Sitting of 4 April 1963

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  UNIVERSITIES OF DURHAM AND NEWCASTLE UPON TYNE BILL
  Read the Third time and passed.
PETITION

  British Museum
  The Secretary of State for the Home Department (Mr. Henry Brooke): I have been asked by the Trustees of the British Museum to present a Petition, which they have to submit to this House each year, explaining their financial position and praying for aid. The Petition recites the funded income of the Trustees, and points out that the establishment is necessarily attended with expense far beyond the annual produce of the fund and the Trust cannot with benefit to the public be carried on without the aid of Parliament. It concludes with this Prayer:
  Your Petitioners therefore humbly pray your Honourable House to grant them such further support towards enabling them to carry on the execution of the Trust reposed in them by Parliament, for the general benefit of learning and useful knowledge, as to your House shall seem meet.—[Queen's Recommendation signified].
  Petition referred to the Committee of Supply.

ORAL ANSWERS TO QUESTIONS
  HOME DEPARTMENT

    Victims of Crimes of Violence (Compensation)
    Mr. Dribergasked the Secretary of State for the Home Department if he will now make a statement on the introduction of legislation to provide for compensation, by the State and by those convicted of crimes of violence, to the victims of the crimes.
    Mr. C. Johnsonasked the Secretary of State for the Home Department when his Department first embarked upon the study of a possible scheme of compensation for the victims of crimes of violence; and when he will announce Her Majesty's Government's intention to introduce such a scheme.
    The Secretary of State for the Home Department (Mr. Henry Brooke): A Working Party of officials of the Departments concerned was appointed in Februrary, 1959, to examine the practical problems involved. Its report was published in June, 1961, with a view to eliciting further opinions. The Government are now studying this important question in the light, among other things, of the various reports by other bodies which have been considering the matter, the latest of which was published last November, and also in the light of further proposals made in the course of a recent debate in another place. I hope to be able to make a further statement before long.
    Mr. Driberg: Is it not the case that most of the public opinion which has been elicited broadly supports this kind of proposal? Could the right hon. Gentleman say a word about the Private Member's Bill introduced by my hon. Friend the Member for East Ham, North (Mr. Prentice)? Are the Government prepared to give some assistance to that Bill?
    Mr. Brooke: I am aware of that Bill. The hon. Member who introduced it will no doubt wish to take into account the terms of any statement that I may be in a position to make later on behalf of the Government. I certainly am aware

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    that, as the hon. Gentleman says, public opinion seems generally in favour of action on these lines. Nevertheless, it is rather embarrassing that the four authoritative bodies which presented reports on the subject all differed as to their recommendations. Therefore, it takes some time to work out a scheme which may be generally acceptable.
    Mr. C. Johnson: Would the right hon. Gentleman be good enough to answer the first part of my Question? Is it not a fact that more than seven years ago his Department was seeking statistical evidence from chief constables on this very matter? The subject has therefore been under consideration for a very long time. Moreover, in support of what my hon. Friend the Member for Barking (Mr. Driberg) has said, is it not a very real indication of the widespread public concern about this matter that within the last few weeks the two leading evening newspapers in this country both carried leading articles protesting against the Government's procrastination and seeking immediate action in this matter?
    Mr. Brooke: There is no question of procrastination. The Government have already made it clear that it would be impossible to legislate on this matter in this Session. The hon. Gentleman has referred to a period seven years ago. I was at that time Financal Secretary to the Treasury, so I could not say exactly what was happening then, but in my reply I sought to answer the first part of the hon. Gentleman's Question when I said that a working party was appointed in 1959.

    Prisoners (Wages)
    Mr. Dribergasked the Secretary of State for the Home Department what further progress has now been made in enabling prisoners to earn adequate wages for work done while they are serving their sentences, in order that they may help to compensate the victims of their crimes and be able to leave prison with fully stamped National Insurance cards.
    Mr. Brooke: I have nothing further to add to the full Answer which I gave to the hon. Member on 7th February.
    Mr. Driberg: Was not that only an interim Answer? Can the right hon.
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    Gentleman say when some real progress is likely to be made which he can report to the House? In particular, now that the Prison Commissioners no longer exist, will he try to prevent under-cutting of the kind practised by the Prison Commissioners, as reported in today's Daily Mail, in tendering at less than one-eighth of the price required by the Birmingham Blind Workshop for a War Office job?
    Mr. Brooke: Perhaps the hon. Gentleman would table a Question on the latter point. As to my previous reply being an interim one, I have more than once explained to the House that I am very anxious indeed that a greater number of prisoners should be able to work a full working week, but the bottlenecks are at present lack of workshop space and shortage of prison officers. We are doing everything we can to make good both of these deficiencies.
    Sir J. Langford-Holt: Would not my right hon. Friend agree that this underlines the point raised in the first Question asked today—that it is highly desirable that, in the first place, this compensation should be paid by the guilty party and only in default of their ability to collect should the State itself become liable?
    Mr. Brooke: That is one of the matters to which consideration has to be given in relation to the subject of the first Question.
    Miss Bacon: Apart from the payment of adequate wages, would the right hon. Gentleman make a statement about the main purpose of the Question concerning fully stamped National Insurance cards, the lack of which militates against a prisoner getting work when he leaves prison?
    Mr. Brooke: I am not sure about the latter point, because I do not think that it should be concealed from any employer that a man has come out of prison. For the purposes of insurance, the National Insurance Scheme presupposes the existence of wages and a contract of service. Neither of those exist, at any rate at present, in prisons, so it would be anomalous to stamp prisoners' cards.

    Experiments on Living Animals
    Mr. Burdenasked the Secretary of State for the Home Department whether

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    any monkeys, dogs, cats, horses, donkeys or mules have been used in trying to induce lung cancer through the inhalation of tobacco smoke.
    The Joint Under Secretary of State, Home Department (Mr. C. M. Woodhouse): No, Sir.
    Mr. Burden: Would my hon. Friend not agree that had he made it perfectly clear that no other animals, apart from those which had been indicated as being used on 7th February, were, in fact, used, this Question would have been unnecessary?
    Mr. Woodhouse: I agree that that was so and I am sorry if my Answer on that occasion unwittingly misled my hon. Friend. I referred then to the animals being so used, including those which I listed in my Answer on that occasion. I did so because I was not at that time quite certain that no other animals, besides those I listed, had been used. I am now certain.

    Prisoners (Reconviction)
    Miss Quennellasked the Secretary of State for the Home Department what proportion of those prisoners who have served sentences of one year or more subsequently suffer a further conviction.
    Mr. Woodhouse: The information available about reconvictions of Star prisoners is given in a table on page 174 of the Prison Commissioners' Annual Report for 1961. I regret that similar information for other prisoners is not available.
    Miss Quennell: But would not my hon. Friend agree that in the study of criminology and its treatment the compilation of statistics of this nature would be very helpful to his Department?
    Mr. Woodhouse: I agree that statistics can be very useful, but one must place some limit on the quantity of statistics collected. Those which the Prison Commissioners published in the Report to which I have referred include the information which my hon. Friend seeks, though not in the detail for which her Question asks.

    Prisoners (After-care)
    Miss Quennellasked the Secretary of State for the Home Department if
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    he will now consider the need to establish a service for the after-care of prisoners, especially those released after serving long sentences, to help them in the first few months in resuming normal civilian life.
    Mr. Brooke: The after-care of discharged prisoners is at present the responsibility of the Discharged Prisoners' Aid Societies or the Central After-Care Association, according to the class of prisoner, with the assistance of a Government grant. I am looking forward to an early report from my Advisory Council on the Treatment of Offenders on the whole organisation of after-care, because I want to consider this very important subject with a fresh mind in the light of whatever that report may say.
    Miss Quennell: I express my appreciation of the work the voluntary societies mentioned have done in this connection, and I am delighted to hear that my right hon. Friend hopes to receive this report fairly soon. Is there anything he can do to expedite his Advisory Council in its deliberations and in the preparation of its report?
    Mr. Brooke: I do not think that the Advisory Council needs any prodding. It is as concerned about this subject as I am—and, I believe, as the House is—and I hope that we shall have a report of great value, because I attach exceptional importance to this subject.
    Sir G. Nicholson: Is my right hon. Friend aware that there is a slight gap which could easily be filled in that the representatives of the National Assistance Board do not usually see a discharged prisoner until the day of his release? If arrangements could be made so that these representatives could see prisoners 10 days or a fortnight before release, it might save a good deal of trouble.
    Mr. Brooke: Yes, Sir. That point has been brought to my attention and I have certain other points in mind, but I hope that my hon. Friend will excuse me if I do not commit myself on any of them until I see the report.

    Street Offences Act
    Mr. Fitchasked the Secretary of State for the Home Department how many women have been sent to prison

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    under the Street Offences Act, since the Act came into operation; and if he will make a statement on the working of the Act.
    Mr. Brooke: The number of women sentenced to imprisonment for offences under the Street Offences Act from 16th August, 1959, the date on which the Act came into operation, to 30th September, 1962, is 1,185. In addition, 1,129 women were committed to prison in default of payment of fines.
    The main purpose of the Act was to deal with loitering or soliciting by prostitutes in public places. It has been successful.
    Mr. Fitch: Would not the Home Secretary agree that since the Act came into operation there has been a considerable increase in the growth of undesirable clubs—places of organised vice and crime—and would he not agree that while the Act may partially have got rid of unorganised vice in the streets, it has encouraged organised vice in the clubs? What does he propose to do about it?
    Mr. Brooke: I know that the hon. Member was opposed to the Measure when it was going through the House. I must say, however, that it appears to me that the Act has accomplished its main purpose very effectively. There are, of course, other evils and vices, not necessarily arising from this legislation. I certainly am not blind to them, but I do not think that at the moment a case for further legislation is made out.

    Male Prisoners (Working Hours)
    Mr. Fitchasked the Secretary of State for the Home Department what is the average number of hours worked per week by male prisoners in Her Majesty's local prisons.
    Mr. Woodhouse: At a recent date, of 10,000 men working in workshops in local prisons, about 3,000 worked for 17 hours or less, 4,400 between 18 and 25 hours, 1,500 between 25 and 30 hours, and 1,100 for more than 30 hours.
    Mr. Fitch: Would not the hon. Gentleman agree that part of the reformative training of prisoners should be a hard day's work? Will he tell us a little more about the statement his right hon. Friend the Home Secretary made in reply to an
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    earlier Question asked by my hon. Friend the Member for Barking (Mr. Driberg) about the various schemes which are now being considered for increasing the number of hours that prisoners work? Surely the hon. Gentleman would agree that prisoners should work at least as long in prison as they would be expected to work in industry outside?
    Mr. Woodhouse: I certainly agree with the first point in the hon. Member's supplementary question. On the second point, I hesitate to add to what my right hon. Friend has already said. I recognise that the low figure of hours worked in the case I gave of 3,000 prisoners is unsatisfactory. It occurs in the large local prisons where the shortage of workshop staff and other demands on the staff, to which my right hon. Friend referred, are acute. But we are thinking of ways in which this can be remedied.

    Probation Service, London
    Mr. Compton Carrasked the Secretary of State for the Home Department what considerations he is giving to the future of the probation service in London.
    Mr. Brooke: I hope shortly to be in a position to circulate proposals to those concerned, for their comments. Meanwhile I wish to express my gratitude to Judge Aarvold for accepting my invitation to become chairman of the London Probation Committee, which advises me on the administration of the London Probation Service under present arrangements.
    Mr. Carr: Is my right hon. Friend aware of the very great pleasure his announcement will cause among the members of the probation service in London?
    Mr. Brooke: I am obliged to my hon. Friend.
    Mr. C. Royle: Can the hon. Gentleman say if there has been any improvement in recruitment following the improved salaries for probation officers?
    Mr. Brooke: Yes, Sir. As the hon. Member probably knows, I am extremely glad that it was possible to reach that settlement on probation officers' pay. We are, of course, still short of probation officers, so if the hon. Member can help me in increasing recruitment I should be grateful to him.

    Legal Aid (Criminal Cases)
    Sir E. Erringtonasked the Secretary of State for the Home Department whether, in view of the doubts that exist, he will draw the attention of all concerned to the rules and regulations relating to the conditions under which legal aid in criminal cases can be given by magistrates' courts; and if he will make a statement.
    Mr. Brooke: I am not aware of any general difficulties, but I would gladly consider any particular difficulty that my hon. Friend may have in mind.
    Sir E. Errington: In view of the considerable extensions under the new Regulations which came into force on 1st April, and the potentially considerable cost this involves, may I ask my right hon. Friend whether he will draw the attention of all concerned to Section 18 (3) of the 1949 Act, which requires a written statement, with appropriate punishment for false statements? I do not think that the attention of magistrates has been called to that.
    Mr. Brooke: The courts have been informed of the changes, which took effect on 1st April, in the conditions under which legal aid may be granted. I shall consider the points made by my hon. Friend, but I hope that his public-spirited action in calling attention to this in the House may have the requisite effect.

    Jury Service (Departmental Committee)
    Sir B. Jannerasked the Secretary of State for the Home Department whether he will now give the names of the departmental committee inquiring into the law and practice relating to jury service.
    Mr. Brooke: I would refer the hon. Member to the answer which I gave to him on this subject a week ago.
    Sir B. Janner: When does the Home Secretary expect to be able to set up this committee? Is he aware that in reply to a Question that I put to the Prime Minister I received an Answer that in some 740 cases of committees being set up, the average length of time that it took for each was 19 months? In view of the feeling about the absurd position of the jury system, is the right hon. Gen-
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    tleman prepared to do something straight away, to see if it can be remedied, as it can be if he puts people on the register in the regular list?
    Mr. Brooke: Because some committees take a long time, I am particularly anxious to choose and appoint an exceptionally good committee on this occasion. I have appointed a first-class chairman and I hope very shortly to be able to send out invitations in respect of the other members.

    Prisoners, Durham (Suicide Attempts)
    Mr. Greyasked the Secretary of State for the Home Department how many attempts have been made to commit suicide in Durham prison during the past three years.
    Mr. Brooke: Among the 12,000 prisoners who have passed through Durham prison since 1st January, 1960, there have been 32 apparent attempts to commit suicide in the prison, of which two were successful.
    Mr. Grey: Will the Home Secretary tell us how these figures compare with those for the rest of the country? Will he say that these incidents will be the subject of the inquiry now taking place, how long it will take before the inquiry has completed its findings, and whether he will publish its report?
    Mr. Brooke: I have asked the visiting committee to conduct the inquiry and I do not think that I should now interfere with the way in which it is carrying it out. I hope that it will report as quickly as possible. I can say to the hon. Member that the proportion I mentioned is not excessive, compared with prisons elsewhere.
    Mr. Grey: Will the report be published?
    Mr. Brooke: I should like to see the report first.

    Criminal Justice Administration Act, 1914 (Section 14)
    Mr. van Straubenzeeasked the Secretary of State for the Home Department whether he will introduce legislation to extend the jurisdiction of magistrates' courts under Section 14 of the Criminal Justice Administration Act 1914, by raising from £20 to £100 the amount

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    the court can order in payment of the amount of the damage caused in addition to any other penalty.
    Mr. Woodhouse: My right hon. Friend has noted this point for consideration when a suitable opportunity for amending legislation occurs.
    Mr. van Straubenzee: I am obliged to my hon. Friend for that answer. May I urge on him that this requires more than consideration? Will he bear in mind that in modem conditions the imposition of a fine of £20 for offences of this nature is far too low, and will he particularly bear in mind the case arising at Hurst, in my constituency, which I recently placed before him?
    Mr. Woodhouse: Yes, Sir. We are aware that there are anomalies in the present provisions, and I shall certainly give consideration to the case to which my hon. Friend has drawn attention.

    Dangerous Drugs
    Mr. N. Pannellasked the Secretary of State for the Home Department how many convictions there have been for being in possession of dangerous drugs since 1st July, 1962; how many of those convicted were Commonwealth immigrants; and how many such immigrants could not be recommended for deportation because they had been resident in the United Kingdom for five years or more.
    Mr. Brooke: The number of convictions is 416. Of those convicted, 272 originated from other parts of the Commonwealth, and of these I estimate that nearly half had been resident in the United Kingdom for five years or more.

    Immoral Earnings
    Mr. N. Pannellasked the Secretary of State for the Home Department how many convictions there have been for living on immoral earnings for the Metropolitan Police District since 1st July, 1962; how many of those convicted were immigrants from the Commonwealth or the Republic of Ireland, respectively; and how many such immigrants were immune from deportation through having been resident in the United Kingdom for five years or more.
    Mr. Brooke: In the Metropolitan Police District between 1st July, 1962,
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    and 16th March, 1963, 123 persons were convicted of living on immoral earnings, 52 came from Commonwealth countries and 15 from the Irish Republic. Of these 67, 51 were not liable under the Commonwealth Immigrants Act for deportation because they had been resident in the United Kingdom for at least five years.
    Mr. Pannell: Do not the replies to these two Questions indicate quite clearly not only that Commonwealth citizens are particularly prone to these serious offences but that the majority of them escape the penalty of deportation on the ground of residence? Does not my right hon. Friend consider that there has been sufficient experience of the operation of the Commonwealth Immigrants Act to indicate this serious defect, and will he consider amending legislation to correct the position?
    Mr. Brooke: I am not sure from what source my hon. Friend draws his inference that Commonwealth citizens are particularly prone to these offences because, as I have said, out of 123 persons convicted in the Metropolitan Police District for living on immoral earnings, 52 came from the Commonwealth. I cannot hold out hope to the hon. Member that at any rate in present circumstances we should amend the Commonwealth Immigrants Act in the direction he desires.
    Mr. Fletcher: Would not the right hon. Gentleman agree that when Parliament discussed the Commonwealth Immigrants Bill it was felt by hon. Members on both sides of the House that it would be quite wrong to give the courts power to deport anyone who had been resident here for more than five years?
    Mr. Brooke: I did not take part in those debates, as the hon. Gentleman did. I know that there is a feeling shared by numbers of people besides my hon. Friend that in the case of certain offences deportation powers ought to exist, even though the person has been in this country for a long time. However, my hon. Friend knows well, I think, the difficulties that there would be in the way of amending the law in that direction.
    Mr. Pannell: In regard to the remarks of my right hon. Friend that Commonwealth immigrants are not particularly prone to these offences, the numbers given

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    should include 15 Irish immigrants, which makes a total of 67 Commonwealth immigrants coming under the Act. That is more than half the total and is quite disproportionate. With regard to those being in possession of dangerous drugs, 272 out of 416 is more than 50 per cent. Surely this indicates action, and will my right hon. Friend again consider action in this regard?
    Mr. Brooke: It is a very serious matter that there are these cases of convictions both for being in possession of dangerous drugs and living on immoral earnings, but I think that Parliament would have to consider the matter very carefully before legislating to the effect that somebody who had been in the United Kingdom for five years should, nevertheless, be liable to deportation.

    Hawkers Act, 1888
    Commander Keransasked the Secretary of State for the Home Department in how many counties in England and Wales the Hawkers Act, 1888, operates at the present day; and how many prosecutions have taken place in the last five years to the latest convenient date.
    Mr. Woodhouse: The Act operates throughout England and Wales. For the years 1957 to 1961 inclusive the number of prosecutions was nil, 7, 2, 1 and 2, respectively.
    Commander Kerans: Will not my hon. Friend agree that this Act, which is 75 years old—in the days of the horse and cart—is a little archaic to say the least, and that the application of this law hinders certain mobile traders in their business? Will he review the working of the Act in this modern age?
    Mr. Woodhouse: In view of the extremely small number of cases that I have listed in my original reply, it does not seem as if the Act is working too badly.

    Wage Robberies
    Sir C. Osborneasked the Secretary of State for the Home Department if, in view of public concern with the increasing number of wage robberies and their greater violence, he will introduce legislation to impose flogging for such crimes; and if he will make a statement.
    Mr. Brooke: I continue to believe that the reintroduction of corporal punishment as a judicial penalty would not be a right or effective remedy for these or other crimes.
    Sir C. Osborne: Is my right hon. Friend aware that the majority of people in this country think otherwise—[HON. MEMBERS: "No."]—despite what the "softies" opposite think? Since it is impossible to make the thugs pay, why cannot we flog them?
    Mr. Brooke: I hope that my hon. Friend is not implying that I am a "softy", because that has not been alleged against me before. The maximum penalty for the crime of armed robbery or of robbery with violence is already life imprisonment, and if that is not a sufficient deterrent I doubt whether corporal punishment would be.

    Impact of Television on the Young (Committee)
    Mr. V. Yatesasked the Secretary of State for the Home Department what discussions he has had with the British Broadcasting Corporation and the Independent Television Authority concerning the inquiry into the impact of television on crime; what form the inquiry is taking; who have been appointed to take part; and what progress has been made.
    Mr. Brooke: I have consulted the British Broadcasting Corporation and the Independent Television Authority about the scope and organisation of the research which the Authority has generously agreed to finance into the impact of television on the young. Following on these consultations, I have decided to appoint a committee to plan and co-ordinate research in this field. I will circulate the terms of reference in the OFFICIAL REPORT. The Vice-Chancellor of Leicester University, Mr. T. A. F. Noble, has accepted my invitation to be chairman of the committee, and I am grateful to him for his readiness to undertake this important public service. I shall proceed as quickly as possible with the appointment of the other members.
    Mr. Yates: I thank the Home Secretary for that reply, but as he and his predecessor promised an inquiry a year ago, has there not been a rather regrettable delay? Will he give some sense of

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    urgency to this inquiry, especially as, in the last fortnight, a young boy has been convicted by the Edinburgh High Court of murdering his mother, and it was stated clearly in court that he had been watching television and acting again scenes on television? This is urgent. Can the right hon. Gentleman really speed up the inquiry? How long is it likely to last?
    Mr. Brooke: I attach immense importance to this inquiry, and I am very glad to have had the opportunity to make the announcement today. Certainly, I have never promised to set up an inquiry of this kind, and I did not know that my predecessor had. I am happy indeed, that it should now come to fruition, but I must say to the House that we shall not get reliable results by a quick inquiry into these matters. Serious research must be made. That is why I am glad to have the vice-chancellor of a university willing to take charge of the committee that will guide it.
    Following are the terms of reference:
    "To initiate and co-ordinate research into the part which television plays or could play, in relation to other influences, as a medium of communication and in fostering attitudes, with particular reference to the ways in which young people's moral concepts and attitudes develop and the processes of perception through which they are influenced by television and other media of communication; and to administer any funds made available to it for such research".

    Dartmoor (Assaults on Prison Officers)
    Commander Courtneyasked the Secretary of State for the Home Department what representations he has received from the Dartmoor branch of the Prison Officers' Association regarding the substitution of psychiatric treatment for birching in the case of recent attacks on prison officers; and what replies he has sent.
    Sir T. Mooreasked the Secretary of State for the Home Department what action he will take in response to the representations made by the Prison Officers' Association about his refusal to allow the prisoners who had attacked prison officers at Dartmoor to receive the sentence ordered by the visiting magistrates.
    Mr. Brooke: I have received no such representations.
    Commander Courtney: May I draw to my right hon. Friend's attention a very interesting letter in The Times from a former prison commissioner which dealt with the problems of command as opposed to those of administration in H.M. Prisons? Can my right hon. Friend say whether the governor of this prison was wholeheartedly in support of his action in this matter?
    Mr. Brooke: I read that letter with great interest. I do not propose to answer questions about whether my officers are or are not wholeheartedly in support of what I have decided. I have no doubt whatever about the rightness of my decision.
    Sir T. Moore: Is my right hon. Friend aware that many of us, including the prison officers, find it very difficult to understand his action on this occasion? Is it his policy to withhold from prison officers this last protection against the brutal thugs whom they are supposed to try to control? Psychiatry does not take every place in our life.
    Mr. Brooke: I think that there may be a misapprehension that psychiatric treatment is being used as an alternative to corporal punishment. My decision was that these two men should be the subject of psychiatric examination because there were certain facts known to me that seemed unquestionably to need further investigation. I think that I am right in saying that of the last 24 recommendations for corporal punishment in such cases, 15 have been confirmed. There is therefore no question of each of these recommendations not being considered strictly on its merits.
    Miss Bacon: Is the Home Secretary aware that some of us feel that his action on this occasion was his most courageous since he has been Home Secretary?
    Sir T. Moore: Fear the Greeks when they bring gifts.
    Sir H. Studholme: Although I agree that this is not nearly such a simple question as it may at first sight appear, may I ask whether my right hon. Friend would agree that the best way of dealing with these dangerous criminals is to let them know that if they attack prison officers they will be sent for a long time

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    to some place where they will be segregated under the most rigorous and strict discipline?
    Mr. Brooke: I think that prisoners who are in full command of their faculties do know that very serious consequences may ensue if they attack prison officers.
    Mr. K. Robinson: Despite the pressure from his hon. Friends, will the right hon. Gentleman continue to rely on responsible medical opinion in dealing with cases of prisoners who are psychiatrically ill?
    Mr. Brooke: I shall take into account all the evidence available to me, and I shall then reach my own decision without fear.
    Sir H. Studholmeasked the Secretary of State for the Home Department what reply he is sending to the petition he has received from wives of Dartmoor prison officers, asking that a stronger line of action be taken against prisoners found guilty of assault on prison officers; and if he will make a statement.
    Mr. Brooke: I will, with permission, circulate in the OFFICIAL REPORT a copy of the reply which has been sent to the petition on my instructions.
    Sir H. Studholme: In view of the interest taken in the matter by a number of constituents, I beg to give notice that I shall attempt to raise the question on the Adjournment.
    Following is the reply:
    Home Office, Whitehall, S.W.1.
    3rd April, 1963.
    DEAR MADAM,
    The Home Secretary has now given careful consideration to the petition on behalf of the wives of Dartmoor prison officers which was enclosed with your letter of 23rd March. He sympathises entirely with the feelings of the wives of prison officers who are exposed to the danger of assaults by prisoners, but he cannot accept the criticism of his actions which the petition implies. The facts are that out of 24 awards of corporal punishment made by boards of visitors and visiting committees since the beginning of 1960, 15 have been confirmed. It would not be right for the Home Secretary to give an undertaking, as the petition requests, that all future awards will be confirmed, since it is his duty to consider each case on its merits.
    Yours faithfully,
    Signed: A. H. TURNEY,
    Private Secretary.
    Mrs. D. Goodier.

    Juvenile Delinquency
    Mrs. Butlerasked the Secretary of State for the Home Department if he will launch a scheme for the prevention of juvenile delinquency, inviting the cooperation of parents, teachers, youth leaders, doctors, social workers and magistrates in a general campaign to tackle the problem.
    Mr. Brooke: There is no simple answer to this problem. We need much more information about the underlying causes of delinquency, and I am supporting research to this end. I welcome local and personal initiative of the kind suggested and am already in touch with areas and organisations in which it has been taken, and I am also considering what further initiatives might be taken centrally.
    Mrs. Butler: Does not the root of this problem lie in the failure of our educational provision and our whole social environment to encourage the idealism of young people, both girls and boys, and to provide worth-while outlets for their energies, particularly in the large towns? Should we not be urgently trying to find the answer to this in terms of national social policy on the lines suggested in my Question, which is a far bigger task than any purely personal or local initiative can undertake?
    Mr. Brooke: Without ascribing failure to anyone, I think that there is a great deal in what the hon. Lady says, but the subject is not as simple as she suggests. I believe that we have to be prepared to put in hand most careful research in order to obtain hard information on which we can proceed.
    Mr. P. Noel-Baker: Will the Home Secretary look again at the very important observations made on this problem by Sir John Wolfenden in his Report on physical education and recreation, and will he consult his noble Friend, Lord Hailsham, about implementing those recommendations?
    Mr. Brooke: I am ready to look at anything in this field. As I have said in public this is just about the most difficult and important task of a Home Secretary, and I shall welcome the assistance of anyone from either House of Parliament or elsewhere who can give me helpful advice and support in the campaign

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    I am seeking to wage against juvenile delinquency.

    Litter Act
    Mr. Leaveyasked the Secretary of State for the Home Department if he will instruct the Metropolitan Police to treat as an offence under the Litter Act the attaching of circulars to the outside of parked cars.
    Mr. Woodhouse: Prosecutions under the Act of 1958 may be undertaken by the local authority or the police, and my right hon. Friend has no power to instruct them what constitutes an offence.
    Mr. Leavey: I am obliged to my hon. Friend for that reply, but does he not recognise that it is an increasing practice to use this method for the distribution of circulars, and that is a palpable evasion of Parliament's intentions as embodied in the Litter Act, since all that happens is that the circulars are put on the bonnets or windscreen wipers of the cars and, a few minutes later, fall on the street? Could he not use his good offices to ensure that, especially in this respect, the Act is more vigorously enforced?
    Mr. Woodhouse: I think that it would be improper for my right hon. Friend to give directions to the prosecuting authorities. The question whether this particular practice would constitute an offence is one that could be settled only by the courts. I do not think that any case has yet been tested.
    Mr. Speirasked the Secretary of State for the Home Department how many prosecutions under the Litter Act took place in each of the last four years.
    Mr. Woodhouse: The numbers of persons prosecuted under the Act were 2,450 in 1959, 2,599 in 1960 and 2,395 in 1961. I regret that the figures for 1962 are not yet available.
    Mr. Speir: While thanking my hon. Friend for that information, may I ask whether he is aware that a growing body of opinion feels that the provisions of the Act are not being sufficiently well observed? In view of the fact that the Act has now been in operation for five years and that we are approaching the holiday season, may I ask my hon. Friend whether he does not think that it would be reasonable for his right
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    hon. Friend to appeal to the police, the courts and the public to observe this Act more stringently?
    Mr. Woodhouse: It is principally for the local authorities to bring proceedings under the Act, and my right hon. Friend has not the power to give directions on this matter. If the law is thought to be inadequate, it would be a matter for my right hon. Friend the Minister of Housing and Local Government and I will convey the points made by my hon. Friend to him.
    Mr. Dodds: Will the hon. Gentleman bear in mind that many of the local authorities are at fault far providing fiddling little baskets on trunk roads where holiday-makers stop and also for the long time that elapses before the baskets are emptied? Is the hen. Gentleman aware that conditions in some places are disgraceful where litter is left in the baskets waiting to be taken away and the local authorities do not take the job seriously?
    Mr. Woodhouse: I am sure that the local authorities will take note of what the hon. Member has said.

    Betting Shops
    Mr. Sorensenasked the Secretary of State for the Home Department how many betting shops have been opened in England and Wales since they became legally permissible; what information he has in respect of the increase in betting because of those facilities; and what recent representations he has received in respect of keeping the number of betting shops within reasonable limits.
    Mr. Woodhouse: The number of betting office licences in force in England and Wales on 1st June, 1962, was 11,558. My right hon. Friend has no means of assessing the volume of betting either before or after betting offices were lawfully established, Apart from Questions by hon. Members and the Motion which stands on the Order Paper in the name of the hon. Member for the Western Isles (Mr. Malcolm MacMillan) and others, my right hon. Friend has received representations in favour of amending legislation to provide additional control over the number of betting offices from one association of local authorities and in a few letters from members of the public.
    Mr. Sorensen: May I ask whether the hon. Gentleman has not received communications from public bodies interested in the ethical side of betting? In view of the fact that there has been a considerable increase in the number of betting shops, would not the hon. Gentleman agree that whatever may be said on the ground of the public desire or need for the lesser of two evils, to increase the number of betting shops is likely to increase betting as a whole to the detriment of the nation? Cannot the hon. Gentleman therefore inquire more fully into the whole matter?
    Mr. Woodhouse: It is true that apart from the representations to which I referred in the original Answer we have had some letters from members of the public protesting against gambling generally rather than specifically referring to betting shops. The number of betting shops in existence does not exceed and is in fact a bit below the figure which was expected at the time when the Act was passed. That expectation was based on experience gained elsewhere, particularly in the Irish Republic, from the practice of betting shops.
    As for looking at the legislation again, it has been in force for less than two years and my right hon. Friend has already indicated in Answers on earlier occasions that he regards it as premature to re-examine the whole Act.
    Mr. A. Lewis: In his original Answer the hon. Gentleman quoted the figure for June of last year. Why cannot he give a later figure? Is he not aware that since June of last year there has been a spate in the setting up of these shops? Can he not show the figure at least to the end of last year?
    Mr. Woodhouse: I am sorry that I cannot give a more recent figure because returns under the Act are due only after 1st June each year. The current figure will not be available until the summer. While it is true that new shops have been opened since June last year, it is also true that there have been closures.

    Prisoners (Footwear)
    Mr. Boydenasked the Secretary of State for the Home Department if, in view of the need to improve the employ-
    622
    ment situation in the boot and shoe industry, he will increase his Department's purchase of boots and shoes so that all inmates of penal institutions can be provided with hygienic and comfortable footwear.
    Mr. Woodhouse: Prisoners' footwear is made in prison workshops. It would be wasteful to provide every short-term prisoner with a new pair of shoes, but part-worn shoes are not issued unless they are serviceable, and the present arrangements do not constitute any danger to health.
    Mr. Boyden: That is a very complacent answer. Has the hon. Gentleman ever inspected the sort of footwear which a great many prisoners are compelled to wear? If not, will he do so?
    Mr. Woodhouse: This is not a complacent Answer. It is a factual Answer to the Question as put.

    Tobacco (Consumer Protection Act, 1961)
    Mr. F. Noel-Bakerasked the Secretary of State for the Home Department what requirements he has imposed upon tobacco products, including cigarettes, under Section 1 of the Consumer Protection Act, 1961, in order to prevent or reduce the risk of death and injury by diseases, including bronchitis and cancer, caused by these products.
    Mr. Woodhouse: None, Sir.
    Mr. Noel-Baker: In view of the fact that the Act gives the Home Office specific power to require tobacco manufacturers to indicate on each packet of cigarettes the risks run by the smoker consuming them, why does not the Home Office take advantage of its power? Is this not an indication that the Government did not take seriously the campaign to warn smokers of the dangers that they run?
    Mr. Woodhouse: No, Sir; that is not the implication. As the hon. Gentleman well knows, the Government's policy was stated in a reply to him by my right hon. Friend the Prime Minister on 21st March. I have looked carefully at the possibilities of the Consumer Protection Act, but, of course, it was not devised in order to prohibit any article altogether, and I cannot myself see what

    623
    requirements could be imposed under that Act which would serve the purpose the hon. Gentleman has in mind.
    Mr. Noel-Baker: Section 1 of the Act lays down clearly that the Home Secretary has power, in order to reduce risk of death or personal injury, to require manufacturers to put a warning on a package. What is the difficulty in applying this to cigarettes? Will he look at the Act again?
    Mr. Woodhouse: I shall look at the Act, but it cannot be said that tobacco would be "safe" if the yield of the various noxious contents of the tobacco were reduced below any particular level.
    Mr. Lipton: In view of the vast sums of money derived by the Chancellor of the Exchequer from the sale of tobacco, would it not be suitable for the Government to ask cigarette manufacturers, as a quid pro quo, to print on each packet, "Cigarette smoking causes lung cancer"?
    Mr. Woodhouse: Judging by the form in which the hon. Gentleman put that supplementary question, I think that it would be better put to the Chancellor of the Exchequer.

    Borstal Training (Minimum Age)
    Miss Baconasked the Secretary of State for the Home Department when he intends to lay the order reducing the minimum age for borstal training from 16 to 15 years.
    Mr. Brooke: Provision for lowering the minimum age of eligibility for borstal training from 16 to 15 years was made by Section 1(1) of the Criminal Justice Act, 1961. In accordance with the intention which I announced on 7th February in reply to a Question by my hon. Friend the Member for Bridgwater (Sir G. Wills), I have now made an order bringing this Section into operation on 1st August. It does not require to be laid before Parliament.
    Miss Bacon: This is a very important matter. In reply to a Question I asked him last week, the Home Secretary said that nearly 2,000 boys aged 16 and 17 had spent periods of imprisonment while awaiting borstal sentence or awaiting removal to borstal, and that of these 461 had spent a period of over a month in a local prison awaiting sentence and
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    494 had spent a similar period awaiting removal to a borstal. In view of these figures, is it not shocking that the right hon. Gentleman has made an order which will now mean that 15-year-olds will spend these long periods in a local prison?
    Mr. Brooke: I agree about the importance of these matters, but I hope that the hon. Lady will approve of my taking action which is designed to make possible the total abolition of imprisonment for offenders under 17. Surely, that is something which the whole House should welcome. As soon as we have enough remand centres, there will no longer be the need for boys who are remanded with a view to borstal sentence to be detained in prison. As the hon. Lady knows, we are pressing forward as rapidly as possible with the provision of more remand centres.

    Summer Time
    Mr. Shepherdasked the Secretary of State for the Home Department if he will now make arrangements to harmonise Summer Time in the United Kingdom and Europe.
    Mr. Woodhouse: The possibility of having the clocks one hour in advance of Greenwich Mean Time throughout the year, so that they would accord with those in other countries in Western Europe in the winter as well as in the summer, was considered when it was decided to make a limited extension in the periods of Summer Time in the years 1961 to 1963. The disadvantages of extending the period throughout the winter have so far seemed to outweigh the advantages, but the question is examined afresh every year.

    Chief Enahoro
    Mr. Swinglerasked the Secretary of State for the Home Department if, when he first considered Chief Anthony Enahoro's request for political asylum in Great Britain, he was in possession of a copy of the affidavit submitted by Crown counsel to the British courts concerning the charges being made against the Chief and the penalties attached thereto.
    Mr. H. Brooke: Yes, Sir. This affidavit formed part of the documents which were

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    submitted to the magistrate at Bow Street and were before both the Divisional Court and the Appeal Committee of the House of Lords when they considered the case. It was sent to me, with the other papers, after the case had been disposed of by the courts. A copy was also included among the documents appended to Chief Enahoro's request to me to be allowed to stay in this country.
    Mr. Swingler: That being so, and since it is said quite clearly on page 3 of the affidavit that count two of the charges against Chief Enahoro carries the death penalty, why did the Home Secretary suggest that his only source of information on the subject was the Nigerian High Commissioner who had assured him that there was no death penalty connected with the charge against Chief Enahoro, quite contrary to the affidavit submitted to the courts by the Nigerian Government themselves?
    Mr. Brooke: No, Sir. The hon. Gentleman is completely misinformed about the contents of this affidavit. There is no reference in the affidavit to the death penalty being a penalty for any of the charges on which Chief Enahoro's return was sought. If there had been, I have no doubt that counsel for Enahoro would have raised the matter in the Divisional Court when he was seeking to persuade the Lord Chief Justice that it would be too severe a punishment to return him to Nigeria.
    Mr. Turton: Has my right hon. Friend referred to the previous treason trial in Nigeria in which Mr. Tarka was charged in 1961 with a number of offences, including conspiracy to commit treason? If so, has he noted that it was made clear in the course of those proceedings that that charge carried the death penalty?
    Mr. Brooke: What I can say with assurance—and I am sure that the Attorney-General would confirm this—is that the charges on which Chief Enahoro's return to Nigeria was sought do not carry the death penalty.
    Mr Wade: When will the right hon. Gentleman be making a statement on Chief Enahoro's request for political asylum? Is it not highly desirable that there should be a final decision on this as quickly as possible?
    Mr. Brooke: Yes, Sir, but it is not for me to announce the future business of the House.
    Mr. Fletcher: In coming to his original decision, should not the Home Secretary have noticed that, in view of the contents of the affidavit filed at the magistrates' court, there were charges in Nigeria which might involve the death sentence? In view of that possibility, should not the Home Secretary have taken that into account, and should not he have come to the conclusion that, in those circumstances, this man should not be sent back?
    Mr. Brooke: No, Sir. I took everything which was before me into account, and I reached the same conclusion about the risk of Chief Enahoro being liable to the death penalty as his counsel in the British courts apparently reached.
    Mr. D. Smith: Has my right hon. Friend yet seen a document which arrived from Nigeria today from the leading defence counsel in the treason trial, Mr. Akintoye, which is addressed to the Prime Minister, the Leader of the Opposition, and various other right hon. Members, and in which he puts forward a reasoned argument that Chief Enahoro certainly faces the death penalty on count two? If my right hon. Friend has seen it, will he bear it in mind? Does not he feel that, after three temporary reprieves, justice would now be done if this man were set free?
    Mr. Brooke: I have not seen that document. I think that questions on the legal interpretation of the affidavit should be put to the Attorney-General.

  NUCLEAR TESTS
  Mr. A. Hendersonasked the Prime Minister whether, in view of the new deadlock at Geneva, he will propose to President Kennedy and Mr. Khrushchev that the three Foreign Ministers should again participate in the 17-Power Conference in order to reach a nuclear test ban agreement.
  The Prime Minister (Mr. Harold Macmillan): We are in constant touch with the United States Government on all matters connected with the nuclear tests negotiations, and in particular on how the present deadlock might be

  627
  broken. If it seems to us that the time is ripe for another meeting of the three Foreign Ministers at Geneva, we shall not hesitate to propose this.
  Mr. Henderson: Is it not a fact that the three Foreign Ministers have not participated at the Geneva Conference for more than 12 months? Would not the right hon. Gentleman agree that certain major and clear points of difference have emerged at the conference which should now be negotiated by the Foreign Ministers? Will the right hon. Gentleman consider suggesting to President Kennedy and Mr. Khrushchev that the time has now come for the Foreign Ministers to return to the conference?
  The Prime Minister: I will bear that in mind. I repeat that I am in very close touch with the President on the best method of handling the situation now.

  SCOTTISH TRADES UNION CONGRESS
  Mr. W. Hamiltonasked the Prime Minister if he will seek a meeting with representatives of the Scottish Trades Union Congress, in order to discuss the implications of the policy proposals suggested by him in recent correspondence with the Trades Union Congress on Scotland's economic problems.
  The Prime Minister: I am sure that if the Scottish Trades Union Congress would like another meeting with me it will let me know.
  Mr. Hamilton: Does the right hon. Gentleman recognise that the Scottish T.U.C. is deeply disappointed and indeed angry at the nature of the proposals which he communicated in his letter? Is he aware that he is now being charged in Scotland with being guilty of a confidence trick perpetrated on those men who came down to see him?
  The Prime Minister: That is not in the least my impression from the way we held either this discussion or previous discussions. I have always had the most courteous and friendly relationship with the Scottish T.U.C.
  Mr. Hamilton: Does the Prime Minister recognise that many of the points
  628
  in the original memorandum from the Scottish T.U.C. were ignored by him when he replied?
  The Prime Minister: Many of them were dealt with yesterday.
  Mr. Baxter: In view of the statements yesterday by the Chancellor of the Exchequer that a different fiscal policy should apply to areas of high unemployment, may I ask the Prime Minister whether he would consider altering the whole fiscal policy of Scotland to come in line with the newly declared policy of Her Majesty's Government?
  The Prime Minister: This matter will no doubt be discussed today and during the remaining stages on the Budget, and of course I will take into account with my colleagues what the hon. Member has said.
  Mr. W. Hamiltonasked the Prime Minister if, following his consultations with the Scottish Trades Union Congress, he will now publish in the OFFICIAL REPORT details of the projects, outlined in his letter to them dated 15th March 1963, designed to solve the problem of unemployment.
  The Prime Minister: I would refer the hon. Member to the reply I gave to the hon. Member for South Ayrshire (Mr. Emrys Hughes) on 2nd April.
  Mr. Hamilton: Does the right hon. Gentleman regard the proposals in that letter as the short-term palliative as opposed to yesterday's long-term solutions? Can he tell us, for the enlightenment of the House, who will have the greater impact on the Scottish economy—Beeching or Maudling?
  The Prime Minister: On the subject matter of the Question, I repeat that I think we had a very useful meeting. Many of the short-term things were dealt with as well as I was able before the Budget, and much of the long-term policy was developed yesterday.
  Mr. Lawson: Does the right hon. Gentleman not agree that if a sensible policy towards Scotland had been followed over the past 12 years the situation which now exists need never have arisen? Will he take steps to see, even at this late hour, that there are radical rectifications?
  The Prime Minister: We shall try to do better during the next 12 years.
  Mr. Brewis: Is my right hon. Friend aware that the proposals in the Budget, and particularly the loan for the new Fort William pulp and paper mills, will be very greatly welcomed in Scotland?

  NORTHERN IRELAND-GREAT BRITAIN (COMMUNICATIONS)
  Mr Brewisasked the Prime Minister what communication he has had from the Prime Minister of Northern Ireland regarding the effect of the proposed closing of the railways linking Belfast and London and Belfast and Glasgow via Stranraer on employment and industry in Northern Ireland.
  The Prime Minister: The Northern Ireland Minister of Home Affairs has discussed the question of communications between Northern Ireland and Great Britain with my right hon. Friends the Home Secretary and the Minister of Transport.
  Mr. Brewis: Is my right hon. Friend aware that about 3 million members of the Armed Forces used these lines during the war years and that about 20 per cent. of Ulster's tourist traffic uses the crossing? Would it not be folly on defence, tourist and social grounds to accept Dr. Beeching's proposals?
  The Prime Minister: As my hon. Friend knows, on this as on all the other points there is the whole procedure of examination and eventual responsibility for the Minister concerned.
  Mr. W. Hamilton: Does the Prime Minister recognise the conflict between what the Chancellor proposed yesterday for the Scottish economy and what Dr. Beeching has proposed for the railways?
  The Prime Minister: No, Sir; they are very much in harmony.

  FOREIGN SECRETARY (STATEMENT)
  Mr. Rankinasked the Prime Minister if the public statement made by the Foreign Secretary at his Press conference in Tokyo on Friday, 29th March, on trade with the State-trading countries represents the policy of Her Majesty's Government.
  The Prime Minister: Yes, Sir.
  Mr. Rankin: I welcome that continued policy of expansion, but does the Prime Minister recognise that one of the reasons for the smallness of our trade with China, which the Foreign Secretary regretted, is China's difficulty in acquiring sterling? Does he realise that that trade would be increased if he would take the necessary steps to give to China the terms of trade which have been given to Japan and which are much more favourable than those which China now has?
  The Prime Minister: No, Sir. Our trade with China was expanding and will, I think, expand again, but there has been a reduction during recent years owing to the situation of near-famine in China which forced the Chinese to spend a very large proportion of their foreign currency on the purchase of wheat. This has, of course, had a corresponding effect on their ability to purchase other forms of material from this country.
  Sir A. V. Harvey: In considering the sale of second-hand transport aircraft to China, will my right hon. Friend take into account the feelings of the Indian Government in the matter?
  The Prime Minister: All these matters are taken into account. What my noble Friend said in Tokio repeated the situation as regards our trading arrangements as they now stand with the bloc countries.
  Mr. P. Noel-Baker: All recent visitors to Japan will warmly welcome the Foreign Secretary's encouragement of Japanese trade with China, but will the Prime Minister give consideration to what my hon. Friend has proposed in regard to British trade with China?
  The Prime Minister: Yes, Sir; but the facts are as I have given them. Trade was going up until about two years ago. The Chinese, of course, have difficulty in finding sufficient foreign exchange to meet their requirements, and they had to spend a very heavy amount on purchases from Australia, Canada and other countries in order to feed their people.
  Mr. Shinwell: Does the right hon. Gentleman realise that the statement made by the Foreign Secretary was the most sensible statement made by a Member of the Government for some considerable time? In view of this, will

  631
  he take active steps, even dynamic steps, to implement the content of the policy formulated by the Foreign Secretary
  The Prime Minister: I am very glad to hear this tribute from the right hon. Gentleman. I remember so well what he said three years ago when the Foreign Secretary was appointed.

BUSINESS OF THE HOUSE
Mr. H. Wilson: May I ask the Leader of the House to state the business of the House for next week?
The Chancellor of the Duchy of Lancaster (Mr. Iain Macleod): Yes, Sir. The business for next week will be as follows:
MONDAY, 8TH APRIL—We shall continue the general debate on the Budget Resolutions and the Economic Situation, which will be brought to a conclusion on Tuesday, 9th April.
At the end on Tuesday, Motions on the National Insurance (Earnings) Regulations, and the Housing (Payments for Well-Maintained Houses) Order.
WEDNESDAY, 10TH APRIL.—Report stage of the Budget Resolutions.
Remaining stages of the Local Government (Financial Provisions) (Scotland) Bill.
Second Reading of the Fort William Pulp and Paper Mills Bill, and Committee stage of the Money Resolution.
Motion on the Police Pensions (Amendment) (No. 2) Regulations.
THURSDAY, 11TH APRIL.—It is proposed that the House should meet at eleven a.m., that Questions be taken until twelve noon, and that the House adjourn at five o'clock, until Tuesday, 23rd April.
Mr. H. Wilson: Is the Leader of the House yet in a position to say when we can expect to debate the Beeching Report and if so, how long it is proposed to allocate to that debate?
Mr. Macleod: I hope that the debate on the Beeching Report and, if I may take the right hon. Gentleman's point a little further, the debate on the Radcliffe Report, which we have not yet
632
received, but which we hope to receive in a very few days' time, will take place very soon after we come back from the Easter Recess.
Sir G. Nicholson: Can my right hon. Friend say what is the business with which we shall deal after we resume?
Mr. Macleod: No, Sir. I will, of course, make a statement on that before the House rises.
Mr. Swingler: Can the right hon. Gentleman say when the Prime Minister will make his promised statement on the case of Chief Enahoro? If necessary, we shall have to resume debate on this case.
Mr. Macleod: The House will realise that the Budget debate will take two days next week. It cannot be debated next Friday, because that is Good Friday, and Thursday will be devoted to Adjournment debates.
I am sure that the House will realise that the business which I have announced for Wednesday may be subject to alteration. There certainly will be a statement on the immediate question of Chief Enahoro, and perhaps we can consider the possible rearrangement of Wednesday's business in the light of that. The legal aspects of the case would probably be dealt with in a statement by my hon. and learned Friend the Attorney-General.
Mr. H. Wilson: Quite apart from the narrow legal point, I take it that the Leader of the House will confirm that there is no question of Chief Enahoro being deported before the House has had a chance to debate and vote on the Resolution before it?
Could the right hon. Gentleman answer the question which I put to him earlier, about the length of time which will be allocated to the debate on the Beeching Report?
Mr. Macleod: Of course, there is no question whatever of Chief Enahoro being sent back until the House has had an opportunity of disposing not just of the legal point, but of the whole issue of deportation involved in this case.
I think it likely that two days will be devoted to the debate on the Beeching Report, but I am sure that we can come

633
to an arrangement on that through the usual channels.
Mr. Webster: Since my right hon. Friend has given indications on the Radcliffe and Beeching Reports, can he give one on the Rochdale Report?
Mr. Macleod: No, Sir. I have given an undertaking that we will debate the Rochdale Report, but the first two big debates which the House will wish to have after we come back from the short Easter Recess will be on the Beeching and Radcliffe Reports.
Mr. G. Brown: The Leader of the House said that the legal aspect of the Chief Enahoro case will be dealt with by a statement from the Attorney-General. As I understand, the Attorney-General's view of the law is disputed by other distinguished lawyers. I take it that the right hon. Gentleman therefore understands that that will form part of the debate which we shall have subsequently?
Mr. Macleod: Yes, I do, but I merely have very much in mind the undertaking which my right hon. Friend the Prime Minister gave to the House, and repeated at the end of the debate in response to the hon. Member for Eton and Slough (Mr. Brockway), that, apart from the arguments about whether the second charge or any other charge carried the death penalty, an opportunity would be given to the House to consider the
634
matter. I undertake that we will meet both those points.
Mr. Lipton: Can the right hon. Gentleman say when the Report of the Vassall Tribunal is likely to be made available? Various statements about its imminent publication have already appeared in the Press.
Mr. Macleod: As far as I know, those statements are unfounded, but I have said to the Leader of the Opposition that we expect to receive it within a very few days—three or four days' time. We will publish it as soon as we possibly can, and that, I hope, will enable the House to have a very early debate on it.

BILL PRESENTED
  FORT WILLIAM PULP AND PAPER MILLS
  Bill to authorise the Board of Trade to make advances to Wiggins, Teape & Co. Limited in connection with the construction and equipment of pulp and paper mills in the neighbourhood of Fort William, and to make grants to that company in respect of interest on such advances, presented by Mr. Erroll; supported by the Chancellor of the Exchequer, Mr. Noble, and Mr. David Price; read the First time; to be read a Second time tomorrow and to be printed. [Bill 94.]
ORDERS OF THE DAY

  WAYS AND MEANS
  Considered in Committee [Progress, 3rd April].
  [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

  WAYS AND MEANS

    AMENDMENT OF THE LAW
    Question again proposed.
    That it is expedient to amend the law with respect to the national debt and the public revenue and to make further provision in connection with finance, so, however, that this Resolution shall not extend to making amendments of the enactments relating to purchase tax so as to give relief from tax, other than amendments making the same provision for chargeable goods of whatever description or for all goods to which any of the several rates of tax at present applies.

  BUDGET RESOLUTIONS AND ECONOMIC SITUATION
  3.40 p.m.
  Mr. James Callaghan: I should like, first, to express my thanks to the Chancellor of the Exchequer for a clear and lucid exposition yesterday. It was one which we found interesting the whole way through. He certainly avoided the scramble that usually takes place at the end of a Budget debate, when we have heard the distribution of the largesse or the penalties, whichever it is to be.
  It was not, of course, the first time that the Chancellor has batted on a Budget wicket, although it was the first time that he has opened the batting. He usually goes in first wicket down, when the shine has been taken off the ball, but he managed to play the ball very well indeed right in the centre of the bat. He even ignored the rather menacing figure at deep third man—or perhaps he is in the pavilion. At least, we hope that we will hear the right hon. and learned Member for Wirral (Mr, Selwyn Lloyd) during the course of the debate—
  Mr. Selwyn Lloyd Mr. Selwyn Lloyd (Wirral) indicated assent.
  Mr. Callaghan: —subject, of course, to you, Sir William—because I trust very much that we shall hear what he has
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  to say about the complete reversal of his policies by the present Chancellor of the Exchequer.
  The change in presentation of the Budget has many advantages, most of which we readily acknowledge. This rearrangement had one other advantage which has not been commented upon, that in the course of over a 100-minute speech the Chancellor was able to dismiss the miserable record of the last twelve months in half a column of HANSARD. Instead of starting, as we usually do, with a review of the events of the last year, we had no more than 300 words or so on what must have been one of the most catastrophic post-war years in the development of the country's economy.
  The Chancellor shares the well-known Tory capacity for drawing a veil over their own crises. As the late Aneurin Bevan once said, the Tories have an infinite capacity for putting flamboyant labels on empty baggage. If he were here now, he would say that they could not even change the labels. It is the same old stuff again, and the Chancellor knows it. He has said it himself before on many occasions, when he has appeared at the Dispatch Box to put forward the case for the Government on various Budgets.
  In any event, the Government supporters, I understand, are well satisfied with the Budget.
  Hon. Members: Come on, cheer.
  Mr. William Shepherd: Does not the hon. Member realise that he is far too subtle?
  Mr. Callaghan: Perhaps hon. Members opposite are not very well satisfied with the Budget. I do not know which it is. We shall wait with interest to find out. Although they cheered the Chancellor when he sat down yesterday, they cheered the right hon. and learned Member for Wirral a year ago for doing the very reverse of what the Chancellor did yesterday, either ignorant or careless of the fact that it was entirely different.
  Let us take some of the differences. The policy of the right hon. and learned Member for Wirral was based upon the premise that home demand must be held down so that we should get exports first. The Chancellor said yesterday that we must have growth at home to stimulate

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  exports as soon as possible. Hon. Members opposite cheered both statements. The right hon. and learned Member for Wirral based his Budget on the need to safeguard the £ abroad, which, he said, meant restricting demand at home. That was the whole case for the pay pause. Yesterday, however, the Chancellor told us that a healthy expansion of home demand and a strong £ go hand in hand. Hon. Members opposite managed to support both these statements at different times.
  In his resignation letter to the Prime Minister, the right hon. and learned Member for Wirral said:
  "you are well aware of my concern"
  about
  "the growth of public expenditure."
  The Chancellor's reply is to spend another £500 million this year.
  The right hon. and learned Member for Wirral, in his strong desire to limit public expenditure, kept down borrowing in his last Budget to £74 million. Under the heading, "Borrowing Requirements", the present Chancellor proposes to raise £700 million, which is ten times that sum. In every major respect, the Chancellor of the Exchequer has said that his former colleague in the Cabinet was wrong. Not merely the whole of budgetary policy, but the philosophy which underlies that policy, has been reversed. The Prime Minister, who, unfortunately, has left us, said in his letter to the former Chancellor:
  "Your courageous policies … have always commanded the support of your colleagues. You can rest assured that we intend to continue on the path that you have prepared."
  We might have known that, when the Prime Minister said that, the very reverse would happen very soon.
  Whether the right hon. and learned Member for Wirral was right or wrong in his philosophy about exports and home demand, about the need for keeping the £ strong and, therefore, keeping down home demand and the rest of it, perhaps he will settle with his right hon. Friend the Chancellor. One grave difference which I have with him, however, and which everybody outside of Government supporters has with him, is the grave error of forecasting that he made a year ago about the state of the economy.
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  The right hon. and learned Gentleman convinced himself that the economy would grow and that consumer demand last year would increase by 4 per cent. without any help from him. He went to the Sheffield Cutlers' feast and rebuked all his critics. He said "Do not believe these prophets of woe. There will be no recession this year." Nothing like this had been heard since Mr. Chamberlain said that he thought there would be no war—or was that the Prime Minister? No, Hitler missed the bus—the same thing.
  The right hon. and learned Member for Wirral said that there would be no recession this year and that there was no need to pump in Treasury help. Everybody unitedly told him that he was wrong—the trade unions, industrialists and the Opposition. Hardly a voice was raised in favour of Government policy—except, of course, that the sheep went into the Lobby in support of him.
  At the conclusion of the Budget debates, the right hon. and learned Gentleman's last words were:
  "I am convinced that the general balance of my Budget is right."—[OFFICIAL REPORT, 12th April, 1962; Vol. 657, c. 1630.]
  The whole of the Government supported him, including, of course, the President of the Board of Trade, who is to follow me in this debate today. A year ago, in the corresponding debate to today's, the President of the Board of Trade said:
  "we can look forward to a period of steady and healthy expansion, in which the growth of exports will take the lead."—[OFFICIAL REPORT, 10th April, 1962; Vol. 657, c. 1189.]
  The Minister of Education, who has the misfortune to be extremely lucid and articulate, so that there is never any misunderstanding of what he says, said:
  "Our whole object is, rather, to create conditions in which exports lead the growth of the economy…"—[OFFICIAL REPORT, 11th April, 1962; Vol. 657, c. 1336.]
  He said that it would be wrong, and that it was not borne out by experience, that a deliberate stimulation of home demand would be an effective means of encouraging exports.
  Did the Chancellor of the Exchequer listen to all that? How does he reconcile his differences with the Minister of Education? The Economic Secretary to the

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  Treasury had not then been promoted, but he was, nevertheless, a strong supporter of the Budget. They were all strong supporters of the Budget, and they were all wrong. This is why there is considerable indignation amongst those who took a different view a year ago that the unemployment that we have suffered, the unused men, materials and machines, and the unfilled order books, are due to a mistake in which all members of the Government shared an error of forecasting which has cost the country hundreds of millions of pounds. Now, we are asked to trust them again. This time, the Chancellor tells us, the Government have the National Economic Development Council to help them; they have accepted the 4 per cent. per annum growth target fixed by the Council.
  As the Chancellor did not give a review of last year, let me give a short review of the year's activities and put it alongside what the National Economic Development Council says, because the Chancellor is its chairman and has accepted the 4 per cent. target. N.E.D.C. said that it was quite possible for our economy to expand at the rate of 4 per cent. per annum. So does the Chancellor, but in the last year our production was stationary. There was no growth at all. N.E.D.C. said that our exports should grow at the rate of 5 per cent. per annum. Last year, they rose by 1·5 per cent. N.E.D.C. called for an increase in the total of investment, in new plant, new machinery, etc. of 8 per cent. per annum. In fact, total investment fell by 2 per cent. per annum, and in the case of private investment in manufacturing fell by as much as 7 per cent.
  N.E.D.C. told us that all this could be achieved with a low level of unemployment. In fact, as we all know, unemployment rose to record levels for any consecutive period of twelve months since the end of the war. N.E.D.C. says that the balance of payments should be £300 million in surplus. In fact, it was £67 million in surplus. Just to add to the record, last year, in which in every case we fell far, far short of targets which the Government accepted, prices continued to rise at home, and we had to borrow £80 million from the central banks abroad in order to keep sterling steady. Altogether, 1962 was a miserable year, a mixture of incompetence and weakness. I am not
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  surprised that the Chancellor forgot to review it in his Budget speech.
  Now for the new watchword, the new label, "Expansion without inflation. Expansion which can be sustained". This is to be the slogan. Of course, the case is overwhelming. Everyone knows this. We have pressed it upon the Government for much longer than it has been accepted as official Government policy. Of course, it is not the first time that we have climbed on the expansion bus. We have been there before—and it stopped long before we reached our destination. We did it in 1959 and we did it in 1955.
  Now, in 1959 the then Paymaster-General made a speech in the course of the Budget and he told us there was a case for substantial expansion and it started from the record surplus of our balance of payments, a very great strengthening of the £, a great improvement in the reserves, a record level of fixed investment, and unemployment lower than in most European countries and so, said the Paymaster-General of the day, the Chancellor had gone as far as he could without threatening the balance of payments. I wonder what the right hon. Gentleman the Member for Barnet (Mr. Maudling) has to say to the Paymaster-General, or to the Chancellor of the Exchequer.
  Does the right hon. Gentleman believe that he started off with his expansion with a record surplus of balance of payments, with a great strengthening of the £, improved reserves and levels of fixed investment, or low unemployment? He is starting off with the very reverse of these. Let us take what happened when he started to expand—I forbear to say what year that was—when the Government gave away £360 million and by the end of the next year the record surplus of 1958 in our balance of payments which had stood at £312 million had turned into a deficit of over £300 million. Of course, that was followed by the pay pause and the right hon. and learned Gentleman the Member for Wirral had to clean up the mess which was left by his predecessor.
  But the Chancellor of the Exchequer does not escape responsibility here. He has been in and around the Treasury for most of the last twelve years during which the Government have been in office,

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  either as Economic Secretary, or as Paymaster-General, or as President of the Board of Trade, or as Chancellor of the Exchequer. This is no new broom coming to sweep the Augean stables clean—merely an old hack put out to grass once more. In 1955, the Chancellor of the Exchequer was the right hon. Gentleman the First Secretary of State, who was the deputy Prime Minister, and he had a word for it, too. Then it was called expansion and stability. That was our watchword then.
  It could almost have been yesterday that we heard the speech of 19th April, 1955:
  "… the Budget proposals must constitute, before all else, a fresh incentive to the forces of"—
  what?—
  "growth and expansion."—[OFFICIAL REPORT, 19th April, 1955; Vol. 540, c. 58.]
  And:
  "During this last year we have learned much about the problems which we must face if we are to succeed in combining expansion and stability …"—[OFFICIAL REPORT, 19th April, 1955, Vol. 540, c. 35,]
  The Government had learned so much that they gave away £155 million—I for bear to mention what year that was—and, of course, it was followed by a crisis in the autumn.
  The present Chancellor of the Exchequer spoke in that debate, too, on 21st April:
  "My right hon. Friend"—
  he said—
  "will concentrate on a policy of expansion, freedom and incentives, which has throughout been his policy and has throughout been a successful policy."—[OFFICIAL REPORT, 21st April, 1955, Vol, 540, c. 365.]
  Well, it was certainly successful in winning the General Election, but I do not wonder that my right hon. Friend was a little cynical yesterday.
  Mr. Harold Wilson: Oh, no!
  Mr. Callaghan: Well, I withdraw that. Shall I say that he found it a little difficult to understand why it is that there happens to be this fortunate coincidence that in a year when it is necessary to give away so much in tax reliefs there happens in that year to be an appeal to the electorate?
  I understand that it amounts to this: that certainly 70 per cent. of all the reliefs
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  given away in taxation and otherwise by the Government during the period they have been in office have been concentrated in the two General Election years, plus this year, when we are running up to an election. We do not know when it will be. I am sure that the Prime Minister does not, either. It depends on how long he can keep a tottering Government and party together. At any rate, the Chancellor has helped him. He has done his best.
  Now we have him starting again. We are going through a period of expansion and stability. The reformed drunkard is coming to the penitent's stool once more. He is going to sign the pledge for the third time. Unfortunately, he has still got the taint of whisky on his breath. He really must forgive us if we are a little disbelieving about the motives and the consequences of the Government's sudden conversion to a policy of expansion.
  As I said earlier, the case is overwhelming. In my view, the Chancellor has been too cautious. I believe that there is a need for greater incentives if we are to get industry running full out. I do not believe that we can maintain it, but I think that there would be a case for arguing economically that we should have a relatively sudden spurt for a period of twelve months before we settle down to a steady rate of growth of about 12 per cent.—[HON. MEMBERS:"What?"] I means settle down to a steady rate of 4 per cent. I realise that 12 per cent. is outside the comprehension of anybody in this Committee. But it would not be outside the comprehension of the Japanese. It would not be outside the comprehension of other countries which have managed to get periods of growth of that order for a short time.
  I say this to the Chancellor, in all seriousness. I believe that there is a case this year for doing more if he is to lower unemployment, if he is to get the economy growing. He could not keep up that pace in the economy in which we are living, but I think that he has been too cautious in what he has done. Subject to what happens in the rest of the world, which will always be a preoccupation of any Chancellor, I think that he ought to get his 4 per cent. this year, but that will not relieve unemployment, which will last in many

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  parts of the country. Unemployment will go down; it is bound to do in some parts of the country; but I believe we shall still have high levels where there is structural unemployment at the present time.
  Corning back to this question of growth, I think that it is humiliating, when the O.E.C.D. reports are produced year after year on the policy of economic growth, to see where we stand. Let us take the most recent report which came out last month, and the table on page 16, showing what the major countries, the 20 major countries in O.E.C.D. in this group, and the rate of growth from 1950 to 1960, and in the whole list we see we are last but one. Only Ireland has grown at a slower rate than Great Britain, and right hon. and hon. Gentlemen opposite have been responsible for our destinies during the whole of that period.
  Everybody has grown faster than Britain and I believe that the Chancellor of the Exchequer has now set his targets too low. Even the United States, after the Kennedy Administration were returned, grew at a rate of well over 8 per cent. from the first quarter of 1961 to the first quarter of 1962. Their economy is in many ways similar to our own. They have the same degree of sluggishness, the same difficulties with balance of payments, the same difficulties with exports, and the difficulties of too great a rise in wages as against productivity, yet they managed to grow at a rate of 8 per cent. The Chancellor has fixed his target for only 4 per cent.
  I wish that the right hon. Gentleman had said more about exports. Why did we not do better last year? Perhaps the President of the Board of Trade will tell us. His speech last year was a confident forecast of the success that lay to our exporters. The right hon. and learned Gentleman was keeping the way open for his success. He was keeping home demand down so that the right hon. Gentleman and the exporters could step in, and there was every reason why they should, because whilst our home demand was so low, Europe was still running full out. Our competitors were still supplying at as high a rate as they could their own domestic markets and yet they did better in exports than we did.
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  Why did not we take advantage of all this? Perhaps the President of the Board of Trade will tell us. Perhaps he will review 1962 and tell us why he thinks that we failed last year. Perhaps he will tell us why the Government's policy was such a failure and we grew at a rate of only 1·5 per cent. in exports when he confidently expected something very much higher.
  The Chancellor says that British goods must be competitive in price, quality, and date of delivery. He is right. We have said it before, and it is none the worse for hearing it from him again, but I do not think that this is all the trouble. I do not know whether the Committee has read the remarkable article which appeared in The Times yesterday, by Professor T. Barra, headed, "Export growth retarded by technical backwardness". I ask my colleagues to take five minutes to read this article, because it is one of the most penetrating analyses that has been made of our export policy.
  Perhaps I might quote some extracts from it. Professor Barna analyses the export position of Britain, the United States and Western Germany, but he does it according to categories of exports rather than to total volume, or total value. He divides his categories into fast-growing exports and others. The fast-growing exports include office machinery, scientific instruments, metal-making machinery, electrical measuring instruments, plastics, and synthetic fibres. Comparing our performance with that of the United States and Western Germany, he says that the surplus of the United States is four times, and that of Western Germany three times that of Britain's export surplus in this category.
  Professor Barna goes on to say:
  "In fact, Britain's position is inferior in each product group in this category",
  and his conclusion is that the shortfall in Britain's net export manufactures compared with either the United States or Western Germany can be accounted for only by the shortfall in the fast-growing machinery and chemical products. He says, in fact, that the faster world demand expands in any product group the more inferior becomes Britain's share of that market, and that we hold our position best in the export products which are in the slow growing class.

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  This is a severe indictment of Britain, of British industry, and of Government leadership, because these are the exports and this is the field where, clearly, we should be getting into a position where we ought to have world leadership as we had at the turn of the nineteenth century and at the beginning of the twentieth century. It is this field on which the Chancellor of the Exchequer and the President of the Board of Trade must concentrate, and I should like to hear from the President of the Board of Trade his proposals for ensuring that there is a more rapid rate of growth in these industries where the fast-growing manufactures find a ready market overseas.
  I therefore say to the Chancellor that it is not just a question of price. It is not just a question of quality. It is not just a question of after-sales service. All these things are important, but they are only as important as the capacity to sell the right type of goods which other countries are seeking and for which the markets exist. This is the lesson to be drawn from this article, on which I hope the President of the Board of Trade will comment.
  The Chancellor of the Exchequer said that he was against an added value tax. Mr. Gordon Richardson has been given the task of changing the Chancellor of the Exchequer's mind, if that is the right thing to do. It is an odd way to run the Government, but, knowing Mr. Richardson, I am satisfied that there could be nobody better qualified to change the Chancellor's mind if it needs changing. I am sure that he will bring expert knowledge and judgment to this task, but I ask that we should have an early report and decision on this matter.
  We on this side of the Committee have been going into these questions of taxation. We have made our own studies about them and at the moment I am inclined to agree—I am rather changing my mind from what I thought a year ago—that there is not so much in these fiscal incentives as I had originally assumed. I think that if we go into these incentives we would need such a drastic overhaul of the taxation system that the administrative inconvenience could outweigh the benefit to be achieved. That should not prevent us, if we believe it to be right, from reforming the taxation system, for
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  which I have many proposals, most of which are taken out of context and not put against their full background; but I should be out of order if I were to go into that now.
  On the question of expansion, I have one or two points to put to the Chancellor. I believe that in respect of growth he is in a very much inferior position compared with 1959, because although he said that the stock ratio to output was really not too bad, nevertheless, if he is to get the level of growth that he wants there will have to be a substantial increase in stocks of imports. From that will follow what he proposes to do. Obviously he must be concerned about the position of sterling.
  If we have unlimited imports—perhaps he will not want to look ahead—and they endanger the balance of payments position the Chancellor will have to make up his mind what to do, and I hope that he will tell the Committee which he believes comes first. Does he really place expansion above everything else? If he does, if, at last, after two false starts in the earlier years, we are placing expansion first, he may have to take some uncomfortable decisions which will be opposed to the ideology of his own supporters.
  Let us consider these decisions. Import control is such a one. Last year, the President of the Board of Trade tried to get me on a Morton's fork. "Ha, ha," he said. "Is the hon. Gentleman proposing import controls?" I declined to rise to the bait. I am not the Chancellor, and it is the Chancellor who has to answer that question if the level of stocks builds up to the point where it endangers continued expansion. Until we have a clear answer to the question whether, in the event of trouble of this sort, he proposes to go ahead with expansion, businessmen will continue to remain sceptical.
  I am surprised at the number of letters which I have had. The right hon. Gentle. man did not convince some people in industry that he really means to go for a policy of expansion and to subordinate other considerations to it, and I think that the Committee would like further guidance from the President of the Board of Trade about the Government's intentions this time. Are they ready to put

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  aside ideological prejudices which they may have to ensure that expansion continues?
  I turn now to the problem of sterling. The Chancellor of the Exchequer has, in my view quite rightly, ruled out any question of devaluation, but it cannot be a comfort to him to know that there were tremors in the £, even though they were speculative and did not represent the real position, even before expansion gets going. I believe now—as I did when proposed it last July in the censure debate—that the Chancellor was right to put up his plan for increasing world liquidity and in trying to get some alterations in the key currencies at the Washington meeting. Unfortunately, perhaps because of the rapid change, it was a half-baked plan and did not get the response it warranted. Perhaps it was because there was not enough time to prepare it. There might have been better preparation.
  It is my information now, however, that there would be a much better response for proposals of this sort now than there was a year ago. I think that it is an encouraging factor for Britain that many of the difficulties we have experienced over the years are now being shared increasingly by the United States. I was very interested in the letter written by the hon. Member for Halifax (Mr. Maurice Macmillan) about this, a short while ago. For a long time we have carried a heavy overseas burden which has never been recognised by others. Now, the Americans are doing the same thing.
  I doubt that they will get their balance of payments really under control. I believe that they will go through the same phase as we have been through. That gives us identity of interest. The dollar is not the currency that it was ten years ago. That is one considerable identity of interest. Both countries are financing, between us, 60 to 70 per cent. of world trade. That is another identity of interest.
  The Chancellor should follow up as quickly as he can the ideas he scouted yesterday about the position of sterling in order to try to remove the strain from it. It is absurd that, when sterling and the dollar are facing heavy balance of payments difficulties, France and Germany—and, indeed, Italy—should be
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  piling up surpluses. These surpluses should be, and could be, called into use. I hope that there will be a development along these lines, but it is too technical a matter to go into now in detail.
  I want to ask the Chancellor about one matter in particular. It concerns a speech by Lord Hailsham, who always manages to combine very high morality with very good politics. He said recently:
  "Can you wonder that foreigners speculate against the pound? How can a General Election remove uncertainty when it is want of confidence in the declared policy of the Opposition which is causing the alarm?"
  This really is a very serious matter. Are we to start playing party politics with the £? [An HON. MEMBER: "That is not."] Well, this article is. Three weeks ago there were tremors in the position of the £—in my view, quite unjustifiable. I gave a long interview then to two German and Swiss newspapers in which I came out strongly on the side of the Chancellor—no, on the side of Britain—against devaluation. I am glad to say that these two interviews were widely reported in the German and Swiss Press, and I have had official intimation—not from the Government, but from other quarters—that the fact that we were taking this strong line had an impact in steadying speculation.
  If Government spokesmen are to abuse their position by saying that it is the possibility of the election of the Opposition that is causing the run on the £, then I can assure the right hon. Gentleman that he will be in serious trouble not because of us but because of speeches by his own colleagues in the Cabinet.
  I want to repeat as emphatically as I can what I have said constantly, as the right hon. Gentleman and his colleagues know. There is no case for devaluation. It was also made clear by my right hon. Friend the Leader of the Opposition in Washington this week that a unilateral devaluation of the £ would be an antisocial step of the first magnitude. It could have only a damaging effect on world trade.
  I believe very strongly that we must not yield to this temptation. I ask the Chancellor, in all seriousness, to speak to Lord Hailsham about this matter, because we do not want this sort of thing.

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  I must say that the Chancellor will make things extremely difficult if he starts approving such speeches.
  Sir Cyril Osborne: I entirely agree with the hon. Gentleman that the position of sterling ought not to be a party political matter. He puts expansion as priority No. 1, however, Where would he restrict expansion if it started an inflationary process and a risk to sterling?
  Mr. Callaghan: I shall not say any more on that question at the moment. Let the hon. Gentleman ask the Chancellor. I have my own answers, and have written about them. I am ready to go into them again later.
  I believe that the Chancellor has to consider some of the matters which he touched on yesterday, such as getting large backing from the International Monetary Fund. I prefer that to short-term loans across the exchanges from the bankers of Europe. I am sure that is one way to start. He must also be ready to consider the question of import controls.
  There are a number of matters into which I could go. Above all—and this is probably the difference between the hon. Member for Louth (Sir C. Osborne) and me—I think that Britain must have a long-term plan to relate our resources to our capacity and that we must put the efficiency and expansion of our industry side by side and above all else. These should be the major objectives of any Government. They would certainly be the major objectives of a Government from this side of the House. If we did that, we could transform the country in ten years. That is why I am so anxious to hear the right hon. Gentleman tell us the Government's plan to deal with the difficulties when they emerge in consequence of the expansion programme.
  Now I want to turn briefly—because I have already taken up so much time—to the problems of taxation. I think that the reductions the Chancellor has made are in the right places. How could I say anything else? We proposed them. In my corresponding speech to this a year ago, I spent a great deal of time showing, I think for the first time, what effects there have been on the small taxpayer. Our case was widely disbelieved and we had to go through the whole Finance Bill, proving it time and
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  again, before it was recognised as being true.
  I believe that the increases in the old-age exemption limits and the personal allowances are the result of the fact that the Government have at last recognised the truth of the case that the small man has not had a fair deal over the last few years, certainly since 1955. Last night. the Chancellor said en television that his concession was equivalent to a 2 per cent. rise in wages for a man on £800 a year. That was a dangerous figure to use and a dangerous way to proceed.
  After all, a married man with two children on £2 a week or under will get no rise because he gets no relief from taxation. For a man with £13 a week it means a 1 per cent. rise in the Chancellor's terms. What is the Chancellor advising employers to do in wage negotiations? Does he want them to adjust the extent of wage increases to the amount of relief given in tax? I assure him that if ha hopes to have an incomes policy he will run into as much trouble as his predecossor did if he pursues that course. He cannot find the right answer in that direction.
  If the right hon. Gentleman says that it was an illustration which he thought was interesting at that level, then that is all right. But if he 'wants the employers and the unions to take this into account, then he is making a great deal of trouble for himself over the next few months. In agriculture, textiles, clothing, furniture and local government there are many people with well under the average increase of 2 per cent. that is supposed to have come to those people mentioned by the Chancellor.
  Last year, I took a number of figures into account in discussing National Insurance. They were disputed by the Government, but I still stick to the point, which is that it is right, when considering what burdens of taxation are placed upon people, to take account of increases in National Insurance contributions. As a simple illustration, I quote the case of a man on £700 per annum with two children. In 1956–57, he paid £17 6s. in tax and he pays no tax now. But in the same period his National Insurance contributions have gone up by £18 6s. Thus, he is actually paying more. One has to take the whole burden of taxation into account. It is the regressive effect

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  of much of these National Insurance contributions which is setting off any benefits in direct taxation which the Chancellor may be giving.
  For example, a young single person, perhaps in his early twenties, earning £12 a week will pay 1s. 9d. a week less in tax from 4th July, but 1s. 1d. more in National Insurance contributions from 3rd June. He will be 8d. a week better off. That is not a relief which will appeal to him when he takes into account the increase in fares, the worst that Dr. Beeching can do, and so on.
  Where do we get to? The Chancellor says that he has exempted 3¾ million people from paying tax. That is jolly good. We asked him to do it; it is one of the things we pressed. I warmly congratulate him—he has now got back to the number of exemptions which existed during the last days of the Labour Government. Over the last twelve years, the Government have allowed the exemption limit to remain too low, with the consequence that, despite rises in the cost of living, people have been brought into taxation, called upon to bear taxation, which was extremely unjust.
  There are a number of industries which are hard hit by Purchase Tax—furniture, knitwear and others. The Chancellor doubled the taxation of household goods a year ago. Here, as in family allowances, is a case for the Chancellor to consider whether those who do not secure the Income Tax benefits should not have some advantage.
  I am very glad that the Chancellor has picked up and adopted our suggestion for local employment area allowances. His proposals are eminently sensible and none of them is novel. What he has done, very sensibly and wisely, is to dredge the net. He has caught a lot of shrimps. They are useful, and nice eating they will be, I am sure, but to look for anything novel in the Budget would be a futile occupation. However, this is a useful proposal which he has picked up and incorporated in his Budget and which has been put forward on many previous occasions.
  We are bound to agree that more positive action will be needed in Scotland and Wales and the North-East. One of the things which will arise from the new allowance is that people will
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  look much more carefully at the areas which are covered. The definition of the boundaries will mattter a great deal. Some areas which are not in will want to came in. For example, what is to be the position of Cornwall? My hon. Friend the Member for Falmouth and Camborne (Mr. Hayman) is constantly making the case that 70 per cent. of the workers in Cornwall take home less than £10 a week. If we are concerned about the Distribution of Industry Act, this is an area which would justify its inclusion, and its permanent inclusion, in these areas.
  What about the word "permanent"? What will happen to an area if its unemployment falls below a certain level? Will firms which have already started to put in new pieces of machinery find themselves blocked from getting the allowance, or will a new firm which is going, and which is exactly the same as another firm, find that it will not get the allowance although the other firm will? There are many complications about this, and my suggestion to the Chancellor—I will not make it a proposal at this stage—is that local employment areas should be much more widely defined on a regional basis than they now are. If we are to carry out the Distribution of Industry Act properly and get rid of what is happening in London and the South-East, or, at any rate, lessen its effect, we can afford to make regional differences in taxation provisions of this sort.
  We are all glad to hear that the Government are so far overcoming their inhibitions that they are willing to make a loan to Wiggins Teape for a pulp and paper mill near Fort William. Private enterprise cannot do the job and it is left to public enterprise. It is all public enterprise up there, the railways, the hydro-electric schemes, the forests, and so on. But why a loan and on what conditions? I realise that the Government have come only half-way and that we may carry them the whole way yet. I am delighted to see so many of these Socialist notions gradually overtaking the Chancellor of the Exchequer. When can we hope that he will get his courage high enough to insist on having a share in the equity so that the public can share in the profits of this concern instead of getting just a fixed return on the loan?

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  Would the President of the Board of Trade care to give us the answer to that this afternoon? This is a gambling age and although he may say that he does not like gambling, everybody else does. Let him take a shot and take up some equities in Wiggins Teape pulp mill and see whether we cannot get a good return for the public advantage. If not, will he explain his ideological objection to doing some good for the public?
  We shall return to the subject of retraining in the course of the debate. Some of my hon. Friends will want to say a great deal about it.
  I have tried at various times during the last few months to stimulate some intelligent discussion of questions such as taxation reform. We have now reached the "silly season" and it may well be impossible to have much intelligent discussion of these things, because anything that is said will be just picked up and made into party points, and so I suppose that we shall have to wait until after the election.
  This is a great pity, because there is a great deal to be done in taxation, not by taking out one item and saying what needs to be done, but by reforming the whole taxation system. I have a fixed view—which I think is right for Britain in the 1960s—that taxation should be an energiser and not a penaliser, that we should bear less hardly on earnings than we do on capital, that the creation of capital has gone into such particular forms that it is not energising the economy and, in certain ways, may be holding it back.
  I am afraid that discussion of that sort will probably have to await the result of the General Election, because hon. Members opposite are so short of ammunition that they will pick up anything that is said and twist it out of context as much as they can. Indeed, we have passed long since into the arena where we shall have a Government of only two things—bribes and bogies. We had the bribes yesterday afternoon. The bogies will be trotted out as the election period develops.
  4.28 p.m.
  The President of the Board of Trade (Mr. F. J. Erroll): We have listened to a very agreeable speech from the hon. Member for Cardiff, South-East (Mr. Callaghan). In his more light-hearted
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  moments I thought that he was on his way to becoming a kind of one-man "That Was The Week That Was". Certainly, his style owes a good deal to David Frost in his better moments. Many of the things that he said in his more serious moments had been answered by my right hon. Friend the Chancellor of the Exchequer in his Budget statement yesterday, and I hope that during the course of my own speech I will be able to deal with some, if not all, of the matters which the hon. Member raised.
  As the Committee knows, it is customary for the President of the Board of Trade to open for the Government on the second day of the Budget debate, because it is a debate not only on the Budget but on the economic situation. The Committee usually likes to hear about economic matters from the point of view of the Board of Trade.
  There is one fact of which I remind the Committee and which we are apt to take for granted in this country. It is that in many countries there are two separate departments for industry and commerce, one dealing with domestic matters and the other with foreign or external trade. In Britain, the two interests are combined in one department, the Board of Trade, for the very good reason that our national prosperity is so dependent on world trade and on our success in the world and, conversely, that we can succeed in world trade only if our domestic industries are modern, efficient and competitive. I intend, therefore, to tell the Committee what the Government are doing to help these objectives at home and I shall then have something to say about our commercial prospects overseas. I shall deal, in particular, with exports, as the hon. Member invited me to do.
  At home our objective is sound growth, based on the full and efficient use of resources, and a strong balance of payments, derived from commercial success throughout the world, in the broadest sense of the term. Expansion, and its possible consequences, to which the hon. Member referred, were very fully dealt with by my right bon, Friend in his Budget statement yesterday, so I will not go over that ground again. The Budget will contribute to sound growth twice over—directly, through the changes in taxation, and indirectly, by creating greater business confidence. Businessmen

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  can plan ahead, knowing that the Government will do their part to achieve the steady expansion of the economy and the fulfilment of the broad objectives of the N.E.D.C. programme.
  The changes in taxation and the other measures which my right hon. Friend announced yesterday, will provide a firm base for a sustained increase in national output. They follow and supplement the wide range of measures which the Government have taken in recent months both to strengthen the competitive position of British industry and improve the efficiency of the economy generally.
  These measures include the improved allowances for investment and research which the Chancellor announced last November. They cover all that we are doing to modernise the roads and railways, the ports, and other basic services on which the economy relies. They also deal with the human problems, and in particular the new arrangements for handling the problems of industrial training and redundancy which are so often brought about by the very growth and change we know to be necessary, and which will be discussed fully in the Committee on Monday.
  One of the most important things to do is to get a more even spread of economic growth throughout the various regions of the country. In this way we shall grow faster and more surely. The Chancellor yesterday announced measures to help the regions with special economic problems, and these are a central feature of our plans. I will now explain them in rather more detail.
  As the Committee knows, Parliament has given the Board of Trade the responsibility for what is described in the Act as
  "the proper distribution of industry"
  over the country as a whole, and the further responsibility for promoting employment within the development districts and providing special financial inducements to that end.
  Mr. Walter Monslow: Inasmuch as development districts have a percentage unemployment figure of about 5 per cent., although my own area has a figure of approximately 6 per cent., do I understand that, nevertheless, it will have to come within the
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  ambit of a development district before it is entitled to have the allowance which has been proposed for the purpose of creating further employment?
  Mr. Erroll: I know that the situation in Barrow is a difficult one. My hon. Friend the Parliamentary Secretary and are watching it very carefully.
  Several Hon. Members Several Hon. Members rose—
  Mr. Erroll: I am sorry, but I cannot give way. I must continue with the theme of my speech and not get into a discussion of a series of constituency points. If hon. Members are raising the same point there is no need for me to listen to it a second time.
  Briefly, my task is to ensure that prosperous industries, whether in development districts or in the Midlands and the South, continue to prosper. I must, at the same time, insist that growing industries in the more fortunate areas contribute a substantial part of their growth to the development districts.
  Although many of the development districts are places where industry first became established, they are far from being the blighted areas which were so exaggeratedly depicted in the Press and on the radio during the winter, when there was so much loose talk about the so-called "Two nations" concept. In these areas the existing industries are already being modernised, and new dynamic growth industries are being introduced. At the same time, new factories, houses and schools are being 'provided, and communications are being improved.
  I would like the Committee to have this concept of a development district. It is a place where firms—those already established and newcomers alike—receive special benefits to assist their development and growth. At times, we in Parliament have been apt to think that the provision of new jobs in development districts depends mainly upon the entry of firms from outside. This contribution by new entrants, although essential, is far from being the whole story. I want to correct this impression, because the expansion of industry already in these districts contributes, in practice, a great deal towards the provision of extra jobs. A study recently made by my Department showed that in the five years from 1958 to 1962, inclusive, half

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  the jobs arising from approved industrial developments in the development districts came from expansions of companies already in those districts. This gives the lie to those—some of them industrialists—who say that by setting up in a development district an enterprise will not prosper and grow.
  The point is well illustrated by this year's experience on Merseyside. Since Merseyside again became eligible, on 21st January, for financial assistance under the Local Employment Act, we have received 27 applications for assistance. Of these, no less than 20 were for local expansions. Movement is important, and the time to bring it about is when a firm in a prosperous or congested area is ready to expand its premises, or to modernise in such a way that some rebuilding is necessary. This is where my power to refuse an I.D.C. is so important and also so effective.
  I am often told, both here and outside the House, that I ought to follow a tough I.D.C. policy. I can assure the Committee that I do this very thing. No I.D.C. is granted for any project which, in the opinion of the Board of Trade, could be moved to a development district. If hon. Members are in any doubt about this they should consult industrialists in the Midlands and the South. They will soon learn from them how tough the policy is.
  Mr. Douglas Jay: Since the right hon. Gentleman has made that protestation, has he noticed that the Ford Motor Company is proposing a large expansion in Basildon? Will he direct his attention to that?
  Mr. Erroll: I am aware of the Ford case. I do not want to detain the Committee on this point, but I must point out that it does not represent an expansion; it is largely a bringing together of existing facilities, and it will be within the jobs ceiling agreed with the Ford Motor Company at the time of its big move to Halewood.
  Mr. Jay: The right hon. Gentleman will have noticed that according to the Ford Company this will involve between 2,000 and 3,000 people in Basildon.
  Mr. Erroll: I accept that, but it is within the jobs ceiling already agreed with the company for that part of the country.
  Mr. Godfrey Lagden: is it within my right hon. Friend's knowledge that these will be technicians and not ordinary working people? It is technical building and not a factory that is referred to.
  Mr. Erroll: Yes. I appreciate that it is a building of that nature, but a large part will still require an industrial development certificate.
  In some cases a firm refuses to reorganise in such a way as to place part or all of its expansion in a development district and prefers to carry on in its existing cramped and perhaps old-fashioned premises. But this occurs in a minority of cases, because of the work of my officials who meet the representatives of these firms. Thanks to the patient, careful and understanding work of those officials, many firms do move part of their production to development districts, and in the end they are usually very glad that they did so.
  I intend to continue this tough policy, and I shall not grant a certificate for any project which could reasonably be expected to go to a development district.
  Mr. William Warbey: The right hon. Gentleman is announcing a very important point of principle. He seems to be working upon the assumption that the country can be entirely divided into two halves—areas of high unemployment and areas of low unemployment. But this is not the case. There are very important intermediate areas where there is—
  The Chairman: Order. If the right hon. Gentleman sits down it is in order for an hon. Member to ask a question, but it is not in order for him to make what amounts to a speech.
  Mr. Erroll: I think that—
  Mr. Warbey Mr. Warbey rose—
  Mr. Erroll: I think that the Committee knows that I am very willing to give way when points are raised by hon. Members. But I have a long speech to give and some news to announce, and I feel that I must continue, as I have already given way to a number of hon. Members. I think that I am aware of the point which the hon. Member for Ashfield (Mr. Warbey) wishes to make.
  Mr. Warbey Mr. Warbey rose—
  Hon. Members: Sit down.
  Mr. Erroll: I think that the hon. Member for Ashfield is being very unreasonable, in view of the number of times that I have given way already. I should like to try to deal with his point, of which I think I am aware. It is that there are areas which are neither one nor the other. There are a good number of developments which cannot be moved to a development district. For these, industrial development certificates are granted, and many of those developments are in areas of the type which the hon. Gentleman has just suggested.
  I wish now to refer to what my right hon. Friend the Chancellor told the Committee yesterday about the standard benefits we are proposing to introduce for new plant and new factories or extensions. I should like to say straight away that the Local Employment Act has proved to be an effective means of encouraging the introduction and expansion of industry in the development districts, thus providing much-needed employment there. In the first three years' operation of the Act, the Board of Trade has undertaken to provide total assistance of £81 million—£29 million by way of providing Board of Trade factories and £52 million in the form of financial assistance. The projects that we have so assisted are estimated to provide about 90,000 new jobs.
  Our assistance has gone to large projects and small in development districts throughout the country. In short, we have achieved encouraging successes under the Local Employment Act. We now want to improve the Act still further. Hitherto, the benefits have been entirely tailor-made, to suit the circumstances of the individual project. Some firms would prefer fixed rates, known in advance, which would simplify their planning. This should prove particularly attractive also to overseas firms who may be thinking of setting up in Britain.
  What we now propose is to make the building grant a flat 25 per cent. of the actual cost. Under the present system it is necessary to make a separate computation for each new building or extension and the size of the grant has varied with local values. On average, it has worked out at 17 per cent. of the actual cost. Under the new flat-rate scheme we shall reckon in the cost of the building the
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  provision of any essential services, and such things as special foundations for heavy plant.
  The grant will be subject only to the exclusion of items which are so lavish that they ought not to be contributed to out of taxpayers' money. Broadly, the cost will include the building itself and any permanent fixtures that are reasonably required for the purposes for which the building is intended. I hope that this new grant will encourage industrialists to build their own factories and not just rent factories from us.
  Mr. Jay: Will this require legislation?
  Mr. Erroll: Yes.
  Now a word about plant and machinery. Hitherto, Board of Trade Advisory Committee loans have been the only means by which we could help with the cost of plant and machinery. We want to go further than this. I am proposing that a grant should be made of 10 per cent. of the cost of plant and machinery installed in industrial undertakings, provided that employment is likely to arise for the benefit of the development district as a result. I intend by administrative action to exclude certain things which, by being readily movable outside development districts, could frustrate the intention of this grant. As an illustration, I have in mind lorries and certain types of office machinery, such as typewriters.
  The statutory obligation to consult B.O.T.A.C. about the viability of the project before making a building grant will continue. But I do not propose that there should be a similar obligation for the grant on plant and machinery. I propose, however, in administering this new grant to consult B.O.T.A.C. on the larger cases, and on those where we are in any doubt about the position of the company seeking a grant. These grants will not replace the other benefits of the Local Employment Act, which will continue. For instance, B.O.T.A.C. loans and grants under Section 4 of the Act will still be available when the Committee recommends them. But when assessing need the Committee will of course take into account that fixed grants will be payable.
  In view of the criticism of B.O.T.A.C., I should like to take the opportunity to pay a tribute to the work of B.O.T.A.C. which, over three years, has considered

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  no fewer than 600 applications and recommended assistance for about half of them. The fact that we have bad some bad debts shows that the Committee has taken some risks within the spirit of the Act. In general, it has secured an admirable balance between the needs of the development districts and proper safeguards for public expenditure. In any case we do not want "dud shows" going to development districts. We want them to be good ones, with a fair prospect of success.
  To give effect to these proposals, a Bill will be introduced as soon as possible. In the Bill I am making provision for these new benefits to be available with effect from 3rd April—yesterday. The grant on plant and machinery will apply to expenditure incurred on or after that date. Regarding building grants, while offers made before 3rd April will not be affected, applications now under consideration or received from now on will be dealt with under the new provisions.
  Mr. Jay: Presumably these new concessions will be available for firms in the areas as well as firms moving in from outside? Can the right hon. Gentleman say whether agriculture is included both in this and in the depreciation allowances announced by the Chancellor yesterday?
  Mr. Erroll: Firms already in the development districts will qualify equally with new entrants. I should like to study the point about agriculture rather than give an "off-the-cuff" answer.
  These new standard benefits, in common with the existing financial inducements of the Local Employment Act, will be linked with the general policy of the Act, that is, the projects concerned must create employment. In the case of plant and machinery, for example, the grant under the new Bill will not be available for simple replacement. We shall have to put a ceiling, as we do at present, on the total assistance available under the Act for individual projects where the cost to public funds is too high in relation to the number of jobs to be provided. But we shall ensure that, with the exception of projects which are obviously capital intensive, any ceiling that we put on an individual case will be high enough to accommodate these new standard benefits. In the majority
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  of cases there will also be room for B.O.T.A.C. loans and grants available under Section 4 of the present Act.
  As the Committee will remember, yesterday my right hon. Friend announced that industrial firms in development districts will be able to write off for tax purposes the cost of new fixed plant and machinery at the rate of their own choosing—free depreciation, he called it. This facility will be available for replacement and modernisation and, unlike the new standard grants under the Local Employment Act, will not be related to the provision of employment.
  Mr. William Baxter: Will buildings come under the free depreciation provisions?
  Mr. Erroll: No. The free depreciation provisions relate solely to plant and machinery and not to buildings which will come under the new increased depreciation rate also announced yesterday by my right hon. Friend.
  The combination of these new types of benefits should be a powerful aid to further growth in development districts.
  Dr. Jeremy Bray: May I ask whether the right hon. Gentleman has considered to what extent these depreciation provisions will reduce employment in development districts?
  Mr. Erroll: Well, it can, of course, be argued that when a firm modernises it may reduce employment. But the fact is that where the modern industries are we usually find there is the greatest prosperity and usually the highest level of employment.
  Mr. Douglas Marshall: I wish to make certain about one thing. Where a firm goes to a development district, and it is a question of building a factory and providing machinery, is the land also included?
  Mr. Erroll: The grant relates to the building and the free depreciation relates to the machinery and, of course, the machinery grant also relates to the machinery. The land must be considered separately. The combination of these two new types of benefit should be a powerful aid to further growth in development districts. The development district thus becomes a locality in which special fiscal reliefs and predictable cash grants are available to existing and new industry.
  Mr. H. Rhodes Mr. H. Rhodes(Ashton-under-Lyne)
  rose—
  Mr. Erroll: I am sorry. I cannot give way again as I have given way so much.
  The Committee may well ask: how does all this look to the industrialist in, say, Birmingham? I think that the industrialist in a prosperous or any other area first looks at the cash outlay in relation to the expected return. What will be the difference between his expanding in Birmingham, provided that he could get an I.D.C. to do so, as compared with a development district?
  I have worked out a straightforward hypothetical case which the Committee might look at, taking a project costing £1 million of which £250,000 is for buildings, £450,000 for plant and £300,000 for working capital. That is a typical proportion in present circumstances. Assume that the business is already earning profits sufficient to enable it to use in one year all the tax allowances available under free depreciation and that the management decides to do so. In a development district the grants available as standard benefits would amount to about £100,000 and the first year tax saving to about £300,000.
  If the project were not in a development district there would be no standard benefits and the tax saving would be about £160,000. So, in a development district the Government will be contributing by these combined benefits nearly 60 per cent. of the cost of the building and plant as compared with less than 25 per cent. elsewhere. Moreover, if the project were in a development district, the company might be able to finance some of the rest of the cost, including working capital, from funds borrowed from the Board of Trade.
  Of course, the advantage in the development district would be reduced in subsequent years, but the company would have the benefit of the use of the capital released by the earlier granting of tax allowances as a result of free depreciation and by the standard benefits. So that hon. Members may be able to see the full computation, which I have no time to set out here—it runs into three foolscap pages—I am having a copy placed in the Library and I can send copies individually to hon. Members who ask me to do so.
  Mr. Eric Lubbock Mr. Eric Lubbock(Orpington)
  rose—
  Mr. Erroll: No, I cannot give way again.
  If our measures succeed, as I am confident they will, then a development district will not remain a development district for ever. We shall deschedule in the future just as we have in the past. On descheduling, the standard benefits and other benefits under the 1960 Act will no longer be available. Perhaps even more important, free depreciation will no longer be available either for expenditure undertaken thereafter. Prudent industrialists, I suggest, will have this in mind when making their plans.
  We must look to industrialists to make full use of these improved facilities and so bring more work to the development districts, but I am not going to sit back and wait for them to read HANSARD, still less for them to apply for an I.D.C. and be refused. Starting on Monday next, I shall be inviting the chairmen of leading companies with growth prospects to discuss with us at the Board of Trade the possibility of their establishing new projects in the development districts of Britain and in Northern Ireland.
  I am proposing to start this series of meetings before the end of this month and during the next two months we hope to meet the chairmen of over 100 major companies. In this way we shall seek to impress upon an important section of industry the many advantages to be gained from taking work to these areas.
  At this point, I wish to refer to the advance factories which the Board of Trade are building in a number of development districts. We have encouraged firms to go to development districts by providing Government factories and by giving financial assistance. Many industrialists want factories built to suit their particular requirements. We are always willing to consider building in the development districts for such firms. Other firms prefer to set up in standard factories all ready for occupation. At the moment, we have a programme of 19 of these so-called advance factories in England, Scotland and Wales. They are of various sizes up to 50,0000 sq. ft. and all are to be completed this year. We have no tenants yet, but there have been many inquiries so far.

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  We have also in hand a substantial programme of clearance and development work on our industrial estates which will make them more attractive and provide more sites ready for building. In addition to all this, we are planning a further programme of advance factories to follow on after the present one. This will comprise another 11 factories, all fairly small but of a size which should attract expanding firms. These factories will be planned for completion in the second half of next year. I hope to give the Committee or the House further details shortly.
  I shall now say a word or two about Wiggins, Teape and Company. As my right hon. Friend announced yesterday, there is one project which will require special legislation—the proposed new pulp and paper mill at Fort William. A Bill is being introduced today to empower the Board of Trade to make loans to the company for this purpose up to a total not exceeding £10 million, representing about half the total cost. The great contribution of this project will be to provide a new point of lively and developing industrial activity in the West Highlands. It will take advantage of local supplies of timber. It will create in the forests and in transport even more jobs than those created directly in the mill itself. The site for the mill has been chosen as being the most advantageous possible from the point of view of timber and water supplies and of transport.
  The United Kingdom paper industry has been at some economic disadvantage compared with its competitors in the forest countries which have been able to operate fully integrated mills based on indigenous supplies of timber. For the Fort William project the timber is there in the Scottish forests, both those owned by the Forestry Commission and by private interests, and the supplies will be expanding steadily over the next few years. This project aims to use these forest resources in a way not previously possible in this country. To help the flow of material to the mill, the Forestry Commission will accelerate its programme for the construction and improvement of its forest roads within the area of supply.
  It is, however, in some ways a pilot undertaking for our paper industry. Nothing on these lines and of this scale has been done in Scotland before. It is also
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  a very large undertaking. To be efficient and competitive a mill of this kind must be very large and, inevitably, it takes a very considerable time to erect and bring into production. We have satisfied ourselves that the company could not find the finance for such a novel, large-scale and long-term project entirely from normal resources. In the special circumstances we are satisfied that there is a very strong case for a Government loan to get the project off the ground.
  Hon. Members interested in the method of financing—by equity as distinct from loan capital—would perhaps prefer to wait to debate the matter on the Second Reading of the Bill which, I understand, will be on Wednesday next, so I shall not deal more fully with the subject at the moment—
  Mr. Jay: Why does it need legislation? Why could it not be done through B.O.T.A.C., like other schemes?
  Mr. Erroll: There are a number of reasons for that. One is that the mill itself would not provide sufficient employment to qualify for facilities under the Local Employment Act to see the project through. On the other hand, if we get the project going it will provide a great deal of employment in the forests and ancillary transport industries. This point can be fully developed on the Second Reading of the Bill. If we could have done this under the Local Employment Act, we would have done so. I am sure that the Committee will endorse the Government's action in assisting a project which is calculated to have an invigorating and permanent effect on the economy of the Highlands.
  I turn to world trade. As I said when began, Britain's economic growth depends on the success of our export trade. We cannot achieve the high rate of growth which we need unless we step up very considerably the rate of growth of exports. We need to ensure that British industry is fully competitive and we need a steadily rising volume of international trade on which to base the growth of our own exports.
  The hon. Gentleman asked me to refer to exports in 1962. I am very glad to tell him how our exports fared last year. In the first half of 1962 our exports rose sharply. By the autumn they were 5 per cent. higher than at the end of the previous year. In October they stood at

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  a higher figure than they had ever been before, £336 million on a seasonally adjusted basis. It is quite true that since then this increase has not been sustained, as I and other observers had expected that it might be. This was due to a marked slow down in the growth of world trade and production, especially in Europe, and not to any weakening of British industry's competitive position.
  I believe that just now British exports are, in general, particularly competitive. It is important, that they should be, particularly since world trade is not expanding at the moment as fast as we should like. But we shall lose all too easily any advantage that we may have gained through the more rapid rise of some of our competitors' costs unless we are successful in preventing the rise in domestic incomes from outstripping the growth of productivity. Our export performance will, of course, depend to a large extent on the course of world trade, and there are uncertainties about the pace of its expansion this year. I have in mind particularly the great industrial centres of Western Europe and the United States, whose economic well-being is so important for much of the world.
  In the United States the authorities are concerned about the sluggishness of the economy and the level of unemployment. The encouraging thing is the vigour with which President Kennedy is tackling these problems, and I hope very much that the measures which the Administration propose meet with success. There are also some problems on the Continent. I am glad to see that the forecasts of the European Economic Commission indicate a reasonably satisfactory pace of expansion this year. These forecasts are themselves based on the assumption that there will be no adverse influences from outside the Community, and this, I think, serves to underline the great degree of economic and financial interdependence throughout the free world which exists today and the paramount importance for Britain that world production and world trade should continue to expand.
  Mr. Lubbock: Will the right hon. Gentleman give the figures for the E.E.C. and the United States, so that we can compare them with our own targets?
  Mr. Erroll: I have some figures relating to our own exports to various parts of the world, which I should be glad to give, but if the hon. Gentleman wishes to have figures of those countries' exports I suggest that he should put down a Question, which I will do my best to answer.
  I now have something to say about several of our most important markets, of particular interest at the present time. First, Europe. We were, of course, greatly disappointed at the breakdown at Brussels, but this breakdown is really a challenge to us to pursue, even more energetically than hitherto, a trade policy aimed at the general expansion of world trade. It is fortunate that the Kennedy round of tariff negotiations now provides a great opportunity for progress in this direction, which we for our part are determined to do all we can to exploit.
  We have repeatedly made it plain that we have no intention of turning our backs on Europe. We hope to keep closely in touch with the European Economic Community. We want to avoid developments of policy which would damage each other's interests, or increase those differences between us which might make future membership more difficult; and we have good reason to know that most of the members of the Community share these objectives with us. We shall improve our relations by more frequent bilateral discussions with member countries, by strengthening our Permanent Delegation in Brussels and, where possible, through our common membership of the O.E.C.D.
  Our exports to the member countries of the Community have grown dramatically during the last three years, from over £520 million, or 15 per cent. of our total world exports in 1960, to £720 million, or 19 per cent., in 1962. This shows that determined salesmanship can surmount the obstacle of tariff disadvantages. If, as we expect, economic expansion within the Community continues, there will be ample scope for developing this great market still further. I see no reasons, therefore, why our trade with Europe should not continue to expand.
  Turning now to E.F.T.A., £517 million, or over 14 per cent., of our total exports go to the E.F.T.A. countries. These

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  countries constitute rapidly expanding markets for our goods. Between 1960 and 1962 our exports to them showed an increase of just over 20 per cent. and all member countries, including ourselves, of course, should achieve further substantial benefits as the tariff barriers continue to come down. We and our partners are urgently studying the possibility of speeding up that process.
  At the February meeting in Geneva of E.F.T.A.'s Ministerial Council it was agreed that a programme should be worked out by the permanent representatives for eliminating all the tariffs in the course of 1966. Ministers will consider this programme when we meet again, at Lisbon in May, and in the meantime there will be further discussions on other aspects of the E.F.T.A. arrangements.
  Now a word about trade with the Commonwealth, which remains of the greatest importance, although its makeup is changing all the time. There will be a meeting of Commonwealth Trade Ministers in London, to begin on Monday, 13th May. Commonwealth Governments welcome this initiative. The meeting will take place shortly before the G.A.T.T. conference in Geneva, due to start on 16th May. The G.A.T.T. conference could be of the greatest value to all Commonwealth countries in promoting the expansion which we hope to see in international trade over the next few years.
  In our talks with the Commonwealth Trade Ministers we shall also take the opportunity to discuss ways and means of expanding our trade with other Commonwealth countries to our mutual advantage. We must recognise, of course, that there are limits to what Governments can do in this way. Other Commonwealth countries already enjoy unrestricted duty-free access for nearly all their exports to the British market and we already receive, in many Commonwealth markets, valuable tariff preferences.
  Mr. McEwen, the Australian Deputy Prime Minister and Minister for Trade, will be in London a few days earlier for preliminary discussions about the future of the Anglo-Australian Trade Agreement. Whatever happens elsewhere, the Commonwealth will continue to be a major customer of ours, and a major supplier.
  Mr. Callaghan: Will the right hon. Gentleman consider putting on the agenda of the Commonwealth Trade Ministers' conference a discussion on G.A.T.T. and its effectiveness today, and how far, as an instrument, it meets the needs of the Commonwealth at the present time?
  Mr. Erroll: I should be very glad to consider the hon. Gentleman's suggestion and to see what can be done about it. But I am sure that he will not expect me to say more than that just now.
  Many opportunities for increasing our trade in Commonwealth countries exist, but they are mainly in the field of what I may call ordinary commercial endeavour. The Government will continue to give every support to British exporters in this field, and we are doing a great deal, particularly in Australia. I think that it might interest the Committee to know what we are doing to help there. We have, for example, recently launched a major exports promotion campaign in Australia in collaboration with the Federation of British Industries and the Australian Association of British Manufacturers. The campaign opened last month with a highly successful British Pavilion at the Melbourne Trade Fair, which was by far the largest national exhibit in the show.
  British Trade Weeks will be held in various Australian cities this year and next. The climax of the campaign will be the British Exhibition in Sydney in the autumn of 1964. This will probably be the most important of its kind which Britain has ever organised overseas.
  I have a particular point to make to the Committee about India and Pakistan. Up to now, E.C.G.D. has not been authorised to guarantee a longer period than five years' commercial credit for exports to India and Pakistan, because of the long-term aid that we have been giving to these countries. This has impeded the traditional trade, in a valued market, of some of our exporters, including those in industries with surplus capacity which could well be used. I am glad to say that we are prepared, in present circumstances, and in the special case of India and Pakistan, for E.C.G.D. now to give longer-term cover for selected cases, on lines similar to the existing matching and financial guarantee schemes.

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  I want to say a brief word about Japan, because I am sure that the Committee will be glad to know that the Commercial Treaty which we concluded last November has today been ratified in Tokyo during the Foreign Secretary's visit there. It will come into force on 4th May. The Treaty will put commercial relations between the two countries on a settled basis. I hope that our exporters will take full advantage of this, because Japan has a rapidly expanding industrial economy starting from a much lower level than ours—a point the Opposition very rarely make—and still has a long way to go before it catches up with our high standards. Most of the market is now open to imports. I hope to see the expansion of orderly trade in both directions.
  Mr. Julian Snow: By the right hon. Gentleman's remark about Japan and its much lower standard, is he not running into the danger of giving a false impression, in the sense that Japan's wage levels, including all benefits, are now beginning to equate to those of the lowest element in Western Europe? Therefore, the danger is decreasing from the point of view of competition.
  Mr. Erroll: I agree that the danger is decreasing, but it serves in part to explain—one cannot go into the whole of the Japanese economy in a debate like this—why the percentage increase seems to be so dramatic compared with our own.
  I cannot do justice to the great United States market in the course of a speech of this sort, but I must point out to the Committee that at present this immense market takes only 8 per cent. of our exports, although it is still our largest single market. I am convinced, particularly from my recent visit to Washington and New York, that there is great scope for a big expansion of our sales there, and I hope that British industrialists will pay special attention to it so that we may have a really concentrated effort there to improve our export performance.
  Before leaving what I may call the geographical part of what I have been saying, I should like to say a few words about East-West trade, because this is so very much a subject of discussion at the
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  present time. I believe that the Committee would be making a mistake to suppose that our export problem can be solved simply by selling more to Russia, Eastern Europe and China. These countries certainly offer an important market for our exports of capital goods, a particularly valuable export because of their high content of skill and "know-how". Strategic goods apart, we shall do our utmost to promote sales to the bloc countries. In this connection, I was very glad to welcome Mr. Lu, the Chinese Vice-Minister for Foreign Trade, when he arrived in Britain a few days ago.
  The practical limitation on this trade is the capacity of the bloc countries to pay for their purchases. Clearly, there is no point in giving our goods away or extending excessively long credits, which after all have to be paid off sooner or later. Even so, our sales to the Soviet bloc have been increasing steadily, from £45 million in 1958 to £110 million last year. I have no doubt that it will continue to devlop. However, at present the Soviet bloc takes no more than 3 per cent. of our total exports. Even a doubling of this figure would not solve our export problem. Further, the other countries would have greatly to increase their earnings of sterling, which would be a formidable task for them.
  In his speech yesterday my right hon. Friend the Chancellor of the Exchequer referred to the question of export incentives. I think that I ought to say a few words about this, because there is now, as there has been in the past, a choice between only two possible policies. Either we can go all out to increase exports by subsidies and by special tax reliefs, realising that others will do the same, or we can seek to have such export incentives outlawed internationally.
  The Government have been guided in this not by theory, but by our own national interest. We rely more heavily on overseas trade than do most countries and, if we were to enter an export incentives race, we would stand to lose as against other countries with a lesser stake in exports, because they could afford bigger incentives. We believe that Britain would be a certain loser in an incentives race, so we do not intend to start one up. Our policy is, indeed, just the opposite. It is to secure

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  international agreement prohibiting such incentives and it is now bearing fruit.
  The G.A.T.T. Declaration on this subject came into force last November, by when 16 countries, including most of the major industrial countries, had agreed to give up subsidy and direct tax relief as export incentives. Japan has also now agreed to come into line. Our international agreements, therefore, are not standing in our way. They are helping us to secure a world free of such artificial aids to exports.
  Mr. Warbey: What about Eire?
  Mr. Erroll: Eire has one or two small export incentives, but she is not a member of the G.A.T.T.
  Our agreements do not, of course, affect reliefs from internal indirect taxes, like Purchase Tax.
  Since tax incentives and subsidies for exporters are ruled out, the Committee may ask me: what incentive is there to export? The most important incentive is that our prices should continue to be competitive in world markets. This the Government are determined to ensure, as my right hon. Friend explained to the Committee yesterday.
  The other incentive is self-interest. The biggest firms in this country must secure a large volume of export sales in addition to home orders if they are to maintain an economic through-put in their factories. Medium and small-sized firms, which are so frequently said to be content with the sheltered home market, are increasingly finding that they cannot expand their share of it because of domestic competition. Their only hope of expansion, therefore, lies in going into export markets.
  Further, as tariffs come down so will the home market become less protected and therefore less "safe", as it is called, and should not be solely relied upon. Then there are the vast multitude of small firms. Many of them are making components and assemblies, and they already see their products exported in the finished goods of direct exporters.
  All this is well understood by British industry, and I believe that the majority of British firms, capable of exporting, neither seek nor require further incentives of the type so frequently canvassed. I have studied with care all the argu-
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  ments in recent months over the advantages and disadvantages of a value added tax. Its effectiveness as an export incentive is, in my view, very much subject to doubt, and it cannot be judged solely with this in mind. I was very interested in what the hon. Member for Cardiff, South-East said on this subject today. I am glad that my right hon. Friend has decided to ask Mr. Gordon Richardson to preside over a group which will make a special study of this complicated matter, of which the question of an export incentive is only one aspect.
  Nevertheless, although the Government are not prepared to make a move in the direction of subsidies or export incentives of that sort, there is a great deal of help which we can and do provide in other directions. The Government pride themselves on their services for exporters, and rightly so. Certainly, they are the envy of those businessmen in other countries with whom I have talked from time to time on my own travels abroad. I am glad to see the hon. Member for Lichfield and Tam-worth (Mr. Snow) nodding in agreement. But that is not to say that we are complacent about them. I am always delighted to hear constructive suggestions about how we can improve them even more. From time to time hon. Members write very helpful and useful letters to me on this subject.
  I particularly want to mention what we are doing in the matter of trade fairs, because the past year has seen a big expansion in the Board of Trade's participation in trade fairs, both on our own account and in co-operation with British industry. The score in 1962 was 46, from Amsterdam to Osaka, and the goods shown ranged from garden plants to prefabricated buildings. In 1963, 37 have been arranged so far, with eight months of the year still to go.
  Both the Western Hemisphere Export Council and the Export Council for Europe are playing a leading part in "British Weeks" and British store promotions. I would like to pay a tribute to their invaluable work on export promotion generally. Along with the newly-formed Council for Middle East Trade, which is just getting into its stride, they play a very special and important role in our export effort. I must also say

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  a special word about the personal contribution of the Lord Mayor of London, who has made "exports" the theme of his year of office. It is a very apt theme for the holder of this great traditional office at the heart of the commercial and financial life of this country.
  I turn to another support of the exporter—[HON. MEMBERS: "Oh."] I was asked to deal with exports, so I am dealing with them—the Export Credits Guarantee Department. Two years ago we introduced some significant developments. We introduced E.C.G.D's new financial guarantees, putting our industries in a position to undertake large projects overseas on long credit with the necessary long-term finance assured. Projects worth £45 million have so far been covered, and a further £82 million worth are under active negotiation now. We also made this new facility available for large ships and it has proved helpful to our shipbuilders, covering £6½ million, with a further £60 million under negotiation.
  At the other end of the scale we introduced the Small Exporter Guarantee, a way of encouraging and assisting export "beginners" and also of demonstrating E.C.G.D. facilities to them in a simple way. At the same time, in April, 1961, we made a substantial reduction in premium rates by 20 per cent. overall.
  Since those changes of two years ago—and we have made a number of others—last year the full percentage facility was introduced whereby trouble-free contracts which have run two years from completion can enjoy, without extra charge, a full 100 per cent. insurance cover. At the beginning of this year we announced, in respect of short-term business, the grouping—this is an extremely technical and specialised matter and I must get it right—under a single premium rate of the various lengths of short-term credit—credit up to six months—that is, 30 days. 60 days, and up to six months. This change not only gives a useful simplification of procedure, but provides also a cash benefit equivalent to an average reduction of premium of 8 per cent. on no less than four-fifths of our turnover.
  The several premium reductions I have already mentioned have, of course,
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  had their impact on receipts and have lessened the scope for further concessions. Nevertheless, the volume of business has increased, revenues remain buoyant and the accumulated reserve from past transactions has continued to grow, further reinforced as it has been by the interest credited on it in its Commercial Account. The E.C.G.D. Advisory Council has considered the position and has taken all these factors into its calculations.
  I can now announce—and I have kept this item of news until the end—that the Department will be making a further reduction of 10 per cent. in its charges for insuring export risks. This reduction will be effective immediately for all business transacted from the beginning of this month and the Department will be sending new premium schedules this month to all holders of comprehensive guarantees so that they can apply the new rates to their April business. This reduction will lower still further the costs of exporting and will, I hope, induce still more exporters to make use of the E.C.G.D. facilities.
  Apart from credit insurance, industry needs to secure finance for exports on the best terms. The facilities available in the City and through the banks are, perhaps, not as well known as they might be, and the Minister of State is studying ways of making this information more widely known. As regards the cost of such finance, I look to the financial institutions to respond to the lead we have given in reducing E.C.G.D. rates.
  I have been able to touch on only some of the aspects of Government policy.
  Mr. Callaghan: Before the right hon. Gentleman leaves the question of exports, may I say that we shall want to study what he has said, but, in the meantime, can he tell us what increased target of exports he is hoping for as a result of his announcement?
  Mr. Erroll: I am not in a position to commit myself to a target at present, because I know that I would only be giving the hon. Gentleman a hostage to fortune; and I do not intend to do that.
  Mr. Callaghan: The National Economic Development Council has announced a target of growth of 4 per cent., which the Chancellor of the Exchequer has said he accepts. N.E.D.C. also says

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  that to secure that target we will need an increase of 5 per cent. in our exports. In view of this, it seems fair to ask the President of the Board of Trade whether the Government expect to get a 5 per cent. increase in exports this year?
  Mr. Erroll: I would like to put it the other way and say that if we fail to reach a target of 5 per cent. then we will not have the other growth figure of 4 per cent.
  As I say, I have been able to touch upon only some of the aspects of Government policy affecting our domestic economic activities and our overseas trading position which are so relevant to the Chancellor's Budget proposals. In summing up, I submit that we are in no sense complacent about our achievements or about the prospects in the year ahead. It will be a testing year and the aims we have set ourselves will not be achieved without resolute action, not only by the Government but by all sections of society.
  The Budget proposals and the further measures which I have outlined present a twofold challenge to industry to bring prosperity to the development districts, particularly in Northern England and Scotland, and to win the increase in the country's export earnings that we must have for our economy to grow, as it can and should. The Government are doing their part and I believe that we can go forward confident that industry will respond to the opportunities of the year ahead.
  5.26 p.m.
  Mr. H. Rhodes: I am always somewhat shocked when I am called upon to speak, and even after all these years I still get the jitters.
  The right hon. Gentleman the President of the Board of Trade spoke about the development districts. Were it not for the fact that I have spent several months on the Estimates Committee—where this matter has been considered—I would have taken what the right hon. Gentleman said on its face value. Knowing what I do, I cannot do that because right up till the last bit of evidence we received, and that was only about a month ago, the Board of Trade estimated that it would have spent about £81 million from 1st April, 1960, to 31st January, 1963, and would thereby have provided about 90,000 jobs.
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  I say this because up to a month ago neither the Board of Trade nor the Treasury knew whether or not a single job had been provided. The reason for this is the weakness of the Local Employment Act and the fact that accountability is not called for regarding the number of jobs provided for the amount of money spent. I challenge the President of the Board of Trade to get to his feet and say, now that the Act has been in operation for nearly three years, how many jobs have been created for the amount of money spent up to date.
  Mr. Erroll: In the early part of my speech I gave an estimate of 90,000.
  Mr. Rhodes: That is absolute nonsense, because that figure is nothing more than an assessment, an assumption, and I still challenge the right hon. Gentleman, or even a Treasury spokesman, to give me the figure. They cannot do it; or at least they could not give me one a month ago. As I say, £81 million is involved and I want to know how many jobs have been provided.
  Mr. Erroll: I find the hon. Gentleman's point rather difficult to follow. If he will go to Bathgate he will see that whereas there were green fields less than three years ago 3,000 people are now working there. That represents 3,000 jobs having been created. Here are 3,000 people drawing pay packets; people who did not have jobs before.
  Mr. Rhodes: I have never heard such nonsense. The Board of Trade could not in cross-examination say how many jobs have been created. It is no use the President of the Board of Trade drawing a red herring across this. If he will consult the officials of the Board of Trade he will find that I am right.
  Concerning the question of Wiggins, Teape & Co., it was stated that we should require a new Act for this. As a matter of fact, we do not. Under the Local Employment Act, the motor car industry, with the support of the then President of the Board of Trade who is now the Chancellor of the Exchequer, received in the case of Scotland £10·73 million for one project and £10·33 million for another. Those are the Board of Trade's own figures. I am quoting figures that have been given to me. Why could that not have been done sooner? Why rely on

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  putting through an Act of Parliament which will take some considerable time? Why could it not be got on with?
  Now to the Budget implication. A few weeks ago I was speaking in the Come Valley by-election, and one of the questions addressed to me at a factory was, "Why is it that this firm's quotation on the Stock Exchange is now 20 per cent. higher than it was last September? We are not any busier than we were last September; in fact, we are less busy." I said, "It is because the investors are expecting that the Government will step in and do something to boost trade." My questioner said, "Does that mean that the investor is getting his cut before Government action, because, if it does why cannot we put in our wage claim before as well?"
  Sir C. Osborne: Did the hon. Gentleman not tell him that South Durham steel shareholders in the last two years have seen their shares come down from 63s. to 11s. 3d. and they are getting no dividends; that one has to be put one against the other?
  Mr. Rhodes: I have no doubt that the hon. Member when he comes to speak will have some criticism of his Front Bench because the Government have not given him an opportunity to line his pocket with increasing values of shares. [HON. MEMBERS: "Withdraw."] All right, I will withdraw it. Let me say to the hon. Gentleman that he has had experience of this subject for a long time, and he probably is of the opinion that unless growth is of such a nature that it will give a fillip to the Stock Exchange the Budget proposal will not succeed. That is precisely what my questioner at Slaithwaite was getting at. If Government action will increase the value of the shares on the Stock Exchange, he wanted to know why he could not have his cut beforehand as well.
  Yesterday, the Chancellor went a tremendously long way towards making the climate of opinion for the introduction of an incomes policy. If ever a Chancellor gave a hint to institutions such as the Stock Exchange that it could not expect another 1958, 1959, 1960, it was yesterday. I think that he went some way towards creating a climate of opinion where he could start again with his in-
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  comes policy, because I am certain that unless we have an ordered incomes policy in an expansionist economy we cannot succeed in our aims.
  There are two or three principles involved in this. There is the principle of automatic compensation for rises in the cost of living. No one could disagree with that. Another is that differentials should be maintained. Where the difference arises is what labour receives as the fruits of productivity. My personal view is that if we could get down to an understanding and arrangements for an agreement on this, irrespective of a looming General Election, it would go a long way towards saving this country in the struggle that lies ahead. Anybody who does not assist in this endeavour is not doing what he should to help the country through its difficulties.
  I admire the way in which the Chancellor put over his speech yesterday. He stated certain desirable objectives on which both sides are agreed. We may differ on how the proceeds of prosperity should be divided, but we are agreed on such fundamentals as the stability of the £, the avoidance of substantial inflation, full employment, a high standard of living now and a rapid rate of growth. We agree that a fluctuating exchange rate would be bad and that periodical devaluations are disastrous, but the status of the £ and the avoidance of substantial inflation go together. If we assume that we have no control over the flow of goods, and over prices and incomes, we are left with fiscal and monetary action as the two main instruments of policy.
  For many years we have not been able to keep the £ stable or inflation within bounds without sacrificing growth and full employment. There is an inconsistency here. It seems as though, when we go for one objective we lose out on another. We have sought compromise in moderate inflation, fairly full employment and a moderate rate of growth, but the status of the £ has always been a stumbling block. The £ has remained vulnerable. As a result, one or more of the objectives that both sides of the House agree are desirable has had to be discarded according to the economic or political state of the country, and the Government have had to act.
  We remember the incentives given to the economy in 1958–59. As I have

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  repeatedly said, those incentives were a fraud. They were not dependable, and they made many people in industry, particularly in the north of England, suspect that we are approaching the time for a "phoney" boom. That is what they call it. We have to do a lot before we can restore confidence, because businessmen are looking cynically at what the Government are doing. I will not detail all that the Government did in 1958, 1959 and 1960—that has been done before by myself and by others more competent. Suffice it to say that the result of the stimulation given in 1959 and 1960 was one of the most catastrophic drifts into wage increases that the country has ever known.
  Many people again expect a release of purchasing power and a boom, but I do not think that the Government will get it this time. Many of today's factors are quite different from those of 1959. For instance, we will not have the banks going into the hire-purchase business as they did then for the first time in a big way.
  Will the Chancellor's measures be successful or not? He has made it clear that he accepts a rise of 3½ per cent. per annum in terms of income increase. He has accepted the growth rate of 4 per cent. Whether he will postdate the 4 per cent. target to 1961 as the N.E.D.C. did he did not say, but it is certain that if he wants to achieve what he seeks by 1970 the growth rate must be more than 4 per cent. from now on.
  If we doubt whether the Chancellor's measures will be sucessful, it is only fair that he should state why. I think that the right hon. Gentleman is vulnerable on two points. He is vulnerable, first, in regard to manufacturing industry. As a result of the spending boom in 1959–60, investment by manufacturing industry on capital equipment amounted to £1,195,000. There has been a large decline in 1962. Unless the Chancellor can get a correspondingly high investment in the private sector of manufacturing industry he cannot possibly get his growth figure, because the two are tied together.
  Some experts say that the money spent in 1960–61 has been largely wasted. Have we had a return for it on the basis of profits? No. Have we had a return on
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  the basis of growth? No, because growth has been comparatively stagnant, with much plant idle. As profits have gone down so this has directly affected the decisions that managements are likely to take to reinvest and to take the inducements offered by the Chancellor in the shape of investment allowances last autumn. The figures show that a colossal release of purchasing power—more than, has been injected by this Budget—has been needed in the past to get substantial investment under way. The lesson of a balance of payments crisis preventing manufacturers from using all the resources has been learned.
  The machinery makers are left frustrated, their development is discouraged, and they very often just tick over until the next boom will enable them to sell their old models. We cannot afford this, and the only way to avoid it is a steady flow of capital investment so that machinery makers can carry the cost of development all the time. Whether we like it or not, this is where central planning will have to come in.
  Thought is being given to this problem. For instance, the machine-tool industry is waking up to the fact that it needs something like this in order to make progress, and it has suggested that, in fat times, there should be a syphoning of its profits into a reserve, as in Sweden, so that in lean times it can take advantage of what has been saved.
  N.E.D.C. has assesed the growth prospects of 17 industries. That is first-class as far as it goes, but why cannot the Council now proceed to an investigation in depth of the industries that supply the manufacturing industries with their machinery, in order to make certain that the productivity of the machines supplied over the next decade is well in advance of growth targets? An investigation like that will give us some shocks, but unless we make it we shall not be sure that our resources are used to the best advantage. We want, too, to know whether the development of the machines in which manufacturing industry invests and on which it depends will be channelled to the growth industries on which the country will depend as a spearhead in the export trade.
  Let me give an illustration. The wool trade is a first-class export industry. It exports £160 million worth of goods a year, and will continue to do so. It has

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  10,000 looms which run at a rate of 96 picks a minute, but the best looms in the world run at speeds ranging from 138 picks to 250 picks a minute.
  Is it not the Government's concern that this should be remedied? Is not the N.E.D.C. the instrument to find out why this is not done, and is it not up to that body to provide the answer and say how it should be done? This illustration can be multiplied many times over the face of British industry. In terms of manufacturing industry, investment should now be on the basis of quality and productivity rather than in terms of capacity, as it was in the boom years of 1959, 1960 and 1961.
  I have lately been to Japan and have had the opportunity of studying what the Japanese do about their export trade. My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) drew our attention to an article published in The Times this week. I should like to say to him and the Committee that what the professor was advocating in The Times this week the Japanese have been doing for ten years. If any advanced country has a new industry or a new technique, the Japanese want it. The Government, workers and everybody in Japan are enthusiastic about going forward.
  When the Japanese hear of a new product or patent in any part of the world applications for licences to manufacture are applied for. The Japanese know precisely what the shape of their export drives will be for the future. In 1953 they began their planned exports. The British Government will have to do the same if they are to succeed in the efforts announced this week. The Japanese are switching over from light industry to heavy industry all the time. The authorities there show very little interest in industries which, although they are exporting successfully now, are likely to decline in the future.
  The cotton industry in Japan is not regarded as in the forefront of their exporting industries. The Japanese have already stated publicly that they expect the under-developed countries to take on the job of making cotton and other textiles. The way in which the Japanese get down to the assessment of trade figures is ingenious. They take the percentage
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  of world trade in a commodity and then assess their own share of that world trade and give themselves a rating. If world trade in the commodity is rising, then Japan's index must rise, too. If their specialisation index is high and world demand is not rising they just do not care about the industry concerned.
  Now a word about aids. The Japanese give exemption from corporation tax on profits on a new product. They give freedom to import "know-how" in growth industries. They provide tight protection for infant industries. They give low rates of interest in connection with goods for export. They provide low discount rates for bills of exchange. They give 80 per cent. relief of Income Tax on export profits. If any firm exports 50 per cent. of its products it qualifies for 80 per cent. relief of taxation as well.
  Just as the Japanese know the precise shape that their export trade is likely to take, there is no reason why we should not know the same here. What is to prevent us from getting down to this task and finding out which industries will be the exporting industries of the future and stimulating them? We have had too much "stop and go" and action afterwards because palliatives are needed.
  It is up to the Board of Trade to show that it has some ideas which are out of the rack of platitudinous repetition given to us this afternoon. It must show this by generating energy in planning our export policy. If it does not, then all we have to say today of yesterday's. Budget speech is that it was just another waste of time. It is up to the Board of Trade to prove that it can perform this task.
  5.54 p.m.
  Sir Cyril Osborne: I am always pleased to follow in debate the hon. Member for Ashton-under-Lyne (Mr. Rhodes) because he has great personal experience in trade and he usually knows what he is talking about from the practical point of view. It is true that at times he says one or two extravagant things and I am glad that he withdrew one of those comments today on second thoughts.
  The problem for the country and the Committee is simply how we as a Government can help a nation of 52 million to earn a living in an increasingly competitive

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  world and give the people a high standard of living and full employment. This problem will not be solved by throwing party points from one side of the Committee to the other. On the Chancellor's speech I should like to make three short points. First, I congratulate my right hon. Friend on what I consider to have been the hest Budget speech I have heard since I became a Member of Parliament in 1945. Secondly, we should remember that the nation, the House of Commons, and my party in particular, owe a special debt of gratitude to my right hon. Friend's predecessor, my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) because reflation in this Budget would not have been possible but for the stern and unpopular measures taken by him.
  Mr. Arthur Lewis: And so they sacked him.
  Sir C. Osborne: I am not the boss.
  Thirdly, I should like to warn my colleagues, who I wish were here in greater numbers, against over-optimism as a result of the Chancellor's proposals. My right hon. Friend has not played a kind of pantomime fairy godmother part, waving a wand and taking all our troubles away. The economic problems which faced the nation on Monday are still here on Thursday.
  Steel production today is only 70 per cent. of the industry's capacity. Shipbuilding is only half employed. I had lunch today with one of the big shippers. He told me that the shipbuilding capacity of the world is twice what the world needs. This is one of our problems. We have to fit our economy in with that of the rest of the world. The Lancashire cotton trade still faces the problem of Hong Kong imports and, regrettably, we still have nearly ¾ million unemployed. These difficulties and concrete problems still face us despite yesterday's Budget. For hon. Members, particularly on this side of the Committee, to go away cheering blindly over one speech is, in my opinion, the height of folly.
  I say to my right hon. and hon. Friends on the Front Bench that unless an incomes policy is accepted by both sides of industry nothing that the Chancellor of the Exchequer does can succeed. This is the key to everything. The leaders of
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  industry and the leaders of the great unions must themselves play their difficult parts, for without their co-operation whatever the Chancellor proposes will not succeed.
  I put the Budget proposals to three practical tests. First, will they help exports? Secondly, will they help to check inflation? Thirdly, will they help the unemployed'? I admit that if they did all three it would be a miracle, but I have been in the House too long to expect miracles.
  I take exports first. In my view, this is priority No. 1 for, unless exports go well, the whole fabric of our economy will fall to pieces. Everything depends upon it. We have to import 50 per cent. of our food and practically 100 per cent. of our raw materials, and these have to be paid for by exporting roughly one-third of all we manufacture. No Government of any party can compel the foreigner to buy British. He will buy British only if our goods are cheaper, better or more attractive, or are sold better, not just because they are made here or because we have a Conservative Government, a Socialist Government or even, perhaps, a Liberal Government. We have not the power to compel other people to buy our goods. Our goods must be sold abroad if we are to pay our way.
  Either we export or we go hungry. Let hon. and right hon. Members opposite remember that if exports fail, and if they are so sure that they will win the next election and be the next Government, it may well fall to their lot to have to impose bread rationing as a previous Labour Government had to do in 1946. These are the prospects I want burned into the hearts and minds of our people.
  Furthermore, as the under-developed countries industrialise themselves in order to raise their own standard of life, so the United Kingdom's problem of selling in world markets will grow. Let us face it. Any fool can give exports away. Exports must be sold, and sold at such a price as will cover all our costs of production and leave a profit in order to maintain the Welfare State. Otherwise we go bankrupt.
  London's financial pre-eminence and England's prosperity were built upon our being the centre of one world economy. The old Jewish prophet said that we are all bound up in a bundle of life together.

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  This is true economically as well as spiritually. No country suffers so much as ours from the division of the world through the cold war. We stand to gain more than any other nation from an ending of the cold war and the increase of East-West trade, of world trade. London was the centre of finance, insurance, banking and the entrepôt trade of the whole world. By cutting the world in half we suffer far more than anyone else.
  I make this plea to my hon. Friends on the Front Bench. We ought to make a double effort, certainly double the American effort, to come closer to Mr. Khrushschev, who, I believe, has made a special effort, even at his own risk, to get understanding between East and West. I should like to see it done especially in trade.
  From my own experience I know that exports are not fun. I find, as most of my friends do, that they are damned hard work. It is human and understandable for manufacturers to sell in the easy, more profitable home market rather than take all the trouble necessary to go into the more difficult and less profitable export markets.
  Hon. Members opposite sometimes toy with the idea of comprehensive planning for export, industry by industry, as far as possible within the framework of our free competitive society. I confess that, from time to time, I am tempted to go half-way with them because, if industry will not export, sooner or later the Government must say, "Either you do it or else". However, I remind hon. Members opposite of this, which is what worries me when I am tempted to agree with them. In the iron and steel industry the Board has the power to control production, but, in spite of that, the iron and steel industry today is running at only 70 per cent. of capacity. The cure to our problem of production for the home market and the export market lies not merely in some form of planning. Other things are needed. There is a world surplus of steel producing capacity, and the other parts of the steel producing world also are running at less than capacity.
  Industries which have to import a lot of raw materials in order to do their business should, in my view, be com-
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  pelled to earn their own foreign currency by exports. They have no right to expect other industries to earn the foreign currency which will enable them to buy raw materials to keep themselves going.
  My summary of the export situation is this. I think that it will be increasingly more difficult for us to sell, and, if the Chancellor will allow me to say so, I do not think that this Budget will do an enormous amount to help exports.
  Mr. R. Gresham Cooke: I am following my hon. Friend's argument with great interest, and I agree with much of what he says, but what is the position of the building industry, for instance, which uses a lot of imported raw materials, timber and so forth? How can that industry export to buy its own raw materials?
  Sir C. Osborne: I am obliged for that interruption, but I do not think that there is much in it since I do not agree that the building of houses uses a lot of imported raw materials.
  Mr. Gresham Cooke: It does.
  Sir C. Osborne: I do not wish to keep the Committee long, and I have two other points to develop.
  I come now to my second test. Do the Budget proposals help to check inflation? I am very pleased to see my right hon. Friend the Minister of Defence here because I recently read again the speech which he made from this bench after he resigned as Chancellor of the Exchequer. With almost all that he said I agree, and I shall use one of his arguments, if he will forgive me for stealing it from his speech. I do not think that the Budget proposals will help to check inflation at all. I think that they will make inflation worse.
  From July last year, the Chancellor released £681 million extra spending power. The present Budget proposals will release another £250 million. About £1,000 million extra spending power will have been released in the last nine months. Unless not only home production but exports rise in some relationship with that £1,000 million extra spending power at home, there must be inflation. I hate inflation. It is our duty to do our best to check it. I warn

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  the Committee that there is a terrible danger of hon. Members on both sides thinking that somehow we can spend ourselves into prosperity. We cannot. An artificially buoyant home market without a sound export basis is the worst of all dangers, and it is folly to put more purchasing power into the home market without having the corresponding exports to support it.
  To my mind, there are two chief causes of inflation. The first is that wage and salary increases are not linked with extra production. The greatest modern economic fallacy in our country which has arisen since the war is that the workers have a divine right every year to an increase in wages. It is a dreadfully stupid concept, and unless production increases it must produce inflation.
  Mr. A. Lewis: The hon. Gentleman has not said a word about the right hon. Member for Woking (Mr. Watkinson), who never puts in an appearance here but who is now on £24,000 a year plus another £3,000 or £4,000 in allowances. Is not that inflationary?
  Sir C. Osborne: That is not quite fair.
  I believe that the British people—including myself—have no idea, unless they go abroad regularly, how lucky they are in their standard of living. I asked the Treasury only last week what was the annual income per capita in this country and in Pakistan and India. I was told that the figure for this country was roughly £400 and for India £25 and Pakistan £20. I was told that an average of those figures is £56—£56 for everyone, Front Bench Members as well as back bench Members, and old-age pensioners as well as Members of Parliament, less than 25s. a week. The British worker would say he could not live on that. The Indian worker lives on much less, and has to do so. Yet here we are demanding more and more money for less and less work.
  This is what is wrong. Because of the fear of losing votes, neither side of of the Committee will tell the people the truth. We say, "Do not frighten the people or they will vote against us." This is what I protest about. People may say, "But you are talking about the Asiatics." It was reported in the
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  Economist last Saturday that the minimum wage in Spain had just been raised from 4s. 6d. to 7s. a day—less than £2 a week. Yet we are telling our people that they can have more and more money, whether or not they do more work or produce more wealth. This is the greatest cause of inflation.
  I well remember sitting on the Opposition benches with the late Sir Stafford Cripps sitting on the Government benches when we sat in the Chamber in another place. He pleaded often and earnestly that there should be no increases in salaries, wages or dividends unless we increased production. What a strong position our nation would be in today if only we had followed his advice.
  Mr. Snow: What encouragement would the hon. Member's party give?
  Sir C. Osborne: Forget party politics for a moment and consider the matter in the national interest.
  What an immensely strong position we would be in today if our wage rates were anything like what they were twelve years ago. The German miracle would be nothing compared with ours. We should have no unemployment and no export problems. Though we did not have the wisdom to accept Sir Stafford Cripps' wise advice, for goodness' sake let us act wisely and accept it today. Instead of talking about a 2½ per cent. increase in wages each year, why does not my right hon. Friend the Chancellor of the Exchequer put in the public mind the idea of stability of paper incomes and a 2½ per cent. reduction every year in the cost of living? That is a much better idea, and all the country would be better off if it were achieved.
  My right hon. Friend the Minister of Defence said in 1958 that the Government were trying to do far too much. He said that we cannot have terribly expensive nuclear rearmament and, in addition, conventional forces, and that we cannot have on top of that a Welfare State and make great loans abroad and have a shorter working week at the same time. We are trying to do too much with our limited resources, and I repeat the plea which my right hon. Friend made in 1958 that we should get our priorities right and cut out some of the things which are beyond our resources.

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  May I remind my right hon. Friend the Minister of Defence—and I am glad that he is here—that in 1951, when our party came to power, Government expenditure was £3,800 million a year. In 1956 it went up to £4,800 million, and the present Prime Minister promised that he would reduce it by £100 million a year. Today, Government expenditure is nearly £7,000 million. Is there no hope of reducing Government expenditure and of restoring honest money? Because of what I have said, I do not think these Budget proposals will help to check inflation at all. I think the danger is that they will make it worse.
  The third question which I wish to ask is whether the Budget proposals will help the unemployed. I do not put this question last because I think that it is the least important. It is important, along with the other questions. I do not think that these proposals will help the unemployed to any great extent, and I think it is a cruel fraud for hon. Members opposite to suggest that they can, by political means, guarantee full employment for all time and a high standard of living. That is just a nasty, cheap political fraud. Every week we have Questions in the House from hon. Members on both sides demanding that the Government shall create full employment in their areas. No Government can guarantee full employment for all time for everyone, not in a free society. It is a nasty, cheap swindle for us as politicians to tell our people that we can do it, or to pretend that we can do it.
  I wish to quote something which the Deputy Leader of the Opposition said last month. I wrote him a note telling him that I would refer to him, so I cannot be accused of discourtesy if he is not in his place. A report in The Times of 22nd March said:
  "Mr. George Brown, deputy leader of the Labour Party … said he had had a popular make of car for the past fifteen months and during that time, 'every single wire fell off and every screw and bolt that could fall off fell off'.
  It goes on to quote him as saying:
  "in that time"—
  that is, in the fifteen months that he had had this popular car—
  "we came to hate every sound of it, and had I been an overseas buyer it would have been the last I should have bought of that make."
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  What I want to ask the Opposition is this: if their Deputy Leader says this, how can they guarantee the jobs of the men who make those cars?
  Mr. A. Lewis: What about the executives?
  Sir C. Osborne: Since the Deputy Leader of the Opposition says that if he were a foreigner he would not buy British goods, and since 5 million jobs depend on those exports, how can hon. Members opposite honestly say that they will guarantee full employment? What would the right hon. Gentleman do to people who make these cars, management as well as labour? What sort of discipline would he impose? These questions must be faced. The right hon. Gentleman said that if he were a foreigner he would not buy another British car. Then he goes out to the country saying that Labour will guarantee full employment when he, as an individual, is doing his best to see that there is unemployment in the motor trade. [HON. MEMBERS: "Oh."] Here is his statement—
  Mr. Douglas Houghton: I am sure the hon. Member does not wish to misrepresent my right hon. Friend. The hon. Member read out the extract from my right hon. Friend's speech, that if he were a foreigner it would be the last car of that make that he would buy. A moment ago, however, the hon. Member represented that to be a declaration that if my right hon. Friend were a foreigner, he would not buy another British car. The two are very different statements.
  Sir C. Osborne: To the extent that I exaggerated, I withdraw, but in so far as this concerns, I understand, one of our greatest motor manufacturing organisations, employing hundreds of thousands of men, it would jeopardise their jobs. This is not encouraging foreigners to buy the cars upon whose purchase depends the whole of our Welfare State as well as the jobs of the men who make the cars.
  Mr. Sydney Silverman: The hon. Member is doing a great injustice to my right hon. Friend the Deputy-Leader of the Opposition. My right hon. Friend's point was that the firm in question would sell more cars if it took steps to put right the

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  faults of which he was complaining. I do not know why anybody should consider that amusing. I thought we were all interested in seeing that British products were the best in the world in order to have their share of the foreign market. If there are faults, surely they should be pointed out.
  Sir C. Osborne: That intervention did not help the Deputy-Leader of the Opposition, to whom I gave notice that I would refer to him. He has not troubled to defend his view, because it cannot be defended. This was what the right hon. Gentleman said:
  "… had I been an overseas buyer it would have been the last I should have bought of that make".
  Is that helping British exports? Is that helping the workers who make the cars? Can they be promised full employment on evidence like this? I, too, do not regard it as anything to laugh about, and neither would the men whom the right hon. Gentleman would wish to put out of employment.
  Both sides of the Committee must look at the question of unemployment from an entirely new point of view. I am convinced that if we had full co-operation between management and labour and both were efficient, and if all the available labour-saving equipment were fully used, we could produce 25 per cent. more goods with the same labour. The problem is, what are we to do with the labour that it no longer required to produce a given quantity of goods? It is not, however, a problem which faces only this country. It faces the whole Western industrialised world.
  Let me give just three examples. In 1946, Britain's agriculture employed 976,000 men and women. Last year, the number was down to 633,000 and yet this smaller number of people produced 50 per cent. more food. In 1948, British Railways employed 648,000. Last year, the number was only 474,000. In 1947, the nationalised coal industry employed 711,000 people and last year, only 551,000, and yet this much smaller labour force produced exactly the same amount of coal as the much bigger labour force of more than ten years earlier.
  Sir Robert Cary: Mechanisation.
  Sir C. Osborne: Of course. This is the problem that faces the whole of Western industry. Fewer men can produce more and more wealth. How are we to find jobs for the men who are displaced by automation? On the other hand, we cannot afford a Luddite attitude to the newly-developed countries.
  What are we to do for the men now employed if the scheme introduced by my right hon. Friend for the North-East, introducing much labour-saving machinery, puts them out of work? This is a problem which both sides of the Committee must face.
  I am convinced that in British industry there is a lack of confidence and an unsettling uncertainty that hampers possible development. It is my right hon. Friend's job to try to dispel those fears. There is ahead of us real danger of a great slump, equal to the inter-war slumps, unless we are careful. I beg my right hon. Friend not to take this too lightly or too cheaply. It is not often I agree with the absent Leader of the Opposition, who earlier this week, in New York, warned the Americans that in his opinion there could be a 1931 slump back here again in a year or two's time.
  To support the Leader of the Opposition, I make two final references. On 3rd March, the New York correspondent of the Daily Telegraph wrote:
  "The spectre of 'disaster' for the American economy was conjured up in Washington today by President Kennedy .. .. Mr. Kennedy, who spoke some weeks ago of the need to spur the economy, is now talking darkly of the dangers of another recession. His own economic advisers do not see one in prospect this year, though they concede one is conceivable next year."
  As the late Aneurin Bevan said to us so many years ago, if the Americans catch a cold, we catch pneumonia.
  Finally, in the Sunday Times of 24th March, Mr. William Rees-Mogg said:
  "Yesterday in Chicago, President Kennedy warned that the U.S. might face 'ten years of recession' and chronic economic troubles unless Congress passed his proposed tax cuts."
  I beg Ministers to face these possibilities and to do something to reassure the business world and to encourage the trade union leaders, who have a difficult task. And in his difficult task, I wish him luck.
  6.27 p.m.
  Mr. Anthony Crosland: During the course of his half-hour speech

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  the hon. Member for Louth (Sir C. Osborne) gave three criteria of what he considered to be a reasonable Budget, and by each one of them he condemned the Budget and his right hon. Friend the Chancellor of the Exchequer. It is not clear why the hon. Member would not go into the Lobby against the Budget and will not do so whenever opportunity arises. His speech was the most sweeping condemnation of the Budget that we have heard today.
  I am not surprised at the hon. Member, who represents the constituency next to mine, being worried about the state of the motor industry, because if Dr. Beeching has his way neither of us will be able to get near our constituencies by train. Therefore, I share some of the hon. Member's worries about the state of efficiency of British cars.
  The hon. Member was certainly unfair to my right hon. Friend the Member for Belper (Mr. G. Brown), who had merely tried to do precisely what the hon. Member was doing in the whole of his speech. My right hon. Friend was trying to improve the competitive efficiency of British manufacturing industry by making constructive criticisms. The whole of the hon. Member's speech consisted precisely of that.
  Following the Chancellor of the Exchequer yesterday, we have today heard the President of the Board of Trade. The debate has become slightly soporific at this stage, partly because the Budget was less exciting than some people expected and partly because the President of the Board of Trade tends to breathe a mood of drowsy euphoria among his listeners. He rattles through an enormous number of detailed points, exuding good humour and amiability all the way round. This tends to have the effect of emptying the Chamber and of diminishing interest, particularly as after one has thought about what the right hon. Gentleman has said, one realises that he has said extraordinarily little.
  The right hon. Gentleman reminds me of a well-known story told by Harold Nicolson that when at school he was reproved by his tutor for a minor misdemeanour and was compared, to his chagrin, with an odious school prefect named Marston, who, his tutor told him, had never had a mean or nasty thought. "It was six years," said Harold Nicolson,
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  "before I realised that he never had a thought at all." That is what one sometimes thinks after hearing speeches by the President of the Board of Trade. The right hon. Gentleman was complacent in what he said about British exports. Some of the minor matters which he raised would, no doubt, be helpful, but his whole tone was complacent.
  Before coming to the main question of competitive exports, I want to register a protest against what I think is the very dangerous habit of saying that countries like Japan are only growing faster than we are because they started from a point further behind. I think that this is both a very fallacious and a very dangerous argument. I think it impossible to reconcile with the fact that one or two European countries with practically the same standards of living as we have are still going ahead a great deal faster than we are, and I find it impossible to reconcile with the fact that we never catch up with the United States. After all, we are well behind the United States in standards of living, Why do we not catch them up, since we started from a point further behind? I think that this is an argument which proves a great deal of complacency which is very dangerous.
  As far as the Budget is concerned, I should like to start by echoing one thing that my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) said, that there was a striking omission in the Chancellor's speech, namely, that there was no serious inquest on last year. Surely the one thing which 1962–63 proved once for all, beyond any shadow of doubt, was that the traditional Conservative and. indeed, Treasury policy that cutting imports and domestic expenditure is a cure for balance of payments without inflation is disastrously wrong; and from the Chancellor's speech I hope that this lesson has been finally learned.
  I say that I hope it has been finally learned, because the doctrine that if we hold back home demand we solve the balance of payments and the export problems, and we prevent wages from rising faster, has been the doctrine and the policy for the last twelve years, and last year's economic record shows it to be erroneous. Certainly, last year was an excellent test of this doctrine and we see that the doctrine was without any foundation of any kind.

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  As far as imports are concerned, they did not fall because we did not get deflation. We had deflation all right and 2½ per cent. unemployment, even excluding the seasonal. This conceals the fact that the labour force could have been very much greater, and there was unutilised capacity—30 per cent. less steel, and a good deal less also in most of the metal-using trades.
  We had deflation all right, but what went wrong was that deflation did not do the job it was supposed to do to help the balance of payments. It did not reduce imports, which went up by 4 per cent. during the year; and imports of manufactured goods went up by 12 per cent. in the year, although our industries producing those goods in this country had a great deal of spare capacity. Demand certainly did not solve our exports problem.
  Exports, as the President of the Board of Trade told us this afternoon, rose during the first half of the year, but fell during the second half while world trade manufacturing as a whole was increasing, while wages were going up more rapidly in most European countries, particularly in Germany.
  I think that this all amply proves that periodic cuts in home demand are not the way to cure the balance of payments. It is true that the balance of payments did improve somewhat, but the reasons for that had nothing to do with cuts in domestic demand. All that this policy does is to slow down the rate of growth, and it means waste of capital and waste of labour in this country. All that it does in addition is to reduce the rate of investment, thus making our whole industry less competitive and very much more insecure. I hope, from the Chancellor's speech and firm statement about expansion and a strong £, that this policy has now been buried once and for all.
  As to what the Chancellor has done this year, it is very hard to take up any dogmatic view whether he is giving away too much or too little or not quite enough. Anybody who dogmatises in this field is, clearly, an imbecile. This in the end is a matter of judgment and one cannot state statistical proof. Nevertheless, there is something to be said for what my hon. Friend the Member for Cardiff South-East said, that the Chancellor has acted on the cautious side.
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  He has certainly given away less than most outside commentators thought necessary.
  I should like comment on this matter later, but it appears likely that what he has given away will not be sufficient to bring us properly back to full employment and full utilisation of capacity, and it also seems unlikely that the amount he has given away in this year will give us the rate of growth which will bring us back to the N.E.D.C. target. I am not clear what the Chancellor's view about this is, and perhaps it could be explained.
  I understood him to say that this concession of £250 million would give us a 4 per cent. rate of growth this year, but if that is the case, since we are already nearly two years behind the N.E.D.C. target of 4 per cent. in 1961–62, this implies that we must achieve a faster than 4 per cent. rate this year to achieve the N.E.D.C. target by 1966. However, it is a matter of judgment whether he has been somewhat too cautious or not.
  What I want to discuss mainly in my rather brief speech is the question of the balance of payments, the question to which the hon. Member for Louth addressed himself, the question of making our exports competitive, because, whatever the right figure, whatever is the precisely correct figure for the Budget this year, the major limiting factor of our economic policy under any Government is our balance of payments.
  As far as the short run is concerned, the Chancellor, clearly, is intending to take a risk, and I am certain he is right, with exports this year. He reckons, presumably, on a moderate surplus in the balance of payments even if imports go up rather faster than they otherwise would have done. He reckons that he can cope with a certain amount of borrowing, and I am sure that he is right to take a risk and right, if necessary, to borrow to do this.
  But this policy does not solve our long-run problem and certainly there is no possible prospect of solving it in 1963. This surplus of £400 million is not within miles of the N.E.D.C. target. The surplus is necessary not only for reasons connected with economic aid, exports and imports, defence expenditure abroad, and everything like that; it is also absolutely essential if we are to reduce the

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  vulnerability of sterling. The speculation against sterling which would occur if we had a surplus of anything like that size is, of course, less than the amount of speculation which occurs with a comparatively small surplus such as we have at the moment. Therefore, to achieve that surplus must be the first priority of any Government's economic policy.
  Why is it that it is apparently so hard for the country to achieve this surplus? After all, it must be ten years since the Chancellor first set a target something like this, and yet we are as far away from achieving it as we were then. According to N.E.D.C. we have to achieve a 5 per cent. increase in exports every year. Why do we not achieve this? Basically, we do not—and here I come much nearer to the view of the hon. Member for Louth—because our goods are not competitive. When it can be shown year after year what a huge increase in manufactures there has been, and that industrial production has increased abroad, it is surely hard to suggest otherwise.
  If we look at exports we find year after year that our share of the trade in manufactures has declined. This seems to me to suggest beyond any shadow of doubt—and it was confirmed in the N.E.D.C. Report—that our goods are not competitive.
  What is to be done about this? Let us assume, for the sake of argument, that we rule out devaluation. But let me say something about devaluation—though not to advocate it—and the exchange rates. One of the curiosities of the change in thinking over the last few years is that the wartime hopes of how we would organise international trade have completely disappeared and no one apparently holds them any longer.
  I recall the plans drawn up during the war, in which Lord Keynes and many others played promient parts, Then, it was practically taken as axiomatic that if a nation was faced with difficulties in its balance of payments after the war, instead of being forced to deflate, as was the case before the war, or forced to restrict imports—both of which measures have great disadvantages—it would change the exchange rate. This theory underlay the
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  Bretton Woods Agreement and all that Lord Keynes ever wrote about the postwar world.
  But, through various subterranean moves of opinion over the last few years, we find ourselves now almost wholly attached to rigid exchange rates. That is one of the ways in which our postwar hopes have disappeared. Let us assume, therefore, that adjustment of the exchange rate is ruled out for us. What are we to do about the basic problems of making British goods competitive?
  I agree with the hon. Member for Louth that this is the No. 1 criterion which should be applied to the Budget. But by that very criterion the Budget is an extreme disappointment. There is practically nothing in it which helps towards solving the long-term problem of the competitiveness of our goods. I believe that only two things in the Budget have relevance to our general industrial efficiency.
  The first one consists of the measure to help solve regional unemployment. Naturally, if we can increase employment in these regions we shall help national production. But I am certain that we shall never solve the problem as long as we treat this as a matter of local unemployment and not as one of regional employment. The problem is insoluble on the basis of small development districts, but only when seen in larger regional terms.
  The other relevant factor is the halving of Stamp Duty. I am utterly opposed to this. The only justification for not having a proper capital gains tax over the last few years was the 2 per cent. Stamp Duty. It was an argument consistently used by Tory Chancellors of the Exchequer that we did not, therefore, need a capital gains tax.
  The reduction in Stamp Duty for Stock Exchange securities is a pure gift to the property-owning class and nothing else. I gather from the Sunday Times colour supplement last week that the Chancellor is given to dancing barefoot on the Riviera. This may be a pleasant past-time and good for his figure, but it is not the slightest excuse for doling out large sums to his Riviera companions.
  Another argument is that we need to reduce Stamp Duty to encourage foreign portfolio investment here. But I have

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  grave doubts about this. Such investment is invariably volatile. What flows in easily can flow out just as easily. I do not think that we want our balance of payments to depend on a great measure of portfolio investment from the United States or anywhere else.
  To claim that we have to depend on a continuous flow of this portfolio investment implies that we are some backward, primitive, country, being kept by rich foreign investors. We must rely on our own exertions and not try to attract volatile capital from other countries. The halving of the duty is not really justified, but it is the only measure which bears on the whole question of competitive efficiency.
  Otherwise, the Budget is distinguished only for a series of omissions. It is to be condemned mainly because of the omissions. I want to list five things which most hon. Members will agree are necessary to increasing our efficiency and not one of which is in any way sustained by the Budget.
  The first concerns incomes policy. On the whole, I believe in an incomes policy. I do not think that it is the sort of panacea that the hon. Member for Louth seems to think, nor that it is mainly necessary because wages here have gone up faster than wages in other countries. They have gone up at roughly the same pace. The trouble is that our productivity goes up slower. Nevertheless, an incomes policy has some rôle to play, although I doubt whether it is a major rôle, in increasing competitiveness. From the point of view of encouraging that, the Chancellor should have done two things.
  The right hon. Gentleman should have made some concessions not in the form of concessions on Income Tax, but in the form of concessions on indirect taxation in order to reduce prices and diminish pressure for wage increases. It is very unfortunate that he has not done this. Nor has he been bold enough with tax reform. His extreme caution about it is one of the depressing features of the Budget. He has turned down practically every major suggestion. Had he adopted the single corporation tax, he would have made it easier to control the level of profits, which would have had a sensible part in the exercising of an incomes policy. The right hon. Gentleman has missed a big opportunity there. He has
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  shown extreme timidity and, indeed, slackness over the last few months.
  Secondly, the President of the Board of Trade talked about export incentives in terms which bore no relation to what anyone is proposing. He said that we must not enter a race for export incentives. No one has suggested that we should. The whole discussion has hinged on an added value tax, and that would be a matter of adopting a tax which, within a short time, has been adopted in most countries of the European Economic Community.
  My own view of the added value tax is that it is a matter of acute disagreement as to whether it is an export incentive. Whether it is or not depends entirely on the highly controversial question whether the tax is offset by the fact that manufacturers, at previous stages, have passed the tax on in their prices. I accept that there is extreme disagreement on this.
  It is appropriate, therefore, to have an inquiry into it. What is extraordinary is that the inquiry should be announced only now, when the tax has been the subject of acute argument for months, and, indeed, years. We have had the long Report on it from the E.E.C. Commission. It was grossly neglectful of the Government to leave the inquiry until now. It should have been put in hand a year ago. Certainly, it should not be left to a single merchant banker, however eminent and devoted he is. On such a controversial matter, the Chancellor should have appointed a small committee, including not only the merchant banker but also tax experts, accountants, economists, and the rest. That would have been a far better way of going about it. He has missed yet another opportunity.
  The third major omission relates not so much to the Budget itself, but to the whole of the Government's economic policy over the past year. The Government have allowed private manufacturing investment to fall to a level nearly one-fifth lower than that of a year ago. We can disagree as to how important this investment is to growth, but no one, and certainly not the Government, says that we must not have higher investment in order to attain a higher rate of growth. To have allowed private manufacturing investment to fall to a level 18 per cent.

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  below that of a year ago is an extraordinary condemnation of the Government's entire economic policy.
  Fourthly, the right hon. Gentleman should have been more forthcoming for education, which is a particular form of investment. The people who write about economic growth cannot avoid reaching the conclusion that it depends very much on the amount spent on higher technical education. There was an O.E.C.D. Report on this very matter. This showed that any given level of investment is very much more productive in some countries than in others. This appears to be very much due to what is spent on education, especially, as I say, on forms of higher and technical education.
  The Chancellor is right in saying that our education spending is on a quite rapidly rising curve. But he should have bullied the Minister of Education a little more to spend less time on breaking down the settled bargaining procedures in the teaching profession and more time, if only to escape future strictures by the Robbins Committee, on producing a more rapid spending on all forms of higher education. That was another big omission in the Budget.
  The next missed opportunity was that the Chancellor made practically no reference to the rôle of N.E.D.C. He referred to N.E.D.C.'s targets more than once, but he made practically no reference to its rôle, and that was quite astounding in a speech which took an hour and forty minutes and of which a large part was devoted to general economic expansion.
  I would have liked to have heard a great many things from the Chancellor about how he sees N.E.D.C.'s rôle. For example, there is now an argument about whether it should or should not have a whole series of industry commissions. This is an argument of great importance and one would have liked to have had the Chancellor's views. There are many things which come within the purview of N.E.D.C. and which are still very controversial and on which the Chancellor, as chairman of the Council, should have given his views. That was a very serious deficiency in his speech.
  My general view is that although the Budget is acceptable as a short-term method of getting expansion this year, and although we may get there and I
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  hope that we get through this year and have temporary expansion without a balance of payments crisis, the Budget contributes practically nothing to the solution of the critical long-run problem, which is that of getting a 5 per cent. annual increase in our exports. It comes out with complete clarity from the N.E.D.C. Report that one possible serious obstacle to the 4 per cent. growth rate to which we are all committed—I hope that we all are—is the danger of not getting the annual 5 per cent. increase in exports. Looked at from the point of view of that overriding economic priority, I find the Budget extremely disappointing.
  I very much doubt whether the Chancellor of the Exchequer is the right man to get this large increase in exports. He seems to be becoming more and more a Baldwin-esque figure, so far as I can judge from the publicity which he is getting. He made one alarming remark which was quoted in the colour supplement of the Sunday Times last week, when he said that he used to keep chickens, but that every time he looked at them they became extremely sick. I fear that every time he looks at the British economy it becomes extremely sick. He is building up the figure of a comfortable, portly, family man very much on the Baldwin model. The only trouble is that this is a time when we need not a Baldwin as a leader, but a much more dynamic and audacious man.
  6.52 p.m.
  Mr. William Clark: I welcome the opportunity of joining in the debate. It is always a pleasure to follow the hon. Member for Grimsby (Mr. Crosland), although I did not altogether agree with what he was saying. There was an element of prejudice which I will probably pursue later.
  I should like to congratulate my right hon. Friend—my hon. Friend the Member for Louth (Sir C. Osborne) is rather worried about what I have to say, but I am speaking on the Budget for the moment—on the presentation of the Budget. I think that both sides of the Committee accept that it was a very good change from the precedent of a rather long and dreary rigmarole of what happened last year, with the Budget proposals then brought in at the last moment.

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  While congratulating my right hon. Friend, I welcome the Budget in the sense that at last we have a piece of Tory policy put into effect with the abolition of Schedule A. The property-owning democrats of the Conservative Party have advocated the abolition of Schedule A for many years, and I have to admit that so have some hon. Members opposite. The second thing I am pleased about is that my right hon. Friend has given help to the lower income brackets and to married men with responsibility. We should not overlook that and the Chancellor should be given the widest possible credit for having grasped the opportunity to direct part of his Budget to the benefit of the married man.
  I do not agree with the hon. Member for Grimsby when he says that the Budget is a little too cautious. I know, as he and other hon. Members know, that the National Institute suggested a figure of £400 million, although the National Institute never made it perfectly clear whether the figure of £400 million was for this year or for a full year and never made it absolutely clear whether it was intended to include the measures on Purchase Tax which my right hon. Friend took in November last year.
  To the £260 million which has been relieved from taxation in this first year, which is only a partial year, must be added the £80 million which was relieved of Purchase Tax on motor cars and television and radio sets in November. That gives a figure of £340 million. While I agree that one cannot be dogmatic about whether the figure of £340 million or £400 million is right, that is only for a partial year and the present Budget proposals will cost the Exchequer £579 million in a full year, to which must be added the figure of £80 million for last November's changes, giving a figure of more than £600 million. Again, while one cannot be too dogmatic, I would not have thought that this was a cautious Budget in the sense which the hon. Member was trying to imply. I believe that it is a Budget in which the Chancellor will he successful in his policy of expansion without inflation.
  When we speak of expansion without inflation—and the hon. Member for Grimsby brought this out in his speech—we must consider our rate of investment in this country. The figures published on 1lth December were that fixed
  706
  investment as a percentage of the gross national product in 1961, the latest year for which figures are available, was 19 per cent. In West Germany the corresponding figure was 29·1 per cent. The 1961 figure for Japan is not available, but that in 1960 was 34 per cent.
  Between 1957 and 1961, our investment rose from 17·4 per cent. to 19 per cent., which is a good increase, but I accept that we are working on the wrong base for the simple reason that while we are investing only 19 per cent. of our gross national product, our overseas competitors, who are often held up to be the top of the league of which we are the bottom, are investing far more of their gross national products. I should have liked more emphasis to have been placed on investment in this country.
  However, the Chancellor has emphasised investment by the differential rates of Income Tax which have now been introduced into our tax system. I do not wish to recapitulate the arguments about whether the differentials should be widely defined or narrowly defined, or defined on an industry or regional basis, but the crux of the matter is that the Chancellor has given tax relief of £240 million in a full year for increased capital allowances in development areas, and this cannot but do good. This is one way in which we can instil confidence into businessmen, and I cannot emphasise sufficiently the importance of getting business men in this country to have confidence in the future. I think that both sides of the Committee will accept that.
  Over the past two years, businessmen have suffered from some hesitancy through no fault of the Government, but simply because of the prolongation of the Common Market negotiations. We were waiting for the Common Market, but it so happened that the Common Market did not come to fruition. With the collapse of the Common Market negotiations, during which businessmen did not know whether to expand here or go to the Continent, businessmen were then looking to the Budget and wondering whether it would give incentives. This uncertainty has played a tremendous part in the difficulties.
  Confidence will now be given to businessmen by the capital allowances—I

  707
  agree only in development districts, but we must remember that capital allowances outside the development districts have also been increased—coupled with the facilities already given by the Government—cheap factories and establishment grants and putting Government contracts as far as possible into development districts and the restriction of industrial development certificates.
  I have the greatest respect for the economic views of my hon. Friend the Member for Louth, but I did not altogether agree with him. If I may put his argument back on him: if what the Deputy Leader of the Opposition said was a disservice to the British motor car industry—and I do not want to recanvass that argument—it is equally true that if people get up in the House of Commons, or outside, and they say that there is a danger of a recession, that will kill that confidence which we are trying to instil into the public.
  I hope that my hon. Friend the Member for Louth will not misunderstand what I am about to say. We can talk ourselves into a recession. I know some people can make a speech about the dangers of a recession and nobody takes the slightest notice. I have no doubt that no matter what I say, people will take not the slightest notice. But when my hon. Friend the Member for Louth makes such a speech, from his wide experience in these matters, people are inclined to listen to him. I know this personally. This matter must be handled very carefully.
  Sir C. Osborne: My hon. Friend will remember that I quoted the Leader of the Opposition, who had said this in New York at the beginning of this week. I also quoted President Kennedy.
  Mr. Clark: I agree, but we ought not to bring in President Kennedy. He made his speech in order to get his tax proposals through Congress. I should not think for a moment that he believes that there will be a world recession. To my mind, the difference between the post-war years and the inter-war years, is that America has ceased to be isolationist. She has taken her part in Western democracy. This means that she cannot possibly allow a world recession. She will pump money into the underdeveloped countries as we have done since the end of the war. It is
  708
  not fair to bring in what President Kennedy said, when he was making a political point for consumption by his own Congress
  The Government must do more to increase investment over the whole range of industry. The Finance Bill will provide opportunities for us to put down Amendments to help small savers. Much more incentive should be given to savers. According to N.E.D.C., we should have a personal savings rate of about 12 per cent. Last year, it was only 10½ per cent. There is a great margin for increased personal savings, which help investment.
  I welcome the reduction in Stamp Duty on shares and transfers of property. I do not agree with the hon. Member for Grimsby that all that this does is to put money into the pockets of the property-owning classes. During the last six years the number of people investing on the Stock Exchange has increased from 1¼ million to 3½ million. These are not all men who run Rolls-Royce cars, or yachts, or who go dancing on the Riviera, with or without shoes. These people include the small savers of this country. We must remember London's position as a money market as compared with money markets abroad. Foreign countries do not have Stamp Duty.
  This fact must operate as a disincentive to foreigners to invest here through the money market. We must not assume that such people come here only to use the London money market to buy shares. They take part in the market, and from that market we obtain much of our invisible earnings, including our invisible exports. The 2 per cent. Stamp Duty ought not to have been introduced, and the reduction to 1 per cent. is very welcome, although I should like to see it abolished entirely.
  Mr. Crosland: Without a capital gains tax?
  Mr. Clark: During my short experience in this House one thing that has always stood out in the Budget debates to which I have listened has been the attitude of the Opposition to the achievements of the Government. I know that it is the duty of an Opposition to oppose, but I wish that when they did so they were constructive. Everything that the Conservatives do cannot be

  709
  wrong. Some of the things may be wrong, but not everything.
  Investment in this country is vital to our survival. I am sure that there is no difference between the parties on that point. Why, then, does the Socialist Party intend to bring in a wealth tax? If we agree that we must instil some confidence in our businessmen to persuade them to increase investment and, as a consequence, to make our country more competitive, I cannot see why the hon. Member for Cardiff, South-East (Mr. Callaghan) should advocate a wealth tax. What does he mean by a wealth tax? A wealth tax on what?
  Mr. G. R. Mitchison: I am interested in whatever may be coming. We did not object to everything in the Budget. On the contrary, there were many things we did not object to, because we suggested them first and the Tory Party has taken them up.
  Mr. Clark: It is always difficult to discover to whom second-hand clothes belonged in the first place. So many people say that an idea was theirs first. But the intervention of the hon. and learned Member for Kettering (Mr. Mitchison)—for whom I have great respect—shows that he is considering my remarks out of context. It is true that the Opposition must oppose, but they should be constructive. If they are as anxious as the Government to instil confidence in businessmen, those businessmen and the investing public should be told what they mean when they talk about a wealth tax.
  Hugh Dalton did not impose such a tax. Sir Stafford Cripps did, but he said that it could not be done annually; he did it once for all. Mr. Gaitskell had the opportunity to impose it, but he did not do so. How does it come about that after all these years this idea has returned, apparently as part of Fabian thinking? Is it that the Fabian Society has some new members, who think the same as their predecessors thought fifty years ago?
  We cannot link these two matters; we cannot tell the investing public that they must have confidence and increase investment and, at the same time, hold the sword of a wealth tax over their heads. The Opposition ought to let the public
  710
  know what they mean by this tax. They ought not to shield behind the claim that they will do it when they become the Government, because they may not have the chance. They may always be pushing forward this idea of a wealth tax without ever getting it on the Statute Book, they may never form the Government.
  The public also ought to be told more about the social benefits that they will get if there is a change of Government. Let them know more about social security, at which the Opposition have had four attempts. In 1957, they brought out a graduated pensions scheme—half pay, and this, that and the other. Somebody re-read it and found many arithmetical errors, so they brought out a revised edition in 1958. That was dropped after the 1959 General Election. In 1961, they produced Signposts for the Sixties. They should have made it clear to which century they were referring, because people are rather confused, not knowing whether it is 1860 or 1960. Then they said that they would bring out a graduated form of tax, and a few weeks ago they came forward with their new proposals. But however much we question the Opposition about this we never get detailed figures.
  We have been talking about the importance of exports, and of keeping down our costs, but here is another sword hanging over the heads of the electorate, and especially the industrialists. Who will pay the contributions of this new scheme of the Opposition? How much will those contributions be? As compared with 1951, double the amount of money is now going into the National Insurance Fund. It was then £109 million; today, it is £221 million.
  How much do the Opposition say that the Exchequer will have to find for this new social benefit? This is germane to the whole argument about our economic survival, costing, exports, and the rest of it. The whole emphasis must be on exports. We lost a golden opportunity from 1945 to 1951. The world markets were open to us, yet all we did was to indulge in domestic politics. We lost that golden opportunity, and in 1951, when the Conservative Party came to office, the sellers' market had ended. Japan was rising, West Germany and

  711
  Europe were rising. Let us never forgot—
  Mr. Crosland: The hon. Gentleman will forgive me for interrupting him, but I have refrained until now under the extreme provocation of his highly inaccurate remarks about a wealth tax and many other things. He should have been in the House to see the performance of the Conservatives in opposition from 1945 to 1951. If the hon. Gentleman imagines that the Conservative Party gave figures about what they would do, he must be out of his mind. In view of what he has said about exports, is he aware that by the time the Labour Government left office in 1951, exports—contrary to the most most gloomy expectation—were double what they were before the war, and they have scarcely risen since?
  Mr. Clark: This is an extraordinary philosophy. The Conservative Party has been accused of many things. If the economic situation was as rosy as the hon. Member for Grimsby says, why did his party abdicate?
  Mr. Geoffrey Hirst: Scuttle.
  Mr. Clark: We cannot have it both ways. We cannot say that in 1951 we were in a strong economic position and, at the same time, there had been devaluation, with the gold and dollar reserves running away like sand. What happened was that the Labour Party went to the country and gave the succeeding Tory Government the job of clearing up the mess.
  I do not think that we need to worry about what has happened in the past. But I am serious when I refer to these promises which are being made by the party opposite about what is to happen to our economic life. The industrial public deserves more consideration than it is being given by hon. Members opposite. If they have some things to put forward as part of their next General Election programmes, they should indicate what will be the cost, because that will determine whether we shall continue exporting or whether our exports will decline and we go back to the position in which we were some years ago.
  I am partially grateful to my right hon. Friend the Chancellor for the reference
  712
  in the Budget statement to exports. Mr. Gordon Richardson is to look into this question whether it would be possible to provide a tax incentive. That is not in violation of G.A.T.T., or anything like that. All we want to establish is a tax reform and this is an important part of it. We want a tax reform and the turning of part of the system over to T.V.A. which is far more popular than a turnover tax. If T.V.A. is a built-in export incentive, we should know about it and our exporters ought not to be put at a disadvantage.
  The French and the Germans are operating T.V.A. They get the export advantage, if there is an advantage. I agree with the hon. Member for Grimsby that it may be a controversial question. It may be debatable whether there is an advantage. My information is that it is an advantage to the exporter. The French and the Germans think that it is and have changed over from a turnover tax. They are going for T.V.A. and our exporters should get the same relief.
  I regret that the proposed inquiry was not started a year ago when, during a debate on the Finance Bill, we debated exports incentives. My right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), who was then Chancellor, said that he would look into the whole question of export incentives. I am sure that the hon. Member for Grimsby did not mean it, but I think it was unfair to say that this is being done by only one man. Mr. Gordon Richardson will be the leader. But he will get all the help he can.
  I wish to refer to the question of fuel tax. This tax has borne heavily on some industries. I accept the argument regarding the National Coal Board, but if the fuel tax is a burden on industry and is acting against exports, what would happen were it halved or abolished? It would merely mean that those industrialists who, at the moment, are "oil-fired" would be able to reduce their costs. No one would swop over from oil to coal simply because the fuel tax remains. It would be only on new machinery that the Coal Board could possibly lose any business. Although I accept the importance of getting the coal industry into a more viable economic position in order to show a profit, and so on, I regret that the fuel tax was not reduced or abolished.

  713
  While I am on the subject of exports, I recall that in November last year the Chancellor gave a boost to the car industry by a reduction in Purchase Tax which, I am sure, has been of immense benefit. Since then, car exports have gone up. But there is no incentive for heavy industry. People are not buying our heavy industrial goods. It also needs an incentive.
  I welcome the reference to world liquidity. I sincerely hope that the Americans will be convinced of the necessity for improving facilities for world liquidity. I accept the Kennedy Round as being extremely useful. But I wish that as much energy could be put into improving world liquidity as has gone into the Kennedy Round. It is obvious that people want to buy our goods, but they have not the money because of the inadequate reserves and we must do something about increasing liquidity. I regret as much as other hon. Members that the Maudling plan did not get the reception which it deserved.
  The hon. Member for Cardiff, South-East inferred that this was an election Budget. From time to time the Conservatives are accused of introducing election Budgets. I cannot really accept this and I should like the Committee to bear with me for a moment while we consider it. Our costs and prices are, in fact, competitive over a large section of our industry. This is so for two reasons. One is that the reserve of labour available on the Continent has dried up. Europe has had a hidden unemployment figure for many years, while we have had full employment. Obviously, it could be more efficient. Its cost and prices have been kept down.
  The hon. Member for Cardiff, South-East—the Leader of the Opposition did so yesterday—made rather a cheap gibe about the difference between what was done by my right hon. and learned Friend the Member for Wirral and the present Chancellor. I do not think that either of those policies are compatible, for the simple reason—[Laughter.] It is very easy to laugh at an argument before one has heard the argument. It is much more difficult to laugh after one has heard it, knowing that one has no come-back to it.
  714
  If possible, we should have had the pay pause earlier. It is well known that as a nation we have been paying ourselves far too much for too little work. In 1961, we paid ourselves 32s. 5d. a week more for 12s. 7d. a week more work value. Obviously, that cannot go on. I think that my right hon. and learned Friend the Member for Wirral did a great service to the economy in halting this and narrowing the margin between incomes and productivity.
  When speaking about election Budgets let us not forget that all Budgets must either take more in taxation or give more relief from taxation, unless there is to be a Budget which does nothing. Invariably, a Budget does something, even if it gives only £1 million or takes £1 million away. It should be emphasised to hon. Members not only on this side of the Committee, but opposite, that since 1951, whatever is said about Conservative Budgets, we have reduced taxation from 32 per cent.—[An HON. MEMBER: "Nonsensical."] An argument cannot be declared as nonsensical until it has been propounded—to 27 per cent. of the gross national product.
  Hon. Members opposite may not agree, but I could guarantee to prove these figures. Obviously, I should not give a figure like that unless I was absolutely certain of it. That reduction from 32 per cent. to 27 per cent. was before this year's Budget. That is the measure of what Conservative Budgets have done. We are taking less of the gross national product and giving far more benefits. I am not making a party point in saying that it is nonsensical for anyone on either side of the Committee to say the opposite. Everyone knows from evidence in his constituency that this is the truth.
  I reiterate what the Chancellor said yesterday. The whole of our economic survival depends on our export position, our balance of payments, competitiveness, and so on. No one side of the nation is responsible for that. It has to be a general effort. I hope that very careful note will be taken of the words used by the Chancellor. We are all in the same boat and if we do not all pull together the boat will sink. Management, trade unions and Government must pull together. If that message gets over to the country there should be no fear that we shall not pull ourselves out of the

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  slack in industry and go forward to prosperity.
  7.23 p.m.
  Mr. Eric Lubbock: Unlike the hon: Member for Nottingham, South (Mr. William Clark), I am much more interested in 1966 than in in 1946. I do not propose to follow him into the realms of ancient history with which he took up so much of the time of the Committee. I have very seldom heard a speech of such great 'length with so little content. I listened carefully but I heard him enunciating only one principle, that it was the function of the Opposition to instil confidence into British industry.
  I do not want to go into numerous questions relating to history which the hon. Member introduced and I shall touch on only one point of his speech. That is what he said about investment. I entirely agree with him in thinking that increased investment in British industry is an essential concomitant of growth, but I point out that it is living an another world to imagine that investment opportunities for British industry depend on going into the Common Market or not.
  Mr. Gresham Cooke: The hon. Member does not know what he is talking about.
  Mr. Lubbock: If the hon. Member wishes to make an interruption I shall give way.
  Mr. Gresham Cooke: If one has surplus money to spend and there is the possibility of going into the Common Market, there is every incentive to take plant over into Europe, or in the long term one may decide to spend at home. One has to make these decisions.
  Mr. Lubbock: The hon. Member is talking about the huge mammoths of British industry like I.C.I. He ought to know that 80 per cent. of British industry is composed of firms with less than 100 employees, who could not from their own resources invest in setting up factories on the Continent even if they wished to do so. The investment decisions of people in British industry are based on a much more complex set of factors than the hon. Member seems to appreciate.
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  I do not wish to waste more time on the content of the speech of the hon. Member for Nottingham, South because there was very little in it. I wish to make a few remarks about what the President of the Board of Trade said this afternoon and what the Chancellor said yesterday. In the speech of the President of the Board of Trade there seemed to be no greater realisation than in that of the Chancellor that the past year has been a disastrous one from the point of view of the British economy. He told the Committee that Britain's economic growth depends on our export trade. I should have thought we all knew that by now. He blamed poor export performance at the end of 1962 on to a slowing up of world trade as a whole rather than on shortcomings in Government policy in this direction.
  I think we can leave the electorate to be the best judges of that, but before they make up their minds they should compare our performance in this country with the performance of other major industrial nations. I think everyone in the Committee agrees that exports are vital to achieve the 4 per cent. growth target which has been accepted by the Government and was proposed by the N.E.D.C. It is particularly important for that reason that the President of the Board of Trade should in turn accept the implications of that target which have been enunciated by the N.E.D.C. The Council, in paragraph 272 of its Report, says:
  "It is estimated that a rate of increase of about 5 per cent. per annum from 1961 to 1966 is required. …"
  That is, to achieve the 4 per cent. growth rate overall.
  When the President of the Board of Trade was questioned about this and asked if he adhered to this figure, he was not prepared to commit himself. He said that he would not give a hostage to fortune by going nap on that 5 per cent. figure. Yet it is absolutely vital, as hon. Members opposite—including the hon. Member for Louth (Sir C. Osborne)—have made quite clear, that unless we can achieve that 5 per cent. rate of growth in exports we shall not be able to see the 4 per cent. growth in our gross national product which the Government have accepted.

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  It is worth emphasising that the Chancellor said in his Budget statement yesterday that it should be made clear—I think "crystal clear" were the words he used—that the theme of the Budget was expansion without inflation He asserted his belief in the proposition that the N.E.D.C. target of 4 per cent. could be achieved without danger to the £. Considering that in the past our rate of growth has been slower than in every major industrial country, that is a pretty modest target. It can be seen as exciting only by contrast with the stagnation of the last decade. If one looks at the two graphs in the Economic Survey, taking 1958 as 100, one sees that our industrial production has grown to just under 115. In the next graph the growth in the E.E.C. countries has been to nearly 140, and in the world to over 130. So our performance is very poor in comparison with those other countries.
  It should be pointed out that in order to catch up with the N.E.D.C. target we need year a growth rate of at least 8 per cent. to make up for the stagnation of last year. The Chancellor ought to make clear when talking about the achievement of this target whether he means that we are to have a rate of growth of 8 per cent. this year or that we have lost forever the 4 per cent. which we ought to have had in 1962. The year 1962 was the year in which the gross domestic product not only showed no increase at all but actually fell back slightly. In 1961 the figure was £22,225 million. In 1962 it was £22,179 million. These are the figures at 1958 prices taken from the Economic Report for 1962, page 17.
  It still remains to be see whether the very fine words about expansion used by the Chancellor of the Exchequer yesterday mean a change in the Government's attitude. We have heard this speech many times before. I had hoped that the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) would intervene in the debate this afternoon, because it would have been interesting to hear what he had to say about the contrast between this Budget and the previous one. In his speech last year the right hon. and learned Gentleman said this:
  "The theme of the Budget is the maintenance of a firm base for sound expansion."—[OFFICIAL REPORT, 9th April, 1962; Vol 657, c. 994.]
  718
  That only paraphrases what we were told many times by the Chancellor of the Exchequer yesterday.
  Where all Chancellors since the war have failed is that their cautious obsession with the health of the £ has always halted the take-off of the economy just at the critical point when it was beginning to get into its stride. Yet I think that the history of these years should have shown that restrictions on demand and profits at home are not the right way to encourage the exports which are essential to an expanding economy.
  What I think is needed above all is for British industry and for foreign holders of sterling to have full and absolute confidence in the Government's determination to make growth the prime and overriding object, not only of their Budget, but of their whole economic policy. We certainly welcome the indications that the Chancellor has grasped this elementary fact, which we have been trying to put across for so many years, and the assurance that he will make full use of our external borrowing powers to combat any short-term depletion in the reserves which might be caused by the stocking up process which will inevitably accompany reflation is particularly valuable.
  It is important to emphasise at this stage that one Budget speech, however good it may have been, will not be enough to undo the mistakes of twelve years which are now admitted, at least by implication in the Chancellor's speech. Is this miraculous conversion which we have witnessed a permanent one? Has the whole of the Tory Party, including the right hon. and learned Member for Wirral, repented? We might have had more confidence that this has happened if the Chancellor in his Budget speech had admitted frankly that the last Budget was a grave error of judgment.
  I come to the proposals in the Budget. I think that we are all agreed that at this stage the stimulation of demand by some reductions in taxation was essential. The only question in my mind is whether the figure of £270 million fixed by the Chancellor is large enough. The Economist and various other informed sources have put the figure at £400 million tax relief. They have said that this was required in the light of the estimates of industrial production which came out

  719
  quite recently. This is open to argument. I would not be at all dogmatic about it. I think that in considering this figure, whether it should be £270 million or £400 million, one must take into account what are the medium-term possibilities rather than look at this particular year in isolation. One must see then that the scope for reductions in taxation is inevitably limited by projected increases in Government spending to which we are already committed. Some components of these increases are welcome, such as those on education, and they can be looked at, as one hon. Member has said, as part of our investment programme.
  I think that if the Government are really serious in their endeavour to meet this 4 per cent. N.E.D.C. target, they have to pay just as much attention to their own housekeeping as they do to that of the private sector. They must ensure particularly that all Government expenditure is designed to encourage growth. Nearly 27 per cent. of all Government expenditure goes on defence alone. It is particularly vital to ensure that lack of control there will not vitiate any gains which may be secured in the rest of the economy.
  The N.E.D.C. Report postulates an annual growth in defence expenditure of 4 per cent. in money terms. The rise between the 1962–63 outturn of £1,766 million and the 1963–64 estimate of £1,838 million amounts to more than 4 per cent. It in fact comes to 4·2 per cent. If one then assumes that the outturn for the current year exceeds the estimate by the same amount as it did last year, it will be another £45 million on top of that, making a total increase in defence expenditure between the two years of no less than £111 million. That is far above the N.E.D.C. limit.
  I am nervous that this is going to happen when I look at some of the words which have been spoken recently by the Minister of Defence. I think that he is already busy working out his alibi in case defence expenditure does exceed the target by such a large amount. In the Defence debate on 4th March the Minister of Defence said this:
  "While we shall and must attempt to keep spending at around 7 per cent. of the gross national product, it must be remembered that the costs of research and development in all
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  countries are rising faster than the increases in the gross national product. It is that single factor more than any other throughout the world that is tending to force defence cots upwards …"—[OFFICIAL REPORT, 4th March, 1963;Vol. 672, c, 31–2.]
  Thus, I believe that a danger exists, to which we ought to be alive, that inflationary processes will arise from this grandiose defence policy which has been adopted by the Government and that this could wreck any short-term good done by this Budget and those which follow it over the next few years. It is as well that one should bear that in mind when discussing the Chancellor's detailed proposals.
  I welcome, as everybody does, the fact that the Chancellor of the Exchequer has at last gone some way towards meeting our proposals for additional assistance to the development areas. It is about time that we had some admission from the other side of the Committee that the Local Employment Act has been a complete failure. Are we certain even yet that the inducements now being offered to industry to go to these areas are large enough? Are they, for example, big enough to solve the persistent unemployment in Northern Ireland? I do not believe that the Chancellor can give us that assurance. I do not believe that he could honestly say that these inducements are going to wipe out the unemployment in Northern Ireland which has persisted ever since the war.
  I should have liked to have seen the Chancellor take additional powers beyond those which he has taken in the Budget. For example, if he could have taken powers to waive or reduce the National Insurance contributions in these development districts, it would have been an extra measure which he could have used if these measures were not successful in their application. I would also agree with those hon. Members who have said that it is not enough to consider only development districts. We have to think in terms of regions from now on. We have to think in terms of regional planning to get population to go into certain areas. That means that we may have to give the same concessions as we have in the Local Employment Act to areas and districts where the unemployment may not reach the figures which are calculated as the minimum for this aid under the Act,

  721
  That is essential if we are to have a long-term policy for the distribution of industry in this country.
  The President of the Board of Trade spoke about the marvellous inducements which are given to industrialists to go to these areas. I want to make one comment about the example that he quoted. He said that if a factory was set up for a total expenditure of £1 million, divided as to buildings £250,000, plant £450,000 and working capital £300,000, that would attract grants totalling £100,000 and a tax saving of £300,000 in the first year. I wish the right hon. Gentleman would tell me what type of business it is that can set up and start operations and make a profit which would be large enough to have such a large sum to set against taxation in the first year of its operations. I would certainly like to get in on it.
  While on this subject of National Insurance contributions, there is a contradiction in the right hon. Gentleman's Budget proposals. We are about to be asked to pay increases in our National Insurance contributions, yet the avowed intention of the Chancellor in reducing taxation is to spread purchasing power as widely as possible over the economy as a whole. To illustrate what I have in mind we might take a little example. A London bus driver, with two children aged between 11 and 16, earning nearly £14 a week including overtime has hitherto been paying about £3 a year in Income Tax. He is now relieved of that entirely but, correspondingly, he will lose £2 8s. by having to pay an extra 11d. a week in National Insurance contributions. I do not suppose that that bus driver is exactly leaping for joy, having realised the full implications of the Budget proposals.
  I had hoped—because we heard so much about this Chancellor being a radical thinker who was contemplating large reforms in the taxation system—that he would have looked at the whole contributory principle once again. It would certainly be much fairer and more simple to finance the whole social services out of direct taxation and abolish altogether the employees' contributions in this context. It is time that we swept away all this ridiculous paraphernalia of stamps and cards which must be a terrible time waster to people in industry. However, I suppose that that was
  722
  too much to hope for. And since it has not happened, I urge hon. Members opposite not to try to pretend, as some of them are doing, that everyone will be better off under the Budget proposals.
  Even for those who will benefit from the tax changes more than they lose under the increased National Insurance contributions—and they have to be earning more than £700 a year to do that—in many cases they will find that whatever benefits they get those benefits are swallowed up by rates increases.
  Mr. Gresham Cooke: Have not the rates in Orpington gone up by 4s. 1d. under the Liberal Council?
  Mr. Lubbock: If the hon. Member wants me to explain why there has been this increase in rates in Orpington I will be delighted to do so. I have explained it to my constituents and they understand that the increase is due entirely to the Tory Government. In this connection, many of my constituents—and this goes for the people who the hon. Member for Twickenham (Mr. Gresham Cooke) represents—will find that any benefits they get out of the tax changes in the Budget are nullified by increased rates.
  I would like to know why the Minister of Housing and Local Government was so resistant to the suggestion that some benefit should be given to people suffering this increased rate burden because we now know that the Chancellor had about £270 million at his disposal to hand back to the taxpayers. Perhaps it is not too much to hope that if people continue to vote Liberal at by-elections in sufficient numbers we may get some satisfaction in this direction as well. It is obvious that a good part of the Budget consists, from the individual's point of view, of handing back some of the money already taken away from them by other Ministers.
  I notice that another technique has crept in; and I intend to expose it as well. I refer to the practice of making promises in Budget speeches which will be fulfilled at a future date and which, of course, cost nothing immediately. This technique has been used extensively by this Chancellor following, I suppose, the example of the previous one in regard to Schedule A. If the present Chancellor really means what he says about Schedule A I wonder what has justified the Government keeping it on as part of their policy

  723
  for so many years. Why has it taken them so long to get rid of it?
  It is interesting to note some of the many things which this Chancellor has said will be done at some indeterminate date or this year; things about which we have been given promises but nothing more concrete. There will, he says, be some unspecified improvements in the arrangements for dealing with redundancy. That is a requirement which we in the Liberal Party have already spelled out in detail. There are to be further investigations into the feasibility of a corporation tax—"further investigations" I emphasise—although last year we were told in the Budget speech of the right hon. and learned Gentleman the Member for Wirral:
  "We have got beyond the stage of general talk about the desirability or otherwise of a single tax and can now look at a possible scheme."—[OFFICIAL REPORT, 9th April, 1962; Vol. 657, c. 972.]
  It seems that we have left that position and are now not looking at a possible scheme but are indulging in general talk. I suppose that the idea was peddled round the City of London, as my right hon. Friend the Leader of the Liberal Party strongly advised against. My right hon. Friend knew that once it got lost in that jungle nothing would come of it.
  We are told that there will be consideration of an added value tax of the type which my party has advocated. Mr. Gordon Richardson is to conduct an investigation on behalf of the Government, so they are once again sloughing off the responsibility on to someone else for making a decision. The Chancellor has said that there are some doubts as to whether such a tax would be feasible and of assistance to our exports. On the Continent they are in no doubt about it and if the Chancellor had listened to the speech of his hon. Friend the Member for Willesden, East (Mr. Skeet) yesterday he would have seen a thorough explanation of how this T.V.A. tax operates on the Continent, for he said:
  "Further, when we find that the Common Market countries have decided to harmonise turnover taxes on France's T.V.A. system, I should have thought that the evidence was overwhelming."—[OFFICIAL REPORT, 3rd April, 1963; Vol. 675, c. 561.]
  724
  It is certainly overwhelming on the Continent although, once again we have not yet caught up with them.
  To give further examples of my earlier remarks, there is the promise of relief on the duty on light hydrocarbon oils. This is something that could have been easily incorporated in the Budget and a subject which the Chancellor should know has been a critical disincentive to some industries with outstanding export performances—industries to which relief should have been given long ago, particularly the paint and plastics industries. There is a vague undertaking that he will consider the removal of the duty on fuel oils, provided Lord Robens gives him permission to do so some time next year. The Chancellor admitted that the removal of the duty would help, among others, the steel industry—and we all know that that industry is grossly underemployed at the moment. It is operating at 70 per cent, of its capacity and I would have thought that this would have been one way to have quickly increased its capacity.
  We have all these promises of reforms to come as a substitute for any real policy. Even in respect of gambling, which the Chancellor agrees should make a contribution towards the rising cost of social expenditure, the only suggestion he has made is that the Customs and Excise should compile a list of one-arm bandits and other gambling machines.
  In a Report published yesterday by the Churches' Council on Gambling, it is stated that gambling turnover last year reached a record £853 million—not £700 million as the Chancellor said—and the Churches' figure does not include the notorious gaming clubs which are springing up everywhere and the turnover of which it is impossible to estimate. While we are waiting for a reform of gambling taxation, nothing is being done to relieve certain parts of the betting industry from the discrimination which has operated against them for many years. While we would all agree that gambling should make its contribution towards our social expenditure, it is wholly unfair that the Government should single out certain parts of the industry for heavy discrimination, as has been done on the dog racing industry, as a result of which dog racing is contracting all the time and the money is going to other spheres.

  725
  Stamp Duty on stock transfers and house conveyances is reduced from 2 per cent. to 1 per cent., so we have to maintain the same expense for collection while halving the revenue, and we believe that it should have been abolished altogether. I must make it clear that we should have accompanied that by a full-blooded capital gains tax, because everyone knows that for people with large private investments capital gains are treated as if they were income, and we see no reason why they should be excluded from the tax network. Therefore, I couple those two proposals together. An hon. Member said that one should not consider abolishing the Stamp Duty without introducing a capital gains tax, and I agree with him that these two measures should go together. If we had a full-blooded capital gains tax, we think that it would have enabled the Chancellor to give more reliefs to earned income where they are really required if we are to reward opportunity and not speculation.
  Finally, in my list of examples of what we would have done had we had the opportunity, we would have replaced Estate Duty by a legacy duty to encourage the splitting up of large estates, and this would bring about a much wider distribution of property. This would have had to be accompanied by a similar tax on large gifts to prevent the avoidance of tax by people who give away their property more than five years before the date of their death.
  To sum up, I think that the presence of some good things in the Budget—we admit that there are some good things in the Budget—is tempered by disappointment that the Chancellor has dodged all the major issues of tax reform that we have been demanding, and that bolder measures to secure the expansion of the economy, which he himself said is so necessary, have not been forthcoming. The Guardian editorial hit the nail on the head this morning when giving reasons for this. It said
  "Perhaps it was a vain hope that a Government so weak politically would embark on an adventurous course at this stage."
  When we come to look at this Budget in retrospect, I think it will be seen to have failed in its main object, that of securing the expansion of the economy. To do that, a much more dynamic approach was necessary to this question of stimulation, and it should
  726
  have been accompanied by a reform of the taxation system as a whole. More than the expression of will was needed. We should have put the emphasis on the creation of a real partnership between the Government, on the one side, and industry and the trade unions on the other. Pious exhortations to co-operate will not be enough. The Government have so far lost the confidence of the people of this country and made so little effort to win it back that no single Budget, even if it were far better than the present Budget, could remedy the damage that has already been done.
  The Financial Secretary to the Treasury (Mr. Anthony Barber): I have listened with great interest to an obviously thoughtful speech, but I should like to put one question to the hon. Gentleman. He has given the views of the Liberal Party on certain traditional cuts in taxation which it would like to see adopted, and certain traditional taxation proposals, but he has not expressed his opposition to a single one of my right hon. Friend's taxation proposals. I wonder whether he would tell us whether the Liberal Party is opposed to any of the taxation proposals, and if so which.
  Mr. Lubbock: I thought I had made it clear that the proposals do not go far enough. We should have liked to have seen a much more radical reform of the taxation system as a whole. It may be that if we had the corporation tax which we have been asking for, and the T.V.A. tax, this would have meant certain consequential changes in other parts of the taxation system. But we all know what has happened. If we had a T.V.A. tax, it would enable us to reduce either Profits Tax or some of the indirect tax on purchases. Although I am not quarrelling with individual proposals in the Budget, I feel that if there had been an overall look at the taxation system we should have come to some different conclusions about how the reductions in taxes could have been distributed.
  Mr. Barber: This is very important. The hon. Gentleman is speaking on behalf of the Liberal Party, and may I take it that he is not opposed to any of the taxation proposals put forward by my right hon. Friend?
  Mr. Lubbock: I think that I said that. I said that we would have gone further

  727
  in certain respects than the Chancellor has done in his Budget.
  Mr. Barber: Which one?
  Mr. Lubbock: The hon. Member says "which one", but it is impossible to pin this down to one detail. As I have explained, if we were to recast the whole of the taxation system we might want to give more away in some respects and less in others. For example, I thought that I had made it clear that we would have given the 1 per cent. Stamp Duty away in exchange for a full-blooded capital gains tax.
  7.56 p.m.
  Mr. Geoffrey Stevens: At the beginning of his speech, the hon. Member for Orpington (Mr. Lubbock) said that be did not wish to go into ancient history. I think that is a very good maxim for this debate, so I shall make no reference to the Liberal Party, not even to the ghost of the future of the Liberal Party.
  I will start by referring to an observation made by the hon. Member for Cardiff, South-East (Mr. Callaghan) in his very interesting opening speech this afternoon. He said that the Budget contained nothing novel. It seems an awful pity that the Shadow Chancellor of the Exchequer should make a main Budget speech for the Opposition without having read the Budget proposals. If there is one thing about the Budget which is absolutely certain, it is that it contains more novel proposals than any that I have listened to, and I have listened to sixteen. No doubt in earlier Budgets there have been more original touches.
  Let us take an example. The right hon. Member for Battersea, North (Mr. Jay) knows very well that one of the reasons why previous Conservative Chancellors, and previous Labour Chancellors, did not increase the personal allowances for Income Tax was because to increase the single allowance by £10 and the married allowance by £20 would be so vastly expensive. That was one of the main reasons. I do not know whether the right hon. Gentleman was making an interrogatory gesture, but he knows that perfectly well.
  The novel thing that my right hon. Friend has done is to increase those two
  728
  personal allowances very substantially but to reduce the effective cost by changing the reduced rate bands. I think that is distinctly novel, and it also has the novel effect of giving the largest amount of tax reduction to the lowest income groups—a thing that does not always happen in those circumstances.
  With regard to the higher quality motor cars, I share my right hon. Friend's view about the good that the Rolls Royce motor car and the Rolls Royce engine do to British trade as a whole, and the way in which he has provided a capital allowance for expensive motor cars in this Budget is highly original. If the hon. Member for Cardiff, South-East can show me its equivalent in any other capital allowance in the whole range, I will stand him a very large whisky and water.
  I have been quite fascinated by a good many of the speeches from the benches opposite today on the subject of how disastrous Tory policies are. The hon. Member for Grimsby (Mr. Crosland), with whom I cross swords with bated breath, waxed furious about that: "1962 was a disastrous year—ah! these terrible Tories!" Why not stick to the facts, and remember that when the Brussels negotiations broke down the pound remained strong? Admittedly, there was some selling, but, because of sound Conservative financial policies and the underlying strength of our economy, sterling remained firm.
  It was only people like the hon. Member for Grimsby and Mr. Nicholas Kaldor who spoke about devaluation—
  Mr. Gresham Cooke: And helped to make the pound rock.
  Mr. Stevens: Yes, and helped to make the pound rock—
  Mr. Jay: I do not know whether the hon. Member for Portsmouth, Langstone (Mr. Stevens) said that my hon. Friend the Member for Grimsby (Mr. Crosland) talked about devaluation, but I do not remember that my hon. Friend did. I thought that it was Mr. Kaldor.
  Mr. Stevens: I certainly heard the hon. Member talk this afternoon of the possibility of devaluing the pound. I do not say that he advocated it, but he spoke of talk of it and rumours of it.
  Mr. Jay: But the hon. Gentleman would not suggest that what my hon. Friend said this afternoon led to weakness of the pound in February.
  Mr. Stevens: No, he said that Mr. Nicholas Kaldor wrote to The Times suggesting devaluation. That did not help to strengthen the pound at all. But it is only from that side of the Committee, not from this—and from Mr. Kaldor, who is certainly not a supporter of this side—that talk of devaluation comes. The pound has been hard in recent months, because we were confident in the results of Conservative policy.
  I want to pass to some of the good things in the Budget. I certainly welcome the "free depreciation," as my right hon. Friend called it—the 130 per cent, capital allowance for plant and machinery in the development districts. I know that my hon. Friend the Member for Dover (Mr. Arbuthnot) will be pleased to see that, because that is a principle—and, incidentally, it is a brand new principle—for which he has been fighting for some time.
  I also welcome the depletion allowance for United Kingdom minerals. Here is another novel aspect. My right hon. Friend flies in the face of the Royal Commission, which recommended that depletion allowances should be limited to land being worked at the appointed day. My right hon. Friend has taken the courageous course of making the allowance cover reserve land as well. It is not every Chancellor who flies in the face of a Royal Commission recommendation.
  The hon. Member for Orpington regretted that in the Budget there were so many promises of what was to happen later, but we know that as long as the promises are made by a Tory Chancellor they will be redeemed. I welcome the undertaking, as I think it is, to remove the 2s. 9d. a gallon duty on light hydrocarbon oils. The Economic Secretary seemed to nail that pretty firmly last night. This will be of help to exporters of paint, surgical gloves, and things like that.
  Many hon. Members on all sides of the Chamber have had many letters and visits from constituents who will suffer an increased rate charge. That is not primarily a matter for my right hon. Friend, but I want to refer to the report of a speech made by a former Member
  730
  of this House, Mr. Angus Maude, in which I first saw the suggestion that rates on private dwellinghouses should be allowed as a charge for Income Tax purposes. There are certainly precedents for such a procedure. Businesses are allowed to charge their rates against income both for Income Tax and Profits Tax purposes. The reason for that may be that their rates are held to be expenses wholly and necessarily laid out for the purpose of the business, but one could not say that the rates on a private dwellinghouse were wholly and necessarily laid out for the purpose of earning a notional income.
  In parenthesis, it may not be novel but it was certainly a good thing for my right hon. Friend to abolish Schedule A, which takes me to the second precedent for giving consideration to the idea I have just mentioned.
  Ever since there has been Schedule A there has been a statutory allowance for repairs. Where the actual cost of the repairs exceeds the statutory allowance one can charge that cost against the slice of income assessed under Schedule A, but one cannot say that those repairs are incurred wholly and necessarily for the purpose of earning that portion of income. Surely, in that sense, rates can just as legitimately be charged against the whole range of income as against the notional income for the purposes of Schedule A.
  I can see two drawbacks to the proposal, and one of them is financial. If the proposal were to be adopted, I should imagine that the loss to the Revenue would be very considerable. I have not done much research into this, and the figure I mention is not an estimate but a pure guess. I think that the cost would be well over £100 million a year, and that would have to be recouped by some other form of tax.
  The second drawback is that such a procedure would bring no relief to the very people whom we want to help most—the old people on small incomes and the young people who, thanks to successive Conservative Governments, are probably below the Income Tax level already. On the other hand, I saw in the same Press report to which I have referred that Mr. Angus Maude said he had experience of the system in

  731
  Australia and that it worked well there. Perhaps it would work well here, and I wonder whether the Government have looked at that possibility.
  There is one omission that I have mentioned before. Nothing has been done to raise the starting point of Surtax in respect of what is commonly called unearned income. That is a term I do not like—I prefer to call it investment income, savings income, or whatever it may be. I entirely agreed with my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) when he effectively raised the starting point of Surtax on earnings, but I do not think that it is sufficiently realised that a very large number of people with investment incomes are people who have worked all their lives in jobs to which no pension was attached. Therefore, during their working lives they had to save from the income, the profits or the salaries that they had. When such a person retires, he may have exactly the same income—£2,500 or £3,000—as the man next door, but because the chap next door worked with a company that had a "top hat" and other pension schemes his £3,000 a year is treated as earnings, while the other man still pays Surtax on the excess over £2,000. It is time that something was done for these people.
  I want to refer to the continued absence of a tax on betting and gambling. I find it extremely difficult to follow my right hon. Friend the Chancellor's figures and logic. Yesterday, he said:
  "No one can say with any certainty what is the total turnover on commercially organised betting still less on gaming, but figures in the region of £700 million a year or more have been suggested."
  He then went on to say:
  "Most of this money, however, is returned as winnings which may in turn be restaked over and over again."—[OFFICIAL REPORT, 3rd April, 1963; Vol. 675, c. 465.]
  He gave a net expenditure on betting of only £100 million, but, as the hon. Member for Orpington has said, the Churches' Council on Gambling has put the figure for 1962 at £850 million, as compared with £760 million in 1961.
  I do not follow this logic of such a large proportion of winnings which are restaked. It is an awfully nice principle
  732
  which I think we should apply to the short-term capital gains tax. If one reinvests gains made within six months, then, by the same argument, one does not pay the short-term gains tax. Surely it makes no difference whether or not the amount invested derives from previous winnings. It is all betting money and should be taxed, if taxation is possible. I accept the difficulties and the social issues involved, but, on the other hand, the advantages of such a tax seem to me from the national point of view considerable. There is no extra charge on the cost of production and no hardship on people living on small fixed incomes. Such a tax is justifiable on most grounds.
  The principal feature of the Budget is that no new tax is introduced and that there is no increase in existing taxes. On the contrary, there is a net reduction of about £270 million. I think that it is the duty of all of us on this side of the Committee to hammer home that message not only in our constituencies but throughout the country, because there is not the slightest doubt that if the Labour Party gets back into power as a result of the next General Election higher taxation will follow.
  I want to say something about the wealth tax which the hon. Member for Cardiff, South-East (Mr. Callaghan) talked about a week or so ago. [HON. MEMBERS: "Not now."] I have not seen any report recently of eulogies poured on that idea by his right hon. Friend the Member for Huyton (Mr. H. Wilson). I wonder why. Perhaps the right hon. Gentleman does not know about it yet. If the hon. Member for Cardiff, South-East is the Shadow Chancellor, then presumably, or, if that is too strong a word, then possibly, he will be the real Chancellor if the Labour Party wins the next General Election. The hon. Member claims that that wealth tax levied at the 1 per cent. rate which he has in mind would yield £200 million each year. Does the party opposite believe in the need for saving? I think that it does, but is this a good way of encouraging saving?
  Let hon. Members consider for a moment the sort of people whom the tax would hit. They would be the rich, because the starting point is £20,000.

  733
  These people, from the upper slices of their incomes, pay 17s. 9d. in the £ even under a Tory Chancellor, leaving only 2s. 3d. in the £ for spending and saving. If we make it very difficult for these people to save within their income and then, in addition, take £200 million a year out of existing savings, not to create a Budget surplus, which is a form of compulsory saving, but to give additional tax reductions to the lower-income groups, the £200 million must be made up in some other way. In other words, there would have to be an additional tax somewhere to produce the £200 million, because the people to whom the £200 million was transferred would be most unlikely to save 100 per cent, of the tax remission. There is no doubt that very heavy additional taxation would be required.
  My hon. Friend the Member for Nottingham, South (Mr. W. Clark) mentioned the Labour Party's graduated social benefits schemes. I make no criticism of that scheme at the moment. I think that The Times called it "A plan for a plan". We have not enough of the details yet to criticise. One difficulty would be the cost. It would be very expensive, but no doubt it is coming in due course. It could be financed only either out of the weekly stamp or out of national taxation, and that again would mean an additional burden of taxation. There is not the slightest doubt that if the Labour Party succeeds at the General Election and we have a Labour Chancellor of the Exchequer severe increases in taxation will be inevitable.
  It should be our duty on this side of the Committee. to make that position perfectly plain to the people. The Tories at the moment are in the trough. There is no doubt about that, whatever one may or many not think of public opinion polls, but, speaking of the contrast between Socialist and Tory taxation policies, I say without fear of contradiction that if his Cabinet colleagues can match up to the Chancellor's performance yesterday the Tories will have their fourth successive electoral victory.
  8.14 p.m.
  Mr. Ernest Thornton: I hope that the hon. Member for Portsmouth, Langstone (Mr. Stevens) will forgive me if I do not follow him in his
  734
  detailed argument, although I would point out to him that in the second half of the twentieth century, when the community is becoming more highly literate and educated, it is not likely that that community will long stand for a position in which 2 per cent. of the population own 50 per cent. of the country's privately owned wealth. This is a position which must change with the times, and it is only a question of time before the change comes about.
  Mr. Stevens: I do not dissent in any way from what the hon. Member has said, but I did not argue the case from that point of view or on those merits. I argued it merely on the basis that surely a wealth tax would mean a reduction of savings of £200 million a year and that that reduction would have to be made good by increased taxation. Does the hon. Member dispute that?
  Mr. Thornton: I quite appreciate that, and I thought that my observation would merely put the matter in proper perspective. I repeat that this is a problem which will have to be faced and that as we become a more highly educated community these differences of wealth will not be tolerated.
  I want to pay a compliment to the Chancellor of the Exchequer. I think that his Income Tax reliefs are as fair as they possibly could have been, but 1 noticed that on the other side of the Committee any enthusiasm shown for the Budget has been at a rather tepid temperature. [HON. MEMBERS: "No."] The leading article in The Times today says:
  "On gambling, he is not yet certain of his ground. On the question of introducing a turnover tax he is far from convinced and wants more information. On redundancy he awaits talks with industry. This adds up to too much procrastination."
  It is on some aspects of that procrastination that I want to base my comments. In the present state of the country there is a great danger that the right hon. Gentleman is attempting too little too late.
  If there is time, I want to deal with three issues which I hope are highly relevant to the Chancellor's speech and to the economic problems now confronting the country. The first relates to redundancy, the second to exports, and the

  735
  third to managerial efficiency. In varying degrees the Chancellor attached importance to these in the comments he made on them in his speech.
  I am glad to see from column 478 of the OFFICIAL REPORT that the Chancellor said yesterday that he intends to tackle the problem of redundancy and of making proper provision for those made redundant. To use his own word, he intends to tackle this problem "vigorously". Why have the Government left the problem for so long? Have not they been aware that there was a problem? Have they just been converted to realisation of it within the past few months? This cannot be so. They had to make provision for compensation to redundant operatives in the Cotton Industry Act, 1959, nearly four years ago, but only now are they suggesting that the matter is one of urgency.
  Fours years ago, when the Cotton Industry Act was passing through the House, the Government and the House as a whole accepted the justice of the principle of operatives' compensation when industries contracted, as the cotton industry has done. I have a lifetime's experience of a contracting industry, and I know what some of the problems mean in human terms.
  I am sorry that the President of the Board of Trade is not in his place. I wanted to ask him whether he was aware of what is alleged to be happening—which I have good grounds to believe is, in fact, happening—in Lancashire now, that is, very important secret negotiations for a widespread merger in one section of the industry. If this merger is effective, it will mean that three-quarters of the productive capacity in that section will pass under one financial ownership and control. It is being done with the co-operation of the merchant banks.
  I do not say that such a merger would necessarily be damaging for the industry or for our national economy. Indeed, in certain circumstances, it could be good. But I must warn right hon. and hon. Members opposite that, if one reaches a point where 75 per cent. of what is, in effect, an industry within an industry—is under one financial ownership, the case against public ownership is very seriously weakened.
  736
  The fact must be faced that a merger of such a size controlling three-quarters of one section of the industry is fraught with dangerous possibilities and repercussions, not least that many more mills will be closed, and closed without proper provision for compensating operatives who suddenly lose their jobs.
  I should have liked to have asked the President of the Board of Trade whether he was aware that, as recently as 22nd March last, the Cotton Employers' Association, of which all the firms involved in the merger are members, emphatically rejected the trade unions' claim for a redundancy compensation scheme on the ground that a national scheme would be forthcoming. But, of course, arranging any legislation for a national scheme takes time. There is bound to be considerable delay. What will be done about those who fall by the wayside in the meantime? I suggest to the Government that to deal with this matter in its immediate urgency they might well consider affording facilities for the quick passage of the Bill introduced by my hon. Friend the Member for Gloucester (Mr. Diamond), the Redundant Workers (Severance Pay) Bill, which would help to mitigate some of the problems which are with us now and which will be with us in the very near future.
  I should like to know from the President of the Board of Trade whether he will consider the effect on the industry of such a merger as I have described. The Government's contention in their reorganisation proposals was that they wanted to make it more vertically organised, but this merger, which I have reason to believe is being negotiated, would tend to make even more rigid its horizontal stratification.
  So much for my comments on the cotton industry. I appreciate that the House has from time to time been very tolerant towards me in the troubles I have had cause to raise. I turn, now, to exports.
  I agree entirely with my hon. Friend the Member for Grimsby (Mr. Crosland). The Chancellor did not lay sufficient emphasis on this vital matter. Our poor showing in exports has probably been the basic cause of Britain's poor economic performance in recent years. Our poor export performance really reflects the uncompetitiveness of British

  737
  industry as a whole. The Government attempt to put the blame, or nearly all the blame, on inflation, that is, the growth of incomes faster than productivity; but I believe that this is only part of the story. I suggest in all seriousness that, when right hon. and hon. Members opposite talk about an incomes policy, they are not really thinking about all incomes. They are thinking about wages and the lower and middle salary grades. I think that they really believe that their system would work if we could have income restraint from 90 per cent, of the population and freedom for the top 10 per cent. But, of course, they are not likely to get that.
  It is not sufficient to put the blame for Britain's failure in exports mainly upon inflation. Let us remember that inflation, during post-war years, has not been peculiar to Britain. France, Italy, Japan and Sweden have all had their inflation problems, yet they have all had a much better export performance in recent years than Britain has had.
  How uncompetitive is British industry today? I have done a little research into trade between the United Kingdom and Hong Kong. Hong Kong, of course, is a free market, quite undistorted by quotas and tariff arrangements. We have performed very badly in recent years in this free market. I ask the Committee to bear with me while I give a few figures.
  On 14th March last, in a Written Answer, the President of the Board of Trade told me that, in the four-year period 1955–58, our exports to Hong Kong represented 59 per cent, of the total visible trade between Hong Kong and the United Kingdom. In the following four-year period, 1959–62, our exports to Hong Kong represented only 48 per cent, of the total visible trade between the United Kingdom and Hong Kong—obviously, a relative deterioration in our position. Let me hasten to add that the nearly 60 per cent, represented by exports in the 1955–58 period may appear to be exceptional, but it is not, because for the last ten or twelve years Hong Kong's visible external trade has been fairly evenly in the proportion of 60 per cent, imports and 40 per cent, exports. Therefore, in the first four-year period, 1955–58, we were taking about our share of the trade which was going. In the
  738
  last four years, our share has deteriorated very much.
  I now come to the competitiveness of our industry. On 26th July last year, the Colonial Secretary gave these figures in a Written Answer. In 1955, of the imports of non-electrical machinery into Hong Kong, 42 per cent, came from the United Kingdom. In 1961, the percentage had dropped to 33. The non-electrical machinery industry should be one of our expanding industries. In 1955, 64 per cent, of the imports of electrical machinery into Hong Kong came from the United Kingdom, but by 1961 the figure had declined to 45 per cent.
  These are supposed to be among our most efficient industries. These are industries for which other industries—for example, cotton—should be allowed to contract. There appear to be some shortcomings in the performance of these and other supposedly efficient and expanding industries. It is lack of productive efficiency? It is a question of marketing, delivery or after-sales service? I do not know the answer, but we must find it and rectify the situation if we are to demonstrate that United Kingdom industry is really competitive in its so-called expanding sectors.
  My third and last point is on managerial efficiency. Yesterday, the Chancellor of the Exchequer referred to
  "The amount that could be achieved, and achieved rapidly, by better management and better deployment of our resources … "—[OFFICIAL REPORT, 3rd April, 1963; Vol. 675. c. 487.]
  I wonder whether he attaches sufficient importance to the rôle of management. The right hon. Gentleman's priorities, as I interpret them from a close study of his speech, would appear to be, first, an incomes policy, secondly, a higher level of investment, thirdly, better labour deployment, and, fourthly, better management. I would put the priorities in a rather different order. First, and equally important I think, are a higher level of investment and better management. There is bound to be wastage if a high standard of capital equipment is not matched by really first-class and competent management.
  There is a growing belief that one of the main handicaps of our country today is that somehow there is very faulty selection in our community as a whole, and

  739
  I think that this is particularly true of management. I wonder whether sufficient importance is being attached to ensuring that correct selection is made. To what extent nepotism still enters into it and to what extent it is a matter of faulty judgment I am not prepared to assess, but I believe that this is one of the really important issues which Britain has to face if she is to resolve her problems and to improve her competitiveness and industrial efficiency in order to increase exports which are vital to her advancement and survival.
  8.35 p.m.
  Mr. Peter Walker: Members of the Committee always listen with interest and respect to the remarks of the hon. Member for Farnworth (Mr. Thornton). We know that he is a great authority on subjects connected with the textile industry. The case which he has put in connection with exports was, possibly, a little overstated and there are several advantages which our economy enjoys but which are not shared by our competitors. These are often forgotten in discussions concerning export incentives.
  For example, the heavy subsidisation of our transport system is of general assistance to the exporter. The fact that by means of a system of agricultural subsidies we pursue a cheap food policy enables us to have a control upon the price of food which has effects in preventing inflation and preventing increases in our export prices. I have frequently been abroad and have heard foreign businessmen discussing what are called the wicked subsidies which this country employs in assisting the exporter in that way.
  The particularly interesting aspect of the hon. Member's speech, and one which I find of interest about the whole of today's debate, is the change of emphasis in the attitude of hon. Members opposite today as opposed to yesterday. Yesterday, the Leader of the Opposition made one of his witty, interesting and amusing contributions to our debates, the whole context of which was that there was a wicked Tory manoeuvre to produce an electioneering Budget. I do not know why the right hon. Gentleman did that. I do not know whether it was because,
  740
  as he told us, he had lost his sleep the previous night. I can imagine the right hon. Gentleman, returning in his aircraft from the United States, pencilling a few notes about what he would say next day and thinking of all the witticisms that he could produce if the Budget was a good and popular one. Then, having listened to it, he decided that it was a rather good and popular Budget and that as he had prepared all his splendid remarks he must deliver them.
  Then, however, came the afterthought. One visualises the meeting this morning when the shadow Cabinet gathered together to discuss future tactics in the debate. Hon. Members opposite must have said that if they were taking the line that it was a popular, electioneering Budget, they could not in the next breath say that the Government had not done enough, because that would imply that the Government were over-cautious and irresponsible and the Budget could not, therefore, be an electioneering manoeuvre. Thus, we had the delicate and witty speech of the hon. Member for Cardiff, South-East (Mr. Callaghan), who did not follow the line taken yesterday by his right hon. Friend the Leader of the Opposition. Obviously, on further reflection, the Opposition decided that their tactics of yesterday were bad. Consequently, in contrast to yesterday, we have had today the theme that the implication of what my right hon. Friend the Chancellor of the Exchequer has done in his Budget is not to attempt to gain popularity but that he has not done enough.
  We have had the usual auction by the Opposition parties, with the Labour Party making its suggestions a little cautiously, that perhaps the Budget was not enough, and the Liberal Party, more flamboyantly, saying that it would improve upon most of the tax benefits and concessions which are being given.
  The fact that there is some degree of caution goes towards exposing the generally popular attitude today that we are all in favour of expansion and must not be too concerned about mere things such as the value of the £, but must forge ahead with expansion irrespective of the cost. This is a rather irresponsible attitude to develop within the country. It is why I unapologetically cheered vigorously the speech of my right hon. and learned Friend the Member for

  741
  Wirral (Mr. Selwyn Lloyd) last year and why I cheered the speech of my right hon. Friend the Chancellor of the Exchequer this year. I do not regard the two as contradictory. Last year ray right hon. and learned Friend the Member for Wirral provided policies which were right at that time. Likewise, I consider that my right hon. Friend the Chancellor has this year produced the right policies for this moment in our history.
  If one examines the facts as they were when we met for the Budget debates last year, we had the position that there was likely to be an improvement in our economy. There was every indication that exports throughout the world would improve. Nobody on the benches opposite suggested that the conjectures of my right hon. and learned Friend that the American economy would show considerable expansion in 1962 were wrong. Nobody on the benches opposite suggested that there would be a considerable depression in our Canadian trade. No hon. Member of the Committee was able to predict these things at that time. My right hon. and learned Friend produced policies that were right in assuring that we remained competitive in the export markets. If these policies had not been produced we should not have had the good export record we enjoyed last year, and the fact that last year exports went up at all was associated with the fact that my right hon. and learned Friend the Member for Wirral was successful in preventing the inflationary trend which developed in the economy of that time.
  Mr. S. Silverman: Then why did you sack him?
  Mr. Walker: I did not sack him. I think my right hon. Friend the Chancellor has made perfectly clear in his speech, and in the policies he has been developing since he became Chancellor, that they are the natural sequel of the steps taken by my right hon. and learned Friend the Member for Wirral.
  Mr. Lubbock: If it was correct to restrict demand at home and profits last year to encourage exports, why is it not equally correct to do so today?
  Mr. Walker: For the very simple reason that at the time those measures were introduced last year there were indications of wage inflation setting in in
  742
  the economy. There were many areas of over-demand, in the Midlands and the South, and a strain on the available labour resources, and this was creating a type of wage inflation which was disastrous to our competing in overseas markets. Certainly I believe that what the Chancellor has done is the natural sequence of those earlier policies.
  The other feature of the debate today has been the complete failure of hon. Gentlemen opposite to develop a coherent policy of their own towards the economic needs of this country. I question why this is. I ask hon. and right hon. Gentlemen on the Opposition French Bench, whoever opens on their behalf on Monday or winds up this debate on Tuesday, to develop a little upon the policies which the Labour Party would apply to our present position. As far as one can see, looking back at the traditional policies of hon. and right hon. Members opposite in the years from 1945 to 1951, in all fairness I think they can be said to have been, in the main, advocates of a cheap money policy, advocates of import control and advocates of the policy of extension of public ownership. I do not think that that is an unfair interpretation of some of the fundamental principles which hon. and right hon. Gentlemen opposite employed when they were in power.
  I wonder, are these still the basic principles of their policy? Are they still to be applied today? Or are there somewhat different principles? If there are somewhat different principles, may we hear about them? There is an incredible coyness and shyness about their latest proposals.
  The shadow Chancellor of the Exchequer made a few remarks about the wealth tax by which he would take £200 million out of the economy, but yesterday when hon. Gentlemen opposite started making speeches about it they said they would not go into the details of the tax at all till after the General Election. That is an incredible thesis for the Labour Party to propound. If hon. Members opposite believe in their wealth tax, let us hear all the details and let us have all the information about it and about their other policies of cheap money and extension of public ownership which they operated when they were in office.

  743
  Unless they can provide the details of those policies they will not deserve the support of the people of this country.
  Let us recall that when they were in office, in 1947, there was an unemployment situation due to the weather, but we have had a similar winter this year, and yet we have not reached the levels of unemployment which were reached when hon. and right hon. Gentlemen opposite were in office at that earlier period. In 1949 they devalued the £. In 1951 they scuttled out of office because the whole economy was going bankrupt. Do not let them be the people to talk about stop and go. With them it was stop, stop, stop and very little go—and a major devalution in between.
  I should like now to make one or two comments on the proposals made by my right hon. Friend, and first in connection with the proposals he has made to extend the theme of ownership. I certainly support the manner in which he has abolished Schedule A. This is an extension of several operations which we have carried out to encourage home ownership. I welcome the manner in which we have destroyed Stamp Duty upon the purchase of houses. Now, a young married couple purchasing a £3,000 house will no longer have to pay the £60 duty. Having purchased it, they will no longer have to pay Schedule A tax. This is a major step forward.
  The hon. Member for Grimsby (Mr. Crosland) opposed the halving of the Stamp Duty on shares because he considers that it benefits those who go dancing on the Riviera. But I suggest that this proposal could have an important effect upon the expansion of ownership. I say "could have". I do not think that it necessarily will have. It depends on the attitude and the reactions of the Stock Exchange to my right hon. Friend's proposal.
  For many years the Stock Exchange and the City have said that this duty is one of the barriers against widening share ownership. Now they have had a substantial reduction in it. I hope that, as a result, the Stock Exchange itself will adopt a far more vigorous method of providing and offering its services to the public at large than in the past.
  744
  In recent years, it has extended the knowledge that people have about its activities. But there is still much to be done. It could, for example, agree to open branch offices throughout the country and to the expansion of advertising. If it really is enthusiastic to widen the scale of share ownership, it has been given a lead now by the Government and I hope that it will proceed with it.
  I am glad of this proposal for its effect on investment from abroad. I was shocked by remarks made by the hon. Member for Grimsby. He said that it was deplorable that we should try to attract money from abroad because it made us look rather like an underdeveloped country. That is contrary to my own view, which is that we should endeavour to encourage foreign investment.
  Throughout the Common Market negotiations, many people in favour of our entry said that one of the advantages would be the attaction of foreign investment to this country. I disagree with the hon. Gentleman about this. There are many attractions for capital to come here. For instance, there are Imperial Preferences and the preferences within E.F.T.A., quite apart from our great consumer market. I hope that the measures proposed by my right hon. Friend will encourage foreign capital to come here.
  Now I want to deal with overseas earnings, particularly invisible earnings. This is a feature which I am afraid that the Board of Trade and the Treasury tend to neglect. It is one of the mystiques of modern finance. People comment on the fact that our balance in terms of invisible earnings has improved or has declined, but they give little detailed reason as to why it should improve or decline.
  We enjoy substantial earnings in terms of shipping, insurance, banking and finance. Something much more positive could be done to extend these earnings. Let us remember that at this moment our invisible earnings are equal to more than half our total visible exports. This is an important feature in our economy.
  Last year I visited Australia and New Zealand and was shocked by the pressures that were building up there—pressures of prejudice against the substantial sums of

  745
  money that the United Kingdom earns in the form of earnings from insurance companies, banks and shipping companies. There is much more to be done in seeing that these companies earning from Australia and New Zealand, and other countries, bring to their attention the benefits that this brings them. For example, substantial investment in Australia has been provided by British insurance companies and British banks, and the manner in which they have offered their services has benefited the economies of those countries.
  At the moment, little is being done for public relations in terms of our invisible earnings. Recently I suggested to my right hon. Friend the President of the Board of Trade that he should inquire into the possibility of setting up an organisation—for instance, an invisible earnings council or some similar body—to look into the problem of good public relations and of promoting more invisible earnings.
  I also suggest to my right hon. Friend the President of the Board of Trade that he should find ways of encouraging the great retail organisations of this country to open up abroad. I think of companies such as Marks and Spencers who have methods of "know-how" in retailing far better than methods employed on the Continent. There is no reason why these organisations should not be encouraged by positive Government means to extend their activities abroad and, through their organisations abroad, to sell great volumes of British merchandise and thus make a valuable contribution to our export trade.
  This Budget at this time probably hits the right level, and I agree that it should result in a period of expansion. I hope that throughout the coming financial year my right hon. Friend will not hesitate to give further encouragement to expansion if he thinks that that is the correct thing to do, considering the strength of the £. Likewise, if he finds that these measures, together with those he has already taken, lead to inflation, I hope that he will not lack the courage immediately to take measures to see that the strength of the £ is protected.
  8.51 p.m.
  Mr. Sydney Silverman: I had not intended to make any
  746
  contribution to today's debate. A great many years ago, I confess, I was described by my university tutor in economics as a first-rate economist. I have never believed in the science of economics since. The assessment made by that gentleman so many years ago has been repeated by others and every pronouncement I have heard by any economist has been contradicted by some other economist at the same time, or shortly afterwards. Therefore, I no longer take part in these esoteric mysteries.
  What prompted me to intervene in the debate—I am sorry that he is not here to hear me say so—was what I thought was the gross discourtesy of the President of the Board of Trade in refusing to give way during his speech when there had been only one interruption before, and that for less than half a minute, and when, thereafter, he proceeded to give way to every Member on his own side who wished to make any intervention of any kind.
  The Economic Secretary to the Treasury (Mr. Edward du Cann)The Economic Secretary to the Treasury (Mr. Edward du Cann)rose—
  Mr. Silverman: I shall not give way. I shall show the same standard of courtesy as the President of the Board of Trade showed in not giving way.
  I wanted to deal with that matter, but I am not sure now that I shall, because he is not even courteous enough to be here, nor is there any representative of the Board of Trade on the Government Front Bench. That is a shocking thing on the first day of the Budget debate which, as the right hon. Gentleman himself said, is the traditional day for discussing Board of Trade affairs.
  I should like for a short time to deal with some of the more obviously fallacial party political points to which we have been treated in the course of the last hour or hour and a half by hon. Members opposite. I have every sympathy with them. They are in a difficult position. It is their duty to back up their Government as best they can however inauspicious the circumstances. Perhaps the more inauspicious the circumstances, the more it is their duty to try, but they ought not to be allowed to get away with it, and I should like to expose one or two of the fallacies.

  747
  The first is the oft-repeated legend, in which not even those who utter it believe, that domestically and economically the Labour Government between 1945 and 1950 was a failure, or that its methods or policies did not succeed. In 1945, the war was just over. The right hon. Member for Woodford (Sir W. Churchill), in a sentence which was recorded in his diary by Mr. Morgenthau. of the United States of America, said that he was afraid of what the returning soldiers would have to come back to in this country.
  Lord Woolton—Minister of Reconstruction in the interim Cabinet between the breakdown of the Coalition Government and the General Election—said that this country was virtually bankrupt. That was not a reproach to anybody. We took pride then—and we should take pride now—in our having driven ourselves so near to bankruptcy in order to rid the world of the Nazi and Fascist set that we had fought so hard for six years to overcome. All I say is that that was the situation which the Labour Government took over.
  We are now, were then, and always will be, a country which lives, if it lives at all, by its export trade. In 1945 we had no export trade. We had sacrificed the whole of our export markets all over the world in order to convert the factories which used to supply those markets for war purposes, allowing our competitors, who were also our allies, to make headway in the overseas markets which we had abandoned in order to fit ourselves to play a proper part in the war. Everybody in this Committee at this moment knows that that is true, and we are all, presumably, proud of it.
  That is where the Labour Government started—with Britain a long way behind her competitors, bankrupt, with no export trade and no factories to make goods for the export trade. We had very little skilled labour available. But within less than four years—in fact, scarcely more than three years—we had increased our production to a figure that was no less than 180 per cent, above the best pre-war figure. This is what the right hon. Member for Woodford described as paralysis.
  I am not dealing with what followed. All sorts of things followed, and the
  748
  fruits of their success in those years were not available to us by the time we had to go to the country. Hon. Members opposite may think that that is a good reason or a bad reason for what followed. I do not care what they think. But I do ask them, in spite of their anxiety to defend the Government in a difficult situation, to remember that when they attack what the Labour Government did between 1945 and 1950—and I suppose that I attacked them as much as anybody in those years—they ought not to attack them on the ground of their economic policy, because their economic policy was a triumphant success—and everybody knows that it was. That is the first point. I hope that nobody disagrees with it.
  I see that the hon. Member for Louth (Sir C. Osborne) is present again. I sat through his speech, and I enjoyed it, as I almost always enjoy his speeches. I do not always agree with him. I do not think that I have ever agreed with all that he has said in any one speech. But I recognise him as a man of great intellectual integrity and of great courage. He looks at things for himself and forms his own opinions, and he gives them to the House frankly, whether they are popular with his hon. Friends, popular with hon. Members on this side of the House, or unpopular with everybody.
  I like Members like that, and I like listening to their speeches. But he said one thing that was surely unfair. He described Sir Stafford Cripps's austere policies. I think that I am right in saying that he described them sympathetically. He wanted us to believe—as I do believe—that he himself agreed with them, and thought that they were right at the time. Indeed, if I understood his speech correctly, he thinks that we ought to be following similar policies now.
  It seems to me important to recall how his friends, or the hon. Member himself, treated Sir Stafford Cripps' policies at that time. Sir Stafford was sneered at on the basis that Socialism would always spread misery—as though there were any better thing that could be done with inevitable misery than to share it with everybody, instead of piling it on to the weakest shoulders and leaving them to bear it alone. But that was what was said.
  If the Labour Party lost the General Election which followed, it was at least

  749
  as much due to the unpopularity of those austerity measures, however necessary, as to any other single cause. The hon. Gentleman—I do not remember what he said about it—will agree with me, I know, that all the Members of his party squeezed the last ounce of political capital out of them in order to win the General Election against the Labour Party who had supported those measures—for reasons which the hon. Gentleman says were virtuous reasons, and not reasons that ought to have been condemned.
  Sir C. Osborne: I am obliged to the hon. Gentleman for the kind things that he has said. If he looks at the OFFICIAL REPORT, he will see that in this Chamber, on more than one occasion, I defended Sir Stafford Cripps against the attacks of his own back benchers.
  Mr. Silverman: I do not know about the attacks of his own back benchers. I think that all hon. Members on this side of the Committee were behind Sir Stafford Cripps at that time. I do not think that there were any exceptions at all.
  Naturally, I accept what the hon. Gentleman says about the attitude he took. But he will realise that he was then in an even smaller minority in his own party than sometimes I am in mine, so we have a fellow feeling about that. But when next the hon. Gentleman talks about Sir Stafford Cripps and his austerity policies, which he has supported so much, would he please have the grace to admit—and not wait for it to be pointed out from the other side of the Committee—that he was alone on that side of the Committee in that opinion?
  The hon. Member for Worcester (Mr. Walker) thought that he was making a wonderful and unanswerable point when he thought he had caught out my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). He said that my hon. Friend was talking nonsense and contradicting himself when in one breath he said that this was an election Budget, and in the next that the Chancellor was not doing enough. He asked how could both things be true at the same time? If the hon. Gentleman will make the effort, he will see that not merely can both things be true at the same time, but that they are true. What my hon. Friend did today, and what the Leader of the Opposition did yesterday, was to recognise that, how-
  750
  ever inadequately and inefficiently the Chancellor on this occasion had put forward his Budget, it was intended to be an expansionist Budget.
  My hon. Friend was saying that the Government had put forward an expansionist Budget only two or three times before and that, by some quirk of history, it just so happened that whenever a Tory Government put forward an expansionist Budget a General Election was either immediately ahead or just round the corner; and that in all the periods in between they did not pursue expansionist Budgets but restrictionist Budgets. That was the point that was being made.
  I am not asking the hon. Member to agree with it. I know that he dare not. All I am asking him to do is to understand it, and to understand, too, that it is quite intelligent to say that and to say, at the same time, that even now it is not expansionist enough. That is all that has been said.
  Mr. Walker: Surely the point of the argument is that the right hon. Gentleman the Leader of the Opposition said that in the past the Tories have introduced over-expansionist Budgets and then have had to recoup the money. This was the point which the right hon. Gentleman made yesterday. It is now argued that the Government have not done enough and could have given more away and still have got away with it.
  Mr. Silverman: The hon. Member is mistaken. He should read my hon. Friend's speech in HANSARD today.
  Mr. Walker: I have read it.
  Mr. Silverman: Then the hon. Gentleman should read it again. I do not think that he will find any passage in my right hon. Friend's speech in which he accused any Conservative Government of having been over-expansionist. I concede at once to the hon. Gentleman that if my right hon. Friend said that, then he has a point. On the other hand, if, when he rereads HANSARD, he finds that there is no such accusation of over-expansionism in the past, I shall expect him to accept that he has no point at all on that score, and he will no doubt take a suitable opportunity to put the matter right.
  Next, the hon. Member said that there was no discrepancy at all between the

  751
  Budget placed before the House yesterday afternoon and the last Budget put forward by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd). That is an astonishing proposition. I admit that in today's debate the hon. Member perhaps did not have enough time to elucidate that as clearly and persuasively as he is no doubt capable of doing. But I assure him that at the moment he is in a minority of one. Not even the Chancellor of the Exchequer would agree with him, not even the former Chancellor of the Exchequer would agree with him. Those two right hon. Gentlemen know quite well that whereas one of them said that the only way to save the situation was to have a restrictionist Budget, the present Chancellor of the Exchequer says that the only way to save the situation—although he does not clearly define what is the situation which he wants to save—is to have an expansionist Budget. An expansionist Budget is one thing and a restrictionist Budget is the exact opposite.
  The hon. Member for Louth appreciates that clearly, and he devoted his whole speech to a restrictionist policy. But it requires a mind much more subtle than mine even to contemplate the possibility of reconciling the Budget for which the right hon. and learned Member for Wirral was sacked with the Budget of the present Chancellor of the Exchequer, in which he wishes to win a General Election, if not before the next Budget then after the next Budget, when perhaps he will pump into the purchasing power of the nation the £100 million or whatever it is that he kept back on this occasion.
  I turn to the Budget itself. The most astonishing thing of all is that the Chancellor said that the theme of his Budget—and an admirable theme indeed—was to get expansion without inflation. I wonder when he thought of that. Over the 12 years during which the Tories have been responsible for the economy of this country, so far as any Government in our system can be responsible for the economy, they have been doing the exact opposite. It has not been expansion without inflation they have been securing. They have been securing inflation without expansion. That has been the whole history of the matter since they took
  752
  office a dozen years ago. Is there anyone who denies it?
  They admit that it is now necessary to do something to expand the economy. This involves, at least by implication, the admission that it has not been expansionist so far and that it is necessary to do something more. It has to be stirred up. Incentives have to be given. Purchasing power has to be poured in. There have to be all kinds of expansionist devices to rescue the country from its present stagnation. It is, therefore, clear that they have not been expanding the economy during these 12 years. I think that we can all agree on that.
  Sit C. Osborne: No.
  Mr. Silverman: Does the hon. Gentleman think that we have been expanding during the last 12 years? We have been at the bottom of the league table every year.
  Sir C. Osborne: I said in my speech that in 1947, when the Labour Party was in power, there were 977,000 people employed in agriculture as against 633,000 today. Agriculture has expanded its productivity in that period by 50 per cent. Is not that expansion?
  Mr. Silverman: If the hon. Member will apply his arithmetic accurately, which we all know he is capable of doing, he will realise that 1947 is a lot longer than twelve years ago. I am not talking about 1947. I would not blame or praise the hon. Gentleman or his party for anything that happened in 1947. I am talking about what has happened since his party took over power. I invite the hon. Gentleman to agree with me, if he will be so kind—I have already paid a compliment to his intellectual intergrity, so it is with every confidence that I invite him to agree—that during that twelve years we have been a largely stagnating economy. There has been an occasional exception—I do not deny that—especially just before elections. Apart from that, the economy has been stagnating the whole time. It is admitted that it is stagnant now.
  The next question I ask is whether anybody denies that there has been a very rapid, continuous and progressive inflation over the whole of that twelve years. Is that wrong? What the Tory Party has succeeded in doing is not getting what

  753
  the Chancellor of the Exchequer now says he wants, namely, expansion without inflation. What he has been getting is inflation without expansion.
  I hope that this time the Chancellor will succeed better. For my part, I do not think that he will. I think that he will succed to a certain extent in expanding the economy. I know that he wants to. When an economy is expanded under our uncontrolled and unplanned system, inflation inevitably comes with it. What the right hon. Gentleman will do is what the present Government have always done. When the renewed inflation reaches a certain point, they will decide that the inflation has gone too far and, at that point, if they have to choose between expansion and inflation, they will choose to abandon the expansion rather than allow the inflation to continue, because they are incapable, under their system, of having expansion without inflation all the time. That is the cause of the trouble.
  I see that the right hon. Gentleman the President of the Board of Trade has returned to the Chamber. I do not intend to deal at length with a point I would not now need to make had the right hon. Gentleman been courteous enough to allow me a gracious intervention in his speech earlier in the day. I have known the right hon. Gentleman for many years. I know him to be as kindly, good-humoured, courteous and well-meaning a Minister as he was all those things when a back bencher.
  When the right hon. Gentleman behaves with gross discourtesy—which is not often; just now and again—it is because he knows that he does not have an answer to the point which is to be put to him. He thinks that it is a lot safer for him not to allow the point to be put. Whether or not that is good strategy I would be inclined to doubt, because it only produces a longer speech. But, as tactics, it may achieve a certain momentary, though illusory, success.
  I think that the right hon. Gentleman already knows the point I wish to put. The theme of this year's Budget, said the Chancellor, was expansion. To achieve it he would do certain things and put the emphasis on those parts of the country where unemployment was most serious. He announced a number of
  754
  proposals. I do not know how useful the powers under the Local Employment Act were to those who benefited by them—or, at any rate, had the chance of benefiting if there was any benefit to be derived; and there are two views about that—but there is no doubt that what the Chancellor will do now will enable the President of the Board of Trade to do useful things in areas of that kind.
  I beg him not to leave north-east Lancashire in the lurch. I beg him not to neglect it, not to ignore it. I beg him not to refuse to listen to it and I beg him not to keep it halting between hope and despair. This district was for a short time a special area under the old Distribution of Industry Act. It was made one for the first time three or four months before the 1959 General Election. Hardly were the ballot papers locked away when the then President of the Board of Trade, the present Chancellor of the Exchequer, repealed the Act altogether and brought in the new one which proceeded on the false principle of picking out isolated spots instead of treating areas as units.
  In the list he put down, the whole of this north-east Lancashire area was omitted—and he is still refusing to put it back. He knows that there are special problems. He knows about the contracting cotton industry. He knows about the slum derelict mills which the Chancellor made a big point of. One of the things that the right hon. Gentleman has taken power to do is to provide more money to rescue them. Where are there more mills of this kind than in the cotton belt of Lancashire? Yet we will not get a farthing out of the proposals in the Budget.
  The right hon. Gentleman knows about the contracting cotton trade and the heroic efforts made on their own initiative and at their expense by the local authorities there to help them to help themselves to help the industry to survive. He knows, from any true consideration of the matter, that the percentage of unemployment is almost as high as the worst of the areas he includes, yet he still keeps us waiting for answers which we have been asking for for years. Lancashire is in its present plight because it has been for too long the Cinderella of the Tory Government.

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  Social capital is being wasted. The population has been and still is drifting away.
  Now we have a new gimmick for the railways, the result of which—if it is implemented; and I agree that there has been no decision about it yet—will mean that we will lose the only railway that connects us with Manchester—this, a cotton area. It really is too bad. I think that the right hon. Gentleman would have been better to have allowed me to make this point more shortly by intervention in his speech so that he could have answered it. I have made it now, and I do not propose to continue.
  Mr. Erroll: As the hon. Gentleman has been courteous enough to give way, I should like to say that in the press of making a speech with a number of interventions, I felt that I could not accept every intervention, and I intended no discourtesy to the hon. Gentleman whose interventions I am always delighted to receive.
  Mr. Silverman: The right hon. Gentleman had the eye of the Chair. He had the Floor. He was entitled to address the Committee as he thought fit. If he did not choose to give way, that was a matter for his discretion and not mine. All that I am saying is that I think it would have been better if he had done so. Since he has heard the point now, I hope that he can give me some assurance that the matter will be considered again, and that there will be some opportunity of our getting the advantages which are open to other areas of high and persistent unemployment.
  9.16 p.m.
  Sir Henry d'Avigdor-Goldsmid: When the hon. Member for Nelson and Colne (Mr. S. Silverman) got up he told us that he was going to intervene for only a short time and I was preparing myself to congratulate him on being a happy exception in the prevailing note today. We have listened to a number of interesting but extremely lengthy speeches. The hon. Member for Grimsby (Mr. Crosland) was the exception. The hon. Member for Nelson and Colne may not have made the longest speech of the day, but I think that if we compare content with length it was certainly the
  756
  emptiest. I do not think that he got on to anything more recent than 1959, and most of his time was spent in the middleforties.
  This is a day appropriate for back benchers to convey their congratulations to my right hon. Friend the Chancellor. I think that very much the general view, although I am not quite certain whether my hon. Friend the Member for Louth (Sir C. Osborne) shares it to the full. Nevertheless, I think that the general view throughout the Committee has been that this has been a successful Budget. It has been criticised as being a rather dull one. I have heard that expression used, and it rather supports the view of my hon. Friend the Member for Worcester (Mr. Walker) that it was very far from fulfilling the conception of what would normally be an electioneering Budget. I think it can be said to be a play without a hero.
  Mr. Mitchison: It certainly had several gravediggers.
  Sir H. d'Avigdor-Goldsmid: I have no doubt that they will in the course of the debate have played their part, but I should like to say that the one particular person cast as the villain of the piece is my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd). We have been able to focus most of the darts of criticism and antagonism, which cannot be indefinitely taken away from our debates, on his body. What is his crime? His crime—I think that the hon. Member for Cardiff, South-East (Mr. Callaghan) mentioned this particularly—was to go very wrong in his forecasts last year.
  Even though hon. Members may not believe what the Economic Survey says, they will accept the Economic Report as a truthful and reliable guide. Paragraph 7 of the 1962 Economic Report stated:
  "In the first part of 1962 there was a brisk rise in demand and output which corresponded closely to the general trend forecast in the Budget speech. Exports rose rapidly and all the other main kinds of demand, apart from fixed investment, rose too … consumers' expenditure rose because there was some recovery in net borrowing from the banks and on hire purchase and so in expenditure on durable goods, mainly cars. Industrial production more than regained the ground lost in the second half of 1961, and by the middle of the year was a little higher than the previous beak in the middle of 1961."

  757
  The Budget is presented in April of each year, so that my right hon. and learned Friend, when making his Budget speech, had no more information available to him than that, and that information was completely accurate. My right hon. Friend the President of the Board of Trade said today that October, 1962, was a record month for exports. I think that he said that, seasonally adjusted, exports were the highest ever for that period.
  On 13th July, my right hon. and learned Friend lost his job. He was made the scapegoat for policies that were not at all popular in the country, but in thinking this over one must realise that he has suffered very severely because, had he remained in office, he could have done a number of things which his successor could not do, for the best reasons, for a month or so while he was settling in. The blame that attaches to my right hon. and learned Friend, which has been very freely laid on him, might easily go to some extent to his advisers.
  I know that it is not customary for Ministers to mention their advisers, but no one can have failed to notice that several of my right hon. and learned Friend's leading advisers made their departure very soon after his. It must be implicit in that that he was the scapegoat for the bad advice he received on that occasion. I am firmly convinced, as I believe many of my hon. Friends are, that British industry would not today be so competitive both as to price and delivery had it not been for the very unpopular measures that my right hon. and learned Friend took in 1961 and 1962—measures of unpopularity for which he suffered.
  The right hon. Member for Huyton (Mr. H. Wilson) said yesterday:
  "Of course, the £ a year ago was at least as strong as it is today …"
  and added:
  "… and some say stronger, than at present."—[OFFICIAL REPORT, 3rd April, 1963; Vol. 675, c. 509.]
  That was not an entirely considered remark from the right hon. Gentleman, whose judgment in these matters I fully respect. Had he taken the temperature of the patient, he would have found it a great deal more feverish this time last year than it is today. It is not a thing that can be proved, but it is the con-
  758
  sidered opinion of most people in the City of London, and elsewhere, that the £ was, in fact, not as strong in 1962 as it is today, and credit for that must to a great extent go to the measures of my right hon. and learned Friend.
  I think I am right in saying that after the end of the 1914–18 war Field Marshal Earl Haig made a special pilgrimage to Lord Haldane—who had been Secretary of State for War at the beginning of the First World War, and who lost his job because he became unpopular—to thank him for all the preliminary groundwork that had eventually led to the victories of 1918—[Interruption.] I know that, in a sitting position, the hon. Gentleman the Member for Nelson and Colne (Mr. S. Silverman) is an eminent expert in the art of war. When the successful generals of this engagement are counting their laurels they might remember one who cleared the way for them, and who also paid the penalty for having stuck his neck out.
  I thought that we had the keynote speech from the right hon. Member for Huyton. I think that I can summarise it quite fairly as saying, "I cannot criticise the Budget because we thought of it all first." This is not a verbatim quotation, but I do not think that it is an unfair paraphrase.
  The right hon. Gentleman quoted in his speech discriminatory tax relief, industry going to development districts, depreciation allowances, abolition of Schedule A, for which he claimed credit, and various Income Tax concessions. I, for one, was not greatly surprised at this claim because, after all, the right hon. Gentleman and his hon. Friends have had a lot of practice in opposition. They have had eleven or twelve Budgets to which to put down Amendments, and it is not at all surprising that in the course of them they have thought of some quite good ideas. They are not at all lacking in diligence. The ideas do not always come at the right time, but still they try. They have also been rather clever in a way in that they have been able to hedge their bets.
  In April, 1961, my right hon. and learned Friend the Member for Wirral introduced a heavy oil duty. The right hon. Member for Huyton, as reported at column 987 of the OFFICIAL REPORT

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  for 18th April, 1961, said that the Opposition welcomed the tax on fuel oil. On 15th May last year, on page 2214 of the Order Paper, there was an Amendment in the name of the hon. Member for Cardiff, South-East, then the official spokesman, and many of his hon. Friends, to the effect that the rebate on heavy oil should be restored to what it was before the duty. That really is hedging the bets. It is true that the Amendment was not called, but whether that was on your judgment, Sir William, or whether it was second thoughts on the part of the right hon. Member for Huyton, I do not know. Whatever it was, it seems to me that if my right hon. Friend the present Chancellor, as many of my hon. Friends and I wished him to do, had repealed the heavy oil duty, the hon. Member for Cardiff, South-East would have said, "Look what we said last year." As it was, there was no change there and so it is a case of "We stand by the views of the right hon. Member for Huyton."
  I understand that the hon. Member for Cardiff South-East is making a broadcast tonight and I hope, therefore, that it will not be taken amiss, since he opened the debate, though that seems a long time ago, if I comment on some of the things he said and perhaps on things which he did not say. I know that the hon. Member has been having lessons from some of the most highly skilled economists in the land. We are told that at the seminars he absorbs and digests the frequently conflicting views of these eminent gentlemen. I do not think that these tutors would have given him very high marks for this afternoon's performance. Perhaps they would have given rather higher marks for his article in the Financial Times of 12th April under the title "The Budget I should like to see". I am not clear whether it was the Budget which he would like to bring in or the Budget which he would like to see a Conservative Chancellor introduce. The hon. Member, however, advised my right hon. Friend to concentrate on "reversible measures". There has been talk of "stop and go" but that at least presupposes movement in one direction. "Reversible measures" suggest moving in two directions.
  The hon. Member for Cardiff, South-East, in the course of his remarks today,
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  referred to taxation proposals which he and his hon. Friends have been considering but which he said would have been out of order for him to introduce in the debate. I wonder whether they would have been out of order under our rules, or whether perhaps this is a case where the rules of touch football, which the right hon. Member for Huyton has recently been practising in the United States, would specially apply.
  My right hon. Friend the President of the Board of Trade today mentioned that famous television programme without which no debate in this Chamber seems complete—"That Was The Week That Was". Naturally here we are all greatly in admiration of the star, Miss Millicent Martin, but this charming lady does not seem to study the papers quite so closely as some of her colleagues. An interview with her was published in the Daily Mail on 28th March. This charming lady has recently received a film contract under which she will be paid a very large sum, and she is reported in the Daily Mail as having said: "I want to invest my money in property. Security is essential. That is why I am rather thrifty". Very good. She will do much better, having earned this money, under the present Government than she would if the hon. Member for Cardiff, South-East and his friends had had their way and the Surtax reliefs for earned income had not been allowed.
  I wonder whether she realises what the hon. Member for Cardiff, South-East has in store for her. The hon. Gentleman said that he would welcome an intelligent discussion on taxation but only after the election. I thought that that was a most peculiar thing to say. I do not see why we should have to "Wait for Godot". We can have a quite reasonable discussion on taxation in this Committee. It does not seem to me to inhibit intelligence. It is not inappropriate that we should discuss the great new discovery of the seminars, the wealth tax.
  First, we should clear our minds of cant. Many hon. and right hon. Members would be subject to it, by no means all of them on one side of the House. We can discuss this rationally, like any change in Excise Duties or taxation which affects us all. Hon. Members opposite should not deceive themselves and imagine that this is a tax which will

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  affect only Conservative supporters. In fact, more than 1 million people, who are far from wealthy in the accepted sense of the word, would be caught. I can prove this figure. It could have a very important effect on the fortunes of this country, and it merits a moment's serious consideration.
  It is difficult to ascertain the true doctrine on this tax because we can glean only rather numinous comments. On 11th February, the hon. Member for Cardiff, South-East said:
  "I should be willing to reduce taxes on earnings … if I could get permission to tax capital and wealth as well. This would be one way of … encouraging earnings and those who wish to move ahead."—[OFFICIAL REPORT, 11th February, 1963; Vol. 671 c. 1131.]
  Then, in an address to, I think, the Young Fabians—unfortunately, I am not in touch and I have not a copy of his remarks there—the hon. Gentleman suggested, so I understand, that a wealth tax should be introduced by my right hon. Friend the Chancellor of the Exchequer, and he advised him to consider a tax "on all wealth". This, in fact, was confirmed by his article of 1st April in the Financial Times. The three principles the hon. Gentleman is reported as having mentioned are these. It should apply to people whose ownership of capital was more than £20,000. It would catch only one person in every 100. It would bring in about £200 million annually.
  His colleague, the hon. Member for Dearne Valley (Mr. Wainwright), has been doing a little research on his own. He also is doing some homework about a wealth tax. On 14th March, the hon. Member for Dearne Valley put a Question for Written Answer to my right hon. Friend the Chief Secretary asking what amounts a tax on a graduated scale would bring in. I shall not weary the Committee with the whole scale, but it starts at ½ per cent. on fortunes from £20,000 to £50,000, rising finally to 5 per cent. on fortunes of over £400,000. My right hon. Friend replied, that the tax would bring in £225 million in a full year.
  We can see that this wealth tax which is to bring in £200 million will be at a fairly steep rate. I think that that must be accepted.
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  My right hon. Friend the Chief Secretary has estimated that 400,000 estates would be caught by it. He is on record to that effect. Presumably, the 400,000 taxpayers would have some dependants. They would not all be bachelors. Most of them would have a dependant or two. Therefore, a round total of 1 million people would be affected by this tax. I am sure that the hon. Member for Grimsby will accept that that figure is not unreasonable.
  When we come to apply this tax, all sorts of extraordinary anomalies arise. Mr. Rees-Mogg, in the Sunday Times, produced all sorts of startling theories to show that almost any farmer caught by the tax would be ruined and forced to sell his implements and fields. There is also the case of the man with his fortune in a private business and owning a house. These people would seem to be caught by the tax. I do not wish to go into detail, because I know that hon. Members opposite prefer to play this by ear, rather like the hon. Member for Coventry, East (Mr. Crossman) in dealing with insurance problems. Figures are liable to be misleading, but the figures which I have given come from unimpeachable sources and therefore have to be taken into account.
  As I say, many anomalies would arise Party, with a General Election before it, exceptions, because clearly the Labour Party, with a general election before it, would not impose a crippling tax on farmers. Owner-occupiers obviously would be let off. We know from the figures which my right hon. Friend gave in answer to the hon. Member for Dearne Valley that the net revenue would amount to less than £250 million.
  How would this tax be treated? We had a very good example of this in the debates on the speculative gains tax last year on the Finance Bill. Hon. Members opposite—and I suspect that the fine Italian hand of the hon. Member for Sowerby (Mr. Houghton) was involved in this—put down a succession of very complicated Amendments to the speculative gains tax which the hon. Member for Cardiff, South-East described as
  "a useful peg on which to hang this debate, because it serves as an illustration of how a capital gains tax could be devised."—[OFFICIAL REPORT, 22nd May, 1962; Vol. 660, c. 242.]
  Obviously, the hon. Member would not have to stick to the figures which he

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  gave, but the net result of the Amendments tabled by hon. Members opposite—I do not ask them to stick to them, but I refer to them merely to give an indication of how their minds were working—was that this tax would be turned into a capital gains tax, so that, after ten years, profit on any land transaction would be caught as to 70 per cent. and profit on any other form of transaction as to 45 per cent. I am sure that hon. Members opposite will admit that these figures are correct, based on their Amendments last year.
  The right hon. Member for Battersea, North (Mr. Jay) said:
  "I do not believe that the tax will be temporary."
  Then he cited Income Tax and Purchase Tax as evidence of taxes which were introduced as temporary measures but which became permanent. The right hon. Gentleman also referred to it as a tax
  "which will have to be converted in the future into something much more substantial and much more effective."—[OFFICIAL REPORT, 22nd May, 1962; Vol. 660, c. 311–2.]
  I suggest that if this wealth tax is introduced it will be treated in exactly the same way as the speculative gains tax was treated by hon. Members last year.
  I see that the hon. Member for Sowerby is now present and therefore I shall not raise any questions about the difficulties of administration of such a tax. After all, he knows much more than I do about the Inland Revenue and probably more than anyone in the House of Commons. If he tells me that the Inland Revenue is capable of taking on this extra burden without reinforcement, then I naturally will accept what he says. The hon. Gentleman does not seem to wish to intervene. I have not noticed him advocating this particular measure himself. Perhaps it will come later.
  Mr. Douglas Houghton: Since the hon. Gentleman is provoking me, I will say that the Inland Revenue can perform miracles.
  Sir H. d'Avigdor-Goldsmid: I have no doubt that when the hon. Member was active in the Inland Revenue it did perform miracles.
  764
  A special miracle is required here, because if a wealth tax were brought in there is a notional idea that about 19 million estates will have to be assessed. About 400,000 estates and, perhaps, another marginal 100,000 estates, making a possible 500,000 estates, will have to be assessed annually. This would present quite a problem. Even the advisers of the hon. Member for Cardiff, South-East might find it difficult, without greatly increasing the bureaucratic farce of the Inland Revenue, to assess 500,000 estates annually. I shall not raise questions about household possessions, the assets of a business or pictures. These go by the way. It is the principle that we want.
  Mr. Houghton: Would the hon. Member care to tell the Committee which Budget he is discussing?
  Sir H. d'Avigdor-Goldsmid: As the hon. Member very well knows, I am having a discussion on taxation, which is entirely proper to this debate. All I can say in conclusion on this aspect is that despite what the hon. Member has told me about the Inland Revenue being able to work miracles, because of the difficulty for the staff without greatly increasing its numbers, I prefer to rely on slightly amending the old poem, written same 100 years ago,
  "Let laws and learning, wealth and commerce die,
  But leave us still our old bureaucracy."
  One of the ridiculous things is that we already have four forms of taxation an investment—Estate Duty, Stamp Duty, which is now reduced, the speculative gains tax and the discriminatory taxation rates on investment income. Furthermore, if hon. Members opposite have their way, we have in the pipeline a tax on gifts inter vivos and a capital gains tax. Therefore, there will be six forms of capital taxation to cope with before even we come to this.
  I need not deploy the argument further. All I would say about it is that in the 1930s there was much talk about the capital levy, but the electorate did not like it. It became a sort of smear word and it was dropped. In the 1940s, we had Sir Stafford Cripps' special contribution, which was a quite different matter. It was, in Sir Stafford's words, a once-for-all. It had the special purpose of reducing the debt and it was

  765
  relatively easy to collect, being based upon the Surtax payer and his return. Even so, it was not popular in the country. Then, we had four consecutive general elections, fought by hon. Members opposite with increasing unsuccess. Now, we are back to where we were. The capital levy was a smear word and was forgotten. Now, the wealth tax becomes the O.K. word of the 1960s.
  The hon. Member for Cardiff, South-East rather gracefully compared my right hon. Friend the Chancellor of the Ex-chequer to an old hack put out to grass. As the hon. Member is so keen on equestrian metaphors, I give him a new one. His wealth tax is no election winner. It would not win a donkey race. It has been foisted on the public without guarantee of soundness by a cheapjack auctioneer and the catalogue entry runs: Dark horse by Pink Seminar out of Capital Levy. In the words of the famous Lord Birkenhead: it is begotten by a rogue sire out of a dam that roared.
  I thought that at that stage I could sit down, but I am standing up only because the hon. Member for Grimsby referred to devaluation. We had, I thought, reached the stage in our thinking where devaluation was as much a dead subject as bimetallism. I do not think that in dealing with a complex twentieth century State of the most complicated kind, devaluation is a policy or anything but a confession of complete and total failure. We are unique in the sense that any other country can devalue its currency and simply do damage to the poor, the old and those who live on fixed incomes. If we devalue, however, we do it also at the expense of those who trust us abroad.
  Mr. Crosland: I did not urge devaluation on the part of the British Government. I was making a general proposition that one of the curiosities about the last fifty years was that we have moved from the idea when we thought that flexible exchange rates were a good thing to the stage when we thought that they should be ruled out of court. I did not say that devaluation was a good thing.
  Sir H. d'Avigdor-Goldsmid: I am sorry that anything I said would suggest that I did think that the hon. Gentleman had urged devaluation. I was referring to
  766
  devaluation because he referred to it, and all I said was that he preferred bimetallism, an equally dead concept.
  When people talk about a floating £ we know very well they must mean a sinking fund, and it means sinking it very far, because if we were in a position where the £ was floating it would have to be so reduced in value that those who had to balance it here would not think it worth transferring through the exchanges. Therefore, it is no good thinking of exchanging it at its present level but at 40 per cent. or 50 per cent. lower.
  This has been an interesting stage in the debate. We have had some very long speeches and I am sorry to have added to them in a speech even longer than that of the hon. Member for Nelson and Collie though, I hope, with slightly more content. In the circumstances I should simply like to say to my right hon. Friend the Chancellor that I think that he and his colleagues have done a superb job. I think that the speech by the President of the Board of Trade today was really the most constructive thing this or any Government have ever done for the areas of heavy industry. I am confident that it will meet with the success it deserves.
  9.51 p.m.
  Mr. E. L. Mallalieu: The hon. Gentleman the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) invariably makes a speech, if I may say so with great sincerity, which interests us. This evening it was a notable speech, first, for his very eloquent tribute to his right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), who sits behind him, and, secondly, I think, for the nature of the second part of the speech, because in this he did two things.
  The hon. Gentleman frivolled very entertainingly and raised bogeys, and I think that both these things are an indication of the uneasiness which hon. Gentlemen on the other side of the Committee must feel at this time, because, of course, they have to bolster up their spirits in view of the things for which this Budget has really been designed.
  I want to say something about the speech of the Chancellor of the Exchequer. I am very glad that he is here to listen to it rather than that I should have to say it without his presence.

  767
  I want to say that his speech nauseated me—[HON. MEMBERS: "Oh."] That, as I think he will believe, is nothing whatever personal to himself, because invariably, whether a nauseating speech or a thrilling speech, or an inspiring speech, he delivers it with the greatest charm and erudition.
  There is nothing, that is to say, personal to him in my remarks, other than that those remarks might be personal to every hon. Member on the benches opposite, because he knows perfectly well that the policies of his right hon. Friends and himself over the last ten years have really been taking up the putrefying corpse of party advantage and trying to clothe it in sweet-smelling garments of economic respectability. This strikes me as being a very unfortunate thing to do.
  Unfortunately, the right hon. Gentleman claims that this particular moment is propitious for doing things which we on this side have argued for a very long time should be done and has given no reasons whatever for thinking that exactly the same considerations did not apply a year ago or even more. That, it seems to me, is a fraud upon the electors.
  The fact that it is a fraud upon the electors worries the right hon. Gentleman not at all. That applies to almost every other right hon. and hon. Member opposite. In their own personal lives I feel absolutely certain that each one of them is entirely honest and honourable. But bring them to that Box as Ministers of Her Majesty and they are prepared to deceive the electorate to any extent they feel they can get away with. That is a very sad state of affairs.
  They have raised taxation throughout their twelve years of office. They say that they have not, but when one takes into account the whole economy—for instance, the National Insurance Contributions—the fact remains that people who can ill afford it are paying more than ever before. The party opposite has claimed to be reducing taxation all this time while, on the contrary, it has been doing nothing of the sort.
  Invariably, a move towards expansion has been trotted out just as Members opposite are "coming into the straight" and when they think that they can see the General Election post in the distance.
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  It is not surprising that in these circumstances the Prime Minister should have let slip the other day the remark that he made about diplomatic courtesies in order to explain a singularly sordid piece of deceit in which he had been caught.
  Some of us spend time going abroad trying to convince people in Africa, India and elsewhere that the system of Government we have evolved here, the parliamentary democracy of which we think so much, is a really good thing both in its achievements and in its possibilities. I suppose that that is an excellent thing to do. It has been done by Members from both sides with great assiduity, and, I believe, with great effect.
  I have no doubt that many of us will go on trying to do this thing, but, although the right hon. Gentleman may think me sanctimonious and lecturing and, if he likes, puritanical—I may be all these things—I say to him that those of us who do go abroad to try to extol the virtues of this most sophisticated of civilised systems of government will do so in future with a heavier heart because we believe that, in this country of ours, under this system, there are far too many people who should know better who wilfully set out to deceive the electorate for party gain.
  Whereupon Motion made, and Question, That the Chairman do report Progress and ask leave to sit again.—[Mr. McLaren]—put and agreed to.
  Committee report Progress; to sit again Tomorrow.

BRITISH ARMY (GUARDSMAN TILL)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. McLaren.]
10.0 p.m.
Mr. Leo Abse: In 1961, British law followed the French law of 1790 and at last abolished suicide as a criminal offence. Thus, a dead man dead by suicide was declared at last not to be a criminal. It followed that attempted suicide also ceased to be an offence by English law.
The pathetic case of Guardsman Till, which I am raising tonight, would seem to indicate that the War Office, with an attitude which I regard as extraordinarily

769
callous, apparently decided to ignore the change in the law. This lad, serving in the Coldstream Guards, barely 19 years of age, obviously sick in mind, was gripped, equally as obviously, by a severe depression, with the result that he made a serious attempt on his life.
With a razor blade, he slashed his wrists no fewer than 30 times. He probably swallowed scores of codeine tablets and is known also to have swallowed a quantity of denim buttons. Everyone, except, it seems, the Army authorities who have duties to young serving men which are certainly no less than that which the serving man has to the Army, should recognise that this was the classic suicide attempt and, like all such attempts, a plea for help, a desperate plea.
When the House of Commons abolished suicide as an offence, recognising that the police and the courts might no longer be able consequently to steer some of the 25,000 attempted suicides which take place annually to hospitals for treatment or supervision, the Ministry of Health caused a considerable number of circulars to be sent to regional hospital boards to ensure that the provisions of the Mental Health Act were known and applied so that, in short, succour could be given to those people and be given rapidly.
For the Army, however, it seems that time stood still. No attempt, apparently, was made in the case of this young man to have placed at his disposal the psychiatric attention which the Ministry of Health and all civilised people believe should be given to someone who finds himself or herself in such a melancholy and depressive condition that he or she would do what Guardsman Till clearly did do.
This wretched boy, instead of being given help, was hauled before a court and sentenced to 112 days' detention. If the facts are as reported, and as I am stating them, this conduct is little short of being barbaric. I am informed that no oral evidence was given, that the lad, doubtless in the gloom and apathy which characterise a depressive, pleaded guilty. As I understand the position, apparently he has been sent for punishment and not, as he should have been, for treatment.
I want to ask a few questions. Was there any psychiatric opinion received, or was it merely some medical officer giving
770
written evidence and without the appropriate psychiatric qualifications? Is it correct that the defence statement was that this poor lad had broken his spectacles and was in a state of fear which was so great, that he was so fearful of the "bull" of the regiment, that he was frightened that without his spectacles he would be unable to have sufficient vision to lay out his kit?
If this was said by the defence in mitigation at that hearing, as I understand it was, and it is not accepted that there was this excessive discipline which could bring a young lad to this condition, why is it that no treatment was immediately administered and why is it that he was not given the obvious aid he required? If there was no real reason, no external reason, no objective reason which caused this lad to take such a desperate act, then, clearly, anyone with a modicum of common sense would recognise and acknowledge that he was in need of psychiatric help.
Perhaps no less important is the principle. I understand that this boy, who had inflicted at least 30 wounds upon his wrists, was charged not with attempted suicide—for this is not possible—but with malingering. Presumably he must have been charged under Section 42 of the Army Act, which says that
"Any person subject to military law who … injures himself with intent thereby to render himself unfit for service … shall be guilty of malingering and shall, on conviction by court-martial, be liable to imprisonment for a term not exceeding two years …"
Quite clearly, anybody who makes an attempt upon his life must be rendering himself unfit for service; he is seeking to render himself unfit for life.
If the Army is not seeking, through the medium of this Section, to sidestep the express wish of Parliament, I should like to know what is being done to distinguish genuine cases of malingering—in which some act is performed of the kind we know to have occurred in cases of mutilation—from cases of attempted suicide. I should have thought that on the facts as reported, if a boy of 19, for no apparent rational reason—if there was no intimidation caused by excessive discipline—decides to take scores of codeine tablets, slash himself in the way that I have described, and swallow denim buttons, it was abundantly clear that he was making an attempt upon his life.

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If, on each occasion that this occurs in the Army, there is to be a distinction between what happens inside the Army and what happens outside, a very serious situation will exist. In this country there are 25,000 attempted suicides annually, and I do not doubt that by the simple fact that that number is so large there must perforce, unfortunately, be some people who, within the Army, will make similar bids to commit suicide. I hope that I may have some satisfaction in being told that it is clearly understood by the Army authorities that Parliament has willed that attempted suicide is no longer to be regarded as triable as an offence. Surely there should be no less humanity inside the Army than there is outside it.
I am no less concerned than any other hon. Member in seeing to it that the image which the Army presents is one that is informed with passion and humanity. As a result of recent events the Army has received a somewhat unfortunate image in this respect. We have heard of men complaining bitterly, with or without justification, about the treatment that they are receiving inside the Army. It will be a most unfortunate day if the opinion is spread abroad that if someone is in such a wretched condition as this young guardsman clearly was, the treatment that will be meted out to him is 112 days' detention or two years' imprisonment. It will be a sorry day if that image of the Army is presented to the nation and the world.
I hope that I may be told what is happening to this lad at this moment, and whether he is receiving psychiatric attention. I hope, equally, that I shall hear that some steps are being taken to ensure that cases of attempted suicide in the Army are clearly distinguished from cases of genuine malingering.
10.9 p.m.
The Under-Secretary of State and Financial Secretary for War (Mr. James Ramsden): I could not normally congratulate the hon. Member for Pontypool (Mr. Abse) upon having raised this case because, as I shall seek to show presently, I think that he has taken the wrong view of it. But perhaps I may congratulate him upon having had the opportunity to raise a matter on the Adjournment this week and express
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my condolences with him for not being able to speak yesterday.
The case which he has been trying to make out is that this was a young soldier with a grave psychiatric disturbance—so grave that he made attempts to commit suicide, and, with great hardness of heart, the Army charged him with malingering, court-martialled him, and finally punished him. This is a travesty of what actually did happen, as I hope to show the hon. Gentleman. I cannot begin to accept the construction which he put on the series of events on which he touched.
Before I come to that, perhaps I may say a word about the general legal position with regard to the law on suicide and its implications for those who are subject to military law. It is true, as the hon. Gentleman said, that suicide or attempted suicide is no longer a civil offence, and the hon. Gentleman had something to do with that state of affairs. But it is not a military offence either, and no disciplinary action can be taken against a person subject to military law for committing suicide—obviously not—or even for attempting to commit suicide. I can give the hon. Gentleman the assurance for which he asked. That is the position today.
It sometimes happens that a soldier tries to do himself some injury in the sense that he may deliberately try to make himself unfit for duty. Anyone subject to military law who injures himself with intent to avoid service is liable to be charged with the offence of malingering, under Section 42 of the Army Act, 1955, which was correctly quoted by the hon. Gentleman. The fact that this is so is in no sense side-stepping the wishes of Parliament or the law in respect of genuine suicides. It is recognising a state of affairs which may come up in the Armed Services and which, in the interests of discipline, clearly cannot be allowed to exist.
There must be a clear difference between a suicide attempt and what amounts to malingering. It is equally clear that in the Armed Forces we cannot have a state of affairs where people can deliberately shirk their duty by doing harm to themselves. The hon. Gentleman asked how is this distinction valid and how does it operate in practice. I have had figures looked up from which

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it appears that at present in the Royal Victoria Hospital, Netley, which is where psychiatric cases are treated, out of 140 cases in the first two months of this year 13 had an element of suicide about them. While this is not a precise figure for the Army as a whole, the number of cases with a suicide aspect may be about 100 in the course of the year, that is, attempted suicide. I emphasise that all these are cases where on medical grounds no action of a disciplinary character is taken; they find themselves subject to treatment in Netley or elsewhere.
Against these figures, since December, 1959, in a period of nearly four years, I have been unable to unearth more than nine cases where attempts by the soldier to harm himself were judged to be malingering and where disciplinary action was taken. Typical instances include wrist slashing, as in this case; a soldier drinking a tin of Brasso and that kind of thing. We are all glad to know that the number of these cases in relation to the numbers in the Army is not very large. But none the less I have indicated a fairly wide field and within this category the practical distinction which the hon. Gentleman asked about has been made very often, and in such a way as not to give any ground for complaint.
I come, after these generalities, to the case of Guardsman Till. On 21st November, Till complained of a headache. He was given some Codeine tablets and told to go sick. The next morning, when he did so, it transpired that he had taken all the tablets—30 of them, and not "scores" as the hon. Gentleman suggested. He told the medical officer that he did so with a view to putting an end to his life. I am being completely frank with the hon. Gentleman and giving him all the facts, and he will see that at various times Guardsman Till did give various reasons for doing what he did do. The medical officer arranged for psychiatric advice to be taken. In the meantime, on 27th November, Guardsman Till again went to the medical sergeant in his unit. He said that he had cut his wrists, and again, that it was because he was fed up and wanted to do himself in.
Mr. Abse: When was the first incident?
Mr. Ramsden: On 21st-22nd November.
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The day after the wrist-slashing on 27th November, he was again seen by the medical officer. The cuts, which were on the outside of his wrists, were superficial and required no dressing, let alone stitches. Guardsman Till again said that it was a suicide attempt. The medical officer had him put in custody where he could be kept under supervision.
The hon. Member asked me whether a qualified psychiatric opinion was taken. I come now to the question of the psychiatric advice which we took and this, as the hon. Member indicated, is crucial to the whole question. But I am in a difficulty because, for reasons which he will appreciate. I cannot quote this advice. By general agreement advice of this nature is confidential. I therefore cannot quote it.
I hope that the hon. Member will accept from me that, having studied everything which is relevant to this case in great detail and after a careful study of all the facts—I hope that the hon. Gentleman understands what I am saying—my conclusion is that Guardsman Till was an immature personality, that he regretted his original decision to join the Army, that he had no intention of trying to soldier properly, and that he meant to go on making a deliberate nuisance of himself in order to work his discharge. One thing which has coin out of this is that he had a job lined up to go to after his discharge, which he hoped to get, had been obtained. This in itself discounts the idea of the suicide attempts being very genuinely conceived.
The evidence is that the so-called suicide attempts were no more than rather childish exhibitionist displays and that there were no medical grounds for not taking disciplinary action. On the evidence which I have seen, including technically qualified evidence, I cannot accept that this is what the hon. Member called a classic suicide attempt, and I cannot accept that there were grave emotional disturbances in the case of this young man. Put into plain words, Guardsman Till was not an attempted suicide but what we call in the Army a malingerer. He was remanded on custody by his commanding officer and disciplinary proceedings were started and subsequently carried through.
Mr. Abse: Will the hon. Member be kind enough to deal with the third

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incident in which I understand this boy was swallowing denim buttons? In his reply will he bear in mind that in recent surveys, for example in Wales, of 8,000 suicides, it was found that four out of five had affected this type of suicide attempt? They had been to doctors. There were people who subsequently, unfortunately, committed suicide.
Mr. Ramsden: I have not yet finished with the history of this case. I will come to the two incidents of swallowing buttons and the outcome, when I reach it, will reassure the hon. Member.
I said that disciplinary proceedings had been started. While he was in the guardroom, Guardsman Till again cut his wrists, this time on the inside. Most of the wounds were scratches, five of them described as deep enough to have damaged superficial blood vessels, but none was deep enough to need stitches. He had also swallowed some button rings. The only evidence which came out of this incident was that when the N.C.O. took him to be X-rayed after the incident of the button rings, he said to the N.C.O. accompanying him that he had done this in order to get out of the Army.
Eventually the soldier was sent to the Military Corrective Training Centre at Colchester. He arrived there on 13th February, after conviction on 14th January. The hon. Member said that Guardsman Till was not given the help that he should have been given. I commend to the hon. Member—I say this seriously—the Military Corrective Training Centre at Colchester, because it is an extremely fine institution in every way. I will not attempt to describe it. Time would not suffice. I should like the hon. Gentleman, and indeed any other hon. Members interested in this field, to go and see it some time, because an excellent job is done there. They have an impressively high rate of success in making good soldiers out of young men who have got off to a shaky start in the Army and found difficulty in adjusting themselves to Army life. Incidentally, while Guardsman Till was there he happened to be near his family home. His family were able to visit him while he was there. I understand that no complaint has been made from that direction about his treatment,
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how he was looked after, and how be was helped.
I have had a full account of Guardman Till's progress during the time he was at Colchester. It is significant that this confirms in every respect the view of him which the authorities of his unit had already taken. I am afraid he did not come along very well with his subsequent training at Colchester. In spite of professing on more than one occasion an intention to do better and get down to Army life, he did not find himself coping with life any better and when he was had up for not getting on parade he again cut his wrists with a razor blade. Again, what he did produced no more than slight scratches on the outside of his wrist.
Mr. Abse: Was this the fourth or the fifth time?
Mr. Ramsden: This was the third time. The psychiatric advice which was taken did not differ from that which had been already received. The hon. Gentleman has asked me how many times. He is using a slightly emotive term in the sense of wrist slashing. These were very slight scratches, none of them severe enough to require a stitch to be inserted. They were done, in our view, and in the view of qualified advisers, in an attempt to attract attention and in pursuit of the individual's intention to call attention to himself and make a nuisance of himself. There was also another incident when Till swallowed some more buttons.
The Commandant at Colchester has been to a great deal of personal trouble with Guardsman Till, as indeed it is his duty to do and as I know he does with all his cases. But I am afraid he concludes that the soldier has not sufficient determination or stability to make a satisfactory career in the Army. His intentions are good, but when he is faced with having to get down to make a serious effort he tends to lose control of himself, and in these circumstances he does these rather foolish things.
He was released yesterday from Colchester at the expiration of his sentence, but he went out with an unsatisfactory conduct assessment, and he has now been discharged—that is, today—under Queen's Regulations, on the ground that his retention is no longer desirable in the interests of the Service, because of these frequent petty breaches of discipline.

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I hope that I have convinced the hon. Gentleman—
Mr. Abse: The hon. Gentleman has not convinced me.
Mr. Ramsden: —that the Army has handled this case correctly. I have drawn the distinction which I think must be made between a genuine suicide attempt, in respect of which anybody under military discipline is in no different position from any other member of the community, and a case of malingering, which is a crime by no means unknown throughout the annals of the Service, though not, I am glad to say, very common, and a crime which has to be seriously treated and properly dealt with if proper conditions of military discipline are to be preserved. Guardsman Till was not—this was confirmed by all the evidence I have seen, professional and otherwise—a would-be suicide. He was trying to work his way out of the Army by taking refuge in doing the things he did.
Such conduct on the part of any one under military discipline cannot be overlooked in the interests of discipline. The punishment which followed, I submit, was no less than could have been expected. It was combined, as punishment of this kind rightly is for a young soldier, with a chance for him to make good. I very much regret that it did not work, that the outcome was not what we would have wished and that Guardsman Till has not turned into a satisfactory soldier.
None the less, I believe that he was fairly and correctly treated and that he was given every chance by the Army authorities to make good. I am only sorry that he was not able to avail himself of it.
Mr. Abse: With the leave of the House, may I suggest that if, in the
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first instance, this boy had been treated—from what would appear to me from the clinical history we have been given—as a boy in very deep and serious difficulties, the situation might have been different? Instead, as has clearly been proved, through a mistake on the part of the Army, they treated him as a malingerer should be treated, by punishment. Had they treated him differently we may have had a healthier individual who could have been either integrated into the Army or into civilian life.
I would have thought that the hon. Gentleman would agree that there has been an incorrect diagnosis from the start and that it was assumed by whoever were the advisers that punishment could put it right. That punishment lamentably failed, precisely because the boy has not received from the word "go" the psychiatric help and attention which I am sure in civil life—or, earlier, in the courts in similar circumstances—he would inevitably have received. It is not a very pretty picture; the idea of a boy of this kind being punished. It has clearly been proven that the punishment has been a complete and absolute failure from the point of view of the Army and the boy.
Mr. Ramsden: With the leave of the House, I hope that the hon. Member will read carefully what I have said. He suggests that the treatment was inadequate. I was at great pains to say that there was no grave emotional disturbance diagnosed and that therefore—in the sense meant by the hon. Member—there was nothing to treat. I am afraid that the hon. Member for Pontypool takes his view and I take mine. I would remind him that my view is based on the best advice available to me and I regret that, over this, we must disagree.
Question put and agreed to.
Adjourned accordingly at twenty-eight minutes past Ten o'clock.

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

MESSAGE FROM THE QUEEN
Lord COBBOLD: My Lords, I have the honour to present to your Lordships a Message from Her Majesty The Queen signed by her own hand. It is as follows:
"I have received your Address praying that the Location of Offices Bureau Order, 1963, be made in the form of the draft laid before your House.
"I will comply with your request".

CASINO ON ISLAND OF ANTIGUA
2.35 p.m.
Lord BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, with regard to the Island of Antigua, West Indies, it is intended that a franchise be granted for the establishment of a casino on the Island; and if so, is the ultimate beneficiary of the operation of this franchise to be in the hands of Antigua citizens or aliens.]
THE MINISTER OF STATE, COMMONWEALTH RELATIONS OFFICE (THE DUKE OF DEVONSHIRE): My Lords, I understand that as part of a general attempt to encourage tourism in the island, the Antigua Government have licensed a group, consisting of American and Antiguan interests, to establish a casino there, for a trial period of one year only, provided they construct a hundred bedroom hotel by 1st October, 1963. The renewal of the casino licence would be subject to the satisfactory operation of this casino during the year and, if renewed, in subsequent years.
LORD BARNBY: My Lords, while it is to be assumed that the Colonial Office have power to veto, is it to be understood in this matter that the establishment of a casino, with its danger of the destruction of the amenities of the island, has the full support of Her Majesty's Government? Secondly, do they really think that the licence for one year would be the sort of basis on which any commercial venture would be likely to be established?
THE DUKE OF DEVONSHIRE: My Lords, the licence has been granted on the basis of one year. I understand that the idea of a casino is to increase the amenities of the island and that it has the full support of the Antigua Government, which, as my noble friend will know, has a very large measure of self-government.
VISCOUNT ST. DAVIDS: My Lords, can the noble Duke inform the House whether, before this licence was granted, the various religious bodies on the island were consulted? As the noble Duke may know, they are in considerable strength, particularly the Nonconformists, and they may not have approved of this. Can the noble Duke see to it that, before this licence is extended, at least these various bodies shall be consulted?
THE DUKE OF DEVONSHIRE: My Lords, I am aware that the religious authorities in the island have expressed their view. Indeed, they made a submission to Her Majesty The Queen on this subject. Due weight has been given to their protests, and in view of the feeling of the Government of the island it would be decided to disregard this protest. I am quite certain that before the licence is renewed, due weight will be given to any further protest they should make.
LORD BARNBY: My Lords, would the noble Duke answer the point of the question that I made? In his penultimate reply, he mentioned that the island has self-government. Is it to be understood from this that Her Majesty's Government have renounced the power of veto?
THE DUKE OF DEVONSHIRE: My Lords, I hope and believe that I said, "a large measure of self-government".
LORD WALSTON: My Lords, while not wishing to pass any judgment on the merits or demerits of gambling in casinos,

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is the noble Duke satisfied that the authorities in the island are able, and have powers, to prevent the influx of some of the undesirable elements who occasionally, I am told, come in the train of gambling, on the other side of the Atlantic if not on this side?
THE DUKE OF DEVONSHIRE: My Lords, I am quite satisfied that the Antigua Government have given due weight to such dangers as this. No doubt one of the reasons why a licence is granted for one year only is to see whether any of the eventualities which the noble Lord has mentioned takes place.
LORD HENDERSON: My Lords, does the noble Duke think, in the event of the hotel being built parallel to the issue of a licence for one year, that the licence is going to be withdrawn after that year? Once the licence is related to the building of the hotel, does that not make it almost impossible to withdraw the licence?
THE DUKE OF DEVONSHIRE: My Lords, I think it fair to say that this licence has been granted for one year, subject to the building of an hotel of 100 bedrooms. Should the casino be carried on in undesirable fashion, the promoters will lose their licence. That is a risk the promoters of the scheme must take. They are quite aware of the risk involved.
LORD BARNBY: My Lords, could the noble Duke indicate at what point in the island the casion is to be built? Are the Government satisfied that that is the point in the island in which it is most desirable that gambling should be instituted?
THE DUKE OF DEVONSHIRE: My Lords, I presume that my noble friend means what point geographically?
LORD BARNBY: Correct.
THE DUKE OF DEVONSHIRE: My Lords, I am afraid that I cannot answer that question, but I would say this. Her Majesty's Government believe in devolving responsibility for government on their colonial territories, and it would seem to me a gross breach in this principle if we were to interfere too much in the affairs of the Antigua Government. This is their decision, one which they are fully entitled to take, and one which their
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Government has taken; and I think it would be most unbecoming for us to interfere.
BARONESS HORSBRUGH: My Lords, could the noble Duke say if any regulation has been laid down as to what games of chance are to entertain visitors to the casino?
THE DUKE OF DEVONSHIRE: My Lords, I am afraid that I cannot reassure my noble friend as to what particular games have, or have not, been arranged for, but having frequented a casino in my time, I can have a fairly shrewd guess.
LORD HAWKE: My Lords, will the Government look a little nearer at hand, where casinos appear to be springing up in this country, greatly to the shock of a great many citizens who voted for the Betting and Gaming Bill thinking that such things would be impossible?
THE DUKE OF DEVONSHIRE: My Lords, I am sure that I have the House with me when I say that this is an entirely different question.
LORD HENDERSON: My Lords, can the noble Duke say who will pay the guests' bills if they lose all their money at the casino?
THE DUKE OF DEVONSHIRE: My Lords, one thing I can say is that Her Majesty's Government certainly will not.

ELECTIONS TO EGG MARKETING BOARD
2.43 p.m.
LORD RUSSELL OF LIVERPOOL: 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 certain alleged irregularities which took place during the election last December of a special member for the British Egg Marketing Board and whether they do not think that there should be a full inquiry into these matters.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (LORD ST. OSWALD): My Lords, my right honourable friends are aware of

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the irregularities admitted in statements made at the time by the British Egg Marketing Board and its Chairman, but, as my right honourable friend has advised the noble Lord in correspondence, the detailed conduct of these elections is not the responsibility of Ministers, and consequently my right honourable friends do not feel called upon to institute an inquiry into matters which are essentially a domestic responsibility of egg producers.
LORD RUSSELL OF LIVERPOOL: My Lords, I should like to thank the noble Lord for his reply and to ask him a further question: namely, whether, as it appears at the moment there is no machinery to investigate irregularities which may occur during such elections, Her Majesty's Government will consider amending the electoral rules set out in paragraphs 9 to 18 of the British Egg Marketing Scheme.
LORD ST. OSWALD: No, my Lords, because this would require new legislation. The various schemes under the Act are relatively the same in so far as elections are concerned, and we see no reason to alter the details of the scheme in this respect. This was an abuse of the scheme as it stood, and we do not think that other schemes should be affected by legislation at the moment as a result of this particular instance.
LORD RUSSELL OF LIVERPOOL: My Lords, am I to assume from the noble Lord's reply that when such occurrences happen in future elections the Government intend to continue the role of Pontius Pilate?
LORD ST. OSWALD: No, my Lords, we do not anticipate any such continuation or repetition.

DIRECTOR OF CONSUMER COUNCIL
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 appoint a director as head of the secretariat of the Consumer Council as recommended
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in the Report of the Molony Committee; if this appointment will be made from the Civil Service; and when they will be in a position to make a statement on the matter.]
THE MINISTER OF STATE, BOARD OF TRADE (LORD DERWENT): My Lords, as I have already informed the noble Lady on April 1, my right honourable friend has appointed as director to the Consumer Council an Under-Secretary in the Civil Service who has been seconded to the Council for this purpose. The officer selected for this important post has been appointed for her personal and administrative abilities, and for her wide experience in consumer protection matters and knowledge of industry and commerce.
BARONESS BURTON OF COVENTRY: My Lords, we seem to be having a new method of Parliamentary procedure by which Questions are answered three days in advance of the date named on the Order Paper. Does the noble Lord recall, prior to Question Time on Monday, asking me whether I intended leaving to-day's Question on the Order Paper, to which I replied, "Yes", and he then answered it on that particular day? However, reverting to the Answer—I am glad that he finds it amusing; I thought it was quite a new departure—may I ask the noble Lord (and I am speaking on the principle, not the merit) whether the Government really consider that the best way of ensuring the independence of a Consumer Council is to appoint as its director a civil servant seconded to it from the Department with which it will chiefly have to deal?
LORD DERWENT: My Lords, the noble Baroness will recollect that when I mentioned this appointment the other day in answering another Question the announcement had already been made elsewhere. I should have thought that she would be very glad to have it confirmed before she had actually asked her Question. I have now answered it for the second time. As regards the other suggestion of the noble Baroness, I find it a most extraordinary one. As I understand the suggestion, it is this: that a very senior civil servant, who has been chosen for an important public post for her ability and knowledge of consumer protection, because she has been at the Board of Trade before she takes up this job, is not likely to do her job properly.

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I can only assume that the noble Baroness has little experience of senior civil servants, and none at all of Miss Ackroyd.
BARONESS BURTON OF COVENTRY: My Lords, the noble Lord is wrong in both respects. But if I can go on to the next point I want to ask the Government—because I have no intention of being equally unpleasant—may I ask him why this post was not advertised, and why, upon being appointed to it, the person concerned did not resign from the Civil Service, but was merely seconded? May I, lastly, ask him whether it is true that this director will be a member of the Consumer Council herself, as I have seen reported?—because that would seem to be a most unusual proceeding.
LORD DERWENT: My Lords, answering the last question first, the answer is, Yes. The House will remember that the Molony Committee Report recommended that the director of the Consumer Council should have an appreciable status and have contact with Government Departments at Under-Secretary level. Those were the recommendations of the Report. It says absolutely nothing about advertising, and my right honourable friend considered it essential to appoint the person he considered most suitable for this important post. I only hope that the noble Baroness is not doing her best to try to make things as difficult as possible for Miss Ackroyd.
BARONESS BURTON OF COVENTRY: My Lords, may I ask the Minister, please, whether he can tell me of any other comparable councils where the director, who is a paid servant of the council, is a member of the council?—because that is causing considerable concern among industrial organisations.
LORD DERWENT: My Lords, if the noble Baroness, who knows the Molony Report very well indeed, will recall it to her mind, she will remember that that Report said that there was no other similar council in existence.
BARONESS SUMMERSKILL: My Lords, the noble Lord must not treat this matter in such a high and mighty manner. This Parliament is established in order that Members can ask questions of Ministers, and we expect Ministers to come to this House and answer in a reasonable manner. As one, incidentally,
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who has been accustomed to the Civil Service, my noble friend has asked in a very reasonable manner whether, if an independent organisation is set up, which gives an opportunity to aggrieved consumers to question the conduct of a Government Department, it is wise for that independent organisation to be served by a civil servant who has been seconded from a Government Department which will be criticised. I have no feeling about the matter, but looking at this absolutely objectively it seems to me rather surprising—
SEVERAL NOBLE LORDS: Speech !
BARONESS SUMMERSKILL: The noble Lord will not interrupt. The noble Viscount the Leader of the House speaks so much himself, perhaps he will allow somebody else to finish a question.
SEVERAL NOBLE LORDS: Order, order!
BARONESS SUMMERSKILL: I should have thought it would be putting the civil servant in rather an uncomfortable position if she is asked to answer criticisms of her own Department.
LORD DERWENT: My Lords, I have nothing to add on the second part of the noble Baroness's question. As regards her opening comments, I shall take care to model myself on the noble Baroness when she was Minister of Food.
LORD TAYLOR: My Lords, with the greatest respect, and not in any way in a hostile manner, may I ask whether it is wise to make these appointments without advertising them? How can the Minister know who is available unless a public appointment of this sort is advertised? Time and again it happens that a post is filled by the Civil Service, and I should have thought it was most undesirable. It means not a strengthening of Ministerial power, but a strengthening of Civil Service power, which is just what I should have thought noble Lords opposite did not want.
LORD DERWENT: My Lords, I have noted what the noble Lord has said. My right honourable friend does not agree with him.
LORD TAYLOR: Well, I think "he better had".

POSTER ADVERTISING ON DANGERS OF SMOKING
LORD TAYLOR.: 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 what progress has been made in their discussions with the Joint Censorship Committee of the Poster Advertising Industry on the display of Ministry of Health posters on smoking and lung cancer and whether they will publish their correspondence with the Committee.]
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, I must apologise in advance to the House for the absolutely inordinate length of this reply, but I think noble Lords will see that it is probably the only course I could take. The House will recall that the noble Lord, Lord Francis-Williams, raised this matter in the House on December 17 last. On that occasion I disclaimed responsibility on the ground, which is correct, that Her Majesty's Government are not responsible for the decisions of the Joint Censorship Committee of the Poster Advertising Industry. However, on December 17 my noble friend, Lord Ferrers (who had been expected to answer Lord Francis-Williams's Question) received a letter from the secretary of the Committee, which he later handed to me as the Minister who had in fact replied. I think that the House is entitled to be informed of this letter, and of the related correspondence which I am circulating in the OFFICIAL REPORT. However, with the permission of the House, I would desire to quote the correspondence with which I personally was concerned.
The letter to Lord Ferrers, which I received on December 17, was in these terms:
"Lord Luke has asked me to write you in connection with the Question set down for today in the name of Lord Francis-Williams concerning the Joint Censorship Committee of the poster advertising industry.
"He apologises for not writing you personally, and also for the fact that he is unable to be in the House today.
"I enclose a copy of an article which appeared in the August 1960 issue of Signs & Outdoor Advertising which sets out the history
646
of the Committee, its terms of reference and its objects, which I hope will give you information to help in any reply you give to Lord Francis-Williams.
"As his Question refers to recent decisions of my Committee, I give below a few facts concerning them.
"1. The Committee recently banned posters issued by the Sunday Citizen referring to a series of articles on Western Germany, the reasons for the ban being that they constituted an attack on a member of a Government, and were also calculated to wound the susceptibilities of foreign peoples. I must emphasise as strongly as I can that, despite allegations to the contrary, no pressure of any kind has been placed upon my Committee in regard to their decision.
"2. The Committee has also recently banned three posters issued by the Ministry of Health concerning lung cancer. These all contained the statement that 'cigarettes cause lung cancer'. This is, in the opinion of my Committee, undue exaggeration. They appreciate that a great deal of evidence has been adduced to show there is a link between lung cancer and smoking but they are not aware that there is positive proof that cigarettes do cause lung cancer. They would be perfectly willing to display, as they have done in the past, posters stating that cigarettes may cause lung cancer, and naturally they would reconsider their recant decisions if and when positive evidence is forthcoming to substantiate the wording of the rejected posters. Here again, I must point out that no outside pressure of any kind has been brought to bear to influence my Committee in its decision.
"One final point which I wish to stress is that the decisions of my Committee apply only to sites owned or controlled by members of the constituent Associations.
"I shall be pleased to give any further information you may wish to have on the matter."
My Lords, I replied as follows on December 19:
"Lord Ferrers handed me your letter to him, since, as matters turned out, it fell to me to answer Lord Francis-Williams' Question.
"You write that you have knowingly prevented the Minister of Health from communicating the findings of scientific opinion to the public because 'there is no positive proof that cigarettes do cause lung cancer'.
"Yet your terms of reference do not, I note, include the assessment of scientific evidence. Nor am I aware of any qualifications you possess which would enable you to do so.
"On the other hand a number of scientifically qualified bodies support the Ministry of Health in their opinion that cigarette smoking is a cause of lung cancer. These include the Medical Research Council, the Royal College of Physicians, the National Cancer Research Institute of Canada, Netherlands Ministry of Social Affairs and Public Health, the United States Study Group on

647
Smoking and Health, the United States Public Health Service and the World Health Organisation.
"I know of no scientifically qualified body which has come to a contrary conclusion.
"What constitutes positive proof is a matter of opinion, but in my judgment, to deny a public health authority the right to inform the public of an overwhelming scientific opinion is to be guilty of a grave public disservice.
"Your decision, and the responsibility it entails, must be judged against two facts: about £l1 million a year is, I believe, spent on advertising cigarettes and other smoking and the expenditure is rising: some 25,000 people die every year from lung cancer and the deaths from this cause are rising.
"Unless I hear from you to the contrary I propose to send copies of this exchange of letters to the press."
To that letter, I received a reply on January 3:
"Your letter of the 19th December was considered by my Committee today. I am directed to say that they are as anxious as anyone to do everything possible to cut the lung cancer mortality rate. However, they cannot ignore certain long established rules about advertisement copy and design which are adhered to by all media owners. In effect, these rules bar copy which is exaggerated or calculated to induce fear. They feel sure that the Ministry of Health and/or their advertising agents must be unaware of these rules or have not interpreted them correctly.
"My Committee maintain that the phrase 'Cigarettes cause lung cancer' is too sweeping and may cause undue alarm. They have to bear in mind that untold millions smoked cigarettes for a great many years before the incidence of lung cancer reached its present proportions; that all the sufferers from this disease have not been smokers and that the word 'cigarettes ' used as it is could be taken to mean as few in number as two.
"It is noteworthy that the statement has not, so far as my Committee are aware, appeared as an advertisement in the Press or any other medium and that even the Minister of Health himself is not prepared to say more than that 'there is a close causal connection between the smoking of cigarettes and the incidence of lung cancer'.
"Had the posters contained the statement made in your letter and also in the Report of the Royal College of Physicians that 'cigarette smoking is a cause of lung cancer' they would have been accepted without question.
"The Industry has displayed many posters in the past for this campaign including the last series issued by the Ministry in April, and it will always be willing to co-operate in the future provided the posters are based upon the evidence which has so far been adduced. If they can assist the Ministry of Health with the lay-out in order to make it as effective as that just refused they will be very pleased to do so.
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"The Committee ask me to say that they consider that the Outdoor Advertising Industry has been pilloried most unjustly in this matter through maintaining a principle common to all media, including the Press, and I have been asked to refer your letter to the Advertising Association for consideration by the Advertising Standards Authority.
"Finally my Committee would welcome the publication of the correspondence between us in all the Press but they would ask that the letters also are published which have passed between them and the Ministry of Health on the matter."
My Lords, in turn I replied on January 11:
"Thank you for your letter of 3rd January.
"I note that your Committee find a significant difference between the proposition Cigarettes cause lung cancer' and 'Cigarette smoking is a cause of lung cancer'.
"I do not propose to argue the point but simply take you at your word. I have informed my colleague of your assurance and his officials will be getting in touch with you.
"In the meantime I will await the outcome before taking any further steps."
After a meeting with officials and further correspondence, I came to the conclusion that no further use would be served by further delay and that the correspondence should be published. While I deplore the decision of the Committee, I should make it clear that the effectiveness of the Government's Health Education Campaign will not appreciably be affected by it. The Committee's objections relate only to a few of the Government's numerous posters, which are not in any case primarily designed for display on hoardings. In any case, I cannot think that the Committee will find it possible to remain indefinitely in what is a hopelessly indefensible position.
3.3 p.m.
LORD TAYLOR: My Lords, I thank the Lord President for that very long Answer, and I hope that the House will be indulgent if I ask more than one supplementary. First of all, may I ask him: have any other media been approached and refused to give this kind of publicity? I have in mind the daily and magazine Press and the television, all of which carry very substantial volumes of cigarette advertising and all of which are responsible media through which this warning should be conveyed.
Secondly, has a poster of the kind to which the Censorship Committee does not object now been prepared and been submitted to them, and are there any further

649
troubles in connection with it? I personally see no objection to saying that "Cigarettes are a cause of lung cancer". They undoubtedly are, and we ought to get the message over, particularly if all the references are given and the authorities stated.
Thirdly, may one express an opinion that this is the strangest use of censorship that one has ever come across? One can understand censorship in respect of indecent screen advertisements, of which I notice a number seem to slip by this Board. Yet when it comes to informing the public of something which is a well-recognised fact, they seem to jib at it, for reasons, as the Lord President made quite clear, which are clearly financial. If they are prepared to advertise the rival merits of two kinds of detergents, surely it is equally reasonable that they should be prepared to advertise the merits and demerits of smoking. I cannot see that this is a moral issue they are standing on. It seems to be purely financial and quite a wrong way to exercise censorship.
VISCOUNT HAILSHAM: My Lords, in answer to the last part of the question, I entirely agree with the noble Lord. It seems to me to be absolutely indefensible and indeed irresponsible, illogical quibbling, and a quite ridiculous position that this body has taken up. I can only hope that public opinion will say so, too, and that they will see that they must in the end recede from an attempt to assume it. I personally also agree with the second part of his supplementary. I do not myself see any significant difference at all between the words which they said they will allow and those which they said they would reject. I think there is neither a scientific nor logical difference. I regard it as a mere quibble. I will bring the noble Lord's suggestion to the notice of my right honourable friend, though I should be rather reluctant to see him have his advertising media dictated to him, even in that form, by this Committee. I think that no other media have been approached for this purpose and have refused, because my right honourable friend's campaign was, I believe, a poster campaign. However, I will confirm that, and let the noble Lord know if that is not correct.
BARONESS SUMMERSKILL: My Lords, as what the noble Viscount has
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told us debases the standards of the advertising world, could he say whether there is any precedent for advertisers in any field to ignore the policy of a Government Department and, indeed, deliberately to reject it?
VISCOUNT HAILSHAM: My Lords, I know of no precedent in this field; but, of course, what is done is rather more serious than that. I suppose that it is free to anybody in this country to ignore the policy of Government Departments within the law, but this body has presumed to dictate to my right honourable friend even his ability to communicate his own official opinion to the public.
THE EARL OF ARRAN: My Lords, is the noble Leader aware that the great and good effects brought about by the Report of the Royal College of Physicians and the subsequent debate in your Lordships' House have almost entirely been negatived and destroyed by the massive advertising campaign of the tobacco companies subsequent to that Report and to your Lordships' debate?
VISCOUNT HAILSHAM: My Lords, I am not sure that that is quite right, although I appreciate what my noble friend has in mind. What is really disheartening is the apathy of the public towards this question. For instance, in this House we spent a whole afternoon two weeks ago discussing whether DDT, which is only ingested in minute quantities, could conceivably cause cancer, and more than one noble Lord expressed the view that nothing which could conceivably cause cancer should be allowed to be put on the market in any form at all. Yet here we are losing 25,000 lives a year through the gulping in of great masses of smoke from cigarettes, and nobody seems to care.
LORD HAWKE: My Lords, as the Minister is going to tell us what causes various diseases, will be start a campaign against the over-indulgence in food, which kills at least as many people a year as lung cancer?
VISCOUNT HAILSHAM: My Lords, I do not know. I think as a matter of fact that my right honourable friend's Health campaign does include a warning about over-indulgence in food, and certain other things too.
LORD TAYLOR: My Lords, is it not a fact that really a simple rule is moderation in all things, even including smoking; and if we can get people down to below 20 cigarettes a day we shall have done a lot of good. It is the people who smoke 30 or 40 a day who are so terrible; but I fear that in order to get rid of this scourge we shall have to get rid of tobacco altogether.
VISCOUNT HAILSHAM: I think we should be making a great advance if we stopped excessive smoking. The evidence which the Royal College of Physicians accepted was that any smoking of cigarettes could be shown to bear a relationship to deaths from lung cancer. Of course, the issue here raised is not whether people should be free or not free; the issue is whether my right honourable friend should be allowed to express an opinion that they might die as a result of it.
LORD TAYLOR: My Lords, may I strongly urge that the Government should try out these other media as well? if cigarette manufacturers find it worthwhile to advertise on television and in the Press and magazines, surely it must be equally worthwhile for the Government to approach particularly the young people through these very media in order to give them a warning they should have.
VISCOUNT HAILSHAM: My Lords, I absolutely agree that these things must not be excluded; but I feel that a competitive shouting campaign, so to speak, between the Government and the commercial advertisers might be counterproductive. We have to approach this matter in an intelligent way, and we have, of course, available to ourselves certain media and certain methods of approach which are not open to the commercial advertiser and which may, in the end, prove to be more beneficial.
LORD CONESFORD: My Lords, will my noble friend take this into consideration? If the medical fact is as stated by the noble Lord, Lord Taylor, that moderate smoking is not likely to cause lung cancer—I am not saying that the Joint Censorship Committee are right; I regret that they refused this poster—is it not a possible view for an honest man to hold that "Cigarettes cause lung cancer" means they always
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cause it, whereas the statement "Cigarettes are a cause of lung cancer" is not open to that objection? And may I ask whether another suggestion of the noble Lord, Lord Taylor, would not be a very good idea: that they should make that simple modification in the advertisement and resubmit it?
VISCOUNT HAILSHAM: My Lords, I do not altogether take the same view. One of the most effective posters to stop road accidents was, "Carelessness causes accidents". Nobody knows more clearly than the noble Lord that carelessness does not always cause accidents. To say from any rational point of view that that poster ought to have been redrafted like a legal document to say, "Carelessness is a cause of road accidents" seems to be reducing advertising to pure idiocy.
LORD TAYLOR: Would it not be equally logical to say that Daz or another detergent always washes whiter than every other one, which would be complete nonsense?
LORD REA: My Lords, I think the noble Viscount said in his first letter that not all sufferers from lung cancer were smokers. I do not take that to mean that an analysis was made and it was proved that no case of a smoker ever had lung cancer, but quite the reverse.
VISCOUNT HAILSHAM: My Lords, I am not sure what the noble Lord is putting. I never suggested—I certainly did not mean to suggest and I do not think I did suggest—that all those who had lung cancer were, in fact, cigarette smokers. This is certainly not true, as we made clear in our debate a year ago. What is true is that the incidence of lung cancer can be shown to bear a definite relationship to the smoking of cigarettes.
Following is the correspondence referred to in Lord Hailsham's Answer:
Ministry of Health,
Alexander Fleming House.
22nd November, 1962.
DEAR SIR,
Smoking and Health: Ministry Posters
It has been reported to us by a local authority in London that the display of Ministry posters on this subject has been refused by your organisation on spaces controlled by it.
These posters, which in the public interest give some of the main facts about the dangers

653
to health of smoking, are official Government posters issued by the Ministry of Health, following the publication in March this year of the report of the Royal College of Physicians on Smoking and Health. I should, therefore, be glad to know the grounds on which the decision to refuse their display was taken.
Yours faithfully,
(Signed) S. A. HEALD,
Public Relations Officer.
H. M. Mallatratt, Esq.,
Secretary,
London Poster Advertising Association,
48, Russell Square,
London, W.C.1.

JOINT CENSORSHIP COMMITTEE OF THE POSTER ADVERTISING INDUSTRY
27th November, 1962.
S. A. Heald, Esq.,
Ministry of Health,
Alexander Fleming House,
(Room B.1412),
Elephant and Castle,
London, S.E.1.
DEAR SIR,
Smoking and Heath: Ministry Posters
I have received your letter of the 22nd inst.
My Committee considers all posters submitted to them in the light of their terms of reference, one of which is, there shall be no misleading statements by way of gross exaggeration.
It is fully appreciated that a great deal of evidence has been adduced to link lung cancer with smoking, but as far as my Committee is aware there has never been any fundamental proof that cigarettes cause lung cancer. They felt, therefore, unable to accept the posters containing such statements.
They would see no objection to a statement that cigarettes may cause lung cancer, and of course, they will always be willing to reconsider their decisions in the light of positive proof being brought forward.
Yours faithfully,
(Signed) H. H. MALLATRATT,
Secretary.
Ministry of Health,
Alexander Fleming House.
29th November, 1962.
DEAR SIR,
Smoking and Health: Ministry Posters
Thank you for your letter of 27th November. I will write to you again as soon as consideration of your letter in the Department has been completed.
Yours faithfully,
(Signed) S. A. HEALD,
Public Relations Officer.
H. H. Mallatratt, Esq.,
Secretary,
Joint Censorship Committee of the Poster
Advertising Industry,
48, Russell Square,
London, W.C.1.

JOINT CENSORSHIP COMMITTEE OF THE POSTER ADVERTISING INDUSTRY
48 Russell Square,
London, W.C.1.
17th December, 1962.
The Rt. Hon. Earl Ferrers,
House of Lords,
Westminster,
London, S.W.1.
MY LORD,
Lord Luke has asked me to write you in connection with the Question set down for to-day in the name of Lord Francis Williams concerning the Joint Censorship Committee of the Poster Advertising Industry.
He apologises for not writing you personally, and also for the fact that he is unable to be in the House to-day.
I enclose a copy of an article which appeared in the August 1960 issue of "Signs & Outdoor Advertising" which sets out the history of the Committee, its terms of reference and its objects, which I hope will give you information to help in any reply you give to Lord Francis Williams.
As his Question refers to recent decisions of my Committee, I give below a few facts concerning them.
1. The Committee recently banned posters issued by the "Sunday Citizen" referring to a series of articles on Western Germany, the reasons for the ban being that they constituted an attack on a member of a Government, and were also calculated to wound the susceptibilities of foreign peoples. I must emphasise as strongly as I can that, despite allegations to the contrary, no pressure of any kind has been placed upon my Committee in regard to their decision.
2. The Committee has also recently banned three posters issued by the Ministry of Health concerning lung cancer. These all contained the statement that "cigarettes cause lung cancer". This is, in the opinion of my Committee, undue exaggeration. They appreciate that a great deal of evidence has been adduced to show there is a link between lung cancer and smoking but they are not aware that there is positive proof that cigarettes do cause lung cancer. They would be perfectly willing to display, as they have done in the past, posters stating that cigarettes may cause lung cancer, and naturally they would reconsider their recent decisions if and when positive evidence is forthcoming to substantiate the wording of the rejected posters. Here again, I must point out that no outside pressure of any kind has been brought to bear to influence my Committee in its decision.
One final point which I wish to stress is that the decisions of my Committee apply only to sites owned or controlled by members of the constituent Associations.
I shall be pleased to give any further information you may wish to have on the matter.
Yours faithfully,
(Signed) H. H. MALLATRATT,
Secretary.
Article from Signs and Outdoor Advertising, August, 1960

THE POSTER THAT SHOCKED LONDON!
Spine-chiller from the theatre led to formation of censorship committee
During the 1880's there was a considerable public outcry against certain theatrical posters which were being displayed on hoardings in Britain, and particularly in London. About the middle of 1890 a very lurid melodrama was advertised on the hoardings showing scenes of blood and slaughter which shocked the susceptibilities of many sensitive observers.
Series of resolutions
This outcry caused the London Billposters Protection Association to pass a series of resolutions which brought into being a committee of billposters to pass judgment upon posters before they were exhibited to the public, and to prevent the display of any that were for any reason undersirable or calculated to give public offence.
The United Billposters Association which operated in the provinces joined forces with the London Association to form a committee of censors.
Binding upon all
The original committee consisted of six members, all billposters, and their decision upon any poster submitted to them was binding upon all their members.
Any member of the associations had the right to demand a decision on any poster, and pending a decision it was laid down that contracts for the exhibition of the poster should not be entered into. If they were already entered into, the associations undertook to hold the member concerned harmless against any action for a breach of contract.
The industry as a whole respected and abided by the decisions of the censorship committee and the arrangement worked exceedingly well. About 1,900 poster printers and theatrical managers became somewhat uneasy over the large number of posters which was being condemned, and they asked that they should have a say in the decisions of the committee.
They had no idea
They had interests at stake and had no idea of what to avoid or, in the case of a considerable number of "stock" theatrical posters which had been condemned, how to amend them so that they could be displayed.
The representations of the printers and theatrical managers resulted, in 1901, in a joint committee being formed which was quite independent of the billposters' own committee, and merely dealt with the stock posters which had been subject to censorship. In all something like 200 posters were dealt with and the committee functioned until 1903 when, after its final meeting, it issued a report to everyone concerned containing a catalogue of all the stock posters which had been banned.
Most of these posters featured crude sensationalism and in a number of cases the acts of violence shown sought to convey an indirectly sexual thrill.
The censorship committee of the billposters has continued to function steadily and thanks to its voluntary efforts the public has been spared unnecessary shocks.
Consultation sought
The present representation upon the joint committee of censors consists of the three poster advertising associations, namely the British Poster Advertising Association, the London Poster Advertising Association and the Solus Outdoor Advertising Association, and the other members on it represent the British Transport Commission and the Theatrical Managers Association, while consultation is always sought with the cinematograph industry when posters belonging to that industry are brought before it.
During the past few months a still closer association has been fostered with the cinematograph industry by an invitation to the censorship committee to appoint a representative upon the newly-formed censorship committee of the Kinematograph Renters Association.
An enormous. Saving
This ensures that advice can be given and action taken on sketches and designs before cinema posters are actually printed—an enormous saving in expense. The system operated by the joint censorship committee of the poster advertising industry is fairly simple, if any member of any of the associations connected with the industry has the slightest doubt concerning a poster received by him for display he automatically sent it to the committee who invariably meet at the shortest possible notice—in some cases a matter of an hour or two—to consider it.
If the committee are of the opinion it should not be displayed by the trade, the member sending in the bill is informed immediately and all members of all associations are told.
The ideal would be …
Naturally the ideal would be for agents and advertisers to submit sketches of proposed posters which might be in doubt to the committee before going into print as this would save the enormous amount of expense and trouble involved in printing. The committee is loath to incur the expense for advertisers in the banning of any poster that has already been printed, but it does not allow this particular factor to come into its decisions at all.
Terms of reference
The committee has terms of reference which act as a guide to its deliberations. These are as follows:—
"The Joint Committee of Censors shall have power to prohibit the exhibition of posters if such posters:—

(1) Depict murder, scenes of terror, horror or acts of violence.

(2) Are calculated to demoralise, or which could be held to extenuate crime or incite its commission.

(3) Depict obscenity or nudity.

(4) Refer to religious or sacred subjects in a manner which might give offence.

657

(5) Might be calculated to wound the susceptibilities of foreign peoples.

(6) Foment social unrest.

(7) Constitute a person attack on a member of any Government.

(8) Contain any matter which can be regarded as a holding out for the prevention, cure or relief of serious diseases which should be rightly under the care of a registered medical practitioner, or offers for sale to the public any medicine or treatment which is directly or by implication held out in terms calculated to lead to the belief that the product or subject advertised is effective in:—

(a) The treatment of Bright's disease, cancer, tuberculosis or consumption, diabetes, epilepsy, eye-strain and overstrain, fits, locornotorataxy or any ataxia, cataract., glaucoma, disseminated sclerosis, osteoarthritis, spinal, cerebral and venereal diseases, lupus or paralysis, or for preventing any of those ailments or for producing any beneficial effect with respect to the course of any of those ailments.

(b) The cure of amenorrhaea, hernia, blindness, arthritis, or any structural or organic ailment of the auditory system.

(c) Procuring the miscarriage of women.

(d) The treatment of habits associated with sexual indulgence or of any ailment associated with those habits.

(9) Undertake to treat by correspondence any of the ailments specified in paragraph 8 above.

(10) Contain illustrations which are distorted or exaggerated in such a manner as to convey false impressions and calculated to deceive the public, or containing statements of a "knocking" or extravagant nature".

H. H. MALLATRATT.
Office of the Minister for Science,
2, Richmond Terrace, S.W.1.
19th December, 1962.
Lord Ferrers handed me your letter to him, since, as matters turned out, it fell to me to answer Lord Francis-Williams' Question.
You write that you have knowingly prevented the Minister of Health from communicating the findings of scientific opinion to the public because "There is no positive proof that cigarettes do cause lung cancer."
Yet your terms of reference do not, I note, include the assessment of scientific evidence. Nor am I aware of any qualifications you possess which would enable you to do so.
On the other hand a number of scientifically qualified bodies support the Ministry of Health in their opinion that cigarette smoking is a cause of lung cancer. These include the Medical Research Council, the Royal College of Physicians, the National Cancer Research Institute of Canada. Netherlands Ministry of Social Affairs and Public Health, the United States Study Group on Smoking and Health, the United States Public Health Service and the World Health Organisation.
I know of no scientifically qualified body which has come to a contrary conclusion.
What constitutes positive proof is a matter of opinion, but in my judgment, to deny a public health authority the right to inform the public of an overwhelming scientific opinion is to be guilty of a grave public disservice.
Your decision, and the responsibility it entails, must be judged against two facts: about £11 million a year is, I believe, spent on advertising cigarettes and other smoking and the expenditure is rising; some 25,000 people die every year from lung cancer and the deaths from this cause are rising.
Unless I hear from you to the contrary I propose to send copies of this exchange of letters to the press.
(Signed.) HAILSHAM.
H. H. Mallatratt, Esq.,
Joint Censorship Committee of the Poster Advertising Industry, 48, Russell Square, W.C.1.

JOINT CENSORSHIP COMMITTEE OF THE POSTER ADVERTISING INDUSTRY
48, Russell Square,
London, W.C.1.
21st December, 1962.
The Rt. Hon. Viscount Hailsham, Q.C.,
Lord President of the Council and
Minister for Science,
2, Richmond Terrace,
Whitehall,
London, S.W.1.
Dear Mr. Minister,
Thank you for your letter of the 19th inst, which I will bring before my Committee after the Christmas holiday.
Yours faithfully,
(Signed.) H. H. MALLATRATT,
Secretary.

JOINT CENSORSHIP COMMITTEE OF THE POSTER ADVERTISING INDUSTRY
48, Russell Square,
London. W.C.1.
3rd January, 1963.
The Rt. Hon. Viscount Hailsham, Q.C.,
Lord President of the Council and Minister for Science,
2, Richmond Terrace,
Whitehall,
London. S.W.1.
Dear Mr. Minister,
Your letter of the 19th December was considered by my Committee to-day. I am directed to say that they are as anxious as anyone to do everything possible to cut the lung cancer mortality rate. However, they cannot ignore certain long established rules about advertisement copy and design which are adhered to by all media owners. In effect, these rules bar

659
copy which is exaggerated or calculated to induce fear. They feel sure that the Ministry of Health and/or their advertising agents must be unaware of these rules or have not interpreted them correctly.
My Committee maintain that the phrase "cigarettes cause lung cancer" is too sweeping and may cause undue alarm. They have to bear in mind that untold millions smoked cigarettes for a great many years before the incidence of lung cancer reached its present proportions; that all the sufferers from this disease have not been smokers and that the word "cigarettes" used as it is could be taken to mean as few in number as two.
It is noteworthy that the statement has not, so far as my Committee are aware, appeared as an advertisement in the Press or any other medium and that even the Minister of Health himself is not prepared to say more than that "there is a close casual (causal?) connection between the smoking of cigarettes and the incidence of lung cancer". (Hansard, 17th December, 1962.)
Had the posters contained the statement made in your letter and also in the Report of the Royal College of Physicians that "cigarette smoking is a cause of lung cancer" they would have been accepted without question.
The Industry has displayed many posters in the past for this campaign including the last series issued by the Ministry in April, and it will always be willing to co-operate in the future provided the posters are based upon the evidence which has so far been adduced. If they can assist the Ministry of Health with the lay-out in order to make it as effective as that just refused they will be very pleased to do so.
The Committee ask me to say that they consider that the Outdoor Advertising Industry has been pilloried most unjustly in this matter through maintaining a principle common to all media, including the Press, and I have been asked to refer your letter to the Advertising Association for consideration by the Advertising Standards Authority.
Finally my Committee would welcome the publication of the correspondence between us in all the press but they would ask that the letters also are published which have passed between them and the Ministry of Health on the matter.
Yours faithfully,
(Signed) H. H. Mallatratt,
Secretary.
Office of the Minister for Science,
2, Richmond Terrace,
S.W.1.
11th January, 1963.
Thank you for your letter of 3rd January.
I note that your committee find a significant difference between the proposition "Cigarettes cause lung cancer" and "Cigarette smoking is a cause of lung cancer".
I do not propose to argue the point but simply take you at your word. I have informed
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my colleagues of your assurance and his officials will be getting in touch with you.
In the meantime I will await the outcome before taking any further steps.
(Signed) HAILSHAM.
H.H. Mallatratt, Esq.,
Joint Censorship Committee of the Poster Advertising Industry,
48, Russell Square,
London, W.C.1.
Ministry of Health,
Alexander Fleming House,
17th January, 1963.
Dear Sir,
In his letter of the 11th January about the Government posters on smoking and health, the Lord President said that officers of the Ministry of Health would be getting into touch with you. Mr. Heald, the Public Relations Officer of this Department, also wrote to you on 29th November, promising a further letter in reply to yours of 27th November.
I am now writing to say that with other representatives of the Ministry I should welcome a discussion with a representative or representatives of your Committee so that we may go into the points at issue.
If this is acceptable to you perhaps the necessary arrangements could be made over the telephone (HOP 5522, Ext. 265).
Yours faithfully,
(Signed) J. P. DODDS.
H. H. Mallartratt, Esq.,
Joint Censorship Committee of the Poster Advertising Industry,
48, Russell Square,
London, W.C.1.
15th February, 1963.
Dear Mr. Mallatratt,
I am writing with reference to your visit with Mr. Edwards to the Ministry on the 30th January to discuss the refusal of the Joint Censorship Committee to approve the display of certain of our posters on smoking and health, which include the words "Cigarettes cause lung cancer."
It was explained to you that these posters were part of a general effort to bring home to the public the serious risks to health of cigarette smoking. This campaign is based on the highest medical authority and you indicated that your Committee have no desire to frustrate it.
In March last the Royal College of Phycisians, after reviewing the latest evidence, stated categorically in their Report on Smoking and Health that "cigarette smoking is a cause of lung cancer", and you have told us that in view of that authoritative finding the Committee would not object to a statement that "cigarette smoking is a cause of lung cancer" or "cigarettes are a cause of lung cancer".
It is understood that your Committee's refusal is based solely on the view that the statement "cigarettes cause lung cancer" differs from the statement "cigarettes are a cause of lung cancer" to an extent which makes the former a gross exaggeration, though the latter is perfectly acceptable. I should be grateful if you would invite the Committee to consider whether they wish to adhere to this view, which appears difficult to sustain, and whether they are satisfied that they are applying here the same criteria as they apply, or would apply, to any other poster slogan (such as "Careless talk costs lives").
I hope that as a result you will be able to tell me in the near future that the Committee have decided to withdraw their refusal.
Yours sincerely,
(Signed) J. P. DODDS.
H. H. Mallatratt, Esq.,
Joint Censorship Committee of the Poster Advertising Industry,
48, Russell Square,
London, W. C.1.

JOINT CENSORSHIP COMMITTEE OF THE POSTER ADVERTISING INDUSTRY
H. H. Mallatratt,
Secretary,
18th March, 1963.
J. P. Dodds, Esq.,
Ministry of Health,
Alexander Fleming House,
Elephant and Castle,
London, S.E.1.
Dear Mr. Dodds,
Your letter of the 15th ult. has now been considered by my Committee.
After very careful consideration my Committee is still of the opinion that their view of this matter is right and therefore they are adhering to their decision.
At the same time I am again instructed to say that my Committee will welcome discussions with your Ministry in regard to future campaigns.
Yours sincerely,
(H. H. MALLATRATT)
(Signed) Secretary.
Office of the Minister for Science,
2, Richmond Terrace,
S.W.1.
3rd April, 1963.
I have now heard from my colleague the Minister of Health that your Committee intend to adhere to their decision to ban certain posters issued by the Minister of Health containing the statement that "cigarettes cause lung cancer".
Your original explanation of this was that this is undue exaggeration. As you know from my letter to you of 19th December I
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believe that your Committee is taking responsibility on itself in a scientific matter on which every scientifically qualified body of any substance takes a contrary view to that of your Committee, and on which your Committee is not qualified to pass judgment.
I also observe that your Committee is adhering to its decision in spite of the fact that you subsequently conceded that the posters would have been accepted had they instead contained the statement that "cigarette smoking is a cause of lung cancer". This seems to me to be a quibble without scientific or logical significance.
For these reasons I propose to go ahead with my previous proposal to publish the entire correspondence between the Government and your Committee. As I understand a Question is likely to be put down on the Order Paper which I shall have to answer I shall be doing this almost at once.
(Signed) HAILSHAM.
H. H. Mallatratt, Esq.,
Joint Censorship Committee of the Poster Advertising Industry.

BUSINESS OF THE HOUSE
EARL ST. ALDWYN: My Lords, as I informed the House last night, the Committee stage of the Offices, Shops and Railway Premises Bill will be continued this afternoon and this evening, and there will be a Dinner Adjournment at about 7.30. I should inform your Lordships that dinners will be available.
BP REFINERY (KWINANA) BILL
Read 3ª, and passed.
MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER (BOLTON) BILL
Brought from the Commons; read 1ª, and referred to the Examiners.

POLICE PENSIONS (AMENDMENT) (No. 2) REGULATIONS, 1963
THE MARQUESS OF LOTHIAN: My Lords, I beg to move that the Police Pensions (Amendment) (No. 2) Regulations, 1963, a draft of which was laid before this House on March 19, be approved. These Regulations are entirely consequential upon the passing of the National Insurance Act, 1963, and I shall therefore not detain the House long in introducing them. The object of these draft Regulations is simply to increase

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certain widows' and children's benefits payable under Police Pensions Regulations by amounts corresponding to the increases in National Insurance benefits made by the National Insurance Act, 1963.
The police were excluded from the contributory old-age pensions scheme which was in existence before National Insurance schemes were introduced in 1948, and about 8,000 police widows and children are not now entitled to benefits provided under the National Insurance Scheme: police authorities are, therefore, given discretion to pay corresponding benefits under the Police Pensions Regulations. In effect, a miniature National Insurance Scheme is operated under the Police pension code. To take only one example, a widow can, in accordance with the provisions of the Act of 1963, be awarded 67s. 6d. instead of 57s. 6d. a week. The Police Councils for England and Wales and for Scotland have been consulted and are in agreement with the proposal that these changes should be made. The Regulations provide that they should come into operation on May 27, 1963, at the same time as the increases in the National Insurance benefits.
Moved, That the Police Pensions (Amendment) (No. 2) Regulations, 1963, be approved.—(The Marquess of Lothian.)
On Question, Motion agreed to.

LEGAL AID BILL [H.L.]
3.14 p.m.
Order of the Day for the House to be put into Committee read.
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, I beg to move that this House do now resolve itself into a Committee on the Bill. I should like to take this opportunity of informing the House of Her Majesty's Government's intentions in regard to the future progress of this Bill. Some of your Lordships may have wondered why a Bill which the Commons may consider infringes their financial privilege has been introduced in this House rather than in another place. The reason is this. It so happened that when we were ready to introduce the Bill the legislative programme in this House was considerably lighter than that in the House of Commons and it might well
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have proved impossible to get this urgently needed Bill through Parliament this Session if we had delayed introduction until time could be found for it in the Commons. Accordingly, the Bill was introduced into your Lordships' House and Her Majesty's Government have been particularly pleased to be able to obtain the views of your Lordships' House in general and especially of the Law Lords.
I should make it clear that it is not the duty of this House to protect the privileges of the Commons, though, of course, this House rightly pays due respect to the privileges of another place. It is not for us to judge what those privileges are. They are privileges claimed by the Commons, and the Commons are guardians of their own privileges. However, in all cases of doubt on Commons privileges in regard to the initiation, amendment and rejection of Bills in this House, informal consultation takes place between the Officers of the two Houses.
In the case of the Bill before your Lordships' House, I am informed that there are two alternatives which we may adopt. On the one hand, we may complete all stages in this House and send the Bill to the Commons, where it is likely to be laid aside. On the other hand we may complete all stages up to Third Reading, but without finally passing the Bill, so that the Bill does not in fact reach the Commons. I have examined these alternatives, and on the advice of the Officers of the House I concluded that the second is the better of the alternatives, and I propose, therefore, to move no further Motion once the Bill has been read a third time and any Amendments have been dealt with at that stage.
After the Third Reading in this House, the Government have every intention of introducing into the Commons a Bill incorporating the provisions of the Lords Bill. When this Commons Bill reaches the Lords later in the Session, this House will need to do no more in passing the Bill through all its stages than to examine any differences between the Commons Bill and the original Lords Bill. By this means I hope we shall have been able to enact a most important piece of legislation for which otherwise time might not have been found. I ought to inform your Lordships of the fact that a precedent has been found for the procedure which I have now recommended to your

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Lordships, in a case which occurred in 1904, when this procedure was, I think, adopted at the suggestion of my predecessor, Lord Halsbury.
LORD SILKIN: My Lords, this is the most remarkable statement that I have heard since I have been in the House. In spite of the language of the noble and learned Lord on the Woolsack, there is no doubt that there has been an unholy muddle in this matter. Whether there was any consultation beforehand, I do not know. But it is quite clear that this Bill should never have been introduced into this House at all. It was undoubtedly a Money Bill which had the effect of imposing a charge on the Revenue. There can be no doubt about that, because in its terms the Bill provides that certain people should be compensated as regards their costs out of public funds. We were restrained in the Amendments that we might have put down. I had intended putting down an Amendment which might have increased the charge on the Revenue, and I refrained from doing so because I formed the view that it was outside the province of this House to do so, although I imagine it would have been accepted as being in order.
I should like to ask the noble and learned Lord whether in fact there was any consultation before this Bill was introduced into this House. I imagine that legal advice was obtained as to whether or not it was proper to introduce the Bill into this House first. If there was, I should think the legal advice was unsound—probably due to the fact that the noble and learned Lord, who would himself have given the advice in another place, is no longer there. I cannot imagine his allowing a Bill of this kind to come into this House at all. But here we are; and, in spite of the precedent of 1904, whatever that may be (I imagine that it was another mess that had been got into by an earlier Government), I wonder whether the course now suggested by the noble and learned Lord is the right one. What he is saying is, "Although this Bill should never have been introduced into this House at all, because it is a Money Bill, let us go on with it; let us have a Committee stage;"—he himself is putting down Amendments—"let us have a Report stage; let us have a Third Reading and then let us abandon the Bill as if nothing had happened, be
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cause a fresh Bill will then be introduced in another place and it will go through there, and then we shall go through all its stages again in this House."
My Lords, I seriously suggest that, having made the muddle, it would be far better to drop the Bill here and now, and not to waste the time of the House in going through any further stages. I would ask the noble and learned Lord on the Woolsack to consider this point quite seriously. We all make mistakes, some more than others, and I suggest that this mistake having been made, we just accept the fact, and drop the Bill here and now.
3.23 p.m.
THE LORD CHANCELLOR: My Lords, I am sorry to hear the noble Lord express that view. I would say to him straight away that I do not think it is right to suggest that there is any muddle about this. I think I am right in saying that this House can discuss whatever it likes, and could discuss this Bill. What I would stress to the noble Lord—I thought I had his support on Second Reading—is that this is an urgent Bill, and that this is really the only way in which both Houses can give consideration to the content of a Bill of this kind in this Session. The noble Lord asks me to withdraw the Bill and leave it at that. I am reluctant to take that course, for the simple reason that it would mean there would be little chance of the Bill passing through this Session. The noble Lord knows very well how engaged this House is in May, June and July, and if this Bill—indeed, I have mentioned that it would not be this Bill, but another Bill of the same type—were introduced into the Commons and then came to this House in May, June or July, there would not be time for the House to deal with it at all. If the House thinks that ought perhaps to have mentioned this at an earlier stage, I can only apologise; but I thought it right to mention it straight away, before we went to the Committee stage.
I do not think that in discussing this Bill and in suggesting this course, we have in any way encroached upon the privileges of the other House: because it means, if I carry the House with me, that we shall have considered what we think ought to go into this Bill. If the Bill does not leave your Lordships' House there can be no intrusion on the privi-

667
leges of another place. If a Bill in the same form as that in which it leaves this House is then introduced in another place, it will, I hope, be possible for us, if it then comes through to us, not to spend so long in considering its provisions. I would urge on the noble Lord—I am sorry if I have taken him rather by surprise about this—that this appears to be the only way in which, from a practical point of view, we can get this measure through this Session. That is the excuse—if an excuse is needed—that I put forward to your Lordships for adopting this course.
LORD SILKIN: My Lords, I do not myself see how it is going to save time to go through three abortive stages in this House—a Committee stage, a Report stage and then Third Reading, which would take place only after Easter, and then drop the Bill. If we drop the Bill now, the other place will be in a much better position to introduce a Bill earlier. They will have the benefit of the Bill, and of discussing the Amendments which the noble and learned Lord wants to put forward. What is the point of going through all these abortive stages, and then having to go through them all again in this House?
THE LORD CHANCELLOR: My Lords, I should have thought that the point was this; that we should get the Bill in the form in which your Lordships would approve it; and then, when a new Bill in the same form had been introduced in the Commons, if they passed it and it came to your Lordships' House in the same form as the Bill now being considered by your Lordships, we should not have to spend so much time upon it. I should have thought that, bearing this in mind, there was an advantage in getting this Bill into the best possible form. But I must stress to the noble Lord that this is the only way I can see that both Houses of Parliament will be able to give proper consideration, not to the same Bill but to a Bill containing these provisions, this Session; and I should hope that I carry the noble Lord with me in getting his assent in this particular matter.
3.27 p.m.
LORD MORRISON OF LAMBETH: My Lords, the Lord Chancellor said that he was sorry to come to the House
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with this difficulty, and that he was sorry to have to go wide in his discussions with my noble friend the Deputy Leader of the Opposition. I think my noble friend the Deputy Leader of the Opposition has stated a perfectly clear case, and, with every respect to the Lord Chancellor, I do not think that he has adequately answered the case that has been made.
On the face of it it is abundantly clear that this is a Money Bill—certainly it is a Bill which involves expenditure—and it ought not to have come to this place first. Of course the Lord Chancellor must have his share of responsibility for it coming here, as must other members of Her Majesty's Government; but I think the gentleman who probably bears the major responsibility is the Leader of the House of Commons, who, if I am not mistaken, is Chairman of the Legislation Committee of the Cabinet, through which the Bill has to go. It is probable that lawyers sit on that Committee. It ought not to have got through that Committee, and the Leader of the House of Commons should have been quick to protect the rights of another place. It ought to have been abundantly clear that it was no good bringing this Bill into this House first. That is a decision which the Legislation Committee makes, and I think that the Leader of another place has once more slipped up and made a great mistake. He deserves to have it made known that he has made this mistake.
I cannot see anything material in the Lord Chancellor's argument about the time factor. He suggests that we carry such Amendments as we like; then have a Report stage, and a Third Reading, and that we should stop at the Question, That the Bill do now pass. That would not be moved. It is suggested that we do all that, knowing that the Bill is going no further than that point. That is reducing Parliament to a farce. It means that we gravely go through these stages without the slightest intention that the Bill should pass. If to-day we were to adjourn the debate sine die, so to speak, and the House of Commons knew that we know that there has been a mistake made, surely the Government could easily and quickly bring in a Bill in another place. And, so far as I can tell from my knowledge of both Houses of

669
Parliament, I should not have thought that such a Bill would be controversial, though some Amendments might be moved. But it is possible that Amendments might be moved here; and Amendments might be moved in another place whereby, in the end, the Bill would not be the same as that submitted to this House.
Therefore, I think the thing is to "come clean". I think it is for your Lordships' House to say that a mistake has been made, for which the Government is primarily responsible—and, I think, the Leader of the House of Commons—but for which in a sense we are all responsible, in that we did not spot it on Second Reading, so that we all have a share of responsibility for it. I confess, in extenuation, that I have never read the Bill until to-day, which is a good defence in the circumstances of the case, but not a good defence, I understand, in law. I think it would be far better, rather than that we should have to divide the House on the point, that we should "come clean" now; and agree that the Bill, so far as this House is concerned, will not be further considered. Then the Government can bring in a Bill, possibly on a Friday—which is a good day for these innocent Bills in another place—and have it amended in such ways as the House may wish. They will probably get it expeditiously. Then the Bill will come here, and I think I can say, on behalf of my noble friend the Leader of the Opposition, that we have no intention of being unduly troublesome about the Bill when it properly reaches this place. If one is caught out, if it is what I would call, if I may, "a fair cop", which this is, then let us admit it; let us "come clean".
I therefore beg to move, my Lords, that the debate be now adjourned, and I trust that the House will take that course, in the hope that Her Majesty's Government (because it is desirable that the Bill should pass) will present it expeditiously to the House of Commons. Let it come back here soon, and we will give all reasonable co-operation for it to pass through. But it is no good playing about with it when you are caught out. With great respect, I think that the Lord Chancellor is seeking to go through this business in a rather farcical
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way—I do not know why, unless it is to save our faces a bit. I see his argument about the time factor, but I do not think there is much in it. We are caught; we know we are guilty, the whole lot of us, especially the Leader of the House of Commons, and I think the best thing to do is to drop it. I therefore move that the debate be now adjourned in the hope that it will finish this Bill until it comes back from another place.
LORD AIREDALE: My Lords, I think it is proper to observe that we are on the eve of the Second Reading debate next Monday of what I believe is the third Weights and Measures Bill, both of whose predecessors fell by the wayside after lengthy discussion in this House.
3.36 p.m.
THE LORD CHANCELLOR: My Lords, I have listened very carefully to what the noble Lord, Lord Morrison of Lambeth, has said with regard to this. First of all, I should like to disabuse him of the idea that there has been any mistake or muddle about this, and his language about "a fair cop" is not justified. Consideration was given to this before, and I would ask him to bear in mind, too, that we do in this House discuss matters which are contained in Bills and which go back to another House as a privilege Amendment. There is no inhibition, as I understand it, upon what your Lordships may discuss.
I said very frankly at the beginning, when I thought it right to bring this matter to your Lordships' notice, that the advantage of the procedure I proposed was that we should, I hoped, be able to get your Lordships' views on the contents of this particular Bill. If we then sent the Bill to the Commons, then indeed there might be a question of infringing the privileges of that House. But I pointed out that it would be open to the Government—and this was the idea which I hoped would commend itself to your Lordships—if they thought fit, to introduce in the Commons a Bill in that form. It would not be the Bill coming to the Commons from this House, but the introducing of a Bill in that form. I hope that would mean that, if that Bill came back to this House in that form, your Lordships would not need to spend very much time upon it. I wanted to make it quite clear that the reason for this unusual procedure was that the possibility of getting

671
the Bill upon the Statute Book this Session—and it is a Bill for which there is very considerable demand—would otherwise appear extremely remote. If your Lordships desire further time for me to give further consideration to the matter, I will ask your Lordships' leave to withdraw the Motion that I moved for this Bill now to be considered in Committee. In fact, my Lords, I had not put the Question, so I do not think that I need to withdraw it.
LORD MORRISON OF LAMBETH: My Lords, may I say that I am greatly obliged to the Lord Chancellor, as is my noble friend, for the course he has taken? I think that it is in the good interests of Parliament itself.
Order of the Day discharged.

PROTECTION OF DEPOSITORS BILL
3.37 p.m.
Order of the Day for the Second Reading read.
LORD DERWENT: My Lords, in the years since the end of the war hire-purchase has become a widely accepted and much used way of buying motor cars and many kinds of equipment for use in industry, on the farm and in the home. The traders and dealers who supply these goods on hire-purchase need to be financed, and their need is supplied by some hundreds of finance companies many of which were formed in the post war period for this particular purpose. Some of these finance companies obtain a large part of their funds by accepting deposits of money at interest from the public. This Bill is concerned primarily with the public who invest their savings in this way and with the companies which issue advertisements inviting them to do so. As I have indicated, the business of the companies is usually the financing of hire-purchase. But a few finance the management and development of property. The Bill is concerned with any company which advertises for deposits from the public, no matter what the use to which the deposits are to be put.
The need for legislation arises from the fact that advertising for deposits to finance hire-purchase and property
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development is a relatively new development. It was of little significance when the Companies Act was last before Parliament. The Act of 1948, which in its prospectus sections requires a company to disclose a very considerable amount of information about its affairs before it seeks to raise money from the public by an issue of shares or debentures, requires nothing of a company solely on account of its inviting deposits from the public. Indeed, as the law stands at present, an exempt private company which, because it is exempt is not required to publish its accounts by filing them with the Registrar of Companies, may nevertheless advertise for deposits.
There are, as is well known, many deposit-taking companies which are efficient and which conduct their affairs in a way which benefits both their depositors and the traders and dealers they finance. But events have shown that this is not always the case. Companies have over-estimated the profits to be made from hire-purchase, or they have taken too optimistic a view of the debts owed to them, or they have spent too much on an advertising campaign, or they have offered too high a rate of interest. Whatever the reasons, there have been failures and depositors have lost all or part of their money. The Bill seeks to make failures less likely and less damaging in the future.
There are two main ways in which this question of protecting depositors could be approached. One would be to set up a registrar with powers to demand information, impose conditions, and, when he thought fit, prohibit the taking of deposits. The registrar would attempt to draw up rules concerning such matters as the ratio of cash to deposits, the relation between deposits and risk capital, and the provision for bad debts. He would hope that if his rules were observed a company would not fail, and he would ensure that if his rules were not observed a company did not accept further deposits. The Government have examined the possibility of control of this kind with care. Its special advantage is that, if it could be operated effectively, it would ensure that any finance company that advertised for deposits was sound and unlikely to fail. But the Government believe that in fact

673
such a system could not be operated effectively.
The reason is the very great variety of the hire-purchase and property transactions which these companies finance. This makes it virtually impossible to frame rules which it would be sensible to expect all companies to observe. If the rules gave some of the more efficient and enterprising companies sufficient freedom they would not be demanding enough to ensure that other companies kept out of trouble. If, on the other hand, the rules attempted to guard against failure in all circumstances they would be so strict as to interfere unduly with the way in which a number of sound companies conduct their business. The Government would be doing depositors in general a poor service if in order to protect a few they made it impossible for the many to obtain the current rates of interest on their savings.
The alternative way to protect depositors is to apply to invitations to make deposits the principle on which the prospectus provisions of the Companies Act are based. That principle is that any company may invite the public to subscribe to an issue of its shares or debentures, provided that it first publishes in a prospectus adequate information about its affairs. The principle must of course be applied in a way which takes account of the differences between taking deposits and issuing shares. In particular, it must be recognised, first, that taking deposits is a continuous operation, whereas an issue of shares is a single operation which is usually completed in a short period; and, second, that deposits become repayable whereas money raised by issuing shares stays with the company.
The Bill seeks to protect depositors in this way. It requires any company that intends to advertise for deposits from the public to publish before it issues its advertisements up-to-date information about its affairs; and after it has advertised, the company is required to continue to keep this published information up-to-date. The information required is in the form of accounts. The accounts will be similar to those required by the Companies Act, but they will contain more information, they will be required twice a year instead of annually, and they must be published soon after the end of the period to which they relate.
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The Bill does not, therefore, lay upon a registrar or the Board of Trade the duty of assessing the merits of a company and then deciding whether it may safely be allowed to advertise for deposits. What it does do is to require the publication of informative and up-to-date accounts. A person contemplating making a deposit will be able to study these accounts and decide, perhaps—probably, we hope—after consulting anyone to whom he may go for further financial advice, whether the company is one to which he is prepared to entrust his money. Similarly a person whose deposit has become due for repayment will have information on which he can decide whether the company is one to which he can continue to entrust his money.
I now turn briefly to the clauses in the Bill. Clause 1 is based upon Section 13 of the Prevention of Fraud (Investments) Act, 1958, which makes it a criminal offence fraudulently to induce anyone to acquire securities. This clause makes it a criminal offence for any person fraudulently to induce another person to invest money on deposit. That is Clause 1 of the Bill. Clause 2 contains in subsection (3) the provision I have mentioned to the effect that before a company advertises for deposits it must deliver the accounts required by the Bill. But the clause is also concerned with exemptions from the Bill, and for that reason it begins in subsection (1) with a general prohibition on all advertisements inviting deposits from the public. It is not necessary in this Bill to control either the banks or the various bodies which are controlled by their own legislation.
Subsection (2) therefore exempts from the general prohibition the banks, the building societies, the friendly societies and the industrial and provident societies. It also exempts, by reference to the Trustee Investments Act, trustee savings banks and local authorities. Subsection (4) provides for exemptions by regulations or by permissions. There are certain classes of advertisements for deposits which are not of the kind with which this Bill is concerned, for example, advertisements for deposits to be used for charitable or social purposes including those concerned with church funds; advertisements made in connection with employee's thrift or savings schemes; and

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advertisements for deposits with department stores which will be used for future purchases. Advertisements of this kind will be exempted by regulation, no matter whether they are issued by a company, a society or an individual. The power to exempt by permission is required to deal with the relatively few cases where persons other than companies put out advertisements which, if they had been put out by companies, would have been exempted: for example, advertisements by certain banks which are not companies, and for that reason are not exempted under subsection (2).
Before leaving this clause, I should mention that a company, in addition to delivering accounts, is required by subsection (3) to comply with regulations as to the content of its advertisements. These regulations will be concerned mainly with preventing advertisements from being misleading by containing partial information. For example, if gross assets are mentioned there must be an indication of net assets; or if authorised capital is stated, the amount issued and paid up must also be stated. Advertisements will not have to be prospectuses: as I have said, the Bill relies mainly on accounts for the provision of information. Companies of the highest reputation put out short "two line" advertisements, and the regulations will permit these to continue.
Clause 3 gives the Board of Trade power to make the two kinds of regulations I have mentioned; that is, regulations as to the content of advertisements and exempting regulations. A private company, by definition, cannot offer its shares to the public. As advertising for deposits has some of the characteristics of offering shares, it is reasonable to take away from a private company which advertises for deposits the privileges of a private company; in particular, the privilege of making loans to its directors. This is effected by Clause 4.
Clauses 5 to 11 and Clause 13 contain the accounting provisions of the Bill. Clause 5 provides for the accounts a company must deliver before it issues an advertisement, and Clause 6 for the periodical accounts it must deliver after it has advertised. The accounts consist of an audited profit and loss account and an audited balance sheet, and in
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general they will be delivered within three months of the balance-sheet date. Nine months after the balance-sheet date these audited accounts must be supported by interim accounts which again consist of a balance sheet and a profit and loss account, but cover only a period of six months.
The interim accounts need not be audited. Interim accounts are required in order to get information which is more up to date than would be the case with only annual accounts; and auditing of these interim accounts is not made obligatory in order to save companies from the interruptions to their work which might be caused if they were required to call in their auditors twice a year. I should perhaps mention that, once a company has advertised and become subject to the obligation to deliver periodical accounts, a single set of accounts will serve both as the periodical accounts required under Clause 6 because the company has advertised in the past, and as the accounts required under Clause 5 if the company is to issue further advertisements.
Clause 13 provides for the regulations the Board of Trade will make as to the content of the accounts. These regulations will require the accounts to be based on the accounting provisions of the Companies Act. But they will call for additional information. This additional information will be related to the purposes the accounts will serve, that is, the information of prospective and existing depositors; and it will take account of the activities in which the companies are engaged which, as I have said, is usually financing hire-purchase, but may be financing the management and development of property. The regulations will require a company to describe the business in which it is engaged, to give information as to the extent of its obligations towards its depositors, and to give information about its assets. A large part of these assets will of course be debts owed to the company.
The other accounting clauses deal mainly with subsidiary matters such as the company which has ceased to advertise for deposits and wishes to rid itself of the obligation to deliver periodical accounts, the company which for some exceptional reason cannot deliver its accounts on time, the company which

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has advertised for deposits before the accounting provisions come into force, and the newly incorporated company which, because it its newly incorporated, cannot be required to deliver accounts containing a profit and loss account covering a significant period. In addition, there is Clause 11 which provides for the supply of copies of accounts to depositors and prospective depositors. A copy must be supplied free of charge when a deposit is accepted, and a copy must be supplied free of charge to any prospective depositor or existing depositor who asks for one.
Clause 12 is designed to provide depositors with a safeguard against the possibility that a company may decide to engage in business of a different nature from that described in its advertisements. For example, a depositor who has put his money in a company which was financing the hire-purchase of motor cars may not wish to leave his money with the company if it branches out into financing property development. The clause provides that if such a change is made, the depositors must be informed of it and given the opportunity to claim repayment of their deposits not with standing anything to the contrary in the terms on which the deposits were made. There are, of course, certain safeguards for the company: in particular, it may inform its depositors of a contemplated change and require them to let it know whether, in the event of the change taking place, they would claim repayment. A depositor must either reply that he would claim repayment or be content that, in the event of the change taking place, the terms on which he made his deposit should remain unaltered.
Clauses 16 to 20 deal with the Board of Trade's power to ask for papers and documents and to petition for a winding-up. At present the Board's power to petition under the Companies Act is very limited and exists only when an inspector's report suggests that a company has conducted its affairs in certain fraudulent, unlawful or harmful ways. But if a company's position has seriously deteriorated, the right course might be to wind it up. Clause 16 enables the Board to petition for a winding; up if the company is insolvent or if it fails to produce the information required in order to ascertain
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whether it is, or is not, insolvent. Clause 18 enables the Board to make inquiries without the publicity attendant on the appointment of an inspector under the Companies Act. This is important as publicity could hasten the downfall of a company in trouble and do harm to one which in fact was not in difficulty.
Clause 21 is apart from the rest of the Bill as it is not concerned with deposits but with schemes in which the investor is sold a sow or a store pig or some other livestock which is managed for him and said to bring him a profit. There have been a number of schemes of this kind in the past two or three years, and some have failed with losses to those who have put their money in them. The schemes are not essentially different from those which the Prevention of Fraud Act was designed to stop. The clause amends that Act so as to bring schemes of the kind I have mentioned within its scope.
My Lords, my speech has been rather long, but it is a fairly complicated Bill, and I commend it as one which will do much to protect depositors and will do so without making unreasonable demands on the companies which it will affect. I beg to move.
Moved, That the Bill be now read 2ª.—(Lord Derwent.)
3.55 p.m.
LORD LATHAM: My Lords, this is a modest Bill to which we can, I am sure, give a modest welcome. The noble Lord, Lord Derwent, has explained very clearly its purpose and provisions. As I understand it, the emphasis is a little different from what he indicated. To judge from the debates which have taken place, and the statements made by the Minister in another place, the primary consideration in this Bill is not the vast majority or generality of companies and persons inviting money on deposit but the protection of the public, and especially the small man or small woman, against the nefarious malpractices which have grown up fraudulently and recklessly.
Persons or companies get money from unsuspecting depositors by the dishonest method of promising fantastic returns or rewards. In one case cited in another place the offer was 260 per cent, per annum; and, as if that were not enough, it was to be tax-free. Livestock has

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been bought and sold, casinos have been established and all sorts of purposes have been advertised by these people who have deceived, tricked and cheated the unsuspecting depositors. This is done by advertising in the Press and elsewhere; by impressive and glossy prospectuses and brochures and things of that kind; and also, in some cases, by personal call. All these tricks and devices have resulted in quite a number of very substantial losses by uninformed and deceived depositors. The tricks and devices to which some people have resorted show how inexhaustible, as it were, are the facilities for roguery in a civilised country and in a civilised economic State.
One of the great difficulties in this matter is that depositors are invited to gamble. Well, if persons wish to gamble they are entitled to do so; but where these concerns go wrong—and must be stopped if possible—is that they invite people to gamble in the name of investment. It is this rapacity, this lively defect in all of us, of which the "wide boys", as they are called, take advantage. Whether this Bill will in fact afford much protection against that type of company or person is doubtful; but at all events, it is an endeavour.
This Bill, like many another Bill recently, is very belated. The Government proposed to do something in this direction as far hack as six years ago. It appeared in the gracious Speech of 1956; it was in the Conservative Party's Manifesto in 1959; and, three years ago, the then Economic Secretary to the Treasury said that the matter was urgent and that the Government would press on with all speed. Now, after six years, we have this Bill. Almost the same delay occurred in connection with the Offices, Shops and Railway Premises Bill: in that case also there was a delay of some six years. If the provisions of the Bill prove to be efficacious in preventing or diminishing the kind of fraud I have indicated, then the delay which has occurred must have meant very serious losses which could have been avoided but for the procrastination of the Government.
The purpose of the Bill being what it is, the Bill does not match up to the problem, as members of all Parties in another place said when it was first intro-
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duced. It was then described as being "flabby and feeble". It is fair to say that the Bill has been appreciably improved as a result of the unexpectedly lengthy consideration by the Standing Committee of another place. It is a better Bill now, but it is still inadequate. The view is taken that the worst offenders will get away. Some people might say that they get away in any event; but they get away to a larger extent than otherwise would have been the case if the Bill had been strengthened in one or two practicable directions. One should here say that, as the noble Lord indicated, the majority of persons or companies who seek money on deposit by advertisement or otherwise are not guilty in any way of the malpractices to which I have referred, or to recklessness. It is true that the whole trade had a shock in regard to hire-purchase financing resulting from the credit squeeze, but the majority of the persons and companies seeking deposits, whether by advertisement or otherwise, carry on respectable and honest businesses in a worthy and proper way. It is against the minority who do otherwise that protection is so essential.
The added protection sought is, as the noble Lord explained at some length, to close the gap which exists between the provisions of the Companies Act and the Prevention of Fraud (Investments) Act, 1958, because the latter Act does not refer to deposits. That Act deals with and refers to shares and debentures, and accordingly, so I am informed, money which is obtained on deposit would not come within its provisions. It is proposed to close that gap, and also, as the noble Lord stated, to control the issue, the character and the content of advertisements. In addition, it is proposed to require certain accounts to be prepared—periodical accounts, annual accounts, accounts for six-monthly periods—and for those accounts to be sent to the Registrar, to the Board of Trade and to the depositors themselves. This casts a pretty big responsibility upon the Board of Trade, but it should eliminate many of the worst offenders and keep advertisements to fact in place of what they frequently are—glossy fiction.
It has been said that the provisions relating to the preparation and publication of accounts amount to a discipline

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of accounts. As an accountant, I should not object to that description. Some people might think that the accountants themselves could do with some discipline. But the point as regards these accounts is this: admirable as they may be, what use is to be made of them? They are to be sent to the Registrar, which is the case now with the annual accounts; they are to be sent to the Board of Trade; and they are to be sent to the then existing depositors. But what happens? What the depositors need is not the accounts after they have deposited their money: they want the accounts before they have deposited their money, in order that they may be able to judge as to the soundness or otherwise, the honesty or otherwise, of the undertaking, concern or business which invites them to loan their money on deposit. The trouble is that this information arrives too late.
In any case, how many of the depositors or persons likely to deposit—those persons who are approached by advertisement—know how to search the files of the Registrar of Companies and obtain the information? In another place an Amendment was considered which would have provided that any person who, in reply to an advertisement, was considering whether he or she should become a depositor should be entitled to receive copies of the annual and the periodical accounts which had been issued and which had been sent to the Board of Trade and to the Registrar. After all, an advertisement is what I think is described in law as "an invitation to do business". If there is an invitation to do business, I think the person to whom the invitation has been sent is entitled to have further and better particulars—shall we put it that way? But, unfortunately, that Amendment was, I think, defeated. Another proposal considered was whether the Board of Trade, if they were to come to the opinion, after an examination of the accounts lodged with them—which may go over some period of time—that the company was financially unsound, should then be in a position to stop further advertisements and prevent further deposit money from being received.
So, my Lords, we reach this position. It may well be, as I have said, that this Bill will diminish the risks of loss on the part of depositors who are not informed and who are unable to judge as to the
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propriety and financial soundness of a particular concern or company. The point remains as to what the Minister is otherwise going to do with the accounts which are filed with him. I gather, from the statements made on the Second Reading of the Bill in another place, that the Minister is relying principally on the publicity in the Press which would result from the publishing of the accounts, if they were irregular in any important way. There may be some publicity. There certainly would be if there were glaring and outstanding irregularities. But it is hardly seemly for the Minister to pass on his responsibility and the responsibility of his Department to the Press, able and helpful as the Press can be in matters of this kind in making known the situation which may exist in connection with any particular concern.
It really does amount to an abdication of his functions, his duty and his responsibility. The Board of Trade have the accounts and examine them, and they should be able to judge whether a company is unsound financially and whether they should forbid any further advertisement. As I have said, we welcome this Bill. We shall seek to strengthen certain of its provisions. In the meantime, I think that the Bill is entitled to receive a Second Reading.
LORD TERRINGTON: My Lords, I should like very briefly to welcome this Bill, as someone who is much concerned with day-to-day advice on the investment of money. I welcome it in a general sense for what it sets out to do—namely, to protect the unwary investor in this particular field. And I welcome it in a more particular sense on the question of advertising, for reasons which I would elaborate. I have here an advertisement which has been appearing fairly regularly in a leading weekly financial journal and which is of a type that personally I hope will no longer be permitted once this Bill has become law. With your Lordships' permission, I should like to quote some extracts from it, in order to illustrate my point.
To begin with, the advertisement is headed in bold print with the statement that a certain county "welcomes careful investors". Now this statement, taken in isolation, is obviously quite harmless and is very probably true. But further

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study of the more normal size print which follows reveals the fact that the advertisement is describing a finance company which incorporates the name of the county referred to and is inviting the public to make deposits. After this description and invitation to depositors, the name of the county appears again, in even bolder print, with "6½ per cent. interest" alongside it. Then, for the first time, in somewhat smaller print, appears the remainder of the title of the company issuing the advertisement.
I am not for one moment trying to suggest that there is anything undesirable about this particular company, of which I must confess I know nothing; and I would make this point absolutely clear before proceeding any further. But I do suggest—and I am certainly not alone in this view—that this particular type of advertising is most undesirable, since it implies some sort of connection with the county council concerned and, therefore, in the eyes of the ill-advised investor, it probably has some special status. Obviously, if the word "the" were to appear in front of the name of the county, as in fact it does at one point in the main body of the advertisement, it would be more acceptable. But I feel that this is more a question of degree and, certainly as it stands at the moment, this heading catches the eye in a way that it is no doubt intended to do, and I suggest that there is no question that this is misleading and deceptive.
I do not wish to labour this point, as Clause 3 of the Bill clearly enables the Board of Trade to make regulations prescribing the form of advertisements and matters which must or must not, be included. Therefore, I presume that such regulations and the form so prescribed will specifically preclude the use of the name of any public body, such as a county council, in a way which could imply, however remotely, that a public body was connected with the advertising. At the same time, while commending this most useful Bill to your Lordships' House, I should be glad of some assurance that the Board of Trade regulations will pay particular attention to this form of advertising, which I feel is very definitely not in the public interest.
4.16 p.m.
LORD DERWENT: My Lords, may I thank the two noble Lords who have spoken, in one case for the qualified welcome and in the other, for the wholehearted welcome which they gave to the Bill? May I deal with the first remarks which the noble Lord, Lord Latham, made, in which he said that he hoped that this Bill would put a stop to the fraudulent companies. I think that the Bill goes farther than that. I think that it would deal not only with fraudulent companies, but also to some extent with inefficient companies, companies that have bad managements and have not done well, by preventing them from continuing to advertise without giving the necessary information, just as they do not give the necessary information required of them in their accounts.
LORD LATHAM: My Lords, does the noble Lord mean that the Board of Trade are going to determine whether a concern is efficient or otherwise?
LORD DERWENT: My Lords, I was merely saying what it was hoped this Bill would do. I think that the noble Lord may be misunderstanding a little the intention of the Bill. The intention is not that the Board of Trade should prevent people from depositing money, except in purely fraudulent concerns, which is a different matter. But if a company is not doing very well, the public should know, principally by the control of advertisements, but also by the publication of accounts, the exact position of the company so that when anyone proposes to make a deposit he is in the position to know what it is desired to know before making up his mind.
We are making no attempt to say that people should or should not invest in this or that company, or that company A is better than company B. That is not the job of the Government or of a Government Department. My own view, though I may be wrong over this, is that the control of advertisements may have an even greater effect than the publication of accounts on fraudulent companies. I think that they will think twice, if they have to "spill the beans" in their advertisements, quite apart from the accounts.
I would say just one word about purely gambling companies, such as

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casino companies. There is no intention of bringing them into the Bill. At the moment, the semi-fraudulent casino enterprises have largely stopped. But it should be obvious to anyone that the sums of money they draw in are not deposits or investments; they are purely gambling money. What they are saying to people is, "If you want something for nothing, have a go". The Bill is not designed to deal with that sort of thing.
May I say a word in reply to the noble Lord, Lord Terrington? I am grateful for the particular point he has brought up. Under Clause 3, the types of advertisement will be regulated by the Board of Trade. I think the advertisement he is talking about would be covered, but I should be grateful to him if he would send me confidentially that particular advertisement so that we can decide whether it can be stopped by regulations under this Bill, and, if it cannot, whether we ought to take stronger measures. My view is that it can be stopped, but I am not certain; and if he will let me have the advertisement, I shall be glad to look into it. I am grateful to the House for listening to me so patiently.
LORD LATHAM: My Lords, with the leave of the House, I should like to make one point. If the noble Lord will look up the circumstances which led first to the introduction of a Private Member's Bill dealing with this matter and later the introduction of the Government's Bill, he will find that the motive was to prevent fraudulent, reckless persons cheating depositors out of their deposits. That was the origin of this legislation. It was not to deal generally with finance houses and concerns which invited deposits, whether by advertisement or otherwise, but in order to protect the public from the malefactions of persons and of companies.
LORD DERWENT: I agree with the noble Lord that that was the original intention, and it is the present intention. But it goes some way to providing knowledge to the people where a company is not very sound, but not necessarily fraudulent.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

OFFICES, SHOPS AND RAILWAY PREMISES BILL
4.22 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 Carrington.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AILWYN in the Chair.]
Clause 6:
Temperature
6.—
(2) Where a substantial proportion of the work done in a room to which the foregoing subsection applies does not involve severe physical effort, a temperature of less than 16 degrees Centigrade (which is equivalent to 60·8 degrees Fahrenheit) shall not be deemed, after the first hour, to be a reasonable temperature while work is going on.
(3) The foregoing subsections shall not apply—

(a) to a room which comprises, or is comprised in or constitutes, office premises, being a room to which members of the public are invited to resort, and in which the maintenance of a reasonable temperature is not reasonably practicable; or

(b) to a room which comprises, or is comprised in or constitutes, shop or railway premises, being a room in which the maintenance of a reasonable temperature is not reasonably practicable or would cause deterioration of goods;

but there shall be provided for persons who are employed to work in a room to which, but for the foregoing provisions of this subsection, subsection (1) of this section would apply, conveniently accessible and effective means of enabling them to warm themselves.
LORD SHACKLETON LORD SHACKLETON moved, in subsection (2), to leave out "severe physical effort" and insert "strenuous physical activity". The noble Lord said: This Amendment is a comparatively minor one, designed to help clarify the intentions of the Government. It has struck some of us that the words "severe physical effort" are really rather strong, and I am not sure in what severe physical effort one would be indulging in an office or shop. Oviously, if there was a boxing match going on, you could say that that was a severe physical effort. But this seems to be mainly concerned with people who will be moving things, and carrying

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goods backwards and forwards, which will not necessarily involve what I would call severe physical effort. That point is: what effort is necessary to raise an individual's temperature by his own exertions without having the room permanently at a temperature of 60 degrees? I should have thought that "strenuous physical activities" would be enough to achieve this purpose. This is a point that has occurred to a number of people and we have tried to find suitable words. Other words suggested were, "substantial physical effort". But we have "substantial" two lines above, and I rather think the form of words we have suggested would be appropriate. I beg to move.
Amendment moved—
Page 5, line 27, leave out ("severe physical effort") and insert ("strenuous physical activity").—(Lord Shackleton.)
THE PARLIAMENTARY SECRETARY, MINISTRY OF HEALTH (LORD NEWTON): When I saw this Amendment on the Marshalled List I scratched my head rather hard as to what the noble Lord was getting at, and I concluded that he was probably going to argue that the words we have put into the Bill, "severe physical effort", are too weak; but, in fact, he is arguing the other way round, and he thinks they are too strong. However, for practical purposes I do not think there is any difference between the two phrases. I have had recourse to the Oxford Dictionary in the Library, and on looking up the word "severe" I find it says:
"Of a labour or exercise, hard to sustain or endure; arduous".
I then looked up "arduous", and it says:
"Of an activity, strenuous".
So we have it that "severe" equals "arduous", equals "strenuous"; and "strenuous" is the word that the noble Lord, Lord Shackleton, appears to prefer to "severe". I then looked up "effort", and it says:
"The strenuous exertion of power, physical or mental".
I next looked up "activity", and it says:
"The state of being active; exertion of energy".
So it seems to me that the words already in the Bill, "severe physical effort",
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mean "severe physical exertion of power"; and the words in the noble Lord's Amendment, "strenuous physical activity", mean "strenuous physical exertion of energy". I would suggest to your Lordships that, for practical purposes, there is really no difference between the two words.
The reason why I invite your Lordships to prefer what is in the Bill is that the words "severe physical effort", are much nearer the words in the Factories Act. The words in the Factories Act are, "serious physical effort"; but I am advised that we ought not to repeat the word "serious" in this Bill, because somebody learned in the law has suggested that the word "serious" can be construed as being the opposite of "frivolous", though apparently it never has been. For that reason, it seems that "severe" is more suitable. I hope the noble Lord will feel that there is really no great difference between us and will be able to withdraw the Amendment.
LORD SHACKLETON: The noble Lord does not make much use of dictionaries. It is possible by careful use of a dictionary (and this is a practice in which I once indulged on an Arctic expedition) ultimately to find words that come to the opposite meaning of the words you originally looked at. There are subtle differences. If we could take a count, I am sure your Lordships would reckon that "severe" was in fact severer and more strenuous than "strenuous". I do not quarrel about the words "effort" or "activity". I think "activity" is better, but I do not very much mind. It seems to me that the analogy of the Factories Act is where the Government have gone wrong. We are not talking about factories, but about different types of institutions. Obviously, this is not a matter of profound Party political difference, and I would not press it, but I should have said that "strenuous" is really a better word for this purpose.
One does not hear the word "severe" used in this sort of context, and the Government admit that they have put it in only because there was a misunderstanding about the word "serious". I think "severe" is open to the objection that most people who do not go to a dictionary and indulge in this dictionary game would reckon that it is something

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very arduous indeed; something like working a pneumatic drill or lumbering—that is severe physical effort. I do not think one will find "severe" applicable to an office. I do not want to waste time on this matter, but I suggest that the Government are taking a slightly narrow view.
LORD NEWTON: The noble Lord says that people do not bother to go to dictionaries. I should have thought that this clause in the Bill, like all the other clauses, could conceivably fall to be interpreted by the courts, and presumably they would be concerned with the exact meaning of words. "Severe" in the dictionary I looked up is defined as,
"A labour or exercise; hard to sustain or endure; arduous".
And, as I say, "arduous" is defined as:
"Of an activity, strenuous.".
"Strenuous" is defined as:
"Of action or effort, vigorous; energetic; persistently and ardently laborious".
I should have thought that if there is any difference in nuance between these two adjectives "strenuous" is shown to be slightly the stronger word of the two." As I understand it, the noble Lord was concerned because the word "severe" was too strong. I would suggest to him, on the face of what I have discovered from the dictionary, that he might leave it as it is.
LORD SHACKLETON: I will not press this. I disagree with the noble Lord, but I ask leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
4.30 p.m.
LORD CHAMPION LORD CHAMPION moved, in subsection (2), to leave out
"a temperature of less than 16 degrees Centigrade (which is equivalent to 60·8 … "
and
"(a) a temperature of less than 65".
The noble Lord said: In framing my Amendment, I must say straight away that I was not trying to exclude the Centigrade measurement of temperature. The simple fact was that I had forgotten the formula for converting the one into the other. If the noble Lord will accept the principle of the Amendment, I am sure the officers of his Department would provide the necessary formula and include the appropriate figure at a later stage.
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There is, of course, this to be said for Fahrenheit: that most office or shop thermometers are marked in degrees Fahrenheit rather than in the Centrigrade measurement.
The Gowers Committee gave a great deal of consideration to this matter of temperature. They recognised the difficulty of fixing minimum temperatures for shops. But what can be said about shops in this connection does not apply to offices where, quite clearly, it is possible to fix a temperature for reasonable working conditions in the sort of sedentary work which is normally carried on in offices. Because the Government have included a temperature within the Bill, the question here is purely a matter of whether 60·8 degrees Fahrenheit is the right temperature. I should imagine that the ·8 was added on to fit into the Centigrade measurement, and for no other purpose.
When this matter was considered by the Gowers Committee, some of the representatives of clerical workers favoured a uniform standard of 65 degrees as suitable for office workers. I should think that representatives of clerical workers would be the people best fitted to decide what was the right temperature for people who are sitting down, "slamming" on a typewriter, writing, or doing what has to be done in an office. This is a figure which most people to whom I have spoken about this matter thought was about right. In addition to the people to whom I have spoken, some learned bodies have represented what they thought should be the temperature for people who are employed in these sedentary occupations. I understand that the British Institute of Management have suggested 65 to 68 degrees; the Industrial Health Research Board 65 degrees; the National Federation of Professional Workers 62 to 65 degrees; while a recent job of research by a woman research worker indicated that in offices 62 degrees is regarded by women as being much too cold, and that 68 degrees is not the upper limit of temperature which they would like to have.
I suppose that the reason why women have a special point on this arises from the fact that they seem to wear clothes which are just designed to hide the body, but not to hide it to such an

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extent that they appear bulky in those clothes. I must admit that I thought that about America when I first went there. The temperatures were designed for the ladies so that they could appear slim, even although they were already fat. But women certainly have a point in this, and women do work in offices to a large extent.
We here are sedentary workers. I do not regard myself as engaging in any severe physical activity or indulging in strenuous effort. I understand that the temperature in the Palace of Westminster is about 70 degrees. Yesterday morning, when I was in the Library, I was sitting there in reasonable comfort, not too hot, and I looked at the thermometers and saw that one stood at 66 degrees and another at 68 degrees. It seemed to me to be very comfortable, although I had on the fairly thick clothes which men normally wear. All this it seems to me points to the fact that 60·8 degrees included in this clause is much too low—or, at any rate, five degrees, less the ·8, too low. I think the Minister might well include this figure of 65 degrees in the Bill, since clearly it would meet the point put by so many people who have been interested in this, that 65 degrees is just about the right temperature. I beg to move.
Amendment moved—
Page 5, line 27, leave out from ("effort") to ("degrees") in line 28, and insert the said new words.—(Lord Champion.)
THE FIRST LORD OF THE ADMIRALTY (LORD CARRINGTON): The noble Lord has suggested in his Amendment, and in his speech, that 65 degrees is about the right temperature for sedentary workers. I do not think that on the whole I would quarrel with him about that. As a matter of fact, the temperature of this House is about 66 degrees. Some of us think it rather too warm, but that may well be because the ventilation is not very good. It is usually 66 degrees, unless noble Lords opposite get rather excited and are going to have a Division, when no doubt the temperature rises a few degrees.
LORD CHAMPION: That is internal combustion.
LORD CARRINGTON: Although I would not argue with the noble Lord on
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these grounds (though individual preferences vary) there are one or two points which I would ask him to consider about this. First of all, 60·8 degrees Fahrenheit, or 16 degrees Centigrade, which is in the Bill, is a legal minimum. This is the minimum temperature and, of course, it does not follow that because it is the minimum temperature the Government regard it as the ideal working temperature, which I readily accept is about 65 degrees for most men and women, though not all. I know that my noble friend Lord Newton says he likes working in a temperature below 60·8 degrees. We have to remember that the failure to observe this statutory minimum will constitute an offence which is punishable by a fine under the provisions of this Bill. I should have thought—and I think your Lordships would agree with me—that all employers will be anxious to make sure they do not commit an offence, and will in fact aim for a higher temperature than 60·8 degrees.
There is another point, though perhaps a subsidiary one. A good many heating plants in this country—one of them in my own home—are incapable of raising the internal temperature more than 30 degrees Fahrenheit above the level of the temperature outside, so that on the coldest days of winter it might be impracticable for many employers to keep a higher temperature than the standard laid down in the Bill. If we oblige every employer to maintain a minimum standard of 60·8 degrees Fahrenheit, that temperature will apply in the coldest room in his premises; and because of the way heating systems tend to work, the temperature in other rooms will certainly be at higher levels. If one sought to achieve a minimum of 65 degrees in the coldest room, I have a feeling that there would be quite a number of other rooms in the premises where it would be a good deal too hot. I think on the whole it would be better to leave the 60·8 degrees as the legal minimum, though acknowledging what the noble Lord opposite has very fairly said: that the temperature to be aimed at in the rooms is round about 65 degrees Fahrenheit.
LORD SHACKLETON: Once again I think the Government have shown that they do not know how inspectors work

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in this matter. There are already minimum requirements of temperature for factories, and in the very cold weather there will be workrooms and factories—and this has been particularly true lately—where the temperatures will be below the legal minimum. But, because inspectors are reasonable people, they do not immediately start prosecuting: if there is a complaint, they urge the employers or the managers to do something about it. It is precisely because there are a large number of rather old-fashioned bits of heating equipment around that it is necessary to put the figure higher than this minimum. To my mind, it is quite absurd to have a 60—degree minimum for factories and a 65—degree minimum for shops and offices. All the evidence is that 65 is the minimum that is comfortable for anybody except the noble Lord, Lord Newton.
I assure noble Lords that in most offices, where people are trying to behave responsibly, they will aim for a temperature of at least 65 degrees. This argument that temperatures will be very much higher than 65 degrees, and the implication that the people will be uncomfortable if the coldest room is at 65, is not a serious one. Nor is the argument that there will not be more than 5 degrees in it. If it is an old-fashioned building the workers can almost certainly open the window and lower the temperature, and if it is not, if it is air-conditioned, there will in any event be a proper control over the temperatures.
I simply do not understand why the Government do not take this point. If 60 degrees is all right, then for purely sedentary occupations, where there is no real effort at all, 65 is the minimum. Even in a workroom where people may be sewing, or something of that kind, 60 degrees may be all right; but what concerns me is that so often temperatures are allowed to fall below the legal minimum, and shops inspectors are not going to move in very cold weather if the temperature is only three or four degrees below the permitted minimum. The result will be that it will really be too cold for people, and as in the recent cold spell, people will be sitting in offices in their overcoats. Nobody is seeking to press too hard on this matter, but one wants to arrive at what is the right minimum, and there is no doubt that 65
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is the right minimum. I urge the Government—although I know they resisted it in another place—to accept 65 degrees. They have given no valid reason against it, except the noble Lord's own heating plant at home. I urge the Government to try to meet us on this.
LORD BURDEN: I want to say only two or three words in support of this Amendment. First, I understand that the workers themselves in the shops, through their union, are strongly in favour of the suggested figure of 65; and surely the point of view of those who have to work under those conditions ought to be considered by the Government. Secondly, the shop inspectors, through their union, the Association of Public Health Inspectors, who have a wide knowledge of office conditions, feel that 65 should be the figure in the Bill. Frankly, I wish the Government were not adamant and would give way on this point. It means a good deal to the decent working conditions in many shops throughout the country.
LORD SHEPHERD: Before the noble Lord replies, may I ask him if he can inform the Committee whether the Government have had consultations with the unions representing the workers; and, if so, in this matter what were their recommendations? If the unions' recommendation was 65 degrees that would again substantiate the view that was expressed, I think, in all sections of the House—for I remember that three or four speakers opposite said at Second Reading that in their opinion 65 degrees was the right temperature. I feel that the reply given by the noble Lord, Lord Carrington, about 60 being the minimum that could reasonably be enforced, was not a very valid one. Often these minima become the maxima; and I am quite sure that the Committee should insist, if there is sufficient weight of evidence that the noble Lord can give us from the unions, on this 65 degrees.
4.45 p.m.
LORD LINDGREN: I wish to say only one or two words. The noble Lord, Lord Carrington, I think, made his strongest point on the fact that the figure in the Bill constitutes a minimum, and that anyone allowing the temperature in his office to fall below that minimum immediately commits an offence; that if

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we made the minimum 65 the offence would be in falling below 65. That is technically true. But, again, if I might follow up what my noble friend Lord Shackleton said, it seems that the noble Lord has not been well informed as to how these regulations or Acts of Parliament work in relation to either factories or workshops, or in shops and offices where they already exist.
When there is to be a prosecution, there has, of course, to be proof, and the statement of an employee that the temperature fell below 60·8 degrees is not evidence likely to be accepted in a magistrates' court. What happens is that where a temperature is persistently below the permitted figure, a group of employees complain to the factory inspector; or, as it will be under this Bill, to the inspector, who then starts to investigate. He sees what is happening; makes a spot check, and tests the heating system. Even then, there is not a prosecution straight away. There is consultation with the management, who promise to be better in future; and it is only where there is persistent avoidance of the regulations or an Act of Parliament that a factory inspector will prosecute. I have no reason to believe that an inspector under this Bill would be any less considerate in regard to its operation than inspectors have been in the past. It is only where there is persistent and continual ignoring of the Acts of Parliament, after warnings and pleadings by the inspectors and the employees, that any action is taken. Only a small number of cases reach the courts. For these reasons, I hope, having been an office worker myself, and knowing how uncomfortable it is to sit down and try to ponder over reports and work out figures when you are cold, that the Minister will concede this Amendment.
LORD CARRINGTON: I am afraid that I cannot do so, for the reasons I have already given in my first remarks to your Lordships. On the question of these inspectors, the fact remains that an inspector is there to see that the law is enforced, and I do not think it is right or proper to insert into a Bill a provision which is not intended to be enforced all the time. I think it very much better that we should put in a lower minimum and expect people to keep their offices at a higher tempera-
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ture. I quite agree with noble Lords opposite that 60·8 degrees Fahrenheit is too little. The noble Lord, Lord Shepherd, asks me whether any unions or organisations were consulted. I can tell him that 130 organisations, at one time or another, were consulted. Some of them said 65 degrees, some said more, and some said less.
LORD SHACKLETON: Who said less?
LORD CARRINGTON: I could not possibly tell the noble Lord.
LORD SHEPHERD: The noble Lord said "organisations". He does not mean unions. I asked about unions.
LORD CARRINGTON: Unions were consulted, as well as other organisations. I think on these occasions it must be for the Government to listen to what people have said and make up their minds, and in this particular case we think it reasonable that the legal minimum should be 60·8° Fahrenheit.
LORD SHACKLETON: The noble Lord is not being fair to the factory inspectorate. I hope in the course of our debates on this Bill noble Lords will succeed in educating members of the Government on how this operates. The 60° is continually broken now in factories. I am sure the noble Lord, Lord Ampthill, and others with experience are aware that these people do their best. We are not putting in 65° knowing that it is a provision going, to be broken, any more than it is with 60°. If the First Lord did not understand the argument of my noble friend Lord Lindgren, I do not know how they think this provision is likely to operate. Inspectors have to be reasonable, and in all my dealings with them I have found that they are reasonable. The noble Lord concedes that 65° is right. Why not put it in the Bill?
LORD AMPTHILL: I would say, on the point that under extreme outside weather conditions not even this minimum will be reached, that that is possible. Modern plant in this country, I think, is designed on an average minimum temperature outside of 28° Fahrenheit. If the outside temperature happened to be 20° Fahrenheit, you might not be able to preserve your minimum. I am

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sure the inspector would be understanding in a case like that, and the people in the room or rooms would understand, because in fact under those weather conditions something less than 60° would feel jolly cosy. I have thought a good deal about this, and I support the noble Lord, Lord Carrington, in his remarks. This is only a legal minimum, and this Bill covers a wide variety of premises, and a wide variety of conditions will be required for comfort. I have been in the air conditioning business myself and I can tell your Lordships it is quite extraordinary how different people's ideas of comfort are. If I were setting up an office now for purely sedentary people, I should not have less than 67° or 68°, because otherwise I do not think the typists would do the work. On the other hand, this provision covers other premises where workers might want a lower temperature. I thought at first that what was in the Bill was nonsense; but, having thought it over, I think it is right to leave it like this.
LORD CHAMPION: I thought the noble Lord, Lord Ampthill, was coming very much to my rescue when he started. Certainly he was so far as office workers are concerned. But what I think he
really failed to do in the remainder of his speech was to recognise that all these people are people who do not normally indulge in any severe physical effort. They are certainly sedentary workers. What is suitable for a person working in an office is certainly suitable for shops and such other premises.
I must admit I was disappointed with the reply of the noble Lord, Lord Carrington. I thought this might be the first occasion on this Bill when he would get up and say, "Here we are accepting a useful Amendment proposed by the Opposition". I feel with him that good employers will not stick to this 60° minimum. But this Bill, as I understand it, is not aimed at the good employer. They already have higher standards than those included in the Bill in practically every one of its provisions. This Bill is aimed at people who are not such good employers, who do not put themselves out in order to make their employees comfortable. For those reasons I cannot withdraw this Amendment.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents, 24; Not-Contents, 45.

CONTENTS

Airedale, L.

Hughes, L.

Shackleton, L.

Archibald, L.

Kenswood, L.

Shepherd, L.

Burden, L. [Teller.]

Latham, L.

Silkin, L.

Champion, L.

Lindgren, L.

Somers, L.

Douglas of Barloch, L.

Listowel, E.

Strang, L.

Faringdon, L.

Lucan, E. [Teller.]

Summerskill, B.

Greenhill, L.

Noel-Buxton, L.

Terrington, L.

Henderson, L.

Rea, L.

Williams, L.

NOT-CONTENTS

Ailwyn, L.

Ferrers, E.

Massereene and Ferrard, V.

Allerton, L.

Ferrier, L.

Merrivale, L.

Ampthill, L.

Fraser of North Cape, L.

Milverton, L.

Auckland, L.

Goschen, V. [Teller.]

Mowbray and Stourton, L.

Buccleuch and Queensberry, D.

Gosford, E.

Newall, L.

Carrington, L.

Grenfell, L.

Newton, L.

Chesham, L.

Hailsham, V. (L. President.)

St. Aldwyn, E. [Teller.]

Clwyd, L.

Hawke, L.

St. Oswald, L.

Colville of Culross, V.

Horsbrugh, B.

Strathcarron, L.

Conesford, L.

Ironside, L.

Strathclyde, L.

Craigton, L.

Lambert, V.

Stratheden and Campbell, L.

Denham, L.

Lothian, M.

Swinton, E.

Derwent, L.

MacAndrew, L.

Teynham, L.

Devonshire, D.

Mancroft, L.

Todd, L.

Dilhorne, L. (L. Chancellor.)

Mansfield, E.

Windlesham,

Resolved in the negative, and Amendment disagreed to accordingly.

5.3 p.m.
LORD SHEPHERD LORD SHEPHERD moved to add to subsection (2):
"and (b) a temperature of more than 75 degrees Fahrenheit shall not be deemed to be a reasonable temperature while work is going on".
The noble Lord said: It is often said that bodies generate heat. I think there is some advantage to a Division when so many strangers come into the House to raise the temperature a little. I personally find 66 degrees quite chilling.
LORD HAWKE: The noble Lord has spent most of his time in Malaya and therefore anything under 80 degrees would appear to be cold.
LORD SHEPHERD: In actual fact, I can assure the noble Lord that it is quite the opposite. If you have got sun in your body it is amazing how you can withstand the cold. This Amendment is an attempt to bring into the Bill a maximum temperature. The Gowers Report indicates that the British Medical Association were of the opinion, and decided, that any temperature in excess of 80 degrees for four hours was seriously detrimental to a person's health. If they put that as the figure for four hours, I should have thought that the temperature should be even further reduced for a worker working eight or nine hours. I would not stand on the question whether it should be 75, 76 or otherwise, but I feel that the Government should give some thought as to whether a maximum temperature for offices and shops should, so far as is practicable, be written into the Bill. A number of offices in factories are sited close to boilers and the conditions for the workers are often quite intolerable.
I should have thought that, when dealing with temperatures for offices, to provide decent standards for workers, we should consider the question of a maximum temperature. I am putting this forward rather as a probing operation, to see whether the Government are willing to concede the point that in this Bill there should be a maximum temperature in regard to offices and shops. Then, if we had the principle established, we could have some discussion on a friendly basis, such as we had a few minutes ago, on what that temperature should be. There may be a case for it to be 75, or perhaps a little higher. But I think the general
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principle is that we should write into this Bill a maximum temperature for offices and shops. I beg to move.
Amendment moved—
Page 5, line 30, at end insert the said words.—(Lord Shepherd.)
THE EARL OF MANSFIELD: This desideratum would be much more difficult to achieve than that mentioned in the last Amendment. It is true that on all too few occasions our summer temperature exceeds 75 degrees, but when it does any building having a temperature more than that, brought about by merely conforming to the outside temperature, cannot unless it is air-conditioned have that temperature reduced. While it is reasonably easy to warm any premises by central heating or by electric radiators, it would be unreasonable to expect every small office throughout the country to instal air-conditioning, which would thereby reduce the temperature in hot weather to below 75 degrees.
LORD AMPTHILL: I agree that a temperature of 75 degrees Fahrenheit is not one in which it is reasonable to work. But to set it up as a maximum temperature under this Bill dealing with offices is, as the noble Earl, Lord Mansfield, said impracticable without air-conditioning. In our factories we have air-conditioning, partly for reasons of protecting our product and partly for the employees, and we maintain a maximum temperature of 72 degrees under the most extreme outside conditions. But that can be done only with expansive plant. If this figure were put into the Bill it would, in effect, compel everybody to put unit air-conditioners into these offices. They are most expensive items. There are exceptional summers in this country when one get high temperatures in one's office. Goodness knows ! I have them in my office in Cannon Street. But you cannot help it going even higher than 75; without air-conditioning you cannot keep it below that figure. The actual optimum conditions for comfort under these extreme conditions are 72 degrees Fahrenheit, and 58 to 60 per cent. in relative humidity. The noble Lord, Lord Shepherd, talked about rises in temperature when large numbers of noble Lords come into the Chamber. Actually, every individual gives off 5 British thermal units per minute.
LORD AUCKLAND: The difficulty about this Amendment seems to me to be that there are many old offices which have main rooms facing the sun. One has the alternative either of keeping the window shut, and hoping that the sun will not blaze on one's face, or keeping the window open so that the sun streams right down the back of one's neck. If this Amendment were put into force it could possibly be applied to individual offices, which have air-conditioning or other forms of convenience; but old offices would, as my noble friend Lord Ampthill said, be faced with an enormous expense. In any case, even air-conditioning is not always foolproof. So, on the whole, while this Amendment has a good deal of merit in it—because I myself do not like excess heat—for practical purposes it would be very difficult to enforce.
LORD CARRINGTON: My noble friends behind me have produced some rather formidable arguments against this Amendment, but I must confess to having some sympathy with what the noble Lord, Lord Shepherd, is trying to do. Everybody knows that it is most disagreeable to work in rooms that are grossly overheated. I think the real difficulty here is to put in the Bill a statutory maximum temperature. If one does so, to comply with the statutory maximum might be difficult in a good summer and entail o great deal of expenditure in putting in air-conditioning plant.
Of course, there have been other cases in the Factories Act where this problem has arisen. The way the difficulty has been overcome—and it has, in a sense, been much more acute in factories, as Lord Shepherd himself suggested—is by a comparable provision to that in Clause 6(5) of this Bill. This enables the Minister to prescribe a standard of reasonable temperature for all premises or any class of premises. That was the way in which the problem was tackled in the Factories Act. Regulations have been made which prescribe a maximum permissible temperature in factories carrying on a particular process. I think we shall be able to follow this course in this Bill. For example, in shops or offices attached to bakeries, or something of that kind, regulations could be made, under the subsection I have read out, prescribing a maximum temperature
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for that class of premises. Although I am in general sympathy with what the noble Lord is trying to do in his Amendment, I hope on the ground that there are already sufficient powers in the Bill to carry out what he has in mind, he will not press it.
LORD SHEPHERD: I thank the noble Lord for his reply. I appreciated when I put down the Amendment the considerable difficulty in enforcing such a provision in the Bill. Obviously, I have in mind bakeries, as well as offices in some of our older factories where conditions are pretty grim. I appreciate that the Minister can deal with this by regulation. Could the noble Lord undertake between now and Third Reading, to seek an assurance from the Minister that it will be his intention to bring into force a regulation dealing with perhaps the worst types of offices that may exist in the country in which there is unreasonable temperature?
LORD SHACKLETON: Before the noble Lord replies, I should like to support that plea. We all accept that this is not possible in general terms. This applies not only to offices attached to bakeries, but also to department stores; and for long periods during the summer some sections in department stores enjoy, or suffer from, excessive temperature. I know this directly from my own firm, because of the vast amount of money we have had to spend in trying to ease this problem, and obviously through good design it could be done in time. It is just that one would like to see something in the Bill.
LORD CARRINGTON: I can certainly give the assurance that it is the intention of my right honourable friend to see that they work in a reasonable temperature. I have no doubt that if there are classes of premises such as those mentioned by the noble Lords, Lord Shepherd and Lord Shackleton, he will bring in regulations to see that temperatures in them are kept to a reasonable level.
LORD LATHAM: Would such regulations be applicable to the local authorities and to individual premises, as distinct from a class of premises?
LORD CARRINGION: Yes: either to a class of premises or to individual premises.
LORD SHEPHERD: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.16 p.m.
LORD SHEPHERD LORD SHEPHERD moved to add to subsection (3):
"and it shall be a duty of the employer to allow such persons reasonable access to any such means of warming themselves."
The noble Lord said: I hope to be brief on this Amendment, but I regard it as of considerable importance. We are back to the problem of cold weather. We know that there is to be a minimum temperature of 60·8° Fahrenheit. There are some premises where this may not be practical, or where it will be impossible because of the merchandise stored there. Therefore the Government have made it a provision that in the case of such premises alternative rooms should be provided and made available to their staff, so that from time to time they may go there to warm themselves.
But there is nothing in this clause, as I see it, which makes it obligatory upon the employers to permit the persons concerned to have reasonable opportunities to go and warm themselves. All it requires them to do is to provide these facilities. There are a number of people, for instance men and women who work in kiosks and outdoor shops, who may find it extremely difficult, perhaps because of shortage of staff, to leave their place of work in order to go and get warm. Therefore I feel we should lay on the employer the duty not only to provide these facilities but of seeing to it that the individuals concerned have reasonable opportunities to take advantage of them. I should like to refer your Lordships to Clause 13, which deals with seating facilities for which the Government have allowed special provision. I suggest that if this should apply to seating facilities, it should apply also to the people who wish to be able to warm themselves. I beg to move.
Amendment moved—
Page 5, line 46, after ("themselves") insert the said words.—(Lord Shepherd.)
LORD BURDEN: I should like to support the Amendment moved by my noble friend Lord Shepherd, and to call attention to the exemption in subsection (3)(b) which deals with rooms in which the maintenance of a reasonable tem-
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perature is not practicable. Take, as an example, the maintenance of a reasonable temperature in an open-fronted shop. This might not be regarded as reasonable. I know that there is a general trend towards the close-fronted shop, and obviously that is desirable, but this Bill does nothing to encourage the fitting of shop fronts so as to improve the working conditions of the shop assistants. In fact, if a shopkeeper knows that he will have to provide adequate arrangements if he fits a shop front, he may be discouraged from so doing. The acceptance of this Amendment will help considerably those who are compelled for the time being to work in an open-fronted shop.
I should like to see the exemption of open-fronted shops removed entirely, not only in the interests of those who are employed in them but also on grounds of public health. Surely, it is a little unreasonable, with our knowledge of hygiene and so on, that foodstuffs such as fish, meat and so on should be exposed for sale in open-fronted shops, running the risk of dirt, dust and other matter from the streets, Therefore, there is everything to be said for encouraging shopkeepers to fit fronts to their shops, instead of giving them an incentive, such as this Bill does without the acceptance of this Amendment, to avoid fitting shop fronts. In those circumstances, I hope the Government will accept this Amendment.
LORD NEWTON: I quite take the point of the noble Lord, Lord Shepherd, in putting down this Amendment. And of course it is quite true, as he said, that under subsection (3) of Clause 13 a duty is placed upon the employer to permit his employees to use seats when the use of them does not interfere with their work. That provision, of course, is based on Section 37 of the Shops Act, and the circumstances in which the provision has effect can be more closely defined, I think, than in Clause 6 of this Bill, relating to temperature. What I mean is that it is reasonably easy to decide that, when there are no customers in the shop and there is no urgent work to do, then a reasonable opportunity for sitting down exists. On the other hand, in the case of the noble Lord's Amendment, as I understand the position the employer would be forced by law to

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allow his employees to leave their work and go away to warm themselves whenever they said they felt cold.
LORD SHEPHERD: No, no. I never said so. The words are "reasonable access".
LORD NEWTON: I concern myself, as we all have, with what is the probable meaning of the words which the noble Lord has put in his Amendment, and I am advised that that is in fact the case. An employer would be obliged to let them go away from their work and warm themselves whenever they said they felt cold, and quite obviously that could lead to very difficult situations. So this is a very much more difficult and imprecise provision to enforce, than one which covers the employer's duty as regards providing seats.
I would point out that the Bill already states that, in the case of rooms to which subsection (3) of Clause 6 applies, conveniently accessible and effective means of enabling employed persons to warm themselves must be provided. I would suggest to your Lordships that the circumstances of the premises covered by this Bill are so various that it is really better to leave to the common sense of the employers and their employees the arrangements for making use of the means of warming. I really do not, for that reason, think that this Amendment is necessary, and I am quite certain that it would be very difficult to enforce it satisfactorily. So I hope that the noble Lord will be willing to withdraw it.
LORD SHEPHERD: That is a very unsatisfactory reply. In fact, the replies appear to be getting more unsatisfactory as this Committee stage proceeds. We have a position where we have recognised that there should be a proper standard of temperature for workers to work in. We recognise, however, that there should be exclusions; in the main, because of the merchandise that may be in the store. If the noble Lord, Lord Newton, is correct in saying that, because they are fully employed throughout their working day, employees should not have the opportunity of going to warm themselves if the temperature of the premises is below the minimum standard to which we have been forced to agree, then I think that is utterly wrong. I should have thought it was clearly understood
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from the Bill that it was the Government's intention that, where rooms could not be given this minimum standard, there should be alternative arrangements made for the staff to warm themselves from time to time. But the Bill does not say that the employer shall permit his staff, even if it is to his inconvenience, to go into those rooms to warm themselves, to avail themselves of the requirements that you are writing into the Bill.
I would suggest to the noble Lord, Lord Newton, that he might consider the woman who works in a tobacco kiosk. Kiosks are the most draughty places in which a person can work. The assistant is often standing on concrete, rarely with any form of heating, certainly exposed to the winds and draughts, particularly those that blow around railway stations. But there may be only one person working in a kiosk, and according to the noble Lord, Lord Newton, the employer does not have to find time for that person to be able to go to use the facilities that the Government say the employer should provide. I think that is utterly ridiculous. If the Government really believe that these provisions should be made, they should ensure that the operatives have a reasonable chance of going to warm themselves, to make use of these facilities.
The noble Lord said that the situation with seats is different, but there are a number of employers who are reluctant to see their staff sitting on seats. They think it appears rather bad to the customer when he or she walks into the shop. But we in Parliament do not accept that. We say that, if an operative is not immediately employed, then he or she should have the opportunity to sit and rest. I think it is necessary, where the premises come under Clause 6(3)(a) and (b) that during the person's working time and at reasonable opportunities the employer should see that the operative has a chance to use the facilities that you, as the Government, feel should be written into the Bill. I do not think that this is an unreasonable attitude to take. I hope the noble Lord can have second thoughts.
LORD HAWKE: I think that the words written into the Bill as it is provide a reasonable assumption that these means of warming are there for use. I know

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what the noble Lord is working at, but I believe that, in order to deal with a few ladies in kiosks, he runs a very grave risk of making a rather wide abuse, because it seems to me that this Bill will apply to places like Covent Garden and Smithfield markets, and the like. The porters there are working outdoors in outdoor clothing, and so on. If the noble Lord's Amendment were passed, those porters, who we all know are a very independent lot and are perfectly capable of holding the consumers and the producers to ransom at any moment, will decide that they have to have access to special methods of warming themselves as soon as they feel like having a sit down and a rest. The whole market will be subject to this form of "pressure", shall I call it? I believe that the Bill as it stands meets absolutely the noble Lord's point, and that it is a mistake to try to make any amendments to it.
LORD BURDEN: Can we hope that, if and when the new Covent Garden market is built, there will be some concern for the outdoor employees, and that they will not be left to warm themselves in perhaps the traditional way by which porters warm themselves to-day which I will not mention—I am sure it is in the minds of most noble Lords. But in his reply the noble Lord, Lord Newton, ignored the powerful plea that my noble friend Lord Shepherd put forward, calling attention to the fact that men and women work indoors, in places like tobacco kiosks, shops retailing fish and meat, and so on, in all weathers. The Bill provides—and we have accepted it—that no heat can reasonably be provided in the rooms in which they work. We have accepted that; but surely it is not unreasonable that there should be some room where the men and women can go, reasonably—not rushing off neglecting business, but reasonably; and that word is in the Amendment—to alleviate the effects of the inclement weather which they have to endure without any protection. May we ask the Minister to look at this particular Amendment again, to see whether he can accept it?
VISCOUNT COLVILLE OF CULROSS: Before my noble friend Lord Newton replies, I hope he will say something
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to answer what my noble friend Lord Hawke has said. No doubt there are abuses which could spring up in this respect, but, clearly, there is no earthly point in providing the sort of rooms which are mentioned in the last part of subsection (3) of Clause 5 unless people are going to be able to use them. It therefore may be that my noble friend and Her Majesty's Government think that the Bill itself implies that there shall be reasonable access to these rooms. If so, I have no doubt that the noble Lords opposite would be perfectly satisfied; but I hope my noble friend is not going to try to resist this Amendment on a point of drafting, saying that the Amendment set down by the noble Lord, Lord Shepherd, says that people can go to these rooms at whatever time they like. This is not what the Amendment says: it says that they shall have "reasonable access" to them, which is quite different. I say, with respect, that it is an entirely false point to resist this Amendment on that ground, and I hope he will not do so. If he can agree with my noble friend Lord Hawke, so much the better.
BARONESS HORSBRUGH: Surely it is a matter of words here. I disagree with the noble Lord, Lord Shepherd, when he says that the words should be "reasonable access", because that sounds as if they must not be made to climb any walls or go round fences, and that they should be able to get to the rooms. What I should like more is to have such a phrase as "at reasonable intervals", or words to that effect. I think we should all agree that it would have to be laid down in some way that people should not be able to say, as some of us like constantly to say, "We wish to go and get warm" immediately they get cold. They would have to stay for a reasonable time. Granted, we could not put into the Bill what that time is; but I wonder whether some such words as "at a reasonable interval" would not meet the case.
LORD SHEPHERD: I must respond to the very helpful suggestion of the noble Lady. I appreciate that when one puts an Amendment down one does it to the best of one's ability. The intention of this Amendment is quite clear—and it is very much in line with what has been said by the noble Lady. If my words do not have that effect, I would

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be very ready to accept other words that had the right effect: but I would ask the Government now whether they can meet us on this point. If they are ready to respond, then I am ready to withdraw my Amendment, and we can consider behind the scenes what words should be put in. I hope the Government can say they will concede the principle behind this Amendment.
LORD NEWTON: Subsection (3) says:
" … there shall be provided for persons who are employed to work in a room to which, but for the foregoing provisions of this subsection, subsection (1) of this section would apply, conveniently accessible and effective means of enabling them to warm themselves."
The sort of premises which would be covered by that—and this is in reply, mainly, to the noble Lord, Lord Burden—are an office with a counter or grille exposed to the open air, such as an office in a bus station; open-fronted places like greengrocers' and fishmongers' shops; refrigerated rooms, and rooms in remote railway premises. Those are the sort of premises with which this subsection is meant to deal.
I explained why I could not accept the Amendment set down by the noble Lord, Lord Shepherd, and I suggested to the Committee—and I think this is true—that it would be extremely difficult to define what was meant by "reasonable access" to these facilities for warming. That is why I suggested that there are some things which are better left to local arrangements and to the good sense of all those concerned. We have not written into this Bill that an employer should permit his employees reasonable access to washing facilities. I do not know whether your Lordships think that that would be a foolish thing to do, but I should have thought that it would.
LORD SHEPHERD: But they will be on the premises.
LORD NEWTON: It is very much the same sort of provision which the noble Lord is now asking me to accept. I think the Committee must appreciate that there are limits to the lengths to which one can go in describing details in a Bill of this kind. It is a very long and complicated Bill already; and, however far one goes, it is always possible to say that there is yet another situation which has not been met.
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Having said that, I will say again that I cannot accept the Amendment on the Paper, but I will certainly consider again this principle in the light of the views expressed by your Lordships. I cannot commit myself to-day to accepting it, but I will indeed look at it in the light of what has been said. However, I would ask your Lordships to bear in mind what I think are the extreme difficulties of defining sufficiently accurately the situation which might result from the difficulties to which I referred in my first speech.
LORD SHEPHERD: I will respond to that by withdrawing the Amendment. I would say only this to the noble Lord, Lord Newton, and to the noble Lord, Lord Hawke. In 1959 the Government took the view that this Bill was not necessary. They assumed that, with the improvements that were going on, the conditions in offices and shops would be such that a Bill of this kind was not necessary. We now find that the Government have come to the view that this Bill is necessary. It is wrong for us to assume anything. We should try to write into the Bill what we can, to cover the position of the workers. Later on, I shall show where this House let legislation go through which perhaps brought about a major change of law without our being aware of it. So I hope we shall not work on the basis that we can assume anything. In those circumstances, in view of the agreement of the Government to consider this matter, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 [Ventilation]:
5.38 p.m.
LORD CHAMPION LORD CHAMPION moved, in subsection (1), after "air", to insert:
"free from dust and fumes".
The noble Lord said: In this clause we are dealing with ventilation. This is a matter which the Gowers Committee considered fully. They had many witnesses before them, and they considered the Acts which had preceded their period of examination of this question. They did point out in relation to this whole matter of the exclusion of fumes, and in trying to secure pure air for people working inside buildings, that the Factories Act closely followed the Public Health (London) Act in requiring that there

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should be suitable and adequate provision made for maintaining adequate ventilation, and for rendering harmless, so far as possible, all fumes, dust and other impurities. The witnesses, both lay and medical, who appeared before the Gowers Committee were unable to find better words than those included in that Public Health (London) Act and the Factories Act. They recommended that in any future Bill on this matter—the sort of Bill we are now discussing—the words of the Factories Act and the Public Health (London) Act should be embodied.
The Minister, although he sets out here to try to ensure that there is reasonable ventilation, has not included the words that were, in fact, recommended by the Gowers Committee, on the exclusion of fumes in particular. We are trying to put right what the Government, have left out of this particular Bill. We think the exclusion of fumes is no less necessary for the office worker than for the factory worker. Most of us know that many of these offices we are talking about are situated in factories where processes are going on in which fumes are emitted. Many of these offices are tucked away in the corners of large factory floors. Some of them are chemical plants, distilleries and premises where, I am told, refrigeration is much used. There is always a danger of the escape of ammonia from great refrigeration plants, and, indeed, sometimes an escape takes place which can be ignited and cause considerable fire and other damage. We think that to try to exclude all fumes is a practicable measure and one on which we ought to insist in a Bill of this sort to protect the health of office workers equally with factory workers. I beg to move.
Amendment moved—
Page 6, line 25, after "air" insert the said words.—(Lord Champion.)
LORD HAWKE: We on this side of the Committee, I think, have sympathy with this type of Amendment, but I suggest to the noble Lord who moved it that it is an utterly impracticable thing to do. If he has ever sat in a room and watched a ray of sunlight enter, then he will realise that every scrap of air everywhere, except in a chemical laboratory, is full of dust and it always has been,
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and it is impossible to exclude it. Therefore I should have thought that the words in the Bill
"adequate supplies of fresh or artificially purified air"
would meet his case, because I should have thought that adequate supplies of fresh or artificially purified air excludes air which is full of fumes. Although sympathetic to the noble Lord's aims, I believe his purpose is achieved in the Bill and that the Amendment is quite impracticable.
LORD BURDEN: I should like to say a word or two in support of this Amendment, and I speak out of a fairly long experience of offices, and railway offices in particular. I say in all seriousness that if a clause, Amendment or provision of this kind had been law, then over the years that I knew the railway service many lives which have been shortened would have been prolonged. I know it was not the fault of the railway companies. They were starved of capital. Their offices were built in the early days of the railways and they suffered from all the inconveniences and difficulties arising from that. I cannot say from my own knowledge what has been done since the Nationalisation Act of 1947, because my active life, so far as my being in some measure responsible for bringing inadequate office conditions to the attention of the railway companies, had then ceased. But I was glad to note what my noble friend Lord Lindgren told us in the Second Reading debate: that, since nationalisation, very great improvements have been effected in office accommodation. This may seem, on the face of it, trying to ask for the impossible. It is not doing that. We are only asking that men and women who work in a fairly confined space should at least have the advantage, so far as they can get it, of breathing uncontaminated air, and not air likely to affect their lungs and shorten their lives. It is a very serious Amendment, and I do ask the Government to treat it in that spirit.
5.45 p.m.
BARONESS HORSBRUGH: I am sure this is a serious Amendment, but I must say that as I listened to the debate, I came to the conclusion—and I may be entirely wrong and not have understood it clearly—that in an office you can

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never open the window. We have only to think of the dust that comes in—and you can see it on furniture—to realise that you cannot open a window in London. I have not followed the noble Lord, Lord Hawke, about the ray of sunshine. I have lately seen much more dust than sun. But it will be impossible ever to open the window. I understand that in large buildings they may be able to have facilities for the air to be purified, but to say, as we said under this Amendment, that in ordinary offices windows could never be opened, and all forms of air must be produced artificially, is not being practicable. I ant in favour of the very best conditions, but I cannot see that we should accept this Amendment and say that in future in no office can you ever open the window.
LORD SOMERS: May I add a word or two? The air outside in the street is a great deal more lethal than the air in any office, however old fashioned, whether it is provided with artificial air purification or not. It is crammed with diesel fumes and carbon monoxide from thousands of cars, besides other delights, and therefore I cannot help feeling there is no reason for this Amendment at all.
LORD LINDGREN: The noble Lords opposite think of offices and office workers as associated entirely with solicitors' or accountants' offices in the City of London or in other big cities. It is equally true that some of us on this side with industrial experience always think of the worst and not the best. But I can assure noble Lords opposite that I have seen office workers working in blast furnaces where in fact the steel is being smelted. The offices lie along the whole ridge of the furnace. The offices lie above the furnaces and the fumes and dust come through and in the case I am talking about there was no attempt to protect the office workers. I can think of another instance, of an aircraft factory where the time office was over the paint shop. If noble Lords had ever had to sit in an office over an aircraft paint shop, in which sprays were being used, they would not feel like having dinner, I can tell them bluntly, after sucking in the air in that office. Of course, the workers using the paint sprays wore masks and were given milk, but the poor old clerks in the office up top got nothing at all.
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If the machinery of the Bill excludes fumes as well, there is a point in what the noble Lord, Lord Hawke, says. But that is the type of office which we were considering when we put down this Amendment. Such offices still exist—not in the best of firms, I agree—and fumes and dust come into the offices and no extractor fans are used. It is for those offices that we put down this Amendment.
LORD DENHAM: When I answered an earlier Amendment from the opposite side of the House, I was taken to task by the noble Lord, Lord Shackleton, for quoting the Factories Act, and was told that conditions in factories were not in any way comparable with conditions in premises covered by this Bill. I am now having the Factories Act quoted at me.
LORD SHACKLETON: It really is unfair to take an argument that applies to a completely different set of circumstances. We were talking about the spacing of machinery.
LORD DENHAM: We were talking about the health and comfort of employees, and the argument applies equally well in this case. There is already in the Factories Act a provision dealing with dust and fumes, and the noble Lord is seeking to bring this Bill into line with it. In fact, his Amendment goes much wider than Section 4 of the Factories Act, which is concerned with rendering harmless such fumes and dust as may be
"injurious to health and which are generated in the course of the factory processes".
If the noble Lord's Amendment were accepted, all air in office, shop or railway premises would have to be free from dust. I suggest that it would be impossible to comply with such a requirement.
Injurious dust and fumes are a very real problem in some factories, with which the Ministry of Labour have been actively concerned over many years in administering the Factories Act. But the problem does not occur to anything like the same extent in offices and shops, and therefore the Government have been reluctant to include in the Bill a provision to meet a fairly rare eventuality. Where such cases arise, they will usually be in an office in a factory, where the nuisance arises from outside the office, and thus can be dealt with under the Factories

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Act. In any case, I am satisfied that there are adequate powers under Clause 20(1) for my right honourable friend to make special regulations protecting workers against risks of injury to health arising from—and here I should like to quote the words used in the clause:
"the use of any machinery, plant, equipment, appliance or substance, the carrying on of any operation or the use of any process".
This is a sufficiently wide definition to cover the hazards which the noble Lord may have in mind, and also the hazards which the noble Lord, Lord Lindgren, quoted, and I must therefore ask the Committee to resist this Amendment as unnecessary.
LORD CHAMPION: The noble Lord, Lord Denham, has pointed out a very useful clause in this Bill. I must admit that I had not spotted the point when this Amendment went down in the first place. All I can hope is that the Minister will use his powers under that clause. I am bound to agree with everyone who said that there is great difficulty about excluding dust. Unlike the noble Baroness, I understood what the noble Lord, Lord Hawke, was talking about when he spoke of the rays of sunshine being filled with masses of particles of dust floating about in them. But I agree with the noble Lord, Lord Somers, that there are many more lethal places in London than an office. I think that about the worst place in London is Oxford Street on a still day. That is almost more lethal than smoking twenty cigarettes, about which the Lord President was talking earlier. I do not want to delay the Committee on this matter, except to say that the noble Lord, Lord Denham, was on a false point when he quoted the Factories Act against us and said that we had quoted it against him. It all depends on the circumstances of the case. Having regard to what I think is a reasonably satisfactory reply, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Clause 8 agreed to.
Clause 9 [Sanitary conveniences]:
LORD CARRINGTON: The purpose of subsection (4) of Clause 9 is to enable the Minister by regulation to require separate lavatory accommodation for the
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sexes. The subsection states that where persons of both sexes are, "or are intended to be", employed to work in the premises, the facilities will not be deemed to be suitable unless separate accommodation is afforded for persons of each sex. On reflection, we do not think it would be possible to enforce a provision of the regulations in cases where the employer merely had the intention of employing at some date in the future a staff consisting of both sexes. The words are therefore unnecessary and we would rather they were omitted. I beg to move.
Amendment moved—
Page 7, line 22, leave out ("or are intended to be").—(Lord Carrington.)
LORD SHACKLETON: Surely it would be a little late to do anything about it, when a firm actually decided to employ the two sexes. Surely, there is really merit in this phrase. I appreciate the Government's difficulty, but I should have thought that it was a mistake to leave out these words.
LORD CARRINGTON: I do not think that it will be too late. If a firm intend to employ workers of both sexes, they will have regard to the obligations they have to comply with when they do employ them.
On Question, Amendment agreed to.
5.59 p.m.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved to add to subsection (4):
"Provided that no such regulations shall apply to any premises in which fewer than eleven people are employed."
The noble Viscount said: My noble friend Lord Merrivale has asked me to apologise to your Lordships for the fact that he has had to leave the House. I am very willing to move his Amendment on his behalf, although I do not think that I shall say what he would have said in the circumstances. But I think that I can use this as a platform to get cleared up a point under the Bill which causes me great difficulty. I appreciate that I am probably wrong in doing it, because only part of the problem relates to the sort of offices with which I am familiar, a set of barristers' chambers; but no doubt the same sort of factors would be relevant to any other professional offices—those of a solicitor, accountant, architect or anybody of that nature. I think

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of the problem that is going to arise where there are, in this kind of partnership or atmosphere, a large number of working people, or indeed a small number, who are not covered by the terms of the Bill, because they are not, in the terms of Clause 1, "persons employed to work therein"—they are self-employed. I do not think—and I should like my noble friend Lord Newton to confirm this—they are within the scope of the Bill at all. Nevertheless, they may employ, for the sake of argument, one male clerk and a female typist.
We come now to the provisions of Clause 9 in regard to lavatories, and there is also the provision in Clause 10 about separate washing facilities. It seems to me that there will be grave difficulty in some of these small offices, where only a small number of people are employed, in providing the separate facilities which are needed. Noble Lords opposite may well say that this is only part of the problem. I think it was the noble Lord, Lord Shepherd, who mentioned to me the other day that similar circumstances may apply in a coal yard, where there are several men who move the coal about and two women who do the typing, and where the circumstances would be very different from those in the sort of professional accommodation I have in mind. Therefore, it may be that my noble friend Lord Merrivale was not right to lay down a statutory exemption for a minimum number of employees, although it is true that the Gowers Report, in, I think, paragraph 22, mentions a minimum of six, and the Regulations under the Factories Act only require separate lavatory accommodation for 25 people and more.
Nevertheless, the difficulty is this. The only alternative to providing the separate accommodation necessary under this clause and Clause 10 is to get an exemption under the later clauses of the Bill. I may be able to save the time of the Committee if I now mention a point that I have in mind. It can be done in two ways: either you can have an ad hoc exemption under Clause 46 which goes on for a certain period of time and can be renewed, or you can have a general exemption which the Minister allows by regulation under Clause 45.
What really concerns me is the point under Clause 45, because the Minister
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is empowered to make these exemptions, which noble Lords may think cover the sort of difficulty with which I am dealing. The provisions in Clause 45(4) say:
"The Minister shall not make an order under this section except after consultation with an organisation which appears to him to be representative of workers concerned and an organisation which appears to him to be representative of employers concerned and an organisation which appears to him to be representative of any other persons who appear to him to be concerned."
In the kind of small concern of which I am thinking, it is most unlikely that there will be any organisation which represents the one typist or the two barristers' clerks, or the one draughtsman in the architect's office; and, therefore, as the clause is now drafted, it will be impossible and illegal for the Minister to make an exemption in that last case, because he will not be able to carry out the statutory consultation. It seems to me that there is a flaw in the Bill if this is so.
While I am talking about Clause 45 (of course, I have no business to be doing so, but perhaps your Lordships will forgive me) I would say that I think there is something wrong in subsection (5), where it says:
"In this section 'organisation' includes … in relation to workers, an association of trade unions … and 'trade union' includes an association of trade unions".
I think if my noble friend will look at that he will find that something has gone wrong somewhere in the definition. But that is beside the point.
I should like to know from my noble friend how he thinks the Minister will deal with the small concern. Maybe it would not be possible in the coal yard to have an exemption at all, but there must be dozens, if not thousands, of offices where there are one or two people employed by a series of partners, or others who are self-employed and do not come under the terms of the Bill, and where the Minister will not be able to make an exemption under Clause 45. I am sure it is not what the Government intend, but it will be the law if the Bill passes as it now stands. It may be that Lord Merrivale's Amendment is not the right way to do it; nevertheless, there must be some way to deal with it, and I think it ought to be put in the Bill. I beg to move.
Amendment moved—
Page 7, line 26, at end insert the said proviso.—(Viscount Colville of Culross.)
LORD LINDGREN: I do not want to cross swords with the noble Viscount, who is so often helpful to us on this side of the House, but I can assure him that I wish the trade unions of this country were as much a closed shop and as effective in regard to rates of pay and conditions of service as the legal profession; and if the barristers can do it, I should have thought that those associated with them, the barristers' clerks and their other clerks, could also do it. I can assure him that the conditions under which he and his colleagues in lawyers' offices work are such that under this Bill they need have no fear. The noble Viscount does not seem to agree; but, so far as we are con cerned, looking at it purely from the point of view of the worst cases, we should be quite happy if all the conditions that exist in all the lawyers' offices—
LORD SHEPHERD: Some.
LORD LINDGREN: I keep as far away from the law as I can, and judge it only from the outside. If the conditions were the same, I think they would be good. But looking at it purely from the point of view of small offices, particularly in the provinces (let me say, quite frankly, that, so far as London is concerned, in the main, if the conditions are too bad, the employer just cannot get clerical workers), the conditions under which clerical workers have to work—because clerical work is comparatively scarce—are very bad indeed. Perhaps the worst feature of the lavatory and washing facilities being used by both sexes, not quite to the extent of the coalyard and the coal loader, as referred to by the noble Viscount, but in association with other trades and types of workers is that it is very embarrassing, not only for the women but for the men as well. That problem ought to be dealt with. We feel that the clauses which give exemption would enable reasonable conditions where there are one or two people working in close association, by giving them the opportunity of getting exemption through the local authority.
THE EARL OF MANSFIELD: While I am entirely in agreement with my noble friend Lord Colville of Culross, that I
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should feel rather chary about accepting any fixed number of persons employed in an office to which the regulations should not apply, I feel that the moving of this Amendment has done a considerable service by drawing the attention of your Lordships and of the Government to the very real difficulties which exist in bringing adequate regulations into being over this matter. As my noble friend said, in a small office employing only one or two persons of each sex it may be completely impossible, for mere reasons of space, to provide separate lavatory accommodation or washing accommodation: it may be that the construction of the building renders it impossible. In some London offices with which I am familiar, though there may be a number of entirely separate establishments on one floor, there are communal lavatories, sometimes serving both sexes and sometimes serving separate sexes. I think that the matter is one of great importance, because we are anxious to get in all offices and shops the best sanitary conditions that are practicable. At the same time, we have to be careful that we do not impose, either in the Bill itself or by subsequent regulations, conditions themselves so stringent that if put into effect they will render untenable a considerable number of the offices in large towns, such as London and elsewhere.
6.10 p.m.
LORD SHEPHERD: I can see the case which has been made by the noble Viscount, Lord Colville of Culross, but obviously we on this side of the House would not wish in any way to diminish the general requirements of this clause. May I put this point to the Government? If exemptions are to be considered in this matter they should not be given under Clause 45, by the Minister. I think it would be utterly wrong for the Minister in this case to make a general classification that solicitors' offices should not come within this clause. I think this is a question which should be left to the local authority. In other words, the local authority would grant exemptions to specific offices according to the type of facility that office could provide. If it is in the City, in the legal area—I think it is the Inns of Court—no doubt an arrangement could be made whereby the offices would combine to provide separate accommodation for the sexes. It may be possible or it may not, but that should

721
be borne in mind when the local authority are considering whether an exemption should be given to an office.
I hope the Minister will give us a clear understanding that the Government do not contemplate that the Minister will grant exemptions under Clause 45 to a classification of offices, as was put to us by the noble Viscount. I think there is a case in certain offices, where there is a small staff who are known to each other, and where perhaps conditions are good, where exemption might be considered. It all depends upon the circumstances. I do not know whether it would be necessary to look at Clause 46 further if the doubts that have been expressed here were acceptable to the Government, and whether there should be some proviso as to the number of persons who should be in an office for which an exemption should not be granted. At the moment, it appears to be a fairly wide exemption without any regard to the number of operatives. This is a point we could consider later. I hope the noble Viscount will agree that, if there were to be exemptions they should be given under Clause 46. It should be for the local authorities to consider premises individually, entirely upon their merits, and perhaps the type of trade or occupation; it should not be a wide exemption given by the Minister.
LORD NEWTON: I entirely agree with my noble friend Lord Mansfield that the problem of providing separate sanitary accommodation in smaller premises is not an easy matter, and I think my noble friend Lord Colville of Culross recognised that in moving his Amendment. We certainly do not think it would be right to do it by writing a specific provision of this character into the Bill. What the Government have in mind is to deal with the whole problem of "suitable and sufficient" sanitary accommodation, as the Bill calls it, by means of regulations. It will be possible, through wide consultations, to take into account the opinions of all interested organisations before any regulations are made. Obviously, the question of allowing shared accommodation in the smaller premises will have to be carefully considered; and it will be. I do not think the question of granting exemptions will necessarily arise. It could, but what we have in mind is to make regulations covering the scale of provision after these consultations in the
722
case of smaller offices, and it is possible that the regulations will be devoted to the question of how many persons are employed—that question being related to the distribution of the sexes between the numbers.
I certainly take the point made by the noble Lord, Lord Shepherd, about how exemptions should be granted, if it is necessary to grant them. My noble friend Lord Colville of Culross said, and I think rightly, that he probably had no business to attach Clause 45 to this Amendment, and I did not attempt to suggest that he was not right or that your Lordships should do anything about it. I take the points about making orders for exemption, as opposed to making regulations if there were no organisations representing the workers in a small class of premises. I will certainly look at the wording of the clause to see whether it needs alteration. As regards subsection (5) of Clause 45 (I am still out of order, but I hope only for a moment), the answer to my noble friend's suggestion that that needed looking at is this. The T.U.C. is an association of trade unions, some of which are themselves associations of trade unions, and this definition is meant to cover the T.U.C. as well as individual trade unions. That being so, I hope that my noble friend will be willing to withdraw his Amendment.
LORD SHEPHERD: Before the noble Viscount withdraws his Amendment, I have one query on the reply the noble Lord gave. As I understood it, he said the Government intend to issue regulations which may specify that certain sizes of offices need not provide separate accommodation. Am I right in that? If that is so, it seems to be contrary to subsection (4), which says that provision of sanitary accommodation
"shall be deemed not to be suitable for the purposes of subsection (1) unless it affords proper separate accommodation for … each sex."
I understood that separate accommodation must be provided in all circumstances. There is no question at this moment of this being done by regulation. That is my understanding of it. But there can be exemptions where it may be necessary. I hope the Minister is not right: that the provision of separate accommodation will now be dependent on regulations.
LORD NEWTON: Subsection (4) of Clause 9 says:
" … regulations under this section may provide that … provision shall be deemed not to be suitable for the purposes of subsection (1) of this section unless it affords proper separate accommodation for persons of each sex."
I do not want to make any definite statements about exactly what form regulations under this clause will take. They have first to be the subject of consultation. All I said was that it is conceivable that the regulations may deal with this problem of how different sexes are to be dealt with where only a small number of people are employed in the premises. That is all.
LORD SHEPHERD: I still say that, reading this, in spite of the word "may", I do not know what emphasis may be put on it. There is a comma, and then it says
" … provision shall be deemed not to be suitable … ."
It seems to me that that is a clear statement that, unless separate accommodation is provided, the conveniences would not be deemed to be suitable. The regulations may provide—the noble Lord shakes his head. This is my reading of the Bill, and perhaps we could discuss this later. I hope there is no question of this matter being diluted.
VISCOUNT COLVILLE OF CULROSS: I am grateful to noble Lords who have taken part in this debate, because it has certainly cleared up many points on which I must say I was very unsure. I think, with respect, that the noble Lord, Lord Shepherd, is wrong. I do not think there is any definite provision in this Bill for separate accommodation for sexes unless it is laid down by regulation. I think the reading of subsection (4) of Clause 9 means that. It certainly seemed to me that that is what my noble friend Lord Newton said.
However, I am very glad indeed to have heard the speeches of noble Lords, and I feel they may do a great deal to clarify the matter. If the exemptions in cases of which I am thinking are to come under Clause 46, I hope that the provision in the Bill later on, whenever it is, by which the Ministry are to see that the standards throughout of the enforcing authorities are kept similar, will make
724
quite sure that this particular provision is universally enforced in the same way because I think that this is important. I am also grateful to my noble friend Lord Newton for saying that he will look at the point about consultation under Clause 45(4) and for his explanation about the trade unions. Again, my thanks to noble Lords for their very helpful explanation on this point. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 9, as amended, shall stand part of the Bill?
LORD AIREDALE: I wonder why this clause uses the rather nebulous expression "sanitary convenience"? I thought I perhaps had the answer to this problem when I saw that subsection (6) of this clause refers to the Public Health (Scotland) Act, 1897. I supposed that the very polite Victorians had coined this phrase which was immortalised by being repeated in all subsequent legislation for the sake of consistency. But I was quite wrong. Because if you turn up the relevant section of the Act of 1897 you find it opens:
"The local authority may erect such public ashpits, waterclosets, privies, and urinals, and in such situations, as they may think fit."
It is impossible to speak more plainly than that; so who are we, in the middle of the century of the common man, to use the silly phrase "sanitary convenience", which, as my noble Leader said in the Second Reading debate, could perfectly well describe a pocket handkerchief or, for that matter, a dustcart?
LORD CARRINGTON: I do not know, but I will pass all that on to the Parliamentary draftsmen. But I should like to take this opportunity of thanking the Liberal party for a most notable and singular contribution to this debate.
Clause 9, as amended, agreed to.
Clause 10 [Washing facilities]:
6.25 p.m.
LORD MILVERTON LORD MILVERTON moved, in subsection (1), after "cold" to insert "water". The noble Lord said: I beg to move the Amendment standing in my name. This is only a minor Amendment dealing with drafting. Subsection (1) of Clause 10 requires the provision of a supply of clean running hot and cold or warm water for washing, and it will be seen that the words "hot and cold or

725
warm water" are, strictly speaking, capable of two interpretations. The interpretation intended is clearly that, as an alternative to a supply of running hot and cold water, a supply of warm water may be provided. But the words could alternatively mean that there could be provided a supply of running hot water.
The form of the words in the clause, it is true, follows precisely that in Section 58 of the Factories Act, 1961, and the ambiguity in that Act has been noted by authors of commentaries on the Act. I understand that the Ministry of Labour take the view that to amend the wording in the current Bill would be to throw doubts upon the provision in the Factories Act, and that they therefore would not be disposed to accept this Amendment which is now being moved, which aims merely to remove that ambiguity. The Association of Municipal Corporations take the other view, and I agree with them, that it is undesirable to perpetuate an admitted fault in drafting, and that the Government, in accepting this Amendment, could use the opportunity to explain the correct interpretation of the Factories Act. I beg to move.
Amendment moved,
Page 8, line 1, after ("cold") to insert ("water").—(Lord Milverton.)
LORD DENHAM: My noble friend has put forward this Amendment very reasonably, as he says, to make it clear beyond doubt the true meaning of the words in this subsection, which is that the employer has the alternative of providing either two taps, one of hot and one of cold water, or a single supply of warm water. Again, as my noble friend has said, our main reason for advising your Lordships to reject this Amendment—
LORD SHEPHERD: I thought he was going to get it.
LORD DENHAM: —is that Section 58(1) of the Factories Act, in which, as my noble friend has said, the same wording is used, might have doubts cast on its meaning if we altered the wording in this Bill. I do not think that the other interpretation, that any employer who provides warm water might subsequently also be made to provide a supply of hot water, is very likely to happen.
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For this reason, and especially for the first reason, which, as I have said, the noble Lord realised, of casting doubt on the wording in the Factories Act, I must advise the Committee to reject this Amendment.
LORD HAWKE: I do not want to harry my noble friend unnecessarily, but I thought one of the objects of my noble friend Lord Milverton was to try to get a definition of what the Factories Act meant, and we did not get it from him.
LORD DENHAM: The wording is:
"a supply of clean, running hot and cold or warm water".
That is the wording used in this Bill, and the same wording is used in the Factories Act. My noble friend Lord Milverton is worried that that could be read another way. In other words, if an employer provides, very properly, for his employees a supply of warm water for them to wash their hands, an inspector is liable to come along and say, "Warm water is all very well, but where is the hot that the Act stipulates that you must also have?" That is the interpretation that the noble Lord is slightly afraid of, and I am trying to cast doubt on its ever coming about.
LORD LINDGREN: As I understood the noble Lord, Lord Milverton, his view was, in fact, that inspectors who were operating the existing Factories Act had some difficulty with its wording. If in fact it is correct, and I understood the noble Lord, Lord Milverton, to say that there had been some difficulty in administering the Act—the noble Lord shakes his head, and if I am wrong I will sit down straight away.
LORD MILVERTON: I think the position is that the Association of Municipal Corporations say there is an absurdity which they would like to see removed. I presume they are speaking from experience of their offices.
LORD SOMERS: Surely it is not beyond the wit of man to mix hot and cold water in order to produce warm, and I should have thought that the presence of cold water was essential in hot weather in an office where people are constantly wanting a drink.
LORD DENHAM: The words are used in the Factories Act because in some factories it is found convenient to have

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a pipe supplying ready-mixed warm water for the use of employees, and the same definition has been put into the Shops and Offices Act because we have had this possibility coming up before in the case of offices that are part of factory premises and the same supply of piped warm water might be convenient to be used.
LORD HAWKE: We all of us in our homes know the condition when water which was intended to be hot is only warm. Is this warm water by intent or warm water by accident?
LORD DENHAM: Warm by intent.
LORD MILVERTON: While remarking, finally, that it is sad that the Government's regrettable devotion to verbal obscurity should now have afflicted their legal draftsman, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD CARRINGTON: This is a comparable Amendment to one which your Lordships accepted, No. 33, but this one applies to washing facilities. I beg to move.
Amendment moved—
Page 8, line 13, leave out ("or are intended to be").—(Lord Carrington.)
On Question, Amendment agreed to.
Clause 10, as amended, agreed to.
Clause 11 [Supply of drinking water]:
6.35 p.m.
LORD LINDGREN LORD LINDGREN moved, in subsection (1) after "the premises" to insert:
"not forming part of an area housing W.C. or urinal stalls, unless the drinking point and vessels to be used for drinking purposes are or can be sited more than twenty feet away from any W.C. Or urinal."
The noble Lord said: We are dealing in this clause with the supply of drinking water. It may be surprising to your Lordships that even in some new buildings, let alone some old buildings, the only supply of drinking water available to staffs of offices is in lavatories, sometimes in very close proximity to a urinal and W.C. I suggest that that is not a suitable place for the supply of drinking water. I appreciate that subsection (1), in the second line, refers to:
" … maintained, at suitable places conveniently accessible to the persons … ",
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but, "suitable" is a very doubtful word so far as its meaning is concerned. I do not know whether it would be considered suitable for public health, at least, if drinking water were available in close proximity to a urinal. I think under this Bill we ought to have it quite clear. Under this clause the Minister has not the power of regulation. Therefore, I suggest the words in my Amendment ought to be written into the Bill in order that the available supply should not be housed in a lavatory, in close proximity to the conveniences. I beg to move.
Amendment moved—
Page 8, line 13, after ("premises") insert the said words.—(Lord Lindgren.)
LORD AMULREE: I should, very briefly, like to support the noble Lord in the Amendment he has proposed. I do not think it is a very suitable arrangement when the sole supply of drinking water comes from a tap which is so near a W.C. or urinal. I therefore trust the Government will look kindly upon the Amendment. If they will not accept the exact words, I hope they may accept something similar.
LORD HAWKE: As one who is very partial to water and drinks quite a lot, perhaps more than some of your Lordships, I venture to say a few words on this particular Amendment. I have been casting my mind about to think of the various places at which I draw supplies of water and, excepting my dining room, I regret to realise that every one of those carafes, faucets or other sources is within 20 feet of either a W.C. or a urinal. I have just been out and paced the distance at one of my normal sources in your Lordships' House, and I find it is exactly four yards, four paces. I frequently have a draught of water before my lunch at one of the better known West End clubs, and there the distance, I venture to think, speaking from memory, is more like six feet. At a large modern building round the corner, Church House, the distance is, from memory, approximately nine feet.
Although I quite appreciate the point of the noble Lord in trying to make some sort of regulation, because he obviously wants to avoid too much close entanglement between the drinking tap and the sanitary conveniences, I think it is rather impracticable because the question of

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plumbing and the run of the pipes, and so on, arises. Providing there is a glass with which people can drink from the ordinary cold tap, I think in a small office, at any rate, that is quite reasonable. Big offices very often have a suitable arrangement, perhaps with cardboard cups and a special cool supply, as in American offices. But this proposal of a distance of 20 feet I believe is utterly and completely impracticable, and I do not really know that any distance could be laid down which would satisfy the hygienic desires of the noble Lord which at the same time is reasonably practicable, because circumstances vary so enormously. Is the 20 feet to be measured round corners or in a straight line? Personally, I should have thought that one foot away, provided the distance was through a wall, was a better proposition from the noble Lord's point of view than 20 feet in a straight line across an open space.
LORD BURDEN: As the noble Lord, Lord Hawke, said, we might look at the water which is supplied in your Lordships' rooms in relation to this particular clause. We might effect an improvement in that direction. That was not the point I wished to raise. This clause requires the provision in all premises to which the Bill applies of an adequate supply of wholesale drinking water.
SEVERAL NOBLE LORDS: Wholesome !
LORD BURDEN: I mean, wholesome. We should not like to drink it wholesale, I agree. If the supply is not piped it must be contained in suitable vessels and renewed daily. Where the water is not delivered in the form of a jet from which persons cart conveniently drink there must be provided either drinking vessels, such as cardboard cartons, which can be discarded after use, or other types of drinking vessels such as glasses or cups together with facilities for rinsing them. I would submit that the vessels provided should be such as can be discarded after use, and then there is no risk of the spread of infection from person to person, as exists in the use of a communal vessel.
Perhaps, too, one might query the use of cold water as a satisfactory method of cleaning vessels which have been used. But where water is not piped and a supply is provided in a container, adequate cleansing of the vessel will be
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particularly difficult due to the need to conserve the supply. Therefore, I would suggest that, unless there are facilities for rinsing the drinking vessels in hot water, disposable containers only should be permitted. I agree that that is probably a new point, and one of which I had not advised the noble Lord in charge of the Bill. But perhaps he will have the point looked at to see whether anything can be done to meet it.
6.40 p.m.
LORD NEWTON: I have considerable sympathy with the object of the noble Lord, Lord Lindgren, in putting down this Amendment, because obviously it is pleasanter for all concerned, even in your Lordships' House, if the supply of drinking water is situated outside the lavatory. But I am afraid I must agree with my noble friend Lord Hawke that it would be impracticable to ensure this in this way. I invite your Lordships to consider the tens of thousands of small premises, many of them in shared buildings, where the re-siting of a tap might lead to all sorts of complications about accessibility in relation to some other tenant's premises. That is one of the points that my noble friend made, I think. Certainly it might put owners or occupiers to quite considerable expense in the larger buildings, and I am doubtful whether we should be justified in doing that unless a real threat to health were involved. That, I think, would be the main consideration.
I should have thought that in modern buildings, where the lavatories are well ventilated, there is no necessarily serious objection to putting the tap supplying the water in the lavatory. I must draw attention, as indeed Lord Burden did, to the fact that Clause 11(1) says that there must be "an adequate supply of wholesome drinking water." By a slip of the tongue the noble Lord, Lord Burden, spoke of "wholesale" water, but he further said that he thought we should not like to drink wholesale water. My immediate reaction was that we should all rather like to drink wholesale whisky, whether it had water with it or not.
One might also draw attention to Clause 11(2) which says:
"Where a supply of water provided…is not piped, it must be contained in suitable

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vessels and must be renewed at least daily; and all practicable steps must he taken to preserve it and the vessels in which it is contained from contamination".
Those are, I should have thought, fairly rigorous requirements. Perhaps your Lordships would also be good enough to look at Clause 9(2). There you will see that "conveniences"—which, for the benefit of the noble Lord, Lord Airedale, means "sanitary conveniences"—
"provided in pursuance of the foregoing subsection shall be kept clean and properly maintained and effective provision shall be made for lighting and ventilating them."
So I hope that the noble Lord, Lord Lindgren, will feel that his intention is already pretty well covered in the Bill and that he will withdraw his Amendment.
LORD SHEPHERD: I understand the difficulty in this matter, but I think there is undoubted wisdom in the Amendment. In fact, this is one of the only clauses where the Minister has no powers of regulation. I have seen some of these taps which are alleged to provide drinking water, sometimes close to urinals, sometimes in places where, from the height point of view, they could perhaps be better sited. I wonder whether the Government, if they cannot accept the Amendment this evening, would consider, between now and the next stage, inserting power for the Minister to make regulations should be feel this to be necessary, perhaps in regard to siting or, in some cases, the necessity for placing drinking water taps a reasonable distance from urinals.
LORD BURDEN: Following that plea from my noble friend Lord Shepherd, if the Minister is prepared to consider that point I hope he will also consider what I ventured to suggest—namely, the use of disposable vessels. That point could be covered in regulations if they are adopted for this particular clause.
LORD CARRINGTON: The last thing that any of us on this side wants is to be less than encouraging when the noble Lord has a perfectly valid point. But there is a difficulty here. I think we all know this difficulty; if only we think about this House and the situation of the carafes of water and so on. I think that what is really important here, and
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what the noble Lord, Lord Lindgren, is worried about, is that the water should be drinkable and the surroundings clean and decent. Where you drink may not be a matter of importance; you can carry water away. But what is important is that the water should be clean, and that the place where the water is should be clean. And I think that is already covered under the Bill.
As my noble friend behind me has said, Clause 9(2) stipulates that the lavatories must be kept clean. That is an obligation on the owner of the building and on the employer. Then under Clause 11 the water must be "wholesome"; it must be renewed at least daily, and so on. I entirely agree with what noble Lords opposite have said: I think they are perfectly right. But I repeat that what is really important is that the water should be clean and wholesome, and that the place should be clean and wholesome. And, as I say, I think this is adequately covered under the Bill.
LORD SHEPHERD: I would ask the noble Lord to consider this matter again between now and the next stage. He is quite clear that the toilet and sanitary facilities have to be kept clean, but the noble Lord knows well that in some offices you may have 2, 200, 250—and maybe more—persons of one sex or the other using the lavatory facilities during the day. The place may be absolutely spick and span, spotless, in the morning when the staff come on duty. But perhaps by midday when these facilities have been used by all the staff, they are far from being in the clean state that we should expect under this Bill—certainly if it is said that drinking water can be taken from that area. But it would be unreasonable to say to the employer "Because you have 250 people in your office, you have got to employ somebody in your lavatory to see that the place is maintained in accordance with the standard set in the early morning". I shall not press the noble Lord, and I am sure that my noble friend will not do so. But would he please look at this matter between now and the next stage?
LORD CARRINGTON: I appreciate what the noble Lord is saying, and I think (although I do not know) that in the case of big offices it would probably be possible, if it were thought desirable,

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to do these things. But I am thinking of the smaller premises, where the difficulty applies more than anywhere else. Twenty feet is quite a long way, and any other words which I can think of in the Bill would be quite difficult of application—certainly in this House. But, of course, I will consider the point.
LORD SHEPHERD: The point I had in mind was whether the Minister should have power to make regulations in regard to this matter.
6.49 p.m.
LORD LINDGREN: I must say that the reply has been most unsatisfactory. Here we are dealing with a Bill which is supposed to be a charter for the health of office and shop workers. It is a charter to improve he bad conditions which exist and have been existing for 20 or 30 years. I will agree that so long as the water is within the tap it is wholesome; there is no possibility of contamination in that respect. But if noble Lords opposite, including the noble Lord, Lord Hawke, think that the best place from which to supply wholesome water is a tap in close proximity to a urinal, often only two feet six inches from the ground, I do not think that is true.
Now I will declare an interest—perhaps I ought to have declared my interest at the start. This point has been put to me—it is not something of my own thinking—by those who have to operate this Bill. I was going to say for my sins, but perhaps it is for my virtues, I am the honorary president of the Institute of Shoos Acts Administration. Those who are going to operate this Bill, when it is an Act, have pointed out this fallacy in the Bill and have asked me to put this Amendment down, in order to make the operation of the Act by them easier. All that noble Lords opposite can say is that the conditions are so good at the moment that we need not do anything about them. Well, this is just not true.
LORD HAWKE: I think it is not fair to say that. We say the Amendment is crazy because it leaves out of account the fact that water might be one foot away, through a thick wall.
LORD LINDGREN: It is not as crazy as the noble Lord in his exploits in search of water. I have been in search
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of some things, but have never gone to that length to get water. These are the people who have to operate the Act—they are not like the noble Lord, dealing with his own home, but are dealing with the lives and welfare of men and women employed in shops and offices, the conditions in some of which are very bad indeed. So far as I can see, noble Lords opposite are not even prepared to remedy the bad conditions.
I am not going to be tied to the distance of 20 feet. If I had my way, the supply of water would be entirely outside and not be anywhere near these places. This can be done. All the noble Lords opposite are concerned about, when it comes to the health and welfare of the worker, is the question of cost. They never raise the point as to the efficiency of the individual and what he has to put up with. To them it is always the cost and the difficulty of providing it. It is about time we got away from the question of cost and saw to it that if water is necessary for persons to drink, it is pure and wholesome and is provided for them in a place where it cannot get contaminated. As the noble Lord is not prepared to accept the Amendment or make any step towards it, I will not press it to a Division, but I certainly will not withdraw it.
On Question, Amendment negatived.
LORD MILVERTON LORD MILVERTON moved to add to subsection (1):
"and the places at which water is accessible to persons so employed shall be clearly marked so as to indicate whether or not the water at any such place is wholesome drinking water".
The noble Lord said: The purpose of this Amendment is to indicate in respect of any taps or other means of water supply whether the supply is, or is not, of wholesome drinking water. The Amendment is analogous to Section 57 (2) of the Factories Act, 1961, though the Amendment departs from that subsection in that it does not specify that drinking water shall necessarily be labelled as such, and allows the alternative of the marking of a supply as not suitable for drinking. Which course should be adopted can be determined by what is most practicable in any particular case. I understand that the Ministry of Labour do not regard this

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Amendment as necessary, and distinguish the position from that under the Factories Act on the grounds that there are often pipes in factories containing dangerous liquids, and grave injury might result if a mistake were made. Nevertheless, it seems to me that it is most desirable to indicate whether water is fit for drinking—a supply from a storage tank is not normally so. I beg to move.
Amendment moved—
Page 8, line 31, at end insert the said words.—(Lord Milverton.)
LORD CARRINGTON: It seems that I was unable to convince noble Lords opposite last time of the Government's rightness. On this occasion I am afraid my noble friend has been unable to convince me of his case. Even in a building of moderate size there are a great number of taps from which wholesome drinking water can be drawn, and I believe that it would be a large job indeed to have all these marked. Before we ask employers to undertake this sort of task, particularly if it is unnecessary, as I believe it is in this case, we should be sure that there was a risk that people might drink something dangerous, poisonous or noxious in mistake for water.
It is perfectly true, as my noble friend has said, that by Section 57(2) of the Factories Act the supply of drinking water must he marked "Drinking Water"—not everywhere, but only where the, district inspector so directs; there is no general provision. The noble Lord has anticipated one of my arguments. The conditions in factories are in this case—hope noble Lords opposite will agree with this—quite different from those in offices. There obviously can be large numbers of pipes in factories carrying all sorts of liquids, some dangerous, and some may be difficult to distinguish from pipes carrying water. I do not think that could happen in premises with which this Bill deals. I hope my noble frind will think it unnecessary to add yet another burden on employers.
LORD MILVERTON: I am much impressed by the appeal not to add another burden on an already overburdened Government, and I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 11 shall stand part of the Bill?
LORD AIREDALE: I am sorry to disappoint the First Lord by intervening again, but I want to draw his attention to the last two lines on page 8, subsection (3)(b), which describe the washing up facilities required for washing drinking tumblers. We now know, thanks to the noble Lord, Lord Burden, that the water for drinking has to be wholesome drinking water, as provided by subsection (1); but be it noted that the washing-up water described in subsection (3)(b) is not described as "wholesome" drinking water. It is, however, described as "drinking water", and I suppose that means cold water. I know that they wash up tumblers in unwholesome cold water on Epsom Downs on Derby Day, but I should not have thought this was desirable for offices as a regular practice. I should have thought that the average proprietor of office accommodation might think that hot water and a sink were the proper arrangements. What worries me is that, supposing a sink and hot water were to be provided for washing up, under this subsection the proprietor would still also have to provide facilities for rinsing the glasses in drinking water. I cannot see the sense of that. Perhaps that point could be looked at.
Then, when one comes to subsection (4), one finds it is fifteen lines long and I do not find it very easy to understand. The noble Lord, Lord Milverton, talked about the verbal obscurity of an earlier clause. I wonder what the noble Lord thinks about subsection (4). I believe the message of subsection (4) is that if one provides drinking water for the customers it will do for the staff as well. But perhaps I am wrong about that interpretation, because I should have thought that that was covered by subsection (1) in any event. I am wondering whether there is a class of people who need the protection of subsection (4). If not, could we not leave out subsection (4) and get rid of fifteen lines of rather difficult English?
LORD CARRINGTON: I hope the noble Lord opposite does not think that I was complaining about his intervention on the previous occasion. I was very much welcoming an intervention of such a constructive nature from noble Lords who sit on those Benches. I must

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confess that I did not quite understand what his first point was. I did not quite understand whether he was complaining that the regulations were too severe, or complaining that they were not severe enough. We have so much from each side of the House on these matters that I am sometimes a little bewildered. Most of my noble friends behind me complain that the regulations are too severe; the Labour Party complain that they are not severe enough; and where the Liberal Party stand in the matter, I am not sure. If it is a point of considerable importance I will most certainly look at it, but I did not quite get what the noble Lord was saying. As to his second point, I am quite sure that subsection (4) is necessary. I cannot imagine anyone drafting something like that if it were not necessary.
LORD AIREDALE: In a word, my first point was that I was really seeking to underline what I think the noble Lord, Lord Burden, had said earlier: that facilities for rinsing drinking tumblers in drinking water—which I take to be cold water, because I cannot drink hot water—was not very hygienic, and that it was much better if proprietors provided sinks arid hot water. If they did, I only hoped that they would not also have to provide facilities for rinsing in drinking water.
Clause 11 agreed to.
Clause 12 agreed to.
Clause 13—[Sitting facilities]:
LORD LINDGREN LORD LINDGREN moved to add after subsection (2):
"( ) Such seats to be provided behind the counter, or in such other position within the selling area as may be exclusively available and suitable for their use."
The noble Lord said: Section 37(1) of the Shops Act 1950 has a similar provision to that set out in Clause 13(2) of the Bill, and it contains the words:
" … the employer shall provide seats behind the counter, or in such other position as may be suitable for the purpose".
It has been found from experience by those who are operating the existing Shops Act that the words "or in such other position" provide a weakness in the present Act which they have to administer. This Amendment is an attempt by the Institute of Shops Act Administration to try to improve the facilities which will be available to those operating in shops.
May I make it quite clear that, even if the clause is accepted as it is now in the Bill, the opportunities for the protection of staff and the facilities for staff will be worse than under the existing Shops Act regulations? But even the existing Shops Act regulations have not been found easy to operate or entirely satisfactory, where there is a determination or an inclination on the part of the employer to avoid the operation of the Shops Act. Therefore, this form of words is put forward in order that the seats shall be available and in a position in which the staff can use them, adjacent to the work which they have to do. I beg to move.
Amendment moved—
Page 10, line 14, at end insert the said subsection.—(Lord Lindgren.)
LORD HAWKE: This Amendment appears to be a very sound one and one which, if practicable, would fulfil a long-felt want, because every one of us, in going into shops, must have seen the staff, when they were not employed, standing, when they could reasonably have been sitting. One knows, particularly, that the older people find the standing very hard, both on their feet and on their legs. I do not know whether my noble friend thinks the Amendment is practicable as drafted, but I suggest that something of the kind is necessary. I hope the noble Lords opposite will notice that, when they do produce an Amendment which is practicable and appears to have a useful purpose, we support it.
LORD SHEPHERD: We are very grateful to the noble Lord, Lord Hawke. I withdrew my Amendment to delete subsection (2) of this clause in order to support the Amendment moved by my noble friend, but I am not quite sure even now whether this Amendment goes far enough. The noble Lord, Lord Denham, will remember that the other evening I showed him the outline of a type of modern store in which there are a number of counters often manned by one person—sometimes a young girl. If Clause 13(2) continues in the Bill as it now stands, and it requires a minimum—and, as I said to the noble Lord, these minima often become the maxima standards—of only 1 to 3, this might well mean that if a seat was not provided

739
at the counter in some of the big stores, a girl, to sit down during the course of her work, might well have to leave her counter unattended, subject perhaps to shoplifters—because, as the noble Lord knows, shops encourage people to go in, even if they do not buy. Unless you see in that type of establishment, where there is a girl isolated behind a counter, that she has her individual seat, she will never get the opportunity to sit down. The crux of the matter is that subsection (3) of this clause clearly indicates that the person would normally be allowed to sit down so long as it did not interfere with her work.
A comment was made on a previous Amendment about people dodging work. Obviously, if a girl left her counter in order to sit down that would interfere with her work. In the large type of store the ratio of 1 to 3 will obviously not be sufficient, but according to the clause that is all that needs to be provided. Therefore, we may have a situation in which a girl may not be able to sit down for considerable periods, in spite of the fact that there are no customers at her counter. I would again point out that this is another of the clauses under which the Minister has no powers of regulation, so we have no flexibility in it. Self-service stores and the larger stores are increasing, and it would seem to me that there is going to be a very special problem, and very special hardship, if we stick to this ratio of 1 to 3, unless there is some flexibility for the Minister to make an order. Perhaps it would meet the point if my noble friend's Amendment said that seats shall be provided behind each counter. But I do not believe that Clause 13(2) is good enough to meet the modern trend in stores.
LORD CARRINGTON: I think the noble Lord, Lord Shepherd, and my noble friend behind me, have made out an interesting case for this Amendment. But there are certainly difficulties in the Amendment as it stands on the Marshalled List. I do not think it would work. For instance, there are supermarkets where people do not sit down, and I think it would be very difficult in the large stores to provide seats behind every counter.
LORD SHEPHERD: No
LORD CARRINGTON: I think it would, if one considers the lay-out. Nevertheless, I think the noble Lord has a point.
LORD LINDGREN: May I interrupt the noble Lord?
LORD CARRINGTON: May I just finish, because I hope that in the end I may be able to satisfy the noble Lord? I am not sure if I shall be able to, but I shall try. If your Lordships will look halfway down Clause 13(2) you will see that it says:
" … in the course of their work, reasonable opportunities for sitting without detriment to it the provision for their use of a number of seats … ".
I have a feeling that those words "for their use" provide a very considerable safeguard, because whatever the ratio, if they were not for their use, or if it were not possible to sit on them, it would not be considered under this Bill that the facilities were reasonable. The noble Lord shakes his head. I should like to go away and think about this. I do not think this Amendment will do, but I should like to go away and think out whether there is a way of meeting at least some of the noble Lord's points; and if he will withdraw this Amendment I will see what I can do at the next stage of the Bill.
LORD HAWKE: I suspected there might be practical difficulties about the Amendment set down by noble Lords opposite, but I believe there is a little more in this than my noble friend thinks. If he goes around particularly the department stores, I think he will find on the whole that the assistants there rarely appear to be sitting down, even when they are not serving customers. I believe that to be owing to the fact that either they have not got seats or their seats are in the wrong places. This clause says there should be a ratio of one to three, which I should have thought, on the face of it, was too low a ratio. It would be much more satisfactory if each assistant were entitled to a stool of her own.
LORD CARRINGTON: There may be something in that, but the ratio of one to three was in the Shops Act. This has been lifted straight from the Shops Act.
LORD LINDGREN: We are glad that the noble Lord is coming a little more towards us; we very much appreciate it.

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In view of his offer to consider this point, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
7.12 p.m.
LORD CHAMPION LORD CHAMPION moved, in subsection (3), after "work" to insert:
"and he shall in the prescribed manner give notice informing the employed persons that they are intended to do so "
The noble Lord said: The noble Lord, Lord Carrington, has just said that something was "lifted clean out of the Shops Act"—not a bad phrase. My difficulty, and what I am, trying to do by this Amendment, is to point out that, in respect of the matter which is dealt with by this Amendment, the Government have not lifted something out of the Shops Act cleanly enough. This Clause 13 extends the provisions of Section 37 of the Shops Act. That section made provision for seats for female shop workers, and this Bill extends it to all persons employed in offices, shops or railway premises. Section 37 of the 1950 Shops Act is to be repealed by this Bill, and subsection (2) of that section provides:
"It shall be the duty of the occupier of the shop to permit the female shop assistants to make use of such seats whenever the use thereof does not interfere with their work, and the occupiers shall in the prescribed manner and in the prescribed form give notice informing the shop assistants that they are intended to do so."
In the adaptation of that section of the Shops Act for the purpose of this Bill, the duty placed on the owner of giving notice that the seats are intended to be used has been left out. We feel that the words contained in the Shops Act, 1950, really had some meaning, and that, with the other words that have been lifted out of the Shops Act, 1950, they ought to have been included in this Bill. We wonder why they were left out. They, surely, could have occasioned no difficulty for occupiers of shops, and they strengthen the employees' position by making it clear to them what the Shops Act intended. I do not believe it was the intention of the Government not to make clear to the employees that they are intended to use these seats.
What we are suggesting is that the Government, by not including these words, have weakened the position of the female shop workers. It leaves their
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position such that they will be expected to have a knowledge of this Bill if they are going to try to establish their rights, and that is what rather worries us. We cannot expect the shop assistants about whom we are talking now to have a knowledge of this Bill, and we think that they ought to have the same as they had under the Shops Act—a notice which will tell them they are supposed to use these seats. In the circumstances, we think this is a wholly reasonable Amendment, not moved for any purpose of obstruction or anything of that sort, and we feel that the Government ought to accept it. I beg to move.
Amendment moved—
Page 10, line 18, after ("work") insert ("and he shall in the prescribed manner give notice informing the employed persons that they are intended to do so").—(Lord Champion.)
LORD HAWKE: Here, again, this is part of the same story. One hears rumours sometimes that the reason why seats are not used is because the lower management frowns on their use. If there is a notice up, the person who wishes to sit down has an absolute, clear case for sitting down if he or she is not working. I feel that, whether the Amendment is in the right form or not, the principle is sound; and I believe that if my noble friend could see the dropped arches, the varicose veins, and so on, which occur in shop assistants through this constant standing, he would be very sympathetic.
LORD DENHAM: I hope I can satisfy both the noble Lord, Lord Champion, and my noble friend Lord Hawke. The omission of these words was not an over-sight but was done deliberately because of a general provision in Clause 50 of the Bill, which has no counterpart in the Shops Act. Clause 50 is intended to ensure that employees are informed not only of the effect of Clause 13 but of all the provisions of the Bill and of any regulations affecting their place of work. This is to be achieved in one of two ways: by the posting in the premises of abstracts of the relevant parts of the Bill and of any regulations; or, alternatively, by the issue of explanatory books or leaflets which will be prepared under the Minister's auspices. Employers will be obliged to adopt one of these methods to inform their employees of the provisions of the Bill. It was because

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of this general requirement that the words the noble Lord would have us insert were originally omitted; and having heard my explanation, I hope he will feel that his Amendment is unnecessary.
LORD SHEPHERD: I am sure my noble friend will be very pleased to hear that. I think the noble Lord said that it was the intention, perhaps, to put up abstracts of this Bill as notices. All I can say is, "God forbid ! ", because how any individual who has not had some experience of reading the work of Parliamentary draftsmen can comprehend some of the important parts of this Bill is beyond my understanding. Therefore I hope there will be no question of putting up abstracts. Please put it in plain, good English, so that the English or the Scots can understand it.
LORD DENHAM: Yes, I can give the noble Lord that assurance.
LORD CHAMPION: We have been talking about the Gowers Report. If it is put in good, Sir Ernest Gowers language, I am sure it will be understandable. I clearly have not done quite so much homework on this Bill as I thought I had. The point has been covered, and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 13 agreed to.
Clause 14 agreed to.
Clause 15 [Eating facilities]:
7.18 p.m.
LORD BURDEN LORD BURDEN moved to leave out "shop premises" and insert "premises to which this section applies". The noble Lord said: Perhaps it would be convenient if I dealt with Amendments Nos. 41 and 42 together. Your Lordships will notice that Clause 15 provides that where persons are employed to work in shop premises and eat meals, suitable and sufficient facilities for eating meals are to be provided. There is no number laid down—no limitation, no minimum, no maximum. My Amendment seeks to extend this provision to offices where twenty or more are employed. Your Lordships may ask why the figure twenty was selected. I chose that figure because it appears in Clause 29, which
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deals with fire regulations. I am, of course, aware, as are all noble Lords, that many firms provide excellent canteen facilities for their office staff, and that other firms also supplement salaries by means of luncheon vouchers. No one would wish to interfere with those admirable arrangements, but it seems reasonable to me that if office staff are compelled to eat meals on the premises, for one reason or the other, facilities similar to those described or prescribed for office workers should be available. It is only asking for firms who do not provide any facilities to conform with those standards which are being laid down for shop workers. I beg to move.
Amendment moved—
Page 10, line 35, leave out ("shop premises") and insert ("premises to which this section applies").—(Lord Burden.)
LORD CARRINGTON: In spite of what the noble Lord, Lord Burden, has just said, we all want to improve conditions and facilities for office workers as well as shop workers: there is no dispute about that. But I beg leave to doubt whether what the noble Lord has in mind would do this—whether the extension of these facilities to office workers would achieve what he is setting out to do. I am frightened that it might work in precisely the opposite direction, and for this reason—because it would lead to the withdrawal of concessions which already exist; and that is the last thing we should want to do. It might work like this. I would ask the noble Lord to consider this point. It is the custom, I understand, for people in offices—and I have seen them—to eat sandwiches at their desks. Some employers would look at the clause as amended by the noble Lord opposite and might reason in this way: "I have hither-to let my employees eat sandwiches at their desks. Now I shall have to provide suitable and sufficient facilities for them to do so. I have not the space. I do not want the expense of doing it. I have not the money and I had better stop the practice of allowing them to eat in the office building itself." In this way the Amendment would work considerably to the disadvantage of office employees.
In my view it does not make any difference how many office employees are in in the premises; permission to eat lunch at desks might still be withdrawn. The clause does not, however, make any new

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provision for shops, because it only repeats Section 38(5) of the Shops Act, 1950. In any case, shop assistants do not usually eat their sandwiches in full view of the public; it is customary to permit them to use some other part of the shop out of the public view. For those reasons—not because I am opposed to the noble Lord's Amendment on principle, but because I think it might have precisely the opposite effect—I would ask him to withdraw it.
LORD BURDEN: I appreciate the point made by the noble Lord, Lord Carrington. In some instances that may apply. Whether it is a good thing or not for office staff to eat sandwiches at the desks at which they are working I will not debate with him; but it is probably a questionable practice. In any case I do not feel I can withdraw my Amendment; but I will not press it.
On Question, Amendment negatived.
LORD LINDGREN LORD LINDGREN moved, to leave out Clause 15 and insert the following new clause:
Eating facilities
." Where persons employed to work in or about the business carried on in shop premises eat meals there suitable and sufficient facilities for eating them shall be provided and maintained."
The noble Lord said: The noble Lord, Lord Carrington, said in reply to the noble Lord, Lord Burden, that the Government want to improve things so far as conditions for office workers and shop workers are concerned. He then went on to say that this clause is a repeat of Clause 38(5) of the Shops Act, 1950. For the benefit of the noble Lord, I will read that subsection because I am going to contend that the present clause is nowhere near as effective on behalf of the shop workers as the existing provisions of that subsection. If I am wrong, this only strengthens the point of view which is put forward by my noble friend Lord Shepherd in regard to the difficulties people have with Acts of Parliament. If those of us who for 20-odd years have been rummaging around Acts of Parliament cannot notice a difference in the wording, then what about the shop assistant of 15 or 16 years of age having her rights after reading the Act?
The subsection says:
"Where persons employed about the business of a shop take any meals in the shop,
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there shall be provided and maintained suitable and sufficient facilities for the taking of those meals."
Now we turn to the clause which the noble Lord, Lord Carrington, says is a repetition of that clause. That reads:
"Where persons employed to work in shop premises eat meals there, suitable and sufficient facilities for eating them shall be provided."
I would contend that in two respects, right away, the new clause is deficient as compared with the one in the Shops Act, 1950. First, while requiring facilities to be provided, it does not require them to be maintained. That is required in Section 38(5) of the Shops Act, 1950; and I have sufficient experience with some employers to know that if they are not required to maintain them, provision is there and it can become derelict.
Second, the new clause is not dealing with those working in and about shops. As I read Section 38(5) of the Shops Act, 1950, it is true that shop assistants are covered; but what about the boy working about the shop who delivers the goods? He is as much entitled to his mead. He was covered under the Shops Act; and I think this case ought to be provided for. Also, do not forget—and I ought to have mentioned this—that Section 38(5) of the Shops Act, 1950, is being repealed by this Act; so this right now goes, if we put in this new clause. Under the Shops Act, too, there is a requirement for the provision of at least three-quarters of an hour for persons to eat meals on the premises. If they do not get three-quarters of an hour then they must be given one hour for eating a meal outside. The provision I suggest makes the position satisfactory from the point of view of the shop workers, because it brings about at least a status quo so far as their existing privileges are concerned. I submit that the present suggestion under Clause 15 undermines the conditions as they now exist. I beg to move.
Amendment moved—
Leave out Clause 15, and insert the said new clause.—(Lord Lindgren.)
LORD CARRINGTON: I am confident that I can satisfy the noble Lord on this point. I apologise if my answer is complicated: I agree that Acts of Parliament are difficult to interpret or to find one's way about in. But I really think that this one is all right. The new clause

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which he has put forward follows fairly closely the corresponding section in the Shops Act, 1950, Section 38(5). In that Act the words "employed about the business of a shop"
are defined in subsections (9) and (10) of Section 38. This Bill is framed differently and the word "employed" is defined in the interpretation clause, Clause 88, as
"employed under a contract of service or apprenticeship".
If, therefore, a person is employed under a contract of service, he is covered by the Bill whether he actually works hi the shop or about the business of the shop. The different wording will not therefore result in the effect which the noble Lord feared. There will be no restriction of the facilities available. A van-driver, for example, who visited a shop intermittently to collect goods for delivery, would (to use the phraseology in Clause 15) be
"employed to work in shop premises"
even though most of his time would be spent away from the shop. Any employee who carries out any work at all in the shop premises is covered by the wording of the clause. So, legally, that is perfectly all right.
It is true, as the noble Lord opposite said, that the word "maintained" is left out after the word "provided". I do not believe that these words provide any additional protection, although it is true that they appear in the Shops Act. An occupier has to provide sufficient and suitable facilities for eating meals. If his facilities take the shape of a table and chairs, which fall into disrepair, then suitable facilities are no longer being provided. The obligation to provide suitable facilities is a continuing one, and the addition of the words proposed is therefore considered by the draftsmen to be unnecessary. I hope that on this point—a very proper point, if I may say so—about which the noble Lord was worried, I have satisfied him. The points he made are covered by the Bill, and I hope that he will withdraw his Amendment.
LORD LINDGREN: We are placed in a real difficulty, because earlier this evening the noble Lord, Lord Denham, in defending an Amendment against the noble Lord, Lord Milverton, quoted the words of the Factories Act and said that if we were going to change the wording in
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this Bill it would tend to throw doubt on the wording of the Factories Act; and we dealt with the matter on that basis. People have been operating the Shops Act for many years and now the whole range of language is being changed. Employers and employees, and all those operating the existing Act have got used to the words and meanings in it; now this Bill comes along with totally new words, and it looks to them as if there has been a change of meaning. That is certainly how it will look to the shop assistant and the shopkeeper.
For instance, Section 5 of the Shops Act says:
"There shall be provided and maintained suitable and sufficient facilities … "
This Bill drops the word "maintained" but retains "suitable and sufficient". It is all most confusing. I do not know whether an explanatory memorandum will be sent to the chambers of trade, but those of us who have had some experience of the working of Acts of Parliament know how difficult it is for the ordinary shopkeeper in Burslem-on-Slosh to operate these Acts, and I think that some-thing ought to be done to give some guidance about the changes, the reasons for them and where there are improvements: because otherwise it may be difficult for people to find them.
LORD CARRINGTON: The noble Lord is very difficult to satisfy. I have assured him that this is covered under the Bill, and I hope that he will accept my explanation of how it is covered. He drew a dramatic picture of the poor shopkeeper roaming through this Bill to find the differences between it and the Shops Act. With great respect, I think that this is very unlikely. If it were so, I think that he should also take the trouble to read the OFFICIAL REPORT of your Lordships' House and find out what the explanation is.
LORD LINDGREN: I do not want to be difficult and I gladly withdraw the Amendment. But earlier we were told that extracts from this Bill, when it becomes an Act, were to be posted at shops and offices in order that employees can know their position. The employees will see the difficulty. But in view of the late hour and other calls of nature at this time of night, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
[The Sitting was suspended at twenty-five minutes before eight o'clock and resumed at twenty-five minutes before nine o'clock.]
Clause 16 [Floors, passages and stairs]:
LORD SHEPHERD LORD SHEPHERD moved, in sub-section (1), after "construction" to insert "with a permanent non-slip surface." The noble Lord said: It may be for the convenience of the Committee if in moving Amendment No. 43, I speak also to No. 44 because it is very much the same point. The clause requires that floors shall be constructed of sound construction. Those are the words that appear in the Factories Act, and no doubt for a factory they are correct. But I wonder whether they go far enough in regard to offices. I feel that we should try to put into this Bill a provision that office floors should be so constructed that they have a permanent non-slip surface.
I appreciate that some of the older offices may have difficulty in conforming to this standard, and therefore I do not propose to press this Amendment, but to bring it up again, perhaps on the Report Stage, so that it shall refer to new offices; in other wards, that new offices shall have floors with a permanent non-slip surface. This seems to me essential, because there are a number of minor accidents, which can put people out of work for a period, due to a slippery surface. My intention, if the Government could give me some indication whether they are sympathetic to the idea, is to put down an Amendment to ensure that the floors in new offices will be so constructed as to have a non-slip surface.
With regard to Amendment No. 44, this is a matter that. I raised on Second Reading. I find that many new buildings are being constructed—and quite rightly so—with a considerable amount of window space. My attention has been drawn to the fact that a number of these buildings are provided with windows of a considerable size, some of 4' 6" to 5' square, which can be opened fully. In other words, in some of these buildings it would be possible for a whole side of the building to be completely open. I have found also in some of these buildings (and I am speaking of those
750
in which my own office is located) that the windowsill is a mere 2' 6" from the floor. When these windows are wide open at a considerable height there is some danger (I do not put it higher than that) that persons may slip, or they may be fooling around and fall out of the window. In some places these windows are so wide that people might even believe there is no window there at all.
I would suggest to the Government that a provision should be written into this Bill that, where windows are of the description I have given, they should be so constructed or guarded, particularly in buildings of many floors, that a person at least has a hand grip to prevent him from falling out of the building. This type of office building will continue, and is to be welcomed; but at the moment I do not think that the building requirements are such as to be capable of dealing with this problem. Therefore, while we are dealing with offices, it seems to me that it would not be remiss, particularly when dealing with Clause 16, which has a good deal to do with safety, to write such a provision into the Bill. I beg to move.
Amendment moved—
Page 10, line 40, after ("construction") insert ("with a permanent non-slip surface").—(Lord Shepherd.)
LORD HAWKE: In these matters what is sauce for the goose is sauce for the gander, and I wonder whether at the next stage of the Bill Her Majesty's Government would care to introduce some provision that the staff in these offices should be prohibited from wearing stiletto heels: because, as everybody knows, stiletto heels are the complete ruination of any form of floor that man has hitherto devised. If we are going to say that the stairs, steps, passages and gangways shall be of sound construction, I think it would be entirely wrong if we did not also have some provision that that sound construction should not be destroyed because women continue to wear this ridiculous form of foot gear.
8.43 p.m.
LORD NEWTON: I have every sympathy with what my noble friend has said about the damage which can be done by stiletto heels. I feel quite strongly about the visible damage done

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to the floors of my own house. But for the purpose of the two Amendments that we are now considering, the question is whether the wearing of stiletto heels makes it more likely that people will slip on the floor, or more likely that they will fall out of windows. I think the answer in both cases is probably, No.
LORD HAWKE: May I interrupt for one moment? If the staff continue to wear stiletto heels, it will be quite impossible to have a floor that is of sound construction and properly maintained, unless it is repaired almost daily.
LORD NEWTON: It depends what we mean by "properly maintained". In the first Amendment, the noble Lord is proposing a general provision that all floors, steps, passages and gangways should have a permanent non-slip surface. This would involve owners and occupiers in considerable expense. After all, in many of the premises covered by the Bill, the surface of the floor is quite irrelevant (the noble Lord can have a go in a moment; I am referring to the words of his Amendment): because the floor will be covered by linoleum, carpet or some other material.
LORD SHACKLETON: In other words, non-slip.
LORD NEWTON: In his Amendment the noble Lord is suggesting, whether he realises it or not, that the surface of the floor which is completely covered presents a hazard, and that it ought to be composed of non-slip material, even though it is carpeted. I really cannot believe that the noble Lord thinks that, and I cannot altogether accept it. After all, many accidents, I think most accidents, are caused by slipping as a result of things left lying about on the stairs, like pieces of soap; and that sort of hazard is already taken care of in the Bill.
As regards his second Amendment, No. 44, again, the noble Lord is proposing an extremely wide requirement, as I think he recognises. A large modern office building to-day may have hundreds of windows of more than 5 feet square some height from the ground, and I cannot believe that it is reasonable to
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apply to them an absolutely universal requirement that they should be guarded in such a way as to prevent people from falling out, or to make it difficult for them to fall out. If in any particular case there is a risk of people's accidentally falling from windows, I think the best approach to this problem would be to try to find a sensible solution by consultation between all the bodies interested and concerned.
LORD SHACKLETON: I think the noble Lord has really conceded my noble friend's point about non-slip surfaces, and if the Government would now be prepared to give an undertaking that they will table an Amendment the effect of which will be to require sound construction with a floor covering of a non-slip nature, we shall be all right. I do not think he should attack this Amendment merely on a technicality; and I am not even sure that the noble Lord is right to say that a floor which is covered with a permanent non-slip surface must have a non-slip surface under the covering. If he is right there, it would be very easy to put right. It is a perfectly reasonable thing to ask for. It is now standard practice in a large number of new buildings. I agree that stiletto heels are a problem, but even then there are certain types of floor coverings which withstand these heels, at least for a reasonable period. I really do not see why we cannot have this.
Again, I would suggest to the noble Lord that it may well be that some sort of delay could be applied—and perhaps it is in this clause—in respect of existing buildings, and that we should merely require that new buildings at the time of the passing of the Act shall be of this nature. This matter is really not unimportant. There are quite a number of accidents in which people slip. It is unusual to leave soap on the stairs of a large new building, but if it does happen it would obviously involve questions of negligence. A serious breach of statutory obligation would not be the only test. But what we are saying is that these floors should be non-slip, and these can be, and are, provided in modern buildings. I think it ought to be a statutory requirement.
LORD NEWTON: This is done, and can be done, but we are not talking only about new buildings, but all build

753
ings, and the Amendment does not refer only to new buildings. Quite apart from that, I think it is an unnecessary requirement to impose. As I say, it would cost a lot of money, and where on earth are we going to stop? Noble Lords are really saying that there is this serious risk in shops and offices of people falling down all the time because floors are slippery. They will be saying next that there ought to be a requirement in the Bill that all furniture in shops and offices should have no sharp corners, that they should not be rectangular but round, because of the danger that people might walk into them and damage themselves by so doing. If that is so, where are we going to stop? One has to draw the line some-where, and I think it should be drawn on the wrong side of these two Amendments.
LORD SHACKLETON: What worries me again about the noble Lord is that he does not realise these hazards exist. I know of cases where people have slipped and where they have successfully obtained damages under Common Law. There is, in any case, an obligation under Common Law for surfaces to be safe. What we are trying to do is to make it a statutory obligation. It is all very well for the noble Lord to laugh about this, but this is a factor that employers do take into account; and what we are trying to do here, as in the whole of the Bill—and this is what I think the Government want to do is to lay down standards and impose obligations so that those employers who are not so good will realise that they have a statutory obligation.
I shall really despair if the Government say that we cannot do everything. Obviously there are points where one draws the line, but this is an important one. I will say this to the noble Lord. This is certainly a point which has concerned me in my business capacity. Definite steps have had to be taken in the interests of the employees, but also because we should have been negligent if we had not done so. We are wanting to make it a statutory obligation. The noble Lord realises the difference between an action in Common Law and a breach of a statutory obligation.
LORD NEWTON: Yes, I am perfectly well aware of that, and I am perfectly
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well aware of what the noble Lord, Lord Shackleton, and the noble Lord, Lord Shepherd, are trying to do in getting me to accept these Amendments. I am glad the noble Lord, Lord Shackleton, has recognised—I think this is the first time that any noble Lord has recognised this so far—that the line has to be drawn somewhere. It is always a matter of opinion where you draw the line, and we differ on this occasion. And there we are; there is really nothing more to be said.
LORD SHEPHERD: We do not put these Amendments down frivolously. We are sitting here late in the evening in an honest endeavour to improve the Bill, and, we believe, the lot of workers. In this particular clause we are considering matters of safety. I appreciate the position of the three noble Lords opposite who are in charge of the Bill. They are not Ministers of the Department concerned. There is a limit to how far they can go in conceding a point unless the Ministry has already given them a latitude on some points. But even then the position requires that we have a reasoned reply, not necessarily one picking holes in the wording of an Amendment. We in this House have always recognised that the spirit, the intention, of an Amendment is more important, at least at this stage, than the mere words.
I will withdraw this Amendment. We have much to do. But I would ask the Minister if he would consider this matter again with his friends. I qualified my first remarks by saying I should have thought this could reasonably be said to apply to new offices. If new offices are being constructed as they are—one day, perhaps, all the old offices will have gone—I cannot see why we cannot require that, whenever new offices are built, they are of such a substance as to reduce the serious risk of injury, not only to the workers in the building but to visitors. Therefore, I would ask the Minister to consider this matter. Certainly it will be raised at another stage, and perhaps then we might have a more constructive reply. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clause 17 [Fencing of exposed parts of machinery]:
8.55 p.m.
LORD SHEPHERD LORD SHEPHERD moved, after subsection (1) to insert:
"( ) Without prejudice to the generality of the foregoing subsection, it shall be the duty of the employer, so far as reasonably practicabie, to ensure that any dangerous part of machinery is fenced so to prevent injury to any person in the premises through the ejection of materials or of parts of the machinery, or through clothing or tools, or any other things attached to or held by persons working in the premises, coming into contact with that part:
Provided that, where the only risk of injury through the ejection of material is a risk of injury to the eyes, the requirements of the foregoing subsection shall be deemed to be complied with so far as that risk is concerned if suitable goggles or effective screens are provided to protect the eyes of persons who are subject to that risk"
The noble Lord said: I must apologise if I speak a little longer than is normally acceptable at this late hour, but this is perhaps one of the most important Amendments on this Bill. I approach it with some trepidation, because I am entering the realms of law. This is a subject in which I am not trained, and I had hoped that a member of the Government with legal training, or one sitting in a legal capacity, could be here, because there are one or two points which I think need to be answered from a legal standpoint.
This Amendment was fully discussed on the Committee and Report stages in another place. It resulted from the initiative of my honourable friend the Member for Derby, North, who presented it in a particularly brilliant speech. On both occasions the Amendment was defeated, but I do not think the Government will disagree with me when I say that it was defeated, or a Division was called, not so much on the subject or the principle, but on the methods of obtaining the right result. This Amendment is of my own drafting, and again I would say to the Government, that I hope that their reply will not be directed to any imperfections that may appear in the draft.
I believe that the virtue of the Amendment lies in its clear intention. Why do I raise this subject to-night? I think it is due to the fact that, although it has been defeated in another place, it was
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the action of this House, sitting in its Judicial capacity, which upset the practice under the administration of the Factory Act, 1901, and an earlier Act, one which had been in being and giving protection to the workers for close on sixty-six years. The Committee may also ask why a matter which appears to relate to the Factories Act should be raised on the Offices, Shops and Railway Premises Bill? It is because to-day we are bringing into our offices new and modern machinery, some of which may present some danger. Certainly we have in our shops, and we keep thinking of, bacon-slicing machines, which have already caused a considerable number of accidents.
But the real reason why I am bringing this Amendment forward this evening is that the offending words of Clause 17(1) and (2) of this Bill are virtually the same as the words of the Factories Acts of 1961 and 1937. The noble Lord, Lord Hawke, always likes to have statistics as to how many people are involved in the problem. I certainly have no figures as to the number of people who have been injured in shops and offices due to pieces of machinery flying out. As I understand it, these accidents are not notifiable. But I would say to the noble Lord, Lord Hawke, that during 1960 2,500 accidents in factories were notified, and all were attributable to articles and pieces of machinery flying out. Half of these accidents affected the eye, perhaps the most vulnerable part of one's body. In fact, the Minister said in another place on December 20, 1962, that a substantial number of these accidents to eyes could have been prevented if Section 14 of the Factories Act had been complied with by the employer.
Before coming to the present position of the law, and its interpretation by your Lordships' House, I think I should explain the position as it prevailed for sixty-six years before 1937. The first major Act was that passed in 1878. This was followed by a Bill, which became an Act in 1901. The section with which I am mainly concerned this evening is Section 10(1)(c), which said:
"All dangerous parts of machinery and every part of the mill gear must be either securely fenced or be in such a position or of such construction as to be equally safe to every person employed or working in the

757
factory as it would be if it was securely fenced."
I would repeat the words "equally safe to every person employed or working in the factory". As I understand it, the 1901 Act gave absolute protection to an employee in his work; in fact, this was confirmed by a court decision in 1897. I see the noble Viscount who leads the House is now here, and no doubt he will remember, in his legal capacity, the case of Hindle v. Birtwistle, which was a case in which a shuttle flew out of a loom and struck a weaver. The court held that the weaver was entitled to recover damages for a breach of the Factories Act, and their decision showed clearly that the protection included protection against pieces of machinery flying out. This classic case, as I understand it, resulted in thousands of cases being settled both in and out of court. It was a clear interpretation of the law of the day and it gave, apart from negligence, absolute protection to the worker and to those who might be employed in the factory.
Thirty-six years later, in 1937, a new Factories Bill was brought before Parliament mainly for purposes of consolidation, but it did bring about a major change in the section which I have just quoted. The second paragraph of that section, which became Section 14(1), used these words:
"Provided that, in so far as the safety of a dangerous part of any machinery cannot by reason of the nature of the operation be secured by means of a fixed guard, the requirement of this subsection shall be deemed to have been complied with if a device is provided"—
and these are the important words—
"which automatically prevents the operator from coming into contact with that part."
I have looked up Hansard of your Lordships' House, and have carefully read the debate, and I can say that the Minister, when he introduced the Bill, did not draw the attention of the House to that section. He spoke of others, but did not refer to that specific one; nor, in fact, did any other noble Lord. In Committee it was not even subjected to debate. It may be that in 1937 the House did not give the same scrutiny to legislation as we do to-day, about which some complain.
But the fact is that here was a case where there was a major amendment to the law to which the attention of the House was not drawn and which Members of the House did not appreciate. I question whether, in fact, the Government of the day intended any change to the law that had existed for close on 55 years. But this section dramatically changed the position.
The first case was in 1946 in your Lordships' House. This was the case of Nicholls v. Austin. There was an accident to a woman worker at a woodworking machine. She was injured by a fragment of wood which she was feeding into a machine. Part of it flew out and hit her. The decision of the House of Lords was that there was no liability on the part of the employer and no breach of the section. This was quite different from the decision that had been previously made in Hindle v. Birtwistle. The remark of Lord Simonds was that:
"The fence is intended to keep the worker out, not to keep the machine or its products in."
In 1961 there was a further case, Close v. The Steel Company of Wales. This arose out of an accident in which a worker was using an electric drill; a bit of the drill shattered, and a piece entered his eye. The House of Lords, sitting in its Judicial capacity, held that, even if the danger was foreseeable, the employers were not liable under the section, as the obligation under the section was to provide fencing for the purpose of preventing the body of the operator coming into contact with the machinery—I repeat, preventing the body of the operator coming into contact with the machinery—the same principle as the previous one I have just quoted. Lord Denning, who dissented, said:
"I fail to see how any speeches"—
and I believe he was then referring to the statements made in the House of Lords, sitting in its Judicial capacity, not in Parliamentary Assembly—
"can bind your Lordships to hold that a dangerous part of the machinery need not be fenced when the Statute expressly says that it shall be."
That is the problem, and perhaps the noble Viscount, Lord Hailsham, will agree with me. It is a fact that subsection (1) of this section says that every

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dangerous part of any machinery shall be securely fenced. The proviso appears in subsection (2), and I think this is where the House of Lords, sitting in Parliamentary Assembly in 1937, was perhaps misled. Subsection (1) clearly, is a general provision. Subsection (2) is a proviso; but it was not meant, as I understand it, to reduce the strength of the first subsection.
The third case that I would quote is that of Sparrow v. Fairey Aviation. Here a lathe worker was engaged in boring a central hole in a petrol filler cap, and he was doing it with a tool which came into contact with part of the machinery that was not regarded as dangerous in itself and which, therefore, was not fenced. The result was that the man's hand was thrown forward on to the machine and was damaged. I think it would be right if I read the Court's finding. It was found that they were part of the machinery which was not securely fenced, but as it was the tool and not the man's hand which came into contact with the dangerous part, it was held that the employer was not in breach of the section as the section did not require the employer to fence the dangerous part so as to protect a workman against the risk of a tool coming into contact with a dangerous part, and this was so even though the tool was being perfectly and properly used and there was no negligence whatsoever on the part of the workman. The workman failed in his action to recover compensation.
My last quotation is from Lord Reid. He said:
"If I had simply to go to the words of the statute unaided by authority"—
he was referring to previous decisions of this House—
"I would find it difficult to see any answer to the appellant's case. The jaws were dangerous, they were not fenced, and they were not as safe as they would have been if securely fenced. The appellant was not negligent and was in the course of his ordinary work. His hand was injured as a result of the tool he was properly using coming into contact with the jaws. This section has been subject to three decisions of this House."
He goes on further—and I quote from the All England Law Reports, 1962, at page 709:
" … so if the presence of those provisions—that is, Section 14(2) of the Factory Act—turned the case in the Nicholls case"—
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that is the one I first quoted—
"and an examination of the speeches in this House suggest to me that it may well have done so, that would mean that by inserting them Parliament narrowed the meaning of 'securely fenced' and thereby deprived workers of part of the protection that they had enjoyed before these provisions were inserted. I find it impossible to believe that Parliament could have intended to do that."
None of us here, I believe, was in the Government, or even in Parliament, in 1937, but I wonder whether the Government, since this matter was first raised by my honourable friend for Derby, North, in December, can now say whether it was the intention of the Government of the day, when they passed this Act, to narrow the law to the disadvantage of the worker and to reduce the responsibility of the employer. I would further ask: is that the view of the Government of to-day? Do they believe that the present provisions are as right and as fair to the worker as they were prior to the passing of the 1937 Act, and of its interpretation by the House of Lords?
As I have said earlier, there is no evidence that this House was aware of the change of law. There is no evidence that the Government intended a change of the law. Now, what action can we take to-day? As I said earlier, this Offices, Shops and Railway Premises Bill includes the offending words—the words that narrowed the protection that workers had received for 66 years until 1946, which protection was, I believe, lost quite unintentionally by the Government and Parliament. I understand that the Government are aware of the problem. They have suggested that it might be possible to rectify the position by regulation. As I understand it, there may be some advantage to the worker if regulations are passed. They certainly would have the same weight as if Parliament repealed the position in the 1937 Act and took out the offending words in this Bill.
But, from experience, regulations are usually specifically related to particular types of machine, to particular types of factory and operation. I believe this matter is so important that it should not be left to regulations. It should be dealt with in something wider and have the full weight of public legislation. If we were to accept the Government suggestion of regulation I would question whether we should be right to allow these

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offending words to remain in the Bill. Because they are there. They would continue to limit in law the protection which, as I have said, workers have had for 66 years.
If we were to pass this Bill as it now stands—and I consider it would be in the public interest we should—I believe we should, in fact, be confirming and condoning the error that was made in the passing of the 1937 Act. For that reason, even if the Government were to consider a regulation, I believe these particular words, which limit and narrow the protection purely to the person operating the machine and only when he comes into contact with it, would be wrong. This, I believe, is the crux of the way in which we should respond to any offer the Government make: have they any indication of whether Government and Parliament in 1937 intended, appreciated or understood that the law of 66 years was being so amended? If it were so, then I think the Government of the day treated this House in an ill way in not informing it of a major change of law.
Are the Government of the will and belief that this position should be rectified; that a worker, an operative in a factory, should have the absolute protection from any mishap or accident that may arise from his work and the operation of a machine which is in the ownership and control of his employer, subject to his own negligence? I appreciate that the possibility of a large number of accidents is small; but it is the principle that matters. I believe if this House were to say, before this Bill goes to its final stage, that we wished to change the position, then it would be very much up to the Government to say that the Factories Act, which has caused so much hardship and so much cost, could be quickly amended to bring it into line with the wishes of the House under this Bill. I think it would be an act of justice. My noble friends believe that protection should be absolute. It is the duty of an employer to see his machines are so fenced as to reduce to the greatest extent possible any fear of accidents, not only to the operator but to all those around.
I think that this Committee should make it plain and see whether, by the inclusion of my Amendment, it is pos-
762
sible to rectify the position. I will not stand on the words of my Amendment. It is drafted to the best of my ability. I believe that the principle is clear and, if the principle is acceptable, I am sure that we could find words to implement it. I beg to move.
Amendment moved—
Page 11, line 31, at end insert the said subsection.—(Lord Shepherd.)
LORD NEWTON: I should like to deal first with the Act of 1937. I would wholly reject the suggestion that it was some kind of underhand move to make life easier for employers.
LORD SHEPHERD: I never suggested that.
LORD NEWTON: The noble Lord suggested that there was something peculiar about it. The point is that the 1937 Act was the result of years of discussion between both sides, and it came before Parliament substantially agreed upon by those concerned. If the protection was unnecessarily weakened subsequently, this was unfortunate, but it will not have been the first time that the courts have interpreted an Act of Parliament in ways not anticipated by those who passed it.
I come to the Amendment the noble Lord has moved. The noble Lord is trying to strengthen Clause 17 so as to prevent the worker, so far as is reasonably practicable, from being injured through the ejection of materials or parts of machinery or through his clothing or tools coming into contact with the machinery. As the noble Lord admitted in his speech, this question received considerable attention in another place. The Government made it clear there, and I certainly wish to make it clear again, that we are far from being indifferent to this kind of hazard. But it is still our opinion that the right way to deal with this problem is by regulations, which can be made after consultations with those who are familiar with the hazards and the particular circumstances of the processes or operations which are involved.
I think it must be agreed that the problem with which we are concerned in this Amendment is essentially a problem in factories rather than offices and shops. In general, one would not expect premises

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covered by this Bill to be places containing machinery which throw out pieces of themselves or of their product to the danger of workers or where dangers occur from the trapping of tools held by workers. However, should there be such hazards which are capable of removal by legal requirements, we are certain that my right honourable friend the Minister of Labour has ample power under Clause 20 of this Bill to make regulations to deal with the matter.
This does not come under Clause 17. Whether Clause 17, rightly or wrongly, follows the wording of the Factories Act is irrelevant to the question of how, in this Bill, we are going to make provision for giving such protection as is legally possible to workers in shops and offices from pieces which are ejected from machines which they operate. I recognise that the qualification which the noble Lord has put into his Amendment in the words "so far as is reasonably practicable," removes some of the difficulties inherent in the Amendment proposed in another place. The noble Lord's Amendment is less open to the criticism that it requires protection which would put many machines out of use. I can tell the noble Lord that my right honourable friend the Minister of Labour had already considered the possibility of dealing with the problem we are concerned with by a provision on the lines of the noble Lord's Amendment but had decided that this would not provide an acceptable solution. In the first place, the obligation qualified by the words "so far as reasonably practicable" would hardly place any stronger duty on the employer than his existing Common Law duty to take reasonable care for the safety of his employees. The provision would merely tend to increase the uncertainty of the law without making any real increase in the protection given to workpeople.
I would ask the noble Lord, Lord Shepherd, to consider this. It would surely be wrong to enact a general requirement which is known at the outset to be impracticable in many cases, and then to qualify it by a general formula of uncertain application. I would suggest that the right course is to decide, having regard to all the technical and practical considerations, what protection
764
can and should be required by law in particular cases, and then to impose specific requirements under Clause 20 of the Bill. In that way the law is certain; both employers and enforcing officers know where they are, and, even more important, a real contribution is made to safety. This is because specific practical action can be laid down and enforced. There is nothing between us, I think, in the belief that all practicable steps should be taken to avoid the risk of accidents of this kind to people who work in offices and shops.
I should like to suggest a yet further reason why the way in which my right honourable friend thinks it right to tackle the problem is most likely to achieve successfully the ends we all want to achieve. When deciding what practical, effective provision should be made for guarding against hazards from particular machines, he will be able to frame his precise proposals in the light of the advice he receives from the Factory Inspectorate and from the consultations he has with those familiar with the problem on both sides of industry. I think that is a better way to deal with it than by leaving these matters to be settled by the repercussions which can follow from court decisions as to what is, or is not, reasonably practicable in particular and possibly untypical cases. I hope the noble Lord will feel that we are just as anxious to guard against these risks, in so far as they can be guarded against by any legal process, as anyone else. We think this is the best way of doing it, and we have every intention of making regulations to deal with the problem when we can.
LORD SHEPHERD: I should be less than honest to say that I was satisfied, but perhaps that is the usual attitude of the Opposition. I should be satisfied, I feel, only if we could get a major change to this clause. Certainly we should like to see the limitation of the machinery with the operator, although I recognise that the matter can be widened on the other clause dealing with registration. The Committee has been very patient, as I made rather a long speech, and, therefore, I should not wish to delay matters further. I will carefully consider the points the noble Lord has made this evening and will consult with my noble friends to decide whether we should proceed with the matter at a later stage.

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I would only say this to the noble Lord, Lord Newton. The last two cases to which I referred are quite different from the decision which has prevailed for 66 years. Under the Factories Act, 1937, the Secretary of State had power to make regulations. My information is that no regulation in regard to that section was ever made. Therefore, we should need the firmest assurances not only that it would be the Government's intention to deal with offices and shops, but also that they were looking seriously at the main problem which lies in the Factories Act. We will not quarrel at this stage, but it was my understanding that there were no regulations on this matter. I thank the Committee for having listened so attentively to what I have said. I am sorry I have delayed them so long, and in these conditions I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 17 agreed to.
Clause 18 [Avoidance of exposure of young persons to danger in cleaning machinery]:
9.32 p.m.
LORD CHAMPION LORD CHAMPION moved to add to the clause:
"( ) The Minister may by regulations made by statutory instrument prescribe that the preceding subsection shall apply to any class of disabled or other persons specified in the regulations."
The noble Lord said: We regard this clause as a wholly admirable one. Your Lordships will remember that on a previous Amendment we tried hard to include under the protection of this clause all those relatives of employers excluded by Clause 2 of this Bill. We felt that the subsection could be improved and strengthened by the words we proposed. The clause is based on Section 20 of the Factories Act, which contains this sort of provision. But the Factories Act covered not only young people, but also women. Women have been entirely left out of the provisions of this clause, but I must admit that that does not worry me particularly, because I do not think a trained woman is more "ham-handed" than a trained man would be. However, there are some categories of persons who we feel might be brought under this clause and be prevented from cleaning machinery having moving parts. There might be an
766
exclusion of people with defective eyesight. It has been suggested to me that pregnant women in the later stages of their pregnancy become clumsy and ought not to be required to clean machinery with moving parts. Those appear to me to be some of the categories which might be excluded by the Minister under regulations.
Experience of the operation of this clause might well show that those categories I have mentioned, and others, should be brought under the protective umbrella of Clause 18. All we are asking the Minister to do by this comparatively simple Amendment is to reserve to himself the right, by regulation, to fix other categories which might come into it. I think it is a simple point. I hope the noble Lord, Lord Carrington, has understood it. I have moved it briefly; nevertheless, I feel that this is an Amendment which has some point. I beg to move.
Amendment moved—
Page 12, line 19, at end insert the said subsection.—(Lord Champion.)
LORD CARRINGTON: If I may say so, I think the noble Lord has made a good case for this Amendment. I think there is the possibility that there would be circumstances in which it was desirable to restrict the cleaning of machinery to persons other than young persons. The only misgiving I have is whether or not "disabled persons" should be singled out in this particular respect. Quite a few disabled persons are thoroughly competent to clean machinery, and I think that to single them out might perhaps make it more difficult in some cases for people to employ them. So, if the noble Lord will allow me to study the words he has used in his Amendment—I think probably to leave out "disabled persons" because some classes would come in under the blanket powers that the Minister would have—I would undertake to put down an Amendment on Report stage or ask him to put down one with an agreed wording.
LORD CHAMPION: With the noble Lord, of course, I recognise that there are varying degrees of disability. That is no personal reference, and I do not know why my noble friends laughed. I will not delay proceedings, but I will thank the noble Lord for his very friendly reply and hope to get something done

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on this matter at Report stage. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.36 p.m.
LORD SHEPHERD LORD SHEPHERD moved to insert at end:
"(2) In this section, 'young person' means a person who has not attained the age of eighteen".
The noble Lord said: I beg leave to move this Amendment, and I will endeavour to speak to the others which will be consequential. This is quite simple. This is the clause which deals with the training and supervision of young persons working dangerous machinery. I do not see why this should be restricted merely to young people. I think that when any person of any age is called upon to operate machinery, or to clean it or otherwise—
LORD CHAMPION: May I interrupt my noble friend? I rather fear he has jumped 47A.
LORD CARRINGTON: He is coming to the substance of the Amendment.
LORD CHAMPION: Amendment 47A is another thing, and I would suggest to my noble friend that, although my name is also on the Amendment, this is covered by the Interpretation Clause, unless I am very much mistaken, and it does mean a person under 18 years.
LORD CARRINGTON: I do not know whether I can help out on this point, but I think that 47(A) and 103(A) lead into Amendments 48 and 48(A).
LORD SHEPHERD: Perhaps we shall get it straight, but we do understand what we are talking about. We are dealing with the first of the young persons of Clause 19. As I was saying, this clause is dealing with the training of young persons. My view, which I am sure is shared in the House—
LORD AIREDALE: The wording here refers to young persons who have not attained the age of eighteen; and, as has been pointed out, the Interpretation Clause gives that very definition:
"'young person' means a person who has not attained the age of eighteen."
LORD SHEPHERD: I do understand and it is quite clear. The problem was that I put down this Amendment to delete
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"young person", but it was found that instead of having the definition of a "young person" at the back of the Bill it would be brought forward and put into Clause 18. Therefore, I beg to move No. 47(A), which defines a "young person" as a "person who has not attained the age of eighteen". I beg to move.
Amendment moved—
Page 12, line 19, at end insert the said subsection.—(Lord Shepherd.)
LORD CARRINGTON: I only hope, after all that, that I am going to accept the right Amendment. As I understand it, this Amendment which the noble Lord has just moved is paving the way for No. 48, since we are going to delete reference to "young" person in Clause 19. On behalf of the Government, I am very happy to accept the noble Lord's Amendment and Amendments Nos. 103(A), 48, and 48(A).
LORD SHEPHERD: That just shows that, if we are prepared to wait, we may even find a few crumbs from the table. I thank the noble Lord, Lord Carrington, for this concession.
On Question, Amendment agreed to.
Clause 18, as amended, agreed to.
Clause 19 [Training and supervision of young persons working dangerous machines]:
LORD SHEPHERD: I beg to move the next Amendment.
Amendment moved—
Page 12, line 20, leave out "young".—(Lord Shepherd.)
On Question, Amendment agreed to.
LORD SHEPHERD: I beg to move.
Amendment moved—
Page 12, line 31, leave out ("young").— (Lord Shepherd.)
On Question, Amendment agreed to.
Clause 19, as amended, agreed to.
Clauses 20 and 21 agreed to.
Clause 22 [Power of magistrates' courts and sheriffs to make orders for putting down dangerous conditions and practices]:
LORD AIREDALE: The noble Viscount Lord Colville of Culross, had notified his intention not to move the next Amendment.
LORD HAWKE: I was going to move it formally, saying that the Amendment was self-explanatory.
LORD SHACKLETON: I beg to move the Amendment standing in the name of the noble Viscount, Lord Colville of Culross. There is no need for me to explain it, because the noble Lord, Lord Hawke, says it is self-explanatory. Perhaps the Government would explain it.
Amendment moved—
Page 15, line 18, at end insert:
("( ) No complaint or summary application shall be made by virtue of the foregoing subsection unless the authority shall have served upon the occupier of the premises a notice specifying—

(a) the matters upon which the complaint or summary application is made,

(b) the requirements of the authority in respect to any such matters, and

(c) a reasonable time within which such requirements are to be fulfilled

and the occupier has failed within such time to fulfil any such requirement").—(Lord Shackleton.)
LORD NEWTON: The first thing I had batter do is tell your Lordships what the Amendment does. Although two of your Lordships have moved it, neither has explained what it is all about. In fact, the object of Lord Shackleton's Amendment and the object of Lord Hawke's Amendment is to give the occupier a reasonable time to remedy the matters giving rise to the complaint before the complaint is made. The object of Clause 22 is to enable a magistrates' court to put down dangerous conditions and practices—that is to say, those carrying risks of bodily injury or injury to health. Experience of the Factories Act (which incidentally makes a similar provision in Section 54) shows that this power is necessary, even if the occasions on which it has to be used are, fortunately, very rare.
I would suggest to your Lordships that where dangers of this kind exist it is necessary to ensure that protective action is taken without delay. If an occupier can put the matter right immediately, then no enforcing authority is going to take steps to make a complaint. The effect of the Amendment is to allow occupiers a period of time to remedy the danger, during which the employees would continue to be exposed to it. This
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would involve a lower standard of protection than is provided under the Factories Act. I cannot believe that the noble Lord, Lord Shackleton, or the noble Lord, Lord Hawke, or your Lordships at large, would think such a step acceptable either to them or the House. I hope that, together or separately, they will withdraw the Amendment.
LORD HAWKE: I shall study my noble friend's answer with great interest—or rather my noble friend Lord Colville of Culross will. I think there is some flaw in his answer, in that in either case I should have thought there was an interval of time during which the nuisance could go on. However, I am not sufficiently up in the matter to argue with him, and therefore I beg to withdraw the Amendment.
LORD SHACKLETON: I think I moved the Amendment; I am sure I did—unless the noble Lord claims to have moved it. I thought he did not.
LORD HAWKE: I think we created a precedent, because the Amendment has been moved by two noble Lords from opposite sides of the House at the same moment.
LORD SHACKLETON: Before either of us withdraws it, I think the Government are entirely right, and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 22 agreed to.
Clause 23 agreed to.
Clause 24 [First aid: general provisions]:
9.46 p.m.
LORD SHACKLETON LORD SHACKLETON moved, in subsection (7), after the first "may" to insert "at the request of or". The noble Lord said: Amendments Nos. 50 and 51 should be taken together. They are almost drafting Amendments, and it may well be that the purpose they seek to fulfil is satisfactorily attained by other words in what I must admit is an extremely difficult clause and one to which I think we shall have to devote a little attention on the Question, That the clause shall stand part of the Bill.
The purpose of these Amendments is simply to provide that where other facilities than a first-aid box and a first-aider

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are provided which are of a kind that would qualify for exemption, it shall not be an offence on the part of employers in this particular case, they having requested exemption, if they continue not to provide the first-aid box until such time as the inspectors or the court (whichever it may be) make up their mind. Particular circumstances, of course, are the case of a firm which provides rather more elaborate medical facilities—probably a medical room, staffed, perhaps, by a medical sister, and where a first-aid box, as such, and a first-aider are not needed. The Bill makes provision that where there are such facilities there is no need for the first-aid box. I think we should all agree with that. Unfortunately, it will be an offence in the interim period, even when the room, or the sister or the medical facilities are provided, not to provide a first-aid box.
The purpose of this fairly simple Amendment is to enable the occupier to take action to secure the relevant exemption so that, having taken such action, there will be no obligation to comply with the basic requirements of the clause other than by the provision of a first-aid room. I do not think this weakens the purpose of this clause at all and it may provide a clarification; but I shall be interested to know from the Government whether they consider this exemption to be necessary. I beg to move.
Amendment moved—
Page 17, line 31, after ("may") insert ("at the request of or").—(Lord Shackleton.)
LORD CARRINGTON: The noble Lord has what I might call a theoretical point, but I do not think that his Amendment is necessary, for this reason: in his second Amendment he states that subsection (7) is not to render employment unlawful while an application for exemption from the general first-aid requirement is being considered. I do not think that that is the case. I think the noble Lord may have misunderstood the position. There is nothing in the Bill to make employment unlawful in such a case. The only effect of the clause is that an employer remains subject to its general requirements relating to first-aid boxes until an exemption has actually been issued. I think that this is the point that worries the noble Lord. I
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believe that this is more a problem of theory than of fact. I cannot conceive that any authority would prosecute an employer while they were considering his application for an exemption. It is difficult, too, to envisage any successful proceedings by private persons if a satisfactory first-aid room existed.
In point of fact, this subsection is exactly similar to the comparable subsection in the Factories Act, and, so far as I know—the noble Lord may have other information, but I have made inquiries—this has not raised the sort of difficulty the noble Lord has in mind. There have been no cases in which this problem has arisen. For those reasons—first, because I cannot conceive that a prosecution would be taken while exemption was being discussed; and, secondly, because exactly similar words in the Factories Act have not caused this difficulty—I do not think the noble Lord's Amendment is necessary.
LORD SHACKLETON: The employer in these cases will be technically guilty of an offence. I do not know that this has caused any difficulty under the Factories Act, but attention had been drawn to it and some anxiety expressed; and I think we might leave it there. If the noble Lord afterwards, after having had this brief exchange, comes to any other conclusion, no doubt he will take action. In those circumstances, I am grateful for the explanation, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 24 shall stand part of the Bill?
LORD LINDGREN: I do not think that Clause 24 is a satisfactory clause. Had I had any anticipation of the fact the Government would be in the mess they are with their timetable, I would have put down an Amendment to this clause. I rise now only to give notice that I intend to put one down on Report stage. Looking at this purely from the point of view of the normal industrial and clerical worker, or the clerical worker who is associated with industrial activity, I would say that this, again, is a far worse clause than Clause 61 of the Factories Act. I should much prefer my colleagues working in offices to be under the protection of Clause 61 rather than under this clause. When we come to the Report

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stage I shall move in that direction. I admit that I would have done it at this stage had I thought we should be on this clause to-night, but I believed we should have been on it earlier but for the delays we have had—for which neither the Government and certainly not the Opposition are responsible.
I feel that there is no obligation on the employer to see that a competent person is in charge of the first-aid box. Again perhaps I must admit an interest. For well over forty years I have been an active member of the St. John's Ambulance Brigade, and I was encouraged in that activity by the old railway companies because of the possibility of accidents in connection with the railways. The British Red Cross and the St. John's Ambulance Brigade of course cover accident work in their training, but it is a dangerous policy to think that the placing of a few bandages and splints in a box, and appointing a person to be in charge of it, is meeting the provision of first aid. Equally in this clause there is no requirement that the person shall maintain competence. There are certain employers who might encourage a person to go for a dozen lectures and pass the first certificate at a local St. John's or British Red Cross course of lectures, and then fifteen years later still expect that person to be competent. As I have said, I do not consider this clause satisfactory, and I give notice to the Government that I shall move towards bringing certain parts of Section 61 of the Factories Act into this clause, because I think they are much to be preferred to those contained in this Clause.
LORD SHACKLETON: May I ask just one technical question? I am not quite clear what happens under Clause 24(4)(a) when the first-aider goes on holiday. It may be that this matter is adequately covered in Clause 24(5)(a). I have looked at it fairly carefully and taken legal advice, and Clause 24(4)(a) seems to suggest that only one person can be in charge. Later, in Clause 24(5)(a), it says that there can be more than one person. It may be that "the person in charge" is a collective description. Again, it is not made clear, so far as I can see, that if there is more than one person in charge the other person must also be trained. I do not want to press this point too hard, because I am obviously moderately confused myself about it.
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However, it has confused other people, and if the Minister feels less confused, perhaps he could help me.
LORD CARRINGTON: I ought to be able to answer this question. I have tried very hard to get to know this Bill, but I am afraid I really cannot give an on-the-spot answer. Perhaps the noble Lord would allow me to look into it and write to him, and if he is not satisfied with the answer that he gets in writing perhaps he will put an Amendment down on Report stage.
With regard to Lord Lindgren's remarks, I will, of course, wait and see what Amendments he puts down. The only general comment I would make op what he said is that I hope he will remember, in the Amendments that he puts down, that shops and offices are really in rather a different category from factories, and, on the face of it—though one might not think so by some of the things we have been discussing—they are, generally speaking, rather less dangerous places than factories. So some of the provisions have been made less stringent in this case than in the other.
LORD LINDGREN: I will, of course, accept that in the normal sense. But noble Lords opposite must not keep thinking in terms of a solicitor's office. Office organisation is changing rapidly. I can take the noble Lord into offices which are almost like a blacksmith's shop, for the noise that is created and the machines that are in them. Because of the cost of those machines, and with the development of those machines that is going to take place, there will be a tendency, more and more, for employers to keep those machines going for twenty-four hours. This idea that an office is a nine-to-five quiet job must go by the board. More and more it is likely to tend towards being a twenty-four hours' job in some sections, and when we are dealing with legislation we ought to be able to look forward a little. I am trying to look forward, and I think that in relation to first-aid in particular, when we are going to have night work, when we are going to have more and more women operating machines, and when there is going to be feeding of the material into the machines by the backroom staff, it is more important that we should have competent persons in charge of first-aid arrangements, rather than the haphazard methods

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we had when we just had a pen and pencil in an office.
LORD CARRINGTON: I accept a great deal of what the noble Lord says, but, if I may say so, he must also remember that there are offices where these things do not happen. There are offices in London and the City which employ a great many people and we must be careful not to make unreasonable demands on people of this sort. I think we must plan in this Bill between one and the other.
LORD SHACKLETON: There is just one more point that the noble Lord can think out, and perhaps not write to me but be ready for an Amendment on it. Again, it is a technicality. It appears in Clause 25(5)(b) that if one or other of two or more persons in charge of a box are absent casualties may be treated only from the cupboard of the remaining first-aider. This seems ridiculous, to put it mildly. I say no more. I do not ask the noble Lord necessarily to answer that point.
May I make one other point about first-aid generally? First-aid and medical services, both in industry and in commerce, are becoming much more than the treatment of injuries. Indeed, I would have said that one of the most valuable developments of to-day in terms of health is the development of what might be called the industrial health service. Obviously, where there are properly equipped medical rooms, and sisters in charge of them, there is not only an enormous advantage to the individual but a great saving in time, a saving in illness, and so on. First-aid, and somebody who is competent enough, when a member of the staff is feeling, say, one degree under, or whatever it may be, to say, "You have got influenza. Go home"—that is the sort of thing. I would not have said that there was that degree of difference between these premises and a factory; and our preference for the factory legislation is, frankly, that it is a good deal more intelligible than this particular clause.
Clause 24 agreed to.
Clauses 25 and 26 agreed to.
Clause 27 [Penalization of negligent acts and interference with equipment, &c.]:
10.1 p.m.
LORD LINDGREN LORD LINDGREN moved, in subsection (1), to leave out "and" and insert "or". The noble Lord said: I beg to move Amendment No. 51 A. First of all, may I ask for an explanation from the Minister in regard to it? I have noticed the marginal note, which says,
"Penalization of negligent acts and interference with equipment, &c."
That is the rubric to the clause; and yet nowhere in the clause is there any reference to negligence. I am giving the Government some credit, because I believe that their intention in the clause is to say "If, according to it, wilfully or without reasonable cause, somebody does so and so …" My reading of it, or the intention I should like to impute to the Government, is that it should be one or the other, but not both. If that is not so, then I am giving credit to the Government which they do not deserve. I would quite definitely say that there are two aspects here: whether a person wilfully does a thing, or whether he does it without reasonable cause. There is a complete distinction between them.
I would suggest that my substitution of "or" for "and" makes quite clear what I thought was the Government's intention, but, from the inclination of the head of the noble Lord, Lord Carrington, I think I must have been wrong. Therefore, I am more certain than ever that I was quite correct in putting down this Amendment, so as to make it two offences, not for it to be necessary for there to be a combination of two offences before there is breach. I beg to move.
Amendment moved—
Page 19, line 8, leave out ("and") and insert ("or").—(Lord Lindgren.)
LORD CARRINGTON: I hope I can explain this to the noble Lord. This particular phrase, "wilfully and without reasonable cause", is the result of an Amendment which was accepted by my right honourable friend from the Labour Party in another place, and it had the effect of bringing this provision more closely into line with Section 143(2) of the Factories Act. Perhaps I could try to explain why these two concepts of wilfulness and acting without reasonable cause are linked together in the subsection, because I agree with the noble Lord that at first sight one queries it. The

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reason is this. There may be circumstances in which a dangerous act is necessary to avoid still greater dangers to the health or safety of employed persons. If a fire broke out in premises, or some other serious calamity occurred, some action might have to be taken which, although it carried some danger of risk to the safety of some persons, might be essential in order to avoid further and greater dangers. Rescue operations are likely to be an example of the sort of thing I have in mind; and the Government thought, and believe, it would be wrong to penalise a wilful act of this kind which could be shown to have a reasonable cause.
The effect of the Amendment of the noble Lord, Lord Lindgren, would be to widen greatly the circumstances in which a person could be guilty of an offence under this subsection; and one must bear in mind that an employee is just as likely, if not more likely, to be penalised under this clause as an employer. If the noble Lord's Amendment were adopted an employed person who did something wilful but with good cause would be penalised. He would also be penalised for some stupid or careless act which, though not wilful, was done without reasonable cause. This is close to the meaning of the world "negligent" which my right honourable friend was asked to remove: in another place as a result of representations made. He felt and those who put the Amendment down felt that mere negligence on the part of an employee should not be the basis of criminal proceedings. This Amendment was put down therefore to meet that point. I hope the noble Lord will be satisfied.
LORD LINDGREN: I am grateful to the noble Lord for his explanation. It goes to show that even I have not done my homework on the debates in another place, and it also shows that it is not always true that great minds think alike. In the light of the noble Lord's explanation I beg leave to withdraw my Amendment.
LORD AIREDALE: May I point out that the word "negligent" has not been taken out of the sidenote? It still speaks of a negligent act. Perhaps that could be looked at.
LORD CARRINGTON: I noticed it, but I was sure that the noble Lord, Lord Lindgren, was going to mention it.
LORD LINDGREN: I did mention it in the first part of my statement.
LORD CARRINGTON: It was that that drew my attention to it.
Amendment, by leave, withdrawn.
LORD NEWTON: I beg to move this Amendment formally. It is an Amendment to correct drafting.
Amendment moved—
Page 19, line 18, leave out ("therein mentioned") and insert ("mentioned in, as the case may be, the one section or the other,").—(Lord Newton.)
On Question, Amendment agreed to.
Clause 27, as amended agreed to.
Clause 28 agreed to.
Clause 29 [Certification of premises by appropriate authority]:
LORD CHAMPION LORD CHAMPION moved, in subsection (1)(a), to leave out "twenty" and insert "ten". The noble Lord said: Amendments Nos. 54 and 55 clearly go together, and I think we can discuss them together. These Amendments are designed to carry out the recommendations of the Gowers Committee in respect of this important matter of fire precautions and the certificates granted under this section. The Gowers Committee, after considering it, said this in paragraph 61 of their Report:
"It is laid down in Section 37(1) of the Factories Act that where in any factory more than 20 persons are employed in the same building above the first floor, or more than 20 feet above ground level, or where explosives or highly inflammable matter are stored or used in any building where persons are employed, effective steps should be taken to ensure that all persons employed are familiar with the means of escape in case of fire and with their use and with the routine to be followed in case of fire."
They went on:
"This, too, we think should be applied to shops and offices, but as the design of many shop and office buildings is more complicated than that of factories usually are, we suggest that 'ten persons' should be substituted for '20 persons' and there seems to be no good reason to confine the section to employees above the first floor or more than 20 foot above ground level. In many old buildings, some of the windows of which are often barred, it is only too easy in an emergency to lose one's way at ground level, and in new buildings there are often extensive basements and basement passages which are confusing to those who do not know them."
The Gowers Committee ware quite right about this. To-day a surprising variety of premises are used as offices. I am familiar with the City of Cardiff and I see more and more offices moving into old dwellings as the people move outwards to the suburbs. Most of these old buildings have narrow stairways and have central heating installed in them, in converting them into offices. This makes the old wooden stairways highly inflammable and very dangerous. It is also the fact that there is much inflammable material to be found in and around offices—masses of paper and that sort of thing—and most office workers are permitted to smoke, and smokers of cigarettes are notoriously careless with their cigarette ends. We find in the reports of responsible fire officers that fires have often been caused by cigarette ends or matches that are thrown down not properly extinguished. I think that the Gowers Committee were right in their recommendation, and we consider that the figures the Government have incorporated in the Bill of 20 and 10 should have substituted for them the 10 and 5 of our Amendment. I beg to move.
Amendment moved—
Page 19, line 36, leave out ("twenty") and insert ("ten").—(Lord Champion)
LORD NEWTON: My Lords, I am in sympathy with the arguments that the noble Lord, Lord Champion, has advanced in support of this two Amendments, but what is worrying me is the importance of obtaining the right priorities in regard to these fire risks. There is no doubt that the fire authorities will have a big task under the Bill even as it stands at present, examining premises, issuing certificates and giving advice to all those who will no doubt ask for it. A large increase 'in the number of premises which they are called upon to inspect for 'the purpose of issuing fire certificates, as would be entailed by these Amendments, would be bound to divert their efforts from the bigger premises where the risks in the event of fire will affect more people than in the smaller places which the Amendments seek to cover.
The Bill already goes a long way to meet the intention of these Amendments by providing in Clause 29 that where a
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building contains two sets or more of premises covered by the Bill, the numbers of persons employed in the premises shall be added up for the purposes of deciding whether a "means of escape" certificate is necessary. In this way, we have distinguished between the small office or shop standing on its own, where the escape risks in the event of fire are generally small, and the small offices and shops grouped together in a building block, where the risks are likely to be higher. In the latter case, the owner of the building will have to apply for a "means of escape" certificate if the total of persons employed in premises covered by the Bill exceeds 20 on the ground floor or 10 on any other floor. These criteria are the same as those used in the Factories Act.
Supposing there are still special classes of premises, within the ambit of the Bill, which have a high fire risk and are not required to have a "means of escape" certificate under Clause 29 as drafted: if the Minister is satisfied after examining any evidence that is sent to him that more needs to be done in these cases, he has power under subsection (9) of Clause 29 to bring such a class of premises within the scope of the certification procedure in this part of the Bill. But even if premises do not meet the criteria in subsection (1), and are not therefore subject to the certification procedure, they are still subject to Clause 28(1), which states that all premises to which the Act applies shall be provided with such means of escape in case of fire as may reasonably be required in the circumstances of the case.
My arguments are, to sum up, that Clause 28 gives general protection to all premises; that the aggregation provision I have mentioned already brings in many of the places that noble Lords opposite may have in mind; that there are powers to deal with any other type of (premises with special risks under Clause 29(9), and that it is important to get priorities right in the provisions relating to fire certificates. For these reasons, I cannot advise the Committee to accept the noble Lord's Amendments.
LORD SHACKLETON: I do not quite understand, even now, why the Government are ignoring the very specific Gowers recommendation. So far as I

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understand it, it is that the noble Lord has suggested that this is a matter of priorities, and that the fire authorities will be so busy that they will not be able to deal with this right away. Of course, we all know buildings of this kind that, frankly, are fire traps, and in any large building where a lot of people are employed it will be necessary to provide a means of escape, even if only, say, one or two people are working underground in a basement. Here we might have rather more, in the circumstances. But what I am suggesting is that, if it is only a matter of priority, would the Government consider taking powers in this clause to vary the numbers by order at a later date? This is the sort of procedure that they have elsewhere; they have it in regard to certain other clauses. It will then enable them, if the evidence is brought to their notice, to deal with this without having to introduce another Act of Parliament. It is just conceivable that they already have these powers somewhere, but, if not, I think they ought to have them. I urge this quite seriously, and I hope we may get a promise, at least, to consider the point.
LORD NEWTON: I will certainly consider the point, but I cannot give any undertaking that it will be considered favourably.
LORD SHEPHERD: Perhaps I can help. I think in subsection (9) the Minister has power to make special regulations.
LORD SHACKLETON: But not for this point.
LORD NEWTON: Is that Clause 29(9)?
LORD SHEPHERD: Yes.
LORD NEWTON: The object of Clause 29(9) is to bring under the certification procedure precisely those premises which the noble Lord, Lord Shackleton, called death-traps, which would not otherwise be covered. That was one of the arguments which I cited when I was speaking earlier for suggesting to your Lordships that it was not really necessary to accept the noble Lord's Amendments.
LORD CHAMPION: I do not think the subsection mentioned covers the point raised by my noble friend Lord Shackleton. He has made the excellent suggestion that the Minister might in this
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Bill take powers eventually to lower the numbers laid down in this clause as the difficulties of the Inspectorate and the number of inspectors, and so on, are cleared up. Having regard to the fact that the noble Lord, Lord Newton, has undertaken to look at the suggestion of my noble friend, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD CARRINGTON: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 19, line 40, leave out the second ("the") and insert ("any such").—(Lord Carrington.)
On Question, Amendment agreed to.
10.23 p.m.
LORD SHEPHERD: The purpose of this Amendment is to make it necessary for that type of building where the stairways, the only possible means of escape from upstairs premises, are constructed of inflammable material, to have a fire certificate. As one travels the country, one sees not only bright, modern buildings going up, but many conversions of old residential houses into offices. Many of these buildings to-day have no fire escape. It may be that it will be possible to have fire escapes, but that may take some time. I and my noble friends feel that where there are these old offices, and particularly where they have been converted, those persons upstairs should have some protection under this Bill. What we wish to do is to see that any building which has stairs constructed of inflammable material—wood is an example: in old houses it becomes as dry as tinder and can flare up very quickly—should be subject to a certificate, and certainly subject to regular inspection. With those few words, I beg to move.
Amendment moved—
Page 20, line 3, at end insert—
("(d) for any person to be employed other than on the ground floor of any premises where stairs are constructed of inflammable material").—(Lord Shepherd.)
LORD NEWTON: The principal reason why I resisted two Amendments moved just now by the noble Lord, Lord Champion, was that they would have had the effect of requiring a greater number of fire certificates to be issued than otherwise. This Amendment, of

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course, has precisely the same effect, and therefore the same arguments in rebuttal apply. There is, however, one further point that I might make to the noble Lord. As I have said, there are these powers in subsection (9) to extend the certification procedure to any class of premises if my right honourable friend thinks it necessary. The presence of a staircase constructed of inflammable material is only one of a number of factors which he might take into account as a special risk justifying the certification procedure under Clause 29(9). I do not honestly think it would be right to single out one particular criterion, important though it may be, without detailed and expert examination. If one singles these buildings out as a class, one might be distorting the priorities to which I referred earlier. For these reasons I hope the noble Lord will not press this Amendment.
LORD SHEPHERD: Like my noble friends on the previous Amendments, I hear the news from the noble Lord without a great deal of satisfaction. I will consider this matter between now and the next stage and decide what to do. But some of these conversions which are taking place are capable of very great menace, and while it may not be possible to deal with some of the old existing offices I think we should consider the conversions which are going on, or at least those which are now starting, and see that they conform to the proper standards. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
10.26 p.m.
LORD NEWTON LORD NEWTON moved in subsection (5) to leave out paragraph (a) and insert the following new paragraph:
"(a) specify the greatest number of persons who, in the opinion of the appropriate authority, can safely be employed to work at any one time in the premises".
The noble Lord said: I beg to move this Amendment, and it may be convenient to your Lordships if, at the same time, I discuss the consequential Amendments, Nos. 60 and 61. These Amendments are designed to improve the procedure relating to fire certificates. Under subsection (5)(a) of Clause 29, a fire authority is required to specify in the fire certificate the number of employed
784
persons stated in the application for the certificate as the greatest number employed to work at any one time in the premises, or proposed to be so employed. My right honourable friend thinks it desirable to amend that requirement so that the fire authority would instead specify in the fire certificate the greatest number of persons who, in the opinion of the authority, could safely be employed to work at any one time in the premises.
This amended procedure should prove helpful to both owners and occupiers and, indeed, to fire authorities, without in any way reducing the protection for employed persons; indeed, the specification of a maximum safe number should improve protection. The occupier will know that, with the given means of escape, he can safely increase his staff to the number stated in the certificate without making a further application to the fire authority. The fire authority will be spared unnecessary paper work and additional inspections of premises, and the new procedure should also help owners responsible for the fire precautions in buildings to which Clauses 42 and 43 apply. I beg to move.
Amendment moved—
Page 21, line 7, leave out paragraph (a) and insert the said new paragraph.—(Lord Newton.)
On Question, Amendment agreed to.
Clause 29, as amended, agreed to.
Clause 30 [Maintenance of means of escape in case of fire, and inspection by appropriate authority]:
LORD CHAMPION LORD CHAMPION moved, in subsection (5) to insert:
"(d) specify the person responsible (subject to any regulations made under section 38(2) of this Act) for seeing that the provisions of sections 28 to 38 of this Act are complied with."
The noble Lord said: What I am trying to do by this Amendment is to ensure that the responsibility for seeing that the provisions of Clauses 28 to 38 are complied with is placed firmly on the shoulders of someone who shall have a personal responsibility for it. We want to ensure that, without any shadow of doubt, someone will be responsible. I always think that in matters of this kind, unless someone is charged with a definite duty there is always a tendency to "leave it to

785
George"—to the other chap. Under Clause 29(1), provision is made respecting a building containing two sets or more of premises. These premises have common stairways, they may very well have common emergency exits, the approach to which must be kept clear for emergency use by all persons employed in the two or more sets of premises. Clearly, the responsibility for maintaining those exits and keeping open the means of escape ought to devolve on a single person and not on a committee of the: occupiers of the premises.
Clause 53 deals with the powers of local authorities and the Minister's inspectors. Subsection (f) of that clause reads:
"to require any person having responsibilities in relation to any such premises as are mentioned in paragraph (a) above (whether or not the owner or occupier of the premises or a person employed to work therein) to give him such facilities and assistance with respect to any of the matters or things to which the responsibilities of that person extend as are necessary for the purpose of enabling the inspector to exercise any of the powers conferred upon him by this subsection".
It will be noted that under Clause 53 persons having responsibilities in relation to premises may be the owners or occupiers of the premises or persons employed to work therein. I am not sure I have this correctly—I am not a lawyer—but it appears to me that any fire inspector going to a set of premises should know to whom he should go and who is responsible for carrying out the duties imposed under Clauses 28 to 31. He should be able to go to that person and point out any failure to comply with the provisions of the fire certificate, and that person to whom the inspector would go should clearly be named on the certificate to be issued under the clause we are discussing. I beg to move.
Amendment moved—
Page 21, line 20, at end insert the said new paragraph.—(Lord Champion)
10.31 p.m.
LORD NEWTON: The noble Lord wants to make a particular person responsible for complying with the provisions of the Bill in all premises requiring a fire certificate, and that the certificate should bear his name. I quite appreciate that the noble
786
Lord wants to ensure that everything possible is done to provide a high standard of fire protection, but I do not think his Amendment is necessary for this purpose, or indeed is particularly useful. The effect of Clause 62 is to make the occupier generally responsible for complying with the fire provisions of the Bill, except in the classes of buildings to which Clauses 42 and 43 refer, where the owner or owners are responsible. There is thus already a clear allocation of responsibility under the Bill, and it might be confusing if the fire certificate were to specify some other person as responsible for compliance.
There is nothing in the Bill to prevent an owner or occupier, as the case may be, from appointing an officer responsible for fire precautions if he wishes, and in many firms this will be a most commendable practice. But I would suggest it is not really appropriate to relate this to the quite separate question of certification or to make it a general requirement. I should like to add that Clause 29(5) is in fact based on Section 40(6) of the Factories Act which makes no provision for specifying a responsible person in the manner in which the noble Lord's Amendment proposes. I hope that he will be satisfied with my explanation.
LORD CHAMPION: Yes, to some extent. I can see that it is right that the certificate should be issued to the occupier, but, as I said previously, there is always the difficulty in the type of building where you have two or more sets of premises that you will have a common usage of certain things; you issue separate certificates and the difficulty will be to ensure that one or the other will be responsible for the common stairways and the common exits and so on. The noble Lord might have covered this point, but I am not quite sure he did. I shall carefully examine what he said and if necessary put down an Amendment on Report stage.
LORD NEWTON: The position is that where there is more than one occupier, then it is the owner who is responsible. I apologise if I did not make that clear.
LORD SHEPHERD: What is going to be the case in Scotland where there are premises with a large number of occupiers who are in fact owners of their particular premises? I can see some

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difficulty here. I can see the effect of the Bill where there is one ownership of a number of premises of tenant occupiers, but in Scotland the position is quite different. It is usual for premises and floors to be sold off. It would seem to me that there would be some difficulty there. Who is going to see in any particular case that the fire equipment is sufficient for the whole building? I think it should be clearly laid down that in that type of building somebody is recognised as being responsible. I do not know whether the noble Lord can say what is going to be the case in Scotland. If not, perhaps he could come back to the matter at a later stage.
LORD NEWTON: The noble Lord may be aware that where there is one occupier he will be responsible—it does not matter whether he is the owner or not. Where there is more than one occupier then the owner will be responsible.
LORD SHEPHERD: The noble Lord is probably not familiar with Scotland.
LORD LINDGREN: Nor with London, now.
LORD SHEPHERD: In Scotland it is quite usual in a block of flats or offices, or even a factory, for the floors to be owned not by one owner but separate owners—in other words, there are a number of owners in a building. In that case, who is to co-ordinate the arrangements to see that the fire equipment, fire escapes and other provisions for the building are satisfactory and kept in good order? I see one of our noble friends from Scotland. I am sure he will bear me out in the problem that may arise in regard to Scotland and Scottish buildings.
LORD FERRIER: I was just about to rise to support what the noble Lord has said. If I may venture to correct him, I would not say that it was usual, but I agree it is not uncommon, that the situation he described exists, whereby floors in the same building are separately owned. Therefore, there is some substance in what the noble Lord has said.
LORD NEWTON: I have just been confirming my impression: each owner is responsible for his own part.
LORD CHAMPION: There you have the difficulty of the common staircase and so on, down which each employer will to some extent cause his employees to go. I think that the noble Lord's offer to look at it again should be accepted. We, for our part, will look carefully at what he has said and, if necessary, will return to it on Report stage. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 29, as amended, agreed to.
Clause 30 [Maintenance of means of escape in case of fire, and inspection by appropriate authority]:
10.39 p.m.
LORD NEWTON: This is consequential on Amendment No. 58. I beg to move.
Amendment moved—
Page 22, line 23, leave out ("materially the greatest") and insert ("the").—(Lord Newton.)
On Question, Amendment agreed to.
LORD NEWTON: This also is consequential. I beg to move.
Amendment moved—
Page 22, line 24, after ("time") insert ("above that stated in the certificate").—(Lord Newton.)
On Question, Amendment agreed to.
10.40 p.m.
LORD NEWTON LORD NEWTON moved, after subsection (5), to insert:
"(6) Where the appropriate authority are satisfied, with respect to any premises with respect to which a notice under subsection (3) of this section has been given to them, that the giving of effect to the proposals notified will not result in the means of escape from the premises in case of fire becoming insufficient, they shall, upon production of the fire certificate in force with respect to the premises, cause to be written on the certificate a statement that they are so satisfied."
The noble Lord said: Subsection (4) of Clause 30 provides that in cases where there is a change, or a proposed change, of conditions in any premises by reason of which the existing means of escape in the event of fire have become, or are likely to become, insufficient and the fire authority require alterations to be made to the premises, the fire certificate shall be amended or a new one issued. It was suggested in another place that the fire certificate should also be amended in cases where, notwithstanding the change or proposed change

789
in conditions, the fire authorities axe satisfied that the means of escape are still insufficient. This modification of the procedure should keep fire certificates up to date and be generally helpful to owners and occupiers, and this Amendment I am moving would achieve this result. I beg to move.
Amendment moved—
Page 23, line 16, at end insert the said subsection.—(Lord Newton.)
On Question, Amendment agreed to.
Clause 30, as amended, agreed to.
Clauses 31 and 32 agreed to.
Clause 33 [Safety provisions in case of fire]:
LORD SHACKLETON LORD SHACKLETON moved at the commencement of subsection (1) to insert "Subject to the next following subsection,". The noble Lord said: Amendments 64 and 65 go together. Here, again, this is put down to seek clarification in the light of a difficulty. The purposes of Clause 33 are generally clear and we fully support them, but there is a particular difficulty that arises in certain buildings, in which night watchmen, security guards, even firemen, may be employed. This is particularly so in a building where there is a very severe fire risk, such as a department store, which may be equipped with fire doors which enable sections of the premises to be cut completely off. Clearly, it is undesirable to make it difficult for a fireman to escape if there happens to be a fire and he is on duty; but routes which ought to be open by day and during business hours in order to make it possible for large numbers of people to escape may not be necessary after business hours.
I had thought of two ways of dealing with this matter by Amendment, and I am not quite sure whether the one I am proposing is right; indeed, I shall be gratified if I can hear from the Government that it is not really necessary. The intention is to ensure that, providing there is a satisfactory escape route and that escape route is suitable, especially for the particular part of the building in which the individual may be working as a watchman or security guard after hours, all the doors"
"through which he might have to pass"—
which is a strange sort of phrase—
"so as to get out' of the premises shall not be so locked or fastened that they cannot be immediately opened by him on his way out."
This is not so necessary. It may be it could be met by making a requirement that a key must be always available, but I doubt whether what would be necessary for large numbers would be necessary for one or two people. I should be grateful for the Government's view on this problem.
Amendment moved—
Page 24, line 26, at end insert the said words.—(Lord Shackleton.)
LORD CARRINGTON: I think the noble Lord is quite right. If the Bill were interpreted in the way he has suggested, it would be asking a great deal of small firms—and large firms as well, for that matter. I think I can satisfy him on this. The wording of subsection (1) states:
"while a person … is employed to work in the premises … the doors of any doorways through which he might have to pass so as to get out of the premises shall not be so locked or fastened that they cannot be immediately opened by him on his way out."
That does not require all doors on the premises to be left unlocked when a few of the staff—perhaps the noble Lord, the director, working hard after everybody else has left—are still there after business hours. It does not mean that at all.
All that is necessary is that the person concerned should be able to get out of doors which afford or lead to an adequate means of escape. It would be perfectly all right, according to this clause, if he had a key in his pocket, for example, and could open the door which was the exit from the place where he was working. I think the noble Lord was concerned, too, about security. It would still be possible, for example, for a bank or a jeweller's shop to lock up the main entrance so long as there was an exit door which was left unlocked or capable of being unlocked—with the key close by it, perhaps—by the staff concerned.
I am not quite sure what the noble Lord meant in his Amendment by "business hours". But if he meant hours when premises are open to the public for business, I think he will agree that that might cause some difficulty, because there are people—for example, in banks—who would still be employed in large numbers if the interpretation that he puts

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upon "open to the public" is the one which I think he has. I do not think it would be reasonable to restrict the application of subsection (1) in this case. In point of fact, this clause is exactly similar to the one in the Factories Act. I keep on saying that, and I apologise to your Lordships; but it has worked very satisfactorily for some considerable time without any difficulty. I think we do not expect any problems on this particular clause, and I hope the noble Lord will feel that the requirements are fairly reasonable.
LORD SHACKLETON: I hope the noble Lord is right in his clarification. Of course by "after business hours" I did not mean after the hours at which the public are admitted; I meant after the regular business hours of the particular undertaking. If it happens to employ people by night on regular business hours, this Amendment would not affect them. None the less, I am grateful for that assurance, which seems to meet the point, and certain of the remarks made by the noble Lord made it clear to me that he had taken even some of the points which I had not made. With that, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 33 agreed to.
Clauses 34 to 38 agreed to.
Clause 39 [Appropriate authority for purposes of sections 28 to 38]:
LORD NEWTON: This Amendment is consequential on No. 62. I beg to move.
Amendment moved—
Page 27. line 11. after ("30(4)(b)") insert ("and (6)").—(Lord Newton)
On Question, Amendment agreed to.
Clause 39, as amended, agreed to.
Clauses 40 and 41 agreed to.
LORD CARRINGTON: I do not know whether this would be a suitable moment to adjourn. We have made comparatively good progress to-day, I think, and perhaps we might call it a day.
House resumed.

MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVI- SIONAL ORDER (BOLTON) BILL
Brought from the Commons; read 1ª and (referred to the Examiners.
UNIVERSITIES OF DURHAM AND NEWCASTLE UPON TYNE BILL
Brought from the Commons; read 1ª and referred to the Examiners.
HOUSE OF LORDS OFFICES COMMITTEE
Second Report from the Select Committee, made, and to be printed.
  SAFETY OF DRUGS
  SAFETY OF DRUGS
  LICENSING AND INSPECTIONS OF STALLIONS
  LICENSING AND INSPECTIONS OF STALLIONS
  PRISONERS' PETITIONS
  PRISONERS' PETITIONS