Sitting of 29 May 1962

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  MANCHESTER SHIP CANAL BILL
  As amended, to be considered upon Monday next.
PORT OF LONDON BILL
As amended, considered;to be read the Third time.
MANCHESTER CORPORATION BILL [Lords] (By Order)
Second Reading deferred till Tuesday next.
ORAL ANSWERS TO QUESTIONS
  TECHNICAL CO-OPERATION

    Research Experts, West Africa
    Mr. Tilneyasked the Secretary for Technical Co-operation whether, with a view to encouraging research experts to remain in and to be recruited for West Africa, a scheme of compensation for change of status for members of Her Majesty's Overseas Civil Service engaged interterritorially in research has been agreed with the Governments of Nigeria, Ghana, Sierra Leone and the Gambia.
    The Secretary of Technical Co-operation (Mr. Dennis Vosper): An officer of my Department is at present in West Africa for discussions with the Governments there on such a scheme. I will keep the hon. Member in touch with the progress of the discussions.
    Mr. Tilney: Will my right hon. Friend bear in mind that the equivalent scientific personnel in East Africa, who appeared in the pipeline much later than the scientists in West Africa, have already had their compensation agreed? Would he not agree that this delay is
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    very detrimental both to recruiting and to morale?
    Mr. Vosper: Yes. I have that very much in mind. We are negotiating here with at least four Governments. That has accounted for the rather longer delay than I should like in bringing these discussions to a head.

    Overseas Teachers
    Mr. G. M. Thomsonasked the Secretary for Technical Co-operation why preference is given to male candidates for the thirty overseas teachers of English as a second language, appointed by the United Kingdom in accordance with the commitment made at the Second Commonwealth Education Conference.
    Mr. Vosper: Most of these posts are expected to be in Asia and Africa, and the officer appointed will usually be on secondment to overseas authorities who in the British Council's experience most commonly expect to receive men teacher trainers. There will, however, be some posts for which women officers would be appropriate and the British Council will keep this in mind.
    Mr. Thomson: Would it not be better to approach this on the basis of finding the most suitably qualified teachers for these posts, irrespective of sex? Is it not very disturbing to find this kind of condition actually put in advertisement by the British Council?
    Mr. Vosper: The hon. Member may have misinterpreted the advertisement. It did not use the word "preference". The British Council is dependent on overseas authorities for applications and in the past the applications have been in the main for men, but I agree with the hon. Member that there is room for women in this development.

    United Nations Expanded Technical Assistance Programme and Special Fund
    Mr. G. M. Thomsonasked the Secretary for Technical Co-operation what increase he proposes in Her Majesty's Government's contribution to the United Nations Expanded Technical Assistance Programme and Special Fund for 1962 as Great Britain's share of the $150 million target recommended by the General Assembly.
    Mr. Vosper: The United Kingdom Government have pledged contributions of the sterling equivalent of 3 million dollars to the United Nations Expanded Programme and 5 million to the Special Fund for 1962. These contributions are on the same level as for 1960 and 1961.
    Mr. Thomson: Is the right hon. Gentleman aware that that is an extremely disappointing reply? Is he aware that the General Assembly has recommended that there should be a steady, expanding rate of technical assistance, and that if Her Majesty's Government are to co-operate in that there ought to be a substantial increase this year in the amount?
    Mr. Vosper: I should remind the hon. Member that we are still the largest contributor to voluntary programmes, apart from the United States of America. Our programmes for next year will be reviewed in the autumn and I will note what the hon. Member has said.

    Service Overseas (Volunteers)
    Mr. Gardnerasked the Secretary for Technical Co-operation what steps are being taken by Her Majesty's Government to encourage service overseas by volunteers, especially graduates and other young people.
    Mr. Vosper: As a result of discussions with representatives of a large number of voluntary societies and other interested people a scheme has been worked out to co-ordinate and stimulate the recruitment of volunteers for overseas service. I am circulating in the OFFICIAL REPORT a statement which I have agreed with the societies concerned and for whose co-operation I am most grateful.
    These steps to stimulate voluntary service are of course supplementary to the general recruitment activities of my Department, about which I am making a separate statement today.
    Mr. Gardner: Although I welcome the statement which has just been made by my right hon. Friend, may I ask whether he would agree that the organisation which has had, and now is having, a spectacular success in sending boys and girls overseas from the schools and industry to give unpaid a year of their life overseas, is Voluntary Service Over
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    seas? Will he take into account the outstanding record of that organisation when deciding and apportioning the grant which eventually will be given to these societies? Can he say whether a grant similar in proportion to the grant which is being given by the American Government to the Peace Corps is likely to be forthcoming from the British Government?
    Mr. Vosper: Voluntary Service Overseas is one of the organisations whose help I have much appreciated in formulating these proposals. When I receive its proposals for the coming year, I will have regard to what my hon. and learned Friend has said. In reply to the latter part of the supplementary question, I think it false to make a comparison with the American Peace Corps, because this is supplementary to our technical recruitment campaign, to which I referred in answer to an earlier Question.
    Mr. John Hall: Can my right hon. Friend say how many young men and women have volunteered for service overseas?
    Mr. Vosper: The current programme for Voluntary Service Overseas is 160, but there are other organisations which send a number overseas. I hope that for the year ahead there will be a considerable advance over that number.
    Mr. Thomson: While joining with the hon. and learned Member for Billericay (Mr. Gardner) in paying tribute to Voluntary Service Overseas, may I ask if the Minister is aware that there is a need for putting this sort of help on a wider scale? Can he say whether it is his intention to set up some sort of co-ordinating organisation, or is his own Ministry taking direct responsibility for this?
    Mr. Vosper: I welcome that supplementary question, because one proposal which will appear in the statement to be circulated in the OFFICIAL REPORT is, in fact, that there is to be a co-ordinating committee, on which will be represented all the bodies concerned, and which I hope will co-ordinate existing activities and stimulate further activities.
    Sir J. Maitland: Is it not rather unfortunate that the American Peace Corps has had a tremendous amount of publicity, when we had been doing this

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    work long before they started? Is it not part of the duty of the Government to see that the people who do this sort of work get the maximum amount of help and publicity, so that others may know what they are doing?
    Mr. Vosper: I quite agree with my hon. Friend. Organisations in this country have engaged in this field for some years, and I hope that this Question will help to publicise these activities. I am seeing in what way my Department may supplement them.
    Mr. Gardner: Will not my right hon. Friend agree that of the 30 million dollars spent by the American Government on the Peace Corps last year, a considerable amount went in publicity, while not a single penny has gone into publicity concerned with Voluntary Service Overseas?
    Mr. Vosper: That is a matter for Voluntary Service Overseas. I think they have received a fair amount of publicity, and I am anxious to see that they receive further publicity, but it should be on a wider front than one organisation.
    Following is the statement:
    In view of the great and growing interest in the service overseas by volunteers, meetings have recently been held in the Department of Technical Co-operation with voluntary societies and other bodies concerned. It was agreed that the task of recruiting volunteers and sending them overseas could best be discharged by the voluntary bodies;but that their work in this field could be made more effective by co-ordination. Accordingly plans for co-operation among the voluntary societies have been agreed.
    2. With the encouragement of the Secretary for Technical Co-operation a Committee, to be known as the Voluntary Societies' Committee for Service Overseas, has been established. This Committee will have two functions:

    (a) It will undertake general co-ordination of the work of voluntary societies in the whole field of voluntary service overseas by school-leavers, young graduates and other qualified or trained personnel.

    (b) In view of the importance of the recruitment of young graduates and other qualified or trained personnel as volunteers the Committee will work out a scheme for graduates. It will formulate general policy for the recruitment of graduate volunteers;maintain contact with universities, colleges, industry and commerce in order to encourage applications for voluntary service;and disseminate information about the progress of schemes.

    3. In relation to graduates, no less than with voluntary service generally, the voluntary societies will themselves remain responsible for all executive action connected with the recruitment, despatch and administration of volunteers, as well as the selection of projects.
    4. Dr. J. F. Lockwood, Master of Birkbeck College, will be Chairman of the Committee, which will include amongst its members representatives of—

    The National Council of Social Service.

    The British Council of Churches and the Conference of British Missionary Societies.

    Freedom from Hunger Campaign.

    International Voluntary Service.

    The National Union of Students.

    The Oxford Committee for Famine Relief.

    The Overseas Development Institute.

    The Scottish Union of Students.

    Sword of the Spirit.

    United Nations Association of Great Britain and N. Ireland.

    Voluntary Service Overseas.

    The Department of Technical Co-operation.

    The British Council.

    There will also be six members from Universities, Colleges of Advanced Technology, schools, industry and commerce.
    5. The National Council of Social Service has agreed to provide a Secretariat for the Committee from the secretarial staff of the recently established Standing Conference of Voluntary Organisations Co-operating in Overseas Social Service.
    6. The Committee will start work at once on planning a campaign for recruitment of graduates as volunteers for the summer of 1963. If adequate public support is forthcoming a substantial number will be recruited.
    7. Meanwhile for 1962 it is planned to send fifty graduates to Africa on a pilot scheme for volunteer teachers. Her Majesty's Government will pay for return passages and terminal grants for these volunteers and meet some other incidental costs. They will go mainly to schools for which voluntary societies are recruiting staff. The Overseas Appointments Bureau, Catholic Overseas Appointments, Voluntary Service Overseas, the British Council and the Department of Technical Cooperation are co-operating in this scheme, which is being administered by Voluntary Service Overseas.
    8. In addition, the United Nations Association, the National Union of Students and International Voluntary Service are planning to send abroad this year small numbers of graduate volunteers for a year or more. Voluntary Service Overseas are continuing to build up their existing substantial programmes for sending school-leavers overseas. If suitable schemes are presented by those bodies the Department of Technical Co-operation will be ready to provide financial support up to an amount similar to that for the pilot scheme for volunteer teachers.

    Information Expenditure
    Mr. Mayhewasked the Secretary for Technical Co-operation what information work will be curtailed or postponed as a result of the cut in information expenditure overseas in 1962–63.
    Mr. Vosper: Total estimates for overseas information work in 1962-63 are, of course, over £1 million more than last year. Within that total, many small reductions of staff and services have been made in order to reduce expenditure overseas. They have been made primarily in friendly countries, where reliable news about Britain is available through other channels, and generally where economies could be achieved without serious damage.
    Mr. Mayhew: Nevertheless, is not the Minister aware that these cuts, which are sudden and unexpected, can be very wasteful, frustrating and damaging to our reputation overseas? Will he say what he is doing to put the future of the information services on a long-term basis so that they can plan over a period of years and know where they stand?
    Mr. Vosper: These savings flow from the statement which my right hon. and learned Friend the Chancellor made last July. The hon. Member will have noticed, so far as costs are concerned, that full allowance has been made, and, in fact, some new services have been started up in the current year. In regard to a stable policy for the future, I am as anxious as the hon. Member is to see that achieved, but I cannot go further than my original statement today.

    Overseas Recruitment (White Paper)
    Mr. Skeetasked the Secretary for Technical Co-operation if he will make a statement on the overseas recruitment work of his Department.
    Mr. Vosper: Yes, Sir. I am issuing a White Paper on this subject, copies of which will be available this afternoon.
    Mr. Skeet: Is my right hon. Friend aware that the House will welcome the publication of the White Paper? May I ask him whether it will show a continued need for overseas service?
    Mr. Vosper: Yes, Sir. The White Paper will show a continued need for overseas service on the part of people from this country. It will, however, show that that service, in the main, in the future will be of a short-service variety for a wide variety of specialised occupations, and will not, on the whole, provide for the full career service which was customary in the past.
    Mr. G. M. Thomson: Will there be a continued need for those officers at present serving overseas? Does not the right hon. Gentleman agree that the greatest need is for agricultural and veterinary officers, and that, at the moment, these experts are flooding out of Africa because of the lack of some sort of scheme of continuity which would allow them to go on beyond the point of independence?
    Mr. Vosper: I should like the hon. Member to read the White Paper, when he will see the arguments fully deployed there. Any officers coming back from overseas for whom there is a continuing demand will be certain of receiving employment, but the trouble is that the requests I am receiving do not always coincide with the terms of service of existing officers.
    Mr. Tilney: May I ask my right hon. Friend whether he will bear in mind that the neglect shown to those who have served overseas in the past may be detrimental to recruiting in the future?
    Mr. Vosper: I am well aware of my hon. Friend's interest in this subject, and I have that matter very much in mind.

  HOUSING

    Physically Handicapped Persons
    Mr. Milneasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will take steps to enable him to issue instructions to local authorities in regard to the building of specially constructed houses for handicapped persons.
    The Minister of Housing and Local Government and Minister for Welsh Affairs (Dr. Charles Hill): Some general advice on the provision of houses for the physically handicapped has been given by my Department, and I hope in due

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    course to give further guidance in the light of research that is going on in this field. In the meantime, officers of the Department will be glad to help on any particular problem that a local authority may have.
    Mr. Milne: I am grateful to the Minister for that reply. Would he care to look at the excellent scheme devised by the Housing Committee of the Blyth Corporation on this matter, in which the features needed for handicapped persons were embodied at the time of house-building? Will he have a look at the scheme?
    Dr. Hill: I am aware of that.

    Central Heating Installations
    Mr. Boxasked the Minister of Housing and Local Government and Minister for Welsh Affairs what recommendations he has received in regard to the more efficient use of living accommodation by the installation of central heating systems;and whether he will make a statement.
    The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Geoffrey Rippon): Recommendations on this subject were included in the recent report "Homes for Today and Tomorrow" prepared by the Housing Standards Sub-Committee of the Central Housing Advisory Committee. They were brought to the notice of local authorities in Circular 13/62 which was sent out in February.
    Mr. Box: Does not my hon. Friend agree that the present archaic custom of increasing rating assessments on central heating and other such amenities is a direct discouragement to the carrying out of these recommendations? Will he consult his counterpart at the Treasury to see whether some new approach to this problem can be made in the future?
    Mr. Rippon: I think that, other things being equal, if a house has better amenities, it is likely to command a higher rent, and this is properly reflected in Its rateable value.
    Mr. Lipton: Will not the hon. Gentleman be satisfied with the trebled assessment which he will get next year, when the new valuations come into force? Why put this additional burden upon occupiers, when the burden is to be trebled next year, anyhow?
    Mr. Rippon: I think the hon. Gentleman is trying to suggest that the rates will be trebled, but if the rateable value goes up the rate poundage should in fact fall. That, at any rate, is the theory.
    Mr. Snow: Are not such valuation increases in conflict with the clean air legislation which already exists? Are they not a discouragement?
    Mr. Rippon: No.

    Mr. S. I. Sansoni
    Mr. V. Yatesasked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he has studied the further evidence in the case of Mr. S. I. Sansoni sent to him by the hon. Member for the Ladywood Division of Birmingham;and whether he will reconsider his decision not to take action in this matter.
    Mr. Rippon: If the information I gave in my reply of 3rd May was inaccurate, I apologise to the hon. Member and to the House. I gave the facts as they were then known to the Ministry.
    My right hon. Friend has reconsidered this case in the light of the new information which the hon. Member has provided, but he still does not think that it indicates any need for new legislation.
    Mr. Yates: I appreciate that statement, but in view of the fact that this tenant's rent was increased from £9 to £12 and from £12 to £14, which the city council thought was excessive, and which has moved it to take steps to acquire the property compulsorily, and since the evidence that I am now submitting tends to confirm that there are dozens of cases in Birmingham—according to the housing manager—will not the Minister take action so that tenants of this kind may be protected from extravagant demands being made upon them?
    Mr. Rippon: The facts of this case are complex. There may now well be an inquiry into the compulsory purchase order. On the last occasion I intimated that the Birmingham City Council found no merits in this man's case. I think that it was then referring to the housing aspects. It is now clear that the Council is concerned about the rent aspect of the matter. The hon. Member was quite justified in raising this case. We must now leave it for further development.

  LOCAL GOVERNMENT

    Civil Defence (Dispersal Scheme)
    Mr. Haymanasked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he will make a statement on the plans for the evacuation of refugees to Cornwall in the event of a nuclear attack on Great Britain.
    Mr. Rippon: I am sending the hon. Member a copy of a circular sent to local authorities on 28th March, which explains that a dispersal scheme is to be prepared in case it is needed in an emergency. Under the scheme most of Cornwall would be a reception area. Arrangements for the planning of the scheme in detail are being discussed with the local authority associations and a further circular will be issued later.
    Mr. Hayman: May I ask the Parliamentary Secretary to take into account the fact, that his plans may well be frustrated by the Minister of Transport, because there is a danger of the main line from Plymouth being closed altogether? As we can get no assurance from the Minister of Transport, will he do his best to get one, so that we may be assured, at least, of having a railway line?
    Mr. Rippon: We are satisfied that we can provide an effective scheme.
    Mr. Scott-Hopkins: Is my hon. Friend confident that the local authorities in Cornwall are capable of dealing with the increased population which will go down there, if the need arises?
    Mr. Rippon: All these questions as to how the situation will be dealt with will have to be discussed with the local authorities concerned. The maximum number of people which we think Cornwall would have to receive would be about 350,000.

    Premises, Leytonstone (Planning Appeal)
    Mr. Sorensenasked the Minister of Housing and Local Government and Minister for Welsh Affairs whether, before accepting the appeal against both the judgment of his own inspector and
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    the wishes of the Leyton Borough Council in respect of premises in High Road, Leytonstone, he sent a representative to see the heavy traffic in that thorough fare, and, in particular, the number of motor car show-and-sales rooms already existing in the High Road;and what account he took of the traffic aspects of the matter.
    Mr. Rippon: The premises affected by the appeal were visited by the inspector who held the inquiry and his report dealt with the amount of traffic using the High Road and the number of garages and car sales premises in the vicinity. No further inspection was made by an officer of the Ministry before the appeal was decided. The Ministry of Transport was consulted and agreed that dismissal of the appeal would not be justified on traffic grounds alone.
    Mr. Sorensen: Does not the Parliamentary Secretary appreciate that, although it is perfectly true, as he says, that the inspector saw the premises and the vicinity for himself, his recommendation was rejected by the Minister? In these circumstances, would it not have been better for the Minister either to go himself or to send somebody to see the congestion in that part of Leyton, with the result that he might have come to a different conclusion?
    Mr. Rippon: Very full evidence was give at the inquiry. The point at issue was that the premises were already used as a shop. Therefore, this did not seem an unreasonable proposal.

    London Local Government (Reorganisation)
    Mr. Sorensenasked the Minister of Housing and Local Government and Minister for Welsh Affairs if he will now indicate the approximate timetable and progressive stages of implementation in the proposed London local government reorganisation;and whether the whole scheme affecting all existing local authorities will operate as from a specified date.
    Dr. Hill: It remains the Government's aim, as stated in the White Paper on London Government (Cmnd. 1562), to introduce legislation in time for the new

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    authorities to be elected and to take over from the existing authorities in April, 1965, in all cases.
    Mr. Sorensen: Can the right hon. Gentleman give any indication in the interim period as to the stages through which this reconstruction will pass, because there is a good deal of ambiguity and a certain amount of suspense, which might be alleviated if the various authorities knew for certain that on certain dates certain stages would be passed?
    Dr. Hill: For much of that the hon. Gentleman will have to await the Bill, but if he has a particular issue or service in mind and he will table a Question, I will seek to help him, though I cannot guarantee in advance to help him.
    Mr. Mayhew: Will the right hon. Gentleman give an assurance that he will give a great deal more careful consideration to the remaining proposals than he did to his proposals on education in the White Paper, which were criminally slapdash and haphazard?
    Dr. Hill: I have given a great deal of consideration to the problems which I promised to consider. There has been nothing either criminal or slapdash about that.

    Coast Protection
    Mr. Loveysasked the Minister of Housing and Local Government and Minister for Welsh Affairs what proportion of the sum expended on coast protection since the Coast Protection Act, 1949, has been paid by individual property owners contributing to works schemes as allowed for under Section 7 of the Act.
    Mr. Rippon: Between 1 and 2 per cent.
    Mr. Loveys: Does not my hon. Friend agree that the enormous amount of work which has to be undertaken by marine local authorities which operate works schemes is out of proportion to the amount recovered? Does he not think that in future the amounts which would be recovered from works schemes should be included in the grants supplied by the Government in the first place?
    Mr. Rippon: There is a great deal in what my hon. Friend says. My right
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    Friend has raised this matter with the local authority associations. All but one of them have replied. So far all are in favour of not making any more of these works schemes.
    Mr. Loveys: Is my hon. Friend aware that individual property owners concerned and marine local authorities will be greatly relieved at the enlightened view now being taken by the Government concerning this piece of Socialist legislation? Is there any hope of retrospective action concerning works schemes which have taken place but where appeals have not yet been considered by my right hon. Friend?
    Mr. Rippon: In the ordinary course of events I should not have thought that retrospection was possible. There are a number of cases now before my right hon. Friend. No doubt we can bear in mind the point which has been made.

    Rates
    Mr. Ridsdaleasked the Minister of Housing and Local Government and Minister for Welsh Affairs what communication he has received from the Conservative Women's Annual Conference about reform of the rating system;and what reply he has sent.
    Dr. Kingasked the Minister of Housing and Local Government and Minister for Welsh Affairs what representations he has received from the Conservative Women's Annual Conference on the current burden of rates;and what reply he has sent.
    Dame Irene Wardasked the Minister of Housing and Local Government and Minister for Welsh Affairs what representations he has received from the Conservative Women's Conference about the further relief of rate burden;and what reply he has sent.
    Mr. Rippon: My right hon. Friend has received no communication, but I addressed the conference.
    My right hon. Friend sees no present case for further inquiry by committee. It may be, however, that the recent White Paper on Revaluation for Rates in 1963 could usefully be followed up, later this year, by a document giving a wider review of our local government finances as a whole.
    Mr. Ridsdale: Would not my hon. Friend agree that the resolution passed at the Conservative Women's Annual Conference was very similar to Motion No. 99 on the Order Paper signed by ninety-nine Members of this House? Does not his right hon. Friend the Minister think that ninety-nine is a slightly high temperature? Is he aware that the reason for this strong feeling at the moment is the very heavy burden being placed on the small fixed income group? Will he ensure that early action is taken to relieve this section, if nobody else?
    Mr. Rippon: I think that the Motion was similar but different. I hope that my hon. Friend has not missed the significance of the second part of my Answer to his Question.
    Dame Irene Ward: Is my hon. Friend aware that when he answered the Resolution at the Conservative Women's Annual Conference he was more forthcoming than his right hon. Friend when he answered the debate on the Motion proposed by my hon. Friend the Member for Harwich (Mr. Ridsdale)? Can my hon. Friend tell me when we in the House of Commons will see some of the ideas which we put forward acted upon? Is he aware that I am getting extremely tired of sensible Motions and ideas being put forward which are sat upon by the Executive? The Executive would get on much better if it would pay attention to sensible people like its own back benchers.
    Mr. Rippon: I answered both discussions and find no discrepancy in my replies. The Motion of my hon. Friend the Member for Harwich (Mr. Ridsdale) called for a committee. The Motion at the Conservative Women's Annual Conference simply called for the Government seriously to consider the present rating system. The difficulty about a committee is that it is apt to knock the ball into the long grass and produce some years later an unacceptable report.
    Mr. Shinwell: Do I understand from the hon. Gentleman that the Government reject conference decisions?
    Mr. Rippon: On the contrary, we readily accepted the demand that we should consider something that we are always considering.
    Mr. Ridsdale: Is my hon. Friend aware that I welcome the fact that he does not want to have a committee, because what we really want is early action?
    Mr. Rippon: I appreciate my hon. Friend's point.
    Mr. Pargiter: Is the hon. Gentleman aware that this is not really a year in which Ministers will take notice of what takes place at the Conservative Women's Annual Conference but that there soon will be a year when more notice will probably be taken?
    Mr. Rippon: We always take notice of all representations made to us from all quarters.

    Airfield, Fradley
    Mr. Snowasked the Minister of Housing and Local Government and Minister for Welsh Affairs why he withdrew his support for loan sanction to the Lichfield Rural District Council in regard to the sale of the Royal Air Force airfield, Fradley, eight days before the sale was due to take place.
    Mr. Rippon: The amount which the Lichfield Rural District Council was willing to pay, and for which my right hon. Friend was prepared to give loan sanction, was not in the region of that which the Air Ministry expected, and was in the event able to obtain.
    Mr. Snow: I desire to put on record the courtesy and patience the Minister displayed in the negotiations concerning this airfield, in which I was a party, which lasted for many months. Is the Minister aware that there are certain undesirable features about this sale? Is he aware that on three occasions the district valuer, presumably at the Air Ministry's suggestion, increased his valuation? The sale is due for completion on 13th June. At no time was the Air Ministry prepared to give any indication of the price it wanted. The short notice of the change of policy by the Department seems to me at least to indicate that the public interest may not have been well served.
    Mr. Rippon: I do not think that there was a change of policy. What happened was that my right hon. Friend agreed to give loan sanction up to £150,000.

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    Unfortunately, negotiations with the Air Ministry broke down. We agreed with the council that it would be well advised not to offer a higher figure. The real justification for the Air Ministry's view is that in the event it obtained £39,000 or so more than the council offered.
    Mr. Snowasked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he is satisfied that, when approving the Staffordshire County Development Plan, account was taken of the fact that the Royal Air Force, Fradley, airfield was surplus to Air Ministry requirements and therefore should be included in the proposed green belt only three miles away;and what steps he will advise the county planning authority to take in support of the Lichfield Rural District Council to prevent further spoliation of the countryside by outside and unsightly dumps such as those in the near vicinity of this airfield.
    Mr. Rippon: The decision that this airfield was surplus to Air Ministry requirements had not been taken when the county development plan was approved in August, 1958. My right hon. Friend does not think that the county council needs any special advice from him about the exercise of its planning powers in this matter.
    Mr. Snow: Is the hon. Member aware that this Government hold, outside the question of dockyards, airfields and other major installations, no less than 462,000 acres of land, of which 28,000 are on current sale? Is he further aware that the case of Fradley airfield has demonstrated a complete lack of co-ordination between his Ministry and the Air Ministry? If he will visit my constituency I will show him the most unseemly dumps of scrap scattered here and there, which cannot be moved because there is a shortage of staff on the local planning authority and the local authority.
    Mr. Rippon: I cannot confirm or deny the figures referred to in the first part of the hon. Member's supplementary question.
    Mr. Snow: They came from the Ministry of Defence.
    Mr. Rippon: As to the second part of the supplementary question, I do not agree with the hon. Member's assessment of the situation.
    Mr. Snow: On a point of order. In view of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    Dawley (New Town)
    Mr. W. Yatesasked the Minister of Housing and Local Government and Minister for Welsh Affairs whether he has completed his study of the suitability of Dawley as a site for a new town for the relief of congestion in the Birmingham area;and whether he will make a statement.
    Dr. Hill: Yes, Sir. Having considered the report made to me by Mr. Sheppard Fidler I believe that a satisfactory new town could be built at Dawley to include ultimately 80,000 to 90,000 people, of whom I hope that over 50,000 could come from Birmingham. The building of a new town here will have its difficulties, but it will make minimum demands on agricultural land.
    I have therefore decided to designate a site for a large new town at Dawley, subject to what may emerge from the necessary consultations and consideration of objections. I propose to start consulting the local authorities concerned at once.
    I should like to take this opportunity of thanking Mr. Sheppard Fidler for his most valuable report and the Corporation of Birmingham for agreeing to make his services available.
    Mr. Yates: It is not very often that I am able to congratulate the Government, but in this case they have taken an extremely courageous and wise decision. Is my right hon. Friend aware that to use, for this new city, land which was made derelict as a result of the first Industrial Revolution, is a splendid idea? Is my right hon. Friend quite certain that this new city will provide sufficient employment for all the people in the area?
    Dr. Hill: I am grateful to my hon. Friend for what he has said. This site has involved problems and a great deal of expense but, on balance, it has been thought to be a wise step. On the second

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    point raised by my hon. Friend, it is certainly our intention to seek to provide sufficient employment there for the whole population. I hope to secure the co-operation of the Birmingham City Council in persuading some of the industry now in that city to move out, thus helping to relieve the congestion in the city.
    Mr. J. Silverman: Will the right hon. Gentleman also consult his right hon. Friends, especially the President of the Board of Trade, in order to consider what can be done about shifting industry to the area? When a new population is moved into such an area as this it is vital that industry should also be there, otherwise the new town cannot be a success.
    Dr. Hill: I agree entirely with the hon. Member. I shall consult my right hon. Friend the President of the Board of Trade.
    Mr. Cleaver: Is my right hon. Friend aware that this news will be greatly welcomed by many of the 50,000 people on the housing list in Birmingham? Can he give any idea when the project is likely to start, and will he bear in mind the absolute necessity for all the local authorities and industry to co-operate in this venture?
    Dr. Hill: Yes. I will start immediately on the first stage, which will consist of consultations with the local authorities concerned. As soon as these are completed a draft designation order will be made, to which objection can be taken, and as soon as that phase is over I shall make the designation order either in the original or in a modified form.

  NATIONAL FINANCE

    Sport (Disabled Persons)
    Mr. K. Lewisasked the Chancellor of the Exchequer whether he will arrange for a certain proportion of the money being made available for sport, in implementation of the Wolfenden Report on Sport, to be given to the British Sports Association for sport for the disabled.
    The Chancellor of the Exchequer (Mr. Selwyn Lloyd): The funds for voluntary organisations concerned with sport
    1146
    referred to in my statement of 8th May are to be allocated by my right hon. Friends the Minister of Education and the Secretary of State for Scotland. I suggest, therefore, that the Association should make its needs known to my right hon. Friends.

    Goya Picture (Committee's Report)
    Mr. A. Royleasked the Chancellor of the Exchequer when Her Majesty's Government will finish considering the Report received by his Department in February 1962, on the theft of the Goya portrait;when he intends to publish the greater part of this Report;and if he will make a statement.
    Mr. Selwyn Lloyd: The Government have considered this Report, and intend to publish it, with some necessary omissions for security reasons, very shortly.
    Mr. Royle: Why has it taken so long to publish this Report? Has the theft of pictures this week speeded things up? Can my right hon. and learned Friend tell me whether the report in a Sunday newspaper that the National Gallery applied to the Treasury, prior to the theft, for a grant of £100,000 to improve security arrangements is correct?
    Mr. Speaker: The last part of the hon. Member's supplementary question is out of order. The rest is all right.
    Mr. Lloyd: The answer to the first part of my hon. Friend's supplementary question is, "No, Sir".
    Mr. Lipton: Can the right hon. and learned Gentleman now say where the picture is?
    Mr. Lloyd: No. Perhaps the hon. Member can help me.

    Company Directors (Fees)
    Mr. Jayasked the Chancellor of the Exchequer to what extent it is the intention of Her Majesty's Government that the policy contained in Command Paper No. 1626, Incomes Policy: The Next Step, should be applied to the fees of company directors.
    Mr. Selwyn Lloyd: The policy set out in the White Paper applies to all forms of personal income, including directors' fees.
    Mr. Jay: Does that mean that the Government will intervene in future to decide the level of directors' fees?
    Mr. Lloyd: No. Sir. We hope and believe that common sense will have regard to our policy.
    Mr. Dudley Williams: In view of the fact that the only reason why the 2½per cent. rule should be breached is to attract people to a certain industry, and since there is no scarcity of candidates for this House, will my right hon. and learned Friend bear in mind the strong views of the hon. Member who put down this Question when he is considering any increase in emoluments for Members of Parliament?
    Mr. Lloyd: I am not quite certain that that supplementary question arises out of the original Question.
    Mr. Nabarro: Can my right hon. and learned Friend confirm that there is no evidence to support the statement that the fees of company directors have increased at all in the last twelve months? Is not he aware that, since last July, business has been exceedingly difficult for company directors, and that they are much more likely to suffer a diminution of fees than any increase, as a result of my right hon. and learned Friend's activities?
    Mr. Lloyd: I am quite certain that there is no evidence of any general increase.

    Cost of Living
    Mr. Jayasked the Chancellor of the Exchequer to what causes he attributes the rise of 6.4 points in the cost-of living index between April, 1961, and April, 1962.
    Mr. Selwyn Lloyd: 2·2 points are due to the current shortage of potatoes and other seasonal factors affecting the price of foodstuffs. 0·6 of a point is due to increases in rents and rates. The remaining increase of 3·6 points, including 1·2 points on account of indirect taxation, is essentially the consequence, direct or indirect, of personal incomes rising faster than national production.
    Mr. Jay: As the Chancellor keeps telling us that the object of his pay pause policy is to stabilise the value of
    1148
    money and prevent prices from rising, is it not remarkable that in the year of the pay pause we have had the fastest rise in the cost of living for many years?
    Mr. Lloyd: The reason for this increase has been the prior increase of incomes at a higher rate than national production. I very much hope that later in the year we shall see the effects of the pay pause.
    Mr. Ridsdale: Can my right hon. and learned Friend say how many points have been attributable to the increase in the price of electricity and coal, the increase in the price of gas and the increase in the price of rail fares?
    Mr. Lloyd: I cannot give those figures without notice.
    Mr. S. Silverman: Will the right hon. and learned Gentleman explain how he can possibly hope to maintain effective control over the rise in wages if he makes no attempt whatever to control the rise in prices?
    Mr. Lloyd: That is one of the troubles about inflation. In order to bring it under control one has to take certain steps, as we had to do last July, which have the effect of increasing the cost of living. There are some interesting figures to be given by my hon. Friend the Finacial Secretary in answer to a later Question about the extent to which personal incomes have increased much more than the cost of living. They have also increased more than production, and that is the reason for the present position.
    Mr. Jay: Did not the Chancellor admit in his first Answer that part of the rise is due to increases in indirect taxation for which he is responsible?
    Mr. Lloyd: I should like the right hon. Gentleman to realise that in order to stop an inflationary situation one has to take that kind of action which may involve direct or indirect taxation.
    Mr. Jay: Does not the Chancellor understand that if he had made increases in direct taxation instead he would have curtailed spending without raising prices?
    Mr. Lloyd: I do not think that such increases would have taken place in

    1149
    time. Regarding Income Tax, I had to take immediate action indirectly in order to deal with the demand at the time.

    Sweets and Ice Cream
    Mr. Milneasked the Chancellor of the Exchequer how the increased prices now being charged for sweets and ice cream will affect his estimate of the revenue to be derived from them during the current year.
    The Financial Secretary to the Treasury (Sir Edward Boyle): My right hon. Friend's estimate of the revenue took into account the effect on consumption of increased prices attributable to the tax. It is not possible to say how this estimate will be affected by any changes in tax-exclusive prices.
    Mr. Milne: Does not the hon. Gentleman consider deplorable the manner in which certain sweets and ice cream manufacturers have increased the prices of their products following the Budget proposals? Will the Chancellor consider giving the same sort of lecture to these people as he has been giving to the wage earners in the past few months?
    Sir E. Boyle: The Chancellor made it clear during the Committee stage discussions on the Finance Bill on 16th May that in his view when an increase in Purchase Tax is made the increase, and no more, should be passed on to the consumer.

    Greyhound Racing (Taxation)
    Mr. A. Lewisasked the Chancellor of the Exchequer if he will state the Treasury receipts from Pool Betting Duty collected on greyhound totalisators for the months of January, February and March, 1962, divided as between the normal 10 per cent. duty and the 10 per cent. surcharge imposed since 26th July, 1961, and similar figures for Bookmakers' Licence Duties on greyhound racecourses for the same month.
    Sir E. Boyle: I will, with permission, Circulate the reply in the OFFICIAL REPORT.
    Mr. Lewis: Will the figures show that, due to the discriminatory practice of taxing just greyhound racing and not horse racing, there is no tax due to the Treasury from horse racing? Will the
    1150
    hon. Gentleman do something about altering the present discriminatory practice?
    Sir E. Boyle: The figures show a slight fall in greyhound totalisator betting. It is not possible to say that they establish a trend, especially as the surcharge has been removed. It has been announced that the scope of the Pool Betting Duty is to be the subject of a review.
    Following are the figures:

    Month

    Pool Betting Duty on greyhound totalisators

    Bookmarkers' Licence Duty

    Duty

    Surcharge

    Duty

    Surcharge

    £

    £

    £

    £

    January

    366,426

    36,642

    96,074

    9,607

    February

    390,756

    39,076

    101,769

    10.177

    March

    444,002

    44,400

    124,189

    12,419

    Net Receipts

    1,201,184

    120,118

    322.032

    32,203

    Wages and Salaries
    Mr. A. Lewisasked the Chancellor of the Exchequer whether he will publish in HANSARD a table of figures to show by how much wages and salaries would have had to rise each year since 1951 to take account of the rise in the cost of living and the depreciation in the purchasing value of the £sterling.
    Sir E. Boyle:Yes, Sir. With permission I will circulate the figures in the OFFICIAL REPORT.
    Mr. Lewis: Is not it about time that the Minister appreciated that this Government have been in power for over eleven years and that each year they have told us that they will make the £worth something;that they are going to mend the "hole in the pocket" and cut the cost of living? When do they propose to get down to doing this? Is he aware that the £is now worth less than at any time in the last eleven years? When do the Government propose to take some action?
    Sir E. Boyle: I hope that the hon. Gentleman will get down to studying the

    1151
    figures to be circulated in the OFFICIAL REPORT. They are remarkable and provide the clearest indication I have seen—I am grateful to the hon. Gentleman for having put down his Question and giving me the chance to give this Answer—of the extent to which inflation has been due to increases in personal incomes which have increased more rapidly than the volume of production.
    Mr. Jay: Is the hon. Gentleman aware that the more figures the Government circulate the faster the cost of living rises?
    Sir E. Boyle: If the right hon. Gentle. man will study the Answer of my right hon. and learned Friend, he will find a full analysis of inflation during the past year. These figures show, more clearly than any I have ever seen, the need for an incomes policy, and I hope they will be accepted by the House.
    Mr. Wade: Will the figures show to what extent increases in prices have led to automatic increases in wages and salaries, thus maintaining the vicious circle?
    Sir E. Boyle: The figures shown are in answer to the Question which was put down, but may I say to the hon. Gentleman that if we have excess demand, as we had last July, no power on earth can keep stable prices unless one takes sufficient measures on the fiscal side to equate supply and demand, as we did on that occasion.
    Following are the figures:
    The second column in the table below shows the increase in average wages and salaries per head, taking 1951 equal to 100, which would have been required to meet the rise in the cost of living, as measured by the consumers' price index. The third column shows the increase which actually occurred.

    —

    Required increase

    Actual increase

    1951

    …

    …

    100

    100

    1952

    …

    …

    106

    107

    1953

    …

    …

    108

    113

    1954

    …

    …

    110

    191

    1955

    …

    …

    113

    128

    1956

    …

    …

    118

    138

    1957

    …

    …

    122

    146

    1958

    …

    …

    125

    151

    1959

    …

    …

    126

    158

    1960

    …

    …

    127

    167

    1961

    …

    …

    130

    177

    MINISTER WITHOUT PORTFOLIO
    Viscount Lambtonasked the Prime Minister to what extent it is to be the responsibility of the Minister Without Portfolio to mediate between employers and the trade unions.
    The Prime Minister (Mr. Harold Macmillan): None, Sir.
    Viscount Lambton: I thank my right hon. Friend for his reply. Will he also give an assurance that from no source in any way related to his office will there come any suggestion that the Minister Without Portfolio has mediated when in fact he has not, as such suggestions, when they appear to be totally unfounded, cause my right hon. Friend to appear in a most eccentric light?
    The Prime Minister: No statement of any kind was made from my office.
    Mr. M. Foot: Can the Prime Minister say whether he has made any investigation into the widespread story, published in a large number of newspapers, that the Minister Without Portfolio had had discussions with the port employers on this matter? Does not he think something much more honest and straightforward should be said by the Government in view of the repudiation of these charges made by Mr. Crichton, and does not he think that the Government should make a full statement of what happened?
    The Prime Minister: I know that Lord Mills played no part except as a member of the Cabinet. No statement to the contrary was made by me or by a member of my office.
    Viscount Lambton: May I have an elucidation of this point? Will my right hon. Friend give an absolute assurance that from no source of which he has any knowledge was information imparted to suggest that Lord Mills played any part in this mediation?
    The Prime Minister: Yes, Sir, so far as I am aware, absolutely.
    Mr. Jay: In order to clear up the matter, may I ask whether the Prime Minister is saying that the Government did not interfere in any way in an effort to influence these wage negotiations?
    The Prime Minister: No, Sir. The employers themselves said in a statement immediately after the settlement that they were made perfectly aware of the attitude of the Government and of the result of their settlement on the incomes policy. There was no doubt about that at all. But they thought that there were particular circumstances which justified them in going beyond the policy.

    BRITISH COUNCIL OF CHURCHES (DISARMAMENT AND NUCLEAR TESTS)
    Mr. Dribergasked the Prime Minister if he has considered the statement on disarmament by the international department of the British Council of Churches, approved on 4th April at a full meeting of the Council, and the resolution urging Her Majesty's Government not to be a party to the renewal of nuclear tests, passed nemine contradicente at the same meeting, copies of which have been sent to him;and what reply he has made to these representations.
    The Prime Minister: I have considered both these documents which are, of course, sincere and thoughtful contributions to the discussion of these difficult problems.
    Mr. Driberg: Will the Prime Minister say whether he has in fact considered the three specific proposals made at the end of the longer of these documents? Also, does he recall that on 8th May he promised he would do what he could to ensure that Sir Bernard Lovell would have facilities to meet the American scientists engaged in the coming high-altitude tests? As it is now announced that these tests are to begin in three days' time, has the right hon. Gentleman been able to do anything about it?
    The Prime Minister: Perhaps the second part of the supplementary question could be put on the Order Paper as it is a separate question. Regarding the Resolution of the British Council of Churches, as I say I have considered it and know how sincere they are in their feelings. I do not altogether accept the hon. Gentleman's summary of the resolution. The resolution urged Her Majesty's Government to press for no more than
    1154
    "the minimum detection machinery necessary to give reasonable assurance that an agreement will be observed."
    That is exactly the point on which we have been engaged all these months at Geneva. It goes on to say:
    "Her Majesty's Government should not be a party to a final decision to renew tests without ensuring that the value of an agreement on atmospheric tests alone is explored."
    That is the offer which we made and which was rejected—it has been over and over again rejected—by the Soviet Government. While I fully recognise the sincerity of the document, I do not think—I am sure it is by misadventure —it is quite accurately summed up in the hon. Gentleman's Question.
    Mr. Driberg: The right hon. Gentleman has not referred to the specific paragraphs to which I drew his attention. Does he agree, for instance, that there should be a declaration by Her Majesty's Government that Britain will not be the first to use strategic nuclear weapons, which is demanded there? When he says that my other question does not arise, or is a separate question, is it not the case that there is also the demand for the ending of testing referred to in my Question on the Order Paper, and that these are the next tests?
    The Prime Minister: Again, the last part of the supplementary question relates to tests but the Question related to the renewal of nuclear tests. The question of the strategic use of weapons is wholly different.
    Mr. G. Brown: Would not the Prime Minister agree that the problem with all these statements is that anybody may take a sentence out of context and prove with it almost anything they like? Is it not the fact that what we are most concerned with is getting an agreement which will end this beastly business of testing, especially in the atmosphere, and that for the moment it is Russia which is holding it up?
    The Prime Minister: I think that the right hon. Gentleman has very accurately summarised the position. But, as I said, knowing the sincerity with which these views are held, I thought it right to recognise that, although pointing out that the actual points made to me were exactly the ones that, with the general support of the House, we have been. pressing forward.

    DEPUTY PRIME MINISTER OF NEW ZEALAND (TALKS)
    Mr. Healeyasked the Prime Minister if he will make a statement on his talks with the Deputy Prime Minister of New Zealand.
    The Prime Minister: Some of my colleagues and I have had a preliminary talk with the Deputy Prime Minister of New Zealand. There will be further talks during Mr. Marshall's visit. These discussions will, of course, be confidential.
    Mr. Healey: Is the Prime Minister aware that there is strong feeling on both sides of the House, in view of the great sacrifices made by New Zealand on behalf of this country in two world wars and its exceptional dependence upon exports to this country, that we should not join the Common Market without cast-iron guarantees that New Zealand's trade with Europe as a whole, including Britain, will not be disadvantageously affected? In particular, can the Prime Minister assure the House that Her Majesty's Government will not agree to any transitional arrangements for New Zealand's trade if we join the Common Market without solid and clear arrangements that at the end of the transitional period New Zealand's trade will be maintained by a permanent agreement at the existing level at least?
    The Prime Minister: I do not want to be drawn into the details of these negotiations, which are just beginning. I am sure that the hon. Member would feel it would be unwise for me to do so. On the question about Mr. Marshall, we suggested that the Deputy Prime Minister of New Zealand should visit this country because, although we have been in the closest touch with officials all through, we thought that a visit from him would be satisfactory, and it is exactly these questions that we are discussing with him.
    Mr. Healey: I do not want to draw the right hon. Gentleman into too much detail on this, but may I ask whether he can assure the House that Her Majesty's Government will not enter into arrangements with the Common Market countries which do not guarantee New Zealand, to quote the Lord Privy Seal, at
    1156
    least outlets in Europe as a whole comparable with those which it now enjoys in Britain?
    The Prime Minister: Had I not answered the first question I would not have been so well placed to answer the second. I think that it would be wise for me to stand by the general declaration Which Her Majesty's Government made on these matters and allow the negotiations to proceed.
    Mr. P. Walker: Is my right hon. Friend aware that the Deputy Prime Minister of New Zealand stated last week that he was not willing for the life of his country to be fixed for seven years or any other transitional period by the Common Market? Will my right hon. Friend assure the House and take the opportunity of confirming to the Commonwealth that we will not subject the life of Commonwealth trade to a transitional period?
    The Prime Minister: All these matters must be considered as a whole. I repeat the broad declaration of the Government and I still say that it is better to see how the negotiations work out and whether or not satisfactory arrangements cannot be made.
    Mr. Snow: While it is generally agreed that the overall trade of New Zealand should not be adversely affected by these negotiations, may I ask whether it would not be desirable to suggest to this distinguished gentleman that Canada is trying to find markets which would be a safeguard to that country and that New Zealand, by virtue of its geographical position, might also well take that sort of obvious step?
    The Prime Minister: I am grateful for that suggestion. I think that the New Zealand Government are pursuing that, quite apart from any Common Market question, because it is obvious that, quite apart from whether Britain does or does not enter the Common Market, this market itself cannot absorb an indefinite amount. Therefore, it is obviously to their advantage to find other markets as well as the British market.
    Mr. Woodburn: If binding agreements of any kind are made, would they not be binding on both sides, and is the Commonwealth prepared to tie itself indefinitely to agreements of this kind?
    The Prime Minister: I think that it would be wiser to let the negotiations proceed and let the Government see what conclusions they reach and put forward their proposals, should they decide to do so, and let the House discuss them as a whole.

    NUCLEAR TESTS
    Mr. A. Hendersonasked the Prime Minister whether, following the proposal of the Mexican Government at the Geneva Conference, it is now the policy of Her Majesty's Government that no nuclear testing will be carried out by Her Majesty's Government after 1st January, 1963.
    The Prime Minister: I have made it clear that the Mexican proposal will be considered. The right hon. and learned Gentleman is suggesting a unilateral undertaking by Her Majesty's Government, however, and I do not think this would assist the negotiations.
    Mr. Henderson: In view of the announcement that the United States Government propose in a few days' time to carry out high-altitude tests, 400 to 600 miles into space, and the fact that the Soviet Government have announced their intention of carrying out similar high-altitude tests, may I ask the right hon. Gentleman whether, if he is not prepared to take unilateral action, he would take the initiative in proposing to President Kennedy and Mr. Khrushchev that an agreed specified date should be arranged on which all tests should be ended, as suggested by the Government of Mexico?
    The Prime Minister: Of course I sympathise with the right hon. and learned Gentleman's interest in this matter, which indeed we all share. The question is both the effective method and the right moment to make any new suggestions for some new negotiations.
    Mr. G. Brown: Since the British nuclear deterrent died with Blue Streak, could we not at least say that we will not conduct any more nuclear testing because there is no point in it?
    The Prime Minister: If I accepted, which I do not, the premise in the right hon. Gentleman's question, I do not see how to abandon something which he
    1158
    says is no good to us is such a wonderfully generous gesture for others to follow.
    Mr. S. Silverman: Would not the Prime Minister agree that in the case of these high-altitude tests, 400 to 600 miles high, it might be possible to make a limited agreement not to indulge in that kind of testing, without the necessity of verification on the spot?
    The Prime Minister: That does not arise out of the Question, which deals with nuclear testing. If there is a special Question on 'high-altitude tests, as no doubt there may be, I will do my best to answer it.

  TRADE AND COMMERCE

    Motor Industry Electrical Accessories (Report)
    Mr. Leatherasked the President of the Board of Trade when he expects the report from the Monopolies Commission on their investigation into the motor industry electrical accessories trade.
    The Parliamentary Secretary to the Board of Trade (Mr. Niall Macpherson): I understand that the Commission hopes to be able to submit this report before the end of the year.
    Mr. Leather: While thanking my hon. Friend for that bit of encouragement, may I ask whether he does not agree that it is most unsatisfactory that any position like this can be allowed to drag on for over five years? Does it not mean that if there is a monopoly position it has been allowed to go on with the Government's connivance unchecked all this time and that whatever evidence is collected now is likely to be completely in contradiction to that collected five years ago, because the situation has completely altered? Is not this a most unsatisfactory position?
    Mr. Macpherson: I do not think that it could be denied that the situation may have altered since the inquiry started, but the inquiry has kept up with the changes as they have come along. My hon. Friend will know that the inquiry has extended into eight different classes of equipment and has been a very complex and technical one.
    Mr. Leather: Does not this indicate that the Government have not the tools to do the kind of job which in the national interest we all want them to do? Could not my hon. Friend take powers to give himself the people, the bodies and the equipment to get on with the job quickly and efficiently?
    Mr. Macpherson: We are investigating this matter at present, but we have to establish the truth. The truth in so complex a matter may take a long time to establish, no matter how large the organisation we may have to establish it.
    Sir C. Osborne: Is my hon. Friend aware that the fact that these negotiations have taken five years supports the feeling that somehow the Government are not in real earnest to get to the bottom of all this? Although that feeling may not be justified by the facts, is my hon. Friend aware that the Government have accused themselves by being so dilatory in doing the work? Why cannot they get on with it?
    Mr. Macpherson: That is certainly not justified by the facts. It is not the Government who are inquiring but the Monopolies Commission. My right hon. Friend the President of the Board of Trade is not responsible for the conduct of the inquiry. Once a matter has been referred to the Commission, it is the Commission's responsibility to decide on its handling.

    Dairy Products (Imports)
    Mr. P. Browneasked the President of the Board of Trade if he will curtail the imports of dairy products from countries outside the Commonwealth, in view of the fact that these imports continue to rise as a percentage of total available supplies from both home and Commonwealth sources;and if he will make a statement.
    The Minister of State, Board of Trade (Sir Keith Joseph): No, Sir. In any case, my right hon. Friend is-not aware that imports of such products from countries outside the Commonwealth are increasing as a proportion of total supplies.
    Mr. Browne: Is my hon. Friend aware that over the past seven years this home market has absorbed an extra 1,000 mil-
    1160
    lion gallons of milk equivalent? Is he aware that 67 per cent. of the extra quantities used has come from abroad but that of that 67 per cent. only 38·5 per cent. has come from the Commonwealth? Is he aware that this is a trend which is rising? Is my hon. Friend further aware that his Department took no notice of dumped products from France last summer? Does he think that this sort of policy—if it can be called a policy —is in the interest of the farmer, the taxpayer or the Commonwealth?
    Sir K. Joseph: Each case about dumping is dealt with on its merits. We are the main market for the Commonwealth's agricultural exports, in most cases, and provided that our farmers are assured of a reasonable standard of living it is greatly to the interests of the country, as a major trading nation, and to us all as consumers, and to the balance of payments, that there should be the freest possible imports of food supplies.
    Mr. Prior: Is my hon. Friend aware that dumping of dried milk is going on at the moment, and that the only reason that the Milk Marketing Board has not put in an application is that it is so disgusted with its treatment last year that it has decided not to put in an application this year?
    Sir K. Joseph: That is a different question, but an analysis of the number of cases in which dumping applications have been successful should leave those who wish to apply perfectly satisfied with the treatment they get.

HOUSE OF COMMONS ACCOMMODATION (AD HOC COMMITTEE)
Mr. Speaker: I have a statement to make to the House.
In accordance with the recommendation made to me in the Answer of the Leader of the House to a question from the hon. Member for South Angus (Sir J. Duncan) on 18th April this year, I propose to appoint an ad hoc Committee with the terms of reference following, namely:
To consider and recommend how best an area of approximately 40,000 sq. ft. on the Bridge Street site might be used for permanent accommodation for the purposes of the House of Commons.

1161
The following hon. Members have agreed to serve on the Committee: the hon. Member for South Angus (Sir J. Duncan) as Chairman, and the hon. Members for East Grinstead (Mrs. Emmet);Bradford, West (Mr. Tiley);Truro (Mr. G. Wilson);Southend, West (Mr. Channon);Blackburn (Mrs. Castle);Leeds, West (Mr. C. Pannell);Stalybridge and Hyde (Mr. Blackburn);and the hon. and learned Member for Cardigan (Mr. Bowen).
Mr. C. Pannell: Mr. Speaker, may I ask you a question arising from that statement?
Mr. Speaker: Yes.
Mr. Pannell: While I am very happy to serve on any Committee that you set up, Sir., I did understand, in the course of the arguments between the usual channels, that the terms of reference of this Committee were to he somewhat wider, and would take cognisance not only of the dim and distant future of the other side of the road, but of the day-to-day affairs of the House, including the prospective building we have in mind up top "here. I do not know whether I am right in asking you, Mr. Speaker, or whether I should ask the Leader of the House, whether the terms of reference could not be reconsidered.
Mr. Speaker: All I am trying to do is to follow what I thought was the agreed view of the House. In those circumstances, it is probably best that that question should be addressed to the Minister. I thought that those were agreed terms of reference.
Mr. S. Silverman: I hear references made to the agreed opinion of the House and to the discussions that have taken place through the usual channels. For the benefit of those who do not participate in those communications, may we know what this is all about, Mr. Speaker?
Mr. Speaker Mr. Speaker I do not know whether it would, perhaps, help the hon. Member for Nelson and Colne (Mr. S. Silverman) to read in HANSARD what I said, but I think that the statement makes plain what it is about. If it did not, I am sorry. But if there is a difficulty about it in some way, I should be grateful if the hon. Gentleman would address his
1162
question to the Leader of the House, because I am slightly crippled by my office for dealing with the matter otherwise.
Mrs. Castle: You said, Mr. Speaker, that it would be appropriate for us to address our questions to the Minister, and I assume that you mean the Leader of the House. If so, would this be the time to do so? As this is the moment of the announcement, and as some hon. Members on this side have been to see the Leader of the House and have put to him a very strong case for the widening of the terms of reference of the Committee, in the interests of all hon. Members who have many day-to-day problems of accommodation, which were previously dealt with by the Advisory Committee which had the honour of serving you, Sir—and, I think, serving you with considerable effectiveness—may I take this opportunity to ask a question of the Leader of the House now?
Mr. Speaker: I dismiss anybody's idea that I am not intensely grateful for the services of the hon. Lady and other hon. Members on that Committee last year. Listening to this discussion, it seems to me that there is rather more to it than can be dealt with on a wholly irregular basis. I think that a question on another occasion would be more appropriate, because we cannot debate the revision of the terms of reference now with much grace.
The Chancellor of the Duchy of Lancaster (Mr. fain Macleod): Perhaps it would be appropriate for me, Mr. Speaker, to say just a sentence or two about this matter.
As I understand the position, what you have just announced to the House carries out the announcement made on 18th April. I think that we all want to get advice, whatever the future Accommodation Committee may be, on the question of the Bridge Street site. With that, I think everybody is agreed. I therefore thought that it appropriate not to take any action in the matter by way of response to the hon. Members concerned until you, Mr. Speaker, had made that announcement.
Now that the announcement has been made, perhaps I might communicate with the hon. Members on the wider questions that they have raised.

INDUSTRIAL ESTATES MANAGEMENT CORPORATIONS
3.35 p.m.
Mr. William Hamilton:I beg to move,
That leave be given to bring in a Bill to empower Industrial Estates Management Corporations to establish industries in development districts.
At the last General Election, the Conservative Party made a great song and dance about how it would cure the unemployment which its own policies had created. We were told during the course of the election campaign that the Bill to deal with that problem was already drafted. Sure enough, immediately after the election, we got the Measure which is now the Local Employment Act, which has been operative since April, 1960. The purpose of that Act, as was made quite plain by the President of the Board of Trade and other Ministers, was to provide what they called a flexible instrument with which to tackle local pockets of unemployment by providing industry with inducements of one kind and another to go into such areas.
The present Secretary of State for the Colonies, who was then President of the Board of Trade, said, during the Third Reading debate:
"The real thing that we are concerned about;Is the creation of employment "—[OFFICIAL REPORT, 3rd February 1960;Vol. 616, c. 1179.]
Hon. Members should note those words, "the creation of employment".
The hon. Member for Sevenoaks (Mr. J. Rodgers), then Parliamentary Secretary to the Board of Trade, said in the same debate that the Bill
…meets the social and human needs of the community and what is perhaps the most important problem a man can face, that of having a livelihood which will give him both security and dignity."—[OFFICIAL REPORT, 3rd February, 1960;Vol. 616, c. 1135.]
I must add that those sentiments are a very far cry from those expressed by the hon. Member for Poole (Sir Richard Pilkington), who suggested at Question Time the other day that Scotland might be treated as a colony—we might get much more generous treatment if we were—and are also alien to the views of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) —the man born with a silver teapot in his mouth—who suggested that young
1164
men in Scotland were unemployed because they were waxing fat on the dole. I suggest that he might pay a visit to the West Lothian by-election in due course and make the same kind of remark.
Let us compare the achievement with the promise. In an Answer I received in the House last week it was stated that the number of new jobs created in Scotland in the last five years was 51,200 and that the number of jobs lost in the same period was 85,150. During the two years of the effective operation of the Local Employment Act —and this information was given in the same Answer —we find that 23,250 jobs were lost and 33,500 created, a net gain of 10,250.
I received an Answer yesterday stating that in the first quarter of this year about another 5,000 jobs had been lost. In other words, ignoring yesterday's Answer, we have had a net gain in the two years of the operation of the Local Employment Act in Scotland of 10,250 jobs, or about 5,000 a year.
The Parliamentary Secretary to the Ministry of Labour said in Fife a few weeks ago that West Fife alone needed 5,000 new jobs. This is not taking into account the 25,000 people who leave Scotland each year because of the lack of employment opportunities. The Toothill Committee examined this problem and, knowing about the major motor car undertakings that are now coming into effect in Scotland, concluded:
"Even with the recent and notable successes in bringing major undertakings to Scotland it is unlikely, unless new and vigorous moves are made, that there will be enough jobs in 1964."
My purpose in asking leave to introduce the Bill is to try to make one such move. The Act as it now stands provides that the management corporations are little more than estate managers—no doubt very necessary and worthwhile activities. The aim of the Bill is to extend the powers of the management corporations so far as to enable them to build and own their own factories and to start their own publicly-owned industries. The personnel of these corporations, I think we all agree, are well qualified to do this, for they are highly qualified and responsible men who would not embark on such a scheme unless they thought that it was a sound proposition.

1165
I will give a few examples of what might be done. The National Research Development Corporation could be enlarged and reconstructed and could use the management corporations as its agents in setting up productive units and exploiting the fruits of what is, after all, Government-financed research, either in competition with private enterprise, or, if need be, in co-operation with it. My second example concerns the Forestry Commission, again a Government-financed undertaking which is now being profitably established in Scotland, particularly in some areas which are finding it extremely difficult to get alternative industry.
I believe that if the Forestry Commission co-operated with the management corporations to build, own and operate their own small chipboard factories, and so on, in Scotland this would do a great deal to alleviate some of the problems in the extreme North and isolated parts. My third example concerns the National Health Service, again financed entirely by public funds. One of the greatest scandals in the Health Service is the profiteering in drugs which are often marketed after inadequate clinical testing. There is considerable scope here for using the management corporation as the Government's agents for the production of not only drugs, but other National Health Service requirements.
There is great scope in this direction in two ways. First, for increasing the employment facilities in hard-hit areas like the development districts which are scheduled under the Act. Secondly, in reducing the costs of the National Health Service by cutting out the private profit interests that are so much involved at the moment.
My fourth example concerns the oil refining plant at Grangemouth. The Parliamentary Secretary to the Board of Trade knows well that many of the byproducts from that concern are sent to England and even overseas to be manufactured. Private enterprise in Scotland is clearly not interested in manufacturing them on the spot, so why should not the management corporations, under the Local Employment Act, be empowered to step in? I have given these four example—and there are many more—to show what could be done. I hope that the Government will think them to be constructive suggestions—certainly
1166
better than anything so far suggested by the Government.
It is in that spirit, of wishing to help the Government to fulfil their election pledges, that I beg to ask leave to introduce the Bill.
3.46 p.m.
Mr. Ian MacArthur: The proposed Bill of the hon. Member for Fife, West (Mr. W. Hamilton) concerns the rôle of the industrial estates management corporations which were set up under the Local Employment Act, 1960. The Measure would extend the function of these corporations beyond the role which they fill today;that is, it would extend their function from that of factory building and management agents to that of manufacturers. This goes far beyond the intention of the Act and I hope that the House will reject the Motion.
Hon. Members know of the unemployment there is in many parts of Scotland. They also know of the new industries and new employment coming to Scotland—achievements which are so often decried by hon. Gentlemen opposite. Of course, it is true that many jobs have been lost in industries that are declining or contracting, but it is equally true that many new jobs are being created in new industries with a real potential for growth. We have only to think of the new motor industry, which is not only providing new employment in itself, but from which large new satellite industries will spring if Scotland has the will to look forward and seize these opportunities.
The Local Employment Act gave positive encouragement to expanding industries on both sides of the Border to extend into the scheduled areas in Scotland. Indeed, well over half of the total aid under the Act since it came into force has been in Scotland. I believe that the true feelings of the people of Scotland are better expressed by pointing to those sections of our economy that are growing than by continually emphasising, to the exclusion of all else, those parts that are in decline.
Hon. Gentlemen opposite are constant and destructive in their criticism.
Mr. E. G. Willis Mr. E. G. Willis(Edinburgh, East), The proposed Bill is constructive.
Mr. MacArthur: They may consider constant and destructive criticism to be

1167
the function of the Opposition. It is reasonable, therefore, that we should ask what measures they, who failed to remedy the position in their six years of office, would seek to introduce to improve on the Local Employment Act.
Mr. Willis: We are telling the hon. Member.
Mr. MacArthur: The hon. Member for Fife, West, who often speaks for the Opposition in these matters, has rediscovered nationalisation. Just as nationalisation was put forward as the cure for all ills in 1945, so State industries are put forward today. As the hon. Gentleman has shown, it would be relatively easy to extend the statutory powers of the existing management corporations so that they could set up and operate industries of their own, financed and controlled by the State.
I suggest that there are several good reasons for rejecting the hon. Gentleman's proposal. First, it is contrary to Government policy, because it would introduce nationalisation by the side door. It may be thought that the effect would be small and reasonable in view of the latest chameleon change in Socialist policy which excludes I.C.I. from the next programme of nationalisation, at any rate until the forthcoming by-elections are well out of the way. But the hon. Gentleman's proposal is, in fact, the thick end of the wedge, because it would apply to no less than 1,000 factories whose freeholds are owned by the Board of Trade and which are leased by the industrial estate management corporations to private industries.
Secondly, what would these State factories produce? The hon. Gentleman has given several examples. He referred to forestry. Perhaps he is not aware of the new pulp mill to be established near Fort William, thanks largely to the Local Employment Act. He referred to drugs;we have heard all that before. He also spoke of the National Research Development Corporation and suggested that State fac

Division No. 203.]

AYES

[3.54 p.m.

Abse, Leo

Bennett, J. (Glasgow, Bridgeton)

Bowles, Frank

Ainsley, William

Benson, Sir George

Boyden, James

Albu, Austen

Blackburn, F.

Brockway, A. Fenner

Allen, Scholefield (Crewe)

Blyton, William

Broughton, Dr. A. D. D.

Awbery, Stan

Boardman, H.

Brown, Rt. Hon. George (Belper)

Bellenger, Rt. Hon. F. J.

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

Brown, Thomas Ince)

tories could take on and exploit inventions developed by the Corporation. The Corporation already develops inventions to the stage at which they can be commercially exploited by the owners of development contracts with firms which the Corporation considers best suited for the work. The Corporation already has powers under existing legislation to carry out projects entailing the manufacture of goods. There is, therefore, nothing new in the hon. Gentleman's proposal. Surely it is right that the Corporation should also be free, as it is at present, to place contracts with existing and established and capable firms which it considers most suitable to undertake the work.
The hon. Gentleman gave four examples. I doubt whether he, or any other Socialist, would stop there. The powers which he seeks would apply to all of the 1,000 or more factories owned by the Board of Trade. What would he have them all make? Most industries are already represented in the development districts and many of them have spare capacity. There would be no purpose in setting up State industries to compete with existing industries which are unable at present to work to full capacity. Such a course would simply aggravate local problems.
Hon. Members opposite sometimes forget that there is no use in production in the end unless the product can be sold. No doubt the State could continue to run factories at a loss longer than anyone else, because the State has the taxpayers' resources to fall back on. I suggest that this is not the way to build a prosperous Scotland in a competitive world. The proposed Bill is an attempt to introduce Socialist nationalisation in a new guise, and I ask the House to reject the Motion.
Question put, pursuant to Standing Order No. 12 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—
The House divided Noes 229.

Butler, Herbert (Hackney, C.)

Hughes, Cledwyn (Anglesey)

Probert, Arthur

Butler, Mrs. Joyce (Wood Green)

Hughes, Emrys (S. Ayrshire)

Proctor, W. T.

Callahan, James

Hunter, A. E.

Randall, Harry

Castle, Mrs. Barbara

Irving, Sydney (Dartford)

Rankin, John

Collick, Percy

Jay, Rt. Hon. Douglas

Redhead, E. C.

Craddock, George (Bradford, S.)

Jeger, George

Reynolds, G. W.

Cullen, Mrs. Alice

Jenkins, Roy (Stechford)

Rhodes, H.

Darling, George

Johnson, Carol (Lewisham, S.)

Roberts, Albert (Normanton)

Davies, C. Elfed (Rhondda, E.)

Jones, Dan (Burnley)

Robertson, John (Paisley)

Davies, Harold (Leek)

Kelley, Richard

Robinson, Kenneth (St. Pancras, N.)

Davies, S. O. (Merthyr)

Kenyon, Clifford

Rodgers, W. T. (Stockton)

Deer, George

Key, Rt. Hon. C. W.

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

Delargy, Hugh

Lawson, George

Ross, William

Diamond, John

Lee, Frederick (Newton)

Royle, Charles (Salford, West)

Dodds, Norman

Lee, Miss Jennie (Cannock)

Shinwell, Rt. Hon. E.

Ede, Rt. Hon. C.

Lewis, Arthur (West Ham, N.)

Silverman, Julius (Aston)

Edwards, Rt. Hon. Ness (Caerphilly)

Lipton, Marcus

Silverman, Sydney (Nelson)

Edwards, Robert (Bilston)

Loughlin, Charles

Skeffington, Arthur

Edwards, Walter (Stepney)

MacDermot, Niall

Slater, Mrs. Harriet (Stoke, N.)

Evans, Albert

McInnes, James

Slater, Joseph (Sedgefield)

Finch, Harold

McKay, John (Wallsend)

Snow, Julian

Fitch, Alan

McLeavy, Frank

Sorensen, R. W.

Fletcher, Eric

MacMillan, Malcolm (Western Isles)

Spriggs, Leslie

Foot, Dingle (Ipswich)

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

Steele, Thomas

Foot, Michael (Ebbw Vale)

Manuel, Archie

stonehouse, John

Forman, J. C.

Mason, Roy

Stones, William

Fraser, Thomas (Hamilton)

Mayhew, Christopher

StraChey, Rt. Hon. John

Galpern, Sir Myer

Mellish, R. J.

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

Ginsburg, David

Mendelson, J. J.

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

Gooch, E. G.

Millan, Bruce

Taylor, Bernard (Mansfield)

Gourlay, Harry

Milne, Edward

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

Grey, Charles

Monslow, Walter

Thornton, Ernest

Griffiths, David (Rother Valley)

Moyle, Arthur

Timmons, John

Griffiths, Rt. Hon. James (Llanelly)

Mulley, Frederick

Tomney, Frank

Griffiths, W. (Exchange)

Oliver, G. H.

WainWright, Edwin

Hale, Leslie (Oldham, W.)

Oram, A. E.

Warbey, William

Hall Rt. Hn. Glenvil (Colne Valley)

Owen, Will

Watkins, Tudor

Harper, Joseph

Pannell, Charles (Leeds, W.)

Weitzman, David

Hart, Mrs. Judith

Parker, John

Wells, Percy (Faversham)

Hay man, F. H.

Parkin, B. T.

Williams, Li (Abertillery)

Healey, Denis

Paton, John

Williams, W. T. (Warrington)

Henderson, Rt. Hn. Arthur (RwlyRegis)

Pavitt, Laurence

Wilson, Rt. Hon. Harold (Huyton)

Holman, Percy

Pearson, Arthur (Pontypridd)

Woodburn, Rt. Hon. A.

Houghton, Douglas

Peart, Frederick

Woof, Robert

Howell, Charles A. (Perry Barr)

Pentland, Norman

Yates, Victor (Ladywood)

Howell, Denis (Small Heath)

Plummer, Sir Leslie

Hoy, James H.

Price, J. T. (Westhoughton)

TELLERS FOR THE AYES:

Mr. Willis and Mr. W. Hamilton.

NOES

Agnew, Sir Peter

Clark, William (Nottingham, S.)

Freeth, Denzil

Allan, Robert (Paddington, S.)

Clarke, Brig. Terence (Portsmth, W.)

Galbraith, Hon. T. G. D.

Allason, James

Cleaver, Leonard

Gilmour, Sir John

Barber, Anthony

Cooke, Robert

Glyn, Sir Richard (Dorset, N.)

Barlow, Sir John

Cordeaux, Lt.-Col. J. K.

Goodhew, Victor

Barter, John

Cordle, John

Gower, Raymond

Batsford, Brian

Corfield, F. V.

Grant, Rt. Hon. William

Beamish, Col. Sir Tufton

Costain, A. P.

Grant-Ferris, Wg. Cdr. R.

Bell, Ronald

Couison, Michael

Green, Alan

Bevins, Rt. Hon. Reginald

Courtney, Cdr. Anthony

Grimond, Rt. Hon. J.

Biffen, John

Craddock, Sir Beresford

Hall, John (Wycombe)

Biggs-Davison, John

Crosthwaite-Eyre, Col. Sir Oliver

Hamilton, Michael (Wellingborough)

Birch, Rt. Hon. Nigel

Cunningham, Knox

Harris, Frederic (Croydon, N.W.)

Black, Sir Cyril

Dalkeith, Earl of

Harris, Reader (Heston)

Bourne-Arton, A.

Dance, James

Harrison, Brian (Maldon)

Box, Ronald

d'Avigdor-Goldsmid, Sir Henry

Harrison, Col. Sir Harwood (Eye)

Boyd-Carpenter, Rt. Hon. J.

Deedes, W. F.

Harvey, Sir Arthur Vere (Macclesf'd)

Braine, Bernard

Donaldson, Cmdr. C. E. M.

Harvie Anderson, Miss

Brewis, John

Doughty, Charles

Hay, John

Bromley-Davenport, Lt.-Col. SirWalter

Drayson, G. B.

Heald, Rt. Hon. Sir Lionel

Brooke, Rt. Hon. Henry

du Cann, Edward

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

Brooman-White, R.

Duncan, Sir James

Hill, Mrs. Eveline (Wythenshawe)

Brown, Alan (Tottenham)

Eden, John

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

Browne, Percy (Torrington)

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

Hobson, Sir John

Bullard, Denys

Emmet, Hon. Mrs. Evelyn

Hocking, Philip N.

Bullus, Wing Commander Eric

Errington, Sir Eric

Holland, Philip

Burden, F. A.

Erroll, Rt. Hon. F. J.

Hollingworth, John

Campbell, Gordon (Moray &Nairn)

Farey-Jones, F. W.

Hope, Rt. Hon. Lord John

Cary, Sir Robert

Farr, John

Hopkins, Alan

Channon, H. P. G.

Finlay, Graeme

Hornby, R. P.

Chataway, Christopher

Fisher, Nigel

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

Chichester-Clark, R.

Fletcher-Cooke, Charies

Hughes Hallett, Vice-Admiral John

Churchill, Rt. Hon. Sir Winston

Fraser, Hn. Hugh (Stafford A Stone)

Hughes-Young, Michael

Clark, Henry (Antrim, N.)

Fraser, lan (Plymouth, Sutton)

Hulbert, Sir Norman

Hurd, Sir Anthony

Mills, Stratton

Smith, Dudley (Br'ntf'd &Chiswick

Hutchison, Michael Clark

Miscampbell, Norman

Smyth, Brig. Sir John (Norwood)

Iremonger, T, L.

More, Jasper (Ludlow)

Spearman, Sir Alexander

Irvine, Bryant Godman (Rye)

Morrison, John

Stanley, Hon. Richard

Jenkins, Robert (Dulwich)

Mott-Radclyffe, sir Charles

Stevens, Geoffrey

Jennings, J. C.

Nabarro, Gerald

Steward, Harold (Stockport, S.)

Johnson, Dr. Donald (Carlisle)

Nicholls, Sir Harmar

Stodart, J. A.

Johnson, Eric (Blackley)

Nicholson, Sir Godfrey

Stoddart-Scott, Col. Sir Malcolm

Johnson Smith, Geoffrey

Noble, Michael

Storey, Sir Samuel

Joseph, Sir Keith

Nugent, Rt. Hon. Sir Richard

Studholme, Sir Henry

Kaberry, Sir Donald

Oakshott, Sir Hendrie

Tapsell, Peter

Kimball, Marcus

Orr, Capt. L. P. S.

Taylor, Sir Charles (Eastbourne)

Lagden, Godfrey

Osborn, John (Hallam)

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

Lambton, Viscount

Osborne, Sir Cyril (Louth)

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

Lancaster, Col. C. G.

Page, John (Harrow, West)

Teeling, Sir William

Langford-Holt, Sir John

Pannell, Norman (Kirkdale)

Temple, John M.

Leather, E. H. C.

Pearson, Frank (Clitheroe)

Thatcher, Mrs. Margaret

Leavey, J. A.

Peel, John

Thomas, Leslie (Canterbury)

Leburn, Gilmour

Pickthorn, Sir Kenneth

Thomas, Peter (Conway)

Lewis, Kenneth (Rutland)

Pike, Miss Mervyn

Thompson, Kenneth (Walton)

Litchfield, Capt. John

Pilkington, Sir Richard

Tiley, Arthur (Bradford, W.)

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

Powell, Rt. Hen. J. Enoch

Touche, Rt. Hon. Sir Gordon

Lloyd, Rt. Hon. Selwyn (Wirral)

Prior, J. M. L.

Turner, Colin

Loveys, Walter H.

Prior-Palmer, Brig. Sir Otho

Turton, Rt. Hon. R. H.

Lubbock, Eric

Profumo, Rt. Hon. John

van Straubenzee, W. R.

Lucas-Tooth, Sir Hugh

Proudfoot, Wilfred

Vickers, Miss Joan

McAdden, Stephen

Pym, Francis

Vosper, Rt. Hon. Dennis

McLaren, Martin

Quennell, Miss J. M.

Wade, Donald

McLaughlin, Mrs. Patricia

Redmayne, Rt. Hon. Martin

Wakefield, Sir Wavell

Maclay, Rt. Hon. John

Rees, Hugh

Walker, Peter

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

Renton, David

Ward, Dame lrene

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

Ridley, Hon. Nicholas

Wells, John (Maidstone)

Macmillan, Maurice (Halifax)

Ridsdale, Julian

Whitelaw, William

Macpherson, Niall (Dumfries)

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

Williams, Dudley (Exeter)

Maddan, Martin

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

Wills, Sir Gerald (Bridgwater)

Maitland, Sir John

Robson Brown, Sir William

Wilson, Geoffrey (Truro)

Manningham-Buller, Rt. Hn. Sir R,

Rodgers, John (Sevenoaks)

Wolrige-Gordon, Patrick

Markham, Major Sir Frank

Roots, William

Worsley, Marcus

Marshall, Douglas

Russell, Ronald

Yates, William (The Wrekin)

Marten, Neil

Scott-Hopkins, James

Mathew, Robert (Honiton)

Seymour, Leslie

TELLERS FOR THE NOES:

Matthews, Gordon (Meriden)

Sharples, Richard

Mr. N. McLean and

Maxwell-Hyslop, R. J.

Shaw, M.

Mr. MacArthur.

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

Skeet, T. H. H.

ORDERS OF THE DAY

  FINANCE BILL
  Considered in Committee [Progress 23rd May]
  [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

New Clause—(INCOME TAX AND PROFITS TAX (PENALTIES AND ASSESSMENTS).)
(1) Part III of the Finance Act, 1960 (which relates to income tax and profits tax penalties and assessments), shall be construed as having, from the commencement of that Act, the like effect in relation to happenings before that commencement as it has in relation to happenings after that commencement, except as specifically provided by any enactment contained in the said Part III (including the Seventh Schedule to the Act);and where any enactment so contained makes use of words in the present tense or in a past tense, that use shall not be taken to have any reference to the commencement of the Act or to import any distinction between happenings before and happenings after that commencement.
In this subsection "happening" includes any act or omission.
(2) In subsection (2) of section forty-four of the Finance Act, 1960 (which contains savings by reference to proceedings commenced before the commencement of that Act), "proceedings" shall be construed as referring only to proceedings for the recovery of a penalty under the Income Tax Acts or the enactments relating to the profits tax.
(3) This section shall be deemed to have had effect as from the commencement of the Finance Act, 1960, but not so as to make interest payable under section fifty-eight of that Act on any tax as respects which a certificate under subsection (5) of that section was refused before the passing of this Act. —[The Attorney-General.]
Brought up, and read the First time.
4.4 p.m.
The Attorney-General (Sir Reginald Manningham-Buller): I beg to move, That the Clause be read a Second time.
During my speech on Second Reading, I said that we would introduce this Clause in order to counteract the consequences of the decision of the divisional court in the case of ex parte Fysh, which was given after the Budget debate. I reminded the House then of the criticisms made in the court of the penalties and provisions that were contained in the Finance Act, 1960. They were also criticised by the Royal Com-
1174
mission and I need not discuss them in detail.
Suffice it to say that it was open to the Inland Revenue to sue for £20 plus three times the taxpayer's total liability to tax for a particular year, if the taxpayer failed to make a true and correct return. That kind of penalty, under the old law, was criticised as harsh and unconscionable. It is right that I should point out, however, that there was little criticism of the way in which the Revenue used this extensive power. It was open to it to accept far less than the full pound of flesh to which it was entitled by the Statute. In practice, the Revenue used these penalty provisions for recovery of all tax which the taxpayer should have paid and of interest on the amount outstanding, and for the recovery of such penalties in addition as it thought appropriate.
The Committee will remember that in 1960 we introduced a new code which, I think, met with the approval of all right hon. and hon. Members. Under it, provision was made for the raising of assessments to recover the tax which ought to have been paid and had not been paid, for the charging of simple interest at 3 per cent. on tax recovered, and for the Revenue to sue in the court for penalties appropriate to the taxpayer's misconduct, it being for the court to decide what was the appropriate penalty within the prescribed limit.
The intention of the House was that this new code should apply after 1960 to all cases, whether or not the tax default occurred before or after 1960 and whether or not the default was discovered before 1960. There was only one exception. We did not intend to interfere with penalty proceedings already started under the old law, but we intended that any new proceedings for a penalty should be under the 1960 Act. That Act was, in a sense, retrospective in this respect. It was intended to be retrospective for the benefit of the taxpayer. It would, indeed, have been unfair to have allowed the old harsh code to continue to apply to offences committed in the years before 1960 while prescribing a fairer code in relation to misconduct since then.
On 18th April, the divisional court held, in the case of Fysh, that because

1175
the provision in the 1960 Act imposing a charge of interest on unpaid tax was in the present tense, interest could not be charged on tax assessed before the Act came into force. In the light of this decision, it could be argued that the new penalty provisions applied only to defaults committed after the passage of the 1960 Act and that the old harsh penalty provisions applied not only where penalty proceedings had been instituted before 1960, but also where other steps had been taken before that time.
Subsection (1) of the Clause makes it clear that the 1960 code applies to happenings before as well as after the commencement of the 1960 Act and that this is to be so despite the use of the present tense in certain sections of that part of the Act. Subsection (2) makes it clear that the old code of penalty proceedings applies only where penalty proceedings were started before the 1960 Act. Subsection (3) makes it clear that this Clause, while retrospective—as was the 1960 Act—will not affect the decision in the case of Fysh and similar cases.
I may be asked why this Clause should be made retrospective, why it is not to have effect as from the commencement of the 1960 Act, and why it would not suffice to allow it to commence with this Bill. There are three compelling reasons for this course.
The first is that unless it is made retrospective back to 1960 the taxpayer, even though penalty proceedings under the old code have not yet been started, may be liable. I am confident that that was not the intention of Parliament in 1960. The second reason is that between 1960 and the decision in the Fysh case the Inland Revenue made many thousands of settlements with defaulting taxpayers involving over £30 million. These settlements were made on the basis, accepted by both sides, that the new code applied.
In the light of the Fysh case, claims may be made for the reopening of these settlements. Those claims might not succeed, but, if they did, the consequences to the Revenue might be serious. In many of these cases it might also be too late to undertake formal penalty proceedings, or even to assess tax, so that the defaulting taxpayer would get away with it without paying the tax he should have paid.
1176
Furthermore, in some cases the Revenue has started penalty proceedings under the new code. If those proceedings had to be abandoned owing to expiry of the time limit, it might not be possible to start fresh ones. Again, the result would be that these defaulters would get away with it.
For these reasons, and because the passage of the Clause will have the effect of making the 1960 Act do what everyone intended it to do and what, until the decision in the Fysh case, it was generally thought to do to the advantage of the taxpayer, I commend the Clause to the Committee.
Mr. Eric Fletcher:I do not think that anyone on this side of the Committee would want to dissent from the fact that the Attorney-General is commending this new Clause to the House, but I think that it is pertinent to make two observations on his speech.
First, I gather from what the Attorney-General said that it is really a confession on his part that the 1960 Act was imperfectly drawn and that it was not drawn with sufficient clarity to give effect to what Parliament intended.
The Attorney-General: I certainly was not making any confession. I was informing the hon. Gentleman of the decision of the court in construing it.
Mr. Fletcher: It seems to follow from what the Attorney-General said that he and his advisers, in drafting the 1960 Act, had not effectively given operation to the intention of Parliament, because when the courts came to construe the Act of 1960 they placed a different interpretation on it from that which the Attorney-General and others on the Government Front Bench had intended.
As a result of that failure on the part of the Government to draft the Act properly, I think that we might have had, in addition to what the Attorney-General has said, some apology for that omission, and also I think that we are entitled to some assurance that sufficient care is being taken in this Finance Bill to ensure that the intentions of the Government are being properly carried out in legislative form. I think that we are at least entitled to that assurance.
Secondly, I think that it is reasonable to make this observation that, just in so far as the Government recognise that in

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the 1960 Act it was perfectly legitimate to make certain provisions with retrospective effect and to amplify them in this Finance Bill by making them doubly retrospective, it is worth placing on record the fact that the Government recognise that there are cases in which legislation of a retrospective character in Finance Acts is not only perfectly legitimate in itself, but is in the interest both of the taxpayer and of the Revenue.
Finally, I think it right to ask the Attorney-General for this assurance: that in so far as proceedings may in the future be contemplated under the Finance Act, 1960, as we are now about to amend it, any taxpayer will be subject only to the penalties introduced into the 1960 Act by the Act of 1960 and nut be subject to the penalties in force before that Act was introduced.
The Attorney-General: I dealt with the last point raised by the hon. Gentleman the Member for Islington, East (Mr. Fletcher) in the course of my speech, when I made the position perfectly clear. As to the first point that he made, I think that perhaps he had in mind the observation that I made about this on Second Reading.
The 1960 Act was drafted with very great care. It made use of what I think the grammarians call the historic present tense, and that led to difficulty in the divisional court. As I said on Second Reading, one might well have an appeal from that decision, to a superior court, but in view of the fact that the Finance Bill was under consideration it was thought preferable to take this course. We always try to get the Finance Bill right, but instances occur from time to time where the courts put an interpretation on a particular Section which is different from that which the House intended. It is not infrequent for that position to be remedied in subsequent Finance Bills. That has been the experience of all Governments of all parties.
4.15 p.m.
Mr. David Weitzman: I have no doubt that the object of this new Clause is very good and important. However, we have had an example of the sort of decisions which the courts make and on the Government Front Bench we have three hon. and learned Gentlemen very
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learned in the law. Is it not time that something was done to put this matter into simple, ordinary English? Finance Bills are getting beyond all argument and all reason. They are a field for argument by lawyers—I suppose that I should be the last to complain about that —and it is time that something was done about them.
I shall read to the Committee, because I think that it is important to put it on record, the wording of what is proposed. The new Clause states:
"Part III of the Finance Act, 1960 (which relates to income tax and profits tax penalties and assessments), shall be construed as having, from the commencement of that Act, the like effect in relation to happenings before that commencement as it has in relation to happenings after that commencement, except as specifically provided by any enactment contained in the said Part III (including the Seventh Schedule to the Act);"—
it goes on:
"and where any enactment so contained makes use of words in the present tense or in a past tense, that use shall not be taken to have any reference to the commencement of the Act or to import any distinction between happenings before and happenings after that commencement."
That is a jumble of words. Is it not time that something was done to simplify it?
The Attorney-General: I do not think that this provision deserves the criticism of the hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman). I am quite sure that after reading it once, he understood it completely. It is never a matter of easy drafting to make a Statute say what everyone thought it did originally. As I said, a lot of the argument in the divisional court depended on the use of tenses—that is, in respect of the last passage which the hon. and learned Gentleman read.
There are two schools of thought about drafting. One is that one should cover every single possibility, in which case the language becomes rather complicated, and the other is to state quite clearly what is the purpose of the provision. I think that the provision in the 1960 Act comes in the latter category, because the whole of Part III was directed to saying what should happen under the new code. In the provision of Part III, dealing with the new code, the present tense was used and that led to the decision of the divisional court.
Mr. Weitzman: My criticism is that something should be done to simplify the whole matter and get Finance Bills put into proper shape so that ordinary people can understand them.
Mr. Ede: In his original explanation, the right hon. and learned Gentleman said that the first subsection which my hon. and learned Friend the Member for Stoke Newington and Hackney, North (Mr. Weitzman) quoted made something plain, and at another stage he said that it made it clear. All I wish to say—and I hope that the right hon. and learned Gentleman will take it as a compliment, as it is certainly intended—is that I accept that, but do so as an act of faith in the right hon. and learned Gentleman.
Question put and agreed to.
Clause read a Second time and added to the Bill.

New Clause.—(INCREASE OF PERSONAL RELIEFS.)
(1) In section two hundred and ten of the Act of 1952 (Personal relief) for the reference to two hundred and forty pounds there shall be substituted a reference to two hundred and fifty pounds and for the references to one hundred and forty pounds there shall be substituted references to one hundred and fifty pounds.
(2) This section shall not be deemed to have required any change in the amounts deducted or repaid under section one hundred and fifty-seven (Pay as you earn) of the Act of 1952 before the twenty-second day of June, nineteen hundred and sixty-two.—[Mr. Callaghan.]
Brought up, and read the First time.
Mr. James Callaghan:I beg to move, That the Clause be read a Second time.
The Chairman: It will be possible also to discuss with this Clause the new Clause—Increase of a personal relief —and the new Clause—Increase of relief in respect of children not over the age of eleven—and divide separately on the latter if that is necessary.
Mr. Callaghan: We hope that it will not be necessary to have a separate Division, Sir William, because we hope that the Government will accept the new Clause. It is with that gesture of faith, if I may repeat the words of my right hon. Friend the Member for South Shields (Mr. Ede), that I move the new
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Clause. Two of the Clauses have a simple purpose—to increase the personal allowance for the single man and the married man by £10, and the third seeks to increase the child allowance by the modest sum of £10.
These proposed increases do not mark any feeling that this is necessarily the appropriate figure, but the Clauses do mark our dissatisfaction with the trend of the Government's taxation policies, especially over the last seven years. This move to increase personal allowances is yet another step in a campaign to harry and hound the Chancellor until he acknowledges that his predecessors and he himself in this Budget have acted unfairly towards P.A.Y.E. taxpayers. I have followed this theme through many of my speeches on the Finance Bill and I will continue to do so, because so far we have had no acknowledgement from the Chancellor, or any other Government spokesman, that the Government recognise that the small taxpayer, the P.A.Y.E. man, is getting an unfair deal.
I do not think that any hon. Member who looks at the figures can possibly disagree with that. In 1938-39, the personal allowance for a single man stood at £100. Now, twenty-three years later, it has been increased to only £140. The allowance for a married man was £180 in the year of the war and has now been increased to only £240, an increase of just one-third. The increase in the case of the single man is 40 per cent. There were variations in those years. but, broadly speaking, the personal allowances for the married man and the single man have been increased by only an insignificant sum since 1938–39.
The child allowance has a rather better history. There were steady increases right up to 1956–57, but since 1958–59, at any rate, those allowances have been stationary.
It might be argued that we cannot afford these increases, and if that is so we would not be entitled to make them. I have no doubt that the Chancellor will say that they cannot be afforded now. But it is no use picking these items out in isolation and saying that we cannot afford them unless we have first considered them in the context of all the Budgets over a period of years. It is with that backcloth that I say that the

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Government have been treating the P.A.Y.E. man and the family man with a small income extremely unfairly.
The standard rate of Income Tax came down in 1959 and that cost the Chancellor £230 million. The famous or infamous Surtax is due to come down as from 1st January next, and that will cost about £83 million. I have no doubt that the Financial Secretary, who does not seem to be here at moment, will say "Ah, yes, but that was paid for by the increase in Profits Tax". In that way he will hope to wear a fig leaf to salve his conscience—but a fig leaf on the Financial Secretary is a rather indelicate subject and I will not pursue it further. But to regard the trend of Profits Tax over the last few years in that way is to get the whole trend of Government expenditure and budgeting out of context.
Profits Tax stood at 25 to 33 per cent. ranging between those two figures, right up to 1958. It was then reduced to 10 per cent. at a cost of scores of millions of pounds. It was then put up from 10 per cent, to 12½per cent and then to 15 per cent. I think that I am in order in referring to this, Sir William, because I am trying to show the Chancellor that if he had spent less and given fewer relies in that direction, he could have helped the married man and the single man, and the family man, the P.A.Y.E. taxpayer generally, much more than he has. What he has done is so to weight the scales of taxation that he has allowed the companies to have a high old time over the last few years. They have probably never had such a wonderful period of increased profits and lower taxation.
Although figures are a little tedious, I ought to put these figures on the record. In 1952–53, company profits were £2,450 million. In 1959–60, they were £3,470 million, so that company profits have increased by £1,000 million in less than ten years. But the annual taxation paid on those company profits has gone down by £48 million. One would normally expect that with a rise in income, profits would yield higher taxation revenue, but the reverse has been the case.
Because the Chancellor's financial policies have yielded less revenue to fortify his Budget at a time when companies have been even more prosperous than before, I say that company taxation
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has escaped extremely lightly over the last few years as a result of the Government's deliberate financial policy. In 1952–53, company taxation was £815 million, whereas in 1959–60 it was £767 million. The income of companies was up by £1,000 million and their tax was down by 6 per cent.
Making the same comparisons for the Schedule E taxpayer, it will be seen that his income as gone up by 55 per cent. whereas his tax has gone up by nearly 100 per cent. Taking the two groups, companies, on the one hand, and individual taxpayers, on the other, it cannot be disputed that company taxation has gone down substantially and individual taxation has gone up. Although there is obviously a case for giving sufficient incentive to companies actively to invest in new plant and machinery—I shall be coming to that later—I might be less scathing if there were some evidence of that, but we know that not nearly enough has been done in that direction.
Companies have had a phenomenal increase in income over the last ten years, an income which has probably never been exceeded since the Companies Act was instituted one hundred years ago. Most of the profit has been distributed in dividends. I do not wish to go into that now, but the total distributed in dividends has gone up by hundreds of millions of pounds.
I make the contrast—at a time when companies have been more profitable than ever, the Government have so organised their Budgets that companies pay less tax and the P.A.Y.E. man pays more. I propose to continue this campaign throughout the year, if we get no satisfaction in the course of this Finance Bill, to compel the Chancellor, through the sheer force and weight of public opinion, so to alter his taxation policy that the married man and the single man with a small income get higher personal allowances out of which to be able to do at least something to pay for the increased cost of living which is bearing so heavily on them now.
4.30 p.m.
The £10 increase in the allowance that we propose is a token payment. It will cost a certain amount. Oddly enough—this is a feature that I do not like—it will cost much more in the Surtax part

1183
of the range than at the lower end. The real difficulty from the Chancellor's point of view about putting up the personal allowance is that it will cost him a certain amount because he gives away not only Income Tax but also Surtax.
I should like him to investigate the possibility of having a cut-off for the personal allowances. I do not see why not. We have had no fuss in the past over the earned income relief. It was common form up to a few years ago always to have a cut-off at a certain level of income. [Interruption.] Earned income is by far the most important matter here. There are 20 million P.A.Y.E. taxpayers, and that is by far the most important aspect.
I wonder whether, to save a certain amount of revenue, and, in addition, to increase the amount of personal allowance relief where it really matters—at the point of the man earning £15 or £20 per week—the Chancellor would consider having a cut-off on the personal allowance. I wonder whether he has any figures to show how much he could save if he said, "I will increase the personal allowance up to £2,000 a year," or whatever figure he thinks appropriate. I do not see why we should not have this differential. I appreciate that the Inland Revenue will not like it, for it will mean additional work, and the Department is already very hard pressed. But that cannot always be the final consideration. The Chancellor must make arrangements to get the work done in whatever way Parliament thinks necessary.
I come back to the point that the Chancellor is not being fair to the P.A.Y.E. taxpayers. He is offsetting the relief of taxation on company profits, which has been extremely substantial, by increasing the total yield from the P.A.Y.E. taxpayers. It is high time this discrimination was corrected. I hope that the Chancellor will correct it today. If he does not, I can tell him that I shall pursue him and expose him on every possible occasion. I shall do my best to ensure that he is compelled by public opinion to help the P.A.Y.E. taxpayers in the next Budget.
Mr. Fletcher: I support what has been said by my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan).
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In the Finance Bill we have the one opportunity in the year to achieve some degree of financial justice between different classes of taxpayer. As my hon. Friend has said, as the law stands at present this is a montrous injustice to P.A.Y.E. taxpayers compared with other taxpayers.
My only comment on my hon. Friend's proposal is that I do not think that it goes far enough. It is very modest. It is merely that the personal allowance should be increased for a single man from £140 to £150 and for a married man from £240 to £250. I put it to the Chancellor that in view of all that has happened in recent years, in view of the reliefs given to Surtax payers, in view of the profits made by companies, I think that it is recognised generally that the single man and the married man with a family have been paying an undue burden of tax compared with other sections of the community. In view of the rise in the cost of living and the differentials which have been introduced in other spheres of taxation, it is quite absurd that the personal allowances should be left at the figures which have obtained during recent years.
The least that can be done to produce a degree of justice between the lower and the higher wage earners is to increase the personal allowances. I have not worked out what the proposal will cost the Treasury. I have no doubt that either the Chancellor or the Chief Secretary will be able to tell us. If the Chancellor says that the cost is more than he can afford in his overall Budget, then, as my hon. Friend has suggested, there are ways by which the gap can be reduced. There can be a cut-off. There can be differentials in respect of Surtax.
However, the fact that stands out preeminently in our fiscal legislation at present is that as the result of the Government's operations during their ten or eleven years in office the tax burdens of the lower income groups compared with the better-off sections of the community have increased disproportionately. An unfair proportion of taxation now falls upon those with low incomes as the result of the Government's policy. An obvious way to remedy that injustice is to increase the personal allowances. This measure is long overdue. It is

1185
merited by every social consideration and every consideration of justice. I hope that we shall hear from the Chancellor that he is prepared to accept my hon. Friend's proposal.
Mr. Frank Tomney: Whoever the genius was in years gone by who thought of the P.A.Y.E. system, he deserves the congratulations and thanks of the nation, because what he did at one single stroke was to provide the Inland Revenue with a basis upon which the tax assessments covering a multitude of taxpayers—20 million—can be assessed from year to year almost in advance. There was a time under our tax law when the Inland Revenue used to ask people for their tax. Now it is taken from them.
The people to whom my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) referred are those who constitute the productive backbone of the nation's industry. This a modest request—I am surprised that it is couched in such modest terms—for an increase of £10 only. An increase is long overdue.
There are many factors bearing upon the people in this tax group. Many of them cannot be assessed in the ordinary way for tax purposes. There is the effect on them, for instance, of maintaining their children at school, and there is also the ever-increasing effect upon them of the cost of travel to work, for Which no taxation allowance or compensation is made. There is an added necessity for some consideration for these people. They are the people who, by their social content, provide the balance to the fiscal side of the nation, which is lacking in the 5 per cent. at the bottom of the scale, the people who are always trying to get something for nothing from the State, and the people at the top of the scale, who are prepared to grab all they can get.
I support the point made by my hon. Friend with regard to Profits Tax, and so on. If one has a private sector economy it is necessary to tax profits according to a schedule which will benefit industry. But it is also necessary to ensure that the persons who provide those profits receive common justice. In this way, the Chancellor has year after year fallen down in respect of these assessments. I have the greatest pleasure
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in joining my hon. Friend in asking the Chancellor to accept his modest proposal.
Something must be done to counterbalance the ever-growing charges on a person's income against which he cannot Claim, but which, nevertheless, constitute a real burden to him and which, in the long run, represent an increasing demand upon him. Sometimes a man is unable to meet these demands in the strict sense. This burden should be shared a little more equally as between industry and the Treasury. The margin of profitability, particularly in marginal industries which are necessary in making exports, for capital turnover or providing employment should be shared equally and more fairly by tax concessions of this kind to the people who really need them.
Mr. Archie Manuel: I, too, have great pleasure in supporting the new Clause. I compliment my hon. Friends who put down this series of Clauses. We should thank my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) very much for the overwhelming case which he has made for greater personal relief for the lower income groups. My hon. Friend indicated clearly that there is unfairness in the allocation of relief under existing taxation procedures. I cannot imagine that the Chancellor of the Exchequer will find it easy to be firm and rocklike in resolving not to accept the principle enunciated by my hon. Friend.
We continually hear the plea that we will not get much further forward as a nation unless we do all we can to increase the output of our factories, to build more ships in our shipyards, and so on. The incentives so far provided by the Chancellor to achieve this expansion have been given at the wrong end of the income scale.
When the Surtax payers were afforded a further £83 million relief on 1st January, the only argument that we were given was that this would help exports and would make it worth while for people at those income levels to get a better return from industry through their directorships and salaries. We heard not a word about the importance of the man at the bench, the young fellow who wanted to provide a home

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so that he could get marriedamp—the single man of whom my hon. Friend the Member for Cardiff, South-East spoke when claiming this meagre relief for which we ask. I agree that this is merely a token gesture to get the principle established.
My hon. Friend proved overwhelmingly that his case cannot be brushed aside. If it is said that taxation reliefs are dealt with fairly, the figures provided by my hon. Friend—showing the vast increase which has occurred in company profits and the smaller amount of Income Tax now paid by these companies, as against the far greater sums now being deducted from P.A.Y.E. payers—amply demonstrate that we have reached a time when something must be done concerning taxation reliefs.
We are continually being told that the major economic difficulties of the nation will be solved only with the help of those at the top end of the salary scales and by the companies which make vast profits, by appealing to them to obtain greater stability and to increase exports. There is, however, another side to the coin. The Chancellor must recognise the supreme connection in expansion between directorships and the young man at the bench—the young fellow who, for example, has served his apprenticeship, is earning his journey-manship and is starting to save to provide a home of his own. The token £10 additional relief to the classes indicated by my hon. Friend the Member for Cardiff, South-East should be gladly conceded by the Chancellor as an indication that the Government sincerely desire better relations in industry in augmenting exports.
4.45 p.m.
Mr. F. J. Bellenger: When the Chief Secretary replies, perhaps he will explain why the figures of £240 for married couples and £140 for single people ever appeared in a Finance Act. Do they represent the cost of married or single life? If they are token sums, I understand them.
I was a Member of the House before the Chief Secretary and I know the origin of P.A.Y.E. during the war. It was introduced, I believe, by Sir Kingsley Wood. I have nothing to say
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about P.A.Y.E. except that it imposes upon employers the burden of collecting taxes for the Inland Revenue. That was an acceptable arrangement during the war, but I am not so sure that it is equally acceptable today. The imposition of this duty upon big employers means the payment of large sums of money in the expense of collecting these taxes, for which the Inland Revenue has to allow under Schedule D. I am more concerned, however, with the reason for the figures of £240 and £140.
My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) proposes what he calls a token increase of £10 in both cases. I do not consider that figure sufficient, but it all depends upon how one argues the case. If it is argued that the £240 and £140 are merely figures which a former or the present Chancellor regarded as giving, I was going to say a little bit of fat, but recognition that a man is married or single, I understand them. If, however, they are figures which represent the cost of married or single life, they are out of all proportion.
I have no doubt that acceptance of the new Clause would cost the Chancellor a lot of money. It is, however, a question of priorities. Therefore, when the Chief Secretary replies, he must indicate whether he considers that the whole line of allowances should be concentrated on the essence of life as we understand it, and particularly married life, in which I and, no doubt, the Chief Secretary are mainly concerned and in which we have to declare an interest.
We want from the Chief Secretary not the cost to the Inland Revenue of the £10 token increase, but an explanation of the Government's thinking in the granting of allowances to alleviate the burdens which come upon individuals who have to pay tax. Against that background we can judge the other new Clauses and assess whether the Government are doing their best, as in their propaganda they claim to have been doing, to alleviate the great burden of taxation upon individuals.
Mr. Percy Holman (Bethnal Green): Last year, by a similar new Clause, some of us pleaded with the Chancellor of the Exchequer to raise the allowance from £240 to ampamp£250 for married couples

1189
on the ground that the cost of living had gone up approximately four points and that would leave them in exactly the same position as they were in twelve months' earlier. Since then the cost of living has gone up by a further five, nearly six, points. So the concession for which we are asking today is totally inadequate to represent the change in the value of money during the past two years. Today, £260 would barely be as much as £240 was two years ago.
In the fifteen years of my political life I have always believed that these personal allowances were meant to cover the basic elemental needs people have for food, a little for rent, a little for heating, but nothing much besides. On that basis, the allowances left as they are today affect very seriously the lower income groups. They do not affect Members of Parliament very much. What is an extra £10 or £50 allowance to those in the higher income groups? They materially affect the lower income groups, however, and certain groups of white-collar workers who find each year that the basic necessities are rising in price while their wages and salaries have not gone up proportionately with those of many other groups in industry, nor with the cost of living.
I know clerks who are seriously affected by the steady increase in prices while their increments are very much less than those increases. These little adjustments, as I call them, which, in our suggestion, would be totally inadequate today, ought to have amounted to at least £260 instead of £240. Nevertheless, this would be a gesture which would cost relatively little in a Budget which is almost self-supporting. The Chief Secretary should deal with this basic essential point which would materially help those in the greatest need.
Mr. Norman Dodds: I hope that the Government will show at long last that they are taking heed of the appeals made from this side of the Committee on behalf of the lower income groups. My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) will be doing a public duty if he pursues relentlessly the path he has taken in these debates. For years the Government have been transferring wealth and the lower income
1190
groups have been having a very bad time.
I hope that the Chief Secretary will show some appreciation of the work which is being put in by my hon. Friend. The proposals which he put forward were for only token personal reliefs. No one knows better than the Financial Secretary that the Government are in a terrible mess. Slowly but surely people throughout the length and breadth of the land—it matters not whether they are in industry or in agriculture—are realising this fact. I hope that the Minister's P.P.S. will be having a word with him about the growls and grumbles which are being heard because the Government seem to have no time whatever for the lower income groups. Here is a face-saver which would last at least for a week or so if these proposals were accepted.
I ask the Minister to take heed of the warnings given in the last week or two about the rapidly increasing cost of living, which will bear very heavily indeed on lower income groups. A few days ago Oxford University gave figures showing that a family of five with very moderate needs found that the cost of food had gone up on average by 6s. 7d. a week. If they accepted these proposals, the Government would show the people that they have some concern for those in the lower income groups as well as for those who are Surtax payers.
I ask not only that this new Clause should be accepted, but that some expresssion of gratitude should be made to my hon. Friend, because, although this would be only a token, it would indicate that we appreciate how, in a difficult period, the finances of the country have to be carefully watched but the lower income groups should be considered. I hope that there will be an expression of sympathy for the millions who are having a very difficult time.
If the Minister had seen the editorial in the Evening News on Monday night—and that paper is certainly not a supporter of the Labour Party—he would have seen that "the storm signals can be plainly seen" about the increasing cost of living. A writer in the newspaper said:" It gives me no pleasure to see Tory seats with 8,000 or 10,000 majorities being captured by the Liberals. Before

1191
it is too late, will the Government wake up and help the ordinary people if they want their votes?"
The Chief Secretary to the Treasury and Paymaster-General (Mr. Henry Brooke): Probably the most helpful thing would be far me to state in the first instance some of the difficulties involved in this matter.
I was asked by the right hon. Member for Bassetlaw (Mr. Ballenger) what was the justification for fixing these personal allowances at any particular paint. The justification for this was not, as he perhaps suggested, that the figures of £140 or £240 were thought of by Governments as sums upon which a single person or a married couple could live. They are part of a complex system which is designed so to shade the amount of Income Tax at different income levels as to be fair throughout. The right hon. Member will appreciate that there are not only these personal allowances of which we are speaking, but also reduced rates of tax which operate for bands of income above the personal allowance level.
The amounts involved here, if the Committee were to accept this new Clause, would be, under new Clause 2 £34 million a year in respect of raising the £240 limit for a married couple to £250, £30 million a year in respect of raising the £140 for a single person to £150, and, in respect of new Clause 4 —which we are discussing at the same time—there would be another £20 million in a full year. That amounts to £84 million altogether. It would be quite impossible for my right hon. and learned Friend to contemplate a reduction of revenue of that character in this year when he has made clear in his Budget statement and throughout our Budget debates that this is not a year in which he considers, in view of the state of the national economy, that it would be appropriate to reduce taxation by massive amounts of that character.
These questions of personal allowances are very important. It is most desirable that we should discuss them from time to time. The Conservative Government have over the years shown interest in them, by the substantial their interest in them, their practical
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increases they have already given. The hon. Member for Cardiff, South-East (Mr. Callaghan) criticised the fact that they had not been increased by more than they actually have since 1938–39. The fact remains that practically all the increase has been due to Conservative Chancellors of the Exchequer. If one compares the present situation with that Which existed under the last Budget of a Socialist Government and takes as the basis the amounts of these personal allowances in 1938–39, which was the basis the hon. Member for Cardiff, South-East took, we find the following. The increase for a married man over 1938–39, which was 5 per cent. when the Labour Government fell, is now 331 per cent. and in the case of a single person the increase over 1938–39, which was 10 per cent. when the Labour Government fell, is now 40 per cent. Indeed, there has been a remarkable improvement under both of these heads during the years, and if I may refer to new Clause 4 for a moment, on three separate occasions the Conservative Government have substantially increased the arrangements for child allowances.
5.0 p.m.
Mr. Callaghan: As the Chief Secretary is comparing and contrasting the records of Governments, which I did not do, would he not complete the picture by saying that when the Labour Government came into power the personal allowance was £80 for a single man and that they put it up in a period of extreme financial difficulty to £110, and that the married man's allowance was £140 which they put up to £190? Therefore, the difference is not very great. In fact, the Labour Government increased the single man's allowance by £30 in five years and the Tory Government have managed to put it up another £30 in 10 years. The Labour Government put up the married man's allowance by £40 in five years and the Tories have managed to put it up by £60 in 10 years. If the right hon. Gentleman wants to make that cheap sort of comparison—which I did not make, but contrasted the total level of tax on persons and companies, on the one hand, and, on the other, the level of allowances before and after the war—he might at least give the figures which the Labour Government found when they came to power.
Mr. Brooke: I do not think it was I who introduced party politics into this matter. I do not dispute the figures which the hon. Member has just given, but if he wants the picture completed it should be said that under the Labour Government Income Tax was reduced by a net amount of 6d. and under the Conservative Government it has been reduced by Is. 9d.;all these matters have to be taken into account.
The hon. Member for Bethnal Green (Mr. Holman) and other hon. Members have referred to the cost of living. In this Finance Bill, in Clause 8, we have made special tax reductions for some of those classes most hit by the rising cost of living, but the way to offset the hardship caused by the rising cost of living is for the Opposition to set its face against policies that would involve large increases of expenditure and to give full support to the Government's incomes policy, because it is principally through increases in wages and salaries outrunning the rate of production that the cost of living has been rising.
The hon. Gentleman referred to company taxes and quoted certain figures. I hope he will forgive me if I concentrate mainly on the new Clauses, because I was not sure whether he was sufficiently taking into account in his statement that there was a radical change in the whole system of Profits Tax four years ago. In fact, under the old system, in the last year when Profits Tax was charged, if I remember rightly, at 3 per cent. on undistributed profits and at 30 per cent. on distributed profits, the yield of the tax was £255 million, whereas this year, when there is a flat rate of Profit Tax of 15 per cent., the yield of the tax is estimated to be no less than £374 million.
It is all very well for hon. Members to insinuate that companies are lightly taxed, but the fact remains that the combined effect of Profits Tax and Income Tax on the profits of companies is a tax at the rate of 53¾per cent. I do not think that many people who have any concern with the running of a business, whether private or public, will be the more disposed to vote for Labour candidates after hearing the official Opposition saying that companies in this country are lightly taxed.
1194
The situation which we have had for a long time in this country is a system of taxation which, so far as individuals are concerned, has borne very heavily on the wealthy and very lightly on those on small incomes. If I may quote an entirely independent source in support of that statement, I have in front of me the March, 1961, issue of the National Institute of Economic and Social Research's Economic Review, which is certainly not under the Government's control, in which a very interesting article compares the tax systems of ourselves and of a number of other countries on the Continent and across the Atlantic. I will read one sentence:
"Britain taxes the poor lightly and the middle and upper income groups heavily."
That is the answer to these allegations that under our system of taxation those who are living on small incomes are unduly mulcted. The fact is that if we compare the line of our Income Tax on different incomes at different levels with a similar line based on the tax system of almost any other country of the world, it will be seen that our Income Tax falls lightly on small incomes and much more heavily on the large incomes.
Mr. Manuel: Would not the right hon. Gentleman agree that it all depends how one looks at these things? I look at what we have left after the tax is taken off, and my friends have very little left, while the right hon. Gentleman's friends have a great deal left.
Mr. Brooke: If the hon. Member looks at the matter upside down, then it will look like that, but I do assure him that he can examine the independent findings of all kinds of people who have no connection with the British Government and that they will confirm that direct taxation on people with small incomes in this country is relatively low.
Hon. Members: No.
Mr. Callaghan: That is not what was said. What was said was that this is fairer because it is much more progressive than in Continental countries. That is true, but my complaint is that the Government are destroying the fairness by their present policies.
Mr. Brooke: I certainly do not withdraw anything I have said. My point here is that, of course, we have to

1195
examine the personal allowances along with the standard rate, of Income Tax, the reduced rates and the size of the bands to which the reduced rates apply, and this Government has shown in the most practical terms in the last 10 years its interest in reducing taxation, an interest which is greater than that of any other party, to judge from the party policies of the other parties, and the additional expenditure which they would involve, because all that expenditure has to be met out of taxation. If hon. and right hon. Gentlemen opposite were responsible, they would find how difficult it was to meet greatly increased expenditure, while keeping the level of direct taxation unchanged.
To come back to the new Clause now before us, it would be quite inconsistent with my right hon. and learned Friend's judgment on what is suitable for the management of the economy at the moment if he were in this Budget to concede substantial reductions of taxation. Unfortunately, and I use that word deliberately, increases in the personal allowances cost a lot of money, and if what hon. Members opposite suggest were adopted, and we had a cut-off somewhere, they would have to have the cut-off very low down if it were to make any real difference to the cost. It all depends on what result one wishes to achieve, and, quite clearly, a large number of taxpayers, under P.A.Y.E. and otherwise, are concentrated in the lower part of the range. Therefore, whatever arrangements one makes, one cannot enact a £10 increase in one of the personal allowances without its involving a very considerable loss of tax revenue. I have given the figures. If these two Clauses were adopted, it would involve a loss of tax revenue of no less than £84 million a year, and that is far more than my right hon. and learned Friend could agree to. In these circumstances I have no choice but to advise the Committee to reject the Clause.
Mr. Callaghan: The Chief Secretary says that he has no choice, but he has a choice. He has chosen to exercise it. It will not have escaped the attention of the Committee that the total cost of these concessions at £84 million is within £1 million of the cost of the Surtax relief. The right hon. Gentleman has made his Choice.
Mr. A. R. Wise: We have had that five times.
Mr. Callaghan: The hon. Gentleman will have it another twenty-five times. He will hear it another 500 times during the next year, because he does not seem to have realized—indeed, I do not think that he has been in the Committee very long—what the debate is about. The debate is about a matter of fairness and a matter of equal distribution of taxation. I am saying that the Chief Secretary has a choice. It is wrong of him to say that he has not a choice. He has a choice to make today between the Surtax payers and the people of whom we are speaking. He has made his choice. He has chosen the Surtax payers.
Mr. Brooke: Is the hon. Gentleman proposing that the Surtax concessions should be repealed and that the increase in Profits Tax which pays for the Surtax concessions should be repealed at the same time?
Mr. Callaghan: If I proposed that I should be out of order. I will return to that point later. The right hon. Gentleman knows that I would be out of order. It is a remarkable coincidence that there is this close correlation between the Income Tax reliefs which could have been given to P.A.Y.E. taxpayers and the Surtax reliefs which the Government have chosen to give.
I have no hesitation in saying that a Labour Chancellor of the Exchequer, confronted with the same situation, would have given the reliefs to the P.A.Y.E. taxpayer. He is the man who is being hard hit. He is the man whom the cost of living is affecting. He is the man who finds the cost of food, clothing, shoes, rent and beer going up week by week. This is where the relief ought to come, and this is the whole difference between the two sides of the Committee.
The Chief Secretary has made his choice. He is entitled to do that, but he is not entitled to say, "I have no choice but to resist this". He has a choice. He has made it. I say that I differ from him in the choice he has made. It is for this reason that I shall pursue this campaign. During the next twelve months I am determined to make the people of this country understand the position. The Chancellor could have given the reliefs by now, but as he has

1197
not chosen to do so we shall compel him, in so far as public opinion can have any effect on the Government's thinking, before the next Budget is out to face a rising tide of public opinion, because what I am concerned about is relative fairness.
It is not true to say, as the Chief Secretary said, that the poor are lightly taxed in this country whereas on the Continent they are more heavily taxed. The whole point about our taxation system and one of which we were very proud and one which, in all fairness, Conservative Governments helped to do something about before the war, was that through this series of steps and the personal allowances there was a progressive system of taxation which operated as fairly as possible.
5.15 p.m.
What I am complaining about is this. I must repeat the complaint. During the last ten years the Government have departed from their own canons of fairness in order to relieve companies of a far greater proportion of tax than they should have done. How can anyone justify to me that, although the profits of companies have risen by £1,000 million in the last ten years, the total amount of Income Tax and Profits Tax paid by them is less? Is there any normal hon. Member sitting in the Committee today who, if he had had an increase of £1,000 in his income, would not have been paying more tax, unless he were a big Surtax payer? But the whole group of companies, earning £1,000 million more in profits, pay £48 million a year less in tax.
The Chief Secretary said that we had forgotten the recasting of the structure of Profits Tax. Indeed, I have not. It was 25 per cent. it rose to 30 per cent., it mounted to 33 per cent, under the present Government, it was then reduced to 10 per cent., and it has gone up by two successive steps to 12½per cent. and 15 per cent. The right hon. Gentleman tries to justify the reduction of Surtax on this basis, but the fact remains that less is being paid in Profits Tax today by these companies than was being paid ten years ago. Although their profits are £1,000 million higher than they were, they pay less in Income Tax and Profits Tax.
The Committee should probe this matter much more closely than we have
1198
done so far, because the Chancellor has pulled the wool over the eyes of many people by saying that he cannot afford these reliefs. If there were a fair distribution of taxation, he would be able to. I am not asking for a penal system of taxation. All I am asking for is that these groups should pay their fair share of taxation. I say that in times of rising Government expenditure they, too, should contribute, as the P.A.Y.E. taxpayer has had to contribute. That is all I am asking. It is not an unfair request.
The Chief Secretary said that the Opposition would find it very difficult to get rates and tax down with mounting Government expenditure. He should know. It is his task to try to do it. I remind him, as he has brought this fact to our notice, that in 1958–59 the Prime Minister told the country that if they voted for the Socialists they would find that expenditure would rise by £1,000 million in five years. "Do not vote for them", he said. The Chancellor has managed to put up expenditure by £1,000 million in three and a half years. Do not vote for the Tories next time! I must say that I get very impatient with this sort of party poppycock emanating, as it does, from people who, like the Prime Minister, should know better and should be able to put their case on a different basis.
Naturally I agree that it is going to be difficult, but there are big things which the country has to do. I am absolutely positive that if everybody in the country is to assent to make the effort that is needed there must be a conviction that there is fair play. There must be a conviction that as between one group and another and as between one sector of the economy and another no one is being asked to bear an unfair burden.
My complaint against the Government is this. The right hon. Gentleman asked us to support the incomes policy. It was a very rough and ragged affair to support. The simple truth is, as has been brought out more than once in Questions, that in the very year in which the Chancellor introduces an incomes policy the cost of living is allowed to mount at a record rate. In no single period of ten months since the new index was introduced did the cost of living go up faster than it has gone up in the past ten months. The Chancellor is asking

1199
people to accept, as he has said in speeches and in Answers, a real cut in their standard of living at a time when many sections of people, and certainly the companies with their taxation record over the last ten years, are not bearing any cuts in their standard of living but are doing very well indeed. It is the sense of unfairness that I intend to fight against.
I was very alarmed at what the Chief Secretary had to say about the Continental system of taxation. If we are not careful we shall have them shovelling indirect taxation more and more on to the shoulders of the people who are least able to afford it. I admit that there is a case for regrading the rates, but I shall fight against any attempt to put a heavier burden upon the shoulders of those least able to bear it. We are all proud of the fairness of the British taxation system. It has been a wonderfully fair system in the past. Hon. Members opposite have been assisting and conniving in the breaking up of the fairness of that system by their record since 1956, and I hope that my hon. Friends will not allow them to get away with this.
Mr. Fletcher: I have never heard a more miserable speech than that made by the Chief Secretary a few moments ago. I endorse everything that my hon. Friend has said. I hope that the Chancellor will pay heed to the burden of the criticisms being made against him, against the Chief Secretary and against the Government for their refusal to listen to the representations being made in support of the new Clause.
The Chief Secretary quoted from a document and appeared to draw the inference that in some Continental countries there was an even more unfair system of taxation as between the lower-paid and the higher-paid sections of the community than was the case in this country. He did not itemise the countries where the unfairness was greater, and I should like to know where they are.
Even if there are some, does the Chief Secretary really wish to take any credit for that? Is he proud of the fact that there are some countries in Europe in which there is a greater discrimination against the lower-paid sections of the
1200
community than there is against the higher-paid sections? Does not he realise that the success of any community, in Europe or elsewhere, must depend in the long run upon a fair and just basis of taxation? Does not he realise, if he examines the matter in his heart—and does not the Chancellor also realise this—that during the last ten or eleven years, under a Tory Government, the extremes of wealth and hardship in this country have increased? Whereas it was the record of the Labour Government to try to produce less inequality and more equality, and less extremism in respect of wealth, during the last ten or eleven years, as every disinterested person will agree, there has been a tendency towards increased discrimination between those who are well off and have a large spendable income, and are able to indulge in luxuries, and those living on a low margin of income.
Does not the Chief Secretary realise that the policy which ought to actuate any Government interested in securing a socially contented community—one which is able, because of its contentment, to strive and prosper and act in unison, in competition with its European cornpetitors—is to have a just and fair basis of taxation? Does not the Minister realise that the present discontent with the Government, not only in this House but in the country—as evidenced by by-elections and by all the people who lobby us—is due to the fact that it is now recognised that the Government seem bent upon increasing the disadvantages to the lower-paid sections of the community as compared with those who are better off?
This Government have given reliefs year by year to Surtax payers and others at the expense of those who have to pay tax under the P.A.Y.E. system. That is why discontent exists among nurses, teachers, probation officers and the rest. Here, in the Finance Bill, is an opportunity that recurs annually to try to redress the balance. Does not the Minister realise that he has made a grave mistake; that he and the Chancellor have not only done nothing to repair the inequality, but, on the contrary, have stressed and exaggerated it by their whole fiscal policy?
I do not believe that the Chief Secretary or the Chancellor is really proud

1201
of what he has done. It is not only economically stupid, it is politically dangerous and disastrous. The Government will suffer the penalty for it when the General Election comes, as they are now suffering in the by-elections. In their own interest, leaving aside the interests of the country and the community, cannot they reconsider their policies and pay some heed to what my hon. Friends have said? The discussion on the Finance Bill in Committee provides a unique occasion to examine the whole basis upon which taxation is distributed among the various sections of the community.
It is completely irrelevant for the Chancellor or the Chief Secretary to talk about an incomes policy, the pay pause, or increases in the volume of taxation; we are not concerned with that. That is a matter for separate debate. We are now concerned with the fact that, whatever may be the total level of taxation or the total volume of taxation that it is right that the State should exact from the taxpayers to pay for the national services of one kind or another, the total burden should be fairly and equitably distributed among the various sections of the community, and should be seen to be fairly distributed.
It is notorious that in recent years those on small salaries, who have to pay Income Tax under the P.A.Y.E. system, have been unfairly burdened as compared with other taxpayers and Surtax payers, including company taxpayers. I should have thought that it was pushing at an open door to argue this. It is completely irrelevant for the Chancellor to talk about the cost of these proposals, because, if it is right—and it must now be axiomatic—that this reform is essential in order to produce not complete equality and justice but a greater measure of it than now obtains, whatever the cost may be it should be redistributed among other taxpayers.
The policy of the Government has been to increase indirect taxation at the expense of direct taxation. Personal allowances that may have been relevant years ago have now ceased to be relevant, and to the extent that the burden of indirect taxation and the cost of living rises, the injustice of maintaining the old, out-of-date personal allowances becomes an increasing burden on the lowest class of taxpayer. That is what
1202
we are trying to urge upon the Chancellor, whether or not he is taking any notice of it.
I hope that he and the Chief Secretary will not sit there in their places with their stony-hearted, flinty glares, apparently completely irresponsive to the arguments that are being adduced. What is the object of our discussing these matters in Committee on the Finance Bill unless we have some kind of intelligent glimmer of response from the Chancellor and the Chief Secretary? This afternoon we have had a miserable reply, and I hope that this will not be the end of the matter. If that is the policy on which the Government are to stand in the by-elections they are even more doomed to destruction than the results of recent by-elections indicate.
This is the acid test of their policy. If they think that it is clever to go on making concession after concession to a very limited range of Surtax payers they can expect hordes of nurses, teachers, probation officers and the rest of the community to rise up in arms, not only against their incompetence, which is bad enough, but against their injustice and their miserable standards of honesty and fairness. I hope that before we finish with the Clause the whole Committee will rise in righteous indignation against this attitude.
5.30 p.m.
Sir Henry d'Avigdor-Goldsmid: We have had a great deal of talk this afternoon about fairness, and I wonder whether hon. Members realize—I know that the hon. Member for Cardiff, South-East (Mr. Callaghan) realizes—that every hon. Member in the Committee is likely to benefit far more personally if we accept these Clauses than a number of the taxpayers about whom we have been talking. If hon. Members are in the fortunate position of paying Surtax, and perhaps a high rate of Surtax, they will benefit even more. So I think that this is a blunt instrument which is being applied—
Mr. Callaghan: There should be a cut-off Clause.
Sir H. d'Avigdor-Goldsmid: I heard what the hon. Gentleman said, that there should be a cut-off Clause. That was the phrase he used. But I am discussing the proposed Clause.

1203
We have had a lot of information about the time which was devoted to the Clause and the great attention which was paid to it before it was put down and somehow the figure happened to work out at £84 million. I feel that this Clause would have been valuable if brought in as a sort of manuscript Amendment. The suggestion is that we give £84 million back to the taxpayers. But it would go to those taxpayers paying the highest rate of tax. That is absolutely and utterly incontrovertible. More than that, it would affect not at all the large section of the population which pays no tax. First, there would be no relief for people who do not pay tax, and secondly the maximum relief would go to those who are most fortunate in their incomes. If that be the sort of fairness we are asked to support, I have no hesitation whatever in considering that my right hon. and learned Friend is absolutely right.
Mr. Callaghan: That is one of the most specious arguments which I have heard for a long time, and the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) knows it. If what he says is correct he should have voted against all the increases in personal reliefs about which the Chief Secretary to the Treasury was boasting. But I do not remember the hon. Gentleman doing that. I will make this offer to him. I acknowledge the technical difficulties regarding this Clause. If he will assist me in drafting a cut-off Clause and march with me through the Lobbies on Report stage, I will draft a cut-off Clause with his support and we can become Tellers together. Will the hon. Gentleman help me?
Mr. William Ross: I hope the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) will take advantage of the fact that this is the Committee stage and reply to the offer made by my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). The hon. Member for Walsall, South did make a specious speech. He does not like blunt instruments. He prefers sharp ones. When there was a proposal in the last Finance Bill to give this £84 million to Surtax payers, without a single penny for the people about whom he is concerned
1204
today, the hon. Gentleman did not offer a single word of criticism. He accepted it with both hands—with the Lobbies outside crowded with hard-up Surtax payers; with processions down Whitehall of Surtax-paying exporters who said they could not export because they had not sufficient relief. We do not need to have Surtax payers in the Lobbies outside. We have them here in the Chamber in places where they matter. If the hon. Gentleman were honest in what he said, he would have objected to what the Chancellor did last year and would have insisted that this year he put a stop to it in view of the present situation which demands a pay pause.
What do we suggest? We suggest that we do belated justice to the people at the bottom of the scale. No one can quibble with the figures presented by my hon. Friend. They are startling. In 1938 personal relief for a single man was £100. Today it is only £140. Perhaps the Chief Secretary can tell me what is the present-day value of a pre-war income of £100. Before the war, in 1938, the relief far a married couple was £180. Today it is £240. No one, on the face of those simple figures, can state that what we are demanding is anything other than simple justice. This is what happened, and it is happening again this year. We may be able to stop nurses from getting pay increases, but we are unable to stop other people covered by cost of living agreements. In factories in Kilmarnock, in the boot and shoe industry, there are people on this basis. As soon as the cost of living moves up a paint or two automatically they get an increase in their wages. People at the bottom of the scale may soon find that without having had more than a rise to meet the rise in the cost of living they will be paying Income Tax. Others already paying tax will have to pay more. That is the Income Tax cheat which has gone on, while the Government ignore the fact, or do not conceal from the public, that just by keeping up personal incomes whenever wages rise to meet the cost of living automatically more tax is drawn in, and from the poorest sections of the population.
If the Government are able in one year to give away £84 million, it makes it impossible, if they are faced with certain Budget-balancing exercises, to

1205
give justice to the people. People at one end of the scale are paying for people at the other, and there is no justice in that. The Chancellor has appealed to the nation in relation to the pay pause, but that appeal fails completely, because this is one of the most blatant things the Government have done. We are asked not to undermine that appeal by the Tory Government to the people. But how can we defend that policy when we are faced with the fact that the Government are prepared to give benefit to the extent of £84 million to people who are far better off than those who are being hit by rising costs?
The Government must face the dilemma in which they find themselves and which is caused by pressure from hon. Members on the back benches opposite in relation to those in receipt of company profits. The figures were quoted by my hon. Friend and they have not been refuted. Taking Income Tax and Profits Tax together, these people are paying less in direct taxation today than during the last ten years. That does not lead to a sense of justice or fairness. The Government are trying to appeal to the hard core of Tory financial support and at the same time they are trying to appeal to the country. But they cannot serve two masters.
I hope that my hon. Friends will pursue this debate, which I consider absolutely vital. It displays the true interests served by hon. Members opposite in matters of finance. This is where we make clear how they have been using
Budgets and Finance Bills over the years to suit their own ends. There is no doubt about it. This country is less socially healthy today than ten years ago. I refer to the nation, as between one section of the public and another. The hon. Gentleman is rather like the Prime Minister who at times looks across the wide horizons of the country and sees whatever he wants to see for the purpose of the peroration to any particular speech he may be making.
A year ago the Prime Minister was telling us that there was more than a spread of materialism in the country. When he was opening a garden fete in Scotland he said that he thought from what he saw in the country that we were on the eve of a great religious revival. Within a month he was talking of juvenile delinquents and the spread of materialism and things detrimental to the true interests of the nation. I wish hon. and right hon. Members opposite would forget their beer and gaming laws and all the rest and try to do something nationally by means of a fair system of taxation. Until they regret the errors of last year in the Surtax promise that they made, and until they fasten themselves to the reality of the unfairness which has been developing towards the lower-paid workers, the country will continue to distrust them.
Question put, That the Clause be read a Second time:—
The Committee divided: Ayes 176, Noes 250.

Jones, Jack (Rotherham)

Owen, Will

Steele, Thomas

Jones, J. Idwal (Wrexham)

Padley, W. E.

Stewart, Michael (Fulham)

Jones, T. W. (Merioneth)

Pannell, Charles (Leeds, W.)

Stonehouse, John.

Kelley, Richard

Pargiter, G. A.

Stones, William

Kenyon, Clifford

Parker, John

Strachey, Rt. Hon. John

Key, Rt. Hon. C. W.

Parkin, B. T.

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

Lee, Frederick (Newton)

Paton, John

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

Lee, Miss Jennie (Cannock)

Pavitt, Laurence

Swingler, Stephen

Lever, L. M. (Ardwick)

Pearson, Arthur (Pontypridd)

Taylor, Bernard (Mansfield)

Lewis, Arthur (West Ham, N.)

Peart, Frederick

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

Lipton, Marcus

Pentland, Norman

Thornton, Ernest

Loughlin, Charles

Plummer, Sir Leslie

Timmons, John

Lubbock, Eric

Price, J. T. (Westhoughton)

Tomney, Frank

Mabon, D. J. Dickson

Probert, Arthur

Wade, Donald

Mclnnes, James

Proctor, W. T.

Wainwright, Edwin

McKay, John (Wallsend)

Pursey, Cmdr. Harry

Warbey, William

McLeavy, Frank

Randall, Harry

Watkins, Tudor

MacMillan, Malcolm (Western Isles)

Rankin, John

Weitzman, David

MacPherson, Malcolm (Stirling)

Reynolds, G. W.

Wells, Percy (Faversham)

Mallaieu, J P W (Huddersfield, E.)

Roberts, Albert (Normanton)

Wells, William (Walsall, N.)

Manuel, Archie

Roberts, Goronwy (Caernarvon)

Wigg, George

Mason, Roy

Robertson, John (Paisley)

Willey, Frederick

Mayhew, Christopher

Robinson, Kenneth (St. Pancras, N.)

Williams, D. J. (Neath)

Mellish, R. J

Rodgers, W. T. (Stockton)

Williams, LI. (Abertillery)

Mendelson, J. J.

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

Williams, W. T. (Warrington)

Millan, Bruce

Ross, William

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

Mitchison, G. R.

Royle, Charles (Salford, West)

Wilson, Rt. Hon. Harold (Huyton)

Monslow, Walter

Silverman, Julius (Aston)

Woodburn, Rt. Hon. A.

Moody, A. S.

Silverman, Sydney (Nelson)

Woof, Robert

Moyle, Arthur

Skeffington, Arthur

Yates, Victor (Ladywood)

Mulley, Frederick

Slater, Mrs. Harriet (Stoke, N.)

Oliver, G. H.

Slater, Joseph (Sedgefield)

TELLERS FOR THE AYES:

Oram, A. E.

Sorensen, R. W.

Mr. Lawson and Mr. Redhead.

Oswald, Thomas

Spriggs, Leslie

NOES

Agnew, Sir Peter

Corfield, F. V.

Hinchingbrooke, Viscount

Aitken, W. T.

Costain, A. P.

Hirst, Geoffrey

Allan, Robert (Paddington, S.)

Coulson, Michael

Hobson, Sir John

Allason, James

Courtney, Cdr. Anthony

Hocking, Philip N.

Ashton, Sir Hubert

Craddock, Sir Beresford

Holland, Philip

Atkins, Humphrey

Crosthwaite-Eyre, Col. Sir Oliver

Hollingworth, John

Barber, Anthony

Crowder, F. P.

Hope, Rt. Hon. Lord John

Barlow, Sir John

Cunningham, Knox

Hopkins, Alan

Barter, John

Dalkeith, Earl of

Hornby, R. P.

Beamish, Col. Sir Tufton

Dance, James

Hornby Smith, Rt. Hon. Dame P.

Bell, Ronald

d'Avigdor-Goldsmid, Sir Henry

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

Bennett, F. M. (Torquay)

de Ferranti, Basil

Howard, John (Southampton, Test)

Bennett, Dr. Reginald (Gos & Fhm)

Digby, Simon Wingfield

Hughes Hallett, Vice-Admiral John

Berkeley, Humphry

Donaldson, Cmdr. C. E. M.

Hughes-Young, Michael

Bevins Rt. Hon. Reginald

du Cann, Edward

Hutchison, Michael Clark

Bldgood, John C.

Duncan, Sir James

Iremonger, T. L.

Biffen, John

Duthie, Sir William

Irvine, Bryant Godman (Rye)

Biggs-Davison, John

Eden, John

Jenkins, Robert (Dulwich)

Birch, Rt. Hon. Nigel

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

Johnson, Dr. Donald (Carlisle)

Bishop, F. P

Errington, Sir Eric

Johnson, Eric (Blackley)

Black, Sir Cyril

Farey-Jones, F. W.

Johnson Smith, Geoffrey

Bourne-Arton, A.

Farr, John

Jones, Rt. Hn. Aubrey (Hall Green)

Box, Donald

Finlay, Graeme

Kaberry, Sir Donald

Boyd-Carpenter, Rt. Hon. John

Fisher, Nigel

Kerans, Cdr. J. S.

Boyle, Sir Edward

Fraser, Hn. Hugh (Stafford &Stone)

Kerby, Capt. Henry

Braine, Bernard

Fraser, Ian (Plymouth, Sutton)

Kimball, Marcus

Brewis, John

Freeth, Denzil

Lagden, Godfrey

Bromley-Davenport, Lt.-Col. SirWalter

Galbraith, Hon. T. G. D.

Lancaster, Col. C. G

Brooke, Rt. Hon. Henry

Gammans Lady

Langford Holt, sir John

Brooman-White, R.

Gilmour sir John

Langford Holt, Sir John

Brown, Alan (Tottenham)

Glyn, Sir Richard (Dorset, N.)

Leather, E H C.

Browne, Percy (Torrington)

Goodhart, Philip

Leavey, J. A.

Bullard, Denys

Goodhew, Victor

Leburn, Gilmour

Bullus, Wing Commander Eric

Cower, Raymond

Legge-Bourke, Sir Harry

Burden, F. A.

Grant, Rt. Hon. William

Lewis, Kenneth (Rutland)

Campbell, Gordon (Moray & Nairn)

Grant-Ferris, Wg. Cdr, R.

Litchfield, Capt. John

Carr, Robert (Mitcham)

Green, Alan

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

Channon, H. P. G.

Hall, John (Wycombe)

Lloyd, Rt. Hon. Selwyn (Wirral)

Chataway, Christopher

Hamilton, Michael (Wellingborough)

Longden, Gilbert

Clark, Henry (Antrim, N.)

Harris, Frederic (Croydon, N.W.)

Loveys, Walter H.

Clark, William (Nottingham, S.)

Harrison, Brian (Maldon)

Lucas, Sir Jocelyn

Clarke, Brig. Terence (Portamth, W.)

Harrison, Col. Sir Harwood (Eye)

Lucas-Tooth, Sir Hugh

Cleaver, Leonard

Harvey, Sir Arthur Vere (Macclesf'd)

McAdden, Stephen

Cole, Norman

Harvie Anderson, Miss

MacArthur, Ian

Cooke, Robert

Hay, John

McLaren, Martin

Cooper, A. E.

Heald, Rt. Hon. Sir Lionel

Maclay, Rt. Hon. John

Cooper-Key, Sir Neill

Hill, Mrs. Eveline (Wythenshawe)

Maclean, SirFitzroy (Bute&N.Ayrs)

Cordeaux, Lt.-Col. J. K.

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

McLean, Neli (Inverness)

1208

1209

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

Pike, Miss Mervyn

Stoddart-Scott, Col. Sir Malcolm

MacLeod, John (Roes & Cromarty)

Pilkington, Sir Richard

Storey, Sir Samuel

Macmillan, Maurice (Halifax)

Pitman, Sir James

Studholme, Sir Henry

Macpherson, Niall (Dumfries)

Powell, Rt. Hon. J. Enoch

Summers, Sir Spencer

Maddan, Martin

Price, David (Eastleigh)

Tapsell, Peter

Maitland, Sir John

Prior, J. M. L.

Taylor, Sir Charles (Eastbourne)

Manningham-Builer, Rt. Hn. Sir R.

Prior-Palmer, Brig. Sir Otto

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

Markham, Major Sir Frank

Profumo, Rt. Hon. John

Teeling, Sir William

Marshall, Douglas

Proudfoot, Wilfred

Temple, John M.

Marten, Neil

Pym, Francis

Thatcher, Mrs. Margaret

Mathew, Robert (Honiton)

Quennell, Miss J. M.

Thomas, Leslie (Canterbury)

Matthews, Gordon (Meriden)

Redmayne, Rt. Hon. Martin

Thompson, Kenneth (Walton)

Maxurell-Hyslop, R. J.

Rees, Hugh

Tiley, Arthur (Bradford, W.)

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

Rees-Davies, W, R.

Touche, Rt. Hon. Sir Gordon

Mills, Stratton

Renton, David

Turner, Colin

Miscampbell, Norman

Ridley, Hon. Nicholas

Turton, Rt. Hon. R. H.

Montgomery, Fergus

Ridsdale, Julian

van Straubenzee, W. R

More, Jasper (Ludlow)

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

Vane, W. M. F

Morgan, William

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

Vickers, Miss Joan

Morrison, John

Robson Brown, Sir William

Vosper, Rt. Hon. Dennis

Mott-Radclyffe, Sir Charles

Rodgers, John (Sevenoaks)

Wakefield, Sir Wavell

Nabarro, Gerald

Roots, William

Walker, Peter

Neave, Airey

Russell, Ronald

Ward, Dame Irene

Nicholls, Sir Harmar

Scott-Hopkins, James

Wells, John (Maidstone)

Nicholson, Sir Godfrey

Seymour, Leslie

Whitelaw, William

Noble, Michael

Sharples, Richard

Williams, Dudley (Exeter)

Nugent, Rt, Hon. Sir Richard

Shaw, M.

Williams, Paul (Sunderland, S.)

Oakshott, Sir Hendrie

Skeet, T. H. H.

Wills, Sir Gerald (Bridgwater)

Orr, Capt. L. P. S.

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

Wilson, Geoffrey (Truro)

Osborn, John (Hallam)

Smithers, Peter

Wise, A. R.

Osborne, Sir Cyril (Louth)

Smyth, Brig. Sir John (Norwood)

Wolrige-Gordon, Patrick

Page, Graham (Crosby)

Soames, Rt. Hon. Christopher

Worsley, Marcus

Page, John (Harrow, West)

Spearman, Sir Alexander

Yates, William (The Wrekin)

Pannell, Norman (Kirkdale)

Stanley, Hon. Richard

Pearson, Frank (Clitheroe)

Stevens, Geoffrey

TELLERS FOR THE NOES:

Peel, John

Steward, Harold (Stockport, S.)

Mr. W. Clark and Mr. Batsford

Pickthorn, Sir Kenneth

Stodart, J. A.

New Clause. —(CHILD ALLOWANCE: DISREGARD OF EARNINGS.)
(1) For the purposes of child allowance under the Income Tax Acts a child's earnings during the year in which the child leaves school shall be disregarded; and accordingly section two hundred and twelve (children) of the Income Tax Act, 1952, shall have effect with the addition at the end of subsection (4) (limit of child's income and disregard of educational endowments) of the words "or which the child earns during the year of assessment in which the child leaves school."
(2) This section shall not be deemed to have required any change in the amounts deducted or repaid under section one hundred and fifty-seven (pay as you earn) of the Income Tax Act, 1952, before the twenty, second day of June, nineteen hundred and sixty-two—[Mr. Houghton.]
Brought up, and read the First time.
Mr. Douglas Houghton: I beg to move, That the Clause be read a Second time.
It might be convenient, Sir Norman, to take with this new Clause the new Clause—Extension of child allowance—and the new Clause—Increase in child allowance.
This new Clause has three qualities —it is novel, it is simple, and it would not cost the Chancellor very much. As to its novelty, many of these new Clauses are debated in a different atmosphere
1210
and with a different budgetary background year after year. They reflect particular grievances with our taxation system, or contain demands to meet particular circumstances. This new Clause deals with something that has been ventilated from time to time in Committee stages of Finance Bills in the past, but never before have we brought forward a proposal to deal with it.
I hope that it will appeal to the Chancellor. It attempts to deal with the grievance of the withdrawal from the parents of child relief in a year during which a child leaves school and goes to work. 'As the Committee knows, child relief from the parents' Income Tax is not given if the income of a child in its own right exceeds £100 in the year of assessment. That applies whether the income is investment income or earned income.
In the case of investment income, the parents generally know from previous years the approximate amount of income the child will receive, and the question of whether or not they are entitled to the relief can usually be settled before the tax year begins. In the case of children leaving school and earning, no similar prediction is possible. In fact, the parents cannot be

1211
certain that the child will, in fact, leave school in a particular year, nor do they know that, even if the child does leave school, it will earn over £100 by the end of the tax year.
The Inland Revenue deal with the situation in two ways. One way is to look at the ages of children on the tax returns, presume that a child will leave school, and presume that it will earn £100 before the end of the tax year. That presumption rests on the belief that the child will leave school at the end of the summer term and begin to earn and that, at present rates of pay, it will earn more than £100 by the following 5th April.
In such cases the Inland Revenue withdraws the child's allowance from the parents tax coding for the year. When a parent says, "Where is my child allowance?" the Inland Revenue replies," In your own interests, we have not given it to you because we think that this child may leave school and earn more than £100 before the end of the tax year and you would be very upset if you had the child relief on your P.A.Y.E. week after week and were later told that it had to be withdrawn and that you owed the Department something." In some cases, the parent acquiesces in a step that deprives him of child relief in the expectation that, in any case, he might not be entitled to it by the end of the year.
In other circumstances, the child relief is given. The children may leave school, begin work and earn more than £100 by the end of the year. When the Inland Revenue get to know about that, it withdraws retrospectively that relief which has been given on the parent's Income Tax. Sometimes the Inland Revenue is informed by the parents that the child has left school, has started work and is earning so much a week and that it looks as though the child will earn more than £100 by the end of the tax year so the relief had better be withdrawn. Those parents are not only honest and straightforward, but know their Income Tax as well.
In other cases, the Inland Revenue is not aware that the child has started work and has earned that amount by the end of the year. When the Depart-
1212
ment does hear of it, the allowance is withdrawn retrospectively. In fairness, it is unusual, indeed, for the parents to be asked for a cash lump sum payment on the withdrawal of the child allowance. The usual practice is, in the departmental jargon, to "code it in"; that is to say, the amount of tax due is worked into the code number, so that the extra amount of tax is recovered on top of normal P.A.Y.E. in the course of the ensuing tax year. That is very convenient to those affected.
What I plead for in this new Clause is that in the year in which the child leaves school the earnings of that child should be totally disregarded for the purpose of the tax relief of the parents; in other words, I ask that the child's earnings in that year shall be treated exactly as if they were an educational endowment. I do not, of course, ask the Committee to equate earnings with an educational endowment; I merely say that the new Clause would give to earnings in the year in which the child leaves school the same tax treatment as an educational endowment—which, as hon. Members know, does not disqualify the parents from child relief.
I am sure that most hon. Members have had letters or visits from parents complaining about this awkward business of child relief in the year in which the child is leaving school. Parents do not want a relief which they will later have to repay. They feel that it is somewhat unfair to have the relief withdrawn in a most expensive year in the child's life. Many parents say that the children have gone from school uniforms to working clothes;that they have had to fit them out with clothing suitable for their job. The children have ceased to be school children and have become adults and workers and have to mix with others. There arises the whole question of their contribution to the upkeep of the home, and how much of their earnings they shall spend on themselves. There are few parents who are not prepared to assert that in the year in which their children leave school they are put to a good deal more expense than in the year before or expect to have in the year after. In asking for this new treatment of earnings in the year in which the child leaves school we are not only seeking to avoid a good

1213
deal of messing about with the parent's Income Tax. We think that it is justified on the merits of the case.
6.0 p.m.
While I have been dealing with the proposed new Clause standing in my name, our discussion is also associated with the proposed new Clause concerning the extension of child allowance and that concerning an increase in child allowance. I have no wish to anticipate any discussion on the two latter Clauses except to point out that they are not directly related to the point in the Clause in my name, though they deal with the equally troublesome problem of a cut off at precisely £100 in the income of the child for tax relief. That is to say, if the income of the child is up to £100 the parent gets full tax relief but if it is £101 the parent gets no relief at all, and the two proposed Clauses being discussed with this one deal with a tapering arrangement.
Those two new Clauses would assist me in the problem being dealt with in my new Clause, because if there were a tapering arrangement when a child leaves school and begins to earn—even if it is somewhat more than £100 in the same tax year—the parents would not be deprived wholly of the child allowance if, under a tapering arrangement, some proportion of the child allowance was still granted to them. In that sense the three Clauses deal with a common problem but the one in my name deals expressly with the problem of the child leaving school and earning money in the same tax year.
Mr. William Clark: With his usual expertise the hon. Member for Sowerby (Mr. Houghton) has explained the machinations as to how child allowances are granted under the P.A.Y.E. system, and so on. I do not go quite all the way with him regarding the proposed new Clause in his name, although there was a good deal in what he said with which I agree. The fallacy of his argument concerns his remarks about a child leaving school and earning more than £100. Many children, even leaving in the summer term before the succeeding 5th April, earn £100. Therefore, his Clause would divide children into two classes, those who earn £100 or less and those who earn £100 or more.
Mr. Houghton: I am saying that they are at present divided into two classes—those who earn more than £100 and those who earn less. My proposed new Clause says, in effect, that we should disregard the earnings of the child in that year, however large or small they may be. Instead of dividing them I am uniting them in one comprehensive disregard.
Mr. Clark: I take the point. But in the proposed new Clause in my name dealing with an increase in child allowance I have attempted to bring the allowance down to a more realistic level so that, if a child allowance is being paid, it can take into account income above £100. It is, after all, nonsensical for it to he £100, in which case the parent gets an allowance, but that, if it should be £101, the parent loses it. I should have thought that the Treasury could accept the principle which is operated for dependants' relief where it is reduced pound for pound. Surely that is a good principle and precedent on which to base child allowances?
This would be easy in application, there would be no difficulty concerning P.A.Y.E. and it would avoid the problem which the hon. Member for Sowerby pointed out where one has a re-coding in the succeeding year for a child leaving school. To a certain extent we taper off the financial burden which must be borne by parents, and I hope that the Financial Secretary will hold out some hope that the income limit of children will be made a little more realistic so that it will not suddenly be cut off at £100 but will, instead, be cut off pound for pound over the £100 mark in the same way as we deal with dependant relatives' allowances.
Mr. Bruce Millan: The difficulty we are attempting to remove by the three proposed new Clauses has already been well explained. I agree with my hon. Friend the Member for Sowerby (Mr. Houghton) that the most important person we should be trying to help is the parent of a child who leaves school during the Income Tax year, and I certainly support the Clause in the name of the hon. Member for Sowerby from this point of view.
The Clause in the name of the hon. Member for Nottingham, South (Mr. W. Clark)—Increase in child allowance—

1215
goes a good deal further because it would provide assistance to any parent regardless of how the child's income was obtained. The Clause standing in my name, the extension of child allowance, is similar to that in the name of the hon. Member for Nottingham, South in that respect, although it would be rather less expensive to the Revenue because the income limit laid down in my proposed new Clause is rather less generous than that contained in the other.
The important point to consider is that parents feel that they are being treated unfairly—either when they find that the Inland Revenue has stopped their child allowance before the child has left school or if they find later in the year that they have been getting an allowance and have suddenly accumulated a debt because the child's income has gone beyond £100. This limit of £100 beyond which no allowance can be paid is really artificial. I realise that there must be a limit of some sort but there should be some system that provides that there is not just a complete change from getting an allowance to getting nothing at all.
The hon. Member for Nottingham, South drew an analogy with the dependant's allowance and, of course, the proposed new Clauses in his name and in mine are designed to bring child allowances into line with the dependant's allowances. I will anticipate what the Financial Secretary will say when he comes to reply. He will probably say that for dependant's allowances it is not terribly difficult for the Revenue to operate a sliding scale system because the dependant's income is likely to be known in advance so that there is no need for this tiresome adjustment at the end of the year. He will probably say, regarding children—particularly when the child is leaving school—that such a practice might not be so easy. There is a certain point in that but it can apply only to the child leaving school because the child who has an income of up to £100 has probably got a fixed income which is strictly in line with the dependants relief. We come down to the practical difficulties concerning the child leaving school. I accept that there would be a certain amount of difficulty in operating this and that there would have
1216
to be some forecast of what the child's income is likely to be.
The choice is really between making that forecast and an adjustment at the end of the year or continuing with the present system. I have no hesitation in saying that greater injustice and a considerable amount of trouble are caused by the Revenue continuing the present system. Therefore, despite the administrative difficulties, I hope that the Financial Secretary will at least accept the principle of the new Clause.
When this matter was discussed on the Finance Bill, 1957, it was said that there would be about 300,000 cases a year and that it would require about 450 additional Inland Revenue staff to deal with them. I see the Financial Secretary nodding his head. I must, therefore, have my figures right. I do not believe that it would need 450 additional staff to deal with an adjustment like this. That would mean that, for each additional member of the staff, there would be over 600 cases to be dealt with in a year—in other words, that it would take one complete Inland Revenue staff day to deal with two adjustments of children's allowances of this sort.
I just do not believe that it would require anything like as many additional staff as was suggested in 1957. If these figures are repeated this afternoon, I say that the Treasury's case is not good enough and that the Inland Revenue and the Government should consider this matter again. I hope that I am wrong in anticipating what the Financial Secretary will say and that he will accept one of the new Clauses, which deal with a very real difficulty and which, if accepted, would get rid of a considerable sense of injustice among parents about the operation of the present child allowances.
Mr. Michael Shaw: I have a great deal of sympathy for the new Clause moved by the hon. Member for Sowerby (Mr. Houghton) with his usual clarity. He looked at it, very properly, from the Inland Revenue's point of view. Looking at it from the professional accountant's point of view, it is messy to have to deal with the child allowance during the last year of school. It is perhaps even more mess when we have to deal

1217
with the case of the child who goes on to further whole-time education, because the habit sometimes is to drop the child allowance more or less automatically every year just to ensure that the Inland Revenue does not slip up in allowing it for too long a period. The small but cumulative effect if it happens in many cases is that every year one has to take up the question of altering the coding notice for one's client so that his child allowance can be re-entered on the coding notice. The accountant then adopts this as the usual practice but one year later finds that it is necessary to send the notice back to be re-altered because it is decided that the child should go into gainful employment in which he will be earning more than £100 a year.
Another feature which I do not like about this allowance is that there is an element of restrospection about it. At the beginning of the year, the parent is entitled to it. In my experience, more often than not, he obtains the benefit of the allowance. Most children begin working in the autumn, and it is not until the back end of the Income Tax year, possibly the last few weeks, that it is certain that the £100 will be exceeded. The result is that the coding notice is altered at the last moment, which is very unpopular with the taxpayer, or, as the hon. Member for Sowerby said, it is coded into the next year and the parent who thought that he had got his child off his hands finds that he is still paying for him. That is unfair.
Very few allowances, if any, work in this manner. The single allowance which is enjoyed by the fiancée before she gets married is not taken from her when she is married. She is entitled to it in full provided that her income is sufficient to cover it. On the other hand, the lucky man who is getting married, usually just before 5th April, collects the whole of his marriage allowance. There seems to be no difficulty, although her status has not been kept throughout the year, in having the whole of the allowance granted for that year.
6.15 p.m.
I wonder whether the Treasury is afraid of giving this child allowance to a parent in respect of a child at the same time as the child obtains a personal allowance in his own right through
1218
his earnings during the second half of the year. Since the single allowance and marriage allowance are granted in the same year, why should not the same principle be adopted in the case of the parent whose child begins to earn in the second half of the year? Because it would cost so little and because it would count in only one year, why should not such a system be adopted?
I am not happy about one curious point in the new Clause. Knowing by whom it has been drafted, I am not sure whether it has been drafted in this form deliberately, or, if I may say with all due humility, in error. Why does the new Clause refer to the amount which the child earns during the year of assessment in which the child leaves school? I should like it to refer to the year in which the child ceases to enjoy full-time education. More often than not, a child is more expensive the older he becomes. I should have thought that the year in which a child went to a university, or wherever it may be, would be much more expensive to the parent than the year when he reached the age of 16, or whatever it may be, when he leaves school.
Subject to what I have said, I view the new Clause with the greatest possible sympathy.
Mr. Bellenger: In a long experience in Parliament, I have generally found on the Finance Bill that it is seldom that the Treasury spokesman gives way, whatever arguments may be advanced. We have heard a reasoned argument from the hon. Member for Brighouse and Spenborough (Mr. Shaw), and I hope that the Committee will look at the matter in that perspective.
My hon. Friend the Member for Sowerby (Mr. Houghton) said that the cost of implementing the new Clause would be very small. Perhaps the Financial Secretary will help to put the matter in proper perspective by telling us how much it would cost. However, if my hon. Friend is right, I should have thought that this was not an occasion on which Parliament should deal with dry-as-dust words or with Treasury briefs such as the one which, no doubt, the Financial Secretary has, but one when we should deal with matters in a human way, subject to the cost.

1219
What would be a human way to deal with this matter? The parent, not the child, gets this allowance because the child is a burden or a liability on the parent. If the child leaves school during the financial year, it may be said that he ceases to be a burden on the parent. When the child becomes a wage earner in his own right, the Treasury takes its cut from his wages through P.A.Y.E. But every married Member of this Cornmittee—and I hope that the Financial Secretary is paying attention to this—who is a parent knows that if a child is born just the right side of the financial year the parent immediately becomes entitled to a child allowance. It is all, as it were, the luck of the draw. If the child is born within that financial year by one day only, the parent will get his £100. If, as the hon. Member for Brighouse and Spenborough has said, a couple marry just inside the financial ear—as many do, purposelyamp—they not only get £140 single allowance but also £240 married allowance.
Always, of course, bearing in mind the cost which the Financial Secretary will shortly tell us about, it all boils down to the question of whether Parliament is to act in a human way, at very little cost to the Revenue, by saying that the parent who has budgeted for his child over the whole year, and has borne the burden of keeping him a whole year, shall be entitled to the £100 child allowance and that it shall not, to use the words of the right hon. Member for Woodford (Sir W. Churchill) when he was Chancellor of the Exchequer, be "clawed back" from him.
We should give this concession to the parent who has not found the child allowance of £100 a year sufficient to enable him to keep that child in proper circumstances. Or must the Inland Revenue have its full pound of flesh, as I mentioned last week, and claim that as the child has now started earning it will take its cut from his earnings in his own right while, in addition taking back the allowance from his parent because the child has not remained at school to the full limit of the financial year?
Is not this an argument to appeal to hon. Members opposite? In the event of the Financial Secretary resisting this Clause, I suppose that they will go into
1220
the Division Lobby in his support. I can understand that attitude on most issues, but this is one issue which should not be decided on party lines. It is one at which, for once in a while—very seldom do we do it—Parliament should look in human terms. I urge the Committee to support the Clause. I urge the Financial Secretary to give way and so earn, at long last, some little credit for the Government. Everybody knows that they need it.
Mr. J. A. Leavey: I want briefly to support the plea made by hon. Members on both sides of the Committee. It is not often that one gets an opportunity of saying that one wholeheartedly supports all the speeches on both sides, so this one is not to be missed. The arguments adduced by the hon. Member for Sowerby (Mr. Houghton) appealed to me but I wonder whether, if a child is in full-time education, it would not be better to use the phrase suggested by my hon. Friend the Member for Brighouse and Spenborough (Mr. Shaw).
There is also the question of whether one day would qualify, as it does in the case of the married allowance, for parents' relief for the whole year, or whether we would have to write into this provision a minimum period. It could be that the child was in full-time education until the 6th April, which would mean that it was in full-time education for only one day of a financial year, and one wonders whether relief should be applied, in such cases, for the whole of that year.
I do not want to go again over the general point arising from the other two Clauses we are discussing. The arguments have been powerful. It seems to me that, when this Committee decided that if a child has an income of £99 the parent should be entitled to relief, it was not intended that if the income was £101, the parent should get no relief. It seems at least improbable that that was the intent of Parliament.
I am not happy about the argument that my hon. Friend the Financial Secretary will oppose this on the grounds that it is administratively difficult or inconvenient. This is seldom a convincing argument, because one must remind my hon. Friend that Inland Revenue

1221
officials, although many of us have great respect for them, are, after all, public servants. They are certainly subject to difficulties, but if it is concluded that the present position should be changed, they should find ways of meeting the proposal.
I know that it is difficult for my hon. Friend to meet pleas from hon. Members on this side of the Committee for what are, in effect, increased burdens on the taxpayer at a time when he is also often being asked to reduce Government expenditure, for it is these small items which make a large contribution to the whole. I appreciate that difficulty. None the less, since this proposal seems to have the wholehearted support of both sides of the Committee, I hope that he will give an encouraging answer, at least on the administrative difficulty. There might be a compromise proposal to get over this, which would not involve the enormous number of Revenue man hours referred to by the hon. Member for Sowerby. I support the pleas that have been made.
Mr. Tomney: I am sure that the Financial Secretary cannot refuse to accept this Clause in view of the general opinion expressed by hon. Members on both sides of the Committee. Nevertheless, I shall not be surprised if he finds a way round it. I can appreciate the desire of the Treasury to have everything nice and cushy. I can appreciate the fact that countless fathers are penalised in one way or another because they do not reclaim what is due to them under the present system.
One cannot help thinking that the present provision was drawn up when employment was more on a geographical basis than it is today. The sentiments expressed by my hon. Friend the Member for Sowerby (Mr. Houghton) were the real basis of what is involved here. This is the additional expense which parents are put to in the first year after a child leaves school to take up a job or a career. In the case of children taking up professions, the outlay is usually greater.
What has happened to the pattern of employment, at least since the war? In the new towns, for instance, the opportunities for careers for youngsters are limited, for they are populated overwhelmingly by young married couples
1222
with children. Vacancies may not arise regularly to a great extent, which means that young people often have to travel in order to take up their first jobs. There are children today who are spending more on travelling to and from work than they earn in the first year of their employment. That is why this Section of the Income Tax Act, which was framed for other days, is not sensible today.
If a boy is apprenticed to a trade or articled to a profession there are many things, such as books or drawing materials, which he has to buy in connection with that trade or profession during his first year of employment, and the father finds that it is a heavy expense to launch his son on a career.
The proposal of my hon. Friend that a child's earnings during the year in which the child leaves school should be disregarded is a reasonable one. Whatever difficulties the Treasury may find, they are not big enough to warrant the refusal of benefit to parents who are trying to launch their children in jobs or careers.
I know something about the ambitions of ordinary people for their children. In the main they want their children to do better than they themselves have done, and they are prepared to make sacrifices for them; but the Treasury should not also ask them to make sacrifices. I do not know what excuses the Economic Secretary will think up, but they will have to be good ones. This is a new Clause which in equity he cannot possibly refuse to accept. It will confer a benefit in the first year in which a child leaves school when the parents' worry is greatest and when relief is most needed. If the Economic Secretary accepts this new Clause—and I cannot see how he can refuse it in view of the general opinions expressed—it will confer a real service on parents.
6.30 p.m.
Mr. Edwin Wainwright: I hope that the Financial Secretary will take note not only of the frontal attack in respect of these proposed new Clauses but also of the rearguard action. It is always more dangerous to be attacked from behind than from the front. As so many of his hon. Friends have spoken in favour of the principle behind these Clauses, I hope

1223
that he will give way on this issue. The Clauses dealing with the extension of child allowance and increase in child allowance may be called complicated and they may cause a good deal of administrative work. That no doubt will be the argument which the Minister will use. But if that argument is used in respect of those Clauses, it cannot be used in regard to the Clause concerning disregard of earnings. There will be no administrative difficulty at all about that Clause, and no increased work would be required to introduce its principle.
The first year that a child starts work has been mentioned as one of the most costly years, no matter what kind of work the child undertakes. The clothes which it has been wearing at school will not be suitable. New clothes have to be bought for the young boy or girl commencing work. The thought in the heart of any boy or girl going to work for the first time is, "I am now commencing life on my own and I want to make a contribution to the household." What kind of contribution can a boy make? It is a very small one and the father may easily get into difficulties in trying to help him.
The Inland Revenue will say that this young person will be earning above £100 in the present financial year and therefore Income Tax allowance will not be allowed. Supposing that in the first month of commencing work, after Income Tax allowance has been stopped, a boy goes off work because of sickness or accident. He may be away for only a short period of time, but the father is responsible for keeping his child. I know that it may be said that if the father is working he cannot claim National Assistance for this young person but the young person can claim. That is a ridiculous state of affairs, because if the young person goes to the National Assistance Board he will be refused benefit because he will be living at home. Therefore, the father is not only denied Income Tax allowance for this young person, but he is also denied any contribution from income or wages which could be made by that young person.
We must not forget that a young person cannot claim sickness or unemployment benefit, or benefit under the
1224
Industrial Injuries Acts because he has not sufficient stamps on his card to enable him to qualify. Therefore, the family is worse off than before the boy or girl started work. I hope that the Financial Secretary will take these matters into consideration.
There is always a demarcation line where benefits are allowed or refused, but I hope that the Financial Secretary will not use the argument of the demarcation line on this issue. My hon. Friends have explained the difference that can result in respect of Income Tax allowance if a child is born either on the 5th or 6th of April, and also in respect of the date on which a young couple get married. There must be some demarcation line and no argument of that kind ought to be used.
My hon. Friend the Member for Hammersmith, North (Mr. Tomney) mentioned the cost of travel, and it is true that travel is very costly, especially for the low wage earner, the boy or girl just starting work and having to pay the same fares as an adult whose wages may be ten times as much.
I hope that the Financial Secretary will look more cheerfully at this issue and be a little more graceful about accepting the new Clause, especially the first of three which we are discussing. If he cannot accept the other two now, I hope that he will consider them with a view to making a similar provision at a later date. There would be no administrative cost involved in the implementation of the first new Clause and, as it has been supported by many hon. Members opposite as well as on this side, I hope that the Financial Secretary will accept it and put it into operation.
Sir William Robson Brown: There have been so many powerful and convincing arguments from both sides of the Committee in support of this new Clause that I shall make what is probably the shortest speech in this or any other Session by appealing to my distinguished bachelor friend on the Government Front Bench to have some sympathy with married people in these circumstances. The only thing which will convince me in anything he will say is on the score of excessive cost. I hope that the figures will not reveal that and

1225
that on one occasion at least the Committee will be united, Front Benches and back benches alike, on at least one new Clause,
6.45 p.m.
The Financial Secretary to the Treasury (Sir Edward Boyle): The hon. Member for Hammersmith, North (Mr. Tomney) said that he thought that the Treasury must capitulate on this occasion, given the completely unanimous view expressed on both sides of the Committee. I can only say that it is evident that he was not here for our proceedings last Friday. I well remember my own first Session in Parliament when it fell to me to move two or three new Clauses from the back benches on the other side of the Committee when the right hon. and learned Gentleman the Member for Newport (Sir F. Soskice) was a Law Officer, and he was a much better goal keeper than ever I shall be in this Committee. I hove that the Committee will have noticed the presence of my hon. Friend the Parliamentary Secretary to the Ministry of Education. On an earlier Clause of the Bill, exception was taken from the Front Bench opposite when my right hon. Friend the Secretary of State for War was not here. We took that rebuke in the spirit in which it was offered, and that is why my hon. Friend the Parliamentary Secretary is with us for this discussion.
Mr. Ross: Can the hon. Gentleman tell us where the Secretary of State for Scotland is, as he is responsible for education in Scotland?
Sir E. Boyle: I do not know where he is, but I suspect that he is better employed than he would be as a second Minister listening to this debate.
The other thing I have to do is to reply to the right hon. Member for Bassetlaw (Mr. Bellenger), who hoped that I would not speak from a Treasury brief. I have notes for a speech, but I do not in fact have a brief before me. We were told by one of your predecessors, Sir James, that he never objected to seeing Members rise with notes for a speech because there was then a fair chance that their speech would have a beginning, a middle, and an end. That is wise advice when one is dealing with very complicated matters on the Finance Bill.
1226
In this group of new Clauses we are dealing with proposed Amendments to Section 212 (4) of the Income Tax Act, 1952, which provides that the child allowance shall not be given in respect of any child who is entitled in his own right to an income greater than £100 a year. As the Committee will know, there is a proviso to that subsection which says that in the child's income for this purpose, income from
"a scholarship, bursary or other similar educational endowment"
is to be ignored. The first new Clauseamp—and I shall take that first and deal with the other two later—would add a further item of income to be disregarded, namely, a child's earnings during the Income Tax year in which he leaves school. The cost of this proposal is a good deal higher than has been suggested by hon. Members on either side of the Committee. It is estimated at £10 million in a full year, and I must tell the Committee straight away that on the ground of cost alone the Chancellor could not accept this proposal.
Mr. Bellenger: That is in relation to the parents, ignoring the earnings of the child.
Sir E. Boyle: That is the cost of doing what is proposed in the new Clause.
The Committee ought also to consider the principle involved. I do not think anyone on either side of the Committee would seriously dispute the necessity for some limit on the child's income. The allowance, after all, is a relief. I noticed that the hon. Member for Sowerby (Mr. Houghton) quite rightly referred to this as child relief. It is a relief to those who have dependent children to support, and ever since this relief was first introduced, everyone has always recognised that there must come a point at which there could not be justified both an allowance against the parents' income in respect of the child and at the same time an ordinary single person's personal allowance against the child's own income. In other words, there must come a point at which duplication of personal allowances could not be defended, and the question is simply at what point this duplication should cease.
It is a point on which Parliament has taken different views over the years. This income limit was originally set at

1227
£40 in 1920. It has been raised from time to time and was last increased in the Finance Act, 1957, from £85 to the present figure of £100. The first new Clause proposes not to abolish this limit of £100, but rather to exclude a particular source of income for a particular year.
I cannot see that any very strong case for this proposal can be made in respect of the period after the child's first job has begun. It is true that a child's earnings at the start of his first job may need to be earmarked to be spent, for example, on special clothing or equipment. I recognise that, but, after all, this may also happen to a wage or salary earner at almost any point of his working life, and the child in question has earned the money even though part of it may need to be used in a particular way.
Our whole system of direct taxation is based on the principle that taxpayers are charged according to their general economic circumstances. It is one thing to have, as we rightly have, a carefully devised system of tax allowances, but it would be quite another to say that a taxpayer should not be charged on his earnings because of certain particular expenses that he, or his parents, have to bear at a particular point in his life.
The other argument which one often hears in support of a proposal like this is that at the beginning of the tax year in which children leave school they are still, as a general rule, entirely dependent on their parents for support. That is an argument with which one must have a certain degree of sympathy, but I must remind hon. Members of the very important principle recognised by the Radcliffe Commission as applicable to personal allowances, and I quote two or three sentences from paragraph 152 of the Radcliffe Commission's Second Report.
"…income tax is an annual tax that has got to be administered. It is a tax that has to be collected each year from many millions of the population …the range of allowances must be limited to certain broad categories of distinction that commend themselves by their obvious justice: they must be simple in their terms and free from detailed refinements."
It is in accordance with that principle that personal allowances for the tax year are regarded as a unit. There cannot be, as a practical matter, any elaborate
1228
system of apportionment. The amount of the child's own income has to be taken into account over the same entire tax year as that for which the parents' claim for allowances is made.
I do not think that one can draw an analogy between income derived from earnings and scholarship income which is already disregarded when calculating the child's income. It seems quite reasonable to maintain on the one hand that an educational award, like a scholarship, ought to be given special privileges for tax purposes, while a child's earnings in the year in which he leaves school must be regarded as income, just like any other earnings. It would surely be wrong to deal with such earnings in a special manner merely because the child was attending school at the start of that year.
I have devoted some time to the principle of this new Clause because, as I have said, it would be expensive. Not only would it be too expensive for this year, but I think that hon. Members, even those on the back benches, should think very hard before committing themselves to the support of the principle enshrined in the first of the new Clauses.
Sir W. Robson Brown: I wonder what my hon. Friend's views are with regard to apprentices, who are very similar to people undertaking further education, and whose earnings are very much less than they would be if they were doing an ordinary common or garden manual jab.
Sir E. Boyle: We shall be coming to the subject of the apprentices on another new Clause. Briefly, I would say that I realise, of course, the problems of people undergoing particular kinds of training, but I am still not convinced that the Committee would be well advised to support what would be a fairly big departure in our tax system as described in the first new Clause, which would cost a great deal of money.
I would rather turn now to the cost of the two other new Clauses that we are considering, which deal with the same point in a different way. The idea of both these Clauses is to give a partial child allowance to children with incomes above the statutory limit of £100.

1229
The new Clause in the name of the hon. Member for Glasgow, Craigton (Mr. Milian), which is ingeniously worded, proposes that where a child's income is over £100 but not over £200, a partial allowance should be granted on a diminishing scale. The alternative proposal by my hon. Friend the Member for Nottingham, South (Mr. W. Clark) and other hon. Friends of mine contemplates that the partial allowance should be the sum arrived at by subtracting from the normal child allowance a £for every £by which the child's income exceeds the statutory limit.
These are both ingenious proposals, and I apply that remark particularly to that by the hon. Member for Craigton, who made an attractive speech to the Committee. He has obviously given the matter a great deal of thought. I rather dissent from the view of the hon. Member for Dearne Valley (Mr. Wainwright) that the first of the proposed new Clauses is the best. In replying to the Clauses, I would say frankly that of all the starters in this race the one that caught my eye the most was that proposed by the hon. Member for Craigton, which is certainly a very ingeniously-worked-out one. It has the merit also, as I think he rather suggested, of being cheaper than the proposal by my hon. Friend. My hon. Friend's proposal would cost about £8 million in a full year, which is about double the cost of the new Clause proposed by the hon. Member for Craigton.
I am, indeed, not sure whether the new Clause proposed by my hon. Friend would quite carry out his purpose. As drafted, it fails to get rid of the express words in Section 212 (4) which preclude any allowance at all when the child's own income exceeds £100.
The idea of a tapering off of the child's allowance has been discussed on a number of occasions since 1951. It was discused in 1952, 1954 and again in 1957. As I was in the Treasury in 1955 and 1956, this is not to me quite such a hardy perennial as some other subjects such as shale oil, which we tend to discuss year by year.
Indeed, I fully accept that the case for some tapering provision in connection with the child's allowance is in theory reasonable enough. I know it seems unfair to many people that when a child
1230
has an income of £100 his father can claim the full figure in his relief—£100, £125 or £150 according to age—but that as soon as the child's income exceeds £100, however small the excess is, his father can claim no relief at all.
But I must tell the Committee, as many of my predecessors have done—though I assure hon. Members that this will not be my last word on the Clause —that whatever may be said in theory in favour of a tapering provision, any proposal of this kind would give rise to really considerable administrative difficulties, particularly in relation to P.A.Y.E. As this point has been mentioned by a number of hon. Members, perhaps I could explain how this difficulty comes about.
The trouble is that P.A.Y.E. works smoothly only when the code number given to an employee before the beginning of the year accurately reflects the allowances to which he is entitled for that year. With a standard income limit for child allowance, no serious difficulty arises. It is not necessary to estimate exactly what will be a child's allowance for the coming year. One has only to estimate whether or not it will exceed the prescribed figure of £100. I am assured that in the overwhelming majority of cases the answer on this point is entirely plain. Of course, there are individual cases in which the coding turns out to have been wrong because in the event the child's income goes up from below £100 to above it or, which is less likely, falls back below it. But I am assured that these cases are very much the exception and not the rule.
But if for a large number of cases the tax clerk had to estimate just where in the income range stretching above £100 the child's expected income was likely to fall, it would be necessary to ask taxpayers to state beforehand the probable incomes of their children, and after the end of the year to state the actual amount. Moreover, each case would have to be re-examined by the tax office after the end of the year, and unless the estimate of the child's income had proved sufficiently accurate to make no significant difference to the allowance due, an assessment would have to be made on the child's parent, which would involve further work because of the need

1231
either to repay any tax overpaid or to recover any tax underpaid on the basis of the original coding.
Mr. Bellenger: I am very interested in the point which the hon. Gentleman is putting. I quite appreciate the administrative difficulties. But could he tell me what the position would be of a parent whose child had an estimated income of just over £100 and, therefore, the parent was not eligible for child allowance, but, with things as they are at the moment—dividends dropping and so forth—the child's income dropped just below the £100 at the end of the year? What does the parent do then?
Sir E. Boyle: I have explained that there are individual cases in which the coding turns out to have been wrong. This matter then has to be looked at again. But I am assured—on this point I can only state what is the best advice, administratively, that I have received—that, contrary to what is suggested sometimes, these cases are very much in the minority.
I am sure that the Committee will realise from what I have said just how much the proposal would complicate the working of the P.A.Y.E. machine. It is a cardinal principle of our P.A.Y.E. system to ensure that in as wide a range of cases as possible, the correct tax is deducted from an employee's earnings in the course of his tax yeas. When this happens—I am told that it happens in about six-sevenths of all cases—no formal assessment need be made and no further work is necessary for that year.
The introduction of any tapering provisions under which in many cases the allowance could not be finally determined until the child's income for the year was known would obviously be a nuisance from the point of view of the taxpayer. It would substantially increase the work to be done by tax offices. I am assured that it would inevitably call for some hundreds of extra staff. In answer to the point raised by the hon. Member for Craigton, who firmly stated his disbelief, I have checked the matter, and it seems to me that the figures presented to the Committee some years ago really were correct.
1232
I recognise that the hon. Member for Craigton has chosen his particular formula in the hope of meeting these administrative objections so far as possible. His formula, as he explained, divides the range of the child's income from £100 to £200 into four zones. Within each of the zones the amount of the allowance is constant even though the child's income may vary within the particular zones. I recognise that this ingenious device might certainly be expected to reduce the number of cases where the code number originally given to the parents proves in the event to be incorrect because the child's income turns out to be different from the estimate. I think it would be fair to say that, compared with the proposal by my hon. Friend, the formula of the hon. Member for Craigton would be slightly less expensive in staff, though I am told that there would not really be very much in it.
7.0 p.m.
It is not easy to make an accurate forecast when dealing with this kind of question, but the formula of the hon. Member for Craigton would not significantly alter the estimate given five years ago by my right hon. Friend the present Minister of Health to the effect that any tapering-off provision in connection with the child allowance would require approximately 450 extra staff.
I am sure that my right hon. and learned Friend the Chancellor will take full note of the strong views which have been expressed on both sides of the Committee. I am not pretending that I consider the present position at all ideal —clearly it is not. The trouble is that when looking at the formula of the hon. Member for Craigton, the saving in staff might be quite small if unforeseen changes in employment conditions made it difficult to make forecasts falling within the ranges of tolerance that the hon. Member provides. With rather wider ranges and with a tapering provision in the cases where the income is, say, between £100 and £150, it would be administratively easier but, obviously, considerably more costly.
On a combination of cost and administrative grounds, I cannot advise the Committee to accept this proposal this year. My right hon. and learned Friend will. However, take note of the views

1233
which have been expressed. Between now and next year's Bill, we will consider both the administrative aspect and the cost aspect. If within the ambit of what may be possible in any future Finance Bill we can find a scheme which is both administratively practicable in terms of staff and not too ruinously expensive compared with other tax priorities, my right hon. and learned Friend will certainly consider it. It must, however, be recognised that what has been said in the past is correct and that I cannot this afternoon advise the Committee to accept the new Clauses.
Mr. W. Clark: Will my hon. Friend answer this question: if it is logical to apply a tapering provision £for £for dependent relative relief, why is it not logical to do it for child relief? Why are there not the same administrative difficulties in the case of the dependent relative relief?
Sir E. Boyle: I have a note about this but did not want to speak too long. I will explain why the difficulties which I have described did not prevent the tapering of the dependent relative allowance. The majority of dependent relatives have no means beyond the standard National Insurance retirement pension. In all these cases, the full allowance is due and there is no Question of any adjustment being necessary. In those cases where there is a small income from other sources—for example, a small annuity, which happens in a number of cases—again the income is fairly steady. Thus the coding on account of the dependent relative allowance which is made before the end of the year can usually prove fairly accurate. In the case of a child who is working, however, the presumption is that the income may well increase.
I do not want to enter controversial fields, but, whether we have an incomes policy or not, my hon. Friend will realise that any estimate based on facts as they are before the beginning of the tax year may well be put out by changes in the average level of earnings in a number of industries during the year. There is, however, a considerable difference between the circumstances of those who are starting work and those who are entitled to the dependent relative allowance.
Sir W. Robson Brown: When I interjected, my hon. Friend said that he would reply specifically to the problems of apprentices and their peculiar position.
The Deputy-Chairman (Sir Robert Grimston): That would arise better on a later new Clause.
Mr. Houghton: The Financial Secretary said that he had some notes of a speech and also a brief, but that he preferred to speak from the notes. I could not tell the difference. In some parts the hon. Gentleman's speech was a summary of his brief; other parts were an exact copy of it.
In a few moments, I suppose, the Committee will show the impotence of the British House of Commons. All the speeches that have been made on both sides are in favour of some concession being made. I am sure that had all other hon. Members been present they would have been of the same mind. And yet, apparently, or so it seems, the House of Commons cannot decide to make a concession on which we are all so united.
It is a pity to have to divide the Committee in such circumstances, because there is really no division in the Committee. It is a division between the Treasury Bench and the rest of the Committee. I am sorry that it may come to a Division, because so far the Financial Secretary has given no indication that he can make any concession. Since, however, he spent so much of his time on the tapering proposals, I should like to say something about them.
The hon. Gentleman believes that in theory there is something in favour of tapering provisions. Of course there is, because the Royal Commission strongly advocated their introduction into the child relief. I acknowledge that there is a good deal of work in this matter, but the Royal Commission made proposals regarding child relief which would have meant a great deal more work than this. The Commission felt, however, that it was necessary to reconstruct the relief on satisfactory lines.
The Financial Secretary will remember that not only did the Royal Commission recommend a tapering arrangement for child relief, but recommended varying the amount of relief

1235
according to the income of the parent. That recommendation is to be found in paragraph 179 of the second Report of the Radcliffe Commission (Cmnd. 9105.)
The Commission went on to combine with that proposal a tapering plan for child relief. Some years ago, the Government decided not to accept the recommendations of paragraph 179 and not to have child relief graduated according to the income of the parent. Instead, they introduced the existing three-tier child relief of £100, £125 and £150, according to age. The Government did nothing about the tapering recommendation.
In paragraph 184, the Radcliffe Commission recommended:
"Hitherto we have discussed the form of a tapering provision on the assumption that our recommendation for proportional allowances was being put in to operation. Even if it were not, we should still regard a tapering provision of some sort as a necessary improvement of the present scheme."
So that even though the Government rejected the proposals for proportional allowances, the case for tapering still remains.
In paragraph 182, the Royal Commission stated:
"There is no doubt an administrative advantage in a rule so simple as this which allows the parent £85 "—"
as it then was—
"or nothing, but, despite our preference for simplicity in all these rules, we think that the present one is so arbitrary as to be unfair "
It is unfairness with which we are dealing.
Although there may be administrative difficulty and work in adopting a tapering provision, it is necessary sometimes for that work to be done to get fairness in the tax system. We cannot always subordinate fairness in the tax system to administrative convenience. I know that in many respects P.A.Y.E. has put a straitjacket, so to speak, on much that we would wish to do in the Income Tax system but which the P.A.Y.E. arrangements inhibit.
All that the Financial Secretary has done in regard to the proposed tapering arrangement is to say that the Chancellor will take note of it. I can quite understand it if he regards the proposal of the hon. Member for Nottingham, South (Mr. W. Clark) as less acceptable than
1236
the proposal of my hon. Friend the Member for Glasgow, Craigton (Mr. Milan) because it so happens that in paragraph 183 of the Report of the Radcliffe Commission, from which I quoted, there was a criticism of the £for £tapering arrangement. I quote again from that paragraph:
"On the whole we think that the simple rule of reducing the allowance otherwise due by £1 for every £of the child's income would be unsuitable, for it would involve a great deal of work, much of it fruitless, in checking all children's incomes and any increase in a child's income, such as may well happen when employment begins, would result in underpayment of tax by the parent, needing to be recouped later under P.A.Y.E. or otherwise."
The proposal of my hon. Friend the Member for Craigton was not, of course, considered by the Commission because it was working out its tapering arrangement on a different basis.
The Financial Secretary is always given the unpleasant tasks in discussions on the Finance Bill. He promised again that the Chancellor will consider this matter for another year. Last year he promised that personal reliefs as a whole would be reconsidered. He was hopeful then that we should see the outcome of further consideration of the whole pattern of personal allowances. The years go by and we do not come to this matter. Nothing has been done about personal allowances generally since 1955 and nothing has been done about child relief since 1957. When can we expect to have these reforms considered and brought to the House?
I now turn to the proposal introduced in the new Clause in my name—on a very narrow point, as I explained. It deals with a particular grievance which I do not think any tapering arrangement would entirely do away with, that of earnings in the first year on leaving school. It is one which I think appeals to everyone's sense of fairness. There is no algebra about it, no proportions about it, and no complications about it. It is simple; we just ignore the child's earned income for the year when the child leaves school. That would appeal to people as being simple as well as fair.
The hon. Member for Brighouse and Spenborough (Mr. Shaw) said that he would have approved of this new Clause far more had it provided for a child giving up full-time extended education. The new Clause was intended to cover

1237
that. It certainly introduces the word "school" which I do not believe is to be found in the Income Tax Act. The Income Tax Act calls a school "an educational establishment". I have no objection to substituting the words "an educational establishment" for the word "school" in the new Clause if that would make it more comprehensive and more understandable. Certainly it was intended that whenever the child leaves school the earnings of the child should be ignored for tax purposes.
7.15 p.m.
Mr. Shaw: In fact the word "school" is mentioned in the Act, but among many other things. The Act says:
"receiving full-time instruction in a university, college. school or other educational establishment."
Mr. Houghton: That shows that there are not the difficulties about the word school "which the hon. Member appeared to find. I think we can agree that this new Clause is intended to cover school, academy, university or any other educational establishment.
The hon. Member for Heywood and Royton (Mr. Leavey) asked, what about children who might leave school on the day after the beginning of the tax year? The parent would then be able to ignore the child's earnings for the whole of the rest of the tax year. I do not think that marginal case need trouble the Committee. In all cases if a parent were arranging the affairs of the child suited best to his own tax liability the probability is that that would extend and not shorten the child's stay at school. In any case there are marginal anomalies, if one could call them that, in many other reliefs now provided for under the Income Tax Acts. They are there because it is far too much trouble to erect the apparatus necessary to restrain people from getting an undue advantage.
The hon. Member for Brighouse and Spenborough referred to the fact that a single woman getting married during the tax year still has her personal allowance for a full year set off against her earnings as a single woman. Then, the day after she marries, she is entitled to the special earned income relief for married women for the whole year to he set off against her earnings as a
1238
married woman. If she arranges to get married about the month of October and stays at work, she gets one full set of reliefs before the date of marriage and another, and reduced rate reliefs as well, after her marriage—both within the tax year. In addition, the husband gets a married man's allowance for the whole year. There is no doubt that a very large tax bounty is given to newly-weds who know the way around the Income Tax Act.
Also, a child born on the last day of the tax year qualifies the parent for a tax relief for the whole year. A great deal of the agitation in prospective fathers in the latter days of March and the early days of April is not only anxiety for the welfare of the mother and child, but rather wondering whether the child will be born before midnight on 5th April. If it is born one minute before midnight he gets tax relief on £100 according to the rate of tax he pays, and it may be £100 at 7s. 9d. He qualifies for Surtax relief as well where that would be appropriate. These anomalies are accepted as part of the rough and tumble of the Income Tax Act. Those who can arrange their affairs in a way to get the best advantage do not find that the Chancellor is churlish. He does not come to the House and propose anti-avoidance measures and things of that kind. I see no reason why it should be done in a case of this kind.
We are most disappointed with the reply by the Financial Secretary. It will be necessary to ask the Committee to take a little more notice of his unfavourable reply than by just bottling up our disappointment and passing on to the next business. It is too bad that the united wish of the Committee cannot prevail. What is the good of showing our schoolchildren around the Palace of Westminster and saying to our friends from colonial legislatures, "Here is the Mother of Parliaments. This is where power rests supreme in the hands of the people" and so on, when here we are wanting a very small concession but apparently the party system, the Whips and everything else combine to frustrate the will of Parliament?
I think the Financial Secretary has taken upon himself a much bigger responsibility than he should have. He

1239
is undermining the prestige of Parliament as well as rejecting a perfectly reasonable new Clause.

Division No. 205.]

AYES

[7.20 p.m.

Abse, Leo

Hamilton, William (West Fife)

Pavitt, Laurence

Ainsley, William

Harper, Joseph

Pearson, Arthur (Pontypridd)

Albu, Austen

Hart, Mrs. Judith

Peart, Frederick

Allaun, Frank (Salford, E.)

Hayman, F. H.

Pentland, Norman

Allen, Scholefield (Crewe)

Henderson, Rt.Hn.Arthur (RwlyRegis)

Price, J. T. (Westhoughton)

Baird, John

Hewitson, Capt. M.

Probert, Arthur

Bennett, J. (Glasgow, Bridgeton)

Holman, Percy

Proctor, W. T.

Benson, Sir George

Hooson, A. E.

Randall, Harry

Blackburn, F.

Houghton, Douglas

Rankin, John

Blyton, William

Howell, Denis (Small Heath)

Roberts, Albert (Normanton)

Boardman, H.

Hoy, James H.

Roberts, Coronwy (Caernarvon)

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

Hughes, Cledwyn (Anglesey)

Robertson, John (Paisley)

Bowles, Frank

Hughes, Emrys (S. Ayrshire)

Rodgers, W. T. (Stockton)

Boyden, James

Hunter, A. E.

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

Brockway, A. Fenner

Irvine, A. J. (Edge Hill)

Ross, William

Brougtiton, Dr. A. D. D.

Irving, Sydney (Darttord)

Short, Edward

Brown, Rt. Hon. George (Belper)

Jenkins, Roy (Stechford)

Silverman, Julius (Aston)

Brown, Thomas (Ince)

Johnson, Carol (Lewisham, S.)

Silverman, Sydney (Nelson)

Butler, Herbert (Hackney, C.)

Jones, Dan (Burnley)

Skeffington, Arthur

Callaghan, James

Jones, Jack (Rotherham)

Slater, Mrs. Harriet (Stoke, N.)

Castle, Mrs. Barbara

Jones, J. Idwal (Wrexham)

Slater, Joseph (Sedgefield)

Chapman, Donald

Jones, T. W. (Merioneth)

Smith, Ellis (Stoke, S.)

Collick, Percy

Kelley, Richard

Soskice, Rt. Hon. Sir Frank

Craddock, George (Bradford, S.)

Kenyon, Clifford

Spriggs, Leslie

Crossman, R. H. S.

Key, Rt. Hon. C. W.

Steele, Thomas

Cullen, Mrs. Alice

Lawson, George

Stewart, Michael (Fulham)

Darling, George

Ledger, Ron

Stonehouse, John

Davies, G. Elfed (Rhondda, E.)

Lee, Frederick (Newton)

Stones, William

Davies. Harold (Leek)

Lever, L. M. (Ardwick)

Strachey, Rt. Hon. John

Davies, S. O. (Merthyr)

Lewis, Arthur (West Ham, N.)

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

Deer, George

Loughlin, Charles

Swingler, Stephen

Delargy, Hugh

Mabon, Dr. J. Dickson

Taylor, Bernard (Mansfield)

Diamond, John

Mclnnes, James

Thornton, Ernest

Driberg, Tom

McKay, John (Wallsend)

Timmons, John

Ede, Rt. Hon. C.

McLeavy, Frank

Tomney, Frank

Edwards, Rt. Hon. Ness (Caerphilly)

MacPherson, Malcolm (Stirling)

Wade, Donald

Edwards, Robert (Bilston)

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

Wainwright, Edwin

Edwards, Walter (Stepney)

Manuel, Archie

Warbey, William

Evans, Albert

Mayhew, Christopher

Watkins, Tudor

Finch, Harold

Millan, Bruce

Weitzman, David

Fitch, Alan

Mitchison, G. R.

Wells, Percy (Faversham)

Fletcher, Eric

Monslow, Walter

Wells, William (Walsall, N.)

Forman, J. C.

Moody, A. S.

Willey, Frederick

Fraser, Thomas (Hamilton)

Morris, John

Williams, D. J. (Neath)

Gaitskell, Rt. Hon. Hugh

Moyle, Arthur

Williams, LI. (Abertillery)

Galpern, Sir Myer

Mulley, Frederick

Williams, W. T. (Warrington)

Ginsburg, David

Oliver, G. H.

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

Gordon Walker, Rt. Hon. P. C.

Oram, A. E.

Wilson, Rt. Hon. Harold (Huyton)

Gourlay, Harry

Oswald, Thomas

Woof, Robert

Grey, Charles

Owen, Will

Yates, Victor (Ladywood)

Griffiths, David (Rother Valley)

Padley, W. E.

Griffiths, Rt. Hon. James (Llanelly)

Pannell, Charles (Leeds, W.)

TELLERS FOR THE AYES:

Griffiths, W. (Exchange)

Pargiter, G. A.

Mr. Charles A. Howell and

Hale, Leslie (Oldham, W.)

Parker, John

Mr. Redhead.

Hall, Rt. Hn. Glenvil (Cotne Valley)

Parkin, B. T.

NOES

Agnew, Sir Peter

Bishop, F. P.

Carr, Robert (Mitcham)

Aitken, W. T.

Black, Sir Cyril

Chichester-Clark, R.

Allan, Robert (Paddington, S.)

Bourne-Arton, A.

Clark, Henry (Antrim, N.)

Allason, James

Box, Donald

Clarke, Brig. Terence(Portsmth, W.)

Arbuthnot, John

Boyd-Carpenter, Rt. Hon. John

Cleaver, Leonard

Ashton, Sir Hubert

Boyle, Sir Edward

Cole, Norman

Atkins, Humphrey

Braine, Bernard

Cooke, Robert

Barber, Anthony

Brewis, John

Cooper, A. E,

Barlow, Sir John

Brooke, Rt. Hon. Henry

Cordeaux, Lt.-Col. J. K.

Barter, John

Brooman-White, R.

Corfield, F. V.

Batsford, Brian

Brown, Alan (Tottenham)

Costain, A, P.

Beamish, Col. Sir Tufton

Browne, Percy (Torrington)

Coulson, Michael

Bell, Ronald

Bullard, Denys

Courtney, Cdr. Anthony

Berkeley, Humphry

Bullus, Wing Commander Eric

Craddock, Sir Beresford

Bidgood, John C.

Burden, F. A.

Crosthwaite-Eyre, Col. Sir Oliver

Biffen, John

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

Crowder, F. P.

Bingham, R. M.

Campbell, Gordon (Moray & Nairn)

Cunningham, Knox

Birch, Rt. Hon. Nigel

Carr, Compton (Barons Court)

Curran, Charles

Question put, That the Clause be read a Second time:—
The Committee divided: Ayes 160, Noes 223.

Currie, G. B. H.

Lancaster, Col. C. C.

Prior, J. M. L.

Dalkeith, Earl of

Langford-Holt, Sir John

Prior-Palmer, Brig. Sir Otho

Dance, James

Leather, E. H. C.

Profumo, Rt. Hon. John

d'Avigdor-Goldsmid, Sir Henry

Legge-Bourke, Sir Harry

Proudfoot, Wilfred

Deedes, W. F.

Lewis, Kenneth (Rutland)

Pym, Francis

de Ferranti, Basil

Litchfield, Capt. John

Quennell, Miss J. M.

Digby, Simon Wingfield

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

Rawlinson, Peter

Donaldson, Cmdr. C. E. M.

Lloyd, Rt. Hon. Selwyn (Wirral)

Redmayne, Rt. Hon. Martin

Drayson, G. B.

Loveys, Walter H.

Renton, David

du Cann, Edward

Lucas, Sir Jocelyn

Ridley, Hon. Nicholas

Elliot, Capt. Walter (Carshalton)

Lucas-Tooth, Sir Hugh

Rodgers, John (Sevenoaks)

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

McAdden, Stephen

Roots, William

Errington, Sir Eric

MacArthur, Ian

Russell, Ronald

Farey-Jones, F. W.

McLaren, Martin

Scott-Hopkins, James

Farr, John

McLaughlin, Mrs. Patricia

Shepherd, William

Finlay, Graeme

Maclay, Rt. Hon. John

Skeet, T. H. H.

Fisher, Nigel

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

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

Fraser, lan (Plymouth, Sutton)

Macleod, Rt. Hn. lain (Enfield, w.)

Smyth, Brig. Sir John (Norwood)

Freeth, Denzil

MacLeod, John (Ross & Cromarty)

Spearman, Sir Alexander

Galbraith, Hon. T. G. D.

Macmillan, Maurice (Halifax)

Stanley, Hon. Richard

Gammans, Lady

Macpherson, Niall (Dumfries)

Stevens, Geoffrey

Gilmour, Sir John

Maitland, Sir John

Steward, Harold (Stockport, S.)

Goodhart, Philip

Manningham-Buller, Rt. Hn. Sir R.

Stodart, J. A.

Goodhew, Victor

Markham, Major Sir Frank

Stoddart-Scott, Col. Sir Malcolm

Gower, Raymond

Marlowe, Anthony

Storey, Sir Samuel

Grant, Rt. Hon. William

Marshall, Douglas

Studholme, Sir Henry

Grant-Ferris, Wg. Cdr. R.

Marten, Neil

Tapsell, Peter

Green, Alan

Matthews, Gordon (Meriden)

Taylor, Sir Charles (Eastbourne)

Hall, John (Wycombe)

Maxwell-Hyslop, R. J.

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

Hamilton, Michael (Wellingborough)

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

Teeling, Sir William

Harris, Frederic (Croydon, N.W.)

Mills, Stratton

Temple, John M.

Harris, Reader (Heston)

Miscampbell, Norman

Thatcher, Mrs. Margaret

Harrison, Brian (Maidon)

Montgomery, Fergus

Thomas, Leslie (Canterbury)

Harvie Anderson, Miss

More, Jasper (Ludlow)

Thompson, Kenneth (Walton)

Hastings, Stephen

Morgan, William

Thornton-Kemsley, Sir Colin

Hay, John

Morrison, John

Tiley, Arthur (Bradford, W.)

Heald, Rt. Hon. Sir Lionel

Mott-Radclyffe, Sir Charles

Touche, Rt. Hon. Sir Gordon

Hinchingbrooke, Viscount

Nabarro, Gerald

Turner, Colin

Hirst, Geoffrey

Neave, Airey

Turton, Rt. Hon. R. H.

Hocking, Philip N.

Nicholson, Sir Godfrey

van Straubenzee, W. R.

Holland, Philip

Noble, Michael

Vane, W. M. F.

Hollingworth John

Nugent, Rt. Hon. Sir Richard

Vosper, Rt. Hon. Dennis

Hornby, R. P.

Oakshott, Sir Hendrie

Wakefield, Sir Wavell

Hornsby-Smith, Rt. Hon. Dame P.

Osborn, John (Hallam)

Walker, Peter

Howard, John (Southampton, Test)

Osborne, Sir Cyril (Louth)

Wells, John (Maidstone)

Hughes Hallett, Vice-Admiral John

Page, Graham (Crosby)

Williams, Dudley (Exeter)

Hughes-Young, Michael

Pannell, Norman (Kirkdale)

Williams, Paul (Sunderland, S.)

Hurd, Sir Anthony

Pearson, Frank (Clitheroe)

Wills, Sir Gerald (Bridgwater)

Hutchison, Michael Clark

Peel, John

Wilson, Geoffrey (Truro)

Irvine, Bryant Godman (Rye)

Percival, Ian

Wise, A. R.

Johnson, Eric (Blackley)

Pickthorn, Sir Kenneth

Wolrige-Gordon, Patrick

Johnson Smith, Geoffrey

Pilkington, Sir Richard

Worsley, Marcus

Jones, Rt. Hn. Aubrey (Hall Green)

Pitman, Sir James

Yates, William (The Wrekin)

Kerans, Cdr. J. S.

Pitt, Miss Edith

Kerby, Capt. Henry

Pott, Percivall

Kimball, Marcus

Powell, Rt. Hon. J. Enoch

TELLERS FOR THE NOES:

Lagden, Godfrey

Price, David (Eastleigh)

Mr. Whitelaw and Mr. Rees.

Lambton, Viscount

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

New Clause.—(INCREASE OF RELIEF IN RESPECT OF CHILDREN NOT OVER THE AGE OF ELEVEN.)
(1) In subsection (1) (a) of section two hundred and twelve of the Act of 1952 (amounts of relief in respect of children) for the reference to one hundred pounds there shall be substituted a reference to one hundred and ten pounds.
(2) This section shall not be deemed to have required any change in the amounts deducted

Division No. 206.]

AYES

[7.29 p.m.

Abse, Leo

Blyton, William

Callaghan, James

Ainsley, William

Boardman, H.

Castle, Mrs. Barbara

Albu, Austen

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

Chapman, Donald

Allaun, Frank (Salford, E.)

Bowles, Frank

Collick, Percy

Allen, Scholefield (Crewe)

Boyden, James

Craddock, George (Bradford, S.)

Baird, John

Brockway, A. Fenner

Crossman, R. H. S.

Bennett, J, (Glasgow, Bridgeton)

Broughton, Dr. A. D. D.

Cullen, Mrs. Alice

Benson, Sir George

Brown, Rt, Hon. George (Belper)

Darling, George

Blackburn, F.

Butler, Herbert (Hackney, C.)

Davies, G. Elfed (Rhondda, E.)

or repaid under section one hundred and fifty-seven (pay as you earn) of the Act of 1952 before the twenty-second day of June, nineteen hundred and sixty-two.—[Mr. Mitchison.]
Brought up, and read the First time.
Motion made, and Question put, That the Clause be read a Second time:—
The Committee divided: Ayes 158, Noes 228.

Davits, Harold (Leek)

Jones, Dan (Burnley)

Roberts, Albert (Normanton)

Davies, S. O. (Merthyr)

Jones, Jack (Rotherham)

Roberts, Goronwy (Caernarvon)

Deer, George

Jones, J. Idwal (Wrexham)

Robertson, John (Paisley)

Delargy, Hugh

Jones, T. W. (Merioneth)

Rodgers, W. T. (Stockton)

Diamond, John

Kelley, Richard

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

Driberg, Tom

Kenyon, Clifford

Ross, William

Ede, Rt. Hon. C.

Key, Rt. Hon. C. W.

Short, Edward

Edwards, Rt. Hon. Nest (Caerphilly)

Lawson, George

Silverman, Julius (Aston)

Edwards, Robert (Bilston)

Ledger, Ron

Silverman, Sydney (Nelson)

Edwards, Walter (Stepney)

Lee, Frederick (Newton)

Skeffington, Arthur

Evans, Albert

Lever, L. M. (Ardwick)

Slater, Mrs. Harriet (Stoke, N.)

Finch, Harold

Lewis, Arthur (West Ham, N.)

Slater, Joseph (Sedgefield)

Fitch, Alan

Loughlin, Charles

Smith, Ellis (Stoke, S.)

Fletcher, Eric

Mabon, Dr. J. Dickson

Soskice, Rt. Hon. Sir Frank

Forman, J. C.

Mclnnes, James

Spriggs, Leslie

Fraser, Thomas (Hamilton)

McKay, John (Wallsend)

Steele, Thomas

Gaitskell, Rt. Hon. Hugh

McLeavy, Frank

Stewart, Michael (Fulham)

Galpern, Sir Myer

MacPherson, Malcolm (Stirling)

Stonehouse, John

Ginsburg, David

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

Stones, William

Gordon Walker, Rt. Hon. P. C.

Manuel, Archie

Strachey, Rt. Hon. John

Gourlay, Harry

Mayhew, Christopher

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

Grey, Charles

Millan, Bruce

Swingler, Stephen

Griffiths, David (Rother Valley)

Mitchison, G. R.

Taylor, Bernard (Mansfield)

Griffiths, Rt. Hon. James (Llanelly)

Monslow, Walter

Thornton, Ernest

Griffiths, W. (Exchange)

Moody, A. S.

Timmons, John

Hale, Leslie (Oldham, W.)

Morris, John

Tomney, Frank

Hall, Rt. Hn. Glenvil (Colne Valley)

Moyle, Arthur

Wade, Donald

Hamilton, William (West Fife)

Mulley, Frederick

Wainwright, Edwin

Harper, Joseph

Oliver, G. H.

Warbey, William

Hart, Mrs. Judith

Oram, A. E.

Watkins, Tudor

Hayman, F. H.

Oswald, Thomas

Weitzman, David

Henderson, Rt. Hn. Arthur (Rwly Regis)

Owen, Will

Wells, Percy (Faversham)

Hewitson, Capt. M.

Padley, w. E.

Wells, William (Walsall, N.)

Holman, Percy

Pannell, Charles (Leeds, W.)

Willey, Frederick

Hooson, H. E.

Pargiter, G. A.

Williams, D. J. (Neath)

Houghton, Douglas

Parker, John

Williams, LI. (Abertillery)

Howell, Denis (Small Heath)

Parkin, B. T.

Williams, W. T. (Warrington)

Hoy, James H.

Pearson, Arthur (Pontypridd)

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

Hughes, Cledwyn (Anglesey)

Peart, Frederick

Wilson, Rt. Hon. Harold (Huyton)

Hughes, Emrys (S. Ayrshire)

Pentland, Norman

Woof, Robert

Hunter, A. E.

Price, J. T. (Weuthoughton)

Yates, Victor (Ladywood)

Irvine, A. J. (Edge Hill)

Probert, Arthur

Irving, Sydney (Dartford)

Proctor, W. T.

TELLERS FOR THE AYES:

Jenkins, Roy (Stechford)

Randall, Harry

Mr. Charles A. Howell and

Johnson, Carol (Lewisham, S.)

Rankin, John

Mr. Redhead.

NOES

Agnew, Sir Peter

Clark, William (Nottingham, S.)

Gilmour, Sir John

Aitken, W. T.

Clarke, Brig. Terence (Portsmth,W.)

Goodhart, Philip

Allan, Robert (Paddington, S.)

Cleaver, Leonard

Goodhew, Victor

Allason, James

Cole, Norman

Gower, Raymond

Arbuthnot, John

Cooke, Robert

Grant, Rt. Hon. William

Ashton, Sir Hubert

Cooper, A. E.

Grant-Ferris, Wg. Cdr. R.

Atkins, Humphrey

Cordeaux, Lt.-Col. J. K.

Green, Alan

Barber, Anthony

Corfield, F. V.

Hall, John (Wycombe)

Barlow, Sir John

Costain, A. P.

Hamilton, Michael (Wellingborough)

Barter, John

Coulson, Michael

Harris, Frederic (Croydon, N.W.)

Batsford, Brian

Courtney, Cdr. Anthony

Harris, Reader (Heston)

Beamish, Col. Sir Tufton

Craddock, Sir Beresford

Harrison, Brian (Maidon)

Bell, Ronald

Crosthwaite-Eyre, Col. Sir Oliver

Harvie Anderson, Miss

Berkeley, Humphry

Crowder, F. P.

Hastings, Stephen

Bidgood, John C.

Cunningham, Knox

Hay, John

Biffen, John

Curran, Charles

Heald, Rt. Hon. Sir Lionel

Bingham, R. M.

Currie, G. B. H.

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

Birch, Rt. Hon. Nigel

Dalkeith, Earl of

Hinchingbrooke, Viscount

Bishop, F. P.

Dance, James

Hirst, Geoffrey

Black, Sir Cyril

d' Avigdor-Goldsmid, Sir Henry

Hocking, Philip N.

Bourne-Arton, A.

Deedes, W. F.

Holland, Philip

Box, Donald

de Ferranti, Basil

Hollingworth, John

Boyd-Carpenter, Rt. Hon. John

Digby, Simon Wingfield

Hornby, R. P.

Boyle, Sir Edward

Donaldson, Cmdr. C. E. M.

Hornsby-Smith, Rt. Hon. Dame P.

Braine, Bernard

Drayson, G. B.

Howard, John (Southampton, Test)

Brewls, John

du Cann, Edward

Hughes Hallett, Vice-Admiral John

Brooke, Rt. Hon. Henry

Elliot, Capt. Walter (Carshalton)

Hughes-Young, Michael

Brooman-White, R.

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

Hurd, Sir Anthony

Brown, Alan (Tottenham)

Errington, Sir Eric

Hutchison, Michael Clark

Browne, Percy (Torrington)

Farey-Jones, F. W.

Irvine, Bryant Godman (Rye)

Bullus, Wing Commander Eric

Farr, John

Johnson, Eric (Blackley)

Burden, F. A.

Finlay, Graeme

Jones, Rt. Hn. Aubrey (Hall Green)

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

Fisher, Nigel

Kerans, Cdr. J, S.

Campbell, Cordon (Moray & Nairn)

Fraser, Ian (Plymouth, Sutton)

Kerby, Capt. Henry

Carr, Compton (Barons Court)

Freeth, Denzil

Kimball, Marcus

Carr, Robert (Mitcham)

Galbraith, Hon. T. G. D.

Lagden, Godfrey

Clarke, Henry (Antrim, N.)

Gammans, Lady

Lambton, Viscount

Lancaster, Col. C. G.

Noble, Michael

Spearman, Sir Alexander

Langford-Holt, Sir John

Nugent, Rt. Hon. Sir Richard

Stanley, Hon. Richard

Leather, E. H. C.

Oakshott, Sir Hendrie

Stevens, Geoffrey

Legge-Bourke, Sir Harry

Osborn, John (Hallam)

Steward, Harold (Stockport, S.)

Lewis, Kenneth (Rutland)

Osborne, Sir Cyril (Louth)

Stodart, J. A.

Litchfield, Capt. John

Page, Graham (Crosby)

Stoddart-Scott, Col. Sir Malcolm

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

Pannell, Norman (Kirkdale)

Storey, Sir Samuel

Lloyd, Rt. Hon. Selwyn (Wirral)

Partridge, E.

Studholme, Sir Henry

Loveys, Walter H.

Pearson, Frank (Clitheroe)

Tapsell, Peter

Lucas, Sir Jocelyn

Percival, Ian

Taylor, Sir Charles (Eastbourne)

Lucas-Tooth, Sir Hugh

Pickthorn, Sir Kenneth

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

McAdden, Stephen

Pilkington, Sir Richard

Teeling, Sir William

MacArthur, Ian

Pitman, Sir James

Temple, John M.

McLaren, Martin

Pitt, Miss Edith

Thatcher, Mrs. Margaret

McLaughlin, Mrs. Patricia

Pott, Percivall

Thomas, Leslie (Canterbury)

Maclay, Rt. Hon. John

Powell, Rt. Hon. J. Enoch

Thompson, Kenneth (Walton)

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

Price, David (Eastleigh)

Thornton-Kemsley, Sir Colin

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

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

Tiley, Arthur (Bradford, W.)

MacLeod, John (Ross & Cromarty)

Prior, J. M. L.

Touche, Rt. Hon. Sir Gordon

Macmillan, Maurice (Halifax)

Prior-Palmer, Brig. Sir Otho

Turner, Colin

Macpherson, Niall (Dumfries)

Profumo, Rt. Hon. John

Turton, Rt. Hon. R. H.

Maitland, Sir John

Proudfoot, Wilfred

van Straubenzee, W. R.

Manningham-Buller, Rt. Hn. Sir R.

Pym, Francis

Vane, W. M. F.

Markham, Major Sir Frank

Quennell, Miss J. M.

Vosper, Rt. Hon. Dennis

Marlowe, Anthony

Rawlinson, Peter

Wakefield, Sir Wavell

Marshall, Douglas

Redmayne, Rt. Hon. Martin

Walker, Peter

Marten, Nell

Rees, Hugh

Wells, John (Maidstone)

Matthews, Gordon (Meriden)

Renton, David

Whitelaw, William

Maxwell-Hyslop, R. J.

Ridley, Hon. Nicholas

Williams, Dudley (Exeter)

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

Roberts, Sir Peter (Heeley)

Williams, Paul (Sunderland, S.)

Mills, Stratton

Rodgers, John (Sevenoaks)

Wills, Sir Gerald (Bridgwater)

Miscampbell, Norman

Roots, William

Wilson, Geoffrey (Truro)

Montgomery, Fergus

Russell, Ronald

Wise, A. R.

More, Jasper (Ludlow)

Scott-Hopkins, James

Wolrige-Gordon, Patrick

Morgan, William

Seymour, Leslie

Worsley, Marcus

Morrison, John

Shaw, M.

Yates, William (The Wrekin)

Mott-Radclyffe, Sir Charles

Shepherd, William

Nabarro, Gerald

Skeet, T. H. H.

TELLERS FOR THE NOES:

Neave, Airey

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

Mr. Chichester-Clark and

Nicholson, Sir Godfrey

Smyth, Brig. Sir John (Norwood)

Mr. Peel.

New Clause.—(RELIEF IN RESPECT OF APPRENTICES AND TECHNICAL EDUCATION.)
(1) Section one hundred and forty of the Income Tax Act, 1952 (Payment for technical education), shall apply to a payment of wages made to an apprentice of the claimant, being an apprentice undergoing, whether in the place of business of the claimant or elsewhere, a course of instruction approved by the Commissioners after consultation with the Industrial Training Council, as it applies to such a payment as is mentioned in that section.
(2) Where by virtue of the said section one hundred and forty or of the said section as applied by the last foregoing subsection a payment may be deducted as an expense in computing the profits or gains of a trade for the purposes of income tax, there may be made in addition to that deduction a further deduction equal to one third of the first-mentioned deduction and the said section one hundred and forty shall apply to that further deduction as it applies to the first-mentioned deduction.
(3) This section shall not apply in relation to more than five persons in respect of whom the claimant makes such payments as are mentioned in the said section one hundred and forty or in subsection (1) of this section.
(4) Nothing in this section shall affect any deduction from the profits or gains of a trade which may be made for the purposes of income tax otherwise than by virtue of this section:
Provided that the same deduction shall not be made both by virtue of this section and otherwise.—[Mr. Albu.]
Brought up, and read the First time.
Mr. Austen Albu: I beg to move, That the Clause be read a Second time.
The Deputy-Chairman: With this Clause it would be convenient to discuss the new Clause —Professional payments to educational establishments.
Mr. Albu: That will be convenient, Sir Robert. This Clause deals with relief in respect of apprentices. Section 140 of the Income Tax Act, 1952, relates to payments made by a firm to a technical college or to a university on behalf of its employees, mainly apprentices. This is not the first time that this Clause has been moved but, as we know, it is sometimes a case of second or third time lucky. I am very glad to see the Parliamentary Secretary to the Ministry of Labour present tonight. The purpose of the Clause is two-fold. The first purpose is to put up the relief to one and one-third times the payment made. The second purpose is to extend the relief at the higher rate—that is to say, at one and one-third—to the wages paid to an apprentice undergoing an approved course of instruction, whether in a works or, with the increasing number of commercial apprentices, even in an office,

1247
In other words, whereas at present the relief is extended to payments made to technical colleges and universities—of course, there is ordinary relief for the ordinary wages—the Clause increases the amount of relief to one and one-third both for wages and for payments made to educational institutions.
We have limited the number of apprentices who will be covered in this way to five, the intention being to provide the greatest incentive to the small firms, where it is generally considered that the need is greatest. Nobody doubts our need for more skilled workers, and in the last few years continuing discussions have been going on both about the number of apprentices and the quality of apprentice training. On several occasions we have pressed the Government to take advantage of the bulge coming out of the schools so as to be able to train the greater number of skilled workers that most of us think will be needed in the future. The Ministry of Labour has been having discussions with both sides of industry about the form that apprenticeships should take.
In recent months there has been a slight rise in the overall numbers of those undergoing what are called apprenticeships or learnerships—although I do not know much about their quality—but it is really only proportionate to the rise in age groups. It is certainly not happening at a sufficiently fast rate to take account of the urgent needs of the country. The recent study made by the Ministry of Labour of the composition of the unemployed and all other existing information shows that there is still a great need for more skilled workers in many trades.
But this is not merely the current situation. Most of us believe that, with the changing composition of industry, the need to use our technological lead as other countries develop their own industries, and the need to increase our exports, especially of capital goods, in highly scientific fields, the number of skilled workers required will be greater than can be measured merely by extrapolating the present trend. This was the mistake made by the Committee on Scientific Manpower, and this mistake is also made by those who attempt to
1248
discover what will be the need for skilled workers. The trend will rise very rapidly in the next few years.
It is generally believed that it is the small firms which are not doing their share, and it is therefore slightly surprising to find, in the recent report published by the Engineering Employers' Federation on Recruitment and Training of Young Persons in the Engineering Industry—where they have divided the ratio of apprentices to skilled workers according to the size of the firm—that there is an inverse ratio between the size of the firm and the number of apprentices. The ratio of apprentices to skilled men is highest in the small firms and becomes progressively lower as the firms become bigger.
The Parliamentary Secretary to the Ministry of Labour (Mr. Alan Green)indicated assent.
Mr. Albu: I see that the Parliamentary Secretary nods his head. That is a surprising result—so surprising that I suspect that the hon. Gentleman is as suspicious of the figures as I am. I suspect that the real truth is that in the small firms many apprentices are receiving little or no training, and are in fact being used merely as cheap labour. Certainly the large engineering firms which have elaborate training schemes, with training workshops, proper instructors and proper courses, have said in recent years that they are doing as much as they possibly can do to train skilled workers, and that they lose these skilled workers to the smaller firms, which do not provide the same amount of training. I suspect that the reason for these figures is that the larger firms provide very good training and produce very highly skilled workers, whereas the training received in many smaller firms is minimal.
The same report makes it clear that only just over one-third of the workers in the appropriate age group—that is to say, 16—are attending a works school in a proper training workshop. It is generally agreed that in engineering and many similar industries it is essential to obtain as many apprentices as possible for initial training in a workshop, under properly qualified instructors, if the subsequent apprentice training is to be really good. It is the only way in which

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good habits of work can be learned—quite apart from the theoretical instruction—and it provides the best and most up-to-date method of ensuring that the processes carried on in the trade can be learned.
7.45 p.m.
I am certain that the early months which a young man spends in industry very much determine his attitude to work for the rest of his life, apart altogether from the quality and skill which he acquires. This is also shown in the report. There is a very high level of wastages from apprenticeships, especially in the early months. The reason given in the report is not that the apprentices are generally unsuitable, but that they become "browned-off";they do not know where they are going, and do not get any lead—and they probably get no instruction.
This is a serious matter. It is all very well to have a large number of people claiming that they are receiving apprenticeships; but many of these figures are based on what the small employers or the apprentices themselves say. An apprentice may say, "I am serving an apprenticeship", when it is probably not an apprenticeship at all. If the figures are also inflated by a high degree of wastage—or, rather, if the higher figures are deflated by a high degree of wastage—we are losing, and the total number coming out at the end will be less than anticipated.
Small firms may not be able to afford proper training workshops or works schools, and they certainly cannot afford qualified instructors, but they should be encouraged to use the training workshops in Ministry of Labour training centres and training colleges where these are provided. I am talking not of the pre-apprenticeship period but of the first months or the first year of the apprenticeship. The unions are becoming increasingly aware of the fact that this is part of the apprenticeship.
I heard a very interesting discussion on the subject this year, at Folkestone, by the National Committee of the Amalgamated Engineering Union. That union is by no means the least militant, or the most pliable, but it is becoming extremely flexible in its attitude towards apprenticeships, and now realises that with the changing pattern of technologi-
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cal needs it may be necessary also to change the pattern of apprenticeships. It is prepared to recognise that the time spent in training in a workshop outside the firm can be counted towards the apprenticeship. In passing, before I am called to order, I should say that this will need a larger number of trained craft instructors than now exist.
The new Clause would allow relief in respect of apprentices in technical education only for a course of instruction approved by the Commissioners after consultation with the Industrial Training Council. I inserted that provision because this Council is the best that there is at the moment. If it were given this function it might well develop some real authority. This would enable the Government not only to increase the number of apprenticeships because of the incentive given, but also to improve the quality of apprentice training because the relief would not be given unless the training were approved.
I consider this matter to be extremely urgent. Although in this country we have some outstanding apprenticeship schemes, and some firms have done outstanding work, generally speaking the level is probably inferior to that in most European countries. At the recent conference on the subject held by the British Association for Commercial and Industrial Education it was almost unanimously agreed that there was a need for some body to control the standards of apprentice training. It was felt that it could no longer be left to individual firms to call something a training and aprenticeship which in fact covered no systematic or formal instruction whatsoever.
This matter will become increasingly important especially if, in the end, we enter the European Economic Community. One of the aims of the Community is to try to bring about some generally agreed principles for occupational training, presumably in aid of those clauses in the Treaty referring to the free movement of labour;but also, I think, because the Community realises that if the European economy is to continue there is a need for industrial training. The Commissioners have put forward proposals for general principles and a common policy for occupational training which I am sure is being studied

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by the Ministry. It certainly should be. I believe it will be found necessary far us to improve our methods.
I have no doubt that the Financial Secretary will talk about the difficulties connected with this proposed new Clause. For example, for what period are the payments to be made; for how many years? I do not wish to commit myself in what is a highly controversial argument. But perhaps I may go so far as to say that I am prepared to see the relief given for three years without this in any way committing either side of industry to what should be the full period of apprentice training. In my opinion the period should be three years. This could be done in another way. But it should be a period of an approved form of training—approved by the Industrial Training Council, or same other body if the Minister can find some other better body to do it—or a period of training agreed between the trade unions and industry. It could be a period in which a man is coming up to his full rate of pay. I do not think we need argue about what it is called.
Any such period of training would have to start with a period in a works school or training workshop under properly qualified inspectors and continue with approved in-works periods up to a total of three years at the minimum. There might be other ways of doing it but there would not be much difficulty in defining that from the point of view of the Commissioners. There may be objections to the principle of allowing relief at more than 100 per cent. of expenditure, but that is not new. The investment allowance does this already and I was interested to see recently that the Canadian Government propose to allow one and one-third relief on sums spent on research by Canadian industry. I do not think that the Canadian Government have gone so far as to put that on the Statute Book, but I understand that it is a proposal. So the idea of allowing more than 100 per cent. relief as a subsidy or incentive to people to do things we want them to do is not new.
What would it cost? This is always a difficult question for the layman to work out. The amount cannot be very great. I suggest that about £2 million is probably near the mark. I should think that
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it would be well worth that. Not only would there be an incentive to increase the number of apprentices, but, what is equally or perhaps more important, it would provide an incentive for better apprenticeship schemes in those firms, mainly the smaller firms, which so far do not have these schemes. It would not have much effect on the big firms which have good schemes, but it would greatly improve the quality because there would be less wastage because of people being half-trained.
This type of relief is likely to provide a reward for the economy as a whole which would be much greater than the cost to the taxpayer and it is a type of relief which I think the Government should consider seriously. The idea has been proposed two or three times before. My experience is that if one proposes something on two or three occasions, eventually one may win. I hope that on this occasion the Financial Secretary will be more forthcoming than on the last occasion.
Mr. Geoffrey Stevens: I do not know anyone who has been a more consistent advocate of more technical and scientific education, both inside this Chamber and outside, than the hon. Member for Edmonton (Mr. Albu). I doubt whether the hon. Gentleman is satisfied with the progress made in the last few years. There has been substantial progress, but I doubt whether he is satisfied, so I would remind him of the old adage that
"Constant dripping hollows out a stone."
I am not suggesting that any of my right hon. and hon. Friends on the Front Bench bear the slightest resemblance to anything of that sort. But if the hon. Member is not satisfied I hope that he will not relax his efforts.
I cannot find it in my heart to disagree with anything he has said save for one thing. The hon. Gentleman did what I should have thought impossible. He tried to give some estimate of the cost which would be involved were this new Clause accepted. I have no more knowledge than he has on the subject, but had I been the hon. Gentleman I do not think I would have ventured a figure, because it is extremely difficult.
Mr. Albu: There is no magic in the figure I gave. I took the number of

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apprentices which the Ministry of Labour reports to exist and what I thought might, roughly, be their wages, and I averaged it out over three years and from there on the hon. Gentleman can work out the rest.
Mr. Stevens: I accept that. But surely the whole object of the new Clause is to increase the number of apprentices and so automatically the cost would increase as well.
I suggest that the cost of implementing the provisions in this new Clause would be very much greater than the cost involved by the acceptance of the new Clause—Professional Payments to Educational Establishments—which we are discussing with the hon. Gentleman's new Clause. Whereas his Clause extends the payment of wages to apprentices, the new Clause to which I have referred would make a very modest extension of the existing Section 140 of the Income Tax Act, 1952.
As the hon. Gentleman has said, it deals with the allowances for tax purposes on payments made by a trader to a university, college or other establishments for technical training in the trade to which the trader belongs haying established proof for the purposes of Section 140 by the Minister of Education. This is not the first time that this subject has been debated. Indeed, an Amendment to the Finance Bill No. 2 which became the Finance Act of 1946, was moved by Lord Gridley, then Sir Arnold Gridley, the Member for Stockport, to add the words, "or profession" after the word "trade" wherever the word "trade" appeared. Lord Gridley made a short speech and was followed by my hon. Friend the Member for Ayr (Sir T. Moore) who made a much longer speech. The late Lord Dalton, the then Chancellor, wound up. He said he was not prepared to advise the Committee to accept the addition of the words "or profession", but he did not reject the principle. He said that this concession was a new idea and he thought it would be wise to go step by step and stage by stage and let the concession apply to payments by traders in the first instance and see how it worked out. He did not exclude the possibility of extending it to the professions at a later date. It is sixteen years since then—a very much later date. The point made by
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Lord Gridley and my hon. Friend the Member for Ayr was to ask why this distinction was made between traders and professional people.
8.0 p.m.
Is it a good thing to increase the number of traders and a bad thing to increase the numbers in the professions? Do we not need more engineers and technicians? I should have thought so. There seems to be no logical reason for this distinction. There may well have been a practical one, and Lord Dalton suggested that we should take this matter stage by stage. I believe that the Section has worked very well, and I see no reason why we should not now consider extending it to the professions.
The hon. Member for Edmonton was venturesome in hazarding a figure for the cost of his new Clause. I shall not hazard a guess at the cost of mine in adding the words "or professions", except to say that I am sure that it would be trifling, because the educational establishments concerned must be approved for that purpose by the Minister of Education and, consequently, the number of such colleges and institutions would be limited. Since it seems such a dogicial thing to do and since it is sixteen years since the Committee agreed that it should go forward stage by stage, I hope that my hon. Friend the Financial Secretary will be able to say that he is agreeable to my proposal.
Mr. Harold Finch: The purpose of the Amendment is to give some added inducement to the small employer to do something more than he is doing now by way of providing apprenticeship schemes and training young people in skilled occupations. We need more technicians and craftsmen if we are to be successful in competition with other countries. We are short of them, and I am sure that the Committee will recognise that the position is becoming in some respects very serious. We are falling behind other nations in producing conditions which will enable the country through its technicians and craftsmen to meet present-day competition.
Many of the larger firms have been doing a great deal in training young people. They have the resources and

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are able to do the job. They have their own training schemes and they train many young men and women for technical work, but the smaller employer is at a serious disadvantage. Many small employers normally find it difficult to carry unproductive labour costs, and the majority of firms employ fewer than 100 people. This is the trouble when we consider apprenticeship schemes in this country, and the purpose of the Amendment is to give these people additional help.
The Government issue White Papers and give instructions to the Ministry of Labour to encourage apprenticeship schemes, but here is a great opportunity to do something tangible to help the smaller employers to train young people. While the costs incurred by a company in training labour can be considered a long-term investment, many small firms have not the wherewithal for this purpose, and the cost involved is heaviest during the first twelve months when young people have to attend a technical college or an institute. The small employer is unable to meet these costs and he is discouraged by the seeming lack of enthusiasm for apprenticeship schemes.
We must realise that apprenticeship schemes depend upon the employer. It is he and not the education authorities who is responsible for the apprentices. It is wrong to put an apprentice on full-time production work, inasmuch as by so doing he is not receiving instruction in the wider aspects of the vocation for which he is trained. But the employer loses his services in these apprenticeship schemes.
In some areas, such as Treforest, there are group apprenticeship schemes under which an employer will release his apprentice to go to another employer for a time to gain additional knowledge and experience, but the first employer loses the advantage of the training in those circumstances. In South Wales, many large employers such as the Steel Company of Wales, Richard Thomas &Baldwins and the nationalised coal industry have their own training schemes, and they spend a great deal of money on the education of their apprentices in the Cardiff School of Technology. The small employer cannot do this, and yet the future of the appren-
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tice depends to a large extent on what the small employer can do for him.
I notice that the Western Mail recently reported a meeting of the Welsh Board of Industry where it was stated that although 4,200 apprentices were taken on in Wales in 1961, an increase of nearly 25 per cent. over 1960, the absorption of young people into industry was still 10 per cent. below the national average. Here again this is largely due to the difficulties of the smaller employer. The Western Mail pointed out in a leading article that any incentive that in any way would help the small employer to adopt these apprenticeship schemes would be very valuable to the country and to the employer himself.
Day releases are of some assistance to young apprentices, but they are not entirely satisfactory. Some apprentices work an afternoon shift or a night shift and attend evening classes. My hon. Friend the Member for Edmonton said that young men get fed up with it. There is too much for them to do and they are discouraged. We also make use of block releases and sandwich courses, but these are costly.
The Amendment seeks to give these employers some help. I hope that the Government will assist in this matter. Whether they do it strictly on the lines of the Amendment is neither here nor there. They may well have something else in their minds. It is our purpose to improve apprenticeship schemes and to put the country in a better competitive position. We are falling behind, and the difficulty arises with the small employer. The costs are too much for him, but if he is given an incentive tonight through action on the part of the Chancellor he will be encouraged to give greater help to young apprentices who desire to take up these schemes but who are now barred in many cases because their employer is not in a financial position to help them.
Mr. B. T. Parkin: I would not presume to try to add to the forceful arguments advanced by my hon. Friend the Member for Edmonton (Mr. Albu), who has put so much time and skill into his work on this subject, here and outside, but before the Minister replies I should like to call his attention to one particular aspect of the problem, which I hope will interest him,

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and which is extremely important. It is the London aspect.
There was a time when parents seeking to indenture their children as apprentices would, probably wisely, seek out a small employer. Even the one-man business could in those days have offered the best training a young boy could hope for. The difficulty in the London area now is to find small firms in small industries which will offer the same kind of opening. The Ministry of Labour does first-class work in London, and its officials give the best advice to parents seeking it, but it is natural that they should know most about the biggest firms that have the best schemes.
There is developing in London the strange phenomenon of small, skilled industries being squeezed out—a sort of Gresham's Law operation—because they do not offer opportunities to children leaving school to learn some of the very important crafts and skills that ought to be preserved. When the small, skilled industries are squeezed out they are replaced by industries offering less prospect to skill, and that we cannot afford in London.
In the big overcrowded cities there is already enough demand to put the severest strain on our capacity to find dwelling accommodation for those earning modest wages in semi-skilled and unskilled service occupations. We cannot afford a layer of surplus fat in the form of more semi-skilled and unskilled industries setting up in such factories as survive even with the strictest supervision of the planning authorities; the sort of industrial undertakings in the big cities of which no one ought to be proud, offering, as they do, a refuge to the type of people who ought, with all the advantages that the big cities can offer, to be doing better.
All the big cities, and particularly London, can offer technical training of every possible variety. Whatever one wants to learn one has, in London, only to make a telephone call to find some class to join, some way of getting the book learning about the skills of all these industries. Unfortunately, to get an apprenticeship where one can put that learning to practical application in day-to-day work is, indeed a rare thing.
I hope that the Minister will consider that aspect when he replies. I know
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that his right hon. Friend the Minister of Labour will confirm what I say, and I hope that what I say will be accepted as an additional argument for seeking any device that can be found, including this one, to attract the smaller employer into going to the Ministry of Labour and making contacts with parents. There, again, it is so much more difficult for the small man in London to get suitable apprentices. London is not a village or small town where everyone knows of a small business that can give training in certain skills. It is a question of getting parents to meet employers and employers to meet potential apprentices. A small push in that direction might save these small but important industries that one would much rather have in London than the agglomeration of unskilled work in slum factories.
8.15 p.m.
Mr. Cledwyn Hughes: Notwithstanding the admirable speech of my hon. Friend the Member for Paddington, North (Mr. Parkin), I venture to say that this new Clause is of greater significance to Wales than to any other part of the United Kingdom, as I shall seek to show.
Over a wide area of mid-Wales we have the problem of depopulation, and in other parts of the Principality we have the problem of high and chronic unemployment. I refer to those two major problems only in passing—we have debated them many times in the House, and will return to them again in the Welsh Grand Committee tomorrow morning when we discuss rural Wales—but the reference is relevant, because where there is a shortage of work there are very few facilities for apprenticeships.
That is why such a large proportion of our boy and girl school leavers have to leave Wales and their own localities and go to the industrial conurbations of England to become apprenticed or get other training. That is a process that we want to stop; it has gone on for far too long.
In a Parliamentary Answer on 21st May, the Minister of Labour gave some very alarming details of the situation in Wales. Of the number leaving school between December, 1961, and—presumably—21st May, only 19 per cent. of

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boys and 4 per cent, of girls obtained apprenticeships. As the national average is 35 per cent. for boys and 7 per cent. for girls, our average is just above half the national average. The Government should take some positive, constructive steps to ensure that in Wales generally and particularly in Mid-Wales and North Wales, a greater number of these boys and girls have the opportunity of apprenticing themselves.
The education authorities in Wales have done a good job; they have made adequate provision. As my hon. Friend the Member for Bedwellty (Mr. Finch) said, there is ample provision in South Wales. In North Wales, Flintshire and Denbighshire we have excellent technical colleges, but the industries there are small—outside Wrexham and industrial Flintshire—very successful but very small. Many of the industries I have in mind are peculiarly suitable for apprenticeship purposes. The Report of the Rural Industries Bureau for 1959 instances the kind of small industries that have in recent years been built up in the rural areas. It states:
"It might surprise some that amongst the small producers with whom the Bureau has been in touch, and has helped, are manufacturers of dentists' chairs, glass fibre kitchen sinks, scientific instruments, television masts and aerials, surgical appliances for spastics, plastic flooring, lithographic printing machines, and many hundreds of other products equally as diverse and unrelated."
These new industries are being built up in the rural areas and are making an important contribution, but because of the lack of means, the industrialists concerned are not able to take apprentices as they would wish. Therefore, I welcome the proposed new Clause. I am not suggesting that it would solve the entire problem. It may need redrafting but, nevertheless, it would help to increase the number of apprentices in the area.
Educational opportunities are as good in Wales as anywhere else. The percentage of our grammar school leavers entering university is, with Scotland, the highest in the United Kingdom. There is a need for some positive Government action to assist us and the proposed new Clause may be the way in which we can be most effectively helped. I hope that the Financial Secretary will
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accept it, or at least suggest an alternative which will be an inducement and an encouragement to employees.
Sir E. Boyle: This has been an interesting debate. It is always a pleasure to hear the hon. Member for Edmonton (Mr. Albu) speak on questions dealing with technical education and industrial training and there were moments in the discussion when I felt that I had strayed into a Ministry of Labour Supply day and I am sure that the Committee is extremely glad that we have had the company of the Parliamentary Secretary to the Ministry of Labour throughout the debate on this subject.
The intention of the new Clause in the name of the hon. Member for Edmonton —on which I shall spend the greater part of my remarks although I shall later come to the matters being discussed with it—is to give, through the taxation system, a Government subsidy in aid of the non-productive wages paid to apprentices who are released to undergo formal instruction, and also the costs of other training.
This is an important subject and it is the first time we have discussed it since the Finance Bill of 1959. It might be helpful and, I hope, in order, if I set the scene for my reply by first saying something about the existing tax treatment of expenditure associated with apprenticeship schemes. This treatment is really generous although I realise that there are a certain number of misconceptions prevalent about it. As our tax code now stands, both the Revenue expenditure and capital outlay which a trader may incur in connection with apprentice training schemes receive some recognition.
Revenue expenditure is deductible as a trading expense in the ordinary way and capital outlay on the provision of assets which the trader uses for training purposes can be the subject of a claim for the ordinary scheme of capital allowances appropriate to the asset in question. That means, first, that the wages paid to apprentices are deductible in full, notwithstanding that part of the wages may relate to periods when the apprentice has been released from productive work to attend classes at technical college or institution.

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Secondly, the tuition fees which traders pay to an institution which these juveniles attend for further education are also deductible, just like any other revenue expenditure on welfare. I am told that if a trader himself organises courses of instruction on his own factory premises, the remuneration of the instructors can be deducted as well. Thirdly, the assets which the trader provides in connection with a scheme of his own for the training of apprentices and semi-skilled manual workers will generally rank as industrial assets. An extension to his factory to afford accommodation for training would rank as an industrial building and the movable equipment would rank as plant and machinery. Thus he can claim allowances in respect of all of this outlay.
In addition, there is special relief, to which reference has already been made, in respect of payments for technical education conferred by Section 140 of the 1952 Income Tax Act. That Section was intended to give a trader a tax deduction for a donation to an approved technical college to support the giving of technical education in some subject relating to his trade in any case where no such deduction would otherwise have been due.
All that added together seems to me quite reasonably generous tax treatment. I am tempted to anticipate a rather obvious question. I have not made a study of other countries in Western Europe but I can assure hon. Members that the points I have mentioned must rank as being reasonably generous tax treatment.
Mr. G. R. Mitchison: Supposing there is, as we were told there was in Wales, an apprenticeship scheme within an industry. Do the benefits which the Financial Secretary mentioned accrue to someone who is a partner or takes part in such a scheme—such as an employee—irrespective of whether the instruction is given in his own place of employment or somewhere else? Are the firms participating treated as a unit for tax purposes?
Sir E. Boyle: I think that that was implicit in what I was saying but I will gladly consider the matter further. I should have thought, however, that that
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was implicit from the remarks I have made.
One idea that has got around is that the Inland Revenue imposes some restriction on the allowance for tax purposes of apprentices' wages. There is no truth in this. The wages of apprentices rank as a deduction for Income Tax and Profits Tax. Admittedly it is sometimes said that this allowance covers only about a half of the wages paid in respect of the hours during which an apprentice is released for formal instruction. The point is that the wages paid in respect of these hours are wages paid for hours which add nothing to current production and the expenditure to some extent must be paid out of the trader's own pocket, even after the tax allowances have been taken into account. That does not mean, as some have suggested—and this is not true—that only a half of that wage payment is accepted by the Revenue as business expenditure, for it is all accepted.
A second misconception is prevalent —that it is part of the function of Section 140 of the Act to give a deduction when the trader pays tuition fees for the instruction of his apprentices. That is indeed a misconception, because Section 140 does not come into the picture at that point. It is really a very limited purpose which I have described —simply that the fees would be deductible in the normal way as ordinary business expenses.
I want now seriously to consider the objectives which lie behind the proposed new Clause and I must make a few comments on the drafting, because, with great respect to hon. Gentlemen opposite, its drafting does not come up to the extremely high standard of the drafting that we have had on Amendments to the Bill. Subsection (1) of the draft new Clause states:
"Section one hundred and forty of the…Act …shall apply to a payment of wages made to an apprentice …undergoing…a course of instruction …as it applies to such a payment as is mentioned in that section."
The whole point of Section 140 is that it deals with donations which would not be deductible under the general rule for computing trade profits whereas apprentices' wages are so deductible. Thus subsection (1) would not achieve anything at all and the same objection

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affects subsection (2). I do not wish to be niggardly about its drafting, but the closing words of subsection (2) can only mean that the Clause, as it were, chases its own tail. The last three or four lines, taken on their face value, would seem to state that if the bonus of one-third is to be treated as it is within Section 140, the proposed new Clause would give a further bonus of one-ninth, one-twenty-seventh, and so on.
It is some years since I took the school certificate, but, if I remember rightly, the sum of the convergent series one-third, one-ninth, one-twenty-seventh, and so on, is one-half, and that, for the sum to infinity of a geometrical progression, the formula is R over 1 minus R. Perhaps that was not the intention of hon. Members in framing the subsection. There are some obscurities in subsection (3) with which I shall not trouble. It seems to me that the wage payments, which are ostensibly the chief concern of the new Clause, would fall completely outside it. The only effect of the Clause would be to increase by a bonus addition, which hon. Members in the law would enjoy calculating for themselves, the deduction already given under Section 140 for donations to approved technical colleges and other institutions. I do not think the Committee would be well advised to accept this suggestion.
The deduction allowed in Section 140 cases is in itself anomalous in that it is at variance with the general principles regarding the taxation of business profits. It is an exception to the general principle that, to be deductible in computing trading profits, expenditure should possess a direct connection with the process of earning those profits. I do not suggest for a moment that we should here and now do away with Section 140, but I do not believe it can be sensible to single out this fairly limited deduction in Section 140 for a bonus addition.
8.30 p.m.
I should now like to comment on what I believe is the real intention behind the Clause—[HON. MEMBERS: "Hear, hear."] —I apologise for being so long. I think that it was reasonable to point out what is already done in this tax field and then to point out that the new Clause as drafted did not carry out what I believe is the intention of hon. Members opposite.
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I come to the question as to whether we should try to contrive through the tax system some kind of subsidy in connection with apprenticeship training. The whole question of apprenticeship training was fully discussed in the debate on 31st May last year. As has been said tonight, considerable progress has been made since that date, and mare boys and girls obtained apprenticeships and learnerships in 1961 than ever before. The numbers were 115,000 boys, which is 37·9 per cent. of all boys entering employment, and 20,500 girls, which is 7·2 per cent. of all girls entering employment. The figures for boys are a record both in numbers and as a percentage. The percentage for girls has been beaten before, but I am told that the overall figure for boys and girls is a record. The number of boys is 11 per cent. up on 1960 and the number of girls is 3 per cent. up. What is more, this increase is being maintained. In the first four months of 1960, the number of boys who obtained apprenticeships or learnerships was 39,000 as against 36,900 in the first six months of 1961, and the number of girls was 7,900 as against 7,300 in the first six months of 1961.
I am sure that no one in the Committee would wish to dispute that investment in skilled labour—investment in human beings, one might say—is even more important than adequate investment in machines, but, none the less, I do not believe it would be right to use the tax system as a means of giving a Government subsidy towards the cost of apprentice training. Apart from the principle involved, there would be serious difficulties in singling out expenditure on apprenticeship training as the subject of a special taxation bonus. A wage payment to an apprentice in respect of the hours during which he is released from productive work for instruction is, no doubt, extremely desirable from the economic and social points of view—I do not dispute that—but it is by no means the only form of payment which could be said to be desirable socially but which makes no direct contribution, or less than the normal contribution, to output.
I do not believe that, if we agreed to this proposal, it would stop there. I have no doubt that a similar claim would sooner or later be put forward in respect of a number of other things. Let

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me mention two or three. For example, sick pay to employees absent through the consequences of illness or injury; compensation payments to wage earners displaced by a re-organisation scheme;or—surely hon. Members will agree that this is a fair example—the wages of disabled persons whose productivity is less than that of a person without a similar handicap. I am sure that all these are cases for which a strong social claim could he made.
Even to give effect to the present intention of hon. Members opposite would cost a good deal more. I must ask the Committee to excuse me from giving a precise figure, because this is a difficult matter. I thought, however, that the figure given by the hon. Member for Edmonton was a good deal too low.
Mr. Albu: The hon. Gentleman is talking about the number of reliefs which might be given for good social reasons, but the purpose of my Clause is to provide an incentive for apprenticeships. Is he suggesting that tax relief should never be used as an incentive? Surely, an investment allowance is not given on social grounds.
Sir E. Boyle: First, one has to consider investment in plant and machinery. Here, we are dealing with investment in human beings. It would not be possible to single out expenditure on apprenticeship training on economic and social grounds and not expect analogous claims to be made. I am sure that they would be made. I am not even sure that we could stop where I said that we could stop just now.
If we once started using taxation as a method of giving a hidden Government subsidy, there would be considerable pressure on the Government, first to grant tax reliefs for various forms of expenditure for which a good social case could be made but which did not rank for deduction under the ordinary rules, and, secondly, to give a fixed reduction for desirable expenditure which already ranked for tax relief.
The Government realise the need to stimulate the training of apprentices, and in spite of the encouraging figures I have quoted this is certainly not a subject about which any of us should be complacent. None of us, still less a Member like myself, who represents a
1266
Midlands constituency, can be in any doubt about the increasing need for skilled workers. Quite apart from technical education, industrial training also is a subject of major importance, and it will clearly be one to which the National Economic Development Council will give attention. My right hon. and learned Friend the Chancellor of the Exchequer referred to this possibility in his Budget speech, when he said:
"The Council will be considering matters under the direct control of Government …and matters which will more directly concern both sides of industry, for example, the recruitment and training of labour, restrictive practices, efficiency in management, the better use of skilled manpower."—[OFFICIAL REPORT, 9th April, 1962;Vol. 657, c. 969.]
Mr. C. Hughes: The hon. Gentleman has not directed his attention to the deplorable state of affairs in Wales. Where such a state of affairs exists, some special inducement should be given.
Sir E. Boyle: I cannot answer in detail about Wales, but I am bound to say that of all types of special inducement, discriminatory tax relief, so to speak—one that discriminates between one area and another—is about the worst. That adds to all the arguments I have used. It is one thing to have the Local Employment Act—quite another to use the taxation system for that sort of purpose.
Mr. C. Hughes: It would not be discriminating between one area and another but between one country and another.
Sir E. Boyle: These are points of terminology. If we deal with that, we shall make slow progress with the Bill. However desirable it may be to get more skilled workers, I cannot believe that the right way to solving the problem lies in giving special fiscal concessions which are hard to justify in principle and which, in practice, would be inequitable and difficult to work out. It would be invidious and against general confidence in the broad fairness of our taxation system to attempt to pick and choose between different types of socially desirable expenditures on human beings. Taking into account the unsatisfactory nature of the Clause of the hon. Member for Edmonton in itself, and also the difficulties both of principle and practice to which I have drawn attention, I must ask the Committee not to approve it.

1267
I want to say now a word about the other Clause we are discussing. I can be a good deal briefer about this one. It seeks to give the taxpayer, relying on a provision assessable under Case II of Schedule D, the same relief in respect of gifts for technical education as is enjoyed by traders under provisions introduced in 1946 by the late Lord Dalton. Those provisions were deliberately included, as my hon. Friend the Member for Nottingham, South (Mr. W. Clark) admitted, in 1946. I have already stated that Section 140 is, in a sense, anomalous. It is at variance with the general principles governing the taxation of trading profits. This anomaly was created in 1946 in the national interest in order to encourage ever-increasing productivity.
I do not believe that we should be wise to enlarge Section 140 in the way which my hon. Friend suggested. I can say that the particular problem to which my hon. Friend drew attention could, in some circumstances, be met in another way, at any rate to some extent, if the institution receiving a payment could be set up as a charity. Individuals and members of partnerships making annual payments to it under its covenant would be able to get effective Income Tax relief for those payments. Looking back on the legislation as a whole, I do not think that it would be wise at this time to extend the ambit of Section 140 in the way my hon. Friend suggested.
Mr. Mitchison: The finale was magnificent. The idea of the Law Society as a charity is attractive but somewhat new. The speech as a whole was, if the Financial Secretary will allow me to say so with all respect to him, in the worst Treasury tone.
This Clause was discussed and criticised on almost exactly the same grounds in 1959. We did not alter it because, after all, what we really wanted to raise was a substantial question. We are bold enough to think that it does raise a substantial question.
There are two points. The first is about the present position. It is, of course, perfectly clear that wages paid to an apprentice are deductible as a trade expense. No one ignores that and no one doubts it. It is also perfectly clear that Section 140 of the 1952 Act
1268
provides for something rather different, that is to say, payments made by an employer to an educational establishment in respect of one of his own apprentices.
What strikes us about this is that these two things are not quite as separate as the separation which no doubt exists for taxation purposes. I think that the vital case is the kind of case that my hon. Friend mentioned in Wales. The difficulty about apprentices at present in a great many parts of the country and in a great many industries is that if we were to confine apprenticeships to a single man taking a single apprenticeship we should get nothing done at all. There are not enough large firms which take apprentices and there is not sufficient collaboration, as we see it, between the firms in the industry.
There are innumerable industries, one in my own constituency—the boot and shoe industry—which are traditionally small firm industries. There are parts of the country where this kind of difficulty is cropping up over apprenticeships. I remember my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) complaining about apprenticeship schemes in Cardiff on the ground that the local arrangements were not sufficiently elastic to allow apprenticeships to be given full effect to, and consequently there were many school leavers who wanted to become apprentices who were unable to do so. I am not denying that improvements have been made, but I want more to be made.
I come to the taxation position. I cannot see the difficulty of extending the provisions of Section 140, which already apply to educational establishments, to somebody else's works which are in effect acting as an educational establishment in the trade for the apprentice of a small employer. Is there any reason why the small employer who is entitled to deduct the cost of sending his apprentice to a school or institute of some sort should not be allowed to do so if he sends him to a large firm and has him taught there? At present, such a large firm, although it is training a man, is not treated as an educational establishment.
8.45 p.m.
I was very interested in what the hon. Gentleman had to say about group schemes of this kind, but he did not

1269
strike me as having had this kind of point very clearly in mind. I am not concerned with the drafting of the new Clause, although I do not think that it is quite as bad as the hon. Gentleman made out. It was put down deliberately in the same form because we wanted to raise the same series of points which have acquired added force in the interval.
The second point is the bonus element, the extra third. There are many instances, and the hon. Gentleman himself mentioned the obvious one. If there is an investment allowance for machinery, why cannot there be an investment allowance for apprentices? What is the difference when considering industry's future? If people are to be allowed an investment allowance and special tax treatment for the money they spend on scientific research in aid of their industry, why should they not be given similar treatment for what they do in the way of training, apprentices? I can see nothing do the least wrong or illogical in using the tax system for this purpose if there are, as there are, investment allowances and if one of the things specifically included is research and the like.
I think that we have heard a very narrow Treasury point of view and I thought that round the corner at intervals peeped the rather shy figure of a former Parliamentary Secretary to the Ministry of Education; but he found the atmosphere a little drafty and he hastily retired and went on with the Treasury brief. That is not the way that this sort of subject ought to be treated. If, for some reason or other, this is not the way to do it—and I appreciate that this is difficult ground and the sort of thing over which Government technical help is needed—the Government ought not to have waited for the Opposition to raise the matter three or four years after first raising it. They should have come forward with their own provisions to this end before now.
There is no doubt that there are anomalies, anomalies between one kind of instruction and another and anomalies between instruction in one place and instruction in another. There is no doubt that, although there has been improvement, there is every ground, even if only in fairness, for ask-
1270
ing for a tax inducement. I say on the ground of fairness because I understand that many employers who take apprentices do not do so for the money they get out of it or necessarily because they are to get the future work of the apprentices, but because they think that it is right that it should be done. If there are such employers and we want to increase their number, surely something of this kind is called for.
I hope that the Government will approach this matter from a less narrow point of view. We are not too well off in this country for apprentices and technicians and others upon whose skill we must increasingly depend to keep our position and our standard of living in the world. We have tried and succeeded in the past in doing a great deal more than that and if we are to go on doing it—whether we are dealing with skilled work and the possibility of skilled work by hand, or by brain, or a mixture of the two—we have to do all we possibly can to forward it in this country of all others. I have always been proud of what has been done in this country in that way, whether with eminent scientists or skilled workmen and not least by the type of people who carry on the small businesses in some parts of London, one or two of which have already been mentioned.
There has been any amount of special skills in areas such as, for instance, Holborn, up by the railway stations, and other parts of London that I can think of—I am a Londoner. There is a tradition there of small businesses in particular skills. That has, of course, been translated into bigger factories and bigger units of industries. But we are slipping behind in comparison with other countries in this respect. We really must consider what inducements we can obtain, and, above all when dealing with apprenticeships, whether the right unit in which to organise the apprenticeship system is not something larger than the small factory which is the actual operative unit in some trades. It is not a matter that one wants to discuss at great length now, but the broad reasons for that seem to be absolutely convincing, and a reply based on the kind of criticisms that the hon. Gentleman rather shyly made is not of much use to the Committee. What we want to

1271
know is why the Government object to this encouragement of apprenticeship and to the fostering of certain skills.
I should like to say a word about the proposed new Clause in the name of the hon. Member for Portsmouth, Langstone (Mr. Stevens). I appreciate the difficulties. One of them is perhaps that with regard to trade apprenticeship in the usual sense of the word it is often the case that the employer expects to get some future benefit from it. But those who go perhaps as articled clerks in some profession or another are usually taking what is really a course of instruction and going elsewhere when they have finished it. I see that there are distinctions between the two rôles of apprenticeship or articling, but I am bound to say that I think the Government are taking rather a narrow view of the whole question.
While I am primarily speaking to the Amendment put forward from this side of the Committee, if that were accepted I would hope that the rather larger question might be considered. The Section about which we are talking was brought in in 1946 under the Labour Government. Some water has flowed down the river since then, even under Tory Governments, and it is about time that the provision was enlarged.
Dr. J. Dickson Mabon: I hope that the Financial Secretary will respond to the question which has been put to him. With the natural patience of my countrymen, I have sat here listening contentedly to the speeches in the hope that the answer that we got would be as sensible as we expect from the hon. Gentleman, but I was disappointed.
There were at least two major contradictions in the hon. Gentleman's speech. In the first place, in the earlier part of his argument he said how generous the provisions were, and then he went on to condemn the idea of giving fiscal preference of this kind for this purpose as being very unsound in principle and very bad in practice. At this point I must say that I hope my hon. Friends will press the Amendment, even though it is defective in a number of drafting ways, to the point of a Division. It is quite reasonable that we should assert that the Government
1272
are wrong in dismissing the principle just as they have done.
The other contradiction was when the hon. Gentleman talked about the number of apprenticeships being at a record level and being very satisfactory, and later went on to say that no one could be complacent about the situation. No one in the counry has gone on record as saying that the rate of progress of apprenticeships is satisfactory, and no one, certainly not in Scotland, has said that the rate of increase in apprentices taking day release classes is at all satisfactory. That is, surely, the purpose of the exercise.
If the Financial Secretary is telling us that the Government recognise that the rate is not at all the rate that we want but at the same time there are no fiscal means now whereby we can promote it, I should find that an astonishing argument. But even if the hon. Gentleman said that. surely he would be able to say that the Parliamentary Secretary to the Ministry of Labour was going to make a statement later on, let us say, about the introduction of compulsory day release to provide some mechanism whereby industrialists would take on more apprenticeships. The Government cannot skate out of this part of the Finance Bill with the assertion that there are no fiscal means and that the principle is bad.
If the Financial Secretary is speaking on behalf of the Government, he should give a coherent answer to our very good argument, which affects so many of our constituents—admittedly, some who do not vote for us at this juncture but on whom, nevertheless, the future of the nation depends. I thought that it was agreed by both sides that we wanted to invest more and more in our skilled personnel. Practically the only raw material that Britain has is its skilled personnel for training.
Surely, therefore, it would be reasonable for the hon. Gentleman to respond, to express his regret at having said that in principle the Government are opposed to this proposal and to say that although they may not accept the Clause, he accepts that there is, possibly, an argument for fiscal inducement to improve the rate of apprenticeships. Surely, the hon. Gentleman will go at least as far

1273
as that. We do not ask him to say anything specific. We merely ask him to keep his mind open.
The Financial Secretary said that the National Economic Development Council was considering the matter and might make a recommendation. Are we to take it that if it recommends that there should be fiscal preference the Treasury with its cold, blank face will say that it cannot be done? Surely, it would not repudiate its brain child at this juncture.
The hon. Gentleman should not have been as firm and severe in what he said in his closing remarks about fiscal aids for apprenticeships. I plead with him, as we expect of a man of his intelligence and education, to put aside his dull, contradictory Treasury brief and to admit instead that there may he substance in the argument that by fiscal means we can aid industrialists, upon whom we depend, to step up the recruitment of apprentices and that we can aid them to encourage their apprentices to take more day-release classes and to take more advantage of technical education. If the hon. Gentleman goes as far as that, we will be content. If he does not, it is only right to challenge the Government on this issue.
Sir E. Boyle: We have been discussing the new Clause—very properly, for it concerns an important subject—for an hour and a half, but it is the usual experience of the Committee on the Finance Bill that approximately an hour and a half is a reasonable time to take on one new Clause. I will, however, respond to one point raised by the hon. and learned Member for Kettering (Mr. Mitchison) and answer the points raised by the hon. Member for Greenock (Dr. Dickson Mabon).
In answer to the hon. and learned Member for Kettering, I have ascertained the precise facts. Payments for the training of an employee's apprenticeship are allowable quite apart from Section 140 and an employer would be allowed the cost of paying for training in another's factory or in a group scheme quite apart from Section 140. This comes under the general principles which I enunciated at the start of my speech.
Mr. Mitchison: Is not the greater part of subsection (1) of the Clause already law and, therefore, it is practised?
Sir E. Boyle: Yes. I explained that it seemed to me that subsection (1) did not add to or subtract much from the situation and that the Clause made the mistake, as many people do, of assuming that Section 140 was relevant where it was not.
I am not unduly worried by the accusations of logical incoherence brought against me by the hon. Member for Greenock. There is nothing incoherent, for example, in saying that the trend of apprenticeships is a good one. The trend of the figures is good, but the result is not as good as we would like. I am happy to settle with the hon. Member for that formulation.
I purposely said something about our tax code as it now stood, and I mentioned what our tax system does in connection with apprenticeship training schemes. It is perfectly consistent to say what I did and at the same time to have doubts, which I expressed to the Committee, whether the tax system is well designed to perform the task which hon. Members had in mind when introducing the new Clause.
9.0 p.m.
In answer to the hon. Member's final point, I say that the Chancellor made quite clear in his Budget statement that the N.E.D.C. will be considering many matters affecting economic growth, and of course that includes recruitment and training for labour as well as a host of other important issues. What we have been discussing tonight has a bearing on all this, but I think it too early to say whether any particular fiscal measure would be the right way of tackling this intricate problem. I have given the Committee some reasons—which I stand by—for saying that I think there are some dangers in adopting this particular proposal, both on principle and in practice, but that does not mean that we have closed our minds for ever to all ideas of some fiscal measure for apprentice training if that can be justified on its merits, and we shall take full note of what the N.E.D.C. may recommend.
Mr. Mitchison: Since the responsibility rests with the Government and not with the N.E.D.C., since they have had three years to consider it and since they have altogether failed to meet the point to make an inducement for

1275
apprentice training and the like in this country, I shall advise my hon. Friends to divide the Committee.

Division No. 207.]

AYES

[9.1 p.m.

Abse, Leo

Hart, Mrs. Judith

Peart, Frederick

Ainsley, William

Hayman, F. H.

Pentland, Norman

Albu, Austen

Henderson, Rt. Hn. Arthur (Rwly Regis)

Price, J. T. (Westhoughton)

Allaun, Frank (Salford, E.)

Holman, Percy

Probert, Arthur

Allen, Scholefield (Crewe)

Hooson, H. E.

Proctor, W. T.

Awbery, Stan

Houghton, Douglas

Randall, Harry

Bennett, J. (Glasgow, Bridgeton)

Howell, Denis (Small Heath)

Rankin John

Benson, Sir George

Hoy, James H.

Roberts, Albert (Normanton)

Blackburn, F.

Hughes, Cledwyn (Anglesey)

Roberts, Goronwy (Caernarvon)

Blyton, William

Hunter, A. E.

Robertson, John (Paisley)

Boardman, H.

Irvine, A. J. (Edge Hill)

Rodgers, W. T. (Stockton)

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

Irving, Sydney (Dartford)

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

Boyden, James

Jeger, George

Ross, William

Brockway, A. Fenner

Jenkins, Roy (Stechford)

Short, Edward

Broughton, Dr. A. D. D.

Johnson, Carol (Lewisham, S.)

Silverman, Julius (Aston)

Brown, Rt. Hon. George (Belper)

Jones, Dan (Burnley)

Silverman, Sydney (Nelson)

Brown, Thomas (Ince)

Jones, J. Idwal (Wrexham)

Skeffington, Arthur

Butler, Herbert (Hackney, C.)

Jones, T. W. (Merioneth)

Slater, Mrs. Harriet (Stoke, N.)

Callaghan, James

Kelley, Richard

Slater, Joseph (Sedgefield)

Castle, Mrs. Barbara

Kenyon, Clifford

Smith, Ellis (Stoke, S.)

Chapman, Donald

Key, Rt. Hon. C. W.

Snow, Julian

Collick, Percy

Lawson, George

Soskice, Rt. Hon. Sir Frank

Craddock, George (Bradford, S.)

Ledger, Ron

Spriggs Leslie

Crossman, R. H. S.

Lee, Frederick (Newton)

Steel Thomas

Cullen, Mrs. Alice

Lever, L. M. (Ardwick)

Stewart, Michael (Fulham)

Darling, George

Lewis, Arthur (West Ham, N.)

Stonehouse, John

Davies, G. Elfed (Rhondda, E.)

Loughlin, Charles

Stones, William

Davies, Harold (Leek)

Mabon, Dr. J. Dickson

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

Davies, Ifor (Gower)

MacDermot, Niall

Swingler, Stephen

Davies, S. O. (Merthyr)

McInnes, James

Taverne, D.

Deer, George

McKay, John (Wallsend)

Taylor, Bernard (Mansfield)

Delargy, Hugh

McLeavy, Frank

Thornton, Ernest

Diamond, John

MacPherson, Malcolm (Stirling)

Timmons, John

Ede, Rt. Hon. C.

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

Tomney, Frank

Edwards, Rt. Hon. Ness (Caerphilly)

Manuel, Archie

Wade, Donald

Edwards, Robert (Bilston)

Mayhew, Christopher

Wainwright, Edwin

Edwards, Walter (Stepney)

Millan, Bruce

Warbey, William

Evans, Albert

Mitchison, G. R.

Watkins, Tudor

Finch, Harold

Monslow, Walter

Weitzman, David

Fitch, Alan

Moody, A. S.

Wells, William (Walsall, N.)

Forman, J. C.

Morris, John

Willey, Frederick

Fraser, Thomas (Hamilton)

Moyde, Arthur

Williams, D. J. (Neath)

Galpern, Sir Myer

Mulley, Frederick

Williams, LI. (Abertillery)

Ginsburg, David

Oram, A. E.

Williams, W. T. (Warrington)

Gordon Walker, Rt. Hon. P. C.

Oswald, Thomas

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

Gourlay, Harry

Owen, Will

Wilson, Rt. Hon. Harold (Hyton)

Grey, Charles

Padley, W. E.

Woodburn, Rt. Hon. A.

Griffiths, David (Rother Valley)

Pannell, Charles (Leeds, W.)

Woof, Robert

Griffiths, Rt. Hon. James (Llanelly)

Pargiter, G. A.

Wyatt, Woodrow

Griffiths, W. (Exchange)

Parker, John

Hale, Leslie (Oldham, W.)

Parkin, B. T.

Hall, Rt. Hn. Glenvil (Colne Valley)

Paton, John

TELLERS FOR THE AYES:

Hamilton, William (West Fife)

Pavitt, Laurence

Mr. Charles A. Howell and

Harper, Joseph

Pearson, Arthur (Pontypridd)

Mr. Redhead.

NOES

Agnew, Sir Peter

Bishop, F. P.

Chataway, Christopher

Aitken, W. T.

Black, Sir Cyril

Chichester-Clark, R.

Allan, Robert (Paddington, S.)

Bourne-Arton, A.

Clark, Henry (Antrim, N.)

Allason, James

Box, Donald

Clark, William (Nottingham, S.)

Arbuthnot, John

Boyle, Sir Edward

Clarke, Brig. Terence (Portsmth, W.)

Ashton, Sir Hubert

Braine, Bernard

Cole, Norman

Barber, Anthony

Brewis, John

Cooke, Robert

Barlow, Sir John

Bromley-Davenport, Lt.-Col. Sir Walter

Cooper, A. E.

Barter, John

Brooke, Rt. Hon. Henry

Cordeaux, Lt.-Col. J. K.

Batsford, Brian

Brooman-White, R.

Corfield, F. V.

Beamish, Col. Sir Tufton

Brown, Alan (Tottenham)

Costain, A. P.

Bell, Ronald

Browne, Percy (Torrington)

Coulson, Michael

Berkeley, Humphry

Bullard, Denys

Craddock, Sir Beresford

Bidgood, John C.

Bullus, Wing Commander Eric

Crosthwaite-Eyre, Col. Sir Oliver

Bitten, John

Burden, F. A.

Crowder, F. P.

Biggs-Davison, John

Campbell, Gordon (Moray & Nairn)

Curran, Charles

Bingham, R. M.

Carr, Compton (Barons Court)

Currie, G. B. H.

Birch, Rt. Hon. Nigel

Carr, Robert (Mitcham)

Dalkeith Earl of

Question put, That the Clause be read a Second time:—
The Committee divided: Ayes 157, Noes 224.

Dance, James

Lagden, Godfrey

Pym, Francis

d'Avigdor-Goldsmid, Sir Henry

Langford-Holt, Sir John

Quennell, Miss J. M.

Deedes, W. F.

Leather, E. H. C.

Rawlinson, Peter

de Ferranti, Basil

Leavey, J. A.

Redmayne, Rt. Hon. Martin

Digby, Simon Wingfield

Legge-Bourke, Sir Harry

Rees, Hugh

Donaldson, Cmdr. C. E. M.

Lewis, Kenneth (Rutland)

Renton, David

Doughty, Charles

Litchfield, Capt. John

Ridley, Hon. Nicholas

Drayson, G. B.

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

Roberts, Sir Peter (Heeley)

du Cann, Edward

Lloyd, Rt. Hon. Selwyn (Wirral)

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

Elliot, Capt. Walter (Carshalton)

Longden, Gilbert

Rodgers, John (Sevenoaks)

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

Loveys, Walter H.

Roots, William

Emery, Peter

Lucas, Sir Jocelyn

Russell, Ronald

Errington, Sir Eric

Lucas-Tooth, Sir Hugh

Scott-Hopkins, James

Farey-Jones, F. W.

McAdden, Stephen

Seymour, Leslie

Farr, John

MacArthur, Ian

Shaw, M.

Finlay, Graeme

McLaughlin, Mrs. Patricia

Shepherd, William

Fisher, Nigel

Maclay, Rt. Hon. John

Skeet, T. H. H.

Fraser, Ian (Plymouth, Sutton)

MacLeod, John (Ross & Cromarty)

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

Freeth, Denzil

Macmillan, Maurice (Halifax)

Smithers, Peter

Gammans, Lady

Macpherson, Niall (Dumfries)

Smyth, Brig. Sir John (Norwood)

Gardner, Edward

Maitland, Sir John

Spearman, Sir Alexander

Gilmour, Sir John

Markham, Major Sir Frank

Stevens, Geoffrey

Goodhart, Philip

Marshall, Douglas

Steward, Harold (Stockport, S.)

Goodhew, Victor

Marten, Neil

Stodart, J. A.

Gower, Raymond

Mathew, Robert (Honiton)

Stoddart-Scott, Col. Sir Malcolm

Grant, Rt Hon. William

Matthews, Cordon (Meriden)

Storey, Sir Samuel

Grant-Ferris, Wg. Cdr. R.

Maxwell-Hyslop, R. J.

Studholme, Sir Henry

Green, Alan

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

Tapsell, Peter

Hall, John (Wycombe)

Mills, Stratton

Taylor, Sir Charles (Eastbourne)

Hamilton, Michael (Wellingborough)

Miscampbell, Norman

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

Harris, Frederic (Croydon, N.W.)

Montgomery, Fergus

Teeling, Sir William

Harris, Reader (Heston)

More, Jasper (Ludlow)

Temple, John M.

Harrison, Brian (Maldon)

Morgan, William

Thatcher, Mrs. Margaret

Harrison, Col. Sir Harwood (Eye)

Morrison, John

Thomas, Leslie (Canterbury)

Harvie Anderson, Miss

Mott-Radclyffe, Sir Charles

Thomas, Peter (Conway)

Hastings, Stephen

Nabarro, Gerald

Thompson, Kenneth (Walton)

Hay, John

Neave, Airey

Thornton-Kemsley, Sir Colin

Heald, Rt. Hon. Sir Lionel

Nicholson, Sir Godfrey

Tiley, Arthur (Bradford, W.)

Hiley, Joseph

Oakshott, Sir Hendrie

Touche, Rt. Hon. Sir Gordon

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

Osborn, John (Hallam)

Turner, Colin

Hirst, Geoffrey

Osborne, Sir Cyril (Louth)

Turton, Rt. Hon. R. H.

Holland, Philip

Page, Graham (Crosby)

van Straubenzee, W. R.

Hollingworth, John

Page, John (Harrow West)

Vane, W. M. F.

Hopkins, Alan

Pannell, Norman (Kirkdale)

Wakefield, Sir Wavell

Hornby, R. P.

Partridge, E.

Walker, Peter

Hornsby-Smith, Rt. Hon. Dame P.

Pearson, Frank (Clitheroe)

Wells, John (Maidstone)

Howard, John (Southampton, Test)

Peel, John

Williams, Dudley (Exeter)

Hughes Hallett, Vice-Admiral John

Percival, Ian

Williams, Paul (Sunderland, S.)

Hughes-Young, Michael

Pickthorn, Sir Kenneth

Wills, Sir Gerald (Bridgwater)

Hurd, Sir Anthony

Pilkington, Sir Richard

Wilson, Geoffrey (Truro)

Hutchison, Michael Clark

Pitman, Sir James

Wise, A. R.

Jenkins, Robert (Dulwich)

Pitt, Miss Edith

Wolrige-Gordon, Patrick

Johnson, Dr. Donald (Carlisle)

Pott, Percival

Worsley, Marcus

Johnson, Eric (Blackley)

Powell, Rt. Hon. J. Enoch

Yates, William (The Wrekin)

Jones, Rt. Hn. Aubrey (Hall Green)

Price, David (Eastleigh)

Kerans, Cdr. J. S.

Prior, J. M. L.

Kerby, Capt. Henry

Prior-Palmer, Brig. Sir Otho

TELLERS FOR THE NOES:

Kimball, Marcus

Proudfoot, Wilfred

Mr. Whitelaw and Mr. McLaren.

New Clause.—(EXTENSION OF RELIEF UNDER S. 9 OF FINANCE ACT, 1956.)
(1) Subsections (1) and (2) of section nine of the Finance Act, 1956 (which provide relief from income tax on certain savings bank interest), shall, subject to the provisions of the next following subsection, apply in respect of dividends on shares of a society registered under the Industrial and Provident Societies Acts, 1893 to 1961, or under the Industrial and Provident Societies Acts (Northern Ireland), 1893 to 1955, and in respect of interest on deposits with such a society or with a registered friendly society, as they apply in respect of interest on deposits with the Post Office savings bank.
(2) Where by virtue of the last foregoing subsection the amount of surtax payable by an individual would exceed the sum of—

(a) the amount of surtax which would have been payable by him, if that subsection had not been passed, and

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(b) the amount of relief, if any, to which he is entitled by virtue of that subsection, that excess shall be disregarded for all the purposes of the Income Tax Acts.—[Mr. Sydney Irving.]

Brought up, and read the First time.
Mr. Sydney Irving: I beg to move, That the Clause be read a Second time.
The Chairman: With this new Clause it would be convenient to discuss the new Clauses—Savings (pay as you earn) —Relief from tax on certain dividends —Relief on savings policies.
Mr. Irving: In the Finance Act, 1956, the Government provided for the exemption from Income Tax of the

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first £15 of interest on savings in the Post Office and in the ordinary departments of trustee savings banks. The conditions for this exemption were twofold—first, that these savings were at a fixed rate of interest, and secondly, that they were moneys loaned directly to the Government. Each year since 1956 successive Treasury spokesmen have stuck inflexibly to these conditions and refused to consider any variation to cover other institutions concerned with small savings.
The Clause seeks to extend this exemption to apply in respect of dividends on shares in societies registered under the Industrial and Provident Societies Acts. The co-operative movement, which has been the main sufferer under this discrimination, occupies a very special, and indeed in some respects, unique position in our national life. For over 100 years it has been one of the main instruments in the encouragement of thrift among the working classes. Through its dividends on purchases it has made it possible for millions of people to accumulate small savings in a way which would otherwise have been quite impossible. Its total capital amounts to over £300 million, of which £254 million is share capital, the result of the small savings of its 13 million members. This represents roughly £20 per head. Since the war it has distributed in dividends over £1,000 million. In the last financial year dividends amounted to over £60 million. These are very considerable sums and in social and economic terms they have made a very valuable contribution both to the small savings of the nation and to the well-being of millions of ordinary people.
Our submission is that, in defining the conditions of the original concession, the Chancellor did not take sufficiently into account either the character of the co-operative movement and its work or the possible damage it could suffer because of a discrimination in the refusal of this concession to its members. The first condition which was laid down was that this exemption should apply only to savings where the rate of interest was low. But the co-operative movement limits its interest on its share capital to between 2½and 3½per cent. Its share capital is limited to small savings, as
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there is a statutory limit on the holding of any one member.
The Clause does not seek to extend this exemption to loan capital, precisely because there is no limit by Statute on loan capital and this, therefore, does not come into the same category. So far I have been talking about the retail consumer movement. This concession would be equally significant, if not more so, to members of the agricultural co-operative movement, which has had favourable treatment at the hands of the Government. The agricultural co-operatives, being fewer in number, therefore have a bigger personal contribution to make, and this discrimination may discourage them from making that contribution.
9.15 p.m.
Members of the co-operative movement feel a stinging and continuing sense of injustice at their treatment by the Government. The Royal Commission on the Taxation of Profits and Income warned against unfairness in the distribution of this relief, and also against what it galled "delusive savings". The Chancellor was and is anxious to encourage small savings, and this discrimination against co-operative investments places a handicap on the movement. What is worse, it will mean the transfer of past savings, which was certainly not the object which the Chancellor had in view at the time.
The cost of the concession would be no more than £2 million, and it could well lead to an overall increase in small savings. Government spokesmen profess to be well disposed towards the co-operative movement, but how can they maintain this claim so long as these glaring examples of discrimination against the co-operative movement continue year in and year out? I ask the Chancellor to take a more flexible view of the matter and to end this deep sense of injustice by accepting the Clause.
Mr. Geoffrey Lloyd: I wish to speak on the proposed new Clause—Relief on savings policies —in the names of many of my hon. Friends and myself. For quite a long time many of us have been seeking a method of fiscal savings, especially savings in equity shares. Some very interesting schemes have been produced,

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but they have never got anywhere. The reasons have been either that they have been too complicated in the mechanism which they sought to establish, which has caused people to be frightened off, or that there has been a difficulty in establishing a precise basis to which to attach the Income Tax concessions.
For these reasons my right hon. and hon. Friends and I have approached the problem in a completely different way. We seek to provide a method of great simplicity, which we hope is also circumspect, practical and moderate. We propose that the existing Income Tax concession—two-fifths of the standard rate, with no application to Surtax—which at present attaches to life assurance policies, should be extended to savings policies which do not involve death benefits. In other words, the single legislative act involved would be the removal of life cover or death benefit as the essential condition of the granting of Income Tax relief to an insurance policy. This would mean that encourage-meat would attach to a pure endowment policy without life cover. We believe that this would be important, because, especially in the later years of life, the cost of life cover is considerable.
The Committee will appreciate that we have avoided setting up any new and complicated machinery. Instead, we have taken advantage of an existing piece of fiscal machinery which has already attached to it the precise base to which the concession is attached, which is working smoothly, and is well policed, from a revenue point of view, by long practice and custom.
This rather simple and practical plan has another advantage. Because we are adapting an existing form of relief, it involves automatically twelve annual contractual payments, because one of the existing conditions of the relief in life assurance is that the premiums must not be more than 7 per cent. of the capital sum. This amounts to about twelve years of contractual payments. While this is necessitated by the technical form of the scheme, we feel that it has great practical advantages. The intention to save is one thing but a contractual method of saving involves a degree of personal self-discipline which over many years has been found to be a useful method of stimulating savings.
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There is one other extremely important point. We are trying to encourage the small man to become an investor. I think everyone will agree, from long experience in our constituencies, that the practice of regular saving for particular objects is a widespread working-class tradition in this country and has been for many years. What we are doing, therefore, is to take a long established working-class practice, formalise it and attach to it a fiscal advantage.
We feel that this is a method of considerable importance. I wish to emphasise that this Clause aims at the small man, and that is why we have limited the premiums which can attract tax advantage to a maximum of £150 a year. There is nothing in this for the rich capitalist or the man with the high salary. As a matter of fact, most of the premiums would be much less than £150 in our estimation, but £150 would be the absolute limit. This scheme is beamed towards the £15 to £40 a week man.
I should like to remind the Committee of a little bit of history in this respect. It was in 1853 that Mr. Gladstone reintroduced life insurance relief which was originally in Pitt's Income Tax. He did so to encourage the new lower middle classes to make provision for their dependants. We are trying to attract the new emerging middle classes which we see in the country today. Everyone would agree that they have far more income money than was the case years ago, but they still find it difficult to get any capital. We ask the Committee to give favourable consideration to this scheme which would enable the emergent middle classes to get a bit of capital. We hope that the Government will give favourable consideration to it and perhaps improve it.
Mr. Ellis Smith: The right hon. Member for Sutton Coldfield (Mr. G. Lloyd) has made a reasoned case for the Motion he proposed. Would it be fair to interpret the right hon. Gentleman as supporting the case presented by my hon. Friend the Member for Dartford (Mr Sydney Irving)?
Mr. Lloyd: The proposals are different. Those to which I have referred are designed to encourage equity investment.
Mr. Mitchison: Are the savings policies in any way different from the endowment policies?
Mr. Lloyd: They differ essentially in the fact that death benefit would not be compulsory.
Mr. Donald Wade: I am very interested in the observations of the right hon. Member for Sutton Coldfield (Mr. G. Lloyd) and I think they deserve serious and favourable consideration. I look forward to hearing the comments of the Chancellor. You have indicated, Sir William, that in discussing this group of new Clauses consideration may be given to No. 57—Relief from Tax on Certain Dividends. The object of that Clause—it is simpler than the one referred to by the right hon. Member for Sutton Coldfield—is to provide relief from tax on the first £25 of investment income.
There is another proposal on the Order Paper which would increase the limit from £15 to £25 for savings bank interest, and taken together the result would be relief up to £25 on all investment income. That is one of a number of proposals which my colleagues and I have in mind for encouraging small savers. There is, of course, the underlying assumption that it is desirable to encourage savings, and I think that in this Committee that is accepted. It is not accepted quite so widely in all sections of the community.
I remember an interesting observation from an elderly lady in the West Riding of Yorkshire. She said, "My husband and I are getting along very nicely, thank you. We have managed not to save." Further inquiries elicited the fact that her parents had invested all their savings in cottage property which had caused a great deal of trouble and had landed them in considerable loss of capital. She therefore took a very poor view of saving. Hon. Members will also know of people who have put money in 3½per cent. War Loan with rather sad consequences. There is risk in all investments, as anyone who looks at the stock market today realises, but this is not an argument against saving and, from the point of view of the national interest, the question is how to achieve a high rate of investment without inflation. One of the answers is undoubtedly by more individual savings.
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The question arises, therefore, how this is to be done. Taking the long view, the greatest benefit both to the individual and the community as a whole is obtained by ensuring that saving should be as widely spread as possible and should include equities. I do not think that there is any case today for limiting tax relief to one particular form of saving, for example, the Post Office Savings Bank. We have reached a stage of development when we can go beyond that. I would encourage savings in equities as well as in Government securities and the Post Office Savings Bank.
I should also like to see greater uniformity. An article in the Westminster Bank Review, written by Basil Taylor states:
"Equality before the tax law surely requires that all citizens should be allowed to save for retirement and other purposes the same maximum proportion of their true remuneration free of tax—no matter what their employer may have chosen to provide them with by way of pension. Many readers will no doubt be surprised at the value of the tax relief for capital accumulation already permitted under the existing law in the form of ad hoc concessions."
That raises the different point that there are great divergencies in tax relief between one person and another.
The article continues:
"…in varying degrees all employees whatever their salaries appear to be discriminated against vis-à-vis their self-employed brethren who are business proprietors."
I believe that this is true, but the Amendment with which I am dealing is concerned with a rather more limited point, namely, the unevenness of the spread of tax relief.
I should have thought that the time had come when if it is right for the Post Office Savings Bank it is equally appropriate for other forms of saving. My only purpose in referring to this specific amendment is to urge that there should be more equality of treatment and that it should apply to all investment income up to £25 per annum. The time has come for that. There is need for a rationalisation of tax relief for personal savings and I hope that this will be regarded as one way of achieving it.
9.30 p.m.
Sir Lionel Heald: It is a great privilege to be able to take part in this debate, and I very warmly welcome

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the proposal of my right hon. Friend the Member for Sutton Coldfield (Mr. G. Lloyd). I say at once that I can claim no expert knowledge of this subject at all, but I have in the past had an opportunity of learning something about it—one might say from the other side of the Table—when I had the honour of assisting my right hon. Friend the Home Secretary, when Chancellor of the Exchequer, in resisting certain proposals that were made during those years.
I learnt something of the possible classic objections to proposals of this kind, and perhaps the Committee will allow me to seek to show that those objections do not have any serious application to my right hon. Friend's proposal. The first of them has always been that it is a revolutionary departure from principle that there should be any relief of this kind. On the contrary, I would say that this proposal is a logical, sensible and long-needed extension of the principle that has been recognised since 1799. Going back over 160 years, that principle has been accepted, and acted upon progressively—with certain backsliding from time to time—by Governments of very varying kinds and colours.
In the very first Income Tax introduced by Pitt, there was a provision for relief in respect of insurance policies. There was a reaction in the Granville Coalition Government of 1806, when those reliefs were very severely curtailed. All parties deserve praise, and some blame, in this matter because, as my right hon. Friend mentioned, the next stage was Mr. Gladstone's first Budget in 1853, when he redressed the balance and allowed up to one-sixth of income for purposes of insurance.
The principle was carried gradually further until 1916, the time of Mr. McKenna. There was then an unfortunate reversal, because endowment policies had by then become common and the view was taken that a wrong line was being followed. So, in 1916, there was a successful effort to reverse the process, and it was laid down quite definitely that no policies could be eligible for relief unless they contained full life cover.
But in 1956, when my right hon. Friend the Prime Minister was Chan-
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cellor of the Exchequer, progress began again, and we found then, as we find today, that there provision could be made without the requirement of life cover in respect of retirement pensions and provision for dependants. That was a tremendous step forward, because it finally killed the idea that there was a necessity for life cover.
It had another effect. In the books I had to read at one time on taxation, written by great pundits of the past, there was the idea of some lack of equity in giving relief in respect of insurance policies, and so on, because there were other forms of savings, and one had not the principle of absolute equality. That, again, has now gone, of course, so we have a very different position today, and I cannot help thinking that it is in keeping with the modern outlook that that should be so. We must go further because we find that the limitations are tied up with death and old age. That is the position. There must either be provision for life insurance or there must be some requirement for old age in respect of retirement or dependants.
I suggest that today, irrespective of party politics, we should look at the matter from a different point of view. It is not only a question of the dead and the dying. We are concerned today with the living and with the younger generation which wants to be able to save for their lifetime, and that is what the proposal before the Committee would enable us to do.
I do not wish to delay the Committee because I realise that a number of hon. Members wish to speak. It is pleasant to find that we have no ground for difference between us from a party point of view. Our proposal may be different, and while my hon. Friends and I say that ours is better than theirs, I will not quarrel about this because other hon. Members will no doubt say the same about their proposals. I must, however, mention one or two classic objections which are always raised. It is said that the Government should not be tied to any alteration in the taxation structure. But that must not be pressed to doctrinaire limits because, in this case, I do not believe that that argument can apply. Another argument which one frequently finds in the textbooks and which is often used by Ministers is that

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of the complications of the provisions for relief, the difficulty of understanding those provisions and the administrative problems involved. Those matters are always legitimate objections, but I hope that they will not arise on this occasion.
I am sure that my hon. Friends will agree that those sort of arguments cannot apply in this case for there could not be anything more simple than what we have proposed. We frequently hear about so-called evasion. I understand that to be a technical term used by the Inland Revenue, a term one might translate into the phrase "advantage may be taken of these proposals by people who are not concerned with saving in the strict sense of the word." No doubt some of my hon. Friends with experience of this matter will deal with this, but I believe that that objection is largely theoretical. I am told by those who should know that the idea that the millionaires will rush forward as soon as this proposal becomes law—as I hope it will—and take advantage of it has no foundation. I am sure that 12 payments amounting to £150 a year for a relief of £23 will not set all the millionaires' houses on fire.
I hope, therefore, that those objections will not be advanced on this occasion and that we shall receive a sympathetic reply from the Government, because after all we are concerned more than ever today with savings. There may be complicated and difficult arguments about what are savings or real savings, but it is an obvious fact that a large number of people today do not find sufficient outlet on terms they can afford for their desire to save. If we accept the principle that saving is desirable, it is the duty of the Government to set an example, and I believe that this proposal provides the means by which they can do that.
Mr. Mitchison: I have a great respect for the right hon. and learned Gentleman in many ways, particularly for his legal knowledge. Are these savings policies of insurance, and, if so, against what do they insure?
Sir L. Heald: I do not propose to enter into a legal discussion with the hon. and learned Gentleman. If he would like to take my opinion and to pay for it, I should be glad to give it.
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As I was saying before the hon. and learned Member helpfully intervened, surely if savings are of great national importance, the Government should show that they are anxious to support them. Some action is necessary in this matter. Since the opinion of those who know about these things, not of those who merely talk about them, is that additional outlets are required, let us see what we can do to help. If the savers are encouraged, they are good citizens, and if they are good citizens that is to the advantage of the country.
Mrs. Harriet Slater: The right hon. and learned Member for Chertsey (Sir L. Heald) said that savers, particularly small savers, should be encouraged, that the Government needed these small savers and therefore that something should be done to encourage them. We agree. We have been advocating that for many years, but we have not achieved very much.
The right hon. and learned Gentleman said that his proposal was advocating help not for people who saved in order to leave their savings to somebody else, but for those who wished to use their savings in their own lifetime. The cooperative movement has been encouraging small savers so that they could benefit from their savings in their own lifetime. It has been doing that in a very simple but effective way, and many thousands of people have benefited from it in their lifetime. Ordinary folk have been able to buy necessities and to go for holidays which they otherwise would not have been able to do. All sorts of simple advantages have accrued to them through saving with the co-operative movement.
One of the fundamental principles of the movement is that it encourages thrift. It was started in order to help people to help themselves. By its principle of thrift, it has encouraged people to leave in their dividend, to add to their small penny bank savings accounts, thus building up their share capital, and to transfer their penny bank savings to their share capital.
Both new Clauses seek to achieve a sense of justice in taxation: The one dealing with the co-operative movement seeks to secure treatment equal to that given to Post Office savings and to savings in trustee savings banks. At

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the moment, the first £15 of interest on money deposited in trustee savings banks and the Post Office is exempt from tax. The co-operative movement has no such exemption. The proposal seeks to achieve equal treatment between all three forms of saving.
9.45 p.m.
In 1960, about £59·5 million was returned by co-operative societies in dividends. Much of that money was left in as share capital. Not everyone draws out his dividend. More and more people tend to leave it in. My hon. Friend said that over the last fifteen years £1,000 million had been returned as dividend in co-operative societies. In addition to the normal dividends paid in co-operative societies, many of them have what we used to call the "penny bank" but which is now the small savings deposit account. In 1960, £7·6 million was deposited in that way. The Government ask that such savings shall be encouraged because the country needs this kind of small saving. Last year over 32 per cent. of this kind of co-operative saving was reinvested in Government securities. That is another argument for justice to be done to the co-operative movement in thus respect. The movement not only encourages small savings by ordinary working people. It also does a very good job of work in reinvesting some of the small savings in Government securities.
Another discouragement to co-operative savers is the Government discrimination against the co-operative movement, inasmuch that when these people become old or ill and have to apply for supplementary benefits, their co-operative savings are exempted only up to £125 before the rest is taken into account. Yet if a person has put his money in the Post Office or in the trustee savings bank, the first £375 is exempted.
I said this last year, and I say it again: the response of the Government to this Clause moved by my hon. Friend is another indication of deliberate discrimination against the co-operative movement. If the Government are really serious in carrying out support for small savers, I see no reason why they should not accept this Clause. They would at least give a sense of justice to small savers and to the co-operative movement.
Mr. W. Clark: The principle of the new Clause—Saving (pay as you earn)—was fully debated last year and I shall not detain the Committee by canvassing the arguments afresh. But ease of savings is something to which we should pay attention. Since there are 24 million people under P.A.Y.E., I cannot see why the Treasury cannot utilise the P.A.Y.E. machinery as a method of saving. There are industrial savings groups covering 3¼million people, saving about £100 million a year. But of that figure only £20 million can be considered as long-term saving, As the hon. Lady has said, some £80 million is put by for such things as holidays or new clothes and thus may be called short-term savings.
That is why I am delighted to support my right hon. Friend the Member for Sutton Coldfield (Mr. G. Lloyd) in his ingenious suggestions for savings. They would give a great boost to long-term saving. Each of us wants to do something for the small saver. The only way in which we can assist him is to make saving a little easier and give him some fiscal incentive. I know that the Treasury will put up many administrative difficulties in explaining why this, that and the next should not be done. But we have reached the stage when we must tell the Treasury that it must overcome these difficulties because of the paramount importance of the need to assist small savers. Each of us in the Committee is prepared to say that we will help the small saver. On the objective we are agreed. What we have to consider is the method of achieving this objective.
I should like the Chief Secretary to the Treasury to give a firm undertaking that between now and the next Finance Bill he will introduce concrete methods of encouraging small savers by giving fiscal incentives. That is something that we can quite easily ask for in view of the fact that we so often say, "It is essential to save. We must help the saver, but the administrative difficulties are so great." I do not believe that we should over-emphasise this argument of the administrative difficulties.
We say that we are a property-owning democracy. I am firmly convinced of this and unashamedly a supporter of giving small savers a tax incentive. It does not really matter which method is

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used to give the small saver some incentive. What is important is that something should be done for the small saver, and I suggest that the Government, with their expert advice from the Treasury and Inland Revenue, could easily come forward with a scheme which would help the small saver who is obviously doing a first-class job of work for this country.
Surely that is the object of all of us in the Committee, and we must make it easy for people, as my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) said, to acquire capital while they are alive. Let us have this capital saved during our lifetime and enjoy it during our lifetime. Do not let us always be waiting for death before anyone can benefit.
Mr. Callaghan: Would the saving policies have a surrender value? Would they be with-profits policies or without-profits policies? What would happen if a man decided that he would pay no more? Would his premiums, or his savings, be repaid, or how would they be accounted for?
Mr. Edward du Cann: The hon. and learned Member for Kettering (Mr. Mitchison) asked a particular question, and other questions have been asked by the hon. Member for Cardiff, South-East (Mr. Callaghan). To some extent the details of this matter are unimportant. One imagines that a number of institutions, which I shall proceed to name, would formulate plans and submit them to the Inland Revenue which would then approve them as being responsible and sensible suggestions and thereafter they would be offered for sale to the public.
Mr. Callaghan: Are they not important to this extent, that if the hon. Member and his friends wish to bring them under life insurance relief there is a case for demonstrating that they are equivalent to other forms of life insurance relief? I am not saying that there is not a case for them but asking what is the case for treating them as life insurance.
Mr. du Cann: That is absolutely true, and I agree with it. I was going on to elaborate. We are talking about total premiums of £150 in one year and we
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are talking about perhaps a twelve-year period. What I am endeavouring to say is that these details could remain to be settled and be a matter of judgment and that it is not necessary for the Committee to decide them tonight. What seems important to many of us is that we should get clear agreement, as now seems to exist between the two sides of the Committee, that we have waited for help for small savers for far too long and that it is time that we had practical action. It also seems to us that the suggestions which we are making are a sensible method of achieving the sort of results which we all believe to be desirable.
As to the users of this scheme; I believe that the building societies, the joint stock banks, the co-operative institutions, the National Savings movement, the hire-purchase companies, or at least those accustomed to soliciting deposits from members of the public, and the trustee savings banks would be very well placed to formulate schemes for attracting savings. Any of these policies or contractual schemes would have a proper surrender value. That would be an important part of them. The hon. Member for Cardiff, South-East specifically asked about the with-profits element, and one assumes that there would be some method of reinvesting income so as to ensure that there was a continuous growth of capital and a compounding feature.
But it should be appreciated that members of the public could be offered two types of schemes. They could be offered fixed interest schemes, so to speak, in the categories which I have mentioned, or schemes of equity investment through, for example, unit trusts with which, as you, Sir William, and the Committee know, I am associated and in which I must again declare my interest. In the case of unit trust schemes, contractual schemes have been begun on this type of model in the United States, though without any form of tax relief, at the rate of about 40,000 a month. We in the United Kingdom are opening new schemes probably at the rate of about 50,000 a year. We are just beginning and no doubt the process will accelerate. The usual subscription varies probably between about £30 and £50 a year.

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I return to the main issue. Whatever the style of scheme and whichever of all these institutions introduces it, it is surely right that we should have not a situation in which lip-service is paid to the ideal of savings by successive Treasury spokesmen, but rather practical action to enable people to save for those purposes which they themselves deem to be desirable and right.
I should like to give the Committee some statistics. If the average industrial earnings at present are about £15 a week, the average wage earner in the course of his or her lifetime will earn a veritable fortune—between £30,000 and £40,000. How much of that do they have when they come to retire? Many of them have none at all. A recent Gallup poll showed that 33 per cent. of the population have no savings, while a recent survey, introduced by a committee of which my hon. Friend the Member for Halifax (Mr. Maurice Macmillan) is the distinguished chairman, indicated that if contractual schemes for saving were available no less than two-thirds of the population would be only too ready to subscribe to them.
At the other end of the scale, we are only too conscious of the fact that the needs of about 2½million of our citizens were met in the year before last either wholly or in part through National Assistance. The object of the concessions which were given years back and of whose history we have heard something tonight was to encourage working people and middle-class people to stand on their own feet and not to rely on the State to provide for them. Of course it is right that the State should provide for those in desperate need, but it is surely the responsibility of the Committee, and perhaps of the Conservative Party in particular, to encourage people to be proud and independent and to make their own provision in life for their dependants and their families. It is for that reason that we feel so strongly on this subject.
It is my considered opinion, from some little practical experience of these matters, that the proposals which we are putting forward are entirely practicable. I hope that my right hon. and learned Friend the Chancellor of the Exchequer will consider the subject very carefully and do what he can to meet us. The volume of support which these proposals have obtained on this side
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of the Committee will, I am sure, not have escaped his attention—nor their very favourable reception in the Press as a whole. May I take the point a little further and hope that we shall not have to wait until next year's Finance Bill—
Mr. John Rankin Mr. John Rankin (Glasgow, Govan) rose—
Mr. du Cann: May I finish my sentence—before we see practical action taken in this matter, although it is clear that these matters require very careful consideration. I hope that we might see a little support for these ideas on Report.
10.0 p.m.
Mr. Rankin: Before the hon. Gentleman sits down, will he answer one question for me?
The Deputy-Chairman (Sir R. Grimston): Has the hon. Member for Taunton (Mr. du Cann) given way?
Mr. du Cann: I said, Sir Robert, that I would give way as soon as I had completed my sentence.
Mr. Rankin: The hon. Gentleman has detailed a number of methods of saving, and there is no disagreement about them. Would he add another method, that employed by the co-operative movement —that of saving as one spends?
Mr. du Cann: I made clear, I hope—if I did not, I apologise to the hon. Gentleman and the Committee—that in my opinion and in the opinion of many of us the vehicle which we are producing, which we believe to be sound, sensible and practical, as my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) said, would apply to the co-operative movement equally with many other financial institutions. Speaking for myself, I would certainly hope that the co-operative society would take full advantage of it.
Mr. A. E. Oram: I hope that Government spokesmen are being duly impressed this evening by the concerted efforts that are being made in all parts of the Committee on behalf of the small savers. Each of the main parties has its own new Clause on the Order Paper, and each makes its own proposal in its own way. It is interesting

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to observe that as the years go by more and more hon. Members are taking an active interest in small savers and the way in which they are taxed.
The proposal with which I am concerned is that which would seek to remove the discrimination between co-operative society savings and small savings in the Post Office. The cooperative movement regards its facilities as comparable with those offered by the Post Office to small savers. The consumer member of a co-operative society has a pass book very similar to that of the Post Office saver, the facilities for making small deposits or easy withdrawals are comparble, and there are many co-operative shops and offices in which transactions can be conducted, which makes it a most convenient institution for small savings for the ordinary man and woman. We cannot see why this discrimination should have been brought about some years ago, and we cannot see why the Government have year after year resisted our proposal to give equality of treatment as between the two institutions.
The fact that we make this special plea on behalf of the co-operative movement does not mean that we do not welcome the increasing interest taken by other hon. Members in their own schemes. I should wish to know a little more about some of the new Clauses about which we have heard this evening before giving my conclusive support to them, but one can at least welcome the fact that more and more hon. Members are putting their names to proposals of this kind.
The hon. Member for Nottingham, South (Mr. W. Clark) used a phrase which we used to hear a good deal from Conservative lips—"a property-owning democracy". The word "democracy" brings to my mind a special feature of the co-operative society which does not seem to me to attach to the institutions on behalf of which other hon. Members have been speaking. It seems to me that the essential thing which counts in a democracy is the principle of "one man, one vote". In the other schemes which have been referred to it is not a question of "one man, one vote". It is a question of voting according to the size of the holding. That does not apply in a co-
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operative society, in which we have the practice of true democracy. Therefore, in addition to the case which my hon. Friends and I have put forward that the co-operative movement offers savings facilities comparable to those of the Post Office, we claim that on social grounds also, the co-operative movement is deserving of proper treatment in these matters.
I hope that hon. Members opposite who show this keenness on behalf of the small saver and who, over the years, have spoken of a property-owning democracy will, therefore, support us tonight in the Lobby, as they have not done in previous years, and will vote for our new Clause on behalf of the cooperative movement.
Mr. Maurice Macmillan: I do not want to weary the Committee with repetitive argument, although it is remarkably difficult not to do so considering how frequently we have had to repeat our arguments without making much impression on the Treasury. I support especially the new Clause of my right hon. Friend the Member for Sutton Coldfield (Mr. G. Lloyd)—Relief on savings policies—because it has at least some hope of being considered as a fresh departure by the Treasury Bench.
While I have every sympathy with the speeches of the hon. Member for Dart-ford (Mr. Sydney Irving) and of other hon. Members opposite, there is a just complaint against their new Clause that apart from being slightly old-fashioned in its limitation—as if, to use the phrase of the hon. Member for Dart-ford, it is only the institution of co-operation which encouraged thrift among the working classes, a phrase which I should not hope to hear from these benches—as the hon. Member for Huddersfield, West (Mr. Wade) agreed, it is old-fashioned in that the people to whom the hon. Member referred, as the survey mentioned by my hon. Friend the Member for Taunton (Mr. du Cann) showed, engage in many more methods of saving than the Clause indicates.
The new Clause of the hon. Member for Dart-ford tends not to remove discrimination, but merely to extend it. I go with the hon. Member for Huddersfield, West in saying that what we want in dealing with the small saver is to apply terms of equality rather than

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spreading the privilege of saving a little more widely. On the other hand, the great difficulty in attempting this proposal has always been that it is impracticable because administrative reasons make it difficult.
I have in the past put down similar Clauses to that now put down by the Liberal Party but with the relief limited to £15 and not to £25. Even the Wider Share Ownership Committee was con-vinced by the Treasury that our Amendment last year was impracticable. That is why the new Clause of my right hon. Friend the Member for Sutton Cold-field is even more worthy of attention.
I, too, hope that something will be done before the next Budget. Our proposal is new in that, being based upon an existing principle, it can surely be brought into effect either in this form or in such form as, with greater wisdom, the Treasury dictates. It could be brought in in its present form without extending any principle or involving administrative or policing difficulties for the Inland Revenue, other than those that that Department knows how to cope with. It would do only one thing, and that is remove the necessity of life cover for schemes of this sort to obtain tax privilege.
I know that the cost is unpredictable, but any examination of the likely outcome shows that it probably would not be very great, certainly in the first two years. If the cost to the Treasury of such a scheme rose, that would surely be an indication that its value was great and that it had been effective in bringing about new savings.
There is definite evidence that the absence of outlet of investment for what some people have called small investors, but which I prefer to call new investors of small savings, causes limitation and loss of savings. One of the reasons why there is so small a proportion of long-term savers in the country is the shortage of investment and difficulties of investing in the way in which they want to. The indications are that such a scheme would be useful, that it would be used and, in being so used, would not cost the Treasury an undue amount in concessions, certainly no more than existing tax schemes. Certainly there is no more danger of this scheme being abused than many of the others now in force.
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It is not enough to try to achieve a greater measure of social justice and equality purely in terms of income. Our civilisation has reached a point where we must try to obtain a far greater degree of social equity and justice in terms of ownership—not only in ownership of durable consumer goods or a home to live in, but of the real and productive wealth of the country. That is why I hope that the Chancellor will do everything he can this evening, or later in this Bill, to meet us on this point.
Mr. Wade: Will the hon. Member answer one question? I am asking it only for clarification and for the information of the Committee. In answer to a question put to the hon. Member for Taughton (Mr. du Cann), I understood it to be said that the policies could be surrendered In the Clause there are these words:
"(c) the policy provides that no sum shall become payable until not less than twelve years after the payment of the first premium. except by way of return of premiums and reasonable interest thereon in the event of the death of the individual before the policy matures;
(d) the policy includes provision securing that it shall not be capable in whole or in part of surrender, commutation or assignment by the individual;"
I am rather puzzled by the statement that it may be surrendered.
Mr. G. Lloyd: This Clause has been drawn very strictly. Therefore, there is no provision for surrender except in the event of death. We wish this Clause to be moderate in the sense of being strict and following the full rigour of the attitude which one might expect from the Revenue, but in this particular instance I think we have gone too far. If my right hon. and learned Friend is able to adopt this proposal, I think he will find it will be necessary to have provision for surrender under a certain penalty to make sure that what we are giving is the twelve-year period and allowing for the possibility of ill-luck or circumstances making it impossible for a man to continue. The Clause would need amendment in that particular respect.
Mr. George Darling: I wish to assure the hon. Member for Halifax (Mr. Maurice Macmillan) that those of us who support

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the Clause in the names of hon. Members of the Opposition are not asking for any special concessions or special privileges for co-operative societies. We put the Clause forward in this form because in the past there has been discrimination. I and I think my hon. Friends would agree that if we could get rid of discrimination altogether and treat all small savings in the same way for tax relief we would all be very happy.
I make only one observation. There is a great unity of feeling in the Committee that we should have encouragement from the Treasury in the form of tax reliefs and so on for all kinds of small savings. Apart from the technical discussions which must go on if the Government are to accept all the arguments now put forward, the Government have a moral duty at least to consider all these proposals and to do something on the lines advocated. That moral duty arises from the fact that this Government have been opening betting shops and bingo parlours. To redress the balance they have this moral duty to open savings shops in whatever form they may take to encourage small savings in every way.
10.15 p.m.
I add that, though it may be somewhat old-fashioned, if this country does not return to some of the old-fashioned ideas of thrift which our forefathers supported in the nineteenth century we shall never again get a healthy economy in this country. I am convinced that the views that are being expressed in the Committee this evening are absolutely essential to the well-being of the whole community, and that if the Government do not respond to the appeals being made to them tonight the country will be all the poorer for the neglect of their duty.
Mr. Edward Gardner: The principle which I believe hon. and right hon. Members on both sides of the Committee find so attractive is that small savers should be given the greatest possible encouragement by the Government. In doing this, I believe that the Government would be helping themselves in the most effective way to fight one of the great dangers to our economy, namely, inflation. Inflation is not
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caused by having too much or earning too much money; inflation is caused by spending too much money. I remember a well-known economist once saying that the danger of wealth comes when people start thinking about spending it.
Mr. Ellis Smith: It all depends on who is spending it.
Mr. Gardner: It is for this reason that I give warm support to the proposal made by my right hon. Friend the Member for Sutton Cold-field (Mr. G. Lloyd) and urge the Government to take account of the advantages that would come from accepting this proposal, bearing in mind the discipline and the reinforcement of the intentions that would follow from introducing the contractual element in this proposal. I hope that my right hon. and learned Friend the Chancellor will see in this proposal a means of helping the small saver and at the same time providing an effective and safe barrier against inflation.
Mr. Rankin: I have listened to statements from the Government side of the Committee tonight which I welcome, and I want to say how much I regret that I did not hear similar statements last year, the year before and the year before that, when we were pressing from this side of the Committee the very things that are being pressed from the Government side tonight.
A year ago, at this very stage, I made a speech much longer than the one I intend to make tonight advocating—[Laughter.] Well, I do not want to be encouraged to depart from what I have just said. I urged the very things that have been urged from the Government side tonight. I am very sorry that I cannot quote all the hon. Members who have spoken so wisely, but I have listened to them saying things like this: "The small saver should be assisted" and "The Government have waited too long to help." I hope the Chancellor of the Exchequer is listening to those statements. He did not listen to some of the statements when they came from this side of the Committee last year or the year before, and I hope he will listen more closely to them tonight. I even heard one hon. Gentleman suggesting

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that the P.A.Y.E. machinery should be used as a method of saving.
We on this side do not differ in any way from Tory Members in wanting to encourage saving. I see the Chancellor smiling. I thought that would draw a smile of encouragement from him. We want people to save. We have a method. It is not the machinery of P.A.Y.E. It is the co-operative method of saving. The hon. Member for Taunton (Mr. du Cann) mentioned his methods of saving, with which I do not disagree. He mentioned the unit trust and building societies. I have no quarrel with that, but I should have liked him to add the co-operative method of saving to his list, The hon. Member said that the employee earns an average of about f15 per week. The hon. Gentleman asked the employee to set aside in some form of investment a small part of his wage every week. That is a most desirable thing. That is the husband or the son. He is saving out of his wages.
I should like the hon. Gentleman and his colleagues to appreciate that there is another form of saving. When the husband goes home he gives his wages to his wife—all his wages, as good husbands always do, because she is the Chancellor of the Exchequer in the home. She has to run the home. She spends her husband's wages in the cooperative society, if she is a wise and foreseeing woman. A small portion of what she spends in the society is set aside as a saving. That accumulates. The hon. Gentleman is not going to discriminate between the saving that comes
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out of the husband's wages and the saving that comes out of the housewife's or the mother's spending.
The Chancellor has been taxing that form of saving ever since he became Chancellor. I hope that hon. Members opposite, who will be supported by us if they come with us into the Division Lobby tonight in their attempt to encourage and spread saving from wages, will help us in our attempt to encourage saving from spending. It is not a new idea, but if it is to prosper, it must receive support from the Chancellor. He has refused it all along. Tonight he is faced with unanimity on both sides of the Committee in the desire to encourage saving. There is support for the idea from his own back benchers. There is support for a comparable idea, although differently born, from this side of the Committee.
The co-operative idea of saving was not born in the purple. It was born in a thatched cottage in Fenwick in Scotland. There must not be any class discrimination in our attitude to these forms of saving. Having secured the support of both sides of the Committee in regard to the need for saving and there being no disagreement as to the method of saving, we have only one individual to contend with, namely, the Chancellor. If both sides of the Committee will co-operate tonight and become good co-operators, we will force —no;we will not force, because I do not believe in force—we will induce the Chancellor in the long run to do the right thing.
Mr. Brooke: The Committee might think it appropriate—
Mr. Rankin: I thought that the Chancellor was going to reply.
Mr. Brooke: The hon. Member's shafts were wrongly aimed. The Committee may wish a Treasury Minister to express some views about the four proposals put before it. All of them have great interest, and the Committee is clearly at one in wishing to see the maximum incentive given to savings. The hon. Member for Glasgow, Govan (Mr. Rankin) said that there was unanimity in the Committee, but having listened to the debate throughout, I do not remember any Opposition Member speaking in favour of either of the Clauses supported by hon. Members on this side of the Committee. Neither do I remember Members of either of the other parties speaking in support of the new Clause to which the hon. Member for Huddersfield, West (Mr. Wade) referred.
Mr. Rankin Mr. Rankin rose—
Lieut.-Colonel Sir Walter Bromley-Davenport: Sit down.
Mr. Rankin: On a point of order, For my guidance, Sir Robert, can you tell me who is Chairman of the Committee—the hunting colonel or yourself?
Mr. Brooke: With the greatest respect to the hon. Member for Dart-ford (Mr. Sydney Irving) and others who spoke in favour of tax relief for co-operative societies, I do not recollect any hon. Members behind me speaking specifically in favour of that. Although there is a common thread between all four proposals, it would not be right to say that any one commands the universal assent of the Committee. Yet it is of value that we are all agreed on the importance of increasing personal savings, and I think that my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) was right in saying that there is no ground of difference on that general theme, from a party point of view. Surely we would all wish to see voluntary rather than compulsory saving. The proper management of the economy demands a certain level of saving, and if it is not obtainable voluntarily it must be obtained by stern
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Chancellors compulsorily, through higher taxation. I believe that the voluntary system is better, and I am sure that I carry the rest of the Committee with me when I say that. Given a buoyant society, such as we have generally enjoyed during the last eight or ten years, the means of saving exist. But something else is needed, which is even more important than tax incentives. I refer to confidence in the stability of the economy and in our policy to maintain the value of the currency. If we cannot convey that confidence to the people at large they may feel that their savings, which appear likely to achieve a reasonable return by way of interest, may nevertheless dwindle in value.
I did not quite follow my hon. Friend the Member for Halifax (Mr. Maurice Macmillan), who I know has given a great deal of thought to the subject, when he said that there was an absence of outlet for savings now. My hon. Friend the Member for Taunton (Mr. du Cann), who is also extremely interested in the subject, said that the Government were liable to pay lip-service to savings but not to do anything effective about it.
Whereas ten or twelve years ago the amount of net personal savings was comparatively small, in 1957 it had arisen to nearly £1,000 million, and last year—1961—it was over £2,000 million. That is not being done just by a small number of rich men; it means that the savings habit is spreading all the time through the country. There is no question that people are finding the means to save and the media to save.
The question before us is: to what extent should we use the tax system to further the savings movement? It has long been accepted that it is proper to give tax concessions on contributions to pensions and superannuation schemes. It has also long been the practice to give tax relief in respect of Income Tax—but not Surtax—on life assurance premiums.
10.30 p.m.
Since my right hon. Friend the Prime Minister was Chancellor of the Exchequer in 1956, there has been this exemption for the first £15 of interest in

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the Post Office Savings Bank or ordinary department of a trustee savings bank. That equally ranks for Income Tax exemption, but not, of course, for Surtax.
It is right to put before the Committee the general background here. Hon. Members as well as Treasury Ministers have to face the fact that no fewer than three authoritative and independent external bodies in the last 50 years have reported against the use of the tax system to favour savings.
I am not saying that this is a decisive reason, but I am saying that all of us, in considering these matters, should recollect the background. The Royal Commission in 1920, the Royal Commission in 1955, and the Millard Tucker Committee, about the same time, all took the same view. I do not want to bore the Committee, but I think that it is right to quote from paragraph 63 of the Final Report of the Royal Commission on the Taxation of Profits and Income in 1955, which said:
"It seems to us that in principle such a tax is more fairly distributed between A and B, having equal incomes and otherwise equal circumstances, if A and B pay the same amount of tax than if the tax on one of them is lower than the tax on the other because he has reserved part or a larger part of his income from immediate consumption. We think that any tax preference based on personal saving must be weighed against this general principle of equity."
I am not at all sure that the principle which the Royal Commission mentioned should be given absolute overriding authority, but it must be weighed in the balance against other considerations, as the Royal Commission said.
Part of this problem, and a part which particularly troubled the 1920 Royal Commission, is the great variety of schemes, all of them involving some loss of tax revenue, which can be urged if there is a desire to further personal savings through tax exemptions. This discussion in the Committee has underlined that. Three or four schemes entirely different from one another have been brought up and it may well be said that the Government have increased their own difficulties by establishing in 1956 tax exemption for the first £15 of savings bank interest. That concession, as Treasury Ministers recognised at the time that it would do, has accentuated
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the demand for an extension of the principle to other schemes.
Another difficulty, which has hardly been mentioned in this debate, which we must all face—for there is no party issue here—with a number of the proposals canvassed here and elsewhere for tax incentives to further personal savings, is that, with many of these schemes one simply cannot be sure whether an increase in the holding of that particular savings medium has come out of income at all, that is to say whether it has been genuine saving. That is what we all want to encourage. We want people not to spend the whole of their income but to save some of it. It may be that the increase in the particular form of saving which may qualify for tax relief has not come out of income at all. It may have come through realising some other asset and may not be true saving. It will be common ground on both sides of the Committee that there is no case for tax relief when someone is simply switching his money from one form of investment to another, and—
Mr. Glenvil Hall: In order just to earn 2½per cent.?
Mr. Oram: And does the right hon. Gentleman realise that in the case of cooperative investment there is plenty of evidence that it is genuine new savings;that, indeed, 50 per cent. of it comes directly from dividends which people have decided to leave in their accounts rather than draw and spend?
Mr. Brooke: I was coming one by one to the cases included in the new Clauses, but it seemed right to preface my remarks on them by some general considerations that we have to take into account. If the hon. Member will look up my words in HANSARD, he will see that what I said was that this was liable to occur with a number of proposals for savings subject to tax relief.
If new Clause No. 11, which would extend the tax relief to co-operative and friendly societies, were accepted, it would cost the Chancellor about £2½million a year. That is not a great sum but, of course, it will immediately be asked: "Why stop there? Why should this tax relief be given to savings that

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take the form of investment in co-operative or friendly societies? Why should it not be extended to building societies, Trustee savings banks? Why not to municipal banks and joint stock banks?" Then, of course, the cost becomes very different from £2½million.
The hon. Member for Huddersfield, West has a different suggestion. His new Clause is designed to give tax relief on the income derived from all company dividends to a total of £15 a year. That is a variant, but there, again, one can ask "Why should it be company dividends, and not certain other forms of investment income? "—
Mr. Wade: My new Clause was intended to cover any investment income. Whether my wording was adequate, I do not know, but my intention was that all investment income should be treated alike.
Mr. Brooke: I am obliged to the hon. Gentleman. I am afraid that I had not read that intention into his wording. If this were to extend to all investment income, I must advise the Committee that it would cost £40 million a year—a very much larger sum.
The specific exemption given to the first £15 of Post Office Savings Bank income is given, as I said, on the basis that two conditions must be satisfied: that the money invested earns only a low rate of interest—not more than 2½per cent.—and that the money invested must be lent directly to the Government. That has a bearing on the monetary policy of the Government, and is of direct assistance there. I think that the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) said that about 32 per cent. or 33½per cent. of the money invested in the co-operative societies was invested in gilt-edged, but that is only one-third of the amount which, if deposited with the Post Office Savings Bank, would be lent directly to the Government. The co-operatives, naturally and rightly, use their money for various purposes; part of it is used to finance their trading, and part is invested in gilt-edged. The Committee will agree that there is a sharp distinction between money so invested that the whole of it is lent directly to the Government and money which is invested in other most admirable bodies,
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serving their own purposes but which do not exist to pass on to the Government what money is invested in them.
I was not sure as to how far the hon. Member for Dart-ford was pressing his point that co-operative societies were seriously suffering from this. I do not think that one can establish any strong case that the 1956 exemption for savings banks has materially harmed either the co-operative societies or any other bodies which seek to attract investments from the public.
My hon. Friend the Member for Nottingham, South (Mr. W. Clark) raised again a question which was debated last year, when my hon. Friend the Financial Secretary promised to examine it further. I am sorry to have to disappoint my hon. Friend, but I must tell him that further examination of his P.A.Y.E. proposal has only confirmed the view that it would be well-nigh impracticable. I do not say that it is inconceivable, but the more one examines it the more one sees the unattractive difficulties that would arise.
Apart from the practical difficulties, there is the question of the psychological effect, and I am bound to tell the Committee that the National Savings movement as a whole has up to now deprecated the idea of using it to support savings. I think there is a feeling that P.A.Y.E. itself is not a wholly popular operation. Also, most of us have feelings connected with post-war credits which do not make us very enthusiastic about the idea of semi-compulsory savings through the Income Tax system.
I grant that my hon. Friend's scheme would not be semi-compulsory but entirely voluntary, but it would be mixed up with the taxation system, as the post-war credits were.
Mr. W. Clark: I do not understand my right hon. Friend's point in connection with post-war credits. My Clause would give the right to the employee always to have control of his money. Consequently, my right hon. Friend's reference to post-war credits is not quite fair.
Mr. Brooke: I recognise that my hon. Friend's scheme would be entirely voluntary. On the other hand, I was seeking to represent the general view

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which has been conveyed to Treasury Ministers by the National Savings movement that the whole history of post-war credits has cast a certain cloud over any plans that might link up voluntary savings with the taxation system.
I think that the main disadvantage of my hon. Friend's scheme is that it would involve an enormous expansion of staff. I am advised that, if the scheme proved to be popular, and was widely taken up, it would be necessary to add several thousand to the P.A.Y.E. staff of the Inland Revenue Department. As one who is seeking to keep down Government expenditure, that would not be a very attractive prospect to me.
It would not be a wholly satisfactory plan to would-be savers, because it is extraordinarily difficult, unless one is wonderfully well-informed about this, to know what amount of saving one would actually be providing for by asking for a certain change in one's code number. One cannot just read off, from alterations in the code number, the amount of further deductions from earnings that one is likely to have got by the end of the year as savings—in addition to one's tax liability.
There are one or two other minor points in my hon. Friend's new Clause as drafted which would increase the difficulties. For instance, he is seeking to provide that if money were deposited in the Post Office Savings Bank it would attract interest from the previous 6th April. But that would lead to a lot of Post Office deposits, followed by quick withdrawals. I am sorry to have to speak in this way about his scheme, because the general idea is one that, on various occasions, has attracted me to see if one could introduce some contractual scheme in connection with P.A.Y.E.
10.45 p.m.
But the numbers are frightening There are 22 million people under P.A.Y.E. That is why I say that if the scheme proved popular, it might involve several thousand additional staff. I doubt whether employers who, under this scheme, could not opt out, would welcome a plan of this kind which would add something to their work. When we are trying to get the P.A.Y.E. machine to work as quickly and as punctually as possible, there is no get-
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ting away from the fact that this scheme would somewhat slow it up.
I come now to the very interesting new Clause of my right hon. Friend the Member for Sutton Cold-field (Mr. G. Lloyd), and I recognise and respect the purpose behind it. He is seeking, as he said, to provide an incentive to people who would like a bit of capital behind them. He is seeking to add another plan by which they could save not for their dependants in the case of death or for their own retirement, but for some specific purpose twelve or more years ahead. He pointed out, quite rightly, that if they were given some incentive to save so much a year for a period of twelve years or so, there would be a greater likelihood of their keeping it up.
There is virtue in this contractual principle if one can find a successful way of operating it. But I must say here and now that my right hon. and learned Friend the Chancellor of the Exchequer does not feel that this is a Clause which he could accept, for reasons which I will seek to explain in a moment. But he is interested in this whole project and prepared to follow up any scheme that might be devised and that seemed sounder than this.
I must equally say that we in the Treasury have been looking for solutions to these problems and we have not found them. We have been no more successful than my right hon. and hon. Friends. I should state what are the difficulties which a successful scheme of this kind ought to seek to overcome. One is the difficulty of switching, which I mentioned. If my right hon. Friend will consider what I am about to say as sympathetically as he considered the purpose which he intended to serve, he will appreciate that, if we were to incorporate his scheme as it stands into the tax law, it would lead to a very great deal of switching before it started to give any great value in the direction where he wishes to serve a good purpose.
As I read the scheme, although it is true that there is no Surtax relief, it would be available to anybody who had some capital and who could draw on that capital to put up to £150 a year into the scheme and claim tax relief, which I calculate at about £23 a year

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for twelve years. That reduction of £23 a year in tax liability is not unattractive, and I cannot help thinking that large numbers of people quite other than the small savers who my right hon. Friend wishes to encourage would straight away go into this and claim their £23 a year with no loss to themselves and no advantage to the nation.
We must look at what has happened in the past. Reference was made to Mr. McKenna's "unfortunate" reversal of policy when he legislated in 1915 and 1916 to withdraw tax relief from schemes not unlike this. It is important to remember that Mr. McKenna withdrew tax relief from schemes which did not involve a life insurance element simply and solely because they were giving rise to avoidance. What was happening was that somebody entered into one of these contractual schemes for a period of years having made sure that there was a good surrender value if he gave up after a year or two. After a year or two he then gave up, taking the surrender value, and meanwhile he had also enjoyed his tax relief.
My right hon. Friend has very skilfully drawn his Clause so as to safeguard against that. He said he might have dawn it too strictly. There is no possibility of surrender. One cannot get the money back in less than twelve years except on death, unless one simply withdraws one's premiums; one gets no reward unless one leaves the money there for twelve years. That is certainly a very valuable safeguard. But I am bound to ask the Committee how attractive, subject to that condition, this proposed scheme would be to the small saver whom we want to help.
My right hon. Friend spoke of people who would like a bit of capital behind them. But the people who have not got much capital behind them and want a bit of capital behind them want that capital available for emergencies. They do not necessarily want it tied up for twelve years. I am not seeking to make the matter more difficult than it is, but this is a genuine difficulty. If one is to safeguard the scheme against the kind of avoidance use that was made of it before 1916, it is very hard not to render it unattractive to the people who really want money that may be available in case of emergency. I
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fancy there would be strong pressure to release the 12-year tie on the money. I think that there would be certain other difficulties in the scheme which perhaps at this hour I need not pursue at length.
I think that the Committee would wish me to say something about the cost of the scheme. The present cost of the life assurance relief is £60 million a year—a substantial sum. Obviously, one cannot estimate with any certainty what the cost of my right hon. Friend's new Clause would be because nobody could say how much it would be taken up. It would be material, but I do not think one should judge it wholly on the ground of cost because that is so hard to estimate. What I am certainly prepared to say to my right hon. Friend is that the Chancellor is prepared to continue to search for schemes which would overcome the difficulties that I have mentioned but our best efforts in the Treasury have not yet succeeded in finding them. I have, as briefly as I have been able to do, indicated the dilemma which faces anybody who seeks to find a scheme that will serve the wholly desirable purpose that my right hon. Friend has in mind.
I hope that my right hon. Friend will feel that I have dealt with his new Clause not only adequately but sympathetically, because he is on to an important point. His is the most attractive in principle of the new Clauses that we have in front of us, but I am bound to say that, as drafted, it contains objections which up to the present we have found insuperable.
Mr. Mitchison: If I may be allowed three minutes—I will not take more—I am not going to say anything about the schemes that have been put forward with regard to P.A.Y.E. or the scheme that was put forward by the Liberal Party, except that it goes too far, quite obviously. I am not going to say anything either about the scheme which attracted the right hon. Gentleman the Chief Secretary but does not particularly attract me. Of course we want to encourage saving. The question is how far we are going to make exceptional allowances for it in the fiscal system. The insurance companies have done remarkably well out of the life assurance concession in the Income Tax Act.

1313
They, much more than the small saver, I believe, would do remarkably well out of this scheme if it went through. I should prefer to see something a little more in the real interests of the small saver rather than in the real interests of insurance companies.
There are two things which can be done about saving schemes. First, where something is happening by way of saving, it should be encouraged to continue and grow. That applies exactly to what is happening in the cooperative movement. It does not apply to any of the schemes that has been put forward tonight. For that reason, I hope that the Committee will take a fresh and fair view of co-operative saving. There is no real distinction between saving in that form and saving in such a form that the result goes direct to the Government. There may be a difference from the Government's point of view for what I may call matters of high financial policy, but when it comes to encouraging saving help to the cooperative movement in this way is just as useful as help in the direction of the Post Office Savings Bank.
We have had a remarkable debate. No one has even mentioned National Savings. I have listened for the words to come out. That is one way in which a concession is made. The £15 tax-free interest on Post Office savings is another. Premium Bonds is yet another. All those things seem to me to make an even stronger case for giving a concession to the effective channel of working-class savings, if I may use those rather old-fashioned words, which the co-operative movement today represents. It was originally founded in the early years of the nineteenth century to protect the rather poor people from extortion, but it has come a long way from that. It now extends to the vast mass of our fellow citizens. It is in their interests that the Committee should support an Amendment to give the movement the modest fiscal encouragement for which we ask tonight.
Mr. Geoffrey Hirst Mr. Geoffrey Hirst (Shipley) rose—
Hon. Members: Divide.
Mr. Hirst: There is no question about it. I am going to have my say. I cannot let this go as it has been left by my right hon. Friend the Chief Secretary.
1314
Whatever endearing qualities he may have, he is a professional stonewaller. Tonight we have had the biggest piece of stonewalling that I have ever listened to. It is as if the offices are changed but the Brooke goes on for ever.
Tonight hon. Members have made out a solid case. Every argument, relevant or irrelevant, which could possibly be deployed has been used tonight. Authoritative reports have been quoted in some instances but ignored in others. Does that impress anyone? It does not impress me. We have been told a good deal about the cost. The Government and the Chief Secretary realise only too well that the old-fashioned idea of the Budget being the be-all and end-all went out years ago. What counts today is the question of the resources and the capacity and production of the economy as a whole. My hon. Friend the Member for Halifax (Mr. Maurice Macmillan) made that aspect only too clear in an extremely good speech. It is the importance of saving to the economy as a whole. If we can influence people to save more and more, we can start to tax them less and less for the purposes we hear about so often.
Tonight my right hon. Friend lectured the Committee about what happened in 1916. The Government must wake up. [HON. MEMBERS: "Hear, hear."] They must. It is intolerable that we should sit here and listen to that sort of speech. I am not going to spare my right hon. Friend the slightest bit on this. It is the worst speech he has made, or that any other Minister has made, in my twelve years' experience here, and the attitude of the Committee has made it perfectly clear that that is the general opinion.
11.0 p.m.
It is vitally important that savings should be encouraged, and as people get increased incomes, and move into the taxable groups, they will become more and more interested in incentives to save, and they should be encouraged more and more to do so, as is suggested in the new Clause in the names of my right hon. and hon. Friends. They will not be able to do that if they are so heavily taxed as they are, but they could if they were encouraged as my right hon. and hon. Friends would encourage them, and if some of their incomes, within reasonable limits and with the hard and

1315
fast rules as suggested in the new Clause, were relieved of tax.
To wipe all that away as though it were of no importance and to talk about cost is really not treating the Committee with the respect it deserves on this important subject. We have had an important debate, true; but what speech in reply? I am only too sorry that it is not possible, owing to the different natures of the new Clauses, for them to be combined and the Government shown, as they ought to be shown, and have one day got to be shown, that we

Division No. 208.]

AYES

[11.2 p.m.

Abse, Leo

Hart, Mrs. Judith

Probert, Arthur

Ainsley, William

Hayman, F. H.

Pursey, Cmdr. Harry

Albu, Austen

Henderson, Rt. Hn. Arthur (Rwly Regis)

Rankin, John

Allaun, Frank (Salford, E.)

Holman, Percy

Redhead, E. C.

Allen, Scholefield (Crewe)

Hooson, H. E.

Roberts, Albert (Normanton)

Awbery, Stan

Houghton, Douglas

Roberts, Goronwy (Caernarvon)

Blackburn, F.

Howell, Denis (Small Heath)

Rodgers, W. T. (Stockton)

Blyton, William

Hoy, James H.

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

Boardman, H.

Hughes, Cledwyn (Anglesey)

Ross, William

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

Hunter, A. E.

Short, Edward

Broughton, Dr. A. D. D.

Irvine, A. J. (Edge Hill)

Silverman, Julius (Aston)

Brown, Rt. Hon. George (Belper)

Irving, Sydney (Dartford)

Slater, Mrs. Harriet (Stoke, N.)

Callaghan, James

Jay, Rt. Hon. Douglas

Snow, Julian

Castle, Mrs. Barbara

Jeger, George

Soskice Rt. Hon. Sir Frank

Cliffe, Michael

Jenkins, Roy (Stechford)

Spriggs, Leslie

Craddock, George (Bradford, S.)

Jones, Dan (Burnley)

Stewart, Michael (Fulham)

Cullen, Mrs. Alice

Jones, Jack (Rotherham)

Stonehouse, John

Davies, G. Elfed (Rhondda, E.)

Jones, J. Idwal (Wrexham)

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

Davies, Harold (Leek)

Jones, T. W. (Merioneth)

Swingler, Stephen

Davies, Ifor (Cower)

Kelley, Richard

Taverne, D.

Davies, S. O. (Merthyr)

Lawson, George

Taylor, Bernard (Mansfield)

Deer, George

Ledger, Ron

Thornton, Ernest

Delargy, Hugh

Lever, L. M. (Ardwick)

Timmons, John

Diamond, John

Lewis, Arthur (West Ham, N.)

Tomney, Frank

Dodds, Norman

Loughlin, Charles

Wade, Donald

Edwards, Rt. Hon. Ness (Caerphilly)

Mabon, Dr. J. Dickson

Wainwright, Edwin

Edwards, Robert (Bilston)

Mclnnes, James

Warbey, William

Evans, Albert

McKay, John (Wallsend)

Watkins, Tudor

Finch, Harold

MacMillan, Malcolm (Western Isles)

Weitzman, David

Fitch, Alan

MacPherson, Malcolm (Stirling)

Wells, William (Walsal, N.)

Fletcher, Eric

Manuel, Archie

Willey, Frederick

Forman, J. C.

Millan, Bruce

Williams, D. J. (Neath)

Fraser, Thomas (Hamilton)

Milne, Edward

Williams, LI. (Abertillery)

Galpern, Sir Myer

Mitchison, G. R.

Williams, W. T. (Warrington)

Ginsburg, David

Morris, John

Willis, E. C. (Edinburgh, E.)

Gordon Walker, Rt. Hon. P. C.

Oram, A. E.

Wilson, Rt. Hon. Harold (Huyton)

Gourlay, Harry

Owen, Will

Woof, Robert

Griffiths, W. (Exchange)

Pannell, Charles (Leeds, W.)

Wyatt, Woodrow

Grimond, Rt. Hon. J.

Pargiter, G. A.

Hale, Leslie (Oldham, W.)

Parkin, B. T.

TELLERS FOR THE AYES:

Hall, Rt. Hn. Glenvil (Colne Valley)

Pavitt, Laurence

Mr. Charles A. Howell and

Harper, Joseph

Pentland, Norman

Mr. Grey

NOES

Agnew, Sir Peter

Birch, Rt. Hon. Nigel

Chataway, Christopher

Aitken, W. T.

Bishop, F. P.

Chichester-Clark, R.

Allan, Robert (Paddington, S.)

Black, Sir Cyril

Clark, Henry (Antrim, N.)

Ashton, Sir Hubert

Box, Donald

Clark, William (Nottingham, S.)

Barber, Anthony

Boyd-Carpenter, Rt. Hon. John

Cooke, Robert

Barter, John

Boyle, Sir Edward

Cooper, A. E.

Batsford, Brian

Braine, Bernard

Cordeaux, Lt.-Col. J. K.

Bennett, F. M. (Torquay)

Bromley-Davenport, Lt.-Col. Sir Walter

Corfield, F. V.

Bennett, Dr. Reginald (Gos & Fhm)

Brooke, Rt. Hon. Henry

Costain, A. P.

Berkeley, Humphry

Brown, Alan (Tottenham)

Coulson, Michael

Bidgood, John C.

Bullard, Denys

Craddock, Sir Beresford

Biffen, John

Campbell, Gordon (Moray & Nairn)

Crosthwaite-Eyre, Col. Sir Oliver

Biggs-Davison, John

Carr, Compton (Barons Court)

Crowder, F. P.

Bingham, R. M.

Carr, Robert (Mitcham)

Curran, Charles

are growing up as a nation and beginning to realise, as it ought to be realised, the fact that it is not merely a question of cost to the Exchequer—that old-fashioned talk—but a question of how far this continual spending shall continue to undermine the economy. That is the idea behind my right hon. and hon. Friends' new Clause, and it deserves better of the Government than it has got.
Question put, That the Clause be read a Second time:—
The Committee divided: Ayes 122, Noes 192.

Currie, G. B. H.

Leavey, J. A.

Renton, David

Dalkeith, Earl of

Legge-Bourke, Sir Harry

Ridley, Hon. Nicholas

d'Avigdor-Goldsmid, Sir Henry

Lewis, Kenneth (Rutland)

Roberts, Sir Peter (Heeley)

Deedes, W. F.

Litchfield, Capt. John

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

Donaldson, Cmdr. C. E. M.

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

Rodgers, John (Sevenoaks)

Doughty, Charles

Lloyd, Rt. Hon. Selwyn (Wirral)

Roots, William

Drayson, G. B.

Longden, Gilbert

Scott-Hopkins, James

Elliot, Capt. Walter (Carshalton)

Loveys, Walter H.

Seymour, Leslie

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

Lucas-Tooth, Sir Hugh

Shaw M

Emery, Peter

MacArthur, Ian

Shepherd William

Errington, Sir Eric

McLaren, Martin

Skeet T. H. H.

Farr, John

McLean, Neil (Inverness)

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

Fisher, Nigel

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

Smithers, Peter

Fraser, Ian (Plymouth, Sutton)

Macpherson, Niall (Dumfries)

Smyth, Brig. Sir John (Norwood)

Freeth, Denzil

Markham, Major Sir Frank

Spearman Sir Alexander

Gammans, Lady

Marten, Neil

Stanley Hon. Richard

Gardner, Edward

Mathew, Robert (Honiton)

Steward, Harold (Stockport, S.)

Gibson-Watt, David

Matthews, Gordon (Meriden)

Stodart, J. A.

Gilmour, Sir John

Maxwell-Hyslop, R. J.

Stoddart-Scott Col Sir Malcolm

Goodhart, Philip

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

Storey, Sir Samuel

Goodhew, Victor

Mills, Stratton

Studholme, Sir Henry

Gower, Raymond

Miscampbell, Norman

Tapsell, Peter

Grant, Kt. Hon. William

Montgomery, Fergus

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

Green Alan

More, Jasper (Ludlow)

Teeling, Sir William

Hall, John (Wycombe)

Morgan, William

Temple, John M.

Hamilton, Michael (Wellingborough)

Nabarro Gerald

Thatcher, Mrs. Margaret

Harris Frederic (Croydon, N.W.)

Neave, Airey

Thomas, Leslie (Canterbury)

Harris, Reader (Heston)

Oakshott, Sir Hendrie

Thomas, Peter (Conway)

Harrison, Col. Sir Harwood (Eye)

Osborn, John (Hallam)

Thompson, Kenneth (Walton)

Harvie Anderson, Miss

Page, Graham (Crosby)

Tiley, Arthur (Bradford, W.)

Hastings, Stephen

Pannell, Norman (Kirkdale)

Touche, Rt. Hon. Sir Gordon

Hay John

Partridge, E.

Turner, Colin

Hiley, Joseph

Pearson, Frank (Clitheroe)

Turton, Rt. Hon. R. H.

Hill Mrs Eveline (Wythenshawe)

Peel, John

van Straubenzee, W. R.

Hinchingbrooke, Viscount

Percival, Ian

Vickers, Miss Joan

Hocking, Philip N.

Pickthorn, Sir Kenneth

Vosper, Rt. Hon. Dennis

Holland, Philip

Pike, Miss Mervyn

Wakefield, Sir Wavell

Hollingworth, John

Pilkington, Sir Richard

Walker, Peter

Hopkins, Alan

Pitman, Sir James

Ward, Dame Irene

Hornby, R. P.

Pitt, Miss Edith

Wells, John (Maidstone)

Hornsby-Smith, Rt. Hon. Dame P.

Pott, Percivall

Whitelaw, William

Hughes Hallett, Vice-Admiral John

Powell, Rt. Hon. J. Enoch

Williams, Dudley (Exeter)

Hughes-Young, Michael

Price, David (Eastleigh)

Wilson, Geoffrey (Truro)

Jenkins, Robert (Dulwich)

Prior, J. M. L.

Wise, A. R.

Johnson, Or. Donald (Carlisle)

Prior-Palmer, Brig. Sir Otho

Wolrige-Gordon, Patrick

Johnson, Eric (Blackley)

Proudfoot, Wilfred

Worsley, Marcus

Jones, Rt. Hn. Aubrey (Hall Green)

Pym, Francis

Yates, William (The Wrekin)

Kaberry, Sir Donald

Ouennell, Miss J. M.

Kerans, Cdr. J. S.

Rawlinson, Peter

TELLERS FOR THE NOES:

Kimball, Marcus

Redmayne, Rt. Hon. Martin

Mr. Finlay and Mr. J. E. B. Hill.

Lambton, Viscount

Rees, Hugh

Langford-Holt, Sir John

Mr. Selwyn Lloyd: I beg to move,
That the Chairman do report Progress and ask leave to sit again.
I cannot pretend to be exhilarated by the progress which we have made so far. I think that we have made a certain amount of progress, and I hope that we shall make rather faster progress tomorrow. In all the circumstances, I think that it would be appropriate, and not very unpopular, if I moved to report Progress now.
Mr. James Callaghan: I am not surprised to hear that Motion moved at this stage in the proceedings, when we have just heard the worst speech in the twelve years in which the hon. Member for Shipley (Mr. Hirst) has sat in the House. It does not surprise me that the Government have decided to throw in the towel. This is very welcome to us; we hoped that the
1318
Chancellor would move the Motion at this point. But I do not know whether my persuasions were more important or whether it was the stabs in the back which he received from some of his supporters. If the Government could have seen the faces of their supporters while the last series of new Clauses were being discussed, they would feel very worried about Middlesbrough, West and Derbyshire, West.
Mr. Selwyn Lloyd: The hon. Member is trying.
Mr. Callaghan: The complaint of some of the Government supporters is that the Government are not even trying.
We are glad that the Chancellor has moved the Motion. We are delighted to finish on this happy note of the speech by the hon. Member for Shipley, and we shall renew the combat tomorrow with

1319
the aid, at least vocally, of the hon. Member. Some day we may even attract his vote.
Mr. Hirst: The hon. Member has had it before now.
Question put and agreed to.
Committee report Progress: to sit again tomorrow.

SUB-POST OFFICE WARRINGTON
11.13 p.m.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. J. E. B. Hill.]
Mr. W. T. Williams: The case to which I should like to draw attention tonight is a rather unhappy case, of which the Minister already knows a great deal. It is one, as he knows, which has given me great concern and anxiety and which has given rise to a good deal of concern in my constituency.
The facts of the case, quite briefly, are that in August, 1961, the sub-postmistress of Folly Lane sub-post office in Warrington discussed with the head postmaster there the possibility of resigning her position. The sub-postmistress, Mrs. Tabern, at that time had no fewer than thirty years' service with the Post Office, twenty years of that as sub-postmistress of the Folly Lane sub-post office. Her reasons for resigning were such as I think would commend themselves to the sympathy of the House. She has a sick daughter who has been receiving treatment at a London hospital. After being an in-patient in the hospital, the daughter now has to visit a specialist continually in London. The second daughter was hoping to have begun college training in London in the autumn.
Mrs. Tabern has told me she explained to the head postmaster her anxiety to remove to London for these reasons, of her need to sell her own premises if she was to buy other premises in London, and of her fear, if the negotiations broke down in respect of her new premises, of losing her livelihood unless some arrangement could be reached by which it would be possible for her, if the negotiations broke down, to withdraw her resignation. At that time the head
1320
postmaster told her that he understood the position and assured her that in the circumstances she would be able to withdraw her resignation "until the very last date."
It is clear that there is some ambiguity about those last words and apparently they have been differently understood by Mrs. Tabern and by the head postmaster. Mrs. Tabern thought them to mean until the last effective day of her resignation. The head postmaster took them to mean until the last day on which new applications would be received. Perhaps even that would not have mattered but, as things turned out, this lady feels she has now a number of grounds of grievance about which not only she but nobody can be very happy.
In the event, a number of applications were received and a young lady was appointed who had been employed as a clerk at head office and who bought premises about 150 yards away from those occupied by Mrs. Tabern, premises which Mrs. Tabern needed to sell if she was to proceed with her own purchase of London premises. The House may feel that perhaps it was unfortunate that the head postmaster, knowing her position, as the situation developed, did not warn Mrs. Tabern of the way things were going. He had to give consent for the removal of the premises from Mrs. Tabern. He must have known that the consequences to Mrs. Tabern of being unable to sell her premises would be disastrous to what were, after all, her proper plans.
Mrs. Tabern says that the first intimation she had was on 15th December, 1961, that is about three weeks after the closing date for the receipt of new applications. She was then told by the head postmaster that a new appointment had already been made and that the new post office was to be further down the lane, about 150 yards away from hers. According to her understanding of the agreement, she then attempted to withdraw her resignation but she was told that that was impossible as the new appointment had been made and new premises negotiated. The effective result of this procedure has been that Mrs. Tabern has lost her source of livelihood and has been unable to obtain the alternative office which was so important to her and to her family.

1321
I have spoken of the unfortunate fact that the head postmaster did not advise Mrs. Tabern of the way things were going as he might well have done. There are, however, other rather more unhappy features of the case on which I have already spoken to the Minister. In the first place, it is required that copies of vacancies are sent to the vacant office, the nearest other office, the head office counter, the Ministry of Labour, and the local secretary of the Federation of Sub-Postmasters.
In this case, Mrs. Tabern has insisted throughout that she never received any notice, and that she was never told of the closing date for vacancies. The Minister has said that, in fact, it is unlikely that the head office could have made a mistake about this, but I have in my hand the notice to the secretary of the Federation of Sub-Postmasters. The Minister may care to look at it, and see that there has been a mistake, because there is no reference in this notice to any closing date.
Further, Mrs. Tabern has since assured me that a member of the head office staff will confirm that Mrs. Tabern had rung up to complain that no notice had been sent to them while the intermediate days were running. It is not my object to make public scandal, but I can let the Minister have the name of that official if she wants it.
On the question of allocating premises other than those already in use, I have already spoken to the Minister of the failure of those personally concerned—for, after all, this lady had served the General Post Office for thirty years without blemish and without complaint. But the situation that has arisen has given rise to wider concern merely than that. On 13th March of this year, after I had discussed the case somewhat unprofitably with the Minister, I asked the Postmaster-General:
"…(1) what are normally the minimum distances in urban areas between sub-post offices;
(2) in what circumstances, and for what reasons, permission is given for post offices in urban areas to be situated within less than the normal distance between sub-post offices."
The Assistant Postmaster-General replied:
"The normal minimum distance between sub-post offices in urban areas is a mile, but we do not apply this standard rigidly. We also take into account the number and position
1322
of the houses in each area, the nature of the local shopping facilities, whether the journey to the nearest post office is particularly difficult, and the possible need to make special provision for old age pensioners."—[OFFICIAL REPORT, 13th March, 1962;Vol. 655, c. 137.]
In view of the discussions that have taken place between the Minister and myself about Folly Lane, and since the Assistant Postmaster-General knew at the time of the background of those Questions, I hope that I shall not be thought discourteous if I say that I thought those Answers a little disingenuous. I therefore asked the Postmaster-General, on 27th March, 1962:
"…(1) for what reasons he authorised the establishment of a sub-post office in Folly Lane, Warrington, which was situate further from the Dallam Estate than the sub-post office which it replaced, and is within a distance of 700 yards from its neighbouring sub-office? "
The hon. Lady replied:
"As I told the hon. Member in reply to his Questions on 13th March, we do not apply our standards rigidly where special circumstances obtain;and, as regards Folly Lane, our decision meant that local residents were not deprived of facilities they had had for many years."—[OFFICIAL REPORT, 27th March, 1962;Vol. 656, c. 97.]
In the circumstances of this case, it would seem that those last replies were perhaps a little more than disingenuous. In the first place, some six years ago, as the Minister knows, Mrs. Tabern herself asked leave to remove her sub-post office from her then premises to the address for which permission has been given to her successor. She was refused permission to transfer, on the grounds that it was too near the sub-post office in Bewsey Road, which was the neighbouring post office less than 700 yards away.
That, I am told, can be confirmed, if the Minister chooses, by contacting the sub-postmaster in Bewsey Road. It is a little difficult to see in what respect the situation has changed so that what was then regarded as fatal to a transfer is now regarded as being all right. In fact, the change in poliicy has caused some anxiety, not only to Mrs. Tabern and her friends, and to others in the constituency, but also to the Federation of Sub-Postmasters. The general secretary of the Federation wrote to his local branch in Warrington to suggest that it might be better to make a protest to the head postmaster about the re-siting of this

1323
office. I read from his letter the relevant paragraphs:
"There is provision in the Rules for the Staff Side to be consulted when a Head Postmaster is considering the repositioning of a Sub-Office.
While we must recognise that the Rule is mainly concerned with forward planning to meet developing areas, its existence at least gives you some ground for protest in the present circumstances. I understand from Mrs. Tabern that some years ago they wanted to move to get better premises, and the Head Postmaster at that time would not agree to the move suggested because of the effect on the Bewsey Road, which will be within half-a-mile of the new location.
…the Federation had an agreement with the Post Office to ensure that when it was intended to re-position an office there would be prior staff consultation and that this is provided for in Head Postmasters' Manual C I 6."
That does not appear to have been done in this case. The letter makes the further comment that this gave rise to in turn to some concern, and continues:
"Although it does not affect any action you can take, I understand that a serving Sub-Postmaster from Nyewood, Rogate, Petersfield, applied for this appointment but that the Head Postmaster said he could not be appointed as he was unable to attend for interview until after Christmas."
Mrs. Tabern's resignation did not take effect until after Christmas. In these circumstances, I feel that it is perhaps unfortunate that until these matters were brought to the attention of the Postmaster-General as early as 22nd December, and before the new appointment had taken effect, the only response from the hon. Lady to the appeals that came not only from me but also from others in Warrington who are greatly disturbed was that it was impossible to do anything about it and to express her regret that there was nothing she could do to help Mrs. Tabern.
It is difficult to see now what can be done, but it is certainly not right that the sense of grievance of a servant of the General Post Office for thirty years at such treatment should go unrecorded.
My last appeal to the hon. Lady is this: will she not even now do what lies in her power to mitigate the misfortune that this lady has incurred? Will she not see to it that everyhing that can be done will be done to ensure that any chance Mrs. Tabern may have to find another place to serve will not be denied
1324
to her? If, as the hon. Lady told me, she feels that to undo this act would be unfair to other people involved, will she not consider that as the letter of the law has been strictly and perhaps unfairly invoked against Mrs. Tabern, she also has some claim upon the concern of the Postmaster-General?
11.28 p.m.
The Assistant Postmaster-General (Miss Mervyn Pike): The facts as put forward by the hon. Gentleman are, of course, substantially as we discussed them in March and even in January this year. I do not think I need weary the House by going over these facts again. It is true that Mrs. Tabern did discuss with the head postmaster of Warrington in August last the reasons for her resignation, and they are reasons which command the sympathy of all of us. Indeed, they commanded the sympathy of the head postmaster and led him to assure her that he would help her as much as he could in her move at that time.
I believe I am right in saying that he assured her that every assistance would be given to her in her search for a sub-post office near London so that she could see her daughter. On 30th October, she sent in her resignation, which was acknowledged by him on 31st October. As the hon. Gentleman has said, notices of vacancy went out on 6th November, which stated that the last day for applications was 24th November.
I agree with the hon. Gentleman that Mrs. Tabern now says that she did not receive that notice of vacancy. Tonight he has told me that he has knowledge of the fact that she did telephone the head post office. I can only regret that he did not tell me of that fact before, because this is the first time I have heard it, and at this point I am not in a position either to accept or deny that statement. The hon. Member and I have discussed the matter fully, once personally and also by letter, and I am sorry that this is the first time that he has acquainted me with the fact that there was a mistake in the notice to the secretary of the National Federation of Sub-Postmasters. Even so, these factors do not alter the case upon which I based my judgment in January this year—I think that the hon. Member said that 22nd December was the first time that I heard of it.

1325
Six applicants applied for the post of sub-postmaster as a result of the vacancy notice which was posted up, and three of those were chosen for the short list. All three were people well qualified to run a sub-post office and at that point what the head postmaster had to decide was which person could offer in the first place the best qualifications, allied, of course, to suitable premises for the discharge of the duty of sub-postmaster.
I stress that we have to have careful regard to the qualifications of the person concerned and along with this we have to take into consideration the new premises which he might offer and consider whether those premises are equally suitable premises for the general public and the efficient running of a post office.
On this occasion, only one person in the end proved suitable, having qualifications and premises. The hon. Member mentioned a Mr. Morgan who was a sub-postmaster down in Hampshire and who could not come for an interview until January. But the facts about Mr. Morgan's application were not only that he could not come for an interview until January, but that he had stated to the head postmaster that he would be unable to take up his duties in February, which was the operative date when it was necessary for the sub-postmaster to take up his duties.
In the event, Mrs. Pressage, one of the applicants, came forward without premises and was therefore ineligible for the post and, as I have already stated, another candidate, Mr. Morgan, stated not only that he could not come for an interview until January, but that he could not take up his duties in February, when it was necessary for the sub-post office to be taken over by the new applicant. The only applicant with the qualifications was Mrs. Lycett who was a counter clerk, as the hon. Member said, at the Warrington Head Post Office, well qualified for the job of sub-postmistress, having the premises at 26, Folly Lane, which are, as the hon. Member said, 150 yards on the other side of the road from the present premises.
The hon. Member mentioned the fact that six years ago the head postmaster then said that these premises were not suitable for the repositioning of the post
1326
office, which was then being run by Mrs. Tabern. He has made some play of the obligation, which we try to fulfil wherever possible, of consulting all the interested parties when we are repositioning a post office. But on this occasion we were not concerned with the repositioning of the post office but with the appointment of a sub-postmaster, or sub-postmistress, to take over the premises on the relinquishing of the office by Mrs. Tabern on 31st January.
The hon. Gentleman mentioned also that the head postmaster when discussing this problem with Mrs. Tabern had said that he would allow her to withdraw her resignation right up to the last day. Naturally, I do not deny that Mrs. Tabern may in all honesty have thought that he meant that she could withdraw her resignation right up to 31st January, but it is unrealistic to consider for a moment that he was in fact giving her that impression. His responsibility is to ensure that there is a sub-post office in operation from the moment of the relinquishment of the previous office so that there is complete continuity of the office for the purposes of the general public.
So in this case his responsibility was to ensure that there was a new sub-post office in being with a new sub-postmaster on 1st February, 1962. It is quite un realistic to suppose that he really gave the impression to Mrs. Tabern that she was able to withdraw her resignation right up to 31st January. What the head postmaster, in his honest attempt to help Mrs. Tabern as much as possible, wished to convey to her was that, in fairness to the other applicants who possibly had entered into negotiations for new premises, he would be bound to consider the applications which had come in but if she had second thoughts before the last day when applications closed he would consider her plea to withdraw her resignation.
It is an unfortunate factor in this case that out of the five notices that went out, Mrs. Tabern's, according to her, was not received by her. We cannot explain why that notice was not received by her. We know that—this is my knowledge of the case—the notice was sent out to her.

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The position I found myself in at the end of December when the case was brought to my notice was that on 14th December the head postmaster had confirmed the appointment of a new sub-postmistress. He had confirmed the appointment of Mrs. Lycett, who at that point had bought new premises and had entered into a contract to adapt the new premises to the requirements of the General Post Office so that she might carry on the sub-post office there. At that point he had notified her that she had been successful and that she was due to start her office as sub-postmaster on 1st February.
Mrs. Lycett immediately started the adaptation of her premises. There was very little time. It was just before Christmas, with all the delays that occur over the Christmas period in trying to do structural alterations to premises. She had to get on straight away with the adaptation of the premises at 26, Folly Lane in order to reach the point on 1st February which she did.
The head postmaster himself went to tell Mrs. Tabern of the new appointment on 15th December. There was, of course, no need for him to go himself to tell her of this, but he thought that in the circumstances he should go and tell her of the new appointment. It was at that point that she asked for her resignation to be withdrawn. It was at that point that he explained to her that it was too late. As I say, it was not until 22nd December, when the new sub-postmistress had already been confirmed in her appointment, that the appeal was made to me that the whole matter should be put back into the melting pot. We all have the greatest sympathy with Mrs. Tabern. I have assured the hon. Member that we shall do everything we possibly can to help her to obtain the position of sub-postmistress either in her own district where she is now or in the London district to which she wishes to move.
The hon. Gentleman went on to say some things about the way in which we position our post offices and about the yardsticks which we use. I should like to take this opportunity of stressing that, although we have obviously to lay down fairly rigid yardsticks for the use of head postmasters when they are
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deciding upon the positioning of post offices and the granting of new sub-post offices to districts, at the same time we try to be very flexible in our interpretation of those rules. So the position is that when the head postmaster has looked at the circumstances of the case and has probably decided that within the strict interpretation of the rules there is no case for a new sub-post office, it is at that point that the regional headquarters reviews the case. These matters are constantly being reviewed, as I am always telling the House. We are constantly looking at the positioning of our sub-post offices. It is at that point that the regional headquarters looks at the case to see whether there are any exceptional features and ways in which we can discharge our responsibilities to the public without being too rigid in keeping to the letter of our own rules. It is at that point that we try to be as flexible as possible.
Even after this review has been entered into, these cases come up to headquarters, where it is my responsibility to look at them and find if there are any exceptional cases. As the hon. Gentleman knows from Dallam Estate in his constituency, having looked at the case myself and seen all the features of the case, I decided that exceptionally a sub-office could be granted. That is the way these rules are worked. There is nothing disingenuous about our replies, nor is there anything insincere about my repeated assurances to hon. Members that we do look at these matters very sympathetically.
There is nothing much that I can add tonight to the facts which have been outlined by the hop. Gentleman and the facts as I have tried to portray them to the House. I should like to stress that in this case the head postmaster acted perfectly correctly. It may well be that the hon. Gentleman thinks that he should have bent the regulations here and should have helped there. His responsibility was to make absolutely certain that, when the resignation of Mrs. Tabern became affective on 31st January, he had a fit and proper person with fit and proper premises to continue the sub-office in that district on 1st February. All his efforts were bent to that end and he chose a first-class person to run the post office. The post

1329
office is well positioned to serve the needs of the district and we believe that the new postmistress is doing an excellent job.
We are all sorry for the circumstances in which Mrs. Tabern finds herself at this time. I can only repeat my assur-
1330
ance that anything we can do to see that she gets suitable premises near London will certainly be done by my Department.
Question put and agreed to.
Adjourned accordingly at nineteen minutes to Twelve o'clock.

LOCAL GOVERNMENT
  Areas of Outstanding Natural Beauty
  Areas of Outstanding Natural Beauty
TECHNICAL CO-OPERATION
  Technical Education
  Technical Education
HOUSING
  Cwmbran
  Cwmbran
TRADE AND COMMERCE
  Scotland
  Scotland
  Cotton Textile Industry
  Cotton Textile Industry
  Small Investors and Depositors
  Small Investors and Depositors
SWAZILAND
  Trade
  Trade
WEST INDIES
  East Caribbean Federation Conference
  East Caribbean Federation Conference
KENYA
  Constitution
  Constitution
MINISTRY OF WORKS
  Royal Parks (Chairs)
  Royal Parks (Chairs)
  Richmond Park (Road Patrols)
  Richmond Park (Road Patrols)
POST OFFICE
  Picture Postcards (Date Stamping)
  Picture Postcards (Date Stamping)
  Postal Rates (Charitable Organisations)
  Postal Rates (Charitable Organisations)
  Training Colleges, West Midlands
  Training Colleges, West Midlands
WIRELESS AND TELEVISION
  Illegal Broadcasts
  Illegal Broadcasts
AGRICULTURE, FISHERIES AND FOOD
  Small Farmer Scheme
  Small Farmer Scheme
MINISTRY OF HEALTH
  Hearing Aids
  Hearing Aids
HOSPITALS
  Welsh Regional Hospital Board
  Welsh Regional Hospital Board
EDUCATION
  Teachers
  Teachers
EMPLOYMENT
  European Social Charter
  European Social Charter
SCOTLAND
  Randolph Wemyss Hospital, Buckhaven
  Randolph Wemyss Hospital, Buckhaven
NATIONAL FINANCE
  Civil Servants (Pay Warrants)
  Civil Servants (Pay Warrants)
  Civil Service (Salaries and Wages)
  Civil Service (Salaries and Wages)
  Royal College of Science and Technology, Glasgow
  Royal College of Science and Technology, Glasgow

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

DEFINITION OF "ADVERTISING AGENT"
2.34 p.m.
LORD SHACKLETON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the term "Advertising agent" has been considered by the courts and what meaning Her Majesty's Government attach thereto.]
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I assume that the noble Lord has in mind Section 5 (1) of the Television Act, 1954. This Section has not been considered by the Courts. My own view, after consulting the Law Officers, is that the provision applies to a person or company who buys advertising space or time for a third party. It was the intention of the Government, when asking Parliament to enact the section, that it should bear this meaning, and I understand that the Independent Television Authority, which is charged by Parliament with the duty of enforcing the provision, attaches the same meaning to it.
LORD SHACKLETON: My Lords, while I accept that that may have been the intention of the Government, I am sure the noble and learned Viscount will agree that, whatever was said in introducing the clause, or whatever the intention may be, it does not decide what is the law. Would he not now think, in view of the concern that has genuinely been felt, that the matter ought to be clarified, possibly by some Amendment of the Act?
THE LORD CHANCELLOR: My Lords, I entirely agree with the noble Lord that the intention of the Government is not relevant to construing the
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section; that is why I was careful to give my own view before mentioning that fact. I think it is rather early to discuss the terms of the next Television Act, but I am anxious that this point should be clear and I realise that the noble Lord wishes to clarify it. I think that part of the difficulty, as I am sure he will agree, is that the term "advertising agent" is misleading because, as a general rule, an advertising agent contracts as a principal and not as an agent. I think it is from that that some of the difficulty has arisen. Therefore, if the noble Lord will allow me, I should like to make that as clear as I can.
Advertising agents buy space or time for their clients, the advertisers. In doing so, they are wholly independent of the medium or media in which they place the advertisements. In short, as my noble friend Lord St. Oswald said, the distinction is between the organisation whose function it is to sell space which it owns or otherwise has the right to dispose of, and that whose function it is to place advertisements in media in which it has no such right. The latter alone is considered to be an advertising agent. That is as clear as I can make it, but I will certainly convey to my right honourable friend the Postmaster General what the noble Lord has said, with a view to his having it in mind for future developments.

THE MOLONY COMMITTEE'S REPORT
BARONESS BURTON OF COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether it is their intention to publish the Report of the Molony Committee prior to Parliament rising for the Summer Recess.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE): My Lords, this is a long Report, and printing will inevitably take some time. My right honourable friend the President of the Board of Trade is anxious to see it published quickly—if possible before the Summer

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Recess—but he cannot yet make a close enough forecast of the date to offer any firm promise.
BARONESS BURTON OF COVENTRY: My Lords, while being very glad that the President of the Board of Trade is as anxious as we are that this Report should see the light of day, may I ask whether the Minister would not consider it unfortunate if it were not published in time for us to have a discussion in this House before rising for the Summer Recess? Is he aware that many organisations are very interested in this Report and that it would be a pity to delay a discussion on it until October?
EARL WALDEGRAVE: My Lords, the question whether or not there should be a discussion in this House is not, of course, a matter on which I can offer any opinion. That can no doubt be arranged through the usual channels.
BARONESS BURTON OF COVENTRY: My Lords, finally, may I ask the Minister whether he thinks there is any foundation in unofficial opinions which are going about that this Report is likely to be published in mid-July?
EARL WALDEGRAVE: My Lords, I think that it would be unwise for me to try to give foundations to unofficial opinions which axe going about and of which I am not myself aware.
LORD LUCAS OF CHILWORTH: My Lords, would the noble Earl convey to his noble friend that the Report should be published, so that if this House does want to debate it it will have the opportunity? We cannot have even the opportunity if the Report is not published. I can understand that the noble Earl is not able to express an opinion whether or not there should be a debate, but surely he can convey to his right honourable friend the desire of this House to debate it, and so have the Report published in time.
EARL WALDEGRAVE: My Lords, I really think that I cannot depart from my previous Answer. My right honourable friend is anxious that this Report shall be published as quickly as possible. When the Report is published, it will run to some 300 pages in White Paper form. It will take some time before it is available for publication from the Stationery Office.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, is it not fairly clear from what has been said in answer to the Question that there is going to be no discussion in Parliament before the Long Vacation? Therefore, would it be possible, after the long delay of the Vacation, to publish simultaneously the Molony Report and the noble Earl's opinions on it, plus the revised Weights and Measures Bill? We have waited a long time in this House for that.
EARL WALDEGRAVE: My Lords, these are weighty matters, but I will certainly bring them to the attention of my right honourable friend.
LORD AUCKLAND: My Lords, whilst appreciating the reply of my noble friend, may I ask whether he is aware that home safety and other safety committees are in dire need of direction emanating from this Report, and also that the Interim Report was published more than two years ago? Could the Government attach some urgency to the publication of what is going to be a very important Report?
LORD HAWKE: My Lords, could my noble friend tell us roughly what the Report is about? It seems to be connected with weights and measures, so far as I can make out.
EARL WALDEGRAVE: My Lords, the Report is about a number of weighty matters. It arose, I believe, originally out of the difficulties of the safety regulations for oil burners. That was perhaps one of the things which started the Report. I do not think that I can go further. The Question on the Paper asks whether the Report will be published before Parliament rises for the Summer Recess.
BARONESS BURTON OF COVENTRY: My Lords, as the Minister seems to think that the Board of Trade may take more than three months—seeing that they received this on April 25—to publish the Report, may I ask whether he thinks it will be delayed so long that it will not be included in the Queen's Speech for the next Session?
EARL WALDEGRAVE: My Lords, I really cannot answer that question. It would be pure speculation on my part.

DESIGN OF LONDON TAXICABS
2.41 p.m.
LORD DYNEVOR: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware of the inconvenience caused to elderly and/or infirm persons by the latest design of London taxicabs, and whether they will cause a sufficient number of cabs to be licensed that have a running board or step by which to get in or out.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (EARL BATHURST): My Lords, the design of London taxicabs is a matter for the manufacturers, subject, however, to conditions of fitness laid down by the Deputy Commissioner of Police of the Metropolis as licensing authority. As a result of a review by a technical advisory committee appointed by the Deputy Commissioner, changes are to be made in these conditions. The new conditions will require the top of the tread of the lowest step for any entrance to a London taxi, or, where there is no step, the floor level itself at the entrance, to be not more than 15 inches above the ground when the vehicle is unladen. The maximum height under the current conditions is 17 inches.
BARONESS SUMMERSKILL: My Lords, in view of the changes in the design of these cabs, if an individual sustains an accident on entering or alighting, can the noble Earl say whether he or she would be covered by the insurance companies?
EARL BATHURST: My Lords, off-hand I cannot answer the noble Lady's question, but I will write to her.
LORD LUCAS OF CHILWORTH: My Lords, is the noble Earl aware that the noble Lord who has raised this question has performed a public service, because whoever passed the design to which the noble Lord objects should be thoroughly ashamed of themselves, whether it be the Home Office or the Chief Commissioner of Police?
LORD BARNBY: My Lords, does the noble Earl's reply include the complete height from the floor level of the cab without the step to the ceiling?—because the inconvenience to the general public is greater than that to invalids. One can always get a bad crack in the back in trying to got out.
EARL BATHURST: My Lords, I am glad that the noble Lord raised that point. It is one I asked myself when I heard of this change. The noble Lord will be glad to learn that the minimum height of the door will be the same as it is at present, which is 47 inches.

LORD CHANCELLOR'S VISIT TO VIRGINIA
2.44 p.m.
THE LORD CHANCELLOR: My Lords, with the leave of the House, I should like to make a personal statement. In my capacity as Lord Chancellor, I have received an invitation from the University of Virginia to deliver the commencement address on graduation day. I have also been asked to speak to a gathering of alumni of the Law School. In addition, I have been invited to address the Jamestown Foundation and the Virginia Historical Society.
I hope that your Lordships will consider that it is right that I should have accepted these invitations and taken the opportunity of speaking to a number of audiences in the United States. This visit will involve me in leaving London next Thursday afternoon, May 31, and I hope to be back on the following Wednesday morning, June 6. All being well, therefore, I should miss only three sitting days of the House. I accordingly ask your Lordships to agree to my being absent from my place on the Woolsack during that time.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I think that it would be appropriate if I said from this side of the House to the Government that we should like to congratulate the noble and learned Viscount the Lord Chancellor on the invitations sent to him. I hope that he will not only have a very profitable time but do us some good while he is over there.
LORD REA: My Lords, from this side of the House may I endorse what the noble Viscount has said? The noble and learned Viscount is so assiduous in his duties that I would suggest, if he will forgive me for doing so, that he should consider patronising one of the shipping industries on one of his journeys and so have a well-deserved rest.
THE MINISTER WITHOUT PORTFOLIO (LORD MILLS): My Lords, I am sure that my noble and learned friend as well as all of us on this side of the House will be very grateful for what has been said.
THE LORD CHANCELLOR: My Lords, I must thank the noble Viscount who leads the Opposition, the noble Lord, Lord Rea, my noble friend Lord Mills and all the House for their unvarying kindness, which has shown itself on this occasion.

EDUCATION (SCOTLAND) BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to consolidate the enactments relating to education in Scotland. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor)
On Question, Bill read 1a, and to be printed.

ECCLESIASTICAL FEES MEASURE, 1962
2.46 p.m.
THE LORD BISHOP OF EXETER: My Lords, before moving the Resolution which stands in my name, I think that I ought to give your Lordships a short explanation of the contents of this Measure. I shall not weary your Lordships with any of the details but only draw your attention to its three main provisions. The first provision is to transfer from individual clergymen liability to pay fees to ecclesiastical lawyers at their ordination, at their admission to any office and at their resignation. The Measure transfers these fees from the individual clergy to
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the Archbishop or Bishop, as the case may be, and further requires that the Archbishop or Bishop, as the case may be, shall be reimbursed by the Church Commissioners. I feel sure that this humane, if tardy, proposal will meet with your Lordships' approval.
The second main provision is to enable the Archbishops from time to time to set up an ad hoc committee to review the fees payable to ecclesiastical lawyers and to construct a new table which shall be uniform throughout the country. This committee will be composed by the Archbishops' requesting the Lord Chancellor to appoint a lawyer who has the status of a Judge; the Chairman of the Bar Council will appoint a barrister, and the President of the Law Society will appoint a solicitor. Any table of fees proposed by that committee will require the approval of the Church Assembly and later be submitted to both Houses of Parliament.
The third main provision is to enable the Church Commissioners from time to time to review the fees payable to the clergy and other persons, such as a clerk or sexton, in connection with weddings, funerals and the reservation of grave spaces. These fees, when reviewed by the Church Commissioners, will be put into a table, which will be mandatory and uniform for all parishes throughout the country. The table likewise will have to receive the approval of the Church Assembly and be laid before both Houses of Parliament. My Lords, this Measure passed through the Church Assembly without division and without amendment, except for amendments proposed by the members in charge. It may therefore fairly be said to be a non-controversial matter. It has been favourably reported on by the Ecclesiastical Committee. I beg to move the Resolution standing in my name.
Moved to resolve, That in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Ecclesiastical Fees Measure, 1962, be presented to Her Majesty for the Royal Assent.—(The Lord Bishop of Exeter.)
On Question, Motion agreed to and ordered accordingly.

TRANSPORT BILL
2.48 p.m.
Order of the Day for the House to be again in Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Mills.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 11:
Development of land
11.—(1) Subject to this section, each Board shall have power as they may think fit to retain or dispose of such of their land as is not required for the purposes of their business and to develop their land in such manner as they may think fit.
(2) Each Board may, in particular, and subject to this section, erect buildings of any description for use for purposes other than the purposes of their business on any part of their land whether or not the land or those buildings are severable from the land and works used by the Board for the purposes of their business.
(3) A Board shall not incur any substantial item of expenditure in developing their and for purposes which are not the purposes of their business without the consent of the Minister, and the Minister may from time to time give directions to the Boards indicating what is to be treated for the purposes of this section as a substantial item of expenditure.
(4) Where a Board propose under this section to develop any land otherwise than for the purposes of their business they shall have power, with the consent of the Minister, to acquire by agreement adjoining land for the purpose of developing it together with the other land, but the Minister shall not give his consent under this subsection unless it appears to him that the other land cannot be satisfactorily developed unless the adjoining land is acquired by the Board.
Except as provided by the foregoing provisions of this subsection, a Board shall not have power to acquire land for purposes which are not related to any of the activities of the Board other than the development of land.
Debate resumed on the Amendment moved yesterday by Lord Conesford—namely, after subsection (2) to insert as a new subsection:
"( ) Notwithstanding anything contained in subsections (1) and (2) of this Section, no Board shall have power to develop any part of their land within the County of London to provide office accommodation not required for their own business, unless the Minister of Housing and Local Government certifies that he is satisfied that by the time such office accommodation is available for use an equivalent amount of existing office accommodation
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within the said County will have been converted to residential use."
LORD SALTER: I should like to support the theme put forward with such eloquence last evening by my noble friend Lord Conesford. I rise partly because he called in support a publication called The Paper Metropolis, issued under the auspices of the Town and Country Planning Association, and it happens that for a considerable time I have been the President of that Association. I hasten to say, however, that I took no part in this study and it is not at the request of the Association that I now intervene. My relation to the pamphlet being that of a reader, and not of an author, I have no inhibitions of modesty in recommending it strongly to your Lordships' attention, and also to the Government, particularly the Department especially concerned with planning. I do so, not only because of the intrinsic merits of the study, which I think is far and away the best study publicly available of the problem, but also because of the general welcome and warm approval of the experts most qualified to judge when the booklet was published.
I should like to recall to your Lordships one or two of the main facts brought out in that booklet. It is an astonishing fact that in the central area of London the total number of residents is only a little over 200,000, but the number of workers is nearly 1½ million, of whom more than half—namely, about 800,000—are workers in offices. I would ask your Lordships to think of the significance of this really staggering disproportion. First, there is the inconvenience, fatigue and waste of time for so large a proportion of those who work in the centre of London and are involved in long-distance commuting.
Secondly, there is the high costs for the small number of people who have at present an expensive and precarious tenure of living accommodation in the area. Thirdly, of course, there is the terrific congestion involved, not only of traffic, but of transport of all kinds, by the inflow and outflow each day of over 1¼ million people. We should also bear in mind the fact Chat, while the resident population shows no signs of increasing, the commuters show every sign of increasing considerably. I think it follows irresistibly that The Paper Metropolis is

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right in saying that urgent new measures are needed in order to limit the growth of office accommodation.
There was one remark in my noble friend's argument which struck me forcibly. I believe hardly any responsible person, looking at the general planning of this city, would disagree with the view that the amount of office accommodation occupies an altogether undesirable proportion of the total building space available. But as my noble friend said, it is also true that, when particular applications are received, not only from private industrial concerns but, even more, from public corporations which may have the support of a Department of the Government, there is a very real probability that this evil will continually increase and involve all the difficulties and inconveniences to which I have referred—in addition to the further one of probably ruining the whole of the Green Belt policy.
My noble friend remarked yesterday upon the weakness of the position of the Minister, whoever he may be, who is concerned with general planning in relation to one of his colleagues, who may be concerned either to promote for his own Department, or to encourage on behalf of some other body, like the British Transport Authority, a particular scheme. Such a scheme is always then advocated by a unanimity of all his experts, and also by the testimony of anybody concerned in the finance of the concern, as being much more advantageous financially than any other alternative that may be devised. I suggest that it is the imperative duty of the Government, in the powers they exercise, in the powers they seek and in the powers they allocate, and also the duty of any public corporation which is associated with the Government, to do all that is humanly possible to restrict this extremely disastrous growth of the paper metropolis in this country. Whether or not the particular method proposed by my noble friend is adopted, or an alternative method designed to achieve the same purpose, I strongly urge that it is of the utmost importance that this growth of office accommodation in Central London should be stopped.
LORD SILKIN: I should like to congratulate the noble Lord. Lord Conesford, on his speech yesterday, with practically every word of which I agree.
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There is no doubt that this problem is a grave and growing one, and if no action is taken we shall find ourselves completely overwhelmed. Both the noble Lord, Lord Conesford, yesterday, and the noble Lord, Lord Salter, this afternoon, devoted a large part of their speeches to describing what the evils and dangers are; and I imagine that none of your Lordships would disagree with What they said. But the noble Lord, Lord Conesford, did not say much about his Amendment, and while I would say straight away that it is right that we should not increase our office accommodation in London, and that if permission is granted, or if the Board dispose of their property for office accommodation, it should be at the expense of other office accommodation being discontinued, I should like for a moment to look at the mechanics of the proposal to see Whether what the noble Lord is suggesting is really feasible.
He is suggesting that before any of these Boards can dispose of their premises for offices the Minister must certify not only that an equivalent amount of office accommodation, whatever that may be, has been discontinued, but also that housing has actually been made available in its place. First, there is a time factor; and let us see what that is. I presume that the local authority would have to make a compulsory purchase order in respect of the office accommodation they wanted discontinued. No doubt at the end of the day there would be a public inquiry (I am not taking into account the time that would be taken in making a survey in order to decide the appropriate office accommodation that should be discontinued), and the Minister would have to decide. I imagine that in coming to a decision he would have to take into account the existing use of the offices to be discontinued; what is to be the fate of those Who occupy these offices, and what is to happen to those employed in the offices. Then, eventually, he may make an order.
But that is not the end of the matter. The Minister makes an order that the local authority should compulsorily acquire the premises. There would then be negotiations about price, and eventually it would be agreed, or the matter would be decided by the Lands Tribunal. The local authority would then obtain

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possession; they would pull down the property, and then go out to contract for building houses, either there or somewhere else, in place of the offices. I would suggest, first of all, purely on the mechanics, that this would take, roughly, four to five years, and it would mean that the Transport Board would be held up for that time in disposing of their premises.
And that is not all. On whom is the burden to lie of acquiring compulsorily this office accommodation, destroying it and paying compensation to the occupiers of the offices? Because each one, presumably, will be holding a lease, and the lease will have to be determined; every occupier, as well as the owners of the offices, would be entitled to compensation; and the liability to the people employed would be, I suppose, a matter for the employers. But all this will come to a very large figure. I wonder whether your Lordships can visualise the London County Council being prepared to become involved in figures of that kind. There is nothing in the Amendment which would compel them to do this. The London County Council might say, "This method of getting office use relinquished is far too expensive. We do not propose to adopt this." What the noble Lord is therefore saying, in practice—because I cannot think that he has not seen for himself the unreality of the proposition—is really that they shall not dispose of any of their surplus accommodation for office use in London, because the condition he lays down is quite impracticable.
I hope I am being fair to the proposal the noble Lord has put forward. It may be that that is what he wants, in which case it would be far better to say so in plain terms rather than to make it conditional upon fulfilment of these impossible provisos. One might be prepared to support him if he were to say in plain terms that, so long as the existing conditions remain in London, the Board shall not be entitled to dispose of any part of their property for office use. I myself would not go as far as that, but I suggested in my speech on Clause 11 yesterday that the right thing would be for the Board to be compelled to apply for planning permission in
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every case. I pointed out that the noble Lord, Lord Mills, would be interested in this, because on Second Reading he assured me that they would have to go for planning permission. In fact, they would not have to get planning permission if the existing use was office accommodation. But I would propose that they should, in all cases, have to go to the local authority for planning permission, and it would be for the local authority to decide whether they should permit the continuation of office use in respect of these premises once they are disposed of. That does not put an end to the problem, and I think we must face it.
LORD CONESFORD: I intervene more or less at the invitation of the noble Lord, Lord Silkin, because he wondered whether he was understanding me correctly. Of course, it is not quite correct to say that the only way in which office buildings already in use in the County of London could come out of use as offices would be through some compulsory acquisition by the local authority. I think the noble Lord has overlooked, among other things, the fact that some of the terms for office buildings are temporary and are running out. There are, to his knowledge, I know, a number of buildings at present which are destined, in any event, without any further legislation or acquisition, to cease to be office buildings.
LORD SILKIN: I agree that there are a limited number of premises in Mayfair—I think they are principally in May-fair—where the office user permission would expire (I speak from memory) somewhere about 1970. If the noble Lord means that the London County Council should not, in the exercise of its planning powers, give a further extension beyond 1970, I admit that that is a possibility. But it concerns a very small part of the office accommodation in London, and it is very limited in character, as I know from my own experience. By and large, the position is that, in the great majority of the cases that are contemplated under this Amendment, there is already an existing office user and, therefore, the Board would not be required to get planning permission to dispose of it for the same user. I think that under Section 12 (2)

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of the Town and Country Planning Act, 1947, this is not regarded as development. Development is something for which you have to get planning permission, but the continuation of the existing use is not planning development.
LORD CONESFORD: I wish only to follow the noble Lord. Why does he say that most of this land has got an office user at present?
LORD SILKIN: Because I imagine that these are the majority of cases where land would be disposed of for that purpose. I am acquainted with a good many of the buildings which will become surplus, and the majority of them would not be suitable for office accommodation at all, but would have to be re-built. In those cases, there would have to be planning permission. But I am speaking of those buildings which could be adapted by internal arrangements for use as offices, and I was under the impression that the noble Lord who moved the Amendment was dealing, by and large, with that kind of accommodation.
THE MINISTER WITHOUT PORTFOLIO (LORD MILLS): If the noble Lord will read Clause 11 (2), to which it is proposed to add this, he might take rather a different view as to what is proposed to be done.
LORD SILKIN: I will read it, but it is a little difficult to do so while on my feet.
LORD MILLS: I will help the noble Lord. It is talking about erecting
"buildings of any description for use for purposes other than the purposes of their business. …"
LORD SHEPHERD: May I correct the noble Lord the Minister? The words he read out have been deleted and amended by the Amendment that was moved, prior to this Amendment, by the noble Earl, Lord Dundee.
LORD SILKIN: We are getting into a bit of a muddle. For better or for worse, perhaps I had better say what I was going to say, and no doubt I shall be corrected. I was going to say that, as I saw the position, the probabilities were that most of the land which would be developed for office use would be existing buildings which could be readily
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converted to that use by internal arrangements, or by small additions which are permitted within the tolerance in the Third Schedule of the 1947 Act. In that case, what I was suggesting was that these should be subject to planning permission, which at present they are not. Then I was raising the question of the cases where they were refused permission. If they were then refused permission, as the law stands the Board would be entitled to be compensated. The compensation would be the difference between the value of the land for such purposes as it could be used for, and the value that it would realise if it were permitted to be used for office purposes. That might be considerable, and that is a problem we have to face. Who is to bear that burden? I would submit that it would be unfair that that burden should be borne by the local authority.
I am speaking quite generally, because this is not only a London problem, although the problem of London is most acute, but is a problem in most of the large cities in this country. That is, indeed, one of the reasons why I am a little doubtful about this Amendment. I think it is confined to London and that it should be made general in all the big cities in the country. No local authority is prepared to face up to the very heavy burden that would be involved in paying compensation in these cases. The tendency would be—and I know that this has been the case very often—that where on the merits a planning authority would not give permission, they would in fact be compelled by the very large figures involved in refusal to give this permission. All of us who have been interested in planning matters in London and outside will have instances in our minds where undesirable development has been permitted because of the question of compensation.
I was a little disturbed yesterday to hear the noble Earl, Lord Dundee, laying down the proposition, as I understood him, that in all respects the Boards were to be treated as if they were private developers. I would submit that they are not private developers. This is public land; land which is publicly owned and paid for by the public. Although every one of us would subscribe to the idea that the Boards should get the maximum reasonable amount that they

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can in respect of the disposal of their land, I hope that we shall not subscribe to the doctrine that they are to get this regardless of its effect on the public interest and public welfare. Indeed, I would go so far as to say that getting the maximum price for this land is sometimes the most uneconomic thing we can do if it leads to bigger problems which are going to involve us in more expense generally and cause greater inconvenience in the future.
I have said nothing about subsection (2) because under the Bill they would be able to dispose of other buildings for office use as well. I agree with the noble Lord that that would be the case and I shall say a word about that. But if as a result of giving planning permission, or of dispensing with the requirement to get planning permission, they are enabled to build offices the result of which means, for instance, more roads, the cost of which has to come out of the public pocket in the end, I wonder whether the ultimate result would be that the public would pay more than they would have paid had they compensated the Transport Board in respect of the loss, or, as I think may be the case, if the Transport Board were required to get what they could if the land were put to a reasonable and proper use in the public interest.
Much as the Government and noble Lords opposite want the Transport Board to get on its feet and get the maximum possible revenue, surely they cannot want it at the expense of reducing London to a standstill or causing Londoners greater inconvenience in getting about than they have already. I should like the noble Lord, Lord Mills, to get on to the Underground railway at Westminster Station at six o'clock in the evening and try to get home! And I imagine that conditions will be created as a result of this Bill which will increase the "accommodation"—I call it "accommodation", in inverted commas—on the Underground railway by 10 per cent. I do not think the London public would be grateful to him for giving the Transport Board these powers and allowing them to be treated as private developers.
I want, therefore, to suggest two things. First, that in cases where the Transport Board are not required under
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the existing law to obtain planning permission they should be required to obtain it; and I think we can trust the London County Council and the Minister of Housing and Local Government on appeal to look at the matter fairly and objectively without all the paraphernalia laid down in the Amendment. Secondly, I would say that in those cases where permission is refused and compensation would normally be payable, the Transport Board, in view of the fact that they are a public undertaking and are supposed to be carrying out all this in the public interest, should not be entitled to compensation from the local authority, so the local authority would have a perfectly free hand in deciding, on the merits of the case, whether or not planning permission should be granted.
I have been a little critical of the terms of the Amendment itself, but I should like to assure the noble Lord, Lord Cones ford, that I am 100 per cent. in sympathy with what he is seeking to realise, and my only criticism of the Amendment is that I think what I put forward will achieve exactly the same end.
3.17 p.m.
LORD MOLSON: Thus far in this Bill your Lordships have been concerned with almost purely transport considerations. What is likely to happen under this clause makes it necessary for us to consider the whole matter from a very much broader point of view. I believe that the area of the City of London is about one square mile. It is estimated that under this Bill the land made available for other purposes will be 1,000 acres; and if it be true, as I am told it is, that there are 640 acres in a square mile, it means that the additional land made available, possibly for the building of offices, under this clause will be one and a half times the whole area of the City of London. It is therefore of the utmost importance that we should not regard this matter purely from the point of view of the finance of the Railways Board and the other Boards. It is essential, when a large amount of land at present in public ownership is being made available for redevelopment, that we should take fully into account the policy of Her Majesty's Government as regards town and country planning. Let

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me say that I am very glad therefore to see my noble friend the Parliamentary Secretary to the Ministry of Housing and Local Government on the Treasury Bench.
The argument that was put forward yesterday by my noble friend Lord Dundee was that in every respect Railway Boards ought to be in the same position as any other owners of land under the Town and Country Planning Acts and he was clearly of the opinion that the Town and Country Planning Act, 1947, would be effective for the purposes that we have in mind. I always regard the noble Lord, Lord Silkin, as being the greatest of all experts on the 1947 Act. I remember sitting in another place on the Committee on that Act, and I have never known a Minister who was more successful in answering every difficult question put on a difficult Bill than the noble Lord. When he expressed the view that the Act of 1947 would not really be effective for this purpose, I got in touch with the London County Council, with whom I have been in touch because of the Motion standing in my name on the Order Paper with regard to the dispersal of population, offices and industry from great centres. I asked them what their view was about this matter.
It appears that if the Railways Board—and the same applies to a lesser extent to the other Boards—avail themselves of all their powers under this Act it would be possible for there to be a very great increase in the amount of office accommodation in London. It might result in an extra 80,000 office workers, living outside London because there is no available accommodation in London at the present time, joining that great tidal movement, in in the morning and out in the evening, travelling to and fro to come to office work in London. It would be anomalous if, in a clause of this Transport Bill which is intended to improve the transport system of this country, we allowed such redevelopment of land in conurbations—of which the greatest is London, but the same applies in the case of all the other conurbations—as would increase this appalling social and financial problem. When I say "financial problem" I have in mind transport. One of the great problems of the railway and of the bus companies is to maintain enough rolling stock to
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move the commuters in and out every day. Great capital expenditure is involved in providing this, and it is used only in the morning and again in the evening. We have to look at Clause 11 from the point of view of town and country planning, and we also have to take into account what its indirect effects arc going to be upon the transport problem of the country.
I proceed making ample use of notes, because the Act of 1947 is an extremely difficult and complicated one. It would be possible for the Boards, at great inconvenience to the country as a whole, to use the land at their disposal in order to maximise their profits. The Railways Board might build their operational offices over their operational land. That does not require planning permission. They would then transfer their staff, now accommodated in buildings with an office use, to the new offices which they had built over their operational land. The British Transport Commission are using the old Marylebone Hotel as their main offices. They could build new offices over the railways and move their office staff to those new offices. They could then dispose of their old offices to a land speculator or developer, and, taking advantage of everything in the 1947 Act, that might be extremely profitable.
The purchaser could rebuild, and this would of course be reflected in the price. The developer could not be prevented from building offices of the same cubic content plus 10 per cent., which, by lowering ceiling heights, could give a greatly increased floor area. The Marylebone Hotel, built in Victorian times, has ceilings much higher than are normally used in modern office buildings. In addition, they have the right to add 10 per cent.—not 10 per cent. of the cubic volume but 10 per cent. of the floor space. So if there are more floors put into the new building, the increase in the office capacity of the new building is a great deal more than 10 per cent. The only way in which the local planning authority could avoid that would be either by a purchase notice or compensation, in either case the value being calculated by virtue of the Third Schedule to the 1947 Act on the basis of the right to develop for the same use to the extent of the same cube plus 10 per cent. I apologise for the tech-

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nicalities of this argument, but it is important to demonstrate that a very great deal is involved in the drafting of Clause 11 of the Bill.
In the second place, operational land which becomes surplus presumably carries with it existing use rights based on the user by the railway for its operational purposes. For example, a goods yard has presumably an existing storage or commercial user. If it was an old-fashioned goods yard in Victorian times, perhaps not greatly used at the present time, that would not alter the fact that it would have a very great potential value for some purchaser who came in and redeveloped it for similar commercial or industrial purposes. If its existing use is more valuable than the use to which the planning authority thought the land should be put, which perhaps might very well be housing, then in that case the compensation payable by the local planning authority would be the difference between the lower residential value of the land and the higher commercial or industrial value attaching to it at the present time. For example, the Marylebone goods yard has existing commercial user rights and the planning authority might think that it should be used for housing. There the local planning authority would be involved in expenditure which would probably be beyond anything that the local authority could reasonably afford.
There is a third point, to which I do not attach so much importance, but I hope the Government when they reply will deal with it. The Railways Board might construct a raft over existing operational land and develop on top of the raft. This can involve a very great deal of land because it is a kind of development which is being planned at the present time. There is a clause in the Bill, as your Lordships will see, dealing with the application of the Town and Country Planning Act, and I hope that ensures that the local planning authority can, without the risk of compensation, determine the proper use of the raft on the ground that the raft is new land with no existing use. But if that is not the correct interpretation, if building a raft over the land is not to be interpreted as making new land but only as a further development of the underlying land, then again the cones-
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quences of that upon the planning authority would be very serious indeed. It would involve very heavy expenditure in order to prevent great additional concentration of offices or industry in the centre of London.
My noble friend, Lord Dundee, speaking last night, suggested that it would be wrong in a Transport Bill to introduce special provisions relating to town and country planning and compensation in order, as I think he suggested, to penalise the Transport Boards, who ought to be in exactly the same position as anybody else. It is, of course, a persuasive argument. I suggest that there are two fallacies in it.
The first fallacy is that the Railways Boards are coming to Parliament in order to ask that they should be freed from certain disabilities under which they have been in the past. If they ask Parliament for that, it is, I think, perfectly legitimate that Parliament should say, "We are willing to relieve you of those disabilities provided that at the same time the public interest is preserved".
The second fallacy is, I think, not a logical one but a practical one. There comes a time when a change in degree becomes in fact a change in kind. I know that one cannot say at exactly what point that happens, but when 1,000 acres in this greatly congested area of London is going to have its user changed, and when the Ministry of Housing and Local Government for a decade and more past have been trying to deal with the appalling problems, social and economic, of over-concentration in London, surely it is right and reasonable to say that the 1,000 which is being made available shall be available only for purposes which are within the general scope of the accepted policy of the Government and of Parliament.
There are two dangers. One is that the Railways and other Boards will seek to develop all this available land immediately and do so in order to obtain the largest possible immediate return. That I regard as being the more pressing danger. It is the one to which my noble friend Lord Conesford has specially directed his Amendment. I am sure that your Lordships will feel that something must be done in order to ensure

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that this clause in a Transport Bill should not defeat a major feature of Government and Parliamentary policy. The intervention of my noble friend Lord Salter, who has been long concerned in these matters and who has done much to develop and educate public opinion on this matter, was exactly on the same lines. I feel that that is a danger which must be guarded against. There is also a danger that in some cases the Railway Boards might choose to adopt the opposite attitude, and to sit back on the land and not make it available for social purposes, because they think that at some time in the future they would obtain a much higher price for it.
I think that the urgent needs of the people of London, and indeed of the people of this country as a whole, for land in this small and over-crowded island is such that we must be assured that land is going to be made available for the most socially useful purposes. If the Government are not able to accept this Amendment, or to introduce Amendments on the Report stage which are going to alter the machinery in order to achieve these obviously desirable ends, then I think there is something else they can do which would go a long way to setting our minds at rest.
The whole principle of this Transport Bill is that the Minister of Transport shall be responsible for controlling the general policy of all the Boards. It would, in my submission, be quite possible for him within the wide powers given to him in this Bill to make certain that the ideas which have been put forward by my noble friends and by the noble Lord on the Front Bench will in fact be given effect to. If, for administrative reasons, the Government do not feel that in a Transport Bill they can make changes in the machinery which might perhaps be more appropriate to a Town and Country Planning Bill, then I am perfectly clear about one thing: we ought to have an assurance from the Government that they intend these valuable 1,000 acres to be used in the right way. The Minister of Transport has power to do that. We are, I think, entitled to ask that he shall not use his powers in a narrow, departmental way, just in order slightly to alleviate the financial problems of the Board; but that in fact it shall be a Government policy, in accordance with what has been
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accepted by the Government as a whole and is being applied by the Ministry of Housing and Local Government.
3.37 p.m.
LORD HAWKE: I am tempted to support my noble friend Lord Conesford, although I believe his Amendment introduces some rather severe practical difficulties. I do so as a general gesture at the fate which has befallen the unfortunate office workers of London since the war. Their salaries have no more than kept pace with the cost of living; their Income Tax, when adjusted for inflation, has hardly been lightened at all; their rents and mortgages have gone up; fewer of them can afford to live in London, and more and more are driven to the suburbs. Once there, their season tickets have gone up steeply, and within the last two years there have been great increases in the cost of land and the cost of building in the suburbs. So the chances of any young married couple getting a home to-day in the outer suburbs depends largely on whether the wife and the husband can both go out to work.
British Railways say they cannot do much for them because commuting traffic does not pay. The London Passenger Transport Board cannot obtain permission to build that Tube from Victoria to Walthamstow which it has been obvious to every citizen of London has been urgently needed for years and years. Meanwhile, this new science of town and country planning upon Which we have embarked since the war begins to produce more and more anomalies which become more and more apparent. We have had them pointed out to us to-day. One particular anomaly is the urge which it inevitably encourages to develop every possible site as an office or shop. And I would remind your Lordships that the cost falls, as to one-half or so, on the taxpayer and therefore they can naturally command a much higher site value than can dwellings.
Little seems to have been done for these people. They work in these offices in London. They do not belong to the striking classes. On the whole, they are not Socialists; in general, they are supporters of a Liberal-Conservative Government. It is no wonder that recently, when they went to the poll at Orpington, they put the emphasis on the Liberal part rather than on the Con-

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servative part. I hope the Government have taken heed. I have hopes of the present Minister of Housing and Local Government, because I believe he comes from the commuting class himself and therefore realises the great hardships and difficulties under Which these people labour. I only hope he is allowed to take action within his own sphere, and will be supported by the Chancellor of the Exchequer.
This Amendment is a gesture demanding that something should be done to increase the residential development and to decrease the office and shop development in London; and such a gesture I support. If financial difficulties arise as outlined by the noble Lord, Lord Silkin, are we not living in an Alice in Wonderland world when what we want to do with our land is hindered because we, the British people, have somehow or other to find large sums to compensate a body of our servants which has already lost us hundreds of millions of pounds?
3.41 p.m.
LORD SHEPHERD: The noble Lord, Lord Conesford, and also subsequent speakers, have placed us in somewhat of a dilemma—a dilemma from which your Lordships' House in practice is able to extract itself. The Amendment the noble Lord has moved is restrictive, in the sense that, if there is to be development of Board property into office building, it seeks to ensure that the equivalent amount of existing office building should disappear. That, obviously, is restrictive. I, personally, should find it difficult to support the Amendment if that was only what it meant, but, having listened to the speeches of the noble Lords, Lord Conesford, Lord Molson and Lord Hawke, I find that obviously the intention is far wider than expressed by the mere words of the Amendment. In fact, I thought the speech of the noble Lord, Lord Conesford, was a condemnation of the post-war national policy of allowing the central part of the City of London to be built up with large areas of office building, with hardly any restriction. When one looks at Coventry, a city which was destroyed by war and which took the opportunity of rebuilding itself, one cannot help feeling that London itself missed the same
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opportunity. Our streets to-day are not much different from what they were in 1938 or 1939; and yet we try to impose upon those very streets this tremendous increase in traffic.
If the noble Lord, Lord Conesford, means that by supporting this Amendment we are expressing a view that the Government must end the unrestricted growth of office accommodation, then I would try to persuade my friends to support it. If he means that this is to be purely a restriction on the use of Board property, I should find it hard to advise that. If he means that this is a gesiture—to take the word used by the noble Lord, Lord Hawke—by this House, an instruction to the Government that the suicidal policy has to stop and that we will from now on attempt to restrict the growth of office building in London, then I give him my wholehearted support.
Noble Lords have spoken about the effects of congestion upon office workers. Lord Hawke made the case of the commuter. But there is another aspect. By and large, the main office blocks in the central part of London are occupied by the banks, the insurance companies, the Civil Service, the big administrative organisations of Shell, and other major industrial companies. These blocks of offices, in themselves, do not produce the goods but are merely a service—an essential service, perhaps—whose cost falls squarely upon industry. At a time when we are trying to keep down our industrial costs, surely industry should consider whether it is wise to allow (these service costs to increase. I did a quick calculation in my office this morning of what it would cost to keep a shorthand typist or junior clerical worker in one of the new major London offices. If one assumes that she occupies 100 square feet, taking the rates that are now charged for property one could say that the cost, not of her salary, but merely the cost of the space she occupies, is practically equivalent to the rent of a decent, semi-detached house. I think it is completely farcical that one should allow that cost to be imposed on industry. Therefore, when one is talking about restricting the growth of London one must take into account not only the social consequences, the travel, and so on, but also the cost.

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If we support this Amendment, I hope it will not go out from this House that it means that there are to be no new offices in London. Certainly when one sees the rabbit warrens of the City and the West End and the conditions under which clerical operatives are working, it is obvious that this zone should be cleaned out and developed in order that office people should have the opportunity to work under decent conditions. Therefore, if we support this Amendment restricting the growth of office building, it must not be thought that we are opposing any new development. We are really seeking to prevent an unreasonable increase. That, I think, is the issue. If that is what Lord Conesford means, then I would certainly ask my friends to support him. If that is the case, I hope he will make it clear to us, because it will make it easier to decide what to do when that issue arises.
LORD AIREDALE: Lord Shepherd paraphrased the latter part of this Amendment as requiring that an equivalent amount of existing office accommodation must disappear. My quarrel with this Amendment is that although it ought to say that, in fact that is not quite what it does say. It is only a very small quarrel, because I am wholeheartedly in favour of the Amendment in general. In my submission, the last words of the Amendment introduce an unnecessary elaboration. The object, surely, is fairly straightforward: to limit the amount of office accommodation in London. But when the Amendment speaks of "an equivalent amount of existing office accommodation", it says that it will have been converted to residential use. I should have thought that that was unnecessary. There might be an old office building, not particularly well equipped to be converted into residential use, which might be demolished and become an open space. I should have thought that that would satisfy the noble Lord, Lord Conesford, for this purpose even better than conversion into residential use.
So if the Government, having listened to the debate, are in favour, as I feel sure they will be, with the spirit if not the letter of this Amendment, and feel disposed to rewrite a part of it, they might do worse than to substitute for the
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final words regarding existing office accommodation:
"have been converted to residential use."
the words:
"will have been relinquished as office accommodation.",
because I believe that that is really the whole nub of this Amendment.
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE): It is evident that your Lordships' feelings about the congestion not only of traffic but of offices in London is very strong and deep. I recognise that your Lordships' motives in what you have said on this Amendment arise, perhaps, from a strong sense of frustration in our general desire that the growth of offices in London should be restricted and, perhaps from a certain amount of resentment against planning authorities that, in spite of all our legislation, it has not been restricted as much as we think it ought to have been.
My noble friend Lord Hawke said that he supported, and he thought others of your Lordships supported, this Amendment mainly as a gesture, although he agreed that there were a great many practical difficulties about the Amendment itself. Your Lordships are free to indulge as much as you like in the pleasures of gesticulation, but the Government have the much less exciting duty of considering the practical difficulties. I think the noble Lord, Lord Shepherd, took the same attitude when he said that the Amendment was supported by him on very wide grounds, very much wider than those which were actually covered by the wording of the Amendment. But, again, the Government have the duty of considering the actual effect of the wording of this Amendment and what would happen if it were to pass into law.
I should just like to mention a few of the practical difficulties—I will not elaborate them, because they have to some extent been covered already in our discussions on earlier Amendments of this clause—which are worrying us. I know the requirement here is one which is endeavouring to stop the uncontrolled increase of a form of building which we all seem to be agreed has reached excessive dimensions in London—or, I should say, the County of London. My

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noble friend Lord Molson said that the City of London was only 640 acres or one square mile, but the Amendment applies to the County of London. I do not know what is its area, but I imagine that it would be several hundreds of square miles.
The noble Lord, Lord Silkin, referred to one of the difficulties which might arise from this Amendment, although my noble friend Lord Conesford interrupted to say that there were a few office buildings whose term of existence as office buildings was soon coming to an end. I think very great difficulties would be created for the Railways Board, for example, if they obtained conditional permission to build new offices on land which the planning authority and everybody else agreed was suitable for new offices, and then had to run round London finding everybody who was an owner of any block of offices and saying: "Please, will you convert your offices into flats or demolish them so that we can build our offices here, which the planning authority is in favour of?" I think that would put them in a position which would be not only impossible but also rather ridiculous.
I know that my noble friend Lord Conesford largely demanded this proposal on the grounds that we are giving the transport authorities powers of development which they did not have before under the Transport Act, 1947. But even there it is difficult to justify selecting the Boards alone among landowners to bear the restriction—which I believe would be an impracticable restriction, and certainly a very unjust restriction—which is imposed by the Amendment. Why should not the Church Commissioners, who are a public body, or Crown Lands be subject to the same restrictions? Is it not likely that the evil of office accommodation to an excessive extent will arise from building on their ground?
LORD HAWKE: May I interrupt my noble friend for one minute? Being a Church Commissioner, I do not admit that there is any resemblance whatsoever between the case of this Board and that of the Church Commission. This Board is publicly owned. This is land owned by us, the British people. We paid for it and, moreover, we paid hun-
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dreds of millions of pounds to try to keep the thing afloat, which the people lost. The Church Commission is an entirely different state of affairs.
THE EARL OF DUNDEE: Then what my noble friend is proposing to do is this. If we have a Board whose property is owned by the public, then we shall prevent it from engaging in certain kinds of building development which we may think undesirable, but we shall allow everybody else—private owners, Church Commissioners, Crown Lands—who may own fifty times as much land as these Boards, to continue developing in a way which we think undesirable. Does that not illustrate the fact that this is a matter not for a Transport Bill; it is a matter for a Town and Country Planning Bill? You are doing very little general good by preventing one particular kind of public authority from developing their land in this way.
I cannot help feeling that some of your Lordships have rather tended to underestimate the effectiveness of the existing planning legislation. After all, the whole point of having any planning legislation was to prevent building development which is not in the public interest. If, as many of your Lordships seem to think, building development is proceeding to an intolerable extent in a manner against the public interest, then surely that must mean that our planning legislation is ineffective and that the planning authorities are not doing their job. In that case, surely, the right remedy is to introduce either new planning legislation or some new planning powers which will enable the planning authorities to be overridden. Surely we ought to seek a remedy which would apply to everybody and not to the Transport Boards only.
LORD MOLSON: May I interrupt my noble friend and point out one thing? The railways were entitled to acquire this land for operational purposes, and they were not allowed to use it for any other purpose. Parliament is now being asked to give permission for them to develop, or for other people to develop, land which they acquired for operational purposes. I should have thought it was quite reasonable to say that, when they are asking for this great extension of their powers, it should be subject to certain restrictions.
THE Earl OF DUNDEE: If the land is now surplus to their needs—it may be that they acquired it in the first place for operational purposes and that they do not now need it for operational purposes—then they are free to sell it. They are free to sell it now and they will still be free to sell if after this Bill becomes an Act. If they are not allowed to develop it without conditions which it would be difficult for anybody to fulfil—getting somebody else to agree to demolish other office accommodation—they will have to sell it if they do not want to use it, and they can sell it to anybody they like. Mr. Clore or Mr. Cotton—whatever the buyers' names are—can buy it, or it can be sold or resold to anyone who wants to develop building land; and, if the planning authority is willing to sanction the building of new offices on that land, they will be built just the same. The only difference will be that the land speculators who buy it will get the profit and the taxpayer, through the Transport Boards, will not.
The fact is that the effect of the Amendment would not be very great in the long run in preventing new office building. The only difference would be that the Transport Boards might not get so much for their land as they would if they could develop it themselves. Surely that illustrates the need for new planning legislation. If we all agree that this office building is not being held in check as we think if ought to be by the present planning authorities, then we should have new general legislation, and should admit that the existing legislation is ineffective. I am reminded that the main line railway companies had powers to develop the land generally, that only the British Transport Commission were fettered, and that we are putting the Transport Board back into the same position as that in which the railway companies were.
I feel it my duty to put before your Lordships these facts and the general objection, that the only effective way of preventing this evil which we all desire to check is by having wider and more general legislation or by the creation of new powers if we think that the existing Town and Country Planning Act and the planning authorities are not doing their job properly. But I want to pay the most serious attention to your Lordships' views on this matter, coming, as
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they did, from so many of your Lordships with great experience in these matters: the noble Lord, Lord Silkin, who was Minister of Town and Country Planning; my noble friend Lord Molson, who was at one time, I think, connected with the Ministry of Transport; and the mover of the Amendment himself, my noble friend Lord Conesford, whose office in another place gave him great experience in these matters.
I know that your Lordships' feeling is genuine and sincere about this; and since I undertook yesterday to look at the Whole of Clause 11 again to see in what ways it could be improved, and also to consider another Amendment which was moved by some noble Lords opposite, I think I ought to give the same undertaking to my noble friend: we will consider this matter very carefully to see whether anything can be done or whether any new statement could be made before the Report stage of the Bill, which, though it might not satisfy the practical difficulties, might at least respond to the gesture which your Lordships have said you wish to make.
I think that any consideration which might be undertaken, and which I am glad to recommend to my colleagues, would have to be not by the Ministry of Transport alone but also by the Ministry for town and country planning. I think that all I could undertake to do now would be to represent to both Ministries the force and the deep feeling of what your Lordships have said in this debate. I have done my duty, I think, in explaining to your Lordships some of the practical difficulties which we never could get round, and I hope that you will agree that I am doing my best to meet what I recognise is a very deep and genuine desire for the mitigation of the serious evil of office overcrowding in London.
4.7 p.m.
LORD CONESFORD: I thank my noble friend who has just spoken and other noble Lords who have taken part in the debate for the careful speeches they have made. If the Amendment to this clause which I put down had been intended as a mere gesture, I might well think that its purpose had been achieved. It is not intended as a mere gesture: it is intended to meet an urgent necessity which, if it is not met, will cause disaster in our capital city. This is not a new

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problem for me. Interest in the subject of town planning was one of the things that brought me into politics some thirty years ago. I am grateful for the recognition of many of the real problems by the noble Lord, Lord Silkin, but I honestly cannot follow some of his arguments for not supporting my Amendment.
I shall try to clear up certain matters, though it is difficult to know where to start. First of all, if noble Lords would be good enough to study what I said yesterday, they will see that I do not suggest for one moment that this Amendment alone will be sufficient fox dealing with office congestion in the County of London. I have never suggested that; but, though other things may be needed, this at least is needed and is needed urgently. In listening to the speech of my noble friend Lord Dundee, I was really left in some doubt whether he wished this enormous amount of railway property to be devoted to office building. He seems quite willing to face that risk. I am not; I believe that the Committee is not; and I am quite certain that the British public is not.
Then it is said that my Amendment is restrictive. But of what is it restrictive? It is not restricting any powers that at present exist: it is preventing the abolition of all restrictions on bodies that are at present restricted. These Boards are at present restricted from building these offices on their property. I say that, if that restriction is to be removed, the least we can do is to say that they shall not use the new freedom to do something which is universally admitted to be contrary to the public interest. The noble Lord, Lord Shepherd, for whose speech I was grateful——
THE EARL OF DUNDEE: Might I just ask clarification of one point? My noble friend said it is "universally admitted to be contrary to the public interest". In "general, perhaps, one would agree with" that; but in particular, if a particular office building is universally admitted to be contrary to the public interest, then why does the planning authority sanction it?
LORD CONESFORD: I will certainly come to that point. I thought that what was universally admitted to be contrary to the public interest was the further
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increase of office buildings in the County of London beyond what must result from the numerous permissions which have already been given. I do not think the noble Earl will find that his noble friend on his left will dispute that proposition.
I was just going to deal with some very interesting observations of the noble Lord, Lord Shepherd. Lord Shepherd said, quite rightly, that there was a case for more office buildings, and I agree with him that there is a case for some even in the County of London, provided an equivalent amount goes. But there should be many more outside the County of London, and on that subject I will again commend the booklet which has been mentioned once or twice in this discussion. But the noble Lord, Lord Silkin, said that effect could be given to the latter part of my Amendment only if the local authority went in for compulsory acquisition. With respect, I do not think that is so. I think that one of the effects of passing my Amendment would be that the great property companies might have a totally new motive, which they have not got at present, in order to develop some of this new property that the railways can dispose of, to use some of their other property at present used for office buildings to provide residential accommodation. That is at least one possibility, and I do not think a very unlikely one, if we pass the present Amendment.
I regretted that the noble Lord at one stage described my Amendment as "paraphernalia". I honestly believe that the specific mention of the Minister of Housing and Local Government is something of very great value, for this reason. My Amendment does not, as Lord Silkin suggested in one part of his speech, require any order of the Minister, though it does require a certificate. What I What is that Parliament shall insert a restriction on the further growth of office building in the County of London. If Parliament does not exercise such a restriction, then, as a direct result of this Bill and this clause, there will be an immense increase in office building in the County of London, and this will very often be achieved, I have no doubt, in the teeth of the protests within the Cabinet of the Minister of Housing and Local Government. But it will happen.

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In replying to my Amendment just now, my noble friend said: "What about the Church Commissioners and the Commissioners of Crown Lands?". As regards the Church Commissioners, if they apply for some undesirable development, there would at least be nobody to urge that the view of the Minister of Housing and Local Government should be overridden in the interests of another public body. And as for the Crown Commissioners, it may not have escaped the notice of the Committee that I gave, as a specific example of undesirable development, their own proposed office development in Carlton Gardens. As a result of the protest against that, made from many quarters I think, they may take a little more care in future. But the point about the present Amendment is that it does the minimum necessary by way of amendment to the present clause. It provides the last chance we have to prevent what may be a disaster.
Resolved in the Affirmative, and Amendment agreed to accordingly.
I am in favour generally of this clause, provided my Amendment is carried. If my Amendment is not carried, I will have no hesitation whatsoever in voting against the clause. The clause is intolerable without an Amendment on the lines which I am now commending to the Committee. The only point which gives me any cause to hesitate is the last remark of the Minister, who promised that some further consideration would be given between now and the Report stage. I have no doubt it will, and I have no doubt that the attention that will be given will be given with a much greater sense of urgency if we pass this Amendment. If we do not pass this Amendment which I commend to the Committee, then I urge the Committee to delete the clause.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents 59, Not-Contents 39.

CONTENTS

Ailsa, M.

Dudley, L.

Monsell, V.

Airedale, L.

Effingham, E.

Mowbray and Stourton, L.

Albemarle, E.

Elton, L.

Newall, L.

Alexander of Hillsborough, V.

Fortescue, E.

Ogmore, L.

Amulree, L.

Francis-Williams, L.

Rea, L.

Amwell, L.

Goschen, V.

St. Davids, V.

Atholl, D.

Grantchester, L.

Salter, L.

Auckland, L.

Grenfell, L.

Shepherd, L.

Beauchamp, E.

Hampton, L.

Silkin, L.

Bethell, L.

Hawke, L. [Teller.]

Sinha, L.

Bossom, L.

Henderson, L.

Somers, L.

Buckinghamshire, E.

Howe, E.

Stonham, L

Burton of Coventry, B.

Jessel, L.

Tedder, L.

Champion, L.

Kenilworth, L.

Terrington, L.

Cholmondeley, M.

Kenswood, L.

Teynham, L.

Citrine, L.

Lawson, L.

Uvedale of North End, L.

Clwyd, L.

Listowel, E.

Walston, L.

Conesford, L. [Teller.]

Longford, E.

Williams, L.

Crook, L.

Meston, L.

Williams of Barnburgh, L.

Davidson, V.

Molson, L.

NOT-CONTENTS

Ailwyn, L.

Fraser of Lonsdale, L.

Milverton, L.

Amherst of Hackney, L.

Hailsham, V. (L. President.)

Montgomery of Alamein, V.

Balfour of Inchrye, L.

Hastings, L.

Munster, E.

Bathurst, E.

Home, E.

Newton, L. [Teller.]

Boston, L.

Howard of Glossop, L.

Palmer, L.

Bridgeman, V.

Inchyra, L.

Robins, L.

Carrington, L.

Jellicoe, E.

St. Aldwyn. E. [Teller.]

Chesham, L.

Lansdowne, M.

St. Oswald, L.

Coutanche, L.

Lothian, M.

Soulbury, V.

Denham, L.

Luke, L.

Spens, L.

Devonshire, D.

Merrivale, L.

Swinton, E.

Dundee, E.

Merthyr, L.

Twining, L.

Dynevor, L.

Mills, L.

Waldegrave, E.

THE EARL OF DUNDEE: I beg to move Amendment No. 62A.
Amendment moved—
Page 11, line 33, after ("land") insert ("for use").—(The Earl of Dundee.)
On Question, Amendment agreed to.
THE EARL OF DUNDEE: I beg to move No. 62B.
Amendment moved—
Page 11, line 39, after ("land") insert ("for use").—(The Earl of Dundee.)
On Question, Amendment agreed to.
4.28 p.m.
LORD SILKIN LORD SILKIN moved to leave out Clause 11. The noble Lord said: I do not propose to make a speech on this Amendment, which is to leave out Clause 11. In the normal course of events I would have accepted the assurance of the noble Earl that he would look at this clause again. In view of the decision of the Committee—and it is a very strong decision, especially when leaving out those noble Lords who were not present during the debate and who voted, and the "Establishment"—the real sense of the House is beyond all question. Therefore I would respectfully suggest that the proper course on this occasion is to accept the Amendment to leave out Clause 11 and let the Government come back with their considered views of what they will do in the light of the decision of the Committee. I beg to move.
Amendment moved—
Leave out Clause 11.—(Lord Silkin.)
THE EARL OF DUNDEE: Naturally, I regret that your Lordships did not accept the offer of the Government to consider the Amendment which has just been carried and which I think many noble Lords agreed was in itself impracticable. We also believe that it is impracticable. We could not agree, on Report, to the Bill as it now stands. Therefore I agree with the noble Lord, Lord Silkin, that the best course which your Lordships could now follow is to accept the Amendment to leave out this clause, so that we may draft another one on Report.
LORD HAWKE: I do not know whether it is in order for me to make one ox two small points now or whether
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I should wait until the Deputy Chairman puts the Question.
THE DEPUTY CHAIRMAN OF COMMITTEES (LORD AIREDALE): I did put the Question.
LORD HAWKE: We have been dealing with London, and there are one or two points which should be dealt with in the revised clause which the Government are going to bring forward. What I think they have tended to forget so far is that the new Board which is to be set up is not a separate entity but the British public under another name. We, the British people, have paid for this land over the years and we want to put it to the best possible use as soon as possible, regardless of whether by long-term development this particular body, who are our servants, might be able to make more money out of it. As the Bill now stands, there seems to me to be every inducement for the Board to build up a business as land developers, either by themselves or in partnership with other people. There are objections to this course. Land development may well need further capital which the British people will have to supply; and under the new system of above and below the line balances under the Budget we shall have to be taxed to provide this new capital.
There is at this moment a tremendous land hunger in this country for all purposes—local authority, industry and private development. I should like to have an assurance that the local authority can acquire compulsorily land in the hands of the Board. Some of the land hunger is for projects for which high prices, such as are paid for office building, cannot be paid. There are authority and amenity projects which can never come to fruition at high land prices. Unless this is recognised in the Bill, human nature being what it is the railways will sit on their land in the hope that over the years all their land will become ripe for development for high-priced projects. In some cases this will happen, but in many it will not; and in twenty years time we shall find that the railways will be sitting on land which is urgently required, but which will remain sterilised, vainly waiting for high development values.
The Minister says that he wants the railways to concentrate on running railways; and he even refuses to let them

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continue in partnership with the bus companies because they cannot afford the time to sit on the board. I should like to see some pressure put on the railways to dispose of their land for the public use as quickly as possible. One does not want, of course, to be too exacting. A certain amount of their land will have to be developed by themselves and in partnership, such as the land over their own working lines, but up and down the country there will be large quantities of land—and I am not necessarily talking about urban land-in the shape of disused sidings, small stations and the like which is urgently required for local authority amenity and housing purposes. Unless we recognise that somehow in this Bill, the railways will sit on these pieces of land, hoping that they will one day be able to sell them at very high prices, and meanwhile the public will lose the benefit of land which is really theirs.
On Question, Amendment agreed to.
Clause 12:
Pipe-lines
12.—
(2) The Boards shall not have power to acquire land for the purpose of constructing pipe-lines except—

(a) where the pipe-line is or is to be mainly on land belonging to the Boards and acquired for other purposes, or

(b) where the pipe-line is required for the purposes of the business of the Board other than the operation of pipe-lines.

(3) A Board shall not without the consent of the Minister construct any pipe-line unless the pipe-line is required for the purposes of the business of the Board other than the operation of pipe-lines.
4.35 p.m.
LORD STONHAM LORD STONHAM moved to leave out subsections (2) and (3). The noble Lord said: on behalf of my noble friend Lord Lucan, I beg to move the next Amendment. I rather feel that at the present moment the Government are somewhat in the position of the jury, who, after a long and complicated divorce case, were in such an utter state of confusion that they awarded the corespondent the custody of the judge. I should now like to recall them to a point which is a concrete one and which I think can be easily understood.
I would remind your Lordships that during our discussions on the Pipe-lines Bill we on this side of the House tried hard to persuade the Government to give British Railways the power to exploit to the full the potentialities of this new and dynamic form of transport. On one occasion, in replying to an Amendment I had moved, the noble Lord, Lord Mills, suggested that when I read the Transport Bill I should find that it gave the railways the very power for which we were then asking. Well, I have now read the Transport Bill, but it does not give that power. It is true that subsection (1) of Clause 12 raises our hopes, in that it confers on the Boards the power to construct and operate pipe-lines or to allow other persons to do so on the Boards' land. But then come the qualifying restrictions, subsections (2) and (3), which by this Amendment we are asking the Government to delete.
Subsection (2), for example, lays down that unless it is for their own purposes the Boards cannot acquire land on which to construct the pipe-line. True, it also holds out the vain hope that they may be able to buy a little bit of land for general pipe-line construction if they already own most of the land over which the pipe-line is to run, and provided that they had acquired it for some totally different purpose. I do not know quite the reason for that last provision, but it is there in the clause. But even this faint hope is destroyed by subsection (3), which makes it clear that unless it is a pipe for carrying their own water or fuel, or for some other railway purpose, they will not be allowed to construct any pipe-line at all without the consent of the Minister. So the promise held out in subsection (1) of the clause is just a pipe-dream. That being so, I am at a loss to understand how the noble Lord, Lord Mills, could believe that I should find in the Transport Bill the freedom that was denied in the Pipe-lines Bill.
LORD MILLS: I think the noble Lord is mistaken. I told him that he would find the rules governing pipe-lines in the Transport Bill, but not that they would fulfil his hopes.
LORD STONHAM: I am sorry if I misunderstood the noble Lord, but I distinctly remember that he had the

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appearance of attempting to give me some comfort in softening the blow of his refusal to accept the Amendment which I then moved. In any case, it seems to me beyond dispute that the powers vested in the Minister of Power to ensure that British Railways are not permitted, as I see it, to play a worthwhile part in this promising new form of venture are, for good measure, to be vested also in the Minister of Transport. If there is any difference in respect to pipe-lines between this Bill and the previous Bill I mentioned, I should be glad to know what it is.
Meanwhile, we renew our plea for the removal of these restrictions. I would submit that it is common ground that railways, although perhaps on a smaller scale, will continue in the foreseeable future. I hope that is common ground. It is common ground, I think, that they should be given the chance to pay their way. It is even common ground that the Minister may direct the Boards to continue to run uneconomic services. Why should it therefore not be common ground that they should be able to use their land and tracks, and to buy any other land they may need for the construction of pipes for the carriage of goods for other people, and so have the chance of earning a profit? I think the answer is that there is profit in pipelines. Who, in their right mind, would allow a nationalised industry to have a share in a potentially good thing! The taxpayer can have the loss-makers but must protect the interests of the shareholders. That, at least, is how it appears to me, and I submit that that is the only logical reason for the insertion and retention in this Bill of subsections (2) and (3) of Clause 12.
I am, as always, prepared to be convinced by sweet reason, and I shall be delighted if the noble Lord can prove that in this matter the Government's intentions are strictly honourable: that the railways will, in fact, be able to construct pipe-lines for the general carriage of suitable goods. I may be an extraordinary person, but it is inconceivable to me that any Government, being in charge of a publicly-owned industry, should wish to limit the ability of that industry to take part and develop their business within the particular field. In this case it is beyond dispute that pipe-lines
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are a form of transport; that the Boards with which we are concerned in this Bill are all concerned in one way or another with transport. Therefore, arbitrarily to limit their powers to take part in this new form of transport seems impossible to justify in accordance with the rules of equity. I am bound to say that, unless the noble Lord can show otherwise, then the suggestion that I have put forward that these subsections are put in the Bill in order to preserve this new field for the profits of private enterprise and for the interests of the shareholders, is the right one. If I am wrong, I shall be delighted to have it proved to me. But there is nothing that would do more to convince me that I am wrong, to convince me of the Government's good intention, than for the noble Lord to get up and utter those four simple words, "I accept the Amendment". I beg to move.
Amendment moved—
Page 12, line 12, leave out subsections (21 and (3).—(Lord Stonham.)
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM): The noble Lord, Lord Stonham, will doubtless not be amazed when I deny him at the very beginning the satisfaction of the four words for which he asked. If he will allow me to say so without disrespect, I was a little amazed to hear him advancing the argument—I say this without wishing to job backwards—that it was essential that the taxpayer should have the relief of enabling the Railways Boards to do the best they could for the taxpayer with their money, he having just come out of the Lobby, having voted, as it certainly seems to us over here, to do just the opposite. I cannot resist saying that, although of course I do not want to pursue the matter.
The noble Lord started by saying that the point he raised was a concrete one. So it may be. It has been concreted, if concrete in fact it is, by repeated applications of what I believe is lean concrete which in some ways is rather thin stuff. But the noble Lord asked that, if a case was to be made against his Amendment, it should be put forward with sweet reason. Here is sweet reason coming up. If I may add my own memories to what happened in the past, the Bill gave the power for which the noble Lord, Lord Stonham, was asking

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at that time. As I recall them, his words were that, as they had railway lines which were likely to be closed down, there were natural routes ready provided, which the railways should have the power to develop. That is just the power they have; and that was the power which the noble Lord was told, on a previous occasion, was contained in this Bill. I agree completely that it does not contain the general power to develop and operate pipe-lines at large, into which he later developed his theme. But he did ask for the particular power which is in the Bill at the time; and that was the answer, as I recollect, that he was given. I do not want to make much of that, because I want to get on to the substance of the Amendment.
I start with the first subsection, which the noble Lord wishes to leave out and under which the Boards are given power to construct and operate mainly on their own land pipe-lines for other people. The object of the restriction is to ensure that, while the Boards should be able to make the fullest possible use of their existing land, in so far as it does not conflict with their primary purposes, to build and operate such pipe-lines, together with the right to acquire such incidental parcels of land as they need to make up a route which is mainly on their own land and to make the lay-out efficient, they are not able to become pipe-line operators at large. We feel that that is the way to make the best possible use of their assets. Subsection (3), of course, refers to the consent of the Minister. They are being given this power to construct and operate pipe-lines because it will enable them to get the fullest use out of the land which they have to have for their main purposes. I think that the British Railways Board and the Waterways Board particularly will own long stretches of land which will be quite well suited and well used for the purpose; and the Docks Board will have land which is very suited to terminal parts of pipelines connected with transport pipelines provided by the other Boards, or possibly by somebody else.
The powers that are in Clause 12 are adequate in every way to cover the purposes which we intend the Boards to fulfil. But to allow the Railways Board, or, indeed, any other Board, to set up as a
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pipe-line operator at large over the country as a whole is another matter indeed. I think the noble Lord referred principally to the Railways Board in this connection, and I cannot see the justification, the reasoning, for the views he put forward that they should have this wide power to build and operate pipe-lines at large all over the country. They have quite enough opportunity for the construction of pipe-lines on their own land without going out into general pipe-line construction, particularly, as the noble Lord has pointed out on more than one occasion, as they own some of the best routes.
In the financial situation which the railways and the waterways are in to-day, and in view of the fact that for some years to come at least they are going to need revenue assistance from the Exchequer, it really cannot be accepted that there will be sufficient public investment finance available for them to go in generally for transport pipe-line projects. They need all the money that can be provided for them for doing the job which they have to do—that is, providing and running railways—and it really cannot be justified that they should spend large quantities of public money in branching out into this new field, which is not their job and which moreover would divert their attention from what is their proper job.
I wonder whether noble Lords opposite are right about the great profitability, which they keep telling us about, of this dynamic new form of transport—I think I quote the noble Lord's words correctly. I find it very difficult to see pipe-line transport as a public form of transport from which much gold is going to be extracted. I know that it is, in a sense, part of the philosophy of the Party of noble Lords opposite that anything which private enterprise does it would not do unless it made a great deal of money out of it; and the argument is, I take it, that the Railways Board, or other Boards, should be able to get some of that money. But I rather doubt whether that is a theory which is correctly based in this case, because I should have thought that pipe-lines will largely (I agree, not entirely) be used by large firms as a more improved and economic form of transport of their product from one place to

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another where there is a more or less continuous flow or a heavy demand. In that case, if that is going to be the main demand, I cannot see any reason why the Railways Board, or any of the other Boards, should use large quantities of public money to set up a pipe-line for the benefit of perhaps one firm or small group of firms. It does not seem to me to be right.
I think, therefore, that so far as the first part of the Amendment is concerned there is every reason why I should ask your Lordships not to accept it. On the second part, that they should construct a pipe-line only with the consent of the Minister, the provision is something the noble Lord specifically asked for; and the reason that the provision for the consent of the Minister has been included is that the Bill puts the duty of running their own particular business squarely on each individual Board. It is important to ensure, by the Minister's control, that the Boards do not unduly concern themselves with running pipelines when they should be running railways.
There is also the question of the control of investment which is within the discretion of the Minister. The reason for that is that the capacity powers which are given in Clause 12 to construct and operate these pipe-lines extend not only to land which is already owned by a particular Board but also to land held by another of the Boards. In the event of there being some disagreement whether one Board should proceed with a scheme over the land of another, it is desirable that the Minister should be in a position to have the ultimate decision on the matter. I do not know whether, inadvertently, I have failed to answer any question which the noble Lord, Lord Stonham, put. I have tried to answer him and I think I have done so fairly satisfactorily and, therefore, have produced reasons for not accepting his Amendment.
LORD STONHAM: The noble Lord, Lord Chesham, promised to answer my arguments with sweet reason.
LORD CHESHAM: I have.
LORD STONHAM: His Charm, of course, is undeniable, but his reasons, in
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my estimation, were non-existent. The noble Lord seemed to think that it was quite sufficient to say that the Boards cannot be justified in spending public money in branching out into pipe-lines. But if we expect pipe-lines to be constructed—and, of course, no one imagines that we would go to the trouble of having a very complicated Bill and spending weeks in Parliamentary discussion if we did not think so—somebody is going to spend money on their construction. Much money is going to be spent. Whether it is contributed by private shareholders or by the taxpayer, directly or indirectly, someone will spend that money. Our whole argument for this Amendment rests on the submission that publicly-owned Boards should have the opportunity to construct those pipe-lines if they can put up a case for them. We have no objection whatever to the Minister's giving approval for schemes.
The noble Lord then asked, quite properly, are we right in thinking that pipe-lines are going to be so very profitable. Whether they are or are not going to be profitable, what is quite certain is that nobody will invest a penny in a private company to erect a pipe-line unless they think it is going to be profitable; that is quite certain. Therefore, so far as those objections are concerned I do not think, with the best will in the world, that I can agree that there is any answer from the noble Lord at all. The truth of the matter is that there is here a conflict of opinion, a conflict of ideology, a conflict of approach; and nothing can conceal that fact, or conceal that, for the time being, for a short period, numbers are on the side of the noble Lord opposite. Therefore, having heard his reply, I cannot really expect that we shall get very much.
There is one point of practical significance on which he might help. The noble Lord said that the railways have the power for which I asked in a previous discussion—that is, power to construct pipe-lines on their own tracks. I do not dispute that. The trouble is that the railways were built a century or more ago, and the tracks do not in all cases, particularly in view of modern developments, run conveniently to those places where new industries have been built up—the kind of industries, in fact, some

145
of which, at least, may well be likely to use pipe-lines.
Therefore, the question I would put to the noble Lord is this: what does the Bill mean by the words "mainly on their own land"? These are very simple words, very clear words; but how will they be interpreted? The railways are able to build pipe-lines, if they wish, entirely on their own land or mainly on their own land. It is almost certain that the Railways Board, or one of the other three Boards, will wish to build a pipeline which, for the sake of economy, will be substantially on their own land, yet linking up with a particular new industry or factory which is not on their own land. What percentage is meant by "mainly on their own land"? Does it mean 60 per cent., 75 per cent., 80 per cent., 90 per cent.? What precisely have the Government in mind? I think this is a very important point, and I hope that, before we leave this particular point, the noble Lord will be able to give us some information about it.
LORD CHESHAM: I am glad to have the opportunity to clear up that point, which I will do in a moment. But before that there are just a couple of other points that I should like to make, very briefly, on what the noble Lord said. He said, "Someone will put up the money". What I query is the argument that that "someone" should be, for example, the Railways Board, with hundreds of millions having to be written off and enormous sums having to be found for modernisation. I therefore think that the argument that further very large sums should be used in this way is really verging, if I may say so, on the financially irresponsible.
LORD SHEPHERD: May I say to the noble Lord that, while he may make a case that the Railways Board may at present be financially unable to undertake the capital expenditure, this Bill is arranging the transport organisation, restrictions, permissions and duties for the foreseeable future. That is the period with which we are dealing—five, ten, fifteen years ahead. What may exist now is one point; what may exist in the future is another. This Bill will prevent any Board from operating general pipe-lines, and that is the issue we have with the Government: that this Bill restricts for the lifetime of the Bill
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any possibility of a nationalised Board taking part in a new method of transportation.
LORD CHESHAM: Yes, that is exactly what it does, and it merely serves to emphasise what the noble Lord, Lord Stonham, referred to as the ideological difference. That ideological difference between us exists: it has been quite clearly seen to exist in the debates we had on this particular point during the passage of the Pipe-lines Bill. I still stick to my point—perhaps it is idle to argue it further—that noble Lords opposite are wrong about this thing and we are not. We are creating an organisation whereby people are equipped and organised to get on with their own job. As I said a day or two ago, noble Lords opposite seem very keen that they should always be diversifying themselves to do other jobs as well.
I am not going to pursue that point, because I want to go on to the point raised by the noble Lord, Lord Stonham; and he confirmed exactly what I said about the views of noble Lords opposite. I do not want to argue it, but all I want him to do is think about this point. He said that no private enterprise firm or organisation would put money into pipe-lines unless they could make a profit out of it, and therefore the nationalised undertakings should have a chance to get some of that profit. I wonder whether it has occurred to him that large firms with large quantities of something suitable to be conveyed by pipe-line from A to B may not make much profit out of it, but may find it a cheaper and more useful adjunct of their production to use this form of transport rather than transporting by lorry or rail; that while it might help the firm, it would not necessarily contribute very much into the funds of the Board that was operating the pipe-line if they operated it and carried the goods for the firm. That is, at any rate, the way it seems to me.
On the point about the meaning of "mainly on their own land", it is a little difficult to be specific and write into the Bill that "mainly" means 60 per cent. or 80 per cent. or whatever it may be. I think it would make it too specific, and it might serve to prohibit some desirable pipe-line. The idea of that particular phrase is that the Board

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should run the pipe-line where it has facilities to do so mainly on its own land. It might easily be the case that with a 50-mile pipe-line, or something of that kind, they would want to cut across a quarter of a mile outside their own land. If they were not able to do that, if the pipe-line had to be entirely on their own land, the whole project might be brought to nothing because they could not cross the small space. I suppose that, by definition, "mainly" must be in excess of 50 per cent. Again, from the natural meaning of words one would infer that. I think that is an added reason why the consent of the Minister to such a scheme should be required. The phrase is intended, though, to cover the possibility of running a pipe-line over small segments shall I say, of other people's land in order that the whole operation may be completed.
LORD CITRINE: May I ask the noble Lord two questions? The first is whether he disputes the view that the pipe-line system is a new form of transport. The second point is, who will interpret "mainly"? There is nothing in this clause that puts upon anybody the power to interpret "mainly".
LORD CHESHAM: What was the noble Lord's first question?
LORD CITRINE: Does the noble Lord accept the view that the pipe-line system is a new form of transport?
LORD CHESHAM: Basically, I suppose the answer to that is, Yes. But I do not accept that it is a form of transport completely analogous to the forms of transport that we know, because I do not believe that there is going to be much room for investment, except on a limited scale, in pipe-lines which people build in the general hope that somebody may come along and want to put something through them. As a form of public transport, as it were, analogous to road or rail, or something like that, I do not think it comes in the same bracket at all. Clearly, the interpretation of "mainly" is difficult. It will be a matter for the Board who wants to run a pipe-line. Certainly I do not think it is difficult to interpret in this respect: if more of the pipe-line is on their property than is off it, then it is mainly on it. Therefore,
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it will be a question of discretion for the Minister in giving his consent, in regard to whether they are doing something unreasonable in going right away to somewhere they should not properly go, and as to whether they can do it or not.
LORD CITRINE: May I follow that up? Where in the Bill is this power given to the Minister? It seems to me that it is completely open. The Board may say that it is something that is mainly upon their land. Where is the restrictive power held? The clause itself does not give any such power to the Minister. Where is the power given?
LORD CHESHAM: I do not think it is necessary to write into a Bill exactly who is going to interpret every part of it. I think that is automatically part of the Minister's function.
5.12 p.m.
LORD WILLIAMS OF BARNBURGH: I want to ask the noble Lord just one or two questions. First, why does he take the view that either one of the four Boards to be set up will be so irresponsible as literally to throw away taxpayers' money in the manner that he suggests? It does not seem to me that he has much confidence in the persons to be appointed to the four Boards, because if they are as irresponsible as he fears they may be, then the Government's choice of manpower will be very poor indeed. I should have thought that what this Amendment really means is that where one of the four Boards feel that a service, either new, or partially new and partially old, can be improved by the use of a pipe-line, then the Board shall have power to establish one but that they have to prove their case to the Minister before they can get the authority. That being so, I should imagine that members of the Board will be just as responsible as, indeed perhaps more than, directors of electricity companies were in the old days in their attitude towards any service given to the community.
I am reminded of the situation before nationalisation with regard to electricity. It may not be a perfect simile to pipelines, but the situation used to be that one private electricity company after another could come to Parliament seeking power to serve ten, twenty or thirty square miles in area with electricity. Of

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course they knew that on arrival at the House of Commons there would be a Conservative Government who believed in private enterprise, as they were entitled to. They knew, therefore, that their Private Bill to extend the area over which they could supply electricity to households, to industry or to anywhere else, would be a winner the moment they reached Parliament.
What used to happen? I knew the Yorkshire Electric Power Company best. I happened to live near their area. My Parliamentary division was widespread, almost wholly rural and mining, and I happened to reside in Doncaster. The Yorkshire Electric Power Company—I do not suggest that only the Yorkshire Electric Power Company did this; I suppose they all did—got Parliamentary assent to serve a wide area with electricity; but they either served it or they did not, at their own will, and no outside person, neither a railway board nor any other board, could interfere. Consequently, once the Electric Power Company had got Parliamentary power to serve the area, would-be users would wait for years on end for electricity and never get it. Even if they got it, if they lived on the fringe of a county borough area they had to pay dearly for it. While I was paying ¾d. per unit for my electricity pre-war, within three-quarters of a mile of my house, where the Electric Power Company were serving, 5d. per unit was being paid. That is the sort of thing that was happening. This is the best illustration I can give of how not to do things.
The electricity companies over the country as a whole—I am not singling out any—were supplying farms at the rate of about 5,000 to 5,500 each year. Since electricity has been taken over by the State they have been supplying 12,500 farms per year, connecting electricity to farmhouses for both domestic and industrial purposes. This clearly indicates that large farming areas in the country which now have electricity would never have had it had electricity not been taken over by the State. That does not indicate that those in charge of our electricity supplies to-day are a lot of irresponsible people; and I do not think we have any more right to think that those persons to be chosen to man
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the four Boards will be any less responsible than the Central Electricity Authority have been over the past twelve or thirteen years. The farming community at this moment can thank their lucky stars that electricity was taken over and that the Authority had the power at will, commercially, economically, and efficiently to supply electricity, not only in the newly built-up areas, but at the same time out in the wilds of rural Britain.
Having regard to the fact that the members of the various Boards know what can happen to any Board which throws away particularly the taxpayers' money, I should have thought that we could guarantee that they would desire to have a pipe-line of their own outside the land that they presently own only if it were going to serve some facet of transport and not lose taxpayers' money. The noble Lord is quite entitled to his view about private enterprise and non-private enterprise, but I hope that he will not get the definite idea in his mind, and cement it firmly, that all private enterprise is careful and all non-private enterprise or all public servants are irresponsible where money and investment on new undertakings are concerned. I hope that the noble Lord will bear in mind the example that I have given about electricity, and what it has meant to the farmer and to the country in food production and all the rest, simply because the Electricity Authority had the power to provide electricity.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Before the noble Lord replies, I must say that I get very upset by the view that is constantly being put forward that it is right Governments should come to Parliament and ask to put restrictions on publicly-owned bodies which they do not want to put on private enterprise bodies. I think this is a shocking state of affairs. The case put by the Minister this afternoon in regard to transport had no regard to the folly of the Government's policy in interfering with the proper management of the railways—selling off their best assets, like road transport, and making every possible difficulty for the revenue to be maintained. I do not know how the Government have the face to come and argue as they do on these matters, con-

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sidering their treatment of the Transport Commission. We will certainly divide on this.
LORD CHESHAM: If the noble Viscount is going to take that attitude, I welcome the decision to divide. I think we should divide, because there is a good deal between us on this matter. It merely goes to prove what I said the other day. It seems to me that noble Lords opposite simply do not believe that there can be any form of effective railway system unless the railways have power to indulge in every other activity.
VISCOUNT ALEXANDER OF HILLSBOROUGH: No.
LORD CHESHAM: That is quite true, and the noble Viscount's words have proved it again. Noble Lords opposite think they cannot do this unless they have power to go in for pipe-lines or to run road transport. I wonder it has not been suggested that they should go into the property field as property developers, just in order to bolster them up. I myself think that theirs is an incredible argument, and certainly we should welcome taking this Amendment to the Division Lobby.
May I just deal with what was said by the noble Lord, Lord Williams of Barnburgh? I did not think that anything I said indicated that I considered that the Boards would be irresponsible in this matter. I do not think I am under any illusion. I certainly had not intended to say that I considered the Boards to be irresponsible in the matter. I tried to explain why I thought it was necessary that the Minister should have to give his consent.
LORD WILLIAMS OF BARNBURGH: But the noble Lord must recall—I am sure it is within the recollection of the Committee—that he said two, three or four times: why should they be concerned with these pipe-lines and presumably lose these sums of money?
LORD CHESHAM: No, I did not say that. The noble Lord must not put words into my mouth. I said: why should they do this thing, because it is not their job. The job of the Railways Board is to run railways; the job of the
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Waterways Board is to run waterways. It is not their job to indulge in large-scale pipe-line operations. That is what I said. I then went on to say, not that they would lose large quantities of money, but that they would need large quantities of money to put into this. They would need quite enough money as it was, particularly as two of them were going to be supported by the Exchequer for at least five years: they would need further large sums, which I thought would be better devoted to their own purposes and should not be available for doing something that was not their job.
VISCOUNT ALEXANDER OF HILLSBOROUGH: We will look at Hansard to-morrow.
LORD CHESHAM: I know what I said.
LORD STONHAM: I want to make certain what the issue is and what we are voting about. We cannot take the view—the Government's view—that an undertaking is to be debarred from taking part in a new, and probably profitable, enterprise merely because it is owned by the taxpayer. I hope that all noble Lords who agree with us in this and who dissent from the Government will join us in the Division Lobby.
LORD AIREDALE: I believe that the whole of the disquiet felt by noble Lords on my left really stems from the refusal of the Government to admit that pipe-lines are a new form of transport. The Government have refused to admit that in a single word this afternoon. The noble Lord, Lord Citrine, put that question perfectly plainly and clearly to Lord Chesham, and the noble Lord, Lord Chesham, did not feel able to answer it with a simple "Yes". The Government on a previous occasion—which I must not go into all over again—refused to recognise this by placing pipe-lines under the Ministry of Transport. If only they had done so in some form or another—a Pipe-lines Board, or whatever it might be—under the Ministry of Transport, they would not be in the difficulty in which they now find themselves, engendering all this disquiet among noble Lords on my left. In this way the Government are creating difficulties for themselves—they must surely see that.
On Question, Whether the said Amendment shall be agreed to?
Clause 12 agreed to.
Clause 13:
The Boards' powers of manufacture, and production
13.—(1) Each of the Boards shall have power to construct, manufacture, produce, purchase, maintain and repair anything required for the purposes of the business—

(a) of that Board,

(b) of any other Board, or

(c) of a subsidiary of any of the Boards or of a subsidiary of the Holding Company,

and, subject to section eleven of this Act and to the following provisions of this section, the Boards shall not have power to construct, manufacture, produce, purchase, maintain or repair anything not required for any of those purposes.
(5) Without prejudice to so much of subsection (1) of this section as restricts the Boards' powers, a Board shall not have power to manufacture, otherwise than for purposes of research or development, road vehicles, bodies or chassis for road vehicles or major components of road vehicles.
This subsection shall not come into force as respects the Railways Board until the expiration of the period of three years from the vesting date, so, however, that if it appears to the Minister that that Board can properly terminate the activities restricted by this subsection before then, he may direct that for
Their Lordships divided: Contents, 17; Not-Contents, 54.

CONTENTS

Alexander of Hillsborough, V.

Crook, L.

Silkin, L.

Amwell, L.

Francis-Williams, L.

Stonham, L. [Teller.]

Burton of Coventry, B.

Kenswood, L.

Walston, L.

Champion, L.

Lawson, L.

Williams, L.

Chorley, L.

St. Davids, V.

Williams of Barnburgh, L.

Citrine, L.

Shepherd, L. [Teller.]

NOT-CONTENTS

Ailsa, M.

Devonshire, D.

Milverton, L.

Ailwyn, L.

Dundee, E.

Molson, L.

Albemarle, E.

Fortescue, E.

Montgomery of Alamein, V.

Allerton, L.

Goschen, V.

Mowbray and Stourton, L.

Amherst of Hackney, L.

Grenfell, L.

Newall, L.

Atholl, D.

Hailsham, V. (L. President.)

Newton, L. [Teller.]

Auckland, L.

Hastings, L.

Palmer, L.

Balfour of Inchrye, L.

Hawke, L.

Radnor, E.

Bathurst, E.

Howard of Glossop, L.

Rathcavan, L.

Bossom, L.

Inchyra, L.

Robins, L.

Boston, L.

Jellicoe, E.

St. Aldwyn, E. [Teller.]

Bridgeman, V.

Lansdowne, M.

St. Oswald, L.

Buckinghamshire, E.

Lothian, M.

Salisbury, M.

Chesham, L.

Luke, L.

Somers, L.

Conesford, L.

Margesson, V.

Spens, L.

Coutanche, L.

Massereene and Ferrard, V.

Swinton, E.

Crathorne, L.

Merrivale, L.

Teynham, L.

Denham, L.

Mills, L.

Waldegrave, E.

Resolved in the negative, and Amendment disagreed to accordingly.

the period of three years there shall be substituted such shorter period as may be specified in the direction.
5.35 p.m.
LORD CHAMPION LORD CHAMPION moved, in subsection (1), to leave out all words after "business", and to insert instead:
"of any Board or Nationalised Transport undertaking, and in addition may undertake such work of manufacture or repair as may be necessary to operate its factories and repair shops efficiently and economically."
The noble Lord said: The noble Lord, Lord Chesham, chided my noble friend Lord Stonham in that he had just voted for a restrictive Amendment and helped to defeat the Government thereby. That can equally be held against me, of course, and not just on the earlier Amendment. I am bound to plead, in explanation, that I longed for that opportunity from 1951 to 1959. I longed very much to be in the Lobby where I should find myself defeating the Government. In the circumstances, I just could not resist the temptation. I think it is good occasionally not to resist temptation—not as a general precept, of course, but on occasions such as this.
LORD CHESHAM: I would only interrupt to say that I am glad that the noble Lord has succumbed to tempta-

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tion, because, no doubt as with me, it is the only thing he cannot resist.
LORD CHAMPION: Here we are seeking to leave out words which will restrict the commercial freedom of the Board. Pretty well all the way through the passage of this Bill in another place, and, indeed, in this House, the Government have said that the ideal for these undertakings is commercial freedom to:
"so conduct their business as to secure that their revenue is not less than sufficient for making provision for the meeting of charges properly chargeable to revenue, taking one year with another"—
to use the words in Clause 18 of this Bill. But, reading between the lines of the Bill, it is clear that they must do this only provided that in the process they do not hurt any privately-owned undertaking that has a powerful voice in Parliament.
We all know that with modernisation, with the running down of the production of diesel engines and all the rest of the consequences of the shrinking of our railway system, there will be a great deal of redundancy in the railway workshops, and much space will be made available and could be used if the railways were permitted to use that space. There is in Derby, in Swindon, in East-leigh and in a number of other important railway workshop centres a body of highly skilled men trained by the various apprenticeship schemes, who are at this moment facing the prospect of losing their jobs. Most of these are in danger of losing their jobs and—important too—being lost to the railways and the railway systems. As a result of my trade union connection and as a result of representing Derby for a period I know very many of these men. They are decent, honest, craftsmen; decent men who have acquired great skills in their operations and in the jobs they have to do. There will be, too, and there is at present, a lot of unused floor space. What we say is that some of this floor space and many of these men who are in this danger of redundancy could be used for contracts for private industry.
There would be no new principle at all involved here. It is, of course, the case, and I am sure it is known to the Ministers opposite, that the Government permit the Royal Dockyards to
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undertake private contract work, and they have done so for a long time. This seems to us to be a wise use of the men they wish to retain and of the space available in Portsmouth and other places. I had the privilege, some years ago, of going with a Select Committee on Estimates to Portsmouth, where I saw something of the training schemes in operation. I must say that they are really first-rate schemes which produce first-class men. The Government rightly said, "Let us use these men; let these dockyards undertake private contract work", and they do in fact do so.
It is also true that when the Royal Ordnance factories were running down their production after the war they were permitted to undertake other lines of work, provided always—and this was a duty imposed upon them—that they could do it at a profit. This they did, and to the extent of many millions of pounds. The taxpayers were saved to that extent as a result of using these Ordnance factories for that purpose. It is clear that none of the Boards, having the duty placed upon them of paying their way, and bearing in mind all the restrictions, and so on, placed upon them, would undertake work for private industry unless they were sure that at least they could cover their cost, or perhaps make a profit—and to make a profit would, of course, be the ideal in this connection as is the case with the Government establishments that I have mentioned. Surely it is highly desirable that, if the Boards are able to manufacture at a profit something that private industry wants, they should be permitted to do so, always having regard to their commercial obligation—the obligation to make their industry pay.
There is another factor that comes into this. It would be a mistake to disperse too many of these men, who could be used for private industry work. I am firmly of the opinion that within a few years the usage of our roads will be such that there will have to be a return to the full use of our railway system. To use a phrase often used in this connection, road traffic will grind to a halt unless the highways are relieved of much of their traffic—traffic which could with great advantage be carried by the railways. When that time comes, as it will come, whatever the ideologies

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of the Government of the day, there must be a further attempt at co-ordination and integration of transport. I believe that when the time comes that our roads are cluttered up to that extent, then something will have to be done, no matter what the colour of the Government of the day. This might mean, and probably will mean eventually, that there will be some direction of transport-users; and that direction is bound to be towards the railways, for they have the greatest potential available, now unused. I am sure that in many cases a direction towards the railways would be welcomed even by noble Lords opposite. I am sure that, when they have been in their cars following some of the vehicles that are on the roads to-day, carrying some of the loads that they do carry, many noble Lords have wished that somebody had taken steps to direct that traffic on to the railways in order to free the roads.
This potential has been talked about by greater traffic experts and transport experts than I. For example, Sir Reginald Wilson (who I am sure is known to the Ministers opposite as a great transport man) said in 1958:
"Because a railway can be highly mechanised, it is potentially the cheapest mass-producer of transport facilities; or, as the foreign railways prefer to put it, the railroad is a high productivity form of transport."
Whether we like it or not, whether we have a Government holding the views held by the present Government or not, an attempt at co-ordination, I say again, must surely come; and it will come when we reach that period when the roads will no longer carry the traffic. We must use this "cheapest mass-producer of transport facilities." I believe that someone in America has said that eventually they will have to re-invent the railway. We, I am afraid, shall have to do very much the same. We shall regret some of the closures, and so on, that have taken place.
I know enough about it to appreciate that it might be argued that examination has shown that much of the Commission's deficit is being incurred on the workshops side. I know that is the case. I know that it is certainly the case that this is mainly in repair work on old stock. It is also the case that, in the production of new stock, the railway workshops are a profitable undertaking, or a profitable part of the whole undertaking.
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I do not want to go on too long. I think I made that mistake yesterday when moving an Amendment; but I hope that I have said enough to convince your Lordships that this Amendment is a sound one. I beg to move.
Amendment moved—
Page 12, leave out lines 31 to 38 and insert the said new words.—(Lord Champion.)
LORD MERRIVALE: I would agree in one respect with the noble Lord, Lord Champion; and that is When he says that in due course Her Majesty's Government, and Members of this House and another place, Will have to give due consideration to the question of whether or not some form of direction is needed with regard to traffic. That was also a conclusion reached at the annual conference of a transport organisation of Which I have the privilege of being the President, the members of which are operators of road transport and, also, traffic managers. They also felt that the time would no doubt come when, if we are not to grind to a halt on our roads, some form of direction will have to be considered. Apart from that, I disagree with this Amendment, for I feel that if it is carried it will give unduly wide powers of manufacture to the nationalised undertakings. It seems to me, too, that this Amendment, if carried, would affect in no small measure subsections (2), (3), (4), (5) and (6), which place important limitations on the powers of the Boards.
I should like to mention the locomotive-manufacturing industry, which would be one of those most directly affected by this Amendment, if it were carried. At the moment, this industry is faced with rapid contraction and rationalisation. It seems to me that it is increasingly absurd to divide the requirements of British Railways between the railway workshops and the railway locomotive-manufacturing industry. I understand that at the moment only 15 per cent. of the labour force employed in the railway workshops is employed on the manufacture of new locomotives: the other 85 per cent.—a not inconsiderable percentage—is used on repair work, and so on.
I agree with the noble Lord, Lord Champion, that the railway workshops have existed for over a century and that

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they have a tradition and a pride in manufacture. But I think your Lordships will agree that an industry, especially an industry which is exporting capital equipment, needs a home market as a basis with a view to keeping costs down, assuring continuity of production, and also—and this is not unimportant—providing a shop window at home. I think your Lordships also agree that this industry, like other industries in this country, already has to meet vigorous competition from abroad—from America, from Japan, and from countries on the Continent, such as Germany, France, Italy, and Switzerland.
I feel that if this Amendment were accepted, it would make it even more difficult for the locomotive manufacturing industry to compete in world markets, for I should imagine that then the railway workshops, although they would be able to manufacture and export, would do so without having the requisite knowledge with regard to overseas markets, or with regard to special operating conditions, or with regard to climatic conditions in certain countries, and so on. I feel we should follow the example of other countries, because we are the only large manufacturing country whose railways manufacture their own locomotives. The countries I have mentioned acquire their locomotives from private industry. I sincerely hope that it will be possible for us progressively to reach that state of affairs.
LORD SHEPHERD: May I, first of all, thank my noble friend Lord Champion for the manner in which he has introduced this Amendment, and say how grateful we are that he has joined what I might call the "happy band of warriors" on this Bill; it has certainly eased the burden from this side. As this debate progresses, the division which separates noble Lords opposite and ourselves becomes a chasm. We on this side have tried to take the public interest and the public point of view. We are seeking, and will continue to seek, to protect and develop the public investment which is being made in the nationalised industries. As I listened to noble Lords opposite I could not help feeling that they were, as they have been in the past and as they will continue to be, belittling and limiting the health
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and vitality of the nationalised industries. I must say that there are times when I cannot help but believe that there are some noble Lords opposite who would like to cause the death of the nationalised industries. The continual Amendments which have been moved by noble Lords opposite, and the burden of their speeches in every respect, have been to restrict the operations of the nationalised Boards.
When I and my noble friends put down this Amendment, it was my intention to move it in rather muted terms. I certainly was not advocating that the nationalised industries, the railways or the Holding Company, should use their workshop capacity for creating a large industrial capacity for manufacture and repair. What I had in mind then was to move an Amendment—and I hoped your Lordships would be able to accept it—which would mean merely that the existing capacity of the railways, or the capacity that the Board which will be created decided to have, would be operated efficiently and effectively. If they are to operate that capacity efficiently, effectively and economically, they obviously need to have business. Anyone who has had experience in business must know that if you are providing a service in your own business there is a period of slack when your normal supply of items to be repaired, corrected, or adjusted, does not meet up with your full capacity.
The majority of commercial firms deal with that situation very effectively: they take in outside work. By taking in outside work, they create sufficient work for their own workshops to be kept fully operative. This is essential, because one of the main problems of the railways and the London Board will be to keep operatives. If an operative sees that his workshops are permanently slack, he will be seeking new employment; and then, at the time when the Boards require staff to repair and develop their existing machinery, they will find themselves short of men. The noble Lord, Lord Mills, will correct me if I am wrong, but I believe that that situation exists to-day. I believe the railways, particularly in their diesel shops, are finding themselves short of staff; staff have left because they feared they were going to be redundant, and

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have already sought out new work. Therefore there has been a delay in bringing new diesel trains into service.
All we have tried to do in this Amendment—and I would ask the Government not to try to draw a red herring across it and say that it means that a sort of British Motor Corporation could be set up—is merely to say, in the interest of the existing capacity of the railways or the other Boards, that the Boards, in whom we put considerable trust, should be able to take in work from outside if necessary in order that the existing workshops, in which many millions of pounds of public money has been invested for modernisation and the like, can be operated efficiently. I hope the Government, even at this late stage, will be able to accept the wisdom of our words.
VISCOUNT BRIDGEMAN: I shall have to declare an interest as a member of the board of a group of companies engaged in locomotive manufacture, and therefore I am not going so wide in my comments as I otherwise should. I am going to make only three comments. One is in regard to what the noble Lord, Lord Shepherd, has just said, and that is, that I could not possibly agree that his Amendment was so simple or so limited in scope as he would like us to think. The second and third points are with regard to what the noble Lord, Lord Champion, said. It may well be that redundancy will appear in British Railways' workshops, but that is an argument which can be used equally well the other way in regard to redundancy in private enterprise workshops. Whether the same union is concerned in both cases I am not sure. In private enterprise workshops it is the A.E.U.; in the British Railways' workshops, I think it is partly the N.U.R. So one pays one's money and takes one's choice.
The third matter is about the costs. The noble Lord, Lord Champion, with his great knowledge of railway matters, may recall that some years ago (I think about 1952) a serious attempt, with good will on both sides, was made by the constituent companies of the Locomotive Manufacturers' Association and British Railways to determine the relative costs between steam locomotives manufactured by private enterprise and those
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manufactured by British Railways. After everybody had tried very hard, nobody could possibly tell. I think that any argument about relative costings should be received with caution. Whereas private enterprise costs are known, the result of the investigation tended to show that British Railways did not know their costs. As Dr. Beeching has just inserted an advertisement in the papers for a financial expert on railway costs, that position may still be so.
6.2 p.m.
LORD MILLS: I can well understand the noble Lord, Lord Champion, in his very restrained speech, deploring the fact that railway workshops are going down. The reason is that the requirements of the railways are not so great as they used to be. I think we should remember that railway workshops were built to supply the needs of the railways for locomotives and associated equipment and for the repair of locomotives. Therefore, while undoubtedly there is cause for regret, it is not to be wondered at that the workshops themselves must diminish or expand with the fortunes of the railways.
The noble Lord said that some day we should need even greater workshops. I hope that he is right. He instanced the case of the dockyards and the Royal Ordnance factories. They were started because after the war there was a great need for production and a great lack of capacity. I know something about the Royal Ordnance factories. I went through them all after the war, when I was asked to do so by the Minister of Supply, and saw what they were doing—and they were far from happy about it. But that is history. There is a real difference of opinion between the Government and the Opposition on this matter. The noble Lord, Lord Shepherd, said that we were trying all along the line to restrict the nationalised industries. I think that he was a little intemperate when he said that on this side there were noble Lords who wished for the death of the nationalised industries. I do not know that we shall get much out of the retort I could make——
LORD SHEPHERD: I was not attributing the remark to the noble Lord.
LORD MILLS: No, I am sure. I do not think it would be useful if I took up the line that noble Lords opposite

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were trying all the time to extend the powers of the nationalised industries. They want them to go in for pipe-lines, and so on.
I think that noble Lords should realise that this Amendment proposes an extension of the powers of the British Transport Commission, which at present can manufacture and repair only for their own purposes. It has long been the practice and custom of the railways, before and after nationalisation, to look to private industry to make up their own deficiencies. I will go so far as to say that I regretted it when they reduced their demands on private industry so severely. As a result, there is already a substantial excess capacity, both in the public and private sectors, for the manufacture of locomotives and associated equipment. This is of great importance, because the private sector does a certain amount of export and we should like them to do more. Export requirements are different from the domestic railway requirements and therefore private industry has techniques and specifications which are useful for export and which are not possessed in the railway workshops.
We feel too that this Amendment would lead away from what we are trying to do in the Bill. We are trying to get the Railways Board and associated Boards to work within a specific field and to devote their attentions to that. Therefore, in our view, it would be wrong to encourage—or indeed to allow—the Railways Board to engage in private trade by utilising the workshops in this way. I would remind your Lordships that this Amendment would go far beyond the powers possessed by any other nationalised industry—the power industry, for example, who manufacture only for their own requirements. I submit that this is a straight issue between us, and I must take the line that I cannot accept the Amendment.
LORD CHAMPION: I am grateful for the support given to some aspects of my Amendment by the noble Lord, Lord Merrivale. He rightly paid some tribute to the excellence of many workers employed in the railways workshops. He also went to to say that he felt it right that there should be private firms making railway engines. The noble
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Viscount, Lord Bridgeman, also said this. Strangely enough, I would agree with them. I believe that it is right that there should be private firms undertaking work of this character—something to put in our shop window. I would never agree to anything which said that railway workshops, alone should make railway engines. But we are not seeking that in this Amendment. All we are asking is that they should be permitted to undertake private contracts, if private contracts were offered or if they could be obtained, always provided that they could do so at a profit to the undertaking.
I agree with the noble Lord, Lord Mills, that the circumstances of the railway industry make it inevitable that there should be some contraction of workshops. I speak as a railwayman, and I have some pride in the fact that I started as a lamp-boy in 1913, a long time ago, and that all my life has been bound up with the industry we are discussing now. That explains why I was in such haste to make my maiden speech, so that I could come into the discussions on this Bill. Railwaymen look forward to a reasonably streamlined industry. But I would say that that streamlined industry will have to pay its staff much more than it does at present. Perhaps that is a little by the way from the Amendment that we are now discussing, but that is the sort of thing I am looking forward to in the circumstances of the time. We should streamline the industry and have the highly competent technical staff paid in accordance with their qualifications. I see the noble Lord opposite kindly nods his head at that remark, and clearly he agrees. The only thing I would say in that connection is that, so far as the workshops are concerned, do not let this streamlining go so far that you disperse the men so that when they are needed in the future they will not be there. I hope my noble friends will support me in the Division Lobby on this Amendment.
On Question, Amendment negatived.
LORD CHESHAM: I beg to move.
Amendment moved—
Page 12, line 39, leave out ("Inland Waterways Authority") and insert ("British Waterways Board").—(Lord Chesham.)
On Question, Amendment agreed to.
6.12 p.m.
LORD STONHAM LORD STONHAM moved to leave out subsection (5). The noble Lord said: I apologise to the noble Earl, Lord Buckinghamshire, the Deputy Chairman, and to your Lordships for the fact that on the last Amendment we allowed a Division to be called when such was not our intention. It so happens that the noble Earl the Deputy Chairman possesses supersonic hearing and heard a second "Content" which was imperceptible to my less keen hearing. I make no complaint about it, but I should not like noble Lords opposite to feel that we have any desire to obstruct or delay the proceedings of the Committee. However, I assure noble Lords that on the Amendment that I am now moving we have a quite serious intention and the firmest determination to divide the Committee in the event of the Government's not conceding it.
This Amendment refers to a particular section of the more general subject which was dealt with in the Amendment moved by my noble friend Lord Champion, but on this occasion I assure the noble Lord, Lord Mills, that it cannot be alleged that we are asking for anything other than the continuance of the powers already possessed by the London Transport Executive. We are not asking for anything new. In this respect, subsection (5) is a departure from the general principle which has been pursued by the Government, who in all other aspects of the matter appear to have attempted to preserve in this Bill the powers already possessed under the 1947 Act and other enactments by the London Transport Executive.
Subsection (4) of this clause gives the Minister absolute power to control the construction, manufacture and production activities of any of the Boards, and he can close down such activities whenever he likes. It is indisputable, therefore, that on grounds of equity and the public interest subsection (5), which we propose to delete, is quite unnecessary. Obviously the Minister thought this, because there was no suggestion in the White Paper, in the original Bill or during the Second Reading in another place that London Transport should lose the right that they have had for thirty years to construct bus bodies or chassis or components for road vehicles.
Subsection (5) of the clause was, in fact, inserted on the Report stage in another place with, as I think the obvious intention of benefiting private concerns which make road vehicle bodies. I submit that it is no part of the business of your Lordships' House to allow legislation to be used for the purpose of touting for orders by private companies. In seeking to justify the Amendment in another place the right honourable gentleman the Minister of Transport said [OFFICIAL REPORT, Commons, Vol 658 (No. 99), col. 342] that the Boards
"in any case will not inherit any such manufacturing activities."
And he added (col. 343):
"It is not their job … they do not engage in this work, nor is it likely that they would wish to do so."
In so far as the London Transport Board is concerned (the present London Transport Executive), this is just not true. The London Transport Executive had no knowledge of the Amendment in another place until 24 hours before it was presented, and in the limited time at their disposal they objected strenuously to its terms—terms which, in their view, nullify their 30 years' old right to build their own vehicles. Indeed, it is a great pity that the Minister did not choose to reveal this fact. Moreover, I have myself seen deputations from the Amalgamated Engineering Union and the Transport and General Workers' Union.
Just now, in the discussion on a previous Amendment, the noble Viscount, Lord Bridgeman, said that there might be redundancy in private enterprise, and the A.E.U. would be upset if we preserved work for a public undertaking employing members of the Transport and General Workers' Union or some other union. In this case that argument does not arise, because the unions have been to me jointly and expressed their serious concern. I am authorised to say on their behalf that they are very seriously concerned about the position of their members who are actually engaged in these construction shops, and they are fearful of the situation which will arise if this subsection is allowed to stay in the Bill. They, and we, are determined to fight it all the way.
I should make it clear to your Lordships that I am not referring to the three small companies which are to be transferred under the Bill to the transport Holding Company, and who will not, therefore, be affected by the prohibition in this clause. I am not referring to British Railways Board's workshops; I am referring specifically to the workshops which are at present owned and run by London Transport Executive, and which will come under the London Transport Board. I am concerned, therefore, not with the grant of new powers, but with the continuance of the London Transport Board's right to manufacture, a power which was originally granted to the old London Passenger Transport Board under the 1933 Act. This gave them the right to a restricted annual production of 527 bus bodies, and these were, in fact, built at Chiswick until the outbreak of war. Under the 1947 Act, which governs the present situation so far, this right was renewed, although in practice the allocation was pooled with that of other concerns, and the production came from British Transport Commission factories.
London Transport did not then produce new bodies, because the heavy overhaul programme in the early postwar years absorbed the productive capacity of the old Chiswick works. It was with the intention of increasing the programme that the new Aldenham body-works at Elstree were built, and the Chiswick works were completely modernised, at a total cost of many millions of pounds. The Aldenham works have been described as the most modern of their kind in Europe. At that time—that is, at the time of the building and modernisation—it was anticipated that the bus fleet of 7,000 vehicles would be increased to 12,000. Owing, however, to the reduction in the services, or at least in the number of buses in use, the expected expansion has not taken place, and there is thus spare capacity at the Aldenham works to manufacture bus bodies for the Board's own use.
In February of this year the London Transport Executive informed the trade unions that they had placed outside contracts for part renewal of the London bus fleet, but that they proposed to set
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up a sub-committee to investigate the commercial possibilities of re-starting the production of new bodies when the present Bill (the Bill we are now discussing, as it actually stood in February of this year) became law.
I have in my hand, not the minutes of the February meeting, but the minutes of a meeting which took place as recently as April 26 of the joint meeting between representatives of the Executive and of the London Transport Joint Trades Committee. Among other things, they discussed manufacturing powers under the Transport Bill, 1962. Naturally, I do not wish to burden your Lordships with the whole minutes, but they show that it was stated by the Executive Secretary:
"… that under the Transport Bill then in the Committee stage in the House of Commons the new London Transport Board would have unlimited powers for the manufacture of equipment for the Board's use, subject to an overriding control by the Minister."
They also recorded:
"Immediately before the Report stage of the Bill in the House of Commons, the Executive were told that the Minister of Transport proposed to seek to amend the clause dealing with the manufacturing powers of the new Boards to be set up under the Bill, including the London Board, by including an Amendment which would prevent the Boards from manufacturing road vehicles, bodies or chassis for road vehicles, or major components for road vehicles. Representations were made to the Minister opposing the Amendment … notwithstanding the representations, a new clause was included in the Transport Bill …"
I read from those minutes only to make it quite clear beyond any question that at present the London Transport Executive possess those powers.
Under the original Bill, and right up to Report stage in another place, they believed they would have the power to manufacture bus bodies for their own use. They certainly wished to do so, and they were about to start the first arrangements to enable them to build. There cannot be any doubt about that. There cannot be any question that they have the capacity and the wish to build. There cannot be any suggestion that it is not their job, or that this is something new; they have been doing it for 30 years. Therefore, none of the arguments which have been used by the Government or the noble Lord so far can be used in answer to this case.

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Anyone who has visited these remarkable works at Aldenham—anyone, indeed, who saw the fairly recently television programme about them—will realise why London Transport wish to use them to their full capacity. In my view it will be a public scandal, as well as a disgraceful waste of public money, if they are arbitrarily prevented from using them.
This is important. We do not suggest that the London Transport Board could, or would, wish to build all the bus bodies that they will need, or, indeed, even a major proportion of them. I should like to make that quite clear to the noble Lord. I do not think that, after doing their repair work, if they were permitted to do so, they would have the capacity to build all the bus bodies they need. We do, however, insist that with 30 years of "know-how" behind them, it is very much their business, and they must not have this right taken from them. It is not just a question of ideological sentiment, nor of the continuing employment of many skilled workers, vital and important though that is to every one of us.
The case for the deletion of subsection (5) also rests on sound business reasons: first, the need to keep the productive capacity of the Aldenham works fully employed; secondly, to assist the Board by providing a yardstick to determine reasonable commercial prices when they purchase buses and equipment from outside contractors. That is by no means unimportant. At present my information—and it is as up to date as of this morning—is that there is an actual shortage of work at Aldenham and some fears of redundancy. It is only a surmise on my part, but, judging by the circumstances, I feel that the Minister must have moved his Amendment on a basis of inadequate information and therefore not having the opportunity to consider all the implications. It may not be possible—in fact, I do not think it will be possible—for the noble Lord to consider this matter in a few seconds, but I hope he will undertake that the Government will reconsider the matter on the basis of the facts—they are the facts which I have now put forward—so that eventually, if it cannot be done tonight, they will accept the Amendment. I beg to move.
Amendment moved—
Page 13, line 18, leave out subsection (5).—(Lord Stonham.)
6.32 p.m.
LORD MILLS: I understood the noble Lord to say that if his Amendment were not accepted he intended to divide your Lordships' House, so I am not going to indulge in argument; I am just going to state the facts for the Record.
LORD STONHAM: May I just interrupt the noble Lord for a moment? Naturally, he is well aware that there are many stages short of complete acceptance which would persuade me not to divide the House.
LORD MILLS: I thank the noble Lord for that explanation. I still do not think I am going to argue about it. I am just going to explain the facts to your Lordships, so that you can then understand the extent of this problem. The background is that the question of manufacturing road vehicles and the other equipment mentioned in subsection (5) has always received special treatment in relevant transport legislation, beginning with the Transport Act, 1947. The effect of subsection (4) of Section 2 of that Act was to lay down in considerable detail just how many road vehicles and related things the Commission could manufacture on a yearly basis, and these were therefore distinguished from the general run of things manufactured by the Commission, who otherwise had a very wide power to manufacture for their own purposes. The Commission were therefore subjected by the 1947 Act to arbitrary statutory quotas which could not be altered except by new legislation, whatever the circumstances.
The Government have decided that the method of limiting road vehicle output chosen in the Transport Act, 1947, was unduly rigid and arbitrary in its effect. They have therefore included the present provisions in the Bill. The basis of these provisions is that the Boards are given wider power to manufacture for their own requirements, but that in regard to road vehicles the power should be taken from them. What is the size of the problem we are dealing with? The noble Lord referred to the workshop at Aldenham. It is true those workshops exist, but they are not

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used and have not been used for years. I think it is true to say they have not been used since 1938.
LORD STONHAM: May I interrupt the noble Lord, because he should qualify that? They have not been used since 1938 for the manufacture of new bodies, but they have been used continuously for repairs and overhauls.
LORD MILLS: I thank the noble Lord for that correction. That is precisely what I meant. They have not been used for new bodies. The two railway workshops at Wolverton and Temple Mills produce about 220 new road vehicle bodies or trailers a year. I think they employ about 70 people. In the case of the London Transport, there are no road vehicles manufactured at all. They have found it better and wiser to buy them from private industry. The same is true of the Docks and British Waterways.
I think these figures demonstrate quite clearly that the Commission, who, as the noble Lord reminded us, had the power, have really not made any substantial use of that power. That was why, in the light of this and in view of the concept of giving the Boards set tasks and limiting them to those tasks, it was thought wise to state expressly in the Bill that the Boards must not engage in road vehicle manufacture. That is in the Bill and we do not propose to take it out.
LORD STONHAM: I am bound to say that I find that extremely
disappoint-
ing. Surely, the noble Mills grind on, but produce precious little grist. Therefore I shall have to ask my noble friends to adhere to my original, but perhaps somewhat rash, statement. There has, in fact, not been any answer to my case. I told the noble Lord, Lord Mills, that I was not talking about the works at Wolverton but the other small works which have been run by the B.T.C. and later transferred to the Holding Company. The fact is that capacity does exist for this bus building. It was used up to the outbreak of the War. It has not been used since, because there has been a great deal of overhaul work done; but there is spare capacity now for bus body building. The London Transport Executive now wish to use that capacity, or to consider the use of that capacity, for building some bodies, and it would seem quite reasonable to give them the powers to do so. I feel, particularly having regard to the nature of the noble Lord's reply, that these facts have not been fully considered or taken into account. After all, some of the things which I read out took place in April of this year, since the Minister reached his decision, and I think, therefore, that this Amendment ought to be looked at again. In any case, I cannot withdraw the Amendment and would invite my noble friends to join me in the Division Lobby.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents, 12; Not-Contents, 34.

CONTENTS

Amwell, L.

Lawson, L.

Shepherd, L. [Teller.]

Burton of Coventry, B.

Peddie, L.

Silkin, L.

Hughes, L.

St. Davids, V.

Stonham, L. [Teller.]

Kenswood, L.

Shackleton, L.

Williams of Barnburgh, L.

NOT-CONTENTS

Ailwyn, L.

Hastings, L.

Radnor, E.

Albemarle, E.

Hawke, L.

Rathcavan, L.

Allerton, L.

Jellicoe, E.

Runciman of Doxford, V.

Bathurst. E.

Margesson, V.

St. Aldwyn, E. [Teller.]

Boston, L.

Merrivale, L.

St. Oswald, L.

Chesham, L.

Mills, L.

Somers, L.

Coutanche, L.

Milverton, L.

Swansea, L.

Denham, L.

Montgomery of Alamein, V.

Swinton, E.

Devonshire, D.

Mowbray and Stourton, L.

Tedder, L.

Furness, V.

Newall, L.

Waldegrave, E.

Goschen, V.

Newton, L. [Teller.]

Waleran, L.

Hailsham, V. (L. President.)

Resolved in the negative, and Amendment disagreed to accordingly.

LORD MILLS: I beg to move.
Amendment moved—
Page 14, line 5, leave out ("Inland Waterways Authority") and insert ("British Waterways Board").—(Lord Mills.)
On Question, Amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14:
Supplemental provisions relating to the Boards' powers
14.—(1) Subject to this Act, the Boards shall have power—
(b) without prejudice to the foregoing paragraph, to enter into agreements with the other Boards and with any subsidiary of any of the Boards or of the Holding Company, for the management, working and use by one party to the agreement of works, land or other property belonging to the other party, and with respect to the rendering of services and the pooling of receipts or expenses,
(d) in places where those using the services and facilities provided by the Board may require them, to provide both for them and for other persons facilities for the purchase and consumption of food and drink, places for refreshment and such other amenities and facilities as it may appear to the Board requisite or expedient to provide,
(e) to dispose (whether absolutely or for a term of years) of any part of the undertaking of the Board or any property which in their opinion is not required by them for the purposes of their business, and, in particular, to dispose of an interest in, or right over, any property, which, subject to the interest or right, is retained by the Board,
LORD HAWKE LORD HAWKE moved, in subsection (1), to leave out paragraph (b). The noble Lord said: This subsection of Clause 14 allows the Boards to enter into agreements with other Boards and with any subsidiary of the Boards or of the Holding Company, and also, by the use of Clause 16, to delegate their statutory powers to those other bodies. What we want to know is why they want these very wide powers. It seems quite reasonable that they should be able to delegate and enter into agreements with other Boards, and so on, but the existing private bus operators view with a certain amount of fear and suspicion this ability for the Boards to delegate their statutory powers to the subsidiaries of the Holding Company. They fear that by so doing it would be possible for the London Transport Board to delegate their powers to run services in London to a subsidiary of the Holding
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Company, which would be a wholly owned bus company, and thereby they would be able to run through services from London to, for instance, the sea coast without any question of road licences arising; they believe that it might well be possible that by the delegation of London Transport's powers it could be held that the Holding Company's subsidiary would not require a road licence to operate through London, and of course the subsidiary would have no difficulty in getting a road licence to operate elsewhere in the country.
This point was dealt with to a degree in another place, though the closure cut short the arguments. The Government spokesman, the Parliamentary Secretary, said definitely (column 1033 of the Twenty-first Sitting of the Standing Committee):
"The delegation of the statutory functions would not absolve the bus company from the need to get a road service licence from the Traffic Commissioners. The Road Traffic Act, 1960, is quite specific that only London Transport does not need a road service licence in that special area."
Of course the 1960 Act is quite specific. But the question arises as to whether the Board's power to delegate its functions under Clause 16 might be wide enough to enable the Board to authorise a company working as its agent to operate in the special area under the Board's powers without a road service licence.
I should like a carefully considered reply on this, because I know that it is a question of legal (interpretation in regard to which the legal advisers to the private bus companies do not altogether agree that the Parliamentary Secretary's statement that I have just read out is necessarily correct. Nobody wants to stop the Board from making working arrangements with other Boards or subsidiaries of Boards or even the subsidiaries of the Holding Company. But it seems rather odd that statutory bodies like these Boards should be able to delegate their statutory powers to nonstatutory bodies over whom the control of the Minister is most indirect—in other words, only through giving a direction to their owners, the Holding Company. I beg to move.
Amendment moved—
Page 15, line 1, leave out paragraph (b).—(Lord Hawke.)
6.52 p.m.
THE EARL OF DUNDEE: Of course, we could not accept the Amendment to leave out paragraph (b). For one thing, we have already persuaded your Lordships not to agree to two Amendments moved by noble Lords opposite providing that the Railways Board and the Dock Board should specially co-operate and co-ordinate their activities with the other Boards; and in order to show that a reasonable amount of co-ordination will be practised I have twice read out to your Lordships paragraph (b) of subsection (1) of Clause 14 which the Amendment proposes to omit. It provides that the Boards may enter into agreements with other Boards and with any subsidiary of any of the Boards or of the Holding Company, for the management, working and use by one party to the agreement of works, land, or other property belonging to the other, and with respect to the running of services and the pooling of receipts or expenses.
This is a necessary power, because without it the four Boards would not be able to make firm legal agreements with each other, or with each other's subsidiaries, or with the Holding Company, for the management, working and use by one party of works, land or property belonging to the others. My noble friend has particularly expressed concern that there may be a possibility that the London Board could make arrangements with a bus company subsidiary of the Holding Company whereby through bus services could be operated to and from the Central London area to any part of the country. I do not think that the London Board could confer any particular advantage on a Holding Company subsidiary by such a delegation. As my honourable friend has said, they have in any case to get a licence from the traffic commissioners to run; and the London Board could not, by delegation, place such a bus company in any different position from that in which any other bus company which is not owned by the Holding Company could be placed, by reason of a consent given by London Transport under Section 16 of the London Transport Act, 1933.
My noble friend particularly referred to the Act, which I have here. Section 16 of the 1933 Act provides, in general, that no one but the Board may, without
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the Board's written consent, operate stage or express bus services in the London Board's special area. The section also provides specifically that nothing in it authorises the use of a bus otherwise than in accordance with the Road Traffic Act, which lays down the licensing system for the control of bus services in the country generally. So since 1933 the London Board has been free at any time to enter into an agreement with any other bus operator, and, by consenting to his running into their own special area, to allow him, provided he can get from the traffic commissioners the necessary road service licence under the Road Traffic Act, to run to or from any place in the country from or to any part of London. So this provision which my noble friend's Amendment proposes to omit from Clause 14, and also later from Clause 16, does not change the situation so far as bus operations into and out of London are concerned; and I do not think there can be any possible advantage available to buses operated by a subsidiary of the Holding Company as compared with anybody else. I hope that that will satisfy the apprehensions of my noble friend.
LORD HAWKE: I thank my noble friend for his reply. I do not think he has dealt quite as fully as I should have liked with the point, but I dare say he is not in a position to do so at the moment. However, what we feel is that delegation of functions under Clause 16 of this Bill may in effect turn that other company into the London Passenger Transport Board in another guise, and for that reason it would be held automatically to have power to run in the London area without a road licence. This is most definitely a legal point, and while I have no doubt that my noble friend's advisers consider that there is no reason why what I fear should happen, nevertheless the equally competent legal advisers of independent bus companies fear that this delegation of functions constitutes a state of affairs whereby the delegatee, so to speak, becomes the equivalent of the delegator and therefore will not require a licence. I do not want to press my noble friend much further on this point to-night if he has not really considered it. I would merely ask him to consider it carefully between now and the Report stage, and, if there is any doubt, perhaps he can introduce

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some Amendment. My Amendment is moved only to call attention to this particular legal issue.
THE EARL OF DUNDEE: I will send my noble friend a letter on the legal point.
LORD HAWKE: I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
6.59 p.m.
LORD MILVERTON LORD MILVERTON moved, in subsection (1) (d), after "facilities" to insert "including suitable parking places for vehicles". The noble Lord said: I will be quite brief in moving this Amendment. It is not a matter of great importance compared with the earth-shaking principles which have been dividing the Committee for the last five days; but it is a matter to which local authorities attach some importance.
In the Second Reading debate on this Bill reference was made to the question of car-parking accommodation at railway stations. The noble Lord, Lord Lucas of Chilworth, referred to the need for more car-parking places at stations, and the Minister replied that the British Transport Commission have these needs in mind and are examining the problem, and that the Bill contains the necessary powers for dealing with it. I assume that the Minister is referring to the powers given to the Boards in Clause 14 of this Bill, where it is provided by subsection 1 (d) that the Boards may provide such amenities and facilities as may appear to them to be requisite or expedient. This is, of course, a permissive power, and the local authorities feel that the Railway authorities ought to accept an inferential obligation to provide adequate car-parking facilities for their travellers, according to the needs for such facilities and the physical and financial possibility of providing them.
In many towns, for instance, an increasing number of railway passengers are leaving their cars all day in car parks provided for the use of shoppers and for those coming into town for general purposes, thus increasing congestion and obstruction of traffic and depriving those for whom the car parks were intended of their legitimate use. Where no provision is made at a railway station for car parking, and where it can be proved that such provision for railway passengers is
178
needed and is reasonably possible, or where the existing provision for such passengers is inadequate, the railway authorities, in the opinion of local authorities, should be under an implied obligation to make adequate arrangements and the matter should not be hidden in this way under general permissive powers.
I am aware that the Ministry apparently do not feel that it would be appropriate to place an obligation on the railway authorities to provide car parks at railway stations irrespective of the local circumstances. I fully agree with that; obviously that would be an unreasonable obligation to place upon them. But I gather also that the Ministry seem to feel that it is enough that the railway authorities will have permissive powers to be used where the provision of the facility is justified. Local authorities still feel that there is a case for the amount of compulsory attention which would spring from specific mention proposed by this Amendment.
It is, of course, open to a local planning authority to require the provision of adequate parking facilities as a condition of granting planning permission for rebuilding or reconstructing premises, and no doubt this could be done in the case of a railway station which was being rebuilt. It is suggested, therefore, that there is nothing novel in the extension of this principle to a case where railway authorities are not meeting the reasonable demand for parking space or additional parking space at an existing station. Therefore, it is hoped by means of the Amendment, by specific mention, to direct attention to a crying need and to imply an obligation which could not be made rigidly universal—one admits that—because its performance would not be possible everywhere. I hope that the Government will be sympathetic to the idea that it would have a psychological effect if the provision of parking spaces were specifically mentioned in the permit given to the authority.
Amendment moved—
Page 15, line 14, at end insert the said words.—(Lord Milverton.)
THE EARL OF DUNDEE: I think I can reassure my noble friend on this. There is no question of concealing the power to provide a parking place under the

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general permissive powers in the 1947 Act. There is no express reference to parking places, but the Commission have always provided car parks for the use of their customers and others under their powers in the 1947 Transport Act. The position under this Bill will be precisely the same in line 14, where this Amendment proposes to insert these words. The clause provides for
"places for refreshment and such other amenities and facilities as it may appear to the Board requisite or expedient to provide"
and there is no doubt whatever that that includes parking places.
The reason for not making a specific reference is that if you do so in reference to one power, it may perhaps imply that all the powers need a specific reference, which may create some doubt about others. For instance, in regard to refreshments I can assure your Lordships that its juxtaposition with "other amenities and facilities" in this clause is only a coincidence. That is the only reason why it is not desirable to specify too much in legislation of this kind, apart from the fact that it would be quite unnecessary. I hope my noble friend will agree that since the 1947 Act does exactly the same, and since parking places are now provided, this clause as it now stands will continue that position.
LORD MILVERTON: I appreciate the noble Earl's reply, for which I thank him. The local authorities' point was that, although it is true the power was there before, it has not been adequately used, and they thought that a specific mention of it might have brought more attention to it. I do not propose to carry the matter any further, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE EARL OF DUNDEE: I beg to move.
Amendment moved—
Page 15, line 39, leave out from ("business") to ("and") in line 41.—(The Earl of Dundee.)
On Question, Amendment agreed to.
Clause 14, as amended, agreed to.
Clauses 15 to 17 agreed to.
LORD MILLS: My Lords, I think it will be convenient if we now adjourn. I beg to move that the House do now resume.
Moved, That the House do now resume.—(Lord Mills.)
On Question, Motion agreed to, and House resumed accordingly.

SHOPS (AIRPORTS) BILL
7.8 p.m.
Order of the Day for the Second Reading read.
VISCOUNT FURNESS: My Lords, I rise to move that this Bill be now read a second time. At this late hour I do not propose to detain your Lordships for long over this small, but nevertheless important, Bill, but I feel that I should be failing in my duty to your Lordships if I did not explain the situation, as succinctly as I can, to the House. The general law regarding the hours of opening of shops will be familiar to your Lordships. It is found in Part I of the Shops Act, 1950, and generally provides that all retail shops must be closed from early evening and on the afternoon of one day a week, known as "early closing day." There are certain exemptions to this general law, notably for the purchase of meals and refreshments, tobacco, newspapers and magazines, and medicines.
However, the needs of international airports are different. They work round the clock and, indeed, frequently they are busier at night than by day. This fact attracted the attention of the Select Committee on Estimates, who said, in their Fifth Report, 1960–61, at paragraph 84, that
"The hours of opening of shops at the airport"—
this is dealing with Heathrow in particular—
"are regulated by the Shops Act, and passengers using a major international airport are frequently inconvenienced and irritated when shops are closed. It was argued by the Ministry that 'the cost of overtime for staff and so on might make it so much more expensive to run the shops [for 24 hours a day] that our percentage commission would be lessened'. Your Committee cannot believe that a 'skeleton service' of shops would make a loss if operated throughout the 24 hours during the peak periods in the summer. They

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believe that there would be a very considerable demand for them, particularly since the cheap night fares are becoming so popular with travellers. … They therefore recommend that there should be an immediate examination of the financial prospects of extending the hours of opening for certain shops at Heathrow."
The Minister accepted that recommendation and stated in the Fifth Special Report from the Estimates Committee that:
"The Minister wishes to provide the best possible facilities for the travelling public and to bring additional profitable trade to the airport. The judgment of the operators of the shops, i.e., the concessionaires, as to the financial prospects of extended hours of opening must also be taken into account."
No doubt many of your Lordships have taken advantage of the lower fares to travel on the night flights referred to. So popular is this traffic that last summer over 40,000 pasengers passed through Heathrow every week during the hours when shops were compulsorily shut. This is the equivalent of the population of Weymouth and present indications are that this type of traffic is on the increase.
The Bill now before your Lordships' House therefore proposes to exempt shops in passenger buildings, at such international airports as may be designated by the Ministry of Aviation, from the provisions relating to hours of closing and half-days—that is to say, from Part I of the Shops Act, 1950. The Bill is permissive only, and I would stress that it does not affect the rights of employees whether for half-holidays or days off, which are dealt with in Part II of the Shops Act, and which will continue to apply to airports. From the point of view of the convenience of passengers and the public generally, there would be obvious advantages to a blanket exemption of all shops in all airports at all times. I feel, and so do the Promoters of this Bill in another place, that this is too wide and perhaps too controversial an issue to be dealt with as a Private Member's Bill, and it should perhaps await the Committee stage of the next Shops Bill whenever Her Majesty's Government can find time in the legislative programme for such a Bill.
The Bill is intended, primarily, to assist the foreign visitor and other passengers on international flights. Such
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flights may be of long duration and perhaps, beginning and ending at night, pose more difficult problems than those facing the domestic passenger. Besides, the international passenger is more likely to be subject to "holds", when his aircraft for various reasons has either not arrived or is unable to take off. There are, in any event, more international passengers than domestic ones. In 1961, 80 per cent. of all terminal passengers who passed through Heathrow and Gatwick at times when the shops were shut were international passengers.
The suggestion has been made at various times that there would be unfair competition with local traders. As international airports are perforce some distance from shopping centres, I do not think that there is much truth in the assertion. The employers' side of the Retail Distributive Trades Conference and the Union of Shop, Distributive and Allied Workers have been consulted, and have raised no objection. As I am dealing with consultations, I should perhaps say that the consultative committees of Heathrow and Gatwick, and the local authorities covering Heathrow, Gatwick and Prestwick have expressed positive support for the Bill.
This Bill is a very short one of two clauses. The first and operative clause exempts from the provisions of Part I of the Shops Act, 1950, shops, retail trades and businesses at designated airports. It provides exemption for such parts of designated airports as are ordinarily used by passengers. It also exempts the sale of goods from mobile trolleys and so on in the lounges and concourses of passenger buildings, provided such trolleys are dependent on an exempt shop. Subsection (2) of Clause 1 defines a "designated airport" as one
"at which there appears to him"—
that is, the Minister of Aviation—
"to be a substantial amount of international passenger traffic."
I ought perhaps to ask my noble friend Lord Denham, who is to reply to this short debate, whether the Minister has any idea at the present time which airports he would propose to designate as being international airports and to which this Bill when passed should be applied.

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Subsection (3) is a stock provision, which provides the Minister with power to vary or revoke any Order he has made under the Acts. Subsection (4) provides that Orders designating international airports shall be made by statutory instrument. It is not suggested that there is a necessity for these comparatively minor Orders to be subject even to the Negative Resolution procedure in your Lordships' House or in another place. Subsection (5) is technical, and simply accords to expressions in this Bill the same meanings as they have in the Shops Act. Clause 2 gives the Short Title, and provides that the Bill shall not extend to Northern Ireland. This is unnecessary as the Shops Act, 1950, does not apply to Northern Ireland, which is governed by its own Shops Act, 1946. I beg to move.
Moved, That the Bill be now read 2a.—(Viscount Furness.)
7.15 p.m.
LORD SHACKLETON: My Lords, I am sure that we ought to pass this Bill into law, and I should like to congratulate the noble Lord on the rapid and effective way in which he introduced the Second Reading. We ought not to delude ourselves into thinking that this is in every way a satisfactory measure. I congratulate those who were responsible for getting it thus far, and we must see that it passes into law, but it is high time—and I will not pursue the noble Lord, Lord Denham, on this point—that the Government really got down to the question of a revised Shops Act. Already, in general terms, the main purposes are being changed by local option. In Birmingham only recently they have introduced the six-day week by means of an exemption order; and if we are to see the five-day week generally introduced into the retail trade it will probably be necessary for shops to be open six days a week and to introduce the shift system. But, like the noble Viscount, Lord Furness, I do not want to pursue that subject too far.
Of course, the Bill is not going to be too easy to administer. As I understand it, it will apply to international airports. I do not know whether the Government propose to shut off the home side of Heathrow Airport, which also includes flying to Ireland, which is,
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of course, international flying—at least, it is in the international time tables, whereas flying to Jersey or Edinburgh presumably is not. Presumably, passengers will be able to walk through into the international part. Of course, planes do arrive at awkward hours, and even people from Jersey might like to buy a souvenir, or something of that kind. One gathers that if they fly through to Newcastle or Edinburgh or somewhere like that, even if it is in the middle of the night, while the shops will be open at Heathrow, they will be closed at Edinburgh. But perhaps at Prestwick it will be all right, because it is an international airport. So the Bill is, in this sense, an inevitable "dog's dinner", however much we may approve of it as a small measure.
The other aspect of it, which really is depressing, is the fact that when the Bill was first introduced in another place it provided for Sunday opening. Once again, a very small group of people have been able to hold up a measure which I am quite sure the overwhelming majority of people would have welcomed. Here, again, the position is illogical, because one can buy certain things on a Sunday. One can buy fodder or motor-cycle engines and accessories; one can buy medicines, and medical and surgical appliances, but presumably one cannot buy soap—I do not know. If we look at the Fifth Schedule of the Shops Act, and the powers under another section for partial exemption orders which local authorities can make, we can see how hopelessly inconsistent our position is.
But I quite agree that the sponsors of this Bill were right to accept the best terms they could get; otherwise they would not have got it through another place. I do not think—and I ought to stress that I am speaking personally; not all of my noble friends or other noble Lords would necessarily agree with this—we ought to let this occasion go by without some protest against this sort of dictation and interference, which is a nuisance not only to our own people but to people travelling here from abroad, and it is disadvantageous to the country generally. That, I think, is all one needs to say on that matter.
There is one technical point about which I would ask the noble Lord. In my other capacity I spend a good deal

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of time administering the Shops Act and wages council orders. I should like to know—and this point probably has arisen in other circumstances—how the statutory half-holiday, which is provided for not merely in the Shops Act but in the relevant wages council orders (and most of the people will, I think, be covered by one wages council order or another) is to be fulfilled for somebody who comes on duty at 9 o'clock or midnight, as he will if the shop is going to be open during the night. Presumably, this will be under the control of the local authority or wages inspectors, but it seems to be a point that is worth noting. With those few words, I declare strong support for the Bill, which I am sure my noble friends on this side of the House would equally wish to see passed into law.
7.21 p.m.
LORD DENHAM: My Lords, Her Majesty's Government welcome this Bill. My noble friend has quoted the recommendations of the Select Committee on Estimates in another place and the conclusions they came to about this matter, and my right honourable friend the Minister of Aviation agrees with those conclusions. International airports, especially Heathrow, are the first sight that foreign visitors have of this country, and it is important that their facilities should be as good as possible. Night opening of airport shops would not only provide a useful amenity to foreign visitors but also be a valuable help to the export trade. This Bill will not compel shops at designated airports to remain open longer than they want to; the decision to remain open would be a matter for their own commercial judgment. The Bill merely removes legal obstacles to shops staying open in order to meet demand when that arises.
The noble Lord, Lord Shackleton, has raised the question of Sunday opening, and before my noble friend replies on that point I think it would be as well if I said a word as to the Government's view on this matter. My right honourable friend is, in principle, in favour of removing airport shops from Sunday closing provisions, but as regards this Bill he is influenced by two considerations. The first is the strength of feeling that is held by certain people against Sunday opening; and the second is the
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fact that a Committee is at present sitting, under the chairmanship of my noble friend Lord Crathorne, to consider the law relating to Sunday entertainments, sport and trading. In view of these considerations, my right honourable friend is of the opinion that it would be better that the provisions of this Bill should be limited to weekdays.
The noble Lord, Lord Shackleton, also mentioned shop assistants working at night, and asked what was the position about half-holidays. I am advised that the great bulk of the distributive trades are covered by wages councils which, though they cannot prescribe hours of work, lay down wages related to normal hours and ensure that extra hours attract payment at overtime rates. This is a considerable protection for the employee against being required to work excessively long hours, since the cost of excessive overtime is likely to make it uneconomic. My noble friend Lord Furness asked me which airports my right honourable friend would be likely to designate if the Bill becomes law. All I can tell him is that the obvious candidates for his consideration are Heathrow, Gatwick, Prestwick and Manchester. There may well be others, but I do not think it would be proper for me at this stage to speculate on which he would be likely to designate.
In welcoming this Bill, I should like to congratulate my honourable friend the Member for Hartlepools for sponsoring it and piloting it successfully through all its stages in another place, and also my noble friend Lord Furness for the clarity and brevity with which he has introduced it to your Lordships. I hope your Lordships will give the Bill a Second Reading.
LORD SHACKLETON: My Lords, before the noble Lord sits down, may I say that I do not think he answered my point about the statutory half-holiday. He said that overtime will be paid, and this is the normal procedure. I expect that in the shops on the airports, where in fact the statutory overtime rate does not apply in the same way, assistants will be paid above the statutory minimum. But Section 17 of the Shops Act says:
"Subject to the provisions of this Part of this Act, on at least one week day in each week a shop assistant shall not be employed

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about the businesss of a shop after half-past one o'clock in the afternoon."
This is a provision which is very strictly kept in shops, and I am wondering how it will be applied to somebody who is coming on to work at half-past one in the morning.
LORD DENHAM: My Lords, the point which the noble Lord, Lord Shackleton, has put is quite correct, because of the wording in the Shops Act; but it is already the case, under the 1950 Act, that catering trade workers are not protected in this way, and this Bill merely follows the precedent of the catering trade.
LORD SHACKLETON: I am sorry to pursue this point, but the analogy is not, in fact, valid, because the catering workers operate under their own catering wages order. I do not want to press the noble Lord, but I think a little clarification on this point would be helpful, perhaps at a later stage. Perhaps the noble Lord will make a Third Reading speech to explain that point.
7.27 p.m.
VISCOUNT FURNESS: My Lords, I should very much like to thank my noble friend Lord Denham for his kind remarks on behalf of Her Majesty's Government, and also the noble Lord, Lord Shackleton, for his support of the Bill. I agree with very nearly everything that the noble Lord, Lord Shackleton, has said; but, for the reasons explained by my noble friend Lord Denham, this evening I am rather restricted in my brief to the Bill as it has reached your Lordships' House.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

SAINT THOMAS APOSTLE (QUEEN STREET) CHURCHYARD BILL
Reported from the Select Committee without amendment.
KENT RIVER BOARD (HARBOUR OF RYE) BILL [H.L.]
The Queen's consent signified; and Bill reported from the Select Committee, with Amendments.
SHIP MORTGAGE FINANCE COMPANY BILL
Brought from the Commons; read 1a; and referred to the Examiners.
  INTERNATIONAL MONETARY FUND'S RESOURCES
  INTERNATIONAL MONETARY FUND'S RESOURCES