the past, and he has shown it clearly in what he has said to us this afternoon. Moreover, we realise very well the handicap he has been under to-day in being able to give only a very bare outline of what he is trying to achieve for these unhappy people.
But, my Lords, what he has not been able to say, and what no Minister up to now has been able to say, beyond the vague statement made by the Prime Minister three years ago, is that Her Majesty's Government recognise direct responsibility themselves to see that

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proper compensation is paid; and paid in time to be of some use to the claimants. They always seem to be using their good offices with the Egyptian Government. They never seem to say: "If the Egyptian Government will not pay, we will"—except in the most general terms: this year, next year, some time they will pay.
My Lords, we already know very well that the Egyptian Government will not pay nearly as much as is required; and I am beginning to believe that Her Majesty's Government will never say that, for the simple reason that the Treasury are absolutely determined that in no circumstances shall any Government accept responsibility for compensating British people for losses overseas, even though those people have suffered through no fault of their own but purely as a result of the policy of their Government, and even though, as in this case, their own Prime Minister has described "restoration of their assets in full or, alternatively, complete compensation" as their right.
The Treasury, my Lords, are pretty powerful people, but I nave been comforted by recalling an experience I once had a good many years ago, when the noble Viscount, Lord Addison, was leading this House and I was leading the Opposition. In those days, after the 1945 Election, When the Labour Party had a large majority in another place and the Conservative Parity had a large majority in your Lordships' House, Lord Addison (who was a very wise man, as we all know), for the purpose of facilitating the passage of Labour Government Bills through the House, had the good idea of calling meetings of himself, myself (as I say, I was leading the Opposition) and the senior officials of the Department concerned with particular Bills, to go through those Bills before the Committee stage to see how far Opposition Amendments could be rendered acceptable to the Government. In one particular case the departmental officials—I will not say which Department—were being particularly obstructive, and as each Amendment came up they produced what they regarded as unanswerable objections to the making of any concession. Eventually, Lord Addison's patience became completely exhausted, and he turned to them and said, "You do not understand the
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position at all. It is not you who govern this country; it is Parliament that governs this country".
My Lords, I thought at that time, and I still think, that it was an extremely profound remark; and what is true of Government Departments is, if I may say so with all deference, true even of Governments. It is not Governments, ultimately, under Her Majesty the Queen, who govern this country: it is Parliament. It is to Parliament that we have been appealing for three or four years, and to whom we have been appealing to-day. Is it the wish of Parliament that this situation should continue and go on in that way? It is for that reason that we have constantly brought the matter up in your Lordships' House. Is Parliament prepared to allow these people to be denied any longer that full restoration of their assets, or, alternatively, complete compensation, which the Prime Minister has declared to be their right?
We feel sure that the Foreign Secretary has done his best; he has the respect and affection of us all. But it is not the Foreign Secretary alone who is concerned in this; it is the Government as a whole. The noble Lord, Lord Killearn, may feel that we ought to look in more detail at the new proposals which the Foreign Secretary has foreshadowed to-day before proceeding to extremes. I could well understand that very likely it would be the right course. But if he puts his Resolution to the vote, I personally shall support him in the Lobby. In any case, I hope he will continue to return to the attack, and return to the attack again, until these miserable people get justice.
7.21 p.m.
THE EARL OF DUNDEE: My Lords, this is a question on which it is very easy to be contentious in debate. I think that what your Lordships would like me to do, in replying to this short discussion, is rather to be factual; and because I think this is a rather complicated subject, I think your Lordships want to know more about the facts of the case up to the present moment. Whatever your Lordships may decide to do about dividing or not dividing, I think you would rather I tried briefly to answer some of the questions which have been put, rather than to enter into the broader

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issues of controversy with which we are so familiar on this question.
My Lords, these claimants have always been divided, I think, into two main categories: those who have claims to compensation of one kind or another, on the one hand; on the other hand, those who owned property in Egypt, all of which probably has been sequestrated, but there may or may not be any claim for damage, and the point is that they cannot get sterling payments made to them because of exchange difficulties. My noble friend Lord Lloyd argued that their case is very much worse, and is bound to be worse in the long run, than the case of those whose property has been confiscated, because those whose property has been confiscated (I shall give a few figures in a moment) have at least received something, and have the prospect of receiving something more, whereas those whose property has not been confiscated have only the prospect, which up to now has been doubtful and not fulfilled, of receiving £E5,000. Of course, their prospects in future must depend, and can only depend, on the exchange position, on the ability of the Egyptian Government to make sterling payments.
The noble Earl, Lord Lucan, asked whether we were satisfied that there really had been exchange difficulties, and that they might not have contrived to make these comparatively small payments—or, rather, I should say, transfers; he was quite right in drawing that distinction. They are transfers, because the property belongs to the owners in this country, and one ought not to call them payments to the owners of Egyptian property in this country. It is the case that Egypt has been short of foreign exchange over the past years, mainly due, we think, to the failure of her cotton crops. The Suez Canal dues, paid in sterling and other currencies, have for the most part been used for the maintenance and improvement of the Canal. Last year Egypt had a deficit of £17 million in her trade with this country. She exported only some £4½ million worth of goods to us, While she bought some £22 million worth from us. Therefore, it was largely owing to the shortage of sterling that the Egyptian authorities delayed allowing transfers to be made until March, 1961, and then
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they were able only to give this £E1,000, which I think is worth about £870 sterling, on transferable accounts.
Now when my noble friend the Foreign Secretary said that he would hope to be able to make an announcement next week, it would be confined to two things: one, the general desirability of speeding up machinery for settlement of all kind of claims, but, in particular, to get an arrangement—which, of course, I cannot anticipate now, because we cannot say anything about it until it becomes definite—which will enable these undertakings to transfer up to £E5,000 to their rightful owners in this country under the 1959 Agreement to be implemented within a reasonably short period of time: in fact, possibly the shortest period of time in which they could have been paid under the existing machinery of formulating claims to ownership of the property. My Lords, that is what we hope to do, and except for the point about machinery to speed up everything, it has nothing to do at all with compensation. Except in that indirect respect, the statement which my noble friend hopes to make next week will not have anything to do with the amount of compensation payable out of the £27½ million. That again falls into two categories, which my noble friend Lord Lloyd also emphasised: those who were claiming compensation in respect of nationalised, or, rather, "Egyptianised" (as it is usually called) property, and those who have had their property returned, but who are able to claim sums in damage, which may, of course, be relatively small, in some cases trivial, in relation to the total value of the property.
I will now try to give only a few figures. I do not want to trouble your Lordships too much with statistics, although this is a subject which needs, I think, some expounding of statistical facts. I will try to give only the facts both in relation to undertakings and in relation to the present state of the account as between the claimants and the Foreign Claims Commission. I shall not argue with my noble Mend Lord Salisbury the question of whether we ought morally to pay in full all the amount claimable in compensation by those who have had their property confiscated.
THE MARQUESS OF SALISBURY: My Lords, the point I was making was that the Prime Minister himself said that they ought to be paid in full.
THE EARL OF DUNDEE: Yes, my Lords; my noble friend quoted, I think in the couse of supplementary questions the other day, the statement of the Prime Minister on April 11, 1957, that:
"It is the policy of Her Majesty's Government to secure from the Egyptian Government restoration of those assets in full, or alternatively complete compensation".
I think I would read that to mean compensation from the Egyptian Government.
THE MARQUESS OF SALISBURY: But the point is that the Prime Minister said that they ought to have either one or other of those two things, and they now know that they are not going to get it from the Egyptian Government.
THE EARL OF DUNDEE: Yes; but I could not accept, as a matter of historical fact, the implication that, if the Egyptian Government did not pay full compensation, it then became the obligation of Her Majesty's Government to do so. And I am sure that my noble friend Lord Salisbury did not think that at the time, because about only ten days before the Prime Minister made the statement, the noble Marquess, speaking in your Lordships' House on this subject, said [OFFICIAL REPORT, Vol. 202, col. 939]:
"A much wider question was raised by the noble Lord, Lord Winster. He asked what would be the action of the Government in the event of the Egyptian Government rejecting claims altogether. There will, of course, come a time when the Government must decide on that point, which is, for the moment, an entirely hypothetical one. … If I said to-day that if the Egyptian Government refused to pay the debts, Her Majesty's Government would shoulder them all, it would just be asking the Egyptian Government to repudiate all debts; and that is the last thing that any of us wants to do."
THE MARQUESS OF SALISBURY: My Lords, I do not recede from a word I said, but that was before the signature of the Anglo-Egyptian Agreement. When that Agreement had been signed, we knew the full extent of the Egyptian contribution. What the Government were afraid of at that time was that if we offered to pay, then the Egyptians would not pay so much, but after the signature of the Agreement we knew just how
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much they would pay, and it was not enough.
THE EARL OF DUNDEE: But, my Lords, the Prime Minister's statement, which the noble Marquess quoted, was also before the 1959 Agreement.
THE MARQUESS OF SALISBURY: My Lords, does that mean that the Prime Minister withdrew from his statement of 1957?
THE EARL OF DUNDEE: No more than the noble Marquess withdraws from his.
THE MARQUESS OF SALISBURY: I shall not withdraw on mine. I said that it was unnecessary for the Government to say that they would take full responsibility for the debts of all these claimants while it was uncertain how much they could get out of the Egyptians. The Prime Minister said that he accepted that these people had a right to full compensation.
THE EARL OF DUNDEE: From the Egyptians.
THE MARQUESS OF SALISBURY: But what the noble Earl is saying to us in effect is that the Government reject an obligation to compensate these people.
THE EARL OF DUNDEE: I am saying exactly the opposite. No obligation was undertaken. The Prime Minister said that he was endeavouring to obtain from the Egyptians full compensation, and when the Government were asked in your Lordships' House what would happen if the Egyptians could not pay, he said that Her Majesty's Government would not shoulder them all.
THE MARQUESS OF SALISBURY: I do not wish to interrupt the noble Earl, but this is an important point. At the time I made that remark, negotiations were still going on with the Egyptian Government as to how much they should pay, whether they would pay more or whether they would pay less. If at that moment the Government had said they would pay in full, obviously the Egyptians would have said they would pay nothing. But when the Agreement was reached, it was made absolutely clear how much Egypt would pay. From that moment, I felt—and it does not differ in any way from my earlier statement—that Her Majesty's

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Government should shoulder the rest of the burden.
THE EARL OF DUNDEE: My Lords, my point is that this cannot have meant that we were undertaking to shoulder the balance. At the time these negotiations were still in progress our object was to obtain full compensation from the Egyptian Government, and I am only arguing that this does not in fact impose any obligation on the British Government to come along, if the Egyptians did not give full compensation, and pay it themselves. We have always explained that and emphasised that every time the subject has been discussed over the last five years. This is not a new argument I am putting forward. This has been said again and again. When the agreement was debated in your Lordships' House, my noble friend Lord Hailsham, in talking about the question of supplementation, quoted the Chancellor of the Exchequer to this effect [OFFICIAL REPORT, Vol. 215, col. 93]:
"that neither this Government nor any other Government in this country have ever accepted a commitment to make good losses suffered by British subjects in foreign countries. We could not possibly accept a commitment of that kind, but we are anxious to see a fair outcome of the matter."
I am not arguing that we ought not to give more money. As I will say in a moment, we intend to do so. But I must refute and rebut the suggestion that the words used by the Prime Minister in 1957 ought to be taken, or ever have been taken, or could be supposed by any reasonable man to be taken, to involve the undertaking that the Government would be fully responsible for paying compensation, and for making up the full gap between what the Egyptian Government pay and what the compensation claims amount to. I put it to your Lordships that it is highly misleading to make any assertion to that effect, because it is an assertion which cannot be supported by the Prime Minister's words or by the circumstantial evidence or by the subsequent statements which have been made within the last five years, repeatedly and clearly, both in your Lordships' House and in another place.
Having said that, I would again remind your Lordships that the Prime Minister did say in 1959 that we did not
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exclude a contribution from public funds to supplement the amount which can be recovered from the Egyptian Government. As noble Lords pointed out, the chief thing we need now is a speeding up of the assessment of these claims, so that we can be in a position to see what would be a reasonable and fair contribution from the Government, as my noble friend the Foreign Secretary has indicated in this speech. I should like to indicate to your Lordships the factors which I think seem likely to bear most upon this question, which we cannot answer now, of how much what is called the "topping up" ought to be. I am not going to take long over it, because I know that none of your Lordships wants to prolong this discussion needlessly. But my noble friend Lord Lloyd and the noble Earl opposite did ask for a little more about the "breakdown" between the different classes of payments.
I do not think that I need spend long on the provisions of the last Order in Council, which I explained to your Lordships in December, under which claimants of up to £5,000 receive 90 per cent. of the amount assessed; those between £5,000 and £50,000 get 90 per cent. of the first £5,000 and 60 per cent. of the balance; those between £50,000 and £500,000 get 90 per cent. of the first £5,000, 60 per cent. of the next £45,000 and 35 per cent. of the balance. Those over £500,000 get the same up to the first £500,000, and 20 per cent. of the balance over that.
On June 30 of this year, there had been 584 Egyptianisation claims assessed; the total amount being £42,887,000. That is a good deal more than the figure which I gave to your Lordships last December. There has been some speeding up since then, though not nearly so much as we should like. After assessment, the claims (this concerns, so far, only Egyptianisation, and not compensation) fell into the following categories. Up to £5,000 there were 414 claims assessed; the amount claimed was £449,890 and the amount payable under the present distribution order was £378,719. These claimants have received, or will receive, 90 per cent. of their claims. Then, between £5,000 and £50,000, there were 118 claims, amounting to £1,818,000. I should just like your Lordships to see the pattern; the proportion

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of large claims and the proportion of smaller ones. The amount payable under the present distribution order is £1,166,000. Between £50,000 and £500,000, there are only 40 claimants and their claims amount to £6,800,000, of which very nearly £3 million (£2,914,000) is payable under the present order. Above £500,000, twelve claimants have claims amounting to £33,743,000—that is, out of a total of £44 million-odd. The amount they receive under the present distribution is £7,766,000. I do not want to elaborate this or to draw any morals from it but I just want your Lordships to see the pattern.
My noble friend Lord Lloyd asked, would we compare with the damage claims for returned sequestrated property. They, of course, take much longer to assess. They are also a comparatively small total compared to the nationalisation claims. On June 30, 1,224 sequestrated claims had been assessed. To complete the picture I ought to give our estimate of the claims still to come in for nationalisation claims. I gave your Lordships a figure of £44 million assessed. We estimate that there may be about another £17 million to come.
LORD LLOYD: My Lords, these are sequestration claims, are they?
THE EARL OF DUNDEE: No. I have gone back to the nationalisation claims. We estimate £17 million, in addition to the £44 million. So your Lordships will see that more than two-thirds has already been assessed.
On the sequestration claims, 1,224 claims have been assessed. The amount at which they have been assessed is only £2½ million. The amount claimed had been, for the sake of interest, £3,700,000. There is a much bigger gap between the amount claimed and the amount assessed in the case of these claims for damages, than there is in the Egyptianised property claims. This, I think, is what one should expect.
LORD KILLEARN: The majority of the people whose property has been sequestrated have not been able to put claims in yet.
THE EARL OF DUNDEE: I would not say the majority.
LORD KILLEARN: I mean a large part.
THE EARL OF DUNDEE: I gave your Lordships last December an estimate which was the best I could do—it was only an intelligent guess—of what the final total amount of the sequestration claims was likely to be. The best estimate that we can make is that the total amount of claims for damages at the end of the day will be about £10 million compared perhaps with over £60 million for nationalisation. In these sequestration claims, as they are called (I think it is perhaps less confusing to call them damage claims, so that they do not get mixed with the larger question of sequestrated property in general), of up to £E5,000, 1,122 applicants have had their claims settled at £1,060,000, of which they get £914,000 under the present statutory Order in Council. That has gone through already. For amounts between £5,000 and £50,000 there are 96 claimants; the amount assessed is £900,000; the amount which they are receiving under the present distribution is £646,000. Above £50,000 and up to £500,000 there are only six claimants, for £531,000, of which they are entitled to receive, under the present distribution, £248,000. And above £500,000, there are, so far, nil.
Your Lordships will now have, I hope, a rough idea of the pattern of how this is going and how it is working out. Up to now, only about half of the £27½ million has actually been disbursed. We hope that the process will be greatly accelerated before long, and, as my noble friend said, we hope that it will soon be possible to envisage a final date at which all claims under the 1959 Agreement may be finally settled. When we have got that in our minds it will be possible for the Government to present to Parliament what they think is a fair and reasonable amount of additional money, as the Prime Minister has undertaken, to be provided from public funds.
I have tried to give your Lordships the figures which I know some of your Lordships would like. I do not wish at this moment to draw any further conclusions from those figures than I have done, because I think the important thing at the moment is to get all the

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facts clearly and in their right perspective before we can finally judge whether the measures which we will take to bring this matter between ourselves, the Egyptians and the claimants to a final conclusion shall be presented to your Lordships and to another place.
7.46 p.m.
LORD KILLEARN: My Lords, before I go any further—I do not wish to prolong the debate—there is one point which the Foreign Secretary made: that the Treasury would never accept liability for British subjects damaged or suffering abroad. I want to controvert that at once.
THE EARL OF HOME: My Lords, I hope the noble Lord will read to-morrow what I said. I was talking in terms of damage which might be done to British property abroad generally. I was saying that in the general proposition the Government could not accept an obligation to make up in full damage done to British citizens everywhere. The noble Lord has served in many countries, and he knows of cases in which you cannot transfer foreign exchange. What I said was in the general context. I went on particularly to say that in this particular case the Prime Minister accepted an obligation.
LORD KILLEARN: I fully accept that. I misunderstood the noble Earl. We have always maintained, and still do, that this is sui generis. What the noble Earl has said clears up the point.
I should like, first of all, to thank all noble Lords who have taken part in this debate and those who have stayed long enough to listen to it. Frankly, my own instinct would be to divide the House, because I think this is a matter of intense national importance. On the other hand, there was a strong appeal from the noble
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Earl the Foreign Secretary not to divide, because he has certain proposals or declarations (I am not sure which) which are coming before Parliament next week.
THE EARL OF HOME: Well, I hope so. I cannot promise.
LORD KILLEARN: In the light of that, and with a rather thin House, it does not seem to me that I should be justified in dividing it. Just look at the empty Opposition Benches. The noble Earl made a most delightful and helpful speech, but there is obviously no interest in this matter, as your Lordships can see, which I think is rather unfortunate, because it is a question of national honour. So if I ask leave of your Lordships to withdraw my Resolution, it is simply and solely because I think the House is rather thin. It is not big enough for a question of this national importance to be decided upon, especially with the full Front Bench sitting there. I have had this position before. It is heavily weighted, and it would be most unfortunate to divide and to be defeated; I should not like that at all. But I will not divide, mainly because the Foreign Secretary made an extraordinarily interesting and helpful speech, as we knew he would. He has made certain proposals, which I suppose will come up very shortly, and I do not think it would be fair to the House to divide until we know what those proposals are. In addition, the Minister of State more or less suggested that it would be better not to divide, and I certainly do not propose to ignore that request. So, all in all, I ask leave of your Lordships to withdraw my Resolution.
Resolution, by leave, withdrawn.
House adjourned at nine minutes before eight o'clock.