Sitting of 29 May 1963

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

  QUEEN FREDERIKA OF GREECE
  Mr. Awberyasked the Lord Privy Seal why Her Majesty's Government apologised to the Queen of Greece for the action of demonstrators in London who made a protest against the imprisonment of 1,100 political prisoners now in Greek prisons, requesting an immediate amnesty, in support of views publicly expressed by over 100 hon. Members of this House.
  The Lord Privy Seal (Mr. Edward Heath): I have nothing to add to what my right hon. Friend the Prime Minister said in reply to Questions on 2nd May.
  Mr. Awbery: Is the Lord Privy Seal aware of the conflicting opinions held by the Government regarding this case? He stated on 8th May that Queen Frederika had been assaulted. The Home Secretary, the following day, said that the Queen had not been touched. Could he now present us with a report from the police so that we can get an accurate account of what happened? There was no offence as suggested on that day against the Queen. This case has been magnified mainly by the Press as opposition to Royalty in order to hide the real facts behind it that there are 1,100 men now in prison who have been there for 17 years.
  Mr. Heath: Any question of a report on the action of the police is a matter for my right hon. Friend the Home Secretary. My right hon. Friend the Prime Minister dealt with the point that the hon. Gentleman has raised on the last occasion that this was discussed in the House, and he said that, of course, he
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  accepted the statement of Her Majesty Queen Frederika that she was molested.
  Mr. Awbery: She was not molested.
  Mr. F. M. Bennett: Is my right hon. Friend aware that if there has been any magnification of this incident, it has been not by the Press but by those who keep on raising over and over again a question which for the good name of this country had better be buried as soon as possible?
  Mr. Heath: This particular incident has been dealt with by my noble Friend the Foreign Secretary and by my right hon. Friend the Prime Minister and should be allowed to be left there.

  WEST NEW GUINEA
  Mr. Godman Irvineasked the Lord Privy Seal what steps have been taken by the United Nations Authority now in West New Guinea in respect of Article 16 of the agreement between Indonesia and Holland which provides that the indigenous people may decide their own future by the end of 1969.
  The Joint Under-Secretary of State for Foreign Affairs (Mr. Peter Thomas): There is no United Nations authority now in West New Guinea. The United Nations Temporary Executive Authority left the territory on 1st May after transferring the administration to Indonesia, and the United Nations' Representative envisaged in Article 16 of the Netherlands-Indonesian Agreement has not yet been appointed.
  Mr. Irvine: Is not my hon. Friend aware of the alarm that has been caused throughout the Pacific and elsewhere by the fact that the six democratic parties and the people of West New Guinea have been handed over to a dictator without any semblance of a democratic process? Is not my hon. Friend further aware that this alarm is increased by the contrast between that and the United Nations Committee's recommendations that the Secretary of Papua should increase the rate of democratic advance before independence? In these circumstances, does not he feel that Her Majesty's Government should firmly place these facts before the United Nations?
  Mr. Thomas: The position is that the United Nations has done everything that is required under the Netherlands-Indonesian Agreement.

  ADEN (UNITED NATIONS MISSION)
  Mr. Brockwayasked the Lord Privy Seal what response was made by the British representative on the General Assembly's special committee on colonialism to the proposal that a United Nations visiting mission should be sent to Aden to investigate how far the Federation of South Arabia represents the wishes of the peoples.
  Mr. Heath: The Committee of Twenty-Four was informed that Her Majesty's Government were unable to agree to this proposal.
  Mr. Brockway: Is not the right hon. Gentleman prepared to reconsider this whole issue? Is it not clear that the majority of the members of the United Nations take the view that when peoples do not have the right of self-government, there should be some intervention by the United Nations in these cases? Are we not now living in a world when the United Nations will function in this respect?
  Mr. Heath: We have co-operated very fully with the Committee of Twenty-Four by taking part in these discussions and by giving it full information, but the ultimate responsibility rests with Her Majesty's Government, and I cannot therefore accept the hon. Member's suggestion.
  Sir G. Nicholson: Is my right hon. Friend aware that the people who suffer most from this sort of thing are the United Nations and that when missions sent to colonial territories are composed of representatives of nations which do not know the first thing about democracy or have trade union leaders, that can only be interpreted as grossly insulting to this country?
  Mr. Heath: Our purpose is to give all the information we can to the Committee and to explain to it the democratic processes which we ourselves follow.
  Mr. Mayhew: Should we not consider the practical consequences of our refusal,
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  for we still get the United Nations inquiry and the debates at the United Nations? What do we gain by refusing access, except a more tendentious and one-sided inquiry? Do we not just give the impression of having something to hide and having a hostility to the United Nations which we should not show?
  Mr. Heath: What we gain is that the process of government of these territories is not affected by a visit. In this case, the petitioner Mr. Farid, from the Federation itself, fully explained the situation there, in addition to the British representative's explanation, and the Federation has no desire that this Committee should visit the Federation at all.

  ABERDEEN TRAWLER "MILWOOD" (DETENTION)
  Mr. Hector Hughesasked the Lord Privy Seal (1) if he will state the text of the note handed last Saturday by the Icelandic Foreign Minister to the British Ambassador in Reykjavik, the reply sent to it, and the action taken as a consequence; and if he will take steps to have the trawler "Milwood", now detained in Reykjavik, restored to her owners in Aberdeen who are now suffering loss by her detention in Reykjavik;
  (2) if he will make a statement on the recent interview between the Secretary of State for Foreign Affairs and the Icelandic Ambassador Mr. Henrik Bjornsson, about the detention in Reykjavik of the Aberdeen trawler "Milwood".
  Mr. Heath: The Icelandic Ambassador called on my noble Friend on 10th May to discuss the Icelandic Note of 4th May. This gave the Icelandic Government's views on the "Milwood" incident and requested that Skipper Smith should return to Icelandic jurisdiction. Her Majesty's Government replied on 17th May giving their views on the incident and expressing the hope that it would not disturb AngloIcelandic relations. Our Note explained that although Her Majesty's Government had no power to compel Skipper Smith to return to Iceland to stand trial, we hoped that he would do so. We are awaiting the Icelandic Government's response to this Note.
  The Icelandic Government have not published the text of their Note, but I am

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  circulating in the OFFICIAL REPORT the text of our Note of 17th May. As for the detention of the "Milwood", I would refer the hon. and learned Member to the reply given to his Question of 22nd May by my hon. Friend the Joint Under-Secretary of State.
  Mr. Hughes: May I thank the Lord Privy Seal for that full reply? Does he realise that I have full confidence that the Icelandic Supreme Court will administer the rule of law when the case comes before it? Does he also realise that this trawler was seized by force in mid-ocean without any order of the court, that the case is in no way sub judice and does not depend on the evidence of Skipper Smith? Will he approach the Icelandic Government on that basis with a view to resolving the conflict between the Icelandic court and the administrative authorities who control the gunboats which fired on and seized our trawler, and on that basis have the trawler released?
  Mr. Heath: I am very glad to hear the hon. and learned Gentleman's confirmation of his belief in the justice of Iceland. This will support our view that Skipper Smith should return to its jurisdiction. The "Milwood" was detained upon a ruling by a judge of the Icelandic court pending an inquiry into the incident. That is the situation at present and presumably it must remain so until the inquiry is completed.
  Following is the text of the Note:
  Her Majesty's Principal Secretary of State for Foreign Affairs presents his compliments to His Excellency the Icelandic Ambassador and has the honour to refer to the Icelandic Government's Note of the 4th of May about the incident involving the Aberdeen trawler "Milwood" and the Icelandic Coastguard Vessel "Odinn".
  As Mr. Edward Heath stated in his message of the 30th of April to His Excellency the Icelandic Minister for Foreign Affairs, Her Majesty's Government were most distressed to learn that the incident had taken place. They share the serious view of it which is taken by the Icelandic Government.
  Her Majesty's Government recognise that the Commander of the Icelandic Coastguard Vessel "Odinn" refrained from using force to arrest the trawler. Her Majesty's Government, however, wish to invite the attention of the Icelandic Government to the fact that the Commander of H.M.S. "Palliser" used his best endeavours to ensure the arrest of the "Milwood" by the "Odinn" with Skipper Smith aboard. As a result of this co-operation from the Royal Navy the trawler was in fact
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  arrested. However, in the interval between the transfer of "Milwood's" crew to H.M.S. "Palliser" and the arrival on board "Mil-wood" of the Icelandic boarding party. Skipper Smith's conduct and state of mind led Lieutenant-Commander Hunt to the conclusion that the only mean open to him of preventing Smith from endangering his own life was to transfer him to the trawler "Juniper" Lieutenant-Commander Hunt took this action in the firm belief that "Juniper" would be ordered to proceed at once to Reykjavik and would do so. He was surprised and dismayed when "Juniper's" owner declined to order "Juniper" to go to Reykjavik.
  Her Majesty's Government deplore the fact that Skipper Smith evaded arrest in this manner and wish to tender their sincere regrets. They also accept full responsibility for the action of H.M.S. "Palliser" on the 27th and 28th of April.
  While Her Majesty's Government are obliged fully to reserve their position on the issues of fact and law that may be involved, Her Majesty's Government have on several occasions advised the owner of the "Milwood" to persuade Skipper Smith to submit to Icelandic jurisdiction. It remains their hope that he will agree to do so.
  They very much hope that after this explanation the incident involving the "Mil-wood" will not be allowed to disturb the good relations between Iceland and the Untied Kingdom to which the British Government attach so much value.
  Mr. Jegerasked the Lord Privy Seal what action has been taken by the British Embassy in Iceland to assist the crew of the arrested trawler "Milwood".
  Mr. Heath: Five members of the "Milwood" crew have stayed in Iceland at the request of the owners. I am informed that they are not in need of assistance.
  Mr. Jeger: Can the Lord Privy Seal say whether the men are in touch with the embassy or whether the embassy is keeping a supervisory eye on them? Can he give an assurance that if these men, who have been deserted by their skipper, who has come back to England, require assistance it will be readily given to them.
  Mr. Heath: Yes, Sir. The Ambassador is in close touch with the men. He has reported that the owners asked the men to stay there and so far they have agreed to do so. If they are in need of any assistance, I am sure that they will be in touch with the Ambassador, and he will, naturally, do everything possible.
  Mr. Hector Hughes: Does the Lord Privy Seal realise that great financial loss is being inflicted not only on the crew but

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  also on the officers and the owners of the ship by its unlawful detention in Reykjavik, and that the owners have given a banker's guarantee to the Icelandic Government to pay any fine or costs which may ultimately be inflicted on them, and that it is up to the British Government to support the owners in that very proper and fair guarantee? What is the Minister doing about it?
  Mr. Heath: I have explained the legal grounds on which the ship is being detained in Iceland pending an inquiry. I understand that the men are being paid by the owners while they are on the ship.

  UNITED NATIONS

    Charter (Special Agreements)
    Mr. Longdenasked the Lord Privy Seal what attempts have recently been made by the Military Staff Committee of the Security Council to negotiate the special agreements referred to in Article 43 of the Charter without which the sanctions intended to enable the Security Council to fulfil its primary responsibility for maintaining international peace and security cannot be enforced; and what are the reasons still preventing the conclusion of these special agreements eighteen years after the Charter was signed.
    Mr. Heath: None, Sir. The Military Staff Committee reached deadlock at an early stage over the general principles that should govern the organisation of the armed forces to be made available to the Security Council by Member States. Nothing has occurred since to resolve this disagreement.
    Mr. Longden: Could not the Soviet Union be reminded that Chapter 7 of the Charter cannot be brought into operation unless it is so decided by the Security Council, on which the Soviet Union retains its veto? What is the object of holding up the operation of these sanctions?
    Mr. Heath: I will certainly consider my hon. Friend's suggestion, but I am afraid that there is no indication that the Soviet Union would be prepared to agree to the implementation of the Military Staff Committee.

    Finance
    Mr. Prenticeasked the Lord Privy Seal if he will make a statement on the special session of the United Nations General Assembly dealing with the financial situation of the United Nations.
    Mr. P. Noel-Bakerasked the Lord Privy Seal what proposals Her Majesty's delegate has laid before the General Assembly of the United Nations concerning the budget of the organisation; and whether he will make a statement.
    Mr. Grimondasked the Lord Privy Seal what instructions have been given to the United Kingdom representative at the United Nations in relation to the refusal of the Union of Soviet Socialist Republics to pay her contribution to the United Nations; and if he will make a statement.
    Mr. A. Hendersonasked the Lord Privy Seal whether he will state the policy of Her Majesty's Government with the object of maintaining the solvency of the United Nations Organisation, in view of the continued refusal of a large number of the members of the United Nations Organisation to pay their dues in accordance with the provisions of the Charter.
    Mr. P. Thomas: The United Kingdom has not yet formally tabled any proposals at the General Assembly. Our views, however, are well known from the public proposals we put forward in the Working Group of Twenty-One. We are at present engaged in informal discussions with other delegations on the immediate problems of solving the financing of the United Nations Emergency Force and the Organisation des Nations tinier au Congo for the remainder of 1963 and of the collection of arrears from defaulting members. The Russian refusal to contribute to the United Nations Emergency Fund and the Organisation des Nations Unies au Congo accounts is one aspect of this problem.
    Mr. Prentice: While supporting the views expressed by the hon. Gentleman about the position of the Russians and others, may I ask whether the Government would give further consideration to the proposals put forward by India and certain other countries for voluntary

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    peace-keeping funds? Although this may be an unsatisfactory expedient, less satisfactory than a permanent solution, is it not better to have something like that rather than see the organisation drift into a position in which it can no longer undertake these peace-keeping operations?
    Mr. Thomas: We will consider this and other proposals, but our main objective is to see that there is collective financial responsibility.
    Mr. Grimond: Is it not the case that the Russians have said that they will contribute only to purposes of which they approve? If that is so, would the Government consider pointing out to them that this will make a complete farce of everything for which the United Nations stands and is simply old imperialism in modern dress?
    Mr. Thomas: Yes, Sir. I have seen a report to the effect of what the right hon. Gentleman says about the Russian attitude. It certainly indicates a hardening of the Russian attitude, but at the moment this should not divert us from our main objective, which is to reach agreement with the great majority of the members of the United Nations who sincerely wish to see a solution to the organisation's financial problems.
    Mr. Henderson: Has not this parlous financial position of the United Nations become a major political problem? May we have an assurance from the hon. Gentleman that Her Majesty's Government will not participate in any drastic action until after high-level talks have taken place among the four permanent members of the Council, including the Soviet Union?
    Mr. Thomas: I agree that this is a major political problem. At the moment we are trying to reach agreement with the majority of the members of the Assembly in this special session, but we will consider the matter raised by the right hon. and learned Gentleman.
    Sir J. Duncan: Would it not be a good idea if we suggested that those members of the United Nations which had not paid up could not vote?
    Mr. Thomas: That is the effect of the advisory opinion of the International
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    Court in relation to Article 19. Perhaps I should say that, although there are 69 members in arrears, only one member is liable to be penalised under Article 19, and I am informed that that member has given notice that it intends to make payment, so that it will not be penalised; so that this matter does not arise at the moment.
    Mr Warbey: Would not the hon. Gentleman tell the House the whole truth, which is that no fewer than 47 members of the United Nations, including members of both the Eastern and Western blocs and of the non-aligned countries, have so far not paid a single penny towards the Congo operations? In view of this situation, is it not absolutely essential that some supplementary means should be found of raising funds for peace-keeping operations? Will not the Government adopt a more sympathetic attitude towards the proposals for a voluntary fund put forward by a number of non-aligned nations?
    Mr. Thomas: Yes, Sir. It is true that many countries are in arrears, countries both of West and East, but there are many countries in arrears because of financial difficulties, and I do not think that that obtains in the case of the Communist bloc.

    Special Political Committee (Republic of South Africa)
    Mr. Longdenasked the Lord Privy Seal whether the views of Her Majesty's Government with regard to the relevance of Article 2(7) of the United Nations Charter to the racial policies of the Government of the Republic of South Africa remain as stated by the United Kingdom representative in the Special Political Committee of the United Nations on 31st October, 1961, and 20th October 1962.
    Mr. Heath: The remarks in question should be read as references to the statement made by the United Kingdom representative in the Special Political Committee on 5th April, 1961, in which the full views of Her Majesty's Government were given. The text of that statement is contained in the report on the proceedings of the Fifteenth Session of the General Assembly of the United Nations, Cmnd. 1456.

    Voluntary Peace-Keeping Fund
    Mr. E. L. Mallalieuasked the Lord Privy Seal whether the United Kingdom representative on the United Nations Working Group on the Examination of the Administrative and Budgetary Procedures of the United Nations supported the suggestion in its Report for a voluntary peace-keeping fund.
    Mr. P. Thomas: No, Sir. The current Special Session of the General Assembly is concentrating, in our view rightly, on the more immediate problems of collecting arrears of contributions and of working out arrangements for financing the United Nations Emergency Force and the Organisation des Nations Unies au Congo for the remainder of 1963.
    Mr. Mallalieu: Is the Under-Secretary of State aware that no fewer than seven of the non-aligned countries have already expressed their approval of this voluntary peace-keeping fund? Can he give any real reason why people should not be able to demonstrate their loyalty to the world community in this way if they wish to?
    Mr. Thomas: I am aware of the views that have been expressed by the countries to which the hon. and learned Member has referred, but we regard it as extremely important to preserve the basic principle of the collective financial responsibility of the members of the organisation for its activities.
    Sir C. Osborne: Why should we expect a voluntary peace-keeping fund to be any more effective than the old Kellogg Peace Pact of 1928 which, when it came to the test, was so futile and so useless?
    Mr. Thomas: We certainly agree that the suggestion is not a very practical one.
    Mr. Warbey: Will the Minister bear in mind that the whole purpose of these operations is to put teeth into what were formerly pious aspirations; that we cannot have teeth without money, and that when people voluntarily pay money for action, they are more likely to be interested in it, and to support it?
    Mr. Thomas: The very fact that the hon. Gentleman has said one cannot have teeth without money indicates how very out of date he always is.

    CONFERENCE OF AFRICAN STATES
    Mr. Wallasked the Lord Privy Seal what representations he has received from Governments who attended the recent Conference of African States at Addis Ababa about areas of British responsibility in Africa.
    Mr. Heath: Her Majesty's Government have not received representations of such a kind from the Conference. Any other communications on this subject which may be received from Commonwealth or foreign Governments are confidential.
    Mr. Wall: While appreciating the degree of economic co-operation at this Conference, may I ask whether my right hon. Friend would care to comment on the remarks of the Prime Minister of Uganda who is alleged to have offered his country for the training of "freedom fighters" and to have said, "There is going to be war"? What action do the Government take when one Commonwealth country appears to threaten war against another?
    Mr. Heath: I have seen reports of this kind. Naturally, we regret them.

    SOUTH-EAST ASIA TREATY ORGANISATION (MEETINGS)
    Mr. Harold Daviesasked the Lord Privy Seal if, in view of the fact that the South-East Asia Treaty Organisation communiqué issued by the United States Information Service of the American Embassy in London on Thursday, 11th April, is the only published information on the South-East Asia Treaty Organisation Council's eighth meeting in Paris from 8th to 10th April, he will make available to Parliament more detailed information about these meetings.
    Mr. P. Thomas: No, Sir. The South-East Asia Treaty Organisation communiqué contains all the information on the confidential proceedings that those participating agreed to release.
    Mr. Davies: Is the hon. Gentleman aware that hon. Members on both sides of the House deprecate the growing tendency of the Executive to give less and less information to Parliament about these fundamental treaties and other facts? Will

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    he please now tell the House whether a new convention has arisen that no information is given to hon. Members unless they ask for it? Can he say what is the meaning of the bilateral treaty between Siam and the United States of 6th March in relation to the S.E.A.T.O. Treaty, because of the new doctrine of flexibility in S.E.A.T.O.?
    Mr. Thomas: Her Majesty's Government have undertaken no new commitments to S.E.A.T.O. In reply to the first part of the hon. Member's supplementary question, it is, of course, traditional that the proceedings at meetings of this sort, which are confidential, should not be disclosed beyond the communiqué which is released.
    Mr. Davies: But is the Joint Under-Secretary aware that the new doctrine of flexibility reads that
    "…action does not depend on the prior agreement of all parties to the Treaty since"—
    Mr. Speaker: Order. A verbatim quotation is out of order at Question Time.
    Mr. Davies: I apologise, Mr. Speaker. This Treaty does not necessarily need the united acquiescence of the rest of the signatories; in other words, there is bilateral power to take action.
    Mr. Thomas: Positive acceptance of any proposal is still necessary for any commitment.

    CENTRAL TREATY ORGANISATION
    Mr. Harold Daviesasked the Lord Privy Seal if he will make available to Parliament a more detailed report of the 11th Central Treaty Organisation meeting at Karachi than the two-page typescript now available in the Library; and what it has cost Britain to date to remain a member of the Central Treaty Organisation.
    Mr. P. Thomas: Copies of the official communiqué and the secretariat's record of the opening session of the 11th Central Treaty Organisation Ministerial meeting in Karachi are now available in the Library, together with various booklets on the Central Treaty Organisation.
    Her Majesty's Government's share of the organisation's secretariat and military planning staff budgets has, since August,
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    1959, totalled £150,700. In that period Her Majesty's Government have also contributed approximately £2,600,000 in economic, and £2,756,000 in military aid to the regional countries of the organisation.
    Mr. Davies: Does that figure include our contribution to the infrastructure in the area, and does it include our contribution to building the railway between Mush and the eastern area of the C.E.N.T.O. Treaty obligations? Will he not let Dr. Beeching know about this magnificent railway project in case he plans to close it on strategic or economic grounds?
    Mr. Thomas: The figures T have given, from the economic point of view, certainly include things like technical assistance, ports and telecommunication links between the regional capitals.
    Mr. Davies: What about the railway?

    UNITED ARAB REPUBLIC (PROPERTY OF BRITISH NATIONALS)
    Mr. Wallasked the Lord Privy Seal if he will make further representations to the Government of the United Arab Republic about the release of, or payment of compensation for, the property of British nationals resequestrated in October-November, 1961.
    Mr. P. Thomas: Frequent representations have been made in this matter. I regret that the United Arab Republic Government have not yet communicated their decision whether the property of the British nationals concerned is to be released or, if not, how compensation is to be paid. As my right hon. Friend said on 1st May, 1962, however, it seems clear that they will accept the principle of compensation for any property which is not released. Our most recent information is that a decision may he expected comparatively soon.
    Mr. Wall: Would not my hon. Friend agree that there is now no threat from Israel, which was really the excuse for these seizures? Is he aware that some of these properties fall under the terms of the Anglo-Egyptian Financial Agreement, and will he do his best to reach finality on this matter?
    Mr. Thomas: Yes, Sir.

    NORTH ATLANTIC TREATY ORGANISATION (NUCLEAR FORCE)
    Mr. Warbeyasked the Lord Privy Seal what reply he has made to the official Russian protest against British acceptance of the proposal for a North Atlantic Treaty Organisation force of Polaris-carrying surface ships with West German participation.
    Mr. Heath: Copies of Her Majesty's Government's reply of 18th May to the Soviet Note of 8th April about the proposed North Atlantic Treaty Organisation nuclear force have been placed in the Library of the House.
    Mr. Warbey: In view of the terms of that reply, and of the American Government's reply, can the right hon. Gentleman give the House an assurance that the American Government have now finally and definitively withdrawn their original proposal that the Polaris missile carriers should be of the cargo type, possessing the advantage of considerable anonymity through being able to count on the identity protection of as many as 4,500 merchant ships operating every day in the waters in which they would operate? Have they withdrawn that proposal and, if so, as this was put forward in order to meet the criticism of vulnerability, what now becomes of the argument of vulnerability?
    Mr. Heath: If the hon. Member has read our Note he will know that the proposed surface vessels would be warships in fact, in name, and in law—and both Notes make that perfectly plain.
    Mr. P. Williams: Is my right hon. Friend aware of the British protest against British acceptance of any multilateral force—mixed-manned or whatever it may be—and that many of us think that the best thing is a national, sovereign contribution to the defence of the West?
    Mr. Heath: I have over many years taken full note of the individual protests of my hon. Friends. I am fully aware of them.

    LARGE-DIAMETER STEEL PIPES (EXPORT TO RUSSIA)
    Mr. Warbeyasked the Lord Privy Seal if he will make a statement on the
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    official protest made by the West German Foreign Minister against the refusal of Her Majesty's Government to be bound by the North Atlantic Treaty Organisation decision on the export of large-diameter steel pipes to the Soviet Union.
    Mr. Heath: The Federal German Government have made known to Her Majesty's Government their views on the export of large-diameter pipe to the Soviet Union on several occasions, though not as an official protest. Likewise, Her Majesty's Government have explained their position to the Federal German authorities, either through the North Atlantic Treaty Organisation or directly, both before and after the matter was discussed in the North Atlantic Treaty Organisation last year.
    Mr. Warbey: Is the Lord Privy Seal aware that the German Foreign Secretary has twice called him a liar in public by saying that the British Government were bound, and knew that they were bound, by the N.A.T.O. decision? Will he now tell the House the whole truth about this secret decision, which ought never to have been secret? Was it a decision or a recommendation, and did Her Majesty's Government make clear their position that they would not be bound by it when it was made?
    Mr. Heath: The hon. Gentleman is, as usual, completely misrepresenting the views of Herr Schröder; and this matter has been clearly stated to the House on many occasions.
    Sir C. Osborne: Since West Germany is making strenuous efforts to increase her trade with the Soviets, is it reasonable to allow West Germany to play dog in the manger and prevent us from supplying these oil pipes in view of the fact that if we do not supply them the Soviets will themselves start to make them?
    Mr. Heath: The Federal Republic have stopped, by their own action, the export of this piping to the Soviet Union. The question of increasing trade is, of course, a matter both for ourselves and the Federal German Republic in other matters. On this particular matter of large-diameter piping we have made our position quite clear.

    NUCLEAR TESTS
    Mr. Dribergasked the Lord Privy Seal to what extent, in the course of the negotiations for a nuclear test ban agreement, the principal Powers concerned have modified their original estimates of the number of on-site inspections that would be, respectively, the minimum necessary and the maximum acceptable; if, in view of the progressive narrowing of the gap between these figures, he will renew his efforts to secure agreement before either of the Powers makes this more difficult by re-starting tests; and if, meanwhile, in the interest of securing agreement, he will urge both powers to refrain from further testing.
    Mr. Dempseyasked the Lord Privy Seal what progress has been made on the submission of proposals concerning the concept and the number of on-site inspections, presented by Her Majesty's Government at Geneva, with a view to agreement on a nuclear test ban treaty; and if he will make a statement.
    Mr. Prenticeasked the Lord Privy Seal what scientific advice he has obtained about the number of on-site inspections needed on Soviet territory or elsewhere to provide a satisfactory basis for policing a nuclear test-ban treaty.
    Mr. Heath: The Western draft treaty of 1961 provided for a quota of 20 on-site inspections a year. Shortly afterwards, the Western delegations offered to substitute a variable quota of between 12 and 20 inspections, depending on the number of unidentified seismic events on the territory of the other side. As a result of an intensive seismic research programme, the Western Powers were subsequently able to reduce their requirements to between eight and ten, and, last March, to seven, provided that the conditions under which these inspections were made were satisfactory. This takes full account of all the latest scientific advice available to us.
    The Soviet Union, on the other hand, offered a maximum of two to three in 1960, withdrew this offer in 1961, and returned to it again in December, 1962. They have thus made no advance on their position of three years ago.
    We are continuing our efforts to secure a Treaty and my right hon. Friend the Prime Minister and President Kennedy
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    have recently been in correspondence with Mr. Khrushchev on the question.
    Mr. Driberg: Has the right hon. Gentleman noted, and welcomed, the statement given in evidence before a Senatorial Committee by a senior expert at the Pentagon that he would now be content with six or seven; but has he also noted the rather unfortunate coincidence that, on the very day on which President Kennedy said that a new round of testing would be a great disaster, the resumption of testing in Nevada was announced by the Atomic Energy Commission, including what appear to be some atmospheric tests, though the word is disguised under the euphemism of "surface" testing?
    Mr. Heath: I have seen many such reports.
    Mr. Speaker: Mr. Dempsey.
    Mr. Driberg: Cannot the Lord Privy Seal make any comment?
    Hon. Members: Order.
    Mr. Dempsey: Will the Lord Privy Seal say what offer was made in the recent statement at Geneva—delivered, I understand, to the Soviet Ambassador—to try to bridge the gap between the Russians' suggested three on-site inspections and the West's seven inspections? Furthermore, can he say what effort has been made in this declaration to try to solve the problem of the concept of an inspection? Will not he agree that it is essential that we should try to arrive at some compromise between East and West to solve this problem?
    Mr. Heath: I think that the very full Answer I have given demonstrates absolutely clearly to the House what steps the Western Powers have taken to move towards the Soviet Union's position while, at the same time, the Soviet Union has not moved in any way from the position it took in 1960. This is absolutely clear. From the point of view of dealing with the concept of inspection, we have on many occasions offered to have a full exchange of scientific information with the Soviet Union, which it has never accepted. We have offered on many occasions to discuss with the Russians their fear that inspection would lead to espionage, without the invitation being

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    accepted by them. I think, therefore, that the House will agree that the Western Powers have made a very large number of moves towards the Soviet position, and have offered many opportunities for the Soviet Union to clarify the rest, which have not been accepted.
    Mr. Mayhew: Does the Lord Privy Seal recall that on Tuesday the Prime Minister stated that he was, in a day or two, expecting to agree some new initiative with President Kennedy? Can he give any information about this, and whether statements will be made?
    Mr. Heath: I cannot give any information at present.
    Mr. Prentice: How far does the right hon. Gentleman think that the present very narrow gap between the two sides is due to political reasons and how far to a different assessment of the scientific and technical date? If the latter is the explanation, is there not now a lot to be said for pushing the recent suggestion of Her Majesty's Government for the scientists of the two sides to meet, and should not that suggestion be renewed before there is another series of tests?
    Mr. Heath: That invitation has been constantly made by both my hon. Friend the Minister of State and the American representative at Geneva, and it is an open invitation, but always the Soviet Government have made it perfectly clear that their view at the moment is that it is a purely political demonstration, and not based on scientific evidence.
    Mr. P. Williams: Is it not reasonable to ask hon. Members opposite to be as persuasive with the Russians in order to try to get them to effect a compromise as they are with the Government?
    Mr. Driberg: While fully accepting most of what the right hon. Gentleman said, and while urging him to be as persuasive with the Russians as with the Americans, may I also respectfully ask him not to brush aside contemptuously a perfectly serious question about the new round of tests in Nevada?
    Mr. Heath: I am not brushing it aside. The hon. Gentleman made a number of statements of fact, and I said that I noted the comments to which he drew my attention.
    Mr. Lubbockasked the Lord Privy Seal if he will publish a White Paper setting out the reasoning on which the Western demand for seven on-site inspections is based, including an analysis of the seismic events which have occurred within the territory of the Union of Soviet Socialist Republics in recent years, showing the statistical connection between the number of events of doubtful origin and the number of inspections demanded assuming various numbers of unmanned seismic stations and differing selection procedures for the events to be inspected.
    Mr. Heath: No, Sir. The demand for a particular number of inspections is based on a number of factors and data, not only scientific. Moreover, the scientific data cannot readily be presented in the form of a White Paper.
    Mr. Lubbock: But as in answer to an earlier Question the Lord Privy Seal said that this was the very type of information that we had already offered to exchange with the Soviet Union, can he give any valid reason for refusing to do this on a unilateral basis? Does he appreciate that most ordinary people find it impossible to follow the niceties of the argument about whether there should be three or seven inspections, and that many of us believe that if the information were made available we should see that the insistence on seven inspections was unnecessary?
    Mr. Heath: I cannot accept the hon. Gentleman's conclusion in his supplementary question at all. Certainly, the scientific data are immensely complex. Naturally, when we made the offer to the Soviet Union it was for an exchange of scientists to be able to discuss these aspects of the matter which are of concern to them.
    Mr. Fletcher: Would the Lord Privy Seal at least say whether it is true, as reported in the Press on Sunday, that one of the reasons for the Government's attitude is that Soviet Russia is developing an anti-missile missile which can be tested only by means of underground experiments and that that is the reason why the Government want these inspections?
    Mr. Speaker: Order. It is out of order to ask Ministers to comment on, confirm or deny propositions in the Press for which they are not responsible.
    Mr. Lubbock: I appreciate that the scientific reasons for the demand for a certain number of inspections are extremely complex, but does not the right hon. Gentleman know that Members of the House of Commons and members of the public are just as capable of judging the reasoning as are members of the Cabinet or of the Government negotiating team? Why should we not be given this information?
    Mr. Heath: I am fully ready to agree with the hon. Member. All I said was that the information was not readily available or appropriate to be published in the form of a White Paper.
    Mr. Zilliacusasked the Lord Privy Seal whether, in order to make it easier to reach agreement on a nuclear test-ban treaty, he will propose that the negotiating Powers should compose their remaining differences on the basis of the principle that a treaty banning all tests with imperfect means of monitoring minor underground explosions is a lesser evil than the continuation of tests.
    Mr. Heath: No, Sir.
    Mr. Zilliacus: I am not astonished at the reply. Does not the right hon. Gentleman agree that the real reason for the difficulties caused by these apparently narrow differences on issues of detail and technical matters both as regards nuclear tests and as regards disarmament stems from the underlying fear and suspicion? So long as both sides remain prisoners of military logic, each believing that the other will attack if it has the chance, I do not think that we shall ever get agreement. Should not we take the initiative in trying to break the psychological deadlock by drawing attention to the basic fact that minor underground tests can be detected if there is more than one of them and that the slight uncertainty about isolated explosions is a much smaller risk than the risk of having no nuclear test ban treaty at all?
    Mr. Heath: If the hon. Gentleman is right that the trouble here is suspicion between the two sides, perhaps the Soviet Government will accept our invitation to
    1306
    discuss the scientific aspects of this question together with any questions they care to raise about the possibility of espionage, so that we may put their fears at rest.

    COUNCIL OF EUROPE (RECOMMENDATION)
    Mr. Mayhewasked the Lord Privy Seal what proposals Her Majesty's Government will place before the Committee of Ministers of the Council of Europe for implementing Resolution 327 of the Assembly of the Council, which calls for increased contacts, under the auspices of the Council, between the peoples of Eastern and Western Europe.
    Mr. P. Thomas: I assume that the hon. Gentleman is referring to Recommendation 357. As he is aware, Her Majesty's Government are already taking steps to stimulate contacts with the peoples of Eastern Europe, to which they attach great importance. They welcome the interest shown in such contacts by the Consultative Assembly of the Council of Europe, and will consider sympathetically in the Committee of Ministers any proposals which would enable the Council usefully to supplement work being done in this field by individual member States.
    Mr. Mayhew: Whilst I welcome that statement, and recognise that in this respect Britain is ahead of other members of the Council of Europe, may I ask whether we can have an undertaking that, on the Committee of Ministers, the British Government will not let this Recommendation just be noted or approved, but will press for specific action in the terms of the Recommendation in order to get something done?
    Mr. Thomas: Her Majesty's Government are certainly extremely interested in this matter, as the hon. Gentleman knows, but I am not at present in a position to state what proposals, if any, Her Majesty's Government intend to place before the Committee of Ministers in this matter.
    Mr. A. Lewis: Can hon. Members be advised how best to get into this "closed club" of delegates to the Council of Europe?
    Mr. Thomas: I suggest that the hon. Gentleman should consult his Whip, if he has one.

    BAHREIN, QATAR AND TRUCIAL STATES
    Mr. Mayhewasked the Lord Privy Seal what special privileges are exercised by Her Majesty's Government in Bahrein, Qatar and the Trucial States; at what dates these privileges were acquired; and what steps are being taken to modernise relationships with these sheikdoms.
    Mr. Heath: Since the reply to the first two parts of this Question is long, I will, with permission, circulate it in the OFFICIAL REPORT. As for the third part, I have nothing to add to the reply which I gave to the hon. Gentleman on 25th March.
    Mr. Mayhew: Would not the Lord Privy Seal agree that it may well be easier to maintain our interests in the Gulf, which are of great value to the people there, if our relations with the sheikdoms are brought more up to date and, if possible, made rather less obtrusive and dominating? How long do we intend to maintain British jurisdiction in this area, how long are our representatives to have the name and status of political agents, and how long do we intend to insist on monopolising all the foreign diplomatic contacts of those countries?
    Mr. Heath: We are always ready to discuss changes in our relationship with the Rulers, as we did in the case of Kuwait, which led to the exchange of letters of 19th June, 1961, but no question has been raised by the other Rulers in the Gulf to alter their arrangements. As to jurisdiction, a process of hand-over is going on as their juridical processes are established. From the point of view of the remainder of the supplementary question, as long as the relationship is desired, and Her Majesty's Government feel it valuable to maintain it, these other matters will remain.
    Following is the reply:
    SUMMARY STATEMENT OF PRIVILEGES EXERCISED BY HER MAJESTY'S GOVERNMENT IN BAHRAIN, QATAR AND THE TRUCIAL STATES.
    BAHRAIN
    Perpetual Treaty of Peace and Friendship 1861. The Ruler undertook that "British Subjects of every denomination…may reside in and carry on their lawful trade in the territories of Bahrain…and in respect to the treatment of British Subjects and Dependants
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    they shall receive the treatment and consideration of the Subjects and Dependants of the most favoured people. All offences which they may commit, or which may be committed against them, shall be reserved for the decision of the British Resident."
    Exclusive Agreements of 1880 and 1892. Under these Agreements the Ruler undertook respectively not to enter into negotiation or receive representatives from any other power and not to alienate territory without the consent of Her Majesty's Government.
    Agreement regarding Oil, 1924. The Ruler undertook not to grant oil concessions without the approval of Her Majesty's Government.
    QATAR
    Treaty of 1916. Her Majesty's Government acquired privileges similar to those already existing in the Trucial States (see below), and the right to approve all monopolies, concessions, and cable-landing rights. British merchants are allowed to reside and trade in Qatar, and are guaranteed national treatment of their imports.
    TRUCIAL STATES
    Exclusive Agreements of 1892. These bound the Rulers not to negotiate with any other power, receive agents or alienate territory without the sanction of Her Majesty's Government.
    Fujairah became a separate State in 1952, when its Ruler accepted all the Treaties to which the other Trucial Rulers were parties.
    GENERAL
    Her Majesty retained jurisdiction in all of these States over, broadly speaking, non-Muslims. This special British jurisdiction has grown up largely by "usage or sufferance" over a long period, and it is not practicable to define its growth by dates or individual undertakings. The full terms of the above and other Treaties with the Rulers can be found in "A Selection of Treaties, Engagements, and Sanads relating to India and neighbouring countries", compiled by C. U. Aitchison, of which there is a copy in the Library.

    NORTH SEA BED
    Mr. E. L. Mallalieuasked the Lord Privy Seal how much of the North Sea bed comes within the jurisdiction of the United Kingdom under the Continental Shelf provisions of the 1958 Geneva conventions on the Law of the Sea; whether the sea-bed frontiers have been agreed with other North Sea riparian States; and what arrangements for royalties are being made in the event of oil deposits being found in the North Sea.
    Mr. Heath: Demarcation of areas of the bed of the North Sea is governed by the provisions of Articles 1 and 6 of the 1958 Geneva Convention on the Continental Shelf, which has not yet entered into force. It is not possible at this stage

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    to say how much of the bed of the North Sea would be regarded as appertaining to the United Kingdom. There has been no argeement with other North Sea riparian States on these matters. The answer to the last part of the Question is: None, Sir; arrangements will be made as and when necessary.
    Mr. Mallalieu: Can the Lord Privy Seal say on what basis an American company which is supposed to be searching for oil in the North Sea is likely to be able to exploit its findings, and if an American company can exploit findings of oil on the Continental Shelf in the North Sea, will not the Soviet Union equally be able to go into the Irish Sea and do the same? Would it not be a good thing if the United Nations were made the trustees for all these rights of exploitation by way of bringing in revenue to the United Nations and also in order to minimise the likelihood of disputes?
    Mr. Heath: As I said, arrangements will have to be made as and when necessary. At the moment, however, we are awaiting ratification by the necessary number of countries—22—of the Geneva Convention. Eighteen countries have so far ratified it. When the requisite number is reached, the Convention will come into force and govern these maters.
    Mr. Grimond: As a prominent European and, indeed, a Charlemagne Prizewinner, the right hon. Gentleman will be familiar with the system of udal law, and he will no doubt be aware that this system has an important bearing on rights over the bed of the sea and was guaranteed to Orkney and Shetland when they became part of Scotland. Can he explain how this matter will be affected by udal law?
    Mr. Heath: No doubt it will be replaced by the 1958 Geneva Convention when it is fully ratified.

    MEDITERRANEAN (NUCLEAR-FREE ZONE)
    Mr. A. Hendersonasked the Lord Privy Seal whether he will state the policy of Her Majesty's Government with regard to the latest official Soviet Government proposal for the establishment of the Mediterranean as a nuclear-free zone.
    Mr. Heath: Her Majesty's Government have no objection in principle to the formation of nuclear-free zones in certain areas, so long as such zones are set up voluntarily by the States concerned and the existing military balance is not disturbed. In the Mediterranean neither of these conditions would be met.
    Mr. Henderson: Would it not be more realistic if we sought to prevent the spread of nuclear weapons to countries bordering on the Mediterranean sea rather than to declare the Mediterranean sea itself a non-nuclear zone? Will Her Majesty's Government intimate to the Soviet Government that they would willingly co-operate in seeking to prevent the spread of nuclear weapons to countries like Israel and the Arab States in that part of the Mediterranean?
    Mr. Heath: It has long been our policy that we should try to prevent the spread of nuclear weapons in this way and particularly in the Middle East. I will certainly bear in mind what the right hon. and learned Gentleman has said in considering the reply to the Soviet Note.
    Commander Courtney: Would my right hon. Friend also bear in mind perhaps drawing to the attention of the Soviet Government in this context the potential nuclear capacity of Soviet warships lent to the United Arab Republic?
    Mr. Heath: Yes, Sir.

    N.A.T.O. (NUCLEAR WEAPONS AND FORCES)
    Mr. Swinglerasked the Lord Privy Seal what changes in the possession and control of nuclear weapons and forces will result from the agreements to which Her Majesty's Government consented at the recent North Atlantic Treaty Organisation Ministerial meeting; and what the effect of these will be on Her Majesty's Government's policy of opposing German control, or participation in control, of nuclear weapons and forces.
    Mr. Heath: As stated in the communiqué, the North Atlantic Ministerial Council approved
    "arrangements for broader participation by officers of the North Atlantic Treat Organisation member countries in nuclear activities in Allied Command Europe and in co-ocrdination of operational planning at Omaha".

    1311
    The arrangements for ownership and political control of nuclear weapons within the alliance remain as before. Operations of the V-bomber force will now be co-ordinated with the North Atlantic Treaty Organisation.
    Mr. Swingler: Will the right hon. Gentleman say whether this is a policy of deliberately spreading the control of nuclear forces and weapons to countries which at the moment have not got nuclear forces and weapons; and, in particular, is not this a departure from the policy that he has stated at the Dispatch Box several times, that Her Majesty's Government would not agree to any West German participation in control of nuclear weapons and forces? Is it not involved in this policy that we shall concede German participation in control of nuclear weapons and forces?
    Mr. Heath: I said in the substantive answer that the arrangements for ownership and political control of nuclear weapons within the alliance remain as before.
    Mr. Swingler: Would the right hon. Gentleman then say what is the essence of this policy? What is the meaning to be attached, therefore, to this communiqué and all the talk about multilateral or multi-national forces—a N.A.T.O. deterrent?
    Mr. Heath: Because, first of all, in the staff organisation of SACEUR there will be changes in which the international spread of the officers taking part under the Nuclear Deputy Commander will have greater participation. Secondly, because the countries of the alliance, through, we hope, an extension of the consultative arrangements created at Athens a year ago will have greater information and, therefore, participation in the arrangements for this control.

    MIXED-MANNED SURFACE FLEET (POLARIS MISSILES)
    Mr. Zilliacusasked the Lord Privy Seal why the Government have now decided to become a party to the German-United States agreement about setting up a mixed-manned multilateral surface fleet armed with Polaris missiles.
    Mr. Rankinasked the Lord Privy Seal if, in the proposed mixed-manned
    1312
    seaborne Polaris fleet, it is the intention that the supporting members will have the right of veto in the same way as the active members.
    Mr. Shinwellasked the Lord Privy Seal if he will make a statement about the announcement made by the Foreign Secretary at the North Atlantic Treaty Organisation conference at Ottawa that the United Kingdom accepts the principle of a mixed-manned force
    Mr. Heath: The policy of Her Majesty's Government towards a mixed-manned North Atlantic Treaty Organisation nuclear force remains as previously stated to the House, namely we have given a general welcome to the concept but no agreement has been reached to establish such a force. No decisions have therefore been taken on particular questions such as its political control.
    Mr. Zilliacus: Why have the Government, who originally took the same view of the military merits of this proposal as that so forcefully expressed by Lord Montgomery in another place, gone half way to yield to American political pressure exerted in order to appease the German desire for nuclear weapons? Is the right hon. Gentleman aware that in Bonn this concession is regarded as a first step to the achievement of equal rights in nuclear weapons? In view of what happened last time when we encouraged and connived at the rearmament and territorial ambitions of German nationalism and militarism in order to use Germany as a bulwark against Communism, will he please reconsider his position?
    Mr. Heath: I do not accept the hon. Gentleman's interpretation of history, either ancient or modern. When this proposal was first put forward, my noble Friend the Foreign Secretary made a statement saying that we welcomed the concept, which enables the countries of the alliance to work more closely together; but the whole concept must be examined for its military, financial and economic implications. That is the Government's position.
    Mr. Rankin: The right hon. Gentleman will have noted that in my Question I ask what is his intention. Does he approve of the idea of a crew on board a vessel, which will, in the event, continually be in danger, not having equal

    1313
    rights? Should not the supporting members on the vessel have the same rights of decision as the active members, since they will be engaged in the same venture and their lives will be at the same hazard?
    Mr. Heath: I answered the hon. Gentleman's Question by saying that, as no agreement has yet been reached to establish such a force, no decisions have been taken about particular points regarding control such as he raises.
    Mr. Shinwell: Does not the right hon. Gentleman appreciate that his reference to the N.A.T.O. countries working more closely together in the military sphere is quite irrelevant to this new concept which has been welcomed by the Foreign Secretary? The N.A.T.O. countries work together at present. This concept is something quite different. Did the Foreign Secretary, on behalf of Her Majesty's Government, before accepting this new concept in principle, consider its practicability and the expense which is likely to be entailed? May we have an assurance that, before the principle is adopted in practice, the House will be fully consulted?
    Mr. Heath: The form in which statements were made at the time not only in the other place but to this House expressed our views about the concept. I still maintain that it is a concept which allows these countries to work more closely together. We have said specifically that the next step is for all the implications to be examined, and this process is going on. The House will, of course, be kept informed about it.
    Sir A. V. Harvey: Will my right hon. Friend note that some of us on this side of the House are highly alarmed at the prospects of this arrangement? Will he take into account that in any discussions there must be no question of paying lip-service but we must be absolutely frank on this unpractical proposition?
    Mr. Heath: Yes, Sir; I am sure that my hon. Friend, as he always does, will wish to consider the matter fully and carefully and form a balanced judgment when all the information is available.
    Mr. Mayhew: In view of the great concern on both sides of the House about this and the fact that no decisions have
    1314
    been taken on almost all the important questions of control, cost and practicability, is it not a little early to invite over here a naval mission headed by the United States vice-chief of naval operations?
    Mr. Heath: No, Sir; I should have thought that that was exactly what was required at this moment so that the details of the matter could be discussed. It is, after all, an American proposal on which the American Administration have been working. It is, therefore, natural that we should wish to discuss all the details with them before any decisions can possibly be reached.
    Mr. Shinwell: I do as I did the other day, Mr. Speaker, that is, I announce that, failing an official debate on this subject, I intend to raise the matter at the earliest opportunity on the Adjournment.

    PRESIDENT TSHOMBE (BODYGUARD)
    Mr. Biggs-Davisonasked the Lord Privy Seal why, despite assurances that President Tshombe would continue to be protected by the Katanga gendarmerie, United Nations forces assisted Central Congolese troops to disarm the President's bodyguard.
    Mr. P. Thomas: Mr. Tshombe's palace guards have been replaced by 15 Katanga civil police, who will be armed when on duty.
    Mr. Biggs-Davison: Why were two British consular cars interfered with in the course of this operation and one British subject arrested?
    Mr. Thomas: I regret that I have no information about that at the moment. I will find out about it and let my hon. Friend know.

    NORTH ATLANTIC COUNCIL (OTTAWA MEETING)
    Mr. Biggs-Davisonasked the Lord Privy Seal whether he will make a statement about the Ottawa meeting of the North Atlantic Council, with particular reference to the United States proposal for a multilateral or mixed-manned Polaris surface fleet.
    Mr. Frank Allaunasked the Lord Privy Seal if he will make a statement about the North Atlantic Council meeting at Ottawa.
    Mr. Rankinasked the Lord Privy Seal if he will make a statement on the decisions reached at the Ottawa meeting of the North Atlantic Treaty Organisation.
    Mr. Heath: The main result of the Meeting was that the Council approved the steps taken to organise the nuclear forces of the Alliance, on the lines foreshadowed in paragraph 6 of the Nassau communiqué. This means in practice the creation of an inter-allied nuclear force, to include the British V-bomber force, whose formal assignment to the North Atlantic Treaty Organisation was notified during the meeting, and three United States Polaris submarines as well as other nuclear delivery units already assigned to the Supreme Allied Commander Europe.
    The arrangements approved by the Council will increase the effectiveness of the nuclear striking power directly available to the North Atlantic Treaty Organisation and will give member Governments a greater part in the day-to-day management of the North Atlantic Treaty Organisation nuclear forces in decisions on nuclear defence policy.
    The Council also reviewed the political situation facing the Alliance. I will, with permission, circulate the text of the communiqué in the OFFICIAL REPORT.
    Mr. Biggs Davison: Was it at this conference that a general welcome was accorded to the proposed multilateral surface force? Would it not be franker and better for Anglo-American relations if Her Majesty's Government now withdrew this general welcome to something which we cannot afford, which cannot work, and which is detrimental to Her Majesty's Government's own policy with regard to the independent nuclear deterrent? Further, was any proposal of this kind ever envisaged at the Bahamas Conference?
    Mr. Heath: The subject discussed at the N.A.T.O. meeting in Ottawa was the inter-allied nuclear force. There was no full discussion of the multilateral force, because that was not the purpose of the meeting, it still being under examination by the various countries concerned. I
    1316
    hope that my hon. Friend, too, will be prepared to form his judgment when the examinations have been completed.
    Mr. Allaun: Will the Government undertake to publish the details in a White Paper? Is it not true that Bonn has offered to contribute 40 per cent. of the cost and of crews of this fleet? Does not this eagerness spread from the belief in West Germany that this will be a major step towards its becoming a nuclear Power?
    Mr. Heath: I am not sure for what details the hon. Gentleman is asking. The details which were agreed on at Ottawa have already been published in the N.A.T.O. communiqué. As regards the multilateral force, I understand that the German Government have indicated their general support, but any question of the total of their contribution is a matter to be negotiated.
    Mr. Rankin: In the report, the Ministers welcomed the measures taken at Ottawa to increase the effectiveness of nuclear capability. Does the right hon. Gentleman realise that the United States already has an over-kill capacity which absolutely baffles human imagination? Does not he think that, if the Ministers were to reconsider that paragraph, they could also think of the point they might be expected to reach when they could say that they were thinking in terms of a reduction instead of a further increase?
    Mr. Heath: I should have thought that our efforts at Geneva to reach an agreement on disarmament were sufficient proof of our interest in the desirability of a reduction in armaments.
    Commander Courtney: Would not it have been much wiser if the British Government had voiced the obvious technical objection to this proposal before it went to Ottawa and so avoided putting us in a position where a N.A.T.O. decision has been made and we have to make our own separate decision afterwards?
    Mr. Heath: I do not think my hon. and gallant Friend has quite understood the position. No decision was taken at Ottawa about the multilateral force. The decision taken was about the inter-allied force, which was the result of paragraph 6 of the Nassau Agreement. General

    1317
    agreement was reached between the members of the alliance on this point. There was no decision—and it was not a major item of the discussion—about the multilateral or mixed-manned force. That is still being investigated by those countries which are interested.
    Mr. Grimond: In their thinking about the multilateral force, are the Government considering this as an alternative or as an addition to the British independent nuclear deterrent? Also, can the right hon. Gentleman say whether the Government are considering whether it could be controlled by anyone else except the Americans ultimately?
    Mr. Heath: It is being considered as an addition to the existing nuclear arrangements. The matters of control still remain to be discussed both with the American Administration and with the other Governments which are interested.
    Dame Irene Ward: Will my right hon. Friend convey to the Prime Minister the warning from this side of the House that he should not go too quickly in this matter?
    Mr. Heath: If I understand my hon. Friend aright, as I have sometimes tried to do in the past, she means that we should give it most careful consideration and a full examination. I assure her that we will do that, but I have sometimes noted in the past that her emphasis is rather more on haste than on delay.
    Following is the communiqué:
    The North Atlantic Council met in Ministerial session in Ottawa from 22nd to 24th May, 1963.
    2. In their review of the international situation, Ministers emphasised that in the world of today peace is indivisible. The enduring character of the North Atlantic Alliance, founded on the principles of inter-dependence and common defence, constitutes a basic guarantee for the maintenance of peace.
    3. The Council noted with regret that the Soviet Union had so far shown little interest in seeking equitable solutions for outstanding problems.
    4. With regard to Germany and Berlin, the threat has not disappeared. Thanks to the firm attitude maintained by the West, however, developments detrimental to the interests of Berlin and the Alliance have been effectively discouraged. In this connection, the Alliance abides by the terms of its Declaration of 16th December, 1958, on Berlin.
    5. Outside the treaty area too, tensions and difficulties continue to exist which have
    1318
    profound effect on the Alliance, Soviet military personnel remain in Cuba—and the situation there, with its repercussions in the region generally, still gives cause for concern. Ministers also expressed their disquiet over recent events in Laos, and stressed the importance of sustained efforts to secure respect for the Geneva Agreements.
    6. Ministers reaffirmed the importance, in building a peaceful world, or progress towards general and complete disarmament by stages and under effective international control. In this connection, they noted that agreement in principle had been reached between the United States arid the U.S.S.R. on measures to improve communications designed to reduce the risk of war by accident or miscalculation. They expressed the hope that the Soviet Union's attitude would evolve sufficiently to permit genuine progress to be made on key disarmament questions.
    7. The growing scope and complexity of the problems facing the Alliance make it imperative for the Council to ensure that its political consultations arc as prompt and effective as they can be made. Ministers noted the progress already achieved in this direction and expressed their determination to secure still further improvements.
    8. Ministers discussed N.A.T.O. defence policy and approved the steps taken to organise the nuclear forces assigned or to be assigned to the Supreme Allied Commander Europe (SACEUR).
    These include notably:

    (a) assignment of the United Kingdom V-Bomber force and three United States Polaris submarines to SACEUR;

    (b) establishment by SACEUR on his staff of a deputy responsible to him for nuclear affairs;

    (c) arrangements for broader participation by officers of N.A.T.O. member countries in nuclear activities in Allied Command Europe and in co-ordination of operational planning at Omaha;

    (d) fuller information to national authorities both political and military.

    Ministers welcomed these measures to increase the effectiveness of the nuclear capability at the disposal of the Alliance and to improve co-ordination and control of its nuclear deterrent forces.
    9. Ministers recognised the need to achieve a satisfactory balance between nuclear and conventional arms. They directed the Council in permanent session to undertake, with the advice of the N.A.T.O. military authorities, further studies of the inter-related questions of strategy. force requirements and the resources available to meet them.
    10. The Council noted progress made in the implementation of earlier resolutions concerning the defence problems of Greece and reaffirmed its interest in the effective application of these resolutions.
    11. The North Atlantic Alliance seeks peace. It deplores the diversion into the military field of resources which might be used for the betterment of mankind, and in particular for increased efforts to raise living standards

    1319
    in developing countries. But the free world remains faced with a continuing threat that members of the North Atlantic Alliance have both the right and the duty to protect their freedom and independence.
    12. The next Ministerial meeting will be held in Paris in December, 1963.

SUGAR PRICES
The following Questions stood upon the Order Paper:
Mr. AWBERY: To ask the Minister of Agriculture, Fisheries and Food if he is aware that the price of sugar has gone up over 40 per cent. since Christmas and is now at its highest; and if he will seek power to control the price.
Mr. FARR: To ask the Minister of Agriculture, Fisheries and Food what new steps he is taking to increase sugar production in the United Kingdom.
Mr. MCBRIDE: To ask the Minister of Agriculture, Fisheries and Food if he will institute an inquiry into the price of sugar in this country.
The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames): With your permission, Mr. Speaker, and that of the House, I will now answer Questions Nos. 43, 46 and 48.
During the first four months of this year, the world price of raw sugar rose by 75 per cent., from £40 to £70 per ton. Throughout this period we have been adjusting the surcharge at home. This is a charge levied by the Sugar Board to make up the difference between the fixed price at which we buy sugar from producers here and in the Commonwealth, and the normally much lower world price.
As a result of the action which we have been taking to reduce and finally to eliminate the surcharge, we were able, in spite of the rising world price, to keep the price of sugar in this country very steady up to the end of April.
This month, the world price began a new and increasingly steep rise, and this has begun to be reflected in retail prices. As a result of the high price of sugar, profits have accrued to the Sugar Board. As from midnight tonight, the Sugar Board will start distribution payments at a rate of 6d. a lb. of refined sugar to pay back these profits. This will offset the rise in world prices and will make
1320
it possible for retail prices to be restored to their normal levels, and will make it unnecessary for prices of such things as jam and sweets to go up.
In order to remove the risk of serious abuse of these arrangements, the Board of Trade will be controlling the export of those sugar and sugar-containing goods on which the Sugar Board have no power to recover distribution payments.
These arrangements will mean that our supplies of sugar, which are completely adequate for our needs, will be available at normal prices to consumers and manufacturers.
Mr. Farr: In thanking my right hon. Friend for his statement in reply to the Questions, may I ask whether he has considered making this year a non-quota year for British sugar producers? There is an estimated shortfall of about 1 million tons in world sugar production for this year and I should have thought that possibly it was not too late to let British farmers take additional steps to make up some of this shortage.
Mr. Soames: First, we have no idea what the world price of sugar will be at the time when any future crop is harvested. Secondly, there is plenty of sugar in this country for our needs. Supplies under the Commonwealth Sugar Agreement, combined with those resulting from the acreage quotas for the growing of sugar here, amount to 90 per cent. or even more of our total sugar requirements.
The difficulty has not been any shortage of sugar in this country. This rise in world prices has been the reflection of a marginal shortage elsewhere in the world. It would not be a good solution to raise our acreage quotas for home sugar producers at a time when the price was high and to drop them when the price was low. I think that the arrangements which keep the flow of sugar into this country steady are the right ones.
Mr. McBride: In thanking the Minister for his statement, may I ask whether he is aware of the great anger felt by the housewives of Britain at the rise in price of this commodity? In West Germany an allotment from the Government has pegged the price of 1s. Id. a 1b. Is the Minister further aware that

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in Mincing Lane last Thursday as reported in the Guardian, the Daily Telegraph and the Daily Express, all newspapers which favour hon. Members opposite, an anonymous spokesman said:
"What is all the fuss about? It will be all right in the end."
Surely someone made something out of this. Surely the Minister owes it to Britain to inquire into the reasons for the sudden steep rise in price in this commodity.
Mr. Soames: I do not think that the hon. Gentleman has got the facts quite right. Thanks to our arrangements on the importation of sugar, when the world price rose from £40 to £70 in three months, that rise was not reflected in the shops at all. That was up to the end of April. Only during the month of May, and principally during the last two or three weeks, when there was a very sudden increase from £70 to £100, which has gone back in the last couple of days, has this rise been reflected in the shops. In other words, the British housewife has been cushioned from the general rise in world prices, except in the last fortnight. Therefore, action had to be taken. We are now taking the action, and I believe that the housewives will be getting a very good deal from our sugar arrangements.
Mr. Peter Emery: How will this affect exports? I think specifically of industries which have to use a great deal of sugar in the production of biscuits and sweets. Will they be able to maintain their present prices in their export markets?
Mr. Soames: Yes, Sir. This will not interfere at all with our exports of sugar or goods containing sugar. What the arrangement will do is to ensure that people cannot buy sugar in this country at the Commonwealth Sugar Agreement price of around £45 or £46 a ton and then re-export it, without doing anything to it, at the world price of around £90 or £100 a ton. This will not affect our ability to export.
Mr. Peart: The right hon. Gentleman mentioned payments by the Sugar Board and the rebate of 6d. a 1b., which will go to the refiners. Can the Minister
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assure us that this will be passed on immediately to the consumers in toto? Has he had that assurance from the refiners?
Mr. Soames: There is an agreement with the refiners, which, I think, dates back to 1956, that any surcharge or any distribution payment will be reflected in the ex-refiner's price. So this assurance can be given.
Mr. Grimond: When the Minister has made these arrangements about which he has told us, will they enable quicker action to be taken should there be another steep rise in the world price? Secondly, do these arrangements involve action by this House? Do we have to give the right hon. Gentleman any power or pass any Orders?
Mr. Soames: I will lay an Order today which will enable a distribution payment of 6d. to be made by the Sugar Board. If the world price were to rise further and we wished to increase the distribution payment, or, alternatively, if it were to fall and we wished to lessen it, this could be done by a further Order.
As to the powers which should be given by the House to the Government, the Orders which I have laid will be subject to the negative Resolution procedure.
Sir C. Osborne: On the wider issue, does it not smack somewhat of humbug for the House to complain about the rise in the world price of sugar when the people who supply it to us from the West Indies have a standard of living which is only one-half or one-quarter of ours? We wish to improve their standard of living and the only way we can do it is by paying more for what they send us. Is this not sheer humbug, therefore, when they are trying to earn an honest living?
Mr. Soames: Many Commonwealth countries will be getting advantage from the higher world price which is ruling today. As to the sugar which they sell to this country under the Commonwealth Sugar Agreement, normally the world price is below the Commonwealth Sugar Agreement price and they benefit. At times when the world price is high, this country gets the benefit.

ROYAL DOCKYARDS
The following Question stood upon the Order Paper:
Mr. CRITCHLEY: To ask the Civil Lord of the Admiralty whether he will make a statement about the future load of work on the Royal Dockyards.
The Civil Lord of the Admiralty (Mr. John Hay): With permission I will now answer Question No. 60.
The Admiralty is at present engaged on an examination of the expected workload on all the Royal dockyards for the next year or so. So far as Rosyth is concerned, it has already been announced that this dockyard is being developed for refitting nuclear submarines and is to be ready for emergency work in 1965 and for planned refits as soon as possible thereafter. There is no question of any reduction of the work-load there.
The work-load on the three southern dockyards is, however, affected by the completion next year of the modernisation of H.M.S. "Eagle" and the conversion of H.M.S. "Triumph". No new single tasks of comparable magnitude remain to follow. Some classes of refit work are likely to increase to offset the decline in modernisations and conversions, but it is not yet possible to estimate exactly what the load on each of the individual dockyards will be.
Apart from the overall effect of any changes in the work-load, there may be some imbalance between trades. But the order of magnitude of the problem is such that we expect normal wastage, the adjustment of overtime, a fall in the number of men employed over 65 and restriction of adult entry to go a long way towards its solution. It is not possible at this stage to say whether, in addition, any actual discharges on redundancy will be required. This possibility cannot be excluded, but it is already clear that large-scale discharges will not be necessary.
As soon as our examination has reached a sufficiently advanced stage, the trade unions will be brought into consultation.
Mr. Critchley: In thanking my hon. Friend for his statement, may I ask whether he is prepared to give an assurance that he will work with the unions
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throughout the whole of the arrangements that he will have to make during the next eighteen months or so, so that the arrangements may be made as smoothly as possible and the number of people who may have ultimately to lose their jobs will be as few as possible?
Mr. Hay: Yes, Sir, I certainly give that assurance. We have admirable machinery for consultation with the unions, both at national level and in the yards. We will certainly bring them fully into consultation on this problem.
Mr. Willis: What exactly does the statement mean in terms of jobs? How many jobs are to be lost at each dockyard?
Mr. Hay: I cannot yet give any precise forecast. It would be not only unwise, but misleading, if I tried to do so. When our examination has gone a little further, we should be able to reach some idea of the figures. Then, as I have said in my Answer, we shall seek to bring the unions into consultation over the whole matter.
Miss Vickers: In view of the geographical position of Devonport Dockyard and the fact that the City of Plymouth has been dependent on the yard for 300 years, can my hon. Friend assure us that he will give adequate notice of any change so that we may try to become a development district, because it will be particularly difficult to get other industries to take up work there?
Mr. Hay: I hope that action of that kind will not be necessary. As I hope I have made clear in my Answer, this is a limited problem. We do not foresee any large-scale discharges. But certainly, as soon as we are in a position to say anything further, we will, of course, wish to do so.
Mr. Awbery: Is the Minister aware that the island of Malta depends almost entirely upon its dockyard? Can he give an assurance that there will not be a large number of redundancies in the dockyard there, where things have become so serious in the past few years?
Mr. Hay: No, Sir. My Answer is confined solely to the Royal dockyards in this country.
Mr. Burden: Is my hon. Friend aware that many informed people, quite apart

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from those connected with the dockyards, are convinced that it is neither wise, desirable nor necessary to reduce the labour complement in the Royal dockyards at this time in view of the closure of overseas dockyards, the closure of Sheerness and the absolute necessity of maintaining a British Fleet big enough to ensure the free passage of our shipping throughout the world, to which the Polaris programme in no way contributes?
Secondly, will my hon. Friend bear in mind that workers in the Royal dockyards are paid much less for comparable jobs than workers in private yards? Will he urgently consider the question of an examination of the whole wages structure in the Royal dockyards?
Mr. Hay: The answer to the first part of that question is, "Yes, Sir". As to the second part, I understand that wage negotiations are in train over the whole of this field.
Mr. W. Hamilton: Does the Minister recognise that Fife will be gratified that there is to be no run-down at Rosyth? Can he, however, tell the House whether he had any consultations with hon. Members on his side of the House many weeks ago on this problem and that redundancy figures were leaked to the Press, and that it was considerable pressure by hon. Members opposite who represent dockyards that compelled the Minister to revise his policy on this matter? Can he confirm or deny those allegations?
Mr. Hay: As to the first part of the question, I am pleased to know that the position of Rosyth gives satisfaction in Fife. In reply to the second part, the hon. Member should not believe everything that he reads in the newspapers.
Dr. Bennett: While many people will, I am sure, be greatly relieved to hear that what has appeared to be some sort of sentence has been largely mitigated by a firm statement, may I ask that, while we hope that there will be no question of development districts in the dockyard ports, if there is to be a net reduction in the labour force my hon. Friend will keep in the closest touch with his right hon. Friend the President of the Board of Trade so that industrial development
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certificates may be encouraged to be awarded should that be necessary?
Mr. Hay: Yes, Sir. My right hon. Friend the President of the Board of Trade and my noble Friend work in complete harmony in these matters, as always.

SHIPBUILDING (LOANS TO SHIPOWNERS)
The following Questions stood upon the Order Paper:
Dame IRENE WARD: To ask the Minister of Transport whether he will now make a statement on proposals to help shipping and shipbuilding.
Mr. P. WILLIAMS: To ask the Minister of Transport whether, in view of the current threat to employment in the shipbuilding industry, he will now make a statement about the Government's proposals on this matter.
The Minister of Transport (Mr. Ernest Marples): With permission, I should like to answer Questions Nos. 82 and 84.
The Government have been regarding the extent of unemployment in the shipbuilding industry with increasing concern, particularly since it is mainly concentrated in development districts. The world's shipbuilding capacity is now far too large for normal demand. There will have to be some contraction, from which our shipbuilders cannot expect to escape altogether.
But the immediate situation is worse, because in recent years ships have been built faster than world seaborne trade has grown. So our shipbuilders have been faced with a trough in demand which has brought their order books very low. Although recovery must come, there are few signs of it yet.
Therefore, the Government have been anxiously considering whether there are any special steps which they might take to help. Shipbuilders have been hit by the low rate of ordering by British ship-owners, and this feature has been particularly in our minds. We considered a scrap-and-build scheme. But no matter how it was administered, this would really be a subsidy for the shipbuilding industry, and subsidy is a course to avoid if at all possible.

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Moreover, the British mechant fleet is one of the most modern in the world; and British ships are already being scrapped at a satisfactory rate. For these and other reasons, we think that a scrap-and-build scheme would not be appropriate.
The Government have decided, instead, to make funds available for a strictly limited period at Government lending rates for financing new orders for British shipyards.
The loans will be made to shipowners, and the terms of the loans will be decided on the advice of an Advisory Committee which I am setting up under the chairmanship of Lord Piercy. Lord Piercy is the Chairman of the Ship Mortgage Finance Company, and he has agreed that the experienced staff of this company may be put at the disposal of the Committee in the handling and investigation of applications.
The Government are prepared to make £30 million available for financing new orders. We shall consider raising this limit if experience shows that it would be right to do so. But the scheme will not, in any case, continue beyond 31st May, 1964. We contemplate that individual loans might be for periods of up to a maximum of 10 years. The lending rate based on Government credit for loans of from five to 10 years repayable by instalments is at present 5 per cent.
The Government will be prepared to make loans available in suitable cases for up to 80 per cent. of the cost of a ship. But the terms of each loan will be decided on merits, including, of course, the creditworthiness of the applicant. The scheme will apply to orders from British shipowners. Special facilities are already available for export credits.
I hope that this scheme will make a real contribution to the problems of British shipyards at this difficult time.
Dame Irene Ward: While thanking my right hon. Friend very much for having thought out these practical steps which. I think, he needs no assurance will be very welcome indeed, may I ask my right hon. Friend whether this new scheme has been thought out in consultation with British shipbuilders and owners? In view of what he said about the increase of merchant fleets throughout the world and the general problem of
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shipping, has he anything to say about the problems which will arise from this, in view of the fact that it is not only shipbuilding which is the problem but the operation of the merchant fleet throughout the world to full capacity and in really competitive terms with other countries which subsidise both their shipbuilding and shipping interests?
Mr. Marples: I am grateful for my hon. Friend's support of this scheme.
As for the scheme being worked out in consultation with British shipbuilders and owners, the answer is "No", because we felt that the House should know the scheme first. We shall, of course, be consulting them straight away, but from negotiations which go on normally between my Department and the shipowners and shipbuilders we have a fairly good idea of what they have in mind.
As far as the general position is concerned, this is a worldwide problem, because the capacity of the world's shipbuilding far exceeds the rate of demand for world shipping, and it is aggravated by the subsidies given by certain countries. Of the leading shipbuilding countries, France, Italy and the United States are the principal ones which give shipbuilding subsidies. The first two will be eliminated in due course under the Common Market negotiations.
Mr. P. Williams: Will my right hon. Friend accept my congratulations on getting back from the opening of the motorway in time to make this statement? Will he help the House to put the whole matter in the right perspective? When we compare British shipbuilding costs with those of foreign nations we must take into account the fact that foreign nations subsidise their building to a very large extent, and, therefore, there is a great deal of uninformed and unfortunate criticism in this country of the British shipbuilding industry?
Will he also accept that most of us, on this side, at any rate, would also support him in rejecting subsidy? Can he tell the House what sorts of types of ships he expects to be disposed of and replaced in the work of Lord Piercy's Committee? Can he tell us whether he envisages British shipowners getting the same credit facilities as are given to foreign owners at present? Finally, if the scheme envisages legislation, how soon shall we get it?
Mr. Marples: In answer to my hon. Friend's last question, legislation will be needed, but I am advised that the scheme can be started now. There are precedents for that, so the scheme will start straight away. It will apply to ships of 100 tons and over, but will exclude fishing vessels because they are covered by the White Fish Authority and the Herring Industry Board, which administers schemes for fishing.
As far as subsidies are concerned, I think that our principal competitors, such as Japan and Sweden, do not have subsidies, but it is clear that they have been quoting prices which are under actual costs and are unrealistic. Therefore, to that extent, of course, they will be making losses. Japan is extremely concerned at the present trend in prices.
Mr. Willey: Is the right hon. Gentleman aware that, as far as it goes, this scheme is welcome? We welcome any step which will improve the position of British shipowners putting orders into British yards. But does he realise that this does not seem to match present requirements? British shipyards are facing a few—if we take an optimistic view—very crucial years, and if they are to get through those years much more than this will have to be done? We want to encourage new types of ships and reorganisation of construction.
I noticed that the right hon. Gentleman referred to contraction, but he said nothing, about alternative work. We do not want contraction at the further expense of shipyard employees. I think that he has to take a much wider view of the industry and much more constructive action if the industry is to get through the next immediate and very difficult years.
Mr. Marples: There was one supplementary question which my hon. Friend the Member for Sunderland, South (Mr. P. Williams) asked, which I did not answer, about credit facilities. I think that this will mean that the British owners will have credit facilities better than or at least as good as the facilities given to foreigners who wish to buy in this country.
In reply to the first part of the supplementary question by the hon. Member for Sunderland, North (Mr. Willey), I think that it is much too early to say that this scheme will not provide the
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relief which is wanted. It is difficult to estimate quite what relief it will give. All I can say is that British shipbuilders have continually complained that British shipowners do not have the necessary credit terms to encourage or induce them to order ships. This will provide that inducement, and if it does bring orders to our shipbuilding yards it will be welcomed in some of the development districts.
Mr. Shinwell: Was the right hon. Gentleman serious when, in reply to one of his hon. Friends on the other side of the House, he said that so far he has had no consultations with either shipbuilders or shipowners on the proposed scheme because he wanted to make an announcement to the House? Was it not possible, before making the announcement, to have some preliminary discussions with those primarily concerned? How does he know what type of ships are required? How does he know what credit facilities are required?
Is the right hon. Gentleman not aware, on the basis of his own statement, that the supply of ships is far in excess of the demand and that the only way of dealing with this problem, apart from extended credit facilities, is that followed in other shipbuilding countries, for example, in Japan'? Recently, in connection with the building of a tanker for a large firm in this country, it was said that nothing but a scrap and build policy would be of any avail.
Is he also aware that the Court Line recently sold seven ships to a foreign country instead of scrapping those ships, and that they are to he in competition with this country? When will he face the inescapable fact that unless we dispose of a great many of our obsolete ships, some of them 15 and 20 years old, and of a speed which makes them no longer of competitive value against the ships of many maritime nations, we shall not solve this problem?
Mr. Marples: Scrap and build is really a direct subsidy. The shipbuilders did not want that. They wanted owners to be given an inducement to order more. We have now given that. The credit we are now giving covers all types of ships. It is not just one type, and it does not depend on whether it is an advanced type or whether it is a dry cargo vessel or a tanker.

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The credit is given on the best terms the Government can possibly give to any institution in this country, at the lowest rates of interest at which anybody can borrow. Therefore, it ought to be a great inducement to shipowners to order British ships. While I know that this is a world problem, this is specifically intended to help our shipbuilders in development districts. I think that it will do so.
Mr. P. Browne: Is my right hon. Friend aware that the biggest employer in one part of my constituency—the
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Appledore shipyard—closed down overnight recently, and that we have had difficulty in getting it going again? Does he further agree that one of the reasons why these smaller firms are hanging on by their eyebrows is the contraction in the coastal fleet? Will he not pay more attention to this important part of our transport system?
Mr. Marples: I cannot agree with my hon. Friend. What has happened is that, in view of the scarcity of orders in the world, the bigger yards are now going in for the smaller ships, which they did not do before.

FOOD IMPORTS
4.2 p.m.
Mr. Speaker: Before I call the hon. and gallant Member for Eye (Sir H. Harrison) to move his Motion, it may be convenient to the House if I indicate that the Amendment to the Motion, in the name of the hon. Member for East Ham, South (Mr. Oram), at the end to add:

That this House welcomes the decision of Her Majesty's Government to use measures of control of certain imports of foodstuffs as a means of stabilising the market for agricultural products in this country.

Although a back bencher may be fortunate in drawing first place to move a Motion from time to time on a Friday, it is only twice a year that he can be fortunate enough, by choosing a lucky number, to open a debate at 3.30 p.m. [HON. MEMBERS "Four o'clock." When this good fortune happened to me on 14th May I had no doubt that the right subject for me to raise, both in the national interest and in the interests of the agricultural industry, in which so many of my constituents are engaged, was one dealing with the necessity for a greater control of the imports of foodstuffs. This was a Motion calling for a big change in Government policy.
It must be unique in the annals of this House that I should have received a reply to my Motion and, what is more, have had it accepted in principle by the Minister of Agriculture a week before I was able to move it. This was due to the fact that the Opposition, at short notice, took a Supply day to debate agriculture—an opportunity which they had had for many weeks. I tried to discover whether a back bencher was in any way protected by the law of anticipation but, searching through Erskine May, I found, according to pages 403 and 404, that once more the powers of the Front Benches were too strong, and that as the debate was on a Supply day, in Committee, it had priority over mine.
However, no vote was taken last week on the control of imports. Therefore I have extended my Motion to cover a wider field than it covered originally, because I wanted it to be carried and recorded that this House approves the new policy announced by Her Majesty's Government last week. In my view, in spite of last week's welcome announce-
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"provided that domestic consumers are not prevented from obtaining reasonable price advantages from the increasing productivity and abundance of agriculture at home and overseas, and provided also that overseas primary producers are not deprived unduly of the means of paying for British industrial goods"
is not selected.
Colonel Sir Harwood Harrison (Eye): I beg to move,
ment, this debate is still opportune, since it enables us to discuss some of the detail which was, naturally, omitted last week.
I am delighted to know that my right Friend the President of the Board of Trade will be taking part in the debate, because much of the detailed administration of these controls will lie in the hands of his Department. He is often regarded in agricultural circles as the nigger in the woodpile, but I wish that some of my agricultural friends could see how clean and charming a person he is in the flesh. I suggest that he soon speaks to a large gathering of farmers. If he finds that leaders in other industries and businesses try to stop him carrying out this policy, I suggest that he consults his Parliamentary Private Secretary, my hon. Friend the Member for Lowestoft (Mr. Prior). If he follows his advice on farming matters he will be very wise.
The reason that I have chosen this subject for debate is that for some months it has been clear to me that in the interests of our farming community—which wants stable prices—and certainly in the interests of the consumer, or taxpayer, there must be some control on the excessive import of foodstuffs.
When the 1947 Act was passed—and, to a lesser degree, the 1957 Act—we still needed a large quantity of food from the Commonwealth and foreign countries, many of whom were then short of food themselves. The world situation is very different today. There are large surpluses in many countries. We are one of the last free markets left, and it is not unnatural that countries should look to see what they can unload on us. It is that extra amount that is coming on to our market that has upset both supplies from home producers and also prices.

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At the end of last year I met the leaders of the Suffolk Branch of the National Farmers' Union and told them that I, at least, was converted—as I thought many of my hon. Friends were —to the necessity of a policy of import control. At that time the Government were still negotiating in an endeavour to enter the Common Market. It may be argued that they were not at that time paying sufficient attention to the needs of our farmers. Grave concern for the future has been expressed during the year, but the quick change of policy announced last week should restore confidence. Farmers were, naturally, angry at the increase in beef imports, which forced down the prices of the home product, although they were still getting the benefit of the guarantee under the 1957 Act.
It appeared that the Government were reacting slowly. It must be realised that in a democracy it is usually natural for a Government to react slowly, until public opinion is expressed. Farmers are critical of the dumping of foreign produce at low prices, and although the antidumping legislation has achieved much, its machinery is cumbersome. Often the threat of its use has been successful in preventing imports, but this is negative.
Farmers were shaken when it looked at one time as though a contract for the supply of liquid milk to an American air base in East Anglia would go to a Dutch firm. We have consistently had imports of Polish eggs at inopportune moments, and there is a strong feeling that the Danes are getting more than their fair share of the bacon market. While the farmers' price is controlled, to a large degree, any extra costs incurred by the middleman are automatically passed on to the consumer. A few days ago the cost of producing bread rose. It may have been due to a wage increase, or to extra overheads, but at any rate the price of bread was increased, and the farmer felt that he was getting the blame, although he was getting no benefit.
Yet in all the post-war years no industry has increased its productivity more and absorbed more new ideas and techniques, although at the same time—as my hon. Friend the Member for Newbury (Sir A. Hurd) pointed out last week—the numbers of farmers and farm workers
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have decreased. It was for these reasons, for which the Government must accept some measure of responsibility, that I expected, a fortnight ago, to be moving a narrower Motion this afternoon, calling for immediate action. Thus, I was delighted to find that my right hon. Friend the Minister of Agriculture had quickly persuaded the Cabinet to agree to a policy of import control. That is why my Motion is framed as it is.
No doubt the one Liberal Member sitting opposite at the moment may not like the Motion, since Liberals seem to prefer the importation of overseas food free of duty.
Mr. Jeremy Thorpe: The hon. and gallant Member had better read our policy.
Sir H. Harrison: The hon. Member had better consult his grandmother, Lady Violet, and find out what she thinks. Those who do not like support prices are free to vote against the Motion.
I want to raise a few points concerning the detail of the way in which import controls might work. First, I want to consider a commodity of which we produce all that we require, such as milk. Can we have an assurance that under no circumstances will the import of liquid milk be allowed?
When we think of milk, we think of beef, and here the Government for some time now have given great encouragement to farmers to reduce their dairy herds and to go in for beef. That policy has been quite successful. That is why everyone was upset at what happened at the beginning of this year, because it was clear that if we were producing more at home we must have a restriction on imports. During the first three months of this year, there was a big increase in imports from the Argentine. They were nearly doubled. I am glad that my right hon. Friend has been able to make a temporary and voluntary agreement to the end of the year. But I do not think that this is enough. This is a case in which immediate action is required.
We also see that although the production of home bacon was up by 10 per cent. in 1962 over 1961 imports, also, were higher. There is some concern among pig farmers at the cutting back in the standard number of pigs in the Price

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Review this year to 11 million. I must express the hope that when working out import controls for this commodity the Minister will allow the industry to keep the expansion of 12 million reached last year, and of which it shows that it is capable.
We see a continuing increase in the home production of cereals, especially in barley. If standard quantities are to be imposed, I hope that my right hon. Friend will take account of the fact that owing to scientific research in which the Government play a very great part, and the ability of our farmers, more is continually being produced per acre. Will my right hon. Friend therefore consider making his standards on an acreage rather than on a tonnage basis? We have had Questions recently in the House about the relative merits of maize and barley. There is no doubt that in balanced rations there could be a good deal of substitution of one for the other. I know something about this, because far some years I was actively engaged as a corn merchant.
If we are to protect the home producers of barley, there may have to be control over imports of maize, although maize is not produced in this country. Home-produced barley was up by 14 million tons in 1962 over 1959 and imports dropped by 650,000 tons. We see that the maize imports were up nearly 50 per cent. in 1962 over 1961. This was partially due to the late harvest here, and I am glad to notice the big fall in the imports of maize for the first quarter of this year. It is interesting to recall that two-thirds of the maize we import comes from the United States, a highly industrialised country, and not from one of the poorer, underdeveloped countries. Here, perhaps, is a commodity to which my hon. Friend might give attention.
We see a fantastic rise in the price of world sugar. I underline the word "world", particularly in view of my right hon. Friend's replies to Questions asked earlier this afternoon. I believe that this should be a warning to the people of this country. We have been severely rationed in the acreage of sugar beet for many years, and when the sources of supply from overseas become very expensive, surely we must look again at the position. This
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must be a long-term plan, as the planting season for this year is over and we cannot get an increase in home production until the winter of 1964. I hope that there will be no rigid impositions, because I believe that this could be an opportunity, if cereals are to be restricted, where we could, and with advantage, well increase our acreage of sugar beet.
I do not wish to lay down exact details, regarding restriction, or go into the question of whether quota or specific or ad valorem duty would be best, or the right method for the control of imports. My own feeling is that each commodity must be dealt with on its merits. What might suit one may not suit another. I would, however, stress that timing is very important and that it may be necessary to have prohibition of entry at certain times of the year. We can, of course, think of grain at harvest time. Some people believe that what may be required is either a commission or an authority under the Ministers, armed with flexible powers which might be used very quickly.
This, of course, could apply both ways. When adverse conditions arose duties could be removed for a period, as was done regarding foreign vegetables in the spring of this year, when we were short of home-produced vegetables owing to the prolonged frost.
For many years I have firmly believed that the consumer likes stable prices. Nothing upsets a housewife more than when prices either rocket up or down—[Laughter.] That is perfectly true—and she has to rearrange her budget. By this new system, wisely administered, we shall get stable prices which will be to the great benefit of the consumer.
We also want to maintain an expanding market for our home production. The importance of this has been referred to in the Report of the National Economic Development Council and last week my right hon. Friend talked of the expanding population. I presume he means that home production will get its full share.
There have been two most interesting articles recently, one as late as last Sunday in the Sunday Times by Mr. William Rees-Mogg. He was not writing as a farmer on behalf of the farming industry. He is described as the political

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and economic—I stress the word "economic"—editor of the Sunday Times.
I should like to quote a paragraph to support my case:
"It should in any case be remembered that in the last seven years British farming has raised its production faster than British industry. In productivity per man and in cost of many commodities it is strictly competitive with the protected agricultures of the major European producers. In Britain, each farm worker produces enough food a year to feed 30 people—in Russia, each farm worker feeds only five people. In addition, Britain's net farming income has fallen in terms of constant purchasing power in the last 10 years.…It is necessary to consider these matters in some precise detail, for, in fact, British agriculture has made a better proportionate contribution to our balance of payments in the last 10 years than British industry—which is itself highly protected. The expansion of British farming, and its rapid improvement in productivity, has been a national asset."
That is strong language and I think that it supports my case.
In applying controls we must be careful that we do not drive up the price of the foreign foodstuffs coming into this country beyond a reasonable level. We are prepared to pay a fair price, particularly for goods which come from the Commonwealth countries. One of the great reasons advanced for us having had a free market has been that we are a great trading nation and that it has helped our export trade, to which my right hon. Friend has made such a valuable contribution. But I believe that our exports are so strong today that even if we send less goods to countries like Poland and the Argentine our balance of payments position will be much stronger by getting maximum home production.
It is said that only 4 per cent. of our population are engaged in agriculture. This may well be true, but there are many people in allied trades who depend for their living and their home market on the prosperity of agriculture, and I believe that all history shows that a nation without sound agriculture goes down hill. Can we be sure, for example, that we could export as many tractors as we are exporting today if we did not have a flourishing farming countryside?
On 2nd May we debated an Order dealing with the guaranteed price of shell eggs and with egg imports. I spoke very critically then of the policy of allow-
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ing imports of eggs at all and I forced the matter to the point of a Division being called. I do not think that that was exactly popular with my former colleagues in the Whip's Office, but at least a gamekeeper who has turned poacher knows the rules, and I had given full notice of what I intended to do.
Why do I feel so passionately that we must have a prosperous agricultural industry? It is because of my own personal experiences. I remember, as a small boy of 5 or 6 years of age, being out with an uncle of mine one day when, walking along a footpath, we met a very old man, or at least he appeared to be very old. He looked like Methuselah. He was bent double and had a long white beard. In those days, the value of money was great. My uncle said, "Well, John Jeyes, what would you do if somebody left you £100?" The old man scratched his head and thought a moment and then said, "Well, sir, I would do my innards well." In the arrogance of youth, I thought, "What a silly old man. I should buy lots of games." It was much later when I was a prisoner of war that I realised the old man's wisdom, because unless men and women, in his words, "do their innards well" they can achieve nothing at all.
Twice in our lifetime we have seen this nation threatened because it could not feed itself. We hope and pray that there may never be another war, but there are other things, such as world famine or a rapid increase in world population, which could cause a shortage of food for us. It is surely a sound insurance policy that we should produce a high proportion of our food in this country. The changing fashion in consumption must be borne in mind. In an affluent society people no longer have bread, oatmeal, herrings and potatoes as their main staple diet. They are moving to eating less carbohydrates and more of the enjoyable protein foods and fruit and vegetables.
It must be realised that in administering import controls for the future, having seen what can be produced here, we must allot the balance for the Commonwealth countries and the rest of the world. I ask the Government to set the target for the home producer a little on the high

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side, because it is easy to allow extra supplies to come in from outside if required but it is so fatal to our own supplies and prices if in a good year we give too big a share to the exporting countries.
I should like to direct the attention of the House, Government Departments, the National Farmers' Union, and the National Union of Farmworkers to the whole problem of the distribution of agricultural products. We must move forward into the more streamlined age. It may mean that more marketing boards are required, but, apart from that, the process of marketing is still old-fashioned from the farm to the consumer. Too many people are involved in giving a service.
In some ways the consumer likes this personal service, but it involves high prices. For example, in these days, when more and more of the population have, and ultimately all the population will have, refrigerators in their homes, is a seven-day delivery of milk really necessary? Could there not be some inducement by price for people to have a delivery perhaps only twice a week?
The advent of the supermarket and the help-yourself stores may help to bring down distribution costs. I am sure that this development would yield in agriculture and in many other industries rich dividends to the nation if it were thoroughly examined and explored. This could help the farmer to obtain a higher price for his product and possibly lead to a lower price to the housewife.
I hope that as a result of this new policy there will be a greater feeling on the part of the Government, as they have already shown, of obligation and responsibility to the agricultural industry, and a much finer spirit of partnership between the Government, the farmer and the consumer. We have never previously had a finer entry of young farmers than we have at present. Many of these trained and qualified at their own expense, which is not usual among young men and women in other professions. We must see that they have ample opportunity to play their part, using all the new modern, scientific methods on our farms. They must feel that they, too, are in an expanding industry in modern Britain and making a great contribution to the whole economy
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of the country. I commend the Motion to the House.
4.26 p.m.
Mr. Charles Royle: I am sure that the House will join with me in congratulating the hon. and gallant Member for Eye (Sir Harwood Harrison) on his good fortune in the Ballot and on his choice of subject, but when I tell the hon. and gallant Member that there is not a farmer in my constituency, he will not be surprised if I take a view of this subject entirely different from his.
I regard the debate as an extension not only of the announcement which the Minister of Agriculture, Fisheries and Food made last week, but also of the debate two days previously, on consumer protection. Therefore, what I have to say on the Motion will be concerned with aspects of consumer protection as far as they apply to import policy quite as much as to agricultural matters.
The House perhaps will not be surprised if I concentrate on one commodity--meat. It is not a bad idea from time to time in the House if we speak on things we know something about. If we all tried to concentrate our speeches in that way the time occupied by many of our debates would be considerably shortened.
The hon. Member and his friends in agriculture were encouraged by the speech of the Minister of Agriculture and the proposals which, as far as he could go, the right hon. Gentleman outlined last week. But, while they were encouraged, they were apparently not satisfied, and the hon. and gallant Member now continues the pressure purposely to keep his right hon. Friend up to scratch. I do not want to be unfair, but I regard the hon. and gallant Member's attitude as representing a very selfish outlook on the part of the farming lobby. In his speech he made only one reference to the consumer and that reference was to the stability of prices, without any regard to their level, and to how and at what price essential food supplies could be obtained.
The hon. and gallant Gentleman does not appear to be concerned about the 50 million consumers of the country. His attitude throughout seems to be that the agricultural community must

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be all right and that it does not matter very much about anybody else.
Sir H. Harrison: I did not want to give that impression. I had to keep my speech short, since the debate itself is to be short. I wanted to underline that if we do not have a sound agricultural policy our 50 million consumers will be at the mercy of foreign producers.
Mr. Royle: I am in some agreement with the hon. and gallant Gentleman there. I am not saying that there should not be a prosperous agricultural community. My concern is with how this is to be brought about. The hon. and gallant Gentleman and his friends seem conveniently to forget that, in the hardest winter we have had for over eighty years, with nearly 1 million people unemployed and millions more on short time, cheap meat from abroad, resulting in cheaper home-produced meat, was a veritable boon.
I suppose that the Minister's announcement last Wednesday is to be the blueprint of a new approach to farm subsidies, imports and prices. In other words, presumably it is to be the beginning of a new era. I think that all of us have smelt it coming. in the light of the Press interviews, the failure of the Common Market negotiations, the G.A.T.T. conference, the E.F.T.A. meeting and Tory agitation.
We have no details about what is to happen, only a bald statement. It will take months to work out the details. I hope that by that time another Government will be in office which will look at the problem from the point of view of the country as a whole instead of from the point of view of one section. Certainly, the consumer interest must be paramount.
Traditionally, we have offered a free market for food, and the result has been an abundance and a variety and a low cost unequalled in the world. Imported meat is vital to the task of feeding Britain. I do not want to weary the House. I have only a few figures. I take the three years 1938, 1957 and 1962. I chose those years as examples for a specific reason. The last full year before the outbreak of war was 1938, while 1957 was the year when we were begin-
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ning to get away from shortages, and 1962 is the most recent full year.
The consumption per head of beef in 1938 was 55 lb.; in 1957, it was 54 lb.; and in 1962 it was 51 lb. In 1938, the consumption of mutton and lamb per head was 25 lb.; in 1957, it was 22 lb.; and last year it was 25 lb. So, in meat, we are worse fed than we were in 1938. How were these supplies made up?
Mr. Percy Browne: If the hon. Gentleman is to quote figures for meat, he should also include chicken consumption.
Mr. Royie: I agree that there has been some shifting of public demand to poultry. I must say that I never thought, as a butcher, that I would ever see the day when meat was dearer than chicken.
Mr. Browne: The hon. Gentleman said that we were eating less meat. If he adds chicken meat, he will find that his assumption is wrong.
Mr. Royle: The hon. Gentleman will recall that I did not quote pork consumption, either. I was using the word "meat" in relation to beef, mutton and lamb.
In 1938, the home supply of beef totalled 51 per cent. and the imported totalled 49 per cent.; in 1957, the home production had risen to 64 per cent. as against 36 per cent. imported; last year the figure had improved to 73 per cent. home production compared with 27 per cent. imported. In the case of mutton and lamb, the 1938 home production figure was 38 per cent., in 1957 it was 37 per cent.; and in 1962. 42 per cent.
The question I would put to the Minister and to his right hon. and hon. Friends is this: do these figures show an improvement of home effort commensurate with the thousands of millions of pounds in deficiency payments that have been poured out, particularly for mutton and lamb? It must not be forgotten that the milk scheme—which, as the hon. and gallant Member suggests, has been declining to the advantage of beef production—has in the past—and, to some extent, the present—accounted for the beef increase.
It is not the best beef imaginable when we get it, but it is included in the figures of home production. Those of us with experience of this know that, when a beast has had three or four calves, it

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does not produce very good beef. Self-respecting butchers do not often look at that kind of cattle.
Dr. Barnett Stross: I have listened with fascination to my hon. Friend. Is he saying that the amount of meat we eat is an indication of the well-being of the nation as a whole? Did he not note with what scorn the hon. and gallant Member for Eye (Sir H. Harrison) spoke of an impoverished diet of bread, potatoes, oatmeal and herring—a diet which produced the strongest and healthiest peasantry in Europe?
Mr. Royle: I always bow to the superior knowledge of my hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross) in matters of this kind, but the House will expect me to regard beef, mutton and lamb as the very basis of our health. My hon. Friend can have these other things. They are all his. I still want my rump steak on my plate. He can have his choice.
However, I want to leave that particular point, because there are other aspects to this matter. It would seem, according to the hon. and gallant Member for Eye, that it is only incidental that we cannot sell our goods abroad if we do not buy from abroad. But I should have thought that that was elementary in every economic argument. The best example is the protest which, I understand, has already come from New Zealand about the Minister's proposals.
Let us face the stark fact that our farmers can never provide all the meat required by the public at a price which will keep it on the menu consistent with our standard of living. The scheme under which support payments are made has worked badly in short-term periods of both surpluses and shortages, by failing to discourage additional marketing when the market is overloaded and failing to encourage greater supplies when there are shortages. But the long term is separate in its effects on existing home production.
This expansion of home production has been encouraged, I suggest, without any serious assessment of economic justification from a national standpoint. The total Exchequer cost has risen because each additional unit has been subsidised
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at the same rate. The consumer has not benefited from increased quantities or lower prices, because a fairly constant supply has been redivided to the advantage of home producers.
It is impossible to judge the full implications of the new arrangements announced last week until we know some other things about them. First, what will be the level of imports under the commodity agreements? Secondly, what minimum import prices are in mind? Thirdly, what will be the level of standard quantities, and how will they be determined? Finally, what will be the total subsidy the Government are prepared to make?
It seems clear to me that the consumer will pay more on two counts: first, through some of the burden of the higher proportion of high-cost home production; and, secondly, by higher prices for the same quantities of imported meat. In passing, it is interesting to note that during 1962 Argentine chilled meat was always from Id. to 5d. a lb. below the price of home-killed beef, but in May of this year—this very month—the differential has completely vanished.
Parliament has always recognised the importance of a prosperous agricultural community. Here I agree with the hon. and gallant Gentleman. Parliament has not been ungenerous. I am old enough in the service of the House to have been a member of the Standing Committee which discussed the 1947 Act. All of us in those days were very anxious to do all we could, remembering the magnificent service which the agricultural community had rendered the nation during the difficult years of war. We did them pretty well in the 1947 Act, passed by the Labour Government.
The February Reviews every year are worked out between the Minister and the National Farmers' Union, and shortfalls of guaranteed prices have been met by enormous subsidies. On a short market the Exchequer sits pretty on high prices. On a fuller market the Exchequer gets very anxious and, as in 1961, shows signs of hysteria. The meat trade became the whipping boy of the Minister of Agriculture on purpose to cover up his own bad arithmetic. That bad arithmetic has shown itself for a long time in these: matters.

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I strongly hold the view that a scheme devised in days of shortage must creak in days of plenty. That is what is happening. Four hundred million pounds in producer support is a haunting thing in days of plenty. So, with the fear of reduced subsidies, come the pressures on the Minister once more from his back benchers for unilateral action against imports. Now we get the suggestions of limiting and regulating imports. The hon. and gallant Gentleman is not satisfied with that. He calls attention, in his Motion, to
"the need for greater control of foreign food imports."
Deficiency payments are to go on, to be adapted, to quote the Minister,
"to present circumstances by bringing about greater market stability"—
along with—
"…a system of control of imports or import prices, combined with the extension at home of the standard quantity concept…"—[OFFICIAL REPORT, 22nd May, 1963; Vol. 678, c. 446]
What does that mean? I make my own interpretation of it. I say that it means we are heading far a policy of dearer food. The Minister said that he was not intending to restrict supplies or to raise market prices. After years in the meat trade, I cannot see any other consequence of lowered supplies unless demand falls away. In line, demand will fall away with increased prices.
Mr. P. Browne: The hon. Gentleman has great knowledge of the meat trade. May I ask him whether he thinks that the marketing of meat is satisfactory in this country? Does he think that the butchers have always been very fair in the prices that they have quoted?
Mr. Royle: The butchers have always been fair, but distribution and marketing need some improvement. Five hundred delegates at the meat trade conference at Easter unanimously endorsed the view that any restriction on imports can only be to the detriment of consumer interests and taxpayers' pockets. They are the ones—let it be said quite clearly—who have to meet the housewife.
In passing, I wonder what the Minister is doing in consultation with the distributive trades on the matters we are discussing. My hon. Friend the Member
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for Workington (Mr. Peart) mentioned it in the debate last week. It is all very well for these consultations to take place with the agricultural interests all the time, but other people have to get food to the consumer. I think that they ought to be consulted.
To sum up, the Minister has decided that meat is too cheap. I am sure of that. It is costing too much in subsidies. However, his farmers want their pound of flesh. They say that the answer is to reduce imports. By so doing the Government will shock the overseas suppliers whom we might need again some day. They push the bill on to the consumer. The Tories have lost elections before today on this issue, and they will lose again. Only a planned marketing and distribution policy—the hon. Member for Torrington (Mr. P. Browne) will be glad to hear me say this—will give the population what they deserve in price, quantity and quality.
The ideas of the hon. Member for Torrington may be very different from mine, but he will be surprised to know how far I am prepared to go with him on that question. In the rush which is now going on to manage the market and retain the farming vote, the housewife can well do with some champions of her cause. I want to be counted as one of them.
4.48 p.m.
Mr. R. H. Turton: First, I want to congratulate my hon. and gallant Friend the Member for Eye (Sir H. Harrison) on putting the case so very clearly and effectively when he moved the Motion. I congratulate him on his good fortune in winning the Ballot and choosing this subject.
I thought that the speech of the hon. Member for Salford, West (Mr. C. Royle) was extremely valuable, because I think that it gives us the line that the party opposite will take on this question of an agricultural policy. I cannot believe that the party opposite is as divided on this subject as it is on every other subject.
Mr. C. Royle: This is a private Members' debate. I speak as a private Member.
Mr. Turton: I gather, therefore, that this is a private quarrel. What we want to find out is the view, not only of the

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country, not only of the Conservative Party, but of the other two parties on what I consider to be the landmark in agricultural policy announced by my right hon. Friend the Minister of Agriculture, Fisheries and Food last Wednesday. To me, it was common sense, and I hope that although this is a private Members' debate, whoever winds up for the Opposition will make quite clear what the Labour Party's view is on this question of the change in agricultural policy.
It is not possible to work a system of guaranteed prices in a time of over-supply unless there is a measure of control on imports. It is true that in 1947, when there was scarcity, it was possible to work a guaranteed price system, for the market was assured at the same time, but now that we have over-supply, and have had for some time, we must have some measure of control in the interests of the taxpayer, in the interests of the producer, and in the interests of the consumer, about whom the hon. Member for Salford, West, was talking.
The hon. Gentleman rejected my right hon. Friend's arithmetic. I find myself unable to follow the statistics given by the hon. Gentleman, for they have no relation to the actual facts. The hon. Gentleman did not quote his source, so when I quote figures I shall give my source, and we can then judge whether they are right.
Mr. C. Royle: I did give the source.
Mr. Turton: The hon. Gentleman will no doubt be able to put that in the papers afterwards, but he did not give it in his speech. I do not mean that he will be able to put it in HANSARD; he will be able to write to the Daily Herald, explaining why he was more accurate than he appeared to be.
Before the war we produced 24 million cwt. of meat and imported 29 million cwt. This information is derived from the Ministry of Agriculture, Fisheries and Food's annual review figures and the Trade and Navigation Accounts. That means that 53 million cwt. of meat were available before the war. That was not in 1938, when, as the hon. Member for Salford, West knows, there was a certain amount of stocking-up going on. I have given the 1936 figure, and the figure for 1937 was much the same. In 1962, we
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imported 28½ million cwt. and produced 39½ million cwt., making a total of 68 million cwt. There has been a change in supply in this country to the extent of 15 million cwt. extra. which has made the position more delicate for the working of the guaranteed system, and also more delicate for the President of the Board of Trade when he is dealing with other countries.
The position with regard to wheat is similar. Before the war we imported 100 million cwt. and produced 33 million cwt., making a total of 133 million cwt. We now import 78 million cwt. and produce 72 million cwt. making a total of 150 million cwt. We are getting a good deal more wheat into this country, and this makes the position very difficult for the wheat farmer in this country.
The position in respect of barley is even more acute. Before the war we imported 18 million cwt. and produced 15 million cwt., making a total of 33 million cwt. Our imports now are down to 7 million cwt. but we produced 115 million cwt., making 122 million cwt. available. I quote those figures merely to show that the whole picture of supply has changed tremendously, especially recently when we have had this revolution in agriculture.
That this does not work with the present guaranteed supply system I can illustrate best by looking at the picture of egg production, where at the moment we are virtually self-sufficient in the supply of eggs. Last year we had a guaranteed price of 3s. 8d. a dozen eggs, yet we imported 2½ million cwt. of eggs at an average price of 2s. 5d. a dozen, together with £300,000 worth of liquid eggs which caused great damage to the health of my constituents and many others by giving them paratyphoid. These eggs were imported at an average price of 2s. ld. per lb. This so upset the guaranteed price system for eggs in this country that the taxpayer had to pay £24½ million in subsidy. This is a ridiculous state of affairs, which I am certain the hon. Member for Salford, West, even in his private capacity, could not possibly defend. We paid £6½ million for eggs which we did not want, and, in addition, we saddled the taxpayer with a burden of £24½ million.
Mr. C. Royle: Who imported the eggs?
Mr. Turton: Many private sources who wanted them to try to get cheap materials for their manufactured products. I shall deal later with the arrangements we make with certain Iron Curtain countries, for which my right hon. Friend the President of the Board of Trade is responsible.
The system of over-supply does not work with the guaranteed price system, and the next thing at which one has to look is what should be the measure of control? The trouble is that not merely is there over-supply in quantity, but that some of these imports are coming in at exceptionally low prices as a result of what I call desperate dumping. Dealing again with meat, in the first three months of this year—and I call in aid the speech of the hon. Member for Salford, West—the position is that in December last year fat cattle were making about £7 10s. 0d. a cwt. By the end of March that figure had dropped to between £5 10s. 0d. and £5 15s. 0d. a cwt., a fall of between 20 and 25 per cent. Why was that?
The Argentine nearly doubled her exports to us in that period compared with the previous year, and Uruguay trebled her exports to us. The average price of Argentine meat that came in in December, 1962, was £9 12s. 0d. a cwt. The average price of Argentine meat that came in the first three months of this years was £7 10s. 0d. a cwt., a drop of over £2 a cwt.
Who benefited? The hon. Member for Salford, West gave his case away when he said that until the early part of the year there was a margin of Id. to 5d. per lb. on British beef over Argentine beef but that it disappeared by May. Of course it did, because by that time the market for meat had been so saturated that there was over-supply and it was not possible to get the preference that better meat really required.
If one looks at the Retail Price Index and compares the level of December with the level of April, one finds that the index for meat fell by 1 per cent. during that period, although the price of fat cattle fell by 25 per cent. Yet it was at the same level as it was in January, 1962, when the price of fat cattle was £8 a cwt. These quick fluctuations in price, this desperate dumping, does not help the consumer, although I quite agree that there may be some whom I would des-
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cribe as market operators who get some gain by it.
I hope that I shall convince the hon. Member for Salford, West and those who think like him that what the Government are doing is not merely in the interests of the farmer and the taxpayer, but also in the interests of the consumer. We want stable prices. We do not want wild fluctuations. A country which unloads products by excessive imports here is not doing us any good in our balance of payments.
What is to be the method of control? I am quite certain that we cannot deal with this matter solely from the point of view of quantity; we have also to deal with it from the point of view of price. My right hon. Friend the Minister of Agriculture, Fisheries and Food referred on Wednesday last to the working group on bilateral agreements. I entirely agree that we should be working through a system of bilateral agreements, but I hope that when he or the President of the Board of Trade carry out those agreements they will remember the Crathorne policy of agriculture in which Sir Thomas Dugdale, as he was when he was Minister, announced that he would so conduct his policy as to regard the interests of the home farmer first, the Commonwealth farmer second, and the foreigner third.
We now require an amendment to the Crathorne policy because, after we have looked after the interests of the home farmer and the Commonwealth farmer, we have to look after those of our E.F.T.A. partners in preference to the rest of the world. I hope that whoever answers this debate will make it clear that Her Majesty's Government still hold to that system of priorities.
Turning to what measure of price control we should have, we have to realise that if we are to continue, as I hope we shall, with the guaranteed price system we should be linking our system of import control with that system. We want to avoid imports which come in well below the price guaranteed in this country. I agree that no doubt we shall have to have different systems for different commodities. It makes a great difference whether what we are importing is a raw material for a home industry or a finished product, but generally we ought to have a system of tariffs

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which hinges on when the import price is 25 per cent. below the price guaranteed in this country. That is a more effective way of dealing with the problem of excessive imports than the anti-dumping legislation which Lord Eccles introduced a few years ago.
I do not believe that anti-dumping legislation is a satisfactory way of dealing with this matter because it is an insult to a friendly foreign country to call it a dumper. Those countries do not like it. What we can do to a friendly foreign country is to say that we have our system of guaranteed prices which is vital for our home agriculture, but it is equally vital for taxpayers and consumers that it should be operated economically. We should say, "We cannot stand your imports coming in at 30 per cent. or 40 per cent. below the guaranteed price level. Therefore, we shall put on a tariff which hinges at a fairly heavy rate the more that it goes beyond 25 per cent. below our guaranteed price."
I throw out that suggestion for consideration. It is not unlike the sluice gate price system of the European Economic Community. I do not think that the sluice gate system would work so well for us for there is a danger that the Community's system would raise prices unduly high, whereas a system of a hinging tariff would be more in favour of the consumer.
Coming to the problem of the measure of control, I wish to say a few words about standard quantities. My right hon. Friend the Minister has made it quite clear that he intends to introduce standard quantities for meat or cereals in a future Price Review. Reading what was said by the President of the National Farmers' Union only at the beginning of the month, I feel sure that if this system is worked out reasonably it will meet with the approval of the N.F.U. Mr. Woolley said:
"I believe that we, as farmers, must take a clear-sighted and balanced view. Obviously, those markets which can pay for produce must not be so flooded that prices fall to wholly uneconomic levels. Quite clearly, on the other hand, we cannot ask other nations to regulate their production and expect to be able to have a complete free-for-all for home production, whether or not we go through the economic ceiling."
As I understand it, that statement by Mr. Woolley was showing that he is quite prepared to accept standard quantities in
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a future Price Review if there is a satisfactory measure of control, but I beg the Government so to work their standard quantities as to provide for the economic expansion of home agricultural industry. That is both in the interests of the balance of payments, and the interest of home agriculture.
I put it like that and expect to have an answer when the speakers from the Government and the Opposition Front Benches take part in the debate. I hope that each will give his comments on the different views of policy and prices, including those of the hon. Member for Salford, West. There must be economic expansion. We do not want uneconomic expansion in agriculture. I think that there is certainly in beef very good scope for great economic expansion with the development of recent years, both in barley-fed cattle and the rest.
Who is to carry out this measure of control? I alway fail to understand the departmental system of dealing with these questions of trade and imports. My right hon. Friend the Minister is responsible for the whole of the food of the country, whether it is grown here or imported. Yet he has little or no control over imports of food. That is handed over to my right hon. Friend the President of the Board of Trade, who, curiously enough, looks after trade with Commonwealth countries, while if it is a matter of trade with foreign countries it is handed over to the Foreign Office. That is true. The officers who deal with imports in respect of foreign countries are officers of the Foreign Office.
I believe that there is a strong case for so altering the position that when dealing with food imports the Minister responsible should be the Minister of Agriculture, because if he has a ministerial responsibility for food supplies he should decide the quantity which should be imported, naturally taking it as a Cabinet decision. This seems to me the more important because although, except for the hon. Member for Salford, West and one or two others, broadly speaking there is general agreement on the Government's policy for dealing with this problem, when we consider who should carry out the control there is considerably disagreement.
The official Opposition suggests a system of import boards. I understand

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that the hon. and learned Member for Montgomery (Mr. Hooson) wants a commission which would supplant all Government Departments; there would be a certain amount of bureaucracy doing what clearly should be the Government's function. If I am wrong about that, perhaps when the Liberal Party spokes man takes part in the debate he will make a little clearer what the hon. and learned Member intended.
I believe that the question of the control of imports must be in the hands of the Cabinet, the Government and a responsible Minister. In my view, it cannot be handed over to any board or commission although no doubt, just as before the war we had I.D.A.C., an advisory committee could well be appointed, on which I hope the hon. Member for Salford, West and the hon. Member for Workington (Mr. Peart) would work together in happy unison. That seems to me to be the right way, and I do not believe that it can be worked by my right hon. Friend the President of the Board of Trade.
This is not a personal attack on him. I know him to be well intentioned. But, unfortunately, his Department has been responsible for so many things in the past which have gone wrong in agriculture. For example, we have the whole of the Iron Curtain treaties, all the Yugoslav meat, all the Polish eggs—all coming in because, with his zeal for signing agreements to make trade with distant parts of the world, he is bringing in vast quantities of food which are an embarrassment to his neighbour and right hon. Friend the Minister of Agriculture.
I therefore hope, in supporting the Motion, that a measure of control is carried out by the man whom farmers respect and honour, my right hon. Friend the Minister of Agriculture.
5.14 p.m.
Mr. Jeremy Thorpe: The right hon. Member for Thirsk and Malton (Mr. Turton) has, with his usual courtesy, raised certain queries about the Liberal Party's views and I hope later in my speech to answer them, perhaps not to his satisfaction, but at any rate sufficiently to show where we stand.
May I first congratulate the hon. and gallant Member for Eye (Sir H. Harri-
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son) on introducing this Motion. It is no criticism of him when I say that perhaps it would have been even more useful if we had been in a position to discuss the precise nature of the policies which the Government intend to implement. The fact that we do not know what they are is not in itself a criticism of the Government, because the decision to change the basis of our agricultural policy was announced only a few days ago.
May I introduce one slight jarring note? I am not certain whether the hon. and gallant Gentleman's reference to a certain lady was in the best taste, but he would do well to recollect that my party relies less on the leadership of grandparents than does his.
I find it very odd that there should be any doubt among intelligent hon. Members who attend agricultural debates assiduously—that is to say, when the Opposition provide a Supply day, as they did this year but did not last year, or when the Government, rarely, as they do, provide time—as to what are the Liberal Party's views on a managed market. I am staggered that there is any doubt at all, because I have had the privilege, with the exception of this year, of speaking in every Price Review debate in the short time that I have been in the House, and I have gone out of my way to say that what I believed was far more important than the particular Price Review under debate was the framework within which agriculture would operate.
One of the reasons why I advocated, during those debates, that Britain should apply to join the Common Market was so that we should be able to benefit from the managed market which had been created within the Common Market. I well remember when I spoke in June, 1961, some weeks before the Prime Minister announced, to the horror of his supporters, that we were to make application to join the Common Market, that I was howled down by Conservative Members and certain Members on this side of the House for advocating that British agriculture would be better served by operating within the managed market concept of the European Common Market.
The Minister now agrees, and the Government have come round to that

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view, but it was a very different story at the last election. I well remember being hounded night after night for advocating the managed market within the European concept. I well remember Tory Members coming round my constituency and saying that this would be the ruination of British agriculture. Fortunately, the farmers in my division—by a very small majority, but none the less by a majority—decided to disagree. I therefore find it very difficult to believe that hon. Members who have taken a consistent interest in agriculture are in any doubt at all about where the Liberal Party stands.
We have taken the view that as a matter of principle the farming community should more and more be able to get its return from the market and not from subsidy, and that the greater the percentage of the return which can be produced by the market price as opposed to the support figure the stronger and healthier will be the position of the individual farmer. It was to achieve this that we have seen in Europe the creation of commissions for various products, with power to co-ordinate home production and imports. In this connection, I agree wholeheartedly with the right hon. Member for Thirsk and Malton that Ministerial responsibility for those two factors should lie in the same Ministry. They cannot be divided. I shall comment on the extent to which I believe that the commission should be independent of Ministerial control.
Mr. Denys Bullard (King's Lynn): I am trying to follow the hon. Gentleman's argument about a managed market. Surely it is a fact that under the European system the managed market would have operated only under the influence of a swinging common external tariff? Secondly, surely it would have involved a very considerable increase in the price of food. Will he not meet both those points in the new circumstances?
Mr. Thorpe: May I correct the hon. Member's use of verbs? It is not a question of saying that it "would" be possible. It "is" possible only by the means which he mentions. This system is working. The European countries have a long way to go, but the foundation of a common agricultural policy has been laid. I wholly agree that if we are to have a managed market we must have power by one means or another, whether it be
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by a system of quotas, tariffs, the ad valorem tariff or the tariff which becomes operative on a particular date, as with certain aspects of horticulture, to exclude imports. I concede that. I also concede that under the European Common Market there would have been—or there is—a very real possibility that the price of food would rise.
The argument which we put forward, and which I am delighted to say was subsequently adopted by the Government, who came round to this view, was that this might to a very large extent be offset by the more efficient marketing systems to be found in Europe as compared with our own, with the possible exception of milk which, I think, is without its competitors anywhere in Europe, if not the world, and, further, the consequential industrial advantages to be gained.
The hon. Gentleman asks me, very rightly, whether this system is going to increase the price of food, whether a managed market is going to put up the price of food. I think that before one answers that one must ask why a change of policy has been necessary. As I see it, the 1947 and 1957 Acts, which had the support of all parties in the House, and, indeed of the farming industry, attempted to maintain relatively free markets whilst giving a degree of security to the farming community. The 1957 Act accentuated the wish of the Government of the day to increase that security. But since 1955 it is quite clear that those Acts have failed as far as the attainment of those dual objectives are concerned.
Whilst we have seen subsidies increased from £206 million in 1951 to over £350 million in 1961, the price of food, none the less, has gone up by 10 per cent. And not merely that. The incomes of the farming community in the comparable period have risen by only 11 per cent., as all hon. Members who have agricultural interests will know, compared with an increase of 40 to 50 per cent. as far as the rest of the community is concerned. The effect, therefore, of the policies which the Government have been following is, first, that the subsidy bill has gone up secondly, that the price of food has gone up, and, thirdly, that the real incomes of the farmers compared with the rest of the community have gone down—a fantastic triple achievement even for a Conservative Government.

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The Government are, therefore, faced with this fantastic economic achievement which not even Dr. Schacht or any other great economist could have planned. We are faced today with finding a new agricultural policy, first because the existing policy has, for the reasons I have mentioned, failed to achieve its objective and, secondly, because the Government, through their own stupidity, left the application to join the European Common Market so late that we now find ourselves excluded from a community of which we could have been the founder members.
I believe that the Minister is on the right lines in the policy which he has announced. Let me say in answer to the right hon. Member for Thirsk and Malton, who is asking me to go into far greater detail concerning the policy which we would recommend than we have yet heard from the Government of the day, that it may well be that there is some death-bed wish at work in the Tory Party and that hon. Members opposite are already becoming Opposition-minded and probing to see what the policy of the future is going to be.
I would have said, first of all, that it is vital in any system that we should have improved marketing, with commissions concerned particularly with cereals and meat, which could have the dual power of co-ordinating home production with imports. I believe that, ultimately, the Minister should be responsible for the decisions taken. What I think that my hon. and learned Friend the Member for Montgomery (Mr. Hooson) sought to suggest—and in this I am in wholehearted agreement—is that these commissions should be not independent of the Government but should be given an overall degree of autonomy such as is intended for the marketing commissions in the European Common Market. I believe that they must be free of the day-to-day political pressures, with, of course, the Minister of Agriculture remaining responsible for what the price fixture will be and for what quotas and what amount of imports will be allowed in any particular year.
Obviously, it is for the Minister, in company with the rest of the Government, to decide what sort of beef pro-
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duction we want and what sort of trend there should be in milk production, and so forth. I believe that those general overall decisions must be left to the Minister, but that the day-to-day decisions should be delegated to the commission.
Sir Richard Glyn: I am following with great interest what the hon. Gentleman is saying. He says that the day-to-day decisions are to be left in the hands of the commissions. It seems to me that there are two decisions of great importance, and I want to be clear that it is the hon. Gentleman's view that the commissions should have the duty to make them. First, the immediate control of a sudden flood of imports which might unbalance the market. Would the commissions control that? Secondly, would the commissions have the duy of coordinating the home production with imports? Would they have the power and duty to restrict home production if they thought right?
Mr. Thorpe: As I see it, and in so far as these are day-to-day matters, yes, they would have that duty, but, clearly, the over-all picture of what is to be the beef production of this country over the next two or three years is a matter for the Minister. I would recommend to the Minister that if we had a system of target prices such as is envisaged in Europe and a quota system similar to that in Europe, these would be matters which could be delegated to the commissions and the commissions would, therefore, have the power to carry out the process mentioned by the hon. Member for Dorset, North (Sir Richard Glyn). Obviously, this is an enormously complicated question. It represents a complete Government change in agricultural policy. I hope that we shall hear from the Minister or from the President of the Board of Trade in some greater detail the manner in which this new agricultural policy is going to be operated.
I am afraid that I cannot agree with the hon. Member for Salford, West (Mr. C. Royle) in thinking that the butchers always charge a fair price. Of the £78 million Supplementary Estimate in 1951, very little of it went into the pockets of the farmers. I believe that all this policy of a managed market will be set

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at naught unless we have a very vigorous attack on the whole of our marketing system. I should like to start with the millers and the fertiliser manufacturers and, to a certain extent, with the brewers and many other middlemen who find that the farmer is a very weak seller and who have, in my view, quite outrageously exploited his position in the last few years.
This must not be a selfish measure simply to maintain a level of production whatever the cost to the consumer and irrespective of the effects on the rest of the world. As was said in the Price Review debate, we live in a world in which a large percentage of its population are existing at starvation level. I think that this must be linked up with an attempt to get commodity agreements. I think that we may well have to take a look at the export position of many of our Commonwealth partners, who, in any event, would have found some of their exports restricted had we joined the Common Market. We have to realise that the N.F.U. plan has certain merits which should be studied by the Minister. I think that he has a very difficult job of maintaining an agricultural industry which is able to expand and thereby reduce its prices, because it has been part of the Tory philosophy that the industry must reduce its costs but must not expand. As the farming community has pointed out, it is only by expanding that costs can he vigorously cut. This is an economic point which, I think, at last has been accepted. This is perhaps one of the most difficult agricultural problems which has been faced by any Government since the 1947 Act was introduced.
Finally, by way of answer to the hon. Member for Salford, West, I think that the hon. and gallant Member for Eye was very wise in quoting the article of Mr. William Rees-Mogg in the Sunday Times. Those who would seek to regard agriculture as expendable would be very wise to ponder over that article. I have a very high regard for Mr. William Rees-Mogg, although it did not prevent me defeating him for the Presidency of the Oxford Union; but he came up and fought another day.
I believe that we must not get into a situation in which we become a divided nation, a primarily industrial nation which
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might believe that agriculture was economically expendable. That would be absolutely disastrous to the agricultural community. This is why—I make no complaint, and I do not make this as a party point—I think it is unfortunate that in our debates when we are discussing coal there is a preponderance of hon. Members on one side of the House and when we are discussing agriculture there is a preponderance of hon. Members on the other side of the House. I think that always leads to the threat that we may well be a divided nation. So I think it is terribly important, not only for the consumer, who, after all, in the long run will benefit by having stability of prices, but for a farming community, which has the feeling that it has security to expand and to lower its costs and make a contribution to the balance of payments.
It is also very important that this system should produce a fair price for the sake of the agricultural community itself. Because were any import system of quotas to be operated unfairly to the disadvantage of the industrial wing of our society, or, indeed, consumers generally, then I think that the consumer might well regard the vitally important minority in agriculture as being economically expendable. That would be a disastrous thing for this country, and I believe that socially as well as economically it would be a very grave blow. We should become a country of deserted rural areas with people crowding into the towns. We should become subtopia—if we are not already a subtopian country, we are getting very near it—and I believe that this would hold out very great dangers indeed for the agricultural community.
I hope, therefore, that we shall hear more from the Government about what they intend in detail for the implementation of this policy. I think that this debate has been valuable as it has assisted the hon. and gallant Member for Eye to understand what the Liberal agricultural policy is, which no doubt he will ponder over carefully, and we are very much in his debt for his having raised this matter this afternoon.
5.35 p.m.
Mr. Paul Bryan: Like previous hon. Members. I should like to congratulate my right hon. and gallant Friend the Member for Eye (Sir H. Harrison), first, on his choice of

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subject and, secondly, on the way he introduced it. When the Opposition chose agriculture as the subject for debate on Wednesday last, I thought that they had rather stolen his thunder, but in fact this debate is fitting in very well, for I am sure that there are many hon. Members who value this opportunity of airing their second thoughts on the very important things that the Minister said.
As my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) said, this was clearly a landmark in the British agricultural history. The Minister on that day said that he did not mean to depart from the principles of the 1947 and 1957 Acts. I am sure that he does not intend to do so. But he is certainly putting a fresh wind of change through the way in which those Acts operate, because control of imports is what the farming community has been most insistent about for many months past. If farmers have been uneasy or distressed over the last few months, their distress has been due less to such things as the Price Review than to the cloud of surplus which has overshadowed the hitherto wide open, free British market.
The 1947 Act refers to
"…such part of the nation's food…as in the national interest it is desirable to produce…"
The Government have never really had to decide exactly what the level of that production was to be. Of course, in Annual Price Reviews the Government have been able to influence to some extent home production. I suppose that market forces have also influenced that production, but in a world where nearly all produce, whether foreign or home, is subsidised, market forces have not been a true reflection of real costs. Now that the Minister is to take power to control imports he has also taken on himself the definite decision as to exactly, or pretty well exactly, what home production is to be.
My right hon. Friend the Member for Thirsk and Malton has made various suggestions in this direction, and obviously one would have to decide product by product whether one could produce it cheaply at home in relation to foreign producers and so on. At the same time, one has to have a broad principle on which to base this key
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decision which is the crux of what we are talking about today. Some people have suggested that the proportion of home production to foreign imports should be kept at today's percentage. This would certainly represent a check on our present rate of expansion. Today, as has frequently been said we have increased to 168 per cent. on pre-war figures. In the same time, the population has gone up by 10 per cent. By value, in pre-war days we were producing in this country about one-third of our food; today we are producing about half, and that proportion is continuing to increase.
In the N.E.D.C. Report, I see that for the years 1961 to 1965 it predicts an 18 per cent. net increase and that productivity per man is to go up by 34 per cent. These are better figures than for the previous five years, and it is obvious the rate will accelerate. So as the years go on, on present trends the farmers of this country expect to increase the proportion of home production, and not only to increase it hut, in my view, increase it tremendously. because of all the imports that come in two-thirds are of a kind that can be produced in this country.
This is confirmed in the N.E.D.C. Report. It says:
"The information supplied by the industry shows that it expects to supply an increasing proportion of our food supplies at the same time as raising productivity at a faster rate than over the previous five years."
Another easy-sounding solution, which I read in the newspapers, is that one might decide to keep imports at their present level and to allow the home farmer to take advantage of any increase in home consumption. This, again, would represent a slowing down of our present rate of expansion. The N.E.D.C. Report says that spending on food should go up at the rate of about 2 per cent. every year. That in itself would represent a depressing and damping down of our expansion which is certainly increasing at a swifter rate than that. The Report says that technical advances tend to raise the level of output faster than the growth in the demand for food. I bring this forward to indicate that one has to think in terms of increasing production at home if we are not to see a decline in the present graph of the actual proportion of consumption grown in this country.

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How is this level of imports to be enforced? I will not expand on this, because my right hon. Friend and neighbour from Thirsk arid Malton dealt with it very professionally, but the idea widely canvassed in the weekend Press was that the method should be to impose a price below which a commodity could not enter the country. That is a fairly elementary way in which to deal with the problem, for although it deals with the problem of deficiency payments, it turns the terms of trade against ourselves. The down-to-earth Russians were astonished when we would not have their barley at £14 a ton, but welcomed it at £20. I would be astonished, too, if we could not think of a better method than this. Levies of some sort would be equally effective and at the same time would do something to pay our home support costs.
I underline what has already been said about differentiating among our suppliers. I am sure that hon. Members and people all over the country will feel very strongly that No. I priority should go to the Commonwealth, No. 2 to our traditional suppliers and no priority at all to those, often from the Communist bloc, who have used our market as a convenient dump.
I am sorry that the hon. Member for Salford, West {Mr. C. Royle) was not as pleased as I was with the Minister when he said that the object of controls was not to raise but to stabilise prices, because I believe that stabilisation is what will take place. It is not just the controls but their very existence which has the effect. I am sure that when farmers in my constituency know that barley is coming into Hull, that automatically depresses the market, never mind what the quantities are. The fact that they will know that from now on there will be some sort of control will produce a new stability. The whole story of our recent meat troubles has pointed in the same direction.
The hon. Member for Salford, West said that the Minister's speech had been badly received in New Zealand and by our other suppliers from abroad. As against that, I quote what was said on 23rd May by Senator Henty, the Australian Acting Trade Minister, who welcomed the Minister's speech and said:
"The change in British policy could offer Australia an opportunity to secure agreements which would result in a stable market with remunerative prices for important export commodities."
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The Australians see a lot of sense in this and an advantage to themselves in a stable market.
The case of the imports of Argentine meat this year has been quoted. As the Farmers Weekly said a week or two ago, in the first three months of this year the Argentine exported to this country twice as much meat as in the corresponding period of 1962 and made about half the profit. So from every point of view, ours and theirs, the whole story has been unhappy.
My last question to the Minister is this. If import controls are to be introduced, as promised, when will the changes take place? Will they be made in time to affect the marketing of this year's harvest? If not, I urge the Minister to have some ad hoc measures up his sleeve very early in the day to prevent a flood of imported cereals. Nothing now would do more harm to farming confidence or create more disillusionment than a depressed and glutted cereal market in the first harvest after the Minister's announcement.
Nowadays, every country supports its home agriculture by one device or another. All have found it a tricky business. None has produced a completely satisfactory answer. In the last few weeks, there have been international assemblies in Brussels, Lisbon, Geneva and Dublin, and our Commonwealth Ministers have been meeting here in London. At each of these gatherings agriculture has been the major problem.
Efforts to provide a sound basis for agriculture in this country have had their ups and downs since the war, but by now the system, adjusted as we have gone along to meet varying circumstances, has become the envy of the world. It has produced an expansion and stability of a sort never before known in this country. I believe that these new steps will bring confidence and with it prosperity to those who owe their livelihood to British agriculture.
5.46 p.m.
Mr. George Darling: The right hon. Member for Thirsk and Malton (Mr. Turton) asked me to explain our attitude to the Government's new policy on food imports. We do not know what that policy is. We

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have had some vague assertions of unexplained intentions. The intentions may be good, but we cannot comment on them until we learn more about them. What we can do, as the right hon. Gentleman himself did, is to tell the Minister what we think he ought to do, and I propose to make my contribution and perhaps the right hon. Gentleman will be able to judge in the end whether we agree or disagree with him.
He suffered from the limitations from which all of us in the debate suffer—that we have to be far too brief, and are unable to go into the details with which we would like to deal. I congratulate the hon. and gallant Member for Eye (Sir H. Harrison) on having started what has turned out to be a very interesting, useful and timely debate. I agree with him that British farmers have done extraordinarily well ever since the war in improving, expanding and developing home food production.
However, the hon. and gallant Member weakened his case for giving them more protection by making hardly any reference to our internal marketing arrangements. While it is true that farmers deserve all the congratulations we can give them for improving production. the improvements which should have taken place in marketing have not taken place. He did not give us any nonsense about the alleged virtues of free markets and free competition. He is all for controls. I must remind him that we had a debate on the consumers' side of things last week and all his hon. Friends who spoke in that debate were all for competition, very few controls, and free markets all over the place.
The Liberal Party went even further. The right hon. Member for Orkney and Shetland (Mr. Grimond) opened his contribution in that debate with a declaration which would go down well with the Liberal Party Assembly. He said:
"The consumer's best friend is a free market. Competition not only allows him or her to exercise choice; competition also protects the consumer from exploitation."—[OFFICIAL REPORT, 20th May, 1963; Vol. 678, c. 60.]
The hon. Member for Devon, North (Mr. Thorpe) has thrown his leader's free market and free competition right out of the window. I agree with the hon. Member and disagree with his leader.
Mr. Thorpe: I may not be in a position to offer the hon. Member the Whip, but the matter will be considered.
Mr. Darling: The hon. and gallant Gentleman covered a lot of ground as he built up his case for import controls. I shall resist the temptation to cover the same ground and I shall limit myself to a few general observations which, I hope, will meet the point raised by the right hon. Member for Thirsk and Malton, and I shall then make some comments by way of example on the meat situation, which has been one of the most troublesome problems in the minds of hon. Members opposite.
My first general observation is that the demand for stricter control of imports proves what my hon. Friends and I have been saying for the past ten years; that one cannot operate a deficiency payments system satisfactorily in a disorganised market. The right hon. Member for Thirsk and Malton said much the same thing today, but he did not say it in 1954 and 1957. However, we all learn from experience. I need not elaborate this theme because my hon. Friends and I have done so on many occasions in previous debates. We have explained the proposition repeatedly and there seems now to be general agreement about it. The Minister of Agriculture endorsed our views only a week ago.
But we cannot accept the solution of the hon. and gallant Member for Eye, of stricter import controls if they, whatever form they take, will be used to protect disorganised, inefficient and costly marketing arrangements. Moreover, when we talk about import controls we must remember that we frequently make complaints about other countries putting on import controls of their own against our exports. We must remember that, as the Minister of Agriculture, Fisheries and Food said only a week ago:
"We want arrangements which will ensure fair access to our market at reasonable prices, both to the overseas supplier and to our home producer. We ½wish them to be½flexible½"
He also said:
"In reaching agreement with them"—
the overseas suppliers—
"on measures which they should take to contribute to the stabilising of our market, we must be prepared to make our own contribution to that same end ".—[OFFICIAL REPORT, 22nd May, 1963; Vol. 678, c. 449–50.]

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This balancing of trade interests is one of the most difficult problems to be faced as we try to work out a new system of import controls. We must all the time remember that while 4 per cent. of our population is engaged in agriculture, 100 per cent. of our people are food consumers. For these reasons—and while I express a personal view, I believe that it is shared by my party—we must go back to the principles of the 1947 Act, which provided for a planned expansion of agriculture, encouraging farmers to produce those things which were in short supply and discouraging them on occasions from producing surpluses, through the Price Review and the development of organised marketing.
Whatever is said about the need to control imports, we believe that those controls must be part of the general marketing organisation in order to obtain stable deliveries and prices, but not to deprive our people of the increasing productivity, better supplies and price advantages from overseas, especially Commonwealth, countries. Hon. Members opposite have complained about the deliveries of cheaper meat, particularly from the Argentine, at the beginning of this year. They have said that this cheap meat was harmful to Britain's interests. I repeat what my hon. Friend the Member for Salford, West (Mr. C. Royle) said in his well-informed speech, that meat prices did fall in the shops, especially in the North. They were forced down at a time when we had nearly 1 million unemployed and millions of workers on short time.
Mr. Turton: The Retail Price Index figures must be conclusive.
Mr. Darling: They are average figures for the whole country, and if the right hon. Gentleman cares to look at the returns published by the meat traders' organisations he will find that in most of the industrial areas the price of meat went down. The reductions were in many cases substantial. I am not saying that this applies to the more expensive cuts of meat, but particularly to the cheaper cuts.
Mr. A. E. Orarn: My hon. Friend has referred to the Retail Price Index as being the average for the country. Is it not also providing average
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figures, in effect, of the prices of the different cuts of meat?
Mr. Darling: That is correct, and while I could give the right hon. Member for Thirsk and Malton the figures, I do not wish to delay the House. However, the people who were able to take advantage of those reductions were very pleased to do so, particularly in the industrial areas where there was a great deal of unemployment and short-time working.
I represent a part of the City of Sheffield. I urge hon. Members opposite to remember that the engineers and steelworkers in my constituency have suffered bigger cuts in their incomes proportionately than any people in the farming community. Many of my constituents have been on short-time for nearly two years and, in some cases, their incomes have been halved compared with two or three years ago. Not one of them has complained to me about those reductions in meat prices.
We believe in an organised marketing of the nation's food. We have said this on many occasions. It is implicit in the 1947 Act and we stand by it. We believe in getting food into the homes of our people as efficiently and cheaply as we can. We shall oppose any attempt to solve our agricultural problems at the expense of the housewives and consumers, not only because that would be unfair to the mass of the public, and would create other difficulties in regard to wages and our balance of payments, but also because we believe it is unnecessary. We believe in the spirit of the 1947 Act, and that we can give both the farmers and the public a fair deal, if we go back to the principles of that Act and get rid of the alterations, which have upset some of the basic ideas of organised marketing, that came in with the 1957 Act.
To explain, in answering the right hon. Member for Thirsk and Mallon, where we stand, I would remind the House that when the 1947 Act was introduced it was designed not solely to benefit the farming industry. Any hon. Member who doubts this should read Mr. Tom Williams' Second Reading speech on that occasion. Three principles were implicit in that Act, and we should remember them. The first is that the Government —and the whole community was behind

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this—were planning for a prosperous Britain with full employment and a fair sharing of the prosperity. We realised that that prosperity would be based on industrial activities and, therefore, we faced the danger that unless we gave special aid to agriculture we would have pockets of industrial prosperity in a derelict countryside.
The second point was that we agreed —and we still agree—that that aid to agriculture should not be given through high food prices. The third was that we wanted then—as we still want—to have an expanding agriculture and for it to be self-sufficient in those things in which it is able to be so; but not to seek self-sufficiency at too high a price or in such a way as to damage our international trade or injure our Commonwealth relations.
Mr. R. J. Maxwell-Hyslop: The hon. Member is saying that the aim should be for agriculture to be self-sufficient in those things in which it can be self-sufficient. Does he believe that we can be self-sufficient in beef as well as in milk products? If so, does he still agree with what he said earlier?
Mr. Darling: I do not think that we can be self-sufficient in beef. I would be prepared, on another occasion, to discuss this matter with the hon. Member. It is an extremely technical subject. We can be self-sufficient, as we are, in milk, eggs and one or two other commodities, but certainly not in lamb or pork.
Sir James Duncan: Pork?
Mr. Darling: Yes, pigment. I think that we shall go on importing bacon and ham.
Sir J. Duncan: Did the hon. Member say pork?
Mr. Darling: I meant pigmeat generally. We still stand by the principles that were implicit in the 1947 Act. We do not intend to allow agriculture to be the poor relation of our industrial society.
There has been public criticism of the high level of support subsidies, and here I return to the meat situation. The great increase in subsidies is, in the main, due to the disorganisation of the cereals and meat markets, for which this Government are responsible. Do hon. Members
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opposite remember how they cheered when the Government announced the end of bulk buying and of all our contractual arrangements? They have now come round full circle, and again want the international commodity agreements and long-term contracts at stable prices in which we on this side have always believed.
We shall be very interested when the right hon. Gentleman the Minister of Agriculture brings forward his proposals for dealing with the meat situation, but I want to use this as an example of the kind of problem we are up against, and our approach to it. I must, however, tell him, as we have said before, that import controls on meat will not work satisfactorily until we have reorganised and improved our meat marketing.
This is not hindsight. If hon. Members will look at the long drawn-out proceedings on the Slaughterhouses Bill five years ago, they will find that twice a week for three months my hon. Friends and I tried to explain to the Government how impossible it is to organise the meat trade satisfactorily through three or four thousand fiddling little slaughterhouses. I do not intend to go over all those arguments again, but I will mention just one reason among many for concentrating the whole meat trade through about a score —or perhaps thirty—well-sited, large-scale factory abattoirs.
I refer to the problem of meat storage. The increased imports of Argentine meat about which hon. Members opposite have been complaining were not the real cause of the trouble. We are bound to have ups and downs in our cattle and meat supplies—it is that kind of trade. The trouble is that we are completely inadequately supplied with cold storage facilities for these temporary and seasonal surpluses. We shall never even out these ups and downs until, throughout the country, we have adequate cold stores for both home-killed and imported meat. Our home-produced meat, when it ought to be held back from the market because there is too much in the process of getting it into the meat shops, ought to go into cold store as soon as it is killed, and at the point at which it is killed; the cold stores must be part of the abattoirs, and serve as regional centres of meat distribution.

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I do not know what kind of report the Minister will get from the Verdon Smith Committee, but unless it is based on the idea of factory abattoirs and getting rid of all these small slaughterhouses--unless they are fitted in as sort of outposts to the factory abattoirs—we shall never make progress. This is not a new idea. The first Report suggesting that our meat trade should be organised on a network of factory abattoirs was put out by the Economic Advisory Council in 1930—we have been waiting 33 years for something to be done. I do not think that we can organise our meat trade efficiently in any other way. Fiddling about with import controls will not do much good if the home trade remains disorganised.
I must again mention the problems we shall face in exercising import controls, in which we believe, unless they are associated with proper marketing arrangements inside this country. We shall be in difficulties unless, in approaching the subject of meat controls, we aim at getting the whole national interest properly balanced. I must repeat what I have said a little earlier about Commonwealth trade, and will take New Zealand as an example. New Zealand is a European country which, quite by accident, happens to be about 6,000 miles away. It has a European standard of living, European methods of trade, a European population—now that the Maoris have been assimilated—and lives by supplying Britain with meat, dairy produce, wool and fruit.
New Zealand's economy is geared to our market, as we all know—we take her food, she takes our manufactures—but this trade is now out of balance. We sell more to New Zealand than we buy from her, and that situation cannot continue. One of the reasons why my steel workers and engineers are on short time is that they are not supplying to New Zealand the manufactured goods that contain steel that would be supplied if we had this trade better organised.
If we take less New Zealand produce, or force down the price of that produce, as we have been doing, we might encourage our own farmers to produce more sheep—perhaps on high-cost marginal land—but, whether or not that would do the country any good, we should
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certainly damage our trade in industrial products with New Zealand, which is a problem that the President of the Board of Trade has to face. We have to take a balanced view of all these national interests, and make our international trading agreements to promote the widest measure of trade consistent with our obligations to our farmers and to our own industries.
In doing that, do not let any one of us forget the tremendous debt we owe to New Zealand, Australia, and other Commonwealth countries. New Zealand continued her food rationing system for five years after the war in order to feed us. I agree with the right hon. Member for Thirsk and Malton that we have a debt, too, to our Scandinavian friends—and other friends in E.F.T.A.—that we have to honour. We on this side will not be party to any schemes that would weaken those Commonwealth ties or prevent us from honouring our debts to our friends. The House will remember that Hugh Gaitskell made that fact clear in the Common Market debates, when the party opposite was prepared to sell the Commonwealth down the river in order to get into the E.E.C.
We stand by our 1947 pledges to maintain a good level of prosperity for British agriculture. We still believe that we can do that by organised marketing and long-term arrangements for food imports, especially from the Commonwealth. I hope that that answers the questions put to me by the right hon. Gentleman. That is our policy, and we shall stick to it.
6.8 p.m.
Mr. W. M. F. Vane: My hon. and gallant Friend the Member for Eye (Sir H. Harrison) said that he had been overtaken by events—my right hon. Friend's statement last week—so it is, perhaps, natural that this debate should take the line of asking to see the colour of my right hon. Friend's money.
What my right hon. Friend announced to the House last week wore the broad principles, but it was a momentous statement, and I suggest that its importance far outweighs any detail that we may be given later. The important thing for the farming industry, for the country and for every country that sends us supplies was in that announcement. It completely outweighs any small differences we may have

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about the methods when they are revealed to us.
It is also natural that a good deal of emphasis should have been put on consumer interests, but I thought that my right hon. Friend's whole speech paid regard to those interests, and our recent policy shows throughout interest in the consumer position. We have nothing to be ashamed of there. Not only is this an important step forward in our agricultural policy, but it is a great personal achievement on the part of my right hon. Friend. It is something which will be remembered for a long time and welcomed in circles far wider than the farming communities most closely involved.
There was revealed in my right. hon. Friend's speech something which has become clearer and clearer to me over the last few years, as it must have done to all hon. and right hon. Members, that the solution to our agricultural problems and the similar problems in other highly developed countries is quite beyond the efforts of any one country. It can be achieved only by international agreement. This will take time, and, of course, it takes more than one to make an agreement. With regard to the control over imports, my right hon. Friend said that the essence is that there will be agreement between ourselves and the other countries concerned.
It is worth noting, when we are considering food imports, that only a very small fraction of the world's food production ever crosses frontiers, but this small fraction can, nevertheless, have a very big influence on the markets of the importing countries. Our market here is the most important in the world to those countries which have foodstuffs to export. It is interesting to note that the United States of America is now one of the principal exporters to us. No longer is the pattern of trade one of industrial nations exchanging manufactured goods for foodstuffs produced by the less developed nations. Frequently, there is an exchange of foodstuffs between highly industrialised nations, a pattern very different from the one which we were brought up to believe was orthodox.
In this connection, I feel not only honoured but immensely interested to
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be going to Washington next week as a member of the United Kingdom delegation to the World Food Congress. The problem of dealing with surplus production, although, of course, it is by no means the key to our efforts to grapple more successfully with the problem of hunger in the world, is, nevertheless, a subject which will constantly crop up in our discussion. It poses a question which we must answer before we can successfully go forward with some of the more fundamental tasks.
When we are discussing the commodities, there is always the danger of forgetting that the long-term key to farming prosperity is not this commodity agreement or that. It is to be found in the way we handle our land and our skill in the business of husbandry. No man can farm well just as a result of price agreements. The land of our country today has never been better farmed. I say this not just because of the nice green colour put on the grass at this time of year as a result of the liberal application of nitrogen. It goes far deeper than that. How we handle our land, not what happens to sugar in Mincing Lane, or what happens in disused Lancashire cotton mills which are said to be full of chickens, is what really matters to us.
We need still more investment in our land if we are to remain competitive. We cannot remain competitive just as a result of limited import controls, as I am sure my right hon. Friend will agree. Yet farming profits soon disappear if there is unwise investment in buildings and, even more easily, if there is over-investment in machinery.
The hon. Member for Sheffield, Hillsborough (Mr. Darling) spoke of the 1947 Act. That Act has great merit. but 1947 is not a holy year, as hon. Members opposite sometimes would have us believe. The Act has, as I say, great merit, and it has proved a good deal more elastic over the years than its authors claimed at the time. It was not a great marketing Act; that came later. The 1957 Act, too, has great merit, and it has buttressed the 1947 Act. Without the 1957 Act, the 1947 Act would not have given to agriculture the stability it has enjoyed over the past few years.

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Turning again to the subject of commodity agreements, cereals and meat are clearly the most important and should be tackled first, but, whereas the stability of the cereal market is very important to many farming countries, notably the E.E.C. countries and those with large arable acreages, it is not so important as a key to prosperity in this country nor in other countries on the Atlantic seaboard where grassland is more important, and where upland farming and livestock plays a very much greater part than it does, say, in the centre of Europe or in Canada.
In the uplands, it is not only the four-legged animal which matters. We must think of the rural economy also as comprising rural industries—often making use of the raw material of the locality and offering alternative employment to people. Here, I make just one reference to the "nigger in the woodpile", who was mentioned earlier in the debate in connection with food. If the woodpile were the products of our home-grown timber industry, then my right hon. Friend would remain the "nigger", particularly having regard to what, I believe, has recently been going on at Geneva.
I ask my right hon. Friend to consider the products of our woodlands in the same way as the products of our farmland are considered. This is almost the only country of Europe which does not regard forestry and farming on the same basis, and in the hill lands, particularly, forestry should play a very much bigger part.
It has taken several years for the policy announced last week to be worked out. Such changes of policy are not thought up overnight in any country, least of all an industrial country with trading interests such as ours. Probably, no one knows better than I do how much my right hon. Friend has put into this work, thinking ahead, never letting himself be submerged by the smaller and day-to-day issues which beset every Minister all the time. We passed a great landmark last week, a landmark on a fair road which we ought now to be able to tread confidently not only in the interests of agriculture and the consumer but in the interests of our industrial country as a whole.
6.17 p.m.
Mr. A. E. Oram: The hon. Member for Westmorland (Mr. Vane) said that the speech of the Minister of Agriculture, Fisheries and Food last Wednesday was the result of long years of careful preparation. If that be so, we ought to have been treated on that occasion to a little more detail and specific information than was, in fact, forthcoming.
Mr. Vane: I did not mean that my right hon. Friend had spent a great many years over the speech, very good speech though it was. What I meant was that major policy changes in a country like ours are not thought up overnight—not by wise Governments anyway.
Mr. Oram: I agree, but my point still remains that a little more detail might have been forthcoming, after such careful preparation. I was disappointed, naturally, when you said, at the outset of the debate, Mr. Speaker, that it had not been possible to select the Amendment which I and my hon. Friend the Member for Salford, West (Mr. C. Royle) had put it on the Order Paper. We felt it desirable to set that expression of opinion down because there was a danger of the debate being somewhat unbalanced if conducted within the terms of the Motion as it stood. I was glad to hear many lion. Members make the point, but the Motion itself did not indicate any concern for the consumer or any appreciation of the relation between food imports and our export trade. These two matters are taken up in the Amendment.
In the matter that we are considering today, it is necessary to find the right balance between a number of conflicting interests—the interests of rural England and of industrial England; the interests of the farming population and of the consumer; and the interests of exporters as well as importers. I felt that the speech of my hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) was admirable in preserving just the right balance that we need in this matter. My hon. Friend the Member for Salford, West felt that the consumers' interests should be paramount. I hope that he did not mean that they should be paramount irrespective of these other considerations. I am sure that he did not.
In this sort of debate, I try to express the consumer's interest. On the other

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hand, I understand the farmer's position and the concern of hon. and right hon. Members who represent agricultural constituencies that an adequate standard of life should be maintained for our farming population. I certainly understand the anxiety of the Government, the Treasury and the taxpayer about the rapidly rising bill for deficiency payments. Obviously, some action had to be taken in connection with that matter. The point that I stress is that, if action is taken to restrict the import of food, that must be done only with all due consideration to the interests of the housewife, the consumer of food.
I think it fair to say that the implication in the speeches of hon. Members opposite in talking about the import of food is that there has been a sudden and dramatic increase in the import of food and that this represents a tremendous danger to our farming community. I think that there are figures to prove that this is not the threat that hon. Members opposite try to make out.
The hon. and gallant Member for Eye (Sir H. Harrison) quoted figures in connection with maize and founded his case on that commodity. I suspect that he rather carefully selected that commodity because the imports of maize have increased dramatically and, within certain limits, substantially support his case.
Sir H. Harrison: I said that the imports of maize had gone down very considerably in the first quarter of this year. What I tried to bring out was that it might be necessary to restrict the import of something which we do not grow here in order to help a similar product in this country.
Mr. Oram: The hon. and gallant Gentleman was very fair in his presentation of the figures on maize, but I have referred to his selectivity because, like all of us, I need to be a little selective in some of the figures which I propose to present.
I have chosen three commodities which seem to me particularly topical in the present situation—wheat, meat and raw sugar. I have compared 1956 with 1962 in the imports of these commodities. It is interesting to note that in 1956 we imported 4·8 million tons of wheat. In 1962, imports had gone down to 3·9 million tons. In 1956, we imported
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805,000 tons of meat. Last year, we imported 786,000 tons, a distinct decrease. In 1956, we imported 2·3 million tons of raw sugar, and last year only just over 2 million tons. There is, therefore, a downward trend in the import of each of these important commodities, which does not bear out the suggestion that the agricultural community is threatened with a very considerable influx of food.
Mr. Bullard: Is not the hon. Gentleman overlooking the effect on the market of sudden increases in importations? He has quoted the figures for meat. The hon. Gentleman will admit that in the first three months of this year the importation of Argentine beef was twice what it was last year. In talking about dramatic decreases, the hon. Gentleman should make some mention of that.
Mr. Oram: I agree that there are temporary increases and that these are important and that measures of control are necessary in respect of them, but, in weighing up general long-term policies, as we are doing today, we should also look at the long-term trends. That was what I was trying to bring before the House.
I was most interested in the way that the hon. Member for Howden (Mr. Bryan) brought out the extent to which home agriculture has increased its production and yields. Again, there are some very convincing figures. Between 1956 and 1962, the increase in wheat in absolute terms was 28 per cent. and the yield went up from 24·8 cwt. per acre to 32·2 cwt. per acre last year. Similar figures can be produced for sugar beet and beef. This shows that there is an actual situation and prospect, as the hon. Member for Howden brought out very clearly, of a considerable abundance in home production.
I always thought that we should welcome abundance, particularly from the point of view of the consumer. If there is more of something, it should be cheaper. Therefore, in this atmosphere of more and more coming out of the fields of Britain, one considers what effect this wonderful new productivity has had on the fortunes of the housewife who buys the bread made from the wheat, who buys the cut of meat in the butcher's shop and who buys the pound of sugar from the grocer's shop.

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Unfortunately, the trend is in the opposite direction to what it should be. Instead of abundance producing cheapness, consumer prices have been going up over this period. Again, taking 1956 as a starting point, the whole of food items have gone up 18 per cent. in a period of increasing abundance. The price of bread, flour, cereals, and so on, has gone up 30 per cent. in a period when it can be demonstrated that wheat is being produced in enormous quantities. The price of meat and bacon has gone up 8 per cent. The price for sugar and preserves has gone up 33 per cent. We have had a Conservative Government in office all this time. This is the effect on the bill which the housewife has to meet in terms of consumer prices.
This might be excusable if it could be demonstrated that our imports were costing us more and that the terms of trade were moving against this country. But, as hon. Members know, the terms of trade have been moving dramatically in our favour as a consuming country during this period. The index in terms of trade in 1956 was 99. Last year, it had moved in our favour to 85. There has been an enormous increase in productivity at home. Prices to this country are favourable in the places abroad from which we buy our food. As the hon. Member for Devon, North (Mr. Thorpe) said, it is an economic miracle that the Government have been able to combine increased productivity at home, sources of cheaper food abroad and increasing prices for the domestic consumer.
We shall look with anxiety at the way in which these new policies are implemented, because restrictions on food imports, though they may be necessary in certain restricted instances, are all too likely to lead to increased retail prices rather than the reverse. We shall want to see the way in which these policies are applied in practice and we shall be vigilant on behalf of the housewife in these matters.
6.30 p.m.
The President of the Board of Trade (Mr. F. J. Erroll): I am glad that my hon. and gallant Friend the Member for Eye (Sir H. Harrison) has used his success in the Ballot to bring this Motion before the House and I am pleased to have th s opportunity of joining in a
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private Members' debate on an important aspect of the economic life of the country.
A week ago, as a number of hon. Members have mentioned, the House of Commons had a useful discussion, on the basis of a statement by my right hon. Friend the Minister of Agriculture, Fisheries and Food, on the Government's future agricultural policy. On that occasion, the Committee of Supply was concerned primarily with the problem of our own agriculture industry. That has been touched on during today's debate, but the Motion gives an opportunity of considering in more detail certain aspects of the policy then announced and, in particular, the problem of imports and the need to safeguard the interests of consumers.
As President of the Board of Trade, I am, naturally, very much concerned about the proper balance between the consumption of home-produced food and of imported food. Both in the House of Commons and outside, one comes across two extreme and opposite views of the relationship between food imports and home production. I should like to mention both points of view and give my answers to them.
On the one hand, it is sometimes suggested that the Government's objective should be to make the country as nearly as possible self-sufficient in food production. In these days, there is no economic, strategic or other argument for such a course to be pursued. Britain's exports as a whole amount o no less than 10 per cent. of world exports and our standard of living depends upon the continuation and development of our international trade.
Although Britain is always classified as a manufacturing country and our exports are predominantly of manufactures, we also import large quantities of manufactured products, both consumer goods and engineering equipment, in addition to our agricultural and food imports. By way of example, we both import and export a very large quantity of machine tools each year.
The only way for us to maintain a healthy balance of payments in the long term is to concentrate on producing in Britain those lines which we can produce most competitively and to import what we

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cannot. For these reasons, absolute self-sufficiency in food cannot be the objective of Government policy any more than self-sufficiency in manufactured goods.
The other extreme argument is what I would call the cheap food argument of importing cheaply regardless of the consequences. It is certainly not the Government's intention that our market should be flooded by surplus overseas produce off-loaded at prices which not only cause large and sudden increases in the cost of Exchequer support but which also undermine the long-term prospects of British agriculture. So it is between these two extremes that we have the policy of the Government of maintaining the principles of the 1947 and 1957 Agriculture Acts, which involve, to use the term given in this year's Farm Price Review White Paper,
"maintaining a proper balance between homegrown and imported food."
This is not a policy either of self-sufficiency at any price or of cheap food regardless of the consequences.
It is all very well to state the principle —and it seems a reasonable and sound one—but, as always in such cases, the difficulty is to define the proper balance. It is made no easier by the inevitable variations in agricultural output, both here and overseas, as between one year and another. I should like to make it quite clear that the Government adhere to the system of support through guaranteed prices and deficiency payments. There is no question of dismantling this system. We propose to modify our system to make it better suited to the circumstances of today.
I am sorry that the hon. Member for Devon, North (Mr. Thorpe) is not in his place, because I should like to refer to his extreme remarks, in which he said that our system had failed. I entirely disagree and I will say why. What the hon. Member said is on the record and I should like the Government's answer also to be on the record and to make plain why we disagree with what the hon. Member said.
As to the price of food, there has been a rise over the years, as was mentioned by the hon. Member for East Ham, South (Mr. Oram), who made play with the points made by the hon. Member for Devon, North. This increase in price,
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however, is inevitable with increases in distribution costs, which the hon. Member ignored, and the demand by the public for a greater degree of processing, packaging and the like which, in turn, is carried out by people who themselves expect to work for higher wages and to live at a higher standard of living. The interesting fact is that the wholesale price of meat this year is low, and so is the wholesale price of cereals. There is no room for doubt that the price of food is much lower under our system than it is, or would be, under the managed market system.
The hon. Member for Devon, North spoke about the level of farm incomes in relation to the rest of the economy. It is inevitable that as the standard of living rises, the proportion that people spend on food as opposed to other goods tends to fall. I wonder, however, whether the hon. Member realised how agricultural income in relation to the remainder stands in this country as compared with other countries. In a very good survey undertaken by F.A.O. in 1959, Britain came out third in the "league table" of the whole developed world with a ratio of 80-100. The other two countries that were higher than us were New Zealand and Australia, both of which are essentially agrarian nations. This, surely, is a great achievement and a credit to our support system.
The question of the proper balance at any given time must bear relationship to the balance in previous years. Indeed, we should look at the situation before the war to see how great has been the achievement and development of agriculture since the war. The proportion of temperate agricultural supplies, including sugar, coming on to our market from home production has gone up from one-half before the war to two-thirds now. In 1962, we produced about 70 per cent. of our carcase meat as against only 50 per cent. before the war, and, similarly, about 45 per cent. of our wheat, flour and cheese as against less than 25 per cent. pre-war.
We now produce nearly all our barley, pork, eggs and potatoes at home, and although the proportion is lower, we have also been producing more of our sugar. These percentage figures, which were put in absolute terms by my right hon. Friend the Member for Thirsk and

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Malton (Mr. Turton) in his interesting speech, highlight the long-term changes which have taken place in British agriculture.
It may be said that these changes, to a large extent, owe their origin to the war years, but this is misleading in two ways. Our consumption was at a low level in the war years, and since then, while our consumption has risen, British production has not only kept pace and maintained its share but has actually increased its share of this large amount. This is a measure of what has been achieved as a result of the Government's policy of support for agriculture. On the other side of the picture, it is also, of course, a measure of the reduction in the share of our market by our Commonwealth and other overseas suppliers.
The immediate problem is the sudden increases in Exchequer costs which arise when the bottom falls out of the market and the subsidy payments are automatically increased to make good the deficiency between the market price and the guaranteed price. This is very largely due to the fluctuations in imports. Several hon. Gentlemen have referred to the sudden fluctuations of imports coming in very often at low prices. Of course, we must also remember that the flow of produce of our own farms has played a part in the increases in Exchequer costs, These sudden imports coming in unexpectedly and lowering prices very rapidly are quite a different thing from what I may call the steady, long-term invasion of the British market by overseas suppliers such as we have experienced in some other industries, notably some manufacturing industries where we have to accommodate ourselves to the changing pattern of the flow of goods.
As I have indicated in the figures a moment or two ago, the import share of our food market has, in fact, been falling over the years. The real trouble is the unpredictable way in which imports have fluctuated. As my right hon. Friend explained last week, agricultural production is going up in other countries just as it is going up in Britain. Overseas, as at home, more capital in the form of machinery, fertilisers and better strains of seed or breeds of animal are being used in agriculture so that output per acre and per man is rising all the time. The effective demand, however, for all this pro-
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duction is not going up at the same rate either here or abroad, and so, in consequence, we encounter everywhere efforts to maintain a foothold in traditional markets or to capture a bigger share of whatever market may be going. So it is not surprising, really, that in these circumstances there are flurries of imports offered at almost any prices which they will fetch.
I think it was my right hon. Friend the Member for Thirsk and Malton who suggested that these imports were dumped. They are often referred to as dumped or subsidised imports, but it is not always necessarily the case that they are. For example, the increased supplies of Argentine beef which contributed so much to the dramatic fall in market prices earlier this year were not, as far as we can tell, subsidised supplies. They were coming on the open market, unsubsidised; although I appreciate that there are certain other cases in which imports reaching us are subsidised in one way or another.
One can argue, of course, that such imports coming in at very low prices are of benefit both to our cost of living index and also to our balance of payments, but the important point is that these imports at unduly low prices, despite the fact that the quantity is quite small in relation to the total supplies reaching our market over the year, can disrupt our market and cause a quite disproportionate increase in Exchequer costs; and it is in view of this that the Government intend to secure greater stability in the market for cereals and fatstock.
In working out arrangements to this end, one of the considerations which the Government will have to take account of will be our relations with our Commonwealth and other suppliers and our international obligations to them—and theirs to us, because they have obligations to us, as well as we have to them.
This is where I want to turn particularly to our international obligations. These are of two main kinds. First, there are the multilateral agreements of which the G.A.T.T. and the E.F.T.A. are obvious examples. I was glad to hear several hon. Gentlemen refer in kindly terms to the European Free Trade Association which is developing so very satisfactorily. These multilateral agreements, broadly, contain provisions directed both against the imposition for

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protective reasons of import restrictions and also against any restrictions being applied in such a way as to discriminate between one overseas supplier and another. Then we have tariffs—
Mr. Maxwell-Hyslop: I think my hon. Friend is not quite accurate. That we must not discriminate between other members of the G.A.T.T. does not prevent discrimination against non-signatory countries.
Mr. Erroll: No, obviously not, because if they are not members of the club, so to speak, the rules do not apply; but, in fact, it is as a matter of sound commercial policy that we apply the G.A.T.T. principles to all our trading partners who are not actually themselves yet members of the G.A.T.T.
As to tariffs, we have committed ourselves in certain cases not to raise tariffs, but in the food field this mainly affects certain manufactured foodstuffs. The most part of our food comes in free of tariff, except where certain tariffs are imposed to provide Commonwealth preferences.
A more important point I should like to put to the House is that both under the G.A.T.T. and many of our longstanding commercial treaties we have undertaken to give most-favoured-nation treatment to other countries, to treat them, in fact, all alike, subject to the special preferences we extend to Commonwealth and the E.F.T.A. countries.
Secondly, we have many bilateral agreements with individual countries. The most important from this point of view are those with Commonwealth countries for so many of whom we have traditionally provided a market in return for preferences for our own exports. These obligations are, however, only one side of the picture. I think that hon. Gentlemen sometimes think that we are always hamstrung by obligations which we are in honour bound to keep, but I should like to remind the House that of course there is another side to the picture. In return we receive very substantial benefits for our worldwide trade, which is why we have accepted such obligations. We should not, therefore, lightly infringe undertakings which we have given, as to do so might well result in damaging our own interests.
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My right hon. Friend the Member for Thirsk and Mahon, I think, rather twitted me at one time about my worldwide visits to try to reach agreements with countries far away from ourselves in order to secure more trade. But, of course, we want to secure more trade. It is very important that we should.
Here I want to make the point that it is what I call the multilateral type of agreement which is often the one which best suits our interests and best reflects the multilateral pattern of our trade, because—if I may show it by contrast—the bilateral attitudes of the Soviet bloc require us often to strike bilateral balances of trade with Eastern European countries. Even in this case we have to take account of their need to earn sterling and to buy goods from the less developed Commonwealth countries to whom they sell relatively little. But with the rest of the world our trade follows a freer pattern.
I want to emphasise how important it is to us, this problem of imports of agricultural products, against the background of our worldwide trading pattern. If we had ever to force our trade pattern into the straitjacket of too rigid a bilateral trade balance, that balance would certainly be struck at a very much lower level.
Commonwealth trade follows the same multilateral principle. We sell Australia more goods than we buy from her. We sell Canada and New Zealand much less than we buy from them.
Mr. Darling rose—
Mr. Erroll: Yes, it is always difficult to get this right. In the case of Canada and New Zealand we sell them much less than we buy from them and therefore we have an adverse balance with those two countries.
Having explained the general worldwide pattern, I want to make the point that our international commitments and agreements are not a lifeless and rigid body of law imposing out-of-date restraints on our freedom of action but a pattern of contractual business relationships reflecting the pattern of our trade. These relationships are not fixed for all time, and it is practicable and reasonable to contemplate the negotiation of changes. But I stress the importance of trying to negotiate the changes.

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Naturally, we should have to bear in mind that our overseas suppliers have a real interest in our market and we, in the same way, have a real interest in the market which they provide for our exports. Therefore, in seeking new arrangements, we must not lose sight of the overall balance of interest between us and them. Indeed, the problem in our market is but one aspect of what is an international problem in agricultural products.
The steep fall in prices on our markets, which results from the violent fluctuations in agricultural imports, also affects the returns received by our overseas suppliers. It is to their interest, therefore, as much as to ours, that we should succeed in putting a floor in the market. They would also benefit from the stabilisation of our market and therefore we would hope and expect to receive their co-operation in steps to this effect.
The aim which the Government have set themselves, therefore, is to secure changes which will remedy the damage done by the fluctuations of food imports on our market and agricultural support system, without bringing about greater damage to the interests of our export trade or to our domestic consumers. It might be possible, for example, to reach arrangements with overseas food suppliers to sell us smaller quantities of food at much higher prices. No doubt this would solve the financial problems of agricultural support for the home farmer, but we cannot leave out of account the resulting cost of imports to the consumer. I think that sometimes we talk about consumers as if they were some kind of special animal; but we are all concerned with the cost of living. It is important directly to our own standard of life and indirectly to the competitiveness of the exports on which we all rely.
The Government are, therefore, not prepared to base their policy on a long-term rise in the cost of food to the consumer. The object is to prevent sudden falls to quite unduly low prices. It is open to question whether they work their way through to the consumer, but very low prices cause hurt to the agricultural support system.
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I therefore want to explain what we intend to do. In the coming months we shall be discussing cereals and meat in the specialist groups at the G.A.T.T. These are the important commodities, because they account for about 80 per cent. of the support payments, and if a practical solution is to be achieved it will be necessary to discuss the existing problems realistically and in detail. My hon. Friend the Member for Westmorland (Mr. Vane) referred to this as being an international problem. Certainly it is, and our hope is that we shall secure an international agreement to deal with what is in essence an international problem.
My hon. Friend the Member for Howden (Mr. Bryan) asked about the dates and how long all this would take. If such commodity agreements or other long-term arrangements cannot be achieved rapidly—and I regret that I cannot give my hon. Friend precise dates as early as this—it will also be our endeavour, whether as a result of these international negotiations, or as a result of the discussions which we are holding direct with our suppliers, to ensure that by one means or another interim solutions may be arrived at quickly, pending the more permanent arrangements. My right hon. Friend and I will push ahead with the international consultations, parallel with the discussions which he is having with the leaders of the home industry.
My right hon. Friend the Member for Thirsk and Mahon suggested that food imports should be the responsibility of the Minister of Agriculture rather than the President of the Board of Trade. I make no claim for a monopoly in this field, but I suggest that my right hon. Friend should consider the advantage of having in one Government Department general responsibility for Britain's commercial relations with the whole world, whether Commonwealth or foreign countries. In foreign countries our commercial representatives are part of the Foreign Office overseas staff, whereas in the Commonwealth countries they are appointed by the Board of Trade.
This makes no difference to the overall concept that one Government Department, whatever one calls it and whoever is head of it, should have sole responsibility for commercial relations, of which

1391
agricultural interests are an important part. This is why I spend a good deal of time in negotiating agreements of a bilateral and multilateral character. I do that with the help of my officials because we are covering the whole field and not part of it. This is why I have to balance the advantages of the purchase of agricultural products from Poland against the advantages of increasing our export opportunities in that country, and so all the way round the world.
As for the negotiations which lie immediately ahead in the implementation of the policy announced by my right hon. Friend last week, I should like to make the important point that in all operations of this kind some give and take will be necessary on all sides. Granted this flexibility and desire to reach a solution of the problem, which affects other countries as well as ours, I am convinced that stabilisation of markets at broadly the present general level of prices can be achieved, not only for the benefit of the taxpayer and the farming community but to the advantage of the country' as a whole.
Question put and agreed to.
Resolved,
That this House welcomes the decision of Her Majesty's Government, to use measures of control of certain imports of foodstuffs as a means of stabilising the market for agricultural products in this country.

ORDERS OF THE DAY

  FINANCE BILL
  Considered in Committee [Progress, 28th May].
  [Sir ROBERT GRIMSTON in the Chair]

  FINANCE BILL

    New Clause.—(EXTENSION OF RELIEF UNDER S. 9 OF FINANCE ACT 1956.)
    (1) Section 9(1) and (2) of the Finance Act 1956 (which provides relief from income tax on certain savings bank interest), shall, subject to the provisions of the next following subsection, apply in respect of dividends on shares of a society registered under the Industrial and Provident Societies Acts 1893 to 1954, or under the Industrial and Provident Societies Acts (Northern Ireland) 1893 to 1955, and in respect of interest on deposits with such 4 society or with a registered friendly society, as they apply in respect of interest on deposits with the Post Office savings bank.

    (2) Where by virtue of the last foregoing subsection the amount of surtax payable by an individual would exceed the sum of—

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

    (b) the amount of relief, if any, to which he is entitled by virtue of that subsection,

    that excess shall be disregarded for all the purposes of the Income Tax Acts.—[Mr. Houghton.]

    Brought up, and read the First time.
    6.59 p.m.
    Mr. Douglas Houghton: I beg to move, That the Clause be read a Second time.
    The Deputy-Chairman (Sir Robert Grirnston): With this new Clause the Committee can also discuss the new Clause "Reduction of rate of profits tax on co-operative societies, etc.", the new Clause "Building societies to be exempt from profits tax", the new Clause "Exemption of building societies from income tax and profits tax", and the new Clause "Exemption of building societies from income tax and profits tax (except in respect of profits from special advances)". The Committee can divide, if required, on the second and penultimate Clauses.
    Mr. Houghton: In moving this new Clause I should also like to deal in a preliminary way with the second and third Clauses that you have mentioned, Sir Robert.

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    The Clause proposes that the concession now given to Post Office Savings Bank interest and interest in the ordinary bank of the trustee savings bank for Income Tax purposes should apply to share interest, loan interest of registered industrial and providence societies, and to deposit interest payable by registered friendly societies.
    The Committee is fully aware of the fact that the first £15 of Post Office Savings Bank interest and of the interest on deposits in the ordinary branches of the trustee savings bank is exempt from Income Tax, but not from Surtax. The second new Clause proposes that the Profits Tax now levied on industrial and provident societies at the rate of 15 per cent. should be reduced to 3 per cent. The third new Clause proposes that complete exemption from Profits Tax should be granted to building societies on their residual surpluses. That Clause is one of three dealing with taxation on building societies.
    The fourth and fifth of the new Clauses which we are discussing also deal with the taxation on building societies but propose to go further. Indeed, in the fourth the Liberal Party would go very much further than what is proposed in the Clause that I have moved.
    I suppose that few topics have been so frequently and thoroughly debated as this. Royal Commissions and other bodies have considered them and debates on successive Finance Acts have gone over the ground again and again. What encourages my right hon. and hon. Friends and myself to persevere is that nothing that any Treasury Minister said last year, or the year before, or the year before that, or the year before that, will necessarily be Government policy today. That is a most comforting thought at this moment. No Government have performed more somersaults on the Floor of the Committee than this one during the course of our proceedings on this Finance Bill.
    The Financial Secretary has the distinction of recommending to the Committee proposals which he opposed on earlier occasions. He has been quite unabashed, undaunted. He is, I think, a political jockey who is prepared to ride any horse from the Government stables, even if it
    1394
    runs this year in the opposite direction from last.
    The Financial Secretary to the Treasury (Mr. Anthony Barber): May I inform the hon. Gentleman that the horse I backed this afternoon did just that?
    Mr. Houghton: I acknowledge at once that the hon. Gentleman is an extremely lucky man, otherwise he would not be sitting there. He has survived purges. His contradictions have not disturbed his repute on the Government benches. If he gets thrown in the course of the race, he will climb back in the saddle even if he finishes up back to front. With such a versatile horseman anything can happen, and we hope that something will happen on this new Clause tonight.
    The Clause refers to interest on savings in co-operative societies and registered friendly societies. On a previous occasion, the then Financial Secretary, now Minister of Education, referred to the conditions under which the concession was first given, in 1956, to Post Office Savings Bank and trustee savings bank interest. He said that two conditions were laid down. The first one was that the rate of interest must be static at 2½ per cent. The second was that the money should be lent direct to the Government, that being the case in connection with Post Office deposits and, by arrangement, also with trustee savings bank deposits.
    The Minister said:
    "My right hon. Friend was not just seeking, in a general way, to encourage small saving. The whole point of the concession was to encourage small savers to make a kind of voluntary contribution to the Budget surplus at a time when, as now, budgetary policy was a factor of first-class importance for the management of the economy."—[OFFICIAL REPORT, 20th June, 1961; Vol. 642, c. 1258.]
    That was two years ago and referred to a concession given in the conditions of 1956.
    We on these benches think that some fresh consideration should be given to the restrictions which have been maintained so far on this concession for Income Tax purposes. I cannot quote the Royal Commission in my support in this connection, because it was against this form of tax relief and recommended accordingly. Notwithstanding that, the Government introduced this concession within about a year of the final Report of the Commission.

    1395
    We think that now we should not stop at the limit of the 1956 concession. Nor do we believe that the arguments used in 1961 by the then Financial Secretary are necessarily conclusive today. The other day I came across an interesting little pamphlet which says that
    "A tax-free income of £15 per annum is permitted on interest from deposits in the Post Office Savings Bank and interest on National Savings Certificates is untaxed. This position should be rationalised in order to emphasise the need for investment in industry as well as Government-sponsored savings schemes. The tax-free level should be raised to £25 and extended to include all investment income."
    The committee may think that that is from a brash pamphlet issued by the Liberal Party. In fact, it is a memorandum by the Young Conservatives, who recently produced some very interesting and thought-provoking suggestions on the future of taxation. It is issued under the emblem of the Young Conservatives, which shows a blue lion rampant with tongue fully extended in the direction of his leaders. I think that that is an encouragement to go on, notwithstanding the disappointments of past years.
    The Economic Secretary should address himself to this question. In the light of the Government's new economic policy, what is the rôle of small savings today? Does the Chancellor of the Exchequer want them, or does he not? The Chancellor recently delivered a rude shock to the National Savings movement when he suspended the last issue of National Savings Certificates. He says that the idea that he did it to interrupt the rhythm and flow of savings was nonsense. He still wanted people to save, but he had to stop them doing it while the printing presses got ready for the new and less attractive issue.
    At a time when we are boosting the economy, when inducements are being given to consumer spending, when the concept behind the Budget is expansion and the raising of the level of demand, it would be as well if the Chancellor were to define in this situation the rôle of small savings. If he wants to encourage them, not only for Government sponsored projects, but for the expansion of the economy generally, he might well adopt the proposal that we make in the new Clause, "Extension of relief under Section 9 of Finance Act 1956".
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    Further, in this situation the Chancellor should emphasise that saving is the policy of individual prudence, quite apart from economic considerations. Savings are encouraged through endowment insurance policies on a large scale. Institutions are amongst the biggest investors of small savings in the country today. Savings in co-operative societies and in friendly societies are merely another form of personal saving for prudence sake as well as for economic purposes. Therefore, they may serve two objects—to offer a degree of individual security to the saver, and, at the same time, to provide some resources upon which the Chancellor and others could draw for economic expansion at the present time.
    I believe that the cost of the Clause would be about £2 million. The cost of the existing concessions as regards Post Office Savings Bank and trustee savings bank interest is about £12 million. But, as is customary on these occasions when the cost of the concession asked for is small, Ministers frighten the Committee by saying that it would not stop there. If the concession were applied to the extent proposed by the Young Conservatives in their interesting pamphlet, the total cost might be as much as £38 million. We are not asking for that. We are a little more realistic and a little more modest in our proposals.
    I pass to the new Clause, "Reduction of rate of profits tax on co-operative societies, & c.", which I wish to bring into the discussion of the trio of new Clauses that I am sponsoring at the moment. The history of the taxation of co-operative societies is, in my opinion, a sordid one. The Industrial and Provident Societies Act was passed in 1893. They were not then liable to Income Tax. They remained exempt from Income Tax until the Royal Commission on Taxation of 1920 had a disagreement as to whether co-operative societies should be brought within the scope of taxation.
    By a majority, the Royal Commission recommended that they should, but nothing was done about it. It was too controversial for anything to be done about it until in 1932 another Committee was set up—a departmental committee called the Raeburn Committee. It recommended that co-operative

    1397
    societies should be taxed on their profits just as if they were limited liability companies, without any deduction for interest on shares paid to their members.
    In 1933—there are some hon. Members here old enough to remember 1933—when the most reactionary Government of all time came to office on the biggest artificially stimulated wave of panic that our political history has ever known, the late Mr. Neville Chamberlain decided to bring co-operative societies into the scope of Income Tax. The reactionaries had their day of triumph under a Tory Chancellor in a reactionary Government in 1933.
    Sir Cyril Osborne: Led by a Socialist Prime Minister.
    Mr. Houghton: Led by a Prime Minister. I do not think that we should affix labels on all Prime Ministers.
    Then the Royal Commission of 1955 recommended applying the undistributed Profits Tax, or if a flat rate were introduced the flat rate of Profits Tax, to co-operative societies. The rate of Profits Tax charged on Co-operative societies went up from 3 per cent. to 10 per cent., then to 12½per cent., then to 15 per cent.; but in fairness I must add that in 1958, when the recommendation of the Royal Commission of 1955 was implemented, a change was made in the basis of the assessment of cooperative societies and share interest paid to members became deductible from the surplus for taxation purposes. The new Clause seeks to restore the rate of Profits Tax to 3 per cent., as it was before, but I candidly say that we do not propose to reverse the favourable change in the basis of assessment which was made in 1958.
    7.15 p.m.
    In an earlier debate on this matter, so far as speeches by Ministers then are relevant today, the present Financial Secretary said this:
    "However, the over-riding objection to giving cooperative societies the special relief of Profits Tax which is sought in these Amendments is that it would be most unfair to their trading competitors."—[OFFICIAL REPORT, 14th June. 1961;Vol. 642, c. 446.]
    How come? This concession would not lead to a price war with private shopkeepers and multiple shops. It would not mean a higher dividend to the share-
    1398
    holders, which, in any case, is taxed on the recipient. It might help to restore the dividend on purchases to a level more like it used to be. To suggest that this concession would be unfair to the competitors is to misunderstand the mutual aspect of a co-operative enterprise.
    I should add that my hon. Friends will supplement the case that I am making at present, both in respect of co-operative savings and Profits Tax on co-operative societies. I am a sort of curtain-raiser to give my hon. Friends the opportunity of taking the measure of hon. Members opposite, seeing what substance they are made of, and deciding whether it is worth while expending too much eloquence upon the driblets of the Conservative Party opposite, or whether my hon. Friends should fix their gaze on the Economic Secretary and regard him as the only Member on the benches opposite worth while talking to in present circumstances. Before there is any comeback on that, I will pass quickly to building societies.
    Here, the Committee has a choice of three: the realistic and more modest new Clause, "Building societies to be exempt from profits tax", the more radical proposal of the Young Conservatives in the new Clause, "Exemption of building societies from income tax and profits tax", and the more drastic—
    Mr. William Clark: That is the Liberal one. The hon. Gentleman must not confuse the Young Conservatives and the Liberal Party.
    Mr. Houghton: I mixed them up.
    Our new Clause deals with Profits Tax only. The other two new Clauses deal with Income Tax as well as Profits Tax, though they are not precisely the same in their effect on buildings societies. Profits Tax paid buy building societies in 1961–62 was about £3¾ million. Income Tax was nearly £10 million. That disregards the tax paid by the building societies to the Inland Revenue in the composite rate on share and deposit interest paid, so that over £14 million is blatantly extracted from a property-owning democracy.
    There is nothing that hon. Gentlemen opposite—perhaps I had better not say what I was going to. This is not an occasion for invective. I want to put my case calmly and persuasively to the

    1399
    Economic Secretary. I want him to say that as usual I have made my case in my customary courteous and persuasive way, because then I shall know that I am to get nothing.
    This is a proposal to relieve building societies of Profits Tax. I believe that there is a case—though I do not put it today—for relieving them of Income Tax as well. I think that in the light of this Finance Bill we have to get away from the conventional outlook of the Royal Commission on the principles of taxation. This Bill definitely leads us away from that. The abolition of Schedule A tax on owner-occupiers, reported against by the Royal Commission, has been adopted by the Committee and it has been put to the country as an act of social policy. Free depreciation in development districts, denied to the rest of the country and a radical departure from the concept of equality in taxation, is an act of economic policy.
    Hon. Gentlemen opposite have come, belatedly, to accept discriminatory taxation for social, economic, and similar purposes in the national interest. Discriminatory taxation is now an instrument of social and economic policy. I do not often refer to what I said in the past, because I am never proud enough of it, but I said in 1961 that it was time to have a reappraisal of the rôle of building societies in the housing programme. The case for that is just as strong today, and I believe that we have to consider the rôle of building societies in the housing programme of tomorrow.
    Look at the White Paper on Housing, the latest of the Conservative Party's electioneering pamphlets. Paragraph 39 refers to the importance of the rôle of the building societies in this new housing drive. The Housing Corporation will not be able to function unless building societies are prepared to pour money into the local housing associations, and in paragraph 39 we read what they are expected to do:
    "…the expectation is that the greater part of the money required by the housing societies will come from the building societies and other private sources."
    In this connection, as in connection with the private owner-occupier buying his house through a building society, there is an urgent need to get interest rates
    1400
    down. How can the prospective home owner cope with the combined effect on a limited income, of rising interest rates and rising building costs, and the astronomical rise in the price of land? This is at the root of the problem.
    I will not pretend that to relieve building societies of Profits Tax alone would enable them to reduce their interest rates. It would not. If they were relieved of Income Tax as well, however, I feel sure that it would, but I think that what is necessary now is a re-examination of the rôle of building societies in the housing situation of today in view of the heavy reliance now being placed on these societies for the fulfilment of the aspirations of right hon. and hon. Gentlemen opposite for a property-owning democracy. They should be taking the step which I am suggesting now, and we hope that this fresh look at matters which we have discussed in years gone by will bring forth a new point of view on these proposals.
    We do not want the Economic Secretary merely to repeat what has been said in previous debates. He probably has a brief which is exactly the same as the brief of last year, and that of the year before, except that it is now duplicated on black-edged notepaper and is headed, "Death to Their Hopes". This is an opportunity for the Economic Secretary to make a different speech from that made by his hon. Friend the Financial Secretary. This is an opportunity for him to show that the Government are as forward looking as they claim to be. This is an opportunity for right hon. and hon. Gentlemen on the benches opposite to strike a new blow for the property-owning democracy which they love.
    Mr. T. H. H. Skeet: Hear, hear.
    Mr. Houghton: All right. Let us have a response on that note. I shall spoil it if I say a single word more.
    Mr. W. Clark: It is always a pleasure to follow the hon. Member for Sowerby (Mr. Houghton), even though on this occasion he mixed up the Liberals and the Young Conservatives. I am delighted that he appreciates that the Conservatives in this Committee are at least young in idea and in freshness of thought.

    1401
    I felt that the hon. Gentleman was inclined to accept the new Clause—"Exemption of building societies from income tax and profits tax (except in respect of profits from special advances)"—rather than the new Clause moved by him and that tabled by the Liberal Party—"Exemption of building societies from income tax and profits tax". As the hon. Gentleman said, there is a feeling in the country that the rise in mortgage rates is hitting the small owner-occupiers. Not all these people live on fixed incomes, but they are finding it difficult to meet these rising costs. Having entered into a commitment with a building society to pay interest at 4½per cent. or 5 per cent., because of the dependence of the building society industry on market rates the societies have to borrow money at higher rates, and, in turn, have to charge the owner-occupiers more for the money they lend them.
    It is worth recording that although building society rates have gone up by about 20 per cent. since 1951, wages have gone up by 70 per cent. It is also fair to make the party point, following the example of the hon. Member for Sowerby, that under a Socialist Government it is true that mortgage interest rates were about 4 per cent. and they have risen since, but we must add that under a Socialist Government, up to 1951, only about 30,000 people a year were able to borrow money to go into owner-occupation of houses, whereas under the Conservatives the figure has risen to between 120,000 and 125,000 a year. More people are buying their properties despite the fact that mortgage interest rates have risen.
    7.30 p.m.
    I wish to refer in particular to the new Clause in my name and the names of my hon. Friends. We have tabled this new Clause deliberately not only to take in Profits Tax on surpluses but also Income Tax on surpluses. The cost, if the Clause proposed by the hon. Member for Sowerby were adopted, would be about £14 million. If the building societies were relieved in this way it would allow them to reduce their rates by about ¼ per cent. A quarter per cent. reduction is not much to the owner-occupier who is feeling the pinch, but in our new Clause we have gone further and said that Income Tax
    1402
    on the building societies should be absolutely abolished.
    If this were agreed the composite rate which the building socities pay to the Exchequer would be abolisheed. It is fallacious to think that an investment is free of tax. They do not get interest free of tax. The tax gatherer collects his rate; he collected in 1961–62 about £39 million. If the revenue were to forgo that it would mean a loss of £39 million, plus the £14 million Profits Tax on surpluses, a total of just over £50 million. In logic it is very difficult to substantiate a plea to give one industry—the building society industry—relief of £53 million, but we have to look at our whole tax system and be more and more discriminatory. No one, particularly on these benches, will refute the argument that a property-owning democracy is good for the country.
    One of the greatest advantages of owning one's house is, without talking airy-fairy nonsense, that it gives a person a sense of security and a sense of responsibility. I am sure that is a good thing. It is interesting to note, in parenthesis, that this makes the person a capitalist. My only criticism of the capitalist system is that in this country there are too few capitalists, and we want more of them. I said that I did not think that in logic we could possibly argue this case, but concerning social factors there is a very strong case for increasing the property-owning democracy.
    If it is considered right for the public purse to pay out £80 million in subsidies to council house tenants—and I am not arguing that that should not be paid out —that is a political decision and does not bear logical analysis. It was a political decision made rightly or wrongly, and to exempt building societies from Income Tax on the composite rate and on the surplus and from Profits Tax on the surplus would have to be a political decision. No doubt my hon. Friend the Economic Secretary will say that the Chancellor in this Budget has relieved taxation to a tremendous amount. There is no question that he has. The Chancellor never gives anything away, because he has nothing to give; it is forbearance from taking so much from the taxpayer. Probably £50 million this year would be too much, but I urge him that a political decision must be taken soon

    1403
    to create in this country more and more property owners.
    One way in which that can be done is to relieve building societies of Income Tax on surplus and Profits Tax on surplus. When my hon. Friend replies he may give us the "brush-off", but I want him to hold out hope that this may be done in the next Budget, or in the year after that.
    Mr. Donald Wade: Personally, I am not expecting a "brush-off" although it would not be the first time we have had it. I do not think one should be quite so pessimistic.
    You have indicated, Sir Robert, that we may discuss in this debate the Liberal new Clause "Exemption of building societies from income tax and profits tax". The object of that Clause is to relieve building societies from liability to Income Tax and Profits Tax on their surpluses. Those who have taken part in previous debates on this matter will agree that the existing tax on surpluses is not based on any logical principle but is due largely to fortuitous historical circumstances.
    The debate tonight is an omnibus debate dealing with a number of separate subjects. The only common feature is the claim for some relief from the burden of tax, but that is common to most debates on the Finance Bill. I understand that the Clause moved by the hon. Member for Sowerby (Mr. Houghton) proposes that the first £15 of dividend and shares and deposits held by an investor in a co-operative society shall be exempt from Income Tax. The concession is similar to that granted on the first £15 of interest invested in savings banks which was intended to encourage savings. In previous years I have advocated an extension of the concession to other forms of saving. Therefore, I have no objection in principle to the proposal in the Clause, which, if adopted, would strengthen the case for considering other savings institutions such as building societies.
    It must be remembered that building society investors at present receive no benefit whatever by way of relief from taxation. I stress that. It is important to appreciate the way in which building societies are taxed. Investors in building
    1404
    societies are not relieved from tax. They receive their interest free from any deduction of tax because the tax which would be payable has been accounted for by the building society to the Treasury by way of composite rate.
    Account is, of course, taken of the fact that some who invest in building societies have incomes below the level of liability for Income Tax, but the Exchequer does not lose. The composite rate is calculated by reference to the total amount which the Exchequer would receive if each investor had to pay that Income Tax direct. The Exchequer gets its full pound of flesh. It may well be that the Treasury gains owing to the administrative saving resulting from the arrangement it makes with the building societies.
    If relief were granted on the first £15 of interest for building societies also, this would alter the composite rate and would be of some benefit to the building society movement, that is to say, to those who invest in and borrow from building societies. Therefore, if the idea were extended it would be reasonable to apply it to building societies but I am not pressing that. In my proposal I am tackling the subject from a different angle.
    In addition to paying the composite rate, building societies pay Income Tax and Profits Tax on the residual surplus. This surplus is not income in the strict sense. There are statutory provisions which have to be observed in investing the surplus. It must be remembered that there are no equity shareholders in a building society and no ordinary shareholders to whom any part of this surplus could be paid. The only persons who could benefit by a relief of taxation on building societies surpluses would be the home buyers. They would benefit in two ways if this relief were granted.
    First, they would benefit by some reduction in interest charges. I agree that if it were only on Profits Tax, as proposed by the hon. Member for Sowerby, it probably would not be possible to bring about any reduction in interest rates. It is only if relief is granted from both Income Tax and Profits Tax that some reduction in interest rates would be possible. Secondly, they would benefit by the fact that building societies would be able to build up their reserves more

    1405
    rapidly and thus, by expanding their services, would help to meet the requirements of all those needing building society mortgages.
    In view of the White Paper to which the hon. Member for Sowerby referred, there could scarcely be a more appropriate time to abolish Profits Tax and Income Tax on building society surpluses. The Government want the co-operation of the building societies, and their association has promised support for the programme of building houses both for home ownership and for rent through housing societies. In paragraph 32, on page 6, of Cmnd. 2050, it is stated,
    "The Government have had discussions with representatives of the Building Societies Association about the possible need for giving more help to people in a sound position…who are anxious to buy a house."
    I understand that a public statement has been made to the effect that the building societies are very willing to co-operate in this programme. In paragraph 36, on page 7, we read,
    "The building societies can play a major part in this new development. A few societies have indeed already shown willingness to lend money to housing societies building to let, and the Government now wants to enlist the support of the whole building society movement."
    Mr. Hocking: It is housing associations.
    Mr. Wade: Housing association is the name used in the Bill, but in the White Paper there is a reference to housing societies, and I am quoting from the White Paper. It continues:
    "Discussions have taken place with representatives of the Association and they have agreed to recommend that societies should co-operate in the following scheme."
    Proposals then follow about setting up housing corporations, and there is a reference to houses owned on a co-ownership basis. I think that this is the first time that the word "co-ownership" has appeared in an official document. My colleagues and I have been advocating co-ownership for many years. Obviously we are making some progress.
    Mr. Oram: Is it not a fact that it is co-operative societies which are being advocated, and are not the Government being a little coy in not using the word "co-operative"?
    Mr. Wade: I will not argue whether the Government are being coy. I only draw attention to the fact that the word "co-ownership" is used. I understand the sense in which it is being used, and I have advocated this proposal in past years. But it would be out of order for me to dwell at length on the White Paper. I merely say that there is a certain amount of pie in the sky in it, and vague hope, but the objective, at any rate, is right.
    This tax on building societies' surplus is in the nature of a penalty. The late Mr. Glenvil Hall, who I think all hon. Members agree always spoke with moderation, used quite strong words in the debate last year. On 30th May, 1962, he said:
    "The Government, instead of penalising building societies, should recognise their value."
    He also said,
    "Is it not grossly unjust to treat building societies in this way? They help people to save and provide houses for those who need accommodation. They assist the Government in every possible way. It is unfair that these societies should be mulcted in this fashion."—[OFFICIAL REPORT, 30th May, 1962; Vol. 660. c. 1379–80.]
    No satisfactory answer has ever been forthcoming from the Government to show why this tax on surpluses should continue. I am aware of the arguments which have been developed from time to time, but I do not think that they stand up to examination. The Government may say that they are anxious not to create a precedent, but I do not think that they would be doing so in relieving building societies of this burden. Indeed, I think that we have a new precedent which might well be followed, because by virtue of Clauses 42 and 65(4) the housing associations will be relieved from Profits Tax and Income Tax. As authority for that I can quote the observations of the Joint Parliamentary Secretary to the Ministry of Housing in the short debate on Clause 42. Referring to this Clause on 23rd May, 1963—he used the words co-operative housing association —he said:
    "The Clause provides in effect that the associations are to be treated as collective owner-occupiers."
    —we have a variety of names—
    "The relief, therefore, is twofold. In the first place, the association will not be charged with Income Tax or Profits Tax on the rents which it receives from its members. In the second place, each member will be allowed

    1407
    relief where appropriate on as much of the interest paid by the association as is attributable to the property which he occupies."— [OFFICIAL REPORT, 23rd May, 1963; vol. 675, c. 656.]
    7.45 p.m.
    If one follows that to its logical conclusion, the rent which a co-owner pays is similar to the mortgage interest which a home buyer pays to a building society. There is a very close relationship between the exemption from Profits Tax and Income Tax of these housing associations and the case which I am making for relief for building societies.
    It must be remembered that building societies are not engaged in trade and therefore it cannot be contended that they are in competition with some trading body. They are not operating in competition with any form of retail trade. They are in competition only with the national savings movement. Building societies are the only form of savings institution in which neither the investor nor the institution is accorded any Income Tax relief.
    Some people may think of the building society movement in terms of attractive and substantial office buildings where the business is carried on, but it would be fairer to think of the movement as one which benefits large numbers of people who are buying their own homes and who would be unable to do so without the help of building society mortgages. Unfortunately, there are many thousands of people who either cannot find a house to buy or cannot afford to pay the price when they find it, and I regret to say that the prices of houses are still rising.
    In an interesting leaflet published by the Building Societies Association, No. 38, there are figures of the index of house prices. I will not burden the Committee by reading out the figures, but they show a steady pattern of rising prices. It reads:
    "it will be noted that the upward trend in the price of new houses continues. The provisional figure for the March quarter of 1963 has risen by four points over that for the December quarter of 1962, the biggest increase in a single quarter since the table was first compiled in 1956."
    It rightly points out that the index covers the whole of Great Britain and that similar indices for similar regions, such as the London area, would show marked variations. Even if the proposals in the
    1408
    White Paper were carried out—and obviously much of it is hope—and even if the hopes were fulfilled, the Government would be only too willing to take any practical steps which would be of assistance.
    It is true that a number of proposals have been put forward to make it easier to own one's home, and some are already in operation. For example, there are cases in which 100 per cent. mortgages are available for which a long term is granted. but it is as well to remember that there are some disadvantages as well as advantages in this. It is not a complete solution.
    If one pays a very small deposit and obtains a long-term loan, interest inevitably forms a very large part of the monthly repayments in the earlier years. For example, if a young couple buy a house on a 95 per cent, mortgage for a term of 30 years or over, they may find that in five years' time, when for some unforeseen reason, such as a change of occupation, they have to move, the monthly repayments will have had comparatively little effect on the total capital owing on the mortgage.
    The amount of the deposit is also an important factor for anyone buying a house, but the aim should be to lessen the overall cost of home buying. There are three factors which contribute to this: one, the price of land; two, the cost of building; and, three, the amount of interest paid on the money which is borrowed. I should be out of order if I were to discuss the rising price of land or the methods of reducing building costs. I will only say that I hope that there will not be a scramble for land between the new housing corporations, the local authorities and private developers.
    The matter of interest rates is very relevant to this Clause. The building society movement is in competition with the savings movement, and interest rates are, of course, affected by Government policy. Anything that could be done to reduce interest rates would be a useful step in the right direction. It is clear that if the tax, which I regard as an unjustifiable tax, on building society surpluses were abolished, it would make possible some reduction in interest rates. It would, at any rate, be of some real help.

    1409
    The Chancellor has, of course, to consider the loss of revenue. The figure of £14 million was mentioned. According to my calculations, in the last year over £11 million was paid in the form of Income Tax on the residual surplus of building societies and over £4 million in Profits Tax, making a total of £15 million. I shall not argue whether it is £14 million or £15 million. If this tax had not been imposed, the sum involved would either have been devoted to building up reserves or facilitating home buying. In either case it would be encouraging saving and would not represent any real loss of revenue. That is the crux of the problem.
    We have had many debates on this subject and there is very little new to be said about it. We have heard the case from the Treasury Bench many times. I think that we have now reached the stage when the Government should give way. I hope that the Minister will do so graceully—and this year is the time when it should be done.
    Mr. Philip N. Hocking: I do not want to follow the hon. Member for Huddersfield, West (Mr. Wade) into the realms of vocabulary and political slogans. Nor do I want to follow him in the delightful way in which he ran through my right hon. Friend's White Paper, which was published yesterday. I was, however, intrigued with one point which he made. I do not think that he quoted with due fairness from the building societies' publication with regard to the increase in the cost of housing from one quarter or another. He did not say, as I thought he ought to have said, that the increase in cost was directly attributable in the first quarter of this year to the increase in wages that had to be paid. This is a fact which is inescapable. I have seen the cost rise over the last 12 or 15 years by 100 per cent., and I think that it would have been worth while if he had mentioned this increased cost which has been largely attributable to increased wages paid.
    Mr. Donald Chapmanrose—
    Mr. Hocking: I do not want to give way because I want to pursue the argument with regard to building societies and support the case made by my hon.
    1410
    Friend the Member for Nottinghamshire, South (Mr. W. Clark).
    This matter in regard to building societies has been debated over and over again, both by my hon. Friends and by hon. Members opposite. We all know the history of this taxation. We have had the facts given to us in this House and from people outside as to the whys and wherefores, and I think that it is true to say, as the hon. Member for Huddersfield, West said, that no one accepts that the tax charged on building societies is justifiable.
    We know the importance of the building society movement, and it is significant that this matter has been debated every year since 1958 on every Finance Bill. In each of those debates it has been stressed that building societies are not trading undertakings as we know them. I believe that they are entitled to some special consideration, such as my hon. Friends on this side of the Committee have set down in their new Clause.
    Building societies fulfil a unique service. They channel the funds or money from those people who have a surplus to those who need to use it to house themselves. Why should extra taxation be taken by the Exchequer in this processs? Last year the building societies paid some £4 million in Profits Tax plus the other sum, making a total of between £14 million and £15 million. It seems wrong to me that the Chancellor should take money in this way merely because it is being channelled from one section of the community to another and used in a worth-while cause. This work should be encouraged still further. It is obvious that it will need to be encouraged still further in the years that lie immediately ahead. I hope that home ownership will be encouraged by everyone who takes part in the political life of this country.
    If we are to encourage home ownership, the cost to the borrower should be kept to the absolute minimum. It is perhaps not surprising, in view of what lies ahead in the next 12 or 18 months, that practically all parties at the present time are united in wanting building society interest kept to the absolute minimum and cheap money made available for those who wish to provide themselves with housing accommodation. I think now, and I have always

    1411
    thought, as I know that most hon. Members have on this side of the Committee, that the question of home ownership is most important.
    8.0 p.m.
    If my hon. Friend would give way now or on a future occasion on the lines suggested, the Building Societies Association has said that it would recommend to all its members a reduction of¼per cent. in the interest charged to borrowers. This may not be very big, but it would be a step in the right direction. It would mean that the standard rate charged by societies could be reduced to 5¾ per cent. The relief would be felt by a section of the community which has carried a large burden of the cost of running the country in the last few years, carried it not only in taxation but in considerable sums in rates. My hon. Friend the Member for Nottingham, South mentioned the subsidies paid to local authority tenants. There is a fair case to be made for home owners to receive some relief.
    The hon. Member for Sowerby (Mr. Houghton) spoke of the merits of the various Clauses under discussion. Our new Clause—"Exemption of building societies from income tax and profits tax (except in respect of profits from special advances)"—is the fairest of the lot in this respect. We are honest enough to say that we want the benefits of this change to go only to home owners and home occupiers and that we do not want special consideration to be given to that section of building society business which comes under the definition of special advances in the Building Societies Act.
    I know that this is only a small part of the business, but we feel that home owners and would-be home owners deserve some consideration, and we have deliberately excluded the special advances which could be said to be normal commercial business.
    Mrs. Joyce Butler: I will confine what I have to say to the new Clause which has been so vigorously moved by my hon. Friend the Member for Sowerby (Mr. Houghton). He indicated that its purpose was to extend to interest on co-operative shares and penny bank accounts the concession made in the
    1412
    1956 Act by which the first £15 of interest on deposits in the Post Office Savings Bank and in the ordinary depart-meats of the trustee savings bank is exempted from tax.
    After listening to the debates on this subject in recent years, and studying the replies from the Treasury Bench, I have been puzzled to know why the reasoned arguments from this side of the Committee have been unable to penetrate the inflexibility of hon. Members opposite. The attitude of the Government has been rather as though they were promoting an exclusive kind of small savings club. Year after year they have said that they were not prepared to vary the rules by one iota to accommodate the small savers of co-operative societies. They themselves have made the rules and they can perfectly well change them if they so desire. The arguments from this side of the Committee have been sufficient to indicate that they should change the rules and be less inflexible than they have been in this respect.
    It is quite clear that the Government have appreciated that the Co-operative movement is a savings movement. For example, they recognise that, in 1961, £302 million were invested by small savers in co-operative societies of which the considerable sum of £255 million was in share capital. The Government have recognised that this considerable sum is an accumulation of very small amounts by 13 million members of co-operative societies of small amounts averaging about £20. All this has been recognised, but still the Government have not given way.
    They must also recognise that not only is the Co-operative movement a savings movement in the sense in which we understand the word, but it gives special facilities for encouraging saving. One could say that a co-operative society has a built-in savings incentive by the very principle of co-operation and the machinery provided for enabling members to keep their dividend, which is a form of deferred discount, in their share capital account instead of drawing it out. It does more than any other institution to encourage members to save year after year in this way. Yet we have not succeeded, during all the years in which this matter has been debated, in persuading the Government to give co-operative

    1413
    societies the facilities given to the Post Office Savings Bank and the ordinary departments of the trustee savings bank.
    The Government know that there is a statutory limit on co-operative shares of £1,000 and on penny bank accounts of £50, and that these are, therefore, small savings. There is no question of big savings. There is a ceiling on the amount of interest paid by co-operative societies, which is about 3 per cent., so that the rate of interest is extremely small. About 34 per cent. of the money saved is invested in Government securities so that a large part of the money saved goes in Government securities. These are all matters on which the Government have insisted.
    Mr. Percy Holman: Out of the £300 million which has been invested in co-operative societies, £191 million has been reinvested and not used in trading or production. Out of that £191 million, approximately 34 per cent. is invested in Government and local government securities.
    Mrs. Butler: For the sake of time, I rather telescoped the argument, but I am assuming that the Government know all these things and I am just reminding them of them. Assuming that they do, it is difficult to understand why they continue their discrimination against the co-operative small saver.
    It is all the more difficult to understand because in the Bill, in Clause 42, the Government have gone out of their way to assist co-operative housing associations. They have taken up something which has interested me for a long time, the difficulty which members of cooperative housing associations have in respect of Income Tax. Those members are now brought into line with ordinary owner-occupiers. In the Clause, which is complex, the Government have dealt with a much more abstruse principle for which it is much more difficult to draft than this very simple Clause which we now advocate and they have also acted very quickly.
    Following the introduction in the 1961 Housing Act of their support for cooperative housing associations, in this Finance Bill they have seized the difficulty of members of co-operative housing associations with Income Tax and have formulated an answer to the problem and
    1414
    included it in the Bill. If they could do that and if they could see that and if they could find an answer to that problem, I cannot follow why they cannot see this point about co-operative small savers and find an answer to it.
    The Government do not say to members of the co-operative housing associations, "You must change your rules in order to fit in with the Income Tax regulations"; they have changed the Income Tax regulations in order to accommodate members of co-operative housing associations. What we are now asking is that they should change the Income Tax regulations in order to accommodate cooperative small savers.
    The principle is exactly the same. If one follows the avowed intention of the Government in the White Paper on Housing, which is to end tax discrimination against co-operative house owners in order to encourage co-operative housing associations as part of the general housing contribution, why do they not use the same principle and end tax discrimination against co-operative small savers and encourage them as part of the general small savings' contribution to the national economy?
    The Treasury Bench could make a break-through this evening and support what my hon. Friends and I are suggesting. I cannot see how the Government can fail to accept this argument, since, in Clause 42, they have already taken action on another aspect of the Cooperative movement. We are jealous of the rights of the individual. We are concerned to see that justice is done, even when relatively small matters are involved.
    I ask the Treasury to realise that the small savers to whom I am referring represent some of the finest people in the country. The Government are frequently saying that people should try to help themselves, and these people are doing just that. They are seeking to help themselves by the principle of co-operative self-help and they deserve better treatment in this respect than they have had.
    I hope that, for all these reasons—in the name of logic, above all—the arguments which we have adduced to benefit the people who are using their initiative in an effort to help themselves through their small savings will not be met by the

    1415
    Government repeating the arguments they have used in previous years, but that they will support our claim.
    Sir C. Osborne: The hon. Lady the Member for Wood Green (Mrs. Butler) has made a persuasive and attractive speech on behalf of the small savers in the co-operative savings movement. For over 100 years this movement has undoubtedly been one of the finest organisations of its kind in the country and has done a great deal of good work, particularly for the poorest section of the community. Whatever we can do to help in this direction would receive my support, although I do not necessarily go all the way with the hon. Lady in supporting the proposed new Clause entitled "Extension of relief under s. 9 of Finance Act 1956." But in her aim to protect and encourage small savers I am with her one hundredfold.
    The hon. Member for Sowerby (Mr. Houghton) said that there had been in power in 1933 probably the greatest reactionary Government of all time—or words to that effect. I would remind him that that Government was originally led and inspired by the three famous founders of the Labour Party; Ramsay MacDonald, Jimmy Thomas and Philip Snowden, and I should have thought that he would not have regarded such saints in those terms.
    He also said that we must look to the building societies to provide the money for the new housing drive. That is going to be grossly unfair to the savers for whom the hon. Member for Wood Green pleaded, for it would mean that we would be providing money to the borrowers, money which would grow in value, at the expense of those who lend their money. They would be swindled and robbed of their savings through inflation.
    The proposed new Clause does not get my support because it does not go far enough. It fails to tackle the real problem of savings which faces us. It is like giving a poor patient an extra lump of sugar in the hope that it will cure a complaint like cancer; in this case, financial cancer. The Clause, so the hon. Member for Sowerby claimed, would cost only £2 million whereas the previous concession given by the then Chancellor in 1956 cost £12 million. This was followed by the
    1416
    hon. Member asking, "What is £2 million today if it will encourage the small savers?"
    8.15 p.m.
    Why did the hon. Member stop there? Why stop at those two extra types of savers? If it was unjust to have selected two classes of people in 1956, it is just as wrong to do so now. Why should not all small savers benefit in the same way and have the first £15 interest free of Income Tax? The aim of all hon. Members is to encourage people to save—all types of people—and it is an excellent exercise for us both to encourage savings and to save. I put it to the Chancellor and to the hon. Member for Wood Green: why should not the holders of War Loan, the most widely held securities in the country, have their first bit of interest free of Income Tax?
    Mr. James Dempsey: If the hon. Member feels so strongly about it, why does he not table an Amendment or new Clause to that effect?
    Sir C. Osborne: The hon. Member should not rush his fences. I am merely saying that the proposed new Clause does not go far enough to even touch the real problem because it will not encourage people to save. It is futile and inadequate to encourage savers in this way. It is far more important to protect the real value of their savings than merely to give a tax concession on the first £15 of interest. To illustrate this I urge hon. Members to recall that in October, 1946, the famous 2½ per cent. Dalton Treasury bonds were issued. The price was £100, but the price of them today is £45. People who took the advice of the then Labour Chancellor and put their money into those bonds today have only £45 for their £100 investment.
    Mr. John Rankin: Another Tory achievement.
    Sir C. Osborne: They have been swindled.
    Mr. Dempsey: Tory inflation.
    Sir C. Osborne: It is also important to realise that £1 at that time, in 1946, is today worth about 10s., so that £100 saved then is today worth only £22 10s. These people have been swindled out of £77 10s.
    The Deputy-Chairman: I hope that the hon. Member will relate all this to the Clauses under discussion. I am a little uncertain at present of the connection.
    Sir C. Osborne: The proposed new Clause to extend relief under the 1956 Act is asking that the first £15 of interest should be granted free of Income Tax—not Surtax—to the recipients on two new classes of savings. The purpose is to encourage people to save. I am trying to reason that this is futile unless, first, it selects the other groups of savers and, secondly, because it excludes far more people than it includes. It is, therefore, socially unjust to savings.
    In any case, the proposed new Clause will not do what hon. Members on both sides of the Committee want to do—encourage people to save more. Fifteen pounds free of Income Tax will not cause people to save more if, at the same time, they see the real value of their savings being lost in inflation. The falsity of the proposed new Clause is that, on the one hand, on one occasion hon. Members urge my right hon. Friend the Chancellor to spend more—and to create inflation and thus to take away the value of the savings they want the people to provide—and that, on the other hand, they must know that people will not save if they see the value of their savings being whittled away.
    Mr. James Callaghan: The hon. Member is assuming that there will be a continuation of Conservative government, and if that happens I quite agree that people will go on being swindled of their savings. But we are assuming that there will be a swift change to a Labour Government to restore the value of people's savings.
    Sir C. Osborne: I am much obliged to the hon. Member for his intervention. If he will look at the figures between 1945 and 1951—
    The Deputy-Chairman: Order. This is going much too far from the Clause. We cannot discuss inflation now. I hope that the hon. Member will come to the Clause.
    Sir C. Osborne: I will obey your Ruling. Sir Robert.
    I oppose this Clause because I do not think that it will achieve the object that
    1418
    hon. Members opposite have in mind. To allow the first £15 of interest to be free of Income Tax, a concession which they wish to give to two sections but to deny to other sections, such as holders of War Loan and other Government stocks, would be socially unjust and would land us ultimately in inflation. This new Clause only plays with the problem. It is futile, and should be rejected.
    Mr. W. T. Williams: The last time I spoke on a Clause similar to the New Clause—"Reduction of rate of Profits Tax on co-operative societies &c."—was in 1958, and since then I have listened to most of the speeches urging the Government to fulfil its purpose. Our approach tonight is rather that of the much-married American starlet who at the moment of her fourth marriage said that it was a triumph of hope over experience.
    The hon. Member for Louth (Sir C. Osborne) will not expect me to agree with much that he has said, but I am at least happy for once to join him in paying tribute to the work and social significance of the Co-operative movement. It is this that makes me wonder why the Government persist in pursing a policy of imposing Profits Tax on this movement that has been characteristic of them through out their period of office. The hon. Member for Nottingham, South (Mr. W. Clark) congratulated the Conservative Party on being ever fresh in ideas, but in the Government's attitude towards the Co-ops it is true that the more Ministers there are the more things remain the same.
    As long ago as 1933, the Raeburn Committee instituted what is illegal fiction with a vengeance—that the Co-ops were to be treated just as though they were joint stock companies. The Government ought to know better than to behave like that, because the Co-ops have absolutely nothing in common with joint stock companies. They are not joint stock companies, their capital structure is not the same, the way in which they distribute their profits is completely different, and the 13 million membership is made up of people who are, by and large, very different from the shareholders in the joint stock companies.
    The Government are supposedly in favour of the Co-ops—they pay them the tribute of lip-service—yet they persist in

    1419
    continuing this fiction that it is just and fair to treat them as though they were joint stock companies for the payment of Profits Tax. That is not only unjust and unfair—it does not even make sense.
    For instance, the Co-ops, apart from having a fixed price for their shares—the shares are for ever at par and do not increase in value as, one hopes, the joint stock companies shares do—limit the amount of interest they pay and spend the greater part of their surpluses as dividends to their members. The people who benefit are those who purchase from the co-operative stores. In such circumstances, this legal fiction, is manifestly unjust.
    The position is now rather worse than it was in 1958 when this profits taxation was first imposed on the Co-ops. They are not now being treated even in accordance with the original fiction, but worse than the joint stock companies, by the raising of the rate from 3 per cent. to 10 per cent. in 1958; from 10 per cent. to 12½ per cent. in 1960, and from 12½ per cent. to 15 per cent. in 1961. In the same period, the joint stock companies have benefited tremendously, because in 1958 the taxation on their profits was reduced from 30 per cent. to 10 per cent., and they will this year be paying half their pre-1958 rate while the Co-ops will pay five times as much.
    That is manifestly unjust to the 13 million co-operators who comprise the backbone of our working people, for they are able to hold relatively little capital. The average amount of capital held by each co-operator is only £22 10s. 0d., yet it is these same people who give to the co-operative movement the enormous total capital in shares and loans of £294·7 million.
    We have already heard that one-third of the total of Co-operative savings is invested in Government stocks. However, the effect of the 1958 Act upon the co-operative societies holding the capital of their co-operators has been that they have had to pay in the form of taxation on profits an additional £1–3 million, in 1960 a further £500,000, and in 1961 a further £450,000. That is an increase in taxation paid by the societies of about £2¼ million a year out of moneys which would otherwise be returned to their 13 million members, who are, in the main, people in the lower income groups.
    1420
    The fall in dividend paid by the co-operative societies is related directly to this. The effect is so grossly disproportionate, demanding such a large contribution from lower-paid people and increasing the burden upon organisations which the Government constantly aver are for the social and economic benefit of the country, that we repeat our plea tonight, more in hope than in confidence, I fear, that they should revise their attitude and grant what we ask in the new Clause.
    8.30 p.m.
    Mr. Skeet: I do not wish to follow the remarks of the hon. Member for Warrington (Mr. W. T. Williams), although I concede that his argument is extremely persuasive. I wish to direct attention to the new Clause, to which, together with some of my hon. Friends, I put my name, to exempt building societies from Income Tax and Profits Tax.
    No doubt, my hon. Friend the Economic Secretary has had an opportunity to read Cmnd. 2050, to which many references have already been made. It appears that he may be in a rather troublesome predicament here. If new housing societies are to be created which do not pay Income Tax or Profits Tax, it will be rather difficult not to concede this concession to the building societies. After all, the building societies have contributed enormous sums to the same purpose since the war, and if the money had not been forthcoming from them it would have had to be found by the local authorities or by the Government.
    I shall make my point briefly, because I support what has been said by my hon. Friends and by some hon. Members opposite who have pressed this proposal on the Government. I suggest that my hon. Friend the Economic Secretary ought to make perfectly clear to the Committee precisely what future rôle he has in mind for the building societies. He has said that the building societies can play a greater part in the life of this country. What precisely is to be their rôle? Cannot that rôle be facilitated by exemption from income Tax and Profits Tax, which would involve only about £15 million?
    Who will be the people to benefit? One cannot do better than refer to the Halifax Building Society, the largest in

    1421
    the country. Last year, the Halifax advanced a total of £114 million on 60,000 mortgages. The breakdown of the total is interesting. There were 56,966 mortgage advances agreed which did not exceed £3,000 each, and these were all in respect of homes to be occupied by the borrower himself. The total there was £97 million. Again, of 3,180 mortgage advances between £3,000 and £3,500, all were in respect of homes to be occupied by individual persons, the total amount there being approximately £10 million.
    Thus, we find that the people who would benefit would be those in the lower ranges of income, the very people we would wish to benefit, those requiring mortgages for the advance of about £3,000 or, perhaps, even £4,000. We are not asking for a concession to assist extremely wealthy people. The concession would assist young married couples, often the people who advance money to the building societies, who want homes which they can have as their own so that they will not be paying rent in perpetuity but, rather, over the course of the term of, say, twenty or thirty years, will have an investment.
    We do not wish to return to the era of Socialist inflation. We hope to be able to say ultimately (that every man in the United Kingdom will have a house of his own, if he so wishes. We already know that each year 125,000 people are buying their own houses with the assistance of building societies. The purpose of the new Clause to which I am speaking is well understood, and I hope that my hon. Friend the Economic Secretary appreciates that he may be in some difficulty here.
    There are various forms of saving. There is saving through the building societies, the National Savings movement, the housing associations, and so on. There are all these common avenues by which money is saved by the community. Are some of them to be subjected to Profits Tax and Income Tax and others not?
    Mr. Laurence Pavitt: As the hon. Gentleman is developing this theme of the vast number of people who will own their own houses, may I point out that in his constituency the borough council had to stop lending money for a long period to would-be owner-1963
    1422
    occupiers because of the high interest rate which arises from the Government's policy, whereas when I was on a local authority under a Labour Government we were lending money under the Small Dwellings Acquisition Act at the rate of 2¾ per cent.? Surely that is inconsistent with the hon. Gentleman's argument.
    Mr. Skeet: That Act was not put on the Statute Book by a Socialist Government. I believe that the Small Tenant Acquisition Acts were introduced in 1889 and 1923, but they were not put on the Statute Book by a Labour Government. If the hon. Gentleman likes to discuss the question of interest rates, he must take a number of factors into account. The Government cannot manufacture money by a printing machine. They can only derive it from the taxpayer and from people who are prepared to advance it. Thirty-eight per cent. at least of the contributors are the public themselves, and unless they are paid a reasonable rate they will not provide the money.
    Reference was made a moment or two ago to War Loan. I do not want to get out of order on this matter, but I have been asked a question on it. Hugh Dalton, as he then was, advised people to put down £100 for War Loan. It has reduced in value until today it is worth only £45. Members of the public appreciate that 2½ per cent. is not enough and feel that they are entitled to a little more. In considering the question of interest rates, we must bear in mind not merely internal, but also external matters which affect our balance of payments.
    The Halifax Building Society paid £8,922,283 in Income Tax last year, but I appreciate that a large part of it would be paid on account of the investors themselves and that only part of it would be on the residual surplus. The Society paid £813,000 in Profits Tax, a quite significant figure. I appreciate that if only the Profits Tax argument were conceded the building societies could not do very much because the ratio of their reserves to assets has gone down from 6·4 to 4·4 per cent. and it would be necessary to build this up.
    Who would benefit from this suggestion? The chief general manager

    1423
    of the Halifax Building Society has written me a letter—
    Mr. Rankin: Is the hon. Gentleman a director?
    Mr. Skeet: I have nothing to do with the Society. The chief general manager states:
    "In present conditions, assuming an immediate exemption from profits tax and income tax on surpluses, it would certainly be the wish of the Halifax Board that the benefit arising from the consequent adjustment in margin should be passed to the borrowers by way of an actual reduction in the rate of interest they are charged at present, which is 6 per cent. I cannot foresee the precise extent of such reduction except to say that it would he at least I per cent."
    This is an authoritative statement. This would be the benefit which would go to the people in a property-owning democracy which, we hope, will extend.
    Many arguments have been adduced on this matter, but I think that the only argument which the Government can put against it is that it would create a number of anomalies. It might be said that, if the Government conceded this in respect of building societies, they would have to concede it in respect of co-operative societies, and so on. But there is one prime necessity, and that is to build more and more houses throughout the country, which the Government are doing under the proposals of the recent White Paper. What the people want, above all, is more houses which they will own over the course of years.
    We appreciate that it is necessary to build more council houses, but the advantage of this from the building societies' point of view is that a man will have his own house through his own earnings over a number of years. This is one way in which the Government could substantially aid the borrower.
    Mr. Rankin: I am committed to only five minutes and that is a disaster which the hon. Member for Willesden, East (Mr. Skeet) did not minimise by exceeding five minutes. I am thinking of my hon. Friends on this side who would like to say a word or two. Before I came into the Committee tonight, I read the speech which I made on this subject last year and I enjoyed it very much. I consider it to be a very good speech. It occurred
    1424
    to me that if I had time, I would bring it in and read it again tonight, but, unfortunately, it occupied more than five minutes, and I have been reminded by my Front Bench that I sometimes forget when I have had my five minutes.
    I am glad to see the Economic Secretary on the Front Bench, because he was not occupying that position when I spoke a year ago and had a great deal of support from him. He was most friendly in his disposition towards us when he was on the back benches, sitting next to his hon. Friend the Member for Crosby (Mr. Graham Page), who evidently remembers the occasion. A year ago, we bad much encouragement from hon. Members opposite. They were all in favour of saving. When it came to the vote, however, they went into the Lobby against us. The Economic Secretary has the chance tonight to redeem himself.
    I wish particularly to address my remarks to the new Clause entitled "Reduction of rate of profits tax on co-operative societies, & c.". I should like the Economic Secretary to remember what he said a year ago about savers and to tell us that tonight, instead of running away, he will stand with us. I asked him to do that last year, but he did not.
    There is one little problem in this long fight that has been with us since 1958 when we abandoned the 3 per cent. tax. Why is it that these profits, created by the same people in the same way and in the same movement, the Co-operative movement, were regarded as undisturbed profits from long before the publication of the Reyburn Report in 1933—and the Labour Government throughout its term of office regarded and treated them as such—but that in 1958 they suddenly, overnight, became distributed profits treated in exactly the same way as if the Co-operative movement were a joint stock company? That was altogether wrong.
    I am certain that when he replies, the Economic Secretary will not try to prove what is unprovable. Perhaps, however, he will tell us why what was regarded as the right thing to do prior to 1958 suddenly became the completely wrong thing to do after 1958, with the result that the movement is today losing £2¼ million, practically all of which comes from working people.

    1425
    Last year, the Economic Secretary said that he wanted to see savings made out of income. I want to ask him again, as I asked him last year: what is the difference? He wanted to save out of husbands' incomes. We want to save out of the housewives' spending. We were prepared to assist him in his effort last year, will he come to assist us in our effort this year; to encourage the savings which women make when they spend money in a co-operative society?
    8.45 p.m.
    My five minutes are up, much to my regret. [HON. MEMBERS: "Go on."] I should become very unpopular with those on this side of the Committee if I did. My hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) cannot sit any longer in his seat, and I hope, Sir William, that you will note what I am saying. However, I am grateful to have had five minutes; and I hope that the hon. Gentleman who supported me on this topic once before but not by vote will be helpful on this occasion and correct that error and support our new Clause.
    Mr. Graham Page: I want to return to the new Clauses which deal with building societies and particularly to those which seek to give relief not only from Profits Tax but for Income Tax as well—although I think that hon. Members have taken too slavishly the statement of the Building Societies Association that relief from Profits Tax could not be reflected in any reduction in interest charged to borrowers. Certainly, so far as the smaller societies are concerned, which have a variety of ways of advancing at varying interest, relative to the properties on which they advance, I believe that even relief from Profits Tax could be reflected in benefits to the borrowers, perhaps on the older properties on which some of the smaller societies charge slightly more interest.
    I have to declare an interest at once. I am a director of a building society. I find that the public idea of the board of a building society is rather extraordinary. We are thought of as whimsically or devilishly turning the screw to get another¼ per cent. interest out of the borrower and delightedly putting it into the board's pockets. Of course, what the board of directors of a building society are concerned with is that margin be-
    1426
    tween the rate of interest which they have to pay to get the money in and the rate of interest which they have to charge the borrower.
    In dealing with the margin they are dealing in shillings and pence. It is not a large margin. Into that margin have to be squeezed the administrative expenses, the reserves which building societies have to maintain, and tax; and the tax takes a very big slice of that margin. If there were tax relief that margin could be cut; not could be, but would be cut, because it would be an obligation on the building societies to cut that margin.
    It depends which end one is going to cut it. Is the interest which is paid to the depositors in order to attract more money into the building societies to be increased, or can the rate of interest charged to the borrowers be reduced? Until recently I would have said that the necessity would have been to give more interest to depositors in order to attract more money in, but from the beginning of this year or the end of last year the money has been coming into the building societies freely at the rate of interest which is offered.
    This is a situation which makes it possible, if the Government would give relief now, to pass that relief on to the borrowers. It is a situation which has not existed until this year in all the debates we have had on this subject from 1958 onwards. The trouble from 1958 onwards for the building societies has been to get the money in. Therefore, any relief which they might have been given on taxation might have been passed on to those lending money to the societies, in order to attract the money in, rather than to relieve borrowers.
    Now the situation has changed. The money is flowing in at the rate of interest offered, and therefore even if building societies were relieved of Profits Tax this could be passed on to the borrowers as a definnte benefit. This, then, is just the moment this year to give that relief, a moment which has not occurred in all the past years.
    There is a further reason for giving the relief this year, or at least forecasting that it will be given next year, and that is the White Paper to which hon. Mem-

    1427
    bers have referred and which blandly says
    "…the Government have decided to encourage an expansion of the housing society movement. The building societies can play a major part in this new development."
    The part which they are to be asked to play is to advance two-thirds of the money required by the housing societies in this expanded programme and to advance it for periods of forty years.
    This will make it more and more difficult for the directors of building societies to adjust that margin. They are to be asked to try to spread their investments over forty years, with less and less coming in to lend out again, and having their investments tied up for that period. This is a serious thing to ask the societies to do in order to enable the Government to carry out their expanding programme. This ought to be recognised by the Government and relief should be given in return for it.
    It has become the practice over the last one or two years for Chancellors of the Exchequer to forecast what they will do in the next Budget. We had, for example, the forecast about Schedule A. What is stated in this White Paper on Housing cannot come into operation for at least twelve months. It needs legislation and the whole scheme has to be worked out, but it does need the assistance of the building societies. The White Paper actually says so. It needs their assistance to the extent of two-thirds of the money which is required for this expanded programme. If my right hon. Friend could say this year that to carry out that expanded programme the next Budget will include relief to building societies we should be very happy. I think that this should be done. I think that it must be done.
    Mr. Chapman: This debate has been repeated so often in previous years and the case for the building societies has been made so frequently and clearly that I shall not restate it again tonight. The tendency in the Committee has been simply to state the broad case all over again. Obviously, I am in sympathy with that, for I have made it myself in every previous debate on this subject, but I thought that it would be as well if I tried not to restate that broad case but to examine the response hitherto made by the Government.
    1428
    I want briefly to look at what I think was the most important debate which we have had on this subject, which was in June, 1961, when the present Financial Secretary replied on behalf of the Government to this broad case. The case is clear enough. It is the difference between building societies and joint stock companies, the absence of distribution of profits, the special nature of building societies as small savings institutions and the broad social argument on housing grounds. I should like, therefore, to refer to the answer which was given by the hon. Gentleman on that occasion. What the hon. Gentleman said gave us half our case. He said:
    "It is perfectly true that there is no equity interest in their capital, that any surplus which is put to reserves does not enure for the benefit of their shareholders, who are entitled only to a fixed rate of interest, and that that serves to build up the business for the benefit of would-be house owners."
    All that is true. So he thus gave us a very important part of our case. It is, therefore, a waste of time to keep on making that case for it has been accepted by the Government. The hon. Gentleman went on:
    "As to the surplus or the profit, the amount which the societies put to reserve after deducting all the outgoings by way of expenses and interest is a true profit and recognised as such by the Royal Commission. It is difficult in those circumstances to see why it should escape tax in the case of the building societies on any grounds of principle and logic, certainly as compared with an ordinary company."
    The hon. Gentleman stands by that.
    Mr. Eric Lubbock: The big difference surely is that these profits cannot be distributed.
    Mr. Chapman: I am pointing out that the hon. Gentleman the present Financial Secretary stands by that feature of his case. Even if the profits are not distributed, according to him they are profits. He said that this was something which must be considered as a profit and taxed as such.
    Mr. Barber indicated assent.
    Mr. Chapman: The hon. Gentleman nods his head. He stands now where he stood in 1961 on this matter. But does he not see the flaw in that case? If we are looking for a particular reason to foster an organisation on social grounds, we can see it in the tremendous difference

    1429
    between a joint stock company which distributes its profits and an organisation whose surplus the hon. Gentleman calls a profit because he wants to and for no other reason. This gives us the loophole to say that this difference between building societies and other organisations enables us to disregard his purely academic definition of profits so that we can pursue a particular social purpose and thus relieve them from this taxation. In the last resort, the hon. Gentleman is hanging on to a very slim academic argument which has little to do with reality. Indeed, he admitted it.
    The second leg of his argument was that if the Government relieved building societies from this form of taxation it would be
    "…virtually impossible to withhold a similar concession from other bodies which have no equity share capital and are not profit-making according to the definition of profit-making which has been assumed by certain hon. Members in the debate."—[OFFICIAL REPORT, 14th June, 1961; Vol. 642, c. 498–9.]
    In other words, if he did this for building societies he would have to do it for the Post Office, the nationalised industries and public utilities. This may be so. Indeed, I would support that case. But it can be supported and argued on quite different grounds.
    The relief of nationalised industries from taxation is mainly a matter of national accounting, book-keeping and administrative tidiness. Therefore, that argument is quite different from the one about building societies. The argument about building societies is that we are trying to foster a small savings institution which is, so to speak, half nationalised—I mean in the sense that it is a social institution. We can, therefore, approach the problem from that angle. Thus, the second leg of the hon. Gentleman's argument does not really stand up. The arguments can be judged on entirely different grounds.
    9.0 p.m.
    I rose tonight only because I have become tired of these debates year after year during which we make the broad case but receive no answers. I challenge the Financial Secretary. For heaven's sake, let him not rely on these two arguments for the fifth or sixth year in succession. They are alt we have had every year. I ask him to stop it. Let us have
    1430
    a real answer to our case, which is that there is sufficient difference on every ground between building societies and other institutions to merit a special concession. I hope that we shall get a little further tonight.
    Even hon. Members opposite have not progressed very far. The hon. Members for Nottingham, South (Mr. W. Clark), Crosby (Mr. Graham Page) and Coventry. South (Mr. Hocking) said tonight—"If not this year, could we at least have a promise for next year?" They keep on saying this. In 1961 the hon. Member for Nottingham, South ended his speech with these words:
    "I hope that my hon. Friend will give some hope, if not for this year then for the future, because building societies should get relief."— [OFFICIAL REPORT, 14th June, 1961; Vol. 642, c. 492.]
    I could detect the tremor in his voice. We have had the same thing all over again tonight. /t is up to hon. Members opposite. A tough lobby on Schedule A managed to secure some progress. While there is a Conservative majority in the Committee, we must depend to some extent on some hon. Members opposite being a little tougher each year. It is no good now making the same speeches as were made in 1961. They will get the same "brush-off" from the Front Bench as they received then. It is time hon. Members opposite were tougher with their own Front Bench, if they really mean what they say each year on this issue. I look to them tonight to be a little stronger when it comes to the final decision. We have had enough of their words. Let us have a little action from them.
    Mr. Dempsey: Like my hon. Friend the Member for Glasgow, Govan (Mr. Rankin), I must keep an eye on the clock and an eye on the few notes I have. This is the second evening in succession when time has been my greatest adversary. Although I find it most unpalatable, I have come to a gentlemen's agreement and, being a gentleman, I intend to observe it.
    I have a co-operative society in my constituency known as the Coatbridge Co-operative Society. It is a fairly large society. Its board of directors has already made strong representations to the Financial Secretary about the discrimination against co-operators small

    1431
    savings. It feels very strongly that it is unfair to penalise co-operative savers when there is no discrimination against Post Office savers. The Clause seeks to ensure that co-operative small savers should enjoy the same privileges as Post Office and trustee savings bank savers. No doubt there are millions of persons who have made investments with the Post Office and who are enjoying this advantage, but there are also millions of co-operators who have done likewise through co-operative societies. Why should these small savers who are contributing to the nation's well-being be penalised?
    Earlier we listened to some clap-trap about a property owning democracy. The 13 million co-operators democratically own, manage and control their own businesses. They elect officials. After meeting trading expenses, they share the surplus according to member's purchases. This section of the community is worthy of every consideration and encouragement from the Government. We ask that these small savers should have the same advantages as those who invest in the Post Office or in trustee savings banks.
    I was recently asked to address the managers of this society. They were angry at what they called the shameful treatment of the co-operators in this country. All that we are asking is that the Government should grant them a relief of £2 million. This should be no trouble to hon. Gentlemen across the way. I am sure that there was more lost on a certain race which took place earlier this afternoon. I think that this is the reason for the Bill being discussed at this late hour and for hon. Members like myself being restricted to two or three minutes in which to make a speech.
    This Amendment has been discussed year after year in our consideration of Finance Bills, and speaker after speaker on this side of the committee has pleaded the cause of this movement. I am assured by members of the Co-operative movement in my part of the country that had this tax never been imposed the money which would have been saved by the co-operative societies, especially those in the development districts, would have enabled them to modernise their property to a far greater extent than they
    1432
    have been able to do. By modernising their shops they could have provided a considerable amount of work for building trade operatives and at the same time helped the expansion of the national economy. During the period when this tax has been in operation the Inland Revenue authorities have captured from small savers sums which could have been better directed to the development of consumer organisations and indeed producer organisations in the Co-operative movement of this country.
    All that the new Clause asks for is fair play for the co-operators by treating them in the same way as those who invest in the Post Office and trustee savings banks are treated. The amount involved is infinitesimal, and I would therefore have expected a sympathetic response from hon. Gentlemen opposite to this request. I hope that the Minister will consider the representations which have been made and not try to convince us that to concede this amount would cause inflation. Time and again it has been said that this concession will cause inflation, but it will amount to a concession of £2 million out of the many thousands of millions in the national budget.
    I have never listened to as much piffle as I have heard from the other side of the Committee tonight. I ask the Minister to be realistic and fair-minded and for once to be sympathetic to the Cooperative movement, which has done so much for the country and for the people it serves so loyally.
    The Economic Secretary to the Treasury (Mr. Edward du Cann): We have been discussing five separate propositions which have certain common threads running through them. There is the proposition to extend relief under Section 9 of the Finance Act, 1956, to give co-operative and friendly societies the same privilege enjoyed by the ordinary departments of trustee savings banks and the Post Office savings bank, by which the first £15 would be free of Income Tax although not of Surtax. We have been discussing a new Clause suggesting that co-operative societies should be put in a favourable position as to liability to Profits Tax by going back to 1958. In the final group of new Clauses the suggestion is made that we should exempt building societies from Profits Tax or Income Tax and Profits

    1433
    Tax together to a greater or lesser extent. There is a slight difference between the suggestions made by the Liberal Party and by my hon. Friends.
    The hon. Member for Sowerby (Mr. Houghton), the hone Members for Glasgow, Govan (Mr. Rankin), Coatbridge and Airdrie (Mr. Dempsey), Birmingham, Northfield (Mr. Chapman) and others have referred to debates we have had on these matters throughout the years. It might be thought perhaps that the Committee would be suffering ennui as a result, because we have heard the same points made before and have had the same speeches.
    Mr. Rankin: Mine was not the same.
    Mr. du Cann: The hon. Member's may have been shorter, but I think it was the same in substance. We have had some excellent speeches tonight. I wish to mention in particular the speech of the hon. Lady for Wood Green (Mrs. Butler), which impressed me as it did the whole Committee.
    I was very pleased that no one made the point, as I thought they perhaps might, that there was some sort of prejudice against co-operative societies. That is a point which is sometimes made outside this Committee. The hon. Lady and the hon. Member for Workington (Mr. Peart) and my hon. Friend the Member for Louth (Sir C. Osborne) went to some trouble to say extremely pleasant things about the Government and their attitude towards co-operative and friendly societies. I am sure that is appropriate. A great deal was said tonight about the splendid work they do. I believe the hon. Member for Sowerby used the word "admirable". I wish to endorse all these tributes paid to that splendid movement.
    The hon. Member for Govan seemed to put his finger on the point perhaps to a larger extent in one observation he made. He suggested by inference, and he was probably quite right, that I might find myself in some personal difficulty for, as the Committee well knows, I am enormously prejudiced in favour of savings, because savings do so much for the individual and the habit of thrift is a fine thing to encourage. It brings out the best qualities, as the whole Committee will agree. On the other hand, and here is the conflict, I am sensible of the need
    1434
    for sound, wise and fair administration. There is a conflict here.
    Mr. Rankin: The hon. Gentleman is now saying that we agree, he and I, on the need for savings. I ask him this year what I asked him last year, not to penalise savings in the Co-operative movement.
    Mr. du Cann: With great respect to the hon. Member, I think his memory is slightly at fault. I have never knowingly penalised anyone either in the past or at present, as I shall describe. His intervention reminds me—and I hope to illustrate the point in my remarks—of the difference between an optimist and a pessimist. I once heard an optimist described as the man who said a bottle was half full while a pessimist said that it was half empty. We have had the same difficulties during the course of this discussion. We are talking about an exact, precise and definable situation which some say is unfair, some say is discrimination and in which some say there are decided advantages. We shall see and come to a decision in due course. What we have basically to decide is whether co-operative societies, friendly societies and building societies should be placed in a somewhat special position.
    On the subject of the first of the new Clauses we are considering, which was especially referred to by the hon. Members for Wood Green, Coatbridge and Airdrie, Sowerby and others, the hon. Member for Sowerby was entirely right when he said that when the concession to the trustee savings banks ordinary departments and the Post Office savings bank accounts was introduced by the Prime Minister when he was Chancellor, in 1956, two clear conditions were laid down. I wish to rehearse them clearly to the Committee. The object was to give special encouragement to those savings institutions which invest the whole of the funds deposited with them with the State and which pay a relatively low rate of interest. They are the only two savings institutions in the United Kingdom which fulfil those conditions.
    Some hon. Members discussing this point this evening have suggested that our attitude is inflexible. That is not so. I wish to remind the Committee of what happened in the case of the Birmingham Municipal Bank, which is now under this

    1435
    general umbrella. I dare say—it is a matter that we shall have to decide in time—that other institutions could come under the same umbrella if they fitted the precise conditions, but at the moment they do not. I do not deny that they do immensely good work, but they do not fit these two conditions.
    9.15 p.m.
    Secondly, it is true, as has been argued, that giving the concession to co-operative societies and friendly societies would cost only about £2½ million, which is not a very great cost. On the other hand, if we departed from those conditions and devised conditions which would fit these two types of society, inevitably the demand would arise from many other forms of savings institutions. It is not only cooperative societies and friendly societies which encourage the small saver. There are many other institutions which do, and will do, exactly the same thing. The list is very long indeed, and the fact is that the total cost would be about £40 million. The point is that here are conditions. They are entirely clear. These two institutions have this favoured position, and they meet these conditions. The other institutions do not.
    The hon. Member for Sowerby asked a question about National Savings Certificates. I will not follow him into a lengthy intervention on that point—you would not wish it, Sir William—but I was asked particularly what was the Government's attitude towards small savings. I confirm that it is our clear opinion that small savings are vital from every point of view vital for the national economy and for the kind of social reasons which I briefly discussed earlier. It is true that the inevitable hold-up in the issue of new Savings Certificates has been an inconvenience to the savings movement in general, although all other forms of National Savings have been open. It is pleasant and gratifying to read of the spendid result which the new issue has deservedly had on its introduction.
    I turn to the new Clause dealing with co-operative societies. The hon. Member for Sowerby mentioned the Report of the Royal Commission on Taxation, and I will quote from paragraph 562 of the Final Report:
    1436
    "The main principle that we wish to see adopted is that a tax on the profits of corporations should apply to all profits without distinction…It seems to us that only by an impartial distribution of the tax whenever and wherever profits are found can there be a fair balancing of costs and prices…"
    Those words are extraordinarily clear. The hon. Member for West Ham, North (Mr. A. Lewis) comments that I read this better last year. He is very good at interrupting while remaining seated. I did not speak on this subject last year.
    Mr. Arthur Lewis: I said that it was read better last year from the Front Bench.
    Mr. du Cann: I do not think that I need follow the matter further. I have made my point, and I think that the Committee accepts it. These words of the Royal Commission are entirely clear. I am not one of those who believe that the words of the Royal Commission are Holy Writ. On the other hand, as I shall argue tomorrow, if we reach the subject which I hope to discuss tomorrow, these words have to be taken with very great seriousness and to be given proper weight. They are clear and definite and they bear particularly on four of the new Clauses.
    Mr. Houghton: The hon. Member no doubt recalls what the Royal Commission said about Schedule A.
    Mr. du Cann: Indeed, and I remember the hon. Member making that point with his usual distinction and clarity. I will not mention the exact words which he invited me to use about his speech earlier, because I do not want him to read too much into them. I have said that I do not regard the words of the Royal Commission as Holy Writ, but it is appropriate to argue that we should pay strict attention to them, as the hon. Member himself argued, and take them seriously.
    The hon. Member for Sowerby pointed out quite fairly, although other hon. Members have failed to point it out, that in relation to their share dividends Cooperative societies are somewhat specially treated. So they should be, I believe, and so the Committee feels, for share dividend is certainly different in kind from the dividends paid by ordinary companies. This position is made clear by Section 26(2) of the Finance Act, 1958. Some hon. Members argued as though we treated co-operative societies exactly on

    1437
    a par with joint stock companies. This is certainly not so.
    On the other hand, if we accepted the new Clause in the name of the hon. and learned Member for Kettering (Mr. Mitchison), not only should we be in breach of the Royal Commission's recommendation, but I sincerely suggest to the Committee that we should be creating a thoroughly unfair situation as against other traders of all kinds in the national economy.
    It was argued by some hon. Members that because Profits Tax had increased over a period, we had somehow done something which was particularly and peculiarly unfair to co-operative societies. That simply is not so. If taxation in general rises, it must be appropriate that all traders should bear it equally; anything else would be inequitable.
    Mr. Holman: How can the hon. Gentleman maintain that the Profits Tax should apply to non-profit-making organisations which merely have to accumulate a small reserve, such as a building society or co-operative society, in order to maintain their solvency under difficult conditions?
    Mr. du Cann: I suggest that it should apply simply because these societies are engaged in trade in the same way as limited liability companies are engaged in trade.
    I now advert to the larger group of Amendments dealing with building societies. I shall not follow the hon. Member for Huddersfield, West (Mr. Wade) into the details of the long-standing arrangements which have existed in relation to the composition of tax and the rest of it. I think we are all agreed that this is the appropriate and sensible thing to do, and, as he quite rightly suggested, it saves everybody a great deal of trouble; and that surely is a thoroughly good thing.
    I want to come to the argument used in favour of giving building societies an especially favoured position. Something was said to the effect that building societies were non-profit-making concerns. A great deal on this point was again said by refe-ence to debates that we have had in earlier years. The hon. Member for Northfield with HANSARD in his hand —a very bulky volume from the look of it—quoted at some length from the
    1438
    debate of 1961. Many other hon. Members have quoted from our earlier debates. But what I did observe, somewhat to my disappointment, because I know that hon. Gentlemen are honourable men, was that these quotations were very selective. No one quoted, for example, the speech of my hon. Friend the Member for Wimbledon (Sir C. Black) last year. No one in this Committee has more experience of building society matters than the hon. Member for Wimbledon. This is a matter of fact, not a matter of argument. He made the point very clearly that a building society is a profit-earning society in the same way as any limited liability company attempts to be. There were other hon. Gentlemen who suggested, rather as has been suggested in relation to co-operative societies, that there were no particular tax concessions for building societies. This is again simply not true.
    In the case of Profits Tax, with which we are concerned particularly in relation to the Opposition Amendment, the difference between their shareholders and those of an ordinary limited liability company is already recognised in arriving at their Profits Tax liabilty.
    Mr. Chapman indicated assent.
    Mr. du Cann: I am obliged to the hon. Member for Northfield for confirming that. Therefore, they do in fact have special treatment under our tax system at the present time. But their surplus is undoubtedly and unquestionably a profit in the ordinary sense of that term. Of that there is no doubt whatsoever. There can be no escape from the logic of the Royal Commission's view, because if we get away from that clear principle and start modifying the rate of tax according to the nature of the trade or business which is carried on, or the nature of the body which carries it on, as Lord Amory said a year or two earlier, we shall certainly be in a very deep bog indeed. Where would the exception of these particular societies lead us? That is a question that no Member of the Committee is willing to attempt to answer.
    Nobody in the Committee produced one of the arguments which has been made many times in the past, to the effect that the incidence of tax prevents building societies from building up adequate reserves. I am not surprised,

    1439
    for it is an argument which it is impossible to justify, although we hear it outside the Committee from time to time.
    We are told, and we were told, that there are special social reasons why building societies should be helped. It was said, in particular by my hon. Friend the Member for Nottingham, South (Mr. W. Clark), my hon. Friend the Member for Willesden, East (Mr. Skeet) and my hon. Friend the Member for Crosby (Mr. Graham Page), who also has great experience of these matters, that the exemption proposed in the Clause which those hon. Members recommend would allow for a reduction in the mortgage interest rate charged by societies of about ¼ per cent.
    I accept the argument that it is essential to do all that we can in various ways, so far as it is open to us, to facilitate home ownership. I have never had any doubt about that in the whole of my life. Of course that is true. But, of course, it is similarly true that many factors go to make up the cost, so to speak, to home owners. Everyone in the Committee knows this. It is certainly true that interest rates are one of them, but what would a difference of per cent. mean to the kind of people, talked about with such eloquence by my hon. Friends, when they come to attempt to buy their own houses?
    I have had a calculation made and I report it to the Committee. When the rate of interest on mortgages was reduced from 6½ per cent. to 6 per cent., the Building Societies' Gazette reported that this would mean on a mortgage over a 20-year term that the monthly repayments would be reduced by 7d. per £100 borrowed. This calculation did not take into account the Income Tax allowance and perhaps the reduction would be a bit less than that, but we will forget that for the moment. A reduction of ¼ per cent., which might or might not follow from this change—some building societies might make a full reduction, but I am perfectly certain that not all would do so—and taking into account the total reduction of Income Tax and Profits Tax on surplus, would leave a monthly benefit of little more than 2d. per £100 borrowed to the standard rate taxpayer. For example, on a loan of £2,000 repayable
    1440
    over 20 years, the net monthly repayments would be reduced by 3s. 8d. for the standard rate taxpayer. I am not suggesting that that is nothing. What I am saying is that one must get these matters into proportion and that this is a very small item.
    Mr. Lubbock: The hon. Gentleman said that he was not sure whether the calculation based on the½ per cent. reduction was accurate. Is he aware that it was given in the Financial Times on 10th February, 1962, when the calculation showed that it would save the borrower £100 on a mortgage loan of £2,500 over a 20-year period?
    Mr. du Cann: I dare say that there may not be any difference between the figures I have quoted and those which the hon. Member for Orpington (Mr. Lubbock) has quoted. What I am saying is that, in general, on the basis of regular payments this reduction would make very little difference.
    Even if it made a very much larger difference, this is the year in which, as the hon. Member for Sowerby has reminded us, my right hon. Friend the Chancellor of the Exchequer has abolished Schedule A liability. This is the year when yet again this Administration has reduced the Stamp Duty on the purchase of houses. These concessions were extremely expensive—they were right and appropriate and proper concessions—and it is not altogether unreasonable to point that out to those who have pressed hardest to suggest that we should go still further during the course of this year.
    We have continually done much to encourage home ownership and it is only right that we should be proud of that. We look forward to going further in the future, but, for the time being, there certainly seems to be no appropriate reason for giving a very high priority indeed, for social reasons only, to this suggestion in relation to building societies.
    9.30 p.m.
    I would like briefly to refer to the proposed new Clause in the names of my hon. Friends. That differs in cost not at all from the Clause proposed by the Liberal Party. Both parts of the profit or surplus—and I can see the reasoning, which is logical, of my hon.

    1441
    Friends—arise from the lending of money at interest and I do not think that they should be dealt with differently for that special reason.
    Mr. Wade: What is the significance in the statement that has been made on one or two occasions by Government spokesmen to the effect that there will be no Profits Tax or Income Tax on housing associations? What is the difference between that, if there is an operating surplus by a housing association, and a building society?
    Mr. du Cann: I think that the point the hon. Member is endeavouring to press upon me is that the announcements made in the White Paper, which have to be followed by legislation, possibly constitute a precedent in the kind of Clause which he and the Liberal Party are advancing. I do not believe that to be so because the two things are different. One is an entirely co-operative venture and the other a building society of the orthodox kind, and to that extent an entirely commercial venture. The two things are entirely different and separate.
    My hon. Friend the Member for Willesden, East asked what was the attitude of the Government towards building societies; what was our idea of the rôle they should fulfil in the future. I do not altogether accept the remarks of
    my hon. Friend the Member for Crosby on this point. The building societies have played a very valuable part in our economy in the past. There can be no doubt about that. We believe that they will continue to play a great part in the future; that they will help the country and many individuals. We have enormous faith in them, as we have demonstrated, I hope, by the reference to them in the White Paper.
    However, anyone who looks at their record of results I will not retail them all to the Committee, except to point out that their assets have risen from £1,256 million in 1950 to £3,437 million in 1961—will see how well they are doing. The argument that they or their social activities are adversely affected by the taxes which they currently have to bear, as does every other enterprise in the United Kingdom, quite frankly ignores the facts.
    For those reasons, which I believe to be logical and good, I hope that the Committee will not see fit to press these new Clauses too hard.
    Question put, That the Clause be read a Second time: —
    The Committee divided: Ayes 151. Noes 216.

    Division No. 129.]

    AYES

    [9.34 p.m.

    Ainsley, William

    Dempsey, James

    Hughes, Hector (Aberdeen, N.)

    Albu, Austen

    Diamond, John

    Hunter, A. E.

    Allen, Scholefield (Grewe)

    Dodds, Norman

    Hynd, H. (Accrington)

    Awbery, Stan (Bristol, Central)

    Donnelly, Desmond

    Hynd, John (Allercliffe)

    Beaney, Alan

    Edwards, Rt. Hon. Ness (Caerphilly)

    Irvine, A. J. (Edge Hill)

    Bellenger, Rt. Hon. F. J.

    Edwards, Robert (Bilston)

    Irving, Sydney (Dartford)

    Bennett, J. (Glasgow, Bridgeton)

    Edwards, Walter (Stepney)

    Janner, Sir Barnett

    Benson, Sir George

    Fernyhough, E.

    Jay, Rt. Hon. Douglas

    Blackburn, F.

    Finch, Harold

    Jenkins, Roy (Stechford)

    Blyton, William

    Fitch, Alan

    Jones, Dan (Burnley)

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

    Foot, Dingle (Ipswich)

    Jones, J. Idwal (Wrexham)

    Bowles, Frank

    Forman, J. C.

    Jones, T. W. (Merioneth)

    Boyden, James

    Fraser, Thomas (Hamilton)

    Kelley, Richard

    Braddock, Mrs. E. M.

    Galpern, Sir Myer

    Kenyon, Cllifford

    Bray, Dr. Jeremy

    George, LadyMeganLlyod(Crmrthn)

    Lawson, George

    Broughton, Dr. A. D. D.

    Ginsburg, David

    Ledger, Ron

    Bulter, Mrs. Joyce (Wood Green)

    Gourlay, Harry

    Lee, Frederick (Newton)

    Callaghan, James

    Grey, Charles

    Lever, L. M. (Ardwick)

    Carmichael, Neil

    Griffiths, Rt. Hon. James (Llanelly)

    Lewis, Arthur (West Ham, N.)

    Chapman, Donald

    Griffiths, W. (Exchange)

    Lubbock, Eric

    Collick, Percy

    Hale, Leslie (Oldham, W.)

    Mabon, Dr. J. Dickson

    Craddock, George (Bradford, S.)

    Hamilton, William (West Fife)

    McBride, Neil

    Cronin, John

    Hannon, William

    MacDermot, Niall

    Crosland, Anthony

    Harper, Joseph

    Mclnnes, James

    Crossman, R. H. S.

    Hart, Mrs. Judith

    McKay, John (Waltsend)

    Cuilen, Mrs, Alics

    Hill, J. (Midlothian)

    Mallalieu, E. L. (Brigg)

    Dalyell, Tam

    Hilton, A. V.

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

    Davies, G. Elfed (Rhondda, E.)

    Holman, Percy

    Mapp, Charles

    Davies, Harold (Leek)

    Houghton, Douglas

    Marsh, Richard

    Davies, Ifor (Gower)

    Howell, Denis (Small Heath)

    Mason, Roy

    Davies, S. O. (Merthyr)

    Hoy, James H.

    Mendelson, J. J.

    Delargy, Hugh

    Hughes, Cledwyn (Anglesey)

    Millan, Bruce

    Milne, Edward

    Roberts, Albert (Normanton)

    Thomas, Iorwerth (Rhondda, W.)

    Mitchison, G. R.

    Robertson, John (Paisley)

    Thompson, Dr. Alan (Dunfermline)

    Monslow, Walter

    Robinson, Kenneth (St. Pancras, N.)

    Thornton, Ernest

    Oliver, G. H.

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

    Tomney, Frank

    O'Malley, B. K.

    Ross, William

    Wade, Donald

    Oram, A. E.

    Silverman, Julius (Aston)

    Wainwright, Edwin

    Oswald, Thomas

    Silverman, Sydney (Nelson)

    Warbey, William

    Padley, W. E.

    Skeffington, Arthur

    Watkins, Tudor

    Paget, R. T.

    Slater, Mrs. Harriet (Stoke, N.)

    Willey, Frederick

    Pannell, Charles (Leeds, W.)

    Slater, Joseph (Sedgefield)

    Williams, D. J. (Neath)

    Parkin, B. T.

    Small, William

    Williams, LI. (Abertillery)

    Pavitt, Laurence

    Sorensen, R. W.

    Williams, W. R. (Openshaw)

    Pearson, Arthur (Pontypridd)

    Soskice, Rt. Hon. Sir Frank

    Williams, W. T. (Warrington)

    Pentland, Norman

    Spriggs, Leslie

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

    Prentice, R. E.

    Steele, Thomas

    Winterbottom, R. E.

    Price, J. T. (Westhoughton)

    Stones, William

    Yates, Victor (Ladywood)

    Randall, Harry

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

    Rankln, John

    Swain, Thomas

    TELLERS FOR THE AYES:

    Redhead, E. C.

    Swingler, Stephen

    Mr. McCann and Mr. Whitlock.

    NOES

    Agnew, Sir Peter

    Fletcher-Cooke, Charles

    MacArthur, Ian

    Aitken, W. T.

    Fraser, Ian (Plymouth, Sutton)

    Maclay, Rt. Hon. John

    Allan, Robert (Paddington, S.)

    Freeth, Denzil

    McMaster, Stanley R.

    Allason, James

    Galbraith, Hon. T. G. D.

    Macmillan, Maurice (Halifax)

    Arbuthnot, John

    Gammans, Lady

    Maitland, Sir John

    Atkins, Humphrey

    Gardner, Edward

    Markham, Major Sir Frank

    Awdry, Daniel (Chippenham)

    Gibson-Watt, David

    Marshall, Douglas

    Barber, Anthony

    Gilmour, Ian (Norfolk, Central)

    Marten, Neil

    Barlow, Sir John

    Gilmour, Sir John (East Fife)

    Mathew, Robert (Honiton)

    Barter, John

    Glover, Sir Douglas

    Matthews, Gordon (Meriden)

    Batsford, Brian

    Glyn, Dr. Alan (Clapham)

    Maudling, Rt. Hon. Reginald

    Baxter, Sir Beverley (Southgate)

    Goodhew, Victor

    Mawby, Ray

    Beamish, Col. Sir Tufton

    Gower, Raymond

    Maxwell-Hyslop, R. J.

    Bennett, F. M. (Torquay)

    Grant-Ferris, R.

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

    Bennett, Dr. Reginald (Gos & Fhm)

    Green, Alan

    Mills, Stratton

    Berkeley, Humphry

    Gresham Cooke, R.

    Miscampbell, Norman

    Biffen, John

    Grosvenor, Lt.-Col. R. G.

    Montgomery, Fergus

    Biggs-Davison, John

    Gurden, Harold

    Morgan, William

    Bingham, R. M.

    Hall, John (Wycombe)

    Meave, Airey

    Birch, Rt. Hon. Nigel

    Hamilton, Michael (Wellingborough)

    Nicholson, sir Godfrey

    Bishop, F. P.

    Harris, Reader (Heston)

    Nugent, Rt. Hon. Sir Richard

    Black, Sir Cyril

    Harrison, Col. Sir Harwood (Eye)

    Oakshott, Sir Hendrie

    Bossom, Hon. Clive

    Harvey, Sir Arthur Vera (Macclesf'd)

    Osborn, John (Hallam)

    Bourne-Arton, A.

    Harvey, John (Walthamstow, E.)

    Osborne, Sir Cyril (Louth)

    Boyd-Carpenter, Rt. Hon. John

    Hastings, Stephen

    Page, John (Harrow, West)

    Boyle, Rt. Hon. Sir Edward

    Heald, Rt. Hon. Sir Lionel

    Page, Graham (Crosby)

    Braine, Bernard

    Henderson, John (Cathcart)

    Pannell, Norman (Kirkdale)

    Brewis, John

    Hendry, Forbes

    Partridge, E.

    Brooman-White, R.

    Hendry, Forbes

    Pearson, Frank (Clitheroe)

    Brown, Alan (Tottenham)

    Hill, Mrs. Eveline (Wythenshawe)

    Percival, Ian

    Browne, Percy (Torrington)

    Hirst, Geoffrey

    Peyton, John

    Buck, Antony

    Hocking, Philip N.

    Pickthorn, Sir Kenneth

    Bullard, Denys

    Holland, Philip

    Pitman, Sir James

    Bullus, Wing Commander Eric

    Hollingworth, John

    Pitt, Dam Edith

    Carr, Compton (Barons Court)

    Hornsby-Smith, Rt. Hon. Dame P.

    Pott. Percivall

    Chichester-Clark, R.

    Howard, John (Southampton, Test)

    Powell, Rt. Hon. J. Enoch

    Clark, Henry (Antrim, N.)

    Hughes Hallett, Vice-Admiral John

    Price, David (E (Eastleigh)

    Clark, William (Nottingham, S.)

    Hughes-Young, Michael

    Prior-Palmer, Brig Sir Otho

    Cole, Norman

    Hulbert, Sir Norman

    Proud foot, Wilfred

    Cooke, Robert

    Hurd, Sir Anthony

    Pym, Francis

    Copper, A. E.

    Hutchison, Michael Clark

    Ramsden, James

    Cooper-Key, Sir Neill

    Iremonger, T. L.

    Rawlinson, Sir Peter

    Corfield, F. V.

    Irvine, Bryant Godman (Rye)

    Redmayne, Rt. Hon. Martin

    Coulson, Michael

    Johnson, Or. Donald (Carlisle)

    Rees, Hugh

    Craddock, Sir Beresford (Spelthorne)

    Jones, Arthur (Northants, S.)

    Rees-Davies. W. R.

    Crawley, Aidan

    Jones, Rt. Hn. Aubrey (Hall Green)

    Renton, Rt. Hon. David

    Critchley, Julian

    Kerans, Cdr. J. S.

    Ridsdale, Julian

    Crowder, F. P.

    Kerby Capt. Henry

    Roberts, Sir Peter (Heeley)

    Curran, Charles

    Kerr, Sir Hamilton

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

    Currie, G. B. H.

    Leather, Sir Edwin

    Rodgers, John (Sevonoaks)

    Donaldson, Cmdr. C. E. M.

    Leavy, J. A.

    Russell, Ronald

    Drayson, G. B.

    Leburn, Gilmour

    St. Clair, M.

    du Cann, Edward

    Legge-Bourke, Sir Harry

    Scott-Hopkins, James

    Duncan, Sir James

    Lilley, F. J. P.

    Seymour, Leslie

    Eden, Sir John

    Litchfield, Capt. John

    Sharples, Richard

    Elliot, Capt. Walter (Carshalton)

    Longbottom, Charles

    Shaw, M.

    Elliott,R. W.(Newc'tle-upon-Tyne,N.)

    Longden, Gilbert

    Shepherd, William

    Errington, Sir Eric

    Loveys, Walter H.

    Skeet, T. H. H.

    Farr, John

    Lucas, Sir Jocelyn

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

    Fell, Anthony

    Lucas-Tooth, Sir Hugh

    Smithers, Peter

    Finlay, Graeme

    McAdden, Sir Stephen

    Spearman, Sir Alexander

    1444

    1445

    Stodart, J. A.

    Tiley, Arthur (Bradford, W.)

    Webster, David

    Stoddart-Scott, Col. Sir Malcolm

    Touche, Rt. Hon. Sir Gordon

    Whitelaw, William

    Storey, Sir Samuel

    Turner, Colin

    Williams, Dudley (Exeter)

    Studholme, Sir Henry

    Turton, Rt. Hon. R. H.

    Wills, Sir Gerald (Bridgwater)

    Summers, Sir Spencer

    van Straubenzee, W. F.

    Wilson, Geoffrey (Truro)

    Taylor, Sir Charles (Eastbourne)

    Vane, W. M. F.

    Wolrige-Gordon, Patrick

    Taylor, Edwin (Bolton, E.)

    Vaughan-Morgan, Rt. Hon. Sir John

    Woodhouse, C. M.

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

    Walder, David

    Woodnutt, Mark

    Teeling, Sir William

    Walker, Peter

    Thatcher, Mrs. Margaret

    Walker-Smith, Rt. Hon. Sir Derek

    TELLERS FOR THE NOES:

    Thompson, Sir Kenneth (Walton)

    Wall, Patrick

    Mr. Peel and Mr. McLaren.

    Thornton-Kemsley, Sir Colin

    Ward, Dame Irene

    New Clause.—(REDUCTION OF RATE OF PROFITS TAX ON CO-OPERATIVE SOCIETIES, &C.)
    (1)As from the beginning of August 1963, and in relation to any trade or business carried on by a society registered under the Industrial and Provident Societies Acts 1893 to 1961, or under the Industrial and Provident Societies Acts (Northern Ireland) 1893 to 1955, the rate at which the profits tax is to be charged shall be three per cent.
    (2) This section shall have effect notwithtanding any enactment to the contrary whether in this Act or elsewhere.—[Mr. Houghton.]
    Brought up, and read the First time.
    Motion made, and Question put, That the Clause be read a Second time:—
    The Committee divided: Ayes 152. Noes 215.

    Division No. 130.]

    AYES

    [9.44 p.m.

    Ainsley, William

    Hale, Leslie (Oldham, W.)

    Padley, W. E.

    Albu, Austen

    Hamilton, William (West Fife)

    Paget, R. T.

    Allen, Scholefieid (Crewe)

    Hannan, William

    Pannell, Charles (Leeds, W.)

    Awbery, Stan (Bristol, central)

    Harper, Joseph

    Parkin, B. T,

    Beaney, Alan

    Hart, Mrs. Judith

    Pavitt, Laurence

    Bellenger, At. Hon. F. J.

    Hill, J. (Midlothian)

    Pearson, Arthur (Pontypridd)

    Bennett, J. (Glasgow, Bridgeton)

    Hilton, A. V.

    Pentland, Norman

    Benson, Sir George

    Holman, Percy

    Prentice, R. E.

    Blackburn, F.

    Houghton, Douglas

    Price, J. T. (Westhoughton)

    Blyton, William

    Howell, Charles A. (Perry Barr)

    Probert, Arthur

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

    Howell, Denis (Small Heath)

    Randall, Harry

    Bowles, Frank

    Hoy, James H.

    Rankin, John

    Boyden, James

    Hughes, Cledwyn (Anglesey)

    Redhead, E. C.

    Braddock, Mrs. E. M.

    Hughes, Hector (Aberdeen, N.)

    Roberts, Albert (Normanton)

    Bray, Dr. Jeremy

    Hunter, A. E.

    Robertson, John (Paisley)

    Broughton, Dr. A. D. D.

    Hynd, H. (Accrington)

    Robinson, Kenneth (St, Pancras, N.)

    Butler, Mrs. Joyce (Wood Green)

    Hynd, John (Attercliffe)

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

    Callaghan, James

    Irvine, A. J. (Edge Hill)

    Ross, William

    Carmichael, Nell

    Irving, Sydney (Dartford)

    Silverman, Julius Aston)

    Chapman, Donald

    Janner, Sir Barnett

    Silverman, Sydney (Nelson)

    Collick, Percy

    Jay, Rt. Hon. Douglas

    Skeffington, Arthur

    Craddock, George (Bradford, S.)

    Jenkins, Roy (Stechford)

    Slater, Mrs. Harriet (Stoke, N.)

    Cronin, John

    Jones, Dan (Burnley)

    Slater, Joseph (Sedgefield)

    Crosland, Anthony

    Jones, J. Idwal (Wrexham)

    Small, William

    Crossman, R. H. S.

    Jones, T. W. (Merioneth)

    Sorensen, R. W.

    Cullen, Mrs. Alice

    Kelley, Richard

    Soakice, Rt. Hon. Sir Frank

    Dalyell, Tam

    Kenyon, Clifford

    Spriggs, Leslie

    Davies, G. Elfed (Rhondda, E.)

    Lawson, George

    Steele, Thomas

    Davies, Harold (Leek)

    Ledger, Ron

    Stones, William

    Davies, Ifor (Gower)

    Lee, Frederick (Newton)

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

    Davies, S. O. (Merthyr)

    Lever, L. M. (Ardwlck)

    Swain, Thomas

    Delargy, Hugh

    Lewis, Arthur (West Ham, N.)

    Swingler, Stephen

    Dempsey, James

    Lubbock, Eric

    Thomas, Iorwerth (Rhondda, W.)

    Diamond, John

    Mahon, Dr. J. Dickson

    Thompson, Dr. Alan (Dunfermline)

    Dodds, Norman

    McBride, N.

    Thornton, Ernest

    Donnelly, Desmond

    MacDermot, Niall

    Tomney, Frank

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mclnnes, James

    Wade, Donald

    Edwards, Robert (Bilston)

    McKay, John (Wallsend)

    Wainwright, Edwin

    Edwards, Walter (Stepney)

    Mallalieu, E. L. (Brigg)

    Warbey, William

    Fernyhough, E.

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

    Watkins, Tudor

    Finch, Harold

    Mapp, Charles

    Willey, Frederick

    Fitch, Alan

    Marsh, Richard

    Williams, D. J. (Neath)

    Foot, Dingle (Ipswich)

    Mason, Roy

    Williams, LI. (Abertillery)

    Forman, J. C.

    Mendelson, J. J.

    Williams, W, R. (Openshaw)

    Fraser, Thomas (Hamilton)

    Millan, Bruce

    Williams, W, T. (Warrington)

    Galpern, Sir Myer

    Milne, Edward

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

    George,LadyMeganLloyd(Crmrthn)

    Mitchison, G. R.

    Winterbottom, R. E.

    Ginsburg, David

    Monslow, Walter

    Yates, Victor (Ladywood)

    Gourlay, Harry

    Oliver, G. H.

    Grey, Charles

    O'Malley, B. K.

    TELLERS FOR THE AYES:

    Griffiths, Rt. Hon. James (Llanelly)

    Dram, A. E.

    Mr. McCann and Mr. Whitlock.

    Griffiths, W. (Exchange)

    Oswald, Thomas

    NOES

    Agnew, Sir Peter

    Grant-Ferris, R.

    Page, John (Harrow, West)

    Aitken, W. T.

    Green, Alan

    Page, Graham (Crosby)

    Allan, Robert (Paddington, S.)

    Gresham Cooke, R.

    Pannell, Norman (Kirkdale)

    Allason, James

    Grosvenor, Lt,-Col. R. G.

    Partridge, E.

    Arbuthnot, John

    Gurden, Harold

    Peel, John

    Atkins, Humphrey

    Hall, John (Wycombe)

    Percival, Ian

    Awdry, Daniel (Chippenham)

    Hamilton, Michael (Wellingborough)

    Peyton, John

    Barber, Anthony

    Harris, Reader (Heston)

    Pickthorn, Sir Kenneth

    Barlow, Sir John

    Harrison, Col, Sir Harwood (Eye)

    Pilkington, Sir Richard

    Barter, John

    Harvey, Sir Arthur Vere(Macclesi'd)

    Pitman, sir James

    Botsford, Brian

    Harvey, John (Walthamstow, E.)

    Pitt, Dame Edith

    Baxter, Sir Beverley (Southgate)

    Hastings, Stephen

    Poet, Percivall

    Beamish, Col. Sir Tufton

    Heald, Rt. Hon. Sir Lionel

    Powell, Rt. Hon. J. Enoch

    Bennett, F. M. (Torquay)

    Henderson, John (Cathcart)

    Price, David (Eastleigh)

    Bennett, Dr. Reginald (Gas & Fhm)

    Hendry, Forbes

    Prior-Palmer, Brig. Sir Otho

    Berkeley, Humphry

    Hiley, Joseph

    Proudfoot, Wilfred

    Bitten, John

    Hill, Mrs. Eveline (Wythenshawe)

    Pym, Francis

    Biggs-Davison, John

    Hirst, Geoffrey

    Ramsden, James

    Bingham, R. M.

    Hocking, Philip N.

    Rawlinson, Sir Peter

    Birch, Rt. Hon. Nigel

    Holland, Philip

    Redmayne, Rt. Hon. Martin

    Bishop, F. P.

    Hollingworth, John

    Rees-Davies, W. R.

    Black, Sir Cyril

    Hornsby-Smith, Rt. Hon. Dame P.

    Renton, Rt. Hon. David

    Bossom, Hon. Clive

    Howard, John (Southampton, Test)

    Ridedale, Julian

    Bourne-Arton, A.

    Hughes Hallett, Vice-Admiral John

    Roberts, Sir Peter (Heeley)

    Boyd-Carpenter, Rt. Hon. John

    Hughes-Young, Michael

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

    Boyle, Re, Hon. Sir Edward

    Hulbert, Sir Norman

    Rodgers, John (Sevenoaks)

    Braine, Bernard

    Hurd, Sir Anthony

    Russell, Ronald

    Brewis, John

    Hutchison, Michael Clark

    St. Clair, M.

    Brooman-White, R

    Iremonger, T. L.

    Scott-Hopkins, James

    Brown, Alan (Tottenham)

    Irvine, Bryant Godman (Rye)

    Seymour, Leslie

    Browne, Percy (Torrington)

    Johnson, Dr. Donald (Carlisle)

    Sharpies, Richard

    Buck, Antony

    Jones, Arthur (Northants, S.)

    Shaw, M.

    Bullard, Denys

    Jones, Rt. Hn, Aubrey (Hall Green)

    Shepherd, William

    Bullies, Wing Commander Eric

    Kerans, Cdr. J. S.

    Skeet, T. H. H.

    Carr, Compton (Barons Court)

    Kerby, Capt. Henry

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

    Chichester-Clark, R.

    Kerr, Sir Hamilton

    Smithera, Peter

    Clark, Henry (Antrim, N.)

    Leather, Sir Edwin

    Spearman, Sir Alexander

    Clark, William (Nottingham, S.)

    Leavey, J. A.

    Stodart, J. A.

    Cole, Norman

    Leburn, Gilmour

    Stoddart-Scott, Col. Sir Malcolm

    Cooke, Robert

    Legge-Bourke, Sir Harry

    Storey, Sir Samuel

    Cooper, A. E,

    Lilley, F. J. P.

    Studholme, Sir Henry

    Cooper-Key, Sir Neill

    Litchfield, Capt. John

    Summers, Sir Spencer

    Corfield, F. V.

    Longbottom, Charles

    Taylor, Sir Charles (Eastbourne)

    Coulson, Michael

    Longden, Gilbert

    Taylor, Edwin (Bolton, E.)

    Craddock, Sir Beresford (Spelthorne)

    Loveys, Walter H.

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

    Critchley, Julian

    Lucas, Sir Jocelyn

    Teeling, Sir William

    Crowder, F. P.

    Lucas-Tooth, Sir Hugh

    Thatcher, Mrs. Margaret

    Curran, Charles

    McAdden, Sir Stephen

    Thompson, Sir Kenneth (Walton)

    Currie, G. B. H.

    MacArthur, Ian

    Thornton-Kemsley, Sir Colin

    Donaldson, Cmdr. C. E. M.

    McLaren, Martin

    Tiley, Arthur (Bradford, W.)

    Drayson, G. B.

    Maclay, Rt. Hon. John

    Touche, Rt. Hon. Sir Cordon

    du Cann, Edward

    McMaster, Stanley R.

    Turner, Colin

    Duncan, Sir James

    Macmillan, Maurice (Halifax)

    Turton, Rt. Hon. R. H.

    Eden, Sir John

    Maitland, Sir John

    van Straubenzee, W. R.

    Elliot, Capt. Walter (Carshalton)

    Markham, Mayor Sir Frank

    Vane, W. M. F.

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

    Marshall, Douglas

    Vaughan-Morgan, Rt. Hon. Sir John

    Errington, Sir Eric

    Marten, Neil

    Walder, David

    Farr, John

    Mathew, Robert (Honiton)

    Fell, Anthony

    Matthews, Gordon (Meriden)

    Walker, Peter

    Finlay, Graeme

    Maudling, Rt. Hon. Reginald

    Walker-Smith, Rt. Hon. Sir Derek

    Fletcher-Cooke, Charles

    Mawby, Ray

    Wall, Patrick

    Fraser, Ian (Plymouth, Sutton)

    Maxwell-Hyslop, R. J.

    Ward, Dame Irene

    Freeth, Denzil

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

    Webster, David

    Galbraith, Hon. T. C. D.

    Mills, Stratton

    Whitelaw, William

    Gammans, Lady

    Miscampbell, Norman

    Williams, Dudley (Exeter)

    Gardner, Edward

    Montgomery, Fergus

    Wills, Sir Gerald (Bridgwater)

    Gibson-Watt, David

    Morgan, William

    Wilson, Geoffrey (Truro)

    Gilmour, ran (Norfolk, Central)

    Neave, Airey

    Wolrige.Gordon, Patrick

    Gilmour, Sir John (East Fife)

    Nicholson, Sir Godfrey

    Woodhouse, C. M.

    Glover, Sir Douglas

    Nugent, Rt. Hon. Sir Richard

    Woodnutt, Mark

    Glyn, Dr. Alan (Clapham)

    Oakshott, Sir Hendrie

    Goodhew, Victor

    Osborn, John (Hallam)

    TELLERS FOR THE NOES:

    Gower, Raymond

    Osborne, Sir Cyril (Louth)

    Mr. Frank Pearson and Mr. Rees.

    New Clause.—(INCOME TAX: EXTENSION OF EXEMPTION FOR CHARITIES TO CERTAIN NATIONAL VOLUNTARY ORGANISATIONS.)
    (1) Sections 447 (exemption from tax on rents interest, dividends and annual payments
    1448
    belonging to charities, etc.), 448 (exemption from tax in respect of lands owned and occupied by charities and of profits of trade carried on by charities) and 450 (procedure for claiming exemption under last three preceding sections) of the Income Tax Act 1952, and section 15 (charities, superannuation funds and other special cases) of the Finance Act 1962,

    1449
    shall apply to a national voluntary association receiving or eligible to receive a grant under section 3 of the Physical Training and Recreation Act 1937 (which authorises grants towards the, funds of national voluntary organisations having, as objects, the provision of facilities for physical training and recreation) as they apply to a charity.

    (2) In this section "national voluntary organisation" has the same meaning as in the said Act of 1937 and "charity" has the same meaning as in the said section 448.—[Mr. Redhead.]

    Brought up, and read the First time.
    Mr. E. C. Redhead: l beg to move, That the Clause be read a Second time.
    Despite its somewhat involved terminology, this proposed new Clause has the simple and limited purpose of exempting from the payment of Income Tax nonprofit-making bodies which are concerned with the development of amateur sport. I stress "non-profit-making"that is to say, the Clause does not seek to provide concessions for any commercial body connected with sport—and the development of amateur sport.
    This proposal is prompted by the Report of the Wolfenden Committee on Sport, which was rather significantly entitled "Sport and the Community", and, in particular, paragraph 162, which in fairness should be quoted in full. It states:
    "We know that the law on income tax is a highly complicated and specialised field and we would only intrude into it with diffidence and hesitation. But even though any amendment to the definition of a legal charity may be impracticable, is there not room for offering exemption from income tax to a new category of non-profit-making national bodies concerned with the development of amateur sport?"
    The reason for this observation and this suggestion of serious consideration to the proposal contained in that paragraph was given in the preceding paragraph which I will take the liberty of quoting, also:
    "Our evidence has also shown us that a number of the Governing Bodies of amateur sport feel bitterly about their liability to pay tax on their annual surplus, in the same way as a trading company. They claim that it places an additional and unnecessary handicap on their work of developing their sport for the general welfare of the community."
    It does seem unreasonable that Income Tax should be charged on income which, in many instances, is the sole source of revenue enabling an amateur, non-profit-making body to do its work. So far from
    1450
    accepting the justice of their liability to Income Tax, we are recommending that statutory grant aid should be available to enable such bodies to extend their work of coaching and development. Such relief would, in my submission, be justified not only in the interests of the organisations to which the proposal refers and the amateur sports which they are concerned to foster and encourage, but, indeed, on wider, general community grounds.
    Again, I would quote from the Report of the Wolfenden Committee—a brief extract from paragraph 3:
    "At the same time, it is a reasonable assumption that if more young people had opportunities for playing games fewer of them would develop criminal habits. But our major thesis is that there is a positive 'play' element in the life of young people, which can be neglected only to the disadvantage of both the individual and society."
    Paragraph 6 of the Report reads:
    "Again, there are claims that participation in games, especially of a competitive kind, will encourage the development of qualities which are valuable both to the individual and to society. Courage, endurance, self-discipline, determination, self-reliance, are ail qualities which the sportsman, in the broadest sense of the term, has at least the opportunity of developing in the pursuit of his sport. They spring as readily from mountaineering as from rowing, from fencing as from football; and they can be acquired by the 'rabbit' as well as by the international. On this ground alone it is clear that a valuable element in the growth of individuals, especially of young people, would disappear if games and outdoor activities ceased to be practised."
    I imagine that those sentiments will find a very general acceptance on the part of hon. Members. The importance of amateur sport to the health of the community is today widely recognised, as. indeed, is stressed throughout this very important and significant Report of the Wolfenden Committee, and the importance of sport in the life of the community gained further emphasis only a few days ago in a debate in another place, as recently as 22nd May, when it was stressed that the Government themselves had a responsibility to encourage the development of sport in all reasonable, possible ways.
    In that debate the noble Lord, Lord Hailsham, putting on the appropriate hat for this particular rôle, not only expressly accepted that the Government had a definite responsibility but went to great pains to point out that the Government already, in various ways, rendered assistance to the encouragement of sport,

    1451
    assistance which, he claimed, had been steadily mounting. The noble Lord went on to announce the Government's intention to support it by financial grants in various directions, including grants to national voluntary organisations for their headquarters administration. I expect that in reply to the proposal which I am putting to the Committee we shall hear rather a lot about the Government's assistance in this respect.
    10.0 p.m.
    I do not decry, nor do I seek to minimise, the amount of financial aid already given from public funds to various aspects of sporting activities. On the contrary, I welcome and approve it, and I also welcome the announcement that there is to be further financial aid, though, even now, spread over the country the figures quoted do not, on average, represent a tremendous increase in the revenues of many of the associations which are concerned with the encouragement of sport.
    But surely it is utterly incongruous to give financial grants from public funds with one hand and claim credit for so doing and yet, with the other hand, persist in taking away, by the continued imposition of Income Tax, from the very organisations whose financial need is very widely recognised even in the fact that grants are made available from public funds.
    As one official of such an organisation put it to me recently, "In this proposal we are not asking the Government to give us any of their money. We are asking for the privilege to retain a little more of our own." Some of the bodies with which the new Clause is concerned are facing serious financial difficulties and a severe limitation of their ability to expand and develop the sports to which so much importance is attached in general. I would quote one example, and I emphasise that it is only one of many which can be quoted and which others of my hon. Friends will doubtless be able to supplement in the debate.
    Hon. Members have been circularised by the Amateur Boxing Association, one of the bodies seriously affected, which, in paragraph 5 of its memorandum, made the submission that
    "It is not putting our case too strongly to say that at the present time amateur boxing is struggling for its existence and that its ultimate survival may depend upon the ability
    1452
    of the Amateur Boxing Association, its Associations and its clubs to draw upon capital during this crucial period. The liability for Income Tax greatly reduces the resistance of the Amateur Boxing Association and its members to this challenge since it is impossible to build up any real reserves. Some indication that the fears expressed in this paragraph are not groundless can be found in the fact that when the London Association was formed, in 1949, there were 262 member clubs, whereas at the end of 1961–62 Season this number had fallen to 176. This decline is due almost completely to the lack of finance."
    Whatever one may feel about boxing, and I know that there are prejudices on the subject in some quarters, I suggest that if these details are, as I believe them to be, indicative of the plight of various other comparable organisations it is a serious matter and one which the Committee should seek to remedy by any means which lie within its power.
    I am not doing any special pleading for one association. This is one of several, and I hasten to emphasise that the new Clause includes all comparable bodies without any differentiation at all. I anticipate two grounds of objection to these proposals. If one is to judge from replies given by the Chancellor of the Exchequer, or on the Chancellor's behalf, to a number of hon. Members and to honorary secretaries of amateur boxing associations who have written to him on the subject, I anticipate that it will be contended that the cost of such a concession would be prohibitive.
    I quote, for example, from the reply given to his representations to the honorary secretary of the A.B.A. It said:
    "Although Mr. Maudling is very sorry to learn of your difficulties he does not think that it would be possible to give amateur boxing tax relief without doing something for all amateur sports
    "He is afraid that such a considerable exemption is out of the question."
    To my hon. Friend the Member for Manchester, Ardwick (Mr. L. M. Lever) the reply was:
    "A concession over the whole field of amateur sport would be a very large extension to which the Government do not feel able to agree."
    Clearly, the implication of those two statements is that the cost would be heavy, indeed prohibitive. I would not refer to the question of cost of such a concession as in itself being conclusive if it were otherwise demonstrable that the concession was just, right and sensible, as I contend it to be in this

    1453
    instance. Nevertheless, I felt it expedient to probe the question of cost. I accordingly put down a Question to the Chancellor on 2nd May as follows: I asked him
    "…whether he will give an estimate of the cost of implementing the suggestion contained in paragraph 162 of the Report of the Wolfenden Committee on Sport of offering exemption from Income Tax to non-profit-making national bodies concerned with the development of amateur sport."
    The Economic Secretary replied:
    "I am afraid that the necessary information is not available."—[OFFICIAL REPORT, 2nd May, 1963; Vol. 676, c. 136.]
    I must confess that I was bewildered by that reply. As I have stated, the Chancellor has twice said that an exemption of such magnitude could not be contemplated, yet the Economic Secretary says that he has no information about the cost.
    The Royal Commission on the Taxation of Profits and Income advanced arguments against any substantial extension of exemptions for charities, and, in general, I would not contest that argument. Nor would it be appropriate that I should go into detail on them on this Clause. But my proposal is very closely defined and very strictly limited, and in the special circumstances of the case I believe that it is wholly justified.
    I hope, therefore, that the Financial Secretary will be responsive to this plea. I ask that at least he will agree that the lack of adequate information seems to indicate that there has not yet been the careful attention to this which the Wolfenden Committee's standing would justify. I hope that he will agree that the Government's contradictory replies indicate an absence of information, and that in these circumstances he will give an undertaking that this proposal will be seriously examined and the necessary information obtained, in the recognition that here the Government could give a tangible gesture of their desire to foster and encourage amateur sport as a vital factor in the life of the community.
    Mr. Tam Dalyell: In the interests of clarity I shall present in detail the difficulties of one organisation, the Amateur Athletic Association, and in the interests of brevity some slight references to the problems of several
    1454
    others. Mr. E. H. L. Clynes, secretary of the Association writes:
    "This is a question we have been pursuing through official quarters for many years without any success apart from the fact that income tax inspectors have always dealt with our Association with every consideration within their powers of discretion and within the existing law. The income tax authorities have refused our plea that our organisation and the work it does is charitable and, therefore, entitled to exemption, although a major part of the Association's work is in teaching teachers and other persons how to become honorary coaches as well as teaching athletes for which work we are grant-aided by the Ministry of Education authorities. They regard our championships and other promotions attended by the public as being liable for tax despite the fact that the net profits from these meetings are necessary to enable the A.A.A. to conduct its work and also the British Amateur Athletic Board to raise sufficient funds to enable them to finance our international commitments such as sending teams to the European championships.
    These profits are liable for payment of tax before being used for this purpose. We would point out that our profits from these meetings are not sufficient to enable the Association to carry out all the work of development and coaching it feels it should carry out. Although the Association has been in receipt of grants from the Ministry of Education towards the cost of our coaching work this and our income from meetings is still insufficient for the work we ought to do. Of course, there is the anomaly that the money accepted in grants from the Ministry has to be higher than it need be because of the amount of tax to be paid.
    I am sure that you are aware the sport has been able to scrape along on this small budget because of the tremendous amount of voluntary service given to it in all fields. Officials helping at the public meetings at the White City and at other venues, the profits of which are taxable, do so at their own expense. It, in fact, these officials charged their expenses to the meetings the profits would be much less.
    The amount of tax paid by the athletics governing organisations has been considerable having regard to the small amount of money we have to run the sport and in the last financial year has amounted to £2,000. We are getting increased income to help the sport from television fees, but this will increase our tax liability."
    This goes in some detail, for which I do not apologise, into the problems of one of the great organisations. I think that the same could be said of a number of other big organisations which have written to me. In some ways, I am more concerned about the smaller and less formidable organisations than the Amateur Athletic Association. I select the problems of just one of them, the

    1455
    Scottish Bowling Association. The secretary, Mr. John Linning, says this:
    "Many of our clubs find it very difficult to make ends meet, and any such relief would be most welcome…The number of clubs in membership of the Scottish Bowling Association is 779, many of them in rural areas, with small membership but providing a much needed amenity."
    In the light of Crowther, in the light of Albemarle, and in the light of Wolfenden, which was quoted by my hon. Friend the Member for Walthamstow, West (Mr. Redhead), and in view of the desire to assist sport which is shared by all political parties and all parts of society, is it not undesirable that we should nevertheless impede its progress in this way?
    There is one other aspect on which I will briefly touch—the taxation of sporting equipment. The recommendation is that there should be Purchase Tax relief on equipment bought through the ruling bodies in amateur sports. Just two examples will suffice—the 25 per cent. Purchase Tax on fencing equipment, which causes considerable hardship, and the tax on barbell sets—
    The Deputy-Chairman: Order. I am sorry, but equipment is not dealt with in the Clause.
    Mr. Dalyell: Finally, the feeling is that the yield from taxation is not of such a magnitude as to be vital to the Treasury, but it has considerable and almost critical importance to many of the sporting organisations, particularly the humbler sporting organisations. It is for that reason that I am glad to support the new Clause.
    10.15 p.m.
    Mr. Barber: I agree entirely with all that the hon. Member for Walthamstow, West (Mr. Redhead) said about the desirability of the Government and also people outside the Government doing everything possible to encourage amateur sport in this country. Indeed, while I do not want to go over the ground which was dealt with at some length in the debate in another place the other day, I think it is fair to say that the Government of doing a great deal to help amateur sport.
    I also accept, as would anybody with experience of these matters either in his constituency or elsewhere, the fact that
    1456
    there are some amateur associations and sporting activities which could benefit greatly from more financial assistance. The hon. Gentleman gave one example, and his hon. Friend the Member for West Lothian (Mr. Dalyell) referred to the difficulties of the Amateur Athletic Association and the Scottish Bowling Association.
    In moving the new Clause the hon. Gentleman referred to the recommendation of the Wolfenden Committee, and I shall therefore not take up the time of the Committee by going over the background of this very important question. Suffice it to say that this new Clause proposes to extend the exemption from income tax which charities enjoy and to extend the relief to a
    "national voluntary association receiving or eligible to receive a grant under Section 3 of the Physical Training and Recreation Act. 1937…"
    It is important that the Committee should bear in mind that that Act empowers the Minister of Education to make grants to national or to local voluntary organisations for providing facilities for physical training and recreation, including the training and supply of teachers and leaders. It also empowers local authorities to provide similar facilities, or to assist a local voluntary organisation to do so, and of course considerable direct grants have been made for this purpose.
    The real objection to the new Clause is that the promotion of sport, as is admitted by the hon. Gentleman, is not, as the law stands at the moment, a charitable purpose, and however much one approves of the policy of encouraging people to be players rather than spectators, it does not follow that any financial assistance should be by way of taxation relief as distinct from an open subsidy.
    We are not, I suggest, here concerned so much with the question whether sport or recreation should be assisted, as with the question of how this should be done. The new Clause would, in effect, extend the definition of a charitable purpose so as to provide taxation relief. The hon. Gentleman fairly referred to the recommendation of the Royal Commission on Taxation on this matter, but he did not quote what the Royal Commission said. I think that I should quote what it said

    1457
    because this bears directly on the hon. Gentleman's proposal. The Royal Commission said that the charity exemption
    "does amount in effect to a grant of public moneys towards the furtherance of such causes as come the legal category of charity without Parliamentary control of their individual purposes or of their administration",
    and it thought that the proposal was open to criticism on this ground. Indeed, its view was that the activities which rank for exemption from Income Tax under the heading of charity ought to be narrowed rather than widened.
    No action has been taken to restrict the scope of the charity exemption for tax purposes, but I think that the reasons which the Royal Commission gave are cogent ones for reaching the conclusion that there are serious objections to widening it even further.
    Mr. Dalyell: Would not the hon. Gentleman agree that whereas there might be considerable force in his argument in respect of the major sports, it hardly applies to minor sports such as fencing and weight-lifting which do nor normally get a subsidy?
    Mr. Barber: I doubt it very much. If one takes the view that in principle it is better to provide assistance by means of an open subsidy which can be discussed in the House, and one can discuss the administration and the purposes to which the money is given, rather than by way of taxation relief which would follow if we were to accept the principle behind this Clause, I think there would be serious objections to so doing.
    Even if one could ignore the objections in principle to a widening of charity relief, the present proposal would raise very serious difficulties. The hon. Member for Walthamstow, West, in moving the Second Reading of this Clause, said that it made no discrimination as between one amateur association and another. The Wolfenden Committee mentioned that there were 200 national bodies with a direct or indirect interest in the development of sport represented on the Central Council for Physical Recreation and not many fewer on the Scottish Council for Physical Recreation. It spoke of:
    "national voluntary organisations in great profusion and variety, responsible for the development of individual activities"
    The bodies which gave evidence to the Wolfenden Committee ranged from such organisations as the Amateur Athletic
    1458
    Association and the M.C.C. to the Clay Pigeon Shooting Association and the Cambridge University Tiddleywinks Club. As the Report commented:
    "Here indeed is richness."
    The idea of offering Income Tax exemption to this profusion and variety of organisations is not an attractive one. The test for exemption which the Clause proposes is eligibility to receive a grant under Section 3 of the Physical Training and Recreation Act, 1937. This embraces all non-profit-making organisations and empowers grants to be made to any of them at the discretion of the Minister or of the local authority for specified purposes connected with sport and recreation. I should have thought a definition like that is too wide for the purpose of giving a tax exemption which all could claim as a matter of right. It would be extremely difficult to frame a definition which would satisfactorily pick out national governing bodies of particular games and recreations from the great diversity of bodies to which I have referred.
    Mr. Lubbock: The hon. Gentleman has mentioned the Cambridge University Tiddleywinks Club. I am sure he was being facetious, because that would not be eligible under the Physical Training and Recreation Act, 1937.
    Mr. Barber: I was, in fact, making a joke. I hoped that was appreciated.
    On the question of cost, on which the hon. Member for Walthamstow, West sought information, perhaps I could say to him something which I hope will go some way to explain the difficulty we are in. I think I have shown, even if I ignore the particular body which has been referred to by the hon. Member for Orpington (Mr. Lubbock), that there is great difficulty in identifying all the various bodies in question. To make a close estimate of the cost of the proposed exemption would, in fact, involve compiling a list of eligible bodies and inquiring of the local inspector in each case what the income of the body is and what tax it pays. Some of the bodies in question have probably very little income indeed, but others earn large sums from admission charges to important matches and tournaments. The only figure which is available centrally is the aggregate trading profits of all sports clubs. This would include all local clubs, with which the

    1459
    hon. Member is not directly concerned, and exclude national bodies which are not trading. It would also exclude all investment income, so the figure would be of no assistance.
    For this reason, it is not possible to give the hon. Member anything approaching an accurate figure of the cost of the Clause unless we went to considerable trouble. All that I can tell him—and this is not inconsistent with what was said by my hon. Friend in answer to the question—is that if we were to grant exemption and if matters proceeded with this new category of charities which he would have us approve as the tax exemption has proceeded in relation to existing charities, not only would the cost be fairly significant, at any rate to start with, but it would tend to rise rapidly like the cost of the charities exemption itself.
    We have done a certain amount by way of abolishing Schedule B on amenity land, and the abolition of Schedule A on owner-occupiers is bound to be of some assistance to some of these organisations. The Government are doing a great deal to encourage physical training and recreation. The hon. and learned Member was very fair in the way in which he welcomed what the Government are doing. I remind the Committee of two sets of figures. Over a three-year period, the grant to national voluntary organisations under the Physical Training and Recreation Act, referred to in the new Clause, will have more than doubled. The total capital public expenditure on facilities for sport and recreation has increased from just over £15 million in 1960–61 to £25·9 million last year, and we expect it to rise this year to more than £29 million.
    This has been a useful debate in raising the question not of the extent of the financial assistance which should be provided for sport but how best to provide it. But I hope that the Committee will take the view that if it is desirable for Exchequer assistance to be given to any kind of activity it is better to do so by direct financial assistance which is subject to the normal process of Parliamentary control. I am sure that that is the right approach, but if it is not enough, I have pointed out that in any event the form of the Clause is far too wide, and that I cannot advise the Committee to accept it.
    Mr. G. R. Mitchison: Before the hon. Member sits down, will he say that he will never again mention the sums which the Government give with one hand without mentioning those which they take away with the other?
    Mr. Arthur Lewis: I was amazed by the Minister's reply. He said that he could not do something, but had no idea how much it would cost. He said that it would mean a lot of hard work and difficulty. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) put down a Question, to which he received a typical Treasury reply.
    If we asked how much Surtax had been given back to Surtax payers since the Government have been in power, they could find that easily. Many hundreds of millions of pounds have been given back. But in this case the Minister is not in a position to give the figures. Before we leave the new Clause he should tell us that he will consider the matter again to see how much the new Clause will cost and that if, as I believe to be the case, the cost is negligible, he will see whether he cannot do what we ask, even if not in the Bill. He should promise that if he finds that it does not cost much, he will see whether something can be done about it.
    10.30 p.m.
    Mr. L. M. Lever: I must press the Minister on this matter. The proposal from this side of the Committee for taxation remissions to amateur sport is reasonable. When the Minister tells us that the amount that the Government are spending in assistance to amateur sport will rise to £29 million this year, he should remember that it is a very small proportion of a Budget of nearly £6,000 million to be paid as a token of our devotion to the health of the younger generation and as assistance to those clubs which are helping amateur sport.
    I feel that we should not allow this matter to be passed over in this formal way. I think that at least we should have an undertaking from the Minister that, although he has not got any figures available now as to what it would cost if he were to remit taxation as proposed in the new Clause, he will inquire into the cost and report to the House at a later stage.

    1461
    As a beginning, could not some remiss ion of tax be given to those clubs which are already receiving grants or subsidies under Section 3 of the Physical Training and Recreation Act, 1937? At least in regard to those clubs the Government have some information about their activities, otherwise they would not have given them the subsidies.
    We cannot dismiss the matter as lightly as that. It is an important matter and affects the youth of the community and the health of the community. I would rather spend money on giving the youth of the nation facilities for participating in amateur sport and promoting good health than spend it on trying to recover its health once it has gone. Prevention is better than cure. I believe that in training our youth in sport we are making a contribution towards building its character from which the nation will benefit.
    After all, when we are talking about surpluses—I wish that my right hon. and hon. Friends on the Opposition Front Bench would keep quiet while I am speaking. [HON. MEMBERS: "Hear, hear."] The Front Benches have ample opportunities for airing their views, and I think it quite right that occasionally back benchers should have their say. I propose to have mine now, irrespective of what my right hon. and hon. Friends say.
    I think that we should have an undertaking that an inquiry will be made into the cost. If the Minister will give such an undertaking it will, I believe, satisfy us at least for the time being. We must remember that members of these amateur sporting clubs pay subscriptions. Those subscriptions are not paid out of relief of revenue; they are paid out of the taxed incomes of those members.
    I hope, therefore, that the Minister will give us such an undertaking and will not dismiss the subject lightly. Then, perhaps, we can look at it again at some future date.
    Mr. Barber: I hope that, apart, perhaps, from one deviation, I did not treat the matter lightly, because I agree entirely with the hon. Gentleman that this is a very important matter. Indeed, the Government would not be contributing to the
    1462
    extent which they do towards sport unless it were considered to be a very important matter.
    Perhaps I can say to the hon. Gentleman that in dealing with the question of cost I was, in courtesy, and as best as I could, answering the point made by the mover of the new Clause. However, I should like to make it clear that although I gave the explanation at the end of what I said, the principal reason why I cannot advise the Committee to accept the Clause is because, quite frankly, I agree with the Royal Commission that whatever the cost might be it is far better that assistance should be provided directly and subject to the normal opportunities of Parliamentary control rather than by way of taxation relief.
    The hon. Member made the point that he did not think that enough assistance was being given to sport. I gave some figures and I will not go over them again, but this is an entirely separate matter. It may well be that if the hon. Member had the opportunity and was the Lord President of the Council, he would treble or even quadruple the amount of assistance given to sport, but it does not necessarily follow that it should be given by means of taxation relief.
    Mr. L. M. Lever: Will the hon. Gentleman look into how much this would cost if I put down a Question?
    Mr. Barber: I would look into it, but the difficulties are very considerable. If, in the morning, the hon. Member reads in HANSARD what I have said, he will appreciate that the difficulties are very real. I doubt that we would be justified in going further.
    Mr. Redhead: That answer was entirely unsatisfactory. If the hon. Gentleman had been disposed to say a little more forthrightly that he appreciated our purpose and was prepared to consider it in more detail and with much more care than has been evidenced by the Treasury, we might have been disposed to accept an undertaking of that character, but in all the circumstances and in view of the unsatisfactory nature of the reply, I shall advise my right hon. and hon. Friends to divide the Committee.
    Question put, That the Clause be read a Second time—
    The Committee divided: Ayes 124, Noes 175.

    Division No. 131.]

    AYES

    [10.36 p.m.

    Ainsley, William

    Griffiths, W. (Exchange)

    Pentland, Norman

    Allen, Scholefleld (Crewe)

    Hale, Leslie (Oldham W.)

    Price, J. T. (Westhoughton)

    Awbery, Stan (Bristol, Central)

    Hamilton, William (West Fife)

    Probert, Arthur

    Beaney, Alan

    Hannan, William

    Redhead, E. C.

    Bellenger, Rt. Hon. F. J.

    Harper, Joseph

    Reynolds, G. W.

    Bennett, J. (Glasgow, Bridgeton)

    Hill, J. (Midlothian)

    Roberts, Albert (Normanton)

    Blackburn, F.

    Holman, Percy

    Robertson, John (Paisley)

    Boardman, H.

    Houghton, Douglas

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

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

    Howell, Denis (Small Heath)

    Ross, William

    Bowles, Frank

    Hoy, James H.

    Silverman, Julius (Alton)

    Braddock, Mrs. E. M.

    Hughes, Cledwyn (Anglesey)

    Silverman, Sydney (Nelson)

    Bray, Dr. Jeremy

    Hughes, Hector (Aberdeen, N.)

    Skeffington, Arthur

    Broughton, Dr. A. D. D.

    Hunter, A. E.

    Slater, Mrs. Harriet (Stoke, N.)

    Butler, Mrs. Joyce (Wood Green)

    Hynd, John (Attercliffe)

    Slater, Joseph (Sedgefield)

    Callaghan, James

    Irving, Sydney (Dartford)

    Small, William

    Carmichael, Neil

    Janner, Sir Barnett

    Sorensen, R. W.

    Craddock, George (Bradford, S.)

    Jay, Rt. Hon. Douglas

    Soskice, Rt. Hon. Sir Frank

    Cronin, John

    Jenkins, Roy (Stechford)

    Spriggs, Leslie

    Crosland, Anthony

    Jones, Dan (Burnley)

    Steele, Thomas

    Crossman, R. H. S.

    Jones, J. Idwal (Wrexham)

    Stones, William

    Cullen, Mrs. Alice

    Jones, T. W. (Merioneth)

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

    Dalyell, Tam

    Kelley, Richard

    Swain, Thomas

    Davies, G. Elfed (Rhondda, E.)

    Lawton, George

    Swinger, Stephen

    Davies, Harold (Leek)

    Ledger, Ron

    Thomas, Iorwerth (Rhondda, W.)

    Davies, S. O. (Merthyr)

    Lever, L. M. (Ardwick)

    Thompson, Dr. Alan (Dunfermline)

    Delargy, Hugh

    Lewis, Arthur (West Ham, N.)

    Tomney, Frank

    Dempsey, James

    Lubbock, Eric

    Wade, Donald

    Diamond, John

    McBride, N.

    Wainwright, Edwin

    Donnelly, Desmond

    McCann, John

    Warbey, William

    Edwards, Rt. Hon. Ness (Caerphilly)

    MacDermot, Niall

    Watkins, Tudor

    Edwards, Walter (Stepney)

    Mclnnes, James

    Whit'ock, William

    Fernyhough, E.

    McKay, John (Wallsend)

    Wigg, George

    Finch, Harold

    Mapp, Charles

    Willey, Frederick

    Fitch, Alan

    Mendelson, J. J.

    Williams, D. J. (Neath)

    Foot, Dingle (Ipswich)

    Millan, Bruce

    Williams, LI. (Abertillery)

    Forman, J. C.

    Milne, Edward

    Williams, W. it. (Openshaw)

    Fraser, Thomas (Hamilton)

    Mitchison, G.R.

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

    Galpern, Sir Myer

    O'Malley, B. K.

    Winterbottom, R. E.

    George,LadyMeganLloyd(Crmrthn)

    Cram, A. E.

    Yates, Victor (Ladywood)

    Ginsburg, David

    Oswald, Thomas

    Gourlay, Harry

    Pavitt, Laurence

    TELLERS FOR THE AYES:

    Grey, Charles

    Pearson, Arthur (Pontypridd)

    Mr. Charles A. Howell and

    Mr.Ifor, Davies

    NOES

    Agnew, Sir Peter

    Corfield, F. V.

    Harris, Reader (Heston)

    Aitken, W. T.

    Coulson, Michael

    Harrison, Col. Sir Harwood (Eye)

    Allason, James

    Craddock, Sir Beresford (Spetthorne)

    Harvey, John (Walthamstow, E.)

    Atkins, Humphrey

    Critchley, Julian

    Hastings, Stephen

    Awdry, Daniel (Chippenham)

    Crowder, F. P.

    Heald, Rt. Hon. Sir Lionel

    Barber, Anthony

    Currie, G. B. H.

    Hendry, Forbes

    Barter, John

    Donaldson, Cmdr. C. E. M.

    Hill, Mrs. Eveline (Wythenshawe)

    Batsford, Brian

    Drayson, G. B.

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

    Bennett, Dr. Reginald (Gos & Fhm)

    du Cann, Edward

    Hirst, Geoffrey

    Berkeley, Humphry

    Duncan, Sir James

    Hocking, Philip N.

    Biffen, John

    Elliot, Capt. Walter (Carshalton)

    Holland, Philip

    Bingham, R. M.

    Elliott,R.W.(Newc'tle-upon-Tyne, N.)

    Hollingworth, John

    Bishop, F. P.

    Emery, Peter

    Hornsby-Smith, Rt. Hon. Dame P.

    Black, Sir Cyril

    Errington, Sir Eric

    Hughes-Young, Michael

    Bossom, Hon. Clive

    Farr, John

    Hulbert, Sir Norman

    Bourne-Arton, A.

    Felt, Anthony

    Hutchison, Michael Clark

    Boyd-Carpenter, Rt. Hon. John

    Finlay, Graeme

    Iremonger, T. L.

    Boyle, Rt. Hon. Sir Edward

    Fletcher-Cooke, Charles

    Irvine, Bryant Cadman (Rye)

    Braine, Bernard

    Galbraith, Hon. T. G. D.

    Johnson, Or. Donald (Carlisle)

    Brewis, John

    Gammans, Lady

    Jones, Arthur (Northants, S.)

    Brooman-White, R.

    Gibson-Watt, David

    Jones, Rt. Hn. Aubrey (Hall Green)

    Brown, Alan (Tottenham)

    Gilmour, Ian (Norfolk, Central)

    Kerans, Cdr. J. S.

    Browne, Percy (Torrington)

    Gilmour, Sir John (East Fife)

    Kerr, Sir Hamilton

    Bullard, Denys

    Glover, Sir Douglas

    Leavey, J. A.

    Chichester-Clark, R.

    Glyn, Dr. Alan (Clapham)

    Leburn, Gilmour

    Clark, Henry (Antrim, N.)

    Goodhew, Victor

    Legge-Bourke, Sir Harry

    Clark, William (Nottingham, S.)

    Cower, Raymond

    Lilley, F. J. P.

    Cole, Norman

    Gresham Cooke, R.

    Litchfield, Capt. John

    Cooke, Robert

    Grosvenor, Lt.-Col. R. G.

    Longbottom, Charles

    Cooper, A. E.

    Gurden, Harold

    Longden, Gilbert

    Cooper-Key, Sir Neill

    Hamilton, Michael (Wellingborough)

    Loveys, Walter H

    Lucas, Sir Jocelyn

    Pitman, Sir James

    Studhotme, Sir Henry

    Lucas-Tooth, Sir Hugh

    Pitt, Dame Edith

    Summers, Sir Spencer

    MacArthur, Ian

    Pott, Percivall

    Taylor, Edwin (Bolton, E.)

    McLaren, Martin

    Powell, Rt. Hon. J. Enoch

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

    Maclay, Rt. Hon. John

    Price, David (Eastleigh)

    Tooling, Sir William

    McMaster, Stanley R.

    Prior-Palmer, Brig Sir Otho

    Thomas, Peter (Conway)

    Macmillan, Maurice (Halifax)

    Proudfoot, Wilfred

    Thompson, Sir Kenneth (Walton)

    Markham, Major Sir Frank

    Ramaden, James

    Thornton-Kemsley, Sir Colin

    Mathew, Robert (Honiton)

    Rawlinson, Sir Peter

    Tiley, Arthur (Bradford, W.)

    Matthews, Gordon (Meriden)

    Redmayne, Rt. Hon. Martin

    Touche, Rt. Hon. Sir Gordon

    Mawby, Ray

    Rees, Hugh

    Turner, Colin

    Maxwell-Hyslop, R J.

    Rees-Davies, W. R.

    Turton, Rt. Hon. R. H.

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

    Renton, Rt. Hon. David

    van Straubenzee, W. P.

    Mills, Stratton

    Ridedale, Julian

    Vaughan-Morgan, Rt. Hon. Sir John

    Miscampbell, Norman

    Roberts, Sir Peter (Heoley)

    Walder, David

    Morgan, William

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

    Walker, Peter

    Oakshott, Sir Hendrie

    Rodgers, John (Sevenoaks)

    Walker-Smith, Rt. Hon. Sir Derek

    Osborn, John (Hallam)

    Russell, Ronald

    Wail, Patrick

    Page, John (Harrow, West)

    St. Clair, M.

    Ward, Dame Irene

    Page, Graham (Crosby)

    Seymour, Leslie

    Webster, David

    Pannell, Norman (Kirkdale)

    Sharpies, Richard

    Whitelaw, William

    Partridge, E.

    Shaw, M.

    Wills, Sir Gerald (Bridgwater)

    Pearson, Frank (Clitheroe)

    Skeet, T H. H.

    Wilson, Geoffrey (Truro)

    Peel, John

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

    Wolrige-Gordon, Patrick

    Percival, Ian

    Smithers, Peter

    Woodhouse, C. M.

    Peyton, John

    Spearman, Sir Alexander

    Woodnutt, Mark

    Pickthorn, Sir Kenneth

    Stoddart-Scott, Col. Sir Malcolm

    Pllkington, Sir Richard

    Storey, Sir Samuel

    TELLERS FOR THE NOES:

    Mr. Ian Fraser and Mr. Pym.

    New Clause.—(EXEMPTON FROM ESTATE DUTY OF MONEY PASSING TO CERTAIN GALLERIES, MUSEUMS, ETC.)
    (1) Where money passes or is deemed to pass on the death of a person dying after the commencement of this Act to a body to which this section applies, that money shall not be taken into account for the purpose of estimating the principal value of the estate passing on the death or the rate at which estate duty is chargeable thereon and that money shall be exempt from estate duty.
    (2) The bodies to which this section applies are the National Gallery, the British Museum or any other similar national institution, the National Art Collections Fund, the society known as "the Friends of the National Libraries" or any other fund or society formed for the purpose of contributions to public museums, galleries or libraries and accepted by the Treasury as of public importance for that purpose. — [Dr. Stross.]
    Brought up, and read the First time.
    10.45 p.m.
    Dr. Barnett Stross: I beg to move, That the Clause be read a Second time.
    This Clause refers to exemption from Estate Duty of money passing to certain art galleries, museums, etc. I note that on this occasion the Economic Secretary is to reply whereas, in July, 1959, we received our answer from the then Financial Secretary. That leads me to hope that we shall fare better than on that occasion—when we could not have failed more. I well remember the answer we got then from the Financial Secretary—which, I thought, was a little specious—was completely demolished by my hon. and learned Friend the Member for Kettering (Mr. Mitchison).
    Tonight, we are looking at the possibility of offering some further fiscal advantage to possible benefactors of art galleries and museums. What we ask for is not new; the door is at least three-quarters open, and we want to see it opened just a little further, because examination of the situation has shown me—and I think that many hon. and right hon. Members know that it is so —that there are already considerable incentives offered to would-be benefactors.
    The present fiscal advantages fall into three categories. First, Estate Duty is remitted in respect of pictures, prints,
    1468
    books, manuscripts, works of art or scientific collections that appear to the Treasury to be of national scientific or historical interest and are given or bequeathed for national purposes to a university, a county council or a municipal corporation. That is a very real fiscal advantage, but there is a second one. Objects similar to those I have just mentioned are additionally exempted under Section 40 of the 1930 Finance Act, and subsequent Acts, when they are sold by private treaty to national or provincial museums. The third advantage is that gifts made inter vivos of money or money's worth to a museum or gallery are exempt if the donor survives for only the first year instead of the usual five.
    By this Clause we ask only that if money is bequeathed it should not be aggregated, and that the heir should not have to pay Estate Duty on it. We argue that there is no serious distinction between bequeathing a Renoir or the value of a Renoir between the painting or the value of the painting. The fact that it is at present not possible so to treat such a bequest has been reviewed again and again by many authorities interested in the arts, including the Gulbenkian Committee in its 5th and 6th reports on museums and galleries, and in its recent excellent survey of provincial museums and galleries. They are satisfied that the present provisions are such that the lack of this further provision for which I am pleading is a deterrent to help that might well come to museums and art galleries, and they are particularly sensible of the need of museums and art galleries in the provinces.
    I mentioned a Renoir or the value of a Renoir. It is quite possible that a spate of Renoirs will be bequeathed to the nation at some time in the future—possibly within half a generation. Every great builder or developer knows that he has not "arrived" if he has not got a Renoir. They all have one. This is fascinating; I like it. It is fashionable, and such people can afford it. Some of them, I hope, will give their Renoirs to the nation, and there will be no aggregation. But if they have not got a Renoir and say, "We will give £50,000 instead to the National Gallery or the Tate Gallery", their heirs must suffer. This does not seem reasonable.

    1469
    I am aware of the kind of argument that has been used against this suggestion, because I have consulted the report of the debate that we had in 1959 on this subject and the answer that we had from the Financial Secretary at that time. The answer is that there is a difference between the two gifts—between a gift in kind such as a painting or a piece of sculpture, and a gift of money. We heard on the last Clause how eloquently the Financial Secretary pleaded that we must have Parliamentary control over money that there is no Parliamentary control if people bequeath it or if there is tax remission on it, whereas if it is given in a lump sum direct from the Treasury to the organisation concerned we know what we are doing and we can decide how it should be spent.
    There is something to be said for that argument, but not as much as was suggested when we last debated this matter. I suggest that there is so little in this argument that I hope we shall this time recover some of the ground that we lost last time and attain our objective.
    Everyone knows that in other countries different and much more far-reaching methods are used. This is a very modest proposal. Most hon. Members, I think, view with a good deal of caution the methods used in the United States. I certainly cannot agree with some of the expert advisers, whether in the Standing Commission or elsewhere, who think that we should go all out and use the American technique.
    However, be that as it may—and it would be out of order to stress this point —I think it is generally accepted that I am asking for very little. This proposal is not likely to cost very much. The situation today is really urgent. I ask the Economic Secretary to say that he recognises that many of these institutions for which I am pleading need financial help, that in many cases the fabric is decaying and the roofs need patching. Some of them leak. Labelling, conservation and preservation of articles that must at all costs be well cared for are such that we are losing some of the very symbols of our past. Perhaps I have stated this badly, but I think hon. Members know what I mean when I speak of our history being wrapped up in the contents of many museums, which show how we live and what we have come from. We have
    1470
    no right to be careless of our own heritage.
    I remember a few years ago in the House mentioning, I think almost with tears in my eyes, that I knew of one gallery in the South-West, a national institution, where priceless old masters' drawings had become mildewed because the roof was leaking. Conditions at that gallery are better now, but at that time the curator had to spend all his spare time on the roof patching it to prevent the rain from coming in because there was no money available. That fault was not necessarily Ours or that of the Treasury. The local authority was responsible in that case and should have taken much more care, as I know it is doing now. But in many of these institutions not owned or supported by local authorities, institutions which were privately endowed, most of them about eighty or ninety years ago, with endowments which were quite sufficient then but which are quite inadequate now, there is little or no help. It is high time that the pleas of the Standing Commission in the Report to which I have referred were accepted and the Treasury found some money at once to ensure that help is given.
    In 1960, I think it was, when we had our last debate on the arts—it was on a Friday—the Standing Commission was asked to survey the whole subject with a view to enabling the Government to ascertain what help, and how much, was needed. In its Report the Standing Commission made clear that quite a lot of money is required immediately. The Economic Secretary knows that an offer of £10,000 for all the area organisations is not regarded as very much, and it is only £10,000 that the Government have offered towards the costs of the areas councils of the organisations concerned with all the provincial museums and galleries. Ten times that amount would do to start with.
    If the Economic Secretary will give us a satisfactory reply showing that the Treasury take the matter seriously—I believe that that is its attitude—I should plead with my right hon. and hon. Friends not to divide the Committee on this issue. I would rather we did not divide. Over the years, there has been constant pressure for a generous attitude towards the arts by the Government of the day, whichever Government it may be. I like

    1471
    to think that this pressure has produced results. It has certainly produced quite excellent results fairly recently. But we cannot go on with a little help from the Government and nothing from the private benefactor. If we want help, as we do, from the private benefactor, we should give him the opportunity afforded by the new Clause. For those reasons, not taking the matter at length because of the time, I commend the new Clause to the Committee.
    Mr. W. R. Rees-Davies: I oppose the new Clause, so pleasantly and ably moved by the hon. Member for Stoke-on-Trent, Central (Dr. Stross), for several reasons which I can state quite briefly. First, it is right to recall that this debate is similar in many respects to the debate we have just had about sport. Everyone was in favour of amateur sport. Everyone was in favour of being able to provide some sort of financial advantage to amateur sport. The real question related to the method by which that aim was to be achieved. In that case, hon. Members opposite were suggesting that it should be done by fiscal advantage, and they sought to argue that the method should be by the remission of tax.
    In this case, it is suggested that a similar aim should be achieved by another technique, to divert bequests from other worthy objects to the benefit of the specific objects expressed in the new Clause. Both of them are wrong because both of them are the wrong system to achieve what is the right objective in itself.
    11.0 p.m.
    The hon. Gentleman and those hon. Gentlemen who support him no less than I are great advocates of trying to assist the fine arts, but I am quite satisfied that the method which he wishes to pursue is not the right method by which this can be pursued. I believe we must be equal in tax under the law. The principle must be the same, and if one is to be entitled, either by way of an object or by way of money, to be given a fiscal advantage in order to divert money to the National Gallery or museums it will merely mean that other worthy objects, be they research, natural history, birds, ornithology, or what have you, will as a result suffer, because the money will be left under bequests in this direction.
    1472
    It does not entirely end there. In each of the objectives in subsection (2) of the new Clause the fact is that the Treasury would have to accept
    "as of public importance for that purpose"
    any bequest to the benefit of
    "the National Gallery, the British Museum…the National Art Collections Fund…the Friends of the National Libraries'"
    and indeed any public society, provincial or otherwise, for the purpose; because it is not applied to the object: it is applied to money, and obviously, each of these societies and museums would be able usefully, as being of public importance, to use that money.
    The other reason I oppose it is this. This is again going perilously near to what one may call the American system, and I do not think this country is fully apprised of quite how unfortunate that system is. It of course was of great value to the Americans, particularly in years gone by, but I believe that it will not be long before they themselves abrogate that system which is really rapidly becoming a farce. The situation today is that the curators of the main museums in America are approached in advance by a millionaire or a potential millionaire. I can cite the names of the curators and I can cite examples, if need be, arising from my own visit there when I discussed these matters with the men concerned. They are asked, "What do you want us to give you?" They then proceed to beg the curators to allow them to purchase various works of art—of course, nothing less than about 50,000 dollars: the more the better—tax-free, the basis being that they enjoy them during their lifetime and they pass on their death to the museums concerned. This, of course, has been of use in America where they did not have the heritage which we are fortunate enough to have in this country. We are not so much concerned with obtaining new works of art as they have been during the last twenty or thirty years.
    I am bound to say—I do not say this in any sense offensively—that I do find it a most extraordinary situation that Socialists can support the suggestion which is coming tonight from the Socialist benches, when they of all people have done so much to try to break down, with heavy Estate Duty, the opportunities to preserve the very heritage which we seek. Let me

    1473
    give an example of this. Take the Duke of Devonshire, who has, I suppose, one of the finest art collections in this country, who in recent years has had to sell off many of the finest works of art in his collection—although I am happy to say he still retains a good many—for the purpose of paying heavy Estate Duty. We have here today in this country one of the greatest collections of silver which has probably ever been seen in the world, the Brownlow Collection, which the House of Commons cannot be bothered to buy and did not make an effort to preserve, with the Belton wine cistern which belonged to the Speaker two centuries ago. This is the way we go.
    The fact is that if we want a heritage we do not want to put it all into museums. What is the point of putting all the finest eighteenth century furniture into museums`? It cannot be seen properly there. We want to retain it in the right surroundings. The hon. Gentleman has effectively debated with me the necessity of maintaining the historic homes, and the hon. Gentleman is one of those who, I know, share my view.
    If we want to encourage this, do not let us tear down by heavy Estate Duty the great homes and heritages which can preserve the great works of art to be seen by all, but let us give every encouragement to enable them to be maintained, provided that they are open freely to the public. If hon. Members opposite like to criticise that these homes are not sufficiently open to the public, I will support them to ensure that they are more open and the public can more enjoy them. My argument is that where money is bequeathed or bequests are made in kind, in sculpture or pictures, the wrong approach is to try to give fiscal advantage either before or after death to encourage a man to divert money which should be regarded as absolutely equal for the purpose he wants. We should take a little less away in Estate Duty and give an opportunity for the great estates and the works of art to be maintained, and we should give a direct incentive to ensure that they are maintained so that the public can see them.
    I know a great deal more about sport than I am ever likely to know about the arts.:rust as we should support sport though bodies like the A.A.A. by subsidy, so likewise we should give support here
    1474
    by direct subsidy to buy pictures for the nation and to encourage their showing to the public in the right setting. But, for heaven's sake, do not let us try to persuade the Cottons and the Clores to divert after their death money to the National Gallery which equally could go to helping the blind or to research work of some kind. I am not prepared that we should stand for the betterment of the fine arts by pinching for them what should equally belong to other institutions.
    Sir Barnett Janner: I cannot understand the argument of the hon. Member for the Isle of Thanet (Mr. Rees-Davies). It is entirely illogical in present circumstances. If an estate contains articles which an institution similar to those mentioned in the new Clause would want to buy or have in its collection, that article is anyhow exempt from Estate Duty. Its value is not included in the value of the estate, and if it is given by the trustees or an executor to an art gallery it carries no Estate Duty. Its value is not included for the purpose of estimating the amount due ad valorem for Estate Duty. What on earth, therefore, is the hon. Member talking about? If this is the case it means that precisely what the hon. Member wants is already possible. If it is kept in such a home and then transferred to an institution, no duty is payable on it. The only time that duty becomes payable on it is if it is sold.
    In these circumstances, the hon. Member for the Isle of Thanet gets all he wants. He says that Estate Duty should not be charged on residences and furniture and the other assets of an estate, excluding articles of art. I am sure the Economic Secretary will agree that that argument is not sustainable. I make this appeal to the Economic Secretary: why not allow the portion of an estate which is bequeathed to a gallery or museum to be treated in precisely the same way as if the individual concerned had brought a work of art for that gallery or museum?
    If a person grants in his will a sum of money for precisely the same purpose, his beneficiaries have to pay full Estate Duty on the full amount, whereas if the money had been used a week before his death to buy an article which a museum would want it would be excluded.

    1475
    I cannot see the logic of preventing the money itself from being exempt if the deceased could have avoided the duty on that sum by using it to buy an article of art a few minutes before his death. It may be argued that money bequeathed to an institution may be used for other purposes than purchasing works of art. That, too, is a false argument, because a museum exists for the purpose of exhibiting works of art. The money would only be used to further the objects of the institution, and as long as there were an undertaking that the money would be used for such purposes, perhaps the Government would be prepared to agree to this Clause. This would mean nothing other than what happens at present.
    11.15 p.m.
    It is not a question of an art gallery buying it. The law at present is that these articles need not be sold to an art gallery. That is what the hon. Member for the Isle of Thanet was talking about. A person can retain the article in his home. He can lend it to a gallery. The only thing he is prevented from doing is sending it out of the country. He would be prevented from sending it out of the country only if he intended to sell it to somebody abroad. If he intended to sell it to somebody abroad, the Board of Trade could insist upon the British Museum or other institution purchasing the article because it was of value to the nation. Museums are institutions which exist for the purpose of buying—not for the purpose of selling, but for the purpose of exhibiting.
    In an attempt to compress this argument into a small space I may have confused the issue. The point is that the law at present is that the executors of someone who has works of art are not called upon to include the value of those works of art, if they are accepted as such, in the aggregate of the estate on which duty is assessed. For example, if a person left an estate of £500,000, of which £400,000 consisted of articles of that description, the assessment for duty purposes would be £100,000 only.
    It might be an inducement to people to leave money to the various institutions. An honest person who wanted the finest articles preserved for the benefit of the nation would take the view that it would
    1476
    be better for him to save the money than to buy articles himself, because they might be of no value, whereas an institution would purchase articles it required and which were of value. if this concession is not granted, people who want to preserve articles of this description for the nation will be encouraged to purchase articles which may not be required by museums but which on the purchasers' death will go to museums, instead of museums being in a position to purchase exactly what they want.
    This is an extremely important point. I ask the Economic Secretary to grant this concession.
    Mr. du Cann: I first say to the hon. Member for Stoke-on-Trent, Central (Dr. Stross) that the length of his speech—which we are all aware he deliberately compressed and we all understand and are grateful for that—was in inverse ratio to his sincerity, with which we are extremely familiar. To the hon. Member for Leicester, North-West (Sir B. Janner), who seemed a little nervous about the precis work he had done on his speech, I say that I found his view extraordinarily clear. The fact that he spoke for less time than he might have done did not affect the vigour and clarity of his argument.
    The hon. Member for Stoke-on-Trent, Central described in detail the concessions there are in respect of Estate Duty in this field at present. I followed that description as closely as I could and could not fault it; therefore I shall not repeat it. He described the various substantial exemptions from Estate Duty of one form and another. A point which has a particular bearing on a question asked by the hon. Member for Leicester, North-West is that the object of these concessions is to keep works of art in the United Kingdom. We regard this as extremely important. I think it reasonable to claim that the present system which has merits, and may have demerits I dare say, has had great successes in that regard. I am sure that is something which the Committee will recognise.
    I am bothered about one aspect of the new Clause. The bodies which the hon. Member for Stoke-on-Trent specified in the Clause do not include universities or

    1477
    county councils and municipal corporations. It may well be that it was his intention to include them, but I am advised that the Clause does not. I think he would agree that this is a possible defect in the Clause.
    Dr. Stross: I entirely agree. I apologise for the wording, which I thought better and more comprehensive, but in any event the Treasury can always put it right.
    Mr. Mitchison: I am sorry that my hon. Friend has apologised for the wording. I may perhaps assure the Committee that the wording was deliberately very moderate. It was confined to museums and galleries. The reason it was confined to museums and galleries was that it follows the recommendation, now three limes repeated, of the Standing Commission on Museums and Galleries. I regard that distinguished body as singularly competent to make recommendations about museums and galleries, but not quite so competent to make recommendations about universities.
    Mr. du Cann: I had assumed that the truth was something as the hon. and learned Member for Kettering (Mr. Mitchison) has described, but, if the Government were to accept this Clause we would immediately find very heavy pressure put by the universities and provincial museums and galleries—some of which are very important, such as the museum and art gallery in Birmingham—to have it extended to them. That is one of the problems which has a particular bearing. It is extraordinarily difficult to draw a line.
    Mr. Mitchison: I am sorry to interrupt again, but I do not think that is a real difficulty. Even a small place like Kettering has the Friends of the Kettering Art Gallery. That is the way in which it would be possible to apply this Clause to university museums, the Birmingham one or any other place of this kind. They have only to form a society or fund for the purpose and it is done if the Treasury approves.
    Mr. du Cann: That is exactly the point. I am not arguing that there would be difficulty about doing that, but that there would be tremendous pressure to see that this concession was extended as widely as possible. Pressure would
    1478
    come from Kettering, Taunton and all over the place. I am not saying that there is any physical difficulty about it. I am saying that the door would be open very wide.
    As the hon. and learned Member rightly said, the Clause follows successive recommendations made by the Standing Commission, and, as he did not point out—though it would reinforce his argument—also made by the trustees of the National Gallery in 1960 and 1962. I remind the Committee quickly of the terms of reference of the Commission:
    "To stimulate generosity and attract the efforts of those who aspire to become public benefactors."
    It is not surprising, perhaps, that the Commission concentrated on tax relief. But, as my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) said, by inference tonight and more directly on other occasions, there are other ways of encouraging private benefaction than at the expense of the Exchequer, which means at the expense of the taxpayer.
    The hon. Member for Stoke-on-Trent, Central primarily concentrated his attention on the suggestion that it is illogical to give exemptions for things and not to give some benefit for making gifts. I understand the point, but I am bound to say that the reasons for which exemptions were given in 1896 are still valid, and I genuinely believe them to be valid. I am all for modernisation, and I do not believe in old things when old things have outlived their usefulness, but the arguments here are incontrovertible. In the debate of 1959 the hon. Member will find those reasons, and I need not re-state them tonight.
    Dr. Stross: I am sure the hon. Member agrees that if we are not careful we shall fill our art galleries and museums with things which, however precious and desirable in themselves, will overwhelm the institutions. We want to use these art galleries and museums as places of culture and education. Their collections must be balanced. More and more we should leave precious things in the possession of folk in their own homes. Galleries must have not everything but balanced collections. It is for this reason that I plead for assistance to the provincial museums.
    Mr. du Cann: The hon. Member is leading me to a point which I intended to make in a moment. I am grateful to him for making the point clear. I appreciate his feeling and to some extent I share it, for we share the same objects. I hope that he will believe me in that.
    I draw his attention to the fact that the Government feel strongly about this matter, and I draw his attention particularly to Clause 51, from which he will see that there is no exemption for maintenance funds there. This has been our view all along, and we believe it to be the right view and to be the inevitable view.
    My hon. Friend the Member for Isle of Thanet said a good deal—in what I fully understand was a shortened speech —about the American practice. I well understand that he speaks with a special knowledge and expertise in these matters, of which we have had experience in our debates formerly. He rightly said that the American authorities are very much dissatisfied with the working of their present system. In a sense it is the American system which the hon. Member for Stoke-on-Trent, Central wishes to import. The difference between the Americans and ourselves lies in the fact that they have no state aid for the arts. The American system applies to charities as a whole, which brings me to a point which I tried to make in reply to an intervention by the hon. and learned Member for Kettering—that once we start with the proposal of the hon. Member for Stoke-on-Trent, Central it will be extraordinarily difficult to draw the line. I think that it will be quite impossible. I do not believe that it could be held anywhere.
    Finally, the Americans do not have any parallel estate duty relief such as the hon. Member described and such as the hon. and learned Member for Leicester, North-West mentioned, and which has done a great deal of good.
    11.30 p.m.
    The hon. Member for Stoke-on-Trent, Central referred to the speech last year of the then Financial Secretary, now my right hon. Friend the Minister of Education. He made the point then that the better way to help the arts was by direct grant over which Parliament had control. I do not think that any Government spokesman is entitled to make that
    1480
    claim unless be is prepared to back it up with evidence of what the Government are doing, and that evidence should be satisfactory as a whole to the Committee.
    I should like, therefore, to make the point very shortly that provision for the arts has increased each year since 1959–60, and, to talk particularly about the arts museums and galleries, those grants have grown from £3·3 million in 1959–60 to £5·5 million in 1963–64. It is not as if we are resting just on a matter of principle, and that is that. We are actually doing something to improve and help these museums and galleries and to enable them to expand.
    Nor is that all. The purchase grants will amount in all to over £400,000 in the current year, and, in addition, the Government have over the past five years supplemented the normal allocation for purchases by special grants totalling over £1·1 million. These are not inconsiderable sums.
    The hon. Gentleman talked about the need for galleries to have what they want. This is enabling them to do just that very thing successfully and satisfactorily. In addition, the Government have also made full use of their powers under the Finance Act to accept outstanding pictures and furniture in lieu of Estate Duty. In the past year chattels to the value of about £158,000 have been acquired in this way from the estate of the Earl of Powis.
    Total expenditure on the arts is estimated at over £11 million in the current year which compares with about £3·5 million in 1951–52. There is one piece of news which I am sure the Committee will be glad to hear. My right hon. Friend the Minister of Education—and I should like to pay a tribute to him for the work which he did for the arts as Financial Secretary—with the concurrence of my right hon. Friend the Chief Secretary, who is now in his place I am pleased to see, has agreed in principle to a special grant towards the purchase for the Victoria and Albert Museum of a bust which has only recently come to light and which is a masterpiece of Italian Gothic sculpture by the great Giovanni Pisano. A Supplementary Estimate giving details of this grant will be laid before the House in due course. It may not be possible to show this acquisition for many months, but when it is on view

    1481
    I am sure it will be recognised as being among the most notable treasures of the Museum.
    I am glad to be able to quote this in addition to the other factual information which I have given the House of monetary assistance, because it indicates that, when my right lion. Friend talked about this selective form of Parliamentary help as opposed to indiscriminate help, at least we have a system which is being successful and which is satisfying the kind of criteria which the hon. Gentleman quite rightly described to the Committee.
    Dr. Stross: I wonder if it is possible to be told whether anything will be done in the very near future for the provincial galleries and museums following the outstanding Report to which the hon. Gentleman referred tonight.
    Mr. du Cann: The hon. Gentleman is extremely good at getting in just ahead of what I am about to say. He made the point, as he was entitled to do, that we were not being generous enough to the provincial museums and galleries. I do not think that he was quite fair in quoting the figure of £10,000. If I may I would refer him first to an Answer which my right hon. Friend gave to his colleague the hon. Member for Bishop Auckland (Mr. Boyden) on 23rd May and to an Answer which I gave to my hon. Friend the Member for Exeter (Mr. Dudley Williams) on 19th March. We tried to make between us—I am sorry if we did not do it clearly enough, though I always feel that my right hon. Friend is a master of clarity—two points. First, that the Report of the Standing Commission on Museums and Galleries makes a number of recommendations over a very wide field, and, secondly, that these recommendations must be considered. We cannot very well implement them, if we decide to do so, immediately. We must have time, for there are a number of people we have to consult and there are a number of bodies which it is right that we should consult.
    Secondly, we felt able, in advance of detailed consideration of the Report, to accept in principle, subject to the approval of Parliament, the Standing Commission's recommendation that the Exchequer should give financial assistance, not exceeding the amount sub-
    1482
    scribed locally, towards the initial and continuing expenses of schemes of mutual help and co-operation on matters of conservation of authorities in the same area. This is the figure of only £10,000 which has been mentioned. The objects to which this amount is to be devoted are to be decided this year. This is therefore promptness, and my right hon. Friend is to be congratulated rather than criticised on having been so quick to translate willingness to help into action.
    Finally, on the subject of cost; I have tried to explain that if we accepted this proposal we would open the door widely. I think that that point has probably been taken. The hon. Member said that he had estimated that his proposal would cost very little. In the first instance it might cost about £10 million, but we are perfectly certain that over the years the cost would grow very rapidly. We are not clear that the benefits to the nation would necessarily be commensurate with, equivalent to, or necessarily even better than, the present system.
    Therefore, while we are all agreed on the objectives of the hon. Member for Leicester, North-West, the hon. Member for Stoke-on-Trent, Central and my hon. Friend the Member for the Isle of Thanet, and while we have every sympathy for them, I am sorry to say that, for the reasons I have given, a little inadequately in view of the time factor, we cannot agree with the specific proposal which has been made. None the less, we are all grateful to the hon. Member for Stoke-on-Trent, Central for giving us the opportunity to discuss an important matter about which we all feel strongly.
    Question put and negatived.
    Mr. William Warbey: I beg to move,
    That the Chairman do report Progress and ask leave to sit again.
    I would do so very briefly in order to get an indication from the Government of what they have in mind. In view of the beneficent atmosphere of sweetness and light which has been spread on our deliberations by our recent debate on cultural matters, I would be very reluctant at this late hour to introduce the clouds of controversy. The issues which would be raised on this new Clause would be of a far-reaching character,

    1483
    touching the lives of the majority of the citizens of this country.
    As I understood that there was a general feeling in the Committee that it would be for the convenience of the Committee that we should certainly not sit later than midnight, in view of the time that is still left to deal with the remainder of the Bill. I would have thought in all the circumstances that it would be possible for us to conclude our deliberations tonight and to start again fresh tomorrow afternoon on what is a substantial and controversial issue.
    The Chief Secretary to the Treasury and Paymaster-General (Mr. John Boyd-Carpenter): It is certainly not our wish to ask the Committee to take its proceedings tonight very late. On the other hand, the Committee must have in mind the fact that we still have a considerable amount of work to do to conclude the Committee stage.
    If my calculations are right, on the basis of what I understand are the selections, we still have ahead of us, including the hon. Members new Clause, some 14 further issues to discuss, and I do not need to stress to any hon. Member experienced in this Committee, in view of the time of year, how essential it is to conclude this stage of the Bill before we part tomorrow night or Friday morning. It is a question, therefore, of a sensible distribution of our work as between the two days or nights.
    I should have thought that while the hon. Member attaches importance to his Clause—and I suppose that we all attach importance to our Clauses and want them to come on at an agreeable time of the day—it would be wiser to deal with this matter in a proper way, and, I hope, without undue length, tonight. The new Clause in the name of the hon. Member for Sowerby (Mr. Houghton) entitled "One hundred per cent. disablement pensions: relief"—which has the significance that there are likely in your view, Sir William, to be five other new Clauses which would be discussable with it—it is the series of Clauses relating to allowances in respect of disability—would, perhaps, be a more appropriate one with which to open our day's proceedings tomorrow.
    I hope, therefore, that the Committee will feel able to deal with the new Clause
    1484
    in the name of the hon. Member for Ash-field (Mr. Warbey) and then we might proceed with the feeling that we have given ourselves a reasonable chance of coping with our work tomorrow without imposing an inconveniently late sitting on a day which would, I think, be particularly inconvenient to a lot of hon. Members who may, no doubt, be not entirely disinterested in the times of the sleeping car expresses. I hope, therefore, that the hon. Member will not press the matter and thereby consume time at this stage on the Motion to report Progress.
    Mr. Warbey: Having made a mild protest, in keeping with the general atmosphere of the Committee, and also, perhaps, having given a warning to hon. Members, I beg to ask leave to withdraw the Motion.
    Motion, by leave, withdrawn.

    New Clause.—(INCOME TAX: RENT ALLOWANCE.)
    If a person proves that in the year of assessment he has paid rent for a dwelling-house in his occupation, he shall be allowed a deduction from the amount of income tax with which he is chargeable equal to tax at the standard rate on the rent so paid:
    Provided that—

    (a) where the rent is for a full year, no deduction shall exceed tax at the standard rate on a sum equal to one-third part of the gross rateable value of the dwelling-house or on the sum of one hundred pounds, whichever sum is the less;

    (b) where the rent is for a period of less than a year, no deduction shall exceed tax at the standard rate on such part of whichever is the less of the two said sums as bears to the whole sum the same proportion as the period bears to the year; and

    (c) for the purposes of this section no person shall be treated as in occupation of more than one dwelling-house at any one time—[Mr. Warbey.]

    Brought up, and read the First time.
    Mr. Warbey: I beg to move, That the Clause be read a Second time.
    I want to make it perfectly clear from the outset that I do not stand rigidly by the formula set out on the Notice Paper, that I intend to argue the general principle enshrined therein and to express the hope that the Government will concede that this general principle is a reasonable one and will themselves, with all the facilities which they have at their disposal for surveying the issues involved, bring forward on Report an appropriate

    1485
    Clause which would do justice to the principle to ensure that householders who are called upon to pay rents which are higher than they should have to pay on any reasonable standard should receive some relief by way of a tax rebate related to the rent they pay, but with a maximum upper limit to ensure that we do not thereby be subsidising those persons who choose and can afford to live in an expensive house.
    The new Clause is essentially simple; simply that there is a basic principle underlying the principle of our whole taxation system that taxation should not deprive a man or woman of the income necessary to maintain and pay for the basic necessities of life.
    11.45 p.m.
    I do not propose to argue that point further, although one could illustrate it from many of the forms of tax relief already provided in our finance legislation, butt I assert that it is wrong in principle, and accepted as wrong, that where a man's income is insufficient to cover payment for the necessities of life food, clothing and shelter—plus a reasonable allowance for all the other things that go towards making a modest standard of living, we should take any tax from him, and thereby diminish his ability to provide a reasonable standard of living for his family.
    The need to afford relief to people who are at present having to pay an excessive amount for one of the basic necessities—shelter for their families—arises from the fact that present rents are far too high; that they are higher than the average man or woman can afford; that under the present Government they are being increased, and that they cannot be reduced by any other means than affording relief by fiscal means.
    My hon. Friend the Member for Sowerby (Mr. Houghton) will probably argue that this form of relief from the excessive cost of providing a home will not be necessary in future, because, in the not-far-distant future, we shall have an opportunity to implement the Labour Party's very admirable policy, and I fully accept that. I am sure that that policy will succeed in reducing rents to reasonable levels, and I have every confidence that a future Labour Chancellor and a future Minister of Housing will co-operate in such a way as to ensure that the
    1486
    scandal of our present society, by which a large number of our citizens are compelled to live either homeless or in substandard homes because they cannot afford decent homes, will he removed.
    Nevertheless, I have to deal with the present Government, the present Chancellor and the present Minister of Housing, and with a Tory housing policy and rent policy established over a number of years and still being continued by the present holders of those two offices. The foundations of that policy were well and truly laid by the right hon. Gentleman who, before he became the worst Home Secretary of modern times, earned the reputation of being the worst Minister of Housing of the twentieth century. Under his administration were laid the three pillars of Tory housing and rent policy—first, the Rent Act, 1957, which is progressively abolishing public control of rents in this country; secondly, the Town and Country Planning Act, 1959, which created a free market in land and thereby laid the foundations for the large increase which is now taking place in the cost of housing and consequentially of rents; and thirdly, the creation or recreation of a free market in money.
    The Chairman: Order. I am sorry to interrupt the hon. Member, but surely it is the Income Tax aspect of this matter to which he should devote himself on this proposed Clause.
    Mr. Warbey: With great respect, Sir William, I am seeking to show that a form of relief to persons who have to pay excessive rents is necessary, and in order to establish that case I think I have to show that those rents are excessive, that they are beyond what many people can reasonably be expected to pay, and that therefore they should receive compention in the form of tax relief. That is the essence of my argument. This Clause, after all, introduces a new principle into our taxation. It is not a case of moving an Amendment to increase or decrease an existing relief. This proposes an entirely new form of relief.
    With great respect, Sir William, I suggest that when one is proposing an entirely new form of relief and a new method of applying fiscal measures to the remedying of social injustice, one has to show that that social injustice exists, that it exists also as a result of the policy of the Government who impose taxes

    1487
    upon the people, and that therefore it is the duty of the Government to rebate some of those taxes in order to redress the balance. That is the essence of my argument, and I suggest that I am entitled to show, at least briefly, that this is the policy of the Government and that it has these consequences and therefore requires these remedies.
    I was saying that those policies that I have named have had the effect of creating a situation in which the cost of land has risen to excessive levels, in which speculators have been able to build up the cost of land for building, and therefore for the provision of houses to rent, to levels which are altogether excessive, and the excessive character of which is demonstrated by the fact that the share values of property companies in the last six years have risen by no less than 12 to 14 times their former value. That increase in value has come partly out of the pockets of the people seeking homes in which to live.
    In the same way, the creation of a free market for money, with a prohibition on local authority borrowing for the provision of housing at less than the prevailing free market rates, has had the effect of increasing the economic rent of houses to levels which are far beyond those which householders can reasonably be called upon to pay.
    The present Minister of Housing has continued and intensified this policy, building upon the foundations laid by his predecessor. He announced soon after he assumed office that he was putting pressure on local authorities to compel them to charge the economic rent of a council house to every tenant who could afford to pay. [HON. MEMBERS: "Hear, hear".] Of course, that principle sounds very good when it is enunciated in that form, but let us look at the facts. What is the present economic rent, and what proportion of their incomes can people reasonably be expected to pay in rent?
    The present economic rent of a typical three-bedroom council house is £3 10s. a week, excluding rates, and the addition of rates brings it up to about £4 a week. How many people can be expected to afford to pay £4 a week for housing out of their incomes? What is the Government's standard? Do they expect a man with a wife and, say, one
    1488
    child under 11, bearing as he does the taxation burden which still falls upon him today and bearing the burden of National Insurance contributions which have recently been increased, to pay rent and rates of £4 a week if his gross earnings are less than the average income of the adult male earners in this country, namely, £15 10s.? No man with gross earnings less than £20 a week should be compelled to pay a rent of £4 a week, including rates.
    Mr. Peter Emery (Reading): In his estimate of £4 a week, what proportion does the hon. Gentleman consider is subsidy either from the Exchequer or from the local authority?
    Mr. Warbey: I do not know whether the hon. Member has just come in or has only just begun to listen to the discussion.
    Mr. Emery: I have been here all the time.
    Mr. WarbeyAll the time I have been talking about the economic rent.
    12 m.
    Mr. Emery: I am sorry but the hon. Member has not understood me. What would be the subsidy to bring it up to the economic rent he is talking about? What is the subsidy he is talking about on rents which he suggests are at an economic level of £4 a week?
    Mr. Warbey: The hon. Member still has not followed my point. My starting point was the statement of the Minister of Housing and Local Government that people occupying council houses should be compelled to pay the economic rents of those houses as long as they could afford to do so. The economic rent of a typical three-bedroom house is, as stated again by the Minister of Housing and Local Government, today £3 10s. a week excluding rates; say about £4 a week including rates. Those are the rents and rates which the Minister of Housing and Local Government indicates that people occupying council houses ought to be compelled to pay.
    Mr. Emery: The hon. Member must not mislead the Committee, and I am certain he would not want to. These statements are made about the economic rents of new property becoming available at the moment. The Minister has not

    1489
    implied that the economic rent of all local authority property today is at the level of £4 a week. This is why specifically I have asked the hon. Gentleman if he will tell the Committee what subsidisation is a local authority tenant able to obtain on average property. I have asked him so that we can judge the matter in fairness, and so that we can be certain what benefits the local authority tenant is getting from his rate subsidy and Exchequer subsidy.
    Mr. Warbey: I shall come to that in a moment. First I want to deal with the point which hon. Members opposite approved of by their voices. I think the hon. Member was among them. They indicated their approval of the principle that every occupant of a council house who can afford to do so should be compelled to pay the economic rent of the house. Now the economic rent of a three-bedroomed council house—I am sorry to have to repeat it again—including rates is about £4 a week.
    Mr. Frank Taylor (Manchester, Moss Side):Council rents in Manchester are 16s. a week on average. Is the hon. Member suggesting that the average subsidy on those houses is £3-odd—a few more shillings—for every house?
    Mr. Warbey: That may well be. If that is the case I congratulate Manchester Corporation on being able to relieve its tenants to so large an extent, but to an extent which is contrary to the policy of the present Minister of Housing and Local Government, and to an extent which the Minister of Housing and Local Government is fighting hard to change. That the Minister is fighting hard to change that is indicated in the statement to which I have already referred and, secondly, by the statements made in his new White Paper on housing policy, where he has indicated very clearly indeed that it is his intention to go on with the policy of compelling local authorities to accept the principle of differential rents in order to qualify for housing subsidy at all, and that the total value of housing subsidies is therefore likely to be reduced, not increased.
    I have still not had from any hon. Member opposite, in all these interjections, any indication of what they consider to he a reasonable proportion of a householder's income which he should
    1490
    be expected to pay in rent. If a man is expected to pay in rent and rates a sum of £4 a week he must have gross earnings of not less than £20 a week. Hon. Members opposite talk about subsidies as if they were a form of compensation for the present high cost of providing houses to rent. The subsidy is £24 a year, or less than 10s. a week. The economic rent of the typical house is £3 10s. a week, and two-thirds of that sum is made up of interest charges.
    That economic rent is double what it was five or six years ago and treble what it was under a Labour Government. The reason why it is treble under the present Government is that interest charges for building houses to rent have been allowed to rise to the present appallingly high level, and the subsidy which at one time was a reasonable compensation to the local authority for having to pay interest for the provision of houses is nowhere near providing the very large sum which local authorities have to pay.
    The Deputy-Chairman (Sir Robert Grimston): I have been listening carefully to the hon. Member. I understand that he is developing a case for this Clause, but frankly I do not see where we are getting to. Could the hon. Member please address what he is saying now to how it affects the Clause?
    Mr. Warbey: Yes, Sir Robert. When your predecessor was in the Chair, I explained the general tenor of my argument and its relationship to the new Clause. I thought that to justify the new Clause it was necessary to show that the current and prospective levels of rent are on the average higher than people can be expected to pay and retain a reasonable sum to provide for the other needs of their families and, that being so, it was necessary to provide them with some additional means of relief by way of tax rebate.
    Members opposite suggest that relief is being provided by means of a subsidy. I was merely going on to say that that subsidy is quite inadequate for the purpose because it represents only a quarter of the interest burden which enters into the economic rent of a council house, and that therefore something more is needed in addition.
    That is why I submit that, since the Government are not prepared to reintroduce rent control on a substantial scale,

    1491
    or to lower interest rates, the only thing they can decently do is to provide some relief by way of tax reduction.
    In order further to illustrate the point, I would like to show how this position will operate for people who will be affected, or who are hoping to benefit, by the new proposals made by the Minister of Housing and Local Government in the White Paper issued yesterday. The Minister has indicated what be considers to be the level of rents which wage and salary earners seeking to have decent homes are likely to be called upon to pay. In his proposals for a Housing Corporation— which is apparently to have the specific intention of providing houses to rent for young married couples in the salary earning and higher wage earning class who nevertheless do not earn enough to buy homes of their own—the Minister committed himself to the statement that the rents they are likely to have to pay will be between £4 and £7 a week.
    This is really a most dishonest fraud on the many young married couples who are looking forward in the coming years to having a decent home of their own to live in. It is so dishonest that it can only be righted by the present Government by adopting this Clause.
    What does it mean in reality? Let us take the case of the typical wage or salary earner whom the Government say they have in mind. I take it that, by the time the Housing Corporation gets into action, in view of the further increase in the cost of land which will have taken place, in practice it is unlikely to be able to charge an economic rent lower than £4 to £5 a week, on top of which there will be rates averaging about 15s. a week. This will mean a total of £5 a week which a family will be expected to pay. Who is going to be able to pay that sort of figure?
    12.15 a.m.
    Let us look at the situation of some typical familities among those the Government are said to have in mind.
    Let us take, first, the case of the man earning the average wage of adult male workers—about £15 10s. a week, about £800 a year. That man under the new proposals made by the Chancellor in the Bill, taking into account all the reliefs that the right hon. Gentleman offers in
    1492
    the Bill, will still have to pay tax of £46 2s. a year. On top of that, with the increase in the insurance contributions which are just coming into force, assuming that he is contracted in he will have to pay 17s. 4d. a week. With 17s. 9d. tax and 17s. 4d. insurance contributions, the net take-home pay of the average adult male worker will be £13 14s. a week. Does any right hon. or hon. Gentleman suggest that a man with a wife and a child under the age of 11 and with a net income of £13 14s. a week will he able to afford rent and rates of £5 a week, leaving him with £8 14s. to pay for food, clothing and all the other necessities? All hon. Members would regard that as totally unjust.
    I go higher up the scale and take the case of the £1,000 a year man—the case, for example, of the Member of Parliament, whose salary is £1,000 a year, the case, for example, of the highest level of wage earner and the average level of salary earner. It sounds a lot, but it means £19 5s. a week. On this a married man with one young child will have to pay on the new scales tax of £96 5s. 6d., or £1 17s. 8d. a week. His insurance contributions will be 19s. 4d. The total deductions from his pay will be £2 17s. a week, leaving him with £16 8s. Is a man with a net income of £16 8s. a week expected to pay rent and rates of £5 a week to provide a home for his wife and child? Is that what the Government expect?
    There will be some who will be driven to such desperation by the general housing policy of the Government that they will take on that obligation. They will take on that obligation either by forcing their wives to go out to work to help to pay the rent or by sacrificing the rest of the standard of living of their family. That is why I say that the new housing policy of the Government is just as much a cruel fraud on the mass of the home seekers as their past housing policy. Any right hon. or hon. Member can work out for himself that to be able decently to afford rent and rates of £5 or £6 a week a man needs to have gross earnings of not less than £1,500 a year. That rules out completely practically every wage-earner and three-quarters of the salary earners. Unless the Chancellor is prepared to adopt the principle of this Clause, nine-

    1493
    tenths of the population will derive no benefit whatever from the Government's housing proposals. Nine-tenths will be condemned for years to come, should we have the misfortune to retain a Tory Government, to sacrifice their general standard of living in order to be able to afford decent homes for their families.
    We are placed in a situation in which in order to provide large incomes for money lenders and speculators 90 per cent. of the people are mulcted in high rent and mortgage payments which leave them with a miserably low standard of living in this so-called affluent society. That is the situation which I ask the Chancellor to remedy by the only means left in his hands. That is by introducing the principle of a tax relief for the payment of rent.
    Mr. Barber: The hon. Member for Ashfield (Mr. Warbey) has spoken at some length about this new Clause. He also referred to it during an earlier discussion we had in Committee. As I understand, he considers that this proposal for some form of rent allowance is particularly appropriate because of the abolition of Schedule A. I gather from what he said on an earlier occasion that he does not dissent from the proposal to abolish Schedule A, but he thinks that if the owner-occupier is to be given some form of tax relief so also should the tenant. I must tell him frankly and straight away that I fundamentally disagree with him. It is with no disrespect to him that I say that in my view his argument is wrong both in logic and on social grounds.
    Mr. Warbey: I hesitate to interrupt the hon. Gentleman so early, but I hope that he will address his reply to what I said in the course of my speech this evening, in which I did not base my argument at all on the parallel of the abolition of Schedule A.
    Mr. Barber: In that case I shall not refer again to the speech the hon. Member made previously when he gave notice that he would put down this new Clause. That relieves me from the necessity to deal with that matter.
    I certainly do not intend—I say this with all respect to him—to answer all the points he made about the Government's housing policy or the attitude of
    1494
    previous Ministers of Housing. It has always been the policy of this Government, as he knows full well, to encourage home ownership, to build up what we call, and many hon. Members opposite accept, a property-owning democracy. I need not weary the Committee again with figures of achievement over the past few years in this respect. I believe that the abolition of Schedule A will give one more boost to the extension of home ownership. On that score it has been welcomed, I believe, by all hon. Members.
    It is true, as the hon. Member indicated, that a house—whether owner-occupied or not—is a necessity of life just like food and clothing. It is true that no Chancellor of the Exchequer could ignore such basic facts as the cost of renting a house, to which the hon. Member repeatedly referred, in the same way as no Chancellor of the Exchequer could ignore the cost of food, but there is no better case for a special tax allowance in respect of rent than there is for a special tax allowance in respect of the cost of food.
    The proper way to take account of these items is in the personal allowances, which the Bill proposes to increase by £80 for married persons and £60 for a single person. There are millions of rent-paying tenants who are protected by the State from paying an economic rent either by housing subsidies or through rent control. When considering relief from Income Tax, I am sure that the right way to take account of the factors to which the hon. Member referred—the size of income and the cost of the necessities of life, including the level of rents—is by the various personal allowances, and this my right hon. Friend has done this year. The Committee will bear in mind that the total cost of the remissions amounts to £240 million in a full year. The hon. Member referred to those whose incomes were below £20 a week. But 42 per cent. of the remissions in personal taxation will go to people with incomes of less than £1,000 a year.
    The cost of the hon. Member's proposal, I understand, would he £50 million in a full year, which is slightly more than the cost of abolishing Schedule A, but it would be unlikely to end there, and if an allowance were given for all rents—I accept that this is not the hon. Member's immediate intention—the cost

    1495
    would be in the region of £150 million. For these reasons, I ask the Committee to reject the new Clause.
    Mr. Houghton: It is a great misfortune that this Clause is debated at this hour of the night, for there could have been a good deal to say about it. My hon. Friend the Member for Ashfield (Mr. Warbey), with respect to him, did not develop the case for the Clause in the way in which I would have done had been moving it. He did not explain the significance of the relief proposed in the new Clause and why it is what it is.
    It arises directly out of the abolition of Schedule A on owner-occupiers. But for that, the new Clause would never have made its appearance on the Order Paper, at any rate not in its present form. It is the sort of thing which the right hon. and learned Member for the Wirral (Mr. Selwyn Lloyd) anticipated would arise if Schedule A were abolished on owner-occupiers. It was this sort of proposal which he said was a sobering thought when he was asked to abolish Schedule A. He specifically said that some such claim as this would be made and it would be costly. He said that he had to keep it in mind. It was to an extent a discouragement from abolishing Schedule A, because the cost of abolishing Schedule A on owner-occupiers, high as it was, would become higher still if he had to concede something in the way of rent relief. But only a week ago the Economist, in an article entitled "The Ghost of Schedule A", referred to the prospect that this sort of claim would be made and that Governments would hear repeatedly about it in the days to come. So, I believe, they will.
    12.30 a.m.
    It is too late to develop this case now, and I think we shall have to leave it to another occasion. But before I sit down I should like to explain why the proposal is that tax relief should be given on one-third of the rateable value in the case of the occupier of rented accommodation. For years now the owner-occupiers of dwellinghouses have been assessed for Income Tax purposes under Schedule A on annual values very much below the current rental value of their houses. The assessments have been broadly related to the
    1496
    annual values of 1939, and they were quite low enough even at 1939 values.
    Throughout the intervening years, although the Income Tax Act defined the assessment of the occupation of property owned by the occupier at the annual value on conventional lines—current rental value—owner-occupiers have, in fact, been paying tax on values which have long been obsolete. The new valuations are, broadly speaking, two and a half to three times the old valuations for rating purposes, and it seemed that if a rent allowance were to be claimed it would be appropriate that tenants should get tax relief on something equivalent to the old valuations since it was on the old valuations that the owner-occupier had been assessed. That is why it was suggested in the new Clause that to have relief not on the full current valuation of the house but on the broad equivalent of the valuation on which the owner-occupier had been assessed would be a fair compromise. That is the basis of the new Clause.
    As to the relative tax position of the owner-occupier and the tenant, there is a good deal that can be said about that. There is no question that in present circumstances the owner-occupier, the person who is buying his house, is buying an asset of appreciating value. He is buying it on mortgage granted to him on the current value of money which he will repay over the years at the present value of money. That also is a hidden asset in the eventual outcome of the transaction.
    However, I do not think that I should pursue the matter now. The Committee is weary; I am weary. These debates go on late into the night. We have a long day in front of us tomorrow and we have to see the Bill through Committee before we break off tomorrow night, or Friday morning. I will content myself with saying that I would be unhappy if this case went by default on the first occasion that it has been debated specifically on a new Clause. I think that I ought to allow it to rest at that. I do not want to get involved in a cross-argument about it. I just put on the record one or two of my thoughts on the subject. I know that there is an answer to it—I fully acknowledge that and the Financial Secretary was probably discouraged from deploying the reply to me because my hon.

    1497
    Friend invited him to reply to something else. That is just the state we get into when we carry on too late at night.
    I hope that when I sit down somebody will pop up quickly and bring this debate to an end, because I do not think that it would be profitable to continue it any longer. As long as what I have said is on the record for later consideration on another occasion, a more suitable occasion, I shall be content.
    Question put and negatived.
    Mr. Boyd-Carpenter: I beg to move,
    That the Chairman do report Progress and ask leave to sit again.
    As I indicated a little time ago, it seems to us that this is a good time to break off and start with the new group of new Clauses which Sir William indicated would be taken with the next new Clause. But I must warn the Committee that we have a very heavy programme ahead of us—I was about to say tomorrow, but in Parliamentary language it is this day—and it will require a good deal of hard work and co-operation if we are to finish tomorrow, as we must, without imposing on the Committee a very late sitting, indeed. I agree with the hon. Member for Sowerby that we have proceeded far enough this morning.
    Question put and agreed to.
    Committee report Progress; to sit again this day.

  HOUSING (GLASGOW'S OVERSPILL)
  Motion made, and Question proposed, That this House do now adjourn. — [Mr. MacArthur.]
  12.38 a.m.
  Mr. James McInnes (Glasgow, Central): I welcome the opportunity, even at this late hour of the morning, to deal with what I regard as one of the greatest social problems in this country, namely, that of Glasgow's overspill. At the outset may I briefly outline the problem which confronts the City of Glasgow and which has made overspill an absolute necessity? Although since 1919 Glasgow Corporation has built no fewer than 121,000 houses, there still remain 78,000 applications on the housing waiting list. Of the 329,000 houses in Glasgow, almost one-third are either sub-standard or
  1498
  totally unfit, while 34,000 people live more than four persons in one room and 19,000 more than three persons to one room. Almost half the houses in the city have only one or two rooms and more than 400,000 people are living in them. This is indeed a depressing picture and one which, in my submission, calls for drastic action.
  I want to examine the action the Government have or propose to take to deal with this grave social problem. I do not propose to go through the whole history leading up to Glasgow's overspill problems, because it would mean my going back to 1943 and the setting up of the Clyde Valley Regional Planning Advisory Committee which, in turn, appointed the late Professor Abercrombie to undertake the preparation of a plan for the whole of the Clyde Valley region. That plan was completed in 1946, but I shall content myself by starting with the year 1952.
  It was in that year that the then Secretary of State for Scotland invited the Clyde Valley Regional Planning Advisory Committee to undertake a study of Glasgow's overspill as a matter of extreme urgency. That Committee reported in 1954 and indicated that about 300,000 people would require to be overspilled outwith the City of Glasgow. That report resulted in the designation of the new town of Cumbernauld in 1956 and led eventually to the passing of the Housing and Town Development (Scotland) Act, 1957. That Act provided for Glasgow to export its 300,000 overspill to existing townships throughout Scotland and to the new towns then existing.
  The Act of 1957 set out administrative and financial arrangements under which Glasgow, as the exporting authority, would pay to the receiving authorities £14 per year for ten years for each family rehoused either in a reception area or in a new town. It is interesting to note what the then Joint Under-Secretary of State for Scotland, now Lord Craigton, said in Committee on the 1957 Act. He said:
  . we look upon this operation as a sort of first ten-year plan. Within that period the target is to provide 15,000 houses … in overspill areas of other local authorities; and another 20,000 houses in the two new towns." — [OFFICIAL REPORT, Scottish Standing Committee, 7th May, 1957; c. 811.]

  1499
  That is 35,000 houses, or an average of 3,500 a year for ten years. Exactly six years have elapsed since the passing of the 1957 Act. Under the target set by the Minister, of 3,500 a year, we should by now have built 21,000 houses, instead of which we have built only 6,923. In other words, we have achieved only one-third of the target.
  That is an appalling and deplorable record, and one cannot ignore the tragic effect that this lamentable failure on the part of the Government to achieve even their own modest target has had, with 14,000 Glasgow families having to remain in the sordid and squalid conditions in which they live in the city. At the present rate of progress that has been achieved over the past six years, it will take 84 years before we are able to remove the overspill of 100,000 from the city.
  The failure to overspill these families has created many other problems. For example, it has had the disastrous effect of retarding the redevelopment programme. Only by moving the population out of the city in large numbers will it be possible for Glasgow to proceed with its redevelopment policy within the city's 29 areas. Why have the Government failed so lamentably to deal with this problem? I think that the simple answer is that they are not prepared to face up to the expenditure involved. It is a simple matter of finance.
  They are not even prepared to provide any form of inducement to industrialists to move. Admittedly, they give—
  Mr. F. J. P. Lilley (Glasgow, Kelvin-grove): But that is not so. The Government do offer industrialists inducements.
  Mr. McInnes: I wish the hon. Member would let me finish my sentence.
  Admittedly, there is a measure of compensation for disturbance, but that is all, and that compensation is grossly inadequate, and not attractive enough to encourage industrialists to move farther afield. It is true that some of them have moved to Kirkintilloch, Cumbernauld and East Kilbride, but those places are on Glasgow's doorstep. Practically no industry has moved to such places as Stranraer, Wick or Dunbar, or the outlying places. Apart
  1500
  from the industrialists, what about the family that has to move? Apart from the disturbance caused by moving to, say, Wick, Stranraer or Dunbar, there is the cost of removal, but no compensation, no financial inducement, is given.
  I want to compare Glasgow's overspill with that of London. Between December, 1946, and October, 1949, eight new towns were provided to deal with London's overspill. Those new towns did not cost the London County Council or the London boroughs a single penny, and today 85,000 families are located in them. Since then, however, London has had its Town Development Act, 1952. What do the London boroughs pay to overspill families into reception areas and into new towns? They pay £4 a year to the Minister of Housing and Local Government for each family overspilled to a new town, and when they overspill a family into a local authority reception area they pay £8 10s. per family for ten of fifteen years according to an arrangement made under a voluntary agreement. In Glasgow the city has to pay £14 a year for ten years in respect of each family overspilled either to a local authority reception area or to a new town. That amounts to £140, and when the whole overspill operation is completed it will cost Glasgow £14 million.
  Why should Glasgow be saddled with this intolerable burden? What justification is there for this discriminatory and outrageous demand? Why should Glasgow ratepayers be asked to bear this burden? The dispersal of population and industry is a matter of Government policy, a policy based on strategic, economic and social considerations, and no Government should be allowed to evade their responsibilities on such a serious problem as overspill.
  I conclude by dealing with the much-vaunted White Paper on Housing, issued by the Government yesterday. What are the proposals in this White Paper for dealing with this great social problem? One sentence, which reads:
  "For Glasgow, the Scottish new towns and other overspill schemes will continue to play their part; within the period the Livingston new town will make a substantial contribution."
  There is one sentence, conveying absolutely nothing, and in essence it is a

  1501
  continuance of the negative policy that the Government have pursued ever since they tackled this problem. The Government stand condemned for their lamentable failure to deal with what I regard as the greatest social problem in the whole of this country.
  12.53 a.m.
  The Under-Secretary of State for Scotland (Mr. Gilmour Leburn): The hon. Member for Glasgow, Central (Mr. McInm;) has spoken with his usual clarity and forthrightness on this subject, on which we have heard him before, and he has made a number of criticisms of the Government's policy and programme concerning the question of Glasgow housing, with particular reference to overspill.
  I do not think the hon. Gentleman will expect me tonight, in the time that remains. to try to deal with our Government White Paper, but I will be very happy to discuss that with him in full on a later occasion.
  Mr. William Hannan (Glasgow, Mary-hill): It would not take very long.
  Mr. Leburn: We all understand and admire the hon. Member's close personal knowledge and awareness of what the Glasgow housing problem means. I shall try to demonstrate that that awareness is shared by the Government, and to show how, by our actions, we are contributing substantially and progressively to a solution.
  We are on common ground in our concern at the size and seriousness of the Glasgow housing problem. The hon. Gentleman has given certain figures. In this respect, I think that precision is impossible, and I propose to say no more than that we accept what is stated in Glasgow Corporation's 1960 development plan survey report:
  "The Corporation's redevelopment programme for the 1960–80 period is aimed at rehousing 100,000 families from the central areas, and the overspill which will be created by these operations will be approximately 60,000 families, involving in all probability at least 200,000 people".
  A redevelopment programme of that size is in itself an enormous undertaking, even if no overspill were involved.
  Under the Development Plan, the Secretary of State has approved 29 areas for redevelopment, some of which are already
  1502
  under way. Alongside this programme of major redevelopment, the corporation has undertaken a very comprehensive review of existing smaller sites within the city capable of use, or of more intensive use, for housing in the shorter term. I think that there is plenty of evidence, if one looks around Glasgow, of the energetic way in which the Corporation is tackling this. I myself have seen one or two of these schemes, and I mention particularly the schemes on the sites of the old Maryhill Barracks and the Duke Street prison.
  The number of houses actually under construction by the Corporation and the Scottish Special Housing Association in March this year was 6,430, as against 3,336 at the same time last year. There should be an output of well over 3,000 houses per year over the next few years.
  Mr. McInnes: Utter nonsense.
  Mr. Leburn: We hope also that the rate of output will be further increased by the adoption of new techniques of building which both the corporation and the association are considering.
  Even so, progress with redevelopment in the longer term—here I agree with the hon. Gentleman—must depend on the rate of overspill. This is an extremely complicated business, since we are entirely dependent on voluntary movement. No one can compel individual families to move from Glasgow; they must select themselves, so to speak. When families move out, the help which their departure gives to the corporation's redevelopment programme may be very indirect, and a lengthy chain of decanting may be necessary before families in the redevelopment areas can benefit. There is, however, really no other way of operating a fair and democratic overspill scheme.
  There is no doubt as to the readiness of very many local authorities throughout Scotland to participate in the overspill programme. Overspill agreements have now been approved between 46 local authorities and Glasgow Corporation covering the provision of nearly 10,000 houses outside the new towns, apart from the further contribution which the Government are prepared to make in each case by way of houses built by the S.S.H.A.
  It is, of course, a far cry from the completion of overspill agreements to

  1503
  the actual housing of Glasgow families. Since there is no purpose in committing houses until jobs are assured for Glasgow workers to come to, it may be a very long time before the agreements are implemented. Nevertheless, many local authorities are ready to make a small number of houses available as an earnest of their intentions, and varying numbers of Glasgow families have already been accommodated in as many as 18 receiving areas excluding the new towns.
  The key to increased overspill movement is jobs in the reception areas, and filling as many of these as possible with workers from Glasgow.
  The two industrial developments making the greatest contribution to overspill movement at present are the Rootes-Pressed Steel development at Linwood and the B.M.C. development at Bathgate. Already about 500 of the Glasgow workers recruited at these factories have been housed under the overspill arrangements. More than 2,800 further houses for overspill families are under construction or about to be started in the surrounding areas.
  I know that when the Housing and Town Development (Scotland) Bill was before the House in 1957 an estimate was given that in a period of 10 years 20,000 houses would be built for overspill in the new towns and 15,000 in the other reception areas, an average, as the hon. Gentleman says, of 3,500 a year, and it is certainly true that that target has not yet been hit. I think that if the hon. Gentleman considers it for a moment he will see it would have been unrealistic to have expected houses to be started actually before 1959, after the passing of the 1957 Act.
  If we take the period from the beginning of 1959 to the end of March this year the total number of overspill houses built was about 6,500. Of those 656 were completed in the first quarter of this year alone, by far the largest number in any quarter so far. Output is rising from all sources, and I believe that there is every prospect that at least 3,000 houses will be ready this year. This is not all. During the same period, January, 1959, to March, 1963, the Corporation and the S.S.H.A. built 11,852 houses within the city. Over the next year they should build 10,000 more, and
  1504
  this is a much larger continuing building programme within the city than we ever thought sites could be found for in 1957.
  Mr. McInnes: Ten thousand a year? Surely not.
  Mr. Leburn: I said or intended to say, in the next three years.
  If we add to this the output of the reception areas where 9,500 houses should be built in the next three years we have a total over the seven years from 1959 to 1965 of the order of 37,000 houses or well over 5,000 a year. I think this is no mean achievement.
  The hon. Gentleman suggested, I think, that we were not giving Glasgow sufficient assistance in this matter of overspill. I think when he makes his criticism he really does not fully appreciate what in fact the Government are doing. The Government are playing a very major direct part in this programme in two ways—through the Scottish Special Housing Association, and through the new towns. Virtually the whole of the Association's activities are being directed at the Glasgow problem both by assisting the Corporation's housing effort within the city and by assisting the efforts of local receiving authorities. This, along with the special subsidy for overspill houses built by local authorities, represents a major contribution on the Government's part, and a form of Exchequer assistance which is not available to assist any other local housing programme. The Scottish new towns programme which in its present form represents a Government commitment of something like £170 million is also largely directed at assisting the Glasgow problem. At the present time 3,235 houses are under construction in the new towns and the vast majority of these will be let to Glasgow families.
  I know that the hon. Gentleman feels that insufficient speed is being made with the building at Cumbernauld and the new town at Livingston. I would agree with him that up to date building at Cumbernauld has been disappointingly slow, but they are making headway now and they have been faced with formidable difficulties. I believe that Livingston can make a tremendous impact on this

  1505
  question of Glasgow overspill. But I think that it would be wrong to rush at Livingston before we have had time for it to be properly planned. Unless we do that we may regret later on having rushed the matter.
  I agree with the hon. Member that we have a long way to go on this immense problem of Glasgow overspill, but I believe that a good deal has been done. I am confirmed in this view by a most comprehensive analysis of the whole subject of overspill made by the convenor of Glasgow Corporation's Overspill Commitlee, in a paper which he read in March to the Annual Scottish Conference of the Institute of Housing. The conclusions which he reached were:
  "The progress made to date can be regarded as justifying the practicability of the plan to rehouse 60,000 Glasgow families in expanded and New Towns throughout Scotland. There has been an immediate and significant contribution to the city's housing need, Glasgow and non-Glasgow firms have provided the jobs necessary to achieve this and to facilitate the construction of many thousands. of new overspill houses over the next five years, Glasgow workers have made it possible for the Reception Areas to increase their attractiveness to expanding industries and the Receiving Authorities, Glasgow Corporation and central Government Departments have achieved a level of co-operation which promises well for the future"
  1506
  I suggest to the hon. Member that those conclusions provide a fair representation of the overspill movement and the opportunities it presents, and acknowledges in a generous way the tremendous efforts which are being devoted in a wide range of local government to the solution of this major social problem which the hon. Member and myself have at heart.
  Mr. William Ross (Kilmarnock): The Under-Secretary of State said that we have still a long way to go. We can judge how long that way will be only by the promises given in the past and the performance we have so far seen. The hon. Gentleman was not in the House at the time, but I recall very well the occasion when the noble Lord Craigton, as he now is, made a speech on overspill. I can well remember, as no doubt you do Mr. Deputy-Speaker, the long debates we had, for one of which we sat all night.
  The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at eight minutes past One o'clock.

  SOUTH AFRICA (SIMONSTOWN NAVAL BASE)
  SOUTH AFRICA (SIMONSTOWN NAVAL BASE)
  DISARMAMENT
  DISARMAMENT
  NORTH ATLANTIC COUNCIL (OTTAWA MEETING)
  NORTH ATLANTIC COUNCIL (OTTAWA MEETING)
AGRICULTURE, FISHERIES AND FOOD
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  Vending Machines (Milk)
  Antibiotics in Milk (Report)
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  Forestry Training School (Lynford Hall)
  Forestry Training School (Lynford Hall)
  Smallholdings (Committee)
  Smallholdings (Committee)
  Sugar
  Sugar
MINISTRY OF DEFENCE
  N.A.T.O. (V-bomber Force)
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ROYAL NAVY
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Preamble
The House met at two of the clock, The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Birmingham

PLANT-BREEDERS' RIGHTS
LORD WALSTON: 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 when they intend to introduce legislation to implement the recommendations dealing with plant-breeders' rights contained in the Report of the Committee on Transactions in Seeds published in December, 1961.]
EARL FERRERS: My Lords, the Agricultural Departments are at present working on proposals for legislation on plant-breeders' rights, to give effect to the recommendations of the Committee on Transactions in Seeds. As your Lordships will be aware, from the statement which my right honourable friend made in another place at the end of 1961, these recommendations have been accepted by Her Majesty's Government, who have decided to give effect to them.
The broad effect of the legislation will be that the breeders of new varieties of plants will be able to acquire legal rights in them for a limited period, much as patents may be obtained for new inventions. There have been discussions recently with the organisations concerned on the Government's detailed proposals, and I am glad to say that these confirmed that a very wide measure of agreement exists within the industry on the Government's proposals. This will much encourage Her Majesty's Government when the time comes to introduce the Bill, although I cannot at present say when it will be possible to find a place in the Government's legislative programme for this measure.
LORD WALSTON: My Lords, I am grateful to the noble Earl for his Answer,
844
but is he aware that this extremely long delay in introducing legislation is having a very serious adverse effect, directly on plant breeders and indirectly, and perhaps more importantly, on agriculture? I would ask him, further, whether he is aware that this is caused by the fact that breeders are naturally awaiting the introduction of such legislation before embarking upon the very expensive processes of breeding new seeds, and because those who have arrived near to the stage of putting new varieties on the market are, quite reasonably, holding them up in order to gain the protection of the announced legislation. Would he therefore give some indication that the Government are viewing this question with some greater urgency than they have done in the past, and that the industry and, in particular, agriculture can look forward to the early introduction of legislation?
EARL FERRERS: I can assure the noble Lord that Her Majesty's Government are fully aware of the importance of legislation, but, as the noble Lord is well aware, Parliamentary time is fully occupied, and it is a question of priorities. Her Majesty's Government have this matter very firmly in mind, and will do all they can to introduce legislation as soon as it is feasible.

EASTER ROAD CASUALTIES
2.6 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have completed the analysis of the Easter road casualty figures and, if so, with what results.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM): My Lords, I regret to say that the final figures show that in the five days from Thursday, April 11, to Easter Monday, 113 people were killed and 1,551 seriously injured in road accidents. At Easter, 1962, 83 people were killed and 1,395 seriously injured. This is a most disappointing result, which

845
cannot be explained by the increase in traffic between 1962 and 1963. The day-by-day figures show that there were particularly large increases in casualties on the Thursday and on Good Friday. The detailed analysis, which with your Lordships' permission I will circulate in the OFFICIAL REPORT, does not suggest any

NUMBERS KILLED AND SERIOUSLY INJURED AT EASTER*

—

Killed

Seriously injured

Killed or Seriously injured

Percentage change 1962–1963

1962

1963

1962

1963

1962

1963

Killed or seriously injured

Estimated motor traffic

Thursday

19

27

263

315

282

342

+ 217

—

Friday

13

31

248

319

261

350

+ 34

+ 15

Saturday

19

19

341

345

360

364

+ 1

+ 13

Sunday

13

17

271

264

284

281

− 1

− 9

Monday

19

19

272

308

291

327

+ 12

− 1

83

113

1,395

1,551

1,478

1,664

+ 13

+ 3

* From Thursday, April 19, to Monday, April 23, 1962; from Thursday, April 11, to Monday, April 15, 1963.

NUMBERS KILLED OR SERIOUSLY INJURED AT EASTER BY TIME OF DAY BUILT-UP AREAS

—

Easter, 1962

Easter, 1963

Thurs.

Fri.

Sat.

Sun.

Mon.

Thurs.

Fri.

Sat.

Sun.

Mon.

Midnight-6 a.m.

5

9

7

19

3

2

17

5

21

18

6 a.m.-Noon

42

19

33

15

23

42

36

34

13

24

Noon-4 p.m.

50

37

60

44

42

61

36

73

45

47

4 p.m.-6 p.m.

35

21

34

21

26

37

32

27

14

29

6 p.m.-10 p.m.

45

22

39

27

30

38

32

30

30

17

10 p.m.-Midnight

25

19

52

25

26

28

48

57

33

35

202

127

225

151

150

208

201

226

156

170

NON-BUILT-UP AREAS

—

Easter, 1962

Easter, 1963

Thurs.

Fri.

Sat.

Sun.

Mon.

Thurs.

Fri

Sat.

Sun.

Mon.

Midnight-6 a.m.

2

10

4

8

2

8

15

10

24

6

6 a.m.-Noon

17

34

19

18

31

30

33

27

19

28

Noon-4 p.m.

9

26

35

41

37

33

22

29

30

47

4 p.m.-6 p.m.

9

24

28

33

23

27

23

15

13

17

6 p.m.-10 p.m.

27

13

28

22

34

17

27

26

24

40

10 p.m.-Midnight

16

27

21

11

14

19

29

31

15

19

80

134

135

133

141

134

149

138

125

157

single factor which could have accounted for these increases. The results will emphasise the many special dangers on the roads at Bank Holiday periods, which I hope everyone will bear in mind over the coming week-end.
Following is the analysis referred to:

ALL AREAS

—

Easter, 1962

Easter, 1963

Thurs.

Fri.

Sat.

Sun.

Mon.

Thurs.

Fri.

Sat.

Sun.

Mon.

Midnight-6 a.m.

7

19

11

27

5

10

32

15

45

24

6 a.m.-Noon

59

53

52

33

54

72

69

61

32

52

Noon-4 p.m.

59

63

95

85

79

94

58

102

75

94

4 p.m.-6 p.m.

44

45

62

54

49

64

55

42

27

46

6 p.m.-10 p.m.

72

35

67

49

64

55

59

56

54

57

10 p.m.-Midnight

41

46

73

36

40

47

77

88

48

54

282

261

360

284

291

342

350

364

281

327

NUMBERS OF EACH CLASS OF ROAD USER KILLED OR SERIOUSLY INJURED AT EASTER

Easter 1962

Easter 1963

Built-up areas

Non-built-up areas

All areas

Built-up areas

Non-built-up areas

All areas

Pedestrians

300

31

331

310

56

366

Pedal cyclists

71

32

103

83

28

111

Motor cycle, scooter and moped riders and passengers

258

214

472

225

188

413

Car drivers and passengers

155

289

444

264

363

627

Goods vehicle drivers and passengers

39

48

87

48

50

98

Other road users

32

9

41

31

18

49

855

623

1,478

961

703

1,664

LORD LUCAS OF CHILWORTH: My Lords, I can only concur in what the noble Lord has said. These are appalling figures—I repeat, appalling figures. I would ask the noble Lord this. Is it not shocking that the Ministry of Transport do not place any concrete suggestion before this House—there is no trend of improvement or anything else—and that we have to go on, month in and month out, with expedient after expedient, while on and on goes the terrible toll on the roads? The noble Lord must realise I know he does—the shocking state of affairs that exists. I think it is time the Committee over which he presides at the Ministry, the National Safety-First Committee, took this matter really in hand. We cannot go on like this. I ask him, with his right honourable friend the Minister, to give the matter even more serious attention than they are giving it at the present time.
LORD CHESHAM: My Lords, I do not think I need to reassure your Lordships that we never stop thinking about these things. I do not know whether or
848
not the noble Lord intended an implication that the conduct of the Ministry of Transport in this matter was shocking.
LORD LUCAS OF CHILWORTH: Let me say this straight away. The figures are shocking. The criticism I would have of the Ministry, if the noble Lord will allow me to say so, is that we have gone from expedient to expedient—we have one in the experiment which is being tried now—but we make no impress upon this shocking problem.
EARL HOWE: My Lords, may I ask the noble Lord who has just spoken whether he has noticed the new rules which the Minister of Transport has said will come into force on, I believe, the 29th of this month?
LORD CHESHAM: My Lords, I do not want to argue it out with the noble Lord, Lord Lucas of Chilworth, here and now, because Question Time is not the moment to do it, but I certainly do not go with him all the way when he implies that we are desperately or wildly trying expedient after expedient. We certainly

849
try a number of experiments, as well as other things that have been done. I think that, so far as my right honourable friend's Department is concerned, we are as conscious, if not more conscious, of the dire necessity in these matters as anyone else.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, could the Minister tell us what would be the increase in the number of vehicles licensed at the time of this Easter holiday he is referring to, as compared with the number at Easter last year?
LORD CHESHAM: Without notice, I could not give the exact figure, but I understand that the overall traffic figure represents something like (this is an indication only) an increase of 10 per cent.
EARL ALEXANDER OF HILLSBOROUGH: I can understand that it is not easy to provide additional road improvements to match an apparent increase in traffic of 10 per cent. year by year. That accounts for the enormous expense already; I do not know what it is proposed to do about that. But certainly I do not think the general public would have any complaint to make if penalties were very much increased.
LORD LUCAS OF CHILWORTH: And the law enforced, too.
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, I feel, with the noble Earl, that we should take this matter extremely seriously, but, for instance, the outcry against the introduction by my right honourable friend of the Regulations which both Houses of Parliament in effect approved in the recent Road Traffic Act makes, I think, a somewhat melancholy commentary upon some of the things which are said.
VISCOUNT ST. DAVIDS: My Lords, will the noble Lord not agree that there is one common factor in all these accidents, and that is that all these people were on the roads? Will the noble Lord tell us what casualties, if any, there were upon the railways over the same period? Would the noble Lord add the figures of these casualties to the Beeching figures?
LORD CHESHAM: My Lords, without notice I cannot give the noble Viscount the information he desires, because the Question we have before us relates to road casualties.
LORD LUCAS OF CHILWORTH: My Lords, the figures which the noble Lord gave just now were 113 killed and 1,551 seriously injured. If I put a Question down after the Whitsun Recess, would he be prepared to tell the House how many prosecutions were made in connection with the accidents which caused those fatalities and injuries?
LORD CHESHAM: I could not guarantee to do so, because I do not know whether I could assemble the information at the time the noble Lord puts his Question down after the Recess. I cannot tell him at what stage there might be some figure given in that connection. But, as always whenever the noble Lord puts down a Question, I can try to answer it.
LORD LUCAS OF CHILWORTH: Would the noble Lord not agree with me that those figures would, at least, show the House the efficacy of our enforcement and of the things we have tried to do in the various Road Traffic Acts which have been passed? They would show whether or not punishment is a deterrent to wrong-doing. Will he let me know when I can put down the Question? It may be some time ahead, but I will gladly do it.
LORD CHESHAM: I shall be glad to comply with what the noble Lord wants. I am not sure whether the figures will be conclusive proof of one thing or the other in this matter. But I agree with the noble Lord, they would be interesting.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, as I understand there are conferences or considerations undertaken by the Minister of Transport with regard to the co-ordination of road or rail traffic, may I ask the noble Lord to consider whether some steps could be taken to see that a good deal of the very heavy traffic, some of which I agree does not run in holiday times, is further expedited by putting more heavy stuff on the rail instead of on the road?
LORD CHESHAM: My Lords, that raises a wider consideration altogether. It might be almost as well to consider putting more people on the railways.

STANDS FOR TROOPING THE COLOUR
LORD AMULREE: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government—

(1)how long it takes to erect the stands upon the Horse Guards Parade for the benefit of those who wish to watch the ceremony of Trooping the Colour;

(2)when work started upon the erection of these stands this year;

(3)when will the stands be dismantled and removed.]

THE MINISTER OF STATE, HOME OFFICE (EARL JELLICOE): My Lords, the answer to the first part of the noble Lord's Question is that the erection of the stands normally takes some six weeks. Work on the War Office balcony stands started on April 8, and on the other stands on the Parade Ground on April 25. Dismantling will begin on Monday, June 10, and is due to be completed in about a month.
LORD AMULREE: My Lords, I thank the noble Earl for his reply, but I wonder whether he would look into the question of whether that work could not be done rather more quickly. It means that this fine Parade is obscured by scaffolding and stands for a longer time than is necessary. Could the noble Earl look into that question?
EARL JELLICOE: My Lords, I will, of course, bring the noble Lord's observations to the attention of my right honourable friend and his Department. Anticipating the noble Lord's supplementary question to a certain extent, I have already looked into it and find that there are a number of practical difficulties, such as the uneven terrain, which make it difficult to speed up this particular work. But I will certainly see that his point of view receives further attention.
LORD FARINGDON: My Lords, I wonder whether the noble Earl could induce his Department to devise a system for this work, which is done every year. He says that the terrain is difficult. But it seems to me that it
852
would be possible to have permanent holes to take the points of the scaffolding. This is a procedure—and I ask the noble Earl to look at it—which ought by now, surely, to be done absolutely automatically.
EARL JELLICOE: My Lords, as I have already said I will have this particular point looked into again, and I will also have the possibility which the noble Lord mentioned examined.

TIDYING-UP OF HYDE PARK
LORD AMULREE: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government when the blocks of stone lying behind the Powder Magazine in Hyde Park will be removed and the building of which they formed a part re-erected.]
EARL JELLICOE: My Lords, it is hoped to tidy up the whole area by the end of the summer. The objects which are at present stored there had to be removed when work on the Park Lane improvement scheme started, the bulk of the material having formed part of the dismantled Cumberland Screen which used to stand at the Marble Arch end of Hyde Park. Their future has still to be decided.
LORD AMULREE: My Lords, I should like to thank the noble Earl for his reply.

BUSINESS OF THE HOUSE
2.16 p.m.
EARL ST. ALDWYN: My Lords, I should like to inform the House that at a suitable moment after 3.30 p.m. my noble friend Lord Chesham will be making a statement on the shipbuilding industry.

LONDON COUNTY COUNCIL (IMPROVEMENTS) BILL
Read 2a, and committed to a Select Committee.
LONDON TRANSPORT BILL
Read 2a, and committed to an Unopposed Bill Committee.

PEDESTRIAN CONTROLLED VEHICLES REGULATIONS 1963
LORD CHESHAM: My Lords, I beg to move that the Pedestrian Controlled Vehicles Regulations 1963, dated May 9, 1963, a copy of which was laid before this House on May 14, 1963, be approved. These Regulations are made under Section 10(5)(b) of the Road Transport Lighting Act, 1957, and Section 254 of the Road Traffic Act, 1960, which give my right honourable friend the Minister of Transport power to specify mechanically propelled vehicles which shall be treated as not being motor vehicles for the purposes of the Road Traffic Act, except Part IV of it, and as being hand-propelled for the purposes of the Road Transport Lighting Act.
It has been put to my right honourable friend that the present controls on certain pedestrian controlled vehicles, such as milk floats, are unduly onerous and restrictive when one considers the very limited capacity they have for causing damage. Obviously, from the fact that they are pedestrian controlled, their speed is restricted to walking pace. Therefore, and in particular, the necessity for the pedestrian controller to have to match the same eyesight requirements of the driver of a 10-ton lorry or a Jaguar seems overdoing it somewhat, when it results in a number of otherwise suitable people not being allowed to be employed in this job. One particularly hard case of a milkman in Blackburn whose eyesight was just short of the required standard has produced strong representations, which included a petition signed by a large number of residents, and the case was supported, I understand, by the Chief Constable himself.
It is not possible under the Road Traffic Act as it stands to relieve these drivers—if that is the right term—of the need to be in possession of a driving licence so long as the vehicles themselves remain classed as motor vehicles for the purposes of the Act. It would have been possible merely to alter the eyesight requirements for these drivers in the driving licence regulations, but this involves considerable practical and administrative difficulty and complication, and after careful consideration of all the implications, including road safety, my right honourable friend
854
thought that the better course was to use the powers given to him by Section 254 of the Road Traffic Act, 1960, to make these regulations.
If your Lordships approve the regulations, drivers of these vehicles will no longer be required to have licences, and there will be certain other consequential effects. For instance, third party insurance will no longer be compulsory and the Construction and Use Regulations will no longer apply. However, those of them—and they are the great majority—which are used for the carriage of goods will continue to be motor vehicles for the purpose of Part IV of the Road Traffic Act, 1960, which deals with the regulation of goods vehicles and carriers' licences. Under these provisions vehicle examiners have powers of inspection which include the right to prohibit the carriage of goods by a vehicle which may be unfit for service on account of any defect. Other statutory provisions which will continue to apply are those of the Vehicles Excise Act, 1962, under which they must be registered and licensed for purposes of revenue and identification.
It is just possible—though I think it is likely to be very rare—that these effects might prejudice the interests of other road users, and in order to meet this kind of objection my right honourable friend has decided that the Regulations should be confined to vehicles under 8 cwt. unladen weight, which is a minority of the whole class of mechanically propelled pedestrian controlled vehicles. I cannot be absolutely precise, but it has been estimated that there are about 3,400 vehicles under 8 cwt., out of a total of some 8,000 pedestrian controlled motor vehicles on the roads. Most of them are milk floats, but some also are used for delivering bread or other commodities, collecting refuse and street sweeping.
The noble Lord, Lord Faringdon, gave me notice that he was worried about the consequences of these Regulations as they affect lighting requirements. As the law stands, it is impossible to exempt these vehicles from the motor vehicle provisions of the Road Traffic Act, 1960, without at the same time causing them to be treated as hand propelled vehicles for the purposes of the Road Transport Lighting Act, 1957. This means that vehicles between 2 ft. 6 ins. and 4 ft. wide will need only one side light and either one

855
rear light or one reflector and those over 4 ft. wide, two side lights and one rear light or reflector.
My right honourable friend is not fully satisfied that these lighting requirements, which apply to hand barrows and things like that, are adequate for even such a slow mechanically propelled vehicle in modern traffic conditions, and we are, therefore, taking another careful look at the lighting regulations. I assure noble Lords that, if need be, they will be amended to make certain that both front and rear lighting will be really adequate for safety on the roads at night.
These Regulations, which I now ask your Lordships to approve, are a very modest relaxation of the present strict requirements relating to motor vehicles as they apply to a small class of very innocuous road-users. I want to emphasise that they are intended to be strictly experimental in character, and I can definitely assure the House that, if there are any adverse consequences, my right honourable friend will have no hesitation in proposing to revoke them. I beg to move.
Moved, That the Pedestrian Controlled Vehicles Regulations, 1963, be approved.—(Lord Chesham.)
LORD REA: My Lords, unless I did not hear the noble Lord correctly, I gather that people in charge of these vehicles under one cwt. would not be required to have a driving licence or third party insurance. Is there any safeguard against control of these vehicles by a small boy of nine or ten, or somebody else, who may not be quite so responsible as one would wish?
LORD CHESHAM: My Lords, I will be perfectly frank with the noble Lord. I think that there is, but I am not certain what it is. May I take steps to find out and reassure the noble Lord on that point?
LORD REA: My Lords, that was a question, not criticism.
LORD FARINGDON: My Lords, I gave the noble Lord notice that I should oppose these Regulations this afternoon, for the reasons which he has given. At that time, I did not appreciate the technical difficulties which he has outlined to your Lordships this afternoon, but it seems to me that these technical difficulties
856
could be met by a provision in the Regulations under which, though these vehicles would cease to be treated as mechanically propelled vehicles, they would still be required to carry the same lighting as mechanically propelled vehicles. I fully take the noble Lord's point about requirements for the people who are in control of these vehicles and that to treat a vehicle moving at walking pace like other mechanical vehicles seems ridiculous. On the other hand, just because the vehicle is slow moving it does not cause less danger on the highway. Indeed, it might be said that it can cause even more. Therefore, I hope your Lordships will refuse to pass these Regulations. Surely slow-moving vehicles require more hind-lighting than fast moving vehicles, which, after all, are overtaking. With fewer lights, they would become an additional danger on the road.
Moreover, I can see no reason why they should be relieved from the necessity for third party insurance. If any alteration were to be made, I should prefer that the alteration should be exactly in the opposite sense: that vehicles which are now exempt should be made subject to the same lighting and insurance laws as those to which mechanical vehicles are subject. I regret very much that, unfortunately, owing to the fact that these are Regulations, we are forced to throw the baby out with the bath water. None the less, since I regard the bath water as being dirty—in other words, since I regard the additional provisions of these Regulations as undesirable and adding to the danger on our roads—I must ask your Lordships to reject the Regulations.
2.29 p.m.
LORD LUCAS OF CHILWORTH: My Lords, perhaps the noble Lord in charge would like to answer all the criticisms together. I certainly cannot agree. I think that this is a most retrograde step. Earlier this afternoon the noble Lord read out the appalling figures of road accidents, and now he is asking us to agree that any mechanically propelled vehicle not exceeding 8 cwt.—not 1 cwt., as the noble Lord, Lord Rea, the Leader of the Liberal Opposition, said—need not be insured for third party risks.
LORD CHESHAM: My Lords, I am sorry to interrupt the noble Lord, but I

857
did not say "any mechanically propelled vehicle". I said, "any mechanically propelled vehicle controlled by a pedestrian."
LORD LUCAS OF CHILWORTH: I omitted the hand operated. I can assure the noble Lord that I should not feel in any way relieved, if an 8 cwt. vehicle hit me from behind, because it was pedestrian controlled or not. And if there is no compulsory third-party insurance, who pays? The mopeds (I believe I am right, and the noble Lord will correct me if I am wrong) and the lightest form of motor cycle have to have compulsory third-party insurance. Why do we lift third-party insurance from this obstruction on the highway?—and it is upon the highway. It is not like a lawn mower that trundles along on a pavement.
Then, it is absolved from all the provisions of the Construction and Use Regulations. It need not have any brakes at all, in law, unless it is found out by a Ministry of Transport examiner that it is not fit to be on the road. But why relieve it from the Construction and Use Regulations, which require a vehicle of this size to have proper brakes, proper steering and to be in a fit mechanical condition? Then, as regards lights, I cannot imagine why a Regulation like this has been brought forward which does not require the requisite amount of lights on a vehicle of this size. An 8 cwt. vehicle is a sizeable vehicle. I suggest to the noble Lord that the only reason he has brought to your Lordships in support of this is that one semi-blind individual in Blackburn—
EARL ALEXANDER OF HILLSBOROUGH: Semi-blind?
LORD LUCAS OF CHILWORTH: His eyesight was impaired. He was not allowed to manipulate one of these vehicles, and it was a case of hardship. That may be so, but it is no reason to bring forward a Regulation which says this vehicle can be absolved from all third-party insurance. We all know that one of the weaknesses of Regulations to-day concerns people who do not have third-party insurance; any magistrate knows that.
I suggest that the noble Lord should take these Regulations back and have a look at these points. I do not want
858
to say that a man who drives one of these pedestrian-operated milk floats must have a driving licence, but there are such considerations as lighting, mechanical soundness, third-party insurance, and, for some, age limit, as the noble Lord, Lord Rea, says. I cannot see why anybody—even a junior—should be permitted to operate one of these pedestrian-controlled vehicles without needing to have a licence. I ask the noble Lord to take these Regulations back and to bring them forward again after they have been looked at. It is all very well to say that this is only an experiment, and if the Ministry find out it is not successful, they will alter it. I would rather see all these doubts and apprehensions cleared away before this ever becomes law.
LORD WILLIAMS OF BARNBURGH: My Lords, may I ask the noble Lord, before he replies, how many, if any, accidents have occurred involving these vehicles over the past twelve months?
LORD HAWKE: My Lords, I was going to ask that question, too, but I should also like to ask my noble friend to what degree these Regulations affect the use of grass-cutting machines on the highway, because if they do make an honest man of every gardener who runs his mechanical scythe along the edge of the road, I welcome them. I think the noble Lord, Lord Lucas of Chilworth, is making a great bother out of very little.
LORD CHORLEY: My Lords, I feel that my noble friend Lord Faringdon has done a considerable service in bringing out this question of insurance. These vehicles have an exceptionally full lock, and I should think that twice, if not more, during the last few weeks I have nearly come into collision with one of them because they come out into the road unexpectedly quickly. I think it would be quite dangerous to remove any obligation to make compensation, which is provided for by the compulsory insurance system, in this sort of case, because whether or not there have been a number of accidents, I am sure that on some occasions they have been only narrowly averted. I feel that this particular difficulty, which is no doubt a very real one (and suffering, to some extent, from defective vision myself, I sympathise

859
with the man at Blackburn), ought to be overcome in some other way than by possibly destroying the compensation of some unfortunate individual who may be damaged as a result of this rapid movement out into the road, which I think is typical of this sort of vehicle. If the noble Lord has not seen it, I am sure that many other motorists have.
LORD CHESHAM: My Lords, there are a number of interesting points before us, and I cannot help thinking, as I shall go on to mention in a moment, that some aspects of this, if noble Lords will allow me to say so, have been a little overstated. The noble Lord, Lord Faringdon, mentioned the question of lighting, and said, "Could this not have been specified under this Regulation?" Of course, it could not be specified under this particular Regulation which refers to driving licences. I would, however, remind the noble Lord that I have already given the House an undertaking that my right honourable friend will further consider this matter and take action akin to what noble Lords have suggested is necessary if further consideration indicates that it should be taken.
On the point of insurance, I think we are tending to overlook that, although, as the noble Lord, Lord Chorley, has said, these vehicles are mobile and very manœuvrable, they are in fact extremely slow. I do not know whether the noble Lord, Lord Lucas of Chilworth, anticipates a serious bang in the back from a vehicle led by a man proceeding at walking pace; but even conceding that that might happen, and that the conductor of the vehicle failed to push him out of the way at the critical moment, it is still possible that he might be tripped up, or have his knee knocked in some way that would give rise to damages. But in that case he would be entitled to claim them under the due processes of the law, in exactly the same way as he would be if he happened to be "knocked for six" by a bicycle, which I suppose, when your Lordships consider it, is a more likely thing to happen. In exactly the same way the noble Lord, Lord Chorley, could have recourse to the courts if one turned out rapidly from a kerb and diverted him from his course so that he suffered damage.
LORD CHORLEY: Cannot the noble Lord see that this argument is against compulsory insurance altogether? The whole object of compulsory insurance is to ensure that a man who has not financial backing can in fact meet the compensation which the court awards.
LORD CHESHAM: I cannot see that it is an argument against compulsory insurance altogether, because I think for the broad class of motor vehicles it is the perfectly right thing. I am merely saying that in this particular instance we are talking about it does not seem to me to be a reasonable proposition.
The noble Lord, Lord Williams of Barnburgh, asked about accidents. Unfortunately, the statistics do not show positively what the numbers of accidents are.
LORD WILLIAMS OF BARNBURGH: Are there any?
LORD CHESHAM: I understand that there are. I understand that they are not many; but more than that I cannot say. That argument, I would admit, is based on what I claim to be the inherent innocuousness—if that it the right description—of these vehicles.
It seems to me that these Regulations as they stand are not unreasonable. I think it would be reasonable to try them. I have given an undertaking that if what noble Lords fear should occur—which we do not think will happen—they will be reviewed and, if necessary, revoked. But this seems to me in the circumstances a reasonable change. It is not so long ago that it was considered necessary to have a man with a red flag in front of a motor car. That is now considered a somewhat out-of-date provision; but here we are dealing with vehicles with a man in front of them. In answer to my noble friend Lord Hawke, the present requirement does not apply to grass-cutters and so on. They are already exempted under the Road Traffic Act, and have been for two or three years. With this class of vehicle, I think it is reasonable to ask your Lordships' approval for this change, and I hope that you will give it.
LORD CHORLEY: My Lords, if the result of this change is that there are accidents for which compensation will

861
be recoverable, will the Government be prepared during this intervening period to find the funds for the compensation? That might well influence me in the way I shall vote.
LORD CHESHAM: No, my Lords. I will not be persuaded to offer the noble Lord some carrot to sway his vote.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I should be very unhappy if we had to go to a Division on this matter at the present time because of all the circumstances. I feel that I have rather a political interest in the matter, because part of the reason for introducing these Regulations was to meet the case opened up by a Member of another place, Mrs. Castle, of Blackburn; and the Government have been seeking to meet her. On the other hand, there is substance in some of the points raised, and I wonder whether the noble Viscount the Leader of the House might consider—I cannot expect the Minister concerned to say—whether it would be possible for this matter to be delayed a short time, in view of the fact that some points could possibly be put right, so far as the Minister of Transport himself is willing to do it, before coming to us for a final decision.
VISCOUNT HAILSHAM: My Lords, the noble Earl who leads the Opposition has appealed to me. I am only too anxious to meet the needs of the House, and also the requirements of the Regulations. I have not studied what they are, and sometimes there is more in these things than meets the eye. If the noble Earl would agree, they could come in tomorrow, if need be—because we may require them by Whitsun. I think I could ask my noble friend to withdraw them to-day. But I do not know what the requirements are. They have been passed by another place, and I should not like offhand to withdraw them or to undertake not to put them back to-morrow. If that would meet the noble Earl, I would gladly go as far as that.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, that would enable us to make some inquiries in another place as to what their view is about the matter. I think it would be a
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sad precedent if we started dividing on something which has been passed by regulations as a sort of Statutory Order. We had some sort of understanding on things in the past, so I think we must be rather cautious about it.
VISCOUNT HAILSHAM: My Lords, I want neither to avoid nor to provoke a Division, but on that understanding I will ask my noble friend to ask leave of the House to withdraw them to-day, and perhaps we can bring them back tomorrow if that proves necessary.
LORD FARINGDON: My Lords, as the mover of the Motion for rejection, I shall be satisfied if the noble Lord will do what the noble Viscount the Leader of the House has suggested, and take back the Order and reconsider it. But I hope he will reconsider it very seriously. Some of us are quite considerably disturbed about these provisions which would seem to increase the danger on the roads. I should have thought the roads were quite dangerous enough. If I may say so, with respect, if the Minister wishes to avoid trouble, perhaps it would be as well to postpone the Order until after Whitsun.
LORD CHESHAM: My Lords, I hope the noble Lord will acquit my right honourable friend and myself of seeking to do something which we consider to be detrimental to road safety.
LORD FARINGDON: My Lords, I should not dream of suggesting that the noble Lord, for whom I have the greatest respect and for whose views on this kind of subject I have a great deal of sympathy, would do anything to make it more dangerous on the roads. But in fact he is making these vehicles more dangerous.
LORD CHESHAM: My Lords, that is the noble Lord's opinion. But, as he well knows, we should never have done it if we had shared that opinion. Nevertheless in view of what my noble Leader has said and so that I can convey to my right honourable friend for his consideration what noble Lords have said, I beg leave to withdraw my Motion for the approval of these Regulations.
Motion, by leave, withdrawn.

ROYAL COMMISSION ON THE PRESS
2.47 p.m.
LORD FRANCIS-WILLIAMS LORD FRANCIS-WILLIAMS rose to call attention to the Report of the Royal Commission on the Press; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion standing in my name. May I say at the beginning how sorry I am that the noble Lord, Lord Shawcross, who was the Chairman of the Royal Commission on the Press, and who had hoped to be present to-day to hear your Lordships' views on his work, has written to inform me that his doctors will not, unfortunately, allow him to be present. May I also say that, for different reasons, I find it personally regrettable that none of the noble Lords who have controlling interests in some of the great newspapers of this country have seen fit to participate in a debate which is considering grave matters affecting the Press. Although I am delighted that the noble Earl, Lord Arran, is to speak, I think that even he will agree that he cannot perhaps be regarded as one of the main bulwarks and foundation stones of the Press, but rather perhaps as a slightly flighty column of it.
THE EARL OF ARRAN: My Lords, I am not interested in the noble Lord's jolly jokes, but I wish to say that one noble Lord controlling a Press group has leave of absence from this House, and is also not well.
LORD FRANCIS-WILLIAMS: My Lords, there are other noble Lords who could well have attended. I am perfectly prepared to agree, for example, that the noble Lord, Lord Beaverbrook, who has just had his 84th birthday, can well be excused, though if he had participated in our debate I feel sure he would have added immensely to the gusto, the merriment and the vigour of it.
The Press might be said, for various reasons, to be in somewhat bad odour at the present time. This is not, of course, the first time in its history that this has happened. Indeed, it is reported that Sir Walter Scott, when consulted by a young friend of his as to whether he should seek employment on a newspaper, replied, "Young man, I would prefer to sell gin to the poor and poison
864
them in that way rather than work on a newspaper." One may hope that both gin and journalism have gone up in the world a little since then. But I daresay that there are many of your Lordships, particularly on the Benches opposite, who, in the course of recent events, may have found themselves agreeing with that very shrewd and pertinent lady, Queen Victoria, who once remarked to Lord Palmerston, when she heard that the then editor of The Times, Mr. Delane, was frequently to be seen riding in the Row with a Duke on either side, that she saw no reason why journalists should be accepted in Society. She thought that the disclosure of confidential information would lessen if they were not, and she said that she could see no difficulty in this, since, she said, "Surely no gentleman would wish to consort with journalists unless required to do so in the course of his duty".
Although the Press has on many occasions been somewhat in disfavour—as, indeed, it is often right that it should be; for certainly it is no part of the business of the Press to seek popularity with Governments, any more than it is of Governments to seek popularity with the Press; although some do—what we are facing at this present time is a crisis in the affairs of the Press, both, if I may say so, in its relationships as an industry and also, and I think even more, in its relationship to the public. And this was well expressed in the terms of reference to the Royal Commission which were—and I quote:
"…To examine the economic and financial factors affecting the production and sale of newspapers, magazines…"
and particularly
"to consider whether these factors tend to diminish diversity of ownership and control or the number and variety of such publications, having regard to the importance, in the public interest, of the accurate presentation of news and the free expression of opinion;"
In putting down this Motion for debate I am concerned particularly with that aspect of matters; with how far the economic and industrial factors in the Press, and how far other pressures which have developed in the Press, affect its abilities in reporting facts accurately and reasonably objectively and in giving a proper variety of opinion.

865
My Lords, consider the background to the appointment of the Royal Commission. It came into existence because public opinion had been deeply disturbed by the death of a number of newspapers, culminating in the death of the News Chronicle and the Star, both old and highly respected newspapers with what, in earlier times, would have been a massive circulation assuring them not only of a solid body of public support but of a profitably economic existence. Public opinion, deeply disturbed by the death of these newspapers, was again disturbed by a take-over bid which resulted in the Daily Mirror-Sunday Pictorial group taking over the whole of the Odham's Press group, including the Daily Herald and the People and a great empire of periodicals, which has made Mr. Cecil King, the man at the head of the Mirror-Pictorial group, the man. I suppose, most listened to by women in the whole of history, since he controls almost the entire consortium of women's periodicals which are read with such avidity week by week.
It is, I think worthwhile just to look back to the 1949 Royal Commission, of which my noble friend Lady Wootton of Abinger was a most distinguished member, and which made a number of proposals that are only now beginning to be accepted by the Press. But although it made a number of highly sensible proposals, that Commission—oddly, for a Commission of which my noble friend was a member—very seriously mis-judged the economic future of the Press. It judged in its Report that although there had been—and I quote:
"between 1921 and 1948 a marked tendency away from the previous concentration of ownership in the national Press",
it saw
"no reason to expect a reversal of this tendency and a fresh bout of concentration".
Unfortunately, this belief proved tragically wrong. In fact, as the Royal Commission on the Press of 1962 reported, on page 15, paragraph 18:
"Taking all dailies together, it is clear that the extent of concentration has been substantially increased slice the report of the 1949 Commission. The three leading undertakings controlled 67 per cent. of the total circulation in 1961 against 45 per cent. in 1948."
In fact, we have now reached a position in which nearly seven out of ten of all the daily newspapers read each day by the people of this country are controlled
866
by one of three people: Lord Beaverbrook, Lord Rothermere, or Mr. Cecil King, a Canadian and two nephews of Lord Northcliffe.
In the Sunday paper field the concentration is even greater. There, more than eight out of every ten of all the Sunday newspapers, which are read with such enormous appetite on Sunday morning by the people of this country, are controlled by one of three people: Lord Beaverbrook, Mr. Cecil King or Mr. William Carr, the Chairman of the News of the World. Coming up strongly, of course, there is Mr. Roy Thomson, who controls the Sunday Times as part of a vast international empire of the Press, comprising altogether some 100 newspapers in, I think, twelve different countries on both sides of the Atlantic and in Africa—the manifestation of a new phenomenon in publishing such as the world has never seen before. I think there is this to be said for Mr. Roy Thomson and this strange new development of which he is a sort of forefront. At least, as he himself has said, there are many people who think that they can edit one or perhaps two newspapers, but nobody but a fool would think that he could edit 100 at the same time. Therefore, I think it is the case that the developments of Mr. Roy Thomson—and it perhaps ought, in fairness, to be said—have brought more editorial freedom to the editors of the papers he controls, if only because it is beyond the human capacity of any one man controlling 100 papers to act in such close telepathetic communication with them as Lord Beaverbrook does with the editors of his two papers, the Daily Express and Sunday Express, who always seem to know what he is thinking, in whatever part of the world he may be, and what he would wish them to think.
In 1949 the Royal Commission of that day commented on the closure of newspapers in the previous two decades, and said that any decrease in the number could not be contemplated without anxiety. But in fact the Shawcross Commission had to report (page 9, paragraph 2) that since 1949, when that statement was made, a further 17 daily and Sunday newspapers had ceased publication in London and the provinces. The people of this country read more newspapers per thousand of the population than the

867
people of any other country in the world. Until comparatively recently the rise in circulation was of a quite phenomenal character. Although the increase in population might have led to a certain expectation of increase in circulation, in fact the actual number of newspapers read went up by nearly three times. If one pays attention to those symbols and tools of our time—what are called "I.Q.s"—one will find that practically everybody in this country who is capable of reading at all reads one or more papers. And sometimes, looking at the papers one suspects that even those who cannot read also buy them—indeed, some of them are produced for that particular purpose.
My Lords, we read more and more of fewer and fewer newspapers. Yet the whole basis on which the long struggle for the freedom of the Press took place, was the premise that what was desirable and essential for the health of a society was that all significant views should be able to find their expression; that there should exist a Press which would be able to report the interests of all kinds and express the desires and ambitions of all groups. The freedom of the Press was won by people of all kinds, many of whom suffered greatly for it. It was won as part of the whole democratic heritage of our society; not as something which was, or was to be, the possession of newspaper proprietors or newspaper editors in order to enable them to make substantial profits, but because a free Press is an essential instrument of a democratic way of life.
What we have seen happening more and more consistently over recent years—and the process has speeded up enormously, even in the interval between the two Royal Commissions—has been the closure of newspapers which in fact represented very substantial bodies of opinion. So that we are now reaching a kind of polarisation of the Press in which, at one end of the scale, we find newspapers, often of great distinction, that serve comparatively small publics, but publics which are believed by advertisers to have a high income and therefore come in what is called the A-B group when the purchasing capacity of people is broken down. At one end of the scale we have these small papers serving groups of fairly high income.
868
At the other end of the scale are the great mass circulations which now, in order to succeed, probably require a circulation of at least 4 million, which means a readership of well over 12 million. We have a polarisation of the Press with an increasingly great desert in between. The result is that what I might call the great middle groups of the community, who, although they may not have wanted the serious consistent diet of the more serious papers, and wanted something more interesting and more valuable as a guide to public affairs than the pure entertainment paper, find it increasingly difficult to find any newspaper at all that can serve their needs.
I hope that during the course of this debate we shall pay some attention to this aspect, and that we shall hear from the noble and learned Viscount the Leader of the House the Government's views on what, in their opinion, can be done to meet what I think may fairly be described as a situation critical for democracy. In part, as the Royal Commission Report itself shows (though it is not put as a major factor), it can be claimed that this closure of newspapers has been due to high costs, resulting from an uneconomic structure within the industry. I have no doubt that those of your Lordships who are concerned in the management of great businesses and who may, from time to time—particularly those of you who have at any time been associated with nationalised industries—find yourselves pilloried in the Press for the inefficiency of your undertakings, may have derived a certain wry satisfaction from the Report of the Royal Commission, backed up by a survey made by management consultants, that the Press itself is the most inefficient of all industries—indeed, so inefficient that were the same stage of inefficiency to operate in the industrial structure of this country as a whole, the Commission comment that we should be economically bankrupt.
Speaking from this side of the House and as one who has spent much of his life being concerned with the history and the problems of the trade unions, I think that in part (and I believe some of the printing trades union leaders themselves would agree) it has been owing to a body of practices which have been built up over the years and which are no longer tenable, although it also needs to be

869
said that in many cases the managements of the most successful papers have not only supported, but often almost inspired, these restrictive practices in order to make the going harder for their rivals. This structure, which certainly is no credit to anybody, is a fault of both sides of industry equally.
During the last few days I have had discussions with leaders of the printing trades unions, and I am assured by them that although there are now some 16 trade unions on the production side of the newspaper industry, there is good hope that, as a result of discussions now taking place, they will progressively be reduced and will, in the end, be brought down to no more than six trade unions. This will very greatly improve the negotiating structure, and will do away with many of the demarcation difficulties that have existed. I think it needs to be said, and ought to be said, that in this matter the printing trades union leaders, aware of the situation, are themselves taking a most progressive attitude towards the problems that face them. Not that that would surprise me among trade union leaders, where one often, and usually, finds a progressive attitude. The problem often is to get that attitude to permeate down through all levels of industry, whether on the management or the labour side. That is not easy, but it is essential, and I hope that we shall have an assurance from the noble Viscount the Leader of the House that the Government, through the Minister of Labour, are keeping in close contact with the discussions that are now taking place and are standing ready to give every aid that can be given, particularly—because this is most essential—in creating and establishing an acceptable system of redundancy payments that will make possible a run-down in the total labour force of the industry, which is almost certainly required, without too much damage and upheaval.
I hope, too, for an assurance that the Government will also do whatever they can to support what is again a most necessary part of any reform of the labour structure of the newspaper industry; that is, to help to promote and help forward the measures and discussions which are now taking place to promote an industry-wide pensions scheme, so that men who have to leave one newspaper which is in difficulties to go to another will not, as
870
often happens at present, lose their pensions. In many instances those pensions are on a purely grace-and-favour basis of the employers, without any proper backing. That seems to me a situation which is really indefensible at this period in our industrial history.
But, important though the cost structure of labour costs in the newspaper industry may be, the primary factor in the decline in newspapers is, of course, the revenue situation. The situation here, which I think ought to be recognised, is that we in this country have all grown used to accepting our papers at a price which is far too low. We have been brought up to buy a subsidised Press, a Press that is subsidised by advertisement revenue. Of course, in any economic newspaper undertaking advertisement revenue must bear a proportion, and a pretty substantial proportion, of the total revenue. But we have tended to reach a situation where the dependence upon advertising revenue, as compared with the dependence on sales revenue, is so out of proportion that any decline in advertising revenue for a particular newspaper may, as in the case of the News Chronicle and many other newspapers, lead to their untimely death, even though those who attend the funeral as mourners may number several millions who ought to be able to get the kind of paper that they wish.
Although I accept the fact, contrary to some who gave evidence before the Commission, that it would be most difficult and might well be dangerous, for the Government to attempt to intervene in this matter, either by regulating advertisement percentages in newspapers more than at present or by taxing advertisements, I hope that the advertisement industry as a whole will accept the fact, that unless it is prepared to look at what is happening, it may in the end find itself completely in the grasp of a few newspapers, one or two newspapers, which alone have been allowed to survive because advertising has been concentrated in such few papers.
As I said earlier, all these factors have led to a concentration of the ownership of newspapers, and the Royal Commission recommend that because this concentration has now gone so far, measures should be taken, by the setting up of a Press Amalgamations Court, to consider how far any new proposals for amalgamation

871
that would affect a substantial body of circulation—over 3 million copies—are or are not in the public interest. The recommendation that such a Court should be set up has the backing, I think I can say, of almost all the organisations representing those employed in the newspaper industry, whether on the journalistic side or on the production side. Although I think that the employers' organisations may be somewhat shy of it, I know a number of individual employers who are also in favour of it; and I hope very much that when the noble Viscount, the Leader of your Lordships' House, comes to reply for the Government he will be able to give us some assurance that the Government are prepared to take seriously this recommendation of the Royal Commission.
When we have a situation in which, as I said earlier, seven out of ten of all the daily newspapers in this country are controlled by one of three people, it seems to me a matter of the greatest public interest that there should be serious examination and consideration of any proposals which are likely to increase that concentration of newspaper or periodical power by still further adding to the immense newspaper industry.
THE EARL OF DROGHEDA: My Lords, would the noble Lord allow me to intervene for one moment? When he refers to this figure of seven out of ten newspapers, is he talking about copies or individual titles?
LORD FRANCIS-WILLIAMS: I am talking about copies.
LORD MABANE: My Lords, would the noble Lord tell me whether or not he is referring only to national daily newspapers? His figure is not correct for the whole country, because he is excluding provincial newspapers.
LORD FRANCIS-WILLIAMS: My Lords, I am talking about the national daily Press and the Sunday Press—which are, of course, the most widely read and, for good or ill, the most widely assimilated newspapers in the country.
The point which I should like to make, and which I would ask the noble Leader of the House to take very seriously into consideration, is that an economic concentration which may be perfectly viable
872
in terms of many industries, where it is perhaps right and proper that the economic claim for big units should be considered, and may even, sometimes, be paramount, ought not alone to rule when the concentration of newspapers is under consideration. The issues that arise in looking at the newspaper industry cannot be, and ought not to be, regarded simply in industrial or economic terms, but must be regarded also in terms of the public interest as a whole.
So far I have been speaking in the main about the newspaper industry as an industry. I want now to speak very briefly about what is to me, in many ways, the more important aspect of the matter, and that is what I may term the profession inside the industry. Part of the basic problem of the Press—and, indeed, part of the basic problem, as I believe, of our whole modern society—is how to maintain, encourage and enhance professional standards in an increasingly industrialised society. This is particularly so in the case of the Press, where the profession or vocation of journalism operates inside an industry which grows increasingly powerful and increasingly dedicated to commercial ends. It is very necessary not only that the individual journalists shall hold in the highest regard the professional standards that will best serve the public interest—and I cannot pretend for one moment that this is always done—but also that, in so far as society itself can give support to those standards it should do so.
This, of course, is the purpose of what I might perhaps call the second major recommendation of the Royal Commission—which, indeed, repeats a recommendation made by the first Royal Commission, of which my noble friend Lady Wootton of Abinger was a member—that the Press Council should be reconstituted with an independent Chairman and lay members. The Press must always be regarded as a trio in which there are equal (or perhaps not always quite equal; I think the third is even more important than the other two) interests to be regarded: the interests of the owners of newspapers; the interests of those who edit and write the newspapers; and the interests of those who read the newspapers, the general public. And a Press Council which has prestige and authority, and which represents not

873
only the proprietors of newspapers but the editors and writers of newspapers, and the public is, I think, an essential in this present time.
As the noble Viscount the Leader of the House will know, since I am sure that the communication between Press and Government runs both ways, a great deal has already been done in this respect. Indeed, I expect it to be announced shortly after Whitsun, unless the Leader of the House is in a position to announce it to-day, that in fact a reconstituted Press Council is to be established which will have an independent Chairman and lay members. I think that is a very good thing and that a welcome for this change should go forward from this House.
But on this question of the constitution of that Press Council, it is, I think, important that in any consultations the Government may be having with the Press Council and those who form it, and the constituent bodies which make it up, it should be borne in mind that it is important that that Council should be available not only to meet the criticisms of members of the public, but also to sustain and support those within the profession of journalism who feel themselves pressurised by commercial interests, or even by their own colleagues and superiors, to go in for the kind of practices which in some instances brought such disgrace—and I use the word advisedly—on the Press in the Vassall case. It seems to me essential that in the body of the Press it should be possible for an individual journalist—who I think must sometimes he prepared to show more courage in rejecting the wrong orders than he sometimes is—to have a professional body of this kind to which he can turn for support to hold up his arm when he feels it necessary to stand against instructions that are contrary to what he believes to be the ethics of journalism and the interests of the public.
My Lords, I have perhaps spoken for too long, and I ask your forgiveness if from time to time a certain emotion has crept into my voice. But I have been a working journalist, a professional journalist, almost for the whole of my career. I am proud to be one, and believe that it is a profession or trade worthy of great honour. Also, I am proud to say that not only have I myself
874
been a journalist now for a great many years, but my daughter who is a journalist has just recently become engaged to another journalist. So I am perhaps in the hope of starting, if not a dynasty, at any rate a sort of line of journalists. In part my plea before your Lordships' House is that, if such is the case, you will help to do what you can in making a journalism which will be worthy of my grandsons. My Lords, I beg to move for Papers.
3.33 p.m.
THE LORD BISHOP OF LONDON: My Lords, it is nearly 200 years since Blackstone delivered his famous dictum:
"The liberty of the press is indeed essential to the nature of a Free State".
Present events, or recent events, in other countries, if we exclude consideration of our own, have underlined and emphasised the truth that a free State does require a free Press. It is for this reason, I think, that the public instinct is disturbed when the freedom of the Press here seems to be in any way endangered. We are grateful to the noble Lord, Lord Francis-Williams, for initiating this debate and for, if I may say so, rightly allowing a note of emotion occasionally to appear in his voice; because it is a matter on which on the professional side it is right that he should feel deeply, and on which many who are not within the profession of journalism sometimes feel deeply also. We are grateful for this opportunity of a debate in your Lordships' House on a matter which is of great public concern.
The Royal Commission of 1962 had as its concern, and indeed in its terms of reference, really only part of this vast subject. That part related to the importance in the public interest of the actual presentation of news, and the free expression of opinion. We are concerned lest the concentration of ownership or control in any way militates against that free expression of opinion. I think that what has emerged from discussions and recent controversies is a very considerable and widespread public ignorance of the way in which the Press works, and indeed of what the Press is. I hope that the Press itself may perhaps make its workings better known to the public as a whole, because there is a good deal of confusion of thought from the failure to understand what the noble Lord himself has made so clear: that when we

875
talk about the Press we are considering both an industry and a profession, and a profession which has to work inside an industry, and which as such is subjected to pressures which no other profession in this country knows.
When we speak of journalists, we are indeed speaking of some 20,000 very different human beings, nearly all of whom are earning their living, or trying to earn their living, in conditions of exceptional difficulty. It is difficult and dangerous to generalise about any particular group of men in any particular profession. But perhaps it is most dangerous of all with journalism, for it is from that danger of generalisation, from a few instances, that the whole profession of journalism has in recent months been somewhat under a cloud; that the vast majority of our journalists, men of great integrity and sincerity, feel now that they are almost outcasts in society, hated and feared rather than respected; and that some of them feel, as one with a long experience in Fleet Street said to me not long ago, that perhaps the journalist in this country now suffers from a lower status than journalists in almost any other free country in the world.
That, my Lords, is clearly not right. It is unfair to the vast majority of journalists as a whole. It is particularly unfair to that great majority of them who are employed in the provincial newspapers. If I may just add my own personal testimony, I know very well—because I have experienced it so often—the co-operation, tact and integrity of very many journalists with whom I have had dealings both in provincial and national newspapers, whom I have never known to betray a confidence or fail to appreciate the delicacy of a particular situation.
The noble Lord who introduced this Motion referred, as it were in passing, to the fact that journalism is an overcrowded profession. I sometimes think that a serious sociological study of the effects of redundancy in the world of Fleet Street would be extremely illuminating, and might produce some reflections of general application. This is directly related, I believe, to the first part of the speech of the noble Lord, Lord
876
Francis-Williams. Where there is a danger of newspapers going out of existence, the individual reporter is obviously exposed to very considerable pressure to obtain stories in the teeth of competition and to get them accepted, and therefore to a tendency to over-write and to intensify the sensation. With too many reporters chasing too many stories for too few column inches, the personal strains upon their integrity are bound to be very great.
But just because journalists form a profession within an industry, the economic situation of the industry itself can affect that free expression of opinion. If the economics of newspaper publication are so difficult and delicate as the Report of the Royal Commission reveals, then we must clearly be even more on our guard lest these difficulties continue to reflect adversely on the freedom and integrity of the journalists themselves—a freedom even when there is liberty to abuse that freedom, which I believe must be defended with all the power that we have, if we are to have the free Press which our society requires.
The Royal Commission, in paragraph 313 of its Report, is somewhat realistically pessimistic in declaring
"that there is no acceptable legislative or fiscal way of regulating the competitive…forces so as to ensure a sufficient diversity of newspapers."
It goes on to suggest that a weaker newspaper, if it is to survive, must find managers and editors of enterprise and originality. That is clearly true. I think that perhaps I would have gone with it a little further if it had placed editors in front of managers and had included journalists with editors.
But if it is true that the newspaperman of this country has a lower status in society, even without lowering it as much as Her late Majesty Queen Victoria seems to have done, this may in part be due to the fact that the very conditions of a journalist's life divorce him in some way from society. I was rung up not long ago by a newspaper at about half-past one in the morning when they wanted an opinion from me on something. They had in fact got somewhat involved in a theological discussion which they thought I might be able to sort out. Mustering all the

877
friendliness I could on that question at that hour, I endeavoured to sort it out, and then I ventured to suggest very mildly that it was perhaps a little early in the morning. One could obviously imagine the sub-editor at the other end of the telephone blinking and saying, "Yes, of course. I had forgotten that you were bound to be in bed this time". This divorce of the journalist, by the nature of his work, from the ordinary lives of ordinary people is, I sometimes think, a serious situation which we need to realise; and, so far as society itself can ensure it, we should understand more widely the powers, the limitations and the difficulties within which the journalist has to work.
I believe, too, it may not be unfair to say that that part of the Press which we call the journalistic profession needs, indeed, to make its own nature better known, and to attract better people into itself—and I say that without any reflection on those who are in the profession of journalism to-day. Perhaps one feels that most of all in the field of sub-editing, where sometimes one suspects that some pretty good reporter's work has not always had the fairness of treatment which it deserved when it reached the sub-editors' room. As journalism can be seen more and more as a profession with its own high professional standards, perhaps here we have at least one minor way (and not too minor, after all) of meeting this danger with which we are concerned. The former Lord Archbishop of Canterbury said in this House in 1960 that any real remedy must come from the profession and nowhere else, and with that I would agree. I would also agree with the noble Lord who moved the Motion, that it is essential that the powers of the Press Council be reconsidered and greatly strengthened, in order that from it may come a strong, united profession of journalism which perhaps, in the end, may prove to be the most effective safeguard against the dangers of concentration of ownership which, if uncontrolled, could be of the very greatest danger to our society.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, may I ask whether we are now to be given a statement.
VISCOUNT HAILSHAM: No, my Lords. I am sorry, but as your Lordships know—
EARL ALEXANDER OF HILLSBOROUGH: It is very inconvenient.
VISCOUNT HAILSHAM: It is not my fault, and really the noble Earl must forgive me on this. As your Lordships know, we do not normally make a statement in this House until we have some news that it has been started in another place. I understand that in another place the statement to which the noble Earl refers is the third of a series of statements. That being so, I am bound to tell the noble Earl that it has not yet started, so far as I know, and although I myself was hoping, even before the right reverend Prelate spoke, that we should be in a position to make it. I cannot feel that we would be justified in making it yet.
EARL ALEXANDER OF HILLSBOROUGH: We like to be accommodating, but some of us are waiting to attend meetings outside the Chamber.
VISCOUNT HAILSHAM: I am merely telling the noble Earl, however impatient he may be, that it is not within my power, unless we were to break the conventions of the situation, to help him; otherwise, I would. I think the best thing would be if the noble Earl, Lord Drogheda, made his speech, and then I shall take the responsibility of asking my noble friend to make the statement here.
3.45 p.m.
THE EARL OF DROGHEDA: My Lords, it is some years since I had the temerity to address your Lordships. Indeed, I have done so only once before. Therefore, I would crave a measure of indulgence. Before making my few remarks, I should declare a personal interest in that I am managing director of a specialist paper called the Financial Times. I am not a Press lord, as the noble Lord, Lord Francis-Williams, recognised; I am simply a Lord connected with the Press. I suppose he can say he is the same, and my noble friend Lord Arran likewise. I think the noble Lord, Lord Francis-Williams, has done very well to initiate this debate, and I thought he made a most reasoned speech. He himself is a very well-known Press figure, and I always read with great interest his weekly column in the New Statesman,

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comforted in the knowledge that he virtually never refers to the Financial Times, although I hasten to add that I do not regard this as a compliment.
It is well to recall why it was felt necessary in 1961, for the second time within fourteen years, for a Royal Commission to be appointed to inquire into the state of the Press. On this occasion the Royal Commission, presided over by the noble Lord, Lord Shawcross, who produced a most masterly Report, did not concern itself primarily with general ethical questions. Its appointment arose, as the noble Lord, Lord Francis-Williams, said, out of two major events in quick succession. One was the decision to stop publication of the News Chronicle and the Star, and the other was the fight for the control of Odhams Press, a newspaper and publishing group which itself had absorbed the successful George Newnes group only a few years earlier. The first of these two events spotlighted the weaknesses and strengths of newspaper economics, and the second the tendency towards concentration of ownership—a tendency which is by no means confined to the world of publishing.
The death of the News Chronicle (for it was a death, although its good will was acquired by the owners of the Daily Mail) was a lamentable event both for the country and for the newspaper industry. It was tragic that a paper with its sturdy tradition of independence and with a circulation of some 1¼million copies a day, could not survive. The hard economic fact was that it was competing with others with daily sales ranging between 2 million and over 4 million copies a day. It was regarded as a popular newspaper, and it had to face competition from these very much more powerful rivals. Had the News Chronicle been able to take itself out of competition with them, and had it been able to modify its image to something more like that of, perhaps, the Daily Telegraph, which had a rather smaller sale—not much smaller; substantially about the same—its fate might well have been different; but, as a popular paper competing with larger and stronger rivals, the News Chronicle could not attract enough advertising to make a profit. The same held true of the Star, although here the considerations were not in all respects identical.
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There are people who argue, from what happened, that there is something pernicious about advertising and that it should in some way be penalised. The Royal Commission had before it various proposals for a tax on advertising and other devices for diverting advertisements from successful to financially less secure papers. I am glad that the Royal Commission rejected these proposals, which I believe to be both bad in themselves and ineffective as a means of helping the Press. It would, I think, be naive to imagine that because an advertiser was forced out of the paper of his choice he would spend his money in some financially insecure paper and thus help to secure its survival. People advertise where they do because they get results. You cannot make a newspaper a good one by forcing advertisers to support it. If newspapers lack advertisements, it is generally because as a newspaper, either editorially or managerially—and I hope that the right reverend Prelate will note the order of those two words—is failing to secure public support, and not the other way round.
The exercise of such controls as these would, I feel, damage the Press and also the general industry of the country, because Press advertising is important to a very large section of the industry of a country, as we have seen recently in New York where there was a long stoppage. Moreover they would be a very dangerous first step in official control, beginning as control of advertising in the Press but ending, perhaps, in control of the Press itself. The basis of a free Press is, to my mind, financial independence, and I know of no better way of ensuring this than through the medium of advertising revenue. Without advertising revenue, the selling prices of newspapers would have to be materially increased and they would not be able to maintain the quality of their services. I think we should tend towards a plethora of small circulation, financially insecure papers, each consisting of a very few pages and giving a poor news service. As the noble Lord, Lord Francis-Williams, has said, papers are being sold too cheaply to-day; and one can accept that as a proposition, in the case of the Financial Times, in order to break even we should have to charge something approaching 2s. 6d. a

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copy, which is not a very good service to people because it would be very expensive to buy the paper.
LORD FRANCIS-WILLIAMS: My Lords, I was not suggesting—and I think nobody would suggest—that the entire revenue of the paper should come from sales. It has never been done; and no newspaper in this country would balance its books in that way. Advertising revenue and sales revenue have, in my view, in many newspapers got out of proper relationship with each other. You want an increase in sales revenue coupled with some in advertising.
THE EARL OF DROGHEDA: I accept that as a proposition; but I do not consider it is realistic to think of a mass of small circulation newspapers giving rather an indifferent service in a world which is so dependent now on mass means of communication. But, having said this, I should like perhaps to contradict myself, because I feel that large advertisers have a responsibility, when drawing up their schedules, to remember the existence of the papers which may be declining, and to sustain them. If they do not do so they are really assisting materially towards a reduction in the total number of newspapers—which is something nobody wishes to see.
Much was said in the Report about the efficiency of production and the utilisation of labour. It was pointed out that earnings in the newspaper industry are higher than in any other industry in the country, which, I suppose, is true. Nobody in the industry on either side is opposed to these high earnings. But with high earnings there should go a high degree of co-operation in ensuring the most efficient use of machinery and of equipment. It is true that efficiency in newspaper offices falls very much short of the ideal; though I think one should bear in mind the conditions in which newspapers are produced, with the necessity of working to a rigid deadline—as the noble Lord, Lord Francis-Williams, will no doubt remember—and the rush of activity which requires what, on the face of it, seems a superfluity of men to deal with the situation. There is a very high degree of skill demanded, and this can be seen in operation any night in any of our leading newspaper offices. But there are still extravagant and out-dated practices which arise in
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the main from the failure to adjust manning to the efficiency made possible by the introduction of modern machinery. There has also been a resistance to the introduction of modern machinery.
Undoubtedly men have, all too often, imposed checks on production when they felt they had grievances, without waiting for the agreed means of settling these differences to be given a proper trial. Managements, in the same way, have been anxious to give way to unreasonable demands for fear that production would be held up. Both sides must, and I think will, take steps to remedy this situation. The Newspaper Proprietors Association has taken the initiative in submitting to the trade unions what I believe is a very helpful memorandum to provide a basis for discussion of all aspects of this most complex subject, dealing with the problems of redundancy and pension schemes—all matters which are dealt with in the Royal Commission's Report. On the union side a fruitful start has been made—as the noble Lord, Lord Francis-Williams, said—in a movement towards a reduction in the number of trade unions whose members are engaged in the daily production of newspapers. It is clearly in the long-term interests of those employed on newspapers, just as much as those who own and manage them, that the industry should make a proper use of its manpower and resources; and this, I genuinely believe, is reflected in the attitude discernible among general secretaries and others holding responsible positions in the unions who need no warning of the danger to their members if London is to become an impossibly extravagant printing centre.
I should like to refer briefly to the Royal Commission's proposal for reconstituting the Press Council. We have already been told by the noble Lord, Lord Francis-Williams, that agreement has been reached—which is true—among all bodies making up the Council, on changes which would meet the Royal Commission's recommendations, by the appointment of an eminent public figure as chairman and by the opening of the membership of the Council to lay representatives. These, I hope, would not all be drawn from one sex; and I trust that in this matter an example would be taken from your Lordships' House. Also it has been agreed

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to find more funds for the work of the Council, so I think, in this respect at any rate, the Royal Commission recommendations are being fully carried out. None of us can deny there has been a basis for criticism of the Press, although it would ill become me to particularise.
The reconstitution of the Press Council is certainly no "cure-all" but it can be welcomed. I believe the addition of lay members will be valuable provided that those chosen are unbiased and show an understanding of the way in which newspapers work. I particularly agreed with the noble Lord, Lord Francis-Williams, when he spoke about the Council "sustaining and supporting" the profession—those, I think, were his words. I would also suggest that the time may come when the Council is further enlarged and is required to embrace within its sphere of surveillance the fields of broadcasting and television. I do not propose to develop this idea now; but I think it is a genuine problem which is arising. We all worry too much about what the Press says and does; but there are certain programmes which need very careful observation in these other media of communication.
Finally, I turn briefly to the recommendations of the Royal Commission for establishing an Amalgamations Court to which proposed amalgamations above a certain size would have to be submitted. The Court's decision would be based on whether it thought a given merger would be in the public interest. My first feeling was that the proposal should be supported, and, indeed, in the evidence of the Financial Times before the Commission we expressed sympathy with the idea. At the time of the Odhams takeover, people were naturally much exercised about what was happening. They saw this tendency towards concentration going on and I think felt it very deeply. But, with time, doubts have risen in my mind both as to the efficacy and the appropriateness of the proposed form of control. It emerges clearly, from reading some of the evidence before the Commission, that the proposed Court would have been able to do nothing to save the News Chronicle as a separate entity, and the Royal Commission recognised that the proposed Court could do little
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to prevent the absorption of unsuccessful papers, by recommending that such takeovers should be excluded from its purview.
LORD FRANCIS-WILLIAMS: My Lords, it was never suggested that the Court could do anything in the case of the News Chronicle, where the paper was at the stage where it almost certainly would have died; but it could have done something in the case of the takeover bid for Odhams. That is exactly the sort of issue which should come before such a Court, which would consider how far it would be in the public interest.
THE EARL OF DROGHEDA: My Lords, that, indeed, is true. I am simply saying that I am not sure that it is the right machinery. There are so many similar operations which could still arise. Of course, the Amalgamations Court could do nothing whatsover about actual closures. There remain the successful papers, which I believe will go on competing. But should proprietors wish to sell control, there are two alternatives: first, to sell to someone who does not already have a substantial Press interest, and such a transfer would be excluded from the Court's jurisdiction; and secondly, to sell to an existing group which already controls other newspapers. It seems to me that at the present time any one contemplating further expansion would think very carefully before acting, after the publicity directed on this matter by the Royal Commission. Furthermore, I suggest that anyone contemplating enlargement of his group by the acquisition of some particular successful newspaper would recognise that the success of that newspaper depended more than anything else upon its public image, and that it would be pure folly to try to tamper with it.
We are still far from having a single ownership of the Press, and I feel that if we ever come within measurable distance of such a condition public opinion would ensure a remedy. Public opinion can still be very powerful in these matters. And if we believe in the working of the democratic principle and the exercise of freedom in the conduct of our affairs, as we all do, I feel that statutory control is not the way to tackle this admittedly most difficult problem.

LOANS FOR SHIPBUILDING
4.5 p.m.
LORD CHESHAM: My Lords, I think that it will now be convenient for me to make a statement similar to that being made by my right honourable friend the Minister of Transport in another place about the Government's proposals for assisting the shipbuilding industry.
The Government have been regarding the extent of unemployment in the shipbuilding industry with increasing concern, particularly since it is mainly concentrated in development districts. The world's shipbuilding capacity is now far too large for normal demand. There will have to be some contraction, from which our shipbuilders cannot expect to escape altogether. But the immediate situation is worse, because in recent years ships have been built faster than world seaborne trade has grown. So our shipbuilders have been faced with a trough in demand which has brought their order books very low. Although recovery must come, there are few signs of it yet.
Therefore, the Government have been anxiously considering whether there are any special steps which they might take to help. Shipbuilders have been hit by the low rate of ordering by British ship-owners, and this feature has been particularly in our minds. We considered a scrap-and-build scheme. But no matter how it was administered, this would really be a subsidy for the shipbuilding industry, and subsidy is a course to avoid if at all possible. Moreover, the British merchant fleet is one of the most modern in the world; and British ships are already being scrapped at a satisfactory rate. For these and other reasons, we think a scrap-and-build scheme would not be appropriate. The Government have decided instead to make funds available for a strictly limited period, at Government lending rates, for financing new orders for British shipyards. The loans will be made to ship-owners, and the terms of the loans will be decided on the advice of an Advisory Committee which my right honourable friend is setting up, under the chairmanship of Lord Piercy. Lord Piercy is the chairman of the Ship Mortgage Finance Company, and he has agreed that the experienced staff of this company may be put at the disposal of
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the Committee in the handling and investigation of applications.
The Government are prepared to make £30 million available for financing new orders. We shall consider raising this limit if experience shows that it would be right to do so. But the scheme will not in any case continue beyond May 31, 1964, We contemplate that individual loans might be for periods of up to a maximum of ten years. The lending rate, based on Government credit for loans of from five to ten years, repayable by instalments, is at present 5 per cent. The Government will be prepared to make loans available in suitable cases for up to 80 per cent. of the cost of a ship. But the terms of each loan will be decided on merits, including, of course, the creditworthiness of the applicant.
The scheme will apply to orders from British shipowners. Special facilities are already available for export credits. I hope this scheme will make a real contribution to the problems of British shipyards at this difficult time.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, we are obliged to the noble Lord, Lord Chesham, for giving us that statement. It is a very important one and perhaps the noble Viscount the Leader of the House will not mind if we say a few words about it. We welcome any attempt which is made to provide employment in special areas like this, because it has a cumulative effect. But I am not altogether sure that one can accept this scheme as it stands, willy-nilly. To start with, the period during which loans can be made is limited to less than eleven months. That seems an extraordinarily short period in which all the various kinds of people concerned in shipbuilding, beginning with the ship-owners, can decide on what type of ship they want, or are allowed to build, and make their applications. It seems to me to be wholly inadequate—unless the Government are making this particular decision in relation to the date of the Election. Is that it?
Then I do not understand the restriction on the time for which this money, given as a maximum sum, is to be available to applicants. I think that this requires some explanation. I am quite satisfied, of course, with the arrangements which are being made with regard to the proper vetting of applicants for Government

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credits up to 80 per cent., which will be in the hands of the noble Lord, Lord Piercy, and his very experienced group. But we know nothing about the type of ship that would be most likely to be wanted. No mention is made of that. Is there any limit? Does it go from a small motor launch up to a cargo liner—or anything bigger? Why are we not told something about that? If any special legislation is to be introduced at a later date, perhaps we could have a longer debate about it.
The question of unemployment in the shipyard areas is by no means confined to shipbuilding: it is also connected with ship repair. I am sure the noble Viscount the Leader of the House will agree with me that, if Japan is going to give very large credits on a ship-repairing job of up to £2½ million, it will be necessary to look at ship repairs with just as much concern. Then we have to consider the history in this matter. I know, for example, what a terrible task the Admiralty had during the war because we had not the required ship-repairing yards. Sometimes there were over 3 million tons of shipping awaiting repair. Many of these facilities were closed down by the National Ships Security Company (or whatever it was called) under the late Sir James Liscott, and they were liquidated. We want to know what the Government are doing all the way round. The noble Leader will perhaps suggest when we can debate this matter more fully, and how exactly the authorisation of the announcement made to-day is to be dealt with. Will it require legislation? Will it require a financial Order? If so, then perhaps we may have a debate. Certainly there is a good deal of "meat" to be attacked in this business.
LORD BALFOUR OF INCHRYE: My Lords, may I ask the noble Lord to make one point clearer? I have particularly in mind the smaller shipyards on the East coast. Will this scheme apply to the small shipyards who build what I call the standard types of ships? If so, must the aid be in respect of firm orders? If those yards have the courage, the initiative and the finance to build what I call for stock—I am thinking particularly of shipping trawlers and the like—will they be able to qualify for
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the aid to build for stock, as against firm orders?
VISCOUNT HAILSHAM: My Lords, we are getting rather a backlog of questions to answer. I do not want to stop further questions, after I have answered those that have been asked, but perhaps I might deal at once with the questions put by the noble Earl the Leader of the Opposition, and leave my noble friend to handle other questions, with which he is more competent to deal. Of course, this would normally be a proper subject for debate. I understand that legislation will be required; I am not exactly sure why, but I am advised that it is so. This means that there would in the ordinary course be a debate. I should think that is the right answer to the noble Earl's request for a debate.
I think the noble Earl is mistaken, if he will forgive me for saying so, about the question of the period for which the loan is available. To begin with I must say that it was perhaps less than right that he should make the gibe about the Election date. That was perhaps unfortunate in the circumstances.
EARL ALEXANDER OF HILLSBOROUGH: The date suggested it.
VISCOUNT HAILSHAM: I think the noble Earl must appreciate that a responsible Government is just as keen as he or his friends may be to help an industry in need, and it is quite unworthy to suggest that any electoral motive has entered into it. Indeed, if it had, I must say that it would be fairly easy for a Government in power to make a splash with a "scrap-and-build" scheme, which we have expressly, and I think rightly, rejected. The fact of the matter is that we think—and we may be right; I suggest that we are—that what is really needed is the bringing forward of orders now. The shipbuilding industry is in need of help now. Probably the scheme will yield a limited amount of new orders at any time, and the effect of making the loan available only for a limited period will be, I hope, to ensure that those orders will come forth soon, rather than at some undetermined date in the future when it may happen to suit the shipowners to place them. This may not be right, but I think it is the kind of argument that was passing through my right honourable friend's head, and

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he was probably wise to do it in that way.
I agree with the noble Earl as regards the matter of the ship repairing industry, which is allied, but still distinguishable. It is doing a great deal better than the shipbuilding industry at the moment, and it has, in effect, a much greater security, because British owners are not as likely to put their ships in foreign yards for repair as they may be to take advantage of a cheaper price for an article in the first instance. At all events, it must not be thought that this scheme would be suitable for a ship-repairing scheme. It is appropriate for the placing of new orders in the particular nature of the mechanism employed. I think those were the points raised by the noble Earl. I am glad he regards this as an important statement. So do we. I am sure he shares with us the desire and belief that it will prove of benefit to those for whose benefit it is intended.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, may I say that there was no gibe intended. I only asked the reason for the short period: could it be because of the Election that they felt they could not commit other Governments. That was the reason for it. I must say that £30 million is going to want some spreading in the course of eleven months from the word "Go"; and if you want legislation first, I do not know how you a re going to do it.
VISCOUNT HAILSHAM: My Lords, I may say to the noble Earl that I accept what he says. It struck me at the time as intended to be what I said, but I accept from him that he had no such intention. We have not merely allotted in the statement £30 million, but have said that it would be extended if need be.
LORD LUCAS OF CHILWORTH: My Lords, the statement is of first-class importance and I am certain that the Government, having made up their mind that the combined shipping industry, owning and building, is in need of financial help, are right to have started with the shipowning industry and not the shipbuilding industry, because, as the noble Lord, Lord Chesham, said in his statement, the plight of the shipbuilding industry is due to a shortage of orders from the shipowning industry. But there is a good deal to be said for the points the noble Earl the Leader of the Opposition
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has made. This subject wants very careful consideration, because one has to take into account the question of which lines it is going to be in the national interest to help. As the noble Viscount the Leader of the House knows, one of the greatest obstacles to the development of our shipbuilding is the fact that the demand all over the world for British shipping has fallen, and is falling, through flag discrimination and subsidisation to an appalling extent. Unless we can do something, and do it quickly, for some of our old-established shipping lines, the British flag will not be flown in some parts of the world. That, I think, would be a serious matter. It is no good thinking that there will not have to be discrimination, because it is no good giving this money to overcrowded lines. You have to give it to companies that are flying the flag and plying their trade under the great obstacles of flag discrimination and subsidisation. I hope that the Government will bear this in mind when they prepare legislation.
LORD HAWKE: My Lords, as one who has constantly urged the Government to do something about this problem, I am pleased to hear what my noble friend has announced, though I am not quite sure that I should not have preferred a "scrap-and-build" plan, because I am rather dubious about the placing of new orders by shipowners when they cannot earn depreciation on their existing tonnage. What I should like him to look into is the question of naval tonnage, because he said that the British Mercantile Marine is well up to date. But are we certain that if we get involved in some trouble within the next year we have the landing craft, et cetera, to deal with the matter, other than the landing craft that are rusting from the last war? I believe it would be far more profitable to employ this money in building auxiliary naval vessels than to offer this particular carrot to shipowners.
LORD SILKIN: My Lords, the noble and learned Viscount, in answering my noble friend, said that the problem of ship repair was not so grave as that of shipbuilding, and that may well be so, but it is, nevertheless, quite a serious problem. I do not expect a reply straight away, but I would ask for consideration to be given to the question of assisting, in appropriate cases, all ship repair as well

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as the acquisition of ships. I imagine that as legislation is involved we shall have a full opportunity of discussing these matters at greater length, but I hope that ship repairing will not be ruled out where a proper case can be made out for assistance.
LORD REA: My Lords, I apologise for not being in my place earlier, but I have read the noble Lord's statement. I should like to support the noble Lord, Lord Balfour of Inchrye, and others, who have pointed out that the pinch is with the building yards, the repairing yards—
VISCOUNT HAILSHAM: The building yards.
LORD REA: —the building yards, which, of course, are often repairing yards as well. I ask this only for information. Have the Government considered giving this subsidy to the people who are suffering—that is, the yards—rather than the shipowners, so that they may quote lower prices, rather than that the money should be given to the shipowners to pay higher prices?
LORD OGMORE: My Lords, may I ask the noble Lord whether he is aware that the special facilities that he refers to as available for export credits are not adequate, and that British shipbuilders are under heavy competition, and sometimes unfair competition, from foreign shipbuilders? There is more reason to give facilities for export trade rather than for internal trade. Secondly, may I ask the noble Lord whether any similar facilities will be available for our aircraft manufacturers who are having a very difficult time at the moment?
LORD CHESHAM: My Lords, it seems to me that we have an incipient debate on our hands. I will at once answer my noble friend Lord Balfour of Inchrye, who really has the leading question on this matter, before it gets lost among any others. He enquired about the position of small ships being built in small shipyards in places, for instance, like the East Coast. He mentioned trawlers. Of course, this loan would not be available for the building of fishing vessels, which are looked after by different means, and therefore they are not affected by it. But it is intended that this scheme should apply to other forms of smaller vessels of 100 gross tons upwards.
EARL ALEXANDER OF HILLSBOROUGH: One hundred gross tons?
LORD CHESHAM: Yes.
LORD BALFOUR OF INCHRYE: Against firm orders?
LORD CHESHAM: Against firm orders. It is not intended that these loans should be available for what, in the best sense of the word, might be described as speculative building.
LORD BALFOUR OF INCHRYE: Stock building.
LORD CHESHAM: It is intended to be against firm orders by the shipowners who want the ships.
EARL ALEXANDER OF HILLSBOROUGH: I wondered whether this is to be entirely for sea-going ships or whether they are to be river barges or something of that kind, of 100 tons.
LORD CHESHAM: I do not think there is any means of differentiation in that matter.
EARL ALEXANDER OF HILLSBOROUGH: Oh, well!
LORD CHESHAM: The noble Earl says, "Oh well!", but this is a measure which is intended, though applied through shipowners, to assist shipbuilders, who presumably will find it of assistance to build any vessel that comes within the scope of the size.
I do not want to enter into a discussion on a number of the useful points put forward by the noble Lord, Lord Lucas of Chilworth, which obviously have to be taken into consideration in our thinking, as indeed they have been very much in our thinking for some time. I would say merely this. Even with the aid of the loan, of the credit facilities, which are proposed, a shipowner has still to see his way to running his ship competitively in the world before he will order. In that sense, it is almost self-regulating, in that presumably no sensible shipowner, even with easy credit facilities, will order ships which he cannot run competitively on overcrowded routes.
LORD LUCAS OF CHILWORTH: But interest rates do enter into the cost of running a ship.
LORD CHESHAM: Yes, my Lords, that is so, but I do not think that a likely consequence of this scheme is an overcrowding of already over-populated routes.
The noble Lord, Lord Hawke, raised a point which is rather outside the consideration of the statement, and I can say no more except to remind him that this really has nothing to do with it. The naval programme has been accelerated in order to form another means of some assistance to the shipbuilders. The noble Lord, Lord Rea, seemed to see this as some kind of gift to shipowners, which it is not in any sense. It is a possibility of obtaining an advantageous loan in order to encourage shipowners to produce orders which will also help the shipyards. That is the nature of the matter, and it is not intended to lead the shipowner into any sort of difficulty of overcrowding stock in the way I thought the noble Lord meant.
The noble Lord, Lord Silkin, mentioned repairing yards, which is really another consideration. I think there is general agreement that the pinch comes on the building yards, although in some cases they may be repairing yards as well. There is, of course, the existing, fairly generous, depreciation provisions already available to shipowners if they have the ships to repair, and I do not think his point is analogous to the same kind of consideration we have before us in the statement.

ROYAL COMMISSION ON THE PRESS
4.28 p.m.
Debate resumed.
THE MARQUESS OF HERTFORD: My Lords, I had a telephone call yesterday from a newspaper which wanted to know why I was to speak in this particular debate after maintaining an unbroken silence for 23 years. I pointed out that when I inherited my title in 1940 I was not in a position to take a very active part in this House, because I was then only nine years old However, I took my seat in 1952, mainly because I heard a rumour that Peers who had not taken their seat might not be invited to the Coronation. It has taken me eleven years since then to summon up the courage
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to address your Lordships, so I hope you will be indulgent.
I must confess that I have a personal interest in this debate. I work in Fleet Street myself, not for a newspaper, but for a public relations firm. That may give me an exaggerated idea of the value of the Press. Nevertheless, I really believe that a free Press is of fundamental importance to a democracy. I also believe that the freedom of the British Press is now threatened, not by any outside influences, but by its own internal financial weakness. It is not generally realised how very serious the situation is. A number of newspapers have recently ceased to exist. Some others are still losing money; and, sooner or later, a paper that is losing money is almost bound to close down. Last year Mr. Cecil King said—and I quote:
"Of the London dailies, the Sketch, the Herald and the Morning Advertiser are on the danger list. The Times and Daily Mail are under observation; the Mirror and Express are all right; the Telegraph and Financial Times are riding high."
Such a small number of newspapers clearly cannot be enough to represent an entirely free Press. What one can do about it is not easy to see, but the trouble is purely economic. So, if I may, I will just run through a few facts which your Lordships already probably know.
The revenue of newspapers comes principally from two sources, circulation and advertisements. As this country already has the highest newspaper readership in the world, the circulation of one newspaper group can be increased only at the expense of another; the total sales of newspapers cannot be increased much further. But advertisement revenue depends on circulation, because, of course, those newspapers with the highest circulation can charge the highest rates. So the bigger papers get richer and the smaller ones do not.
There are two main costs of producing a paper. Newsprint is an enormous basic cost, and the agreements with our fellow members of EFTA would not allow us to subsidise this cost, even if it were considered to be desirable, which is doubtful. The other main cost is printing. This could be enormously reduced; and if it were reduced many newspapers which are now in a most precarious situation would be given a new lease of life. Here I venture on to rather dangerous

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ground. It is impossible to discuss the high cost of printing without mentioning the printing unions. There is a very general tendency, whenever a union and a management have failed to agree together, to blame the union. Without claiming to know all about it, and certainly without wishing to be in any way controversial, I must place a fair amount of blame on the management. Whoever is blamed, the fact remains that the lack of co-operation within the printing trade leads to inefficiency, waste of time and waste of money. It is standing in the way of progress; it is keeping the cost of printing unnecessarily high; and it will in time destroy the newspapers on which both management and union members depend.
Newspaper proprietors are in a peculiarly weak position to bargain with their trade union employees. A strike of a few days can do them an enormous amount of damage. A newspaper is an ephemeral product with a tenuous, continuous link between one day and the next. In this respect, its appeal is perishable, like fruit, and in that connection it is no coincidence that one place where the labour force is in a correspondingly strong position and where wages are correspondingly high, is Covent Garden Market. If a strike delays the production of motor cars the customers are, on the whole prepared to wait, and by producing more cars the manufacturers may, in time, make up their losses; but no one is going to buy last week's paper, or even yesterday's edition. So, for a newspaper—and I am speaking chiefly of the national daily newspapers—the cost of a wage increase is usually less at the time than the cost of not appearing for a few days. The unions have, understandably, taken advantage of this weakness, not only to ensure high wages but also, by forming a web of restrictive agreements, to keep the labour force quite unnecessarily high. The Report of the Royal Commission on the Press points out that as many as one-third of the men employed in producing the national newspapers are, in fact, redundant.
The worst result of this apparent inability of the managements and the unions to work together for the good of all is that control of the Press and of
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the newsprint and the newspaper printing industries is already in the hands of a very few people; and these are likely to become fewer. It is not now possible for anyone other than the Daily Mirror Group to start a national daily newspaper. Surely, we must not let it become impossible for anyone else even to maintain such a paper. This, like so many other really important things, is not a Party political problem. It is one that the employers and the unions have completely failed to solve. This failure presents a real threat to the freedom, indeed to the existence, of the British Press as we now know it. May I suggest that this is something that calls for serious consideration by Peers on both sides of the House?
4.37 p.m.
THE EARL OF ARRAN: My Lords, it is very pleasant for me to have to congratulate the noble Marquess on his maiden speech. He spoke with great grace and style, and with an assurance which I personally envy. Also, he spoke good sense and, incidentally, removed a great deal of what I hoped to say myself. It is, too, nice to see a younger Member of your Lordships' House taking part in our discussions. I hope that, having broken the ice, he will continue. As has been pointed out before, we are an old House and are badly in need of new blood. There are four or five junior Lords (if I may use that phrase), clever and able young men, who, if they so wished, could come and talk to us. I am sure your Lordships would give them a real welcome. We still, perhaps, like to think that we are "with it", but I wonder very much whether we are—certainly I am not—and we should be all the better off for knowing from first hand what the young people are thinking and where we are going wrong.
Your Lordships may recall that some three years ago I had the honour of introducing to this House a Motion on the Press. I do not know whether the debate did much good, though immediately thereafter, which was not altogether a coincidence, the gossip columns cleaned themselves up. But at any rate, the debate enabled noble Lords to express, publicly and openly, their views about the newspapers; and that, surely, is something that cannot be done too often. Quite honestly, what impressed me most on the last occasion was the measure of praise

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awarded to the Press, particularly by the most reverend Primate. His mantle has apparently been assumed to-day by the right reverend Prelate the Lord Bishop of London, who, I am glad to say, apparently has the same respect for British journalism and journalists as the Archbishop. These things help.
To-day, my Lords, we are back on the same subject. It will be interesting for us newspapermen to know what your Lordships think about us now. And here I must, as usual, declare my interest. I am an executive of Associated Newspapers Limited, and a director of the Daily Sketch: not a managing director, not a real tycoon, like the noble Earl, Lord Drogheda, who knows where I only guess; but still a worker in the industry—if you like, the "poor man's Lord Drogheda". This debate, of course, is not quite like the last one. Then we discussed the Press, as it were, in vacuo; to-day we have a Report before us—and an excellent and very informed Report it is—containing recommendations on which we are asked to express a view. I shall tentatively give my own—my own, my Lords, and nobody else's. There is much to answer, and much to say; but I do not like to make long speeches, and so I will concentrate on those issues which seem to me to matter most. They are labour, the Press Council and the proposed Amalgamations Court.
First of all, labour. We have to face the fact that the position at the moment is pretty chaotic, as the noble Marquess who spoke before me pointed out. I was not surprised to learn that there is said to be a 34 per cent. excess of labour for requirements in the mechanical departments, though, in fact, the evidence for this happens to have been obtained in a most superficial manner. Perhaps your Lordships were surprised. Perhaps you were rather horrified. If so, what would you have thought had you known about the so-called "ghost workers", those mythical men who are called in to work the machines when extra pages are printed, and whose money, far from mythical, is shared out among those actually at work? Is that the sign of a healthy well-run industry? Again, did you know that wage increases in the newspaper industry have to be negotiated with—I thought, eleven, but the
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noble Lord said sixteen, different unions? Is that really the way to run a railway or a newspaper? On this point I was particularly glad to hear from the noble Lord, Lord Francis-Williams, that the number of negotiating unions may be reduced from eleven or sixteen as the case may be to six. That will be the day!
What about employers? As the Report says, what is required of them is that they, too, should be united. But are they? It appears not. There is, says the Report, in theory an agreement that if the production of one newspaper's publication were stopped the other newspapers would not publish. This arrangement, says the Report, seems to be broken as often as not. If there is not solidarity here either, are you surprised that newspaper production is a hand-to-mouth, haphazard thing, and that chaos prevails? What amazes me is that newspapers manage to appear at all. It seems to me, therefore, that the Commission were absolutely right in demanding the setting up of some joint consultative body of employees and employers to look into manpower problems and wage structures, to prevent unnecessary disputes, and generally in their own interests. Indeed, so obvious does it seem that one wonders why until now—I gather it is being done now—no serious attempt has been made to do it.
We have had to-day particularly welcome news from both sides of the industry. Let us at last have a united Newspaper Proprietors Association and a united association of unions, not necessarily to agree with one another, but to make sure, if they are to disagree, that both sides speak authoritatively and representatively. That way we shall get things done, and quickly. Because if this is not done, and done soon, as the noble Marquess pointed out, there is going to be an almightly crash. Competition becomes always fiercer, profit margins smaller; and the weak are ever more threatened. I beg both sides of the industry to stop behaving like spoilt children. Are they now at last going to see the writing on the wall of the house in which they live? Are they at last going to put that house in order? Do they want to destroy it? Surely that would be madness, and for the employees at least it would be difficult to find another abode so fine and comfortable. As the Report points out,

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earnings in the newspaper industry are the highest in Britain.
From labour to editorial, and thus, obviously, to the Press Council. Surely there has been a ponderous dragging of feet in the matter of the Press Council. I am not saying that that body has not done important work in examining errors of taste and in helping to uphold journalistic standards. But, frankly, its annual reports at present read like a parish magazine. What it must do—and here again we have had encouraging news from the noble Lord—is to make itself into a vehicle for informing the country about what is going on in the Press. It should give regular "state of the nation" reports. That does not mean that it should have statutory powers; I do not think that would work, and I do not think the Commission want it. What is needed is not something for the expert but something for the public. I think that I can promise the Council a massive readership. People are fascinated by the Press and by Press politics. Small wonder! For in some ways it is the most glamourous of all the professions. Again, what was wrong with the idea of a lay Chairman and lay members? Was there so much to hide? By refusing to have such persons those concerned have certainly given that impression. It is good to know that there is to be no more nonsense about this. Let the Council have these lay men and women and cease to be, as it were, a closed shop.
Finally, on the Press Council, may I warmly commend the suggestion in the Report that the Council hear complaints of influence by advertisers upon the editorial columns? I commend it particularly because there is a widely held impression that this does happen, and it would be good to have it dispelled. I have never experienced it myself, except perhaps in the matter of motor car reviews. I have never read a really unfavourable report of a motor car. Yet cars, like everything else, are sometimes good, sometimes not so good and sometimes downright bad. Compare book reviews, which do not give a damn. This is a small matter that might be looked at profitably by the Council.
Here, in parenthesis, may I report something which may amuse or, more likely, sadden your Lordships. You will
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remember that some time ago we had a debate on the Report of the Royal College of Physicians on smoking. Because, particularly, of what the noble Viscount the Leader of the House said on that occasion, some £30 million were clipped off tobacco shares overnight. What happened? The tobacco manufacturers immediately countered by nearly trebling their Press and television advertising, and I am told that nearly 20 per cent. of newspaper advertising to-day comes from the tobacco companies. I initiated the debate and spoke strongly about the dangers of smoking. Ironically, I, as a newspaper man, now profit indirectly from the thing I spoke against. Life is indeed unpredictable.
Next I come to the proposal for a Press Amalgamations Court. I am naturally in favour of any measure that will prevent a reduction in the number of newspapers. But is this really a practicable proposal; and is it still necessary? And here I find myself in a predicament. The statutory machinery which it is proposed to set up seems to me cumbersome and almost unworkable. After all, whether we like it or not, we are still, in the last resort, dealing with finance and private monies. Newspapers are still, thank God, not nationalised, though they should beware lest this direst of fates may befall them. If a purchase or a take-over were required to comply with all the conditions suggested in paragraph 348 of the Report—which, to me at any rate, are so confused that I cannot make head or tail of them—would the result be anything but another lawyers' banquet: a banquet of so many courses that everyone concerned would be quickly sick? On the other hand, this process of the strong devouring the weak must be halted somewhere. As I said in the last debate, if I may quote myself [OFFICIAL REPORT, Vol. 224, col. 471]:
"If a time comes when one man is in control of too many sources of public information, then someone is going to say, 'No'."
Personally I would leave it for a while. I may be wrong, but I think the predators are getting a little "windy". Let Parliament and public opinion keep them in suspense. They will not get away with another one.
LORD FRANCIS-WILLIAMS: My Lords, may I ask the noble Earl how many Royal Commissions on the Press

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he requires to be set up before he considers that measures of this kind, which would deal with the danger pointed out by both Royal Commissions, should be taken? Does he want another Royal Commission in ten years; and another after that?
THE EARL OF ARRAN: My Lords, I fully appreciate the strength of the noble Lord's argument. My point, quite simply, is that I have the feeling that people are getting frightened, and that public opinion is beginning to influence them and will stop such a thing taking place. If it does take place, to my mind it is utterly wrong. But I think we are coming into the waters of safety. In this matter of keeping a dying newspaper alive (it has not been said before and it is very important) let me quote the words of the Royal Commission:
"While legislative interference with market forces might conceivably check stray newspapers and bolster up weak ones, there is no way to success but through the quality of management and editorial direction."
The Royal Commission says this twice. It is completely and utterly true.
Last of all—and I have probably spoken for too long already—how is the Press doing to-day—I mean editorially? Are the newspapers, and particularly the popular newspapers, worse or better than they were when last we talked about them? Speaking quite objectively, I would say, better. The gossip columns in their former odious form have, as I have said, virtually disappeared, and though there is still too much prurience, I think the tendency is towards less dirt. But, of course, in the last resort, it all depends upon the question of education—education of the people, which is not the concern of newspapers, and education of the journalist, which is. Here I am glad to be able to report some progress. I am glad to learn that you cannot now apprentice yourself to a provincial newspaper—and provincial newspapers are the nurseries of national newspapers—unless at the same time you enrol yourself in the training scheme of the National Council for the Training of Journalists. I am afraid that 23 per cent. or so of the applicants are still below the minimum educational requirements of the Council, and that over 50 per cent. fail to pass their proficiency test. But still, we are moving forward
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here, and the effect will be felt in the years to come.
Meanwhile, as has been said by the right reverend Prelate, I think, the Press and we newspaper men remain rightly sensitive to public opinion and to what Parliament thinks about us. We are no blushing violets, but we are also no bulldozers. For instance, the debate on the Vassall Tribunal made a deep impression in Fleet Street, and there were some who took the noble Leader's remarks about the imprisoned reporters greatly to heart. We are not to-day discussing Vassall—that is over—but it would be pleasant if my noble friend felt able, with his customary generosity, to say just a little more about this. I have made a long speech and I am afraid I may have wearied your Lordships. But, after all, the Press, a great and entirely British institution, employing some 75,000 English and Scottish men and women, is a daily and important part of our lives. Let us continue to inquire into it, into our newspapers, as they continue to inquire into us; and let us be forthright in our criticisms. That way we shall learn, if not to like, at least to respect each other.
4.53 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I, too, should like to congratulate the noble Marquess, Lord Hertford, on his maiden speech, and to echo what the noble Earl, Lord Arran, said. We hope to hear him taking part in many debates in the future. I, too, am also grateful to Lord Francis-Williams for initiating the debate to-day. In accordance with the custom in your Lordships' House, I must at once declare my personal position. If your Lordships care to turn to page 148 of the Report of the Royal Commission on the Press you will see that I am listed among the directors of Thomson Scottish Associates Limited, which of course is the controlling company of the Thomson organisation. But, let me hasten to say, I am there in an entirely non-executive capacity.
The second reason why I speak to-day is that I, too, like Lord Francis-Williams have had the privilege of earning my living in journalism. Many years ago, in the early 'twenties, I was a reporter on the Daily Mail. I was not worth any salary; I was taken "on space", and it took me a year before I graduated to the then minimum of 9 guineas a week for

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reporters. Lord Francis-Williams may remember that in those days—they were great days—just after Lord Northcliffe died, the reporters' room was occupied by such famous journalists as F. W. Memory, Montague Smith, Harold Pemberton, and R. E. Dunne. Those are the men who taught one the elements of one's profession.
THE EARL OF ARRAN: May I interrupt just to tell the noble Lord that Mr. Montague Smith is still there?
LORD BALFOUR OF INCHRYE: I am delighted. He used to tell me off quite often. The noble Lord, Lord Francis-Williams, divided his speech broadly into two parts. He dealt first with the structure of the industry, and then he dealt with functioning of the Press. On the structure of the industry, he condemned or criticised the concentration. I use the words he used; I took them down. He called it a "crisis in relation to industry and the public", and he said, "it was a situation critical for democracy". I suggest that we should feel a sense of proportion in these matters, because I personally dispute both those statements. All we are seeing, as my noble friend Lord Drogheda pointed out, is an expression in the newspaper industry of what is going on almost everywhere else in every other industry at the present time. In the chemical industry, the enginering industry, the shipping industry and the brewing industry we are seeing this expression of concentration; and I suggest to your Lordships that the structure of newspaper concentration is here.
I do not believe that the proposed court which would have to sanction future amalgamations would have much to do. If such a court is set up, it will be rather like bolting the stable door after the animal has escaped. I submit to your Lordships that we have to accept the structure as it is, and ensure that in its functioning freedom does not become licence and, on the other hand, that freedom is not restricted and that the public interest is preserved. Here, I was so pleased with the tribute of the noble Lord, Lord Francis-Williams—I am sure he will call it a tribute—to my colleague Mr. Roy Thomson, who regards newspaper ownership as a business and leaves editorial freedom
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complete. Indeed, in his organisation there are papers of the Left, there are papers of the Centre and there are papers of the Right. I think the remedy of weaknesses lies from within. As a start, I think there could be much done in agreement for better editorial standards. As a start, I should like to see an agreement between most editors of dailies and Sunday newspapers to abolish the memoirs of prostitutes, convicted criminals and other highly undesirable persons. But against this, we have to keep a sense of proportion in our criticism.
As Lord Francis-Williams said, the Press is at present in bad odour. It is a popular target to-day for stricture and abuse. But I believe that much of the dislike of the Press springs from prejudice and dislike of criticism of ourselves, of those we know and causes we serve. It is only natural. The Press is disliked to-day. So be it. To-day, in any club and at any political gathering round any table someone has only to make a sweeping condemnation, unsupported by any evidence, of the daily Press to get a reaction of pleased assent, usually from an ignorant audience. In most cases, this reaction is based, as I say, not on personal knowledge but just on sweeping general conclusions founded on indirect reports of particular instances which may or may not be true. I look round this Chamber, and I do not believe there is a single noble Lord who has not been the subject of criticism. Criticism we must accept. It is only natural that sometimes we feel slightly resentful, and from that resentment are sown the seeds of an inclination to have a slap at the Press when the chance comes.
I suggest to your Lordships that there is another side. There are very often attempts by citizens, by organisations, by Government Departments to mislead and to suppress. I do not believe that there is a Minister in the Government who could put his hand on his heart and say that he does not know of cases where "D" notices and the public relations system have been used to cloak individual or departmental failures. It is not the job of the Press to be popular with legislators or the Executive, and I often wish they were more free to criticise the Judiciary. It is the job of the Press to probe and expose the failings of those

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personal or official standards which we expect from people in public life, whether such exposure is hurtful or not. This is a harsh doctrine, but it is one to which all who pay lip-service to the Press ought to subscribe.
In fulfilling this function of what I call the watchdog for public interest against inefficiency, extravagance, excesses, and abuses of privilege I believe that, by and large, the Press does a pretty good job. But in their fulfilment of this task, we often hear of cases of intrusion into private life, sometimes rightly, sometimes wrongly, which is resented. We all know such cases. But sometimes events belong to the public if such events are inconsistent with the position and the responsibility of the individual.
Let us remember that the reporters themselves have a pretty difficult job of work to seek out news and report facts. Sometimes the line of demarcation between intrusion and exposure is a very thin one. I can remember once many years ago, on a Saturday morning, having climbed the wall of a very depressing looking, grey Victorian vicarage in Bedfordshire, beating upon the front door in order to get let in. The lady of the vicarage said, "Come inside", and I went in and sat down. She said, "Excuse me, you are sitting on a revolver. I am going to shoot my husband". I at once got up. I unloaded the revolver. That was part of a story on a vicar in Bedfordshire who had gone off with the local lady organist, leaving his wife and daughter chargeable on the rates. Under ecclesiastical law at that time, if a vicar was away from his living for a year and a day the living was sequestrated. The vicar announced, having had his year with the lady, that he was coming back to take the service in the church the next day. The vicar's wife had barricaded herself in with her daughter, and was going to shoot her husband if he arrived. I got the story, and I then went down to the village which was divided into two camps. I went to the farm where the vicar was staying and got the story on his side. I went back and thought that I had got the best story the newspaper had had for a very long time. To my disappointment the next day not one word was printed—because, of course, at that time I was so ignorant
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that I did not know the laws of libel in relation to newspapers.
I cite that example in order to ask your Lordships this: was that intrusion? I think it was. But was it not justified as an exposure of deplorable church procedure and the individual conduct of a member of the Church? If so, it was intrusion which was justified. I give that example to prove my point that the line of division between intrusion and the duty of a reporter is often a very difficult one. Do not let us always condemn the reporters when they have to fulfil their unpleasant duties. Freedom is all for the Press. If from within, by the suggestions of the Royal Commission on the Press, we can improve the professional conduct, all to the good. But let us beware of any thought of action from without which would limit, directly or indirectly, Press freedom. Let me remind your Lordships once more of the words of Voltaire, who wrote:
"I disapprove of what you say, but I will defend to the death your right to say it."
5.5 p.m.
EARL BALDWIN OF BEWDLEY: My Lords, I, too, should like to congratulate the noble Marquess, Lord Hertford, on his excellent maiden speech and I may say that I am entirely convinced by the reason he gave us for not having spoken in this House for 23 years. I hope that we shall often hear him again.
I feel that I ought immediately to declare my own interest. It is by no means a financial one, but is entirely emotional. I am glad that the noble Lord, Lord Francis-Williams, confessed to his emotions on the subject, and I know very well that the noble Earl, Lord Arran, also has emotions on it. My own, perhaps not quite so strong, arise from another facet. As a close relative of a politician who was plentifully abused by a certain section of the Press in the years between the wars, those rather discredited years, and who is sometimes abused still when convenient, naturally, my experience of newspapers, which is solely from outside the profession, has been on the whole rather more displeasing than pleasing. The effect of this might be what psychologists call "traumatic", but any passion is long since spent and has subsided into an attitude of comparative detachment.

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Fascinating as are many features of a Pressman's work, and much as one must admire his courage, persistence and ingenuity as well as his underlying ideal of service to the public, I find that I am no longer able to take all the fruits of his labour, whether in the political or in any other field, quite so seriously as I once did. Having years ago been sometimes fairly close to the sources of political news, I have been struck, as I think have many others, by the frequent aberrations of fact and inference on the printed page the next day. Some readers go so far as to say, on the subject of general news, that if ever they have exact knowledge of an event the account they read in the papers the following day is always at fault in some particular. My own view is that, if this is in fact customary, it is not so much the fault of the reporter or of the editor, as of the system; and readers will have to put up with it so long as they call for their daily news—as they do—tasty and piping hot. But I recommend the addition of a pinch of salt.
My few personal encounters with the Press have been generally urbane, but not invariably so. Incidents that I can recall are trivial, but nevertheless disquieting. I remember being coaxed into being photographed seeming to do something I had not done, and then being captioned next day as having done it. I have been spoken to very rudely on the telephone by a lady reporter who thought I was not co-operating over some dull matter to do with a young member of my family. I have been libelled—and, under pressure, apologised to—by a very left-wing journal, which inferred that because I was a director of more than one company I was therefore corrupt. I had never provoked any of these people, nor ever spoken harshly when approached.
My Lords, are such experiences as mine unique, or are they typical? I simply do not know. These journalists were just doing their duty according to their instructions, as was the noble Lord, Lord Balfour of Inchrye, in regard to his story of the vicar's wife. It is all so silly and such a waste of time; but it is part of the high-pressure system which has been built up to give the public what it wants. That may be information, but it seems to me to be primarily entertainment. Each—Press and public—reflects
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and excites the other's mood, and the effect upon both is inaccuracy and extravagant language.
The Royal Commission was asked among other things to have regard to the accuracy and freedom of opinion of the Press. For the reasons that I have given, I think it is idle to expect to improve the accuracy of daily newspapers. They seem to me to be about as accurate as they can get in the time, space and conditions that govern them. In fact I am surprised that they manage to maintain as high a standard as they do. In paragraph 205 of the Report we read that what are called "first-copy costs" give the proprietor a strong incentive to increase his circulation. I should have thought there was strong enough incentive whatever the costs were—high or low. But it is what must ensue from that that worries me. For any intensified effort to increase circulation will surely mean even more speed and more excitement—all at the expense of accuracy.
The Report says that there is less choice of all daily papers than there was in 1949, and that it would be better if there were more. Most people would agree with that. Variety is certainly desirable. But I think also, my Lords, that we all read too much of the newspapers as it is. And when I say that I mean simply that we should spend less time upon their study. It is the sheer cumulative impact that I object to, because of its stupefying effect upon the reader: all the more dangerous because it is unfelt. Something of the kind has often been said before; but not being obvious, it has naturally been disregarded.
Nothing that I say here is intended, of course, to derogate from the freedom of the Press. Once that goes, we are all done for. The freer the better. But up to what point I am never sure. If, as the noble Lord, Lord Kilbracken, said in your Lordships' House the other day in the Vassall debate, defamatory matter has been published, then a libel action provides the most suitable remedy. But there is one drawback here: the law of libel extends its protection only to the living, so that families of dead unpopular personages must continue to read offensive tales about their relations with what stoicism they can. And let them not suppose that a protesting letter to the editor of however reputable a newspaper,

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and however courteously worded, is certain to find its way into print. Room may not be available for it. Although the Press is free for all, it is not bound to incommode itself over everyone's personal grievance. More desperate remedies have been tried. In France, for instance, the wife of a statesman then alive shot and killed the editor of a famous newspaper which had savagely attacked his reputation. But that was 50 years ago.
Such personal anecdotes, however, are not the reason for my wish that the consumption of ephemeral reading matter should diminish. It is my belief—and I do not suppose it is an original one—that, just as over-eating leads to physical flabbiness, so over-reading of popular periodicals leads to mental sloth and general unfitness of judgment; only in the case of the mind the result is not so manifest as it is in the case of the body. Few adults, I suppose, base their gastronomy on chocolates and cream puffs, but a great many readers seem to feed their minds almost exclusively on the literary equivalent, thus ensuring at least partial atrophy of the mental faculties. It is not the too-sweet quality of the sentiment, nor the misuse and the jargonising of the English language—that cant which is in itself an enemy of clear thinking—nor even its occasional impudence, but the sheer quantity of its empty brightness that I think is dulling men's wits: the excess of things so dreaded by the wise old Athenians who, while always keen to hear and talk of some new thing, also recommended, if I may use the language,—"Nothing in excess". My Lords, for all our cleverness, we ignore the wisdom of the ancients at our peril.
I live in the middle-west country, and what strikes me when I come to London is the amount of One that citizens and suburban travellers seem to spend in reading newspapers. The main reason for this may be that they have had to move so much to and fro in public vehicles that, in the hours of waiting and going, often in detestable conditions, they have become paper-drug-addicts and can no longer think for themselves, nor bear to be deprived of their anodyne. You do not see so much of that in the country buses where the people, having no midday and evening pipers thrust at them, tend to look about them and talk or sit and think—or, as townsmen may suppose,
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simply sit. Anyway, my point is that they are not being got at so much; they are not being battered into accepting what I think is a cock-eyed sense of values. To-day, of course, country people do have the television, which is capable of producing a similar result in about half the time.
My Lords, if this over-reading and over-viewing continues unabated, the level of our intelligence in the far future may sink to that of poultry. Some of your Lordships may have observed the occupants of a hen-run. As soon as one bird is noticed to have made a discovery, the others leg it with all speed for fear of missing anything that might have been unearthed, only to find nothing profitable when they get there. This goes on all day. They never learn; nor, it seems, do they wish to. While we are on the subject of chickens, that goes, if I may say so, for many a human egghead, too. It is my belief that no mind, whether void or ovoid, and however self-confident, can over-indulge in this beguiling form of literature and remain safe. And this when, more than ever, we need all the brains we have to cope with the increasing complexities of civilised life! Perhaps it is not surprising that the popular Press directs so much of its attention to youth, because youth is impressionable, credulous, inclined to chivalry and very quick to condemn.
Many of your Lordships, like myself, have nearly or quite reached what Sir Walter Raleigh called the sixth of the seven ages of man: that age, ascribed to Jupiter (and I quote):
"in which we begin to take account of our time, judge of ourselves, and grow to the perfection of our understanding".
My Lords, if the mind of man, and therefore the sanity of public opinion, is even more important than the wellbeing of the Press, then I believe that the more mature and well-educated folk, at least, should examine themselves in relation to this daily torrent of verbiage which is gradually washing the colour out of our individuality. It is not much good blaming the newspapers, for as I said it is not in their estate to operate otherwise so long as they continue to serve democracy as it desires. But it may be in their readers' power to use a little more discretion in their appetites. Our political safety may lie in the freedom

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of the Press, but our judgment can be kept fit only by self-discipline, and I doubt whether any legislation is an adequate substitute for that.
5.20 p.m.
LORD WALSTON: My Lords, I should like, first of all, to be the first from these Benches to congratulate the noble Marquess, Lord Hertford, on his maiden speech—a maiden speech which did not in any way suffer from what must have been a considerable trial in having to wait for a long statement just before it was made. I should also like, if I may, to say to the noble Earl who has just sat down how very much I, and I am sure many others, enjoyed all that he had to say, and his way of saying it. While he was saying it I was thinking how fortunate it was that in this Chamber it is not considered the right thing to read a newspaper while other noble Lords are speaking. We here at least have ample time to sit, if not to think. That, I hope, is something that will go on for a very long time. Possibly our example, after the noble Earl's words, may be followed elsewhere.
A great deal of this most interesting debate has turned upon the question of the undue concentration of power in the hands of a few people or a few groups of people. I am certain that we all agree that this is undesirable, and that the results stemming from such undue concentration must be extremely serious for the whole future of the Press and the country. But I must confess that, while I agree wholeheartedly with my noble friend Lord Francis-Williams in the fears that he has expressed and in the hopes that some action on the lines of the Royal Commission Report may be taken, I also share the fears expressed by other noble Lords (I think the noble Earl, Lord Arran, was one of them) that such action is extremely difficult, and, in my view, is unlikely to have any effect entirely by itself. Therefore, I would suggest that we ought to look to other means of overcoming the evils which can arise from this undue concentration.
My Lords, what is it that we really wish from the Press? Because whether the Press belongs to one group, one individual, ten, a dozen or a hundred, it will be neither good nor bad just because of its ownership: it is good or
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bad because it comes closer to or is farther away from those ideals that we believe it should have. When I say "we", I mean the people of the country who are readers of the Press. The important thing for the Press, surely, is that it must be responsible in what it reports and in how it reports it, and its reporting itself and the presentation of its reporting must be objective. It must also have a sense of responsibility in its selection of news; what is news that is worth while reporting, that is good to report, that is right to report; and what is news to which, although of news value, it may be against the public interest to give undue publicity. That is what I mean by responsibility; and in objectivity it clearly must report the facts as well as it can, without bias in that reporting or in that presentation.
Now I do not mean that the Press should be entirely objective. It is perfectly reasonable for any newspaper, any periodical, to have its own views. In fact, if it is to be a good and worthwhile organ of opinion it must have its own views: but those views should, to my mind, be expressed editorially and not on the news side of the newspaper, and it should be made manifestly clear to the readers where the bias lies in that particular newspaper. In general, editorially speaking, that is so, but there are undoubtedly occasions and instances where this does not happen; and it is there, I believe very strongly, with my noble friend and with other noble Lords, that the Press Council should come into the picture. I will reserve my remarks on the Press Council until a little later but I should like at this stage to make it quite clear that in general, in my view, the Press fulfils its functions well. It is responsible, and it is, by and large, objective.
When, in the course of this debate, it appears that we are dwelling mainly on the faults of the Press, we are in fact doing no more than the Press itself does when it reports the disasters, the accidents and the scandals which occur all round us. It is not a true picture of life. All the countless thousands of miles which are driven without an accident, all the thousands of men who go down into the pits to quarry our coal without having a mine disaster, all the thousands of married couples who live happily without

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shooting each other or getting divorces—these are things which, naturally, are not reported. Nobody is interested in all that. If in the course of this debate we dwell on the shortcomings of the Press in exactly the same way, we are doing that because this is the subject we are discussing, and it must not be taken as meaning that, in the opinion of those who mention these things, the Press is universally bad and spends all its time doing these reprehensible things.
What we are chiefly concerned about in the behaviour of the Press, I would say, is, as I have already said, that their reporting should be truthful and objective. In certain cases it is not so, and then we have the laws of libel which can be brought into use. In my view, the libel laws are one of the strongest bulwarks in this country for the preservation of the freedom of the Press, because they give the ordinary individual the ability to challenge the vast monsters of the Press and, in certain cases, to obtain redress from them.
I know that one of the big newspaper proprietors holds views very different from these. Mr. Cecil King, whose name has already been mentioned by several noble Lords, in a fairly recent speech made an impassioned plea for the poor newspapers to be preserved from the action of the libel laws. His actual words were:
"The British law of libel is an absolute nightmare to editors and working journalists. It is a territory full of pitfalls, even for the most cautious, where honesty of purpose is no protection. No editor, when he goes home to bed, can be sure his paper does not contain some unwitting libel".
That is a terrifying and pathetic picture of poor editors tossing and turning as they lie at night, wondering what they have said which is going to hurt some innocent person.
He goes on to say:
"In the face of the grossly excessive damages awarded by juries, the Press is inhibited from its duty of public and critical comment".
At a later stage he says:
"Since the result of a lost libel action and the heavy costs involved can cripple all but the richest newspapers, it is not surprising that many actions are settled out of court—to the great satisfaction of the litigants".
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I do not know if the noble and learned Viscount would agree, but I cannot see that it is a disaster if cases are occasionally settled out of court; and I must confess that tears did not spring to my eyes when I read of the sad plight of all but the richest newspapers who may be crippled by the appalling damages inflicted upon them by the courts or by the costs of these actions, and I cannot help feeling that if anybody did have such tears come to his eyes and had them analysed they would in fact have been found to be crocodile tears.
VISCOUNT HAILSHAM: The only newspaper I ever sued went "bust" before we got to court.
LORD FRANCIS-WILLIAMS: The noble Viscount the Leader of the House should pick his newspaper.
LORD WALSTON: Or possibly the processes of the law in his case were somewhat too slow. But I know of one, which belonged to a friend of mine, and which in fact did have a rather famous but very small libel action. But I cannot believe that many people would seriously maintain that our laws of libel at the present time are anything but a preservation, not only of the rights of the individual but also, in an indirect way, of the rights of the Press itself.
I am concerned not so much with the actual libellous statements which from time to time are published in newspapers, though I think we should remember that for every libel which is published and proceeded against there are undoubtedly a good many libels which, one knows, are never proceeded against because the cost of litigation puts off all but the richest of those who have been libelled. What I consider more serious is when a newspaper publishes what is, in fact, the absolute truth, but deliberately gives an entirely false impression—what I believe the lawyers call a suggestio falsi. In fairness to the newspapers, we must admit that this is not only the prerogative of the Press; other individuals and bodies do it. The Guardian on May 28 had an interesting leading article on this matter, headed "Statistics in a blue light". While I do not in any way wish to bring Party politics into a debate of this kind, I would, in fairness to the Press and to show that they have good companions in this, draw your Lord-

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ships' attention to this article and read one extract from it:
"The tables above "—
which are, in fact, pictured in this article—
"taken from a Conservative Party advertisement on education are a fair sample. The number of university students in 1959–60 was exactly a quarter more than in 1951–52, but the pictorial indicator has grown six times. As for projected growth up to 1973–74, at a careless glance the size of the student body might be supposed to swell sixteen times in twenty years; in fact it is expected to double."
That is what I am suggesting as speaking the truth but in such a way as—I will not say "to be calculated to deceive", but in such a way that a reasonable person might consider it to be something which is not deceiving.
The classic example, of course, was the famous occasion when a predecessor of the most reverend Primate visited New York at the time of prohibition. At that time, "speak-easies" were very much in the air. The Archbishop was warned by some of his most experienced advisers that it would be a mistake for him to make any mention of such matters because it could easily be misrepresented. When the liner on which he was travelling docked at New York, it was boarded by reporters who were given an interview by him, and the first question they asked was, "Tell me, Archbishop, what do you think of our speak-easies?". He remembered the advice given to him, opened his eyes in innocent astonishment and said, "Are there any speak-easies, gentlemen?" The headlines which appeared that evening told the population that the first question the Archbishop asked on landing in New York was: "Are there any speak-easies?".
We see that happening frequently in all aspects of the Press to-day. When the balance-of-payments figures are published, you may see in one newspaper that exports have reached their highest-ever figure; but you may read in another newspaper that the gap has widened still further and the position is becoming serious. Both facts are completely true. Last week in your Lordships' House we had a most interesting and helpful debate on Sport, when the noble and learned Viscount the Leader of the House, in his other capacity, was able to announce the
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welcome additional sum the Government would be able to make available on sport. That could well have been reported in one newspaper as, "Government gives another £1½million to sport", and the ordinary reader would have said, "Good for the Conservatives; they always look after the footballers." On the other hand, with equal truth, it could have been reported as "Government accept Labour Peeress's suggestion for more help to sport"—in which case the man in the street would have said, "Good for the Labour Peeress, and the Labour Party." Both would have been true.
I have talked of what might have happened and what, in vague terms, has happened; but on Sunday we had an example of this in the Sunday Express which probably many of your Lordships read. The main headline read:
"Public School Shock. Accept State education or face big new bill—that's the threat to thousands of parents. Labour's secret plan: 'Bar university grants to fee-paying boys'."
Then it goes on to say, with a long article by the Sunday Express political correspondent:
"A scheme to run the public schools out of business by denying their pupils State-aided places at universities is being considered by the Labour Party planners."
Some of us may have read, if we read the back pages of various newspapers to-day, that that has been categorically denied by a leading member of the Labour Party. There is, in fact, absolutely no truth in the assertion that the Labour Party has made such proposals. Whether some members of the Labour Party who are, in their own right, planners—and all of us can be that—have at some time put forward this point of view or not, I do not know. I believe that two years ago somebody did so. So, to that extent, you can say that this is not a direct lie; but you can say with complete emphasis that this type of thing, this statement with these headlines, gives an entirely wrong impression of what is happening in this, to my mind, somewhat important aspect of public life. I presented this example because it is topical; I am not saying it is the Labour Party who are universally victimised and the Conservative Party are not misrepresented; we all have our fair share of misrepresentation all the way round.

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I think the way this matter should be tackled, and the only way in which it can be successfully tackled, is by a Press Council. That must be the answer to it. That is what has arisen in the minds of those of the Royal Commission who suggested the Press Council in the first place. Let me remind your Lordships of the remarks of the 1961 Royal Commission on the Press on this particular matter. I quote from paragraph 325 of the Report in which it is stated:
"If however the Press is not willing to invest the Council with the necessary authority and to contribute the necessary finance the case for a statutory body with definite powers and the right to levy the industry is a clear one."
Both Royal Commissions have come down very firmly on the side of a Press Council and I believe it is necessary, not only in the interests of the reading public, not only in the interests of the people who may be misrepresented and maligned by the Press, but also, as the noble Lord, Lord Francis-Williams, has said, in the interests of those who are actually engaged in the profession itself.
A Press Council would, so far as they are concerned, deal with the complaints and difficulties of the reporters who have been wrongly sub-edited or ordered to do things they consider are against their professional morals. It would also deal with the complaints of editors who feel they are being given wrong forms of overriding instructions by their owners, and with all matters of that kind. But also, I think, it must deal with these problems of misrepresentation and of apparent truth being given an entirely false impression. In order to do that, it must be a very different body from what it is at the present time. Whether it should have lay members or not, I do not know. I should have thought it should have some lay members; I should have thought it should have a chairman, at least, who is not a journalist, who is not a newspaper owner; and perferably one with considerable legal experience. But I should be happier it were appointed by the Press and run by the Press, and not imposed upon the Press front outside.
Apart from its constitution, it must be able to do two other things. First, it must be able to act quickly. The present Press Council seems to hide itself from the general public in a way which makes it very difficult to get hold of it. I
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tried to find it yesterday. Its number in the telephone book no longer answers and had been discontinued. The present number is ex-directory and only after a considerable amount of research and pressure was it possible to make contact. If the Press Council is to be able to act in cases of the sort I have outlined, it must be possible to contact it immediately and it must be possible for the Council to come to a decision immediately. If an aggrieved person complains that he has been misrepresented, it is no good having a retraction published in the newspaper two months later. A retraction must appear within 24 or 48 hours, certainly within 72 hours. And it must be made in a place of prominence equal to that of the original statement. It is useless having the name of a political Party, organisation or private individual splashed in the headlines on the front page and then, two or three weeks later, or even two or three days later, a small paragraph in the back page saying that the newspaper is sorry, it made a mistake.
The Press Council must be organised in such a way as to be able to deal with these complaints with the utmost rapidity, so that the complainant can be given the chance of presenting his case and so that the newspaper can produce its own justification. It need not be in any way a long legal process; it need be only a common-sense investigation of the facts. The Press Council should not only wait for an aggrieved individual to come forward and place his complaint; it should also be the watch-dog. It should read all the newspapers all the time and should be able on its own initiative to ask a newspaper for an explanation and, if necessary, to obtain a retraction of what has been said, if in the opinion of the Council unprofessional conduct is involved. I believe that only by that form of self-discipline within the profession of journalism, by having a Press Council, preferably with a legal chairman, so constituted that it can act rapidly and can actually order an offending newspaper to publish a retraction in whatever way the Council decrees, can we be sure that the concentration of power which has taken place and which, in my view, will continue increasingly to take place, no matter I what the Royal Commission may propose,

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will not result in the complete corruption of our Press.
My final word is to repeat what I said earlier on. The fact that we have dwelt mainly on the shortcomings of the Press does not mean that these occurrences are other than rare. I believe that, in general, we have a good Press in this country. We have certain weeklies, monthlies and dailies that are a model to the whole of the world, and even among those newspapers rather derogatorily referred to as "organs of mass circulation" there are models to the rest of the world. We have a Press of which we are proud, but from time to time they have serious and wicked shortcomings, which the Press must look to if we are to continue to have a Press with its present reputation.
5.45 p.m.
LORD MABANE: My Lords, at this late hour there is no need for me to be anything but brief, especially after this interesting debate. And perhaps I may be allowed to say, without presumption, how much I enjoyed the maiden speech of the noble Marquess, Lord Hertford.
I am bound to say that I find myself in agreement with much that has been said in the course of the debate. My claim, if it is a claim, to take part in this debate is that I have lived through two Press Commissions. In 1949, I was an active director of Kemsley newspapers; and more recently, rather to my surprise, I was the second witness to be called before the Royal Commission. Therefore I am perhaps more acquainted with the evidence and with the Report than some other noble Lords are. I think that if noble Lords will look at the 1961 Royal Commission's terms of reference, they will find that the terms are much narrower than was the case in 1949. After thanking the noble Lord, Lord Francis-Williams, for introducing this debate, I should like to repeat what he said by way of tribute to the members of the Commission under the noble Lord, Lord Shawcross. I spent three hours before them and was able to understand how carefully they approached their task, and with what wisdom: though, as I read the Report, I felt as if they were rather searching for something to say.
Perhaps, as one actively concerned in newspapers, I can say that, while there
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has been much talk about the concentration of power, there has been no mention so far of where that power concentrates. It concentrates in the readers. Nobody has to buy papers, and if a paper has a large readership it is not because the proprietor is powerful, but because the readers want to read it. The reason why newspapers go bankrupt and close down is because nobody wants to read them.
THE EARL OF LONGFORD: My Lords, I do not wish to interrupt the noble Lord too much, but surely he agrees that newspaper proprietors are very powerful. Mr. Cecil King is surely many times as powerful as the noble Lord or myself.
LORD MABANE: My Lords, I do not agree at all. Both the noble Earl and myself are more powerful than Mr. Cecil King or anyone else, because we can stop buying the paper.
LORD FRANCIS-WILLIAMS: My Lords, is it not the case that over 1¼ million buyers of a newspaper, and probably somewhere in the neighbourhood of 4 million readers, wanted to read a paper like the News Chronicle; but the News Chronicle is no longer there for them to read? It is no good saying that people can stop reading a paper. What is happening now is that the paper they read can stop being available for them to read.
LORD MABANE: My Lords, I feel that the reason why the News Chronicle went down was because it was badly managed and was not a readable paper; and that is the feeling all the way through the evidence and the Report.
LORD FRANCIS-WILLIAMS: My Lords, it was a badly managed paper, but some 4 million people found it a very readable paper. The economics of the Press are now such that that figure is not enough to make a paper viable.
LORD MABANE: I do not want to enter into controversy. I wish to give my view that the real control of the Press is in the hands of the readers. I am surprised that anyone like the noble Lord should deny that.
I should like to say a word about advertising, which is often spoken of as rather a bad thing. But people should realise that advertisements are good readership. I ventured to say to the

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Royal Commission that if one wants to find the best paper in a locality, one should find out which publishes most births, deaths and marriages. It is the "smalls" that attract the readers. I was interested after the New York newspaper strike to hear that many people, when asked what they missed most, said the obituary columns.
The two things which I wish to avoid at all costs are censorship and subsidy. I fear that the way in which some of this Report is drafted might seem to be opening the door to censorship and subsidy. I believe that for a newspaper to be subsidised by any particular individual or any particular body is the worst thing in the world. It happened in France before the war, as your Lordships will know; and it happened once in this country with a newspaper now defunct, the Morning Post, which, it is said, died of its own opinions. Therefore, I am, along with the noble Lord, Lord Walston, rather doubtful about the proposal for the establishment of this Amalgamations Court. I feel that it might be the way to censorship and therefore I do not like it. And I am glad that many other noble Lords who have spoken are also doubtful about this proposal. I am entirely in favour of moving ahead with the Press Council although I do not think it will do so much good which the readers alone cannot do.
To summarise the three points I want to make: the real power is in the readers; censorship and subsidy are, above all, to be avoided; and if anything useful can be contributed to our affairs from the Report of this Royal Commission, it is by an extension of the Press Council in the way indicated in the Report and in the way in which many noble Lords have to-day suggested.
5.52 p.m.
LORD AIREDALE: My Lords, I think that everything I might have said has been said already, and said much better. I should like therefore to read one sentence from the Royal Commission Report and to make one single comment. The sentence is from paragraph 325 where it says:
"If the Press is not willing to invest the Press Council with the necessary authority the case for a statutory body is a clear one."
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I should like simply to take up one point made by the noble Lord, Lord Walston, and ask the Government to assure us that they agree that the case for a statutory body is quite incontrovertible if the Press Council cannot even get itself into the telephone directory.
5.53 p.m.
THE EARL OF LONGFORD: My Lords, I must apologise for being unavoidably out of the Chamber far more than is proper for someone who is to speak last for the Opposition. Having said that, I should like to add that I was glad that I heard a good many of the speeches, including the all too short one of the noble Lord, the maiden speech of the noble Marquess, who I see has been called away and who spoke so well when I was here—and no doubt even better after he had ceased to be disconcerted by me; and, of course, I heard the powerful opening speech of the noble Lord, Lord Francis-Williams, who I think, by general consent, stands alone in his knowledge of this subject having so many years of distinguished service in that field. We are all aware of the famous saying that
"Who is tired of London is tired of life".
Without going so far as to say that—and it is perhaps a not unwelcome break in the long and important discussions on the London Government Bill that we should turn to this subject—and, although I say it, from me at least it will not be resented, I am glad that the Bishops have been able to come and that a major contribution has fallen from the lips of the right reverend Prelate the Lord Bishop of London.
I suppose that when we are tired these days, we look for rest and consolation among the writings that appeal to us. I believe that the noble Viscount occasionally translates a Catullus in these moods, and others fall back on the Meditations of Marcus Aurelius or the confessions of St. Augustine or even those of Rousseau. At any rate, we refresh ourselves from the deepest springs. But others (and here I am afraid I almost rule myself out in advance as a man of—I forget quite what—
VISCOUNT HAILSHAM: Poultry.
THE EARL OF LONGFORD: Well, I have no doubt chicken feed for the noble Viscount to follow. But I was really

923
thinking of the noble Earl, Lord Baldwin of Bewdley. I am what might be called a "chain-smoker" of newspapers, a drug addict of the lowest type; and a man of that type, I gather, has hardly any claim to detain the House. Nevertheless, I must confess, since it is a day of confessions, that I return to writers in the Press—and there are many good writers in the Press. There is Francis Boyd, or Mrs. Lena Jeger in the Guardian, or Mr. Malcolm Muggeridge in the Daily Herald; I enjoy "Peterborough", or "The Londoner" (whoever he or they may be) and the "Londoner's Diary", and in this way I gain the rest which the noble Lord gains from feeding the chickens—if that is what he does with his chickens.
There are those who take the noble Lord's side about this. The noble Lord, Lord Francis-Williams, reminded us of the poor opinion Queen Victoria had of journalists. He did not quote another saying of hers about newspapers. She said on one occasion:
"I never read the nasty newspapers. It does one no good and it prevents one doing one's work properly."
I am not sure how she defined a nasty newspaper. I think it was roughly in the same way that we all define a nasty newspaper, as a paper which ignores one (which in her case was not likely) or which treats one harshly. There have been others who have taken that view. I am not sure what the practice of that great man the father of the noble Earl, Lord Baldwin of Bewdley, was in these matters; but certainly Lord Balfour was always accused of never having read the newspapers. This I have never been able to believe: that a Prime Minister should not read the newspapers; it always seemed to me to be a bit of affectation. But it was always said that he never did On the other hand, Matthew Arnold said:
"There are more things worth knowing in a single number of The Times than in all the works of Thucydides."
The noble Lord opposite is a Thucydidean scholar and may not agree with that. But this view is partly supported, and it is one that I share. It is from that point of view that I approach the subject of this debate.
Some of us are experts; others speak for the Government, others for the
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Churches, while yet others are left speaking for themselves. That is really my position, as it was of other noble Lords. One is therefore left to offer some rather general views about the Press. The Press is attacked for various reasons. I agree with the general opinion of the noble Lord, Lord Walston, in his affection for the Press at the present time, but it is attacked on certain grounds. The Press is occasionally accused of pornography. If I am asked how I come at this, I suppose that I come at it as what might be called a Catholic puritan. That does not mean someone who is a puritan in his week-day reading but a Catholic in his Sunday reading, because that might not be a very elevated figure. But I am, on the whole, a puritan, and at the same time one who is ready to read what may be a little dangerous for the soul, but what it may occasionally be his duty to study.
I remember some time ago, at the time of the "Lady Chatterley" business, that I was rung up by a firm of lawyers, who appeared to be acting for the publishers, and asked whether I would give evidence in favour of Lady Chatterley's Lover—the book, I mean, not the lover. I said, "I have not read it". It was not easy to buy then. It was only afterwards that it became impossible not to buy it. They said, "That can be put right", and that they could send me a copy. I replied that I did not think I should like it. They said, "Why not?". I said, because I was a puritan. They said, "There is no difficulty about that. D. H. Lawrence was a puritan, too". So I said, "Yes, but I am a different kind of puritan"—and I am afraid that is the one distinction between me and that man of perverted genius.
To-day, if I see that some Duchess is writing her memoirs in a Sunday newspaper, I do not read them unless I feel a duty to do so. Last Sunday, with a debate of this sort coming on, I felt one was perhaps under an obligation to see what these reminiscences amounted to. Having read them, I felt rather like the noble Duke, the Duke of Atholl, who, I believe, complained yesterday that he paid for what he thought was vicious and found that it was very harmless. That was my experience on Sunday: it was very mild and not very exciting. On the whole, I would not say that our

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Press was obscene. I would say that it trembles on the brink of obscenity, and there is always a danger of its going over the brink.
Here, let me salute an old friend of the noble Viscount and mine, Mr. Randolph Churchill. I think his greatest public service has been the extraordinary, single-handed war he has waged against the Press, even indicting certain Members of this House, I think, as pornographers royal, and generally making a great noise about it. He was in the peculiar position of conducting a campaign which appeared to be anti-prig and anti-pornographic at the same time. I would say that the Press have been distinctly better since they knew somebody was going to attack them if they overstepped this line of obscenity, and I think we find very little pornography in our Press to-day. That does not mean that the Press are in any way perfect. One has on many occasions had to differ from their sense of news values. There is the question of bias. The noble Lord, Lord Walston, dealt with that.
At the time of the last Royal Commission, the conclusion of the Commissioners was that in the Press to-day the views of the Left are not insignificantly expressed. They are supported by the biggest popular morning circulation under one control, the Daily Herald and the Daily Mirror. That may have been so then. It can hardly be said to be so now, though I would agree that these newspapers favour the Left Wing rather than the Right Wing Parties. But one could not say that the Daily Herald to-day was a Socialist newspaper as such; it tends to favour the Labour Party more than the Conservatives. I say that clearly. It is not under Labour Party control. At the present time I would say that the Labour Party suffer distinctly, as compared with noble Lords opposite, from not having a paper more closely associated with their views. I say that in all candour. But I agree that these newspapers favour the Left Wing argument on the whole, and we must not neglect the service they seek to render. I would not say that bias was a noticeable feature, because on the whole the newspapers present the facts and the bias comes out in the leading articles, which is where it should come out. But there is a good deal more writing from the Conservative side.
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When we come to other criticisms of what might be called the news value of the Press, it is harder to be equally satisfied. If we take the discussions we have had in this House about London government, everyone would agree that these discussions have been among the most important with which this House has been occupied for many years. Take the two full days which we devoted to the Second Reading of the London Government Bill. To the best of my belief—and I have had this checked to-day—and so far as I have been able to discover, those discussions were not dealt with, certainly not in any recognisable form, in any of the popular newspapers. I have not looked at the Daily Sketch, but the noble Earl, Lord Arran, will probably confirm that, if it is true of the Daily Sketch. It is true of the Daily Express, the Daily Mail, the Daily Herald and the Daily Mirror. If you take the popular Press—I do not say the quality newspapers are unpopular, but I think "the popular Press" is a well-known expression—those discussions in this House were not referred to in any way.
This is something that must give us pause. We may be told that it is because the House of Lords is not news. It is news when we are discussing something sensational. Anybody who looks at the newspaper this morning will see that it is big news all over the popular Press, because the Peers are described as "attacking sleazy clubs". That is, no doubt, a worthwhile job in which the House did its part yesterday. But no one would say that the discussion yesterday would rank in importance with two full days' debate on the Second Reading of the Greater London Bill. No one would say there is any comparison in importance. But in the one case there were headlines all over the place, and in the other, complete silence.
THE EARL OF ARRAN: My Lords, if it is any comfort to the noble Earl, I think he may be assured that there will be some coverage, at least, of to-day's debate in your Lordships' House.
THE EARL OF LONGFORD: That, I am bound to say, is no comfort at all. It would be a personal comfort if the noble Earl could give me any assurances about my own remarks. It would be certifiable if there were a full debate in

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this House on the Press and the Press did not report it. I am glad that the noble Earl has told me that, but, to be honest, I think it shows a great pessimism about the Press that he thought it necessary to give us that reassurance. At any rate, those are the facts about the debates in this House.
Your Lordships may say that what they stress is not necessarily trivial or sensational; you may call it the human or, possibly, the dramatic. When we had an important debate on the educational side of the London Government Bill, which went on most of the working day, it was not referred to, so far as I noticed, in the Daily Mail, except in one aspect—where the noble Lord, Lord Morrison of Lambeth, felt it his duty to criticise the fact that the Bishops were not here. But the educational issues were not touched upon by the Daily Mail. On the front page, I am glad to think—I suppose I am glad to think—I obtained my own mention under the heading, "Lady Edith rebukes Earl". I apparently had been talking to someone on this Bench, and the noble Baroness, Lady Summerskill, thought it her duty to say that she could not hear herself speak. That got on to the front page, and the profound observations which I and others made on education were ignored. That is a little more human story than the reorganisation of educational authorities in the London area which, in any case, is rather difficult to put shortly.
Let me say something quite seriously. I must express warm appreciation of the attention which the popular Press, along with other newspapers, have given to the grave illness of the Pope. When you get some dramatic thing that happens to a man popular all over the world, the Press does its job. Therefore one must not talk as if it paid no attention at all to deep and moving events.
So much for sensationalism or triviality. We may be told that the Press are inaccurate. They often start by being so, but it is a question of whether they finish by being so. I was rung up on Sunday and asked whether it was true that I had recommended popular polo. In fact, the noble Duke had recommended it and I interrupted and said I did not see how it was going to work. I questioned the merits of its quality, but it had got round
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in some indirect way that I had recommended popular polo. I told them I had not, and that was the end of it. You cannot blame the Press for getting the thing wrong at first blush, but it would have been wrong if they had put it in without checking it.
Great indignation has been aroused by some of the things which the Press did in the Vassall case, and I can understand that. But, of course, it was often very difficult to get at the truth, and the Press felt that they must try to state the truth, yet they could not find it out. I think very often this is where the mistake comes. The Press realise that there are some important facts which are of great interest to the public and, maybe, of great significance. They cannot find them out. They conjecture and speculate, and put out what they believe to be the truth, although they have little ground for it. That is where one of their mistakes arises.
The other big mistake lies in the field of prediction. They announce, perhaps, that there is going to be an Election this year, without knowing any more than the rest of us whether there will be; but that is pardonable and, I think, fairly well understood. The papers this morning seem to have guarded themselves fairly well against the Derby result. I looked in the Daily Express and the Daily Herald, for example, among other newspapers, and each of them had four or five commentators or tipsters, if one is still allowed that word. So it is very unlikely that between them they were not going to get the answer. They made more or less sure of the result one way or the other and I have no doubt that each paper must have got it. That, of course, is not allowed in most of the comment, and a lot of the misleading things one reads in the Press are really predictions based on scanty evidence. But as an inveterate reader of the Press, I am bound to say that as long as the predictions are not damaging to individuals I might make great mental allowance on behalf of the journalists.
So we reach the question: what, if anything, is to be done about the Press? Here I place myself firmly, and almost deferentially, behind my noble friend Lord Francis-Williams. We have had these Royal Commissions, and they have reached the same conclusion, that there

929
ought to be a Press Council with a lay chairman and strong lay representation; and we have been told—and this, to me, was the main sensation of the debate so far—that, in fact, this is shortly to be announced; I did not know this when I first came in here to-day. So, we understand, in that sense we are not only pushing at an open door, we are simply walking into a room with the door wide open. That is apparently the position now, that there is going to be a Press Council of this particular sort; so I think, in that sense, I need not argue very much for it.
There was great stress laid on concentration and very striking figures were given by the noble Lord, Lord Francis-Williams. I am sorry that the noble Lord, Lord Mabane, has gone because he produced an interesting but, I am bound to say, I thought fallacious argument that you can compare the power—I do not know whether or not he was serious in this contention—of the individual reader of a paper with the power of a Press lord. You might say that if you could collect 1 million, 2 million or 3 million readers and band them together and they decided to take common action against a Press lord, their power could be compared with his. But to take an individual reader and compare his power with that of a Press lord is of course rather fantastic—but I doubt whether the noble Lord made that point seriously.
I side very much with the view of the noble Lord, Lord Francis-Williams, that in journalism we have a profession. He spoke in a way we all respected about his family connection, past, present and future. In this profession—which is an industry in which economic considerations are operating—a journalist, while in some ways he may like to follow the professional standards of a doctor or a barrister, is in a sense at the mercy of economic forces which cannot altogether be ignored. That raises a case for a kind of intervention which you do not find in other professions, and it seems to be in general agreement—and it is shortly to be announced, indeed, by the papers—that a Press Council of the sort suggested in the Royal Commission should be established.
I would add only just one word on that, and one word on something else, and then sit down. The noble Lord,
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Lord Walston, carried me with him when he called for quicker action, but I thought he wanted action that was in a way quicker than human nature and human circumstances would permit. I have read this Report of the Royal Commission and I am afraid that I do not think you could dispose of most of these matters in two or three days even if you could, so to speak, subpoena everybody. Nevertheless, I agree with him in wanting this speed. I was a little less happy about the active watchdog, which I thought would have a job of commenting almost every day on what was going on, which might be going too far. But I agree with his approach to speed. I was going to put a question to him, but I daresay he would agree with me now, that much more money for that and other purposes would be required than the Press Council has ever possessed up to now.
I would add one further thought which came to me in a pamphlet which was written by Mr. Harford Thomas, a leading figure on the staff of the Guardian, who suggested that a Press code should be established. I do not imagine that this code would be compulsorily established; it would be propounded by the Press Council and the papers would be expected to comply with it. But if anybody says that a Press code is impossible, I would say to them that apparently many countries in the Free World have a Press code—for example, Australia, West Germany, India, Italy and Sweden—and the United Nations has drafted at least one international code. So there is nothing far-fetched or absurd in the idea of a Press code. It would lay down certain general principles about accuracy and the kind of evidence which should be ruled out, professional secrecy and other matters. I am throwing this thought rather rapidly at the noble and learned Viscount, and, therefore I am not expecting him to deal with it offhand if he does not wish to. But I respectfully suggest that there is a great deal to be said for this Press Council propounding a Press code.
In conclusion, I support the noble Lord, Lord Francis-Williams, and many other speakers in pressing for this strengthened Press Council and I also support him in pressing, along the lines of the Royal Commission, for the Amal-

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gamations Court. I feel that is quite essential in view of the staggering facts about concentration which he placed before the House earlier on. In the last resort, I feel that most of us—even perhaps, in other moods, the noble Earl, Lord Baldwin of Bewdley—admire the work that is done by our journalists in this country, who are full of failings like the rest of us. But the real question is whether some sort of self-discipline can be accepted by the Press; whether they can accept some sort of machinery which means that from day to day and year to year there will be some force operating on them other than purely the force of the market and their own competitive instincts. We do not want such a force in any way whatever to take the form of interference by the politicians, but a Press Council on the lines suggested seems far the best way of tackling this problem. I am very glad indeed—it seems we already have a most satisfactory outcome, not perhaps unconnected with this debate—that this Press Council is on the way. For that and for many other reasons, I think we are all grateful to the noble Lord, Lord Francis-Williams, for initiating this debate.
6.18 p.m.
VISCOUNT HAILSHAM: My Lords, the noble Earl, Lord Longford, who has just resumed his seat, has covered a very wide range of subjects, moving rapidly from my own habit of translating Latin poetry when life becomes too much for me, to Queen Victoria, skirting over the illness of the Pope and complaining bitterly that his own speeches on the London Government Bill were not adequately reported.
THE EARL OF LONGFORD: My Lords, that was a very small part of my complaint; it was a complaint that the speeches of nobody, not even of the noble and learned Viscount, who was otherwise very well reported, were dealt with on that occasion.
VISCOUNT HAILSHAM: I made no speeches on that occasion, so in that case the Press were entirely accurate.
THE EARL OF LONGFORD: The noble and learned Viscount said that he made no speeches, but what about the long arguments on the procedural question before the Second Reading adjournment?
LORD AIREDALE: My Lords, could I put this to the noble and learned Viscount? He may attack editors of the popular newspapers for many things, but surely he should not attack them for not printing that particular discussion in extenso for the edification of their readers.
VISCOUNT HAILSHAM: My Lords, my own judgment, for what it is worth, is that the popular and more serious Press valued those debates at exactly their true worth, and I could not more heartily endorse what they reported or what they did not report. But there was more than that in the speech of the noble Earl with which I did not agree. I did not agree that it is any handicap to the Labour Party not to have a tied newspaper any longer. Indeed, so long as the Daily Herald was, in fact, tied to the Labour Party, I think that it was a good deal less successful than it is now as a supporter of their side. I should have thought, broadly speaking, that at the present time the Left Wing point of view was very much better represented in the popular Press than that which I myself uphold.
However, the debate, in spite of the noble Earl's enticements, is about the Report of the Royal Commission, and the main part of what I say I think ought to be devoted to this topic. We have had a number of interesting, and some of them extremely amusing, speeches. In the latter category I particularly enjoyed that of the noble Earl who sits on the Gross Benches, and one very pleasing maiden speech from my noble friend Lord Hertford, whom we were glad to welcome after a too long period of silence before he embarked upon his career as an active Member of this House. I was also very glad to hear the speech of the right reverend Prelate the Lord Bishop of London. It seems to me that this is exactly the kind of debate in which a contribution from the Bishops' Bench is particularly welcome. I am bound to say, too, that I did not endorse at all the criticisms which, in their absence, were made against them by the noble Lord, Lord Morrison of Lambeth, and which seemed to me to quite misunderstand the rights of Members of the House to take part in such debates as they feel they can offer a useful contribution to. I thought this was a most unfair attack.
THE EARL OF LONGFORD: My Lords, I must interrupt, because I was present. I cannot remember whether the noble Viscount was.
VISCOUNT HAILSHAM: I was.
THE EARL OF LONGFORD: He did not come to their defence then.
VISCOUNT HAILSHAM: That is quite true. I had no part to play in that debate and I have a part to play in this, and I told the noble Lord, Lord Morrison of Lambeth, I proposed to advert to his remarks on this occasion. He is absent on this occasion; the Bishops are present. I am bound to say that I think he was most unfair on that occasion to the right reverend Prelates.
We all enjoyed the opening speech, and as the noble Lord, Lord Francis-Williams, reminded us, the Commission whose report we are discussing was set up very largely in consequence of the demise of the News Chronicle, followed by the take-over among other organs of the Daily Herald. The demise of the News Chronicle was an event I think we all deplored, although it was one which few of us were bold enough to say could have been prevented. It was in itself a matter of some significance. Despite what my noble friend Lord Mabane said—and I could be no judge as to whether what he said about the quality of its management was correct—as the noble Lord, Lord Francis-Williams, pointed out, it is something of a portent that a business, to put it no higher, such as the News Chronicle, supported by an army of customers, or readers, of 4 million, or something of that kind, should suddenly be swept away by economic forces which rendered it unprofitable to carry on.
Although personally I was always somewhat sceptical of the results of this Royal Commission—and that is no criticism of its members—I do not wonder that people thought that here was a phenomenon worthy of careful investigation. The noble Lord, Lord Francis-Williams described the situation as critical for democracy. I am not sure I would go as far as that. In that degree I think I agree with my noble friend Lord Balfour of Inchrye, that perhaps this was overstating the case.
The Lord Bishop of London reminded us of Blackstone and the freedom of the
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Press, but I cannot help feeling that the nature of the freedom of the Press has developed a little since the end of the 18th century. In those days it consisted of anybody with a few pounds in his pocket buying a press and selling a few, perhaps a few hundred copies of a newspaper; and in those days what was chiefly insisted upon was the right to express his own opinion. Nowadays, if such a freedom ever existed it has long since died. Nobody can start a newspaper to-day unless he is supported by many millions of pounds. It may, of course, not be illegal for him to try. It is like the law before the days of legal aid, open to everybody like the rest; but it is not everybody who can afford to enjoy this particular freedom.
I personally attach a great deal more importance to the value and comprehensiveness of the news service than to the leader columns of any newspaper as an essential organ of democracy, and I think in that I am echoing the opinion put by my noble friend Lord Drogheda, who told me that, for reasons he gave, he was unable to stay to the end. The real value of an independent and free Press to a country is, after all, that people should be in possession of the necessary objective facts to be able to exercise their own judgment about events, and not so much that everybody should be able to express his own opinions through the columns of the Press, which he manifestly cannot. Indeed if the freedom of the Press meant that, I should be obliged to say with the late Archbishop Temple—who I am assured never did say it—se non é vero é ben trovato. "I believe in the Holy Catholic Church but I much regret it does not exist."
The result of the labours of the Commission is certainly a Report which is of great value. I rather share the scepticism of my noble friend Lord Mabane as to whether really the recommendations will go far to remedy the disease which it was designed to diagnose. For my part, I agree with the Commission in rejecting the various proposals for subsidy, whether direct or concealed or whether paid for by levy or by contribution from public funds or by compulsory service from advertisers, as being remedies which are in themselves worse than the disease; and in that I think most of us this afternoon agreed.

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Of course, the recommendation of the Commission which has met with the most response in this afternoon's debate is that for a stronger Press Council. I think almost every speaker has agreed with that and has laid considerable stress upon it, and it is one with which the Government agree and to which the Government attach importance. As the House will recall, the Commission desired to see a stronger Press Council with wider functions, and fulfilling, as at present it does not, the recommendation of the 1949 Commission that it should have a lay chairman and lay members. The additional functions included: to scrutinise changes in the ownership, control and growth of Press undertakings, including periodicals, giving wide publicity to authoritative information in these matters in annual or special reports; to keep up to date and publish information about concentration in the Press on the lines recommended in the Report; to enforce the Royal Commission's recommendation that newspapers should bear the name of the company or individual in ultimate control of their affairs.
The Commission thought that the Press should be given another opportunity voluntarily to establish such an authoritative Council. And although I sensed in Lord Airedale's brief intervention that he might not be of the same view, I am bound to say I did not detect very much public enthusiasm behind the recommendation that the Government should, at any rate at this stage, enforce them by a time limit. At any rate, the Government have thought it right to give the Press Council a reasonable interval to act on the suggestions of the Commission.
The Council met immediately on publication of the Report and have since held more than a dozen meetings to consider this and other recommendations. It is, I think, fair to the Council, which might otherwise have been accused of undue dilatoriness, to remind the House that it is composed of journalists or managers nominated by no fewer than seven constituent organisations. These are scattered throughout the country, and their sponsoring bodies meet, I need hardly say, on different dates, and various other difficulties exist in the way of getting them together for consultation. At any rate, the Government do
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not consider the Council have been dilatory, and I believe that they are now, as has been said, within reach of an agreed formula.
They have kept the Government informed of their progress and they have told us that they have, not without difficulty, reached a position where there is an overwhelming body of opinion within the Council in favour of a lay Chairman and additional lay representation. They are also agreed to extend the scope of the Council's work as the Royal Commission recommended, and they expect to obtain Council approval of the new constitution early in June. If we can obtain voluntary agreement by then—and it looks as if we shall—there are obvious advantages in dealing with it in this way. Legislation, which in any case would never have come before us this Session, could not have speeded up the establishment of what we want.
I should like to add two further reflections on the future of the Press Council. If it is to fulfil the wider functions envisaged by the Royal Commission, it will certainly require a bigger permanent staff than it has now. I think this would meet one of the points put by the noble Lord, Lord Walston. No doubt this is in mind, but it will cost more and I hope that the industry will be willing to accept the obligation. It seems to me essential that the services of busy professional men who join the Council should, so far as possible, be aided by adequate administration. The new Council should, therefore, have an adequate, although I would not suggest lavish, secretariat.
That brings me to the second reflection. The Council will need, and ought to have, the best men and women available to it, whether Press or lay. Not every proprietor or editor instinctively welcomes losing even a small part of the services of a valued member of his own staff. Such appointments, though honourable to the recipient, are not invariably welcomed by employers. I can only say that I hope proprietors will be not only co-operative but encouraging in this respect. It is in everyone's interests, not least those of the Press, that this Council should be a body with authority. I hope that no one called upon to serve it will be made to feel too strongly a conflict of loyalty between

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his own newspaper and the interests of the Press as a whole.
It is not for me to comment upon the suggestion of the noble Earl, Lord Longford, for a professional code. I would make only two points to him as my immediate reflection upon what he said. The first is that a profession must make its own code: it is not something which a Government ordinarily can impose. The Government do not impose the definition of what is called, rather strangely, infamous conduct on the part of the medical profession; nor do they impose upon either or any of the legal professions what they consider to be right and proper. The second is, of course, that if a code is to be imposed by anybody there must be some degree of sanction behind it. You can be unfrocked if you are a priest, and you can be disbarred if you are a barrister. I am not sure that there is any comparable event which can take place in your life if you are a newspaper man. Of course, this presents one with a slightly different point.
THE EARL OF LONGFORD: My Lords, if the noble Viscount is leaving that matter may I point out that, as I understand it, in other countries the profession would work out its own code? I am not suggesting that it should be imposed. If they do work out these codes in other countries, surely they must overcome the difficulty mentioned by the noble Viscount. I do not suppose they in fact "unfrock" them; so I suppose they reprimand them.
VISCOUNT HAILSHAM: There can in no profession be any objection in principle to a code, so long as it is administered by the profession itself and is agreed to by the profession itself. I can see considerable special difficulties in the way of a general code for newspaper men; but, having myself lived within the bounds of a profession, I should be the first to welcome a professional code in any profession; although I would say that, even so, the written rules are always of considerably less importance in governing one's conduct and in maintaining a high standard of conduct than the unwritten rules which are sometimes observed much more closely.
That brings me to another recommendation of the Commission, which is the recommendation of a Court with
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power to prohibit further acquisitions. I am bound to say that the Government are able to give the assurance for which the noble Lord, Lord Francis-Williams, asked: that we take such a proposal seriously and will consider it seriously. But I am bound to say that, speaking solely for myself, I was more impressed with the scepticism, for instance, of my noble friend Lord Arran than I was with the modified enthusiasm of the noble Lord, Lord Francis-Williams. I can see the attractions of the idea, and I acknowledge the partial analogy of the Restrictive Practices Court. But I think it is a misleading analogy. I did not myself feel that the Commission had thought the proposal through. I remain unconvinced, unless it can be shown either that the Court would be in a position to reverse the economic conditions which have given rise to most amalgamations and take-overs in the past, in which case (which I recognise as improbable) the Court would seem to be unnecessary, or that the consequent economic losses, if any, of not carrying out the recommendations of the Court would be borne by the public, in which case I should have thought it was undesirable.
LORD FRANCIS-WILLIAMS: My Lords, I am sorry to interrupt, but I think it is quite clear that the sort of case the Commission had in mind was the sale of Odham's Press to one group, the Roy Thomson group, which had been more or less completed when there was a take-over bid by another group, that of the Daily Mirror. The one made a concentration of both daily and Sunday newspaper ownership which the other would like. In that case, it would not have meant the death of any paper, which would have meant that in any case the Odham's group would be kept alive. It might have been well worth while to have a tribunal to judge as to which was more likely to be in the public interest.
VISCOUNT HAILSHAM: This may, of course, have been much in the Commission's mind, because it was something which had happened recently and was partly one of the causes leading up to the appointment of the Commission. But one must examine the recommendation, as to whether it is practicable, either in the form in which it is made, which certainly did not limit it to cases of that kind, or indeed in any modified form.

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As a lawyer, of course, I greatly respect the legal process, but I am bound to say that the first question I ask when it is proposed to set up a court of law, presumably presided over by a member of the Judiciary is: is the issue which it is proposed the Court should decide one which, in the strict sense, is justiciable? In this case I find it difficult to accept that what is in the public interest is in that sense justiciable, and I would not willingly recommend to Parliament a proposal in which this difficulty was not adequately met. I do not think that the proposed recommendations on this score were at all satisfactory.
Moreover, I must point out the danger of getting the Judiciary into politics. In the case of the Restrictive Practices Court, although they had a residuary jurisdiction to decide what is in the public interest, apart from the objective criteria which they had to apply, they were dealing with things which were not directly concerned with Party politics. If they were going to deal, say, with the future of the News Chronicle, which was a Liberal paper, or with the future of the Daily Herald, which was at that time a paper devoted to the Labour Party, I could see, I think, a considerable reluctance on the part of the Judiciary to become involved in an inquiry of that nature at all; because their primary concern must, of course, be to retain the respect of the public for their independence—which involves not merely their real independence of mind, but also the belief which the public can have that they are seen to be independent in every respect.
Moreover, I am bound to point out that the prohibition of a transfer of shareholdings in a newspaper which was losing money might in fact prevent the only hope it had of continuing in business; and the time involved in the procedure contemplated (which I am told might be, even without appeal, at least a year) might prevent amalgamations which would otherwise have been unexceptionable. Furthermore, even where redundancy and closure did result, I cannot help remembering that the News Chronicle amalgamation was at any rate defended by those who took
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part in it as affording some additional recompense to the staff. So I remain personally unconvinced of the practicality of the proposal.
In some ways the most attractive and solid findings of the Report, certainly to me as Minister for Science, were those relating to efficiency of production. I noticed, as did my noble friend Lord Hertford, in his maiden speech, that in paragraph 91 it was stated that Personnel Administration, Limited, estimated that a saving of the order of 34 per cent. could be made in the manpower employed and distributed in the London newspaper offices which they investigated on behalf of the Commission, and that, apart from this waste of labour, the development of new machinery and techniques has not been developed to the best advantage. I agree that these findings indicate that both sides of industry, not just the unions, are to blame and that the industry as a whole needs to apply modern methods of management and production, modern ideas in labour relations, and modern research and development.
One cannot help asking, in view of the statement by Lord Hertford that some papers now on the danger list could be saved if modernisation were carried out, whether the News Chronicle, and perhaps other newspapers, would still be alive and redundancies avoided if labour hoarding and restrictive practices had been abolished. Whether this be so or not, these are deficiencies which must be remedied by both sides in the industry putting their own house in order before further closures or redundancies should take place. As the noble Lord, Lord Francis-Williams, reminded us, newspapers, like everybody else, must consider that they could make a really notable contribution to Productivity Year by modernising their own industry; and no more than any other industry can newspapers escape the general economic law which declares that an industry which will not modernise will ultimately decline, and suffer from all kinds of other troubles too.
This brings me to some of the recommendations of the Royal Commission on matters affecting manpower and labour relations. I was glad that Lord Francis-Williams expressed some hope that there would be a reduction in the number of

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unions, and he asked me a question about the position of the Minister of Labour in matters of this kind. Soon after the publication of the Report, my right honourable friend the Minister of Labour began a series of discussions with the leading representatives of the employers' organisations and trade unions concerned, to discuss the recommendations. His general objective was to urge, them to take action as quickly as possible to remedy the matters on which the Commission had been critical of the industry—for example, inefficiency due to over-manning and diminished productivity, and the machinery for negotiation and consultation. My right honourable friend is keeping in close touch with developments, and he has been assured that progress is being made, although, in view of the fundamental issues involved, it is not likely to be rapid.
So far as the national Press is concerned, the Newspaper Proprietors Association, as my noble friend Lord Drogheda told us, has put forward proposals which are at present under consideration by the trade unions concerned. These proposals are, I am told, of a far-reaching character. They suggest discussions with the unions on the possibility of a smaller and higher-paid labour force and a more realistic staffing in all departments, the reductions to be achieved not by dismissals but by wastage and retirement. They suggest also that the wage structure should be simplified and rationalised, that casual working should be reduced, and that against this background of a reduced but more productive labour force schemes might be introduced covering redundancy, pensions and sick benefits.
Clearly, proposals of this sort will require close discussion, and it would not be appropriate to comment on them in any detail. But in answer to Lord Francis-Williams, who asked me to specify the Government's attitude, I would say that the Government welcome this fresh comprehensive approach to the labour problems of the industry. Technically, I think that improvements would result as much from exploitation of modern machinery and methods as from increased research and development. This is frequently the case, and the inquiries I have made about the technical position of the industry confirm the view of the
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Royal Commission that the development of new machinery and techniques has not been exploited to the best advantage. I had something more to say about that, but at this late hour I will not inflict these technical considerations on your Lordships.
All this having been said, one is left with what was really the theme of the speech of the noble Lord, Lord Francis-Williams: that here we are confronted with an industry which contains within it a profession. And in dealing with the Press, one is bound to remember that a profession is a proud and sensitive thing whose ethical standards ultimately come from within and cannot be imposed from without. My noble friend Lord Arran made a number of interesting, and in places very amusing, comments on that aspect of the matter, in addition to those noble Lords to whose speeches I have already referred. He also invited me to make some more remarks about the two journalists and the Vassall case. I am not at all sure how far I ought to go with him there, but there is one matter I should like to say, if nothing else.
I personally enjoy a friendship with the noble Lord, Lord Rothermere, and I was very distressed when I found the next morning that I had given him deep offence. Indeed, I enjoy a friendship not only with him but with members of his family, and it would have been an abominable thing if either the noble Viscount or the management of the Daily Mail had influenced these two comparatively humble members of the profession to act to their detriment in the way that ultimately happened. I must say that it never crossed my mind either that this had happened or that anyone might understand my remarks in that sense. As a matter of fact I was not intending to refer in that speech to the management of the Daily Mail: I was, in fact, looking in a totally different direction. And the only reason I did not make it clear was because I felt—and feel—that my information did not justify my being more precise.
Having myself been a member of a profession—I hope an honoured member of an honourable profession—for thirty years, I found it utterly incredible that two professional men, faced with a serious problem of professional conscience—indeed, with something of a crisis in their career—did not discuss

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the matter with trusted colleagues; perhaps senior to themselves; perhaps their equal or juniors; perhaps on the same newspapers, or perhaps not. Of course, in the end, a decision on a matter of conscience is a man's own, but I cannot find it in myself to place the sole blame on the two men concerned. My opinion may be controversial—many of my opinions are—but I felt, and feel, it right to say that I think it is the greatest of pities that two men who had lived blameless lives, and for whom until that time no one had a word of ill to say, were allowed to come into conflict with constituted authority for the sake of a principle which I strove then to show, and still believe, they had misunderstood.
At all events, I hope that that particular episode will be forgotten, and I hope that my noble friend Lord Arran will take it back to his associates in the Press group of which he is a member that it certainly did not cross my mind to say anything which could legitimately give any offence relating to them. Indeed, it would have given me great distress to think that the quite happy relations with the proprietors personally, and with the management personally, could in any way have been jeopardised by my remarks.
THE EARL OF ARRAN: My Lords, may I just say one thing? Whilst I thank the noble Leader for his kind remarks, it is still a matter of some importance to us; and we feel a little embarrassed at the thought that our people should have been given advice when in fact they were not. That is the view of the noble Leader. The point is that if we had given them advice, either one way or the other, we should have been doing one of two things: either we should have been helping them to commit what turned out to be a criminal act; or, on the other hand, we should have been telling them not to respect their journalistic code. In those circumstances, our position was terribly invidious, and I believe that it would have been quite wrong for us to give them any advice of any sort.
VISCOUNT HAILSHAM: I quite understand that the position of the employer in this relation was necessarily an invidious one, and, as I said to my noble friend, it never occurred to me
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that I was looking deliberately in his direction or that of his friends. So far as I am concerned, I entirely accept their explanation, and I know of no circumstance whatever which would in any way invalidate what he said.
My Lords, we are left therefore with the fundamental question of the standing or status of journalism as a profession. I felt that the noble Lord, Lord Francis-Williams, and indeed the right reverend Prelate, took a lower view of the standing of the profession than I should myself. I would not wholly accept the view as a universal generalisation that the profession was in bad odour, or was an outcast or hated, as I think the right reverend Prelate seemed to hint. What I believe is true is that its fundamental function needs to be looked at by the profession itself. As I said at the beginning of my remarks, its fundamental function, in my view, is to provide society, in its widest sense, with the objective facts upon which an individual can found his own judgment reliably on quite a different range of subjects, ranging from politics to sport, to art, to literature and so on. I feel myself that, if this were done, it would greatly assist not merely relations between Parliament and the Press, but relations between the Press and other bodies.
I quite accept, for instance, from my noble friend Lord Balfour of Inchrye, who told us such an interesting recollection of his early life (although in fairness to his employer I think he should have made it clear that he was not instructed to unload the revolver), that it is not the business of either the Press or the politicians to be popular. Both have a public duty to perform; and this must necessarily involve both from time to time in unavoidable unpopularity. But if our function is to expose or to probe, as I think my noble friend perfectly correctly said, the public must be sure that it is done without malice or without vindictiveness.
To show what I mean about this—again, I do not want to be accused of any bias in this matter or of any feeling—let me take, for instance, the period between the institution of the Vassall Tribunal and the debate we had the other day. I read in the New Statesman on March 22 a feature called "London

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Diary" by Mr. Paul Johnson, in which he said this:
"I wonder if Macmillan quite understands what he has let himself in for. He is about to fight an election in which he will need every friend he has got. At the moment he has none whatever in Fleet Street. During the campaign itself he will of course get formal support on proprietorial instructions from certain Tory papers, but only in the leader columns which few people read anyway. Between now and polling day political news reporting, and of course slanting of news, will be heavily pro-Labour. I think this has already been reflected in the coverage of Wilson since he became Leader, which has been far more favourable than even his most optimistic supporters could have expected. At the same time any Tory Minister or M.P., or for that matter judge or barrister, who gets involved in a scandal during the next year or so must expect, I regret to say, the full treatment."
Now what does that mean? It means that, in the opinion of this experienced writer, the people who are reporting news are not reporting facts honestly, are going to report them vindictively, and are going to report them maliciously and in a slanted fashion. Of course it is true—
LORD FRANCIS-WILLIAMS: If I may interrupt, I hope that the noble and learned Viscount will stress that that is the opinion of one individual. I do not think it would be an opinion that would be shared, certainly by the majority—indeed, by hardly anybody else—in Fleet Street. My own feeling is that on that occasion Mr. Johnson was talking the most absolute and complete rubbish.
VISCOUNT HAILSHAM: I was about to make a very similar point. And, of course, Mr. Johnson says that he regrets to say it. But what is significant is that a man of his experience could state it as his own opinion about the code of conduct observed by his fellow journalists. This is the serious thing about it.
It is very fair to the Press to add, as a rather similar point to that of the noble Lord, Lord Francis-Williams, that he was in fact castigated for it, certainly in the Daily Mirror, and, I believe, in other national newspapers, too. But we must remember that this kind of thing has happened to banisters, has happened to judges and has happened to politicians. Anybody who has read, for instance, my brother's life of the late Sir Edward Marshall Hall, will remember a dreadful example where this man, who was an aggressive type of advocate, cross-examined,
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in good faith, the witness in the case which indirectly involved the proprietor of a newspaper, and was very nearly driven out of business until he made an abject apology.
It is vital, if the Press are going to probe, are going to expose, are going to do things which it is their duty to do, that the public should be reassured that it is being done honestly and without bias. It is ultimately their business to see that they do it; because the Government cannot. The Government are powerless in this matter. Up to a point the law of libel is a protection, but it is not a full protection. And, my Lords, to quote from the same newspaper an article by the noble Lord, Lord Francis-Williams, which he wrote after the Report of the Tribunal in the Vassall case on April 26, he said:
"The Press have come very badly out of it. Altogether the Tribunal analysed some 250 separate articles in the national Press. They deal in detail only with a few of particular significance. They find themselves bound to report that not one of these stands up to serious inquiry."
And if the noble Lord will remember from his writing, he said a very great deal more than that—and more honour to him for saying it!
The fact is, my Lords, that the Press must put their house in order. It was not bias against the Press, or hatred of them, when one of the most distinguished writers in Fleet Street wrote that on April 26.
Moreover, despite the very good things that could be said, I do think it dreadful (and I notice that the noble Lord, Lord Francis-Williams, finds it exactly the same, because I read his article last week in the same newspaper) that large sums of money, amounting to thousands of pounds, are repeatedly paid out by popular newspapers for the recollections of a traitor or a pervert, since when we have been regaled with Miss Keeler and the Duchess of Argyll. I regard that as deplorable, not only in a Christian country but in any decent and civilised country at all. If the Press want to raise their own status, it is no good abusing me or the Government for sometimes uttering a word of criticism. We are pretty well the only people who can say anything which is ever heard or paid attention to. My hope is that the Press will put their own house in order and will not

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attack those who feel it their duty to bring these standards to the attention of the public.
My Lords, I have said all I am going to say. I am very grateful to the noble Lord, Lord Francis-Williams, for bringing this subject to our attention. I regard the Press as one of the great bastions of freedom in this country, as one of the organs of culture in a civilised country; and I hope that we can all wish them well in the task which lies in front of them.
LORD AIREDALE: My Lords, before the noble Viscount sits down, might I ask him whether it would be possible for the Government to put to the Press Council, which is undergoing a change, what is going to be the attitude from now on of the Press Council on this question of the payment of vast sums for the reminiscences of traitors, and so on?
VISCOUNT HAILSHAM: I understand that one of the unions concerned has taken up one aspect of the matter, and I would far rather that this were done by the Press internally, without Government pressure. It is much the same kind of problem as we were faced with over tobacco advertising. I do not like Government action by force if people can be persuaded to exercise a responsible conscience of their own—as I believe will happen here. But if it does not happen, public opinion will probably, in my view, compel some kind of political action.
7.3 p.m.
LORD FRANCIS-WILLIAMS: My Lords, I have no wish at all to extend this debate further. I think it has been a very interesting and very valuable debate. I put the Motion down largely in the hope that matters would be raised in this House and opinions expressed, because although no concrete action is possible by the Government or by anybody except the Press itself, it is desirable that opinions should be heard; and in the belief that your Lordships' Chamber provides exactly the kind of forum in which opinions of that kind on a matter of public interest can be heard and expressed with some possibility that they will have influence on those who are directly concerned both in the industrial conduct of the Press and in its professional affairs.
I am glad to find myself so much in agreement with the noble Viscount the
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Leader of the House on so many matters. I regret he does not feel able to go along with the Commission on the issue of an Amalgamations Court. In support of this, I should like, if I may, to call in a Member of your Lordships' House with whom I very rarely find myself in agreement but whose experience and knowledge on these matters is undoubted and of the greatest. I refer to the noble Lord, Lord Beaver-brook. When giving evidence before the Royal Commission, Lord Beaverbrook was asked whether he regarded it as a danger that there should be more amalgamations; whether there would be a danger if a single proprietor bought up more papers. To which he replied:
"Stop it."
He was then asked:
"You say, 'Stop it'. How?".
And he replied:
"Only the Government can do it".
He was asked by what means, and he said:
"The Government can stop amalgamations when contrary to public interest, and the amalgamation of a newspaper to a very great extent would be contrary to public interest".
I had hoped, my Lords, that at the end of this debate we might have had the fascinating and unique spectacle of Lord Beaverbrook, Lord Hailsham and myself walking hand in hand towards the future. That is not to be offered us. The noble Viscount, Lord Hailsham, has dropped out—though, as I understand it, in the friendliest fashion.
My Lords, I have no desire to continue further. I think, judging by the edition times your Lordships have recently been sitting, we have come to a fairly reasonable Press time. I have no desire to stop the papers and the editions from rolling any longer, and I beg your Lordships' leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

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