Sitting of 2 December 1963

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  PENSIONS AND NATIONAL INSURANCE

    Industrial Injuries (Prescribed Diseases)
    Mr. Prenticeasked the Minister of Pensions and National Insurance what consideration is being given by his Department, or by the Industrial Injuries Advisory Council, to possible additions to the schedule of prescribed diseases under the Industrial Injuries Act.
    The Minister of Pensions and National Insurance (Mr. Richard Wood): My Department closely watches developments which might have a bearing on the prescription of industrial diseases. The Industrial Injuries Advisory Council is kept informed of anything significant. The Council itself can consider on its own initiative the whole range of possible additions to the existing schedule, but its proceedings are confidential and I know only of those aspects of this work which it brings to my attention.
    Mr. Prentice: May I draw the Minister's attention to the debate on this matter which took place at this year's Trades Union Congress, and the disquiet displayed by representatives of a number of unions about it? Particularly, is the right hon. Gentleman satisfied that enough people in the Ministry are doing research into new processes to ensure that if new processes in industry carry a risk of disease the question of prescribing those diseases can be considered reasonably quickly?
    Mr. Wood: I think that that is so. More important, perhaps, the Industrial Injuries Advisory Council is continually examining the possibility of new prescription. I think that the hon. Member
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    would agree that it is immensely important in this connection that the relationship between the disease and the employment: of the men or women concerned must be clearly demonstrable if the principle is not to be irretrievably breached.
    Dr. Stross:Will the Minister bear in mind that for years all of us who serve in areas where people are at risk from noxious dust inhalation have been trying to persuade his Department that pulmonary disability, whether or not there be radiological findings, should be recognised after many years of work in such an industry? As a new Minister to this Department, will he bear this fact in mind?
    Mr. Wood:The hon. Member has a great interest in these matters. I know that these questions have been examined on many occasions. I should like to inform myself on the issue, and anything that he would like to send me I shall certainly look into.

    Benefits (Christmas Week)
    Mr. A. Lewisasked the Minister of Pensions and National Insurance whether he is aware that since the last adjustment in welfare and retirement payments food prices have increased, rents have risen, and the purchasing power of the £sterling has further depreciated; and whether he will introduce legislation to enable all National Insurance benefits to be doubled for the Christmas week to assist those on limited incomes to enjoy the festive season without increasing the inflationary spiral.
    Mr. Manuelasked the Minister of Pensions and National Insurance if he will make, the week before Christmas, an additional payment equivalent to one week's pension to all retired men and women who are in receipt of a contributory National Insurance pension or a non-contributory pension.
    Mr. Wood:Since the retirement pension improvements in May, the retail prices index for all items has moved very slightly downwards. Any argument based on (he movement of prices is therefore misconceived. In any event, payments of the kind mentioned have always been regarded as quite inappropriate to our system of social provision.
    Mr. Lewis:The Minister may quote general prices, but is he not aware of the fact that the cost of food, rent, and the basic commodities which old-age pensioners and others mentioned in the Question have to meet has risen drastically? Does he think it fair that these sort of people should not receive increases while such people as judges should get a 50 per cent, increase and such people as the chairmen of public boards should get a 20 per cent, increase? If, during the period of the election, the Government propose to make certain hand-outs, should not the people referred to in the Question be the first to receive the benefit?
    Mr. Wood: I read HANSARD, and I am aware of the hon. Member's researches. If I may offer him a little advice, I would point out that it would be better if his researches were less selective, and if they produced the whole picture. In any event, it is important to remember that, rather than give bonuses in Christmas week, a few months ago the Government took steps to see that pension rates, all through the year, were put at a higher real value than they have ever been.
    Mr. Manuel: Will the right hon. Gentleman recognise the very great happiness that he could bring to the lives of retirement pensioners if he gave this additional week's increase? Is he aware that it would enable these old people to buy gifts for their grandchildren, and such like, and so enter into the festive spirit at Christmas?
    Mr. Wood: I think that the Government were right, rather than giving a week's increase, to take the decision they did and give an increase over the whole year.
    Miss Herbison: Surely the right hon. Gentleman is aware that the gap between what the old-age pensioner or the retired person receives today and the average wage is much bigger than it was even in 1938, before the war? Is not this really proof that old-age pensioners, visà-vis wage earners, are having a very thin time?
    Mr. Wood:No, Sir. The proportion which the retirement pension now bears to average earnings is very much higher than it was when the Conservative Party came to office.

    National Assistance, Bournemouth
    Sir J. Edenasked the Minister of Pensions and National Insurance (1) how many people in the county borough of Bournemouth are in receipt of a National Insurance pension: and how many of these are drawing National Assistance;
    (2) how many people in the county borough of Bournemouth over retirement age and not in receipt of a National Insurance retirement pension are drawing National Assistance.
    Mr. Wood: I do not know the number of National Insurance pensioners in any particular local authority area. The National Assistance Board tells me that 3,496 retirement pensioners and 576 people over retirement age, but without a retirement pension, were receiving weekly grants from its Bournemouth office on 24th September, the latest available date. This office covers four-fifths of the county borough of Bournemouth and small parts of Christchurch and Fordingbridge. Some of the grants provided for the requirements of a household with more than one pensioner.
    Sir J. Eden:Can my right hon. Friend say whether the figures which he has quoted indicate an increase in the total number of elderly people drawing National Assistance? If so, would not that indicate a welcome change of attitude, particularly in an area such as Bournemonth, as it would mean that many people were coming to recognise National Assistance as an extremely fair way of providing help for those most genuinely in need? In welcoming the work of the National Assistance Board officers, will he do everything he can to encourage them to be as liberal as possible in their assessment of needs, particularly with borderline cases?
    Mr. Wood: I cannot give the proportion for this area, but the proportion generally throughout the country has remained reasonably static in recent months and years. I hope that my hon. Friend's Question will get all the publicity it deserves, because this is the attitude which I should like to encourage.

    Sickness Benefit (Personal Case)
    Mr. A. Lewisasked the Minister of Pensions and National Insurance when he received from the hon. Member for West Ham, North, the communication from one of his constituents making the claim that although he is entitled to £7 10s. sickness benefit, for which the local office remitted a postal draft on 12th November, 1963, which has not yet been delivered to the claimant, he will have to wait a further seven weeks before payment; and, in view of the fact that this constituent will otherwise need to apply to the National Assistance Board, whether he will authorise payment forthwith.
    The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mrs. Margaret Thatcher): As I have explained in my reply to the hon. Gentleman's letter of 21st November, his constituent received a duplicate postal draft on 26th November.
    Mr. Lewis: I thank the hon. Lady for that reply and for the expeditious way in which she has satisfactorily resolved this matter. However, will she look at the general principle, because it appears that if a postal draft goes astray for some reason, the normal practice is for the intended recipient to have to wait for seven weeks during attempts to trace the original draft? Could not the Ministry use the recorded delivery, or some other, service to see that when people do not get the original draft, they have some payment, instead of having to wait seven weeks for the draft to be traced?
    Mrs. Thatcher:Perhaps the hon. Gentleman does not know how many postal drafts we issue in a year. My Department alone sends some 35 million postal drafts a year and that would exclude recorded delivery.

    Widows (Ten-shilling pension)
    Sir J. Langford-Holtasked the Minister of Pensions and National Insurance why the pension paid to widows aged 49 who married before 5th July 1948, and who have continued National Insurance contributions since their husbands' deaths is limited to 10s. shillings.
    Mr. Wood: Under the present scheme a woman widowed under the age of 50
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    does not normally qualify for a continuing widow's benefit unless she has children. The 10s. pension is payable to some of these widows as a reserved right from previous legislation. Contributions paid during widowhood will qualify them for the retirement pension and other benefits of the present scheme.
    Sir J. Langford-Holt: Would my right hon. Friend bear in mind that it is much more difficult for a widow at the age of 50 to become re-employed than it is for younger ones? Will he consider the age of 50 rule which has been in existence, I know, for a very long time?
    Mr. Wood: I will certainly bear in mind what my hon. Friend says.
    Mr. H. Hynd: Is the right hon. Gentleman aware that the contributions during widowhood which he has mentioned swallow up practically the whole of the 10s. pension?
    Mr. Wood: Certain relaxations can be made for women who are not working and, in any event, the 10s. widow who has to pay a contribution is better off than the widow in similar circumstances who, under the new scheme, is not receiving any pension at all.
    Mr. J. Bennettasked the Minister of Pensions and National Insurance what, in terms of 1946 prices, is the present value of the 10s. weekly pension now being paid to some widows.
    Mr. Wood: 5s. 4d., on the basis of the Retail Prices Index from June, 1947, and the Cost of Living Index for the earlier period.
    Mr. Bennett: Will the Minister accept that his reply has been heard with a sense of shock by all hon. Members? Does not he agree that a continuation of this principle is quite indefensible, and will he seek an early opportunity to redress what is a very serious wrong?
    Mr. Wood: I did not quite gather from the hon. Gentleman what was the principle the continuation of which was indefensible. It seems to me that what is shown by the reduction in the real value of the 10s. pension is that the lead which widows who receive it have over other widows in similar circumstances is rather less than it was. Since the

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    House agreed that the basis of compensation for widows should be different, I do not think that there is any justification for bringing the lead back to where it was.
    Mr. P. Williams: Will my right hon. Friend tell us how much of the decline occurred up to 1951?
    Mr. Wood: I have not got that information now, but, if my hon. Friend will put down a Question, I shall be very happy to give the answer.

    National Assistance
    Mr. Mitchisonasked the Minister of Pensions and National Insurance what percentage, as at the latest available date, of persons and of householders receiving retirement pensions or contributory old-age pensions was also receiving National Assistance.
    Mr. Wood: It is estimated that 22.6 per cent, of pensioner households were receiving supplements from the National Assistance Board in June, 1963. Pensioners in these households amounted to 21.7 per cent, of the total number of retirement and contributory old age pensioners.
    Mr. Mitchison: In view of these very high proportions which have now been running for some years, does not the right hon. Gentleman consider that an increase in National Insurance benefits is overdue?
    Mr. Wood: The proportion is almost exactly the same as it was at the end of 1951. It would certainly be possible to reduce the proportion, as suggested, by improving National Insurance benefits and not National Assistance, but the difficulty is that this would give no help to the poorest of those concerned, because they would merely get benefit instead of assistance.
    Mr. Mitchison: Does that mean that the right hon. Gentleman has no intention of increasing National Insurance benefits?
    Mr. Wood: I have a number of Questions on this subject. Perhaps I can answer them when I get to them.
    Sir J. Eden: Can my right hon. Friend say what proportion of the National
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    Insurance retirement benefit has been paid for out of contributions?
    Mr. Wood: I should have to have notice of that very complicated question.

    Retirement Pension
    Mr. Gourlayasked the Minister of Pensions and National Insurance by how much the retirement pension of a married pensioner would require to be increased to raise its present purchasing value to that which obtained on the date when the present rates of pensions were announced.
    Mr. Wood: Is. 1d. would have to be added to the combined retirement pensions of a married couple.
    Mr. Gourlay: Is the right hon. Gentleman aware that pensioners consider that they have been very shabbily treated by the present Government? Will he, therefore, review the present position of pensioners, especially at this time of year when many of them are unable to purchase sufficient coal to keep themselves warm? Will he consider announcing an early increase in pensions, although a General Election is not very far off?
    Mr. Wood: I find it hard to believe that pensioners believe this, because in May—
    Mr. A. Lewis: Ask them at Luton.
    Mr. Wood: Luton was concerned with a number of issues—National Insurance benefits were given the highest value that they had ever had, and they still retain this highest value.
    Mr. Gourlay:Notwithstanding that, is it not a fact that pensioners in Scotland in particular are still very dissatisfied with the present rate of pension, which is not sufficient to ensure that they can keep themselves warm at this time of year?
    Mr. Wood:We could continue this argument for a very long time, but the steps which the Government took in the spring of this year had the effect of giving the pensioner a pension of greater value than he had ever had before.
    Mr. Smallasked the Minister of Pensions and National Insurance if he will express in terms of 1946 prices the present value of the basic retirement pension for a single adult male.
    Mr. Wood:36s. 2d., on the basis of the Retail Prices Index from June, 1947, and the Cost of Living Index for the earlier period.
    Mr. Small:Does the right hon. Gentleman recognise that, in relation to the 26s. pension of 1946, the present level in monetary terms is quite derisory, particularly in what is regarded as our present affluent society?
    Mr. Wood: The hon. Gentleman is not comparing two like things. The pension has not only increased in monetary terms, but has risen by more than half in real value since 1951. I point out also that the 26s. pension he is talking about had already decreased in value by 1951 to 23s. 3d. In fact, this Government are spending a very much larger proportion of the national income for this purpose than was being spent in 1951.
    Mr. Mitchison: Why does one in five have to go for National Assistance?
    Mr. Wood:For the reason which I gave earlier, that we have increased National Assistance as well as National Insurance benefits. If we had done one without the other, we should certainly have reduced the proportion, butwe should not have helped those who were poorest.
    Mrs. Slater:The Minister uses the argument that more of the national income is being spent for this purpose. Does he take into account that there are very many more old-age pensioners? Further, will he look at the problem from the point of view of the old-age pensioner for a change, recognising that what they suffer from is the constant increase in the cost of bare essentials which they, as old-age pensioners, must have? For instance, the price of bread will go up next week, and this will be an important increase for them. Finally, will the Minister tell us clearly and definitely what is the Government's policy: is it to extend National Assistance rather than the basic pension, as he seemed to imply in an earlier answer to one of his hon. Friends?
    Mr. Wood:I shall do my best to give as informative answers as possible to any hon. Member who puts Questions down. I am glad that the hon. Lady has drawn my attention to the increase
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    in the number of retirement pensioners. The difference in the cost of pensions between 1951 and 1962 is striking—£270 million in 1951 and £820 million today.

    Medical Appeal Tribunals
    Mr. Swinglerasked the Minister of Pensions and National Insurance if he will stats, for each of the last three years in respect of injury benefit and disablement benefit cases, respectively, in what proportion of cases where the decision of the medical board was favourable to the claimant he referred the case to the medical appeal tribunal.
    The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Lieut-Commander S. L. C. Maydon):Questions of injury benefit do not come before medical boards except in some cases of diagnosis of prescribed diseases. My right hon. Friend exercises his power to refer to medical appeal tribunals decisions of medical boards in the interests both of claimants and other contributors. The proportion of all the medical board decisions which came before medical appeal tribunals after such references in I960, 1961 and 1962 was about 1.4 per cent, 1.4 per cent, and 1.6 per cent, respectively.
    Mr. Swingler:That does not answer the Question, which was concerned with a decision favourable to the claimant. Is the hon. and gallant Gentleman aware that I am concerned with the figures given by the Minister to my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) last week, which showed a startling increase in the number of cases which the Minister referred to the appeal tribunal, cases in which the medical board had given a favourable result to the claimant? In the last three years, in north Staffordshire at any rate, this increase in the number of cases referred to the appeal tribunal by the Minister has created the impression that the Ministry is doing everything possible to dispute the claims of the injured and disabled.
    Lieut-Commander Maydon: In the first place, it is impossible to separate what might be considered a favourable from an unfavourable decision. The assessment is given by the medical board, and it is not until after appeal that it can be found whether it remains

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    the same, is reduced or increased, in which case it would be favourable or unfavourable.

    Widows (Pensions and Earnings Rule)
    Mr. Liptonasked the Minister of Pensions and National Insurance whether he will increase the pension of 10s. widows and abolish the earnings rule for widows' pensions.
    Mr. Wood: Both these proposals were rejected by the House of Commons earlier this year. I have no further statement to make.
    Mr. Lipton:Is the right hon. Gentleman aware that the Government have already decided to improve pensions including those of the 10s. widow, and to abolish the earnings rule? Can he give us an assurance that these improvements, whatever they are, will be put into effect as soon as practicable and not kept in cold storage for the Tory election manifesto?
    Mr. Wood: The hon. Gentleman seems to be in possession of information which has not come my way. Perhaps it would be helpful if we could have a little talk about this some time.
    Dame Irene Ward: Apart from his argument with the hon Member opposite, can my right hon. Friend tell me whether he agrees with my view and the view of most of my Conservative colleagues on the question of widows, and will he tender that advice to the Cabinet, which is much more important than an exchange of views across the Floor of the House?
    Mr. Wood:My hon. Friend has expressed a number of views to myself and my right hon. Friends. With most of her views I find the same thing—I agree with some of them, but not necessarily all.

    Retirement Pensions and Benefits
    Mr. W. Hamiltonasked the Minister of Pensions and National Insurance when he intends to make a statement on retirement pensions and other National Insurance benefits.
    Mr. Milneasked the Minister of Pensions and National Insurance what
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    changes Her Majesty's Government intend making in old-age pensions and other similar payments arising from recent increases in the cost of living.
    Mr. Frank Allaunasked the Minister of Pensions and National Insurance if he will grant an increase of £1 a week to those on retirement pension or on National Assistance.
    Mr. Wood: I have no statement to make except to remind the hon. Gentlemen that National Insurance benefits now have a higher real value than ever before.
    Mr. Hamilton: Who will make the statement when it is made—the right hon. Gentleman or the Prime Minister? Would the right hon. Gentleman be prepared to live on the old-age pension?
    Mr. Wood:I have not said whether or not a statement will be made, so it would be wholly hypothetical if I said who was going to make it. As for the retirement pension, I have not had any case brought to my notice where a pensioner is having to live on it alone.
    Mr. Milne:When will the right hon Gentleman agree to stop juggling with statistics and deal a little more sympathetically with this matter? Does he realise that the weightings in the cost of living index are heavily against the old-age pensioners? Will he have a look at the question of food and fuel in relation to pensioners and then tell us what he is prepared to do about it? Is he not aware that it is obvious in all our constituencies that there is a considerable amount of hardship which should be dealt with more sympathetically?
    Mr. Wood: I will examine any information that the hon. Gentleman has to suggest that the means of measuring these things, which have been used for a very long time, are in some way basically faulty, but I have not had brought to my notice information which convinces me that the present is not the best way we have so far discovered of measuring these things.
    Mr. Allaun:Does not the right hon. Gentleman agree that the Labour Party is committed to a substantial and immediate increase and that this will force the Government to promise some increase before the General Election?
    Mr. Wood: I understand that Labour is so committed, but what the party has not told us is what it will cost.
    Miss Lee: Will the right hon. Gentleman look again at an earlier reply in which he said that he had not had brought to his notice any case where a pensioner was living on "it" alone—meaning the retirement pension? Does he think that the type of pensioner who is over-shy, muddled or too proud to ask for National Assistance or for assistance from voluntary organisations of any kind is the type of pensioner he will hear about?
    Mr. Wood: What I have been trying to do—in answer to my hon. Friend the Member for Bournemouth, West (Sir J. Eden)—is to discourage the reluctance which I understand people feel, but which is so unnecessary, to approach the National Assistance Board. The Board exists—and Parliament has put it in a position to be able to do so—to help pensioners to supplement their means if they are inadequate for them to live on.

    National Assistance (Scotland)
    Mr. W. Hamiltonasked the Minister of Pensions and National Insurance how many retirement pensioners in Scot-, land are in receipt of National Assistance supplementation; what proportion this is of the total; and what is the average supplement being paid.
    Mrs. Thatcher: At the end of June, 1963, 86,040 retirement pensioners in Scotland were receiving supplements from the National Assistance Board. Some of these grants provided for the requirements of a household with more than one pensioner, and it is estimated that the proportion of households receiving retirement pensions in which a supplement was also paid was 20·4 per cent. The average supplement was 17s. 9d.
    Mr. Hamilton:Is not this further evidence that the basic pension is entirely inadequate? Will the Government give an assurance that one of the solutions to the problem—although not the only one—would be an increase in the basic pension? Will the hon. Lady also assure us that, when a statement is made on this, the Conservative Party, contrary to rumour, will not seek to solve the problem by putting the increase on National
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    Assistance benefits, which means a means test, rather than on the basic pension?
    Mrs. Thatcher: The proportion of retirement pensioners drawing National Assistance depends really on the relationship between the two scale rates, that is, National Insurance and National Assistance. If last time we had put up National Insurance rates without putting up those of National Assistance, we should have been subject to very severe criticism. The proportion of retirement pensioners drawing supplements has not altered materially in recent years.
    Mr. John Hall: Does not my hon. Friend agree that the National Assistance system allows assistance to be given where it is most needed? Would she not also agree that, to encourage people who are reluctant to apply for National Assistance, it might be helpful to adopt the suggestion I have often advanced—change the name of the National Assistance Board, which is a very unfortunate name in the minds of many people?
    Mrs. Thatcher: We have considered that from time to time, as my hon. Friend knows, but we do not believe that changing the name of the Board would achieve a material increase in the number of people applying for assistance. I would emphasise that one of the points about the system is that a person in need of help can get it readily this week—now—without having to fill in as much as a single form or visit a single Government office.
    Mr. Mitchison: Is it the Government's intention to continue paying insufficient National Insurance pensions and to rely on the National Assistance Board to make them up to what is required to live on?
    Mrs. Thatcher: As the hon. and learned Gentleman knows, insurance pensions are paid by virtue of contributions, quite regardless of need, and I think that the system we have of National Insurance on the one hand and National Assistance on the other, is right for present purposes.
    Mr. Smallasked the Minister of Pensions and National Insurance how many unemployed men in Scotland are in receipt of a National Assistance allowance below the scale because of the wage stop.
    Mrs. Thatcher: About 6,500.
    Mr. Small:Does the hon. Lady recognise that these figures relate to people who, because of the anomalies of the wage stop, are compelled to live below the standard set by the Government themselves? Will she review the situation, since this is not necessarily the best measurement to give justice to people who are unemployed?
    Mrs. Thatcher: As the hon. Gentleman knows, we frequently discuss this in the House. The basic problem is that the wages system takes account only of a man's capacity to do a job and the social security system takes account of his family commitments. This is the point at which we have to have a reasonable compromise between the two, and the present regulations governing the wage stop are, I believe, reasonable.
    Mr. Bence:Is the hon. Lady aware that the wage stop as applied in many areas is based upon the minimum hourly or weekly wage of a man working so many hours a week, whereas, in fact, most people working in industry earn, by agreement with their employers, a wage far above the minimum wage? Is it not quite unfair to a worker to set the stop at the minimum wage? Ought not the stop wage to be averaged according to the trade or occupation which a man follows in industry?
    Mrs. Thatcher: The wages figure which, in consultation with the Ministry of Labour, the Board try to apply is what the man would earn if he went back to work this week. I think that this is a reasonable basis.
    Mr. Lawson: Is the hon. Lady aware that there seems to be a practice now—this is so certainly in Lanarkshire—of the National Assistance Board itself scaling down the earning capacity of a man, for instance, reducing him from a general labourer to a person who is not physically fit to labour at all and paying him, therefore, on the basis of a person who is not physically fit to do a general labourer's job? Will she look into this?
    Mrs. Thatcher: If the hon. Gentleman has any individual cases, we will, as he knows, look into them; but the basis
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    which I have given—what a man would earn if he went back to work this week—is the one which the Board generally apply.
    Miss Herbison:Will the hon. Lady look into this again? Does not she know that, taking the last two occasions on which increases were made in National Assistance rates, there were 6,500 people who got nothing from the last increase and nothing from the previous increase? Does not she realise how difficult it is for a man, his wife and his family to try to exist on an income quite a bit below what even this Government regard as necessary for mere subsistence and keeping body and soul together?
    Mrs. Thatcher: I am aware of the difficulties, but I am quite sure that it would be wrong to pay a man more when he is out of a job than he could get if he went back to work.
    Mr. Millanasked the Minister of Pensions and National Insurance what estimate he has made of the number of persons in Glasgow who are in receipt of National Assistance supplementation, but whose regular weekly income falls below the National Assistance minimum scale rate.
    Mr. Lawsonasked the Minister of Pensions and National Insurance what estimate he has made of the number of persons in Lanarkshire who are in receipt of National Assistance supplementation, but whose regular weekly income falls below the National Assistance scale rate.
    Mrs. Thatcher: I regret that information from which such estimates could be made is not available.
    Mr. Millan: Will the hon. Lady try to get such information? Quite apart from the detailed anomalies to which my hon. Friends have drawn attention, is it not quite wrong and distasteful in principle that in these cases the National Assistance Board should be deliberately paying people below the subsistence level?
    Mrs. Thatcher: The information from which we get the wage stop figures arises from a sample survey. This gives us a reliable figure for a large area, but not for a small area such as the hon. Gentleman requests, which could be done only by taking an actual count. I

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    do not think that I can usefully add to what I have already said about the wage stop.
    Mr. Lawson:Is the hon. Lady aware that some of my hon. Friends asked for, and were given during the last Session, even more detailed information? If at one time we can get information related, for instance, to Hamilton and other places, why cannot we have similar information now? Will the hon. Lady look at the matter again, since I and other hon. Members know of people receiving as much as £2 less than her own Government consider should be the minimum standard below which no one should have to live?
    Mrs. Thatcher:During consideration of the last general uprating provisions and the interaction between National Insurance and National Assistance, the Board took an actual count as we went through the papers. That count was relevant only to the uprating and the circumstances in which it was done. I shall, of course, look into any individual case which the hon. Gentleman puts to me.

    War Pensioners (Widows)
    Sir R. Caryasked the Minister of Pensions and National Insurance what proposals he has to help the widows of severely disabled war pensioners during the period immediately following the husband's death.
    Mr. Wood: As from today, the widow of a war pensioner, who was receiving constant attendance allowance or unemployability supplement, will be eligible for a special allowance for the first thirteen weeks after his death. The allowance will normally be equivalent to the war disablement pension and the main allowances paid to the husband before his death, except the additional allowance for a wife.
    The new allowance will usually be substantially higher than, and will then replace, the war widow's pension or National Insurance widow's benefit for those thirteen weeks, after which the appropriate existing widowhood benefits will apply.
    I hope that this new allowance, by broadly continuing the husband's pension for thirteen weeks, will give some help to widows of severely disabled war pen-
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    sioners in the period immediately after their husbands die.
    The amending Pensions Instruments have been laid and copies are available in the Vote Office.
    Sir R. Cary:May I ask my right hon. Friend whether he is aware that his Answer will give widespread satisfaction to both sides of the House, as it will to the hard-working officials of the British Limbless Ex-Servicemen's Association and other organisations? Over the years, successive Governments have dealt honourably and fairly with limbless ex-Service men but in the past, all too often on the death of such a man, his widow has suffered a grievous decline in her standard of living to the point of almost intolerable hardship. My right hon. Friend has corrected that position for the future and may I thank him sincerely for the step he has taken?
    Mr. Wood: I am grateful to my hon. Friend for those remarks. Perhaps I may also express my appreciation of the work of my predecessors, who prepared the way for this.
    Dr. King:Is the right hon. Gentleman aware that the British Limbless Ex-Servicemen's Association put this particular hardship at the head of its agenda at every annual conference for a number of years and that it will wish to echo the thanks conveyed by the hon. Member for Manchester, Withington (Sir R. Cary)? Is he further aware that I also pay tribute to him and to his predecessors for the way they have handled some of the hardships of disabled ex-Service men? Would the right hon. Gentleman be willing to meet a deputation from the British Limbless Ex-Servicemen's Association to consider some outstanding hardships which still remain?
    Mr. Wood:I am also grateful to the hon. Gentleman. I am seeing representatives of the association both tomorrow and Wednesday, and no doubt they will take the opportunity then of raising further points with me.

    Pensions
    Dr. Brayasked the Minister of Pensions and National Insurance whether he will now announce a planned rate of increase in pensions.
    Mr. Wood: I think it best that we should continue to take into account all the circumstances that are relevant, including prices, before putting specific proposals to Parliament
    Dr. Bray: Does not the right hon. Gentleman feel that the new attitude to forward planning of Government expenditure—taken many years ahead—plus the accepted need for a policy of distribution of income, means that if we do not earmark an increasing share of the national income for pensioners we shall always be in the position of not being able to afford the pension increases which we know are needed?
    Mr. Wood: I think that the method suggested by the hon. Gentleman would tend to introduce a certain unwelcome rigidity into the development of pensions. If, in the past, we had tried to link increases in pensions to some economic index, they would almost certainly be lower than they are. If they had been linked, for instance, with the retail price index they would be 43s. 6d. and if linked to average earnings they would be 58s. 5d. As it is, however, they are 67s. 6d.
    Mr. Mitchison: Does not the right hon. Gentleman have some sort of index of the cost of living for old-age pensioners, something more particular than the usual retail price index? If so, will he make it available to hon. Members or publish it?
    Mr. Wood: The question put by the hon. Member for Middlesbrough, West (Dr. Bray) was whether we would project our minds forward and announce a planned rate of future increases of pensions. I think what he had in mind was some means of assessing what prices and other circumstances will be in the future. There is no mechanism at the moment that will do that.

    Children (National Assistance)
    Mr. McKayasked the Minister of Pensions and National Insurance if he is aware that a child leaving school at 15 years of age has no claim through his parent to family allowances, National Insurance or National Assistance if he remains unemployed, and the parent is sick or unemployed, and that a child who leaves school at 16 years of age has
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    a claim to National Assistance of 37s. per week if unemployed; and, in view of these facts, if he will consult the National Assistance Board with a view to making regulations to enable them to give children who are unemployed at 15 years of age a claim to National Assistance.
    Mrs. Thatcher: No, Sir. The needs of a child of 15, in the circumstances described in the Question, can be provided for in the assessment of any assistance allowance payable.
    Mr. McKay: I am afraid that the hon. Lady has not the right information on this matter. I have made inquiries about this myself of various National Insurance officers and they definitely tell me that a boy who leaves school at 15 cannot claim National Assistance and that, in addition, if his parents are on National Insurance benefit through sickness, injury or any other cause, he loses about 20s. National Insurance money. I understand that, in addition, if the father is on National Assistance he loses the 28s. which he used to get for the boy.
    The whole point is whether this is a big question or so small that it can be overlooked. The Minister of Labour informs me that there are 32,181 concerned who are under 18 years of age, so this is a big question. If the hon. Lady allows for the 17-year olds, the 16-year olds and the 15-year olds, allocating the 15-year olds only one-third of the total, this would mean a total of 10,000 of these youngsters. These children have no place in society for the time being. The Minister should pay attention seriously to this matter and consider the advisability of giving a child of 15 some National Assistance just as the 16-year-old boy is able to get it.
    Mrs. Thatcher: I wonder if I may clear up what would appear to be one or two misunderstandings between the hon. Gentleman and myself? I agree that a child of 15 cannot claim National Assistance in his own right. The point I was trying to make, and on which I can assure the hon. Gentleman I am right, is that, if the boy's father is on National Assistance, an allowance can be paid in respect of the boy but not to the boy himself.
    Mr. Lawsonasked the Minister of Pensions and National Insurance if, in view of the number of unemployed young people under 16 years of age, he will introduce legislation to enable the National Assistance Board to pay these young people a weekly allowance.
    Mrs. Thatcher:No, Sir. The minimum age for making independent application for National Assistance was fixed by Section 7(5) of the National Assistance Act, 1948, and my right hon. Friend has no proposals to amend it.
    Mr. Lawson: If the hon. Lady's Government claim to have made so many improvements in past legislation, will not they look at this? Is it not a great anomaly that, for instance, although the parents of a child continuing at school may be in receipt of allowances in respect of that child, no allowances are payable if the child does not continue at school? Is there not a strange anomaly here which this Government, if they are really so much concerned to make improvements, should put right at once?
    Mrs. Thatcher:I think that the age of 16 is quite young enough to allow a child income in his own right, and there is nothing to warrant reducing the age to 15.

    Graduated Pensions Scheme
    Miss Herbisonasked the Minister of Pensions and National Insurance what to date is the sum of the contributions paid under the graduated pensions scheme by men and women who have retired before being eligible for any benefit.
    Mr. Wood: I am afraid that this information is not available.
    Miss Herbison:But is not the Minister aware of the feeling among people about to retire when they know that what they paid under the graduated scheme would neither give them an increased pension nor be returned to them? Will he do his best to get this information?
    Mr. Wood: In order to get the information, I should have to examine the records of all contributors who have retired in the past two and a half years. I should then have to add the graduated
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    contributions paid by those who have failed to earn any graduated pension. The hon. Lady will understand that this would be a quite formidable exercise. If I may try to get to the point of the Question, I do not think that the present system is unfair. As it is, if half or more than half the cost of a unit has been paid, then a whole unit is earned in pension, and, if less than half, then the contributions do not earn a unit. Frankly, I do not think that there can beany complaint that a man or woman retiring today is being "diddled" by the Government, because he or she gets a National Insurance pension worth many times the contributions he or she has paid, even if those contributions have been in full over the past forty years.
    Miss Herbison:Surely, the Minister must be aware that there are many people among those retiring who have paid this graduated contribution and who are in receipt of benefit from it but who also think that it is a swindle in the scheme that they are not getting in return what they ought to be getting?
    Mr. Wood:The hon. Lady will find that, if it became the system to give refunds where: it was not possible to give any graduated pension, it would not then be possible to pay a unit of pension until the full contributions for that unit had been paid. I do not think that pensioners would benefit in the long run.

    Medical Board (Examinations)
    Miss Herbisonasked the Minister of Pensions and National Insurance what are his proposals for decreasing the time-lag between a person's being referred to a medical board and his examination taking place.
    Lieut-Commander Maydon: I do not know which medical board examinations the hon. Lady has in mind. If she has evidence of difficulty in a particular case, I shall be glad to look into it.
    Miss Herbison:The Minister will at least be aware of the number of times I have to write to his Department. I have in mind cases of people who are off sick. Their doctor has certified them as unfit for work, but, before any money in insurance is paid to them, they are

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    immediately referred to the medical board, and there is delay in the working of the medical board which makes it very difficult to have any proof that the doctor was right in giving the certificate.
    Lieut-Commander Maydon: The normal period between being called for an Industrial Injuries Medical Board and examination is only seven days. There may be cases in which further complications arise, such as the need for a report from a hospital, which cause some delay, but cases of that kind are the exception rather than the rule.

    Unemployment Benefit
    Mr. Prenticeasked the Minister of Pensions and National Insurance what consideration he is giving to raising unemployment benefit as a partial answer to the problems of redundancy and severance pay; and if he will make a statement.
    Mr. Wood:Unemployment benefit was substantially raised last March. The hon. Member may have in mind the question of earnings-related benefit; I am now examining the problems this would involve.
    Mr. Prentice:Is that all that has happened since July, when the Minister of Labour's National Joint Advisory Council considered the problem of redundancy and said that part of the answer might lie in a revision of the unemployment benefits system? Can the Minister say when he expects the consideration which he mentions to be completed, or whether there is any hope at all of a revision of unemployment benefit, and possibly graduated benefit, during the remaining months of this Parliament?
    Mr. Wood: What has happened both before and since July has been an examination of the very complicated problems which this would involve. I have had discussions with the employers, and I am about to have them with the Trades Union Congress. I hope to make progress on this, but, as the hon. Gentleman, with his knowledge of these matters, will realise, this is a very complicated question, and I cannot promise any very rapid progress.

  MINISTRY OF HEALTH

    Dr. Mackenzie
    Mr. C. Pannellasked the Minister of Health whether he will cause a full inquiry to be made into the circumstances in 1958 in which the late Dr. Mackenzie was appointed in New Wortley, Leeds; why this appointment was cancelled by his Department; and why Dr. Mackenzie was later reappointed.
    The Minister of Health (Mr. Anthony Barber): I have inquired into this matter and am satisfied that Dr. Mackenzie's appointment was properly dealt with. An appeal was allowed, but the successful appellant did not take up the vacancy.
    Mr. Pannell: Will the Minister suspend his satisfaction and keep an open mind until he has received a further statement from me about this case, following the very full statement that he sent to me? Will he take it from me that there is a considerable doubt in my mind, having seen rather more evidence than he has, whether his original statement is true? If the right hon. Gentleman would not mind, I think he probably would like to agree to meet me on the subject.
    Mr. Barber:I know of the hon. Gentleman's concern about this case. Indeed, he has already talked to me about it. As he has pointed out, I have written to him at some length. Of course I should be happy to consider any further points he would like to bring to my notice.

    Invalid Tricycles (Passengers)
    Sir J. Langford-Holtasked the Minister of Health whether he is aware of the danger to life which arises in the case of fire to an invalid car where there is no passenger; and if he will now allow passengers to be carried.
    The Joint Parliamentary Secretary to the Ministry of Health (Mr. Bernard Braine): I assume that my hon. Friend is referring to powered tricycles. The carriage of passengers is an offence under Regulations recently approved by Parliament and my right hon. Friend

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    has no discretion in the matter. Experience shows that the risk of injury from firs is not significant.
    Sir J. Langford-Holt:Will my hon. Friend examine this matter again with a view to providing a vehicle in which a passenger can be carried, whether it is called a powered tricycle or something else? Failing this, will he examine the possibility of making a cash allowance to those who provide it themselves? Further, will he rest assured that I can bring to his notice an example of where a person's life was saved only by the intervention of a passer-by?
    Mr. Braine:We are always prepared to look at the appliances which my hon. Friend makes available to National Health Service patients, and research and inquiry are going on into this very question. I will certainly look at what my hon. Friend has to show me. I think I ought to say that there were nine cases of fires in invalid tricycles in the past year out of 14,000 such vehicles in use. In no case was the disabled person injured. All new powered tricycles issued during the last four years has been equipped with fire extinguishers.
    Sir J. Langford-Holt:Is my hon. Friend aware that research and inquiry simply are not good enough for this problem? Everybody agrees that this should be done, and it is possible to do it. Will he take a stronger attitude?
    Mr. Braine: Research and inquiry always precede action—[Interruption.] I have already indicated to my hon. Friend that my right hon. Friend will certainly be looking into this matter.
    Mrs. Braddock: Is the Joint Parliamentary Secretary aware that it is not only a question of fire? If an invalid tricycle breaks down, at present there is only one person in it—the invalid. Did not his Department receive a few years ago a request from the Invalid Tricycle Association, now the Disabled Drivers' Association, that agreement should be given to a competent person being present with a disabled driver?
    Mr. Braine: I am well aware of all those considerations. This matter will have to be considered. Adding a passenger tends to turn a tricycle into a motor car. [HON. MEMBERS: "Why
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    not?"] It involves examining the whole question of what kind of vehicle should be provided for National Health Service patients.
    Mr. Paget: Is not the real answer that it would be just as cheap, taxation matters aside, to provide two-seater cars as it is to provide invalid tricycles, that the taxation matter is merely one pocket to another in the Government, and that it would be much better for all concerned and safer if invalids had two-seater cars? Why can we not pass on to that policy?

  HOSPITALS

    New Hospitals
    Dr. Dickson Mabonsked the Minister of Health how many new hospitals were built in 1962, and how many have been built so far in 1963.
    Mr. Barber: In England and Wales, in 1962 phases of two new and eight substantially remodelled hospitals were completed and brought into use; in 1963, so far, one new general and one new dental hospital, and phases of one new and four substantially remodelled hospitals, have been completed and brought into use.
    Dr. Mabon: Does the Minister agree that that is a remarkable performance compared with the proposals which the nation is reading now and which his predecessor made in 1960? Does he realise that in 1960 the Minister promised a rate of expenditure of over £70 million a year but that it has in fact been running at only half that figure? Will he now undertake that all this money will be spent in 1963–64, thus fulfilling all the pledges which have been made?
    Mr. Barber: If the hon. Gentleman wishes to make comparisons, I would say that it is a remarkable achievement compared with the period from the beginning of the National Health Service to the end of 1951, when only two new hospitals were started. At present no fewer than 65 new or substantially remodelled hospitals are in progress.
    Mr. K. Robinson: Is the right hon. Gentleman aware that both he and his

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    right hon. Friend the Secretary of State for Scotland have been asked Questions by me about the number of new hospitals planned and started in recent years? Is he further aware that I find it quite impossible to reconcile the Answers I received with the statement made by the Prime Minister on the first day of the debate on the Gracious Speech that one new hospital was being started every nineteen days? The figure is nothing like as good as that.
    Mr. Barber: I can assure the hon. Gentleman that, if he looks into it a little further, he will find that there is nothing inconsistent between the words of the Prime Minister and what my right hon. Friend and I have said. The fact is that last year fourteen new or substantially remodelled hospitals were started. This year twenty-one either have been or will be started. [Interruption.] We have another month to go. Next year the figure will be increased to twenty-eight.
    Mr. K. Robinson: Is the right hon. Gentleman saying that there is no difference between a new hospital, which was the phrase employed by the Prime Minister, and a substantially remodelled hospital? Will he ask his right hon. Friend to explain this discrepancy to the House?
    Mr. Barber: With all respect to the hon. Gentleman, I will put this as mildly as I can. If what he wants is useful information rather than party political propaganda, obviously one must, as anybody concerned with this matter knows, consider together new and substantially remodelled hospitals.
    Mr. Grimond: As the right hon. Gentleman will be aware, a certain amount of party political propaganda has already been made out of this matter. May we be informed of the date from which the Government began building a new hospital a week?
    Mr. Barber: I do not know, Sir. All I can tell the right hon. Gentleman is that in this year—[HON. MEMBERS: "Answer."]—in this year we are most certainly starting once every nineteen days a new or substantially remodelled hospital.

    Croydon General Hospital (Casualties)
    Sir R. Thompsonasked the Minister of Health whether, following correspondence with the hon. Member for Croydon, South, he is now satisfied with the arrangements for dealing with casualties at the Croydon General Hospital; and if he will make a statement.
    Mr. Barber:No, Sir; the regional board recognises the need for improvement and is considering the adaptation of additional accommodation at present used for other purposes.
    Sir R. Thompson: Does my right hon. Friend think that a hospital with admittedly inadequate casualty accommodation and with its staff below complement can really cope with the needs of 300,000 people for fifteen hours a day? I welcome the long-term proposals, but cannot my right hon. Friend do something in the short-term to improve the position?
    Mr. Barber: I know of my hon. Friend's concern. He has written to my predecessor about it on a number of occasions. As to the short-term, if the detailed plans to which I referred are accepted by the board he will be happy to know that the extension will probably be available early in the new year.

    Maternity Facilities, Redditch
    Mr. Danceasked the Minister of Health whether he will give an assurance that plans for the expansion of Redditch will include the provision of maternity facilities.
    Mr. Braine: It is too early yet to determine how and where such facilities would best be provided.
    Mr. Dance: Can my hon. Friend tell me when the regional hospital board will be able to consider the matter? Secondly, will that board take into consideration the inevitable increase in population when Redditch becomes a new town? Thirdly, will it be able to make any plans to build or enlarge the existing Smallwood Hospital in Redditch?
    Mr. Braine: I understand that there will be a public inquiry into the new

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    town proposal on 7th January to consider objections. If the order is then made and a development corporation appointed, the Birmingham Regional Hospital Board will, at a very early stage, start discussions with the Corporation about the provision of hospital services.
    The answer to the second part of my hon. Friend's supplementary question—about taking into account the increased population—is "Yes". The answer to the third part of by hon. Friend's question—about Smallwood Hospital—is that I understand that it is too small to permit any major development but, as my hon. Friend knows, the hospital plan for this area envisages the development of the major district general hospital at Rubery, and, in the long term, one at Bromsgrove.

  QUESTIONS TO MINISTERS
  The following Questions stood upon the Order Paper:
  Mr. PAVIIT: To ask the Minister of Health what action he proposes to take to alter the present distribution of remuneration between those general practitioners providing a high standard of service and those who do less.
  Mr. K. ROBINSON: To ask the Minister of Health if he will initiate discussions with representatives of the medical profession, with a view to amending the basis for reimbursing general practice expenses.
  Mr. Pavitt:On a point of order, Mr. Speaker. Some time ago I gave notice of a Question to the Minister of Health for oral answer. That Question—No. 42—appears on the Order Paper today. Last Friday, I read in the Evening News not only the Question, but the Answer I wish to receive today, which, in my view, constitutes a Written Answer to that Question.
  May I ask you whether this is a breach of privilege and, if it is not, what protection hon. Members can have against this procedure of having Questions answered through the Press, and not on the Floor of the House? Thirdly, if the Chair cannot protect hon. Members, may I ask from whom should I seek protection—the Leader of the House or the Minister?
  Mr. Speaker: I do not think that I can help the hon. Member. I do not think that a matter of privilege is involved. I know nothing, of course, about the origin of this. I think that it is a matter between the hon. Gentleman and the Minister. It is not necessary for it to be explored now, though no doubt it could be. I do not know how it comes about. I have no knowledge.
  Mr. K. Robinson:Further to that point of order, Mr. Speaker. Since I also had a Question down in similar terms to the Minister, I wonder whether you would give the right hon. Gentleman the Minister permission to tell the House how it came about that the Answer appeared in the Evening News last Friday.
  Mr. Speaker: I do not know if the right hon. Gentleman has had notice. I would allow it if the Minister could assist us now. More than that it is not proper for me to say.
  The Minister of Health (Mr. Anthony Barber): I know nothing about any report in the Evening News, Mr. Speaker, but if it would assist the House—with your permission and that of the House, and without taking up undue time—I would willingly answer Questions Nos. 42 and 43 together.
  Mr. Speaker: I do not think that there is any need for that. It is not quite the same point. The Written Answer can be compared with the newspaper's prognostications before considering the matter further.

ADJOURNMENT DEBATE (27th NOVEMBER)
Mr. Wigg: Mr. Speaker, I beg to raise points of order, of which I have given you notice and which I have drawn to the attention of the Leader of the House, arising out of the Adjournment debate that took place on 27th November.
On that occasion, after a speech of about 15 minutes, the hon. Member for Kidderminster (Sir G. Nabarro) resumed his seat, and you then called the Minister. When a point of order was raised in this connection, you said:
"I have been looking for the Ruling, which I do not find at this moment, but it exists …"—[OFFICIAL REPORT, 26th November, 1963; Vol. 685, c. 246.]

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With great respect, since that time I, too, have been looking for this Ruling, and have failed to find it. I wonder, therefore, whether you would be good enough to give the reference to the Ruling in Erskine May—or, perhaps, the HANSARD reference.
In such a matter, it is, of course, my object not in any way to challenge the Ruling of the Chair, but perhaps I may draw your attention to the nearest approach to the Ruling on the matter. This occurred on 16th December, 1958, when the Minister was called, and the then Mr. Deputy-Speaker said:
"The practice is to call the Minister who will reply to the debate."—[OFFICIAL REPORT, 16th December, 1958; Vol. 597, c. 1088.]
The Ruling on that occasion was in accordance with the right of the Chair to call whichever hon. Member the occupant wishes to select, but the then Mr. Deputy-Speaker was referring to the debate, whereas your Ruling last Tuesday night was a Ruling in relation to the Adjournment debate. I certainly thought, and I think that my hon. Friend certainly thought, that you were giving a Ruling that, in an Adjournment debate, once the Minister rose you were bound to call him.
My second point of order is this. Having failed to get an opportunity to reply to the debate—the Minister refusing to give way—I then drew attention, as I am entitled to do under Standing Order 30, to the absence of a quorum. In this matter, I would respectfully submit that the custodian of the rules of order is not the Chair, but every Member of the House. Every Member has the bounden duty to see that the rules are obeyed. In view of the observation of the Chair
"That practice, in an Adjournment debate, has, of course, been deprecated."—[OFFICIAL REPORT, 26th November, 1963; Vol. 685, c. 248.]
I shall be much obliged if you would give the reference in HANSARD where that practice has been deprecated.
Moreover, if it has been deprecated I would suggest, with great respect, that it is not the function of the Chair either to approve or disapprove of the action of any hon. Member provided that he is acting within the rules of order. I humbly suggest, therefore, that on the second point, as on the first, the Chair
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may have been proved to be fallible. For I can find no reference in HANSARD. What I can find are references by occupants of the Chair to hon. Gentlemen using the Adjournment debate not to have a debate, but to prevent one.
Mr. Speaker Clifton Brown, in 1945, rebuked an hon. Gentleman when he instituted a debate when there was no Minister present to reply. I would respectfully submit that this is a House of debate, and that the country and the House can only establish the truth if the truth is put by hon. Members on both sides of the House, as they see it. I therefore respectfully submit that it is of the utmost importance that these matters should be cleared up beyond any shadow of doubt.
Mr. Speaker:This is an instance when I am glad to answer the hon. Member for Dudley (Mr. Wigg) when he is rising to a point of order because the circumstances were quite rightly stated. I could not find the Ruling I wanted at the moment, "off the cuff". I hope that the House will bear in mind that it could only be in an extraordinary circumstance that we could discuss, on a point of order, the procedural Rulings of nearly a week ago; otherwise, we should be spending on such matters days to which the House has assigned other business.
What happened on the occasion to which the hon. Gentleman refers I claim as a complete authority for what I felt obliged to do the other night. There had been an Adjournment debate in which the hon. Gentleman had taken part, and another hon. Gentleman on that side of the House, and the ex-Secretary of State on the right of the Chair, and an hon. Member from the right of the Chair. The Deputy-Speaker then called the Secretary of State for War in these words:
"The practice is to call the Minister who will reply to the debate."
From this there followed some argument. The argument ran on the lines that the hon. Gentleman speaking from the right of the Chair had been making observations about the Opposition, and that the Opposition ought to have an opportunity to reply. That is the burden of it.
My predecessor had meanwhile resumed the Chair and the discussion

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was going on with him. My predecessor—I do not want to read all of this, but seek not to misrepresent it, said:
"The Government ought to answer the charges which have been made. That is always accepted. An hon. Member raises a matter on the Adjournment and he would be very disappointed if a Minister did not reply and give some sort of answer.
As to the strict alternation of parties, one tries to do that as much as one can. The Chair always does that, but the trouble is the rule that a Minister should reply to charges made on an Adjournment Motion."
He went on to say that the House should listen to the Secretary of State, and when complaint was made, or sought to be made, about the Deputy-Speaker's Ruling, he said:
"I am afraid that I am bound by what has been done. I do not see that the Deputy-Speaker had any choice but to call the Minister to reply to the debate."
That was the precedent I had in mind. It accords with our general practice, and I am glad that the hon. Gentleman has given ms an opportunity to find it, and repeat it.
With regard to the hon. Gentleman's other point, I should dislike it very much if he or any other hon. Member felt aggrieved when I said that the practice of counting out an Adjournment debate had been deprecated. The hon. Gentleman little knows how much he had my sympathy at that moment, but I conceive that I have that duty, and I will tell the House why.
It was deprecated by my predecessor in a letter, to the then Leader of the House in July, 1950. On that occasion my predecessor referred to it—that is to say, the not counting out of Adjournment debates—as an unwritten understanding—and he described it as a convention—and the reasons he then gave for us all observing that seemed to me as valid now as they were then. They were, to adapt his words, that it saves reprisals and unnecessary bad feeling, and it was solely with that in mind that I felt obliged to say that the practice had been deprecated, which, in fact, it has.
Mr. Wigg: First of all, Mr. Speaker, is it not a novel proceeding that private correspondence between the occupant of the Chair and a Member of the House, should now be introduced as a sanction for the proceedings? When, as I understand, a—
Sir K. Pickthorn: On a point of order.
Mr. Speaker: I am being addressed on a point of order. I will hear the hon. Baronet a little later.
Mr. Wigg:Further to my point of order, which I was interrupted in making, is it not a novel proceeding to introduce as an authority private correspondence between the Chair and a Member?
Furthermore, in this matter, must not some regard be paid to the rights of ordinary back benchers? Is it not a fact that an hon. Member who wants to take an independent line in the House has difficulties enough already without being confronted with, or being expected to conform to, Rulings which depend upon private correspondence?
If I may return to the point I raised in the first instance, may I respectfully draw your attention to the fact that Mr. Deputy-Speaker on that occasion dealt with the matter as if he were calling a Minister in any debate of any kind and not a debate on the Adjournment. He said that the practice was to call the Minister who would reply to the debate. Later, the late Mr. Speaker Morrison made the point that he was bound by what had been done. I therefore respectfully submit to you that that Ruling by Mr. Speaker was merely an endorsement of the fact that Mr. Deputy-Speaker had chosen, as he had a right to do, and as you had a perfect right to do, to call what Member he liked. You yourself, Mr. Speaker, in your reply to me, pointed out that an hon. Gentleman who makes charges has a right to expect a reply. Equally, if it was an hon. Member opposite who made the charges—[Interruption.] Yes, and he has run away from repeating the charges outside the House—
Mr. Speaker:Order. I am glad to indulge the; hon. Member for Dudley (Mr. Wigg) as far as I possibly can, but we really cannot rehash a previous debate.
Mr. Wigg: I am not on this occasion seeking the protection of the Chair, Mr. Speaker, I can look after myself, but if I am subjected to a running fire of interruption, from the benches opposite—[HON. MEMBERS: "No."]—I shall have only two courses open to me. One

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is to—[An HON. MEMBER: "Sit down."]—exactly, which I have no intention of doing, or, secondly, to reply to hon. Members. They are making the points made by the hon. Member who has run away from the challenge to debate with me. [Interruption.] May I continue to put to the Chair the point of order? [An HON. MEMBER: "Tedious repetition."] May I put the point that on 16th December, 1958, Sir Gordon Touche, who was occupying the Chair [HON. MEMBERS: "Order."]—the right hon. Gentleman who occupied the Chair; I thought that he had left the House—was giving a Ruling as the Chair can give a Ruling. I do not challenge it and nobody else can challenge the Chair to select what speaker it likes.
You, Mr. Speaker, did not say this, but said that you were bound by a rule that if a Minister rises in an Adjournment debate you must call him. I certainly thought on that occasion, and so do the hon. Friends whom I have consulted, that your Ruling was in relation to an Adjournment debate, and that you were saying that once an hon. Member had spoken, and without any reply from the other side, you were bound by the rules of order to call the Minister. I respectfully submit that on both counts the Chair has been found to be fallible, which, after all, is only human.
Sir K, Pickthorn: On a point of order. I was only going to inquire, Sir, whether the whole of this were not a novel proceeding and whether, if it had to happen at all, it should not have happened on a substantive Motion.
Mr. Gordon Walker: Mr. Speaker, whatever one may think in general about counting out a debate, must one not take into account an abuse of procedure? I ask you whether there is not an abuse of procedure in an Adjournment debate if an hon. Member takes up 15 minutes attacking the other side and relies on the Minister precluding anyone else from speaking?
Mr. Speaker:Let us proceed a little more gently, point by point. In the first place, I concede that in the circumstances obtaining at that moment I was bound by the practice of the House to call the Minister if he rose. The whole of our practice proceeds on the basis that the
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Minister of the day is allowed to answer a debate. We end up everything like that. I cannot tell at the moment the precise hour at which the Minister rose, but it was fairly plain to anyone that he would not have the opportunity to answer the debate if he were not called when he rose. If a Minister in such circumstances should give way to allow someone else on the opposite side to speak, that is a matter for the Minister and not for the Chair. I leave it to the House to read this passage completely. I conceive that I have precisely followed it, and I used the words to follow it.
Mr. Wigg rose—
Mr. Speaker: I cannot argue this matter. I am really doing this as a matter of courtesy to the hon. Member for Dudley, because on that occasion I found that I had not the authority with me, but that was the authority I had in mind.
As to the other matter, it would be a sorry day if, there being a fairly well-known convention of the House on a certain matter, the Chair should not say that to depart from that convention had been deprecated.
To turn to another matter which the right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) raised, I cannot dictate to hon. Gentlemen what they should say in an Adjournment debate if they keep within the rules of order. Certainly, I would not envy the position of the Chair if it were to comment on observations made by one side of the House or the other on the policies and propaganda of the opposite side. It is the sort of thing that does happen, but the matter in this instance, as far as I can remember, was not confined to that. The hon. Member who is not here asked a large number of questions of the Minister—I thought that there were twelve. If there were to be any answer to these they would have to be answered by the Minister in that debate.
I hope that the House will forgive me, but I cannot irregularly argue a matter of this kind. If it is sought to have serious argument about it, I hope that some other occasion or opportunity will be found.
Mr. Wigg:Further to my point of order—
Mr. Speaker: We must go on.
The Minister of Aviation (Mr. Julian Amery): Mr. Speaker, I simply Wanted—
Mr. Speaker: We must go on. This is all irregular.
Mr. Wigg: Further to my point of order. I readily accept your right, and do not wish to make any further submissions to you, Mr. Speaker, about your right, to carry out the rules of order, as you feel bound to do by the rules. However, equally, I am bound by the rules of order. If, within the rules of order, I take action to stop what I regard as an abuse under one head, then I respectfully submit that the Chair has no right whatever to deprecate my action.
Mr. Speaker: The hon. Member reminds me that we are all subject to the rules of order, and, manifestly, they do not permit me to discuss this matter further now.

ORDERS OF THE DAY

  AIR CORPORATIONS BILL
  Order for Second Reading read.
  3.51 p.m.
  The Parliamentary Secretary to the Ministry of Aviation (Mr. Neil Marten): I beg to move, That the Bill he now read a Second time.
  It will be convenient to the House it my right hon. Friend the Minister winds up the debate tonight so that he can answer the many questions which will doubtless arise in the course of the day.
  The Air Corporations Act, 1962,authorised my right hon. Friend to lend to the Corporations for the purpose of financing deficits incurred on revenue account. The powers under the Act were limited to deficits accruing before 31st March, 1964. The Act authorised lending only so long as the accumulated deficit on revenue account did not exceed £100 million in the case of B.O.A.C. and £10 million in the case of B.E.A. The purpose of the Bill is to extend these powers for a further two years to 31st March, 1966, and to increase the figure of £100 million in the case of B.O.A.C. to £125 million. B.E.A.'s ceiling will remain at £10 million.
  It may be asked why B.E.A. should be mentioned in this Bill at all, because it is now doing very well indeed. At 31st March, 1963, its deficit stood at £2½ million but results so far this year are encouraging and I have every reason to believe that all, or almost all, the deficit will be extinguished next year. At the same lime, experience shows that the airline business can be subject to some very sharp fluctuations. It seems, therefore, only prudent to extend the period during which my right hon. Friend has authority to lend money to B.E.A. if the need arises. I would stress that there is no question of increasing the ceiling, and I should be very disappointed, and I am sure that B.E.A. likewise would be very disappointed, if it ever has to use these extended powers. Next year will see the introduction of the new Trident airliner into the service of B.E.A., and this will, I believe, further strengthen the Corporation's position and do much to maintain the reputation of the British aircraft industry.

  787
  I do not know whether we shall be debating the affairs of B.E.A. again before the end of the financial year. In case we do not, I should like, on behalf, I think, of all hon. Members, to salute Lord Douglas's achievement as Chairman of B.E.A. During the 15 years that he has led the Corporation, it has acquired a reputation for safety, service and efficiency which is the envy of all airlines. It is fitting, too, that his last year as Chairman should have witnessed a very impressive recovery in the Corporation's fortunes and opened up the prospect of prosperity ahead.
  As the House knows, Lord Douglas is being succeeded in March next year by Mr. Anthony Milward, who has been in the service of B.E.A. for 14 years. For seven of those years he has been the Corporation's Chief Executive. I am sure that the House will join me in sending good wishes to him and all those throughout the Corporation who have combined to bring it to its present position.
  I come now to B.O.A.C. There is much ground to cover in my speech and, therefore, it may be a little longer than I should otherwise have wished. I thought that it would be for the convenience of the House if I dealt with the problems of B.OA.C. first, as to the past, and then as to the future. We have had the White Paper on the financial problems of B.OA.C. and my right hon. Friend made a statement to the House twelve days ago. My purpose is to explain the Bill and to take the House through the White Paper. While I want, as far as possible, to avoid repeating what is already in the White Paper, I must, nevertheless, take the House through some of its main points.
  The background to the Bill and to the request for extended lending powers is the heavy deficit already accumulated by the Corporation and the prospect of some further increases in the deficit before it can overcome the very difficult problems which lie ahead. The House will recall that the Select Committee on the Nationalised Industries reported in May, 1959, on the two air Corporations—a long and very valuable Report. The Ministry of Aviation discussed with B.OA.C. its future plans and prospects,
  788
  and the Select Committee reported again in February, 1962.
  When my right hon. Friend was appointed Minister of Aviation in July, 1962, one of his first actions was to examine the problems of B.OA.C. As a result of his assessment of the position, he appointed Mr. John Corbett to investigate B.O.A.C.'s position and prospects and to report to him. He also sought such other advice as he could, and this he sought over a very wide field indeed.
  Mr. Corbett, in turn, commissioned special studies of certain areas of the Corporation's activities—from the Associated Industrial Consultants who studied engineering and maintenance organisation, from Messrs. Urwick, Orr and Partners, who studied the marketing organisation, and the separate management consultancy firm of Peat, Marwick, Mitchell and Co., who studied the Financial Comptroller's Division. I should like to take this opportunity of expressing the Government's thanks to Mr. Corbett and the consultants he appointed.
  As paragraph 10 of the White Paper shows, the deficit we are considering amounted to £80 million at the end of March, 1963. I am afraid that, at the end of the present financial year, this is likely to have increased to £85 million. I should like to examine and analyse this figure of £80 million.
  An airline, whether nationalised or not, must, like other industries, earn enough revenue to meet its operating costs such as salaries and fuel. It has to amortise its capital assets and has to meet the interest charges on any money which it has borrowed. The biggest element in the deficit is the sum of approximately £35 million in respect of losses on aircraft. Of this sum, only a small part was attributable to the Tudor, Hermes and Comet I aircraft, while the balance was attributable to the short in-service life of the DC7C, the Britannia and the Comet IV.
  A large part of the loss stems from the disaster which befell the Comet I and the delays in introducing the Britannia into service. The Comet I was the first of the civil pure jets and it made a great impression on the travelling public and achieved a very high load factor compared with other aircraft.

  789
  At that time the future of B.O.A.C. looked very promising. But then, after a series of crashes which were eventually traced, as we know, to metal fatigue, the aircraft had to be taken out of service and was subjected to prolonged tests. Meanwhile, the Corporation had to buy aircraft off the shelf. They were mostly American piston-engined aircraft with less appeal to the travelling public than the Comet I. As a result, we lost the lead in civil pure jet commercial aircraft and B.O.A.C. suffered much as a result.
  B.O.A.C. had also backed the lead which the British aircraft industry had taken in the development of the turboprop aircraft, in the early 1950s, many of the experts on both sides of the Atlantic: judged that for transatlantic and other long-range journeys the turboprop aircraft was the best investment because of its low operating costs.
  B.O.A.C. backed the Britannia, hoping that it would be delivered in 1954 to 1955.
  Mr. Roy Mason: This is history.
  Mr. Marten: I did say, in opening my speech, that I would be taking the House through further aspects of the White Paper, I am leading up to the point I want to make.
  Mr. Mason: But is this history really necessary?
  Mr. Marten: There is nothing wrong with history.
  Mr. Mason: The hon. Member is wasting the time of the House.
  Mr. Marten: It has been wasted already.
  Mr. Mason: The Minister is wasting it.
  Mr. Marten: The introduction of the Britannia was delayed for two and a half years. The reasons for this were the introduction of a long-range version early in the production line, technical troubles, and additional structural testing after the Comet disaster. If the long-range Britannia had come into service on the North Atlantic when B.O.A.C. originally planned in 1954 it might have had several years of profitable operation, but as things turned
  790
  out it did, in fact, come into service in 1957 and was only a year ahead of the large American jets.
  B.O.A.C. suffered in two ways. First, because the new jets directed traffic away from B.O.A.C.'s slower turboprop aircraft; and, secondly, because of the short lives in service of the DC7Cs, which had been purchased as gap-fillers, of the Britannias and Comet IVs. I stress that I am here referring to the long-range Comet; the medium-range versions are still widely in use and in production. These troubles cost the Corporation about £35 million.
  Another considerable item in the losses, as the White Paper tries to show, springs from development costs of introducing new aircraft such as training aircrew, carrying out route-proving flights—
  Mr. John Diamond: On a point of order. The Parliamentary Secretary is taking us through, more or less verbatim, the White Paper which has been issued by authority of the Government and which has been read by everyone in preparation for this debate. Does the rule about tedious repetition apply in these circumstances?
  Mr. Speaker: Not so far.
  Mr. Mason: It is tedious, anyhow.
  Mr. Maiten:I was referring to the costs of introducing new aircraft. Among them, I would stress, are training aircrew and the carrying out of route proving flights, adapting engineering and maintenance departments, and providing ground equipment and spares along the whole range of routes to be covered. While doing this, an airline has to service the capital cost of aircraft before they begin to earn. Between 1956 and 1962 five different types of aircraft were introduced into service with B.O.A.C. and cost about £13 million.
  The losses which I have so far mentioned were largely due to ill luck. The Corporation was adventurous because it pioneered new and exciting British aircraft. Its success must depend not only on standards of safety, reliability and passenger comfort—where there is not much to choose between the best airlines—but on being first in the air with new aircraft of higher performance and increased passenger appeal. As we saw

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  with B.E.A. and the Viscount, this can certainly pay off handsomely, but when things go wrong through ill luck I do not think that we should criticise the Corporation for following the adventurous course.
  The widespread introduction of the big American jets on the long haul routes began in 1958. How did it come about that the full extent of the losses arising from this was not brought into B.O.A.C.'s accounts earlier? A note of warning was, indeed, added to the 1958–59 accounts that the book value of certain aircraft might be in excess of their realisable value on disposal, but the full effect was not brought into the accounts until 1961–62.
  Mr. Eric Lubbock: Was not that note to the effect that some would have to be written off if aircraft were taken out of service, and this only referred to DC7Cs, not another aircraft?
  Mr. Marten: It was a more general statement, I think.
  The full effect was not brought into the accounts until 1961–62, when the profit and loss account included a sum of nearly £32 million in respect of additional amortisation. It will be remembered that in the last debate in November last year my right hon. Friend referred to this point and his remarks were the subject of some controversy. It was even suggested, I believe, that the then Minister prevented the Corporation from writing down the capital value of the DC7Cs.
  I have gone into this very carefully and I should like to give the House some of the facts. The Air Corporations Act, 1949, empowers the Minister to give directions as to the form of the Corporation's accounts, but he has no power to tell the Corporations what amounts they should include in these accounts. The Minister can rightly only concern himself with matters of form and not matters of substance.
  The Corporation was aware of this, and in 1957 the Corporation's auditors drew up, following an earlier request of the Minister, a statement of the principles which they recommended for the future treatment of amortisation. Among their recommendations, which were agreed with the Minister and the
  792
  Corporation, was the principle that the rates of amortisation should be reviewed and adjusted from time to time in the light of the changing values and changing expectation of life of the aircraft, but although the Corporation was aware of the likely change in values it still charged amortisation on the basis of seven years' useful life of the aircraft, after which they would still have a disposal value of 25 per cent, of the original cost. This is set out in paragraph 13 of the White Paper.
  In the 1958–59 accounts the Corporation wished to show the reduction in value as a deduction from capital borrowing, or, alternatively, as an item on the assets side of the balance sheet under the heading of "Lost capital account" without bringing it through the profit and loss account. The Minister, concerning himself with the form only, as I said, of the accounts would not allow this. He considered that this would carry a clear implication that the Government had agreed to write off that accumulated deficit. In the event, as I said, the Corporation merely noted the fact of reduced value and continued to charge amortisation at the old rates. This continued for the two following years 1959–60 and 1960–61.
  This was a matter of financial control and management by the Board of B.O.A.C. The Minister under the 1949 Act has no standing in this matter except only as to form; but looking back I can say this, that although the then Minister did warn the Corporation of the dangers it was running, it might have removed any possibility of misunderstanding if it had been made clear at that time that the Minister's rejection of the Corporation's proposals for writing down did not absolve it from adhering to the principles agreed with the auditors.
  Mr. Frederick Lee: I know the argument about the form of the accounts and the Minister's position, but would the hon. Gentleman answer this point, that if B.O.A.C. had been allowed to write down the value of the DC7Cs in 1959 it would have written them down to the tune of £6½ million?
  Mr. Marten: That was the figure the Corporation was talking about, yes.
  But the Corporation knew what it was doing. It had been warned about it by

  793
  the Minister. Indeed, the Select Committee drew attention to this sort of thing in paragraph 218 of its 1959 Report when it queried the degree of control which the Minister should exercise over the Corporation. The Minister would be wrong to tell the Chairman how to adjust the figures in the accounts.
  I therefore hope that what I have said will clear up this point and will end the controversy on this matter.
  Hon. Members: Oh.
  Mr. Marten: I now turn to the losses incurred by the Corporation's associated and subsidiary companies. These amounted to over £15 million by 31st March last. I shall not go into the details of how B.O.A.C. first acquired interest in overseas subsidiaries. Some, such as the interests in Bahama Airways and British West Indian Airways date back to 1949. The main motive for investing in local airlines was to secure feeder traffic for the main trunk services and to protect transit and traffic rights.
  It is very difficult to say how far this policy has been successful, but from information available it points to the conclusion that even if the policy itself was justifiable the execution of the policy was defective. For many years losses exceeded budget forecasts. Until recently the Board of B.O.A.C. had no recorded estimates of the extent of the feeder traffic, nor was there any recorded estimate of the financial consequences of a particular associate coming under control by a competitor. There were, no doubt, incidental gains in these arrangements to the British Aircraft industry, which we as a country have to set off in the balance sheet, in fostering the sale of aircraft.
  One is bound to conclude that the losses would have been much less if the board had ensured that the purpose of each investment had been more clearly defined, if the benefits which each was expected to generate had been more carefully weighed against the costs involved, and if the expenditure had been more carefully controlled.
  Mr. John Rankin: Questions along those lines were put from this side of the House dealing with this aspect. Why did they receive no support from the Minister at that time?
  Mr. Marten: I do not remember the Questions.
  Mr. Rankin: I put one.
  Mr. Marten: But that does not make me remember.
  Mr. John Cronin: The hon. Member will want to be fair. He ought to make it clear that the person responsible in B.O.A.C. for these associated companies left the board quite a long time ago.
  Mr. Marten:That is, indeed, well known, and I will come to those questions later.
  There are other factors which can go into the balancing scales, and one of these is the loss of cabotage. In the early post-war years B.O.A.C. was in a strong position. To the East and to the South the geographical spread of the Commonwealth formed the basis of its route network, and competition from foreign carriers was comparatively slight. Traffic to Australia and East, Central and South Africa was shared solely with B.O.A.C.'s Commonwealth partners. The Corporation had a virtual monopoly of traffic between the United Kingdom and West Africa. Not least important, traffic between the United Kingdom and points on the routes in colonial or protected territory was reserved under established international practice to the British operator. Across the Atlantic the Corporation had the advantage of being based on London, which in the days of shorter-range aircraft also constituted the gateway for traffic coming from other points into Europe.
  In recent years many of these advantages have been reduced. The number of airlines now competing for traffic on B.O.A.C.'s traditional routes has increased out of all proportion to the traffic growth. Newly independent territories have set up their own airlines, all claiming the right to a share of the traffic to and from their territories. Germany, Italy and Japan have also emerged as strong competitiors.
  There is another question which we must also put in the scales—that of traffic rights, to which reference was made in the White Paper. We have always believed that the air transport industry in all countries would best thrive in a world in which national restrictions were kept

  795
  to a minimum. But as more and more countries have entered the international airline business, and as competition everywhere has increased, the maintenance and expansion of routes has become increasingly, for all countries, a matter of hard bilateral bargaining. We must conserve what negotiating strength we have. We must concede rights only in exchange for rights of value to our own airlines, and we are forced to look very critically at the rights which we have granted in the past.
  I should like to say a word about comparative costs, another factor which we have to put in the scales—comparative costs per unit of production, per capacity ton mile, for different airlines, about which much information was given to the Select Committee and is at the back of the White Paper. In this, B.O.A.C. comes out better than some and worse than others.
  I do not think that too much should be made of these comparisons, because it is difficult to compare like with like in the airline business. Part of the difference in B.O.A.C.'s overall cost compared with Pan-American's may be due to the higher proportion of large jets in the Pan-American fleet. Nevertheless, if a competitor can operate at much lower costs, it is something which no commercial undertaking can afford to ignore. The cost levels of the most efficient airlines will increasingly set the standard to which the level of fares and freight rates will be related. If the Corporation's costs are any higher than they need be, whether because of the aircraft which they operate or for other reasons, this will seriously affect its financial viability.
  As part of the general inquiry undertaken at the Government's request, studies were made by professional consultants into various aspects of B.O.A.C.'s activities. The first of these studies concerned B.O.A.C.'s engineering and maintenance organisation. There were several reasons for studying this particular part of the organisation. It accounts for nearly one-quarter of the total annual expenditure, and within it are employed a large part of the Corporation's labour force.
  I should like to make it quite clear that there has never been any doubt about the technical excellence of the
  796
  work carried out in B.O.A.C.'s engineering and maintenance division, but its high costs have long been a cause for anxiety. In 1957, the Corporation itself examined the costs and organisation of the division. It found that the Corporation was employing on this type of work from two-and-a-half to five times as many staff per flying hour as its competitors. There appeared to be no compensating factors, such as differences in workshop equipment, to account for this disparity. It seemed to be mainly due to defects of organisation, procedures and management. These were aggravated by the difficulty of operating a fleet composed of several different types of aircraft and by unsatisfactory labour relations.
  After the 1957 investigation, the Corporation drew up plans which have since produced very considerable savings. Changes in the type and complexity of aircraft, in the age of the fleet and in the volume of output make precise comparisons difficult. Nevertheless, the consultants who recently examined the division found that there was still considerable scope for achieving further savings in costs without any danger of lowering the high technical standard of the work. It considered, for example, that there was an inadequate emphasis on accurate planning and cost control. The absence of reliable standards of work content and material cost prevents sufficient planning and control of manpower, material and equipment resources. There is scope for improvements in the techniques used for stock control of consumable materials, and considerable scope exists for improving methods and procedures in both workshops and offices.
  As a result, the consultants said that it should be possible over the next three years to achieve further savings in costs associated with maintenance of the order of about £4 million a year as compared with the 1962–63 cost levels. They also considered that there should be substantial indirect benefits flowing from the increased utilisation of aircraft made possible by more rapid overhaul. The findings and recommendations of the consultants are clearly relevant in the context of the steps which must be taken if B.O.A.C. is to achieve financial equilibrium.

  797
  The second detailed study which the consultants made was of the Financial Comptrollers Division. This division was selected as being representative of the Corporation's headquarters administration. The consultants, on this occasion, came to the conclusion that there are opportunities for improving the organisation and methods of the division and also opportunities for reducing the size of the staff. Their most important conclusions, however, were that the division had not been allotted the part or the authority which it should have in a commercial undertaking the size of the Corporation.
  A further study was made, this time of B.O.A.C.'s marketing organisation in this country—and I stress "this country"—and Europe. In the last two years B.O.A.C. has spent about 18 per cent, of its total revenue on sales and advertising. About two-thirds of this is incurred in the areas covered by the Western, Eastern and Southern routes, and the balance in Europe and the United Kingdom. The Corporation's percentage expenditure on advertising is materially less than that for most world airlines, but its other selling expenses, such as the cost of its sales office, its reservations system and the commissions paid to agents, are probably of the same order and size.
  The consultants, I am very happy to say, were impressed by what they saw of B.O.A.C.'s sales, advertising and publicity in the area in question—this country and Western Europe. Their conclusion was that the Corporation had obtained a creditable share in most of the markets to which it and its pool partners had ready access. They thought that expenditure was at about the right level and that, although there was scope for various detailed improvements, the Corporation was getting good value for the money which it spent under this head.
  So far, I have dealt with the past, endeavouring to show the House some of the causes of the deficit which has already arisen. The Bill before the House asks for an increase, in the figure of £100 million deficit on revenue account, to £125 million. This increase provides for continuing losses before the Corporation can overcome the problems which lie ahead.
  798
  What is likely to cause these losses? Here, I move on to the future. As the House knows, I fear only too well, world airlines are suffering from too much capacity. Competition is increasing. The number of airlines on the major routes has increased considerably and the general pattern will continue to change. There are always strong pressures for reduced fares, and B.O.A.C. are in full agreement with this policy, but the problem is to make the reductions in the right way so as to bring about a commensurate increase in traffic and not simply to lose revenue.
  Fare cuts, if made now and if of the right kind, could, in the long run, improve airlines' finances. But in the immediate future we have to recognise that reduced fares will not improve B.O.A.C.'s position. It takes time for traffic to respond to fare cuts. For example, a 20 per cent, cut in fares requires at the very least a 25 per cent, increase in traffic to keep revenue stable.
  I want to look to the future. Over the next three years B.O.A.C. will be involved in introducing into service an entirely new aircraft, the VC10. It has to be faced, as I explained earlier, that the costs of introducing it will fall heavily on the Corporation during this period. On the other hand, by 1966–67 B.O.A.C.'s fleet should be composed of only two types of aircraft, the Boeing 707 and the VC10, and at that stage the fruits of the VC10, once it has been run in, should be apparent.
  This VC10 will have advantages over other similar long-range planes. Its rear enginss will mean quieter travel. Indeed, a forward-engine configuration in this class of aircraft may in a few years time possibly seem as obsolete to the passenger as a propeller does today. Moreover, it has been designed to use a blind landing capability. It remains to be seen what effect these advantages will have on the economics of operating this type of aircraft.
  Therefore, when we are asking for this sum to cover increased deficits, these are the items for which we think we have to cater.
  Later, we will come to the supersonic air transport. This is not due into airline service in the 'sixties, but in 1970.

  799
  It will present considerable problems for management, particularly its economic phasing into the existing range of subsonic planes. When we consider all these formidable problems we ought not to take too optimistically—I am sorry to sound a note of caution—the recent forecasts of improved operating results, although, of course, we all hope that they will continue.
  Another matter which will contribute to the continuing loss is the servicing of B.O.A.C.'s debt which, as we all recognise, and as was brought out in the White Paper, is a considerable part of B.O.A.C.'s burden. Some people say, "Why not write off the deficit now and let B.O.A.C. start the new financial year with a clean slate?"
  Mr. Diamond: Hear, hear.
  Mr. Marten: I note the comment from the hon. Member. I well appreciate that it is bad for morale and highly unsatisfactory for the Corporation to have this deficit round its neck. The Government have decided that until the Corporation can see its way to solvency it would be premature to write off the losses. I doubt whether Parliament would accept the theory that when a nationalised industry has built up crippling losses, they should be automatically written off and the interest payments abrogated without any plan for recovery.
  As the White Paper shows, my right hon. Friend intends to ask Sir Giles Guthrie to produce such a plan for recovery within 12 months—or before then if he can.
  Mr. Cronin:Is it not a fact that last year a full plan has been produced by Sir Matthew Slattery and that last spring another plan was submitted by Sir Basil Smallpeice? In what way will Sir Giles Guthrie's plan be able to differ so much from the earlier ones, particularly when one considers that he is not to be allowed to look at the Corbett Report?
  Mr. Marten: We will have to wait and see what Sir Giles Guthrie produces. In a business such as a commercial airline a plan for recovery is best left to the management, for only they can size up the prospects and profitability in this rapidly developing industry.
  Mr. Rankin rose—
  Mr. Marten: Naturally, the Minister of Aviation will always be available for consultations so that the implications of Government policy can be thoroughly considered. As my right hon. Friend has frequently said, a Minister sitting behind his desk in Whitehall cannot, or should not, attempt to run a business. Once the plan is ready and has been studied, then, and only then, will we consider the question of whether to write off all or part of the debt.
  In the context of possible economies, we have looked carefully at the question of the merger of the two Corporations. The arguments for and against are finely balanced. On the one hand, they have many functions in common which, if combined, might lead to some savings-better aircraft utilisation might be achieved under certain circumstances—but, on the other, there will doubtless be a loss on inter-line revenue and it is doubtful whether, owing to the different types of aircraft in operation on different schedules, there could really be much common maintenance. However, neither of the Corporations favours merger and the fact of their two very different financial situations makes it quite impracticable.
  My right hon. Friend has, therefore, on his recent appointments to the board, taken steps to achieve a measure of interlacing between the two Corporations which willgo some way towards meeting the problem. Since 1956 the chairmen of both Corporations have had regular monthly meetings to resolve difficulties and stimulate collaboration. The results of these meetings have not proved very rewarding and I hope that this new cross-fertilisation will open up further prospects for economy.
  As my right hon. Friend has already told the House, he has come to the conclusion that there is a need for a stronger management in B.O.A.C. While Sir Matthew Slattery has done a great deal to improve the position, the various investigations nevertheless show that there are still weaknesses. Some of these have been corrected; engineering costs have been steadily brought down over the years, although not far enough, financial control has been given a higher

  801
  status and tightened up during the chairmanship of Sir Matthew, and subsidiary companies have, to a large extent, been streamlined, although there is still more to be done in this direction.
  The second and equally important reason for strengthening the management is that the problems of B.O.A.C. are not becoming easier. As I have said, it would be wrong to infer from the improvement in B.O.A.C.'s financial position this year that the Corporation has turned the corner; that adequate remedies have been applied and that full recovery is only a matter of time. The airlines find themselves squeezed between the forces of rising costs, increased capacity and strong pressure for lower fares.
  The task is a formidable one. It will call for much energy and drive—above all, concentration of direction and singleness of purpose. To achieve these things my right hon. Friend came to the conclusion that, in the immediate future at least, the chairman of the Corporation should undertake many of the duties that are at present carried out by the managing director, thus reverting to the pattern of organisation that existed before 1956.
  This was discussed with Sir Matthew Slattery, who made it plain that he would not himself feel disposed to attempt this double task and accordingly my right hon. Friend decided that, on his retirement, he should be succeeded by Sir Giles Guthrie, a younger man with wide commercial, financial and aviation experience. The House is already aware of the terms of the correspondence exchanged with Sir Matthew and how Sir Matthew himself came to the conclusion that it would be in the best interests of the Corporation if the changes were not delayed until his term of office expired in July, 1964, but that they should be brought into effect as soon as possible so as to remove uncertainty and to move into the new régime.
  Accordingly, it was agreed between Sir Matthew and my right hon. Friend that he should vacate the chairmanship on 21st December so as to make way for Sir Giles Guthrie to succeed him.
  Mr. J. J. Mendelson: Was the chairman of the Corporation informed
  802
  about this and, if so, was all the information made available to him before the discussion took place?
  Mr. Marten:I will leave this matter to my right hon. Friend to answer when he replies to the debate tonight, because appointments are very personal matters and I suggest that my right hon. Friend should deal with these matters and not me.
  Mr. Mason rose—
  Mr. Marten: I will not give way.
  Mr. Mason: On a point of order. Is is not rather to the detriment of a good debate that the Parliamentary Secretary should be opening the debate and, since this is rather an important matter, should not the right hon. Gentleman himself now be dealing with it? If so—
  Mr. Deputy-Speaker (Sir William Anstruther-Gray):Order. I hope that the hon. Member will resume his seat when I rise to reply. His point was not, in fact, a point of order.
  Mr. Marten: This proposal was accepted and I am glad to say that Sir Giles Guthrie himself is ready to take up his appointment in the new year.
  Sir Basil Smallpeice, the present managing director, also took the view that, to facilitate the reconstruction of the Board of the Corporation on the lines that had been suggested, he, too, should vacate his seat on the Board at the end of this year. Thus, from 1st January onwards, Sir Giles Guthrie will take up his appointment as chairman and will also carry out many of the responsibilities that were hitherto borne by Sir Basil Smallpeice.
  I should like to take this opportunity of further expressing the Government's appreciation of the services of both Sir Matthew and Sir Basil. Sir Matthew undertook the task of chairman at a difficult time and there is no doubt that the work that he has done will be of enduring benefit to the Corporation. Sir Basil has served the Corporation faithfully and loyally for 15 years, during seven of which he has been managing director.
  Mr. Diamond: Before the hon. Gentle-man—
  Mr. Marten: Sir Basil has served the Corporation faithfully and has rendered great service throughout this difficult time. To single out just one of the notable contributions among the work he has done is that of bringing into being the Commonwealth pool, which has been an important factor in B.O.A.C.'s efforts to adjust itself to the changing conditions of the Commonwealth and Colonial routes.
  The terms of office of one of the full-time members and a number of part-time members of the board come to an end in 1964. Mr. Staple, the secretary of the board, will be retiring in January and his place on the board will be taken by Mr. Charles Hardie, an eminent accountant. Mr. Hardie is joining the board as a part-time member and is in no sense taking over the work as secretary which has been done by Mr. Staple. Mr. Staple has given the Corporation valuable service for many years as Secretary and Legal Adviser.
  At the same time, the greatest tribute should be paid to those who fly, service, and support the planes of B.O.A.C. in a service which enjoys the highest reputation through the world. The Corporation's record of safety is such that there has been no fatal accident in B.O.A.C. since 1957. This is a record of which all those who serve in B.O.A.C. can be truly proud
  While I recognise that I have not covered all the queries which have been raised in a variety of places, I have I hope given the House many of the facts relating to the past and an account of the way we look to the future. I apologise for any gaps, but time does not permit me to deal with them all. My right hon. Friend will deal with them tonight.
  Mr. Mason: Disgraceful.
  Mr. Marten:Whatever might be said in the debate, the House will, I am sure, most sincerely hope that B.O.A.C. will overcome its problems and go from strength to strength.
  4.34 p.m.
  Mr. Frederick Lee: It is not the intention of my hon. Friends to oppose the Second Reading of this Bill. As the Parliamentary Secretary pointed
  804
  out, it is designed to increase the borrowing powers of B.O.A.C. at a time when its finances are not too sound. For that reason my hon. Friends and I would not wish in any way to embarrass whoever may happen to be in charge of the Corporation in the next few days. However, if it were possible by opposing the Measure for us to register our utter and complete opposition to the Government's extraordinary behaviour towards B.O.A.C, I would certainly advise my hon. Friends to oppose it.
  It is interesting to note that the Bill to increase these borrowing powers comes before us at a time when B.O.A.C. is achieving considerable success in recovering from its very heavy deficit last year of more than £12 million. We have been told that after thirty-two weeks of the financial year, revenue this year is estimated at £66.4 million—£52 million better than the same time last year. In the publication B.O.A.C. News of 14th November, Sir Matthew Slattery wrote:
  "The momentum of B.O.A.C.'s financial recovery is now so great that it could carry us to a £3 million profit at the end of the financial year—enough to pay the interest on all our active capital."
  and "active capital", I take it, excludes interest on accumulated deficit. He pointed out that sales in Britain had increased by 12 per cent, compared with last year and that in the four weeks ended—[Interruption.]—if hon. Members opposite wish only to denigrate B.O.A.C., I can assure them that I will try to do the opposite—12th October the Corporation was 21 per cent, ahead of the same period in 1962, the load factor now being over 54 per cent, as against less than 50 per cent, in the comparable period last year. He emphasised, and I ask hon. Members particularly to note these words:
  "Where we are operating comparable equipment on comparable routes, we are very nearly the lowest cost operator, beaten by only the narrowest of margins."
  I am not arguing that this very good turn of events does not necessitate increased borrowing powers, but it is a good thing if we can keep in mind exactly what is at present happening and the fact that this turn of events has been brought about by the present management and Board of B.O.A.C. Even more important, since the Corbett Report has not be made available to the management and since the contents of the White

  805
  Paper were kept from the management—[HON. MEMBERS: "Oh."]—until it was published—it is not the case that the improvements we are now discussing can have anything whatever to do with the contents of the Corbett Report. In other words, they have been brought about by the efforts of everyone now employed in B.O.A.C.
  In his statement on 21st November the Minister said that some losses were likely to take place before the new plan could be put into practice. That may be so. I am merely reporting the fact that the present employees and Board of B.O.A.C. have, of their own initiative and without the inspired influence of anyone else, turned a corner quite remarkably from the £12 million deficit to a position in which they hope to make a profit of over £3 million by the end of the financial year.
  Is it not a remarkable thing that those charged with the conduct of B.O.A.C.'s affairs could for so long have been deprived of the advantages of Mr. Corbetl's opinions, opinions which took about ten months to compile and which is estimated by Flight magazine to have cost about £40,000? Until 19th November the Minister of Aviation thought that Sir Matthew Slattery would be the chairman of B.O.A.C. for a further eight months—in other words, for fourteen months after the Minister had received the Corbett Report. But, surely, if the Report contains findings which could be helpful in eliminating the causes of the losses and in proposing better methods for B.O.A.C. for the future, it is very, very wrong—indeed I would put it as a neglect of duty on the part of the Minister—to deprive the chairman and his board of the benefit of such findings.
  We know from the little in the White Paper which is directly attributable to the Corbett Report that a very grave charge is made against the present management, namely, a weakness in financial control. Yet the Minister was prepared to allow this weakness in financial control to continue for a further long period, after he received such a major criticism, rather than show the Report to the chairman and the members of the present board. It would almost appear that, while complaining about the losses, he was afraid of the prospect of the
  806
  present management getting back to profitability., if it had had the advantage of the Corbett Report. [HON. MEMBERS: "Oh."] If hon. Members opposite catch Mr. Speaker's eye, they can deal with that point.
  There is a further complication about which we require an explanation. The Minister has comparatively recently extended the period of office of Sir Matthew Slattery from 31st May, 1963, to 28th July, 1964. This took place after the Minister had received the Report of the Corbett Committee which charged Sir Matthew with being either responsible for weakness in financial control or, in any event, of condoning that weakness. In such circumstances why did the Minister extend the period of office of the chairman? The issue is made even more remarkable by the statement in paragraph 52 of the White Paper which includes among the conclusions:
  "

  (i) to strengthen the management of the Corporation;

  (ii) to ask the Chairman to prepare within twelve months, and present to the Minister, a plan for making B.O.A.C. financially sound.

  >"
  May I ask who was the chairman who was to prepare the plan? The White Paper was ordered to be printed on 20th November and the Minister told us that he received Sir Matthew Slattery's letter of resignation on 19th November. What are we expected to make of this? Is it that the White Paper was written on the night of 19th-20th November, and that the period of office of Sir Giles Guthrie was suddenly brought forward eight months because Sir Matthew had "reflected"—as the letter said—for a day or so before 19th November? The fact is that when the conclusions which I have read were written the authors knew that Sir Matthew Slattery, Sir Basil Smallpeice and probably Sir Wilfred Neden would be out by the end of this year. To believe otherwise stretches the credulity even of Members of Parliament beyond a reasonable point.
  I think that the position was made impossible for the board and the officials of B.O.A.C. In other words, in plain English, they were fired out—[HON. MEMBERS: "Oh."] From the noises opposite I assume that that is considered to be a prejudiced opinion from members of the political Opposition. Perhaps I may be permitted to

  807
  read part of the leading article in Flight International for Thursday, 28th November: It says—[Interruption.]—if hon. Members opposite will shut up a bit they will hear something which, no doubt, they do not want to hear, but nevertheless they are going to hear:
  "Edward VI is said to have had a liege by name of Barnaby who would be flogged and humiliated in vicarious expiation for the errors of the King. Are Sir Matthew Slattery and Sir Basil Smallpeice of B.O.A.C. the Barnabys of the Minister of Aviation? … The Minister has spent six months reading Corbett and writing the White Paper … Then, without showing Sir Matthew and Sir Basil the White Paper, let alone the Corbett Report, he devises their resignation, pats in a new man with no experience of airline management and tells him to produce yet another plan within 12 months. The B.O.A.C. leaders are cast aside on the basis of evidence which, since it is known to the Minister alone, they cannot answer. Some may feel that that is a most disagreeable political act."
  Incidentally, while we are discussing the Corbett Report, may I say that I have been looking at one or two things and I am sure that hon. Members opposite would like to have the benefit of my inquiries. Mr. Corbett has sat on a number of Government Commissions, including one which inquired into the affairs of N.A.A.F.I. Its report also was never published. The result of the N.A.A.F.I. inquiry was that N.A.A.F.I. got a new chairman—just like B.O.A.C. And now the present N.A.A.F.I. deputy-chairman is Mr. C. E. M. Hardie, the other Radio Rentals director to be appointed to the B.O.A.C. board in the course of the last few days. At any rate, no one could charge Mr. Corbett with a lack of consistency in these matters. It is just one of those coincidences.
  It has taken the right hon. Gentleman quite a long time to produce the White Paper. I wonder, could it be that it is not quite the first effort that the Government made, and that in fact the first White Paper was declared by the Government to be "black" and was torn up? Could the reasons include the fact that the Minister was agreeing to write off the £80 million deficit and appoint Sir Matthew as joint chairman of both Corporations? Indeed, it could be a line of continuity for appointing Sir Matthew for a further period of office, as the Minister did after receiving the Corbett Report. After all, it is only a question of changing the tenses
  808
  a little, from "The chairman has produced a plan and will therefore write off the £80 million", to "When the chairman has produced a plan we will write off the £80 million—and in the interval a small matter of a General Election will be out of the way. If the Labour Party win let them write it off. In the unlikely event of the Tory Party winning, it will be much easier to do it at the beginning of a new Parliament than in the last stages of the present Parliament."
  I put it quite seriously to the House that as yet we have not heard an adult reason for refusing to publish the Corbett Report. I agree at once that there are certain types of documents which it is not advisable to publish for very good reasons. One very good reason, for example, would be that publication would assist overseas competitors; but I doubt whether anything in a domestic Report such as that of the Corbett Committee could possibly have that kind of effect on B.OA.C. I think that probably the true reason was given by the Minister on 13th May of this year—
  Mr. F. A. Burden: rose——
  Mr. Lee:—just a second—when he said:
  "A good many things have to be said which could conceivably be embarrassing either to the Government or to the Corporation".—[OFFICIAL REPORT, 13th May, 1963; Vol. 677, c 974.]
  We all know how far the right hon. Gentleman will go in avoiding embarrassment to the Corporation. Therefore, perhaps we can draw our own conclusions as to the reason for its refusal—
  Mr. Burden rose—
  Mr. Lee:—no—to publish the Corbett Report. I will give way to the hon. Gentleman in a short time. I wish to pursue this point a little further and to make an offer to the Minister over the publication of the Corbett Report—yes, an offer. We are reasonable people. We know of the procedure in this House regarding secret documents on matters which are important to the nation. Where it is deemed that publication is not appropriate there is a formula under which my right hon. Friend the Leader of the Opposition is permitted to look at such

  809
  a document to ensure that the reasons for not publishing are good and adequate and connected with the national interest and that kind of thing.
  If there is anything in the Corbett Report which would be detrimental to the national interest, and if that is the reason for not publishing, I ask whether the right hon. Gentleman will observe that formula, and permit either my right hon. Friend the Leader of the Opposition or some Privy Councillor nominated by him to peruse the document. If after that we are told that there are good reasons why, in the national interest, it cannot be published, I should not ask again for its publication. That would be an amicable way of resolving this difficulty. The right hon. Gentleman knows that he is practically alone in determining that this Report will not be published. The whole of the Press has been in favour of publication, and certainly my hon. and right hon. Friends and myself have been asking for publication since February or March last year.
  Mr. Burden: If the hon. Gentleman had been in the position of my right hon. Friend and he had considered that this document contained information that ought not to be published, would he not have behaved precisely as my right hon. Friend has?
  Mr. Lee: The short answer is that if I could see the thing I should be able to answer the hon. Member.
  It is a strange coincidence that approximately twelve months ago we were engaged in a similar argument about the Minister's refusal to publish the B.O.A.C.-Cunard agreement. The House will remember the differences of opinion on that point between the two sides. On that occasion, we were invited to believe that it was by far too private an agreement for the House of Commons to be permitted to know anything about it. After all, the British people only own the B.O.A.C. Who are they to want to see the kind of agreement that their Corporation indulges in?
  Yet in June of this year, Flight International magazine contained this news item:
  "M.P.s who unsuccessfully pressed the Minister of Aviation last November to give Parliament a sight of the B.O.A.C.-Cunard agreement may be surprised to learn that the
  810
  U.S. Civil Aeronautics Board has been given a copy."
  Terribly secret this—secret within these four walls.
  "It was submitted by B.O.A.C, with the request it would be withheld from public disclosure, as part of the Corporation's application for an amendment of its U.S. permit to operate on behalf of B.O.A.C.-Cunard. The agreement will be seen by other parties to the case, namely Pan American, T.W.A. and Seaboard, though they had been asked by the C.A.B. to respect B.O.A.C.'s wishes that the agreement should be treated as confidential. A Ministry of Aviation spokesman said last week, when asked if a copy of the B.O.A.C.-Cunard agreement would now be given to Parliament: The provision of this agreement to the C.A.B. on a confidential basis and for a commercial purpose is not the same as making it generally available."
  In other words, the chief competitors of B.O.A.C. in world aviation could see the agreement, but the representatives of this nation, and the nation itself, are refused the right to see it. If this is the kind of secrecy that we are to get on Corbett, we still have hopes that the American Press may be able to tell us what are tie contents.
  If the Minister now argues that they had to reveal the contents of the Cunard agreement in order that B.O.A.C. could get amendments to landing rights to include B.O.A.C-Cunard, the answer is that the Government should never have agreed to that agreement, in which event there would never have been any need to ask for any amendment. One thing that clearly emerges from all this is that a private airline gained out of that agreement, which was the objective of the exercise when the Government accepted it.
  In addition to the two documents to which I have referred, we are now to have a new chairman's plan. I believe that Sir Matthew Slattery has already drawn it up and that it could be issued the day after the new chairman takes over. Nevertheless we are told that we are to have a new chairman's plan. Would it be straining beyond breaking point the Minister's conception of democratic usage, if I ask whether, of his charity, he would be graciously pleased to permit us to know the contents of the chairman's plan when that plan is ready?
  The Minister possesses a somewhat unorthodox sense of humour which seemed to get the better of him when

  811
  answering questions on his statement of 21st November. He read to us a letter from Sir Matthew Slattery in which that gentleman informed him that rather than accept the Minister's policy for forcing the chairman to undertake the managing director's duties in addition to his own, he proposed to clear out before 28th July, 1964, after which the Minister blandly informed us:
  "This letter makes it plain that there was no issue of policy at stake."
  A correct reading, even of that letter which anyone with any knowledge of what has been going on knows, and which leaves out 99 per cent, of the policy differences between the chairman and the Minister, would have registered a pretty clear policy difference between Sir Matthew and the Minister. Incidentally—the issue being the question of whether the chairman should undertake the managing director's job as well—if one man could perform both jobs during the utterly critical period through which B.O.A.C. has passed, it would appear that for a long time both occupants have been shockingly under-employed—which I do not believe—or that, in future, someone will be terribly overpaid. I think that, from the angle of the House of Commons, it might be a good thing if we could find out which of those possibles it is likely to be.
  Mr. Dan Jones: It is a reflection on both men.
  Mr. Lee:Yes, indeed. The Minister then informed us that there had been no discussion of the question of writing off the accumulated deficits. Has he forgotten that it was financial policy, including failure to write off deficits, which Sir Matthew described as "bloody crazy"? Indeed, if there is no policy difference between them, can we take it that he accepts Sir Matthew's description as being the correct one? Perhaps a little more evidence of mutuality between them can be seen if I quote HANSARD of 6th November, 1962. The Minister said:
  "… What I tried to indicate was that to dismiss as 'bloody crazy'"—
  I like using that in the House—
  "the idea that one should pay interest charges on borrowed capital was not something which in itself commended itself to me. It may well be that in a reorganisation, if a reorganisation should be called for, there would be a case
  812
  for writing off losses. I cannot say at this stage. But I do not think that there is a natural right on the part of any business, whether private or national, to write off losses such as these."—[OFFICIAL REPORT, 6th November, 1962; Vol. 666, c. 820.]
  The point that I am making is that when the right hon. Gentleman said that there had been no discussion about this, surely he knew that he had discussed it publicly with Sir Matthew Slattery.
  I turn now to current events. Can we be told about the present state of play in the resignation stakes? We know about Sir Matthew Slattery and Sir Basil Small peice, and we suspect that Sir Wilfred Neden may also have gone. What about the activities of the group composed of Lord Tweedsmuir, Lord Rennell and Mr. Lionel Poole? They seem to be opposing the Minister in his determination to sack them. We are entitled to know what is happening—who is to go and what kind of a board we are to have at the end of the night of the long knives, as it were. Indeed, I should have thought that people well beyond the Board of B.O.A.C. are getting rather worried about the activities of the right hon. Gentleman. He is beginning to look every day more and more like a modern vengeance, counting the heads as the guillotine does its work, and I think that the sooner he lets us know where and when this process is to end, the more we can expect stability in B.O.A.C.
  Only two points emerged clearly from what the Minister said on 21st November. He denied that there was any crisis of confidence between the B.O.A.C. and the Government—and how relevant this is now—and that there were no policy differences between himself and the chairman. If the utter chaos now obtaining in the Corporation can be achieved by the Minister without either of these things, one's mind boggles at the thought of what would happen if they were present.
  I do not propose to spend a great deal of time discussing the White Paper. It seems to be a document the first half of which was written, or could have been written, by Sir Matthew Slattery, and the second half by a number of persons who at some time may have had something to do with the B.O.A.C. or with the world of aviation, but who have been away from such work for

  813
  some time and whose object in writing it is to justify getting rid of the present management.
  The Minister has had a very bad Press indeed. I could give the House many quotations, but I should like to quote from Flight International of 20th November. Reviewing the White Paper it said:
  "That White Paper, a pitifully superficial document, contains scant justification for its assertion that 'there is a need for stronger management'. There is nothing in it to allay suspicion that these men are scapegoats for a Minister who, after wasting 16 months, had to do something politically spectacular."
  Dealing with the question of financial control, the magazine said:
  "The charge of inadequate financial control is vague. What exactly does it mean? 'Slack budgetary control.' If it does, how can slack budgetary control have cut B.O.A.C.'s cost level from 40d. to 23d. per c.t.m. in six year.?, and reduced the all-inclusive break-even load factor from over 60 per cent, to less than 50 per cent, in the same period? These cuts are not just the fruits of higher-productivity aircraft, but of sheer hard work. It may be added that these figures take account of the cost of operating obsolescent types which other airlines havegot rid of. How can Mr. Amery substantiate his charge of 'ineffective financial control'?"
  That extract is from Flight International and is not something which has been thought up by the Opposition.
  I have a number of Press articles, all of which express concern about various aspects of the White Paper, and in particular about the conclusion in paragraph 51. I hope that the right hon. Gentleman will answer some of the points that we make on this conclusion which says:
  "The Government think it necessary to reaffirm that the Corporation must operate as a commercial undertaking. If the national interest: should appear, whether to the Corporation or to the Government, to require some departure from commercial practice, this should only be done with the agreement or at the instance of the Minister of Aviation."
  That obviously presupposes that commercial practice will, on occasion, be in complete opposition to the national interest; in other words, that B.O.A.C.'s commercial interests will run counter to the national interest. Such occasions will obviously include questions of purchasing policy, for instance, whether B.O.A.C. should buy British or foreign planes. Let us be quite clear about this. This conclusion gives the Minister a
  814
  complete right of veto over some of the vital decisions which the management of B.O.A.C. is called on to take.
  I remind the House that a portion of the B.O.A.C.'s Report for 1962 was omitted on what may, for reasons of politeness, be described as the "advice of the Minister". I referred to this last year and pointed out that the six pages of the Report which were omitted were those which criticised the British aircraft industry, and it was suggested at the time that Part III of the Report, which criticised the aircraft industry, was omitted. My fear is that the Minister is now taking powers of veto over the B.O.A.C. management on purchasing policy and that, because of the precedent which he has set, it is unlikely that the facts will ever be revealed to the House or to the country.
  For a long time my hon. Friends and I have been receiving complaints from practically all types of employees in the B.O.A.C.—including some types of management, the organisation to which the pilots belong, office people, and people in the workshops—who are utterly incensed at the kind of thing which is happening in their Corporation. They and I feel that there has been so much interference both by the Ministry and by the Minister that nobody can say that the B.O.A.C. is in fact in the hands of the board or of the executive itself.
  Sir Ian Orr-Ewing: We are listening patiently to what the hon. Gentleman is saying. I hope that before he sits down he will, as a result of the information that he has had from these different people, tell us what the Labour Party proposes to do to set the matter right.
  Mr. Lee: The first thing to do is to get rid of the incompetent people and then we can get on with the job.
  I was saying that there is no confidence among the people of B.O.A.C. that it is managing its own affairs. Let us consider what the Minister described as the sudden emergence of large figures of depreciation in the 1962 Report. The Parliamentary Secretary referred to these this afternoon. In 1959, the right hon. Member for Working(Mr. Watkinson), the then Minister of Aviation, refused point blank to allow the Corporation to

  815
  write down the value of ten DC7s by £6£ million. This was because of the refusal to permit anticipation, but it meant that the B.O.A.C. was precluded from writing down the value of the Britannias at a later date. It meant that there was a great deal of accumulated deficit on the planes bought. Despite the fact that the B.O.A.C. board wanted to write down the value, it was refused permission to do so by the Government, and it then found itself criticised by the present Minister for not doing so. If that was not interference, I do not know what it was.
  Mr. Marten: It was agreed with the auditors, Messrs. Whinney, Smith and Whinney, that the writing down should go through the profit and loss account, but the Corporation wanted to put it through the balance sheet.
  Mr. Lee: We have argued this before. What I am arguing, and what the hon. Gentleman is not denying, is that the Corporation wanted to show a depreciation of £6½ million on that fleet of DC7s, but it was refused permission to do so.
  When the Minister announced the Corbett inquiry, I suggested that there should be an inquiry not only into the B.O.A.C, but into its position vis-à-vis the aircraft industry as a whole, but the right hon. Gentleman refused to permit this. We would like to see the position in which the commercial interests of both Corporations are best served by buying exclusively from our own aircraft industry. The position of the industry without the VC10, the Trident, the One Eleven and the Concord does not bear thinking about. But to take away from the management the power of decision with regard to ordinary policy and then to stifle its criticisms while blandly instructing it to operate as a commercial undertaking, solves nothing, no matter how many managements are sacked. Clear instructions should be given. The Government should make it clear that all additional costs rising from the carrying out of such instructions will be met by the Government and not by the Corporation.
  I said that the Press has been almost unanimous in condemning paragraph 51 of the White Paper. I do not often quote the Financial Times, but on 22nd November it pointed out that if it was
  816
  the intention that Sir Giles Guthrie should produce a Beeching Plan for B.O.A.C. this surely would meet with opposition from the Foreign Office, the Defence Ministry, and all those Ministries which have an interest in those products and activities of the B.O.A.C. which it is not possible to estimate in a profit-and-loss account.
  On the 21st I referred, in a Question to the right hon. Gentleman, to the southern routes of B.O.A.C. I said that there had been discussions between B.O.A.C. and B.U.A. on these routes. The right hon. Gentleman told me that there had been no such discussions. I did not say at the time that I knew that the right hon.Gentleman knew about them. He probably did not. I am not accusing him of not telling the truth to the House, but I want to know, when he replies, whether he now knows anything about those routes. Is it not the case that Sir Matthew Slattery saw Sir Miles Wyatt, chairman of Air Holdings, Ltd. and discussed the matter with him, that he met Lord Poole, who is deputy-chairman of Air Holdings and who has a certain connection with the party opposite, that this was reported to the B.O.A.C. board on 14th November, that it did not go on with the discussions in view of the present questions.
  Following the Minister's announcement in the House there has been further discussion. Is it the case that the board met specially in London to discuss the matter and that it then had a letter before it from Sir Miles Wyatt expressing great interest in the proposition made? Is it not true that the board was very apprehensive and rejected any idea of a change on certain African routes and Latin American routes?
  In the light of what I have said will the right hon. Gentleman now say that he is aware that discussions of this type have taken place and that he will give the House an assurance that we are not going to have any hiving off of lucrative routes to private operators to the detriment of B.O.A.C. itself?
  Mr. Lubbock: Let the Minister tell us now.
  Mr. Paul Williams rose—
  Mr. Lee: Is the hon. Gentleman the Minister's P.P.S.?
  Mr. Williams: The hon. Gentleman is perfectly entitled to his interpretation of what he thinks to be the truth, but is it not possible—I think there is a chance that it is possible—that Sir Matthew Slattery, in fact, took the initiative in this matter, discussed it with Sir Miles Wyatt and subsequently laid a draft letter before the board of B.O.A.C., that the matter was shelved and that in some way information about this leaked out from the board to an interested party, perhaps to the hon. Gentleman himself?
  Mr. Lee: I am not answering the issues which I have raised. It is not my job to answer them. Every hon. Member knows that we do not raise issues if we know the answers to them. Therefore, I have suggested that certain negotiations took place, but that the Minister knew nothing about them. I am asking now whether the right hon. Gentleman has had time to look into these matters and to be able to reassure the House on the very great issue which I raise.
  I have been suggesting that the Government's policies have been to use B.O.A.C. as something of a milch cow for the aircraft industry and for the private owners of airlines in Britain. I will give an instance. Let us look at the ordering of the VC1Os. Is it the case that, first of all, B.O.A.C. was not all that keen about an order of this character, that it then, under pressure, agreed to a programme which was to produce a plane comparable to the Boeing; that when it agreed it wanted to limit the numbers to some 25;that under pressure from the then Minister it was pushed up to 30, and that under further pressure from the Ministry it was increased to 35 with an option of some more, and, finally, that that option was made, again under pressure from the Ministry, into a firm order for 10 more?
  The B.O.A.C. was proved to be right in its resistance because up to now three have been scrapped at a cost of some £700,000. We know that the Minister or the board has to make a serious decision yet as between the Boeing and the VC10. If it is the VC10 which is going to be cancelled, the compensation required will be at a far heavier rate
  818
  than the compensation already paid. How does commercial practice come into all this. In other words, as I assert, the Corporation is being used by the Government as a milch cow for the aircraft industry and for the private owners in aviation.
  I believe that because of the terrible chaos which has now been brought to a great Corporation, a Corporation, which, as the Parliamentary Secretary reminded us, has done an enormous amount to improve the standing of Britain in every quarter of the world in which its aircraft fly, and because of the attitude of the Minister, the morale of the staff—almost in every section of it—is now as low as it can be. I believe that because of these things and because of the way in which chaos now reigns in B.O.A.C. we have the right to demand the Minister's resignation, to demand that this chaos shall stop and to demand that this Corporation shall be allowed once again to get on with the job which it has done so well over the years in looking after the interests of Britain in the world of aviation.
  I started by saying that we cannot divide the House on this matter, but I now give warning that we shall probably return to the subject on an occasion when we can censure the Government for a shocking display of inefficiency and bias.
  5.13 p.m.
  Sir John Eden: We have just listened to a fine peroration by the hon. Member for Newton (Mr. Lee), but he has contributed nothing whatsoever to the debate. He told us nothing at all about how the Corporation was to be restored to its feet again, as the hon. Gentleman hoped it might be. His only solution was rather speciously to call for the resignation of the Minister, which will be far more harmful than anything else for the Corporation.
  Having listened since twenty-five minutes to Ave o'clock to the hon. Gentleman, I think that we could probably have been spared a substantial amount of his speech. Most of it came from newspaper cuttings and journals which we, as well as the hon. Gentleman, had all read. We were all patiently waiting and searching for the hon. Gentleman to put forward an original solution.
  I join with my hon. Friend the Parliamentary Secretary in paying tribute to

  819
  the chairmanship of Lord Douglas of Kirtleside in B.E.A. and in saying, on behalf, I am sure, of all hon. Members on both sides of the House, how grateful those of us who have visited B.E.A. from time to time are to him for the courtesy and hospitality which he has always shown us.
  B.E.A. is entering upon a very exciting period at the moment with its new Trident coming into service. This will add to the distinguished place which the Corporation already holds in the airlines of the world. I would like, too, to join with my hon. Friend in welcoming the appointment of Mr.Anthony Milward, of whom many of us have a very high opinion formed from meeting him over a number of years.
  With regard to B.O.A.C., I think that we all join in paying a tribute to Sir Matthew Slattery. I can think of no more unthankful job than that of being chairman of a nationalised industry or corporation. It must be a most difficult task to perform. Sir Matthew has been through a very difficult time recently and will certainly have earned the respect of all hon. Members for the way in which he has acted in recent weeks. He has, I think, set an example which might well have been followed by some of his less distinguished colleagues.
  I also join the hon. Member in paying tribute to the high standard of safety of the two Corporations under discussion. I also want to say a word of praise in honour of those who work in the Corporations, especially the engineers and the highly skilled pilots who fly the aircraft.
  The hon. Member1; for Newton quoted the words of Sir Matthew Slattery, in which he referred to B.O.A.C.'s starting on a new period and having achieved a "momentum of recovery". Every hon. Member will hope that that is so, for nothing is more needed than a momentum of recovery in this Corporation. But what are the facts? The facts are that we have to face an accumulated deficit of nearly £80 million, which looks like rising, in the next year or two, and will probably reach about £100 million.
  If, therefore, the momentum of recovery to which he drew attention is
  820
  as great as he says, and as great as other hon. Members appear to believe, he and they should carry the courage of their convictions into the Lobby and vote against the Bill, because in their interpretation an increase in the deficit financing allowance is wholly unnecessary. If, however, it is not unnecessary, hon. Members opposite must recognise that this is a serious problem, which must be faced, and that something must be done about it. If all is so well with the Corporation there is no need for the Bill.
  I ask myself why we have to have Bills of this kind, dealing with public corporations, which we do not get with other similar bodies. We do not have to have Bills dealing with liabilities to the taxpayer in respect of B.U.A., or British Eagle. The answer to this problem can be expressed in one word—"nationalization". The whole problem with which we are concerned today goes back to nationalisation, and I want to concentrate for a moment on this aspect of the matter.
  What was the original purpose and point of nationalisation? Surely it was to make the industry efficient. We do not hear so much about it nowadays, but hon. Members opposite, in their speeches outside and even in the House, occasionally accuse certain industries and firms with being likely to fail the nation, and threaten to take them over and make them more efficient if they do. Is this what nationalisation has done for B.O.A.C? If so, we would not be concerned with the Bill today. If this is the aim and objective of nationalisation, how is the success of nationalisation to be judged? Surely it must be judged by the degree of efficiency attained by the industry which is taken into public ownership. The only way in which this can be done is by the amount of profit that is earned, or by the commercial success of the undertaking. If this organisation were commercially succsssful there would be no occasion for this piece of legislation.
  Mr. Lubbock: I am very interested in the argument which the hon. Member is developing. Would he tell the House whether he thinks that under different management—supposing that B.O.A.C. had been a private corporation and had

  821
  had precisely the same experience over the last few years, besides having to operate with the same route structure—it would have been able to make a profit?
  Sir J. Eden:It would not have had precisely the same experience. In the first place it would have had a different manager. Secondly, it would have been answerable directly to its shareholders. Thirdly, if it had not survived it would have gone out, and would not have continually added to the burden on the taxpayer.
  Mr. Burden:Does not my hon. Friend agree that if an efficient private company owned this airline it certainly would not have introduced five types of aircraft in the period since 1956, and would not have had as many as four flying at the same time?
  Sir J. Eden:My hon. Friend is indicating some of the detailed aspects of the matter. I am stating the general principles which lie behind my approach to this point. I do not wish to take up my hon. Friend on those points of detail only because I know that other hon. Members wish to speak, and because there are special circumstances—for example, the loss of the Comet I, and the sudden off-the-shelf buying to which my hon. Friend the Parliamentary Secretary referred and which contributed to the state of affairs in which B.O.A.C. found itself at that time.
  What I am concerned about—and what the hon. Member opposite, who spoke so fluently but said nothing at all, must be concerned about—is that if something is going wrong to the extent of £80 million or £100 million, something must be done about it. The hon. Member offered no solution to this problem. AH that he did was to attack what has been done by my right hon. Friend. At least what my right hon. Friend has done is to take a decision. That, in itself, is welcome. He has pointed the way from which a solution to the problem can be found.
  Mr. Rankin: What is the decision?
  Sir J. Eden: Rather than reviewing the history of this Corporation it would be better to leave it—to forget about the background and the build up to the present situation,
  822
  and the utterly impracticable ideology of hon. Members opposite—and to think for a change of the needs of the taxpayer, which were not given any consideration by the hon. Member. In my opinion, the Government, quite rightly, aim to make this Corporation a commercial success, just as they aim to make other nationalised industries a success. This is the fundamental consideration we should have before us today. There are various ways in which this can be done.
  Mr. Austen Albu: Does the hon. Member apply what he has just said about care for the taxpayer to the Government subsidy given to the British aircraft industry to produce the aircraft for this industry, which it has been compelled to fly?
  Sir J. Eden: The element of compulsion to which the hon. Member refers is itself worthy of consideration. I believe that a £2 million Press advertising campaign has just been launched about the wonders of the VC10, which was constructed to the specification of B.O.A.C, and which will be a very fine aircraft. I should not be surprised that if there has been an element of compulsion in that decision, B.O.A.C. will in due course corns to welcome it.
  The aim of the Government is to make this Corporation a commercial success. I hope that hon. Members opposite will agree that that is a sound objective. If they do not agree—if they think that the whole of this Corporation's investment in the future should be subsidised by taxation—let them say so today. I agree with my right hon. Friend's decision not to agree to write off this deficit before the publication of a sound financial plan. He cannot ask this House to give him complete carte blanche—a blank cheque—to write off the whole sum, without at the same time being able to have a reasonable assurance that this sort of story will not be continued into the future.
  This is not the only nationalised industry, unfortunately, with which the taxpayer must be concerned. We are likely to have to face the same sort of problem in transport, coal and other industries.
  Mr. Albu: Coal?
  Sir J. Eden:Yes. We shall probably have to face the writing off of many hundreds of millions of pounds in due course, and the electorate would do well seriously to consider the enormous burden which is likely to be placed upon their shoulders in the future from increases in taxation if the Labour Party ever gets a chance to further its nationalisation plans.
  Hon. Members opposite also complain about political interference. They have sniped at my right hon. Friend and my hon. Friend the Parliamentary Secretary for political interference, for dictation, for having a say in the affairs of this industry. But what else does nationalisation do? If it does not amount to political interference, to what else does it amount? If it is not the most flagrant form of political interference in a commercial undertaking, what else is it? Hon. Members opposite should not be so free with their accusations against my right hon. Friend, whose sole concern in any intervention which he may make is to ensure that the industry becomes a commercial success and ceases to be a drain on national funds.
  We have to look again at the whole of our attitude as a nation towards the nationalised industries. I will not go into the whole range of likely and possible solutions which should be considered, but we have to find a new form of partnership between Government and industry as a whole—not just between the Government and the nationalised industries, which is important enough in itself, although hon. Members opposite do not seem to face up to it.
  I agree that we need a new definition of the role and purpose of the nationalised industries and of the extent to which they can be allowed to continue to be a burden on the State and of the country's attitude towards the monopolistic status which some of them enjoy. I agree that we must look for some new formula if we are serious about encouraging them to be a commercial success, and that we have to give them greater commercial freedom, for example, freedom to buy in the cheapest market. This is something which should have been taken up by hon. Members opposite, but which was not.
  Mr. Alba: Aircraft?
  Sir J. Eden: Certainly. This is an important matter. If we agree that this is to be a commercial operation, it must be backed by decisions which enable the industry to become a commercial success.
  Turning to the future of B.O.A.C., we already have a reasonable hope that things will be much better, a hope based largely on the immediately successful months which are just coming to an end and on the fact that in future the Corporation will have fewer types of aircraft and that one of them will be the world-beating VC10, which will attract a much higher load factor. There will be plenty of time between the coming into service of the VC10 and the coming into commercial operation of the supersonic Concord transport for the VC10 to have a significant role in the Corporation's future.
  I know that this decision has been made by other commercial undertakings and I am certain that it is a wise decision which will not be limited to British carriers, but which will probably be followed by oveseas operators—other than Ghana Airways whom we can already welcome—who will want to cash in on the passenger appeal of the VC10.
  Then there is the fact that as a result of the new appointments and the new plans, the Corporation will have a substantially revitalised commercial department with a much more realistic approach to the problems with which it is concerned. I hope that we shall see closer liaison among all the departments within the structure of the Corporation, including the pilots, who again have made representations to some hon. Members—notably on this side of the House, and correctly so—for the part which they can play in deliberations of the Corporation's policy as a whole. I hope that when he takes over Sir Giles Guthrie will give serious thought to what they have to say.
  Then we can look forward to the fact that my right hon. Friend is to review traffic rights, an important consideration. I was glad that my hon. Friend dealt with this and I hope that my right hon. Friend will pay attention not only to London but to other airports as well.

  825
  I welcome the fact that there is to be no merger between B.E.A. and B.O.A.C., although I hope that we will have a strengthening of the Airlines Chairmen's Committee. The fact that both Corporations are interchanging directors and that Sir Giles Guthrie and Mr. Mill-ward know each other well already augurs well for the future of B.O.A.C. We can expect to see a further streamlining of the work done in the engineering departments and I hope that the Corporation will do better than the £4 million a year improvement which is envisaged.
  Finally, I am sure that we shall see a much more realistic appraisal of the Corporation's prospects, which will mean that its buying of aircraft will be more soundly based. I wish Sir Giles Guthrie every possible success in his undertaking as the Corporation's chairman and managing director. I am sure that his wide knowledge, experience and dynamic energy will soon be recognised throughout the Corporation and will bring it new hope and new spirit.
  In conclusion, I welcome the White Paper, although it is not actually before us, and the decisions which it announces. My right hon. Friend has demonstrated on more than one occasion that he has the capacity to make up his mind. The country will welcome this and also the fact that he has had the courage in this case to stand by his convictions.
  5.36 p.m.
  Mr. Austen Alba: In the middle of his party political speech the hon. Member for Bournemouth, West (Sir J. Eden) seemed to have forgotten that at the beginning of his speech he had given considerable praise to British European Airways, also a nationalised industry. He also forgot that all the fuel and power industries, coal, electricity and gas, were now not only highly successful and profitable, but generally admitted to be among the best-managed industries in the country, on every possible criterion.
  When he was referring to the heavy burden on the taxpayer, the hon. Member forgot that for every £1 which the British Overseas Airways Corporation receives from the British taxpayer, the British aircraft manufacturing industry probably has had at least £10. When
  826
  he got to the more interesting part of his speech and dealt with the relationship between Government and industry, private and public, I thought that he might come to a more reasonable and less party partisan conclusion.
  I do not want to make a long speech about the merits of demerits of the management of B.O.A.C., because we have no means of judging. For more than 10 years the House of Commons has had a Select Committee on the Nationalised Industries. In 1959, it produced a very full report on the airlines, following that up in 1962 with a short report which to some extent dealt with what had happened to its recommendations and which brought the statistics up to date.
  In what way did the report which the Minister received from the consultants, sometimes referred to as the Corbett Committee, differ from the Report of the Select Committee? The only matter into which the Select Committee did not go and with which Mr. Corbett and his associates dealt was that of financial control, but there is little doubt that all the other conclusions of the Corbett Committee were similar to those of the Select Committee.
  We do not know, because we have not seen it, the Corbett Report, whether the White Paper on the financial problems of B.O.A.C. was based on the Corbett Report. If it was, then it is interesting to note that two of its conclusions, on engineering and maintenance, and on sales, advertising and publicity, were very similar to those of the Select Committee.
  In 1959, the Select Committee had drawn attention to the excessive engineering costs of the Corporation, but in 1962 it showed how those had been substantially reduced and were continually coming down. There is nothing in the White Paper or in the Corbett Report, presumably, of which the Select Committee has not already disposed.
  I come to another matter not mentioned in the White Paper, and this is the crux of the matter. Did the Corbett Report make any comments on the relationships between the Minister and the board? Did it make any references to interference by the Minister in the

  827
  policy of the board through the exercise of powers without statutory authority? Here I refer to what the Select Committee said in 1959. I must weary the House by reading what it said in paragraph 217, since it is of vital importance:
  "These unofficial powers comprise a formidable collection. Thus, although the Minister has no express statutory control over the Corporations'capital expenditure, they always seek his approval (and that of the Treasury) for orders of aircraft, and these amount to 80 per cent, of their total capital expenditure. They have agreed not to open new routes without the Minister's consent. They fly on various routes, domestic and international, because he asks them to, and they lose money in the process. They seek his approval for all fares and rates on non-international routes. They refrain, at his wish, from keeping aircraft specifically available for charter work. They come to him for permission before creating or investing in a subsidiary company, and, in effect, get his authority before they dispose of such an investment."
  In paragraph 218, the Committee further said:
  "But, faced with the total extent of the Minister's non-statutory powers,they"—
  that is, the Committee—
  "are bound to ask if these do not add up to a degree of control far in excess of that envisaged by the statutes under which B.O.A.C. and B.E.A. were created, and so lead to an undesirable diminution in the authority of the Chairmen and Boards of the Corporations, and in their feeling of responsibility."
  I remind the House that this was a Select Committee with a Conservative majority. If anyone is responsible for lack of firm management in these airlines, particularly B.O.A.C., responsibility must rest on the right hon. Gentleman and his predecessors. If I have any criticism of members of the Board of B.O.A.C. it is that they have not been strong enough in standing up to Ministers of Aviation and insisting that a Minister, if he wants to exercise these powers, must do so by direction or, if necessary, by asking for legislation from this House.
  The reply to the 1959 Report was given by the then Minister in the usual way in which replies to Select Committee reports are given. He did not really answer this question. In so far as there was a reply it occurs in paragraph 5 of the Special Report of the Select Committee in 1960. Referring to the problem
  828
  of aircraft orders and investment, the reply said:
  "… it is considered that an adequate degree of control over these important capital transactions must continue to be a responsibility of the Minister …"
  Later, the Minister said:
  "Investments in subsidiary companies may also have political implications."
  In other words, the Minister was refusing the Select Committee's recommendations except in so far as he agreed that some further assistance—the subsidy to which I was referring—should be given to the aircraft industry in the development of aircraft which the Minister wished the British airlines to purchase. The Corporations had complained of the cost of development and said that it was too much for them, the Committee had recommended the Minister to bear the cost and, to some extent, that was done.
  In the last Annual Report of B.O.A.C. Sir Matthew Slattery says that during 1962 he raised a number of issues with Ministers of Aviation following the discussions which took place after publication of the White Paper on the Financial and Economic Obligations of the Nationalised Industries. These issues were concerned, in the main, with capital structure and the extent to which the Corporations had international commitments of a national and noncommercial kind and how these objectives were to be reconciled with its general economic aims.
  Again, these were matters to which the Select Committee had referred in 1959, but to which we never got a satisfactory answer. It is impossible to debate this matter realistically while the information on which it can be debated is in the Government's possession and is withheld from the House. What is the point of having a Select Committee if the Government are unwilling to explain whether these industries are doing what the Committee has recommended they should do?
  What did the Corbett Report say about relations between the Ministers and the boards? The conclusion I come to—and I ask the right hon. Gentleman to consider this seriously—is that he should refer the Corbett Report to the Select Committee. If part of the evidence given to Mr. Corbett was confidential, this would, as usual, be taken

  829
  into account by the Committee. The point is, however, that the Committee would be able to report to this House on any differences between the Corbett Report and its own conclusions and the House would be better able to debate the matter.
  There seems to be some sort of change in the attitude on the part of Ministers towards the Select Committee and the relationship between Ministers and the House. Last Friday, I drew attention to this. The Minister of Power, when questioned recently about the Lurgi process and about the structure of the gas industry, said that he would make his findings on the Lurgi process known to the Select Committee, and in the case of the question of structure said:
  "I shall soon tell the Select Committee …of my proposals for dealing with the questions it raised, but any change in the industry's present structure will need legislation."—[OFFICIAL REPORT, 20th May, 1963; Vol. 678, c. 11.]
  It has always been the practice for Ministers concerned with the nationalised industries to make a formal reply once to the Select Committee's recommendations. The same process is followed with the Estimates Committee. But it has never been known for Ministers' subsequent communications to this House to go through the Select Committee. If, however, that is to be the case in future this isa very good example where it should be done. In fact, such a procedure might help to get the Minister out of his present difficulty.
  Sir J. Eden: Were not the reports dealing with the Lurgi plant and the gas industry given to the Minister on the understanding that they would be confidential documents and that their findings would not be given publicity?
  Mr. Albu: I have no idea. The Minister has never said.
  Sir J. Eden: That is the whole point.
  Mr. Albu: I suggest that this is a way out of the difficulty for the Minister of Aviation. He could refer the Corbett Report to the Select Committee which could then consider the matter and report its findings to the House. For far too long we have been unable to debate many serious and important matters involving for example industry, scientific matters and defence because
  830
  the Government keep back information which should be in possession of the House. This makes serious debate much more difficult.
  Mr. Burden: That is not common to this Government. The hon. Gentleman will remember that the Labour Government built the atomic bomb without telling Parliament or the country.
  Mr. Albu: That was a long time ago and I was not here for part of the period. But if that was the case I am sure that it was wrong and that the House should have been told.
  But it is clear that there is far too much secrecy about many of the matters which we now discuss and that the House is far too ill-informed on matters on which it should be properly informed, matters which, very often, are of no party political content whatever and concern scientific policy or something of that sort. Both sides of the House should join in a demand that Governments, of whatever complexion, should better inform the House. The Minister could give a lead in this matter by following the course I have suggested.
  5.50 p.m.
  Mr. Airey Neave: I agree that Select Committees are very important to the House and should be fully informed, but the hon. Member for Edmonton (Mr. Albu) makes a false point in relating his argument to the Corbett Report. If information was given by members of the B.O.A.C. staff in confidence to Mr. Corbett, there would be no justification for the Minister supplying it to the Select Committee. But I entirely support the hon. Member in his idea that more information should be provided to the House through the Select Committees. Indeed, I would like to see an extension of the system of Select Committees applied, for example, to scientific policy.
  Once again, the House meets to consider a Bill to extend the borrowing powers of the two Airways Corporations. I took part in the proceedings of the 1962 Act and to me these debates always have a rather desperate air, without finality, the difference this time being, perhaps, that we are recording the departure of some members of both boards.

  831
  I wish to join in the tributes to Lord Douglas of Kirtleside. Let it be said about him that he always had the national interest at heart, but had a real flair for commercial operation of aircraft, and it may be, with the recent improvement in B.E.A. figures, that what might have been the result had he been chairman of B.O.A.C. is an interesting speculation. For 15 years he has been the most successful Chairman of an Airways Corporation which has met increasing competition.
  I was very confused by the speech of the hon. Member for Newton (Mr. Lee). I could not find that he was enunciating any policy on behalf of the Opposition Front Bench. Would he have written off the total deficit of £80 million? I could not understand his policy there, if there was one. We expect the Opposition Front Bench to have some constructive policy about these problems. It is a very serious matter when a nationalised industry has a total accumulated deficit of £80 million.
  Mr. Cronin: It would be very helpful if the whole House could form some conclusion about this, but we have been kept completely in the dark by the suppression of the Corbett Report.
  Mr. Neave: I do not think that that is a fair point. The White Paper and other reports have given us the total accumulated deficit. I think that we know the facts. We know that for 1962–63 the deficit was £13 million and that there might be a small surplus for next year.
  The hon. Member for Newton said that the Minister was afraid that B.O.A.C. would get back to profitability since he wished to maintain his grip on the board. I thought that was a frivolous statement. I should think that the one thing that the Minister is praying for is that B.O.A.C. will get back to profiability, because he has been having a hard time over the whole thing.
  The hon. Member also said that the management should have been shown the White Paper, but I am sure that we would have had a bigger row and have had a great many more hon. Members opposite on their feet if any such thing had been done.
  832
  I am glad to see that there are signs of financial recovery in B.O.A.C. and I join in the remarks made about Sir Matthew Slattery and Sir Basil Small-peice in this connection. They have made a considerable contribution to the airline industry and we must remember that.
  The volume of traffic in 1962 and 1963, according to B.O.A.C.'s report, showed a healthy growth, but surely it would be over-optimistic to suggest that the operating results of B.O.A.C.at present show that it is anywhere near being out of the wood. The report refers to the well known reputation for safety enjoyed by B.O.A.C. and I congratulate the Corporation on its record in this respect. Nevertheless, it still has a deficit of £80 million and that is something we should be tackling now. When a nationalised industry has built up a crippling deficit, should that deficit be automatically written off?
  No hon. Member, certainly no hon. Member opposite, has answered that question. The answer, I suggest, is that no arrangements for writing it off should be made until the new chairman, Sir Giles Guthrie, has been able to put forward a financial plan. Sir Giles is a financial expert, and he is, surely, the one person that B.O.A.C. badly needs in its present situation.
  No ordinary commercial enterprise with a record like B.O.A.C. could have survived at all. Let us remember that when we have arguments, rather useless arguments, I think, about nationalisation and private enterprise in this connection.
  In my view, it is the job not only of my right hon. Friend and the board to see that B.O.A.C. is efficient; it is the job also of Parliament, through its Select Committees and in other ways, to ensure that the Corporation is efficient.
  Mr. Rankin:Surely, the hon. Gentleman will agree that a private enterprise has the opportunity of doing what B.O.A.C. could not do, was not permitted to do, namely, pass its dividend when in difficult times?
  Mr. Neave: The cost is borne by the shareholders and not by the taxpayers. That is what the hon. Gentleman really means.
  I have said that it is the job of Parliament also to see that B.O.A.C. is efficient. It is clear that the discussions

  833
  about personalities which started in some quarters of the House are not likely to solve the ultimate problem. They may be very exciting to people outside the House, but they are no help in solving the problem of this large deficit and the crippling operating losses. The hon. Member for Glasgow, Govan (Mr. Rankin) is right in this, that there is a difference between B.O.A.C. as now constituted and a profit-making airline in that the Corporation has to pay interest on all its borrowings from the Government; but if that were the only cause, or even the main cause, of its troubles, I should see more force in the argument. In fact, it is not.
  In the debate last year, if I may quote what I said then, I pointed out that
  "If the Corporation has been relieved during the years of its existence of interest on its accumulated deficit, the total deficit would still be more than £55 million, and, therefore, this does not really answer the very difficult problem of reorganisation and financing which we face."—[OFFICIAL REPORT, 6th Nov. 1962; Vol. 666, c. 854.]
  If the payment of Government interest on borrowings were all that made the Corporation different from a private organisation, the position would be very different today. Unfortunately, of course, it is not so. There are other reasons which have added to the total accumulated deficit of over £80 million.
  I do not think that anyone in the House or outside can lay at the door of any Minister the blame for the major commercial mistakes which, undoubtedly, have been made at various times in the past 16 years and simply echo the charge of Sir Matthew Slattery that having to pay interest on loans is crazy. After all, most people have to do that anyway. What is crazy is for Parliament to allow a nationalised board to make these operating losses, and Parliament is now, in this debate, making very clear to my right hon. Friend and the board that they should not continue and that things must be thoroughly reorganised.
  Mr. Frank Bowles: Will the hon. Gentleman give examples of the mistakes he says were made during the past 16 years?
  Mr. Neave: I think that the hon. Gentleman has only just come into the Chamber—
  Mr. Bowles: No; I have been here the whole time. Will the hon. Gentleman answer my question?
  Mr. Neave: I accept what the hon. Gentleman says. For example, the Corporation badly miscalculated capacity on the Atlantic route in 1961–62. If the hon. Gentleman will read my speech in the debate on 6th November, 1962, he will find the whole thing fully and accurately set out, not just quoting from a leader in Flight, as some speakers opposite today have done.
  We are trying to prevent these things happening, and there must clearly be a reorganisation within B.O.A.C. for greater efficiency and a plan for putting the Corporation on to an economic footing. This is essential. I very much hope that Sir Giles Guthrie will collect round him a strong team for this purpose. This is as big a job as Dr. Beeching's, and just as difficult in many respects. I hope that Sir Giles will be able to dispel the present unhappy atmosphere in B.O.A.C., to which many hon. Members have referred, even if it does mean taking strong measures.
  Other world airlines have had their losses and have recovered. Since the hon. Member for Nuneaton (Mr. Bowles) is interested in this, I refer him again to my speech of 6th November last year. T.W.A. lost nearly £14 million, and it has recovered by a very rapid administrative shake-up. S.A.S. lost £6 million in two years. The shake-up may have to be big.
  Now, it would not be fair to blame Sir Matthew Slattery for things which happened when he was not in office. The fact that the Britannias were two and a half years late and that B.O.A.C. miscalculated their life accounted, we were told today by the Parliamentary Secretary, for the loss of over £30 million. Those events were certainly not his fault and he should not be blamed on that account. That was a very sad episode for the aircraft industry, but it may well have been that B.O.A.C. made mistakes at that time, in 1957, in having too many aircraft on hand, even apart from the Britannias. This may well have been so even before the Britannias went into service. Let us hope that no similar error of judgment will be made in regard to the VC10.
  Mr. Lubbock: The hon. Gentleman should not make an unqualified statement like that. In those days, B.O.A.C.'s load factors were nearly 60 per cent., whereas now they are well under 50 per cent.
  Mr. Neave: It may be that B.O.A.C. had not seen, as we have seen from subsequent history, that it had too many aircraft on order at that time. That is all I am saying, and I do not think that it is an unfair comment.
  What is the cause of the balance of this enormous deficit, especially the net increase of £12.9 million since the House last debated the Report and Accounts? It is partly the interest payments, and I suggest that no settlement of this issue should be made until Sir Giles Guthrie has had time to make his report. An argument can be made about these interest payments, that they distort the Corporation's account, and the future system will have to be considered in that connection, but I do not think that anyone suggests that there should be immediate relief without consideration of what the future financial structure of the Corporation is to be, and this is something which must be settled by the new board.
  What is needed also is an examination of the past two trading years. These are very important. The increase in capacity has not brought an increase in traffic, and perhaps the new management will judge capacity better than the old management, as I was suggesting when the hon. Member for Orpington (Mr. Lubbock) interrupted. So often, the board seems to have found itself unprepared for greater competition, and this certainly is not something for which my right hon. Friend can be blamed. Undoubtedly, there have been errors in this respect.
  I am sure that there is a great future for the Corporation if it gets its financial structure right. I am sure, also, that Sir Giles Guthrie has the experience to judge what the best financial structure should be. I hope that he will concern himself principally with the long-term objectives of B.O.A.C. and be particularly careful about the surplus of aircraft when the VC10 comes into operation. We do not want another Britannia crisis in the next year or so.
  836
  The short-term job is to regain or recreate the morale of the staff. I hope that Sir Giles will be able to take the lead in doing this. I welcome the proposed interchange between B.E.A. and B.O.A.C, Mr. Milward being on the B.O.A.C board. I am sure that this will be a good thing, although I should not support a merger. I wish good luck to Sir Giles Guthrie in his new job and to my right hon. Friend in the present difficult situation, which, I am sure, he is handling very well. So far, no one has put forward an alternative to the way he is adopting now.
  6.5 p.m
  Mr. John Diamond: I hope that I do not embarrass the hon. Member for Abingdon (Mr. Neave) by saying that, in comparison, at least, with what fell from the hon. Member for Bournemouth, West (Sir J. Eden), his speech was very pleasant to listen to. I agree at once that there is no benefit on either side of the House in debating the arid question of whether this particular airline shouldor should not be nationalised or the logic of the argument of the hon. Member for Bournemouth, West that, as he does not believe in nationalised airlines, we should not now propose to increase the borrowing powers of the two nationalised airlines by so many millions of pounds. It is far more appropriate to consider, as the hon. Member for Abingdon suggested, how best the two airlines, particularly B.O.A.C, can be made as profitable as possible having regard to the responsibilities which the House has put upon them and which the country expects them to carry.
  Clearly, there is more involved than simply strengthening the management, which, I gather, is a diplomatic euphemism for sacking the chairman and managing director, a far less elegant phrase but much more easily understood. There is much more to it than that, and we should consider the questions before us with as much material as we have available. I regret extremely that we have not more material available, especially as what we have has been prepared at the cost of the nation for presentation to the Minister and to the House. However, we have to do what we can with what we have to try to sort out what the elements are. I believe

  837
  that there are three elements. I imagine that everyone will agree about what they are, but there will be disagreement about the weight to be attached to each. The three elements are mischance, mismanagement and Ministers of State.
  I take mischance first. It is clear from all the known facts, which have been dealt with many times, that there was an element of mischance. The Comet disaster was a mischance. Clearly, the delay in the delivery of the Britannias was, for the airline, a misfortune. From the figures, one can see that a large part of the deficit can be set against this element. What the proportion is, I imagine, is beyond anyone's capacity to fix, but one may say that, perhaps, something like one-third of the total deficit was attributable to one of these three elements. [An Hon. Member: "More than that."] I regret that I even suggested a very round figure. It is open to anyone to read what he likes into it. I should not take the figures as they have been given to us and ascribe all to mischance. I should want to make many inquiries from management about forecasting before I was satisfied that every penny actually incurred was unavoidably or inevitably incurred. However, there was a large element which was mischance, and if I put so much as a third on it, a very big proportion of the total is eliminated on that aspect.
  I am, however, still left in anxiety about why there has been this extreme delay in writing off this figure in the amortisation appearing in the accounts. Why has the Minister not yet been able to make up his mind about writing off the loss, which, again, is dependent on the first question? After all, we have known about it all for some time. Distinguished auditors who have been engaged in both airlines cannot very well give clean certificates as were given every year without matters like this being fully looked into. I do not understand the laconic statement in paragraph 19 of the Return, The Financial Problems of B.O.A.C, that
  "the Corporation made no change in the rate of amortisation until it presented the accounts for 1961–62"
  and then
  "A revaluation then took place".
  I dare say that those last five words are probably right, but why did not the
  838
  revaluation take place earlier? Surely, there was a revaluation at every accounting date. One could not very well prepare the accounts without these figures being looked at. It was a matter of decision that a certain rate of amortisation should be continued or discontinued. It was a matter well known to the Ministry.
  The Minister has sufficiently broad shoulders to accept the responsibility for anything that happened in his time or in the time of his predecessor. If I may, I will in future refer merely to "the Minister". This was all known to the Minister throughout. Why does the Minister come to the House via the White Paper and cast criticism on the Corporation for not having written it off before, or is he criticising the Corporation for writing it off prematurely? Why did he interfere in the form in which it was to be written off? Why did he interfere to the extent, as I gathered from my hon. Friend the Member for Newton (Mr. Lee), that because there was an argument as to whether it was to be done in one document or another he said that it was not to be written off at all? This is a fantastic situation. I should almost have thought that the Parliamentary Secretary had got it wrong if I were not sure that he could not get anything at all wrong. The answer he gave to an intervention from this side of the House sounded extraordinary; because somebody wanted it written off in the profit and loss account and somebody else wanted it written off in the balance sheet, therefore it should not be written off at all. Which document it is written off in does not make two hoots of difference, because the profit or loss goes to the balance sheet anyway.
  I am dwelling on this, fully recognising that it is past history, because it bears on what I think is the fundamental point of all this. Although the Minister in the finality says, "We must run this as a commercial corporation", the last thing he wants to do is to give it the freedom to do so. There is more than an element of politics in regard to his decision on amortisation and writing off. The hon. Member for Abingdon said that no case had been made out for writing this off finally and that it ought to wait until a new board had reconsidered it and decided whether it should

  839
  be written off. I would have told the hon. Member for Abingdon, if he were in his place, that I have little hesitation in saying that any new board coming in and taking over the responsibility for this enormous loan and the charge on overheads that it represents will undoubtedly produce a first-class case for writing off this deficit immediately, if not before that.
  We are only repeating history, because we have had a new board. We had a new board in the form of a new chairman. The new chairman put in his plan. Why was not that taken as a satisfactory situation—a new chairman and a new plan, put before the Minister with the request in clear and telling terms, I think I can say, that it should be written off? It was not written off. We must wait until yet a further change in the board takes place and a further plan is put forward.
  I find no convincing argument in this. As everybody knows, getting rid of the problems of overheads, to put it in accounting terms, getting rid of the weight of guilt, to put it in psychiatric terms, being forgiven, to put it in religious terms—whichever way one looks at it—it is a first principle of sound management that one should not be faced for ever with the burdens of the past over which one has no control when one is being encouraged to tackle a new situation. This House would never say to anybody, certainly not to a nationalised industry—"Go ahead. Lose as much money as you like in the future and we will always make up your deficit."That is not the way we behave. That is not the way boards of nationalised industries, responsible men, expect us to behave.
  To say that this amount must not be written off until they have satisfied themselves about the future, about profitability, and so on, is, I repeat, nonsense, and badly argued nonsense, because we have had it all before. We know for certain that whenever there is a change of board they will always say, "We do not want to be faced with the problems of the past". I repeat that that is the mischance part, but it has a bearing on the attitude of the Minister and of the Government.
  I come to the mismanagement part. Here I am in a little difficulty. None of
  840
  us can refer to what is in the Corbett Report. I cannot refer to it because I do not know what is in it. The Minister cannot refer to it because, if he did, he would have to lay it on the Table, which he is not prepared to do. I can only hope, as a matter of assisting in the rules of order, that the reference to a figure of £4 million does not come out of the Corbett Report. If it does, it is a quotation from the Corbett Report and I should have thought that the Minister has placed himself in some considerable difficulty by doing that and withholding from us the Report in which the figure was arrived at.
  I do not illustrate that in that way because I want to raise a technical point of order. I am not raising points of order with the Minister. I would raise them with you, Mr. Deputy-Speaker. I mention the point because I think that it illustrates the difficulty in which the Minister is placing the House. All progress was delayed for a great number of months until the Report was ready. When the Report was ready, a further delay took place while it was being considered. This debate takes place on a White Paper which is based on the Corbett Report, as everybody knows, and yet we have no chance to see the Report and discuss its essentials.
  Therefore, although hon. Members opposite are asking us for our considered views, I would say—if I may refer to the fact that I happen to be an accountant—that this is the first time I have been asked to express a view on anything relating to the management of any business when the whole of the information is kept from me. I do not say that it is inconsistent with my duties as a Member of Parliament either. I will do my best. The bricks will be poor bricks, because the straw is non-existent—the straw being the Corbett Report, which we are not allowed to see.
  We had the White Paper the first time when we read it. We had it a second time when the Parliamentary Secretary made his speech today. I congratulate him. I would only say that he was in slight error on paragraph 45, which contains these words:
  "… the results achieved by this Committee have so far proved unrewarding."
  When the Parliamentary Secretary made his speech he said, "The results achieved

  841
  by this Committee have so far proved not very rewarding." The Parliamentary Secretary really must be more accurate and keep precisely to the wording, otherwise he will spoil his reputation.
  I want to deal with the three items referred to in that Report. The first study dealt with sales. On the first study, apparently, B.O.A.C. gets good marks, because it has done satisfactorily. The figures reveal in a striking way that that statement needs further explanation. Of all the things that appear from the figures—I have looked carefully at these nassive operating results—the first thing that stands out a mile is that B.O.A.C. was the only—I repeat "the only"—one of all the national airlines which suffered a fall in total revenue during the period under discussion, 1961–62. Every other airline had an increase of about 10 per cent. In total it averages about 10 per cent. Each one is approximately 10 per cent. B.O.A.C. had a fall of 1 per cent.
  Nobody would argue that these figures are sufficient to judge the whole situation, but they are sufficient justification for me to say that I cannot for the life of me follow the study which said that B.O.A.C.'s sales were quite satisfactorily continued, when the one figure which is outstanding in all these fifteen items covering eleven columns shows precisely the reverse. Therefore, I repeat that until we have some more information I find that conclusion very difficult to accept.
  The second study was that with regard to engineering and maintenance. We were told that the Corporation should in the future be able to save £4 million. We ought to be able to accept that conclusion because it is merely the figure which the Corporation passed to the consultants. The consultants put it into their Report. What happened was that the Corporation said to the consultants, "We are developing this satisfactorily. The costs are being cut down and over the course of the next few months or few years we should cut them down by a further £4 million". The consultants said, "That is an interesting figure. We will put it in our Report". When the Minister saw the consultants' Report he said, "That is an interesting figure. I will put it in the White Paper". Now it has come out in the White Paper as a criticism of
  842
  B.O.A.C. I regard this as the most utter circumlocutory nonsense.
  The third study is on financial control. Nobody would claim that all accountants understand financial control. But Sir Basil Smallpeice is a chartered accountant and I can well understand that he would have every possible reason for knowing all about financial control. To criticise; the board on the grounds of lack of financial control needs explanation. It sounds very odd to me. The general criticism against my profession is that far too many of us get involved in the running of companies and being on the boards of businesses. The justification is that, being trained in these qualities, one can perhaps when coming to management make use of them in terms of financial control, particularly over a large organisation like B.O.A.C. We are here given neither reason nor indication of how this conclusion was arrived at. It is a very biting criticism—a very telling criticism, indeed—and it has to be justified to the hilt.
  We are told that there was lack of financial control. I regard that statement as very odd, and would want to see it justified to the full. I cannot accept from the Minister that this is the whole story. When we have one accountant, Mr. Cortett, saying about another accountant, Sir Basil Smallpeice, "You are not doing your accountancy very well," itis a matter of judgment whether thismethod of control has been carried sufficiently far or too far. I readily appreciate that one can carry a system of financial control too far in regulating a live, dynamic business. It is something that has to be dealtwith in proportion. Those who doubt that proposition should ask their wives whether they think that married life should be based on financial control—they will soon get an answer. There are other elements in this, such as letting people get on. Sometimes one has to risk losing 10d. from the petty cash. A wider view of such a matter is taken by some accountants than by others. All I say is that this statement is not made out by the Minister saying "This is the case," and not giving us the information on which we can judge for ourselves.
  There is the question of investment in local airlines. The Minister said that

  843
  the implementation of this policy was unsatisfactory. This matter has been going on for fifteen years—I do not know why it should justify the discharge or resignation of the present chairman, who has been there for less than three years, and the present managing director, who has been there for seven years, or thereabouts. I do not see how the Minister can wriggle out of his responsibility when we know—and as has just been confirmed by my hon. Friend from the Select Committee's Report—that this is a matter on which he regards himself as responsible, and requires the board to consult him before making these investments.
  Here, again, one would want to see an impartial report directed to whether this running into what is admittedly an unsatisfactory state resulted from bad management, unimaginative management, unwise directions by the Minister, or the like. One cannot just say, "Here is the White Paper showing that the board has made all the mistakes, and the chairman and the managing director should therefore go, and I, the Minister, should stay". I do not follow the last part of that logic at all.
  We are told that the rate of expenditure was unduly optimistic. I find it difficult in principle to criticise that the rate of expenditure on aircraft was unduly optimistic. A board engaged in running a large and important business is entitled to be somewhat optimistic, though not unduly so. Here, again, I have to go on such figures and statistics as are available to me, but there is the rate at which the Corporation turned over its capital. If one buys equipment, that is part of one's capital employed, and one's revenue is what one gets from the use of the capital employed. The ratio between the two was maintained over all these years, whereas in other companies it fell. It therefore looks as though, by comparison, other companies invested far more, proportionately, than did B.O.A.C. All these matters require very considerable investigation, but we have no means of investigating them and, on the face of it, the White Paper does not provide the answers.
  I have dealt with mischance and mismanagement—I now deal with Ministers of State. I am on solid ground here,
  844
  because I am dealing with my own observations. What the White Paper says, through and through, is that the great difficulty that B.O.A.C. has had to put up with is increasing competition from abroad which the board was, in some cases, unable to foresee, and which has put it into a position where it has too many planes, too few passengers, too many journeys, and a variety of difficulties—competition coming from Commonwealth countries that were previously not free to run their own airlines, and so on.
  Yet the fact is that the one thing that has been a consistent element in the policy of all Ministers of Aviation has been the increased internal competition put against B.O.A.C. to make it more difficult for the Corporation, and to put it into a position where it had to divert its attention from competing with other national airlines to competing with domestic private enterprise airlines, whose existence is due solely to legislation produced by Ministers and supported by hon. Members opposite. This is the kernel of the whole problem, and this is why I say that it is just not possible to ride off all this on to mistakes by B.O.A.C., and say, "Sack them, but leave me—everything is fine."
  The real difficulty is that although the Minister says that this Corporation ought to be run on a purely commercial basis—and I think that this was echoed by an hon. Member opposite—he knows full well that it is not possible; that B.O.A.C. is a flag carrier, or should be a flag carrier, and has to take the rough with the smooth. It has to do certain things that are not all that profitable and that it certainly would not do if it were not compelled to do so in the national interest. If the accounts covered the whole national-interest activities instead of only B.O.A.C. operations, we would see a very different result. If all the costs incurred in the national interest were taken out of the profit-and-loss account, we would find a very different story.
  One knows that, as a flag carrier, a nationalised Corporation has to do a variety of these things and, as I say, carry the rough with the smooth. But what the Minister's attitude, and the political attitude on the other side of the House, favours is that there should

  845
  be created private-enterprise firms, and that there should be hived off to those private-enterprise firms the smooth—[HON. MEMBERS: "No."]—oh, yes—so that the policy would then be that the nationalised Corporation has to carry the rough with the smooth while the private-enterprise firm has the smooth only.
  That is not a possible policy. It is this muddle, this realisation on the part of the Minister that he is responsible for a nationalised organisation but, at the same time, wants to encourage free enterprise, that has caused a lot of the trouble and lack of clear policy directive. We cannot have pure commercial development, and it is nonsense for the Minister to say that we can. If he wants to carry on on the theory that we can have a pure commercial attitude if only we segregate everything that is not commercial, there will be every day a whole host of activities to be separately dealt with and put back to the Minister as being his concern.
  The first cause of criticism of the Ministry is this lack of policy, and the second is the lack of a forward plan, which I have frequently referred to. I have recently seen, and the Minister has no doubt seen, the report of a symposium held at Cranfield College in October. It very strongly criticised the Government for lack of plan, for vacillation and, particularly, for lack of planning for five years ahead, or what they call the period of engineering gestation, which we all recognise is a very much longer period than the normal financial budgeting periods to which we are accustomed. These are the reasons why, in short, there would seem to me, on the lack of information available, to be some grounds for criticism both of the management and the Ministry, although there was some element of mischance.
  We should get this in proportion. The hon. Member for Abingdon referred to the operating losses. If we are talking about operating results they are, of course, operating profits. In page 10 of the document we see that over the period involved the total figure of operating surpluses or deficits was an operating surplus of £14.3 million, in regard to which all sorts of other items were taken into account to change it into a deficit of £80 million. Nevertheless, there was an
  846
  operating surplus. That is the sort of proportion we have to look at.
  I am saying that although there was an element: of mischance there is an element, it seems to me, of unhappy management and, very distinctly, an element of Government interference for which the Government are not prepared to accept the responsibility. I agree with hon. Members opposite that, of course, a Minister has to interest himself in nationalised Corporations, but why does the Minister think it right that he should suggest to a Corporation what it should do, or tell it what it should do, and then not stand on his own feet and take the responsibility for the result?
  If things turn out well, credit to the Minister. If things turn out badly, no credit to the Minister for the kind of thinking that accompanied his interference. As we must always have a Minister taking a share in consulting and co-operating with nationalised Corporations we shall always need a Minister who is prepared to take his share of the responsibility. The right hon. Gentleman has not taken the share. I suspect that the Corbett Report would throw some light on this, but it has been kept away from us.
  The Report might indicate to what extent the remaining loss was the responsibility of the Corporation, and to what extent it was due to ill-advised interference by the Minister, but we are not given that Report. I know that the White Paper starts off with a few kind words about the chairman and the managing director. That is the sort of thing we might expect. We can disregard that as "Slattery flattery" and come down to the essence of the White Paper which is a criticism of the managing director and the chairman and no criticism of the Minister himself.
  The Minister is a fair sort of person. Why does he not accept responsibility? Why does he not resign, too? Is there some difficulty about the figure of compensation in his case? Is not that as easily settled? I will willingly offer the right hon. Gentleman my services if that would help. I have negotiated this sort of thing many times in the past. I do not know what the rules of the House are about this, but the Minister might consider it. All I say is that it simply does not solve problems by the Minister

  847
  sticking firmly, casting all the criticism on the board and trying to solve the problem by what he calls strengthening the management.
  The right hon. Gentleman has certainly united the board. Its members are united, everyone of them, in opposition to the Minister, as far as I can see. I do not know what the right hon. Gentleman will say this evening about the present state of play on resignations. I do not know why he was not courteous enough to start the debate and give us the information which the Parliamentary Secretary did not, and said he could not, give. I do not know why the right hon. Gentleman wanted to hide behind the Parliamentary Secretary and tell him to make a long dreary speech to get the atmosphere down. Why did the right hon. Gentleman not tell us at the start instead of making us wait until the end when we have no chance of replying? If we had had all the information we might have got somewhere. As it is, we are left with the conclusion that the difficulties we want to solve cannot be solved, because unless we can analyse them we are totally unable to deal with them. Public anxiety is not allayed in this way. It is increased, and there are more and more resignations.
  The Minister may keep his speech until the end of the debate, but he will not deny that the newspapers are getting this matter into the headlines day after day and the position is getting worse. The morale of B.O.A.C. is at its lowest. This is the Minister's achivement. He has united the board in criticism against him, and he has almost utterly destroyed the morale of that organisation. It is for these reasons that I think the right hon. Gentleman is to be highly criticised.
  6.34 p.m.
  Mr. Paul Williams: I think that all reasonable hon. Members would reject the accusation made by the hon. Member for Gloucester (Mr. Diamond) that my right hon. Friend the Minister of Aviation was sheltering for an ignoble purpose behind the Parliamentary Secretary. Those of us who know my right hon. Friend, on whatever side of the House we may sit, would wish in calmer moments to withdraw that unnecessary and inaccurate description of him.
  848
  The hon. Member for Gloucester again raised certain matters about the relationship between the independent companies and the Corporations. I should like to refer to that later. In the meantime, I take up his remarks and those of the hon. Member for Newton (Mr. Lee) on the Corbett Report and its secrecy or otherwise. It seems to me that this is a storm in a teacup and that the House of Commons is making unnecessarily heavy weather in this tiny teacup. If facts are supplied in confidence by someone who is carrying out an investigation on behalf of the Government it would be a breach of good faith for a Minister to disclose the contents of that document. It is unnecessary waste of time to talk about the report any further.
  The hon. Member for Newton spoke about certain passages in an earlier B.O.A.C. report and about the efficiency or otherwise of the British aircraft industry. Although I am not a member of the industry in any shape or form, I resent these snide, sniping comments which can do no more than harm the sales efforts of the British aircraft companies which are struggling in the desperately competitive world in which we live. There are times and places for making comments of this kind, and we should be conscious of the impact which our words may have on the sale of British aircraft. Judging from the speeches of hon. and right hon. Members opposite, the initials S.S.T. should be recoined not to represent "supersonic transport" but "social service transport". They seem to think that the right thing to do is to write off all moneys and forgive past sins.
  The hon. Member for Newton also raised the question of conversations which are alleged to have taken place between B.O.A.C. and one of the independent airlines. I know little of the details, but the hon. Member seemed to have a great deal of information, gleaned from I know not where. It would be very nice of the hon. Member to disclose how a record of this confidential discussion on the B.O.A.C. board came into his hands. If the hon. Member is willing to intervene I am willing to give way to give him the opportunity, but if he is not willing to disclose how he came across this information, presumably confidential to the

  849
  board, I begin to have suspicions about the behaviour of the board in these matters in trying to leak things which would be difficult for the Minister.
  In any case, if conversations took place, as I believe on the initiative of Sir Matthew Slattery, I welcome them because it seems to me that this is just the sort of way in which the Corporations and the independents can and should work. They should see whether they have any interests which they can share and how they can help each other on various routes and act as assistants to one another rather than act on the old terrible basis, which has been one of the crashing bores of the House of Commons for the past ten years, of arguing out the battle between the independents and the Corporations. I hope that they will continue to have the sense to discuss and work out problems together.
  Although this is a Second Reading debate on the Bill, what we are really discussing is the reorganisation of B.O.A.C.
  Mr. Rankin: And the Corbett Report.
  Mr. Williams: The question which is fundamental to the whole matter is how we can restore the efficiency and morale of this Corporation. The position in the past is now best forgotten. We should send our good wishes to Sir Giles Guthrie in his task of using the extra £25 million which I assume we shall give him, though in my view we shall give it very grudgingly. As my hon. Friend the Member for Bournemouth, West (Sir J. Eden) has said, we have to accept that losses will be greater in future before they begin to decline. Therefore, I suppose that, regrettably, this money must be voted.
  I wonder whether the Minister could give us some indication of how soon Sir Giles Guthrie will be able to conduct his investigation and come to conclusions. The White Paper refers to 12 months. I hope that that is an outside limit and that remedial action will be taken on certain fronts well inside that period, if not immediately. There are certain matters, such as the method of communication inside the Corporation and the efficiency of the engineering base, which I believe should be looked at right away. At the end of the day,
  850
  when we have the plan, we should decide what to do about the £80 million plus deficit. However, it would be utterly wrong for Parliament even to contemplate writing off this loss until we have a guarantee of better performance. This must be the "pro" for which we find the "quids" later on.
  I welcome the Minister's refusal to merge the two Corporations. This may be a reasonable policy at a later stage, although frankly I have my doubts about it. I think that there is a conflict of interest between a short-haul undertaking and a long-haul Corporation. I cannot see how they can be merged. If comparisons are made, as happened in the Daily Express, with the amalgamation of British South American with B.O.A.C., I should say that that might have been a reasonable merger because it was a merger of similar long-haul operations. To merge with a short-haul undertaking would create greater difficulties than have to be solved.
  I welcome the cross-posting of chairmen. This is the sort of ad hoc, step-by-step operation which we will have to carry out in finding solutions to B.O.A.C.'s problems.
  Having said all this, there is surely some responsibility on the board for the accumulated loss of £80 million. One cannot, as hon. Members opposite appear to do—I will not put it higher than that—say that there is no responsibility on the board. Of course mere must be some. The White Paper shows this fairly clearly.
  I mentioned the question of internal organisation of B.O.A.C. There are two things which need to be improved—one, lateral consultation and the other vertical communication of ideas, through the belt of top executive management, to the board. One thinks, for example, of the commercial department. Even today, in the shadow of this debate, with B.O.A.C. being attacked left, right and centre and criticised from most quarters, it is launching a mammoth advertising campaign. Is this quite the right moment to do it? Might it not have been better, in the commercial interests of the Corporation, to have held up an advertising campaign of this nature for two or three weeks until the present political disagreement had blown over?

  851
  Would it not have been better, in terms of internal organisation,if some way could have been found to consult more accurately and actively the views of pilots? The hon. Member for Gloucester referred to the fact that there have been conversations on both sides of the House on these matters. I am frankly astounded by the powder keg of views which the pilots hold which appear to have no expression upwards at all. [Hon. MEMBERS: "Hear, hear."] Hon. Members opposite agree. In so doing they are commenting adversely on the present board.
  Mr. Rankin: And the Minister.
  Mr. Williams: The hon. Member says, "And the Minister", but this is something for which the board is responsible. If the board is not responsible, it should be changed, and I trust that my right hon. Friend still has a few resignations in hand.
  I turn to the question of financial policy and amortisation. What is the Holy Writ of seven years? The amortisation policy of the Corporations has been suspect for some time. Surely they should have had a better commercial view on how to handle this matter.
  Then there is the question of the engineering base. The figure of £4 million is mentioned in the White Paper. It may be that this is an accurate figure, but hon. Members on both sides know that we have had considerable doubts about the efficiency of the engineering base for a long time. Perhaps the Minister has had doubts at various times, whoever he may have been. But surely the B.O.A.C. board should have known of these things and done something about them. If this is a question of saving £4 million, it is £4 million, not over a long period, but each year. It would be a great asset to those of us who have to vote the money if we could get an understand-taking that this saving will be carried out.
  I come to the load factors of B.O.A.C. and world traffic. I suppose that hon. Members have seen the same figures that I have seen, brought together very conveniently by the British Air Line Pilots Association from the
  852
  annual reports of I.A.T.A. and B.O.A.C. Whether one talks of the overall load factor or the passenger load factor, both these sets of figures show B.O.A.C. in a worse light than is the average case for world traffic. This is unfortunate—[An HON. MEMBER: "Very superficial."] The hon. Member says, "Very superficial", but £80 million is not a very superficial figure.
  These figures are highly regrettable. The hon. Member for Gloucester fairly said that some of this is mischance and some of it miscalculation. We cannot, perhaps, always avoid mischance, but we should try to avoid miscalculation. As has been said from both sides of the House, a number of mistakes have been made by B.O.A.C.
  I hope that my right hon. Friend, in replying to the debate, will indicate that at this very moment B.O.A.C.'s load factors are improving, for the figures which we have been talking about, certainly those in the B.O.A.C. Annual Report, relate only to the year ending 31st March. I hope that my right hon. Friend will give us some more up-to-date figures. If he can, and if he can assure us that Sir Giles Guthrie will conduct his review within the 12-month limit and will carry out certain acts immediately inside that period, I think that, in voting this financial cushion, we can look with some degree of confidence to the Corporation and hope that under inspired and new leadership it will carve out a brighter future in association with other British airlines in the international field.
  6.47 p.m.
  Mr. John Rankin: I agree with some of the things that the hon. Member for Sunderland, South (Mr. P. Williams) said. With others I disagree. I agreed with him when he said that greater consideration should be given to the views and experience of the pilots. I should be glad if he would join me in supporting the view of the pilots that their experience might be best used on the B.O.A.C. board, because, after all, they are the people doing the contact work, as it were, which those in positions of authority at London Airport simply cannot undertake.
  I disagree with the hon. Member's view that the Corbett Report is simply

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  a storm in a teacup. The whole of this debate is about the Corbett Report, and the reason that the Minister decided to call in the help of Mr. Corbett was, as he said in the early part of this year—I think that it was at Question Time, or during a debate in the spring— that the situation of B.O.A.C., financially and in every other way, demanded a close inquiry.
  My recollection is that on that occasion I asked the Minister whether the Corbett Report would be made available to the House. His reply, which was perhaps unguarded at that time, led me to believe that he intended to make the Corbett Report available to the House. Later, in reply to another Question, he qualified that statement and pointed out that the Report would be made to him and would not be available to hon. Members. In doing that, he robbed the debate of a good deal of its importance, because if we do not know the terms of the Report then it is almost impossible for us to deal sensibly and effectively with what the Government propose to do.
  The hon. Member for Sunderland, South went on to state that the Corporations and the independent airlines should work together. The introduction of the word "work" at that point to describe the relationship between the Corporation and the independent airlines is new because the term which was used from the introduction of the Civil Aviation (Licensing) Act was "compete"—and that is what the Conservatives want. The hon. Member for Bournemouth, West (Sir J. Eden) put it very well, and I will comment on what he said. But the hon. Member for Sunderland, South said that he wanted them to work together, when he was in fact talking about competition.
  As a result of Government efforts, we have the absurd situation at Renfrew Airport in which a B.E.A. aircraft leaves at 7.30 a.m. and at the same time a Cunard Eagle aircraft leaves. That is the outcome of the system advocated by the hon. Member, who was a member of the Committee which put the Civil Aviation (Licensing) Act on to the Statute. Book, and it is the system which he advocates now. It does no good to B.E.A. or to Cunard Eagle, because in order to fly those aircraft Cunard Eagle have to subsidise them by all sorts of
  854
  methods which the hon. Member would vigorously condemn if they were used by B.E.A.
  Mr. P. Williams: The failure of the Licensing Board is that it has licensed far too few flights for Cunard Eagle. It has given Cunard Eagle a licence to lose money instead of a licence to make money.
  Mr. Rankin: That is an outcome of the system which the hon. Member supported and still supports and which is supported by the hon. Member for Bournemouth, West. Competition in air services for a limited and relatively small percentage of the travelling public can result only in losses from those who enter the service to compete with the existing operators. This is one reason why B.O.A.C. is in this present situation.
  Miss Margaret Herbison: My hon. Friend said that two planes left Renfrew Airport at 7.30 a.m. I take it that both B.E.A. and Cunard Eagle were flying to the Western Isles?
  Mr. Rankin: They are flying to London. The largest part of the passenger load is on the flight to London.
  The aim of this system is to hurt the nationalised corporations because, as the hon. Member for Bournemouth, West made clear, he does not believe in nationalisation. He put his finger on the crucial issue, which is that the Conservatives are fundamentally opposed to the concept of a nationalised service and are out to do their best to destroy it.
  The hon. Member for Sunderland, South said, "Do not write off the deficit until we have the financial plan". It could more sensibly be said that there will be no financial plan until the deficit is written off. Nobody knows that better than the Minister. If Mr. Corbett were free to loosen his tongue, or if we had the chance: to read his Report, we should know that he said that the deficit must be written off. I prophesy that before the end of the present Session, before next summer, the deficit will be written off, whether or not we have from Mr. Corbett a financial plan.
  The hon. Member for Sunderland, South referred to the fact that there must be some responsibility on the board for the deficit or £80 million. I do not think that any of my hon.

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  Friends has for one moment made a statement to the contrary. The board cannot be rid of some responsibility for the creation of this debt. If nothing else, there is the responsibility of acquiescence in the policy of Governments which was basically responsible for the creation of the debt.
  The hon. Member cast some suspicion on the way in which the London engineering base was being worked..My mind shot back to the opposition which I conducted in the House against the transfer of the Renfrew base to London Airport. In that opposition I was backed by the trade unions in Scotland, who were concerned that it would not be an economic success and thought it inadvisable for that reason to make the transfer. But now the Conservative Party, who put the change into operation, and carried it through by their majority in the House, are complaining that the airport to which the Renfrew engineering base was transferred is a topic of suspicion to them and that its conduct ought to be closely inquired into.
  I was rather amused to hear the hon. Member for Bournemouth, West wanting to forget all about past history. The one bit of history he does not want to forget is the £80 million deficit. That is one piece of history he will keep alive. However, time does not permit me to develop my argument along those lines, particularly since I must remind the House of that hon. Member's astounding statement in contradiction of his own Government's policy. He advocated that B.O.A.C. should have the right to purchase aircraft in the cheapest market. I hope that when the Minister replies tonight he will dissociate himself from such a policy, for aircraft of that type have dangers—
  Sir J. Eden: Aircraft of what type?
  Mr. Rankin: Cheap aircraft.
  Sir J. Eden: The hon. Member does not know what he is talking about.
  Mr. Rankin:The hon. Member for Bournemouth, West can word it in whichever way he likes, but when he advocates the purchase of goods in the cheapest market he is looking for cheap goods. Cheap goods often represent
  856
  cheap labour and cheap labour often represents danger and a lack of safety, particularly in aircraft. If the Government have courage and wisdom they will dissociate themselves from that sort of policy.
  Sir J. Eden rose—
  Mr. Rankin: I want both the hon. Member for Bournemouth, West and the hon. Member for Sunderland, South to notice how courteous I am, since neither of them gave way to me when they were speaking. I now give way.
  Sir J. Eden: I appreciate the overwhelming generosity of the hon. Member.
  Mr. Rankin: Do not be sarcastic.
  Sir J. Eden:The hon. Member has twisted my words and is trying to show that I advocated the purchase of unsafe aircraft. If B.O.A.C. did that, which is idiotic nonsense, it would certainly not prove a cheap policy. This shows that the hon. Member is talking absolute nonsense and knows it.
  Mr. Rankin: I do not completely disagree with the hon. Member, since so much idiocy comes from him that at times it is difficult to sort it all out. I took a note of his words. He may alter them at the appropriate moment, but I still say that he advocated, in my hearing, that the policy of the Government should be to purchase aircraft in the cheapest market. He used those words. How they appear in the OFFICIAL REPORT will be a matter for his discretion. [HON. MEMBERS: "Oh."] Why not? I said that it would be a matter for his discretion.
  I now turn to what has been the chief bone of contention in today's debate, the load, the deficit, which rests on the shoulders of B.O.A.C. and which we must face. If the present Government remain in power they will have to wipe out this deficit and, if they do not wipe it out, the next Labour Government will do so as soon as we get a chance. In this connection, I wish to quote some statistics published in the Aeroplane last weekend. The magazine drew attention to the interest paid on borrowings by B.O.A.C. In 1948–49, the Corporation paid £490,000 on £22 million of money that had been borrowed. In

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  1962–63, the Corporation, on borrowings of £172 million, paid interest of £77–7 million.
  Mr. Lubbock: Does not the hon. Member mean £77.7million? Is not the decimal point in the wrong place?
  Mr. Rankin: I am quoting the figure published. If the decimal point is in the wrong place the figures still show that on borrowings of £22 million in 1948–49 and borrowings of £172 million in 1962–63 the Corporation has been faced with increases in interest payments from less than £½ million to nearly £8 million—that is, even if the decimal point is in the wrong place. It represents a tremendous increase in the financial commitments of the Corporation and whatever happens—whether or not B.O.A.C. has a good year—it must go on meeting these interest payments on its earlier borrowings.
  That is not all. Beyond that, B.O.A.C. must do more than make money to cover its intromissions. It is required to support the British aircraft industry, though not the aircraft industries outside this country. It is required to show the flag on routes which may not necessarily be economic. We were told by the Government during the proceedings on the Civil Aviation (Licensing) Act that B.O.A.C. and B.E.A. had to show the British flag and it was clear that the Government were not thinking merely in terms of money but also in terms of showing the flag on uneconomic routes Another obligation upon the Corporations is that they must help the small associated companies.
  In addition to these obligations, since the war B.O.A.C. especially has had to operate unsuitable aircraft. No one will dispute that many of them were developed simply as military types. B.O.A.C. was also penalised by the Comet failures, which cost £3 million, and by the delay in bringing the Britannias into service. That, according to the White Paper, cost about £31 million. No hon. Member will hold B.O.A.C. completely blameworthy in view of these failures, particularly when one remembers the huge interest bill which, according to the White Paper, has reached the enormous total of £34.2 million on the £80 million deficit.
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  On top of that we have the £153 million loss incurred largely due to Government instruction, because the Corporation was told to operate certain routes which would not have been operated except for that instruction. The Kuwait service is an example.
  The Parliamentary Secretary quoted from the White Paper that in the view of the Government the policy of investing in associated companies was sound, but its implementation was unsatisfactory. I interrupted the hon. Gentleman to ask why—if that were the case and the Government were aware of it—when Questions were put on the matter the Government did not make the situation clear to the questioners, of whom I was one. As a result of these things a situation, created by the Minister and the Parliamentary Secretary has been perpetuated which now calls for the special intervention of the Minister in the affairs of B.O.A.C. I do not wish again to quote the findings of the Select Committee on the position of the Minister vis-à-vis the nationalised Corporations. But I think it fair to say that at the conclusion of the recommendations the Report demanded a clear-cut division of responsibility between the Minister on the one hand and the chairmen of the Corporations on the other.
  As was pointed out by my hon. Friend the Member for Edmonton (Mr. Albu) so far the Government have not answered that question. Does the statement in paragraph 51 of the Return represent their reply to a question which was put to them in the Report issued by the Select Committee on 14th May, 1959? This is what it said:
  "The Government think it necessary to reaffirm that the Corporation must operate as a commercial undertaking. If the national interest should appear, whether to the Corporation or to the Government, to require some departure from commercial practice, this should only be done with the agreement or at the instance of the Minister of Aviation."
  Now, nearly four years later, is this the answer to the recommendation which the Select Committee on Nationalised Industries made in May, 1959? If the Minister intervenes, will he do it publicly and state when he proposes to intervene in such a situation in this House, and give the House due warning?

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  This business is the crux of the problem with which we are faced tonight. In the editorial of The Times today it is stated:
  "What the House now needs from the Minister of Aviation is a clear outline of the future role of the Corporation. Does he expect them to take a commercial view of all their operations or does he assume that, on occasions, this is bound to be overridden by other considerations—the need to fly certain routes for prestige, to buy British aircraft, or even to make unprofitable investments? If so, how should this be dealt with in the corporation's accounts?"
  Is the Minister proposing to say that he will answer the query put in The Times and which has been put by almost every hon. Member who has spoken from this side of the House? Will he say that to the Corporations in order to give them a chance to flourish in the future—which is the desire of hon. Members on both sides of the House? Will he relieve the trading accounts of these capital investments which ought not to appear as deficits? I hope that the Government will face this problem. We all want to see B.O.A.C. succeed and expand. We want to see B.O.A.C. buy British aircraft and carry more passengers. But at the same time this will not be possible if it has to carry this load of debt. The Times and hon. Members on this side of the House have pointed out the way. We hope that both Ministers will follow the path we are trying to show them.
  7.17 p.m.
  Mr. William Shepherd: I have listened to the hon. Member for Glasgow, Govan (Mr. Rankin), as I have for many years previously on the subject of the Airways Corporations, and I support what has been said by other hon. Members—that we should not enter into an arid discussion on the merits and demerits of nationalisation as it affects aviation.
  But, having said that, equally I should like hon. Members opposite not to be panicstricken about the minute amount of private enterprise flying permitted under the present regulations. It is absurd to have these grievous fears of these very weak and impotent independents. The independent concerns are impotent in terms of the resources available to the Corporations. I am distressed—I say this directly to those responsible—at the attitude of mind of those running the two
  860
  Corporations. It reflects an extraordinary fear of this very limited competition which they should welcome as a contribution to British commercial aviation and accept as a challenge.
  I wish to deal with the issue of B.O.A.C. I have done so on a number of occasions and perhaps I have been more outspoken about the need for the reformation of this Corporation than any other hon. Member. I have listened to the defence of B.O.A.C made today by hon. Gentlemen opposite, and all the arguments designed to prove that there is nothing materially wrong with B.O.A.C. would have some foundation were it not for the fact that B.E.A. is operating under precisely the same conditions regarding status and relationship with the Government.
  It is no use hon. Members opposite telling a sad tale of woe about the life of B.O.A.C. and pretending that there is no material difference between the conduct of B.O.A.C. on the one hand and B.E.A. on the other. It is not so long ago that we were looking on B.O.A.C. as the giant with all the strength and regarding B.E.A. as the lame duck. If we see this transformation, we must accept the fact that there is something materially wrong.
  I do not like nationalisation for one particular reason. It is that when something goes wrong in the conduct of a nationalised industry it is usually because someone at a high level is not good enough. When he is good enough, it is very pleasant for us to say, "What a good chap so-and-so is." It is very difficult and disagreeable for any hon. Member to have to say, "X is no darned good for the job." This is one of the difficulties that we have in dealing with a nationalised industry.
  The difference between success and failure in a business is often very marginal; as, indeed, it is in war. It hinges very largely upon the ability, in most cases, of one individual. This is a disagreeable fact, but it is, nevertheless, true. I think that we must face up to the fact that B.O.A.C. has not had the sort of leadership over the past seven or eight years that it ought to have had.
  It is no use hon. Members opposite talking about the Minister having cast the members of the B.O.A.C. staff into a state of despondency. Let me say, with

  861
  some knowledge of the B.O.A.C. staff, that it has been In a pretty bad state for quite a few years. This is not a new situation. I say to the House that there has not been on the part of the members of the B.O.A.C. board the degree of leadership that is essential for this job. That is not a severe criticism of these men, because they are probably quite able men in various other capacities and directions; but the supreme test of whether a man is fitted for leadership of an industrial corporation is his quality of leadership. If his quality of leadership is deficient, he is useless in that situation. I say that there has been inadequacy of leadership in B.O.A.C.
  I have listened to the pathetic tales which have been recited from Flight International, which seems to have a vested interest in the present B.O.A.C. board, and various other journals, but I ask the House to have regard to some of the factors which cannot be denied, and which are not based on prejudice against any individual or the board.
  Let us look at a few of the figures and make a comparison with Pan American. I know that these figures are not exact, but they are not as superficial as an hon. Member opposite was foolish enough to suggest. There are some figures that, I think, demand the attention of the House.
  The first is that Pan American has roughly twice the amount of carrying capacity of B.O.A.C. and—we ought to consider this in comparison with it—roughly twice the earning capacity of B.O.A.C. Pan American carries nearly five times the number of passengers of B.O.A.C. But the most significant fact of all is that, despite this extraordinary difference, the number of people employed by Pan American is hardly any more than by B.O.A.C. If one takes into account that Pan American has twice the carrying capacity, and twice the revenue, and can carry five times the passengers, it is exceedingly difficult by any objective examination to believe that 22,000 employees of B.O.A.C. are strictly necessary, and even more difficult to believe that this is efficiency.
  Mr. Rankin: Will the hon. Member also add to Pan American assets the £100 million subsidy it gets every year for gathering up the debris at Cape Canaveral?
  Mr. P. Williams: Will my hon. Friend the Member for Cheadle (Mr. Shepherd) add to that that the wage and salary structure of Pan American is incomparably higher than that of B.O.A.C.?
  Mr. Shepherd: The wage and salary structure of Pan American is much higher. Indeed, the air is the only sphere in which the British cannot beat the rest of the world. When it comes to train fares, road haulage, or shipping, we can beat the rest of the world, but when it comes to aviation we do not seem to be able to equal the rest of the world. This calls for a serious inquiry into the efficiency with which B.O.A.C. is run. I do not want to labour the inefficiency side, because I do not think that knocking British corporations or British products is a very useful occupation for British Members of Parliament, but some of the commercial judgments seem to be extraordinarily naive.
  For example, we are told that there is to be an expenditure of £2 million on publicising the VC10. This went off with a big bang last week. I am all in favour of publicising the VC10, which, I believe, will be a first-class aircraft, but, had I been faced with this judgment, and knowing that this aircraft will not come into active service until 1965—[An HON. MEMBER: "1964."] No. the hon. Gentleman always gets it wrong; there is to be a very limited service in 1964—I would have thought that normal commercial prudence, bearing in mind that there is a deficit of £80 million to make up, would have caused the Corporation to say, "We will have a running experience of the VC10. Let us see how it does, if no 'bugs' appear we can put our advertising programme into operation, and it will coincide substantially with the introduction of the aircraft into service."
  But the Corporation lashes out with a tremendous campaign all over the world at once. I do not want to say that there will necessarily be "bugs" in the VC10—but it will be a very unusual aircraft if it does not have "bugs"—and it would be prudent if the expenditure of so vast a sum as £2 million had been suspended until such time as it could have made its impact because of the extension of its service and one was happily certain that no "bugs" would

  863
  appear in the operation of the aircraft. This is only a small thing, but if it is indicative of the way in which the whole of these judgments are taken, it is a desperate outlook.
  I would say a word about the Corbett Report. I have never liked this Report. I think that it was misconceived from the beginning. I do not think that one man, who is an accountant, was suitable to carry out this investigation. He himself found that out after he had started the job. I would have preferred that some form of publication had been arranged, though I realise the difficulties. I would certainly say that if anything was to be to the disadvantage of the British aircraft industry, or British aircraft operators, it would have been taken out of the Report. Had it been to the disadvantage of the Minister we would, of course, not have worried about it. [HON. MEMBERS: "Oh."] Politicians must give and take knocks.
  Let me turn to the solution which my right hon. Friend has proposed for the Corporation. I say at once that I do not particularly like the solution, and that I have very grave doubts whether it will work. One of the things which distresses me—and I hope that it will distress the House—is that in all the years of the Corporation's existence no man has risen in the Corporation who is capable of playing a dominant part in its affairs.
  This is a serious criticism of the Corporation. It seems to show to me that its management selection and training is not very good. No single man capable of running the Corporation, or carrying out the duty of a chief executive or chairman, has arisen from the ranks throughout the long period that the Corporation has been in existence. That is a severe criticism of the management itself.
  Before I criticise what has been done by my right hon. Friend, perhaps I might put my solution to the House. I would have made Mr. Milward the chairman of B.O.A.C. I suspect that he would have hated it immensely, but I think that he is sufficiently good a servant of the country to have accepted it even though he would have preferred to have taken on the job of chairman of B.E.A., a promotion which I think
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  is agreeable and acceptable to all hon. Members. I would have put him in this job because I think that that is the only way in which we could have got the transformation which would have had the impact we need and provided the leadership we require.
  What do we propose to do? We propose to put Sir Giles Guthrie into the B.O.A.C. in the position of something of a gauleiter. I am not happy that he is the right choice. I have nothing against Sir Giles Guthrie. Indeed, I know very little about him. I am told that he is an excellent fellow, and this I am prepared wholeheartedly to accept. But is he the sort of man who will make the difference between failure and success in this organisation? I think that the dice are loaded very heavily against him, because he is coming into a business that he does not really know and he will have to make a dramatic transformation in a relatively short period of time. I wonder whether this is the kind of man we require.
  I do not think that Sir Giles Guthrie is the sort of man that we want for this job. The great industrial wealth of this country was not created by bankers or merchant bankers, or gentlemen who were directors of the Prudential or any other of those highly agreeable semi-social activities. It was created by men of immense energy and drive who were engaged in risk-taking and who spent their lives in arduous effort. I do not think that this gentleman, however able he may be in other spheres, is qualified as a man who has had substantial experience in a trading activity.
  The running of an airline corporation is an immensely competitive trading activity. I should like to see at the head of such an organisation a man who has had experience of successfully running a substantial trading or industrial activity. I do not think that we have got this. Indeed, I feel, unhappily, that we are back in the amateur stakes, and this is where B.O.A.C. has been going wrong for so long. It has been running its business against highly professional competitors with what is virtually an amateur team at the top. This just does not work because the game is too hard. It is not a game for amateurs. It is a game for hard and seasoned professionals.

  865
  I find it difficult to support the view that this will be a particularly successful choice, and I am puzzled by the fact that this gentleman is to be given the job of both managing director and chairman. I confess that I do not know the precise manner in which the respective duties of the chairman and managing director are discharged, but I can conceive this possibility that a man who has the task in this Corporation of doing the job of both chairman and managing director will have so many people reporting to him that he will have no time for serious consideration of what he really has to do.
  If we put a man into the position of being charged with the special responsibility of revamping the organisation, the last thing we ought to do is to saddle him with the day-to-day work of the Corporation. I should have thought that it was obviously necessary to keep him clear of these things so tha the could devote all his time to the question of looking at the pattern of the organisation and seeing where it went wrong.
  I turn now to the question of the merger. I have never been desperately keen on this, because everybody knows that size—above a certain level—is the enemy of efficiency. I think that there is a case against the merger, but I have a feeling that this case is decreasing and that we ought to be turning our minds to the acceptibility of a merger. The Minister has gone some wayby the cross-posting of these chairmen, but it could easily be nothing more than a cross-posting. There could easily be a gentleman's agreement—"This is my preserve and that is your"—and there will be no real movement of co-operation between the two organisations. If this were to happen, I would regard it as almost disastrous, because I think that there could be substantial co-operation between these two organisations.
  There is much more co-operation between the B.O.A.C. and foreign airlines than there is between the B.O.A.C. and B.E.A. This is an incredible state of affairs, but it exists, and if I were to propose, as I did 10 or 12 years ago, that there ought to be some co-operation between them, I would receive a wealth of information to prove that co-operation in training, catering, sales, or engineering, is quite beyond the bounds
  866
  of possibility and practicability, and that nothing whatsoever can be gained from any form of co-operation. I did not believe that 10 or 12 years ago, and I disbelieve it today. I hope that my right hon. Friend will make certain that if there is a cross-posting this is not the end of the matter. There must be practical signs of a desire on the part of these two Corporations to work together.
  One of the things that distresses me about the B.O.A.C. is its extraordinarily inadequate labour relations. No corporation of this size can exist if its labour relations are not good. I do not think that anybody who knows anything about this set-up thinks that the Corporation's labour relations are good. I am not referring to the state of morale, although I emphasise that it is not possible to run a big organisation in competition with other training organisations—which is what the B.O.A.C. is doing—if it is making a whacking loss every year while other organisations are paying their way. Such a situation is destructive of morale.
  Apart from the effect of loss-making on morale, not enough interest is being taken in labour relations at the top level in the Corporation. I took an eminent member of the board to lunch and talked to him about the necessity for an eminent member of the board to sit on the main joint consultation committee and take a personal interest in these affairs. It was not being done, and, as far as I know, is still not being done. It is not possible to run a big show without those at the top taking a genuine interest in the work of consultation. Unless one takes everybody with one in an organisation as big as this, there is no hope of getting the sort of result that we all want.
  Are we making the Corporation commercial, and if we want it to be commercial, how should we compensate it for what might be described as noncommercial activities? I think that one has to accept that the Corporation must becommercial, for the simple reason that one cannot maintain morale in this organisation if it is competing with other airlines in the world and is making a loss while others are making a profit.
  So B.O.A.C. must be run as a commercial proposition if only for the sake

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  of the morale of the people working for it. With an organisation that is not competitive, such as the Army or the Navy, it is possible to pour lots of money in without any trouble, but in the case of a competitive organisation, such as an airline corporation, there must be parity of performance with other world operators if morale is to be maintained.
  Then there is the problem of buying the kind of aircraft the Government want the airline to buy, and the question of running special services for political and other reasons. I believe that there should be some sort of compensation, although an allowance should also be made for the fact that the Corporations have a virtual monopoly in national terms. Because of that fact, they ought to carry some degree of social benefit. I should like to see this assessed. But beyond the amount which they may properly be called upon to pay because of the fact that they have a virtual national monopoly, they ought to receive some allowance from the Government.
  This can be done only restrospectively in respect of the introduction of aircraft. In sales terms it would be bad to offer such an allowance in any other way. In the case of airlines being flown purely for social or political purposes, arrangements could be made right away, and I think that some arrangement of this kind should be made, to give the Corporation a fair chance.
  I support the writing-off of the £80 million as soon as we have some sort of a plan. It is nonsense to carry it on, besides being discouraging to those who are trying to run the business. As soon as a valid plan has been formulated, this £80 million should be eliminated.
  I hope that B.O.A.C. will now turn the corner. It has had an extremely difficult time. It needs good leadership at the top. If, by the changes proposed, we can give it that leadership, it will be of immense value to the Corporation.
  7.42 p.m.
  Mr. A. E. Hunter: The hon. Member for Cheadle (Mr. Shepherd) has made an interesting speech. I agree with his remarks about the writing off of the cumulative deficiency,
  868
  or the waiving of the interest charges on it. The hon. Member repeated what many hon. Members on both sides of the House have said, namely, that the morale of B.O.A.C. is very low. I probably know as many employees of B.O.A.C. as any other hon. Member. In my view, one of the main reasons for low morale is that many of the staff believe that the Government do not want to make a success of the Corporation. After 12 years of Conservative government hon. Members who support the Government now say that the morale of the staff is very low. That is hardly an achievement for the Government. Again, most of the £80 million deficiency has been accumulated in the years from 1951 to 1963, when the present Government or their predecessors were in full control.
  There is bound to be a certain amount of repetition in this debate. The Second Reading of the Bill gives the House the opportunity to examine the Government's civil air transport policies. For 12 years they have been in full control and have had a complete majority in the House. What the industry has lacked is firm Government policy and direction. The Government have appointed members to the Board of B.O.A.C, and criticisms of those appointments have been made, by the hon. Member for Cheadle among others. I agree with him that it is a great pity that no member of the staff of B.O.A.C. who has been through all the departments has yet risen to the Board. The Government are also responsible for the Corporation's financial policies and its problems.
  The Conservative Party's well-known and undisguised dislike of public ownership, even when it is essential in the interests of British civil aviation and the nation, has been a heavy handicap to the Corporations. Many of the 22.000 people who work for B.O.A.C. are most critical of Government policies. This is confirmed by the criticisms expressed by the British Air Lines Pilots' Association, which represents 1,000 pilots in B.O.A.C., and 800 in B.E.A., and by the trade unions, who represent many grades of employees of all ranks in the Corporations.
  I want to deal with B.O.A.C. first. I have always maintained that it has had

  869
  a more difficult operating task than has B.E.A. It has faced strong and heavy competition from international airlines, especially from America on the North Atlantic route. B.E.A. has had an easier task in Europe, although it has done a splendid job.
  Hon. Members have mentioned the tragically bad luck that B.O.A.C. had with the failures of the early Comets. This, combined with the late delivery of the Britannias, caused financial losses. It is interesting to note that the White Paper states that
  "Had the Comet I succeeded, B.O.A.C. would have kept the lead in jet operations for some years."
  Financial losses have also been caused because of pressure by the Government to fly uneconomic routes and prestige routes. B.O.A.C.'s main business is not holiday traffic. A great deal of it is business traffic. When there are world trade recessions—and we have had several between 1950 and 1963—there are falls in airlines passenger receipts. It is not so marked in the operations of European airlines as it is on world airline routes.
  Again, the change from turbo-prop to jet has involved the Corporation in heavy financial losses, in selling out-of-date aircraft because of having to compete with foreign airlines on the long international routes. Independent airlines who, in some cases, do excellent work, do not have to write down the value of their aircraft. They generally operate by using second-hand aircraft which have been bought from the Corporations. But when B.O.A.C. competes with America, or France, or other countries it must have jet aircraft equal to the aircraft of those foreign airlines.
  Despite all these difficulties, the Corporation has had no encouragement from the Government. It has been the Government's deliberate policy to preclude B.O.A.C. from trooping, which has seriously affected the Corporation's earning capacity, especially with its obsolete aircraft such as the Britannias and the DC7s. Each Minister, in turn, has prevented B.O.A.C. from tendering for trooping and the Corporation has been forced to sell its Britannias and DC7s at low prices to independent operators to do this work. The Minister has promised to look into this question, but so far I have not heard from him about it.
  870
  The announcement of an accountant's inquiry came in one of our civil air transport debates. The Corporation has no lack of accountants. The Corbett inquiry must be on the list of secret weapons, for we have not been allowed to see its report, nor has the Corporation, the pilots' association, or the trade unions in the industry. In common justice to those people who are closely involved, the Minister should allow them to receive the report. 'Nothing gives rise to rumours and suspicions more than secret reports.
  As to the future, B.O.A.C. is one of the world's premier airlines and has a great part to play in the development of British civil air transport and British prestige throughout the world, but the Government must encourage and support the Corporation and not allow their opposition to and dislike of public ownership to delay the extra effort which is needed. I hope that the Minister will again consider writing off the accumulated deficit, or waiving the interest charges on it. That would be an encouragement to the Corporation and would raise the morale of its staff.
  A new chairman, Sir Giles Guthrie, has been appointed and is to combine the duties of chairman and managing director. I do not recall having met him, but I trust that he will endeavour to raise the morale: of his staff and to work in close co-operation with them and with the trade unions and the British Air Lines Pilots' Association who could be of great assistance. I hope that he does not share the Government's dislike of public ownership, for that could be a great handicap. I wish him every success in any endeavour to maintain B.O.A.C. as a first-class world airline.
  Despite the handicap of Government policy of opposition to public ownership, even where it is essential to the country's prestige, thanks to the splendid leadership of Lord Douglas of Kirtleside, a fighter in war or peace, British European Airways has made substantial profits for seven years out of eight. This year has been a golden summer for B.E.A., with a record profit of £7½million during the seven months of the summer season. During the golden months from April to October, the airline flew more than 4 million passengers a total of 1,400 million miles. In its 17 years of operation,

  871
  B.E.A. has carried 40 million passengers, and I congratulate Lord Douglas and his staff and all the employees of B.E.A. on this record.
  I have met the new chairman of B.E.A., Mr. Milward, on a number of occasions. He has been the airline's executive officer for a number of years, working closely with Lord Douglas. His appointment is a good one and I wish him every success, for the success of B.E.A., like that of B.O.A.C., is essential to the country.
  The two Corporations carry the Union Jack. They carry the flag for Britain. I hope very much that their handicap of the Government's dislike of public ownership will not injure their growth. If a private firm does well for this country, I am pleased. The Corporations should be the instruments of national policy to build the prestige of British civil air transport, for they are a vital link for the aircraft industry's home and export markets. If the employees of B.O.A.C. and B.E.A. are given the lead, these two Corporations will do the job for Britain.
  7.56 p.m.
  Mr. F. A. Burden: I was pleased to hear the hon. Member for Feltham (Mr. Hunter) refer to the fact that the Corporations carry the Union Jack on their aircraft. I assure him that the independent companies are proud and happy to do the same.
  I am delighted to know that there is to be no Division tonight, that hon. Members opposite will not divide the House against the Bill which proposes to raise the borrowing powers of B.O.A.C. to £125 million. I join with hon. Members on both sides of the House who have said that they would like the large capital sum, now standing at £80 million, to be written off when a new and good plan for the Corporation's future is produced. I make my own position perfectly clear. I am a director of one of the independent companies: but it is perfectly clear that all hon Members, even those not interested in aviation, recognise that the industry is very risky and complicated and that profits are difficult to make, that large sums of capital expenditure are necessary to equip oneself with the propel type of aircraft and that operations
  872
  generally and the problems of the industry can involve companies in enormous losses.
  No one would object if I said that today we were really dealing with the enormous accumulated loss by B.O.A.C. That is the position. We are talking not about hundreds of thousands of £s, not chicken-feed, but about £80 million of public money. The public has a right to know what is going on. Losses at the present rate must not be allowed to go on.
  Mr. Cyril Bence: Hear, hear.
  Mr. Burden: If the hon. Member had sat through the debate as long as I have—
  Mr. Lubbock: I have.
  Mr. Burden:I was referring to the hon. Member for Dunbartonshire, East, (Mr. Bence). If he had sat through the debate as long as I have, he would have learned much more than by coming in and interrupting within two minutes of his entry.
  It was the Minister's duty to make an investigation of the affairs of B.O.A.C. The public interest demanded it. It was in the interests of the board of the Corporation, which had been subjected to much criticism over a considerable period. It is certainly not in the best interests of employees, among whom there has been a good deal of unrest for some time, that there were not the best relations between them and the management. So I think that we can say that my right hon. Friend was right to institute an inquiry. I believe that he was right to employ an eminent chartered accountant in view of the inquiry decided upon, which I believe to have been the right type. I believe that because of that type of inquiry, because of the undertaking required from certain people who wished their information to be given in confidence and would not otherwise have given it, it is quite impossible for my right hon. Friend to publish this Report in full, quite apart from the fact that it would disclose information to overseas operators which would certainly do the Corporation no good.
  I find nothing surprising about the fact that Mr. Corbett found certain

  873
  grounds for criticism. Indeed, I am surprised in some directions that his criticism was not even stronger. I believe that it is really time that B.O.A.C. was viewed as an ordinary commercial undertaking in precisely the same way as those of us who are directors of independent concerns are in general viewed by our shareholders. Our concerns are viewed as commercial undertakings. We have a commodity to sell and must provide the best possible management, equipment and sales force in order to sell it as well and as freely as we can and still retain some profitability at the end of it. I believe that there is nothing wrong in that conception of any trading organisation.
  I do not think that any one could quarrel with this objective, particularly if the Corporation is given—and I hope my right hon. Friend will remember this—the power to recoup itself for any particular routes it may be asked to develop or in any particular function it might be asked to carry out in the general interest of the country or of the Commonwealth, and which may not be good commercial possibilities. If there is power to recoup for that sort of thing, then I cannot see how hon. Members on either side can object to the idea that the Corporation should be treated as an ordinary commercial and business concern.
  The losses, whatever may be implied, that have been made in recent years have not been caused by any Government interference in the route pattern.
  Mr. Lubbock: Oh.
  Mr. Burden: The hon. Gentleman is the most extraordinary fellow. He hops up and down on every subject debated in the House. He really cannot keep quiet until any other hon. Member has finished a sentence.
  Mr. Lubbock:Has the hon. Gentleman seen the Corbett Report? If not, how does he know that there has been no interference with the route pattern?
  Mr. Burden: I was not referring to the Corbett Report. I was referring to my own view. I said that it was my view, and it remains my view, that there is not a title of evidence that the Government at any stage in recent years have told B.O.A.C. what its route pattern is to be. I would be very happy if the
  874
  hon. Gentleman could find any evidence and produce it. In my view there is no such evidence.
  One of the biggest reasons for the losses of B.O.A.C. over recent years has been its failure to produce the right type of new aircraft at the right time. The Britannia 312 and the Comet 4 are classic examples of failure in this connection. Certainly the Britannia project was ill-conceived and badly carried out.
  Mr. Bence: Who by?
  Mr. Burden:If the hon. Gentleman wishes to intervene I should be happy to give way., but if he does not intervene sensibly then it will delay other people who wish to take part. I should be happy to give way. I wish he would not interrupt from his seat.
  Mr. Bence: The hon. Gentleman says that whoever conceived the Britannia made a blunder. Did B.O.A.C. conceive it, or was it the Bristol Aeroplane Company? B.O.A.C. had nothing to do with it.
  Mr. Burden:If the hon. Gentleman will restrain his impatience I am coming to that in my remarks. In the first place he is exposing, if he really believes that, one of the great failures of B.O.A.C. He says that the Corporation had nothing to do with the conception of the Britannia, but, after all, if B.O.A.C. was unable to tell the aircraft constructors what it wanted to fly, it was sadly lacking in its responsibility and that again is another reason for my right hon. Friend's action.
  The Brilannia was introduced on the North Atlantic route in 1957 and a year later the Americans started using long-range jets. The Britannia was far too late in coining forward. Admittedly it was delayed for two and a half years through failures, but that would have given a lead of only three and a half years and the Boeing jet was on the drawing board long before then. This was something that apparently was not realised and I believe it should have been realised.
  Mr. Cronin: The hon. Gentleman should be fair about this. He must know that in 19'56 B.O.A.C. was most anxious to obtain Boeing jets but had the greatest difficulty in getting the Government to agree to purchasing any at all.
  Mr. Burden: Of course it was, but that again is a most extraordinary intervention because after it had placed its orders for the Britannia, having presumably gone into its future requirements with the British aircraft constructors, one year before it was due to get the Britannias it said that it would like to cancel them and buy Boeings instead, because it had made a misconception about the future. With the emergence of the pure jets the great difficulties of the Corporation arose.
  We must accept that there was bad luck over the Britannia but in any case the facts of the matter show quite clearly that even had it come forward on time there would still not have been a proper period of amortisation before it came into direct contact with the Boeing. So there must, therefore, have been an enormous loss however good the circumstances. However much bad luck might have been avoided, there still remained this misjudgment regarding the Britannia, which has involved the Corporation in a great deal of cost.
  In future there must be the utmost co-operation between the Air Corporations and the aircraft constructors in assessing requirements and in meeting them. They each depend upon the other; and—let us be perfectly clear—we have, in the Viscount, a wonderful example of the way this co-operation can help the aircraft industry and provide employment and achieve success. Throughout the whole of that project there was the utmost co-operation, and that is something that is vital.
  B.O.A.C's failure regarding its fleet was high-lighted by the fact that, between 1956 and 1962, it had five different aircraft and never less than four flying at the same time. Any hon. Member with any idea about management must know what that means. It means great problems in the training of pilots and tremendous duplication. It means an enormous increase in maintenance difficulties and costs, in the number of spares that must be funded and held. It creates all sorts of difficulties in selling space for passengers and freight.
  All these problems must be created if one has a number of different aircraft types flying at the same time. I believe it is absolutely essential that B.O.A.C.
  876
  now takes the first possible steps to clean up its fleet. That is one of the first things it must do. I hope that it will make up its mind that the VC10 is the right aircraft and will concentrate absolutely in getting every possible value from it. I hope that it will be encouraged to sell off the rest of its fleet as quickly as possible, and this might include disposal of the Boeings because they too can cause difficulties in maintenance and other ways if they are retained. The Corporation has certainly ordered enough VC10s to be able completely to fleet itself with them, and this is another indication of the necessity to clean up the fleet as soon as possible.
  Mr. Lee:Is the hon. Gentleman blaming the Corporation for buying Boeings when it did?
  Mr. Burden: I am not blaming it for buying Boeings. That arose out of the earlier problems with regard to the Britannia and other aircraft. It had to buy Boeings then because the Britannia was obsolescent. But now it must try to get a single aircraft fleet together which will enable it to cut maintenance costs and give it the viability that it has not had for years. I believe that through this it should be able to improve its position tremendously.
  Mr. Philip Noel-Baker: Who made the decision to take the VC10?
  Mr. Burden: The decision was made by the board of B.O.A.C.
  Mr. Noel-Baker: The present board.
  Mr. Burden: Of course. I have never said that it was not. Who else would make the decision? If the board has to take responsibility for the good things it has done I am sure that the right hon. Gentleman will accept that it must take responsibility for the bad things as well. This is what we mean by turning it into a commercial operation. I find no quarrel with his argument at all.
  Now I turn to the White Paper which has engendered most of the trouble. There are one or two points in it with which I must disagree. On page 6, in paragraph 9, it is said:
  "In the years since 1956 a number of colonies have become independent nations. B.O.A.C. has thus lost most of its valuable cabotage rights."

  877
  I find that statement very misleading. B.O.A.C. still has rights in Ghana. They are not exclusive rights but they are rights. It still has exclusive rights with Jamaica and Trinidad and is currently flying services there. Although Singapore is, independent, B.O.A.C. still enjoys the same degree of rights as previously. It still has the same rights in Nairobi.
  Also in the same paragraph—this is glossed over, of course, but I think that the point should be made—we read:
  "This increase in the number of operators has coincided, in the last few years, with a decline in the rate of growth of air traffic generally."
  This is just not true. I am sorry to have to tell my right hon. Friend that the White Paper is not right. I refer to "World Air Transport Statistics." Let us look at what is said about traffic growth in 1962 on the North Atlantic route, a very important part of B.O.A.C. business:
  "The traffic of 18 IATA members on the North Atlantic route improved considerably in 1962. They carried 2,587,000 passengers … passing the 2½ million mark for the first time. The increase of 18.4 per cent, in scheduled passengers compares with a 9 per cent, increase in 1961."
  Twice as much, it will be noted.
  "Scheduled cargo traffic increased by 26.8 per cent, to 79,667 tonnes, and mail traffic by 12.8 per cent…. The average passenger toad factor moved up slightly to 51.6 per cent.".
  I ask hon. and right hon. Members to bear those figures in mind for a few minutes. I shall shortly refer to a few more figures at the back of the White Paper which I regard as extremely revealing.
  I turn now to page 9, the heading, "Investment in Associated and Subsidiary Companies". Quite a lot has been said about the position of the B.O.A.C. associated companies today, and I hope that I shall be forgiven for raising this point. I am not on the board of B.O.A.C.-Cunard—itcame away from my company—but I should have thought that, at least, it merited some mention in the White Paper. Although we do not see any B.O.A.C.-Cunard aircraft flying with anything on them except "B.O.A.C.", there is considerable investment there, an investment of which B.O.A.C. owns two-thirds of the stock. It is probably the biggest of all the
  878
  associated companies, and I should have expected it to merit mention in the White Paper. I should be glad if my hon. Friend would refer that matter to his right hon. Friend.
  What about the other associated companies? I believe that quite a number of them have gone wrong also because of bad management. In my view, they have been too remote from the central board of B.O.A.C. There has not been enough direct control over individual associated companies from the top management board of the Corporation. There has not been enough close attention paid to integration. Indeed, it seems to me that, at present, the Corporation's one idea regarding the associated companies is to scuttle out of them as quickly as possible. Although there have been heavy losses over the years—about £15 million, as we know—I think that, on balance, it is at this time quite wrong for us to scuttle out, particularly, of the newly developing countries.
  I believe that we should go in on partnership terms there, if possible, or, if that is not possible, that this country should endeavour to open its own subsidiaries in those countries. Insufficient benefit has been obtained from them. Much more could have been done. I believe that much more can be done in the future. If my right hon. Friend really wants to look into this subject, and if there is any indication of B.O.A.C. wishing to get out of more of them, I hope that, before we close up entirely in those areas, the independents will be given an opportunity to say a word and offer their advice.
  I refer next to page 11, parapragh 31, of the White Paper. We are told that
  "The first of these studies concludes that the Corporation's effort on sales, advertising and publicity has been at about the right level and well directed".
  I cannot agree. I know that Mr. Corbett put in a group of consultants on this, but I suggest that that conclusion is definitely not borne out by the statistics given at the back of the White Paper. Already, my hon. Friend the Member for Cheadle (Mr. Shepherd) has referred to some of the statistics and pointed out that Panam had flown a total of twice the capacity ton-miles of B.O.A.C. with approximately the same number of staff, which causes one to

  879
  think. In 1962 among all the ten companies referred to in the table at the back of the White Paper, there was only one with a lower overall load factor than B.O.A.C. with 44.9 per cent., and that was Trans-World Airlines. In 1962, B.O.A.C. had the lowest passenger load factor among these ten companies, the nearest one to it being the 49.2 per cent, of Sabena; so B.OA.C. was almost 2 per cent. lower than the lowest of the other nine.
  Mr. Lubbock rose—
  Mr. Burden:The hon. Gentleman has this document. He has access to the figures. If he is lucky enough to catch the eye of the Chair, he may wish to quote a few more figures. They are all in the White Paper and they cannot be contested. B.O.A.C. had the lowest passenger load factor of all the ten companies named.
  I come now to a most extraordinary fact. If there were no other justification for the Minister's action in insisting on an investigation, these figures disclose quite enough reason. I refer to the number of passengers carried in 1961 and 1962. According to the White Paper—I have had the figures checked since—B.OA.C. carried 983,000 passengers in 1961. In 1962, despite the increase in traffic to which I have referred, B.O.A.C. carried 977,000 passengers. Thus, between 1961 and 1962, the number of passengers carried by B.OA.C. declined, whereas the passenger load of each of the other companies quoted in the White Paper increased. This is a very serious matter. Here is an indication of something very wrong somewhere, and it certainly does not bear out the statement in the White Paper that everything has been right on the sales side of the Corporation.
  I have been critical in some ways, but we must speak out without being mealy-mouthed in these matters. This is a great Corporation. I have tried to be absolutely fair and logical in my approach. If, as we do our duty to the public, some of the present Board of B.O.A.C. are told that they have not been as efficient as they might have been, why should we refrain from stating it? I regret deeply that these
  880
  matters have to be debated in the House, but this is one of the dangers in having a public corporation. If we face our responsibilities, as we ought, either as Ministers or as Members of Parliament, does any right hon. or hon. Member opposite dare to suggest that we should be doing our duty to the public if we were to remain silent?
  Mr. Bence: We are doing our duty, too.
  Mr. Burden: I know, but this has not been the attitude.
  I hope that the new management at B.O.A.C. will have great success. It is vital that it should. Of course, when the new plan of the board is announced, the Minister should come to the House as soon as possible and ask for leave to write off the accumulated deficit and then give the Corporation another chance. I hope that the new management of B.OA.C. will realise that they have tremendous responsibilities, also, towards the staff of the Corporation and will make every effort to ensure that the unrest which has been rippling the surface there for quite a long time disappears. Also, as regards the staff, I find it difficult to accept that even the staff would be prepared to resist changes when they realise that, at present, their biggest competitor, Pan American Airways, apparently does twice the amount of work of B.O.A.C. with about the same number of employees.
  Of course, there will be problems. Everyone, on both sides of the House, wants to see B.O.A.C. successful. But an enormous effort will have to be made by all connected with the Corporation if it is to be put on the commercial basis which I believe will be best for it, best for the country and best for its staff.
  8.28 p.m.
  Mr. Eric Lubbock: The hon. Member for Gillingham (Mr. Burden) is an outstanding personalexample of the old adage that a little learning is a dangerous thing. I am rather surprised at this, considering that he claims to be a director of one of the independent airline operators. I do not intend to follow him in all the details of his speech, because I have too much of my own to say, but I shall take up the discussion which he began

  881
  about the introduction of the Britannia into service and the 2½ years' delay. This is an important point, and the hon. Gentleman ought to understand the facts a little better than he does. I shall try to explain them to him.
  If the Britannia had been introduced 2½ years earlier, and if the same rate of amortisation had been applied, writing the aircraft down to 25 per cent, of its original value over seven years, another 2½ years' depreciation, about £15 million, would have appeared in the Corporation's accounts over those 2½ years. The effect, therefore, would have been to reduce the £224 million special write-off in the 1961–62 accounts to only £7.4 million.
  Another thing would have happened which the hon. Gentleman ignored completely. If the Britannias had been introduced into service that much earlier, it would have meant that B.O.A.C. would not have had to buy the DC7Cs and, therefore, the special charge in the 1961–62 accounts for the obsolescence of this aircraft amounting to £7.4 million would not have been necessary, plus some additional sum which I cannot extract from the accounts relating to the special expenses in relation to the training of crews, introducing the DC7Cs to the overhaul and maintenance base, and so on.
  Mr. Burden: The hon. Gentleman has named me in this. Therefore, I should put him right. I do not "claim" to be a director of an independent company. I am actually a director. I would like to make that point very clear. Further, with great respect I would suggest, being and having been a director of an airline for about five years, that I might know just a little more than the hon.Gentleman, who, apparently, is not so engaged. My point was that anyone getting a new aircraft always has to accept that he will probably get quite a lot of "bugs" in it. It was evident to everybody in the very early stages of the Britannia project that there would be these long delays.
  Mr. Lubbock: The hon. Gentleman has imposed on my courtesy by making such a long intervention. I shall be a little cautious about allowing him to intervene again.
  882
  This debate takes place not only against the background of the mounting losses in B.O.A.C., but also against the background of the Government's obstinate refusal to tell us the truth about how these have arisen and to give the House and the country any idea of how the further deficits which the Corporation might incur in future will be prevented. We heard a speech from the Parliamentary Secretary which was a paraphrase of the White Paper. In some cases he even followed the identical phraseology of that document.
  I could not possibly disagree more with the statement of one hon. Member—it may have been the hon. Member for Sunderland, South (Mr. P. Williams)—that discussion of the Corbett Report should be at an end and that there is no need to pursue the matter further. I feel very strongly that the Report should have been published and that the Minister's refusal to do so stems not so much from any promises which he may have given to Mr. Corbett at the time that the inquiry was instructed as from the saga of political interference with the B.O.A.C. management which this document would have revealed.
  I believe that Sir Matthew Slattery and his colleagues are being made the scapegoats for a situation created in reality by the meddling of successive Ministers. The present Minister made a revealing slip of the tongue when he said in a previous aviation debate, as the hon. Member for Newton (Mr. Lee) quoted earlier, that a good many things had to be said which could conceivably be embarrassing either to the Government or to the Corporation.
  I believe that the public will be able to draw their own conclusions from that remark and that their suspicions might be confirmed if they compared the treatment of B.O.A.C's difficulties with those of British Railways. Why should not precisely the same considerations have applied to Dr. Beeching's Report? The answer is fairly obvious. British Railways were never forced into making uncommercial decisions by the Government of the day, whereas we know perfectly well that in at least one instance, probably in many others that the Government would like to conceal, this has happened to B.O.A.C. The one instance that is actually recorded is the

  883
  investment in Kuwait Airways. That cost the Corporation, as the Parliamentary Secretary will no doubt confirm, £1.4 million alone, plus the interest on the money which the Corporation had to borrow to meet this accumulated loss.
  I would like to ask the Minister, now that he has returned, whether he can tell us in plain terms what part of the rest of the £15.3 million which has been lost by the associated and subsidiary companies is directly ascribable by Mr. Corbett to Government interference. This is not the only aspect of the Corporation's affairs in which Government interference can be proved. The effect of the Civil Aviation (Licensing) Act, 1960, has been very harmful to the Corporations, particularly to B.O.A.C. This was commented on in the Corporation's Report for 1960–61, where it was made clear that the criteria laid down in the Act—that is, the material diversion of traffic and the investment in equipment by the Corporations—were not being followed by the Air Transport Licensing Board and that these things had not been taken into account.
  Further, there is the question of traffic rights which have been granted to airlines like S.A.S. and K.L.M., which do not offer us any reciprocal facilities. We understand that discussions have opened this week between the United Kingdom and Scandinavian Government about the rights of S.A.S. to fly through Prestwick. B.O.A.C. claims that it neither has at the moment, nor does it want, any reciprocal rights from airlines such as S.A.S. or K.L.M. Therefore, these arrangements which allow S.A.S. in particular to fly through Prestwick should be reconsidered now.
  If the Minister has not got anything to hide in the Corbett Report, I should like to make two suggestions to him. First, though I appreciate the argument that he has given an undertaking to Mr. Corbett and that he has some obligation there, I suggest that he could go to Mr. Corbett and ask him to release him from this undertaking, an undertaking which I think he had no right to give on a matter of such grave public interest. This demonstrates once again the contempt for the House which the Government are no longer attempting to
  884
  conceal. Mr. Corbett himself will have realised just as well as anyone in the House that, if he were to waive this undertaking which was given, he would be meeting the demands of nearly everybody in this country as expressed by the whole of the national Press and indeed the aviation Press as well.
  If, for reasons such as the effect on B.O.A.C.'s competitive position, it would not be possible to publish the whole Report verbatim, I think that the procedure which is generally followed in security matters should be adopted in this case. The Report should be shown to the Leader of the Opposition. Then it should be published, except for any parts of it which it is agreed between the two sides there are valid reasons for concealing. I entirely support what was said on the subject by the hon. Member for Newton.
  If this proposition were to be accepted, the House would at least know what recommendations were made by Mr. Corbett. This is really what interests hon. Members, rather than the financial analysis of the deficit, which takes up some nine and a half pages of the thirteen pages of the White Paper. We could have got that information from the published reports and accounts of the Corporation in the last few years. We were led to believe by the Minister that Mr. Corbett was supposed to be concentrating on how these losses were to be eliminated in future rather than on an explanation of how they had arisen in the past.
  The Minister said:
  "I have asked him … to advise me what needs to be done to put it on a sound commercial basis."—[OFFICIAL REPORT, 6th November, 1962; Vol. 666, c 809.]
  It is a great strain on our credulity to believe that Mr. Corbett's only recommendation was to sack half the board, yet that that is all that has happened after the Minister has had the Report for more than six months.
  Apparently, this was the true meaning of the euphemism in the White Paper that
  "… the Government propose … to strengthen the management of the Corporation …"
  Apart from that attempt to shift the responsibility from where it rightly

  885
  belongs, there is the instruction to the Chairman
  "… to prepare within twelve months, and present to the Minister, a plan for making B.O.A.C. financially sound."
  This is where we came in.
  What is the difference between presenting a plan to make the Corporation financially sound and advising them what needs to be done to put the Corporation on a sound commercial basis? Does it mean that Mr. Corbett has made certain recommendations that it would be politically disastrous for the Government to discuss in the period immediately preceding the General Election? The Minister is bound to deny that, of course, but he cannot conceal the unfortunate effects on the morale of Corporation employees, referred to by several hon. Members, of a further 12 months of doubt and uncertainty.
  If the Minister would accept the advice given by both sides of the House to talk to the pilots, the maintenance engineers, and the others doing the real work there, he would soon discover that they are sick and tired of the denigration of their efforts, and yearn for real leadership to correct the faults they know have been made in the past. Apparently, they now have to wait another year for Sir Giles Guthrie's report to be submitted before they can get a diagnosis of the disease affecting the Corporation, and the prescription for its cure. And what guarantees have they, or anyone else, that Sir Giles Guthrie's report will be published when Mr. Corbett's was not? Whether the Minister decided to publish that report would be entirely a question of political expediency at the time.
  Tory spokesmen are fond of claiming that the Liberal Party has no policy. They say it, no matter how many times that lie is exposed, but not only has the Government no policy for B.O.A.C. but they actually rejected a policy specially constructed for them by three of the most eminent consultants in the country at a cost of £40,000. The Parliamentary Secretary shook his head when that figure was mentioned; perhaps the Minister will correct it if it is wrong. The right hon. Gentleman might also, at the same time, confirm that the bill will be paid by him, and not by the Corporation.
  Without having the benefit of this expensive advice, we think that we can
  886
  see fairly clearly what needs to be done in principle, and I intend to devote the rest of my remarks to some of the constructive measures we should put forward—many of which I have already advanced in this House—which we think would put the Corporation on its feet again.
  First, we agree with Sir Matthew Slattery that the financial structure of the Corporation has to be reorganised. The Minister is always implying that the Corporation should be judged by the strictest commercial standards, but in one fundamental respect its financial structure is not like that of any other commercial organisation in the world. It has no equity capital whatsoever, and comparisons with P.A.A. or T.W.A. and other airlines is entirely vitiated by that difference.
  When we debated the Air Corporations Bill on 6th November. 1962, I suggested that the Minister should redeem all the medium-term advances he had made to the Corporation and replace them by equity capital to the equivalent amount-all of it to be held by the Government. On that occasion, the Minister wilfully misunderstood what I said, although it was plainly expressed. He pretended to think that I was advocating that B.O.A.C. should raise its fresh capital requirements on the market. As I said, I was contending that the equity capital should be held by the Government to replace the medium-term loans the Minister had advanced to the Corporation.
  The accumulated deficit of B.O.A.C. is £80 million, and interest on the capital that is employed in the business and to meet this deficit amounted to over £8 million in the 1963 accounts. In the terms of the loans advanced by the Minister, the Corporation was to make repayments in those same accounts amounting to over £23 million.
  Everyone knows that the Corporation cannot possibly be expected to carry this kind of burden, even if it becomes as successful as the foremost airline in the world. Pan American Airways has been mentioned. Last year it made £15 million, but if interest charges of £8 million are deducted there is left only £7 million and it would take the Corporation a long time at that rate of profit to wipe out this enormous deficit.

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  I believe that my proposal is also better than wiping out the £80 million deficit, which has been put forward by many hon. Members on both sides of the House and, for all we know, by Mr. Corbett. If we did what I propose we would continue to show the public money invested in the Corporation, and the Corporation would be relieved of annual interest payments amounting to £5 million in 1963 and rising at a pretty rapid rate.
  Secondly, the Minister should make a capital grant to B.O.A.C. to cover the £1.4 million loss on Kuwait Airways, plus interest at current market rates on the total accumulated deficit in Kuwait Airways for the time being. In all fairness, the same should be done for any other part of the loss arising from noncommercial decisions forced on B.O.A.C. by Government action. We cannot do that now because we do not know the content of the Corbett report which might show to what extent these losses have been due to Government interference.
  It may be surprising that I have dealt with these financial problems first, when one considers that their solution can only affect the picture as given by the Corporation's accounts and can have no bearing on the Corporation's activities when measured by objective standards. My answer would be that the reorganisation of the financial structure on the lines I have proposed would be an important first step in restoring the morale of the Corporation, a restoration which is badly needed at the moment.
  It is even possible that the replacement of 24 different loans, all bearing different interest rates and with different repayment dates, by a single class of ordinary shares, might help in a small way towards the reduction of the financial staff of over 1,000 currently employed. I do not know what is meant by the White Paper when it speaks of a weakness in financial control, but with as many as one in 20 of the Corporation's staff employed on the financial side I do not think that this can be anything arising from staff shortage.
  While it would be wrong to amalgamate B.O.A.C. and B.E.A. entirely, very much more can be done to ensure cooperation between them than merely appointing the chairman of one to the
  888
  board of the other. My proposal, which I developed in a debate on 13th May was to form a new company or companies jointly owned by the two Corporations whose object would be to operate the services they have in common while leaving other operations, particularly in engineering, under the separate control of the Corporations as at present.
  There is no reason, for example, why catering should not be under unified control, with a consequent saving in staff and the purchasing of food supplies and the stock control of those items. There is every reason why selling by the two Corporations should be completely integrated. It would put an end to wasteful duplication of effort, particularly in Europe, where B.O.A.C. has now 21 sales offices in cities which are already perfectly adequately covered by B.E.A. acting as agents on behalf of B.O.A.C., and which B.E.A. is willing to continue to do. Important economies might be realised by having a common London terminal at the newly developed Gloucester Road site where facilities now constructed would be adequate to handle the extra traffic. The Victoria terminal, which must be an extremely valuable building, could be sold off by B.O.A.C. These are a few examples of what could be gained by integration.
  To show the world that we mean to keep British civil aviation out in front and that our efforts in this direction will be concerted in a way which has never happened before, I propose that the two Corporations should be renamed. B.O.A.C. should be called Air Britain Intercontinental and B.E.A. should be called Air Britain European. The aircraft of the two Corporations would be painted in identical colours and marked "Air Britain" with the words "Intercontinental" and "European" in very much smaller lettering afterwards.
  A joint sales effort in other continents designed to sell B.O.A.C. and B.E.A. as the best possible medium for tours of Europe could be launched based on the use of publicity literature, with a common uniform layout, concentrating on the use of the name "Air Britain" which would mean something to the travelling public in most continents where at present B.O.A.C. and B.E.A. are just a collection of meaningless initials.

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  The White Paper says that B.O.A.C7s sales, advertising and publicity effort has been well directed. Perhaps it has, but has the Corporation been trying to sell the right product? The Britannias and DC7Cs have been taken out of service prematurely, in spite of the fact that S.A.S. are still, apparently, capable of operating DC7Cs across the North Atlantic, and they are making much of their position as the only I.A.T.A. carrier on the North Atlantic route still offering low far? nights. The drop in B.O.A.C.'s charter income of nearly £4 million between the 1962 and 1963 accounts arises directly from taking these aircraft out of service, but I doubt whether, even with our 707s, we are doing our best to get the business available.
  Take the London-Chicago run, for example. A few years ago we offered a service equivalent to that of Pan American on this route. Then that concern started a direct flight from Chicago to London and B.O.A.C.'s sales, traffic and flying staff implored the management to do the same. But the management refused. It refused to cut out the intermediate stop at Montreal. The result has been virtually the elimination of B.O.A.C. on the Chicago-London route. A pilot told me that he flew twice out of Chicago recently and carried four and three passengers on the two flights respectively. Pan American, operating 30 minutes earlier, carried 34 and 63 passengers.
  It seems plain that there could be serious criticism of B.O.A.C.'s route planning, a subject on which the White Paper is completely silent. If the Minister is interested, I could send him many other instances similar to the one I have quoted. It would be interesting to know whether I should be entitled to raise these matters with the Air Transport Licensing Board under Section 4 of the Civil Aviation (Licensing) Act, 1960.
  There are many other things that I should have liked to say if there had been time, but I will have to keep them for the main debate which I hope we shall have on this subject. In conclusion, let me say once again how very seriously concerned I am about the Government's failure to take this House and the nation into their confidence in their attempts to deal with the problems facing
  890
  B.O.A.C. We see now that the assurance given by the Prime Minister on television to the effect that he would take the people into his confidence and tell them his policies was nothing but empty words, like every other Tory promise we have heard over the last twelve years.
  The true facts are being concealed from the public on the flimsy pretence of an undertaking which should never have been given to Mr. Corbett, and the man responsible for insulting the House like this and for failing to do a single thing to help B.O.A.C. out of the difficulties which have arisen is not Sir Matthew Slattery, who has been sacrificed to distract attention from the guilty man. The guilty man is the Minister, and the only honourable course for him to take is to resign.
  8.54 p.m.
  Mr. Colin Turner: I am grateful to the hon. Member for Orpington (Mr. Lubbock) for giving me five minutes in which to make some of the points that I wanted to raise. The Liberal Party at least has something over the official Opposition in that it has produced some proposals about what it would do. I have listened to every speech in the debate except for that of the hon. Member for Edmonton (Mr. Albu), and apart from the speech of the hon. Member for Orpington I have not heard a single, solitary constructive thought put forward by an hon. Member opposite.
  In the few moments available, I want to look at one of the problems which I believe faces B.O.A.C. and which no one has mentioned in detail. The most significant point is that the Corporation has not thrown up any person of ability, imagination and drive out of its own ranks. This is the key to the whole problem which we are discussing. The hon. Member for Feltham (Mr. Hunter) said that he probably knew more B.O.A.C. personnel than any other hon. Member, and that is probably true. But hon. Members who apparently know B.O.A.C. personnel have voiced their own groans and moans, but have not put forward any of the views of these people.
  Some of us talk to the pilots and other members of the Corporation in the Palace of Westminster and as we travel throughout the world. I always fly B.O.A.C. whenever that is possible. We

  891
  have found some of the problems which face these people and which are the background to the economic inefficiency which has been illustrated here today. This is why I commend my right hon. Friend the Minister on the action which he has taken. We have also heard that we must get people with drive and efficiency at the head of affairs, and I hope that the new chairman meets that requirement.
  Why is it that in B.O.A.C. the pilots' organisation has no direct access to top management inside the Corporation? The captains of the aircraft have long experience of operating conditions and they know whether it is worth while, on a return flight from the Far East, to call in at Zurich at 2 a.m. We know only too well that the pilots and other senior members of the staff of B.O.A.C. have no direct access to top management. I hope that the new chairman will take this into consideration.
  As I have said on numerous occasions, all the evidence which I have received from B.O.A.C. personnel throughout the world is that it is the middle management of B.O.A.C. which is the difficulty. It is here that we have an inborn resistance built into the Corporation. These are people who played a tremendous part in Imperial Airways in the old days and who consider that they are permanent residents of the Corporation. It is to the resistance which they have created to modernising the Corporation and bringing it into line with efficient management that I hope the chairman of the Corporation will give his very close attention.
  It is not the slightest good changing the top management of any organisation unless that management has the courage and the enterprise to sweep away resistance in the middle levels. This is why I believe that it is right that the new chairman, Sir Giles Guthrie, should combine both the post of chairman and the post of managing director. It is a power which he will not want in his hands for too long, but unless he has this power when he makes his investigation he will not be able to cut through what I believe is the dead wood in the middle management of B.O.A.C.
  If he will direct himself to the problem of improving personnel relations
  892
  in the Corporation and will listen direct, not through a smokescreen of subordinates, to the views and the problems of all sections of the Corporation, he will achieve the results which we very much desire. I wish him well in this great undertaking, because a great responsibility falls on his shoulders. I trust that he will succeed in sweeping the difficulties aside and will makea success of the Corporation.
  9.0 p.m.
  Mr. Philip Noel-Baker: I rise for just a couple of moments to make two observations to the Minister. For about six years I had to answer to this House for industries which were under national control. I found, as a universal experience, that the more publicity was given to the proceedings of the industries under national control the greater the efficiency that resulted. I never refused to answer any Question that any hon. Member tabled and I never said that this or that was a matter of day-to-day administration. I bitterly regret that the Minister has suppressed the Corbett Report, which is essential to the House to fulfil its proper duty towards B.O.A.C.
  I hope that the right hon. Gentleman will tell us how much revenue would have come to the Corporations if they had been given their proper share, or, as I think, full control of trooping over the last 12 years. A large sum of money is involved and I can think of no conceivable reason why Her Majesty's Services should be deprived of what the White Paper calls the safest and most efficient service in the world. I hope that the Minister will give us that vital figure, because it is of great importance.
  I only add that I believe that the VC10 will be, as the hon. Member for Macclesfield (Sir A. V. Harvey) said last year, a great leap forward in British aviation. That view is shared by the chairman of Rolls-Royce, thousands of whose workers are my constituents in Derby. It is disastrous that the Minister should now have turned out of their offices the men who made the decision to go forward with the VC10.
  9.2 p.m.
  Mr. John Cronin: I only wish that my right hon. Friend

  893
  the Member for Derby, South (Mr. P. Noel-Baker) had more time in which to develop his speech. However, I should like firstly to express great dissatisfaction at the Ministerial arrangements for replying to the debate. There is, from the point of view of B.O.A.C., a state of absolute confusion. Every few hours a new headline appears in the newspapers. We hear of more resignations or more people refusing to resign from the board. We hear hostile comments about the policy of the Minister. Indeed, we are in a state of fundamental crisis in British civil aviation.
  Instead of standing up today and giving the House an explanation so that hon. Members could debate it, the Minister has chosen to take the more prudent course of winding up the debate, with the result that no one can criticise him. He has put up the Parliamentary Secretary, a most able Minister, who was obviously briefed to give us a precis of the White Paper. The Minister has been rather like a prudent bartender in a Wild West saloon—avoiding the bullets and leaving it to the pianist to stand in the way in the hope that the House would realise that the pianist is doing his best.
  I should like to join the Parliamentary Secretary in expressing appreciation of the high services of Lord Douglas and pleasure that Mr. Milward has been made chairman of B.EA This is indeed a satisfactory appointment. All hon. Members will wish Sir Giles Guthrie well in what will be a difficult task under considerable handicaps. The Parliamentary Secretary mentioned that Mr. Charles E. Hardie has been appointed to the board with the express purpose of giving B.O.A.C. the benefit of his financial expertise. I think that that was the tenor of the Parliamentary Secretary's remarks. I hope that B.O.A.C. will be able to take advantage of this, because I have been told that this gentleman is already the director of twenty-four companies and is chairman or deputy chairman of six of them. However, I am sure that he will do his best.
  The Parliamentary Secretary and the White Paper—in this case the terms are synonymous—mentioned the importance of B.O.A.C. operating as a commercial undertaking. There is an extraordinary
  894
  history to this. Sir Miles Thomas and Sir Whitney Straight both wished to run B.O.A.C. as a commercial undertaking, and the principal reason why both left was that they were not permitted to do so. Sir Gerard d'Erlanger left B.O.A.C. largely for the same reason. Sir Matthew Slattery, the present chairman and Sir Basil Smallpeice, the present managing director, have constantly begged to be allowed to run B.O.A.C. as a commercial undertaking. In fact, Sir Matthew expressed this wish with a stridency which reached its crescendo when he made his famous "bloody crazy" speech. It seems to me rather superficial to hand it to us as being one of the wise conclusions of the White Paper, that B.O.A.C. should be run as a commercial operation.
  Obviously the point has been missed that B.O.A.C. should not merely be run as a commercial operation and should not only, if the national interest requires it, make departures from commercial practices only with the agreement and at the instance of the Minister; but that the Minister should take clear responsibility when he insists on B.O.A.C. departing from commercial practices. This is where the Minister has let down B.O.A.C. in the past.
  The Parliamentary Secretary referred to possible savings of £4 million a year on engineering and maintenance costs. This seems to me a little specious. The hon. Gentleman made no reference at all to the fact that B.O.A.C. has already instituted reforms which will save about £1,500,000 a year. It would have been more gracious, particularly to the outgoing managing director if this had been said before. It is easy for the Parliamentary Secretary to say that this money should have been saved in the past, but does he realise all the difficulties regarding the labour situation? Does he realise that when B.O.A.C. had a nine-day stoppage it cost the Corporation £3 million? All these difficulties must be borne in mind before one talks too easily of economies of £4 million a year.
  The Parliamentary Secretary told us that it would not be possible to write off this £30 million deficit until a plan had been submitted to the Ministry to put the affairs of B.O.A.C. on a sound footing. Last year we had a plan from Sir Matthew Slattery, and in the spring

  895
  we had a plan from Sir Basil Smallpeice. There has been a plan submitted by Mr. Corbett which we are not allowed to see. Now we are to await a fourth plan from Sir Giles Guthrie. Is not it possible to move without this constant continuity of plans? Are we to understand that the plan from Sir Giles will, in some intrinsic way, be completely superior to the plans which have been put before the Minister?
  I do not think that I can let this occasion pass without saying once again to the Minister that we specifically wish him to publish the Corbett Report. It has been represented by hon. Members, and by people outside the House, that most of the evidence in the Corbett Report is of a confidential nature. But it is not necessary to publish the evidence. The recommendations and opinions of Mr. Corbett could be published. Or the Minister could arrange for the procedure to be adopted which was recommended by my hon. Friend the Member for Newton (Mr. Lee) and treat the matter in the same way as the Denning Report.
  There is certainly no good reason why the Corbett Report should be completely concealed. One appreciates that occasionally there are confidential matters that should not be revealed to the public, but these confidential matters could be eliminated from the Corbett Report before it is published, by agreement through the usual channels. I therefore suggest that the only reason why the Minister is not publishing the Report is because he has something to hide. I think that we should find that the Corbett Report was considerably critical of the Government.
  The Parliamentary Secretary referred to the extraordinary situation which arose when the right hon. Member for Woking (Mr. Watkinson) instructed B.O.A.C. to omit certain important figures about depreciation from its Report. The Minister gave us another explanation of this, and the Parliamentary Secretary gave us a third explanation today. I cannot pretend to the expertise of my hon. Friend the Member for Gloucester (Mr. Diamond), who is a chartered accountant, but it seems to me extremely odd. It looks, on the face of it, as though the Minister asked
  896
  B.O.A.C. to make some improper deductions from its books. If the Minister, or his predecessor, asks B.O.AC, to cook its books, what sort of faith can we have in the books that the Minister writes?
  I turn now to the main theme of my speech, and that is that B.O.A.C.'s difficulties—there is no doubt that it is in serious difficulties—have been to a very large extent the responsibility of the Government. I think that we ought to be careful not to lose sight of the fact, first, that the Minister is completely responsible for the Air Corporations. He has been given this statutory responsibility by the Air Corporations Act, 1949. He often pretends that he is an innocent bystander who has tried to repair the inefficiencies of B.O.A.C, but he and his predecessors have been completely responsible.
  I should like the House to consider the figures of B.O.A.C.'s accumulated deficit. The White Paper says that £35 million is due to losses on the aircraft purchased. It also says that £10 million is due to introductory costs on aircraft, which has also been lost. Finally, the White Paper mentions £28 million as operating losses. All these losses are due to a very large extent to faulty aircraft procurement policy. Hon. Members on both sides of the House have made this point this afternoon. I should like the House to consider what is the procedure every time B.O.A.C. buys an aircraft. First, it has to borrow the money. It can borrow the money from the Treasury only. It can get the money from the Treasury only if it gives the Minister a full case for buying the aircraft. The Minister has to be satisfied that the aircraft is necessary and desirable and likely to be profitable before he can get consent from the Treasury to borrow the money. So every aircraft has been bought with the full and complete knowledge and agreement of the Minister. Yet the impression that one gets from the White Paper is that this is something that B.O.A.C. does entirely on its own responsibility.
  I should like the House to consider, for instance, the specific difficulties of B.O.A.C. during the last few years. I think that hon. Members on both sides of the House have made it quite clear in this debate that one of the difficulties

  897
  facing the B.O.A.C. is that it has lacked enough of the large jet aircraft which its competitors have. Up to the present time these aircraft have been manufactured entirely in the United States. I am talking about the Boeing 707 and the Douglas DC8. These are the only aircraft which can be run really economically on long-distance routes. If hon. Members have any doubt about this they have only to look at page 32 of the Corporation's Report for 1962 to see the big difference in the running costs of these large aircraft compared with the smaller ones which the B.O.A.C. has been obliged to use to a large extent during the last few years.
  In 1956 the B.O.A.C, realised that it would be impossible to continue running these comparatively small high-costing aircraft. The Minister at that time gave reluctant permission for fifteen Boeings to be bought from the United States—and I think it would be fair to add that recently another two have been added—but he told the Corporation that it could not have any more American jet aircraft because no dollars were available.
  The Minister of Aviation (Mr. Julian Amery)The Minister of Aviation (Mr. Julian Amery) indicated assent.
  Mr. Cronin: I am glad that the Minister agrees.
  Since then dollar liberalisation has taken place to an enormous extent and American goods have poured into this country, but as a direct result of Government policy the B.O.A.C. has been forced to operate only a small proportion of large jet aircraft on long-distance routes whereas its competitors have been using these large aircraft. Here we have another example of the Government having interfered directly with the commercial policy of the B.O.A.C.
  I turn now to the VC10. One of the conspicuous omissions in the White Paper is the absence of any reference to this excellent aircraft. I know that Mr. Corbett went into the question of the VC10s, and it seems odd that in these circumstances there should be no reference to them, until one realises the Government's actions in the matter. In 1960 the right hon. Gentleman, who is now the Colonial Secretary, was then in the process of forming the big aircraft mergers. He put great pressure on
  898
  Sir Gerard D'Erlanger to order 10 VC10s in addition to the thirty-five already ordered. Sir Mathew Slattery was appointed chairman of the B.O.A.C. in July, 1960. Before he took up his office he specifically requested Sir Gerard D'Erlanger not to commit himself to the purchase of these extra ten aircraft—and it must be remembered that they cost about £2 million each—but Sir Gerard, under pressure from the Colonial Secretary, went ahead and finalised arrangements to buy them. Only last May the B.O.A.C. announced that it could not properly use ten of these aircraft. Once again, as a direct result of Ministerial interference, the Corporation was not able to use its commercial judgment, and it has been saddled with extra aeroplanes which are greatly superfluous to its requirements.
  There are other considerations to be borne in mind besides the interference of Ministers with regard to the purchase of aircraft. The Minister—and I say this in all sincerity—may have meant well, but he has been most negligent in the negotiation of traffic rights. As hon. Members know, when the B.O.A.C. flies an aircraft to a foreign country it is necessary foe traffic rights in that country to be negotiated by the Minister. These negotiations always take place on a quid pro quo basis. For example, if France gives traffic rights to another country's aircraft to fly into France she expects Air France to be given traffic rights to fly in the country concerned. But the Minister and his predecessors have formed the habit of giving away traffic rights to other countries without expecting any quid pro quo in return. For instance, Air France and Lufthansa now fly three or four flights a week on B.O.A.C. routes to Hong Kong. This has cost B.O.A.C. a great amount in revenue, and the Corporation receives nothing in return. S.A.S. fly from Scandinavia, through Prestwick, across the Atlantic. Again, no quid pro quo is exacted. B.O.A.C. probably loses about £3 million a year in revenue on this alone, simply because of the Minister's negligence in negotiating proper bilateral traffic rights.
  We have already dealt with the baneful effects of the Civil Aviation Act, 1960, on B.O.A.C. The Corporation also suffers heavily because it is not allowed to do any trooping except on a very

  899
  limited ad hoc basis. Hon. Members on this side of the House, year after year, have asked that the Corporation should be allowed to do a substantial amount of trooping, but on each occasion there has been a complete refusal by successive Ministers of Aviation. Pan American and T.W.A. —B.O.A.C.'s principal competitors —receive large sums, running into millions of pounds, for trooping contracts. I understand from B.O.A.C. that the loss of these trooping contracts, as a result of the Government's refusal, costs the Corporation no less than £4 million a year in revenue. That is the situation we find ourselves in when we have a Minister who is hostile to the Corporation for which he is responsible.
  I now turn to paragraph 52 of the White Paper, dealing with the strengthening of B.O.A.C.'s management. Many hon. Members on both sides of the House have felt considerable disgust at the treatment accorded to Sir Matthew Slattery and Sir Basil Smallpeice. I do not think that in recent years two public servants have ever been treated in such a shoddy way. It is a fundamental principle of our justice that any accused person, whether in a private or a public matter, should be confronted with the evidence against him. In the White Paper Sir Basil Smallpeice and Sir Matthew Slattery have been accused of weakness of financial control, excess of spending, and weakness of management. These are grave charges, which will obviously have an effect upon their futures.
  Both these gentlemen have said to the Minister, "Where is the evidence?" The Minister's reply has been, "It is confidential. It is in the Corbett Report. "The House would like to have this information, and the Press would like to have this information. But on every occasion we come up against a complete block—it is confidential; it is in the Corbett Report.
  I suggest that this is the absolute negation of British ideas of justice and fair play. This is probably one of the most disgraceful miscarriages of justice that has occurred since the Dreyfus case. [Laughter.] Hon. Members opposite may laugh, but these two dedicated and efficient executives have been re-
  900
  moved from office without any evidence having been produced against them. If hon. Members think that that is funny, I do not. I should like the House to consider the effect of their removal. They certainly had the confidence of the whole of B.O.A.C.'s worldwide organisation. Their dismissal is having a most profound and demoralising effect.
  The effect on morale is equally serious when one considers what is happening to other members of the board. I hope that the Minister will give us some definite news about what is to happen to Sir Wilfred Neden. Will he let us know also what he is to do about the extraordinary situation which has now arisen on the board? None of us knows what is happening. We hear that some directors have resigned, some are about to resign, and some are saying that they refuse to resign. There seems to be complete confusion. [Interruption.] I am glad that the Minister finds this so amusing. No doubt he will give us an adequate explanation, but I hope that he will not continue to give the misleading impression which he gave in his statement the other day when he suggested that all these resignations had been amicably arranged. There is no doubt that Sir Matthew Slattery was told in a blunt and brutal manner at short notice that a successor had been found for him, and Sir Basil Smallpeice made it perfectly clear in a public statement that he was leaving through no wish of his own.
  The real reason for this extraordinary explosion on B.O.A.C.'s board is the right hon. Gentleman's desire to hide the Government's culpability behind the smoke. The Prime Minister, who has just come into the Chamber, has told us on numerous occasions that the time has come to take the people into the Government's confidence. I hope that he will convey those views to the Minister of Aviation, because so far we have had nothing but smoke, obscurity and obfuscation on every possible occasion about the affairs of B.O.A.C.
  Last year, the right hon. Member for Bromley (Mr. H. Macmillan) used exactly the same technique. When he was in serious personal difficulties, half the Government was dismissed. The Minister has learned this lesson and has adopted

  901
  exactly the same principle as his father-in-law who, like the Turkish sultan, believed, "When in serious personal difficulties, let us have a massacre". That is exactly what took place on B.O.A.C's board.
  On this occasion the right hon. Gentleman has done much more damage to B.O.A.C. than did his predecessor. B.O.A.C. has suffered in the past at the hand of the Government. It is suffering and will continue to suffer because it is a nationalised corporation. A corporation working solely for the public interest is a concept on the far side of an insurmountable mental barrier for hon. Members opposite. They simply cannot understand that any corporation would work solely for the public interest.
  We can only ask right hon. Gentlemen opposite to minimise the damage that they are doing to B.O.A.C. while they still form the Government. To those thousands of dedicated men and women who work for B.O.A.C. we can offer only the consolation that with the inevitable approach of a General Election their burden will soon be greatly lightened.
  The debate has taken place in very unsatisfactory circumstances. Although we have found a stage of complete confusion and chaos in B.O.A.C.'s affairs, we cannot vote against the Bill. However, I give notice that the Opposition intend to raise the matter in the House again at an early opportunity and in a manner which will enable the House to register a decision.
  9.30 p.m.
  The Minister of Aviation (Mr. Julian Amery): I hope that the hon. Member for Loughborough (Mr. Cronin) will acquit me of any intended discourtesy in winding up this debate rather than opening it. I made a statement a few days ago and answered questions on it; and I also published a White Paper. I then read in the Press that there was to be a storm and a devastating attack on me. My wife told me that the television bulletins had warned us that there would be the greatest storm for a long time, so I thought that I had better face it by answering the questions instead of trying to anticipate them. We have now had the storm. Following the good-natured speech of the hon. Member for Newton (Mr. Lee), I think that he will be as surprised as I was when I tell him that
  902
  the B.B.C. described that speech as one of the most slashing attacks ever delivered on a Minister.
  A number of right hon. and hon. Members have raised questions about the independents and B.O.A.C. and the competition that this may have caused it. This was raised by the right hon. Member for Derby, South (Mr. P. Noel-Baker), in particular. The 1960 Act setting up the Licensing Board and the licensing system has, so far as I can make out—and I have studied this carefully—made no contribution whatever to the deficit. No loss that I can identify has been incurred by B.O.A.C, in the existing deficit, because of that Act.
  The B.O.A.C.-Cunard arrangement has proved very important and one day it may prove advantageous to the shareholders of Cunard. But, so far, it has merely led them into sharing some of the difficulties of B.O.A.C. The hon. Member for Newton asked about this arrangement. We have refused to publish it hitherto for fear of giving information to commercial competitors. But I think that he was on to a rather strong point when he said that the submission of the agreement to the American board rather changes the situation. I have, therefore, asked B.O.A.C. and B.O.A.C.-Cunard whether they would agree to my putting a copy of the Agreement in the Library of the House.
  The right hon. Member for Derby, South referred to the trooping question. It has been established policy for a number of years that trooping should be reserved to the independents. I have made it quite clear that, as licences are granted and traffic rights secured, that situation will be reviewed.
  The independents are, of course, and have been for some years, well established in the Nile Valley, and since 1960 there has been a 70–30 per cent, agreement between B.O.A.C. and Air Holdings. The introduction of the VC10s puts this agreement into question, because one would need 2½ VC10s in order to get 30 per cent, of the route, and one cannot split a VC10 without danger to safety.
  Discussions have been going on at executive level for some time about the new situation. That brings me to the question put by the hon. Member for Newton about a possible carve up of

  903
  the African routes, which he also put to me when I made my statement the other day. I have since been looking into it.
  Sir Matthew Slattery saw me last week and told me—and the Air Holdings Company has confirmed this—that he had proposed that there should be something on the model of the B.O.A.C.-Cunard deal between Air Holding Limited and B.O.A.C. over part of the African routes. The question was discussed between the two Chairmen and the Board of B.O.A.C. was informed.
  Before pursuing the matter in detail, Air Holdings wished to know what my attitude would be and a draft letter was under consideration by both chairmen. This was the situation when I made my announcement, 10 days ago, about the changes in B.O.A.C. The negotiations have since been in suspense, I understand, and will remain so until Sir Giles Guthrie takes over.
  The hon. Member for Newton has kindly assured me that he fully accepts my word that I knew nothing of this and that no one in my Department knew. Sir Matthew was undoubtedly within his rights under the Air Corporations Act, 1949, in embarking on these negotiations and it is a very good example of the Government not interfering unduly in the arrangements of the Corporations.
  There have been, broadly speaking, two lines of criticism of the Government. One has been that we have interfered too much, the other that we have not interfered enough. I will deal, first, with the charge that we have interfered too much and that the Coporation has been left in uncertainty as to its role. A number of questions were asked on this by the hon. Member for Newton, the hon. Member for Edmonton (Mr. Albu) and the hon. Member for Loughborough. I will take some of the different aspects in turn, beginning with aircraft purchasing policy.
  The hon. Member for Loughborough said that we had been at fault in this. It is quite true that we have encouraged the Corporation by buy British aircraft. We have done this for broad national reasons and the Corporation has on the whole supported us for its own sound commercial reasons.
  904
  I should say something about the broad national reasons. The aircraft industry makes a major contribution to our exports. It is a vital part of our defence—as vital in its way as any of the Armed Services—and the interaction of civil and military programmes is a very great help in keeping the industry at a reasonably stable level. It also makes a major contribution to our national technology. So support of the aircraft industry by the Ministry of Aviation is something which I would hope both sides of the House would support.
  But B.O.A.C. has always had very good reasons of its own to fly British whenever good British aircraft were available. A small airline is well advised to fly proven aircraft, whatever the big airlines have tested in service and whatever is going cheapest in the world market. But when we get to an airline like B.O.A.C, which is the second largest long haul airline in the world, and when we consider that standards of reliability, safety, comfort and service to passengers, and so on, are very much the same between the great airlines, then the only way that such an airline ready gets ahead is when it brings into service and pioneers a really attractive new aircraft.
  The House will have seen the figures in the White Paper. When the Comet came into service, the load factor on the African routes went from 60 per cent, to 85 per cent., I think, in a few weeks. This was because of the appeal of the new aircraft.
  B.O.A.C. has been quite right, therefore, to go for British aircraft, and I have done everything I could, both in the White Paper and in all I have said in the House, to exonerate the Corporation completely from any of the financial liabilities which may have flowed from the accidents which occurred to the British aircraft which they ordered. The advantages of pioneering could have been very great with the Comet and the Britannia. B.E.A. has had very great success with the Viscount, a success which, I believe, it will now have with the Trident. I am also sure that the VC10, the BAC111 and the Concord will repeat the same successful result as that achieved with the Viscount in the past.

  905
  The hon. Member for Loughborough suggested that there might be occasions when the Corporation ought to buy American. Its record has not been very deficient in this respect. It has bought successively Stratocruisers, Constellations. DC7Cs and Boeing 707s. In fact, more American aircraft have been bought by B.O.A.C. than by the other Corporation. While the view of the Government and the view of the Corporation has been that it should buy British whenever possible, this has not been something on which we have insisted unreasonably.
  Of course, Ministries are right to use their influence to try to persuade corporations to buy aircraft which Government policy wishes to see bought, but there is no obligation on them to yield. We wanted to see the Rotodyne brought into service by B.E.A., but we could not get Lord Douglas to play; and he was quite right.
  The hon. Member for Loughborough referred to the VC10. The reason why there is no detailed reference to the VC10 in the White Paper is that no part of the deficit has resulted from the VC10 because it has not yet been introduced into service. It would be quite wrong to accept easily the idea that the VC10 was something pushed down the throat of the Corporation. It was not. I think that experience will show that this remarkable aircraft, the quietest aircraft in which I have ever flown, will prove a very great commercial success in a short time from now.
  Now, routes. I can find no evidence that any uneconomic routes are being flown under Government instruction. No doubt, ambassadors from time to time have said that it would be a great help if we flew here or there; but all big international undertakings, oil companies and the like, are always subject to this kind of pressure and influence. Going as far back as 3rd July, 1958, Sir Gerard d'Erlanger, in his evidence to the Select Committee on Nationalised Industries, when asked whether he was under pressure to open up services on uneconomic routes, said:
  "I think it is absolutely right to say that all the routes we operate are operated of our own free will".
  I cannot find any evidence different from that.
  906
  As regards the associated companies, I was asked, by the hon. Member for Edmonton, I think, whether it was true that the consent of the Ministry of Aviation had to be obtained before investment was undertaken. This is true of the placing of the investment, but, of course, we have had no say whatever in the control of the investment. In the case of Kuwait, we did specifically ask the Corporation to undertake the investment in Kuwait Airways. The Corporation said that this was contrary to its commercial interest, and it, therefore, requested from us a written instruction to undertake the investment. This we gave.
  I think that this is the exception which proves the rule which I have been trying to explain. The only two instances I can find when we have directed the Corporation to act against its commercial interest were the case of Kuwait Airways and another one when we asked (he Corporation—and insisted—to advance payments to the Bristol Aircraft Company in respect of certain Britannias when Bristols were in financial difficulties. The fact that the Corporation insisted on having written instructions seems to me to show that it knew where the line should be drawn.
  In his 1951–52 Report, Sir Miles Thomas made the point quite clear when he said, in paragraph 14:
  "… the fourth phase in reconstruction was the imprinting on the minds of the staff at all levels the idea that the Corporation was essentially a. commercial undertaking; that the financial aspect of every single activity mattered; and that the ultimate test of the Corporation's success was not only the standard of public service it provided, but also the normal business criterion of whether it could be made to pay its way."
  I do net think that there is any justification for saying that the Corporation should have been, or had reason to be, uncertain about its r61e. It is unwise to compare B.O.A.C. and B.E.A. too closely, but B.E.A. never had any uncertainty on this point, and I do not see why B.O.A.C. should have had any. Even if it did, this is still no justification for unsuccessful control of foreign investment, for excessive engineering costs, or for inadequate financial control.
  Nevertheless, we have thought it right in the White Paper to reaffirm that B.O.A.C's obligations are to operate as a commercial concern and that, where

  907
  there is any need to operate otherwise than commercially, on Government instructions or in response to Government advice, this should be done only with the agreement, or at the instance of. the Minister.
  Mr. Lee: Will the right hon. Gentleman go further and say that, if it is done by Government direction, the Government will foot the bill?
  Mr. Amery: I think that the proper answer to that is in the Air Corporations Act 1949. It is provided by Section 23(3) that
  "The report for any year shall set out any direction given by the Minister to the corporation during that year unless the Minister has notified to the corporation his opinion that it is against the national interest so to do."
  The other charge has been that we have not, perhaps, supervised the activities of the Corporation enough, that we have allowed these deficits to grow without doing enough about them. At first sight, this is a rather more plausible charge, that we have not interfered enough about I have been looking into it. and I do not think that this charge can stick. As early as 1955, my right hon. Friend the present Chief Secretary was a bit worried about the way the accounts were being presented, and he asked the accountants to draw up principles for the presentation of the accounts.
  In 1957, my right hon. Friend the Member for Woking (Mr. Watkinson) warned the Corporation that its depreciation charges seemed to him to be inadequate. In 1959, we had the Select Committee. I freely acknowledge, in response to what the hon. Member for Edmonton said, that many of its recommendations were of the greatest value and have subsequently been confirmed from other sources.
  In 1961, partly following on sorms of the comments of the Select Committee about the associated companies, we instituted an outside inquiry into one of the associated companies, Middle-East Airlines, under the chairmanship of a Mr. Swash, a retired chairman of Woolworth's. This, also, increased our anxieties.
  Then, in 1961, after the publication of the White Paper on the Financial and Economic Obligations of the Nationalised Industries, the Ministry of Aviation,
  908
  like all other Departments concerned with the nationalised industries, entered into discussions with the Corporation to see what target it could hope to achieve. There were repeated meetings between my Department and the Corporation. They examined costs, revenue prospects, and estimates of one kind and another. The results of these investigations were very depressing and the Ministry felt convinced—this was before I came there—that drastic remedies would be needed. Plans were discussed, but no agreement was reached. It was in the course of these discussions that the full scale of the deficit emerged.
  By July, 1962, we were faced with a rather serious situation. The choice really lay, in the Ministry's view, between holding a public inquiry into the affairs of B.O.A.C. and having a private inquiry by outside consultants. I may have been right; I may have been wrong; I accept full responsibility for this; but my own view is that the Government should not put themselves into commission. I do not think that we ought to ask an outside inquiry to settle our policy for us. I thought that the right course was to check the information which I had got from the Department, from previous inquiries like the one into Middle-East Airlines, and the advice of the Select Committee, by putting in some consultants, and to then try to arrive at a conclusion of my own about the situation.
  It was in this spirit that I invited Mr. Corbett to inquire into the affairs of the Corporation and he, as the House knows, appointed three teams of consultants to help him in this process. I would like here and now to pay a very warm tribute to Mr. Corbett for the extremely helpful contribution which he has made to my and the Government's understanding of the problems of B.O.A.C.
  The Corbett Report is not another Denning Report, as the hon. Member for Loughborough seemed to suggest. This is a business consultants' Report throwing some light—a good deal of light—on the affairs of the Corporation. We think that, as long as the Government are to be in the business of nationalised industries, they ought to be free to have access to consultants of this kind and not be under any obligation to publish the resulting report. Therefore, regretfully, but firmly, I must decline the

  909
  different proposals which have been put to me for publishing the Report, in whole or in part.
  I do not think that it is entirely in keeping with our constitution, which provides that the Government's job is to govern, that every aspect of what the Government do should be studied in detail by the Opposition. We might well have requests quite soon, were that right, for the Foreign Office telegrams to be shown.
  Mr, Cronin: Does the right hon. Gentleman intend to show the Corbett Report to the new chariman, since he will be in serious difficulties if he does not?
  Mr. Amery: That question is a sound one. I am sorry; I should have touched on this earlier.
  Relevant sections of the Report have already been shown to the existing management of the Corporation—for example, those on engineering and maintenance—and I propose that all those sections which could be useful to the management should be shown to those branches of the management where it can help. What we have offered to the House is a White Paper which gives our analysis of the losses and how they have arisen, our forecasts of what is likely to come, and the proposals for which we and we alone can accept responsibility.
  As I have said already, I think that half the losses—the hon. Member for Gloucester (Mr. Diamond) is perhaps right in saying one-third; at any rate, it is a substantial proportion—were due to bad luck. There was also a considerable element due to errors of management.
  Many of the weaknesses shown up in the White Paper have been corrected and I should like to pay my own warm tribute to Sir Matthew Slattery and Sir Basil Smallpeice for what they have done in this field. They have done a great deal—
  Mr. John Hynd: And then the Minister gave them the sack.
  Mr. Amery:Some important weaknesses still remain, and I agree with my hon. Friend the Member for Abingdon (Mr. Neave) that there is no ground for
  910
  complacency, particularly when we look at the forecast for the future—increased competition, downward pressures on fares, growing restrictions by other countries on our traffic, and the heavy cost that must attend the introduction of the VC10 and the Concord. That is the background against which we have had to decide our course of action, and against that we have had to seek a policy, and the men to carry it out.
  The hon. Member for Loughborough described the changes made—and I suppose that we must acquit him of intending it seriously—as the greatest scandal since the Dreyfus case. This is on a par with the comment made by the hon. Member for Leeds, East (Mr. Healey) on the TSR2—that it was the greatest scandal since the South Sea Bubble. The truth is that life is not a school, with prizes and penalties. We are not, as one interjection put it, giving the present chairman and managing director the sack. We are not acting on the basis of particular paragraphs in any one report.
  The situation is that B.O.A.C. is faced with a very serious crisis. It is my view, rightly or wrongly,—but I have to recommend a decision on this—that what is needed in this situation is one individual who will take on the leadership of the Corporation, and discharge, for a time at least, the functions of chairman and some of the functions of managing director. For this purpose, I chose, and recommended, Sir Giles Guthrie, who, with his merchant banking background, has great understanding of the financial aspects, who worked before the war with an airline—British Airways—and who has a life-long interest in aviation.
  When I told Sir Matthew Slattery that this was my choice and recommendation, he said, as his letter shows, that he thought it better for him to go now rather than at the end of his term, so as to lift the uncertainty in the minds of the staff of B.O.A.C. I consider that to be a very public-spirited gesture on his part, and entirely in keeping with the attitude he has always adopted. The fact that Sir Giles will also take over many of the managing director's functions led, as a consequential development, to Sir Basil Smallpeice's retirement at the same time. I want to pay my tribute to both of these

  911
  men for the very good work they have done for the Corporation.
  The hon. Member for Newton asked me about the other members of the board, and particularly about the attitude of Sir Wilfred Neden, Lord Rennell, Lord Tweedsmuir, and Mr. Poole. A number of member sare due to retire from the board next year, and I have been anxious to get a balance between the necessity for continuity and the bringing in of new men. I have accordingly asked Sir Walter Worboys, Mr. Booth, Mr. Granville and Mr. Lee to remain on the board when Sir Giles Guthrie takes over, and they have agreed to do so. Mr. Granville's present term was due to expire in January, but I have reappointed him. In addition to Mr. Milward and Mr. Hardie, whose appointments I have already announced, Sir Duncan Anderson, Mr. Arthur Norman and Mr. Ron Smith have also agreed to join the board as vacancies arise.
  Sir Duncan Anderson will be well known to many hon. Members. Among other notable achievements, he built the great Kariba Dam, in Central Africa, within the financial estimate and the time-scale forecast. Mr. Arthur Norman, the Managing Director of De La Rue's, is one of our most capable younger industrialists, and has a life-long interest in aviation. Mr. Ron Smith is a member of the N.E.D.C. and a leading trade unionist. His work has taken him all over the world by air and, in the process, he has acquired a deep interest in aviation.
  It seemed to me that it would be helpful if these new members, who are to be associated with Sir Giles Guthrie in implementing his plan over the next few years, should be associated from the beginning with him in drawing it up. I accordingly asked Sir Wilfred Neden, Lord Rennell, Lord Tweedsmuir and Mr. Poole whether, in the circumstances, they would be prepared to make way in the early part of the year rather than await the end of their appointments which all fell in before the end of the year.
  Sir Wilfred Neden, who is over 70, and was due to retire in June, saw at once the force of my suggestion, and he has agreed to retire in the new year. His resignation, of course, implies no reflection on his services. These have
  912
  been most valuable, particularly with regard to staff matters. The other members, Lord Rennell, Lord Tweedsmuir, and, I understand, Mr. Poole, have so far declined to do so for reasons which no doubt seem good to them. They have, however, assured me that they will co-operate fully with Sir Giles Guthrie.
  The plan is the next thing on which I should like to comment.
  Mr. Cronin: Will the right hon. Gentleman explain how Sir Giles Guthrie will carry through these policies of his if he has a board which to a large extent will not co-operate with him?
  Mr. Amery: I do not think that he will have any difficulty. My experience of him already convinces me that he will be able to get his wise views accepted, and I am sure that the assurance of co-operation which I have received will hold good.
  As for the plan, there has been criticism of asking for yet a further plan after we had the Corbett Report. I am convinced that one cannot separate policy from administration, and that one will only have a sound plan when it is produced by the management itself. As to how soon the plan will be ready, in reply to my hon. Friend the Member for Sunderland, South (Mr. P. Williams), a year is the outside limit but there will be no question of delay in implementation. We will go ahead as soon as each particular bit is ready. I cannot undertake to publish individual bits in full as they come along, but when the time comes to deal with the deficit I will seek to justify whatever action we propose to take.
  The grave position of B.O.A.C. was one of the first problems I had to face when I came to the Ministry of Aviation. I tried to disentangle the cause of the losses and look into the future and form an estimate of the problems ahead. When I had done that I then had to decide how to act. In my view, the key to the problem lies in securing the right management. This is why I have acted as I have done. It has not been an easy or agreeable task. It has not been made any easier by some of the indiscretions and leaks of the past few days, but it is a duty which in my view

  913
  it would have been quite wrong for a Minister of Aviation to shirk.
  Britain has led the world in civil aviation. The pioneering traditions of Imperial Airways have been fostered by B.O.A.C. The Corporation, in its turn, has led the way in its standards of safety, reliability and passenger service. I simply refuse to believe that it cannot achieve similar standards of commercial efficiency. We are living in a boom period, and I believe that B.O.A.C. can do what private business is doing on every side. In asking the House to support the Bill I ask it to show faith in the future of the Corporation and determination that its financial success shall match its other achievements.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Finlay.]
  Committee Tomorrow.

  AIR CORPORATIONS [MONEY]
  [Queen s Recommendation signified]
  Considered in Committee under Standing Order No. 88 (Money Committees).
  [Sir ROBERT GRIMSTON in the Chair]
  Resolved,
  That, for the purposes of any Act of this Session to extend the powers of the British Overseas Airways Corporation and the British European Airways Corporation to borrow from the Minister of Aviation, It is expedient to authorise such increases in the sums which, under section 3 of the Air Corporations Act 1962, may be issued out of the Consolidated Fund as may be attributable to provisions of the said Act of this Session—

  (a) increasing to £125 million the amount of the accumulated deficit on revenue account of the British Overseas Airways Corporation that may be financed by means of sums borrowed from the said Minister;

  (b) substituting the end of March 1966 for the end of March 1964 as the point of time before which any accumulated deficit on revenue account of either Corporation that may be financed as aforesaid must have accrued.—[Mr. J. Amery.]

  Resolution to he reported.
  Report to be received Tomorrow.

  HOUSING [MONEY]
  Resolution reported,
  That, for the purposes of any Act of this Session to set up a new body to assist housing societies to provide housing accommodation and to amend in other respects the law relating to housing, it is expedient to authorise payments out of the Consolidated Fund and out of money provided by Parliament, payments into the Exchequer and the borrowing of money, under the following heads.
  A. (1) The issue out of the Consolidated Fund of such sums as may be required—

  (a) for the purpose of making advances not exceeding one hundred million pounds to the body set up under the new Act;

  (b) for the purpose of making advances under, and subject to the limits in, section 18(1) of the Scottish Act of 1962 to the Scottish Special Housing Association to assist them to act as agents of the said body,

  and the borrowing in any manner authorised under the National Loans Act 1939 and payment into the Exchequer of any money needed for providing or replacing such sums and the repayment into the Exchequer, with interest, of any such sums and their re-issue out of the Consolidated Fund.
  (2) The payment out of money provided by Parliament of remuneration and other sums payable to, or in respect of the services of, members of the said body.
  B. The payment out of money provided by Parliament of sums becoming so payable in consequence of amending existing enactments as follows—

  1. Amendments of the law relating to improvement grants or standard grants which increase expenses incurred by local authorities in making those grants and correspondingly increase Exchequer contributions to those expenses under section 36 of the Act of 19:58 or section 116 of the Scottish Act of 1950.

  2. Amendments of, or affecting, sections 13 and 14 of the Act of 1959 (contributions to local authorities in respect of standard amenities provided by them).

  3. The substitution for the annual sums payable by way of contributions or payments under sections 105 and 121 of the Scottish Act of 1950 and section 14 of the Scottish Act of 1962 of annual sums equal to three-eighths of the loan charges referable to this expenditure likely to be incurred by—

  (a) local authorities in connection with approved improvement proposals;

  (b) housing associations and development corporations in connection with arrangements with local authorities for the provision of dwellings by means of the conversion of houses or other buildings or for the improvement of dwellings;

  (c) housing associations in connection with arrangements with the Secretary of

  915
  State for the provision of housing accommodation by the conversion or improvement of existing houses or by the conversion of other buildings.

  4. The application to the Commission for the New Towns and development corporations of section 9 of the Act of 1958, section 13 of the Act of 1959 and section 105 of the Act of 1950 (Exchequer contributions to local authorities in respect of the provision or improvement of dwellings by those local authorities).

  5. Amendments of sections 12, 13 and 14 of the Clean Air Act 1956 (adaptations of fire-places in private dwellings).

  6. The increase by £5 of the annual payments of £3 and £7 5s. payable to local authorities under section 13(2)(b) of the Act of 1958 and section 4(2)(b) of the Housing (Repairs and Rents) (Scotland) Act 1954 (Exchequer contributions for local authorities buying or holding unfit houses for temporary accommodation).

  7. An amendment of the provisions of Part I of the Scottish Act of 1962 relating to the payment of Exchequer subsidies in respect of new houses provided by the Scottish Special Housing Association, being an amendment providing for the payment, under and in accordance with the provisions of the said Part I, of an annual Exchequer subsidy in respect of each new house provided by the said Association in accordance with approved proposals, being a house provided in the district of any local authority in accordance with arrangements made with the approval of the Secretary of State as being desirable by reason of special circumstances for the provision of housing accommodation in any area for persons coming to that area in order to meet the urgent needs of industry.

  8. An amendment of section 10 of the Scottish Act of 1957enabling a local authority to include in a town development scheme under that section proposals for the carrying out of development in conjunction with any housing accommodation already provided in their district in pursuance of arrangements such as are mentioned in section 8(1) of that Act and thus increasing expenditure incurred by local authorities in connection with such schemes and correspondingly increasing Exchequer contributions to such expenditure under section 14 of the said Act.

  C. The issue out of the Consolidated Fund of such sums as may be required for the purpose of making advances under, and subject to the limits in, section 18(1) of the Scottish Act of 1962 to the Scottish Special Housing Association to assist them to acquire land compulsorily—

  (a) for the provision of new houses, or of housing accommodation by the said Association,

  (b) at the request of the body set up under the new Act, for selling it or leasing it to a housing society,

  916
  and the borrowing in any manner authorized under the National Loans Act 1939 and payment into the Exchequer of any money needed for providing or replacing such sums and the repayment into the Exchequer, with interest, of any such sums and their re-issue out of the Consolidated Fund.
  D. The payment out of money provided by Parliament—
  (a) of periodical sums in respect of houses in the construction of which aluminium alloy was used, being houses—

  (i) provided by a local authority or by a development corporation, and

  (ii) completed in any of the years 1947 to 1952.

  which have been demolished on account of damage by corrosion,
  (b) of expenses incurred in and in connection with the demolition of any such houses,
  (c) of sums in respect of the repair of houses in the construction of which aluminium alloy was used, being houses falling within paragraphs (a)(1) and (a)(ii) above, not exceeding £200 for any one house.
  E. The payment out of money provided by Parliament—

  (a) of any increase attributable to the new Act in the sums payable by way of Rate-Deficiency Grant or Exchequer Equalisation Grant under the enactments relating to local government in England and Wales or in Scotland;

  (b) of any increase attributable to the new Act in the sums payable out of money provided by Parliament in consequence of the extension of Section 175 of the Act of 1957 or Section 170 of the Scottish Act of 1950 regarding Ministers' default powers;

  (c) of any administrative expenses incurred by any Minister under the new Act.

  F. The payment into the Exchequer of any sums falling to be so paid in consequence of any of the provisions of the new Act.
  In this Resolution—
  "the Scottish Act of 1950" means the Housing (Scotland) Act 1950;
  "the Act of 1957" means the Housing Act 1957;
  "the Scottish Act of 1957"means the Housing and Town Development (Scotland) Act 1957;
  "the Act of 1958" means the Housing (Financial Provisions) Act 1958;
  "the Act of 1959" means the House Purchase and Housing Act 1959;
  "the Scottish Act of 1962" means the Housing (Scotland) Act 1962.—[Mr. Green.]
  Resolution agreed to.

  RADIOACTIVE SUBSTANCES
  10.0 p.m.
  Mrs. Judith Hart: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Radioactive Substances Waste Closed Sources) Exemption Order 1963 (S.I., 1963, No. 1831), dated 8th November, 1963, a copy of which was laid before this House on 15th November, be annulled.
  Mr. G. R. Mitchison: On a point of order. There are twelve Prayers on the Order Paper, six relating to England and Wales and a similar six relating to Scotland. They refer to waste closed sources; schools; hospitals' waste; thorium-X; attachments to lightning conductors; and precipitated phosphate. Would it be in order—it would certainly be convenient to my hon. Friends and myself—if we were allowed to move the first Order and to refer to the other Orders so that they are all discussed on the one Motion?
  Mr. Deputy-Speaker (Sir Robert Grimston): Yes. I take it that that is agreeable to the House.
  Mrs. Hart:These Orders were made under the Radioactive Substances Act 1960, which we on this side of the House welcomed. We did our best to improve it as it went through its formal stages, but we recognised that one of the problems thrown up by any period of technological change was that of defining those new areas in which new social responsibility must be exercised. This is one of those new areas.
  It was some time before the Act came into operation. The appointed day, I believe, was one year ago, 1st December, 1962. Shortly afterwards there were a number of Orders for exemptions under the Act dealing with matters ranging from testing instruments and fire detectors to geological specimens and prepared uranium and thorium compounds. Now we have another group of Orders relating to England, Scotland and Wales. They are extremely technical in their nature as they are bound to be considering the subject with which they deal. They refer to certain radioactive materials, which are specified in the Orders, used in certain premises in a certain way—for example,
  918
  as under one of the Orders, in schools and colleges of further education. Another one refers to some radioactive waste from hospitals.
  Then there is one which refers to lightning conductors. I should be most grateful for some explanation of why it is necessary to use radioactive materials on the top of lightning conductors when we have had lightning conductors for a long time without radioactive material being used in connection with them. In addition, there: are three very technical Orders, and I should be extremely grateful for an explanation, if it is possible to give it in layman's terms, relating to a rather sinister substance called thorium-X and to a substance called precipitated phosphate, and to the Waste Closed Sources Exemption Order.
  Certain general points which are not of an essentially technical nature arise out of these Orders, and it is these which I hope to consider tonight and on which I should like to ask the Minister a number of general questions.
  If I may be permitted to remind the House, the Act laid down a two-tier system of control of the disposal of radioactive waste. First, it said that users of radioactive material must register their premises with the Minister of Housing and Local Government or the Secretary of State for Scotland, and when the registration was carried out some details had to be given of the premises on which the materials would be used, of the maximum amount that it was expected would be used and of the way in which the radioactive materials would be used. That was the first requirement.
  Following that, the Minister was to issue a certificate of registration. In issuing that certificate he might impose certain conditions. Thirdly, having issued the certificate of registration the Minister was to consult local authorities, river boards and such other public and local authorities as he thought it proper to consult. Having done so, he was then to grant an authorisation to the user of the radioactive materials for the disposal of the radioactive waste which would result, and a copy of that authorisation was to be sent to the local authority and to whatever bodies he had consulted before giving the authorisation.

  919
  That is the way in which the two-tier system of control was built. First of all, there was the requirement to register and then, having registered, the requirement to obtain an authorisation before the waste could be disposed of. It was believed that in this way an effective system of control over the consequences of the use of radioactive materials would be obtained. It would essentially be centralised in its nature, but the information would be given to those local authorities, river boards and other bodies which in the last resort were responsible for protecting the public against any misuse of radioactive material in terms of radioactive waste.
  Where there is an exemption from these requirements, as there is in the Orders under discussion, either not all these steps need to be taken or none of these steps needs to be taken, as I understand the position. Of the Orders which we are considering tonight, some relate to the exemption from the requirement to register premises. I think that I am right in saying that the Order concerning schools and colleges of further education and the Order concerning precipitated phosphate, lightning conductors and thorium-X begin with the exemption from registration. The other two—the waste closed sources and the hospitals' waste Orders—are an exemption not from the need to register but from the need to have an authorisation for the disposal of waste. The Minister will correct me if I am wrong in my interpretation of the Orders, but I understand that that is the position.
  There were, of course, some fields where we knew that the Act would exempt certain users. The Atomic Energy Authority and, subject to certain provisions, sites which were licensed under the Nuclear Installations (Licensing and Insurance) Act, 1959, were to be exempted from registration under Section 2 of the Act. In addition, premises occupied by Government Departments or by visiting forces were also to be exempt. Finally, there was a general power granted by Section 2(6), which I quote:
  "The Minister may by order grant further exemptions from registration under the preceding section, by reference to such classes of premises and undertakings, and such descriptions of radioactive material, as may be specified in the order."
  920
  I take it that it is exemptions under this general power with which we are dealing tonight. It is therefore very relevant to consider what we were given to understand would be the purpose of this general power which the Act gave the Minister to provide further exemption by Order. We were told a number of specific things during Second Reading of the Bill, upstairs in Committee and in another place when the Bill was first introduced there. Enlarging on the need for registration the Minister of Housing and Local Government said on Second Reading:
  "There must be no risk that there might be users with less than the highest standards of care and skill with regard to waste. There must, therefore, be a registration system …The main reasons for the power to register are first, to prevent users of processes which might throw up excessive or uncontrolled waste, and, secondly, to know in advance of all potential sources of waste and thus help the planning of disposal, which is the main object of the Bill …"—[OFFICIAL REPORT, 8th March, 1960; Vol. 619, c. 324.]
  That was a general statement, and in a further explanation the Minister said in Committee:
  "The main point is that the bodies exempted by Clause 2"—
  that is, the Clause giving general powers of exemption
  "shall be seen to be, and in fact be, subject to the same disciplines to which the non-exempt bodies are subject."
  The Minister went on:
  "One of the objects of the fairly wide power of exemption is that my right hon. Friends will not be requiring registration for its own sake. In many cases information essential to my right hon. Friends will be coming to them through other means of control, from other departments. We do not want registration for the sake of registration when the knowledge is otherwise available."—[OFFICIAL REPORT, Standing Committee A, 29th March, 1960; c. 112–4.]
  Since he was explaining the terms of the Bill I hope I will be permitted to add what Mr. Quintin Hogg, as I suppose we must now call him, said as Minister for Science, introducing the Bill in another place:
  "The exemptions from registration are governed by two principal considerations. First, bodies like the nuclear power stations and the premises owned by the Atomic Energy Authority and, under another Clause, the hospitals, are excluded from registration because there is already equivalent control and equivalent knowledge to that which registration would give. But … they are not

  921
  exempted from the other stage and the control by way of authorisation for accumulation or disposal of waste."
  Yet in the Orders which we are considering tonight we have not only exemption from registration but exemption from the need to have an authorisation to dispose of waste, which does not seem to follow from what we were given to understand would be the way in which these general powers would be used under the Act.
  The first question which springs to mind is, therefore, whether these Orders do not represent a wider use of the Minister's powers than we were led to believe and were assured would be the case. Another relevant question is the amounts of radioactive waste that are likely to be involved. We were led to believe at the time when the Act was passed that there were about 1,000 users of radioactive materials in this country. Such is the enlargement by industry of the use of radioactive materials that one would expect today that the number of users has very much increased.
  It would be interesting to know how many users are registered and, since this would appear to follow, how many premises are likely to be exempted under each of the Orders we are considering, because the Minister cannot judge whether his decision to exempt is right unless he has an indication of the number of premises that are likely to be involved and the amounts of radioactive waste that are likely to follow from the exemption of those premises from the requirement to have authorisation to dispose of the waste.
  Another relevant issue—and this is of particular importance—is whether or not local authorities are informed of the premises from which radioactive waste is coming and what amounts are involved, even though the requirement to have an authorisation is not necessary. We understood that it was after registration and before authorisation was given that the local authorities would be consulted by the Minister and that after authorisation had been given he would inform the local authorities of the premises that had been registered and the authorisations that had been given.
  Under the Orders there is a requirement that users of radioactive materials
  922
  who are exempted shall keep records available for inspection by the duly authorised officer of the Minister or the Secretary of State for Scotland. It seems that this is a very different requirement and cannot guarantee to the local authorities the same certainty that theywill know whether radioactive waste is being disposed of in their own areas unless the duly authorised officers of the Minister will make regular inspections of the records kept and refer such matters, as their duty, to the local authorities in the same way as they would inform them had an authorisation been issued. One would like to know what will be the position in this respect. The local authorities are responsible, and not the Minister, and have the job of knowing where there may be any risks and where there may be an accumulation of waste.
  The Orders do not relate only to the disposal of waste. Local authorities have a duty to know when it is necessary that the public should be denied access to places where waste is being accumulated. The fire authorities require to know where there could be risk involved in any part of their area were a fire to occur on certain premises. The local authorities have to protect the public and one must be certain that, if exemptions are being granted, the authorities will have all the information that they need just as though exemption has not been granted.
  Since records are to be kept and to be available for inspection, it is important that we should know what inspectorate the Minister has to ensure that an eye is being kept on exempted premises. One of the reasons for the delay in fixing the appointed day on which the provisions of the Act would come into operation was, I believe, the difficulty in obtaining enough highly-qualified people to serve on the inspectorate. The Minister gave an undertaking during the Committee stage discussions that the inspectorate would not be a large one but would be composed of well-qualified people. It is relevant to ask, a year after the appointed day, what is the inspectorate and how far it is expected to be able to carry out a careful inspection of premises which are being exempted. The flow of information to local authorities will depend largely on this vigilance.

  923
  There is the further point that the Atomic Energy Authority will act asthe agent for the disposal of radioactive waste. We were told that it would act as an agent for two years after the Act came into operation. We were also told that during this period a national disposal service would be built up. One of the main objectives of the Act, which is based on the White Paper which preceded it, was to ensure that there should be a national disposal service. Linked with the general question of how waste is to be disposed from exempted premises, one would like to know how far progress has been made in building up a national disposal service which could come into operation roughly a year from now. Since the Orders are linked so closely with the measures which local authorities are able to take for the protection of people living in their areas, it seems to me that above all is raised the question of what guarantees are being given to local authorities.
  One may take it that as we move on through the years the number of users of radioactive material will increase considerably and the amount of radioactive waste with which the community will have to deal will also increase. Although hon. Members may lack the technical qualifications to understand the scientific details contained in the Orders, I think it right that this House should seek to be vigilant in its measures of control over this most important issue. It is our job to be certain that we provide protection against the hazards inherent in the use of radioactive material. So, while we wish to encourage the technical programme, we must at the same time ensure that protection for the public is given concurrently with the increase in the use of radioactive material. I regard it as perfectly proper that we should hesitate before permitting exemption from that degree of control envisaged in the Act and contained in these Orders, and I hope that the Minister can reassure us and answer all our questions and remove our doubts.
  10.20 p.m.
  Mr. Cyril Bence: I am sure that the House will agree with me when I express my great admiration and respect for my hon.
  924
  Friend the Member for Lanark (Mrs. Hart who moved the Prayers to have these Orders annulled. We are indebted to her because those of us who have taken the trouble to read them realise that they were laid before Parliament on 27th November to come into operation on 1st December—that is just four days.
  Some of the details of the substances that are subject to being disposed of and exempted from authorisation of disposal are very complicated. Although I have done my best, I find it very difficult to understand them. I should like to have more time to go to the research department to find out the implications of these exemptions.
  There are twelve Orders and in each is mentioned several institutions connected with the use of radioactive substances which are exempted from registration, not only at the places where the substances are used, but exempted, as I understand it, from authorisation of the disposal of these substances.
  There are one or two Orders in which there appears to be exemption from the disposal of radioactive waste substances in closed sources. I take that to mean in some form of sealed canister. The canister might be stolen, or misplaced if there is no authorisation given and no registration. There might be carelessness on the part of the custodian of such closed sources, assuming that I am right in thinking that the enclosed source is a sealed canister, or the terminal of a lightning conductor with some radioactive attachment to it. I assume from the Orders that the radioactivity arising from such an attachment would be treated as an enclosed source. On important Orders like this, dealing with such an important substance, to give only four days from 27th November to 1st December for hon. Members to study and accept them as delegated legislation is most unreasonable.
  I find these Orders more complicated than the Bill itself in 1960. I was a member of the Committee on the disposal of these wastages, and we spent three or four days in Committee on it.
  That Bill was not nearly as complicated as these twelve Orders which we are expected to dispose of in a few hours. In fact they came into operation on 1st December before we had a chance to

  925
  discuss them. This seems an extraordinary travesty of the functions of this House. The Orders are laid before Parliament without one seeing them, and we are praying against them after they have come into operation. I hope that their coming into operation can be delayed until hon. Members can do their duty and examine them more closely.
  I draw the attention of the House to the Radioactive Substances (Precipitated Phosphate) Exemption (Scotland) Order, 1963. I see on the back of it a reference to
  "the number of microcuries of natural uranium, divided by the number of grammes which the substance weighs, does not exceed 2 × 10-3)."
  When one is presented with an Order like this, one should be given time to discover what it means.
  It then refers to
  "the number of microcuries of each of the following elements, that is to say, actinium lead, polonium, protoactinium other than the isotope 234, radium, radon and thorium other than the isotope 234, divided by the number of grammes which the substance weighs, does not exceed 4 × 10-4."
  It is ridiculous to ask me, as a Member of Parliament, to approve this Order.
  We have been given four days in which to consider these Orders, and it must be remembered that those four days included a Saturday and Sunday. It is not possible to work for seven days a week. Members cannot be expected to stay up all night studying Orders like these. I am sure that the public would be amazed if they knew that these Orders were laid before Parliament on 27th November and that we, on their behalf, are now being asked to approve this delegated legislation, having had so little time in which to study it. Enough blunders are committed by the Administration without forcing us to deal with these Orders in two working days. I beg the Minister to take them back and give us a little more time in which to consider them. I suggest that he should ask leave to adjourn the debate and thus give us some time in which to discover just what these Orders mean.
  We are tonight being asked to deal with more legislation than is contained in the Act itself. When the Bill was introduced in the House it was given a Second Reading, the Minister made a
  926
  speech, hon. Members took part in the debate, and about a week later it went to a Standing Committee for further examination. Now, the Act having been passed, the Minister has introduced these Orders and there is no question of their being given a Second Reading or being discussed in a Standing Committee. I shall be very surprised if the Minister himself has read all these Orders. I shall be very surprised if he knows the nature of all the materials involved. If he does, it will mean that he has been far better briefed than many of those who speak on behalf of the Scottish Office.
  I see that the Under-Secretary of State for Scotland is present. Like my hon. Friend the Member for Lanark (Mrs. Hart), I hope that the hon. Gentleman, who has some responsibility with regard to the application of some of these Orders to Scotland, will explain the nature of these materials such as radon, thorium, isotope 234, protoactinium other than the isotype 234, and so on.
  When I report to my constituents, and when my local authorities ask me about this matter—as they probably will; the local authorities in my constituency are very lively local authorities—I want to be able to tell them. When the Government bring in regulations such as these, concerning the health of the people, the local authorities want to be able to apply them and do their job properly, and I want to help them. So I want to be informed.
  I shall expect, even if not tonight, a solid briefing on the details of all these subjects—perhaps by the Under-Secretary's writing to me—so that our local authorities can use their local inspectorates when they receive information that certain exempted people are using these materials. So many people are exempted under these Orders. Our local authorities are spending considerable sums of money to create a defensive system against radioactive substances of all kinds under certain conditions, through our local civil defence services, but under these Orders we shall have people operating all over the place without being registered, and exempt from having to seek authorisation to dispose of radioactive waste.
  Without some fuller explanation, these Statutory Instruments will make the work of local authorities very difficult. When the Clydebank Town Council sees them,

  927
  or hears about them, and asks me to explain them, all that I shall be able to do—unless we are given a fuller explanation tonight—is to refer the council to the Secretary of State for Scotland. I do not wish to make his situation any more complicated and difficult than it is now, but if he is called upon to explain all these Orders to Scottish local authorities his situation will be almost impossible.
  Apart from any explanation from the Secretary of State, I hope that we shall get a full explanation from the Under-Secretary as to the import of these Orders and their effect upon local authorities in carrying out their duties of protecting their communities from radioactive waste.
  10.33 p.m.
  The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. F. V. Corfield): I appreciate that these are rather complex Orders, and that hon. Members may well wish to have some explanation of them. That, as I understand it, is the purpose of the negative procedure, and why we are here tonight. Although the hon. Member may resent spending his week-ends looking at these things, as I have been doing, I can assure him that my efforts tonight may help him rather than hinder him, and I think that it would be a more constructive move to try to explain them than to take them back.
  I want to endeavour to explain the background before coming to the specific questions raised by the hon. Lady, because in doing so I may well cover the bulk of them. The first point to bear in mind is that the definition of radioactive material in the Act was deliberately framed in extremely wide terms. Obviously—and I think that the hon. Lady would be the first to agree—we wished to err on the side of safety, rather than the reverse. Nevertheless, the result has been that within the scope of the definition there are a number of perfectly commonplace items which are not normally regarded as radioactive, and are certainly not dangerous. I quote, for example, things like lighter flints, the filaments of electric light bulbs, and certain fertilisers.
  Mr. Mitchison:Will the hon. Member indicate, as he takes these instances, under which Order they come?
  Mr. Corfield:The ones that I have quoted as examples are types which could be included in the definition and for which, quite clearly, one would not expect to require the full administrative paraphernalia outlined in the Act in respect of matters which might have serious effects.
  The hon. Lady asked me how many applications had been made. Applications have been received by my right hon. Friend from 1,250 users of radioactive materials and of these about a hundred are hospitals. I make it clear that hospitals which use radioactive materials in any large quantities are not exempted. It is the ordinary run of hospitals which do not specialise in the sort of treatments which use radioactive substances on any large scale. There are about 150 universities and colleges, and the remainder are industrial applications.
  Perhaps I can now turn to the main principles which we have followed in making exemption Orders. I hope that the hon. Lady will agree that we have in no way departed from what she was led in Committee and on Second Reading to believe as to the purposes of Section 2(6) of the Act and other exemption provisions.
  The first of the three main principles which have been followed is that we should not insist on applying the machinery of registration purely for its own sake, and one had in mind that one clearly would not wish to go through the registration procedure when another Government control achieved the same purpose. The second principle is that exempting trifling uses of radioactive material where all the medical evidence and so on was that there was no danger would clearly be an advantage so as to concentrate on establishments where the amount of radioactive material in use and the methods of its use were likely to give rise to the undesirable concentrations for which the Act was designed.
  Mrs. Hart:Will the hon. Gentleman make it clear when explaining the background whether he distinguishes between a large number of users of something which is potentially of little danger, but which, when accumulated, may add up to something dangerous, and users using small quantities of inherently highly dangerous radioactive material?
  Mr. Corfield: I am not certain that I follow what the hon. Lady is asking, but I will try to make the distinction and if I do not do so, no doubt she will interrupt me again.
  The third principle is that it must be remembered that the power to make exemptions also includes the power to make those exemptions subject to limitations and conditions and thus subject to a code of safe practice which can be enforced. There were about thirteen Orders at this time last year, many of them subject to conditions of that nature.
  The practice envisaged for and already carried out for local authorities is that when an application for registration is received, a copy of the certificate of registration is sent to the local authorities concerned. The issue of the exemption Orders means that there will be no certificates of registration or certificates of authorisation. We are arranging to give the local authorities details of the users covered by the Orders where that is appropriate.
  We are obtaining from the National Health Service hospitals, which, incidentally, are exempt from registration under the Act, an appreciation of their scale and use of radioactive materials and this will be passed to the local authorities. We shall also advise the local authorities in whose areas any of these lightning conducting devices are installed. Local authorities already obtain information about the use in educational establishments through their medical officers of health. I can assure the hon. Lady that although individual local authorities have not been consulted, the local authority associations have and were satisfied with the safeguards provided. There is a certain amount of disposal by means of local authority refuse collection but the levels are sufficiently low for there to be no hazard, so I am advised by the scientific experts.
  Mrs. Hart: The hon. Gentleman recognises that this is a crucial matter. He "used the words "where appropriate", although I was not clear in what connection. Is he saying that in all circumstances where there is an exemption the local authority will have the necessary information?
  Mr. Corfield: If the hon. Lady will be a little patient, I am coming to that point. It varies from Order to Order, for, as she will see, it is not necessarily appropriate in some Orders although appropriate to others—for instance, the Lightning Conductor Order.
  The first Order is the Radioactive Substances (Waste Closed Sources) Exemption Order, 1963. The definitions are in the articles of the Order and on page 2 the hon. Member for Dunbartonshire, East (Mr. Bence) will find a definition of closed sources. The point about this Order is that some manufacturers and distributors of instruments which contain radioactive material accept for disposal the spent sources held by their customers.
  Under the Act, the mere return of the instruments to the manufacturer is disposal. Control is retained for the actual disposal by the fact that the manufacturer remains registered and subject to authorisation. So all we do here is to say that, where a retailer or user of an instrument returns the source either for repair or recharging or because it is surplus, that transfer is exempted, but that any ultimate disposal of waste in the true sense of the word as we understand it in ordinary parlance is still, by registration and authorisation, the responsibility of the manufacturer.
  This same exemption is extended to where the instrument or other source is reutrned to a disposing authority. I assure the hon. Lady that the Atomic Energy Authority acts as a disposal agent in this matter. It is virtually a complete continuation of the former arrangement but put on a more formal basis. The Authority acts as agent of the Minister in disposing of radioactive waste where this is necessary. It is merely the transfer that is exempted from the Order.
  The Order also contains an exemption from the authorisation to accumulate sources, because clearly small sources cannot really be required to be sent back at once, and a consignment can be kept for up to twelve weeks. These are all closed sources and it is purely transfer that is covered, I hope that the hon. Lady will think that we have not gone wide of the principles of the Act in that one.

  931
  Next comes the Radioactive Substances (Schools etc.) Exemption Order, 1963. It will be common knowledge that a number of schools, technical colleges and teacher training colleges use very small amounts of radioactive material for teaching purposes. The Ministry of Education has issued detailed guidance to education establishments to secure the safe handling of this material and is continually reviewing these requirements.
  The Order grants additional exemption in respect of use on a scale which the Minister of Education is able to approve as safe in schools, and the exemption is given for keeping and the use of up to four millicuries, of which not more than two may be in the form of open sources. The open sources may not contain strontium 90 which is the element that is so dangerous to bone marrow; nor must it contain any alpha emitters. A millicurie is 1,000 microcuries, and a microcurie, I understand, is about the level of radioactivity which one finds in a luminous wrist watch. That gives an idea of the fairly small levels with which we are dealing. An alpha emitter, I understand, is one of the radioactive substances which emits alpha rays, and although these are the least penetrating if one merely handles the substances,they are by far the most dangerous if one swallows them. The position is similar in the case of strontium 90. This is why there is a complete bar on these two types of radioactive material for the purposes of the exemption Order.
  The exemption from authorisation covers disposals of waste in the following manner. First, discharges of liquid waste into the foul water drainage system of not more than 500 microcuries—that is, 500 watches—in the aggregate in any one week. I understand that the open sources most commonly used or likely to be used all have a relatively short half-life, and the result is that, even with this amount of discharge into a drainage system, the build-up is such that one can never, because of the half-life factor, establish a dangerous concentration.
  The second way of disposal is of solid waste by means of the local authority refuse collection service or by a deposit
  932
  on a tip used for the deposit of substantial quantities of ordinary refuse, provided that at the time of disposal there is in the container not less than 3 cu. ft. of waste, including other refuse, and not more than 10 microcuries. The amount of activity in any one article must not exceed 1 microcurie. The relevance of this particular level of 10 microcuries isthat this is the equivalent natural radioactive strength of the earth, so that all one is doing in putting this stuff into a tip is adding 10 microcuries to something which is already at that strength for the same volume of material. One is not, therefore, increasing the concentration of the radioactivity.
  Third, there is the discharge of gaseous waste into the atmosphere of not more than 1 microcurie in one day. We are dealing here with very small strengths, if that be the right word, of radioactivity and dealing with them in a way which, we are advised, is wholly safe and is in any case, of course, under the control of the Ministry of Education's administrative arrangements for seeing that these standards are upheld.
  Now, hospital waste. I will not go into this in detail because it is closely parallel to the schools Order, but I will just remind the House of what I said earlier, namely, that the main users, about a hundred hospitals, are not exempted, and the sort of condition which arises in the smaller hospitals with which we are concerned comes in, for instance, if a patient who has been treated at one of the other hospitals with a radioactive substance arrives and his urine may still be contaminated. Clearly, there is a very small contamination in sucha case, and we are merely making clear that there is no special precaution necessary provided that there are adequate sanitary arrangements.
  Mr. Mitchison: He may have swallowed his wrist watch.
  Mr. Corfield: He might have done that. I am not sure whether that would be a gamma radiation or an alpha one. I gather that, if it were an alpha radiation, he would be in a worse state than if it were gamma.
  As to the second type of disposal, I gather that iodine is one of the commonest radioactive substances used in

  933
  these hospitals. This has a half-life of eight days. So under the condition that not more than 10 millicuries in the aggregate in any four consecutive weeks may be discharged into the drainage system I have done a calculation and, as far as I can make out, the absolute maximum which can be attained if the rules are rigidly adhered to is 20 millicuries in the waste effluent. Here again, I am advised that this is wholly safe. The disposal conditions are almost completely parallel with those in the Schools Order.
  The hon. Lady asked specifically about thorium-X. This is otherwise known as radium 224. I do not know whether that helps the hon. Lady very much. It is used in the form of an ointment or solution for the treatment of skin diseases. It is a use which has been going on for very many years, though on a limited scale. The Order provides exemption to pharmacists, doctors and hospitals in respect; of the keeping and disposal of the specified small amounts. The Order grants exemption from registration for the keeping and use of not more than 1 millicurie of thorium-X on the premises at any one time. It also grants exemption from authorisation for the disposal of up to 100 microcuries of thorium-X per week into the foul water drainage system and up to 10 microcuries per week of thorium-X by means of the local authority refuse disposal service.
  I know that the lightning conductor problem worries the hon. Lady. I must admit that I found it a little difficult to understand at first sight. As I understand it, the theory is that, if certain radioactive substances are incorporated in a lightning conductor, the effect is to increase the length of the conductor. It sends out what I believe are called ions at the top end of the conductor which conducts the electric current on to the lightning conductor. The hon. Lady said that we have had lightning conductors for many years without worrying about putting radioactive substances into them. This I would not dispute. The theory is that it improves the effectiveness. There might be some questioning amongst scientists about whether the increase in effectiveness is more than marginal, but we have had no adverse comment on this Order from the Advisory Committee. Any question as to the actual scientific effective-
  934
  ness is really a little outside my sphere and more for my right hon. Friend the Minister for Science.
  I remind the hon. Lady that here again there is control over firms which make this type of lightning conductor. There is in fact only one firm at the moment. It is required to keep a record of its customers, so there is complete control as to where: these installations are. Here again, this can be made known to local authorities. The customers are required to display notices, and so on, saying that one of these lightning conductors is on the premises.
  Finally, I come to the Precipitated Phosphate Order. Here I understand that the problem arises from the fact that phosphatic manures or fertilisers which are made from phosphatic rock, nearly all of which is imported from Africa, are associated in this rock with very small amounts of uranium which is radioactive. It is not really the precipitated phosphate which is radioactive. It is the uranium with which it is frequently associated in very small quantities.
  The Radioactive Substances (Phosphatic Substances, Rare Earths etc.) Exemption Order 1962, provided exemption for fertilisers containing not more than a specified concentration of radioactive material. It so happens that a recent brand of phosphatic fertiliser has been manufactured, claiming certain agricultural advantages, and this very slightly exceeds the amount laid down in the Order. We have been assured by our scientific experts that this small increase is still within the safe limits. Therefore, the purpose is to raise the limit very slightly so as to include one more type of phosphatic fertiliser.
  Mr. Mitchison: Would the hon. Gentleman be kind enough to tell us whose advice has been taken on these matters? He spoke of "our scientific experts" twice, and once mentioned an advisory committee. Who are these gentlemen?
  Mr. Corfield: I think that the hon. Lady will remember that the advisory committee was very largely responsible for advising the Minister, and the Department generally, on the need for the legislation to which she has referred. Then we have the inspectorate, the members of which are highly qualified in these

  935
  matters. These are the people on whose advice we rely, although many other channels are available if we are in doubt.
  I may not have covered one or two of the matters raised by the hon. Lady. The appointed day was in December of this year, not 1962; it was, in fact, yesterday—
  Mrs. Hart: The appointed day for the coming into operation of the Act?
  Mr. Corfield: Yes. Last year's Orders were made in advance. I apologise for the fact that the Scottish Orders were only laid on the 27th, to come into force the same day as the Act, but I am sure that the hon. and learned Member for Kettering (Mr. Mitchison) will appreciate—he indicates that he does—that in many cases the Orders are even more complex than the Act. One can only consider the drawing up of Orders when one gets the applications for registration and exemption, and can study the things in detail as they arise.
  This, I am afraid, inevitably means that it takes some time to prepare the various Orders. I hope that I have assisted the House in understanding them, have satisfied hon. Members that we are not going outside the spirit of the Act, and that we are making exemptionsthat will be of minimal significance in terms of radiation, and are sensible exemptions to make in the background against which I have tried to sketch the matter.
  Mr. Bence: Before he sits down, will the Minister explain why the Orders for Scotland were laid before Parliament on 27th November, giving us four days to study them, while those tabled by the Ministry of Housing and Local Government were laid on 15th November, nearly a fortnight earlier?
  Mr. Corfield: It may be the inherent superiority of being south of the Border.
  Mrs. Hart:Before he sits down, may I say that the Minister has not completely answered the point about the effect of a large number of users of comparatively low-level radioactive substances, as against a small number of users of high-level radioactive substances. Can he undertake on future occasions to give information about the number of users of the various cate-
  936
  gories specified in the Order who are expected to be exempted?
  Mr. Corfield: I think that the hon. Lady is saying that a concentration of schools all making the maximum disposal of what they are allowed might be more dangerous than the single school—
  Mrs. Hart indicated assent.
  Mr. Corfield: That has been taken into account. Schools and hospitals have a check. The schools come under the Ministry of Education, and similar arrangements apply to hospitals. So there is a check. The fact is that, within these limits, they are not subject to registration or authorisation, as the case may be.
  11.0 p.m.
  Mr. G. R. Mitchison: I am probably speaking for the whole House when I say how grateful we are on the one hand to my hon. Friend the Member for Lanark (Mrs. Hart) for raising a matter which clearly needed consideration and on the other to the Joint Parliamentary Secretary to the Ministry of Housing and Local Government for the homework he has done in trying to answer us. I am not clear whether these Orders come under housing or local government. I am not at all clear what the hon. Gentleman's Ministry ought to have to do with them, but they are the hon. Gentleman's Orders and in the circumstances I would press him a little on this occasion or some other to consider the question of the advice he receives about these matters.
  I had a confused impression of what had happened. The hon. Gentleman had consulted the Ministry of Education about the Order relating to schools. I suppose he consulted the Ministry of Health about the Order relating to hospitals. Then we come to a rather more vague field. The hon. Gentleman had an Advisory Committee which had functioned in connection with the Act and therefore apparently had been called upon to function in connection with these Orders.
  Mr. Corfield:Under the Radioactive Substances Act passed under a different Administration in 1948 a Radioactive Substances Advisory Committee was set

  937
  up. The deliberations of that Committee led to the 1960 Act and it is these people who are available to advise us when required on the matter of exemptions.
  Mr. Mitchison: I am glad to hear that. It answers the question which I put a little time ago, but it does not wholly satisfy me. I do not know who these people are. I do not know how they relate their scientific skill—if that is what they are particularly versed in—to the demands of industry, which were said to be the largest in number of these cases, as well as to the demands of the other services, such as health and education.
  I am disturbed by consultation of this kind because it seems to me that there are other people who should have been consulted. I have never understood what the Minister of Science is supposed to do, but nobody suggests for a moment that anyone has consulted the Minister of Science or any of the bodies for which he is responsible. It is not suggested that the Medical Research Council, which would appear to have some knowledge in this matter, has been consulted. While I have no doubt that this is an excellent Advisory Committee I do not know that it reports to the House or that we have any means of knowing what may be its limitations as a committee and what may be the practical effect of its advice.
  The result of consulting these gentlemen is a series of Orders drawn in exceedingly technical terms, to some of which my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) has called the attention of the House. What one misses is the link between the scientific knowledge of these gentlemen and the ultimate Order which appears from the Ministry of Housing and Local Government—of all improbable places, if I may say so to the Joint Parliamentary Secretary.
  This is serious, because we have had this trouble before in connection with health matters. There was the case which attracted a great deal of attention a little time ago—and I refer to it only in passing—of the substance thalidomide which had been the subject of expert investigation, though not by the Medical Research Council, but which neverthe-
  938
  less produced some deplorable results in those upon whom it was used. That is the sort of question which, with respect to the hon. Gentleman, remains unanswered at the end of this debate. It seems to illustrate the very curious aspects of our constitution that we get these Orders from the Ministry while this gap, between the Advisory Committee and what finally appears in the Orders, remains unfilled. That disturbs me.
  Another important point that disturbs me is the question which was asked by my hon. Friend the Member for Lanark, which also remains unanswered. The efficiency of these Orders—whether or not they will serve any purpose—will depend largely on the inspectorate. One may be able to trust hospitals and schools up to a point, but on a matter of this kind it would be too much to trust the 1,000 or so industrial users who have been among the applicants in the matter.
  We know about the alkali inspectors and I appreciate that from time to time there have been complaints about the shortage of them. Is the Minister satisfied that the inspectorate is adequate, both in skill and numbers to deal with the many cases in which these Orders will be applied by the persons entitled to benefit under them?
  Mr. Corfield: The background is that the inspectorate now consists of six qualified radio chemists or experts in radioactive; substances. It is proposed to use the other inspectorates—such as the Factory Inspectorate and Alkali Inspectorate—for administrative inspection duties. The expert inspectors, the qualified people, will be available to investigate the more complex processes and to assist, give advice and take action in cases where the other inspectorates bring problems to their attention.
  I have looked at the membership of the Advisory Committee and I can assure the hon. and learned Gentleman that its members are eminent in this sphere. There are two members of the Medical Research Council, the Atomic Energy Authority's Director of Health and Safety, the Director of the Radiological Protection Service and a number of other very eminent people. I can also assure him, apart from the question

  939
  of consulting the Departments he mentioned, that the Medical Research Council was also consulted.
  Mr. Mitchison: Distinguished persons, including distinguished scientists, are usually very patriotic, and I am not at all surprised that the Minister has been able to draw upon their services. However, he has not answered my question, which related to the link between the scientific advice given by these gentlemen and the Orders which appear from the Ministry. I take it that these distinguished gentlemen have not drafted the Orders. One wonders whether, in practice, the advice which is given on these highly technical matters is properly translated into the realm of action in the Orders. I expressed some anxiety on this point because there have been other cases where clearly that had not happened.
  However, I do not wish, unless he does, to take the matter further at this point and I refer now to his remarks about the inspectorate. I am a little frightened about a factory inspector having to apply Orders of this scientific complexity. I do not know whether a lightning conductor is a factory or whether one should expect an alkali inspector to shin up the necessary obstacle to inspect what is going on up there. There seem to be a miscellaneous group of inspectors recruited from rather differing sources.
  I can only hope that the hon. Member will succeed in getting the effective inspection upon which the efficiency of these Orders is bound to depend. I have little doubt that my hon. Friends who are interested in this question will from time to time add to their existing inquiries about the alkali inspectors an inquiry about how the radioactive inspectors, or whatever I should call them, are getting on, how many of them there are and whether there are sufficient to do the job.
  At the end of this extremely interesting discussion, I entertain some hope that nothing very dreadful has appeared in the Orders, but I cannot go very far beyond that. It is a difficulty which occurs in this kind of Order. I wonder whether for future reference the hon. Member and his Ministry will consider adding some more informative explana-
  940
  tion at the end of the Orders or with the Orders than appears in the usual Explanatory Note. In this case the Note explained remarkably little—not nearly as much as the hon. Member told us tonight. In the interests of the country and of the House, it is right that there should be a certain liberality either in the Explanatory Note or—although I hesitate to suggest it—in some White Paper which goes with it. After all, if the Finance Bill is sometimes said to need explanation, this kind of Explanatory Note is worthless.
  Mrs. Hart: With the assurances which have been given, and which must satisfy us at least to some extent, I beg to ask leave to withdraw the Motion.
  Motion, by leave, withdrawn.

  CIVIL DEFENCE (HANDBOOK No. 10)
  Motion made, and Question proposed. That this House do now adjourn.—[Mr. I. Fraser.]
  11.12 p.m.
  Mr. Emrys Hughes: I wish to draw attention in this short debate to a Home Office pamphlet advising the householder on protection against nuclear attack. For many years, I have been appealing to the Government to initiate a full-length debate on civil defence, because ultimately all defencs should be considered defence of the civil population. But though we have had many days discussing strategy, independent nuclear deterrents and all the aspects of nuclear warfare, we have had very little opportunity to find out what is the Government's policy on civil defence.
  The Home Office has recently been under a certain amount of criticism for publishing a pamphlet called "Advising the Householder on Protection against Nuclear Attack". I should like to know what are the intentions of the Home Office about the pamphlet in view of the criticisms to which it has be2n subjected. Will the Home Office revise it or withdraw it? This pamphlet has incurred the censure of the Estimates Committee. If it has been condemned by Lord Russell or the C.N.D. or the Committee of 100, one could have understood, but here is a criticism of a civil defence pamphlet by a Committee presided over

  941
  by the hon. Member for Aldershot (Sir E. Errington). This is what the Estimates Committee said in paragraph 56 of its Report:
  "Your Committee do not feel that this pamphlet achieves any useful purpose …Your Committee do not feel that many householders will purchase the pamphlet from the Stationery Office, nor do they feel that those who do will be convinced of the effectiveness of the measures proposed therein. In the opinion of Your Committee the average householder who reads what to do in the event of imminent nuclear attack, and is told, if driving a vehicle, that he should 'Park off the road if possible; otherwise alongside the kerb", will not form the impression that the civil defence measures taken by the Government are of any value whatsoever. Your Committee are anxious that the public should be aware of the steps that are being taken to protect them, and they feel that this pamphlet creates entirely the wrong impression. They therefore recommend that Civil Defence Handbook No. 10 should be withdrawn."
  What are the main features of the pamphlet advising the householder on protection against nuclear attack? It contains some remarkable understatements. On almost the first page we are told:
  "The explosion of an H-bomb would cause total destruction for several miles around; the size of the area would depend on the size of the bomb and the height at which it was exploded. Outside this area survival would be possible but there would be three dangers…".
  When the authors of this pamphlet say that there will be total destruction for several miles around, are not they understating the whole problem that would arise?
  During the debate on the Polaris missile we debated the probable result of a hydrogen bomb dropped over the west of Scotland, and the hon. and gallant Member for Bute and North Ayrshire (Sir F. Maclean) said that if a bomb were dropped over Glasgow it would mean the total destruction of everything within a radius of 100 miles. When, therefore, we are told that there will be total destruction for several miles around if an H-bomb is dropped, it appears that there is a tendency to underestimate the effects of such a bomb.
  It is my guess that four H-bombs delivered by rocket would destroy everything in the country, but apparently the Home Office works on the assumption that, with some kind of air raid precaution similar to that obtaining during the last war, it will be possible to prevent that happening. Throughout this
  942
  pamphlet there is a sense of illusion; a sense of deception; and this has incurred the critcism even of Members of the Estimates Committee.
  We are told that 500,000 copies of this pamphlet have been published. They are sold at 9d. each, and are not distributed free to the civilian population. The protective measures include the provision of a fall-out room in people's houses. Immediately following the suggestion that everybody should have a fall-out room stocked and fitted out as the booklet suggests, we are told:
  "If you live in a house, choose a room on the ground floor with as little outside wall as possible. The further you are from outside walls and the roof the better the protection. A room shielded by neighbouring buildings is better than one overlooking open space."
  Then we read that a person who lives in a bungalow has small chance of survival compared with someone who lives in a tenement or slum, and that single-storey prefabricated dwellings give little protection—
  "If you could arrange to join neighbours who live in more substantial buildings you should do so. If not, you should follow the instructions on pages 9 and 10 for providing a shelter 'core' in your home."
  Then we have a series of elaborate instructions about choosing a room and bricking up the windows or using sandbags. One paragraph says,
  "Put sandbags or earth-filled containers outside the windows. If you cannot do this, block the windows from inside with bookcases, chests of drawers or other large furniture packed tightly with earth, books, or other heavy material."
  This presumes that there will be a considerable time for preparation. Then there is the alternative. You can
  "Remove the frames and put boards, planks or doors across outer and inner sills as shutters. Bolt or wire them together. Fill the intervening space with hard-packed earth or sand as the work proceeds."
  My hon. Friend the Member for Dunbartonshire, East (Mr. Bence) has asked what arrangements have been made for the earth and sandbags, and the bricks. Is it a serious instruction to householders to make these preparations now. Does not the Ministry think that these elaborate measures would tax the ingenuity of a very good general contractor? Can they possibly be put into operation in the short time that would be available in the event of a short air-raid warning?

  943
  It is not difficult to think of many parts of the country where the inhabitants have no spare room at all. In my constituency most of the municipal houses have families in every room. That observation applies to almost the whole of industrial Scotland. But in the suggested fall-out room the basic furniture and equipment is to consist of
  "Mattresses, pillows and blankets, tables and chairs, plates, cups, knives, forks, spoons, tea-pot, tin-opener, bottle-opener, kettle, saucepans, portable stove and fuel, portable radio set and spare batteries, torches, batteries, candles, matches, face flannels, towels, sanitary towels, soap, tea towels, rubber or plastic gloves, clock, books and magazines, toys for children, notebook and pencil, box containing personal papers, e.g. N.H.S. medical cards, savings bank books, birth and marriage certificates, first aid kit."
  Mr. Cyril Bence: And a copy of HANSARD.
  Mr. Hughes: In addition to that, in this room there must be sanitation. We are told
  "You could not rely on being able to use your W.C. There might not be enough water to flush it or the sewerage system might be damaged. Keep the things listed below in the fall-out room or within easy reach outside the door: Large receptacles with covers and with improvised seats for use as urinals, and for excreta. Ashes, dry earth, or disinfectant, toilet paper, clean newspapers, brown paper or strong paper bags (to wrap up food remains and empty tins), dust bin with well fitting lid for pets. Keep a box of earth or ashes."
  Those are elaborate instructions for a fall-out room. But, in addition, while the room is being prepared there is also the instruction
  "Whitewash your windows; those at the top of the building matter most. The whitewash will greatly reduce the fire risk by reflecting away much of the heat, which would have passed by the time the slower moving blast wave arrived. The blast might shatter the glass, but keeping out the heat-flash for those few seconds would prevent countless fires."
  I have quoted some of the passages from this pamphlet which resulted in the Estimates Committee treating it with a certain amount of incredulity, and the substance of the advice of that Committee was to scrap the handbook altogether, to withdraw it, because it was serving no useful purpose. In his reply, the Secretary of State said:
  "Over half a million copies have already been distributed or sold. Judged by its proper purpose as a training manual, there has been hardly any criticism of it by those who use it."
  944
  I wonder how many of those there are.
  "The Secretary of State does not agree that commonsense advice of a simple kind has no relevance to the conditions of nuclear war …"
  Does the Under-Secretary think that the passages which I have quoted are
  "commonsense advice of a simple kind"?
  What proposals has he for either withdrawing the pamphlet, or deleting the passages which resulted in such incredulity? The recommendations of the Estimates Committee can be summarised thus, "This thing is phoney; this thing is rubbish; put it in the waste paper basket".
  The Committee's comment on the Home Office reply was:
  "Your Committee feel bound to inform the House that in their opinion these Observations are unsatisfactory. In particular, several of the Observations do not attempt to meet the reasoned arguments made by the Committee but merely repeat points already made in the course of the enquiry, points which the Home Office for unspecified reasons considers that the Committee have not understood."
  There are many other questions which I should like to raise about what could be done in the event of civil defence being necessary. For example, what progress is being made with plans for the evacuation of 6 million civilians? Certainly in Scotland we do not know to where they are to be evacuated, and how far people can be evacuated from the centre of London is a mystery which has yet to be explained.
  I have some sympathy with the Under-Secretary because I know that these problems are gigantic—I think that they are insoluble. However, now that the Estimates Committee, an impartial body with a majority of Conservative Members, has issued this Report, it is up to the Home Office to tell us precisely what it intends to do about this pamphlet which has resulted in this criticism.
  11.38 p.m.
  The Joint Under-Secretary of State for the Home Department (Mr. C. M. Woodhouse):Although the hon. Member for Central Ayrshire (Mr. Emrys Hughes) frequently calls for debates on civil defence, he seldom attends them when they take place. I should like to call his attention to two debates earlier this year in the report of which he will find answers to a number of the questions which he has put tonight.

  945
  There was one on 1st March in which I dealt with the circulation of Civil Defence Handbook No. 10, the subject he has raised this evening. There was another on 27th June when I dealt with questions relating to shelters and with dispersal policy. It will save time if I refer the hon. Gentleman to those debates, although I should like to answer him in more detail on the questions he has raised tonight, particularly the criticisms by the Estimates Committee.
  Mr. Emrys Hughes: I am the most regular attender of these debates. In fact, the hon. Gentleman's predecessor thanked me for giving him an opportunity to make a speech.
  Mr. Woodhouse: I am glad to join in thanking the hon. Gentleman again, but, unless I am mistaken, I did not see him on either occasion throughout the debate. As to Handbook No. 10 itself, the hon. Member has put—I will not say he is guilty because that is an unkind term—an element of misrepresentation in his Motion on the Notice Paper which I can best correct by pointing out that between the words "handbook" and "advising" he should have inserted "entitled" and then put all the subsequent words in capitals. He would then show that this is the title of the handbook and does not purport to be a handbook which is directly advising the householder.
  There is I think no excuse about not being clear about the purport of the book because it is clearly set out inside the cover. It is a training publication for the civil defence, the police and the fire services with the aim of indicating to their members the sort of advice which should be given in a period of alert by all available means to the general public about what they might do in their homes or out of doors.
  It is, I repeat, a training manual. Some people chiefly those who have not read it or who have read mischievous misrepresentations of it, have been puzzled about its purpose because they have been misled into thinking that it is directly addressed to householders advising them of what to do in an emergency, and that is why they have found it difficult to understand why it has not been circulated to the public.
  946
  But its purpose is the more limited one of stating to people concerned with civil defence the sort of advice which, in the present state of knowledge and resources, which will be revised from time to time, would need to be given in a period of alert to the general public. That advice is concerned with the sort of precautions which the ordinary man in his home: could take on a "do it yourself" basis.
  The handbook does not purport to contain a formula which would guarantee complete protection against the effects of nuclear attack. That is an impossibility. We have always said that if this catastrophe happened the damage would be on a vast and practically unimaginable scale, although I am bound to say that some of the figures the hon. Member quoted did undoubtedly, on our information, contain a very substantial element of exaggeration.
  Nevertheless, it remains true that in an area close to a burst, several miles from it certainly, most people would be killed instantaneously and nearly all buildings would be completely destroyed. But outside such an area the destructive effects would diminish and precautions could mitigate them still further. It is with these precautions, which the ordinary man and woman could take at home or out of doors, that the handbook is concerned.
  This is perfectly clear in the handbook and, I think, apart from omitting the introductory remarks, the hon. Member has clearly stated it very carefully and I do not need to go over the scope of it in detail.
  It has been asked, naturally, how people would be warned and what they should do in an immediate threat of war. Many people are uninformed now; many people never will be fully informed, although we shall always do our best to help to reduce their number. There are some who profess to believe that our evidence is that these precautions could be taken within a period of four minutes, which is absurd and has never been suggested by anybody.
  What is important is to distinguish between the four minutes tactical warning and a strategic warning which could be a period of several days, during which precautions could be taken and

  947
  preparations brought to a state of immediate readiness. It might well be that the period of alert would be so short that all the desirable measures could not be taken in time but that is no ground for failing to make plans and preparations on the assumption that some advantages could be taken of a period of alert.
  Mr. Emrys Hughes: Does the hon. Member suggest we shall have several days warning of an H-bomb attack?
  Mr. Woodhouse:Several days warning of the possibility of war such as we would have had, for instance, during the Cuba Crisis, had it been necessary to take these measures.
  I want to say a word about the practicability of the advice mentioned by the hon. Gentleman and the Estimates Committee. When the handbook was published in January it was already our view that the measures recommended in it were within the ability of most householders. We have since been carrying out practical tests at greater length to establish that point. They are not completed, but, so far as they go, they fully confirm our initial belief.
  The handbook gives several alternative ways of improving protection against fall-out. I emphasise that it is fall-out, because against the effect of an immediate explosion there could be no protection. The methods would have to be varied from place to place, according to the circumstances and what was available. But we believe that one or other of the methods described in the handbook would be found practicable in the particular circumstances of almost every household. We are talking, of course, of a desperate emergency in which extreme measures would have to be improvised, but they could be taken, and, if it were a matter of life and death, they would be taken.
  I turn now to the criticisms of the Estimates Committee. With all respect, I find it impossible to take those criticisms at their face value because the Estimates Committee proposed that the handbook should be withdrawn without proposing that anything should take its place. I cannot believe that it was literally the Committee's intention that the civil defence services
  948
  should simply be deprived of training, and the public of advice, in this crucial field. What I think must be assumed is that the Estimates Committee thought that something better could, and should, replace the handbook, something which would not be open to the charge it made of being of such a general and simple character that it will be of little value to members of the Civil Defence Corps. But on the way in which it should be improved we were given no guidance by the Committee, apart from the express disapproval of one sentence, which the hon. Gentleman quoted, a sentence which, incidentally—as he will see from the handbook itself—was not quoted in full even in the Committee's Report. We shall certainly revise and improve the handbook from time to time, in the light of experience, but we shall, equally, not withdraw it, for the reasons which my right hon. Friend gave in his Observations to the Committee.
  We believe that, in issuing this handbook at the time we did, we were right to make available simple and straightforward advice which could be used for the purposes of training by the civil defence services and be transmitted in an emergency to the public. We believe that we were right to go as far as we have gone, and no farther, at this stage. We believe that this handbook makes a useful contribution to our civil defence preparations, which, as I have said, have a very wide scope, a great deal wider than the field covered by the handbook.
  I return to an earlier point and put this to the hon. Gentleman. No one disputes that a nuclear attack on this country would cause immense devastation and chaos, but those who are opposed to what we are trying to do in civil defence must answer certain questions. Do they believe—I think that the hon. Gentleman purported to believe it, but I question whether, on reflection he seriously can—that it is certain that there would be no survivors whatever of a nuclear attack? Or does the hon. Gentleman say that the survivors would not be worth bothering about? If he does not say that, does he say that we are to make no preparations to ensure that the injured and the sick receive some care and treatment?

  949
  Is no attempt to be made to get food and water to those who would survive? Is nothing to be done to mitigate the after-effects of nuclear explosion for those who survive the initial attack? Are more people to die than need die, if we take no precautions? Are we to do nothing to provide starting points from which those who survive could attempt to build up some form of ordered life again? So long as there remains the possibility of nuclear war, is nothing to be done? Let it not be forgotten that this question has no connection with the particular deterrent policy of the present Government. There is no conceivable foreign policy or defence policy which could enable the Government of this country to declare that there is no risk whatever in any conceivable circumstances of nuclear attack upon us.
  For as long as this remains the case and we have not nuclear disarmament by international agreement, it is no more than prudent and a humanitarian duty to take out such insurance as we can against its effects. Civil defence is not and never can be a comprehensive insurance. The extent of it depends on the premium, we can afford, having regard to our other commitments and on our assessment of the likelihood of this disaster, which I am glad to say at present appears remoter than it has for many years.
  We hope and believe that this possibility will remain remote, but it is a possibility which we cannot ignore, and it is against that background that we have done what we have done in the matter of this small handbook which we have debated tonight.
  11.40 pm.
  Mr. William Ross: I think that the Minister has done less than justice to the Estimates Committee. After all, it was the Estimates Committee's point which my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) raised. The Committee
  950
  is just as anxious that the public should know civil defence and the measures which can be taken for protection as anybody else. What the Committee is concerned about is whether this handbook will create the right impression. This is indeed what the Committee says at the end of its recommendation:
  "Your Committee are anxious that the public should be aware of the steps that are being taken So protect them, and they feel that this pamphlet creates entirely the wrong impression."
  The hon. Gentleman gave entirely the wrong impression when he elaborated and put his series of rhetorical questions. We have debated these matters, and the Labour Party has supported many of them. In respect of this one, there is every justification for what the Estimates Committee said. The hon. Gentleman gave the impression that this v/as not a matter for the general public at all but for the civil defence services. Sir Charles Cunningham, giving evidence before the Estimates Committee, said in reply to Question No. 1701:
  "This was not intended to be a technical handbook at all, but we hoped a fairly clear indication to the householder of what he could do to help himself in an emergency."
  Everyone knows what a training manual is. Training manuals are not generally issued to the public. That is probably the mistake which was made here. Training manuals are supplanted as knowledge increases.
  Mr. Woodhouse:Will the hon. Gentleman allow me to correct him on one point of information? All the civil defence training manuals are equally on sale—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned accordingly at eighteen minutes to Twelve o'clock.

PENSIONS AND NATIONAL INSURANCE
  Personal Case
  Personal Case
  Earnings Rule
  Earnings Rule
  National Assistance (Unemployed men)
  National Assistance (Unemployed men)
  National Assistance (Rent and Rates)
  National Assistance (Rent and Rates)
  Retirement Pensions
  Retirement Pensions
  Pensions, Benefits and Family Allowances
  Pensions, Benefits and Family Allowances
HOSPITALS
  Hospital Pharmacy Service
  Hospital Pharmacy Service
  Hospital Plan (North-East)
  Hospital Plan (North-East)
  Hospital Confinements (Nottingham)
  Hospital Confinements (Nottingham)
  Nursing Staff, North-East Metropolitan Region
  Nursing Staff, North-East Metropolitan Region
  Hospital Workers (Pay and Pensions)
  Hospital Workers (Pay and Pensions)
MINISTRY OF HEALTH
  Pharmacy Act, 1954 (Section 14)
  Pharmacy Act, 1954 (Section 14)
  Water Supplies (Fluoridation)
  Water Supplies (Fluoridation)
  Prescriptions (Labelling)
  Prescriptions (Labelling)
  Sterile Syringes
  Sterile Syringes
  Cervical Cancer
  Cervical Cancer
  Oral Contraceptives
  Oral Contraceptives
  National Health Service (Charges)
  National Health Service (Charges)
AGRICULTURE, FISHERIES AND FOOD
  World Food and Agricultural Development Policy
  World Food and Agricultural Development Policy
  Rural Development Areas
  Rural Development Areas
  Sealed Silos
  Sealed Silos
  Fisheries Limit
  Fisheries Limit
  Sugar (Price)
  Sugar (Price)
  Meat Marketing (Committee's Report)
  Meat Marketing (Committee's Report)
  Pesticides
  Pesticides
  Flood Prevention Schemes
  Flood Prevention Schemes
  Great Ouse Flood Prevention Scheme
  Great Ouse Flood Prevention Scheme
  Sugar Beet, Northumberland
  Sugar Beet, Northumberland
  Home-Produced Bacon
  Home-Produced Bacon
  Milk (Quality)
  Milk (Quality)
EMPLOYMENT
  Apprenticeships, North-West Wales
  Apprenticeships, North-West Wales
  Scotland
  Scotland
  London Transport Road Services (Committee)
  London Transport Road Services (Committee)
  Journalists and Printing Workers, Doncaster
  Journalists and Printing Workers, Doncaster
  School Leavers, Sunderland
  School Leavers, Sunderland
  Newspapers, Edinburgh (Amalgamation)
  Newspapers, Edinburgh (Amalgamation)
  Shipbuilding and Ship-Repairing Industries, Sunderland
  Shipbuilding and Ship-Repairing Industries, Sunderland
  CAMBODIA AND VIET-NAM
  CAMBODIA AND VIET-NAM
  DISARMAMENT (EIGHTEEN-NATION COMMITTEE)
  DISARMAMENT (EIGHTEEN-NATION COMMITTEE)
  UNITED STATES OF AMERICA (PREFERENTIAL SHIPPING CONDITIONS)
  UNITED STATES OF AMERICA (PREFERENTIAL SHIPPING CONDITIONS)
  BRITISH SUBJECTS ABROAD (REPATRIATION)
  BRITISH SUBJECTS ABROAD (REPATRIATION)
LOCAL GOVERNMENT
  River Pollution, West Country
  River Pollution, West Country
  Compulsory Acquisition of Land (Tenant Farmers)
  Compulsory Acquisition of Land (Tenant Farmers)
HOUSING
  House Purchase (Young People)
  House Purchase (Young People)
POST OFFICE
  Surface and Air Mail, Israel
  Surface and Air Mail, Israel
HOME DEPARTMENT
  Miss Gillian Healan
  Miss Gillian Healan
  Suspected Persons (Rules)
  Suspected Persons (Rules)
  Willesden and Wembley (Ward Boundaries)
  Willesden and Wembley (Ward Boundaries)
  Child Care Officers (Training Facilities)
  Child Care Officers (Training Facilities)
  PRESS AMALGAMATION COURT
  PRESS AMALGAMATION COURT
ROYAL AIR FORCE
  Obsolete Aircraft
  Obsolete Aircraft
EDUCATION
  New Schools
  New Schools
MINISTRY OF POWER
  Winter Supplies, London Area
  Winter Supplies, London Area
  Coke (Movement and Storage)
  Coke (Movement and Storage)
  Centralised Fuel Depots, London Area
  Centralised Fuel Depots, London Area
NATIONAL FINANCE
  Malt Spirit and Grain Spirit
  Malt Spirit and Grain Spirit
SCIENCE
  Research Associations
  Research Associations
SCOTLAND
  Development Plan, North-East Scotland
  Development Plan, North-East Scotland
  Central Scotland (Publicity)
  Central Scotland (Publicity)
  Herring Imports
  Herring Imports

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Bristol
The Earl of Rothes—Sat first in Parliament pursuant to the provisions of Section 4 of the Peerage Act, 1963.

NUREMBERG JUDGMENT AND INTERNATIONAL LAW
2.35 p.m.
LORD CHORLEY: 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, in view of the London Agreement of 1945 to which is annexed the Charter of the Nuremberg Tribunal, and in view of the Nuremberg Judgment relating to major German war criminals, they recognise the principles enshrined in these instruments and the Nuremberg Judgment as representing rules of International Law which have received general acceptance among States and as having the status of customary International Law.]
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, the principles of International Law, recognised by the Charter of the Nuremberg Tribunal which was annexed to the London Agreement of 1945 and by the Judgment of the Nuremberg Tribunal, were unanimously affirmed by the General Assembly of the United Nations in a Resolution adopted at its First Session on December 11, 1946. Her Majesty's Government concurred in the view expressed in that Resolution, which is regarded as confirming that the principles are generally accepted among States and have the status of customary International Law.
LORD CHORLEY: My Lords, I wish to thank the noble and learned Lord for his Answer. Is the noble and learned
832
Lord aware that, in spite of the Nuremberg Judgment, prosecutions are being brought in Germany at the present time against public men who have dared to bring to the notice of the German people the fact that major war criminals are still being employed in the public service of that country?
THE LORD CHANCELLOR: My Lords, the noble Lord has made a statement giving certain information. I am not in a position to confirm or deny its accuracy.

ADMINISTRATION OF JUSTICE BILL [H.L.]
2.37 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. It is a Bill which can be described as complementary to the London Government Act, but I hope that it will not give rise to such controversy—and will not, because it follows upon that Act, which I know arouses the ire of the noble Lord, Lord Morrison of Lambeth, stir him up into any very unusual activity to-day. The changes brought about by that Act have made it necessary to make changes and adjustments in the administration of justice throughout the area of Greater London, and in making those adjustments, we are seeking to make considerable improvements. Our intention is that the changes in the administration of justice should come into operation at the same time as those made by the London Government Act; namely, April 1, 1965.
Part I of the Bill deals with the courts in the Greater London area. Assizes are dealt with in Clause 1 and Schedule 1, which amends and brings up to date the legislation relating to the Central Criminal Court. That court was established nearly 130 years ago. My predecessor in office, Lord Brougham, introduced the necessary legislation, and Lord Campbell, in his Lives of the Lord Chancellors, says that it met with unmixed applause. I hope that this Bill may be similarly received. Lord, Campbell went on to say that, in fairness, the merit of it ought to be almost

833
exclusively imputed to Brougham. And he went on to say this:
"From ancient times there was a Court, called the Old Bailey, which met frequently throughout the year for the trial of all offences committed in the county of Middlesex and in the metropolis which formerly did not extend beyond the ancient walls of the City of London. But large portions of the metropolis were now",
he said,
"to be found in the counties of Surrey, Kent and Essex, and persons charged with offences in them might be seven or eight months in prison before being brought to trial."
To-day, nearly 130 years later, it is equally true to say that large portions of the metropolis are to be found in the counties of Surrey, Kent and Essex. That will be changed when the London Government Act comes into force. I am glad to think that the administration of justice in the adjoining counties does not arouse the kind of criticism that it incurred nearly 130 years ago. The Central Criminal Court had as its members the Lord Chancellor and all the Judges. And they are still to-day members of that Court, though it is a very long time since the Lord Chancellor presided at a trial there—if indeed he ever has done.
Under subsection (1) of Clause 1 the territorial jurisdiction of the Central Criminal Court, as a criminal court of assize, is extended to coincide with the area of Greater London, and the Court will consequently have more to do than it does at present. It is thought that the proposed extension of jurisdiction will increase the work at the Old Bailey by about 20 per cent. above the present level. The work has already increased substantially in recent years and it is obvious that the time has come for the Central Criminal Court itself to be expanded.
Your Lordships may remember that the Royal Commission suggested that the Greater London Council should be made responsible for the expenses of the expanded Central Criminal Court, while recommending that the special rights of the Corporation of the City of London should be preserved. The Corporation has already undertaken a scheme for rebuilding the Central Criminal Court which will add four more courts. That will cost, I am told, more than £4 million. The Corporation are promoting
834
a Bill of their own to provide for the appointment of more Judges.
On some occasions the noble Lord, Lord Morrison of Lambeth, has thought fit to utter criticisms of the City of London, but I hope he will join with me in paying a tribute to the Corporation of the City of London for undertaking this heavy financial burden. Not very many of those who appear at the Central Criminal Court are charged with offences committed in the City of London itself, and for the City to shoulder this expense and relieve the ratepayers of Greater London to such a considerable extent shows a degree of public-spiritedness which should command our admiration.
My Lords, in considering what would be the best pattern for the administration of justice in Greater London, I was at one time, I must confess, attracted by the idea of having one Commission of the Peace or one quarter sessions for the whole of Greater London. We have consulted the interested parties and we have endeavoured to meet so far as possible the points they have raised, and it is in the light of the views expressed that the Bill now proposes five Commissions of the Peace and five separate quarter sessions, excluding the City. That is provided by Clause 2. Each of the five quarter sessions areas will have its separate magistrates' courts committee.
Clause 2 as at present drafted designates the five areas by geographical descriptions; that is to say, North-East London area, South-East London area, and so on. It has been suggested, however, that the North-West London area, which covers the area of the present County of Middlesex, should be known as the Middlesex area. I know that those who wish to maintain the identity of Middlesex after the abolition of the administrative County are anxious that this should be done. This would mean that the name "Middlesex" would be attached to the Commission of the Peace, court of quarter sessions and magistrates' courts committee for the area, and also to the Custos Rotulorum and the Under-Sheriff.
I should be glad of your Lordships' views on this. I certainly am not unsympathetic to the idea. But it might appear a little odd if, of these five areas,

835
Middlesex is the only one which is named and the others are referred to by their geographical description, such as the South-East London area, the North-East London area, and so on. I have tried to think of appropriate names for the other four areas, if the North-West London area is named Middlesex, but so far I have not been successful. If one is called Middlesex and the others are not named, may it not in the years to come look rather an anachronism and an anomaly to use the name "Middlesex" in this connection? As I said, I shall be interested to hear your Lordships' views upon this matter. We are not at all unsympathetic to the suggestion, but I should be grateful to know what your Lordships think with regard to it.
The appointment of chairmen and deputy chairmen of the new courts of quarter sessions are dealt with in Clauses 4, 5 and 6. Clause 4 provides for the appointment of five whole-time chairmen—one for each area—and one or more whole-time deputy chairmen in each area, not exceeding 25 for the whole of Greater London. Your Lordships will observe that Clause 5 introduces a novel arrangement by providing for the appointment of county court judges as part-time or temporary chairmen of quarter sessions for the London Commission areas and for contribution by the Greater London Council towards the salary and pension of any county court judge so appointed. It is already possible for county court judges to preside over quarter sessions in counties other than London, and many of them do so. This proposal will enable them to play a responsible part in the administration of the criminal law in London.
Noble Lords may remember that the Inter-departmental Committee on the Business of the Criminal Courts, presided over by Mr. Justice Streatfeild, recommended in paragraph 224 of their Report that the appointment of supernumerary county court judges might be preferable to an increase in the number of full-time deputy chairmen of quarter sessions. This proposal has, to my mind the considerable advantage of adding variety to judicial work. I have often thought that it must get extremely monotonous always to be trying the same kind of cases, whether they be
836
criminal or civil—and I am by no means sure that additional variety may not lead to an improvement in the administration of justice. What I have in mind is, for instance, that for one quarter of a year a county court judge might be asked to preside at quarter sessions instead of sitting in the county court. In order that a sufficiently large reservoir of county court judges may be available from among which the necessary number of deputy chairmen may be found, subsection (2) of Clause 5 raises the limit on the total number of county court judges from 80 to 90.
I would say a word or two in explanation of Clause 7(4) which provides that each court of quarter sessions must be presided over by a legally qualified chairman or deputy chairman and enables the Lord Chancellor to direct that any of those courts shall be held before a chairman or deputy chairman sitting alone. I should like to make it clear that I hope that lay justices, who play a very great part in the administration of justice throughout the county, will continue to play a big part at quarter sessions in Greater London, and I hope that they will continue to attend them. But I have thought it wise to include in the Bill a power to direct that a chairman or deputy chairman shall sit alone.
It is certainly not intended to make general use of this power, but one may get some cases which are likely to last a very long time, for many weeks, and I think it would be asking a lot to ask lay magistrates to devote several weeks on end to hearing a case. Indeed, it might not be possible to find those who could, and so this is, I think, a useful reserve power to have. Lay justices do not at present sit at London Sessions except to hear appeals. Under this Bill it will be possible to secure that they can adjudicate at quarter sessions in the Inner London area.
My Lords, I now turn to the magistrates' courts. At present, in the County of London there are two separate systems of magistrates' courts, the Metropolitan stipendiary magistrates' courts and the petty sessional courts of lay justices. The two groups of courts are organised differently, and have separate staffs. Moreover, there are important differences in their jurisdiction. The

837
Metropolitan stipendiary magistrates can deal with any offence, either summarily or as examining justices, but the criminal jurisdiction of the lay justices sitting in their own courts in the County of London is restricted, by Orders made by the Home Secretary under the Justices of the Peace Act, 1949, to a fairly narrow range of offences, mostly of a kind that are prosecuted by local authorities.
It has long been recognised that it is not satisfactory to have these two systems of magistrates' courts, with overlapping jurisdictions, for one area. The Maxwell Committee recommended in 1937 that the Metropolitan magistrates and lay justices should sit in the same courthouses. In 1960 the Interdepartmental Committee on Magistrates' Courts in London was appointed under the chairmanship of Judge Aarvold to consider what measures were required to integrate the two systems of magistrates' courts in the County of London. It recommended that, after the integration of the two systems, the Metropolitan magistrates and the lay justices should have, with certain exceptions, a common jurisdiction, common staff, common financial arrangements and, eventually, common courthouses. The recommendations of the Aarvold Committee are implemented, with a few variations, in Clauses 9 to 17 of the Bill.
The Bill provides that lay justices in the Inner London area are to have the jurisdiction exercisable by justices of the peace elsewhere, and will also, with a few exceptions, be able to exercise the jurisdiction which is at present reserved to Metropolitan magistrates by Statute. The system of management which the Bill provides is that the integrated courts should be under the control of a committee of magistrates consisting of representatives of the Metropolitan stipendiary magistrates and the lay justices. This will replace the present system in which the Home Secretary has direct responsibility for the Metropolitan magistrates' courts while a magistrates' courts committee controls the lay justices' courts. The integrated courts will be served by a common staff, and it is intended that in time both Metropolitan magistrates and lay justices will sit in the same courthouse.
838
The new courthouse for the South Western Magistrates' Court, which was opened earlier this year, was planned with this in mind, and has court rooms for both Metropolitan magistrates and lay justices; and there is a substantial building programme ahead for further suitable courthouses for the integrated courts. The Aarvold Committee recommended that the area of the integrated courts should be divided into nine petty sessional divisions, and also made recommendations as to what these divisions should be. It will be for my right honourable friend the Home Secretary to define the initial petty sessional divisions. I understand that he has broadly followed the recommendation of the Aarvold Committee.
The establishment of an integrated system of magistrates' courts in Inner London is, I think, a step forward in the administration of justice in this area. It will mean that the dual jurisdiction of the present two systems of courts is done away with, and the removal of the present limitations on the jurisdiction of lay justices will have the welcome effect that they will be able to play a fuller part in dealing with the heavy burden of work in the magistrates' courts in Inner London. I hope noble Lords will agree that this is a useful measure, and that it commends itself to the House.
I do not want to take up much more of your Lordships' time, and I will deal with the remaining provisions of the Bill as briefly as possible. There are, however, one or two matters to which I should draw your Lordships' attention. Clause 12, subsection (3), transfers to the Lord Chancellor the functions now discharged by the Home Secretary in respect of the appointment of the chairmen and members of juvenile courts in London. The present system is rather a curious one. I appoint the magistrates, and then the Home Secretary decides who can sit on the juvenile courts. Throughout the rest of the country the magistrates themselves elect the members of the juvenile court panel. They have, of course, to be within the prescribed ages.
The Home Secretary has great responsibilities for the police. He no longer appoints stipendiary magistrates and recorders, and these appointments to the juvenile court bench are the only judicial

839
appointments still made by the Home Secretary. Your Lordships may take the view that, as the Lord Chancellor is responsible for the magistracy as a whole, and for taking steps to secure that both juvenile court and other lay magistrates receive instruction, he should, and the Home Secretary should not, be responsible for the appointment of juvenile court magistrates in the Inner London Area.
The integration of the Metropolitan stipendiary and the lay magistrates in Inner London has of course a special significance for the staff of those courts. Clauses 15, 24 and 32 of the Bill regulate the appointment and conditions of service of the staff in Inner London, and enable the Home Secretary to make suitable provision for the protection of the interests of the existing staff; and it is our hope that, within this framework, which is drafted in general terms, it will be possible to work out a formula which will be satisfactory to all the interests concerned.
Those of your Lordships who are Lieutenants of Counties will be particularly interested in Clause 18, which provides that there is to be one Lieutenant for Greater London, excluding the City. The clause also makes provision for the appointment of a Vice Lieutenant, of Assistant Lieutenants and for Deputy Lieutenants. The Vice Lieutenant will rank next to the Lord Lieutenant, and the Assistant Lieutenants will come next. These Assistant Lieutenants will be new offices, special to Greater London.
It may be suggested that, instead of a single Lieutenancy for Greater London, there should be five Lieutenants, corresponding to the five Commission areas. This possibility was considered, but it does not accord with the concept of Greater London as a single unit. The unusually heavy work in Greater London is, we think, best met by enabling the Lieutenant to delegate some of his functions, and the creation of the special office of Assistant Lieutenant is intended to give a recognised standing to those who will have to deputise for the Lieutenant on occasions when the presence of the Lieutenant himself, rather than a Deputy, would be expected.
The Bill also seeks to implement some of the recommendations of the Morison
840
Committee on the Probation Service—and perhaps I should here point out that the noble Lord, Lord Morrison of Lambeth, had no responsibility for, or connection with, this work. It was a Committee presided over by Sir Ronald Morison. The Committee concluded that complaints which they had received that the administration of the London Service had been inefficient were not substantiated, but they recommended that
"to secure the contentment and command the loyalty of the London Service a change in administration should be made."
Clause 21 of the Bill provides for the appointment of a Committee composed of representatives of the courts, as the probation authority for Inner London.
I come finally, my Lords, to Part II of the Bill where the opportunity has been taken to deal with some outstanding matters affecting magistrates in general. Clauses 26 and 27 provide for the indemnification out of public funds of justices and their clerks, recorders and clerks of the peace, in respect of damages or costs payable in proceedings arising from acts done in the course of their official duties. Clause 29 provides for the payment of subsistence allowances to justices and members of probation and care committees. The Royal Commission on Justices of the Peace, which reported in 1948, recommended that subsistence allowances should not be paid to justices, and at present they are entitled only to travelling and lodging allowances. Times have changed, however, since 1948, and the Government feel that the time has come when those who discharge the duties of justice of the peace should receive such allowances.
Before concluding I should like to mention one other matter, on which I should welcome your Lordships' views. The provision of accommodation for courts of quarter sessions in counties is at present the responsibility of the standing joint committees, which of course are also the county police authorities. After the creation of new police authorities in the Police Bill, and the consequent abolition of the police functions of standing joint committees, those committees will be left only with the residual function of dealing with court accommodation for quarter sessions. The Bill is drafted on the assumption that the committees should be retained, even

841
though that will be their only function. Some may think that these committees should be abolished, as there will not be much for them to do. If they are abolished, we shall have to decide who should be responsible for court accommodation. With regard to this matter there are four possibilities.
The first is to lay on the county councils the duty of providing proper accommodation, subject to consultation with quarter sessions. Some may think that this would not be entirely satisfactory. Secondly, the duty to decide questions of accommodation could be placed on quarter sessions themselves; but it may well be that some counties would not regard that as entirely satisfactory if they were obliged to follow the determination of the sessions, subject to an appeal to the Home Secretary or to the Lord Chancellor. Thirdly, quarter sessions accommodation could be brought within the province of the magistrates' courts committees, although this would present some financial problems. Finally, a new kind of special committee to deal with this matter could be set up—though if there is a case for not having a standing joint committee there is presumably the same case for not having other special machinery. I should be glad to hear the views of noble Lords on this subject.
My Lords, this Bill has the twofold object of fitting the court system into the new local government structure, while at the same time removing dead wood and improving and modernising the administration of justice throughout the Greater London area. By these means it is hoped to provide better machinery for tackling the vast increase in the load of work falling upon the courts in this area to which I have referred and which, in the case of the magistrates' courts, has led to delays in the disposal of cases which I regard with the gravest concern. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
3.5 p.m.
LORD MORRISON OF LAMBETH: My Lords, the House is much obliged to the noble and learned Lord the Lord Chancellor for the very clear exposition he has given. The provisions of this Bill
842
are not in all cases easily understood, although I do not think it is one of the most difficult measures submitted to Parliament; nevertheless, we are grateful to the noble and learned Lord for the explanations. I hope to be here until the end of the debate but I have an engagement to address King's College on Parliamentary Democracy—the word "democracy" is not entirely unrelated to this Bill; but I will not deal with that. However, I must be at the College at 4.15 and I apologise now if I have to depart before the termination of discussion.
This Bill will not be as troublesome as was the London Government Bill—I am sure many noble Lords will be glad to hear that—but it is a consequential Bill, as the noble and learned Lord said, on the London Government Act, 1963, and therefore, instinctively, I feel that it should not commend itself to me. However, here it is; and I agree that if the London Government Act is to remain on the Statute Books—and this is, at least, doubtful—then something must be done about the administration of justice. I therefore do not blame the Government for bringing in this Bill, which, in any case, does not operate until 1965. There are a few points that I ought to mention in this Second Reading debate, and others may be raised by other noble Lords, including my noble friend Lord Champion, who will raise matters connected with the Provincial and Welsh aspects of the Bill, and my noble friend Lord Silkin who will pick up a few points in winding up the debate.
The first point I would make is about the financing and the administration of the Central Criminal Court, which is popularly known as the Old Bailey. It is provided that the area of jurisdiction of the Central Criminal Court shall be extended from what it was before (I believe this included the counties of London and Middlesex and perhaps one or two other places) to the whole of the Greater London Area. This is a logical consequence upon the London Government Act, 1963. But the set-up and the financing of the Central Criminal Court is a curious affair. I agree that the City of London provides a part of it; I understand that the City provides and maintains the court house at the Old Bailey and pays certain expenses, salaries and

843
superannuation contributions. However, the London County Council, as things are (and now this will be the Greater London Council), pays seven-eighths of the salaries of the court officials and their office expenses. The remaining one-eighth is shared between the County Councils of Middlesex, Essex and Surrey.
But when we come to the composition of the Court, we find in Schedule I paragraph 1:
"The Central Criminal Court (hereinafter in this Schedule referred to as "the Court") shall consist of ex officio judges, additional judges and such other persons as may be included in any commission issued under paragraph 4 of this Schedule, and those judges and commissioners shall be the judges of the court."
Paragraph 2 of this Schedule provides that:
2. The ex officio judges shall be the holders of the following offices, that is to say—
City

Lord Mayor of the City.

Alderman of the City.

Recorder of London.

Common Serjeant.

Then it is provided for some to be, presumably, as regards the Supreme Court, nominees for the Lord Chancellor. At any rate it provides in the case of the Supreme Court that the judges shall be:

Lord Chancellor.

Lord Chief Justice.

Judge of the Queen's Bench Division of the High Court.

I understand that these persons are together the administrative authority for the court. In them is vested the matters of management and of administration. If I am wrong, I can be corrected in due course. I cannot see why the City, so far as local government is concerned, should have a complete monopoly of representation when a substantial part, or a noticeable part, of the expenses is paid by the local authorities.
I should have thought that either the City should pay the whole of these residual expenses or, preferably, the Greater London Council as well as the City of London Corporation should be represented upon this body. And I should have thought that the best way to provide for that would be that the chairman, vice-chairman and deputy chairman (if there is one) of the Greater London Council, who for the time being
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are out of active council politics, at any rate in the jurisdiction of the Council, should be added to the representatives nominated by the City of London. Otherwise, it will be a case of taxation without representation, which I suggest to the House is undemocratic. I hope that this point can be considered in Committee and that the Government will not be unsympathetic if and when the point is raised.
Another point I wish to make is about the juvenile courts. The noble and learned Lord the Lord Chancellor said that it was an anomaly, because he had exclusive, monopolistic jurisdiction over the appointment of justices of the peace, that the function of appointing chairmen and members of panels of juvenile courts should belong to the Home Office—although apparently outside London the chairmen of children's courts are appointed by the justices who sit in the children's courts, for which I should think there is something to be said. This tendency to take every bit of judicial administration from another Department to the Lord Chancellor's Department is part of the "empire building" of which I was complaining last week. This has been preceded by the transfer of the appointment of stipendiaries and recorders from the Home Secretary to the Lord Chancellor's Department. I should not think it a bad thing if these appointments, which involve a certain amount of patronage—I do not use the word in any improper sense—were divided between the two Departments.
But the case here is stronger. This is the appointment of chairmen and members of a panel not for general judicial purposes, but for a special purpose—namely, for juvenile courts. That being so, I submit that the Home Office is more appropriate than the Lord Chancellor's Department for making these appointments. The Home Secretary is responsible for the administration of the Children Act, which is an important Statute dealing with the problems of deprived children and naughty children which arise outside the functions of the Ministry of Education. The Home Office deal with approved schools, which educate and care for children who have gone astray and are often referred to these schools by the children's courts. It also deals with borstal institutions, but these are for somewhat older young

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people. The consequence is that the Home Office is experienced administratively and in relation to local government with the very problems that largely concerns children's courts.
The noble and learned Lord the Lord Chancellor and his Department know nothing about children administratively. They have no special knowledge of the problems of children. But the Home Office has that special knowledge. And I strongly take the view that this function should remain with the Secretary of State and not be transferred to the Lord Chancellor's Department; for these are not general judicial offices, but judicial offices which relate to a particular section of the population, a particular section which is dealt with by the Home Office in the ordinary way. Therefore, I take the view that this function should remain with the Home Office. I very much hope that the noble and learned Lord the Lord Chancellor will think about this again and consider whether, on this occasion, he cannot be a little generous to the Home Office, of which his Department is traditionally jealous and from which it likes to take and seize all it can for itself.
There is another point with which I am concerned. I have been Home Secretary, as has the noble and learned Earl sitting opposite, Lord Kilmuir—I nearly uttered his commoner's name by mistake: I understand that he is not going to "de-Lord" himself, and on that I congratulate him. There is one thing about the Home Office about which I am apprehensive. I do not want it to be a Department dealing solely with police and prisons. If that happens in our country it will become something like a Continental Ministry of the Interior; and with every respect to Continental Ministries of the Interior, I do not like them too much. There is too much of a police flavour about them.
It is a good thing that the Home Office should have human functions outside the police and the prisons, because that tends to preserve the Department as a human Department, and not to make it a cold Ministry of the Interior. The Home Office used to have factory inspectors. They were lost to it because of the powerful persuasion of the late Mr. Ernest Bevin, who had a case for taking them under the Ministry of Labour, though I regret it on the grounds which
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I am indicating. There was an argument about whether the Children Act should be administered by the Ministry of Education or by the Home Office—and there is a case to argue there; but I strongly took the view that the Home Office had to deal with these youngsters and that, in any case, it was a good thing for the Home Office that it should have human duties to discharge and should not confine itself to police and prison administration.
The British Home Office is probably unique among the Ministries of the world. Far from its being a menace to civil liberty, it regards it as one of its primary duties not to make breaches in civil liberty, but to protect it, as I think the noble and learned Earl, Lord Kilmuir, will agree, although I would say that the degree of this protection varies from Home Secretary to Home Secretary. It is a very fine thing that this should be so. It is something of which all of us, irrespective of Party, should be proud. I believe that it would be much more difficult to maintain this if the Home Secretary had not a number of these human services to administer as well as police and prison. And I beg your Lordships to keep this point in mind, because it is a serious aspect of what I think is the desire of all of us—namely, to maintain the Home Office as a protector and guarantor of individual rights and of civil liberty.
With regard to the County of Middlesex, I think the Government have been very rough on that county, as well as London, and perhaps it is some sign of a little sense of guilt and repentance that the Lord Chancellor is proposing to preserve the name of Middlesex in one of the Commissions of the Peace. I should have thought that, on the whole, it was a nice thing to do, even though I agree that he cannot find county names for the other Commissions of the Peace, because, unfortunately, they will cut across existing county boundaries; but all of them, I understand, will be within the Greater London area. That is all I have to say. We shall not be unduly troublesome about the Bill, but I hope that the noble and learned Lord the Lord Chancellor, and the House generally, will take account of the points I have mentioned and others that may be mentioned on both sides of the House, in order that we

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may do our best in due course to make the Bill a better Bill in these respects than it is as introduced.
3.21 p.m.
LORD OGMORE: My Lords, I welcome this Bill, and so do my noble friends on these Benches.
LORD LINGREN: All of them?
LORD OGMORE: All of them; and absent friends, as well. This is a long-awaited Bill. It clears up some tiresome anomalies, such as the position of London justices, who at this moment, as the noble and learned Lord the Lord Chancellor said, have very limited jurisdiction. I not only support the Bill, but would commend it to your Lordships. It is a sensible Bill, with a few reservations which I hope to advance to your Lordships in the next few moments. I should like to say that, although I am speaking on the exceptions, which may appear to make my speech a critical one, I do so only because one does not want to waste the time of the House by commenting on points with which one agrees.
My own connection with the Bill is that I am a deputy chairman of Westminster justices and a member of the Magistrates' Courts Committee for London, of which the noble and learned Lord has spoken, and I also gave evidence before the Aarvold Committee. I may say that anything I say in the course of this debate is entirely my own responsibility; I have no authority to speak for the Westminster justices or for the Magistrates' Courts Committee for London.
As to the Central Criminal Court, I agree with the proposals in the Bill but I feel that the suggestion made by the noble Lord, Lord Morrison of Lambeth, is a wise one. I would support the suggestion that the chairman and possibly also the deputy chairman, should be added to those who are to be ex officio judges. I see no reason why they should not be added, and every reason why they should be, if the Lord Mayor and Aldermen of the City of London are to be ex officio judges. With regard to the Commission areas, these seem to me reasonable. I agree with the Lord Chancellor that we ought not to have one area for the whole of London,
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and five would seem to be a reasonable number. I am sorry that, again, we have not taken this opportunity to get rid of the rather tiresome anomaly of the City of London, but I suppose that the principle has been followed that was enshrined in, and to my mind marred, the Greater London Act by preserving this anomaly.
As to Middlesex, I favour the idea. All the other counties are still preserved in some way, and their names are still preserved. Middlesex is, so far as I know, the only one left out. There will be a Middlesex Regiment, the famous "Diehards", still in existence; but precious few other bodies and authoritiese will include "Middlesex" in their titles. So I would urge the noble and learned Lord to come down on the side of preserving the name of this ancient county attached to the particular Commission area. If I serve within one of the Commission areas, it will not be in Middlesex, and the Lord Chancellor need not fear that most of us will feel any jealousy in that regard.
On the matter of the jurisdiction of the judges of the quarter sessions, I welcome the idea that county court judges should have this additional responsibility. I spoke on county court judges, as the noble and learned Lord will remember, only last week, and he referred at that time to this Bill. I did not refer to the Bill, although I knew of this provision. I welcome this provision, and I think it will give them good experience for promotion. It is my view that more county court judges ought to be promoted to the High Court Bench.
I am pleased that chairmen and deputy chairmen of quarter sessions will be recruited from barristers and solicitors; and I hope that the solicitors will not be forgotten. There are, after all, 20,000 solicitors in the country, as compared to 1,800 barristers, so that we have still a fair amount of leeway to make up. There is one, and one only, Metropolitan magistrate who is a solicitor, and he was appointed by the noble Earl, Lord Kilmuir, when he was Lord Chancellor. I hope that the present Lord Chancellor will follow his predecessor's example and appoint solicitors not only as Metropolitan magistrates, but also as chairmen and deputy chairmen of these new quarter sessions.

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Dealing with summary jurisdiction for Inner London, I am particularly pleased that the proper, suitable and full summary jurisdiction has now been granted to the lay justices. I myself at one time sat at Bow Street, with another justice, and while there we had the full power of the stipendiary magistrate and the same powers as are given to magistrates in any other part of the country. But if you go half a mile down the road and sit in the Westminster Petty Sessions, as I have done, you have this very limited jurisdiction. It is an absurd position, and we justices have felt that it is absurd. Several of your Lordships sit as magistrates in London. People who occupy these positions are very experienced, and this situation has seemed to mean a great waste of their time and effort.
With regard to domestic courts, I appreciate that, as the Lord Chancellor said, in reference to another part of the Bill (but the same principle applies), the hearings may be lengthy, and it may be difficult to get lay justices to sit. But I believe that, in the normal way, it is much better for the stipendiary magistrate to sit with a lay magistrate when hearing cases in domestic courts. This is not a matter where great legal acumen or experience is required—and, in any event, there is always a professional clerk—but one where lay magistrates can make a considerable contribution. This applies particularly to women magistrates, who I think are most important people, both in the domestic courts and juvenile courts.
That brings me on to the juvenile courts where, as the noble Lord, Lord Morrison of Lambeth, said, there is to be a transfer from the Home Office to the Lord Chancellor's Department. The noble Lord, as a former Home Secretary, has put up a powerful plea for this proposal to be reversed and for the Home Office to retain their power. I am not sure that he is right on this point, although I say at once that the Home Office are much quicker than the Lord Chancellor's Department in getting magistrates appointed. That is one good thing about the Home Office. On the other hand, I think there is a great deal to be said for having one judicial authority, and after all, the Lord Chancellor is the judicial authority having responsibility for all the Judiciary. I am sure that now that the Lord Chan-
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cellor is to have more power in this way, and since the system is being cleaned up, it will be much more efficient than it has been in the past. On balance, I think it is better for the Lord Chancellor's Department to deal with this particular aspect of the magistrates' affairs. In a way, I take the reverse view of that taken by the noble Lord, Lord Morrison of Lambeth, on this matter: because the Home Office have so much to do with prisons, prisoners and all the rest of it, I do not think they are a particularly good Department to deal with magistrates. I think the two should be completely separate in the public mind and there is a great deal to be said for a completely separate department which has nothing to do with the police handling the particular problems. I will say more about that in a moment.
I come next to the committee of magistrates which is to take the place of the committee of which I am now a member, the Magistrates' Courts Committee for London. I hope the Lord Chancellor will ensure that the transitional period is as short as possible. There are obviously many problems to be dealt with. As he said, we have built one or two big courts recently, and the court situation in London is a difficult one. A number of new courts are needed, and I hope that that matter will be dealt with. Of course, we also deal with the magistrates' clerks and staffs of the courts. They also cannot be left in the air, as it were, so I hope that the transitional period will be very short.
I am also rather concerned about the constitution of this new committee. It seems to be over-weighted with the professional magistrates. The new committee is to be 27 in number, including 3 ex-officio members, 9 lay magistrates (as they are called in the Bill), 3 juvenile court magistrates—making 15—plus 12 professional magistrates. That seems to me rather a heavy weight. The 3 ex officio members are really professional, so it means 15 professionals to 12 lay.
THE LORD CHANCELLOR: Twelve of each.
LORD OGMORE: Not 12 of each, because, after all, unless I am wrong, the 3 others are likely to be professional as well. If the noble and learned Lord

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the Lord Chancellor will look at the provisions, he will see that what I am saying is so. Maybe it is a Committee point, and I need not waste the time of the House now.
THE LORD CHANCELLOR: My Lords, I can probably help the noble Lord. If he looks at Clause 13(3)(c) he will see that paragraphs (a) and (b) deal with lay magistrates, and then we have paragraph (c), which refers to
"such number of metropolitan stipendiary magistrates…as is equal to the total number of members required to be chosen under paragraphs (a) and (b) of this subsection."
So there will be equality between the stipendiary and the lay magistrates.
LORD OGMORE: I am afraid the noble and learned Lord has not been following me. It is my fault, because I should have made myself clear. What the noble and learned Lord said is in part quite true. There are 9 representatives from the petty sessional divisions who are laymen, and there are 3 members of the juvenile panel—that makes 12. There are, in addition, 12 metropolitan stipendiary magistrates; that gives 24. Then under subsection (2) there are three others who are to be members of this committee. One is the custos rotulorum, whoever he may be—I presume he is likely to be a professional. If he is not, we can snatch him back—I understand that he is the Lord Lieutenant. The Chairman of the Court of Quarter Sessions for that area will definitely be a professional. There is also the Chief Metropolitan Stipendiary Magistrate, and he is a professional. There will be a slight amendment to my figures, and there will, in fact, be 14 professionals to 13 lay, if my arithmetic is correct, and counting the custos rotulorum as not a professional and presuming that he will be a distinguished Field Marshal or the holder of some post of that kind.
There is, I feel, an important point, as the others have been, and one that particularly concerns this House. A great deal of the administrative and financial provisions are dealt with by a gentleman called the Receiver for the Metropolitan Police. At the present moment he has rather ill-defined functions with regard to the courts. I say "ill-defined" because for some considerable time the Westminster justices have been a sort of judicial Ishmael,
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wandering around with no settled home to go to. We have no court of our own. Our tent, as it were, is pitched at the moment in Caxton Hall, which is not a particularly suitable place for a judicial body, and we have been trying to get somebody to take an interest in our fate and provide us with a court. But this is a sort of administrative square dance. There are the London County Council, the Receiver for the Metropolitan Police, the Lord Chancellor's Department and the Home Office—none of them will really take responsibility. You go from one to the other and, as I have said, it is a sort of square dance. Nothing happens. There is a court, Rochester Row, which is not used at all except for the storage of traffic signs by the Metropolitan Police, and we fail to see why a court which has been built for the purpose is not used for that purpose. However, we have not been able to get it.
It is true that this Bill assists in this way: it pins down responsibility to someone, and that is an advantage—I am not denying that—and an improvement on the present system, when no one is responsible. But I feel that it is undesirable for a functionary who is described as the Receiver for the Metropolitan Police to have control, as he will do to some extent, over the magistrates and their staffs. They will have to go through him, and the Home Secretary will have to consult him. The magistrates will have to go through his department to the Home Secretary, and I would much rather some functionary other than the Receiver for the Metropolitan Police did this duty. Even if it was a straight Home Office official I should not mind. I would much rather that it came under the Lord Chancellor's Department. Or why should not the Greater London Council do it? For magistrates to be as it were under some obligation—certainly their staffs are to touch their foreheads in a way—to a police official is quite wrong and not in accord with the separation of functions which we ought to have in this country.
There is only one other point I would make, and that is on the appointments of magistrates. The system we have in this Bill is, I think, quite satisfactory, with one or two exceptions. But the present system of appointment of magistrates in London is not satisfactory. I

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hope the Lord Chancellor will look into this matter when he is re-examining the whole situation under this Bill. It is not satisfactory because there is far too much secrecy about it. It is obviously weighted to the two main political Parties. The advisory committees are like secret societies: one does not know who belongs to them or what suggestions they are putting up to the Lord Chancellor, what their membership is, who chooses them, and so on. I think it is wrong, for example, to have a Minister of the Crown as Chairman of one of these committees, as is the case or was until quite recently. In my own petty sessional division neither the chairman nor the deputy chairmen are members of the committee. The committee consists of people either not on our bench at all or who are members, but not chairmen or deputy chairmen.
Certainly for some considerable time we have been asked to put forward names for magistrates. One puts up names, and nothing happens for a considerable time. One has to go to people and ask them whether they are prepared to stand if selected, and it is embarrassing for month after month and year after year to go by and for one to find that nothing has happened. In my own case, about two years ago I was asked to put up the names of one or two gentlemen to serve. I put them up and the papers were then lost. I put them up again, and finally I was told that one gentleman was not suitable. It seemed to me rather odd, for I would not have put his name forward unless I thought him suitable. Lo and behold, three months or so later he was appointed to another petty sessional division just a mile or two away, still in the Metropolitan Police area! It seemed to me that there was something odd going on.
That is all I have to say. I am glad subsistence is being granted for magistrates. This is very welcome, especially for those magistrates dependent upon salaries or upon daily wages. The magistrate who is a wage earner—and there are, I am glad to say, several in London now—will welcome this very much. As I have said, generally speaking I welcome the Bill, and I hope that my reservations about it can be met during the progress of the Bill through this House.
3.41 p.m.
LORD CHAMPION: My Lords, unlike the two noble Lords who have spoken from the Front Benches, I am not competent to discuss Part I, the major part, of this Bill, so I shall confine my remarks to the general provisions that are contained in Part II. I would begin with the provision in Clause 26 which provides for the indemnification of justices and their clerks.
Since becoming a justice of the peace I have always been conscious of the fact that I was entrusted with considerable duties and powers, powers that might have dire consequences for persons appearing before me, for decisions in which I participated might very well have disastrous consequences and effects upon a human life far beyond the mere fine imposed by the magistrate or, indeed, a sentence of imprisonment. There has always been, too, at the back of my mind the salutary reminder that if I misused those powers I was subject to certain pains and penalties, such as damages being awarded against me in the High Court. Magistrates are human beings and will from time to time come to wrong decisions, and I must say that, in the main, I have always felt that they ought not to be too much upset if a superior court reverses or changes their decisions. I think that Mr. John Scott Henderson, Q.C., who spoke to the Magistrates' Association recently, was talking good sense when he told that Association:
"Do not worry so long as you have come to a just decision. If, perchance, you have come to a wrong decision, there are courts of appeal to put the matter right. That is what appeal courts are for, and do not fret unduly if an appeal court allows the appeal."
I believe that the vast majority of the magistrates' courts take decisions that are just; just by their lights and, of course, their limitations. But I must say, despite the fact that I am a magistrate, that I am not wholly happy about the possible removal of the penalty for the misuse of power by the odd bench here and there. We see these little things happening occasionally, and, of course, it has always been possible to take a decision higher up which would mulct the bench in damages. However, on balance I support this clause.
Having said that, I am bound to question the decision for making the magistrates' courts committee for the area the

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body to determine the question whether or not the magistrate, or the bench, or the justices clerk should be indemnified—and I am thinking particularly of the magistrate in this connection—because I think it would be a very rare occasion upon which a magistrates' courts committee, composed mainly of magistrates, would find against one of its fellow magistrates in this connection. I cannot see that happening, except at least on very rare occasions. I wonder whether some other body, totally removed from all such association, ought not to be entrusted with the first decisions in these matters.
I am, of course, well aware of the fact that the Bill makes provision for appeal to be made to someone appointed by the Lord Chancellor, and that the appeal can be made not only by the magistrate or the justices' clerk who feels that the magistrates' courts committee ought to have indemnified or taken the steps necessary to indemnify the magistrate or the magistrates' clerk against these actions; but there is, of course, the other side, namely, that the local authority can also appeal to the person appointed by the Lord Chancellor if that local authority feels that the magistrates' courts committee have taken the wrong decision. I have these doubts about such a committee composed mainly of magistrates having the right to take the first decision, and on this point I shall be most interested to hear what the noble and learned Lord, the Lord Chancellor, has to say. He did not say very much on this subject in opening, because, quite clearly, this was to him a minor matter.
The second point to which I would make reference is Clause 29, which substitutes for the words "lodging allowance" the words "subsistence allowance". This is an act of some justice to the "great unpaid", as magistrates rather like to call themselves. But I think there is something else still to be done in this connection—that is, provided I understand the words "subsistence allowance" aright. I believe that "subsistence allowance" does not make provision for loss of earnings. I am correct on that, for the noble and learned Lord, the Lord Chancellor, has nodded his assent.
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The Lord Chancellor in his Presidential Address to the annual meeting of the Magistrates' Association in October of last year, said:
"It is important that justices should attend their courts regularly and frequently, not only because their failure to do so may result in the courts being inadequately staffed or an undue burden being thrown upon their colleagues, but also because regular and frequent attendance enables justices to gain experience and to keep themselves up to date on the complex work which they have to perform."
I agree absolutely and entirely with those sentiments. Until the beginning of this century custom and the property qualification ensured that justices were appointed from the upper and middle classes. The squire, the ex-Navy or ex-Army officer, the wealthy businessman or the professional man, were the main sources from which justices were drawn, and they could afford to give their services and time free. The Royal Commission of 1910 brought about a change, and more and more justices were appointed from what may be described as the working class. For many of these to do what the Lord Chancellor advised—that is, make regular and frequent attendance—means a considerable loss of earnings unless, as is sometimes the case, the employer is prepared to give the justice of the peace time off with pay for his work as a magistrate. I am glad to say that, to my certain knowledge, many good employers do this. But often it is impossible for the justice to make the sacrifice of a day or a half day's pay to attend in court.
My Lords, perhaps I might instance my own case. When I became a magistrate I was a £3-a-week signalman. I was able to attend court fairly regularly because I happened at that time to be a shift worker, working three shifts, which meant that when the court met in the morning I could attend two out of three, which was a fairly satisfactory attendance. But I could not possibly have given 10s. out of £3 a week to attend court; I just could not have afforded it at that time. So, had I not been on shift work, I should have had to content myself with merely signing declarations and forms and all the rest of those things which are brought to one's door, and I should not have been able to carry out my main function which is that of being a magistrate and sitting on the Bench and there carrying out the duties which the noble

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and learned Lord rightly referred to in his Presidential Address.
The principle of payment for Parliamentary duties was accepted in the beginning of this century, against considerable opposition it is true, but is now I believe generally accepted. The principle of payment for loss of earnings for attendance at council meetings was established after the last war. That was quite right, too. And if to-day a man sits on a tribunal—I am thinking here of the Assistance Board Tribunal, which I happen to know—and therefore loses a day's pay he is entitled to payment for loss of earnings. If it is justifiable for payments for loss of earnings to be made for councillors attending council meetings, if it is justifiable for those who sit on tribunals to be paid for loss of earnings when they sit on such tribunals, surely it is justifiable for payment to be made for loss of earnings for magistrates who sit on the Bench.
I believe that this justification has been there ever since we started appointing working-class magistrates to the Bench. But I believe it is even more justifiable to-day with the tremendous increase that is taking place in the work of the magistrates' courts throughout the country. We all know to what extent motoring offences have stepped up the work of the magistrates' courts, of the additional time which has to be spent on these cases, which means that magistrates have to attend in order to carry out their work there. The other thing that is increasing enormously the work of the magistrates' courts and the time spent there is the operation of the Legal Aid Act. That is a good Act. It had a right purpose, and indeed has served its purpose well. But it has the effect, so far as magistrates' courts are concerned, that so often we find—and I have found this in matrimonial cases—that cases seem to be spun out, as a result of solicitors and counsel being employed, to inordinate lengths. This takes up a lot of time of the magistrates and of course, I believe, would justify the point I am making.
I believe that everybody here will confirm what I am saying—I mean, everyone who sits as a magistrate. I believe that the time has come for pay-
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ments to be made to magistrates for loss of earnings and that this Bill ought to have included the appropriate provisions. I might have to return to this point on the Committee stage, but I shall be deeply interested to hear what the noble and learned Lord the Lord Chancellor has to say on this as well as on my other point. I may say I would use the same disclaimer as the noble Lord, Lord Ogmore, has. I am speaking for no trade union here, for no association, for no body; I am merely putting this point forward on my own initiative as one who has seen how this can operate, and in the hope that we might here take a decision which ought to have been taken a long time ago to pay loss of earnings to magistrates in the circumstances I have described.
3.55 p.m.
LORD SILKIN: My Lords, I am sure that those noble Lords who have listened to this debate will agree that it has been a very valuable and well informed discussion. We all of us accept the need for this Bill, and I think that all the points that have been raised have been worth raising and are fully worthy of consideration. All I can do is to repeat some of the points that have been made, and I would say at once that, unlike any of my noble friends who have spoken, I speak with no special knowledge on this subject at all. I think I have only once been to the Central Criminal Court, in spite of a long career in the law—and that was not as a defendant, I might say—and I have hardly ever been to any other court.
My noble friend Lord Morrison of Lambeth dealt first of all with the question of the Central Criminal Court. I think he pointed out that there is to-day an anomaly. The noble and learned Lord the Lord Chancellor himself said that the purpose of this Bill, or one of the purposes of it, was to deal with the consequences of the London Government Act, and at the same time to bring the law up to date. I think that my noble friend indicated there is to-day an anachronism as regards the composition of the Central Criminal Court. It was perhaps not practical, at a time when the Central Criminal Court comprised in its jurisdiction the counties of London, Surrey, Essex and Middlesex, to have representation from all those

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counties on the court, and possibly the contribution of those other counties was not large enough to justify it. But to-day if we are clearing up anomalies and getting rid of anachronisms it surely will be much simpler—we are dealing with one other authority apart from the City—to include in the composition of the court representatives of the Greater London Authority. We do take a very serious view of this. We feel that if the Greater London Authority is to be responsible for a substantial amount of the cost of the Central Criminal Court there is no reason whatever why it should not be represented on the judicial body itself.
The noble and learned Lord the Lord Chancellor referred in very glowing terms to the public spirit of the City of London—I thought he laid it on a little thick—in making this contribution towards the cost of the Old Bailey. I am not going to quarrel with the exact terms. I would say that, having regard to their resources and the kudos they get from it all, the ceremony of the Lord Mayor and the Aldermen appearing at the Central Criminal Court, I think they are getting their money's worth. But, in any event, whether that be so or not, I think that now the whole position has been simplified it would be just and equitable and in the public interest that the great new London Authority should also be represented on the court. We shall be discussing this at a later stage of the Bill, and I hope that the noble and learned Lord the Lord Chancellor will keep an open mind on the subject and not close down here and now on the idea.
The Bill refers to the creation of five quarter sessions, and I shall be grateful if the noble and learned Lord will explain to me what will be the relationship between these five quarter sessional courts and the Central Criminal Court. Will they be dealing with the same kind of cases? How will they be distinguished from the Central Criminal Court?
THE LORD CHANCELLOR: My Lords, I can probably save time by answering that now for the noble Lord. The relationship between the quarter sessions and the Central Criminal Court will be precisely the same as the relationship
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between the quarter sessions and the Assize in the county. Their jurisdiction will be exactly the same.
LORD SILKIN: That is to say, I imagine, that the magistrates' courts will send a case either to one or the other according to the nature of the case itself. I join with the noble Lord, Lord Ogmore, in welcoming the fact that county court judges are to be associated with the quarter sessions as deputy chairmen. I think it will give them much more interest and experience, and make them better judges in dealing with the matters with which they normally have to deal. I may say also, now that my noble friend Lord Morrison of Lambeth has left the Chamber, that to my mind that is a further justification of the increases in remuneration which we voted on here last week. Certainly if they are to have these additional and more complicated duties, even though it may be good for them, they are entitled to the extra remuneration that we are giving them.
The noble and learned Lord referred to nine magistrates' divisions. I take it that that does not necessarily involve a reduction in the number of courts. Would that be merely an administrative measure? Perhaps the noble and learned Lord the Lord Chancellor will deal with that. I did not quite follow—it is my own fault—the significance of the nine magistrates' districts. I take it that there is no intention of reducing the number of magistrates' courts, and that this would be a purely administrative point and a simplification.
Then, again, my noble friend Lord Morrison of Lambeth dealt with the question of the appointment of the chairmen of juvenile courts in future by the Lord Chancellor. Again I feel that there is a lot to be said for leaving this to the Home Office. I am not going to repeat his argument, because I thought that he put the case most forcefully and convincingly. But there is this further point. At one time I was chairman of an approved school, and there used to be sent to that school by the magistrates' courts children who had not necessarily committed any offence but were simply in need of care and protection, children who had been neglected. I always thought that it was rather anomalous that they should go to an approved

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school at all; but they did go, and they were sent there by the magistrates. I thought that was entirely a civil function and much more appropriate for the Home Office than for the judicial authorities. It seemed to me that that would be an additional reason for leaving the appointment of the chairmen of juvenile courts to the Home Office rather than transferring that function to the Lord Chancellor. But I would not myself necessarily describe it as "empire-building". It is an open question, but I think it is worth while threshing out in Committee, and perhaps we can all of us preserve an open mind on the subject.
The noble and learned Lord the Lord Chancellor asked for the views of the House about the preservation of the name "Middlesex". For what my own opinion is worth, I think, on balance, that it would be a good thing to preserve. It is poor compensation for having been entirely wiped out as a county council, but at least we are preserving a good many of the well-known names of local authorities which are being absorbed or merged. I see no reason why we should not allow the name of Middlesex to continue. It has an important history among the various county councils that are either being altogether taken over or being cut into pieces. Middlesex has a great history running over hundreds of years, and I think the name should be preserved.
Then the noble and learned Lord sought the views of the House on what should take the place of the standing joint committee. He put forward four possibilities and as I understood rejected them all. I do not know whether we are asked to decide which of the four he has rejected is the least objectionable, but the simple solution is that the authority responsible for finding the money—that is, the county council—is the most appropriate authority to succeed the standing joint committee. I did not follow what were the objections to making the county council responsible. If they are to be responsible for finding the money, and if there are such serious objections to the other alternatives, I should have thought that the county council was possibly the least objectionable.
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Finally, I should like to take up the point made by my noble friend Lord Champion, on subsistence and loss of earnings. I think that after many years we have now, at last, come round to the view that members of the local authorities are entitled to be paid for loss of earnings. I am not sure that, even now, we have found quite the right solution. "Loss of earnings" is a most elastic term, and one that may lead to difficulties and anomalies. But I believe that the principle is right, and I feel that my noble friend Lord Champion made a most convincing case for paying something in regard to loss of earnings. It seems to me that we can profit from the experience we have already had as regards payments to members of local authorities, and perhaps we might do something similar to what is done in this House—that is, to pay a sum by way of expenses. That would cover the kind of case that the noble Lord, Lord Champion, had in mind.
I should not like it to go out that there is a tendency on the part of solicitors and counsel in legal aid cases to spin out those cases. I think my noble friend is completely mistaken in that. I cannot conceive of any solicitor or counsel, for the remuneration which is offered in legal aid cases, thinking it worth while to spin out a case. I would not deny that sometimes they may speak at greater length than is necessary, but that is not confined to the courts. One has only to listen here sometimes—possibly in my own case now—to find that speeches are much longer than is warranted by the occasion. That is due to a variety of causes, and not because of the remuneration involved. So I hope that my noble friend will acquit my profession of being concerned to work on a time basis and of believing that they will be better remunerated because they talk longer. But on his main point—that is to say, remuneration for loss of earnings—I am entirely in agreement. The points that have been made can all be dealt with in Committee—though I am not sure whether or not the point about loss of earnings would come within the scope of the Bill. However, apart from that matter, all other matters can be dealt with in Committee. I hope we shall have a useful Committee stage of this Bill, and that the mind of

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the noble and learned Lord the Lord Chancellor is not closed to the various points that have been raised in the course of this debate.
4.12 p.m.
THE LORD CHANCELLOR: My Lords, it has indeed been an interesting debate, and I am grateful to your Lordships for the way in which you have received this measure. The fact that you have confined observations to raising points on the Bill and not to condemnation of the Bill hook, line and sinker, shows that, even though it has not received the entirely unmixed reception received by the Bill that constituted the Central Criminal Court, it is true to say that it has received a good welcome from your Lordships.
I should like to deal as shortly as I can—because I do not want to be accused by the noble Lord, Lord Champion, of speaking too long—with the points that have been touched on in the course of this debate, while I recognise that it will be open to raise some of them in the further stages of the Bill. The noble Lord, Lord Morrison of Lambeth, raised, as did the noble Lord, Lord Silkin, the question of the financing and administration of the Central Criminal Court. Lord Morrison of Lambeth said that seven-eighths of the cost in regard to court officials and office expenses were being paid by the London County Council and would be paid by their successors, the Greater London Council. In truth I am told that of the running costs, taking into account the salaries of the Judges, the Greater London Council will pay considerably less than one-quarter of the total in the case of the Central Criminal Court and will pay none of the capital costs of the buildings. As I told your Lordships, the capital cost of the building now being undertaken exceeds £4 million. In those circumstances I thought it right to pay tribute to the Corporation of the City of London in shouldering this very considerable burden, which relieves pro tanto the ratepayers in the Greater London area.
The noble Lord, Lord Morrison of Lambeth, then raised the question whether the Chairman and Deputy Chairman of the Greater London Council should not have their names included among the names of the Judges of the
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Central Criminal Court, in paragraph 2 of Schedule I. It is true that the Lord Mayor never sits judicially in the Old Bailey, nor does any Alderman. It is in one sense an anomaly that their names should remain, but it is an anomaly that has existed for a very long time indeed, and the retention of their names there does not, so far as I can see, injure anyone, but merely preserves a long and well-established tradition. I myself would not support the idea that one should add to paragraph 2 the names of other individuals, no matter how distinguished they may be, if, when adding them, you know perfectly well they would not be required, and indeed would not be wanted, to discharge any judicial duties.
At the same time the point made by the noble Lord—and it is a point I should like to consider—was not so much that others should be appointed as nominal Judges who would never be expected to judge, but that, in view of their contribution of less than one-quarter of the total annual cost, the Greater London Council should have some say in the administration of the Central Criminal Court. I will certainly give further consideration to that matter. I think there is no difficulty at the present time between the London County Council and the Corporation of the City of London with regard to the administration of the Central Criminal Court. That is a very different point from adding further names to the list of those who are ex officio Judges.
The noble Lord, Lord Morrison of Lambeth, then referred to juvenile courts, as did the noble Lords, Lord Ogmore and Lord Silkin. I should like to make the position clear, because I feel I must have failed to do so. The Home Office has no say at all in the choice of juvenile court magistrates throughout any part of the country, except in what will be Inner London. In other parts of the country the magistrates themselves select who will be the juvenile court chairman and elect him. The time may come when that will take place in Inner London: when one has lay magistrates in London discharging the same duties as magistrates outside, it will be hard to deny that they should have the right themselves to choose who should sit on the juvenile court panel. What we are dealing with here is a

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limited matter and, I would suggest, a real anomaly. In fact I rather resent Lord Morrison of Lambeth (I am sorry he is not here at the moment, but I understand he cannot be) saying that my office likes to take all it can from the Home Office. There is really no substance in that at all. The amount of times my office has been requested to take over duties and has had to say "No" would perhaps astonish him.
Surely the broad line should be that the Home Office should be concerned with police matters, penal treatment and aftercare, and with juveniles, I quite agree, but that the Home Office should not have responsibility for deciding who should try juvenile cases. In this connection I would draw your Lordships' attention to the recent report of the Estimates Committee, which received some publicity in the Press. One of their recommendations was that
"The Home Office and the Treasury, in consultation with the Lord Chancellor's Office, should take immediate steps to reorganise the present division of responsibilities between the three Departments concerned with the administration of the criminal law, with a view to rationalising its administration and rendering more effective the methods of bringing the criminal law up to date."
The Home Office reply said, among other things, this:
"There is close co-operation between the Home Office and the Lord Chancellor's Department on all matters of common concern."
It went on to say:
"It is also proposed to take the opportunity in the Administration of Justice Bill to effect some adjustments between the responsibilities of the Secretary of State and of the Lord Chancellor."
And this is one of them.
The noble Lord, Lord Ogmore, if I may correct him, was wrong in saying that it is quicker for the Home Office to appoint a juvenile court magistrate. It is not. The Home Secretary cannot appoint a single magistrate. I have to appoint them, and then, I having appointed them, the Home Secretary under the present system selects who he thinks should adjudicate on juvenile court cases in London. They all have to be appointed by me, and if the Home Secretary wanted to appoint somebody I thought unsuitable I could refuse to appoint him a magistrate and the Home Secretary could do nothing about it. The broad line should be, and ought to be maintained, that the Home Office,
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while dealing with after-care, child care, and so on, ought to keep separate from the function of appointing those who should try cases and determine guilt or innocence. It is not a matter of very great substance, but there is an unnecessary overlap there, and I myself should have thought that it would be an improvement to eliminate that limited anomaly.
Reference was made to the name of Middlesex. Everyone has thought that it would be a good thing to retain that name for the North-West London area, and I am certainly not unsympathetic to that; I need not take up any more time on that point. The noble Lord, Lord Ogmore, raised the position of solicitors as deputy chairmen of quarter sessions. My Lords, I will always do my best, not so much to have regard to whether a man is a solicitor or a barrister, but to have regard to the individual capacity of the man concerned, and to select and appoint the best people for all these various offices. Lord Ogmore then raised a question about the metropolitan stipendiary magistrates sitting alone and trying domestic cases. If the noble Lord will look at subsection (1) of Clause 11, he will see that it provides that the metropolitan magistrates should sit alone if it is not practicable for a court with lay justices to be composed. This means that, except in cases of real difficulty, where a case might be held up because of the difficulty in finding a lay justice (perhaps someone has gone ill, or something else like that), the normal rule will be for a metropolitan magistrate to sit with a lay justice. I am dealing with the points as quickly as I can.
The noble Lord, Lord Ogmore, drew attention to the constitution of the magistrates' committee and we had a little argument about that. I do not think anyone can possibly object to the custos rotulorum, the chairman of the quarter sessions and the Chief Metropolitan Magistrate being, by virtue of their office, members of the committee of magistrates. That must obviously be right. But we have taken the trouble to see that the rest of the committee is evenly divided between lay magistrates and stipendiaries. I feel that one ought not to pay too much attention to the exact balance, because, when lay magistrates and stipendiaries are on this committee working together, I am sure they will forget

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entirely whether they are lay or stipendiary, and will work together for the common good.
The noble Lord, Lord Ogmore, made some observations about the Receiver for the Metropolitan Police. It is recommended by the Aarvold Committee that he should take on the functions of looking after the magistrates' courts in the London area, and the noble Lord, Lord Ogmore, was wrong in attributing to the Lord Chancellor's Office any responsibility for magistrates' courts: that is one thing for which the Lord Chancellor is not responsible. That responsibility rests variously between the Home Office and the London County Council. So far as the lay magistrates of Westminster are concerned, I can tell the noble Lord now (perhaps he was not aware of it) that the body responsible for providing appropriate accommodation for the Westminster magistrates is the London County Council.
LORD OGMORE: My Lords, all I can say is that they have been singularly lacking in providing the necessary accommodation. I never suggested that the Lord Chancellor's Department had now the duty: I was hoping that they would take it on.
THE LORD CHANCELLOR: My Lords, the noble Lord is a little behind the times. This matter was brought to my notice a short time ago; I made as many inquiries as I could into it, and I can give him an answer. The noble Lord mentioned the case of the court which he said was not used at all; I think he said that it had been used for storing traffic signs. I went into that, and the court is at Rochester Row. The position about that is that it is not being used for traffic signs at all; it is in use as offices. It is a court with which the Receiver for the Metropolitan Police is concerned. The Receiver looks after the courts for the metropolitan magistrates; the London County Council look after them for the lay justices. That is the system we are getting away from. But the position is this. Rochester Row is now office accommodation for the Metropolitan Police, and I am told that it would be an extremely expensive and lengthy matter to convert it back again. It was bombed during the war, and I understand that to convert it back into
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a court would take eighteen months, and that very extensive work would have to be done. My Lords, my particular Office is doing what it can in this regard, and we are in touch with the London County Council and the magistrates' courts' committee on behalf of the Westminster magistrates. I am sure the noble Lord will be glad to hear that.
I was very sorry to hear the noble Lord criticise the present method of appointment of magistrates. I take as much care as I can about that, and I take care to see that the advisory committees are fully representative of the political Parties and are really on top of their jobs. My Lords, it is not right to say that they are weighted in favour of the two main political Parties. I naturally want to know, if I can, the political outlook of a candidate, for this reason: that it is a bad thing, I think, to have, in any part of the country, a bench of which people can say, "What can you expect from that bench: it is entirely Socialist?"—or "It is entirely Tory," or "It is entirely Liberal." I do not regard the individual's political outlook as in any way a qualification or a disqualification, but over the whole area it is important to see that there is a properly balanced bench.
The noble Lord commented upon the fact that he did not know who were the members of the advisory committees. My Lords, I made some observations about that fairly recently. One of the difficulties is that, if their identities are disclosed, they are subjected to an intolerable amount of lobbying. I do not think there is any difficulty. I am only too glad, as is my Office, to receive from noble Lords any names of those who they think would be suitable. But this would take time—and it is right that it should—because I would pass those names on to the advisory committees and get their views on those particular individuals. Then, in the light of their views and recommendations, and dependent, too, on there being a vacancy on that particular bench, I would consider what decision I should make. I hope that that explanation has comforted the noble Lord, Lord Ogmore. I could not, offhand, remember how many professing members of his Party have been appointed magistrates in the last few months, but it is not an inconsiderable number.

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The noble Lord, Lord Champion, raised a question—he was the only noble Lord who did so—with regard to Clause 26. I did not regard Clause 26 as a minor matter. I did not say very much about it, but I thought that we should probably have some discussion upon it in Committee. I think it is very important to provide for the protection of a magistrate. We had the case, not long ago, of one who really thought he was properly discharging his duties and yet made a bad error, and might have been very hard hit financially in consequence.
The noble Lord criticised the use of the magistrates courts' committee as an adjudicating body, in the first place. But, my Lords, I cannot think of a more suitable body to do that in the first place, because two conditions must be satisfied. A decision must be given swiftly, if the magistrate is going to be defended and so on; secondly, the decision must be made by some body, some people, acquainted with the character of the duties of justices and their clerks, and it will be for them to say whether, in all the circumstances, the magistrate acted reasonably and in good faith. If the local authority, on whom the burden of the expense will fall, think that they have acted wrongly, or if the magistrate thinks the claim has been wrongly rejected, there is—as the noble Lord pointed out—provision for appeal. My Lords, I believe that it will be hard to improve on that system, though I shall naturally be glad to consider any suggestions that the noble Lord may like to make.
That brings me to the question touched on by the noble Lord, Lord Silkin, but with which the noble Lord, Lord Champion, dealt at some length—namely, the question of making provision for the payment of compensation to lay justices for loss of earnings. It is a step forward, about which not very much has been said, that this Bill contains provision for making payment of subsistence allowances. Although none of your Lordships, except the noble Lord, Lord Ogmore, expressed a welcome for this change, I have no doubt that the noble Lord, Lord Champion, also welcomes that particular part of the Bill.
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This question of loss of earnings is indeed a difficult one. It was considered by the Royal Commission in 1948, and your Lordships may know that they recommended against the payment of loss-of-earnings allowances on the ground that this would diminish the prestige of the Bench and would lessen their reputation for integrity and impartiality. Now those views may be right or wrong, but they are certainly views which deserve very serious consideration. Furthermore, the majority of the members of the Magistrates' Association and of the magistrates' courts committees, which are members of the Central Council of Magistrates' Courts Committees, when they were consulted in 1960, three years ago, were opposed to the payment of loss-of-earnings allowances.
I do not myself think that one really can draw much of a comparison between the duties of a local councillor when acting as a councillor and the duties of a lay magistrate acting in the administration of justice. I myself am hesitant indeed about the question whether it would be right to go further than we now propose in this Bill. I appreciate the arguments put forward by the noble Lord, Lord Champion. At the same time, it is right to say that the lack of payment of loss-of-earnings allowances is certainly not, so far as I am aware, restricting the recruitment of suitable persons to be justices of the peace; that is to say, suitable persons who are not of any particular wealth, working men, and so forth. No real difficulty is being found, so far as I am aware, in getting suitable candidates for the Bench drawn from those walks of society.
I am very glad indeed that the proposal, which I think is a novel one, for the employment of county court judges in the way proposed in this Bill has received the reception it has. I will not say any more about that. With regard to the nine petty sessional divisions, to which the noble Lord, Lord Silkin, referred, there is certainly no desire to reduce the number of courts within our sessional divisions for administrative purposes, and we are seeking, indeed, to get more courts as speedily as possible—and the sooner we can remove the Westminster justices from Caxton Hall, the more likely I am

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to have peace from the noble Lord, Lord Ogmore, and other members of that Bench.
The noble Lord, Lord Silkin, was the only noble Lord who referred to the position of the standing joint committees. Here, again, I should just like to say this. As I pointed out, if the Police Bill is enacted, the standing joint committees which now exist will be left with the whole responsibility for quarter sessions accommodation. Throughout the rest of the country, if nothing is done, they will continue to exist. The choice really is as to whether one brings London, the five Commission areas, into line with the rest of the country and appoints standing joint committees for this solitary purpose, or whether one abolishes standing joint committees throughout the whole of the country.
We could perhaps consider that more in Committee, and I should indeed be grateful to know the views of bodies like the Magistrates' Association. It is not of very great moment; the only point is that, if we do abolish standing joint committees, someone will have to be made responsible for looking after quarter sessions accommodation. The noble Lord, Lord Silkin, said that he thought that the county councils would be the right people to do it. It may well be so, but I am not altogether sure that all standing joint committees would welcome that. In any event, I hope that we shall be in a better position to reach a decision on that when the Committee stage comes on.
My Lords, the only other point to which I think reference was made was the wholly unwarranted attack upon the legal profession of spinning out cases in the magistrates' courts. I will not say any more about that in case there will be a tu quoque. But I would say just this: that sometimes I think it is true that there is undue prolixity. The noble Lord, Lord Silkin, said it is not confined to magistrates' courts; but, after all, the courts ought to be able to do something about it themselves. In case I run any risk in that regard, I will conclude my reply to this debate by saying I am grateful to your Lordships for the reception which your Lordships have given to this measure.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

NIGERIA (REPUBLIC) BILL
Brought from the Commons; read 1a, and to be printed.

KENYA INDEPENDENCE BILL
4.35 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Duke of Devonshire.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD STRANG in the Chair.]
Clause 1:
Provision for fully responsible status of Kenya
1.
(3) In this Act "Kenya" includes the territories comprised immediately before the appointed day in the Kenya Protectorate.
THE EARL OF LYTTON THE EARL OF LYTTON moved to add to subsection (3): "except the North-East Region." The noble Earl said: The significance of my Amendment, which is to add four words at the end of the first page, is to exclude from the area transferred to an independent Kenya Government the area wherein the inhabitants have shown that they are unanimously desirous of joining the Somali Republic. My reasons for persisting in this matter are that I feel we are doing something unjust, and on that point I have had a full hearing. I do not wish to repeat anything I said last Thursday. But I also feel that we are doing something highly imprudent which is letting loose the dogs of war, starting with terrorism, going on to the unexpected war without "the bomb," and at least extending the sphere of Soviet influence from Cairo to the Lorien swamp.
I want, then, as the first part of my attempt to persuade your Lordships to have second thoughts at the last minute, to review briefly, in diary form, the events that have driven the Somalia Government into the camp of the Soviet Union. I start in 1941, when the Emperor of Ethiopia distributed his claim to the ownership of the whole of the former Italian Somaliland and Eritrea by

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pamphlet from the air, dropped by the R.A.F. My authority is Sylvia Pankhurst—a recognised authority on these matters.
Then, on April 29, 1946, Mr. Bevin addressed his letter to various Powers recommending, as we know, the unification of all the Somalis. That was 41 years after Sir Charles Eliot, one of our greatest administrators, had suggested precisely the same thing. It is now about 60 years since Sir Charles Eliot, and they are still at it. The next date is June 4, 1946, when Mr. Bevin, our Foreign Secretary, repeated what he had recommended to the Powers. He gave a short historical review, quite contrary to that distributed by the Emperor, and a correct one. It is in Hansard of that date. On June 16, two days afterwards, the Emperor of Ethiopia gave an interview to Reuters protesting against the recommendations of Mr. Bevin on the grounds of Ethiopian strategical requirements.
On October 20, 1946, the Emperor addressed a lengthy memorandum to the United Nations embodying his version of history, and claimed the whole of the area I have already mentioned. This claim was repeated in almost, but not quite, the same words when I was in Delhi in April of this year, in a letter from the Ethiopian Embassy to the Statesman. I think the date was April 19, but I am not quite sure since my cutting has disappeared. In November, 1949, at the United Nations, the Pakistan delegate, Sir Safrullah Kahn, not only recommended complete Somali unity but predicted that they would unfailingly claim it. In 1950, the United Nations decided to establish a trust territory out of one of the dismembered portions of the Somali nation, the former Italian territory, and to appoint Italy as the trustee. On September 20 of that year the Emperor of Ethiopia telegraphed to the United Nations protesting against the selection of Italy and claiming, on the grounds of self-determination, that he should be the trustee.
On August 31, 1956, The Times published an important speech by the Emperor of Ethiopia—I am not sure about the date of the speech; I have checked The Times of August 31, 1956—in which he declared, in the Ogaden
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territory, that he was in favour of Greater Somalia and added:
"Thereby our country will be stronger and larger."
and he concluded:
"We do not claim what is not ours; but we will not give up what is our own."
What he meant, has been made clear by a Mrs. Saunders, who had the Emperor's ear and who wrote a book: he intended to assimilate the whole of the Greater Somalia on what he called the Eritrean solution. We have had an illustration of what he means by "the Eritrean solution" because he has swallowed it up; it is the same idea of assimilation as that of the python.
In 1958, a friend of mine, eminent in the Colonial Service of British Somaliland, was greatly concerned at the extreme slowness and at the way in which the British Government were dragging their feet and declining to say whether they would allow British Somaliland to join the former Italian Somaliland in a joint independent territory. Therefore, in order to discover what the obstacles were, he made approaches to the Foreign Office and to the American Embassy. At the Foreign Office they said: "The joining of British Somaliland to Italian Somaliland in one territory is regarded as a hostile act by the Emperor of Ethiopia. That is the obstacle." When he consulted his opposite number, who was also his friend, a man of substance in the American Embassy in London, the American replied to him: "In the event of conflict between your Somalis, and their undoubted rights on moral grounds, and the claim of Ethiopia, my Government will on international grounds always support Ethiopia." That was said, I presume, before President Kennedy.
On April 11, 1960, Mr. Macmillan made a statement in another place which is generally regarded as a pledge to the Emperor of Ethiopia. The general effect of that statement (which appeared in Hansard of that day and which was made in answer to a question by a Back-Bench member of his own Party) was to subsititute for the modern accepted principle of self-determination territorial integrity in three areas ripe for self-determination, each of them concerned with the Somali nation. That was one aspect of what he said. The second

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effect of what he said was to renounce the British Government's undoubted right at that time to grant permission to the Somali section of Kenya to secede, if it so wished, to Somalia. That was a very important occasion and a very important statement, which I took, when I first read it, as a casual statement, but which I am led to believe by Her Majesty's Ministers was in fact a pledge.
On July 1, 1960, Somalia became independent, with two States, British Somaliland having joined in at the last minute. The Somalis, with their trusted British colonial servants, who, indeed, are the salt of the earth, had managed to overcome the numerous objections, and the two parts came together. In November, 1961, Mr. Kenyatta, not yet, I think, having a Government and only recently out of detention, was the guest of the Emperor of Ethiopia in Addis Ababa. There he fixed up with the Emperor another exchange of pledges to ratify the boundary and guarantee the integrity of the existing frontiers of Kenya. Although he had no status at that time with us, he came away with a publicly-handed-over cheque for flood relief victims in Kenya. He was publicly treated by the Emperor as Her Majesty's representative; and this he was not.
April 15, 1962, was the date of the publication of a celebrated Report, the Kenya Constitutional Conference Report, with the phrase "promised decision on the findings". In July, Mr. Kenyatta was entertained as a hero in Mogadishu by the Somali Government. Here I should like to say that, from what I know of the Somali Government, Mr. Kenyatta's connection with Mau Mau is no sort of obstacle to honour, respect and popularity in the Republic of Somalia. But he arrived too late. He had already been pledged to the Emperor. Moreover, when the pledge was given to the Emperor, he had never been to the N.F.D., if I can rely on what the Provincial Commissioner at Isiolo said at the time. When I was in Isiolo, Mr. Kenyatta was in Addis Ababa. Nor had any other non-N.F.D. politician been there, with the exception of one, who flew there during the rains and was unable to see anybody or to be seen by anyone. It seems, from remarks which Mr. Kenyatta made immediately afterwards, that he quite misconceived the
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nature of the N.F.D. at the time when he exchanged what, to him, was the most advantageous and beneficial pledge for Kenya to ratify the boundary, which I believe was hitherto unratified. I would have brought this out before, because I think it has a bearing on the situation, but I felt that your Lordships would not believe me. So, about a year ago, I tried to get a photostatic copy of this Agreement, but I was unsuccessful. Fortunately, however, Mr. Kenyatta has blurted it out himself.
In 1962, at some time or another, the Emperor, having got worried about the reactions to this N.F.D. Commission, reminded Mr. Macmillan on October 10, 1962, of his pledge. Post hoc, and I suggest, propter hoc, a private memorandum was sent by the Colonial Office to the members of the Commission, which first came to my notice when the Commission's Report was published, when it referred to it rather obscurely, and it was later again brought to my notice by one of Her Majesty's Ministers. The effect of that memorandum was to approve talks on the problems of secession, but to make it clear that Her Majesty's Government were debarred from making a decision in favour of secession before independence—which means, of course, not at all. On August 18, 1963, Her Majesty's Government confirmed, in the conversations in Rome, what we all knew all along, though Her Majesty's Government had never said so—that there would be no permission to secede before independence.
I have omitted to say why my friend went to the American Embassy. It is because the Americans have a base somewhere in Eritrea, or in Eastern Abyssinia. I do not know whether it is an "ear", a "voice", or a trigger, but it is something. Someone told me once what it was and I have forgotten, and it does not matter; but my friend went to discover whether the Americans were an impediment to justice to the Somalis, and I have given you the answer.
That is the end of my first part. May I sum up the answers which the Somalis have received?—from noble Lords on the Government side, "Too difficult"; from the Opposition side "Too dangerous"; from the Liberal Benches,

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"Too late", a statement which is now echoed, I believe, by almost everybody; from Mr. Macmillan, "I cannot; I am pledged"; from the Emperor, "Sentimental rubbish"—I presume that the official Press, the Ethiopian Herald, is the expression of the Emperor's views, and that is what they said about my remarks when I first addressed your Lordships' House in 1962. Mr. Kenyatta, for whom I have great sympathy in this matter, says, "I cannot; I am pledged. Not an inch". From the United States they got: "The Emperor is always right"; from Mr. Khrushchev, "I will help"; from Mr. Mao, "I will help"; from British justice, "I am deaf"; from the United Nations, "We approve the swallowing of Eritrea". I think that this unfortunate little country, so full of determination to be free once more, could do nothing else but appeal to the tiger, as it has done. By approving, by saying, "Content" to my Amendment, your Lordships could check the dirty work that has been going on.
I should like here to say that among those prominent in giving adverse answers on the Somalis I have mentioned Mr. Duncan Sandys, and in previous debates perhaps I have had occasion to say things which might be deemed harsh. I should be glad if the noble Duke would convey to his colleagues, the noble Marquess, Lord Lansdowne, and Mr. Duncan Sandys, that the responsibility rests far above them, and at the time I was not aware how far. If I have said anything objectionable, I should like, though one cannot withdraw what the moving finger has written, at least to say that I am sorry. In that connection, I would say that, but for the help of former colonial servants, including three Governors, I should have had great difficulty in compiling for your Lordships this sorry tale.
It seems to me that we are quite likely at any moment to have a situation where the N.F.D. is conceded to the Somalis in return for something, that something probably taking one of two forms: either the Eritrean solution, which I have explained sufficiently, or a territorial guarantee of Ogaden, which is by far the most important part of what remains outside the control of the Somali nation.
In order to suggest a parallel to your Lordships and to bring into clear focus the problem of the Ogaden, I would go
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back a little and compare the present situation of the Ogaden with that of Mussolini thirty years ago, when we quite needlessly drifted into war. Your Lordships will forgive me for saying some things that some noble Lords may know, but I find that many people like to be reminded. Ethiopia means three things in history, and there were two Ethiopian Empires. It is simpler to talk about the Empire of Menelek I and Menelek II, or about Abyssinia and her Empire. Menelek I founded his Empire possibly thirty centuries ago. It was founded on one of the most glamorous episodes of universal history. This Empire was a small one of three or four tiny kingdoms in the inland highlands of Abyssinia and, with all its stagnant, suspicious, heroic, fascinating history, I have no wish to suggest that I should want anything other than its continued survival. But when Great Britain relieved Abyssinia of the fear of her two Northern neighbours, Egypt and the Sudan, at the end of the 19th century, and with all Europe seeking the favours of an Emperor by providing him with arms, he collected for himself an Empire, having seen how his European contemporaries were doing precisely the same thing. It is that Empire which I want to talk about.
In connection with Ethiopia, there is one episode to which one must refer; that is, the 16th century invasion of Abyssinia by Muslim forces, which derived impetus from the fall of Constantinople in 1453. It was perhaps a misfortune for the Somalis to-day that the leader Ahamed Gran is alleged to have been a Somali, because you can read in the correspondence of the Emperors that every Emperor grinds his teeth at the memory of Ahamed Gran. And it gives a false picture, because the Somalis have no natural desire for any portions of Ethiopia; nor have the Ethiopians any desire for Somalia. It is a case of desert dwellers with camels, nomads on the low level, Somalis, and at the top, Abyssinian agriculturists. There is no natural hostility; and, so far as I can see, there has been relative stability as between these two for several centuries since the Portuguese shot Ahamed Gran.
The disturbances in that area were due to European rivalries as much as anything else, and they were settled by a Treaty between Britain, Italy and

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France in 1906. They agreed to sustain the integrity of Ethiopia. Ethiopia was then four times the size it had been ten years before, and that is its present position. The decision was not taken to acquire Ethiopia in the Treaty. There is nothing to indicate that Ethiopia's interests are of the smallest interest to the three contracting parties. It was their own interests. One of the unfortunate things was that the acquired Empire of Ethiopia produced an immensely long and wide boundary of territory, several times the size of England, incompetently managed, with either no administration or a very indifferent or intermittent administration. But it was our policy to maintain it.
In 1934 in the incident over the Ogaden, which compares with the present incident, Mussolini invoked Clause 4 of that Treaty in order to bring to our notice that he was contemplating the occupation of a part or of the whole of Ethiopia. He inquired whether, under that clause, the interests which had to be considered would in any way be impaired if he did occupy Ethiopia. In our characteristic way, we pretended that we did not know, and set up quite a high-powered Commission, under Sir John Maffey, which duly reported.
Mussolini, of course, knew all about it, and he obtained a copy by photographing it in the Rome Embassy, a fact which is recorded in Lord Templewood's memoirs. This is the copy which I am using, because, although I was offered a copy by the Colonial Office to read, they said: "We cannot let you quote from it." It has the great drawback of being in Italian, and I am not a speaker of Italian, although I can browse through the newspapers. But in order to make sure that certain small passages are correct, and to give your Lordships an opportunity of correcting them, I want to point out what the Commission set out to do with regard to the Ogaden, and what they reported about the integrity of Ethiopia and the condition of the Ogaden; because after that Commission reported, Mussolini occupied the Ogaden, we occupied the Ogaden, and it has only gone back to the Ethiopians sixteen years from now.
I hope that I may succeed in telling your Lordships what is in the passage
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which I want to quote, and I hope that I may pronounce the Italian reasonably correctly. It starts in Part III. This Part was dedicated to examining, and then it quotes from the Report:
"…in quale misura gli interessi britannici sarebbero pregiudicati: a) da una occupazione italiana dell'Ogaden fino alle colline di Harrar o con Harrar inclusa; b) da una conquista di tutta l'Etiopia de parte dell'Italia."
SEVERAL NOBLE LORDS: Order, Order!
EARL ST. ALDWYN: Speak in English.
THE EARL OF LYTTON: May I translate?
LORD FRASER OF LONSDALE: Yes, please.
THE EARL OF LYTTON: I am really a novice in this House, and I do not quite know what the chorus was, whether it was to stop me or to encourage me to go on.
EARL ST. ALDWYN: Perhaps I can enlighten the noble Lord. It is not customary to use a language in the House other than English except for short quotations.
LORD SALTOUN: Surely it is not out of order for a noble Lord to quote a foreign language in this House. I remember when the late Duke of Devonshire, in a debate on water, quoted from Herodotus in Greek because he felt a little embarrassed at translating it into English. I remember the difficulty I had in trying to get it properly recorded in Hansard, but your Lordships will find it there.
THE MINISTER OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (THE DUKE OF DEVONSHIRE): I suggest to the noble Lord that the sins of the father should not be visited on the son.
LORD SALTOUN: The noble Duke is perfectly correct.
THE EARL OF LYTTON: I did not quite hear what was said.
SEVERAL NOBLE LORDS: Translate.
THE EARL OF LYTTON: If I may translate that first paragraph, the terms of reference of this Commission were to consider whether British interests would be prejudiced, first, by occupation on

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the part of Italy of the Ogaden up to a certain region, or a little more, or by a conquest of the entire area of Ethiopia. The conclusion from this is, "There do not exist any vital British interests in Ethiopia and her neighbouring territories of a kind to make it necessary for His Majesty's Government to resist an Italian conquest of Ethiopia. From every point of view the Italian control of Ethiopia would be for us advantageous."
In connection with the Ogaden it says, "There are also tribes on the boundaries as, for example, that of the Ogaden, over which the Ethiopian control is only intermittent and uncertain. These regions are a sort of Alsace and the source of continual embarrassment for neighbouring countries. Raids on stock do not begin to diminish, and it is always difficult to obtain the punishment of the guilty, who are often guilty also of killing people. Every incident which takes place gives rise to long procedures reaching Addis Ababa, and it is not uncommon for governors to disobey the orders from higher up. Criminals continue to find a refuge in Ethiopian territory, and there is the constant risk that conditions of disorganisation on the frontier may fall back again into that state of complete confusion which succeeded that period after the war. "It was then that preserving the integrity of Ethiopia ceased to be a vital British interest. Self-determination has now become a vital interest for everybody, at least in portions of Ethiopia, the Ogaden in particular, and that is the reason for the Emperor's intervention—to keep the Ogaden out of Somali hands. It is wholly Somali. It has become desirable to apply forthwith the principles of self-determination because the Somalis are going to be united; nothing will stop them, even if it takes another forty years.
In that connection, I want to conclude my third part, which will take not very long, with an account of the Somali character, and the way in which I can foresee that terrorism will spread. I take an account from what your Lordships' Librarian told me is the most authentic book by a man called Jardine, with a preface by Lord Milner:
"Bloodthirsty tyrant and cut throat; slaver of innocent women and children, cattle thief, profligate and libertine."
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On the same page and the following page:
"Great achievements. Fought the British Empire for 21 years. Five campaigns with massive orders of battle, field hospitals and heaven knows what. Venerated by his followers even when his fortunes were at their lowest. His name invoked in the heat of battle and at the cold hour of execution. Scoffed at terms offered no matter how favourable. Extraordinary tenacity. Did not know when he was beaten. The cost in premature deaths to his unfortunate people, probably 200,000. When old, he sought no comfort or repose, but tried once more to recover all that he had lost. What did he lose? What had he lost? Only his liberty, the liberty of his people. This is Mohamed Abdilie Hasan the Mad Mullah."
When I met his son the other day at a cocktail party given in my honour, I had hoped that I might be able to invite him and introduce him to Her Majesty so that we could laugh about this period. But, alas! We are to go over it all again.
This is the way I foresee the terrorism developing. First, it must be remembered that the part which is being grievously injured is not the Somali Republic; it is Her Majesty's subjects, formerly loyal, in the N.F.D. Whether or not the Somali Republic agrees to anything, it is they who have been deprived of their uhuru and it is there that the resistance will start. They have the following characteristics. First, the nomads require very little to eat; can even live entirely on milk. Secondly, the young men are capable of doing, two nights in succession, 60 miles each night with a light load. Thirdly, they are capable of learning to use a precision weapon—officers of the Rifle Brigade have taught them. The Kikuyu would blame his rifle if he did not shoot well, but a Somali will learn to use precision weapons. Lastly, he will be assigned with others to a particular target: "Get so and so". This is likely to spread, and every incident will be attributed to the Somali Republic. They will be asked to catch the offenders, when they can lodge anywhere in Southern Abyssinia, anywhere across the Abyssinian boundary with Somali, which is 1,000 miles; 400 miles of Abyssinian frontier with Kenya; 350 miles between Kenya and Somalia a depopulated desert. If they are unhappy there they can go to the Sudan or elsewhere in

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Kenya; and this will spread to three-quarters of Ethiopia—that is the colonial part—and to four-fifths of Kenya which is the non-Negro part. That is where I think it is likely to spread.
There will be these dreadful reprisals. I myself am an honorary citizen of the village of Kalávryta in Greece. I was elected by the population consisting of some 700 widows. All their men folk had been killed by machine guns in cold blood one morning because of a reprisal. This is the sort of thing that is going to happen. Who will benefit? These Somalis are going to have their freedom, and if it requires the help of the Soviet Union they will perforce go to it. That is my reason for asking your Lordships to pass this Amendment now—to exclude from self-governing Kenya the part which is entitled to a separate self-government. I beg to move.
Amendment moved—
Page 1, line 16, at end insert ("except the North-east Region").—(The Earl of Lytton.)
5.18 p.m.
LORD HAWKE: I believe that the noble Earl has been a district commissioner in this part of the world, and is well known to many of us as an extremely charming author on that part of the world, and on many others. He has sought to raise the general question of the future of the Somali race on this smaller matter of the Kenya Bill. I have long been anxious and aware that this particular problem was an extremely grave one, and might well be a source of a local, and possibly spreading, war before very long. British Somaliland was an extremely poor country when it was a British Colony, and when we took over Somalia from the Italians it was completely and utterly unviable. The Italians had started some irrigated agriculture on the river there (I think it is called the Juba), and they had banana plantations, the produce of which the unfortunate Italian populace were made to buy at very high prices. They also attempted to establish a salt industry somewhere up by Cape Guardafui. At any rate, there was a colony there heavily subsidised by the Italians.
For the rest, both British Somaliland and Italian Somalia existed by nomadic grazing; and by heavily over-grazing.
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The British Military Government sent many reports home about this overgrazing and the steps they suggested to try to stop it, but there was a war on and nothing could be done. The noble Lord, Lord Rennell, if I remember aright, was Chief Officer of the British Military Government at the time. The people are nomads entirely dependent on their seasonal grazing in what is within Ethiopian boundaries in the Ogaden. When the British Military Government was in charge, British Military Government police used to accompany the tribesmen across the border into Ogaden for their grazing—I think their winter grazing—and these police kept the peace within the tribes and also between the tribes and the Ethiopians. Now, of course, we have withdrawn, and there the Muslim faces the Christian, the Muslim Somali tribesman the Ethiopian border guard; the Muslim defending his immemorial grazing rights in what is acknowledged to be a foreign territory, yet a territory a long way from Addis Ababa. And who knows to what degree the writ of the Emperor runs over his own border guards? It is a very explosive situation indeed, with Egypt fishing in troubled waters and the Russians and Chinese seeking to take sides.
The United Nations was created to try to stop wars before they started, and I should have thought that this unquestionably was a case where the whole problem should be put to the United Nations to arbitrate and produce a solution for this border situation between the new Somali Republic and Ethiopia. And at the same time they could, of course, consider the question of this province of Kenya which the noble Earl seeks to exclude from independent Kenya. I do not believe that his solution, to exclude it from independent Kenya, is the right one. That would be, politically, quite impossible and wrong. But if the United Nations were to produce a pan-Somali solution in which some sacrifice was demanded of Kenya, then presumably it would be possible for independent Kenya to implement such a suggestion. I shall not vote for the noble Earl's Amendment, but I thought that I should like to say those few words, having read so many reports from the field on this particular problem during the war years.
5.23 p.m.
LORD FARINGDON: I should like to apologise to your Lordships' House for coming in late and joining in a debate of which I have heard only a small part. If I do so it is because I have some small experience and knowledge of the Somalis, and I feel very strongly that Her Majesty's Government would be well advised to accept this Amendment. In saying that, I recognise that the Amendment does not solve the problem. It leaves entirely open what would be the position after Kenyan independence of this particular area. But I have no doubt at all that Her Majesty's Government are doing a very considerable disservice to the new State of Kenya in throwing this problem of the Somalis into their laps at a time when they are establishing that independence and when stability is of the essence of their future prosperity.
I share the anxieties of the noble Earl who has moved this Amendment, and I believe that Her Majesty's Government would have done a much better job by the people of Kenya had they excluded this province until such time as agreement satisfactory to all parties could be reached. I hope that Her Majesty's Government will reconsider this matter.
LORD OGMORE: I rise because the noble Earl, Lord Lytton mentioned my name twice on the Second Reading of the Bill and, by implication, again to-day. It was, in fact, a private letter that I wrote to him. I make no particular complaint, but it is more usual, I think, to ask permission if one is going to quote from a private letter. That, however, is not the point, and, as I say, I do not object to it. But, unintentionally no doubt, the noble Earl has misquoted me. The reason I am against what is behind the Amendment is that it would, of course, be quite impossible to try to cut off this huge area of Kenya at this moment in time. To ask this House and Her Majesty's Government to leave out the North-East district of Kenya is to ask something that is quite unreasonable and quite impossible. In my view, the noble Duke and the Government are quite right in keeping the boundaries of Kenya as they are, and I cannot understand why the noble Lord, Lord Faringdon, should think that at this late stage we could do anything else.
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It is true that in this hot and arid region of the North-East tribesmen wander around the various areas and try to cross the frontiers. But that is not the point. The fact is that for many years past this whole area has been administered by the Government of Kenya; it has sent officers up there; it has had a Regional Commissioner for the area; and it has been administered as an integral part of the country. How can we at this moment, when granting independence, suddenly snatch it away and give it to some undisclosed or even disclosed authority? How on earth could that be done? It may be, as the noble Lord, Lord Hawke, says, that in the future the Kenya Government would be prepared to throw the whole thing into the melting pot and get the United Nations involved in it. I do not know, but I myself feel that it is highly unlikely they would do anything of the kind. It is not up to us. That is for the future. I support the Government, and I hope that the Committee will reject the Amendment.
THE EARL OF LISTOWEL: Perhaps, before the noble Duke replies, I may be permitted to say a very few words on the noble Earl's Amendment. The noble Earl asked us for second thoughts about the Somali problems, and I listened carefully to everything he said in his speech. I have listened carefully to all his speeches, both on the Second Reading of this Bill and on the debates on Kenya that we have had from time to time in this House, and I have not noticed that he has used any fresh arguments. All the arguments he used did credit to his very sincere championship in the cause of the Somalis, but I did not notice anything new in what he said, and for that reason I am afraid that I remain unmoved. The terms of his Amendment are that the whole of the North-Eastern Region of Kenya should be left out of Kenya when Kenya becomes independent. But, as the noble Earl would agree, this would include many tribes, and not only Somalis.
THE EARL OF LYTTON: May I offer what I believe is a correction? This is a very complicated problem: for on the same pages of the Kenya atlas you find different terms used. The present term for the Province just before independence was "Northern Province". It was divided into the N.F.D., about

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which we have all been talking, and other districts with which I need not bother. The N.F.D., although 86 per cent. of its people are believed to be Somali or pro-Somali, has indeed got portions which are homogeneous anti-secessionist and which could be retained in Kenya and have been retained in the Eastern Region. The Regional Boundaries Commission gave as one of their arguments for doing this that if, at a later date, it was decided to lop off the North-East Region it would cause no administrative confusion and would be quite simple—that is, apart, I believe, from some very small exceptions.
THE EARL OF LISTOWEL: The noble Earl is a great authority on this subject, but I should very much doubt if all the inhabitants of this region want to go to Somalia and be excluded from Kenya. I should have thought, even if his case had been accepted, that the wiser course would be to have a plebiscite to decide which people in that area wished to go to Somalia. But that is on the very narrow question of the Amendment, and I myself do not believe the noble Earl's reason for putting down this Amendment was the hope of getting it carried, but rather to have another opportunity to state his case for the Somalis. I agree with what the noble Duke said on Second Reading and with what the noble Lord, Lord Hawke, and the noble Lord, Lord Ogmore, have said, that in fact it would be a political impossibility to transfer this region to Somalia and to exclude it from Kenya at this stage. The Somali problem in relation to Kenya is no longer a problem for the British Government; it is an African problem and it is a problem for all the African Governments concerned, the African Governments with Somali minorities and of course Somalia itself.
The noble Lord, Lord Hawke, suggested that this is a matter which should be dealt with by the United Nations. There is something to be said for that solution. I do not think it arises strictly on the Amendment, but this is a general discussion and I think we are entitled to go rather beyond the Amendment. There is something to be said for that solution, but I do assure the noble Lord that it would be a great mistake for the British Government to take the initia-
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tive. I am sure that would be resented in Africa; and if it were brought to the attention of the United Nations, this should be done by an African Government.
LORD HAWKE: Who is entitled to take to the Security Council the fact that there is some problem in the world which is likely to lead to war? This is likely to lead to war.
THE EARL OF LISTOWEL: I am open to correction, but I think any member of the United Nations is entitled, under the Charter, to bring to the notice of the General Assembly of the United Nations any matter which is likely to cause a disturbance of world peace. I think that the British interest in all this is primarily the maintenance of peace in that part of Africa, and that what we should do is to appeal to all the people, individuals and Governments, concerned to settle this problem by discussion, negotiation—by peaceful methods and not by violence or what the noble Earl, Lord Lytton, called terrorism, because not only would this be disastrous in this part of Africa but it might easily bring the cold war into Africa. Somalia has already been armed very heavily by the Soviet Union, and we do not want other great Powers doing the same kind of thing in order to assist Somalia's neighbours. So I do think that the noble Earl would be well advised to withdraw this Amendment having had this very full discussion on the Amendment; and say this in spite of the view of my noble friend Lord Faringdon, although I welcome his view because it shows that noble Lords on the back Benches on this side of the House also have independent minds.
THE DUKE OF DEVONSHIRE: I must say at once that Her Majesty's Government cannot accept the noble Earl's Amendment. The effect of accepting it would be that this area of Kenya, the North-East Region, would remain a British Colony. Special constitutional arrangements would have to be devised for it, and the Colony would not only be completely landlocked but also economically totally unviable. Clearly it would be a hopeless task for the British Government to have to rule such an area without the active co-operation of the neighbouring Powers. The British Gov-

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ernment have repeatedly made it clear that they have tried hard to find a peaceful and honourable solution to the problem of the Somalis in Kenya, and I dealt at some length with this during the debate of last Thursday.
I would remind your Lordships that the British Government initiated the talks which were held in Rome early this year between the British Government and the Somali Government at which the Kenya Government was represented. Our hopes of securing an agreed settlement were not realised, and we came to the conclusion that it would be wrong for the British Government to take a unilateral decision about the frontiers of Kenya without reference to the wishes of the Government of Kenya, whose Ministers had already made it clear that any such decisions would be quite unacceptable to them.
At this point I would take up the cudgels with the noble Lord, Lord Faringdon, who said that we are doing a disservice to the Kenya Government by putting this problem in their lap. That is not the view taken by Kenya Ministers—in fact, very strongly the reverse. The Rome talks were not intended to close the door to an agreed solution. On the contrary: we sought to make the British Government's position clear and to promote agreement through negotiation between the African Governments concerned. The Kenya Government were prepared to engage in such negotiations, and recognised the interest of the Somali Government in the future of the Somali people residing in Kenya. It was the Somali Government's insistence that their own proposals must be accepted as a pre-condition of their acceptance of the offer of Kenya Ministers to resume talks between the Kenya and Somali Governments that led to the Rome talks being concluded without agreement. Both the British and the Kenya Governments naturally felt that such a pre-condition could not be accepted, and I am quite sure noble Lords in all parts of the House will agree with that attitude.
The matter was referred to again during the Kenya Independence Conference when the future of the North-East Region was again considered, and it was agreed that the people of the region should be given a fresh opportunity to
890
elect a Regional Assembly, either before or shortly after independence, and to send representatives to the National Assembly. These arrangements would give adequate opportunity to the inhabitants of the North-East Region to enjoy in full measure those benefits of the new Constitution which are, I would remind your Lordships, expressly designed to give all the people of Kenya a large measure of autonomy in the conduct of local affairs. Some recent developments, such as the personal discussions between the Somali Foreign Minister and Kenya Ministers, have given grounds for hoping that a peaceful solution may be found. On the other hand, recent outbreaks of violence illustrate the potential dangers. A peaceful solution of this problem is essential to the peace and stability of this part of Africa, and Her Majesty's Government believe that such a solution must be achieved by direct negotiations between the Governments immediately concerned, and they do not consider that it would be achieved by the means proposed by the noble Earl in the terms of his Amendment. With Kenya's independence less than two weeks away, it must surely be clear that this problem can be resolved only by the two Governments primarily concerned. I can only repeat that the noble Earl's Amendment is quite unacceptable to Her Majesty's Government.
THE EARL OF LYTTON: May I begin by offering an apology to the noble Lord, Lord Ogmore? I seem to have broken the rules of protocol in referring to the substance of a private letter. I assure him that, as I learn the ways of your Lordships' House, I will try to avoid stepping on people's corns and dropping bricks.
May I refer to one or two of the points that have been made? First, the non-viability of the N.F.D. Of course it is non-viable; nobody would want it, except the mother of children. The Somali Government, out of £30 million foreign aid (and this foreign aid, incidentally, existed long before the China arrangement; it was more than a year ago) have allocated £300,000 a year for it. According to figures I obtained from the Provincial Commissioner, that should be more than enough to cover it in the stagnant, unprogressive, non-welfare state in which we have preserved it all the time we have had it.

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The noble Earl, Lord Listowel, mentioned the question of Somali arms from the Soviet Union. I have no information about what they are; but from time to time I have had information about Ethiopian arms, and I suggest that Ethiopia keeps five divisions in or near the Ogaden for the suppression of self-determination of Somalis, and a great many more elsewhere. That is the reason. The new factor—or what I thought was the new factor—was the intervention of the Emperor of Ethiopia at every stage to stop every contribution to the reunification of the Somali people, together with Mr. Macmillan's—that is, Her Majesty's Government's—underwriting of a principle quite contrary to that of self-determination. That I thought was a new factor—but never mind.
With regard to the United Nations, there are tremendous difficulties. It is we who have the authority in the N.F.D. They discussed this matter for four years, and, as I mentioned last time, the pan-Africans have adopted the sanctity of colonial boundaries, which they have always denounced as a means of getting us out—a most ungenerous thing in view, as I said last time, of the fact that Somali independence set the pace from which they have benefited. It was most unfair. But I am not hopeful of the United Nations. The Somalis have gone round to London, to Washington, to Bonn and to Rome. They made Mr. Kenyatta a freeman of their city. They have been to Addis Ababa. They have been everywhere ever since they were born in 1960, trying to get further unification. There is "No" in every direction. What more can they do? That is my view.
I must deny the noble Earl's suggestion that I am here to air my views. It has been a great inconvenience to me to come here all this year. I am not a political Peer. I do not come often enough to cover my expenses by putting in a claim. It is a great inconvenience. I am here to get freedom for all the people I like in Kenya; that is the only reason. There was this question of the pre-condition. Her Majesty's Government had a pre-condition which the Somali Prime Minister brought to my attention more than a year ago. This is
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the renunciation by Mr. Macmillan of the British Government's right to give freedom. He knew about that pre-condition.
I do not think I have missed anything that any noble Lord might wish me to answer. I am extremely grateful for the forthright support of the noble Lord, Lord Faringdon. I do not wish to withdraw my Amendment. In these cases I believe it is customary for one, when asked—I say this because I am a novice—to say "Content", which is a disposition of mind I do not enjoy at this moment, and then, on the second occasion, to remain silent and to have the Amendment negatived. Unless anybody else is going to insist on any other formula, that is what I am assured is the best thing to do. But I could not withdraw the Amendment.
On Question, Amendment negatived.
Clause 1 agreed to.
Remaining clauses and Schedules agreed to.
House resumed.
Bill reported without amendment; Report received.

ZANZIBAR BILL
5.46 p.m.
House in Committee (according to Order).
House resumed: Bill reported without Amendment: Report received.

BAHAMA ISLANDS (CONSTITUTION) BILL
5.48 p.m.
House in Committee (according to Order).
On Question, Whether the Bill shall be reported without amendment?
THE EARL OF LISTOWEL: Whether I am strictly in order on the Question that the noble Lord the Deputy Chairman of Committees has put, I do not know, but I am sure your Lordships will allow me just to make one comment. I want to thank the noble Duke for having made inquiries on the points which I put in the form of questions on the Second Reading of the Bill, and for giving me the information before the Committee stage this afternoon, I was

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entirely satisfied, apart from one matter. I was a little disappointed about the noble Duke's inability to put the new Constitution in the form of a White Paper. What I should like to ask him is this. We have not yet got the Bill of Rights which must go into the Constitution. Perhaps, when the terms of the Bill of Rights are settled, he will be good enough to let me know what they are before the Order in Council is made.
THE DUKE OF DEVONSHIRE: My Lords, I shall be most happy to do what the noble Earl suggests.
On Question, Motion agreed to,
House resumed.
Bill reported without amendment: Report received.
House adjourned at ten minutes before six o'clock.