Sitting of 1 December 1964

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  WELSH SHIPPING AGENCY BILL [Lords] (By Order)
  Consideration, as amended, deferred till Tuesday next.
  EDINBURGH CORPORATION ORDER CONFIRMATION BILL
  Read a Second time; to be considered Tomorrow.
ORAL ANSWERS TO QUESTIONS
  COMMONWEALTH RELATIONS

    Immigration to United Kingdom
    Mr. William Hamiltonasked the Secretary of State for Commonwealth Relations what progress has been made in the discussions with other Commonwealth Governments on the problem of immigration into this country; and whether he will make a statement.
    The Secretary of State for Commonwealth Relations (Mr. Arthur Bottomley): I said in my reply to my hon. Friend the Member for Leyton (Mr. Sorensen) on 24th November that I had nothing to add to the reply I gave to the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) on 17th November. This is still the position.
    Mr. Hamilton: I am not too well acquainted with the contents of that Answer. Can my right hon. Friend say whether negotiations are still continuing with the Commonwealth Governments and whether at this stage he can say what the response has been, particularly from the Indian, Pakistan and West Indian Governments, to my right hon. Friend's proposals.
    Mr. Bottomley: Discussions are still continuing, and at this stage I have nothing further to add.
    Mr. Geoffrey Lloyd: Does the right hon. Gentleman now appreciate the advantages of the Commonwealth Immigration Act which is protecting the country from an undue flood of immigration while the right hon. Gentleman pursues his negotiations?
    Mr. Bottomley: As I have said, the negotiations are still continuing and until they are finalised there is nothing further to add.

    Fugitive Offenders Act, 1881
    Mr. Dudley Smithasked the Secretary of State for Commonwealth Relations what proposals he has for the alteration and improvement of the Fugitive Offenders Act, 1881.
    The Minister of State, Commonwealth Relations Office (Mr. Cledwyn Hughes): Precise proposals were put to Commonwealth Governments several months ago, but we have not yet received the comments of all the Governments. This is, of course, an extremely complex matter. Meanwhile, I should prefer to treat as confidential the various proposals which we are in process of discussing with the Commonwealth.
    Mr. Smith: Does not the hon. Gentleman remember that when I taxed my own side on the subject some 18 months ago the then Opposition indicated that if they were in power they would treat this with the utmost urgency and would amend the Act? Does he think that this should now go ahead despite the confidential nature of the discussions, and would he get in touch with the Commonwealth Governments concerned so that we can have a Bill before us in this Session?
    Mr. Hughes: We are anxious to complete a review of the Act as soon as possible, and other Commonwealth Governments have been urged to let us have their views at an early date. I hope that it will prove possible for us and the rest of the Commonwealth Governments to move forward in step with each other. I think that that would be the view of hon. and right hon. Members.

    Exports to the United Kingdom (Surcharge)
    Mr. Goodhartasked the Secretary of State for Commonwealth Relations (1) what decline in imports from Commonwealth countries he expects as a result of the imposition of import surcharges; and
    (2) what studies he is making of the effect of the import surcharges on the economies of Commonwealth countries.
    Mr. Cledwyn Hughes: The purpose of the charge is, of course, to reduce imports, but it leaves consumer choice free. Its effect on any particular category of imports and particular supplying countries will depend on the decisions of importers and consumers. The Government will keep a careful watch on the effect.
    Mr. Goodhart: Is not the Minister rather ashamed of having to give that reply when very little consideration has been given to the effect on the Commonwealth'? Have any talks been carried on between the Minister and the Minister for Overseas Development about special aid to offset this severe blow to Commonwealth trade?
    Mr. Hughes: Other Commonwealth Governments have already in some cases indicated their confidential views on how import charges will affect them. They will probably give more detailed accounts when they have had time to consider the matter more carefully. I cannot go further than that at the moment.
    Mr. Turton: Will the hon. Gentleman explain why it was that these confidential communications were not asked for from these Governments before the charge was put on when it appears from paragraph 11 of the White Paper that the United States Government were fully consulted?
    Mr. Hughes: No Government was consulted before the announcement was made about the surcharges. All Governments were informed more or less about the same time.
    Mr. Bence: Could my hon. Friend tell us for how much longer exporters in the Commonwealth countries would be prepared to export to us if we were not in a position to pay for their exports?
    Mr. Tilney: Is it not very surprising that, despite agreements always to consult with the Commonwealth, they were not consulted?
    Mr. Hughes: The hon. Member should know that this was an extraordinary situation brought about by the actions of his Government.
    Mr. Ennals: Will my hon. Friend confirm that during the 13 years of Conservative rule there was a steady decline in Commonwealth trade?
    Sir F. Bennett askedthe Secretary of State for Commonwealth Relations what advance notification of the decision to impose a 15 per cent. surcharge on imports was given to the Commonwealth.
    Mr. Cledwyn Hughes: I have nothing to add to the reply of my right hon. Friend the Commonwealth Secretary to the right hon. Member for Streatham (Mr. Sandys) on 17th November.
    Sir F. Bennett: Can the hon. Gentleman now clarify once and for all that no advance notification whatever was given to the Commonwealth, but was given to the United States of America? Can we have a straight answer to that, as it is a question which we have found it difficult to get answered?
    Mr. Hughes: All Governments were notified. There was no consultation. I can assure the House that any difference in timing of the messages to Commonwealth and other Governments was not significant.
    Mr. Shinwell: Will my hon. Friend take the opportunity to congratulate the hon. Member for Torquay (Sir F. Bennett) on the honour which he has just had bestowed upon him for political services? At the same time, will he reject the patronising attitude which we are now witnessing day by day from hon. Members opposite and in plain language reject it? If he does not have a sufficient supply of plain language, let him come to me and I will lend it to him.
    Mr. Hughes: I have a sufficient supply of plain language in both English and Welsh, but as this is my first appearance at the Dispatch Box, my right hon. Friend will excuse if I do not use it today.

  RHODESIA

    Economic Aid
    Mr. Wingfield Digbyasked the Secretary of State for Commonwealth Relations what has been the total financial assistance granted by Her Majesty's Government for education in Rhodesia since self government.
    Mr. Cledwyn Hughes: I am replying to the two Questions put down by the hon. Gentleman the Member for Dorset, West (Mr. Wingfield Digby) as they were put down before the division of responsibilities between the Commonwealth Relations Office and Ministry of Overseas Development was settled. It may be helpful to the House if I mention that in future such questions, relating essentially to British economic aid, will be answered by my right hon. Friend the Minister of Overseas Development.
    Southern Rhodesia sought no financial assistance from the British Government for many years after 1923. During the Federal decade education in Southern Rhodesia benefited from the allocations of £2,875,000 of Colonial Development and Welfare funds to the University College in Salisbury which was a Federal responsibility. In 1962 a loan of £355,000 was made to the Southern Rhodesian Government for African education and this year a grant of £1,850,000 has been announced for the University College and Teaching Hospital.
    Mr. Digby: Have the Government in mind any further assistance for education in Rhodesia, particularly for secondary education, and, if they have, will there be any political conditions attached to such help?
    Mr. Hughes: Future assistance is a matter for consideration between the two Governments. Of the sum I mentioned towards the teaching hospital, £280,000 has been paid and the balance will be paid as instalments fall due over the next two years. As to political considerations, aid to Southern Rhodesia will continue provided no unconstitutional action is taken.
    Mr. R. Carr: While being grateful to the hon. Gentleman for the first part of the Answer clarifying the procedure in answering Questions, may I ask whether he could say to what extent the prime
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    responsibility for deciding whether or not to give aid to a country will rest with his right hon. Friend the Secretary of State for Commonwealth Relations or whether that responsibility has been completely passed to the Ministry for Overseas Development?
    Mr. Hughes: I would refer the right hon. Gentleman to the very full statement made on this by my right hon. Friend the Minister for Overseas Development.
    Mr. R. Carr: Because that was not very clear, I was asking a supplementary question having regard to the way Questions have been transferred. Such Questions, and this one which was not transferred, were all put down since the statement was made, and it seemed to be not very clear.
    Mr. Wingfield Digbyasked the Secretary of State for Commonwealth Relations what has been the total financial assistance granted by Her Majesty's Government for African housing in Rhodesia since self-government.
    Mr. Cledwyn Hughes: In 1956, a Colonial Development Corporation loan of £1 million, and, in 1962, a Colonial Development and Welfare loan of £3·5 million for general development, of which over half was devoted to African housing.
    Mr. Digby: Is the hon. Gentleman aware of the work which is being done for African housing, particularly for home ownership, and will he take an early opportunity of going there to see it for himself?
    Mr. Hughes: We are aware of the work which is being done and we appreciate its importance.

    Constitution
    Mr. Dempseyasked the Secretary of State for Commonwealth Relations what progress has been made in solving the constitutional questions of Rhodesia.
    Mr. Bottomley: We are still seeking, as the first step, to arrange for constructive talks with the Prime Minister of Southern Rhodesia.
    Mr. Dempsey: Will my right hon. Friend proceed in this matter a little more speedily because of the growing

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    apprehension in Rhodesia about the uncertain future, and will he see to it that the spokesmen for Rhodesians in general, in spite of restrictions imposed upon them, will be allowed fully to ventilate their attitude towards the problem?
    Mr. Bottomley: At the moment, we are hopeful that the Prime Minister of Southern Rhodesia will accept the invitation of my right hon. Friend the Prime Minister to come to this country.

    Prime Minister (Conversations)
    Mr. Goodhewasked the Secretary of State for Commonwealth Relations what conversations he has had with the Prime Minister of Rhodesia.
    Mr. Bottomley: None, Sir.
    Mr. Goodhew: Is the right hon. Gentleman aware that there is great anxiety in this country that some sort of accommodation should be reached with the Government of Southern Rhodesia, or Rhodesia as it is now called, and is he further aware that, he having been so outspoken in his statements to the Rhodesian Government, many people in this country feel that he should now be equally outspoken to the African nationalist politicians in that country? Will he point out to them the necessity to fight constitutionally if they wish to be taken as responsible politicians rather than rely on intimidation and violence? [HON. MEMBERS: "What Constitution?"] The 1961 Constitution.
    Mr. Bottomley: It is precisely for that reason that we should like talks to get going as soon as possible, so that we can bring about a situation in Rhodesia where peace and security will prevail.
    Mr. Goodhew: It is all very well for the right hon. Gentleman to say that he wishes to speak to the Prime Minister, but this will not do on its own. He has had some pretty rough things to say to the Europeans. Will he now be equally outspoken to the African nationalists, making clear that there is a Constitution on which they could fight and that it would be much more effective if they were to do this instead of relying on intimidation and violence?
    Mr. Bottomley: Perhaps the hon. Gentleman will do me the courtesy of reading the speech I made in Zambia in
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    which I paid tribute to the part which Rhodesians of European descent had played in helping to build up the country and trying to provide a constitution. Since then, there has been a change in the Government, which threatened unilateral action. Until that is out of the way, it will be very difficult to get the Africans to co-operate as we hope they will.

    Talks
    Mr. Sandysasked the Secretary of State for Commonwealth Relations what arrangement has now been made for the Prime Minister of Rhodesia to visit London for talks with the British Government, or for the Secretary of State to visit Salisbury for talks there.
    Mr. Bottomley: I have nothing to add to the reply which I have just given to the hon. Member for Coatbridge and Airdrie (Mr. Dempsey).
    Mr. Sandys: As I understand from the Prime Minister that correspondence is proceeding between the two Governments, may I take it that a statement will be made as soon as possible?
    Mr. Bottomley: As the right hon. Gentleman has said, correspondence is taking place between both parties and as soon as we are able to make a statement, it will be made.

  CEYLON

    Budget Measures
    Mr. van Straubenzeeasked the Secretary of State for Commonwealth Relations (1) what representations he has made to the Government of Ceylon about the imposition of a special export tax of 10 cents per pound on all teas shipped from Ceylon for sale in the London auctions, on a special wealth tax of 10 per cent, on the profits of all sterling companies, and the acreage tax of Rs.300 per acre for high grown estates in lieu of the ad valorem duty;
    (2) what representations he has made to the Government of Ceylon on that Government's new exchange control regulations prohibiting the payment of dividends to sterling companies for at least 12 months from 31st July, 1964.
    Mr. Bottomley: I have made representations to the Ceylon Finance Minister about all those measures in the Ceylon Budget which have an adverse effect on British interests and individuals, including those mentioned by the hon. Member.
    Mr. van Straubenzee: I am grateful for the representations mentioned by the right hon. Gentleman, but is he aware of the considerable hardship being caused to individuals in this country particularly by the operation of the exchange control regulations mentioned in Question No. 6? Would he feel it proper to represent not only this hardship but also the very discouraging effect of these budgetary measures upon further investment in Ceylon?
    Mr. Bottomley: The Ceylon Government have undertaken to consider these hardship cases. As regards the second part of the hon. Gentleman's supplementary question, I think that we ought to wait and see what happens as a result of the return of the Ceylon Finance Minister.
    Mr. Dodds-Parker: Is the right hon. Gentleman aware of the growing public unwillingness to provide aid to these Governments which seem bent on destroying existing productive industry, and will he bring this to the attention of the Ceylon Government?
    Mr. Bottomley: I have nothing to add to what I have already said on this matter.

    Economic Aid
    Mr. Fisherasked the Secretary of State for Commonwealth Relations whether he will withhold the grant of further Government economic aid to the Ceylon Government as long as that Government maintain their policy of squeezing out British-owned businesses of all kinds in Ceylon.
    Mr. Turtonasked the Secretary of State for Commonwealth Relations whether he will make a statement regarding British aid to Ceylon, following his discussions with Ceylon's Minister of Finance during his recent visit to London.
    Mr. Bottomley: As my hon. Friend the Minister of State has explained,
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    Questions essentially dealing with our economic aid are for my right hon. Friend the Minister of Overseas Development.
    The Government of Ceylon have assured us that it is not their policy to squeeze out British-owned businesses and that the recent budget measures were intended purely to safeguard Ceylon foreign exchange reserves.
    The only governmental aid which we are at present providing to Ceylon is a fairly small amount of technical assistance, the withholding of which would not benefit British interests.
    I had no discussion of aid with the Ceylon Finance Minister.
    Mr. Fisher: I am very glad to hear that the right hon. Gentleman did not have any discussion on economic aid. In view of the Ceylon Government's attacks upon the freedom of the Press, upon foreign banks, and especially upon all forms of British interests in Ceylon, does not the right hon. Gentleman agree that it would have been intolerable to ask the British taxpayer to assist the financing of policies of this kind, and would it not be better to suspend economic aid until these policies are reversed?
    Mr. Bottomley: The Ceylon Finance Minister made no request for aid.
    Mr. Turton: Could the right hon. Gentleman explain his Department's division of responsibility, as I have two Questions down, one on Zambia and one on Ceylon, and the one on Zambia was transferred whereas the one on Ceylon has been kept? Does not his reply mean that the right hon. Gentleman does not accept responsibility for aid to Ceylon?
    Mr. Bottomley: As I have already said, where the question is essentially one on economic aid for a Commonwealth country, it is the responsibility of the Minister for Overseas Development.
    Mr. Fisher: It is not clear to the House, and it is not clear particularly to hon. Members who are putting Questions, why the right hon. Gentleman accepts a Question on aid to Ceylon but transfers to his right hon. Friend an almost identical Question on aid to

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    Zambia. What precisely are the responsibilities of the two Departments of State?
    Mr. Bottomley: I made it quite clear. I think that this will adjust itself as it goes along. For obvious reasons, many of these Questions were put down at an earlier date, and it was then clearly my responsibility. Where the responsibility has now been transferred to my right hon. Friend the Minister for Overseas Development, Questions will be answered accordingly.
    Mr. Fisher: They were put down on the same day.

    Finance Minister (Talks)
    Mr. Tilneyasked the Secretary of State for Commonwealth Relations whether, in his talks with the Ceylon Government's Finance Minister, he discussed the future of the tea industry and the large British investment in Ceylon.
    Mr. Bottomley: I made it clear to Dr. Perera that, if they were given the chance, British enterprise and investment could continue to make an important contribution to the economy of Ceylon, including the important export-earning tea industry.
    Mr. Tilney: Will the right hon. Gentleman point out to the Government of Ceylon that the high taxation, particularly the new wealth tax which is retrospective, is having a bad effect on the maintenance of tea gardens and will be likely to affect the export of tea in future?
    Mr. Bottomley: This matter was discussed in my talks with the Finance Minister.
    Mr. Tilneyasked the Secretary of State for Commonwealth Relations whether, in his talks with the Ceylon Government's Finance Minister, he discussed the unfavourable balance of trade which Great Britain has with Ceylon.
    Mr. Bottomley: No, Sir.
    Mr. Tilney: Will the right hon. Gentleman bear in mind that the balance of trade between this country and Ceylon is greatly in favour of Ceylon and that there are many widows of those who helped to build up the economy of Ceylon who are entirely dependent on dividends they receive from Ceylon?
    Mr. Bottomley: The fact that Ceylon's trade with Britain is in her favour makes all the more regrettable the measures recently taken by the Ceylon Government to restrict invisible payments, so large a part of which normally come to Britain.
    Mr. Stratton Mills: Is the right hon. Gentleman aware that the Ceylon Government have put pressure on tea companies not to pay dividends out of funds which have accrued and are at present in London?
    Mr. Bottomley: That again was a matter we discussed when I met the Finance Minister.

  CYPRUS

    Situation
    Mr. Channonasked the Secretary of State for Commonwealth Relations what progress has been made in recent weeks towards a solution of the Cyprus problem.
    Mr. Bottomley: As I told the hon. Member for Haltemprice (Mr. Wall) on 24th November, we await the report of the United Nations mediator.
    On 27th November, Señor Galo Plaza gave Ministers an account of the progress of his mediation. He was told that we were prepared to assist him in the promotion of any solution likely to prove acceptable to all the parties concerned. As regards our sovereign bases, it was pointed out that they have never formed part of the Republic of Cyprus and are not involved in the present dispute; and that we could not conceive of a solution which would not provide for British base facilities.
    Mr. Channon: The right hon. Gentleman's remarks about sovereign bases will receive general acceptance at least on this side of the House, and we are grateful for them, but can he tell us anything at this stage about what is likely to be the future of the British forces on the island? As I understand it, the mandate for the United Nations force expires on Boxing Day. Is it likely to be renewed, and what does the right hon. Gentleman say about the finance provided by Great Britain, as we have already spent 3½ million dollars on this fruitless attempt so far?
    Mr. Bottomley: We hope that the United Nations mandate will be renewed. If it is, we shall accept our obligations as a result.
    Mr. Sandys: Is the Minister aware that his statement that the Government intend to retain British bases in Cyprus will be welcomed and that we are all very glad to know that this is one of the commitments which the Government do not intend to abandon?
    Mr. Emrys Hughes: I was told yesterday that the Cyprus base had cost this country £200 million under the previous Administration, £20 million a year. Are we to take it that the present Government will carry on the policy of the previous Government?
    Mr. Bottomley: At this moment, it is the intention of the Government to have a base in Cyprus.

  MALTA

    Exports to United Kingdom (Surcharge)
    Mr. Grant-Ferrisasked the Secretary of State for Commonwealth Relations whether Her Majesty's Government will exempt Malta from the imposition of the 15 per cent, surcharge on imports into this country.
    Sir P. Agnewasked the Secretary of State for Commonwealth Relations if he will augment the sum to be given to Malta in grant-aid by the amount of the cost to the Maltese economy of the surcharge on imports into the United Kingdom.
    Mr. Cledwyn Hughes: it is not possible to discriminate in favour of Malta either in the incidence of the temporary import charge or by making any additional financial payments.
    Mr. Grant-Ferris: Such an Answer will give no satisfaction either here or in Malta. As the last Government, with the support of the party opposite, did a great deal to start industry going in Malta, is it not the height of folly to cut the ground from under all that, and will the Minister give the House an assurance that Malta will not suffer deleteriously as a result of Government policies?
    Mr. Hughes: The Government much regret the necessity to impose the import
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    surcharge on countries such as Malta with which we have a special relationship, but in the end their interests would have suffered much more if we had allowed our balance of payments to deteriorate further. The prime necessity at this time is to maintain the strength of sterling.
    Sir P. Agnew: As Malta receives grant aid, with the assent of hon. Members in all parts of the House, is it not quite inappropriate to take some of it away again in the form of surcharges?
    Mr. Hughes: We appreciate the problems of Malta, but I stress once again what my right hon. Friends have already said on several occasions, that these surcharges are temporary in their effect.
    Mr. Sandys: Is the hon. Gentleman aware that the financial arrangement with Malta was based as far as possible on an exact calculation of its essential needs? Will he, therefore, consider this matter further?
    Mr. Hughes: We are always prepared to consider any constructive suggestion, but I must point out that the great bulk of Malta's foreign earnings derives from invisible exports, that is, goods and services supplies to the British forces.
    Mr. Sydney Silverman: Has my hon. Friend made any calculation of what it would cost in the effort to reduce imports if consent were given to each and all of the recommendations from the other side of the House to make exceptions?
    Mr. Hughes: No, Sir; we have no such figures.

  TANZANIA

    British Nationals, Arusha (Leasehold Rights)
    Sir J. Fletcher-Cookeasked the Secretary of State for Commonwealth Relations what further information he has received as to the reasons for the recent revocation of leasehold rights of occupancy in the Arusha area of Tanganyika; and what steps Her Majesty's Government are proposing to take to ensure that, where appropriate, British nationals are adequately compensated for the deprivation of their properties.
    Mr. Bottomley: No specific reasons have been given, but these rights of occupancy were revoked under longstanding legislation providing for the proper development of land in Tanganyika. As regards the second part of the question, I understand that the Tanzanian Government have appointed a commission to inquire into individual cases. It is, therefore, premature to speak of deprivation of property.
    Sir J. Fletcher-Cooke: Has the Secretary of State any information to suggest that the real reason for this action by the Government of Tanzania is that the British subjects involved declined to take out Tanzanian nationality? If he has no such information, will he make inquiries on the point?
    Mr. Bottomley: I have no such information. If the hon. Gentleman has evidence to support it, I should be glad to have it.
    Mr. Sandys: Will the right hon. Gentleman give an assurance that he will not accept what has gone on in Tanzania as a pattern for the Government's leasehold enfranchisement?
    Mr. Bottomley: We have an assurance from the President of Tanzania that he wants to do all he can to help to keep British subjects there, and I think that we ought to rely upon that.
    Mr. Goodhart: Is the right hon. Gentleman aware that the harassing of British missionaries in this area has been increased in recent days? Will he ask the High Commissioner to keep an eye on this and protest, if necessary?
    Mr. Bottomley: I think that the hon. Gentleman may be referring to one case. In that instance, we called for inquiries, and we are satisfied about the matter.

    British Citizens
    Mr. Hornbyasked the Secretary of State for Commonwealth Relations what information he has now received as a result of his further investigations into the official allegations made against British subjects in Tanzania; and what further action he has taken.
    Mr. Bottomley: The Tanzanian authorities have made no general allegations against British citizens. As regards
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    individual British citizens who have recently been expelled from Tanzania, I have nothing to add to the reply I gave to the hon. Member for Chigwell (Mr. Biggs-Davison) on 24th November.
    Mr. Hornby: Is it not a fact that very grave anxieties were aroused by the events which the right hon. Gentleman reported in his previous Answer? Is it not also a fact that very much assistance in many different ways has been given to Tanzania by British subjects who have gone to work there? Can the right hon. Gentleman ask for an early reply from the President of Tanzania and tell the House what advice he is giving meanwhile to the Minister of Overseas Development about conditions of service in Tanzania at present?
    Mr. Bottomley: On the general question I have seen the Tanzanian High Commissioner. He assured me that British interests will be fully protected and British subjects, they hope, will remain to play a part in building up the country. In regard to the question about aid, my right hon. Friend and I are always in consultation about any matter where political influence might be concerned with economic aid.

  MALAWI

    British Subjects (Safety)
    Mr. Goodhewasked the Secretary of State for Commonwealth Relations if he is aware of Dr. Banda's recent refusal to give Her Majesty's High Commissioner in Malawi any guarantee for the safety of Major Moxon, Mr. Cameron and Mr. McAdam, all British subjects; and what action he is taking to ensure their safety.
    Mr. Cledwyn Hughes: When the British High Commissioner learnt that Messrs. Cameron and McAdam had been threatened in their homes he immediately called upon Dr. Banda. Police protection had been provided; but in view of the strong feeling in the country following recent political events Dr. Banda felt unable to guarantee their future safety. Major Moxon was not involved at that time. All three men have now left Malawi.
    Mr. Goodhew: Is the hon. Gentleman aware that this state of affairs in which the head of a Government cannot guarantee the safety of British subjects is a

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    matter of great concern to this House? Will he make representations to Dr. Banda to ensure the future safety of British lives and property in his country? Will he also ensure that where people are forced—in spite of that—to leave the country in a hurry, they receive adequate compensation for the property which they leave behind?
    Mr. Hughes: Representations have been made by our High Commissioner to Dr. Banda. Dr. Banda has stated that British subjects are very welcome in Malawi provided they do not interfere in Malawi's internal affairs. The question of compensation goes rather far from the original Question.

  INDIA

    Armaments
    Mr. George Jegerasked the Secretary of State for Commonwealth Relations what undertakings and guarantees were given by the Indian Government as to the use of armaments to the value of £13 million promised in the recent agreement; and whether he will make a statement.
    Mr. Bottomley: We have not promised armaments to the value of £13 million in any recent agreement. I assume my hon. Friend is thinking of the figure of £13·66 million which has been quoted as the total foreign exchange which the Indian Government may require to complete the reconstruction of the Mazagon Dockyard in Bombay and the construction there of three Leander-class frigates. As my hon. Friend will be aware, the British Government have undertaken to make available a loan of £4·7 million over the next four years to help finance this project.
    We recognise that the Indian Navy has a requirement to replace a number of ageing ships in her fleet. No specific undertakings or guarantees have been given by the Indian Government as to the use they will make of these frigates.
    Mr. Jeger: Is my right hon. Friend aware that this agreement, the Press report on which is rather obscure, has caused considerable disquiet to India's neighbours, in particular to Pakistan? Will he give an undertaking that all questions of Commonwealth defence in
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    future should require prior consultation with the neighbouring Commonwealth countries concerned?
    Mr. Bottomley: The Pakistan Government are aware of the reasons why this loan was made.
    Mr. Goodhew: Is the right hon Gentleman aware that it is a rather strange position in which the Government are now prepared to give arms to a country in the Commonwealth which is not prepared to stand by any Commonwealth defence agreement and yet deny arms to South Africa which is prepared to stand by its agreements? Is lie not also aware that the concern expressed by his hon. Friend the Member for Goole (Mr. George Jeger) is felt very strongly in Pakistan, especially in view of the fact that India is one of the countries—[HON. MEMBERS: "Question."]—I am asking a question—India is a country which has used force for the settlement of international disputes? This is a matter of considerable moment to its neighbours?
    Mr. Bottomley: Unlike the party opposite, we shall always put Commonwealth interests first.

    Defence Aid
    Sir F. Bennettasked the Secretary of State for Commonwealth Relations what safeguards Her Majesty's Government have sought to obtain to ensure that the defence aid to India stipulated in the Indo-British communiqué of 20th November is not deployed for purposes of internal repression or conflict with her sub-continental neighbours.
    Mr. Bottomley: If the hon. Member will refer to the communiqué of 20th November, he will see that no new commitments for the supply of arms and military equipment have been undertaken.
    Sir F. Bennett: In regard to the general supply of arms to India at present, under that communiqué and otherwise, and recalling his and his friends' many statements in the past that it is impossible to distinguish to what use weapons are to be put in any particular country, can the right hon. Gentleman say whether in his undertakings for the supply of arms to India

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    he bears in mind all the feelings of Pakistanis in this matter?
    Mr. Bottomley: In supplying arms to Commonwealth countries we do not subject them to any limitation as to their use.
    Mr. Biggs-Davison: Is not the defence aid very properly extended by the United Kingdom to India partially vitiated by the absence of that common defence system for the sub-continent which was offered by Field-Marshal Ayub Khan to the late Sri Nehru and, to achieve that, is not the problem of self-determination in Kashmir very relevant? Will Her Majesty's Government, in common with other Commonwealth Governments, do their best in this difficult problem to see whether India and Pakistan can be brought closer together in the interests of the Commonwealth?
    Mr. Bottomley: This is a matter where all Commonwealth Governments are willing to help if their services are required. Of course we would all like to see the differences between India and Pakistan over Kashmir ended as soon as possible.
    Mr. George Jeger: In considering these matters, will my right hon. Friend give weight to the view that building up arms in that area will not reduce tension between India and Pakistan?
    Mr. Bottomley: This is a matter we have very much in mind.

  NIGERIA

    Dr. V. Allen
    Mr. Hugh Jenkinsasked the Secretary of State for Commonwealth Relations if he is aware that Dr. V. Allen, a British subject, was sentenced to 12 months' imprisonment with hard labour in Western Nigeria, that the previous charge against Dr. Allen was withdrawn, that he was then re-arrested on a new charge, and that a statement from Dr. Allen was disallowed on the grounds that it had been taken from him by the police by unlawful means; and what action he proposes to take in this regard.
    Mr. Cledwyn Hughes: With permission, I will state the facts briefly. Dr. Allen was first arrested in Lagos on 16th June and charged under the Federal
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    Nigerian Criminal Code with the offence of managing an unlawful society. On 1st July this charge was withdrawn, and Dr. Allen, then on bail, was formally discharged. He was then charged under the Western Nigerian Criminal Code, with three others on three separate counts involving sedition. The hearing, in a Western Nigerian court, lasted until 10th October, and on 10th November all four were found guilty and sentenced to four months imprisonment on each charge, to run consecutively. Dr. Allen has been given light work in the prison printing shop. During the trial the magistrate heard evidence on the admissibility of a statement alleged to have been made by Dr. Allen and ruled that this statement could not be admitted.
    The Government are satisfied that Dr. Allen has had a fair trial and that the British High Commissioner's staff in Lagos have, from the beginning, given him the maximum assistance to which he was entitled. The High Commissioner has kept my office fully in touch and will continue to do so. I am satisfied that there is no case at present for any representations to the Nigerian Government on Dr. Allen's behalf.
    An appeal has now been filed. As the case is still sub judice I do not think that it would be appropriate to make any further comment.

  JAMAICA

    Foreign Nationals and Commonwealth Citizens (Employment) Act
    Sir J. Vaughan-Morganasked the Secretary of State for Commonwealth Relations what representations he has made to the Government of Jamaica in regard to the Foreign Nationals and Commonwealth Citizens (Employment) Act.
    Mr. Cledwyn Hughes: The Government drew attention to several aspects of the Bill which adversely affected our citizens, and I am glad to say that the Jamaican authorities made a number of amendments to the Bill before it became law.
    Sir J. Vaughan-Morgan: Will the right hon. Gentleman make it quite clear to the Government of Jamaica that we entirely accept the right of any country to limit immigration if it so wishes?

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    Will he also bear in mind that some firms employing British subjects in Jamaica feel that they may have difficulties now in recruiting the necessary technical staff?
    Mr. Hughes: I shall certainly bear in mind what the hon. Member has said, but I draw his attention to one amendment to this Jamaican Act, namely, that Commonwealth citizens are exempt from the provisions of the Act if they have been employed in Jamaica for at least nine months in a year since 1954. That should be of some assistance.

  MALAYSIA

    Indonesian Forces (Acts of Aggression)
    Mr. Sandysasked the Secretary of State for Commonwealth Relations what information he has received from the British High Commissioner in Malaysia about recent acts of aggression against Malaya and Sarawak by Indonesian forces; and what requests he has received for further assistance from the Malaysian Government.
    Mr. Bottomley: I understand that during the past two months there have been at least seventeen further Indonesian acts of armed aggression against Malaysia.
    The British Government continue to support the Malaysian Government to the full in defending Malaysian soil against these attacks. I have received no request for the deployment of additional British forces for this purpose.
    Mr. Sandys: Is the right hon. Gentleman aware that his statement that the British Government continue to support Malaysia to the full will be widely welcomed? Is he aware that his assurance that the Government will continue to carry out the policy of maintaining support for Malaysia, taken together with his earlier statement that the British Government will retain their base in Cyprus, taken together with the other statements that the British Government will maintain their commitment to B.O.A.R. and their base in Aden, shows not very much change in their defence policy?
    Mr. Bottomley: The right hon. Gentleman ought to know better. The last supplementary question should be
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    addressed to the Minister of Defence. All I can say about that part of the question which concerns me is that when I was on the other side of the House I expressed the same opinions about Malaysia as I have today.
    Mr. Biggs-Davison: Is the United Nations Security Council aware of this threat to international peace and security? If so, has it anything to say or do about it?
    Mr. Bottomley: That is a matter for the Foreign Office.
    Mr. Emrys Hughes: Would not my right hon. Friend agree with me that there is a case for the £200 million spent in Cyprus during the last 10 years having been better invested in Scotland? Will he convey to the Government that in Scotland we want the £20 million a year, which the Government are to persist on spending in Cyprus, where it will give better service to the country?
    Mr. Speaker: I have great difficulty in working Scotland into a Question about Malaya and Sarawak.

  ELECTRICITY

    Nuclear Power Station, Dungeness (Coast Erosion)
    Mr. Costainasked the Minister of Power if he is aware that the possibility of coast erosion at Dungeness affecting the nuclear power station is causing considerable apprehension to local residents; and if he will give an assurance that the nuclear reactor will not be activated until it has been proved that coast erosion will not affect the safety measures which have been built into the nuclear reactor.
    The Parliamentary Secretary to the Ministry of Power (Mr. John Morris): I am aware of Press reports which were subsequently denied by the Central Electricity Generating Board. Erosion and accretion on the beach at Dungeness were assessed before the decision to build the station was made, and I am satisfied that it presents no threat to the safe working of the reactors.
    Mr. Costain: Is the hon. Gentleman aware that that Answer will give much satisfaction?
    Mr. Morris: Thank you.

  MINISTRY OF POWER

    North Sea Bed (Oil and Natural Gas)
    Mr. Eldon Griffithsasked the Minister of Power what is the policy of Her Majesty's Government towards the public ownership of those areas of the North Sea bed now being prospected for oil and natural gas.
    Mr. Peytonasked the Minister of Power what is the policy of Her Majesty's Government towards the terms and conditions of the licences so far issued in relation to the Continental Shelf.
    Mr. Geoffrey Lloydasked the Minister of Power what decision he has reached on the future of the licences granted on 17th September for prospecting for oil and gas in the North Sea.
    The Minister of Power (Mr. Frederick Lee): As these licences have already been issued the Government have concluded that it would not be in the public interest to disturb them.
    Mr. Griffiths: Would not the right hon. Gentleman agree that this is one more example of the Labour Party saying one thing during the election campaign and doing another? Will he give the House and these international companies engaged in prospecting for oil in the North Sea an assurance that the threat of nationalising their operations no longer exists?
    Mr. Lee: The statement made during the election by my right hon. Friend was provoked by the action of the then Government, an action which I thought to be quite unseemly and untimely, in that they did not leave such an important decision to the incoming Government. So far as the future is concerned, we must wait and see.
    Mr. Peyton: I welcome the statement which the right hon. Gentleman has just made and which clears up the uncertainty. Is not the knowledge which he now has available sufficient to convince him that his predecessor was absolutely right in going straight ahead and not wasting valuable time in this important matter?
    Mr. Lee: No. I think that I have already replied to that. I do not think
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    so. It would have been far better had the incoming Government had the right to issue these licences.
    Mr. Geoffrey Lloyd: Does the right hon. Gentleman recollect—
    Mr. Woodburn: On a point of order. Is it customary to call three hon. Members on the same side of the House in succession to ask supplementary questions?
    Mr. Speaker: I think that it will accord with the right hon. Gentleman's not too short recollection that it is usual to offer an opportunity to ask a supplementary question to those hon. Members who have Questions on the Order Paper.
    Mr. Geoffrey Lloyd: Does the right hon. Gentleman recollect that his right hon. Friend the Secretary of State for Economic Affairs said in reference to these licences that it was a case of the last Government giving licences to their private enterprise friends? Will the right hon. Gentleman now ask his right hon. Friend to withdraw that statement?
    Mr. Lee: I have already said that I thought that the statements made by both my right hon. Friends at that time were entirely justified. It would have been far better had the incoming Government had the right to distribute these licences themselves.
    Mr. Woodburn: Would my right hon. Friend agree that this operation was possible only because the previous Government nationalised nearly half the bed of the North Sea?
    Mr. Hector Hughes: Does that policy include steps to protect the fertility and breeding of fish in these fishing grounds, which may otherwise be seriously damaged, with great loss to the North Sea fishing industry and to fish consumers?
    Mr. Lee: I do not think that that question should be directed to me.

    IMMIGRATION
    Mr. Shepherdasked the Prime Minister whether, in view of the reactions caused by the present volume of immigration, he will appoint a committee to report upon the present situation, having special regard to the problems of assimilation, housing, education and employment.
    The Prime Minister (Mr. Harold Wilson): No, Sir. We already have the Commonwealth Immigrants Advisory Council, which advises on the integration of Commonwealth immigrants into the community; and the issues involved are, of course, kept in regular review by the responsible Ministers.
    Mr. Shepherd: Is it not a fact that a great deal of prejudice surrounds this subject? Would not much of it be dissipated advantageously if a large and objective review of all these considerations were made? Would it not serve the purpose of dispelling much of the prejudice?
    The Prime Minister: I think that, whatever differences there are on this matter in the parties and in the country, everyone will agree on the importance of positive action in the areas where this problem is greatest. The hon. Gentleman will be aware that the Council which I have mentioned has already submitted three reports in the time of the previous Government on housing, education and employment for immigrant school leavers.
    Mr. Taverne: Has the Prime Minister had any representation from the Home Secretary, or the Law Officers, concerning a proposal put forward by a group of lawyers to set up a citizens council for a rather different purpose—to investigate any alleged cases of discrimination on grounds of race or religion?
    The Prime Minister: I have seen reports of this suggestion, but I have not had a report on it from the Home Secretary or the Attorney-General.
    Mr. Lipton: In order to lift the problems arising from immigration out of the party dog fight, will the Prime Minister consider setting up a standing committee on which Members on both sides of the House would be represented, working in conjunction with representatives of the Government Departments concerned, which would be a much more effective body than the well-meaning people who are serving on the Commonwealth Immigrants Advisory Council?
    The Prime Minister: The urgent thing is to try to take special action in the areas where the problem is greatest. Of course it is not the custom ever to say what committees of Ministers there are examining these subjects, but I said that
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    this matter, with particular reference to the positive side which I have just mentioned, was under continuous review.

    DRINK AND DRIVING (MINISTER'S BROADCAST)
    Sir M. Galpernasked the Prime Minister whether the official television broadcast by the Minister of Transport on Wednesday, 18th November about drink and driving represents the policy. of Her Majesty's Government.
    The Prime Minister: Yes, Sir.
    Sir M. Galpern: Is my right hon. Friend aware that the pronouncements of the Minister of Transport on his rule of three has caused widespread dismay and created the belief that it is quite all right and safe for motorists to drink, to partake of three small whiskies, or three half pints of beer, or one-third of a bottle of wine and then drive? Will he consider what steps can be taken to counteract this dangerous advice?
    The Prime Minister: I have carefully read the statement of my right hon. Friend. He said:
    "We think, of course, that throughout the festive season those people who have to drive motor cars would be better not to take alcohol when they are going to be in charge of their cars, but if there are people who must do … they really ought not to exceed the minimum quantities suggested by all research bodies as the level beyond which their driving is impaired."
    Mr. Strauss: Is the Prime Minister aware that the amount of alcohol suggested in that speech is above that suggested by the British Medical Association as being safe and that anybody found having had that amount of alcohol in many European countries and in many States of America would be liable to prosecution and severe penalties? Will the Prime Minister ask his right hon. Friend to consider this matter, because the impression given may be dangerous and cause drunken driving?
    The Prime Minister: Obviously individuals react differently to given quantities of alcohol and I am informed—though I have not tested it for myself—that it depends even more on how long it was since one got any solid food inside one.

    SCIENTIFIC DISCOVERIES (NEW INDUSTRIES)
    Mr. Stratton Millsasked the Prime Minister what proposals he has for the establishment of new industries by public enterprise or in partnership with private industry to produce new scientific discoveries.
    The Prime Minister: The Government will be keeping this matter under continuous and urgent study, and will inform Parliament of specific proposals as occasion arises.
    Mr. Stratton Mills: Does the Prime Minister recognise that those words are from his own party's election manifesto? Is this yet another tip of an iceberg, the iceberg of public ownership? Does the right hon. Gentleman think that this kind of Measure will do anything to encourage confidence in either sterling or Her Majesty's Government?
    The Prime Minister: I recognise the words; I wrote them myself. I am sure that if the hon. Gentleman considers this, he will realise that whether these new industries or units are set up in partnership with private industry or in public enterprise, in so far as they will be new productive units which did not exist before, not transferred from private ownership, they will not only give employment to areas which need employment, but will also be good for making a much bigger contribution to our export drive.
    Mr. William Hamilton: Is my right hon. Friend aware that there is an establishment in Glenrothes in Fife which is ready for public take-over, namely, a set of piggeries and factories and refrigerator plant?
    The Prime Minister: I am not sure that that is an industry dependent on new scientific discoveries.
    Mr. Orme: Will the Prime Minister bear in mind that, particularly in the machine tool industry and industries such as that, sections of public ownership would be exceedingly welcome? Is he aware that we are looking forward to his introducing such legislation in the near future?
    The Prime Minister: This Question relates not to a take-over of existing firms, but to the creation of new industries, whether under public enterprise or in partnership with private industry, based on new scientific discoveries. As I indicated in my statement last Thursday, my right hon. Friend the Minister of Technology is taking a special interest in the machine tool industry in view of the anxieties, on both sides of the House, about the growing volume of imports of machine tools and the need to improve that industry's export record.

    CIVIL SERVANTS AND GOVERNMENT SCIENTISTS (SECURITY)
    Sir Richard Glynasked the Prime Minister how many civil servants and Government-employed atomic scientists have been moved from their posts in the last 14 years in the interests of national security because they were foreign-born, or because they had relatives living behind the Iron Curtain or because of a combination of both these circumstances.
    The Prime Minister: Twelve, Sir.
    Sir Richard Glyn: Would the Prime Minister agree that some of these persons have suffered considerable hardship through being removed from their posts under this security rule? Would he further agree that the security rule has now been abandoned by the present Government, and in those circumstances will he. as an act of simple justice, consider how many of these unfortunate people may be restored to their positions in the present circumstances?
    The Prime Minister: The hon. Gentleman is quite wrong. There has been no change whatsoever either in the rule or in the application of the rule. Every case is followed on its merits by the responsible authorities, and anyone who, for any reason—even reasons he cannot himself help—cannot be trusted, is not given access to any form of classified information. I am sure that if the hon. Gentleman will study the record over the past years he will find that in recent times some extremely distinguished civil servants of very high rank of foreign birth gave remarkably good service to the previous Government.

    ISRAEL (MINISTER'S BROADCAST)
    Mr. Maxwell-Hyslopasked the Prime Minister whether the official broadcast to Israel on 23rd November by the Minister of Housing about the Middle East represents the policy of Her Majesty's Government.
    The Prime Minister: My right hon Friend the Minister of Housing and Local Government did not make an official broadcast to Israel on 23rd November. Nor did he propound policy.
    Mr. Maxwell-Hyslop: Would not the right hon. Gentleman agree that it is very unfortunate indeed that Members of the Government should take part in broadcasts of this kind, and would he not really find it easier to control his colleagues if he had fewer of them?
    The Prime Minister: I do not think that the right hon. Gentleman sitting opposite to me, or his predecessor, found it particularly easy to control some of their colleagues over the last two or three years, but so far as the broadcast is concerned, if the hon. Member is really interested in the broadcast and not the crack, the fact is that my right hon. Friend has been a regular contributor for 14 years on this particular B.B.C. service, which, I think, has been very satisfactory to the B.B.C. and to all concerned. This particular broadcast was in effect a signing-off broadcast, as it is obviously clear that he cannot continue in this series, and I would have thought it appropriate, after all that time, to say goodbye.
    Mr. R. A. Butler: If that was not the official view of the Government, may I ask the right hon. Gentleman what is the official Government policy towards Israel?
    The Prime Minister: Yes, if the right hon. Gentleman wants to put down any particular Question he can get an Answer, or in the next debate on foreign affairs he could raise this amongst other matters, and I am sure he would get an answer. To be going on with, I shall be very happy to send the right hon. Gentleman a number of statements which were made by the present Government when we were sitting on the other side of the House.

    CENTRAL OFFICE OF INFORMATION
    Mr. Kershawasked the Prime Minister which Minister has responsibility for the Central Office of Information.
    The Prime Minister: My right hon. Friend the Chancellor of the Exchequer is responsible for the total Vote, organisation and staffing of the Central Office of Information. Specific information activities carried out on behalf of a Department are the responsibility of the Departmental Minister concerned.
    Mr. Kershaw: That is a pretty odd arrangement, is it not? How is the Paymaster-General going to answer Questions if he has not got any Departmental responsibilities? How is he to answer questions about this? How can he do a proper job? Will the Prime Minister come clean about the job the Paymaster-General has? Whom, really, is he watching?
    The Prime Minister: If the hon. Member would study what I said on a previous occasion he would find that there is nothing odd about it at all. The Chancellor of the Exchequer is responsible for the Central Office of Information. If the hon. Member sees any difficulty in this arrangement, it all arises from the fact that we have decided not to have a Minister acting as a party P.R.O.

    POLARIS BASE, HOLY LOCH
    Mr. Martenasked the Prime Minister whether it is the policy of Her Majesty's Government that the United States Polaris base should remain in Holy Loch; and if he will make a statement.
    The Prime Minister: With permission I will answer this Question and Question No. 10 together.
    Members of the Royal Corps of Military Police assisted the Buckinghamshire County Police—
    Mr. Speaker: Order. I called Question No. 8.
    The Prime Minister: The Answer is "Yes, Sir."
    Mr. Marten: Would the right hon. Gentleman agree that the maintenance of

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    this American base in Scotland is a very effective way of making the Alliance strong?
    The Prime Minister: Well, it is a very big subject. We have debated it many times, but certainly the position is as I repeatedly stated when I sat on the other side of the House, that this would be kept in its present form unless and until, as a result of any possible changes in nuclear policy within the Alliance, there were a requirement for it as a N.A.T.O. base.
    Mr. Rankin: Is my right hon. Friend aware that, even if the necessity for a nuclear base in Britain is accepted—and I do not accept it—in Scotland we regard its situation as being extremely dangerous—[HON. MEMBERS: "Oh."]—in view of the fact that it is far too near the greatest industrial centre in Scotland?
    The Prime Minister: When this was debated when the original agreement was signed, my right hon. Friend the then Leader of the Opposition advanced very substantial criticism on the actual siting in that particular part of Scotland. This was very strongly put by a number of us, but it is now in fact there, and I do not think anyone would suggest uprooting it and sending it to a different part of Scotland.
    Mr. Biggs-Davison: Does the right hon. Gentleman the Secretary of State for the Colonies agree with the Prime Minister's endorsement of this Polaris base, and, if so, did he change his mind before or after entering the Cabinet?
    The Prime Minister: My right hon. Friend always, I think, agrees with me. I should start to get worried if he ever agreed with the hon. Gentleman.
    Mr. Bellenger: On a point of order. The order Paper says that Questions to the Prime Minister will begin at 3.15 p.m. Today they started at 3.19. Possibly the Prime Minister might have been able to complete answering the Questions to him if we had started punctually. May I respectfully ask you, Mr. Speaker, if you yourself could help when there is a long string of supplementary questions to the
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    Minister replying before the Prime Minister, so that the Prime Minister can start punctually?
    Mr. Speaker: No. I proposed to call the first of the Prime Minister's Questions at 3.15. It is a matter of misfortune, or not, according to the view taken, that the Question which last occurred before 3.15 was answered together with two other Questions, involving, of necessity, if we were to get a proper balance, a certain number of supplementaries. I regret this distortion, but cannot from the Chair help.
    Mr. Gower: May I respectfully ask your guidance, Mr. Speaker, in view of the great anxiety and the great uncertainty caused by the ill-defined nature of some of the financial proposals of the Chancellor of the Exchequer, and in view of certain statements to the Press, as to whether there is to be a statement now, or an Answer to Questions No. 50 and No. 56, which are related to following Questions to the Prime Minister? Is it possible for the Chancellor to make a statement, or to answer the Questions which are of supreme importance?
    Mr. Speaker: It is a curious fact that hon. Members whose Questions are not reached are from time to time tempted to raise them in this way. I would not wish to give encouragement to the practice.
    Brigadier Clarke: On a point of order, Mr. Speaker. I heard you call Question No. 7, and the Prime Minister said that he would answer Questions 7 and 10 together. If I had not heard him say that I would have postponed my Question No. 10 to him. May I please postpone that Question, because it is a jolly good one?
    Mr. Speaker: The proper method of postponing a Question is not by addressing the Chair in this fashion. The hon. and gallant Member, with respect, is not quite right in saying that I called the Prime Minister to answer No. 7. It was No. 8, and the Prime Minister proceeded, in error, to answer something else, and when I gave him the opportunity he got hack to the right one.

ORDERS OF THE DAY

  FINANCE BILL
  Further considered in Committee [Progress, 30th November].
  [Dr. HORACE KING in the Chair]

  FINANCE BILL

    Clause 2.—(HYDROCARBON OILS, PETROL SUBSTITUTES AND POWER METHY LATED SPIRITS.)
    3.32 p.m.
    Mr. Bryant Godman Irvine: I beg to move Amendment No. 8, in page 2, line 36, at the end to insert:
    (4) If on an application made for the purpose of this section by the owner of any machinery or equipment used for the purposes of agricultural or horticultural business it appears to the satisfaction of the Commissioners that the applicant has at any time within the period of six months preceding the date of his application (which date shall be not earlier than six months after the coming into force of this section) used any quantity of hydrocarbon oil for operating such machinery and equipment he shall be entitled to obtain from the Commissioners repayment of two-thirteenths of any customs duty or excise duty paid in respect of the oil so used.
    The purpose of this Amendment is to enable the agricultural industry—
    The Chairman: Order. I must ask hon. Members to be quieter in leaving the Chamber.
    Mr. Godman Irvine: The purpose of the Amendment is to see that the agricultural and horticultural industries shall have an opportunity of reclaiming the amount of tax paid through the hydrocarbon oil duty. Knowing the interest which the hon. Gentleman the Member for Gloucester (Mr. Diamond) has in agriculture, I am sure that he will welcome this opportunity of making his position and that of the Government clear, so that the agricultural industry may have no doubt about it. Perhaps I should tell him that in his party's election manifesto there was nothing which would reassure the agricultural industry, as the results of that election would confirm. However, I am sure that he is well aware that the agricultural industry provides one of the most important supports to our balance of payments, and if the industry is turned into a high-cost industry that will have a very unfortunate effect upon the overall financial position of the country.
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    What is quite clear from the plan which has been put forward for the hydrocarbon oil duty proposal is that it must lead to inflation. I had a Question down, with some of my right hon. and hon friends, for the Minister of Agriculture on 18th November. On that occasion he made it quite clear that there was to be an increased cost to the industry of about £2½ million to agriculture and £250,000 to horticulture. We pressed the Minister to say how he would deal with that sum, and he said quite clearly that it would be dealt with under the Price Review procedure. What does that mean? It means either that there must be an increase in prices which are paid to the producer for agricultural produce, or that the Government are to find increased sums for agricultural subsidies.
    I put it to the Minister that the horticultural industry is not included in the Price Review. So very unsatisfactory was the answer on 18th November that I later put two further questions to him on 25th November to find out whether he was going to do anything for horticulture or not. He made it quite clear that there was nothing he or the Government had in mind for horticulture and he went on to say that during the past 13 years the Government had consistently declined to remit increases on petrol used in the horticultural industry. Yet in 1961, as the Chief Secretary will recall, there was an arrangement made so that the horticultural industry should be relieved of the 2d. per gallon duty then proposed.
    The other respect in which I would suggest the Minister of Agriculture was wrong was when he said that £250,000 was to be the cost to the horticultural industry. He was, as I suspected, basing his calculation on the overall amount which is produced by the two industries and dividing the ratio for horticulture by the ratio of output produced by each. That is the wrong way to make that calculation. I would submit that there is a much greater amount which the horticultural industry is to be called upon to pay than £250,000.
    According to the Ministry of Agriculture's survey of March, 1964, he will see that there are 45,350 tractors of 10 h.p. or under and the vast majority of those, probably 90 per cent., are used in the horticultural industry. The total of tractors over 10 h.p. is 376,000 and of

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    those the number estimated to use petrol is only 13,000. If those figures are applied to the total sum we expect to be collected by this duty, it will be seen that there are 45,000 tractors of under 10-horsepower most of which are used in horticulture against only 13,000 suitable for agricultural use. I ask the hon. Gentleman to agree that the calculation is incorrect, and that the figure which the horticultural industry will have to meet will be much more than £250,000 and may be well over half of the total of the £2½ million.
    Perhaps I might put it another way. If it is only £250,000, the hon. Gentleman is in precisely the position which the Chancellor of the Exchequer was in in 1961. because, by a strange coincidence, £250,000 was the sum which it was estimated the horticultural industry would have to bear in 1961. The Chancellor of the Exchequer then came to the conclusion that that was a significant amount and that something should be done for the industry. The Chief Secretary is in a similar position today, and I therefore ask him to take this plea seriously on behalf of the horticultural and agricultural industries, and to consider the Amendment very seriously.
    I also ask the hon. Gentleman not to forget that on 3rd April, 1963, my right hon. Friend the Member for Barnet (Mr. Maudling), who was then the Chancellor of the Exchequer, when discussing the question of industrial light oils, found that there was a principle which he thought should receive some attention so that relief would be given to an industry which found that, by the imposition of these additional charges, it was having something added to which its competitors were not subjected.
    My right hon. Friend said on that occasion:
    " The duty of 2s. 9d. a gallon on industrial light oils imposes a special additional burden on a number of industries which happen to use oil in the actual manufacture of their products, one which many of their overseas competitors do not have to carry. I accept in principle the claim for some form of duty relief for industrial light oils."—[OFFICIAL REPORT, 3rd April, 1961: Vol. 675, c. 486.]
    If that is a principle which could be applied in a wide area in industry, I submit that it is one which should receive the hon. Gentleman's favourable consideration for the two industries which I have been discussing.
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    How do we propose that this should be done? If the hon. Gentleman looks at the Amendment, he will recognise that in 1928 Mr. Winston Churchill, the then Chancellor of the Exchequer, introduced precisely the same Amendment to relieve the fishing industry. Whether that will commend the Amendment to the hon. Gentleman remains to be seen, but at least it is a respectable precedent, and it is one which has worked well for many years.
    The other possibility of marking the oil would, it is estimated, add about 1s. a gallon in cost, and, therefore, it seems that our proposal is much the better way of dealing with the position. The proposal is that the industry should purchase its oil in the same way as everyone else, and it should then submit claims which will be checked by the county agricultural executive committees, and by the Customs, according to the methods adopted by them in their experience for dealing with such matters.
    The hon. Gentleman may say that a scheme of this sort was introduced in 1950–51, which was of short duration. If that should be his argument, perhaps I might remind him that it did not have a long enough run to get the difficulties dealt with. If he looks at some of the precedents in other countries, he will be reassured. This principle is working in Finland, France, Denmark, New Zealand, Sweden, and the United States. The three States in which special consideration has been given, by those with whom I have been in consultation, are Indiana, Illinois and Kentucky, where simple forms are filled in and no difficulties arise. The whole thing works to the satisfaction of everyone who has anything to do with it, and I commend the Amendment to the Committee.
    3.45 p.m.
    Mr. James Scott-Hopkins: I support my hon. Friend the Member for Rye (Mr. Bryant Godman Irvine) in the Amendment which he has moved.
    I protest strongly at the absence of the right hon. Gentleman the Minister for Agriculture and his two Joint Parliamentary Secretaries. None of them has seen fit to come and listen to the debate. This is not the first time that this discourtesy

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    has been shown to the Committee when a matter of great importance to the agricultural industry has been discussed. It happened in connection with tied cottages when the Protection from Eviction Bill was being discussed. I suggest that the Chief Secretary should ask his right hon. Friend to come here as a matter of urgency so that he can listen to something which will have a great effect on the two industries. I register once more my protest at the Minister's absence.
    My hon. Friend has estimated that the total cost to be borne by the farming industry as a result of the imposition of this duty is about £2½ million. There is no question of the industry being able to recoup its costs. There is no question of it being able to raise its prices to get a certain amount back. We have been over this subject in the years gone by. In 1961, the same point was made from the other side of the House by me and my hon. Friends when the duty was raised by an even smaller amount than this. It was pointed out that there was no way in which the farmer could recoup the extra impositions put on him and his industry by this kind of budgetary system until the operation of the Price Review which takes place in the months ahead.
    The farmer has had to bear the cost of these increased duties himself, and then hope that at a later date he can recoup the money which he has spent during the months between the imposition and the Price Review. This is grossly unfair, and, although it has an inflationary effect, the farmer does not raise the cost of his produce. Hon. Gentlemen opposite cannot point to a single farm product the price of which has been, or is to be, raised because of this duty, even though it considerably increases the costs to the farmer himself and to the industry.
    Let us consider the cost which the agricultural industry has to bear. The President of the N.F.U. has calculated that the actions of the right hon. Gentleman and his friends during the past 40 to 50 days have added about £23 million to the costs of the industry, and this proposal is just a further addition to those costs. I presume that the Chief Secretary will say that this will be taken into account in the Annual Price Review in March next year. I hope that he will. If he has consulted his right hon. Friend the Minister
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    of Agriculture, he will be forced to say that, or perhaps once again the right hon. Gentleman has no interest in this sort of thing, but I find that difficult to believe.
    I turn for a moment to the incidence of this tax. I understand that heavy hydrocarbon oils are not affected by the duty which is being raised by this Clause, but this duty does affect petrol and derv used in tractors on farms, and, as my hon. Friend said, it affects the horticultural industry because of the light machines which are used in that industry. I am sure that the Chief Secretary knows that it is the small farm and the small farmer who will have to bear the maximum burden of this increase of 6d. in the tax.
    I have many small farmers in my constituency. Indeed, in the West Country they make up the largest proportion of farmers. These are the people who will have to bear the bulk of this extra cost of £2½ million, because often they do not use the more powerful and bigger diesel tractors. They use petrol tractors and tractors which use derv. They also use other types of machinery which require this type of fuel for their operation. Thus, I think that it is fair to say that the incidence of this tax will be concentrated on the small farmer, the one who is least able to bear it. I am certain that the hon. Member has not realised this. Perhaps the Minister of Agriculture, who shows his lack of interest in this matter by not attending, has not pointed it out to him.
    I shall not go into details of the exact cost of running a tractor for so many hours on this or that type of fuel, but I do not think that the industry is in a state to bear this extra tax. I am sure that the small farmer is not in a position to bear it, on top of the other extra costs which the Labour Government have imposed on him and upon the industry generally in the past few weeks.
    It is extraordinary that the hon. Member for Kettering (Sir G. de Freitas) is not here, because he made a smashing attack on the increase on the fuel oil tax in one Budget. He should be here to reinforce our attack upon the effect of this proposal on the farmers.
    This is an unfair tax. The Amendment has a most respectable precedent and it should be adopted. This tax will bear harshly upon the small farmer, who

    241
    can least bear it. This loss cannot be recouped in the forthcoming Price Review, because there is so much to be recouped already—£23 million or £25 million. It is disgraceful that the Minister of Agriculture or one of his two Parliamentary Secretaries should not be here. I hope that the Committee will support the Amendment.
    Mr. Marcus Kimball: I hope hat the Minister will give us a favourable reply. My hon. Friend the Member for Rye (Mr. Bryant Godman Irvine) has put some valid arguments in connection with the agriculture industry, emphasising that this serious increased cost cannot be taken into account at the Annual Price Review.
    As for the Price Review itself, it is fair to say that people throughout the country are already becoming extremely apprehensive because of the extravagance of the Government and the way they are spending public money at the moment. It makes us all fear that there will be no money left in the "kitty" when the Price Review comes around. I am certain that the hon. Member has already had warnings within the Treasury about the likely bill to be paid in relation to the Price Review. I would have thought that the hon. Member would be very worried about it.
    There has already been an increase in wages for which the industry must have full recoupment, and it is not satisfactory to tell the Committee that in addition to that heavy expense, for which the industry will have to be recouped, there is to be this extra increase in the duty on petrol and diesel oil. I hope that the Chief Secretary will give us a favourable answer this afternoon, especially in view of the way in which the Price Review arithmetic is bound to go. If the hon. Member can say something to allay the fears about the way in which the Price Review will go—and I can assure him that those fears are certainly felt by my constituents—we shall be grateful to him.
    I should like to know how this increase will affect the many farmers who still have no mains electricity. Will they have to pay this extra tax for the oil they use for their generating plants? The hon. Member will recollect that
    242
    when previous increases have been made in fuel duty a special rebate scheme has been introduced in respect of private generators where mains electricity is not available. If this increase in duty will have to be paid in respect of small generating sets in places where mains electricity is not available I hope that the hon. Member will begin consultations immediately with the electricity suppliers—the Hydro-Electric Board in Scotland and the electricity boards in England—to see what can be done to speed up the supply of electricity to farms in rural areas. I should declare an interest in this matter. I am without mains electricity myself in various places and I feel very apprehensive about this increase in costs.
    I hope that the hon. Member will also bear in mind the increase in cost that this will mean to the farm workers. He must be aware of the serious problem of rural transport, especially in parts of the country like Lincolnshire, where the public transport service is practically non-existent. The argument is that everybody has his own car and goes to work in it, but the Minister should bear in mind that everybody is forced to go to work in his own car, and is therefore forced to pay the increase in petrol duty. It is, therefore, a matter which must be taken into account by the Agricultural Wages Board. That will mean yet another increase in costs for the industry.
    I hope that we will have a satisfactory answer from the hon. Member which will show us that he has the feelings and worries of the countryside at heart.
    Mr. Geoffrey Wilson: I support the Amendment, partly because agriculture is the most important industry in my constituency but also because of the precedent mentioned by my hon. Friend the Member for Rye (Mr. Bryant Godman Irvine) in the Finance Bill of 1928. I do not know whether the Chief Secretary has read the debate on that Bill. If he has, he will know that on that occasion Mr. Winston Churchill—as he then was—who was then Chancellor of the Exchequer, gave a large concession in connection with derating. To pay for it a tax was put on fuel for motor vehicles. It was orginally proposed that a concession

    243
    should me made in respect of both agriculture and fishing, but as a concession had been pressed for in respect of kerosene, on the ground that that was the fuel used by the poorest section of the community, that concession was granted and the concession for agriculture and fishing was withdrawn.
    The predecessor of my hon. Friend the Member for Cornwall, North (Mr. Scott-Hopkins)—Commander Williams—persuaded the Chancellor to restore the concession for fishing, during the Report stage of the Bill, and that concession has worked quite satisfactorily for more than 30 years. The argument is sometimes used that once a concession is given it multiplies and proliferates in all sorts of directions. In one debate it was suggested that it was like making a crack in a diving bell—the water flooded in. Similarly, it was suggested that the whole tax system would be flooded if a concession was once given. However, the concession then given in respect of fishing more than 30 years ago has worked satisfactorily, and there seems no reason why a small concession of this sort should not now be given to agriculture.
    I relate this history to show that the concession for fishing has worked well, and I would remind the Committee that it was the original intention of the 1928 Finance Bill that a similar concession to argriculture should be given.
    Mr. Aidan Crawley: I support the Amendment. I also regret the fact that there is no representative of the Ministry of Agriculture here. If one were here he might be able to induce the Chief Secretary to regard the Amendment with rather more sympathy than he seems to be doing at the moment. I know it is traditional that Treasury Ministers do not approve of agriculture. They regard it as something which costs them money, but they are wrong. Agriculture is not only our largest industry, with a turnover running into thousands of millions of pounds, from which the Treasury benefits; I would ask the Treasury how it could do without some of agriculture's by-products—alcoholic liquors. The Treasury should be very sympathetic towards agriculture.
    I support the Amendment chiefly on behalf of the small farmer. To the economist the small farmer is an anachronism.
    244
    Economists would like to eliminate or collectivise him. The fact is that the small farmers are not merely the backbone but the bulk of the agricultural industry, and unless we are to have Governments that use compulsion to a degree that I hope no British Government ever will use, they will remain the backbone.
    4.0 p.m.
    The Chief Secretary will know—and, if he does not. his right hon. Friend the Minister of Agriculture can certainly tell him—that the small farmers live on very narrow margins. A great many surveys have been made by university agricultural departments, some of them relating to my own constituency, showing that on holdings of under 100 acres, which are what most of the small farmers of my constituency have, incomes vary from about £2,000 a year—very rarely—to as low as £300 a year for a man and his family. In some areas the majority are living on incomes of below £500 a year.
    To those people, petrol used purely for agricultural purposes is one of their heaviest expenditures, particularly when they are farming in very hilly areas, such as west Derbyshire, where tractors are almost always in low gear. Any addition to the petrol bill is a very serious inroad into an already very narrow margin. The Treasury need not just say that these people should make themselves more efficient. Taking advantage of the various Measures produced by my right hon. Friends in the last few years, these farmers have been doing their utmost to make themselves more efficient. In Derbyshire, there have been about 5,000 applications under the various grant schemes, and an enormous amount has been done to increase efficiency.
    Nevertheless, what these men can do is limited. It is not only the nature of the country but very often the nature of the holdings which, for historical reasons that cannot be overcome, are widely scattered. The cost of petrol for transport and tractor work is one of their main problems, and an increased bill will reduce their incomes. I therefore hope that the Chief Secretary would consult his right hon. Friend the Minister of Agriculture to find out whether he cannot view this Amendment sympathetically, and so help our largest basic industry.
    Mr. Christopher Soames: Has the Chief Secretary consulted his right hon. Friend the Minister of Agriculture on the importance of this Amendment to the agricultural industry? If so, has his right hon. Friend pointed out to him that the result of not accepting the Amendment must be to add to the costs of the industry? Given that fact, what course can the Government take to mitigate that increased cost? They can ignore this Amendment, and so make the industry suffer the increased cost without getting anything to compensate in return. Alternatively, they can meet that increased cost by giving increased prices for certain guaranteed commodities at the Annual Price Review. If they take the latter course, what about the disinflationary aspect of the tax, of which the party opposite has made much? If the Government impose this extra cost on the farmer, the industry suffers—to what avail?
    I am sure that the hon. Gentleman will say that it is very difficult to mitigate the effect of the tax, but I ask him most seriously to consider whether he could not mitigate it in the way suggested in the Amendment. Costs in the agricultural industry inevitably rise year by year—there are so many factors involved—and all Governments must do all they possibly can not to make things worse by imposing upon it unnecessary cost burdens.
    I should have thought that the Amendment could have been accepted. should like to think that the Minister of Agriculture made just such a case to the Chancellor as has been made by my hon. Friends in this debate. Perhaps the Chief Secretary will tell us what the nation gains by the imposition of this tax on agriculture—our basic and so important industry. Of course, increased prices for certain guaranteed commodities would not have the same effect on the industry as would the remission of the tax as suggested in the Amendment because, as many of my hon. Friends have pointed out, this extra cost falls more heavily on certain farmers on certain types of land than it does on others. My hon. Friend the Member for Derbyshire, West (Mr. Crawley) has spoken about farming on the steep hills; such a tax as this falls harder on farmers in places like that than it does on those who farm in the plain.
    246
    The most sensible approach would be for the hon. Gentleman to accept the Amendment, and I very much hope that he will do so. I hope that he will be able to tell us that, after consulting his right hon. Friend—of whom, or of the Joint Parliamentary Secretaries to the Ministry, I had hoped to ask some questions—he will accept the Amendment. If he does not do so, I hope that at least he will give an assurance that the agricultural industry will not be made to suffer from this tax, and will, as a second best, have it made good in the Price Review.
    Mr. G. R. Howard: As has been said, this imposition bears hard on those engaged in horticulture and not covered by the Price Review, who are already being treated most unfairly in relation to the 15 per cent. surcharge. Many importers are suffering hardship in that connection, but the Government have exempted fresh vegetable imports from the surcharge. That means that people in the horticultural industry are not protected by the surcharge as many in other industries are. Now they face this increased cost, which they cannot recoup in the Annual Price Review. Horticultural costs in the Isles of Scilly, where the Prime Minister has a small house, are enormously increased because everything has to be shipped, and those people are now to be exposed to this additional financial suffering.
    I support the Amendment very strongly indeed, and hope that we can get a sympathetic hearing from the Government.
    The Chief Secretary to the Treasury (Mr. John Diamond): I hope that the right hon. Member for Bedford (Mr. Soames) will acquit me of any discourtesy in not immediately following him, but I wanted to give his hon. Friends an opportunity to participate in the debate before I replied.
    As my right hon. Friend the Minister of Agriculture has been so attacked, it is my first duty to explain why it is impossible for him to be here today. He was present yesterday, when it was hoped and expected that this point would be reached, but early last evening it became obvious—as I happen to know, because I have responsibility in the matter—that it would not be reached

    247
    then. Therefore, there was no reason for my right hon. Friend to stay all night merely to be looked at by right hon. and hon. Members opposite.
    The hon. Member for Cornwall, North (Mr. Scott-Hopkins) did not merely draw attention to the fact that the Minister of Agriculture was not here—he mentioned it four times. When an hon. Member mentions a thing once then the Committee is aware of the point. When he mentions it four times then the Committee is aware that a personal attack is being made, and it is because a personal attack is being made on my right hon. Friend the Minister of Agriculture that I am bound to explain that my right hon. Friend was here yesterday and would have been here today had it not been for the fact that he is at this moment talking to farmers. He is addressing a meeting of members of the N.F.U. at the Farmers' Club.
    When that engagement was accepted, there was no possible means of knowing that this Clause would be discussed simultaneously. It is monstrous of the hon. Member for Cornwall, North to keep on pursuing a personal attack in that way. He could easily have found out through the normal channels what my right hon. Friend the Minister of Agriculture was doing today. It was quite unnecessary for him to refer to my right hon. Friend's absence four times in a short speech. I do not know what else he said in his speech other than to attack my right hon. Friend.
    Mr. Scott-Hopkins: The Chief Secretary has not explained why the two Parliamentary Secretaries are not here, either. The Minister of Agriculture knew that this debate would come and surely some arrangement could have been made to have someone from the Ministry here today.
    Mr. Diamond: I do not know whether the hon. Member's reference to the Parliamentary Secretaries is to be taken as an apology for what he previously said in attacking my right hon. Friend the Minister of Agriculture. Apparently he does not intend to offer the courtesy of an apology to the Committee.
    Mr. Scott-Hopkins: I have no intention of withdrawing what I have said.
    Mr. Diamond: The facts are on the record. My right hon. Friend was attacked only last week by some hon. Members opposite—as I was not present I do not know whether they included the hon. Member for Cornwall, North—for not being willing to talk to farmers. Now he is engaged in that very pursuit, and it is hard that he should be singled out today for a personal attack of that kind. We should try to discuss this matter in a certain way.
    The Chairman: Order. I hope that we can now get to the Amendment.
    Mr. Diamond: I am grateful to you, Dr. King, for having given me an opportunity to reply to the four references to the Minister of Agriculture which were made by the hon. Member for Cornwall, North.
    I am grateful to the hon. Member for Rye (Mr. Bryant Godman Irvine) for the helpful and clear way in which he moved the Amendment. He speaks with great authority on this matter. I have had the pleasure of hearing him on many occasions and I listened to him today with great sympathy. Of course, my right hon. Friend the Minister of Agriculture has been fully consulted on the Amendments concerning agriculture and I am fully aware of his views. I propose to deal with the problem in general principle and then to answer detailed points put by hon. Members.
    The purpose of the Amendment is well understood. It is an attempt to relieve farmers and horticulturists from the increase in the duty. But it goes a little wider, because of the drafting. However, no one wants to dwell on a minor drafting point. It is clear that the method proposed is not satisfactory in any way. It is a method impossible to administer because there would be no means of separating the consumption of petrol for different uses once the rebate were given. There would be no means of preventing it from being used for purposes which were not intended by hon. Members.
    4.15 p.m.
    That is, of course, one of the reasons why the right hon. Member for Bedford and his right hon. Friends, when in government, never—I repeat, never—attempted to deal with the matter in this way. When they introduced an increase

    249
    in petrol duty they never attempted to give help to the farming community in the way proposed by the Amendment. There is, of course, a far better way of giving that help, which I shall come to in a moment. Now I am concentrating on the method proposed in the Amendment.
    Mr. G. R. Howard: The hon. Gentleman says that there has been no previous method of differentiating in this duty. I mentioned the Isles of Scilly. On most of the islands there are no cars. There are no roads for them. But there are tractors and other farm vehicles, so, in their case at least, the petrol could not be used for any other purpose.
    Mr. Diamond: I have not made a detailed examination of the Isles of Scilly. It will be a difficult situation if we have to legislate exclusively for the Isles of Scilly. Possibly the hon. Gentleman will accept my main argument that one could not administer the method proposed satisfactorily. The method of helping that the Government adopt in these cases and which my right hon. Friend the Minister of Agriculture is prepared to adopt in this case is through the Annual Price Review. Indeed, he has already said so. In a reply on 18th November, he said that the increased duty on oils would be taken into account on the occasion of the next Annual Price Review in relation to agriculture.
    Since it is clear that the method proposed in the Amendment is not satisfactory, and as my right hon. Friend has stated clearly that this increase in duty will be taken into account in the next Price Review, surely it would be better to leave this problem to be tackled in that way, which would be the best method of doing what the Amendment tries to achieve. There are various difficulties in drafting. It would not be helpful at this point to go into them and I therefore come to the conclusion that, in principle, the Amendment cannot be recommended by the Government to the Committee.
    Mr. Geoffrey Wilson: What is the difference between using this method for agriculture and using it for fishing?
    Mr. Diamond: I am not fully aware, to be frank, about the situation with regard to fishing. I gather that the hon. Gentleman is referring to a pro-
    250
    posal made in 1928. I am not fully aware of that. Nevertheless, for the reasons I have indicated, the system would not work in the case of agriculture. Both Conservative and Labour Governments have agreed on that. There is no need to adopt a method which would not work when one already has a method—the Annual Price Review—which does work. I hope, therefore, that the Amendment will not be pressed.
    Specific questions were asked of me. The hon. Member for Gainsborough (Mr. Kimball) asked what the effect would be on oil for small generators. There will be no effect because that oil is not covered in the Bill, which deals with heavy oils. If he is talking about petrol being used to the extent that the engine is a petrol-driven one, then it must bear the duty in the ordinary way. Most of these machines, however, use gas oil, which is not affected.
    I have dealt as fully but as shortly as I can with the points raised and I hope that the Committee will agree that, while there is full understanding of the purpose sought to be achieved by the Amendment, a satisfactory method of achieving the purpose already exists. There was an attempt to bring such a scheme as that suggested into force by the Labour Government in 1951, but it was never attempted again by the Conservatives during their 13 years of office which followed. There is a better method of reaching a solution of the problem and as my right hon. Friend the Minister of Agriculture has already given a satisfactory answer there will be no need to pursue the Amendment.
    Mr. Reginald Maudling: There are one or two points which make me think that the answer of the Chief Secretary, though courteous as always, is not quite enough to satisfy. I understand that the Minister of Agriculture has an engagement, but I am a little surprised that it is not possible for one of the Parliamentary Secretaries to be present during a discussion which is of considerable importance to the agriculture industry.
    Mr. Diamond: I apologise that I did not go on to answer that point in my speech. Neither of the Parliamentary Secretaries is present because they are

    251
    both engaged on legislation, to be introduced in due course, affecting farmers.
    Mr. Maudling: I think that the claims of this Committee are, on the whole, regarded as paramount, or close to paramount, and I would have thought it possible for there to be some representation from the Ministry of Agriculture on this occasion.
    Coming to the argument, I still find it a little difficult to understand what the Government are trying to do by the duty. They say that it is disinflationary, on the old doctrine that it is disinflationary to raise prices to the consumer. We therefore assume that it is their desire that the total additional cost of the increase in the duty should be passed on in the form of increased prices to the consumer, because if it is not passed on to the consumer it is not disinflationary.
    Therefore, we assume—I am not quite certain whether this is the Government's point of view—that the totality of the additional cost to the farmer of the increase in the duty will be added to prices in the Price Review; otherwise, it is not carrying out their purpose. We assume that the purpose of the whole thing is to increase the price of farm produce to the consumer by that amount when the next Price Review comes along.
    We think that this is very unsatisfactory because it ignores the position of horticulture, which is very important. The Government are in the difficulty that the systems of supporting agricultural and horticultural products in this country have differed over many years. The system of support for the basic agricultural commodities is one which admits of an increase in prices to compensate for an increase in costs. This is not true of horticulture, and from the reply of the Chief Secretary I cannot see any consolation whatever for horticultural producers for this large increase in their costs which inevitably will be involved from the increase in duty.
    For that reason, if for no other, I think that the Government's reply has not been satisfactory.
    Mr. J. M. L. Prior: I apologise to the Committee for not being present when the debate started. I, too, was attending the meeting in which the Minister was involved. I can tell the
    252
    Committee that the Minister made a very good speech, because he upheld the policy which my right hon. Friends pursued very successfully during the last four years and we heard nothing of the new agricultural policy about which we heard so much just before the election. From that point of view, I can assure the Chief Secretary that the Minister's time was not wasted. While he pursues the policies which he adumbrated to the farmers today, I am certain that he will have their support.
    I always think that on these occasions it is interesting to look back at debates which took place in bygone days on similar subjects. I must draw the Committee's attention to a debate which took place in 1961. At that time Mr. Percy Browne was speaking about the imposition of the oil duty. He accused the then Opposition of trying to obtain one or two extra agricultural seats at the next General Election. He was interrupted by the hon. Member for Leek (Mr. Harold Davies), who said:
    " We shall get many more."—[OFFICIAL REPORT, 16th May, 1961; Vol. 640, c. 1130.]
    I have done a little research on the subject of that debate. It is possible that the Labour Party might claim that they got one extra agricultural seat.
    The Chairman: I should be grateful to the hon. Gentleman if he came to the Amendment.
    Mr. Prior: I was just coming to the Amendment, Dr. King. They may have got one agricultural seat, but in getting one they lost one.
    If the Labour Government continue with the disastrous policy towards British agriculture which they have adopted in the first 40 days, they will not get any seats at all at the next election, because the Chief Secretary has completely overlooked the fact that the Amendment is particularly designed to help horticulture. Horticulture can have no protection through an Annual Price Review. It is the industry which is most affected by the increase in the duty. At a time when we are trying to improve marketing particularly in horticulture—marketing involves transport far more in horticulture than it does in agriculture—an extra imposition is being placed on the industry, an imposition which cannot possibly be replaced by increased prices for horticultural products.

    253
    I therefore hope that between now and Report the Chief Secretary will be able to come along with some form of rebate for horticulture. This is possible. We know from the National Farmers' Union that a perfectly reasonable system has been worked out in certain American States. There is no reason why that should not be done here. Unless we have
    a more reasonable reply than we have heard so far, I hope that my right hon. Friend will divide the Committee.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 222, Noes 251.

    Division No. 16.]

    AYES

    [4.25 p.m.

    Agnew, Commander Sir Peter

    Fletcher-Cooke, Charles Darwen)

    Mackie, George Y. (C'ness & S'land)

    Alison, Michael (Barkston Ash)

    Forrest, George

    McMaster, Stanley

    Allason, James (Hemel Hempstead)

    Foster, Sir John

    McNair-Wilson, Patrick

    Amery, Rt. Hn. Julian

    Fraser, Rt. Hn. Hugh (St'fford & Stone)

    Maginnis, John E.

    Astor, John

    Fraser, Ian (Plymouth, Sutton)

    Maitland, Sir John

    Awdry, Daniel

    Gardner, Edward

    Marten, Neil

    Baker, W. H. K.

    Gibson-Watt, David

    Mathew, Robert

    Balniel, Lord

    Giles, Rear-Admiral Morgan

    Maude, Angus E. U.

    Barlow, Sir John

    Gilmour, Sir John (East Fife)

    Maudling, Rt. Hn. Reginald

    Batsford, Brian

    Glover, Sir Douglas

    Mawby, Ray

    Beamish, Col. Sir Tufton

    Glyn, Sir Richard

    Maxwell-Hyslop, R. J.

    Bennett, F. M. (Torquay)

    Goodhew, Victor

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

    Berry, Hn. Anthony

    Gower, Raymond

    Meyer, Sir Anthony

    Bessell, Peter

    Grant, Anthony

    Mills, Peter (Torrington)

    Biffen, John

    Grant-Ferris, R.

    Mills, Stratton (Belfast, N.)

    Biggs-Davison, John

    Grieve, Percy

    Miscampbell, Norman

    Bingham, R. M.

    Griffiths, Eldon (Bury St. Edmunds)

    Mitchell, David

    Black, Sir Cyril

    Griffiths, Peter (Smethwick)

    Monro, Hector

    Blaker, Peter

    Grimond, Rt. Hn. J.

    More, Jasper

    Bowen, Roderic (Cardigan)

    Gurden, Harold

    Morgan, W. G.

    Box, Donald

    Hall, John (Wycombe)

    Morrison, Charles (Devizes)

    Boyd-Carpenter, Rt. Hn. J.

    Hall-Davis, A. G. F.

    Mott-Radclyffe, Sir Charles

    Boyle, Rt. Hn. Sir Edward

    Hamilton, Marquess of (Fermanagh)

    Murton, Oscar

    Braine, Bernard

    Harris, Frederic (Croydon, N. W.)

    Nicholls, Sir Harmar

    Brewis, John

    Hawkins, Paul

    Noble, Rt. Hn. Michael

    Brinton, Sir Tatton

    Hay, John

    Nugent, Rt. Hn. Sir Richard

    Bromley-Davenport, Lt.-Col.Sir Walter

    Heald, Rt. Hn, Sir Lionel

    Onslow Cranley

    Brooke, Rt. Hn. Henry

    Heath, Rt. Hn. Edward

    Orr Capt. L. P. S.

    Brown, Sir Edward (Bath)

    Hendry, Forbes

    Orr-Ewing Sir Ian

    Bruce-Gardyne, J.

    Higgins, Terence L.

    Osborn, John (Hallam)

    Buchanan-Smith, Alick

    Hiley, Joseph

    Page John (Harrow, W)

    Burden, F. A.

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

    Page, R. Graham (Crosby)

    Butcher, Sir Herbert

    Hirst, Geoffrey

    Pearson, Frank (Clitheroe)

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

    Hordern, Peter

    Peyton, John

    Campbell, Gordon

    Hornsby-Smith, Rt. Hn. Dame P.

    Pickthorn, Sir Kenneth

    Carlisle, Mark

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

    Pitt, Dame Edith

    Carr, Rt. Hn. Robert

    Hunt, John (Bromley)

    Pounder, Rafton

    Cary, Sir Robert

    Hutchison, Michael Clark

    Powell Rt. Hn. J. Enoch

    Channon, H. P. G.

    Irvine, Bryant Godman (Rye)

    Prior, J. M. L.

    Chataway, Christopher

    Jenkin, Patrick (Woodford)

    Pym, Francis

    Chichester-Clark, R.

    Jennings, J. C.

    Quennell, Miss J. M.

    Clark, William (Nottingham, S.)

    Johnston, Russell (Inverness)

    Ramsden, Rt. Hn. James

    Clarke, Brig. Terence (Portsmth, W.)

    Jopling, Michael

    Rawlinson, Rt. Hn. Sir Peter

    Cooke, Robert

    Joseph, Rt. Hn. Sir Keith

    Redmayne, Rt. Hn. Martin

    Cooper, A. E.

    Kaberry, Sir Donald

    Rees-Davies, W. R.

    Cooper-Key, Sir Neill

    Kerby, Capt. Henry

    Renton, Rt. Hn. Sir David

    Corfield, F. V.

    Kerr, Sir Hamilton (Cambridge)

    Ridsdale, Julian

    Costain, A. P.

    Kershaw, Anthony

    Roberts, Sir Peter (Heeley)

    Courtney, Cdr. Anthony

    Kilfedder, James A.

    Robson Brown, Sir William

    Craddock, Sir Beresford (Spelthorne)

    Kimball, Marcus

    Rodgers Sir John (Sevenoaks)

    Crawley, Aidan

    King, Evelyn (Dorset, S.)

    Roots, William

    Crosthwaite-Eyre, Col. Sir Oliver

    Kitson, Timothy

    Russell, Sir Ronald

    Cunningham, Sir Knox

    Lagden, Godfrey

    St. John-Stevas, Norman

    Curran, Charles

    Lancaster, Col. C. G.

    Scott-Hopkins, James

    Currie, G. B. H.

    Langford-Holt, Sir John

    Sinclair, Sir George

    Dalkeith, Earl of

    Legge-Bourke, Sir Harry

    Smyth, Rt. Hn. Brig. Sir John

    Dance, James

    Litchfield, Capt. John

    Spearman, Sir Alexander

    Davies, Dr. Wyndham (Perry Barr)

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

    Stainton, Keith

    Dean, Paul

    Lloyd, Ian (P'tsm'th, Langstone)

    Summers, Sir Spencer

    Digby, Simon Wingfield

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Talbot, John E.

    Dodds-Parker, Douglas

    Longbottom, Charles

    Taylor, Edward M. (G'gow, Cathcart)

    Doughty, Charles

    Longden, Gilbert

    Taylor, Frank (Moss Side)

    Douglas-Home, Rt. Hn. Sir Alec

    Loveys, Walter H.

    Thatcher, Mrs. Margaret

    Drayson, G. B.

    Lubbock, Eric

    Thomas, Sir Leslie (Canterbury)

    du Cann, Edward

    Lucas-Tooth, Sir Hugh

    Thompson, Sir Richard (Croydon, S.)

    Eden, Sir John

    McAdden, Sir Stephen

    Thorneycroft, Rt. Hn. Peter

    Fell, Anthony

    MacArthur, Ian

    Thorpe, Jeremy

    Fisher, Nigel

    Mackenzie, Alasdair (Ross & Crom'ty)

    Tilney, John (Wavertree)

    Turton, Rt. Hn. R. H

    Weatherill, Bernard

    Woodnutt, Mark

    Tweedsmuir, Lady

    Whitelaw, William

    Wylie, N. R.

    Vaughan-Morgan, Rt. Hn. Sir John

    Williams, Sir Rolf Dudley (Exeter)

    Younger, Hn. George

    Vickers, Miss Joan

    Wills, Sir Gerald (Bridgwater)

    Walder, David (High Peak)

    Wilson, Geoffrey (Truro)

    TELLERS FOR THE AYES:

    Walters, Dennis

    Wolrige-Gordon, Patrick

    Mr. McLaren and Mr. R. W. Elliott.

    Ward, Dame Irene

    Wood, Rt. Hn. Richard

    NOES

    Abse, Leo

    Foot, Sir Dingle (Ipswich)

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

    Albu, Austen

    Foot, Michael (Ebbw Vale)

    Manuel, Archie

    Allaun, Frank (Salford, E.)

    Ford, Ben

    Mapp, Charles

    Alldritt, W. H.

    Freeson, Reginald

    Marsh, Richard

    Allen, Scholefield (Crewe)

    Galpern, Sir Myer

    Mellish, Robert

    Armstrong, Ernest

    Garrett, W. E.

    Mendelson, J. J.

    Atkinson, Norman

    Garrow, A.

    Mikardo, Ian

    Bacon, Miss Alice

    Ginsburg, David

    Millan, Bruce

    Bagier, Gordon A. T.

    Gourlay, Harry

    Miller, Dr. M. S.

    Barnett, Joel

    Gregory, Arnold

    Milne, Edward (Blyth)

    Baxter, William

    Griffiths, David (Rother Valley)

    Molloy, William

    Beaney, Alan

    Griffiths, Rt. Hn. James (Llanelly)

    Monslow, Walter

    Bellenger, Rt. Hn. F. J.

    Hale, Leslie

    Morris, Alfred (Wythenshawe)

    Bence, Cyril

    Hamilton, James (Bothwell)

    Morris, Charles (Openshaw)

    Benn, Rt. Hn. Anthony Wedgwood

    Hamilton, William (West Fife)

    Morris, John (Aberavon)

    Bennett, J. (Glasgow, Bridgeton)

    Hamling, William (Woolwich, W.)

    Murray, Albert

    Binns, John

    Harper, Joseph

    Neal, Harold

    Bishop, E. S.

    Harrison, Walter (Wakefield)

    Newens, Stan

    Blackburn, F.

    Hart, Mrs. Judith

    Noel-Baker, Francis (Swindon)

    Blenkinsop, Arthur

    Hattersley, Ray

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

    Boardman, H.

    Hayman, F. H.

    Oakes, Gordon

    Boston, T. G.

    Hazell, Bert

    O'Malley Brian

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

    Heffer, Eric S.

    Oram, Albert E. (E. Ham, S.)

    Bowles, Frank

    Henderson, Rt. Hn. Arthur

    Orbach, Maurice

    Boyden, James

    Herbison, Rt. Hn. Margaret

    Orme Stanley

    Braddock, Mrs. E. M.

    Hobden, Dennis (Brighton, K'town)

    Oswald, Thomas

    Bradley, Tom

    Holman, Percy

    Owen, Will

    Bray, Dr. Jeremy

    Horner, John

    Padley, Walter

    Broughton, Dr. A. D. D.

    Houghton, Rt. Hn. Douglas

    Page, Derek (King's Lynn)

    Brown, Hugh D. (Glasgow, Provan)

    Howarth, Harry (Wellingborough)

    Paget, R. T.

    Brown, R. W. (Shoreditch & Fbury)

    Howarth, Robert L.(Bolton, E.)

    Palmer, Arthur

    Buchan, Norman (Renfrewshire, W.)

    Hoy, James

    Pannell, Rt. Hn. Charles

    Buchanan, Richard

    Hughes, Cledwyn (Anglesey)

    Pargiter, G. A.

    Butler, Herbert (Hackney, C.)

    Hughes, Emrys (S. Ayrshire)

    Pavitt, Laurence

    Butler, Mrs. Joyce (Wood Green)

    Hughes, Hector (Aberdeen, N.)

    Pearson, Arthur (Pontypridd)

    Carmichael, Neil

    Hunter, Adam (Dunfermline)

    Pentland, Norman

    Carter-Jones, Lewis

    Hunter, A. E. (Feltham)

    Popplewell, Ernest

    Coleman, Donald

    Irving, Sydney (Dartford)

    Prentice, R. E.

    Conlan, Bernard

    Jackson, Colin

    Probert, Arthur

    Corbet, Mrs. Freda

    Janner, Sir Barnett

    Pursey, Cmdr. Harry

    Crawshaw, Richard

    Jeger, George (Goole)

    Rankin, John

    Crossman, Rt. Hn. R. H. S.

    Jeger, Mrs. Lena (H'b'n&St.P'cras,S.)

    Redhead, Edward

    Cullen, Mrs. Alice

    Jenkins, Hugh (Putney)

    Rees, Merlyn

    Dalyell, Tam

    Jenkins, Rt. Hn. Roy (Stechford)

    Reynolds, G. W.

    Davies G. Elfed (Rhondda, E.)

    Jones, Dan (Burnley)

    Rhodes, Geoffrey

    Davies Harold (Leek)

    Jones, J. Idwal (Wrexham)

    Roberts, Albert (Normanton)

    Davies Ifor (Gower)

    Jones, T. W. (Merioneth)

    Roberts, Goronwy (Caernarvon)

    Davies S. O. (Merthyr)

    Kelley, Richard

    Robertson, John (Paisley)

    de Freitas, Sir Geoffrey

    Kenyon, Clifford

    Rodgers, William (Stockton)

    Delargy, Hugh

    Lawson, George

    Rogers, George (Kensington, N.)

    Dell, Edmund

    Leadbitter, Ted

    Rose, Paul B.

    Dempsey, James

    Ledger, Ron

    Ross, Rt. Hn. William

    Diamond, John

    Lee, Rt. Hn. Frederich (Newton)

    Rowland, Christopher

    Dodds, Norman

    Lever, Harold (Cheetham)

    Sheldon, Robert

    Doig, Peter

    Lever, L. M. (Ardwick)

    Shinwell, Rt. Hn. E.

    Donnelly, Desmond

    Lewis, Arthur (West Ham, N.)

    Shore, Peter (Stepney)

    Driberg, Tom

    Lewis, Ron (Carlisle)

    Short,Rt.Hn.E. (N'castle-on-Tyne,C.)

    Duffy, Dr. A. E. P.

    Lipton, Marcus

    Short, Mrs. Renée (W'hampton,N.E.)

    Dunn, James A.

    Lomas, Kenneth

    Silkin, John (Deptford)

    Dunnett, Jack

    Loughlin, Charles

    Silkin, S. C. (Camberwell, Dulwich)

    Edelman, Maurice

    Mabon, Dr. J. Dickson

    Silverman, Julius (Aston)

    Edwards, Rt. Hn. Ness (Caerphilly)

    McBride, Neil

    Silverman, Sydney (Nelson)

    Edwards, Robert (Bilston)

    MacColl, James

    Skeffington, Arthur

    English, Michael

    MacDermot, Niall

    Slater, Mrs. Harriet (Stoke N.)

    Ennals, David

    McGuire, Michael

    Slater, Joseph (Sedgefield)

    Ensor, David

    McInnes, James

    Small, William

    Fernyhough, E.

    McKay, Mrs. Margaret

    Snow, Julian

    Finch, Harold (Bedwelty)

    MacKenzie, Gregor (Rutherglen)

    Solomons, Henry

    Fitch, Alan (Wigan)

    Mackie, John (Enfield, E.)

    Spriggs, Leslie

    Fletcher, Sir Eric (Islington, E.)

    MacMillan, Malcolm

    Stewart, Rt. Hn. Michael

    Fletcher, Ted (Darlington)

    MacPherson, Malcolm

    Stonehouse, John

    Fletcher, Raymond (Ilkeston)

    Mahon, Peter (Preston, S.)

    Stones, William

    Floud, Bernard

    Mahon, Simon (Bootle)

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

    Foley, Maurice

    Mallalieu, E. L. (Brigg)

    256

    257

    Summerskill, Dr. Shirley

    Varley, Eric G.

    Willey, Rt. Hn. Frederick

    Swain, Thomas

    Wainwright, Edwin

    Williams, Alan (Swansea, W.)

    Symonds, J. B.

    Walden, Brian (All Saints)

    Williams, Mrs. Shirley (Hitchin)

    Taverne, Dick

    Walker, Harold (Doncacter)

    Willis, George (Edinburgh, E.)

    Taylor, Bernard (Mansfield)

    Wallace, George

    Wilson, William (Coventry, S.)

    Thomas, George (Cardiff, W.)

    Warbey, William

    Winterbottom, R. E.

    Thomas, Iorwerth (Rhondda, W.)

    Watkins, Tudor

    Woodburn, Rt. Hn. A.

    Thomson, George (Dundee, E.)

    Weitzman, David

    Woof, Robert

    Tinn, James

    White, Mrs. Eirene

    Wyatt, Woodrow

    Tuck, Raphael

    Whitlock, William

    Urwin, T. W.

    Wilkins, W. A.

    TELLERS FOR THE NOES:

    Mr. McCann and Mr. Grey.

    Mr. Geoffrey Lloyd: I beg to move Amendment No. 9, in page 2, line 36, at the end to insert:
    (4) If on an application made for the purposes of this section by the owner of any public service vehicle it appears to the satisfaction of the Commissioners that the applicant has at any time within the period of six months preceding the date of his application (which date shall be not earlier than six months after the coming into force of this section) used any quantity of hydrocarbon oil for propelling the vehicle, he shall be entitled to obtain from the Commissioners repayment of two-thirteenths of any customs duty or excise duty paid in respect of the oil so used.
    In this section the expression "public service vehicle" has the same meaning as in the Road Traffic Act 1960.
    The Chairman: It will be for the convenience of the Committee if we also take Amendment No. 10, in line 36.
    Mr. Lloyd: The purpose of the Amendment is to allow bus operators in general to claim repayment of the whole of the additional duty which will fall on them as a result of the Chancellor's proposal to raise Customs and Excise duties on petrol and other light hydrocarbon oil and diesel oil for road vehicles by 6d. a gallon. The reasons why we have put forward the Amendment are that an increase in fuel costs which will result from the Chancellor's proposal must raise costs and be reflected in higher fares, thereby affecting the cost-of-living. This it is desirable to avoid if possible, particularly because the lower-paid people and less well-off people in general are particularly dependent upon bus services.
    The Chancellor referred to this in his Budget statement and in his Second Reading speech, but he was not very explicit. I hope that we shall have some further enlightenment from the Chief Secretary to the Treasury. The Chancellor was not very explicit because he referred to giving some relief to the operating companies, and I did not feel that it was in his nature or natural to his political posture to give relief to the companies. That is not our
    258
    position. Our position is that we wish to avoid a rise in the cost-of-living for the public and I shall presume that that is what the Chancellor had in mind.
    The second unsatisfactory feature to us in what the Chancellor said was that he appeared to be referring to the relief which he talked about as being confined to the stage buses. We feel that it would be wrong in principle to confine this rebate to the stage carriage services only. We feel, additionally, that the place for the rebate to be stated is in the Finance Bill. That is why we have brought forward this Amendment. I should like to make it clear to the Committee that we do not believe that the idea of confining any concessions to the stage buses is sound. We cannot be sure that this is the Chancellor's intention, because we are not privy to the discussions which are in progress between the Ministry of Transport and the operators. No doubt the Chief Secretary will enlighten us on this when he addresses the Committee.
    If the proposal is to confine the concession to the stage carriage services, we think that this would lead to anomalies, because, for example, it would exclude contract services to carry school children and it would also exclude contracts to carry men to work. The Chief Secretary will probably agree that there is no difference, in principle, between those services and the stage bus services. We feel, therefore, that if the proposal is as I fear, it is unsatisfactory.
    Our Amendment is broader, in that it would give the rebate to public service vehicles. The main difference, therefore, between what we believe to be the Government's idea and the proposal which we are putting forward in this Amendment is that we should give it to all public service vehicles, which would include the long-distance services in addition to the stage carriage services.
    We think that this is a matter of some importance. The long-distance

    259
    bus services are growing. They are a great convenience to many people. In particular, from our inquiries we find that they are a great convenience to people of small means and to pensioners visiting their relatives. While they sometimes take a good deal longer than railway services, they are a good deal cheaper. I would just like to give the Committee a particular example which is apposite to my case—the Midland Red services from Birmingham to London, and vice versa, compared with the train. The second-class return rail fare is 55s. 6d. and the express coach fare is 32s. The non-express coach fare is as low as 27s. It is true that the Railway has a great advantage in time, because the fastest train takes 1 hour and 55 minutes and the fastest coach to Victoria is 3 hours, while the non-express coach takes as long as 5 hours and 20 minutes.
    But I think that the Committee will appreciate that there are many people, particularly pensioners, who may not have very great demands on their time, but who find it quite a burden to find the money to visit relatives. For these people this extra saving would be very important. We hope that the Government, on consideration, will include the long-distance services in their concession. We hope very much that they will not be inhibited in this matter by what we have felt in the past has been their prejudice towards road services in general.
    4.45 p.m.
    Sir David Renton: I feel obliged to draw the attention of the Committee to the effect of the increased tax upon rural bus services. These services have been declining steadily since the war and many are now running at a loss. The decline and the loss have been due partly to steadily increasing costs and partly to the fact that there have been more cars on the road. However, there are, and will be for the foreseeable future, many people in the villages who need buses. Some of them need buses simply for getting to and from their work. The young people in the villages cannot always get work on the land and have to go to the towns to work. They cannot live in the towns and so they travel to and fro. They do not all have cars.
    260
    There are people who have to visit the towns for shopping and entertainment, for visiting people in hospital and going to meetings—
    Mr. Scott-Hopkins: On a point of order. Is it right that the hon. Gentlemen opposite should carry on conversations in audible voices while my right hon. and learned Friend is speaking?
    The Chairman: That is not a point of order, but I would ask hon. Members, if they have conversations to pursue, to do so outside the Committee.
    Sir D. Renton: I was accustomed to the normal courtesy of the hon. Member for Nelson and Colne (Mr. Sydney Silverman) when he was interested in what I was talking about. Obviously, he is not interested in rural buses.
    I think it reasonable to see that people who live in villages have the opportunity of attending the meetings of voluntary societies, which are mostly held in towns, and even of taking part in local government activities. For these various reasons, in spite of the great increase in the use of the motor car in recent years, rural bus services are and will be needed. Even before the tax was increased, bus operators in my constituency who have approached me have drawn my attention to the fact that they were running so many services at a loss that they might have to cut them unless there were a reduction or a rebate in tax.
    What has happened? There is no question of a reduction or a rebate with the advent of the new Government, but an increase in the tax, which alarmingly increases their difficulties. I understand that at the time that the increase in the tax was announced the Government expressed some anxiety about increased fares and said that they would have discussions with the bus operators about this. Since then, speaking for myself, I have heard nothing more about the matter. I should like to know the outcome of these discussions. Of course, we do not want the fares to go up, but even worse, from the point of view of my constituents, would be a further cut in the rural bus services.
    I therefore hope that when the Chief Secretary deals with the matters which have been raised by my right hon. Friend the Member for Sutton Coldfield (Mr. G.
    261
    Lloyd), he will also deal with the question of the effect, which could be a most unfortunate one, on rural bus services.
    Mr. Daniel Awdry: I naturally hope that the Government will accept Amendment No. 9, but if they do not I hope that they will at least accept Amendment No. 10. It is to that Amendment that I wish to speak. As has been said twice, by my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) and my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), the Government has given an undertaking to give tax relief to bus operators, and all that this Amendment does is to turn that undertaking into a precise legal commitment.
    The basic cause for giving assistance to rural buses is so well known that it hardly needs repeating. It has been very fully set out in the Jack Committee's Report on Rural Bus Services, which was produced in 1961. That Report made it clear that, even then, the level of rural buses was entirely inadequate to avoid hardship and inconvenience. It went on to say that some way had to be found to give assistance to rural buses. That was in 1961 and now the Government propose their monstrous tax to make the position worse. I represent a rural constituency where this problem has become a great deal more pressing now that a number of our railway stations have been closed. I have received a great deal of correspondence on this and I expect that hon. Members on both sides of the Committee have also received letters. These letters are from mothers whose children have to be taken to school, pensioners who live in villages and want to get into town to shop and people who want to visit their relatives in hospitals or have to have treatment in hospitals themselves or have to see dentists. They rely entirely on buses, and something must be done to improve these services.
    The Jack Committee's Report showed that about 10 per cent. of all journeys in rural areas are made by public transport. This 10 per cent. represents the poorer members of the community. Any increase in fuel tax which would lead to a set-back for these rural bus services will hit those people in the community who can afford it the least.
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    Already, they are grossly hampered by local transport difficulties. People who have no garage or car are complaining about inadequate rural services. The idea behind the Amendment is not new. It follows the practical solution set out in a minority report of the Jack Committee, which was signed by Mr. James.
    If the Government cannot face a general tax remission, the least they can do would be to give a remission to that part of the service which operates in rural areas. The Amendment defines rural areas by reference to non-restricted roads. It would be a very easy provision to administer, so do not let us have any talk about it being a provision which could not be administered. It is practical and sensible and could easily be administered. The mileage on rural roads could be recorded and certified by the traffic commissioners. The cost of the relief would not be exorbitant, so do not let us have any talk about it costing too much.
    The idea has been considered by the bus operators. It was considered in 1959 at the time of the introduction of the Finance Act of that year and the bus operators said that it would work well. If the Government are sincere in their intention to assist rural services they have an excellent opportunity to indicate that sincerity by accepting the Amendment. With a confidence which is probably entirely misplaced, I ask them to do so.
    Mr. Charles Longbottom: We have heard about the needs of rural bus services and I should like to put in a word for the urban services. Since the war a continuing pattern has developed in this country, following slum clearance, of people being rehoused away from the centre of cities, on the outskirts, where new development is taking place. People rely more on getting to and from their place of work by bus every day. The payment of fares from the outskirts of the city to destinations which may be on the other side of the city imposes a greater cost on people who have, it may be, to travel several times a day by bus to and from work. It is another example of the way in which this proposal will increase the cost of living for ordinary people. I hope that the Government will bear this in mind and accept the Amendment.
    Many of the homes which are provided in urban areas for old-age pensioners

    263
    are built on the outskirts of cities, away from places where the old people used to live and a long way from where members of their family still live, where they may go to shop. It is not, therefore, only the old-age pensioners in the rural areas who may be affected. Those in the urban areas may be affected even more. This is a serious problem and one which I hope will be borne in mind by the Government.
    Mr. G. R. Howard: I do not wish to emphasise points which have been made by other hon. Members. Recently, a branch railway line in my constituency was closed. We were told that such closures took place only when there was adequate alternative transport. If the alternative transport is by bus is it fair that, because of such measures as this, the cost of fares must go up? This is something which reacts unfairly on people who are left with only one means of transport. Apart from the points raised by my hon. Friends about increases in the cost of living, any increase which may be made in fuel costs is something which is very important to people living in rural areas.
    I hope that the Minister will be able to assure us that he will look at this problem from the point of view of those who live in rural areas and that it may be regarded as a special problem confronting such people where branch railway lines have been closed.
    Mr. Peter Bessell: Like my hon. Friend the Member for St. Ives (Mr. G. R. Howard), I have no desire to go over ground which has already been covered adequately, but I wish to add a word in support of the Amendment, chiefly because during the General Election members of the party opposite laid great stress on their determination to give assistance to underpopulated rural areas such as my constituency. These will suffer considerably because of the imposition of this tax, particularly in relation to the fuel used by buses and other rural transport services.
    For that reason I believe this to be a worth-while Amendment and I hope that the Government will accept it.
    Mr. Diamond: I think that it would be helpful to the Committee if I replied to the debate now and saved hon. and
    264
    right hon. Gentlemen opposite from using their energy to push at a half-opened door, which is an unnecessary activity.
    One understands the purpose of these Amendments and sympathises, up to a point. I do not wish to make the obvious debating point that one Amendment goes rather too wide and the other is rather narrowly drawn. The right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) seems to exclude the possibility of providing help in respect of those cases about which other hon. Members spoke exclusively. I take it that hon. Members opposite are saying that although there is a broad general case there is a particularly strong case for giving assistance to rural bus services, which is part of the total case.
    We accept that there exists a problem regarding rural buses which must be met. One would go so far as to say that the Amendment does not go far enough, because it deals with a limited kind of rural bus service. The first Amendment goes a little too wide because it deals with a number of cases other than the stage fare services and goes into cases which the right hon. Member for Sutton Coldfield indicated might not be in the same category of need. He explained that the fares on the long-distance coaches from Birmingham to London were, I think, approximately half of the train fares but he said that the passengers had to spend more time travelling. On the face of it, that does not indicate an enormous need for help. Those people are offering a service similar to that provided by the railways, but at approximately half the cost.
    Let me say straight away that the Government recognise the need to deal with the problems confronting the travelling public and those going to work. There is a need particularly to deal with the problems of the rural bus services in a way most convenient and most easily capable of administering. That is not by the method proposed in the Amendment, but by the method undertaken long before the Amendment was put on the Notice Paper of making a payment direct to the bus companies concerned by my right hon. Friend the Minister of Transport.
    I was asked by the right hon. and learned Member for Huntingdonshire (Sir D. Renton) how far the negotiations have

    265
    gone. I would refer him to the Answer given by my right hon. Friend on 25th November, when he said that the Government had told bus operators that it was willing to give relief corresponding to the 6d. increase in duty provided that
    " suitable arrangements could be worked out."—[OFFICRL REPORT, 25th November, 1964, Vol. 702, c. 185.]
    These are specifically the stage coach operators. That is where the need is greatest, be it in country or town. There would follow the borderline cases, such as a service which was recognised or defined as a long-distance one but which, up to a point also served the short distance traveller.
    5.0 p.m.
    One can imagine in a rural area a long-distance express service making a minimum charge of perhaps 1s. in effect to cater for the local traveller. These borderline cases are being considered by my right hon. Friend. He has received representations from a number of hon. Members and would be glad to receive others dealing with specific cases which do not fall within the generality of the method by which he is proposing to deal with the matter.
    I am saying, therefore, that there is every sympathy not only with the core of the second Amendment, but with a little more. I am saying that the method proposed is not the ideal one, but that the method we are adopting is a more effective one. While hon. Members want to protect themselves in terms of discussion, an opportunity for discussing this matter will arise when the necessary legislation which my right hon. Friend the Minister of Transport would have to introduce comes before Parliament. That will be the time, if any hon. Member considers that my right hon. Friend's proposals go too far, or do not go far enough, for the matter to be raised again.
    As I explained, long before the Amendment was tabled the necessary steps were taken. My recollection of the matter is that the Budget was agreed to on one night and the following morning the Minister of Transport was already interviewing the bus company operators. Since we are, in effect, meeting more than the desire of one of the Amendments, though slightly less than required in another, since our method is more appropriate, and having regard to the
    266
    rights of hon. Members to debate this matter carefully, I hope that the Committee will agree not to press the Amendment.
    Mr. Maudling: The Chief Secretary has once again been courteous in replying to the representations made by my hon. Friends, but I think that they will not regard his answer as being at all satisfactory. On the specific point, the hon. Gentleman has confined himself to stage coach operators and has not dealt with the other important matters to which my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd) referred, a matter which I feel he will wish to press.
    We are, secondly, left in rather the same difficulty as we were yesterday, for the Government say, "Let this financial provision go through to impose the additional tax and we will subsequently legislate to mitigate the damage." We cannot, as a Committee, be satisfied with that, because we cannot have foreknowledge of the nature of the Government's proposals. For this reason, my hon. Friends are placed in a difficult position.
    As my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) asked yesterday, can the Chief Secretary give an assurance that the Government will deal with this before the Report stage is reached? I have no doubt that the Chief Secretary will answer "No", and I must, therefore, advise my hon. Friends—since it is clear that the Government are not prepared or are not in a position to give an assurance of that sort—to take the matter into the Lobby. We must oppose this provision. It may be that the Government will subsequently put the matter right, but since we have no assurance that that will be so, we must record our opposition in the Lobby.
    Sir D. Renton: I am sure that my right hon. Friend the Member for Barnet (Mr. Maudling) will not take it amiss if I say that I was grateful for the assurance of the Chief Secretary, as far as it went, although I would like him to clarify the position. The assurance he gave was vague in several respects. Can he now confirm that it is the intention of the Government that all regular rural bus services—that is, stage carriage services in rural districts—will ultimately be exempt from the 6d. increase in the duty?

    267
    Will there have to be legislation to legalise the scheme to which the Chief Secretary referred and about which, he said, negotiations with the bus operators are taking place? If so, when will such legislation be introduced, what will be the position meanwhile and will the legislation be made retrospective to the date when the increased duty came into force?
    The Chairman: The Question is—
    Mr. Diamond rose—
    The Chairman: Mr. Diamond.
    Mr. Diamond: I can well understand your rising to put the Question, Dr. King, because I had covered precisely the questions asked by the right hon. Member for Thirsk and Malton (Mr. Turton) in the answer I gave, but I am delighted to repeat what I said if that will help the Committee.
    My right hon. Friend said that the Government had told the bus operators—and that includes rural bus operators—that they were willing to give relief corresponding to the 6d. increase in duty, provided that suitable arrangements could be worked out.
    Mr. Geoffrey Wilson: What does that mean?
    Mr. Diamond: It means that if one cannot find methods of doing it one cannot do it. But we hope to do it. I do not think that there is anything difficult about that.
    The right hon. Member for Thirsk and Malton then asked when legislation would be introduced. I said that it would be introduced and that that would be the opportunity for hon. Members to debate the matter if they considered that it was either satisfactory or unsatisfactory in any respect. As to the question of timing—when legislation will be introduced—the answer is as soon as the arrangements have been agreed. As the right hon. Member for Barnet (Mr. Maudling) assumed, I could not possibly give an undertaking that this will be achieved by next week.
    Mr. G. R. Howard: I do not think that the explanation of the Chief Secretary is as clear to the Committee as it Is to himself. As I understand, conversations
    will take place with the bus operators to see whether the giving of relief to them is practicable. Only then, after those conversations have taken place and if the Government decide to take steps, will legislation be introduced. The Committee has been given no assurance that legislation will be forthcoming. Is that the position; that the Government hope to bring forward legislation but that the Chief Secretary is not prepared to undertake that it will be brought forward?
    Mr. Diamond: I am sorry that I am not explaining properly what is certainly clear to me. Obviously, my lack of powers of exposition are in question. I will, therefore, repeat my remarks, and I hope that this time they will be clear to the Committee.
    The Government are anxious to see that no damage is suffered by the travelling public from the point of view of the stage coach services. We therefore desire to bring in legislation to give effect to our wish to give relief in respect of the 6d. extra duty which is now being imposed. I hope that that is clear so far. As there are problems involved, and as it is not simply a question of writing a cheque, these matters must be discussed. This is a courtesy due to the bus operators. We must find out their problems and see exactly where the line should be drawn. As soon as these discussions have been completed—they are in progress; they started the morning after the Budget was agreed to—my right hon. Friend the Minister of Transport will make arrangements for legislation to be introduced. I do not think that I can be of any more help to the Committee.
    Sir D. Renton: Will it be retrospective?
    Several Hon. Members rose—
    The Chairman: Order. I had thought that in view of the remarks of the Opposition Front Bench the Committee was anxious to come to a decision.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 232, Noes 253.

    Division No. 17.]

    AYES

    [5.10 p.m.

    Agnew, Sir Peter

    Amery, Rt. Hn. Julian

    Awdry, Daniel

    Alison, M. J. H. (Barkston Ash)

    Astor, J.

    Baker, W. H. K.

    Allason, James

    Atkins, Humphrey

    Barlow, Sir John

    Batsford, Brian

    Grant, Anthony

    Monro, Hector

    Beamish, Col. Sir Tufton

    Grant-Ferris, R.

    More, Jasper

    Bennett, F. M. (Torquay)

    Griffiths, Eldon (Bury St. Edmunds)

    Morgan, W. G.

    Berkeley, Humphry

    Griffiths, Peter (Smethwick)

    Morrison, Charles (Devizes)

    Berry, A. G.

    Grimond, Rt. Hn. J.

    Mott-Radclyffe, Sir Charles

    Bessell, Peter

    Gurden, Harold

    Murton, Oscar

    Biffen, John

    Hall, John (Wycombe)

    Nicholls, Sir Harmar

    Biggs-Davison, John

    Hall-Davis, A. G. F.

    Nicholson, Sir Godfrey

    Bingham, R. M.

    Harris, Frederic (Croydon, N. W.)

    Noble, Rt. Hn. Michael

    Birch, Rt. Hn. Nigel

    Harris, Reader (Heston)

    Nugent, Rt. Hn. Sir Richard

    Black, Sir Cyril

    Harrison, Col. Sir Harwood (Eye)

    Onslow, Cranley

    Blaker, Peter

    Hawkins, Paul

    Orr, Capt. L. P. S.

    Bowen, Roderic (Cardigan)

    Heald, Rt. Hn. Sir Lionel

    Orr-Ewing, Sir Ian

    Box, Donald

    Heath, Rt. Hn. Edward

    Osborn, John (Hallam)

    Boyd-Carpenter, Rt. Hn. J.

    Hendry, Forbes

    Page, John (Harrow, W.)

    Boyle, Rt. Hn. Sir Edward

    Higgins, Terence L.

    Page, R. Graham (Crosby)

    Braine, Bernard

    Hiley, Joseph

    Pearson, Frank (Clitheroe)

    Brewis, John

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

    Percival, Ian

    Brinton, Sir E. T. C.

    Hirst, Geoffrey

    Peyton, John

    Bromley-Davenport,Lt.-Col.Sir Walter

    Hordern, Peter

    Pickthorn, Sir Kenneth

    Brooke, Rt. Hn. Henry

    Hornby, Richard

    Pike, Miss Mervyn

    Brown, Sir Edward (Bath)

    Hornsby-Smith, Rt. Hn. Dame P.

    Pitt, Dame Edith

    Bruce-Gardyne, J.

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

    Pounder, Rafton

    Buchanan-Smith, A. L.

    Howe, Geoffrey (Bebington)

    Powell, Rt. Hn. J. Enoch

    Buck, Antony

    Hunt, John (Bromley)

    Prior, J. M. L.

    Burden, F. A.

    Hutchison, Michael Clark

    Quennell, Miss J. M.

    Butcher, Sir Herbert

    Irvine, Bryant Godman (Rye)

    Ramsden, Rt. Hn. James

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

    Jenkin, Patrick (Woodford)

    Rawlinson, Rt. Hn. Sir Peter

    Campbell, Gordon

    Jennings, J. C.

    Redmayne, Rt. Hn. Martin

    Carlisle, Mark

    Johnston, Russell (Inverness)

    Rees-Davies, W. R.

    Carr, Rt. Hn. Robert

    Jones, Arthur (Northants, S.)

    Renton, Rt. Hn. Sir David

    Cary, Sir Robert

    Jopling, Michael

    Ridsdale, Julian

    Channon, H. P. G.

    Joseph, Rt. Hn. Sir Keith

    Roberts, Sir Peter (Heeley)

    Chataway, Christopher

    Kaberry, Sir Donald

    Robson Brown, Sir William

    Chichester-Clark, R.

    Kerby, Capt. Henry

    Rodgers, Sir John (Sevenoaks)

    Clark, William (Nottingham, S.)

    Kerr, Sir Hamilton (Cambridge)

    Roots, William

    Clarke, Brig. Terence (Portsmth, W.)

    Kershaw, Anthony

    St. John-Stevas, Norman

    Cooke, Robert

    Kilfedder, James A.

    Scott-Hopkins, James

    Cooper, A. E.

    Kimball, Marcus

    Sharples, Richard

    Cooper-Key, Sir Neill

    King, Evelyn (Dorset, S.)

    Sinclair, Sir George

    Corfield, F. V.

    Kitson, Timothy

    Smyth, Rt. Hn. Brig. Sir John

    Costain, A. P.

    Lagden, Godfrey

    Spearman, Sir Alexander

    Courtney, Cdr. Anthony

    Lancaster, Col. C. G.

    Speir, Rupert

    Craddock, Sir Beresford (Spelthorne)

    Langford-Holt, Sir John

    Stainton, Keith

    Crawley, Aidan

    Legge-Bourke, Sir Harry

    Summers, Sir Spencer

    Cunningham, Sir Knox

    Litchfield, Capt. John

    Talbot, John E.

    Curran, Charles

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

    Taylor, Edward M. (G'gow, Cathcart)

    Currie, G. B. H.

    Lloyd, Ian (P'tsm'th, Langstone)

    Taylor, Frank (Moss Side)

    Dalkeith, Earl of

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Thatcher, Mrs. Margaret

    Dance, James

    Longbottom, Charles

    Thomas, Sir Leslie (Canterbury)

    Davies, Dr. Wyndham (Perry Barr)

    Longden, Gilbert

    Thompson, Sir Richard (Croydon, S.)

    d'Avigdor-Goldsmid, Sir Henry

    Loveys, Walter H.

    Thorpe, Jeremy

    Dean, Paul

    Lubbock, Eric

    Tilney, John (Wavertree)

    Digby, Simon Wingfield

    Lucas-Tooth, Sir Hugh

    Turton, Rt. Hn. R. H.

    Dodds-Parker, Douglas

    McAdden, Sir Stephen

    Tweedsmuir, Lady

    Doughty, Charles

    MacArthur, Ian

    van Straubenzee, W. R.

    Drayson, G. B.

    Mackenzie, Alasdair (Ross & Crom'ty)

    Vaughan-Morgan, Rt. Hn. Sir John

    du Cann, Edward

    Mackie, George Y. (C'ness & S'land)

    Walder, David (High Peak)

    Eden, Sir John

    McLaren, Martin

    Walker, Peter (Worcester)

    Fell, Anthony

    McMaster, Stanley

    Walters, Dennis

    Fisher, Nigel

    McNair-Wilson, Patrick

    Ward, Dame Irene

    Fletcher-Cooke, Charles Darwen)

    Maginnis, John E.

    Whitelaw, William

    Forrest, George

    Maitland, Sir John

    Williams, Sir Rolf Dudley (Exeter)

    Foster, Sir John

    Marten, Neil

    Wills, Sir Gerald (Bridgwater)

    Fraser, Rt.Hn.Hugh(St'fford & Stone)

    Mathew, Robert

    Wilson, Geoffrey (Truro)

    Fraser, Ian (Plymouth, Sutton)

    Maude, Angus E. U.

    Wolrige-Gordon, Patrick

    Gammans, Lady

    Maudling, Rt. Hn. Reginald

    Wood, Rt. Hn. Richard

    Gardner, Edward

    Mawby, Ray

    Woodhouse, Hn. Christopher

    Gibson-Watt, David

    Maxwell-Hyslop, R. J.

    Woodnutt, Mark

    Giles, Rear-Admiral Morgan

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

    Wylie, N. R.

    Gilmour, Sir John (East Fife)

    Meyer, Sir Anthony

    Yates, William (The Wrekin)

    Glover, Sir Douglas

    Mills, Peter (Torrington)

    Younger, G. K. H.

    Glyn, Sir Richard

    Mills, Stratton (Belfast, N.)

    Goodhew, Victor

    Miscampbell, Norman

    TELLERS FOR THE AYES:

    Gower, Raymond

    Mitchell, David

    Mr. Pym and Mr. R. W. Elliott.

    NOES

    Abse, Leo

    Atkinson, Norman

    Bellenger, Rt. Hn. F. J.

    Albu, Austen

    Bacon, Miss Alice

    Bence, Cyril

    Allaun, Frank (Salford, E.)

    Bagier, Gordon A. T.

    Benn, Rt. Hn. Anthony Wedgwood

    Alldritt, W. H.

    Barnett, J.

    Binns, J.

    Allen, Scholefield (Crewe)

    Baxter, William

    Bishop, E. S.

    Armstrong, E.

    Beaney, Alan

    Blackburn, F.

    270

    271

    Blenkinsop, Arthur

    Houghton, Rt. Hn. Douglas

    Palmer, Arthur

    Boardman, H.

    Howarth, Harry (Wellingborough)

    Pannell, Rt. Hn. Charles

    Boston, T. G.

    Howarth, Robert L. (Bolton, E.)

    Pargiter, G. A.

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

    Hoy, James

    Pearson, Arthur (Pontypridd)

    Bowles, Frank

    Hughes, Cledwyn (Anglesey)

    Pentland, Norman

    Boyden, James

    Hughes, Emrys (S. Ayrshire)

    Popplewell, Ernest

    Braddock, Mrs. E. M.

    Hughes, Hector (Aberdeen, N.)

    Prentice, R. E.

    Bradley, Tom

    Hunter, Adam (Dunfermline)

    Probert, Arthur

    Bray, Dr. Jeremy

    Hunter, A. E. (Feltham)

    Pursey, Cmdr. Harry

    Broughton, Dr. A. D. D.

    Irving, Sydney (Dartford)

    Rankin, John

    Brown, Rt. Hn. George (Belper)

    Jackson, Colin

    Redhead, Edward

    Brown, Hugh D. (Glasgow, Provan)

    Janner, Sir Barnett

    Reynolds, G. W.

    Brown, R. W. (Shoreditch & Fbury)

    Jeger, George (Goole)

    Rhodes, Geoffrey

    Buchan, Norman (Renfrewshire, W.)

    Jeger, Mrs. Lena (H'b'n&St.P'cras,S.)

    Richard, Ivor

    Buchanan, R.

    Jenkins, Hugh (Putney)

    Roberts, Albert (Normanton)

    Butler, Herbert (Hackney, C.)

    Jenkins, Rt. Hn. Roy (Stechford)

    Roberts, Goronwy (Caernarvon)

    Butler, Mrs. Joyce (Wood Green)

    Jones, Dan (Burnley)

    Robertson, John (Paisley)

    Carmichael, Neil

    Jones, J. Idwal (Wrexham)

    Rodgers, William (Stockton)

    Carter-Jones, L.

    Jones, T. W. (Merioneth)

    Rogers, George (Kensington, N.)

    Castle, Rt. Hn. Barbara

    Kelley, Richard

    Rose, Paul B.

    Coleman, Donald

    Kenyon, Clifford

    Ross, Rt. Hn. William

    Conlan, Bernard

    Lawson, George

    Rowland, Christopher

    Corbet, Mrs. Freda

    Leadbitter, Ted

    Sheldon, Robert

    Crawshaw, R.

    Ledger, Ron

    Shinwell, Rt. Hn. E.

    Cullen, Mrs. Alice

    Lee, Rt. Hn. Frederick (Newton)

    Shore, Peter (Stepney)

    Dalyell, Tam

    Lee, Miss Jennie (Cannock)

    Short, Rt.Hn.E.(N'c'tle-on-Tyne,C.)

    Davies, G. Elfed (Rhondda, E.)

    Lever, Harold (Cheetham)

    Short, Mrs. Renée (W'hampton, N. E.)

    Davies, Harold (Leek)

    Lever, L. M. (Ardwick)

    Silkin, John (Deptford)

    Davies, Ifor (Gower)

    Lewis, Arthur (West Ham, N.)

    Silkin, S. C. (Camberwell, Dulwich)

    Davies, S. O. (Merthyr)

    Lewis, Ron (Carlisle)

    Silverman, Julius (Aston)

    de Freitas, Sir Geoffrey

    Lipton, Marcus

    Silverman, Sydney (Nelson)

    Delargy, Hugh

    Lomas, Kenneth

    Skeffington, Arthur

    Dell, Edmund

    Loughlin, Charles

    Slater, Mrs. Harriet (Stoke, N.)

    Dempsey, James

    Mabon, Dr. J. Dickson

    Slater, Joseph (Sedgefield)

    Diamond, John

    McBride, Neil

    Small, William

    Dodds, Norman

    McCann, J.

    Smith, Ellis (Stoke, S.)

    Doig, Peter

    MacColl, James

    Snow, Julian

    Donnelly, Desmond

    MacDermot, Niall

    Solomons, Henry

    Driberg, Tom

    McGuire, Michael

    Spriggs, Leslie

    Duffy, Dr. A. E. P.

    McInnes, James

    Stewart, Rt. Hn. Michael

    Dunn, James A.

    McKay, Mrs. Margaret

    Stonehouse, John

    Dunnett, Jack

    MacKenzie, Gregor (Rutherglen)

    Stones, William

    Edelman, Maurice

    Mackie, John (Enfield, E.)

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

    Edwards, Rt. Hn. Ness (Caerphilly)

    McLeavy, Frank

    Swain, Thomas

    Edwards, Robert (Bilston)

    MacMillan, Malcolm

    Symonds, J. B.

    English, Michael

    MacPherson, Malcolm

    Taverne, Dick

    Ennals, David

    Mahon, Peter (Preston, S.)

    Taylor, Bernard (Mansfield)

    Ensor, David

    Mahon, Simon (Bootle)

    Thomas, George (Cardiff, W.)

    Fernyhough, E.

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

    Thomas, Iorwwerth (Rhondda, W.)

    Finch, Harold (Bedwelty)

    Manuel, Archie

    Thomson, George (Dundee, E.)

    Fletcher, Sir Eric (Islington, E.)

    Mapp, Charles

    Thornton, Ernest

    Fletcher, Ted (Darlington)

    Marsh, Richard

    Tinn, James

    Fletcher, Raymond (Ilkeston)

    Mellish, Robert

    Tuck, Raphael

    Floud, Bernard

    Mendelson, J. J.

    Urwin, T. W.

    Foley, Maurice

    Mikardo, Ian

    Varley, Eric G.

    Foot, Sir Dingle (Ipswich)

    Millan, Bruce

    Wainwright, Edwin

    Foot, Michael (Ebbw Vale)

    Miller, Dr. M. S.

    Walden, Brian (All Saints)

    Ford, Ben

    Milne, Edward (Blyth)

    Walker, Harold (Doncaster)

    Galpern, Sir Myer

    Molloy, William

    Wallace, George

    Garrett, W. E.

    Monslow, Walter

    Warbey, William

    Ginsburg, David

    Morris, Alfred (Wythenshawe)

    Watkins, Tudor

    Gregory, Arnold

    Morris, Charles (Openshaw)

    Weitzman, David

    Grey Charles

    Morris, John (Aberavon)

    White, Mrs. Eirene

    Griffiths, David (Rother Valley)

    Murray, Albert

    Whitlock, William

    Griffiths, Rt. Hn. James (Llanelly)

    Neal, Harold

    Wilkins, W. A.

    Hale, Leslie

    Newens, Stan

    Willey, Rt. Hn. Frederick

    Hamilton, James (Bothwell)

    Noel-Baker, Francis (Swindon)

    Williams, Alan (Swansea, W.)

    Hamilton, William (West Fife)

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

    Williams, Mrs. Shirley (Hitchin)

    Hamling, William (Woolwich, W.)

    Norwood, Christopher

    Williams, W. T. (Warrington)

    Harrison, Walter (Wakefield)

    Oakes, Gordon

    Willis, George (Edinburgh, E.)

    Harper, Joseph

    O'Malley, Brain

    Wilson, William (Coventry, S.)

    Hattersley, Ray

    Oram, Albert E. (E. Ham, S.)

    Winterbottom, R. E.

    Hayman, F. H.

    Orbach, Maurice

    Woodburn, Rt. Hn. A.

    Hazell, Bert

    Orme, Stanley

    Woof, Robert

    Heffer, Eric S.

    Oswald, Thomas

    Wyatt, Woodrow

    Henderson, Rt. Hn. Arthur

    Owen, Will

    Zilliacus, K.

    Herbison, Rt. Hn. Margaret

    Padley, Walter

    Hobden, Dennis (Brighton, K'town)

    Page, Derek (King's Lynn)

    Holman, Percy

    Paget, R. T.

    TELLERS FOR THE NOES:

    Horner, John

    Mr. Gourlay and Mr. Fitch.

    Question proposed, That the Clause stand part of the Bill.
    Sir Henry d'Avigdor-Goldsmid: I do not think it right that we should part with the Clause without expressing the very deep regret which we on this side feel that the Chancellor of the Exchequer and his colleagues have found it necessary to impose such a wasteful and destructive tax on our economy.
    The effect of this increase in petrol duty has gone straight through our economy. The day after the duty was imposed road haulage rates went up by 2½ per cent. This was reflected and magnified in the extra cost of delivering building materials, and builders, who at this time are working at full pressure, have found no difficulty whatsoever in raising their prices yet again. I do not need to detail the effect which the increase in petrol duty is likely to have on the motor car industry on which, after all, we depend for so large a proportion of our export earnings.
    This is the greatest discouragement to healthy industrial life in this country that the Chancellor of the Exchequer could conceivably have devised. Nor could he have chosen a worse time for imposing it. The economy is fully stretched and a relatively small increase in prices—not that this increase is very small—is reflected a hundred times in every part of our economy. I wonder who advises the right hon. Gentleman on matters like this. I hope that he does not feel that the gnomes of Zurich are pleased by this sort of economic ignorance. This is simply playing with our economy. It is a case if increasing a tax because of the arithmetic without regard to the consequences. This is a tax which can by no means help solve the main problem, which is that of increasing exports.
    In view of this, I hope very much that my right hon. and hon. Friends will show their disgust for this tax and will divide against it.
    Mr. F. A. Burden: I was interested in some of the remarks by the Chief Secretary when he suggested that it was right and proper that taxes imposed should be absorbed by industry. I think that it is germane at this point in the debate to point out to him that among the first people to increase their
    274
    prices as a result of the increased petrol tax are the nationalised road haulage concerns. In fact, my own company has a van service which is carried out by one of the nationalised road services, and as a result of this extra tax the cost to us of that service is to be increased by about £750 per annum. This is all for the delivery of essential supplies of consumer goods to the various shops.
    I was also interested, in view of the fact that the nationalised industries are passing this charge on to the consumer, to have heard about a week ago the answer to a question about the possibility of the taxi trade having either to review its fares or of the possibility of a rebate, and, there again, it was pointed out by the Government spokesman that in fact the cost per mile as a result of the increased petrol tax would be very small, and that in any case the taxi drivers or the taxi companies had not so long ago received an increase in the fares. But of course, that was because of the cost of running those vehicles at that time, and since then this additional impost has been made by the action of the Government.
    I would also draw the attention of the hon. Gentleman to the position of the farming industry. This is something of which I have not a very considerable knowledge, but it sticks out like a sore thumb. No industry in this country shows such a good degree of productivity as the farming industry, and I think that no other industry plays such a tremendous part in putting right our balance of payments. The tremendous increase in the quantity of home-grown food has made it possible for us to import less and less from abroad. This industry is vitally important not only from that point of view, but also because of its products. But let us be perfectly frank about this. I do not think that the hon. Gentleman would disagree with me that farm produce is the lifeline of this country and it is something on which every householder has to depend. Any increase in the price of farm produce must increase the cost of living.
    I would ask the hon. Gentleman to consider very carefully whether there is not some way in which the farming industry can be eased of this additional cost, which will almost inevitably have

    275
    to be passed on to the consumer. It was very interesting to hear the hon. Gentleman, who is an accountant, standing at the Dispatch Box and saying that when taxes are imposed by his Government they must be absorbed and prices must not rise. But I wonder whether, as an accountant, when he looks at the books of the companies he is advising and sees inevitable increases in costs, he always gives them the advice he is now advocating.
    I very much doubt whether the hon. Gentleman always tells the company that he is advising when its costs are increasing, "Do not pass them on. Just absorb them." I should be very interested to hear the hon. Gentleman's reply on this point. I know that he is in a difficult position because he is now defending Government action and that when he was advising professionally he was advising his clients.
    All along the line we have had the suggestion that the taxes introduced by the present Government should be absorbed. I wonder whether the hon. Gentleman has looked back as far as the 1951 speech made by the late Mr. Hugh Gaitskell when he was Chancellor of the Exchequer, in which he said that increased taxes inevitably mean increased prices. It was on 11th March this year, as I pointed out yesterday, that his right hon. Friend the Chancellor of the Exchequer said exactly the same thing. If the hon. Gentleman will look up HANSARD of 11th March he will find that his right hon. Friend the Chancellor agreed from the Opposition Front Bench that increased taxes mean increased prices.
    I think that of all the taxes that the Government have so far introduced this is the most inflationary, is bound to make itself felt throughout the whole economy and will undoubtedly lead very soon to an increase in prices over a wide range of goods.
    5.30 p.m.
    The Temporary Chairman (Commander Donaldson): Mr. Bennett, or should I say Sir Frederic?
    Sir Frederic Bennett: Under either name, Commander Donaldson, I am grateful for being called.
    276
    Some few days ago we on these benches had quite a diatribe directed against us by the Chancellor of the Exchequer on the grounds that we have been representing the Budget as being inflationary. We were almost accused of deliberate misrepresentation which was having its effect on the stability of sterling. We were told that we were absolutely wrong to say that the Budget was inflationary and that to the Chancellor of the Exchequer himself it was so clearly not so.
    This is the most astonishing accusation to make, because if hon. Members, either in opposition or in government, think that a Budget is inflationary, then it is their clear duty to say so. It is not a conspiracy against the stability of sterling to say it. There are plenty of arguments for saying that the Budget is inflationary to a very large extent. Had I been here yesterday I should have been quite prepared to argue that the increase in Income Tax with regard to savings is inflationary, but as that would be out of order to discuss today, I will deal with the petrol tax and, in due course, I will say something about the surcharge and the other inflationary items in the Budget.
    The petrol tax must be accepted by the Chancellor as being inflationary. As some hon. Members have said, we all have experience in one field or another. Already, there are clear signs that where road transport of building materials is concerned it is not just a question of raising the price by 6d. It will raise the price of cement, bricks and everything else with its inevitable effect on the price of the house. One could go through every item to prove that this increase in the petrol tax will mean a much bigger rise in costs than adding it merely to just one item in the cost of living.
    I hope, therefore, that when the time comes we shall vote against the Clause and place on record our firmly held view that this is one of the most, if not the most, inflationary items in a very inflationary Budget.
    Sir Douglas Glover: I support what my hon. Friend the Member for Torquay (Sir F. Bennett) has just said, and I hope that we shall divide on the Clause. It is thoroughly inflationary. Not only is it inflationary, but it affects the most efficient organisations in the country. In my constituency

    277
    we have some of the most efficient farmers in Britain, who are very little affected by the Price Review. Therefore, their costs will not be taken into account in the Price Review.
    Their products will not be affected by it. In the words of the right hon. Gentleman, they will be expected to absorb this increased charge, yet they are very great users indeed of mechanical equipment which is continuously being used in the production of the same crop. It will not mean just a first increase of, say, one-fifth of 1d. a mile as in road transport. It will represent a much bigger increase in agricultural production.
    Then there is the horticultural industry, which is already facing today fierce competition from overseas. It is suffering from what those in the industry consider very inadequate protection, and yet now it is faced with an increased surcharge. That industry, again, is not covered by the Price Review. The inevitable effect will be that those in the industry will be forced to increase their prices, and when they do so it will be said that it is inflationary.
    My hon. Friend knows a great deal about the consumer industry. The idea seems to be that the increased tax will be a once-for-all charge on the transport cost of goods. But very often goods are transported five or six times before they reach the actual point of sale, and the extra cost of all that to-ing and fro-ing will mean a very big increase in actual prices.
    One of the stories that the Government are trying to get over is that these increases are necessary in order to find the money with which to pay the increased pensions. This is a story of a horse that will not run. The hon. Gentleman knows perfectly well that in his Budget statement the Chancellor made it quite clear that the on-cost, over and above the stamp, to cover the increased pension charges represents about £15 million in Exchequer grant and this tax alone is expected to bring in about £60 million or £70 million a year.
    Even if we take the whole £15 million on this tax alone, it means that the party opposite is increasing direct taxation on the productive resources of the country by
    278
    £45 million or £50 million more than is needed for pensions. I think that this lie about the pension had better be nailed once and for all. It is a very misleading argument. These taxes are not being imposed in order to deal with the pensions. They are being imposed for an ideological reason, to try to create—[HON. MEMBERS: "No."] Let me say what I was going to say. The Chancellor said that we had created the climate. The hon. Gentleman, who has a lot of knowledge of these things and has made a similar speech to the one that I am making on so many occasions from this side of the Committee that he must almost know what comes in the next sentence, must know that anything that is a burden on the efficiency of the country is something which we do not want to create at this moment.
    These measures will make it harder to export. The whole object of the Budget is supposed to be the exact opposite of what it is to achieve. I am certain that if the Chancellor, who has not been here very much during the Committee stage of the Bill, was able to speak with the knowledge that he has gained in recent days he would say that he wished he had not brought in these measures, but a lot of other taxes which would be much more justifiable and likely to produce the result that he wishes.
    Mr. Donald Box: I join with hon. Friends on this side of the Committee who have expressed regret that the Government have found it necessary to increase the petrol tax by such a large amount. I think that the reactions of the motor industry were best summed up by a garage proprietor in my part of Wales, who, immediately following the announcement, published a notice in the South Wales Echo, the newspaper which circulates in my division and also, rather appropriately, in the division of the Chancellor of the Exchequer, which read:
    " Sir Alec, Return immediately. All is forgiven."
    Quite honestly, I cannot see for what the garage proprietor had to forgive my right hon. Friend the Leader of the Opposition, but I am quite certain that the public will not forgive the present Prime Minister and his right hon. Friend the Chancellor of the Exchequer when they face the extra charges, whether they

    279
    be for urban or long-distance bus fares, for road haulage or for rates which this Clause will involve, for they are all bound to add to the cost of living.
    I was puzzled when, in the Chancellor's speech of 11th November, I came across this sentence:
    " This increase in duty will exercise an appreciable and immediate disinflationary effect and will make an important contribution towards my general objective of preventing an increase in the pressure of demand."—[OFFICIAL REPORT, 11th November, 1964; Vol. 701, c. 1037.]
    It seems to me that, above all else, this increase in petrol duty is bound to have a most inflationary effect on prices in this country. [HON. MEMBERS: "Rubbish."] Hon. Members opposite may think that that is rubbish, but they have been very unwilling to get to their feet to support what they say.
    It is not in the least surprising that the Road Haulage Association immediately recommended that its members should bring about a rise in rates amounting to 2½ per cent. or 6d. in the £. I notice that, despite the Chancellor's assurances and those given by the Chief Secretary, the National Joint Council of Road Passenger Transport Workers, representing about 77,000 busmen, immediately expressed its deep concern at the rise.
    We have been given some rather uncertain assurances about relief in respect of stage carriages. I welcome these assurances, though they were a little indecisive, for the effect in a city like Cardiff would have been dramatic had these extra charges gone on to the bus services. We are already losing about £100,000 a year, and the extra charges based on 6d. per gallon would have amounted to a further £18,000.
    I shall not pursue the point, Commander Donaldson, because you would probably rule me out of order if I did, but I think it pertinent just to observe that, before the election, some right hon. and hon. Members opposite were anxious to point out how mean the Conservative Government were in not making fare concessions to pensioners. I content myself with saying that, in the discussions on relief from this tax, I have not noticed any suggestions from the benches opposite that there should be any concessions for pensioners in the matter of fares.
    280
    As is well known, a number of rural bus services are subsidised out of the more profitable urban services. Despite the Government's assurances about stage carriage relief, I was not surprised to see that at least three companies opera, ting rural bus services in Wales had applied for an increase in their cheap day fares. Incidentally, whenever the subject of rural transport has been discussed in the past, it has always brought a great deal of outcry from hon. Members representing rural constituencies in Wales.
    When rail closures were proposed in their areas, they complained, they rampaged, they arranged marches and meetings of protest. Yet today, in an important debate when we are discussing this very matter which might have an effect on rural transport fares, I see not one Welsh Member representing a rural constituency present. This is what happens when an important issue is discussed. They are conspicuous by their absence.
    There is no doubt that the cost increase for industry will be considerable. Hardly anything will escape. Most important to the area which I represent will be the added cost for the steel industry. Already, the Steel Company of Wales has reported that a material increase in costs is bound to result, and this, of course, will have to be passed on down the line to the customer, making us less competitive in the future.
    I find it difficult, therefore, to see how the rise can do other than increase the cost of living, increase the costs of production and reduce our competitiveness, particularly the competitiveness of our road haulage industry as against the railways, and I hope, therefore, that my right hon. and hon. Friend will vote against the Clause.
    5.45 p.m.
    Mr. Frederic Harris: I may be accused of repetition, but, looking back over the past 17 years, I emphasise that I have opposed every increase in the petrol duty, whether it has come from a Conservative or a Labour Government. The present Minister of Works has often referred in the House to some of my past speeches on the subject.
    I apologise to the Committee for my loss of voice and I shall not detain it long. I wish merely to emphasise two

    281
    points which I have stressed before. The trouble is that the increase in petrol duty is far too easy for a Chancellor to use. It gives him a quick answer to his problems. The second point—I put this from a business point of view, and the Chief Secretary will know about it from his own commercial and professional experience—is that, regrettably, when the petrol duty is increased, every industry invariably has to balance off its figures by putting on an increase which is slightly above the actual cost of the tax itself. In the main, this is true, and it aggravates the increased costs about which we are all disturbed and to which we refer quite rightly as having a considerable inflationary tendency.
    There can be no dodging the fact that, regrettably, industry cannot put on just the equivalent of the increase in the petrol duty. Unfortunately, the levelling off means much higher increases in costs and, therefore, the effect is even more serious.
    On this occasion, as on previous occasions, I strongly oppose the increase in the petrol duty.
    Mr. Diamond: I am sure that I speak for the whole Committee when I say how sorry we are that the hon. Member for Croydon, North-West (Mr. Frederic Harris) has a little difficulty in speaking. We hope that he will rest his voice adequately, because we should hate his trouble to go to unnecessary lengths. We recognise, also, that he has been consistent, always taking the view, which he has just expressed, each time the petrol duty was raised by his right hon. and hon. Friends, which has been on more than one occasion.
    To come straight to the point which the hon. Gentleman and several of his hon. Friends made, that this increase in the petrol duty means either at least an equivalent increase in the sale price of goods, or, as he said, a more than equivalent increase because of the process of rounding off and the habit which people have of adding on a bit more than the costs which they have in fact incurred, I can only repeat what I said yesterday.
    The first thing which we must all understand if we are to get the country out of the situation in which it still is is that we must be more competitive in
    282
    our export prices. We must be much more competitive in our attitudes, and, to be more competitive, we must be much more efficient in all our operations. This means absorbing price increases and not simply idly or lazily passing them straight on and letting the wretched customer carry them.
    Mr. Burden rose—
    Mr. Diamond: I listened very carefully to the hon. Gentleman and I shall give way with pleasure shortly. This is the Committee stage and he may intervene as often as he feels compelled. I should like to complete this point and make it absolutely clear.
    This debate is not about an increase in the cost of living of one-fifth of a point. It is not about an increase in the mileage charge of the average vehicle of one-fifth of 1d. a mile. It is about the totality of the increase in this tax, about £93 million in a full year. It is a substantial producer of revenue, the total in a full year at the new rate being more than £700 million a year. The real question is: was it necessary for this impost to be added on to meet the economic situation, and, it having been added on, what is the best way of dealing with it?
    My right hon. Friend explained in his Budget speech and on Second Reading why it was necessary. I have referred to this matter myself. As is well known, the situation when we took office was such that we were compelled, as a result of the balance of payments position, to reduce imports, and we took steps to do so. If one reduces imports, one increases the pressure which purchasing power exerts on a reduced quantity of goods. In order to avoid that pressure, one had to exercise a disinflationary power, and the best way to do that was some kind of tax which would be broadly spread, which would have the least damaging effects and which would not prejudice exports at all.
    Some hon. Members opposite, notably the hon. Member for Ormskirk (Sir D. Glover), have said that this tax would make it harder to export. Taken in conjunction with the other provisions in this very Bill for the export rebate, it will not have any effect whatever on export prices. Therefore, it does not make it harder to export.
    Mr. Burden: The hon. Gentleman has come back to the point about absorbing the tax. In the circumstances, would it not be a good thing if the Government set an example by sending a directive to the national road transport organisation telling it to absorb the cost of the increased petrol duty rather than pass it on in increased costs to consumers through carriage charges?
    Mr. Diamond: The Government are setting an example by having a stern review of expenditure. This is being conducted at the moment. When the conclusions of it are put before the House, I hope that we shall have the full support of the hon. Member for Gillingham (Mr. Burden) and of all his right hon. and hon. Friends in any reduction of expenditure which may be necessary. This is the way to set the example.
    In reply to what the hon. Member for Croydon, North-West put to me in his reference to my personal experience, I am glad to say that I know of no board of self-respecting directors who, when faced with the problem of increased charges coming from wage increases, increases in direct taxation or in any other way, do not first say to themselves, "Here is an increase in our charges. How are we to absorb it and deal with it without making our goods less competitive by putting up the price?". That is the first reaction of any worthwhile business owner or business manager in this country.
    Sir Stephen McAdden: The hon. Gentleman implies a challenge to us to show the contrary of what he has just said. What about the Government's own attitude in the matter? Has he never heard of the British Transport Commission, which regularly asks for fare increases as soon as wages rise?
    Mr. Diamond: The hon. Member for Croydon, North-West asked me about one's approach to this situation. I am quite sure that it would be wrong for anyone on either side of the Committee to accept it as automatic or anything approaching automatic that, faced with an increase, especially such a minimal increase as this is likely to be percentage-wise, the first reaction of any business is to pass it on in terms of prices. We shall never make progress if we continue on that basis.
    Mr. John Biffen: I accept the hon. Gentleman's point that it is vital to have the closest attention to costs at all times if British industry is to remain competitive. The point I have to put to him is somewhat different. He said that the main purpose of this tax was to act as a kind of regulator of pressure of demand. It is the arithmetic of that which interests me, because a great deal of this increased tax will fall as an industrial cost and, if it is absorbed, it must reduce the effect of the tax as a regulator on the pressure of demand. What does he think is the actual amount out of the £93 million which will fall on consumption after the amount of cost absorption which he would like to see has taken place?
    Mr. Diamond: If it is thought that that is within the scope of this Clause I am only too glad to answer the question. We should not get bedded down with too much detail about the comparative cost of petrol in Belgium, or elsewhere, but we should deal with the vital questions which have been raised by hon. Members who have intervened in the debate. I repeat what the Chancellor said, that the purpose of this tax is to reduce pressure. We can do that in one of two ways. Obviously, if it is all passed on in terms of increased prices the result is a lowering in demand for an equivalent amount of goods. If, on the other hand, it is all absorbed through greater efficiency we get an additional amount of goods for the same purchasing power.
    In either event purchasing power and goods available are kept level, and that is the purpose. It can be done in one of two ways, the inefficient way of passing it on and the efficient way of absorbing it, and either way it will have a disinflationary effect on imports. The Committee should recognise this situation and give full support to the Clause.
    Most of the contents of the Clause have already been discussed in debates on Amendments, but there is one thing I should add as it has not emerged. The Clause, which is a consolidating Clause, in terms of machinery represents that so far as excise duty as opposed to customs duty is concerned, it removes the preference which exists as between duty on home-produced and imported oil as from 1st January, in conformity with our obligations under E.F.T.A., repeating a

    285
    provision in the earlier Finance Act which right hon. Members opposite produced this year.
    The hon. Member for Cardiff, North (Mr. Box) asked why my hon. Friends were not continually asking questions about reduced travel costs for pensioners. The reason why they have not been doing that is that we have already dealt with a Bill concerned with that subject which has gone from this House to another place. I do not know whether he was in this House at the time, but he has made the continual accusation about my hon. Friends not being present. The figures from the Division Lobbies which you, Commander Donaldson—and I trust your accuracy—have read, show that my hon. Friends are present. They seem to be present in greater numbers than hon. Members opposite. The reason why my hon. Friends are not raising questions about the Clause is that they are satisfied with its contents and give it their silent approval.
    Mr. Box: There are many more hon. Members opposite present now than there were when we were discussing Amendments to the Clause. It is true that I have been away on a Parliamentary delegation for some weeks. I was unaware of the fact that the legislation referred to had gone through this House. If my remarks were incorrect, I withdraw them.
    Mr. Diamond: Nothing could be more courteous and I am grateful to the hon. Member.
    The hon. Member for Torquay (Sir F. Bennett)—[An HON. MEMBER: "He has skedaddled."]—raised a question about transport of bricks and concrete. It is true that at the extreme point where a very heavy load of goods which are inexpensive has to be carried we get a higher proportion resulting from the petrol charge than at the other extreme where there are many valuable lightweight goods to transport. But that does not alter the basic argument that the impact is very slight and it is evenly spread. It is introduced for reasons which are absolutely unavoidable to help our competitive position.
    For these reasons, I ask hon. Members to support the Clause.
    6.0 p.m.
    Mr. William Clark: Yesterday, we had a debate on Clause 1 and there were substantial arguments against its being included in the Bill. I think there are similar arguments against this Clause. We do not think that either the Income Tax increase or the petrol tax increase is necessary.
    The burden of the argument of the Chief Secretary was that the increase in petrol tax is to help our balance of payments. The product of this extra 6d. per gallon is to be £93 million. When we break that down we find that approximately £60 million, two-thirds, will fall on industry. if it falls on industry it will be a chargeable expense for tax purposes. If it is said to be disinflationary it should be seen that the Government are not giving up £93 million, but about £30 million. When they came into office the party opposite made great play about modernising Britain, reducing costs, and so on. This is a peculiar way of reducing costs by immediately slapping at least £60 million cost on to industry.
    We have maintained throughout that this Budget is an inflationary Budget, but the Chief Secretary seeks to convince us that it is a disinflationary Budget. He would agree with my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) that we want more exports. Is the increased petrol cost to increase transport costs from factory to port, or not? Surely it will increase the cost of exports. Conversely, if imports are moved by road from port to distributing centre, wherever it may be, as my hon. Friend the Member for Gillingham (Mr. Burden) said, this will increase the cost of transport.
    I should have thought that the major portion of this £93 million must (a) affect industry and (b) affect the cost of living. The Chief Secretary proved to me that, despite the opposition of hon. Members opposite to the stop-go policy which is derided, he was expounding exactly the same policy.
    Mr. Diamond: I interrupt only on a point of fact. The simple fact is that the export rebate is calculated on a number of things, one of which is the cost of the petrol duty entering into the goods exported.
    Mr. Burden: Oh, no.
    Mr. Diamond: I repeat it. It is quite wrong to say that this, in any case, prejudices the export of goods.
    Mr. Clark: Even accepting that, the Chief Secretary, in his winding-up remarks, said that any increase in the cost of petrol for industry should be absorbed and that, consequently, we must become more competitive. It seems extraordinary to slap on a charge on goods and tell the industrialist that he must be competitive and absorb the charge. Even if he does so, that does not make him more competitive for the cost of the goods will not be reduced.
    What were the Socialist boasts during and even since the election, both in the Queen's Speech and in the White Paper on maintaining stable prices? Surely the Chief Secretary and his hon. Friends—and, I am certain, my hon. Friends—must agree that this tax must increase the cost of living. There must be many red faces among the Socialists. I am sure that millions of car owners will be particularly bitter about this Socialist Government who, having got into office, not only increase the Income Tax by 6d. in the £, put a poll tax on National Insurance of 2s. irrespective of income, and penalise the small motorist to the extent of 6d. per gallon of petrol.
    Many of my hon. Friends have given reasons why we should resist the Clause. My hon. Friend the Member for Rye (Mr. Bryant Godman Irvine) and my hon. Friend the Member for Ormskirk (Sir D. Glover) both spoke of the effect on agriculture. There is no point in recanvassing the arguments in that respect. My right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), in the previous debate, spoke about transport, especially in rural areas. If the Government press this imposition they must apologise to the electorate for having given the electorate the impression that the advent of a Socialist Government did not mean increased taxation.
    If hon. Members opposite want to be politically straight about this, they should apologise for giving the impression that there would be no general increase in taxation. Our greatest criticism of this Budget, and this Clause in particular, is that the Chancellor did not think through his proposals. This tax must
    288
    affect our export effort and make us less competitive. For those reasons, I hope that my hon. and right hon. Friends will vote against this Clause in the Lobby.
    Mr. Burden: I intervene very shortly because the Chief Secretary made an important statement and this should be pointed out. He stated that when there is a rebate of the surcharge this increased duty on goods brought in under the 15 per cent. would have the increased cost of petrol included in that rebate. I and many people who have been re-exporting for many years have always found that the amount of rebate we got was the amount shown and assessed by the Customs officials on the invoices only. There was no question of any addition of any cost on transport after the goods had been brought to this country.
    I hope that the Chief Secretary will make this point very clear, because it was a statement which I am sure many people will be glad to hear, that when the rebate on the surcharge is made it will also include a token sum to take care of the cost after the goods have been imported and not as shown on the invoices.
    Mr. Diamond: I am grateful for the opportunity of making clear what I thought was clear and what it is my duty to make clear to the hon. Member and to the country. He has been referring to past experience of existing legislation, but what I have referred to is new provisions in new legislation which the Committee will be debating on a subsequent Clause. Those provisions provide for a new export rebate. One of the elements is the cost of petrol duty. To the extent that petrol duty goes up or down so would the export rebate be varied. I hope that I have made it clear that the hon. Member was referring to a different thing. Under the provisions which the Committee will debate as soon as may be possible, the sooner the better, he will see that what I have said is quite right.
    Mr. Burden: I am grateful to the hon. Gentleman.
    Mr. Geoffrey Lloyd: Commending the Clause to the Committee, the Chief Secretary has again delivered a lecture to the industrialists of the country. He did it yesterday in our debate on the earlier Clause and he has done it again

    289
    today. He says that they have to absorb price increases and become more efficient and more competitive.
    I wonder whether the right hon. Gentleman appreciates the badness of his psychology and how much his lectures will be resented and rejected by industrialists and practical businessmen all over the country. It is bad enough for industrialists to receive constant exhortation from Ministers, but many of them will take the view that to have their costs increased and then to receive a lecture from the Minister responsible is too much.
    Before we part with the Clause, I must make a strong protest on behalf of the Birmingham and Midland industrial community against the increase in the tax on petrol. We in the Midlands are the centre of the motor car industry and this increase in the cost of motoring is bound to be some kind of check to the expansion of our industry. It is not possible exactly to quantify this effect, but the fact that it constitutes an obstacle to the further rapid expansion of motoring, and therefore of motor manufacturing, is undoubted.
    We in the Midlands largely make our living from this industry. It is not only a question of the great motor car companies which we all know, for the component manufacturers are tremendously strongly represented in the Midlands and every year hundreds of millions of pounds worth of orders come into Birmingham and the rest of the Midlands for all the parts which go into motor cars. This production must be checked to some extent by any check in the demand resulting from an increase in the cost of petrol.
    It is sometimes said that almost every factory in Birmingham now makes some parts of a motor car. That is an exaggeration, but it is an indication of the importance of this work to the area. Under the Conservative Government, the motor car industry was going ahead well and in the Midlands we were very prosperous.
    That brings me to my second grievance on behalf of the Midlands, not as manufacturers but as consumers. It is that, because of the very prosperity of the Midlands area, largely due to its great part in motor car manufacture, we have been the part of the country where new motor car owners have been coming along faster than probably anywhere else. It is commonplace that car workers should have their own cars and we are all very pleased about that, but it is also true that almost any young man in Birmingham who is asked how he is getting on is almost certain to say that he does not have a car yet. Anything which makes motoring more expensive will be an obstacle to the ambition of all our young people to own a motor car, which is not only a part of the Midland's prosperity, but also the legitimate ambition of our young Midland workers.
    In the Midlands there is a suspicion that the Government are hostile to the Midlands area. We have already heard that the President of the Board of Trade is to be much tougher about industrial development certificates for our area and in this Clause the Government are striking a blow at the industry which is the fundamental basis of our prosperity.
    6.15 p.m.
    Mr. Joel Barnett: I want to refute one assertion of the hon. Member for Nottingham, South (Mr. William Clark). The hon. Gentleman should have known better. He said that of the total involved in this tax, about £90 million, some £60 million would fall on industry and would then be mitigated by the disinflationary effect. He should know that companies whose years end up to and before 5th April will not have their tax payable until January, 1966, while companies whose years end later will not be paying tax until January, 1967, so that the disinflationary effect will clearly not apply now.
    Question put, That the Clause stand part of the Bill:—
    The Committee divided: Ayes, 243, Noes, 218.

    Division No. 18.]

    AYES

    [6.16 p.m.

    Abse, Leo

    Atkinson, Norman

    Bellenger, Rt. Hon. F. J.

    Albu, Austen

    Bacon, Miss Alice

    Bence, Cyril

    Allaun, Frank (Salford, E.)

    Bagier, Gordon A. T.

    Benn, Rt. Hon. Anthony Wedgwood

    Alldritt, W. H.

    Barnett, Joel

    Bennett, J. (Glasgow, Bridgeton)

    Allen Scholefield (Crewe)

    Baxter, William

    Binns, John

    Armstrong, Ernest

    Beaney, Alan

    Bishop, E. S.

    Blackburn, F.

    Herbison, Rt. Hn. Margaret

    Padley, Walter

    Blenkinsop, Arthur

    Hobden, Dennis (Brighton, K'town)

    Page, Derek (King's Lynn)

    Boardman, H.

    Holman, Percy

    Paget, R. T.

    Boston, T. G.

    Horner, John

    Palmer, Arthur

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

    Houghton, Rt. Hn. Douglas

    Pannell, Rt. Hn. Charles

    Bowles, Frank

    Howarth, Harry (Wellingborough)

    Pargiter, G. A.

    Boyden, James

    Howarth, Robert L. (Bolton, E.)

    Pearson, Arthur (Pontypridd)

    Braddock, Mrs. E. M.

    Hoy, James

    Pentland, Norman

    Bradley, Tom

    Hughes, Cledwyn (Anglesey)

    Popplewell, Ernest

    Bray, Dr. Jeremy

    Hughes, Emrys (S. Ayrshire)

    Prentice, R. E.

    Broughton, Dr. A. D. D.

    Hughes, Hector (Aberdeen, N.)

    Probert, Arthur

    Brown, Hugh D. (Glasgow, Provan)

    Hunter, Adam (Dunfermline)

    Pursey, Cmdr. Harry

    Brown, R. W. (Shoreditch & Fbury)

    Hunter, A. E. (Feltham)

    Rankin, John

    Buchan, Norman (Renfrewshire, W.)

    Irving, Sydney (Dartford)

    Redhead, Edward

    Buchanan, Richard (Gl'sg'w,Spr'burn)

    Jackson, Colin

    Reynolds, Gerald

    Butler, Herbert (Hackney, C.)

    Jeger, George (Goole)

    Rhodes, Geoffrey

    Butler, Mrs. Joyce (Wood Green)

    Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)

    Richard, Ivor

    Carmichael, Neil

    Jenkins, Hugh (Putney)

    Roberts, Albert (Normanton)

    Carter-Jones, Lewis

    Jenkins, Rt. Hn. Roy (Stechford)

    Roberts, Goronwy (Caernarvon)

    Castle, Rt. Hn. Barbara

    Jones, Dan (Burnley)

    Robertson, John (Paisley)

    Coleman, Donald

    Jones, J. Idwal (Wrexham)

    Rodgers, William (Stockton)

    Corbet, Mrs. Freda

    Jones, T. W. (Merioneth)

    Rose, Paul B.

    Crawshaw, Richard

    Kelley, Richard

    Ross, Rt. Hn. William

    Cullen, Mrs. Alice

    Kenyon, Clifford

    Rowland, Christopher

    Dalyell, Tam

    Lawson, George

    Sheldon, Robert

    Davies, G. Elfed (Rhondda, E.)

    Leadbitter, Ted

    Shinwell, Rt. Hn. E.

    Davies, Harold (Leek)

    Ledger, Ron

    Shore, Peter (Stepney)

    Davies, Ifor (Gower)

    Lee, Rt. Hn. Frederick (Newton)

    Short,Rt.Hn.E.(N'c'tle-on-Tyne,C.)

    Davies, S. O. (Merthyr)

    Lee, Miss Jennie (Cannock)

    Short, Mrs. Renée (W'hampton. N. E.)

    de Freitas, Sir Geoffrey

    Lever, Harold (Cheetham)

    Silkin, John (Deptford)

    Delargy, Hugh

    Lever, L. M. (Ardwick)

    Silkin, S. C. (Camberwell, Dulwich)

    Dell, Edmund

    Lewis, Ron (Carlisle)

    Silverman, Julius (Aston)

    Dempsey, James

    Lipton, Marcus

    Silverman, Sydney (Nelson)

    Diamond, John

    Lomas, Kenneth

    Skeffington, Arthur

    Dodds, Norman

    Loughlin, Charles

    Slater, Joseph (Sedgefield)

    Doig, Peter

    Mabon, Dr. J. Dickson

    Small, William

    Donnelly, Desmond

    McBride, Neil

    Smith, Ellis (Stoke, S.)

    Driberg, Tom

    MacDermot, Niall

    Snow, Julian

    Duffy, Dr. A. E. P.

    McGuire, Michael

    Solomons, Henry

    Dunn, James A. (L'pool, Kirkdale)

    McInnes, James

    Spriggs, Leslie

    Dunnett, Jack (Nottingh'm, Central)

    McKay, Mrs. Margaret

    Stonehouse, John

    Edwards, Rt. Hn. Ness (Caerphilly)

    MacKenzie, Gregor (Rutherglen)

    Stones, William

    Edwards, Robert (Bilston)

    McLeavy, Frank

    Summerskill, Dr. Shirley

    English, Michael

    MacMillan, Malcolm

    Swain, Thomas

    Ennals, David

    MacPherson, Malcolm

    Symonds, J. B.

    Ensor, David

    Mahon, Peter (Preston, S.)

    Taylor, Bernard (Mansfield)

    Fernyhough, E.

    Mahon, Simon (Bootle)

    Thomas, George (Cardiff, W.)

    Finch, Harold

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

    Thomas, Iorwerth (Rhondda, W.)

    Fitch, Alan

    Manuel, Archie

    Thomson, George (Dundee, E.)

    Fletcher, Sir Eric (Islington, E.)

    Mapp, Charles

    Thornton, Ernest

    Fletcher, Ted (Darlington)

    Marsh, Richard

    Tinn, James

    Fletcher, Raymond (Ilkeston)

    Mellish, Robert

    Tuck, Raphael

    Floud, Bernard

    Mendelson, J. J.

    Urwin, T. W.

    Foley, Maurice

    Mikardo, Ian

    Varley, Eric G.

    Foot, Sir Dingle (Ipswich)

    Millan, Bruce

    Walden, Brian (All Saints)

    Foot, Michael (Ebbw Vale)

    Miller, Dr. M. S.

    Walker, Harold (Doncaster)

    Ford, Ben

    Milne, Edward (Blythe)

    Wallace, George

    Galpern, Sir Myer

    Molloy, William

    Warbey, William

    Garrett, W. E.

    Monslow, Walter

    Watkins, Tudor

    Garrow, A.

    Morris, Alfred (Wythenshawe)

    Weitzman, David

    Ginsburg, David

    Morris, Charles (Openshaw)

    Whitlock, William

    Gourlay, Harry

    Morris, John (Aberavon)

    Wilkins, W. A.

    Gregory, Arnold

    Murray, Albert

    Willey, Rt. Hn. Frederick

    Grey, Charles

    Neal, Harold

    Williams, Alan (Swansea, W.)

    Griffiths, David (Rother Valley)

    Newens, Stan

    Williams, Mrs. Shirley (Hitchin)

    Griffiths, Rt. Hn. James (Llanelly)

    Noel-Baker, Francis (Swindon)

    Williams, W. T. (Warrington)

    Hale, Leslie

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

    Willis, George (Edinburgh, E.)

    Hamilton, James (Bothwell)

    Norwood, Christopher

    Wilson, William (Coventry, S.)

    Hamilton, William (West Fife)

    Oakes, Gordon

    Winterbottom, R. E.

    Hamling, William (Woolwich, W.)

    Ogden, Eric

    Woodburn, Rt. Hn. A.

    Harper, Joseph

    O'Malley, Brian

    Woof, Robert

    Harrison, Walter (Wakefield)

    Oram, Albert E. (E. Ham S.)

    Wyatt, Woodrow

    Hayman, F. H.

    Orbach, Maurice

    Zilliacus, K.

    Hazell, Bert

    Orme, Stanley

    Heffer, Eric S.

    Oswald, Thomas

    TELLERS FOR THE AYES:

    Henderson, Rt. Hn. Arthur

    Owen, Will

    Mr. McCann and Mrs. Slater.

    NOES

    Agnew, Commander Sir Peter

    Atkins, Humphrey

    Bennett, F. M. (Torquay)

    Alison, Michael (Barkston Ash)

    Awdry, Daniel

    Berkeley, Humphry

    Allason, James (Hemel Hempstead)

    Baker, W. H. K.

    Berry, Hn. Anthony

    Amery, Rt. Hon. Julian

    Barlow, Sir John

    Bessell, Peter

    Astor, John

    Batsford, Brian

    Biffen, John

    292

    293

    Biggs-Davison, John

    Hall-Davis, A. G. F. (Morecambe)

    More, Jasper

    Bingham, R. M.

    Hamilton, Marquess of (Fermanagh)

    Morgan, W. G.

    Birch, Rt. Hn. Nigel

    Harris, Frederic (Croydon, N. W.)

    Morrison, Charles (Devizes)

    Black, Sir Cyril

    Harris, Reader (Heston)

    Mott-Radclyffe, Sir Charles

    Blaker, Peter

    Harrison, Col. Sir Harwood (Eye)

    Murton, Oscar

    Bowen, Roderic (Cardigan)

    Hawkins, Paul

    Nicholls, Sir Harmar

    Box, Donald

    Hay, John

    Noble, Rt. Hn. Michael

    Boyd-Carpenter, Rt. Hn. J.

    Heald, Rt. Hn. Sir Lionel

    Nugent, Rt. Hn. Sir Richard

    Braine, Bernard

    Heath, Rt. Hn. Edward

    Onslow, Cranley

    Brinton, Sir Tatton

    Hendry, Forbes

    Orr, Capt. L. P. S.

    Bromley-Davenport,Lt.-Col.Sir Walter

    Higgins, Terence L.

    Orr-Ewing, Sir Ian

    Brooke, Rt. Hn. Henry

    Hiley, Joseph

    Osborn, John (Hallam)

    Brown, Sir Edward (Bath)

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

    Page, John (Harrow, W.)

    Bruce-Gardyne, J.

    Hirst, Geoffrey

    Page, R. Graham (Crosby)

    Buchanan-Smith, Alick

    Hornby, Richard

    Percival, Ian

    Buck, Antony

    Hornsby-Smith, Rt. Hn. Dame P.

    Pickthorn, Sir Kenneth

    Bullus, Wing Commander Eric

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

    Pike, Miss Mervyn

    Burden, F. A.

    Howe, Geoffrey (Bebington)

    Pitt, Dame Edith

    Butcher, Sir Herbert

    Hunt, John (Bromley)

    Pounder, Rafton

    Campbell, Gordon

    Hutchison, Michael Clark

    Powell, Rt. Hn. J. Enoch

    Carlisle, Mark

    Irvine, Bryant Godman (Rye)

    Prior, J. M. L.

    Carr, Rt. Hn. Robert

    Jenkin, Patrick (Woodford)

    Pym, Francis

    Gary, Sir Robert

    Jennings, J. C.

    Quennell, Miss J. M.

    Channon, H. P. G.

    Johnston, Russell (Inverness)

    Ramsden, Rt. Hn. James

    Chataway, Christopher

    Jones, Arthur (Northants, S.)

    Rawlinson, Rt. Hn. Sir Peter

    Chichester-Clark, R.

    Jopling, Michael

    Redmayne, Rt. Hn. Martin

    Clark, William (Nottingham, S.)

    Joseph, Rt. Hn. Sir Keith

    Rees-Davies, W. R. (Isle of Thanet)

    Cooke, Robert

    Kaberry, Sir Donald

    Renton, Rt. Hn. David

    Cooper, A. E.

    Kerby, Capt. Henry

    Ridsdale, Julian

    Cooper-Key, Sir Neill

    Kerr, Sir Hamilton (Cambridge)

    Roberts, Sir Peter (Heeley)

    Costain, A. P.

    Kershaw, Anthony

    Rodgers, Sir John (Sevenoaks)

    Courtney, Cdr. Anthony

    Kilfedder, James A.

    Roots, William

    Craddock, Sir Beresford (Spelthorne)

    Kimball, Marcus

    Scott-Hopkins, James

    Cunningham, Sir Knox

    King, Evelyn (Dorset, S.)

    Sharples, Richard

    Curran, Charles

    Kitson, Timothy

    Sinclair, Sir George

    Currie, G. B. H.

    Lagden, Godfrey

    Spearman, Sir Alexander

    Dalkeith, Earl of

    Lambton, Viscount

    Stainton, Keith

    Davies, Dr, Wyndham (Perry Barr)

    Langford-Holt, Sir John

    Stanley, Hn. Richard

    d'Avigdor-Goldsmid, Sir Henry

    Legge-Bourke, Sir Harry

    Summers, Sir Spencer

    Dean, Paul

    Litchfleld, Capt. John

    Talbot, John E.

    Deedes, Rt. Hn. W. F.

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

    Taylor, Edward M. (G'gow, Cathcart)

    Digby, Simon Wingfield

    Lloyd, Ian (P'tsm'th, Langstone)

    Taylor, Frank (Moss Side)

    Dodds-Parker, Douglas

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Thatcher, Mrs. Margaret

    Doughty, Charles

    Longbottom, Charles

    Thomas, Sir Leslie (Canterbury)

    Drayson, G. B.

    Loveys, Walter H.

    Thompson, Sir Richard (Croydon, S.)

    du Cann, Edward

    Lubbock, Eric

    Thorpe, Jeremy

    Eden, Sir John

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Tilney, John (Wavertree)

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

    Lucas-Tooth, Sir Hugh (Hendon, S.)

    Turton, Rt. Hn. R. H.

    Emery, Peter

    McAdden, Sir Stephen

    Tweedsmuir, Lady

    Fell, Anthony

    Mackenzie, Alasdair (Ross & Crom'ty)

    van Straubenzee, W. R.

    Fisher, Nigel

    Mackie, George Y. (C'ness & S'land)

    Walder, David (High Peak)

    Fletcher-Cooke, Charles (Darwen)

    McLaren, Martin

    Walker, Peter (Worcester)

    Forrest, George

    McMaster, Stanley

    Walters, Denis

    Foster, Sir John

    McNair-Wilson, Patrick

    Ward, Dame Irene

    Fraser,Rt.Hn.Hugh(St'fford & Stone)

    Maginnis, John E.

    Whitelaw, William

    Gammans, Lady

    Maitland, Sir John

    Williams, Sir Rolf Dudley (Exeter)

    Gardner, Edward

    Marten, Neil

    Wills, Sir Gerald (Bridgwater)

    Gibson-Watt, David

    Mathew, Robert

    Wilson, Geoffrey (Truro)

    Giles, Rear-Admiral Morgan

    Maude, Angus E. U.

    Wolrige-Gordon, Patrick

    Gilmour, Sir John (East Fife)

    Maulding, Rt. Hn. Reginald

    Wood, Rt. Hn. Richard

    Glyn, Sir Richard

    Mawby, Ray

    Woodhouse, Hn. Christopher

    Goodhew, Victor

    Maxwell-Hyslop, R. J. (Tiverton)

    Woodnutt, Mark

    Gower, Raymond

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

    Wylie, N. R.

    Grant, Anthony

    Meyer, Sir Anthony

    Yates, William (The Wrekin)

    Grant-Ferris, R. (Nantwich)

    Mills, Peter (Torrington)

    Younger, Hn. George

    Griffiths, Eldon (Bury St. Edmunds)

    Mills, Stratton (Belfast, N.)

    Griffiths, Peter (Smethwick)

    Miscampbell, Norman

    TELLERS FOR THE NOES:

    Grimond, Rt. Hn. J.

    Mitchell, David

    Mr. MacArthur and Mr. Ian Fraser.

    Hall, John (Wycombe)

    Monro, Hector

    Clause 3.—(CHARGE OF TEMPORARY CUSTOMS DUTY.)
    Mr. Edward Heath: I beg to move Amendment No. 15, in page 4, line 29, to leave out "November" and to insert "March".
    I understand that this Amendment is being taken in conjunction with Amendments Nos. 16, 17 and 18, in page 4, line
    29, leave out "November" and insert "May"; in line 34, leave out "November" and insert "March 2"; in line 34, leave out "1966" and insert "1965".
    The Temporary Chairman: I should have said so in the first place.
    Mr. Heath: Thank you very much, Commander Donaldson.

    295
    The Committee now moves to Clause 3 which deals with the imposition of the temporary surcharge. This Amendment, as, I think, the Committee will agree, is important, dealing with the dating of the surcharges. Nevertheless, it is an Amendment the point of which can be made to the Committee comparatively briefly.
    What does the Amendment do? It limits the period in which the surcharges will run to the end of next March, 1965, instead of to the end of next November, 1965. In other words, a period of just under six months from the imposition of the surcharges would be the limit for their first period. Under subsection (12) the Government would be able, by securing an affirmative Resolution, to continue the surcharges. By Amendment No. 17, this would be limited to a period of a year, but would give them the opportunity of continuing the surcharges till March, 1966. I think, therefore, that these two Amendments ought to be considered together; at any rate, the latter should be borne in mind. I think that the purpose of the Amendment is quite clear, but I should like to say a word about its importance.
    6.30 p.m.
    First, it gives an opportunity to the Minister who is to reply, perhaps the Minister of State, Board of Trade, to explain exactly what the intentions of the Government are towards these surcharges. It is of great importance that this Committee of the House of Commons should be told exactly what the Government's intentions are. There have been a very large number of indications in capitals of other countries of various hints given to other Governments about the length of time for which the surcharges are to run.
    It was even said that in the E.F.T.A. meeting certain undertakings were given to the member Governments about the length of time for the surcharges. We all recall that the President of the Board of Trade, before his flight across the Soviet Union to Peking, stopped at Copenhagen, whence he was reported as saying that a special arrangement would be made for E.F.T.A. by a more rapid deduction from E.F.T.A. countries, to offset the surcharges. This was a very inept move, because immediately it led
    296
    to the accusation of discrimination. It was followed by indications that E.F.T.A., at any rate, had been told the length of time the surcharges were going to run. Perhaps the Minister of State could tell us quite clearly what the intentions of the Government are.
    The Chancellor of the Exchequer himself, during Second Reading of the Bill, said:
    " While it is not possible to fix precise dates for reducing or eliminating the charge, it is intended that this process will begin in a matter of months."—[OFFICIAL REPORT, 24th November, 1964: Vol. 702, c. 1094.]
    The general implication of that, of course, must be that the surcharges are here for a comparatively short time, and if this is the case then I would suggest to the Minister of State that to bring the date forward to the end of March, 1965, is the right way to deal with this matter, as far as Parliament is concerned. In other words, if it is to be a matter of months we should in the Bill fix the end of March, and if the Government then feel they wish to continue the surcharges for a longer period they can go back to the House of Commons for an affirmative Resolution in order to be able to continue them. I hope, therefore, that the Minister of State will feel that this Amendment fits in with the Chancellor's plans and purposes as he described them in his Second Reading speech.
    The second point I should like to make is that this Amendment fits in with the importance of the subject itself. I do not think that anybody, after the history of the last 46 days—if that is what it is now—could have any doubt about the importance of the surcharges in the economic history of this country and of Europe and in the life of this Government, and I think that the importance of this matter is such that it ought to be brought before Parliament again at the end of March if the Government want to carry on with them. The Chancellor himself said that they affect some £1,700 million worth of our trade on the estimates which he made for trade for 1964. Surely something which is described as temporary, a matter of months, and which affects £1,700 million worth of imports into this country, is a matter which Parliament ought to be able to reconsider at the end of March before he brings forward his next Budget.

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    Of course, the effect of this will depend on the extent to which other Amendments put down by my hon. and right hon. Friends are accepted by Ministers, but at the moment the importance of this measure is increased by its breadth and the consequences of imposing it. After all, it is a measure which is imposed on goods already ordered and which have got to come in and it is imposed on goods which are in transit and which have got to come in, and on many fundamental raw materials even though they have been primarily processed in some form or another, materials which are essential for building, which are essential for manmade fibres, and essential for printing. All these things will be covered by the surcharges, and unless our Amendments are accepted the surcharges will be a very great burden on those items for industry, and they are of great importance to the price level in this country. Therefore, because of their importance I feel that the House of Commons should have an opportunity of considering them again before the end of March.
    The third reason is that these surcharges, as the Government have now frankly stated, are in breach of nine different international agreements. The emphasis has, perhaps, been on the fact that the imposition of the surcharges is a breach of the agreements, and naturally attention has been focussed on the animosity which this has aroused in a number of countries in the G.A.T.T., E.F.T.A., the Commonwealth, and so on. What has been less emphasised is the fact that we are continuously in breach of these agreements all the time the surcharges are in action. Surely we do not want to be in breach of the agreements a moment longer than necessary, and if we are continuing in breach of the agreements the House ought to have an opportunity of looking at them again, and looking at them again in a matter of months, which is the period the Chancellor of the Exchequer himself spoke of in his Second Reading speech.
    Another reason why I emphasise the importance of bringing this back to the House of Commons is that these surcharges are fundamentally protectionist. They add another 15 per cent. of protection for British industry, in many cases a number of times the tariff protection industries are getting. They have
    298
    suddenly got another 15 per cent. of protection with the surcharges.
    I do not think the Government have quite realised the impact of one of the sentences in their original White Paper, The Economic Situation, published on 26th October. In paragraph 6 they said that:
    "So far as imports are concerned a sharp distinction must be drawn between the increase in raw material imports required to service an expansion in production and the disturbing increase in manufactured goods most of which this country should be perfectly capable of producing on a competitive basis."
    That phrase "most of which" applied to manufactured goods has undoubtedly given the impression abroad—and the Prime Minister's past utterances, of course, bear this out—that the Government think that we import raw materials for goods and we export industrial products and that the modern development of post-war trade, which is an exchange of industrial goods between industrial countries, has been completely overlooked and the Government want to stop it.
    This fundamentally was the basis of so many of the anxieties of the countries which are affected by the surcharges. They believe that the purpose of the present Government is to have a protectionist system going back to the prewar arrangement by which we imported raw materials which enabled us to supply ourselves entirely with manufactured goods and to export manufactured goods as well. As this means grave damage to the trade of industrialised countries, naturally they are strongly opposed to it.
    It is to demonstrate what quite certainly the Chancellor of the Exchequer has said, to demonstrate that the Government are prepared to consider reducing the charges, that the House of Commons should have a fresh look at this, and I suggest that that is a very strong reason why it should be looked at before the end of March, in order to dispel the idea that this is a protectionist measure deliberately imposed by the Government for this purpose.
    Of course, we must not underestimate the pressures under which the Government will be once they try to remove or reduce these surcharges when costs have been allowed to rise meantime. The pressure from business, from manufacturers,

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    and, above all, trade unions, against removing this protection will be very great indeed. There is no doubt about that. Therefore, from the point of view of the Government themselves this has to be realised, that the longer this goes on the more difficult it will be to get the surcharge off, because industry, management and trade unions, will have become acclimatised to this additional protection. I would suggest that it is in the interest of the Government themselves that they should have this additional weapon of saying that they must bring the matter to the House of Commons before the end of March. They will, in getting a further Order, have the utmost difficulty with all those who want to see an increase in world trade and not a limitation of it through protectionism. Therefore, this Amendment would strengthen the Government's own hand in dealing with the protectionist pressures which they will have to fight.
    For the reasons I have given, and in order to show a proof of their good will, as expressed in the words which the Chancellor of the Exchequer spoke, I hope that the Government will accept this Amendment, which brings the whole matter back to the House of Commons before the end of March, in the last few days of March, and which will give them the opportunity for renewing the powers thereafter for a year. This will do something to ease the difficulties which have been encountered amongst so many of our friends abroad. It will take many years to recover from the alienation of our friends abroad, due to the way in which these surcharges were imposed and handled.
    I am unconvinced by the many statements of right hon. and hon. Gentlemen opposite that no consultation was possible. It was possible in a very brief time, through the existing organisations, to consult these countries, to get their views on the matter, to get them in secrecy, and to take account of them. The Government have taken account of some factors. I hope that they will take account of more during the debates on the Clauses which follow.
    This wound will take a long time to heal. The Government could do something to help by saying that they are prepared to bring the matter back to Parliament before the end of March—nearly
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    six months after the charges were imposed—and not wait until the end of 1965.
    Mr. Michael Foot: The right hon. Member for Bexley (Mr. Heath) said at the beginning of his speech, quite properly, that he came here this afternoon to discover the purposes and intentions of the Government, as he has every right to do. I came here today to discover the purposes and intentions of the Opposition, which I also have a right to do, particularly because of the confusion which they have shown on this aspect of the measures taken by the Government.
    I am not at all surprised that the right hon. Member for Barnet (Mr. Maudling) is not present. I do not make any criticism of him on that count, but, of course, it is evident that the right hon. Member for Bexley and the right hon. Member for Barnet take an entirely different view about the imposition of the surcharge, and therefore, no doubt, they also take a different view about how long these surcharges should be maintained. However, I shall come to that aspect of the matter in a moment.
    In putting his case this afternoon, the right hon. Gentleman excelled his own standards of disingenuity, because he suggested that he had come here to help the Government, to ease their passage and to dispel these rumours that the Government had imposed these surcharges for protectionist purposes. In the country and in the House the right hon. Gentleman has been the foremost member of the Opposition in suggesting that these surcharges were imposed because the Government were protectionist, The right hon. Gentleman has made great, if rather ineffective, play with the statement of the Prime Minister that some people might call him a little Englander. It seemed quite a genial remark in the context, but the right hon. Gentleman uses that as a great declaration of policy.
    For the last four weeks the right hon. Gentleman has been using all his considerable powers to persuade the country, and such foreigners as may pay much attention to him, that the Government are protectionist, and it is really hypocrisy for him to pretend this afternoon that what he is really trying to do is to dispel this unfortunate impression which has

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    somehow got abroad, he knows not how. The right hon. Gentleman might have put his case a bit more openly than that.
    Mr. Heath: I am not trying to dispel the impression for the Government but giving them the opportunity to dispel it for themselves.
    Mr. Foot: We shall come to each part of the right hon. Gentleman's argument. What I was complaining about, and I thought with every justice, every good ground, was that the right hon. Gentleman was seeking to suggest that he was helping the Government by trying to dispel the idea that these proposals are protectionist, when, in fact, he has been trying to tell people at the top of his voice that these charges and the whole purpose of them are protectionist, or at any rate that a large part of their purpose is protectionist. If he really wanted to assist the Government in these difficulties, he might have emphasised that the surcharges were not imposed for any protectionist purposes. Nobody can deny that some of their effect is protectionist, but, obviously, they were not imposed for this purpose.
    I deal next with the right hon. Gentleman's second proposition, that if we accept his proposal now it will help the Government, and the Government will have to come along in March to seek a fresh mandate for the maintenance of these surcharges. I dare say the right hon. Gentleman suspects—none of us knows for certain—that the Government will reject his proposition, because, if they accepted it, it would mean that they were taking power to maintain the surcharges for a very few months.
    6.45 p.m.
    It is a question of how much is a few months. The period from December to March does not cover many months, but what will happen now is that if the Government insist, as I think they have a right to do, that they will maintain the surcharges without having to come to the House again for six months and reject the right hon. Gentleman's proposal, he will be further assisting the spread of the idea that the Government have protectionist purposes in the maintenance of these surcharges. In other words, his proposal, so far from assisting the Government in dealing with the eco-
    302
    nomic position of the country, will only injure them further.
    I understand the right hon. Gentleman's view in this matter. I only complain about the lack of candour at the beginning of his speech. He is opposed to the surcharges root and branch. In a speech that he made in the House on the Budget debate we had many words from him on other matters, but he was bitterly opposed to the surcharges. In some respects, the right hon. Gentleman is a free trader, although he tried to get us into the most severe protectionist system the world had seen for many years. He tried to get us into the de Gaulle Zollverein. There are arguments as to who are free traders, but the right hon. Gentleman was bitterly opposed to the surcharges right from the beginning, and he wants to get rid of them as quickly as possible.
    That, however, is not the view expressed by the former Chancellor of the Exchequer who, after all, is an authority on this matter of the surcharges. On 4th November, 1964, he said:
    " As part of their short-term measures, the Government have decided, in the light of estimates in front of them, that the time has come to employ these measures to operate directly on the balance of payments. I entirely agree with them that if they feel now—and this was their judgment and responsibility, which we will not oppose in principle in any way at all—that action should be taken, then they are right to act directly on the balance of payments and not by 'stop-go' or deflation."—[OFFiciAL REPORT, 4th November, 1964; Vol. 701, c. 239.
    That was a statement by the former Chancellor of the Exchequer, that he would not oppose in principle in any way at all the imposition of the surcharges. That is not the view of the right hon. Member for Bexley.
    We all know what happened. We all know that after the former Chancellor of the Exchequer made a speech of that character and they heard the more rebellious note sounded by the right hon. Member for Bexley there was a revolt by Members on the benches opposite who complained about the lackadaisical manner in which the right hon. Member for Barnet made his non-attacks on the Government. They had a meeting at which they complained about it and said, "We must be more vigorous in future", so they cast aside the under-

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    taking which had been given by the former Chancellor immediately after the Government came to power, namely, that in his view the Government were fully justified in going ahead with the proposals which they made about the surcharges, and I imagine that if the right hon. Member for Barnet thought on 4th November that the Government were fully justified in imposing these surcharges to deal with an extremely serious balance of payments crisis he would not be so foolish as to come along a couple of days later and say that the surcharges should be limited to the period ending in March.
    That is one explanation why he is not here. The conduct of the right hon. Member for Barnet is one reason for the distress which we detect on the faces of hon. Members opposite. They are very concerned that the balance of payments crisis has been shown to be much bigger than they were told. They would not have been surprised if the right hon. Member for Monmouth (Mr. Thorneycroft) or the right hon. Member for Bexley himself had been found guilty of cooking the books, but not dear old, comfortable, ruminating Reggie. To be deceived by him is like being suddenly bitten by a shaggy family pet. Naturally they are very distressed, and naturally they say, "We cannot have a shaggy family pet leading the Opposition when they are trying to deal with this problem."
    I have been trying to work out from the right hon. Gentleman today, and from his previous speeches on the matter, exactly how he thinks that the Government should have dealt with this situation. The surcharge that we are debating is one of the central parts of the Government's plan for dealing with the difficulty. The surcharge was approved, first of all, by the right hon. Member for Barnet. What is the alternative? I gather that what hon. and right hon. Gentlemen opposite are suggesting—and here there is absolute unanimity between the right hon. Member for Barnet and the right hon. Member for Bexley—is that the Government should have come to power and then should have issued a statement after a few days expressing their overwhelming gratitude for the very strong financial position which they had been left by their predecessors. It is suggested that the situation would have
    304
    been helped if a statement had been made by the Prime Minister that our economy had seldom been stronger.
    They would have preferred that, and then, following such a statement, they would have wanted us to go to those European countries and ask them to agree to our imposing a surcharge. The principle of the surcharge is accepted by the right hon. Member for Barnet, but not by the right hon. Member for Flint, West (Mr. Birch). His objection is that we are breaking international obligations. He must argue that point out with his right hon. Friend the Member for Barnet, who does not take that view, because on the first occasion that he had the chance of giving his estimate of what should be done he advocated the imposition of the surcharge, even though it involved serious breaches in our international obligations.
    What was it that the right hon. Gentlemen were recommending that the Government should have done? They were saying that, somehow, having told the world that our situation was no more serious than the present Leader of the Opposition was saying during the General Election campaign—although we had discovered that the figure was at least £100 million and possibly £200 million greater than any figure ever presented by the former Chancellor—we should have gone to these European countries in order to get their agreement to the imposition of the surcharge. We were to say to them, "Our economy is very strong, but we want your assistance in imposing a surcharge of 15 per cent., which we think will help us out of our difficulties. We want to make sure that you have sufficient time for consultation, and we should be grateful for your views on the matter."
    What would have been the situation then? The Danes, the Swedes and all the other European countries concerned would have said, "We cannot possibly agree—first, because you do not need any of these measures, on your own reckoning and on the statement of your former Prime Minister, backed by your present Prime Minister." They would also have said, "Of course we cannot agree. We have our own electorates and our own Houses of Parliament to convince. You have asked us in advance to agree to the imposition of a 15 per cent. surcharge, and we are bound to say 'No'. If somebody gets up in our Parliament, after the

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    British Government have imposed this surcharge, and says, 'Were you ever consulted by the British Government on this matter?' we would have to say Yes and then we would be asked, What was your reply?' and we would have to say, 'Our reply was that we did not like it at all, and opposed it strongly.' Then they would say, You should have opposed it more strongly.'" The proposition that the Government could impose this 15 per cent. surcharge by the method described by the right hon. Gentleman is utterly absurd.
    Mr. Heath: What the Government have had to do since the imposition of the surcharge is to send Ministers to every sort of gathering in Europe in order to explain what they have done. They have been met with the greatest animosity, because this action was taken before they said anything to any members of E.F.T.A.—to which organisation we belong—or the G.A.T.T., or the Common Market, or other countries affected. Surely it would have been better if the Government had followed the normal course of going to the Permanent Council of E.F.T.A., which can be summoned at a moment's notice, and going to the Permanent Council of the Community, in Brussels, which can be summoned at a moment's notice, and to the Permanent Council of the G.A.T.T., and making their explanations there before taking the drastic step of imposing this surcharge, rather than try to pick up the bits afterwards.
    Mr. Foot: On these matters the right hon. Gentleman disagrees with his right hon. Friend. That is one answer. The other is that if we had done that in respect of the E.F.T.A. countries, the countries associated with the G.A.T.T. and the other countries concerned, what would they have said, especially if we had already made all the statements that the right hon. Gentlemen suggest we should have made about the strength of our economy? They would have said, "Of course we will not agree." In the meantime the run on sterling would probably have started a good deal earlier.
    In this debate I cannot go into other reasons why the run on sterling began. It was because of the nature of the Budget. Right hon. Gentlemen opposite have stated on many occasions that that was what caused it. But it was not
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    the measures in the Budget that they disliked that persuaded the financiers to put the screw on this country; it was precisely those items which hon. Members on this side of the Committee found best about the Budget, namely, the measures for improving social benefits. Previously, whenever there has been a financial crisis of this character we have not put on surcharges of the type that we are debating today. They are abnormal. They have never been taken in connection with a balance of payments crisis before. The right hon. Gentleman says that we could have dealt with these matters in the same way as in the past. But this was an abnormal measure—an emergency measure—to deal with an emergency which the right hon. Member for Barnet acknowledges even if the right hon. Member for Bexley will not.
    Mr. Heath: To my recollection my right hon. Friend has never discussed the question of consultation. We have had to discuss emergency matters with E.F.T.A. before. When the decision to enter into the European negotiations was taken it required immediate discussions with the E.F.T.A. countries, and we carried them out in 24 hours, with complete secrecy, and then the announcement was made in Parliament directly afterwards. The same could have been done in this case.
    Mr. Foot: That was a very different proposition. The right hon. Gentleman is trying to compare the proposals in respect of the terms on which we were to enter the Common Market with those for the imposition of a temporary surcharge. During the period when the right hon. Gentleman was negotiating to get into the Common Market there was not a balance of payments crisis all the time. This Government had to deal immediately with a balance of payments crisis, and they had to take emergency measures to do so. What we are now discussing is one of the emergency measures which the previous Chancellor of the Exchequer said we were entitled to do—as I have tried to drill into the heads of hon. and right hon. Gentlemen opposite, although it seems to require an old-fashioned surgical operation to do so.

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    7.0 p.m.
    In his first speech from the benches opposite, the right hon. Gentleman said that the gap in the balance of payments was wider than he had ever been told by his advisers. So the right hon. Gentleman's idea of how this surcharge could have been operated is not, in my opinion, valid, and I do not think that anybody who has listened to his account of how this crisis could have been dealt with can really think that it was a serious proposition. Ever since the election the right hon. Member for Barnet and his hon. and right hon. Friends have played politics—ever since the first day. I do not complain very much on that score. That is what I expect. I think they want to scramble back to office by any possible means, and included among their means they are quite prepared to back the view of every country in Europe or every country in E.F.T.A. or every country in the Commonwealth against this country.
    The right hon. Gentleman talks about the good faith of this Government. He says that it will be years before we can repair the alienation in those countries. He says that and thinks that he is, at the same time, trying to assist this country. One of the most interesting things to notice when hon. and right hon. Gentlemen opposite cross from this side of the Committee to that is how quickly and easily they shed their patriotic cloaks. They become not only the friends but the passionate lovers of almost every country but their own. They embrace Dr. Verwoerd, they blow kisses to General Franco, and they even, at the last moment, start making ogling glances at President de Gaulle. The right hon. Member for Bexley, of all people, is paraded before us as the man whose delicate and tender advances could have dealt with this situation in such expert fashion, this Don Juan before whom every political maiden surrenders without a tussle, this irresistible suitor, this Casanova from Kent. But he is not the real person to lecture my honourable and puritan Friends at the Treasury about conducting their affairs in Europe.
    The right hon. Gentleman in his tenure of office was in charge of the negotiations with these countries. He consulted them, but he should know over many years how strong and passionate was the
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    opposition to the measures which he proposed among Commonwealth countries, among some of the E.F.T.A. countries and among European countries. Or is he trying to tell us that in the face of all his skill even the sweet and chaste Marianne swooned before his feet? No, this was not the case. Right hon. Gentlemen must learn that they have lost the election. They are very poor losers. We thought that that was the one thing they learned at their public schools. They ought to learn to take their defeat with a better grace and, in the meantime, not to retire to the City but, better still, to retire to Trappist monasteries. That is where they might really carry out reforms which might equip them, not to run the affairs of this country but to make a little intelligent opposition.
    The Deputy-Chairman (Sir Samuel Storey): Mr. Emery.
    Mr. Heath: Before the hon. Gentleman sits down, may I say that I have been very flattered by all his attention—
    The Deputy-Chairman: Order. I called Mr. Emery.
    Mr. Peter Emery: I have seldom heard a speech of such amusing character which set out from the very word "go" to say that we have international treaties, and that if we do not like them, then what we want to do as a Labour Government is break them here and now. That is exactly what seemed to be a major part of the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot). He says that we have a treaty, and that we cannot consult; if we cannot, it does not matter, although it may be written into that treaty that consultations shall take place.
    If the hon. Member for Ebbw Vale thinks that it is in the best interests of this country not to do that, then we should break that treaty. What are international treaties about? They are about matters of confidence between one nation and another, and, whether the Labour Party like it or not, in Europe confidence in this country has been shattered by the action of the Labour Government. If I may, I should like to suggest that one of the greatest surprises has been among our real friends in Europe. It is the people who really trusted us, it is the Norwegians, it is the Danes, it is the people who through thick

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    and thin have always stood by us, who were the most greatly surprised by the action of the Labour Party.
    I have had sent to me by an extremely pro-British Norwegian the only Norwegian business publication, by name Formand. It is a monthly which is circulated to nearly every business house in Norway. Its leading article, the first since the sure larges, says:
    "The British Labour Party has given E.F.T.A. co-operation a shock it probably will never overcome. Even if the 15 per cent. import duty should be discontinued after a relatively short time, we are nevertheless afraid that the psychological basis for a further development of E.F.T.A. co-operation has disappeared."
    The article continues:
    " It is not only the faith in the sanctity of international treaties that has been weakened on this occasion; it is the faith in England. Among those nations Norway trusted to keep their international commitments, England took the first place. Or, to say it the other way round: the last country we expected voluntarily to disregard its international commitments, is that same England. If we cannot trust England which nation can we trust?"
    This is from some of our greatest friends in Norway. How can Members from the opposite benches get up and say that this does not matter? How can they possibly argue that this is something which can be put aside?
    That is one of the reasons why I hope the Government will accept this Amendment, because the very basis of it is to try to define what is meant by the word "temporary". It is only meant to be a "temporary" surcharge. Surely, in most people's minds, 12 months is longer than "temporary" for surcharges which are breaking a treaty. We are suggesting in this Amendment that a six months' period will begin to defend the good words of the Government politicians at the moment touring Europe. They could be brought down to base on a six months' period. If they mean what they say, if they really intend to carry out what they say, then surely this Amendment, with, if necessary, an extension of a further 12 months, would put us entirely into the position of having a temporary surcharge.
    The last point I should like to take up is again a matter raised by the hon. Member for Ebbw Vale. He suggested that it was impossible to consult—that we could not go round. It is quite surprising that if there had been a moment's thought about the method of bringing this
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    in, half the animosity in Europe could have been avoided. If it was so essential—I do not accept that it was—to do it immediately, why did not the statement from that Dispatch Box say, "We shall bring it in for eight weeks, while we consult with our European treaty partners and with the Commonwealth." This does not limit one to having it for eight weeks only, but at least it gives the impression abroad that we really mean to live up to our treaties.
    In order to define what the Labour Party mean by "temporary", I hope very strongly that the Government will accept the Amendment.
    Colonel Sir Harwood Harrison: I cannot believe that the speech of the hon. Member for Ebbw Vale (Mr. M. Foot) has helped this country to sell one kettle, pot or pan. It was one of the most irresponsible speeches against the good trade relations of this country that I have ever heard. The hon. Gentleman twitted us about crossing from the benches opposite to these benches. We have seen him cross from these benches to the Government back benches, and he is still below the Gangway. We now know that his right hon. Friend the Prime Minister was probably right to keep him below the Gangway because of his irresponsibility.
    I support the Amendment because I hope that if the Government accept it we may repair some of the damage which has been done to our export trade. There is no shadow of doubt among those of us who are engaged in the export trade that it is the good will of the countries to whom we sell and the good will of their merchants and importers which matters very much. Before I became a Member of the House I travelled to many of the market places of the world in different countries selling goods. I do not suppose that any one of the Ministers on the Treasury Bench has actually gone out to sell the goods that we make in this country. If they had, we might have had a different approach to this matter. It takes a long time to build up good will. One may well meet a customer after breakfast in his office and go off with him to lunch and then come back, and then after a break, perhaps even after dinner, if one produces a contract, the customer may say, "We absolutely agree

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    with everything, come to the office tomorrow morning at 9 o'clock". Then one has to start all over again.
    These are difficult negotiations for our exporters, and nothing that has happened so far as a result of the surcharge has done other than make the task more difficult. We know that at the moment the pipeline is full of orders, but I wish to sound a note of warning to hon. Members opposite. After their behaviour it may be difficult to maintain a high rate of exports this time next year. That is the situation which faces the country. Making this surcharge really temporary would be one way in which we might recover some of the good will that this country has lost. It is an indication of the hurried manner in which this surcharge was imposed that it was clamped on all goods whether they were on the seas or in ships berthed and ready to discharge their cargo. That shows that the party opposite was simply trying to upset some of our best customers.
    I hope that the Government will accept this Amendment. They would be wise to do so, because its acceptance would go some way to repair the damage which they have done. Hon. and right hon. Members opposite never seem to learn what our trade is really about. They seem to think that the Chancellor need only call together a committee of people who sell exports and make a lot of speeches. That of itself does not sell exports. Hon. Members opposite talk about productivity and they think that if cars are at the dock-side, they are sold. But not only have exports to be sold; they must be sold in the right markets. That is what matters. During the last Parliament we had instances of hon. Members opposite wanting us to sell to countries which were not creditworthy. It is not until we have been paid for the goods and the money is in the bank that the transaction is completed.
    Mr. Julian Snow: On a point of order, Sir Samuel. I hesitate to interrupt the hon. and gallant Member for Eye (Sir H. Harrison), but it seems to me that he is slightly out of order. Would not his remarks be more appropriate in respect of Clause 4, about which some of us
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    may have something to say? We are here dealing with imports and not with exports.
    The Deputy-Chairman: I thought that the hon. and gallant Member was expressing reasons why this should be a temporary charge.
    Sir H. Harrison: I was trying to do that, Sir Samuel, and to state the reasons why I consider it so important for our exports that the surcharge should be dealt with in the way suggested in the Amendment. I hope that the Committee will support the Amendment.
    7.15 p.m.
    Mr. Nigel Birch: The hon. Member for Ebbw Vale (Mr. M. Foot) was prolix to the extreme. His speech was drivel, but it was very long. I suggest that if the hon. Member proposes to speak at such length on the Finance Bill the Prime Minister may find it wise to have "three feet" in his Government, otherwise it will take a long time to get the business through.
    As the hon. Gentleman very rightly said, I am opposed in principle to this surcharge and would have been whoever had introduced it. I believe that it is absolutely wrong. Quite apart from the question of breaking agreements, I believe that it is unacceptable economically.
    I do not know whether the hon. Member for Ebbw Vale read it, but some hon. Members opposite may have read a recent issue of the publication of the National Institute of Economic and Social Affairs, which goes into this question of the effect of the surcharge and reaches the conclusion that it would add very considerably to the inflationary pressure in our economy.
    What will happen is that potential imports that we should have had, if the surcharge had not been imposed, will simply find their way abroad and as soon as the surcharge is taken off they will come into this country with a rush; so that our final state will be worse than the first. The pressure in the economy will have been increased and the capacity to suck in the imports which have been held back.
    It is significant that the run on sterling did not start until after the surcharge had been imposed. The surcharge was supposed to stop any run on sterling. I think it important that the Government should

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    indicate their intentions more clearly. When the Foreign Secretary and the President of he Board of Trade approached the E.F.T.A. countries they spoke about the surcharge being withdrawn in a matter of months. They probably did that to get out of a very difficult situation. We do not want to be caught out again breaking agreements and misleading people. If they did say "in a matter of months", and meant it, a way to show that they meant it would be by accepting this Amendment. If the Government do not accept the Amendment I think that the E.F.T.A. countries will reach the conclusion that they were simply being kidded along and, in fact, that might well have been the case.
    I cannot see why the Government should not accept the Amendment. Its acceptance would, at any rate, be an earnest of good faith and do something to repair the damage which has been done. I hope that we shall press this matter to a Division.
    Sir Frederic Bennett: Life is full of surprises. I must confess that I never thought that I should witness the hon. Member for Ebbw Vale (Mr. Michael Foot) dressing himself in a Union Jack and lecturing the rest of the Committee on patriotism and loyalty to country and party. It is a sorry sign of the weakness of the Government's case that they have had to rely on someone to spring to their aid so fervently who is not exactly noted for springing to the aid of his own party.
    From what the hon. Member for Ebbw Vale said, one would assume that what is felt by members of the Tory Party has been invented by ourselves and that foreigners have no reason to feel upset. If that is so, why did the Foreign Secretary, Mr. Gordon Walker, tear off to Geneva and practically plead almost on bended knees with all the members of E.F.T.A., including Labour Governments, for their support and help? If this is all imagination on the part of hon. Members on this side of the Committee, why did the Foreign Secretary do that? Why did he say that this was all a vast plot by the City, the banks and the Tories—which is the usual thing? On the contrary, practically on bended knees he tried to get himself out of the mess which had been achieved
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    by the method adopted by the Government in handling the matter.
    The hon. Member for Ebbw Vale knows very well that it is not a question of my right hon. Friend the Member for Bexley (Mr. Heath) influencing foreigners by his speeches. One cannot find any foreigner who does not feel outraged by the situation at the moment—and that ranges right across the whole of our trading partners.
    I should, therefore, like to ask a question which was answered by no means satisfactorily at Question Time today. Does it not seem that the Government gave prior communication to the United States? If so, I was told something which was incorrect today, to put it no more impolitely, and if it was possible to convey some prior information to America I do not see why it was not possible to convey some information to E.F.T.A. and the Commonwealth. If information was given to one, why was it not given to the other? Instead of the sort of cheap tirade launched by the hon. Member for Ebbw Vale, he should have considered why foreigners feel so upset about the surcharge. Why could not we have consulted them when, as I say, we may have consulted the United States?
    The Government now find themselves in this difficulty. Having had virtually to eat their own words, and having had to promise that the surcharge will be removed within a very few months, I see a danger arising. Do not let hon. Members opposite say that this is a Tory plot. People who stockpiled in the summer thinking that the worst might happen—that Labour might get in, which, unfortunately, happened—will go on using their stocks and hold off making purchases.
    People in that position have had a guarantee from the Government—for what such a guarantee is worth—that the surcharge will be withdrawn within a few months. They are, therefore, bound to hold off making purchases until it is withdrawn. I hear the hon. Member for Ebbw Vale muttering. He spoke for long enough while on his feet. I see no reason why he should continue his speech while in a sitting position.
    As I was saying, any sensible person in business who stockpiled thinking that the worst might happen will go on drawing on his stocks and will not make new

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    purchases until the surcharge has been removed. Business people will, naturally, put off the evil day as long as they can. I cannot fathom why the Government placed such a surcharge on goods and then gave notice that they intended to remove it, thus defeating the whole purpose of the surcharge.
    It is not merely in generalities that we can criticise the Government's action, or in regard to their timing and the method they adopted in imposing the surcharge. The surcharge itself was a clumsy thing to apply. Consider the effect of the imposition on our exports and exporters. In my constituency is a firm with a first-class exporting record. It produces a highly technical form of machinery, two or three items in the manufacture of which must be imported. This firm is finding itself in the greatest possible difficulty.
    The Deputy-Chairman: Order. The hon. Member is straying far from the subject under discussion.
    Sir F. Bennett: I am endeavouring to point out, Sir Samuel, that the surcharge is having such a serious effect that it should be removed as quickly as possible. Since I appear to be out of order in raising this matter, I will abide by your Ruling and pursue the subject further on the Question, "That the Clause stand part of the Bill".
    For the moment I will merely tell the hon. Member for Ebbw Vale—and it is interesting to note that no other hon. Members opposite are anxious to spring to the defence of the Government—that rather than indulge in the sort of tirade represented by his speech he should attempt to restore and not destroy confidence in us in our markets throughout the world, markets in countries governed by Governments of various political complexions.
    Sir S. McAdden: The hon. Member for Ebbw Vale (Mr. Michael Foot) can always be relied on to give a good performance and, so long as it is realised that his contributions to our debates are performances, and are treated as such, it is all right. But he invariably accuses his opponents of saying something that they have not said and proceeds, with a multitude of words, to prove that what they did not say was not true.
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    I fear that that has happened on this occasion. Although he referred to the speech made by my right hon. Friend the Member for Barnet (Mr. Maudling) on 4th November, I thought that, since one should not always believe everything one hears, it would be wise if I looked up my right hon. Friend's speech. Having done that, I have found that what the hon. Member for Ebbw Vale said my right hon. Friend had said was by no means an accurate picture of what was stated.
    To listen to the hon. Member for Ebbw Vale one would get the impression that my right hon. Friend was wholeheartedly in favour of the 15 per cent. surcharge, that he had no qualms about its introduction and that he was extremely anxious that it should be imposed. Nothing could be further from the truth. My right hon. Friend did not say anything of the kind. The hon. Member for Ebbw Vale gave a variation of my right hon. Friend's words, and if one reads my right hon. Friend's speech one sees that he did not accept the premises on which the Government decided to take action. My right hon. Friend in fact said:
    "… if they feel now—and this was their judgment and responsibility, which we will not oppose in principle in any way at all—that action should be taken "—
    and he added
    " then they are right to act directly on the balance of payments and not by 'stop-go' or deflation."—(OFFICIAL REPORT, 4th November, 1964: Vol. 701, c. 239.]
    I regret that the hon. Member for Ebbw Vale left some of that out. Perhaps he did not want us to know that as well as the surcharge we have also had stop-go and inflation.
    I can understand hon. Members opposite not worrying too much about their treaty obligations. "They were entered into by previous Governments", they may say, "and since the Tories entered them we can ignore them". That might be their attitude. It would be wrong, but I would understand them taking it.
    Having said that, I must make it clear that we are in clear breach—as hon. Members opposite must know—of the General Agreement on Tariffs and Trade. That was signed not by the wicked Tories but by a Socialist Government. The Socialists entered into that Agreement—a bit hurriedly because at the

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    time they wanted to get the American loan. It is interesting to note that a signatory to that Agreement was the present Prime Minister, then President of the Board of Trade—though trade was fairly bad in those days. That is why he was the President.
    In these circumstances, no one can pretend that we are not in breach of our international obligations. It is highly desirable, therefore, that we should take the steps recommended by my hon. Friends and get on better terms with our friends overseas—friends we will have once again, I hope—by bringing a speedy end to these breaches of our international obligations.
    Mr. G. R. Howard: I will not comment on the remarks of my hon. Friend the Member for Southend, East (Sir S. McAdden), except to say that while the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot) no doubt made many people laugh, the assertions in it will not read so well amoung our friends in Europe, where there is a saying perfide Albion, or perfidious Albion, to people who do not keep treaties.
    It is not very nice for me to receive letters from Norwegian friends of mine, people with whom I served during the war and with whom I have formed strong links of friendship, saying what a distressing effect the surcharge has had on their businesses and workpeople. In one case the owner of a Norwegian factory exporting 40 per cent. of its goods to this country—having spent the last 10 years building up a market here—has written saying that he is back to where he started 10 years ago and that 50 per cent. of his employees have had to be laid off. I am afraid that the speech of the hon. Member for Ebbw Vale is not likely to generate much amusement in that factory.
    Mr. Michael Foot: Can the hon. Member send to his hon. Friends in Norway a copy of the speech of his right hon. Friend the Member for Barnet (Mr. Maudling) on exactly this subject? I did not, as the hon. Member for Southend, East (Sir S. McAdden) indicated, misconstrue the words of the right hon. Member for Barnet in any degree whatever. The right hon. Gentleman dealt specifically with the question of international obligations and the imposition of the
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    surcharge, and he argued in favour of its imposition.
    Mr. Howard: It will not be necessary for me to do that. The people about whom I am speaking are listening to this debate and will have heard the hon. Member's remarks. They will, therefore, be able to take back to Norway their own views on it.
    Mr. Godfrey Lagden: If my hon. Friend takes the course urged on him by the hon. Member for Ebbw Vale (Mr. Michael Foot), may I suggest that he sends both speeches and allows his friends in Norway to judge the sincerity and truth of both?
    7.30 p.m.
    Mr. Howard: I do not wish to detain the Committee longer than is necessary, but I should like to quote what some friends in Portugal, another E.F.T.A. country, have said about the deep sense of hurt and injustice which this has created and what a Belgian friend has said. I was at a function the other day where an important member of the Belgian Chamber of Commerce in this country said to me, "If only we had been consulted. If you had come to us as partners and consulted us, we should have been able, perhaps, to go some way with you. But in doing this in defiance of treaty obligations and without any warning, your Government have done something which it will take months, if not years, to put right".
    The lack of confidence in this country among countries abroad will have a bad effect on our exports. I speak as one who used to do this job many years ago. Before the war I used to go abroad, and an Englishman's word was his bond, especially in Eastern countries. A friend of mine who travels round the world says that he is amazed at the feeling against the British Government throughout the world. This is not a matter for joking or for amusing speeches. This is a matter which affects the prestige of this country abroad, and it should be looked on as such. It is for those reasons that I support the Amendment most wholeheartedly.
    Mr. George Y. Mackie: I rise to put the Liberal point of view on the surcharge. Of course, we dislike it. We dislike it

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    historically. But we have leant over backwards to understand the Government's point of view. There is no doubt in our minds that they were left with an appallingly serious balance of payments position. Therefore, we have not voted against the surcharge, although we loathe and dislike it. We feel—in fact we know—that it is rather like the case of a drunkard trying to cure his disease by drinking a bottle of whisky all at once in the hope that afterwards he will be able to give up drink. The cause of the balance of payments crisis is primarily the fact that we cannot export cheaply enough to be profitable. There is no profit in exporting when the home market is so protected and so good. Therefore, the 15 per cent. surcharge must be regarded as a very temporary measure.
    I understand that we are discussing the Liberal Party's Amendment No. 16, which suggests that the surcharge should cease to have effect in May, in six months' time. However, we hope that before then there will be, as a guarantee of good faith by the Government, a reduction in the duty which will enable hon. Members to judge whether it should be carried on and whether it was a temporary measure. We are prepared to give the Government a chance, although we dislike this surcharge. There is no doubt that there is a great deal in what hon. Members on this side of the Committee have been saying about its effect on the members of E.F.T.A. I understand, although I have only been a Member for a very short time, that if one proposes to attack someone notice should be given, and I feel that this might have been done in the case of the 15 per cent. surcharge.
    Another reason why the surcharge should be removed as quickly as possible is that there is no doubt that manufacturers and farmers—indeed, everyone in the country who is in business—are mainly in business not for patriotic reasons but in order to make a living. If business people are able easily to dispose of their goods on the home market, they will not export for patriotic reasons. There is little doubt that the 1½ per cent. rebate will be quickly eaten up by increased costs in this country unless the surcharge is removed pretty rapidly.
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    Lastly, people abroad who sympathise with the Government's difficulties, and hon. Members on this side who are prepared to give them a chance to put the situation right, would be reassured if the Government gave a promise to come to the House of Commons in six months and to put their decision to us and give us a chance to discuss it. This would assist in reassuring a lot of people in this country and on the Continent that the Government mean what they say, that they are not basically protectionists. I have a sneaking feeling that some members of the Labour Party are protectionists. If the Government were to accept the Amendment in principle it would go a long way towards reassuring many people both here and abroad.
    Mr. Charles Fletcher-Cooke: The hon. Member for Caithness and Sutherland (Mr. George Y. Mackie) was quite right when he said that the surcharge would make the home market easier. That is its effect although it may not be its motive. But no one is interested very much in motives. What people are interested in is effects. The effect of this surcharge is to give protection to the home producer. Foreign or Commonwealth manufactured goods will be more expensive and thus a protective market will be given to the home producer. The surcharge is not put on for protectionist motives—we have been assured of that over and over again—but that is bound to be its effect. If it does not have that effect, the whole object of the exercise will have failed. The object surely is to make foreign and Commonwealth goods more expensive.
    One Government spokesman, when the surcharge was first put on, cast doubt on that. In a pious speech, he expressed the hope that the prices of foreign and Commonwealth goods which came to this country would not be raised. This showed a degree of muddle-headedness which passed comprehension, because if the prices of foreign and Commonwealth goods are not raised the whole object of the exercise will be pointless. The object is to make people buy domestically produced goods, and they will be so persuaded only if the prices of foreign and Commonwealth goods are raised. This is symptomatic of the muddle into which right hon. and hon. Members opposite have got themselves.

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    Undoubtedly, every month that the surcharge continues there will be a sort of log jam. People who wish to buy foreign or Commonwealth produced goods will lay off buying because they have the word of several right hon. Members opposite that in a matter of months it will be taken off. Once that is said the surcharge loses its object to a large extent. People have only to hold off for a few months and to use up their stocks and not replenish them and they will be able o buy, as they have been doing semi-manufactured or completely manufactured goods from overseas.
    So both in the speech made by a member of the Government when he said that he hoped that domestic prices would not be raised and in the remarks of several other right hon. Gentlemen when they said that the surcharge would be coming off in a matter of months, they have done their level best to ensure that the whole object of this surcharge is defeated. The only way to deal with it in that case is to take it off as soon as possible, certainly by May of next year, which is the six months' period mentioned by the hon. Member for Caithness and Sutherland.
    Mr. Julian Snow: I listened with very great interest to the right hon. Member for Bexley (Mr. Heath) this afternoon, because in a curious way and as opposed to my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) I was myself strongly in support of the Common Market. I think that the time is long past when one need apologise for that sort of attitude, because things are different now and I do not think that the attitude of the Opposition has been particularly helpful.
    7.45 p.m.
    The more I listened to the right hon. Gentleman's speech, the more I came to the conclusion that he was speaking very much with his tongue in his cheek. No one has had more experience than he has of the effort-taking, time-wasting, frustrating sort of negotiations that he had when he tried to negotiate our entry into the Common Market. Therefore, when he spoke about the possibility of our having consulted countries abroad about the proposed action, I suggest that he knows perfectly well that that would have been time-wasting, time-absorbing and, in the end, completely frustrating,
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    because no one seems to have calculated, so far as I am aware, what would have been the position had such negotiations taken place.
    Supposing that they had taken, as might well have been the case, three, four, or five weeks to produce any sort of agreement to disagree, with all the various consultations—I would have thought that a reasonable supposition—what would have been our imbalance of trade at the end of that period? I do not know whether one can delve into these highly speculative calculations as to run down in stock and the estimated improvement in the balance of trade that has been talked about, but is it too great a stretch of the imagination to say that if the imbalance of trade was between £700 million and £800 million six weeks ago by now would it be running at £1,000 million? I think that that is a reasonable calculation. There is a case for brutal action and again the right hon. Member for Bexley has been a victim of brutal action. Is it not about time that this country stopped being shoved around? [Laughter.] Hon. Members laugh, but we have been shoved around.
    What trouble did the late Government take to demonstrate to the public the developing imbalance of trade between ourselves and other countries of the world? It was always taken as one cohesive figure. The right hon. Gentleman frowns as though he misunderstands what I am saying; let me explain further. I say that the late Government should have taken action to show the public just what countries were being greedy, to put it in simple terms, and the developing imbalance of trade between ourselves and other countries which should have been rectified by bilateral consultations.
    Take the position which I see is now developing—perhaps I know a little more about this country than other countries—of Japan, the subject of a trade and navigation treaty less than two years ago. If we study the figures of British-Japanese trade at present, we see a very alarming situation developing with imports from Japan mounting steadily as compared with the increase of exports to Japan. That situation has been reproduced in many other countries over the last ten years. The situation was never brought home to our home manu-

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    factures—the situation where there could have been remedial action taken to stimulate industry to make us relatively if not entirely independent in certain categories.
    The right hon. Gentleman said in effect, that this is a protectionist Measure. Of course, as a side effect, it must be, but surely there is a case for saying that we ought to have a breathing space in order to bring home to those industries which are negligent and sluggish what they ought to do to help us in our present state. I must be frank and tell the Committee that the more I listened to speeches by hon. Members opposite this afternoon, the more I came to the conclusion that the Tories in opposition had turned themselves into some sort of importers' lobby.
    Mr. Heath: I know that the hon. Gentleman is taking this very seriously. All the facts and figures about the trade balances of individual countries are published regularly by the Board of Trade in the Board of Trade Journal. Every industry knows exactly what is happening in this respect. He cited the case of Japan. The Treaty of Japan, negotiated by my predecessor, was a balanced treaty which gave us very great opportunities, as well as giving the Japanese opportunities here, but constantly we have emphasised that our exporters have not taken advantage of these opportunities.
    If the hon. Member looks back on the Board of Trade figures during the month preceding the election, he will see that the comments which were issued with those figures on each occasion were reported in the Press, and, within the scope of not being rebuked for exhortation, I said that what was essential was aggressive export selling and that this problem could never be dealt with unless this was done.
    Mr. Snow: I do not want to fall into the trap by carrying on too much about exports, which was a point on which I raised a point of order earlier. What the right hon. Gentleman has just said exemplifies exceptionally well the weakness of Government leadership during the last 10 to 13 years in the matter of our export and import trade. He said that the figures are published in the Board of Trade Journal. That is correct. One
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    can read all sorts of balance of trade figures in the Trade and Navigation Returns. The fact is that individual companies have not the slightest idea of what goes on in the Board of Trade Journal.
    Mr. Julian Ridsdale: The hon. Member has spoken about our treaty with Japan. Does the hon. Gentleman think that our trade treaty with Japan was a bad treaty?
    Mr. Snow: The hon. Gentleman knows that I have a particular affection for Japan. I was addressing myself to replying to the right hon. Gentleman on his two points. First, I was saying that the average company, medium and large, does not really study what is said in the Board of Trade Journal. Something much more positive and direct for companies ought to be introduced.
    Now I come to the question of Japan. I myself was extremely pleased about that treaty. Although I was pessimistic about the long-term trade with Japan there is at present and in the foreseeable future a reasonable chance of valuable exports.
    The Deputy-Chairman: Order. I think that the hon. Gentleman is getting very far from the Amendment which we are discussing.
    Mr. Snow: I will immediately leave it at this, that trade being two-way, importations from a country like Japan are getting out of hand, and this goes for other countries as well. The right hon. Member for Flint, West (Mr. Birch) said that whatever Government had been in office he would have resisted the surcharge. The right hon. Gentleman has a rather murky past on the question of support of the Government, and I do not think that I would attach particular value to what he said on that score. The fact of the matter is that, somehow or other we have to stimulate domestic production.
    One hon. Gentleman opposite talked about offending those countries which had stuck by us through thick and thin. What about Sweden, a country which was neutral during the war and which, as far as I am aware, is the only one which so far has taken any sort of retaliatory action? In my view, the Common Market countries and most of the other E.F.T.A.

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    countries will not, in the main, take retaliatory action against us. Why? Because we are far too valuable a market. They may make loud noises—they have to—but they will not take retaliatory action. They know perfectly well that their economic health depends upon this country's economic health as well.
    I wish that hon. Members opposite, who have given a very unfortunate impression today of advocating the interests of every country except their own, would realise that the facts are now relatively clear and accepted by their own Front Bench. We were faced with a situation which needed quick surgical remedial action. That action has been taken, and I for one think that the Government were absolutely right.
    Mr. Ridsdale: In reply to the hon. Member for Lichfield and Tamworth (Mr. Snow), I must say that, in spite of all temptations to belong to other nations, I remain an Englishman.
    What has been surprising about the debate so far has been the lack of supporters to come to the aid of the Government. During the last hour, there have been only two hon. Members opposite who have done so. The hon. Member for Ebbw Vale (Mr. Michael Foot), apparently, is the protector of his Prime Minister, the new protectionist, the protector of a policy of protectionism as opposed to what most people now realise the country wants more than anything else, that is, more competition.
    The hon. Member for Lichfield and Tamworth emphasised the need to watch our exports, and he instanced what was happening in our trade relations with Japan. My reply to the hon. Gentleman is that we must in our own shipyards face up to the competition we are having and recognise that our trade union structure is out of date compared with that in Japan. It may be going a little wide of the point of this debate, but I must say these things in urging the cause of my own Port of Harwich. In my constituency, people are most concerned with the future prosperity of the European Free Trade Association and are extremely anxious about the dishonour and bad will which has been brought by the Government into our relations with the countries of the E.F.T.A.
    Harwich has benefited considerably from the capital which has been brought
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    from Sweden to develop our new private enterprise port. A great deal of trade passes through the Ports of Harwich and Parkeston to the European Free Trade Association countries, and those of us who are interested in European trade are greatly disturbed by the measures introduced by the Government which will undoubtedly cause a contraction of trade and a contraction of the capital coming into Britain.
    8.0 p.m.
    This is why I for one heartily support the Amendment introduced by my right hon. Friend the Member for Bexley (Mr. Heath). I know how urgent it is that the surcharges be removed as quickly as possible. The only cure for our country's economic ills is more competition, not protectionism of the type introduced by the new Government.
    Mr. A. E. Cooper: Listening to the speeches of the hon. Members for Ebbw Vale (Mr. Michael Foot) and for Lichfield and Tamworth (Mr. Snow), and studying the expression on the faces of those occupying the Government Front Bench, I was tempted to believe that they were now making a virtue out of the 15 per cent. surcharge. Apparently, this is something good for the country as an act of policy. The fact that, in the doing of it, they have destroyed confidence among our friends and broken goodness knows how many contracts seems to be a matter of complete indifference and unimportance to them.
    If the hon. Member for Ebbw Vale, instead of commuting between the Tribune buildings and this place, would get out and about in the world and study industry in other countries, he would quickly find out, particularly in Europe, just what damage his Government have done to this country's industry.
    The hon. Member for Lichfield and Tamworth talked about an imbalance in our trade of £600 to £800 million and he tried to justify the Government's action on that ground. There is no such thing as an imbalance in our trade of £600 million to £800 million. This figure is made up of all sorts of things. But the Government are very chary of telling us what they are. Yesterday, I put down a Question to the Chancellor of the

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    Exchequer in order to get the information. I asked the right hon. Gentleman whether
    " he will give the breakdown of the estimated balance of payments deficit 1964–65 on 16th October, 1964, as between capital overseas investment, debt repayment—capital and interest—overseas loans and grants, balancing items and current trading figures ".—[OFFICIAL REPORT, 30th November, 1964; Vol. 703, c. 23.]
    The illuminating answer I received was, "No".
    We are entitled to ask whether this is a hoax which the Government are perpetrating on the British people so that we may become a protectionist country once more. The hon. Member for Lichfield and Tamworth accused the Opposition of being what he called an importers' lobby. Has he not bothered to study the Amendments to Schedule 1 already put down by the Chancellor of the Exchequer which release a lot of items previously to be subject to the 15 per cent. surcharge? The materials we are talking about on this Bill, the things which we want to get, are basic raw materials out of which we make goods to export and earn our living. We want to be rid of the surcharge as quickly as possible.
    The Deputy-Chairman: The hon. Gentleman is going very wide of the Amendment which we are discussing.
    Mr. Sydney Silverman: On a point of order, Sir Samuel. I did not gather that the Amendment now before the Committee had anything to do with basic raw materials. I thought it was an Amendment about dates on which the import surcharge should terminate or about the conditions on which they should be renewed, none of them discriminating between raw materials and consumer goods. I submit, therefore, that what the hon. Gentleman is now saying about discrimination in favour of raw materials, although it might be a valuable point to make, is out of order on this Amendment.
    The Deputy-Chairman: That is exactly why I called the hon. Gentleman's attention to the fact that he was going very far from the Amendment.
    Mr. Cooper: One thing is clear. If the points of order constantly raised by
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    the hon. Member for Nelson and Colne (Mr. Sydney Silverman) were currency, we should not have a balance of payments crisis.
    Mr. Silverman: On a point of order, Sir Samuel. I do not object to the hon. Gentleman diverting attention from the point which was raised, but did not I understand that the point of order which I raised with you was decided by you in my favour?
    The Deputy-Chairman: I had already reminded the hon. Gentleman that he was straying away from the Amendment before the hon. Member for Nelson and Colne rose to make his point of order.
    Mr. Cooper: I am more than happy to leave myself in your hands, Sir Samuel.
    The longer this surcharge is kept on our goods, the more damage will be done not only to the good name of our country but to the industries within it upon which we depend for our prosperity. All the wonderful social services talked about by the hon. Member for Ebbw Vale have to be paid for, and they are paid for only out of the produce of British industry. If we lose our good name, as the present Government have made us lose it, our task in the outside world will be made the more difficult.
    Mr. Michael Foot: Scandalous. The hon. Gentleman should speak for his own country, for a change.
    Several Hon. Members rose—
    The Deputy-Chairman: Mr. Gower.
    Mr. Sydney Silverman: On a point of order, Sir Samuel. With great respect, I thought that it was the practice of the Chair to call speakers alternately from both sides of the Committee if speakers were available. I rose to my feet after the hon. Member for Ilford, South (Mr. Cooper) sat down.
    The Deputy-Chairman: The hon. Gentleman must not criticise the calling of hon. Members by the Chair. What he says is correct, but for the last hour there have been hardly any hon. Members rising from the Government side of the Committee. Mr. Gower.
    Mr. Snow: On a point of order, Sir Samuel. With very great respect—[Interruption.] I fail to see why I should

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    not express respect to the occupant of the Chair. Sir Samuel, with great respect, may I recall to your mind that you did not see me when I rose, and I am large enough to be seen.
    The Deputy-Chairman: I apologise to the Committee if I looked rather to one side than to the other, but I think that I have had fairly good cause to do so.
    Mr. Raymond Gower: I assure hon. Members opposite that I shall not detain the Committee for more than a few minutes. I was interested in the intervention by the hon. Member who spoke for the Liberal Party, the hon. Member for Caithness and Sutherland (Mr. George Y. Mackie). He said that his party was prepared to give the Government the benefit of the doubt on the basic principle of the surcharge, but, nevertheless, supported the Opposition in their requirement that it should be removed very quickly, and he gave the reason that the Government had to impose the surcharge in view of the desperate difficulty which they faced.
    I differ from the Liberal Party only in my assessment of the nature of the present trouble, which I attribute more to a lack of confidence in other parts of the world in the ability of the present Government than to any balance of payments difficulties which may have existed.
    We listened to the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot) with great pleasure and amusement. In many ways, it was a meretricious performance, but it was a gifted one in terms of verbal gymnastics. The hon. Gentleman comes from a fine radical family, but I am certain that much of what he said tonight would have made old radicals cringe. In short, his argument was that most important and solemn treaty obligations freely entered into by this nation, whether under a Conservative Government in the case of the E.F.T.A. or under a Labour Government in the case of the G.A.T.T., were of such little importance and that we did not even need to consult the people with whom we had made the agreements before breaking them.
    Mr. Michael Foot: I said nothing of the kind. I quoted what was said by the
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    right hon. Member for Barnet (Mr. Maudling) on the question of obligations. I certainly did not say that the question of how we abided by our obligations was a matter of no importance. What I said, and I stick by it, was a very different matter—that we could not impose this charge if we decided to do it after consultations.
    Mr. Gower: That is where we differ. We on this side of the Committee believe that these agreements, entered into freely by this country are of some importance and the least that should have been done would be to consult and to have conversations with the other parties to the agreements. It is also incumbent upon us to say that the surcharges should last for as short a time as possible. I agree with my right hon. Friend the Member for Flint, West (Mr. Birch), who suggested that these restrictions were particularly objectionable in themselves, not only in the manner in which they were made, but that their intrinsic qualities are objectionable.
    Mr. Iorwetth Thomas: When the hon. Member talks about contractual obligations, the courtesies of international political life and the importance of consulting allies, I wonder whether he remembers what the Government of that day did in regard to the Suez operation?
    Mr. Gower: The hon. Member is not going to lead me from the argument. [Interruption.] An hon. Member who has not been present at the debate all the time, but interrupts, will realise that it is completely outside the terms of this Amendment and that it would be out of order to discuss the Suez or any operation of that nature.
    The nature of these surcharges is in itself objectionable. As my right hon. Friend the Member for Bexley (Mr. Heath) said, they will inevitably create a new area of protection in our economy when an extended area of protection in the economy is the last thing we require in Britain today and would be the most damaging thing in present circumstances. I object too because these surcharges are largely indiscriminate in their impact. They will affect the good and the bad. They will affect goods we produce as well as those we do not. They

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    will affect commodities we require to sustain our export effort.
    In my constituency there is a factory which has to obtain the raw material, silicon, to manufacture silica products. Their import will not be affected, but, the cost of the manufactured goods for export will be put up. In that sense the long maintenance of these surcharges may be positively injurious to the export effort we need to increase. I sincerely hope that we on this side of the Committee will press this Amendment to a very early Division—[HON. MEMBERS: "Hear, hear."]—that we shall press for a Division to show emphatically that we believe these restrictions should be swept away at the earliest possible moment and, moreover, that the memory of them should soon be—
    Sir F. Bennett: Expunged.
    Mr. Gower: I thank my hon. Friend for supplying the word, expunged.
    Mr. Sydney Silverman: I have not heard all the speeches on this Amendment, but I heard the opening speeches and I heard the last two speeches. There have been some in the middle which I have not heard, but I have taken a little care to inform myself as to what was said in those speeches. I make one exception in the case of the right hon. Member for Bexley (Mr. Heath), who opened the debate on this Amendment from the Front Bench opposite.
    The hon. Gentleman made a very different kind of speech from all the speches that have been made subsequently by hon. Members behind him. His speech alone from his side of the Committee failed to attack the import duties in principle. He devoted himself strictly to the point he made about the timing of them, about the duration of them, about the Parliamentary procedure to be adopted if they are to be continued beyond a date when he thought they ought to come to an end. All this was perfectly reasonable and legitimate debating, but in my opinion that was the only speech in support of the Amendment which was legitimate.
    All the other speeches in support of it have been attacks upon the principle of the import duties itself. They have been saying that it was wrong on a variety of grounds, that it was bad in principle because it was a protectionist tax and we
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    were not a protectionist country. They said that it was bad in principle because it represented a breach of agreements into which we had solemnly entered and which had lasted for a long time. It was bad because, in addition, it was done without consulting any of the people to whom we were bound and without any apparent consideration for anything that they may have thought a contempiated breach of our obligations.
    Hon. Members opposite are quite entitled to make these points, to say that the whole thing is wrong and to say it in connection with an Amendment which is related only to time to duration and to the mode of renewal because, if we think that a thing is bad we are entitled to limit its operation and make it as difficult to operate as we can. No reasonable criticism of the legitimacy of that kind of debating can fairly be made.
    8.15 p.m.
    All the same, I say with forethought, and deliberately, that the speeches I have heard—and if the speeches I have not heard were, as I am told, of the same kind—were contemptible and deliberate hypocrisy, deliberate humbug, and deliberately insincere. Hon. Members opposite are not against the import duties as they pretend. If they had been against the import duties as they pretend, they had an opportunity of voting against them. Not a single man jack of them went into the Division Lobby against them. If they are as bad in principle as is being made out—illegal betrayals, wholly wrong, wholly insupportable—how does it come about that the right hon. Member had not a single word to say on those lines today and that no hon. or right hon. Member opposite at any time since they were introduced has availed himself of a single parliamentary opportunity of defeating them?
    I know that my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) has dealt with this point already, but I want to add something to it. The right hon. Member for Barnet (Mr. Maudling), when my right hon. Friend the Chancellor of the Exchequer originally announced these proposals, said that they were right. He said from the Front Bench, speaking at the Opposition Dispatch Box, that the proposals were right.
    Mr. Dan Jones: He did more.
    Mr. Silverman: I know that he did more; I am coming to that. He not only said that they were right, but that they were exactly what he would have done himself. If my hon. Friend the Member for Burnley (Mr. Dan Jones) will allow me to say so that is not all that the right hon. Gentleman said. He made the further point that these proposals were right, these proposals were exactly what he would have done himself if the country had been so unfortunate as to find itself in a position in which he was still Chancellor, but the third point was, "I would not have done it yet. I would have waited a few months. I would have done exactly the same things, but I would not have done them at once, I would have waited a few months".
    I wonder how the right hon. Member for Bexley reconciles that with the Amendment he moved today. How many months would the right hon. Member for Barnet have waited before he introduced exactly the same proposals as my right hon. Friend the Chancellor of the Exchequer introduced?
    Sir S. McAdden rose—
    Mr. Silverman: No, I am not asking the hon. Member; he does not know.
    I am pointing out that if the right hon. Member had waited a few months we may make some speculation about how many months. Supposing that he had waited for three months, he would then have introduced them in February. Would the right hon. Gentleman still have pressed that they should end in March? Suppose that he had waited for four months. Then they would have been introduced at the exact moment that the right hon. Member is now proposing to the Committee that they should stop.
    Sir S. McAdden: He never said it.
    Mr. Silverman: The right hon. Member is here and we all know what he said.
    Sir S. McAdden: He knows what he said.
    Mr. Silverman: The hon. Member for Southend, East (Sir S. McAdden) says that the right hon. Member knows what he said, but I also know what he said and the Committee knows.
    Sir S. McAdden: Will the hon. Member be kind enough to give the reference
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    for the quotation from HANSARD? I have HANSARD here. My right hon. Friend did not say it.
    Mr. Silverman: The hon. Member plays many debating tricks. I have known him play many in his time. It is not much of a compliment to an old colleague in the House to expect me to fall for another of them. The hon. Member must be a little more subtle. I do not fall for tricks of that kind quite so readily and I should have thought that the hon. Member, with whom I have been a colleague in this House for a long time, would have known that perfectly well.
    If the right hon. Member for Barnet said that he agreed that the proposals were exactly what he would have made himself—
    Sir S. McAdden: Where is it?
    Mr. Silverman: —but that he would not have done it for a few months, that makes nonsense of this Amendment.
    Sir S. McAdden: He did not say that.
    Mr. Silverman: The hon. Member keeps saying, "He did not say that" but I happen to hold the Floor at the moment and I say that he did say it. I do not know whether the hon. Member was in the House when the right hon. Member for Barnet made the speech to which I refer. From his interventions I can only assume either that he was not in the House, or that he was asleep when the right hon. Gentleman was speaking, because all the rest of us heard it. [HON. MEMBERS: "No."] When the Budget Resolutions to embody these proposals were introduced by the Chancellor of the Exchequer, the Chancellor of the Exchequer, in the hearing of the right hon. Member for Barnet, made the point which I have just made, and the right hon. Member for Barnet did not repudiate it.
    The right hon. Member for Bexley must be careful. It is quite true that all right hon. and hon. Members opposite are at sixes and sevens about these proposals as they are about a great many other things and it is very difficult to make a concerted attack on the Government from a party which has mutually exclusive points of view. That puts them into great difficulties and I have every sympathy with them in their difficulties,

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    but it does not help them to make a damaging attack such as they are trying to make. Let us see what they are asking if we are to take them seriously that the Committee ought to do or that the Chancellor of the Exchequer ought to have done in the first place.
    Hon. Gentlemen argue that the import duties should not have been put on for all the reasons which we have been dishonestly given during the course of this debate. What, then, was the honourable thing which we ought to have done? We already owe something more than £700 million on this year's trading account.
    Sir Harmar Nicholls indicated dissent.
    Mr. Silverman: The right hon. Member for Barnet admitted £400 million. In 1961, when the Conservative Government introduced a Budget intended to be restrictionist, in order to deal with what they called a most dangerous financial situation, the deficit was £260 million. The right hon. Member for Barnet admitted that he knew throughout the election that the deficit this year would be £400 million and my right hon. Friends say that when they came into office and had a look at the books they found it to be between £700 million and £800 million. Supposing that they are wrong and that it is only £400 million, only 40 per cent. more than it was in what hon. Gentlemen opposite described as the most dangerous year, 1961, what was the honourable thing, if we are to take them at their word, which hon. Members opposite wanted us to do?
    The Temporary Chairman (Mr. E. L. Mallalieu): Would the hon. Gentleman kindly relate his remarks more closely to the Amendment?
    Mr. Silverman: I thought that I was directing my remarks to all the speeches made in support of the Amendment. Would that be out of order? If hon. Members opposite are saying that they are supporting the Amendment because the import duties are wrong, I am certain that if they are wrong it means that they ought not to have been applied and that hon. Members opposite are, therefore, right to make it as difficult as possible to apply them. I invite the
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    Committee to look at the contrary proposition, to test whether the proposition which hon. Gentlemen opposite are now advancing is right or wrong. The contrary proposition would be that we do not have any of these import duties.
    How honourable would it then have been to go on buying what we obviously could not pay for and to go on importing and importing and importing because we had made an agreement not to put on duties? Quite apart from the financial liability, what are hon. Members opposite inviting the Committee to believe about the honour of that? They have had much to say about the dishonour of breaking agreements, but how dishonourable it would have been to go on buying and buying and buying—
    Hon. Members: Buying and buying and buying. [Laughter.]
    Mr. Silverman: It is not a joke—knowing perfectly well that we could not pay for what we had bought already and that, if that situation remained unchecked, the time would come when we could not pay for anything. It is obvious that the right hon. Member for Barnet was right and his supporters wrong. Of course the import duties had to be put on.
    It is then suggested that we should have consulted. What does "consultation" mean? Does it mean telling people that we intended to do it? This we did. If it means—
    The Temporary Chairman: The hon. Gentleman must come more closely to the Amendment, which is about the matter of date and not the whole history of the affairs.
    Mr. Silverman: I am still dealing with the speeches which hon. Members opposite have contributed to the debate inviting the Committee to accept the Amendment. I am trying to show that these arguments led to a reductio ad absurdum. If I am out of order, I will certainly stop, but I cannot see that I am. All these arguments were put forward to induce the Committee to accept the Amendment. I am merely testing their validity by testing them against what the position would have been if hon. Members opposite were right, in order to show that what they are inviting the Committee to do is something which they cannot support by their arguments.

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    If it was decided that it was right to put a brake on imports, it would have been the most stupid thing in the world to adopt a line of consultation, which must have gone on for a long time and which might have resulted in no agreement, but in the meantime allow imports to continue coming in, knowing perfectly well that we had no means of paying for them and that the result would be complete bankruptcy.
    I invite the Committee, if I may venture to do with respect—for I have known many hon. Members opposite in the House of Commons for a long time and they are not always so dishonest as they have been throughout the debate—to reconsider the question and to consider whether they are wise or right to continue an attack on the Government and to make these proposals as difficult as possible to implement when they know perfectly well that in the circumstances the Government did the only thing they could do and that they would have done it themselves if they had had the chance.
    8.30 p.m.
    Mr. Burden: I have found the speeches of hon. Members from the Government Front Bench below the Gangway—I do not know whether there is anything significant in that—rather difficult to follow in many ways. I believe their remarks to be against the best interest of the Government which they were intended to help and also against the best interest of the country.
    We are discussing the surcharges and the date on which they should be removed. The Government themselves have made it clear that they wish to remove the charges at the earliest possible moment. They do so because they accept that it is against the interests of the Government generally and of the country to continue them too long and they have admitted in any case that in order to introduce them they abrogated certain treaties.
    I have found the speeches of hon. Members opposite extraordinary, particularly that by the hon. Member for Ebbw Vale (Mr. Michael Foot), whose speeches are always amusing but who did himself less than justice tonight when he did a great disservice to the country by implying—whatever he says now, the implication was clear—that the abrogation of these treaties did not matter. That
    338
    was the implication which the hon. Gentleman gave to the whole Committee.
    Mr. Michael Foot: Absolutely rubbish.
    Mr. Burden: I hope that the hon. Gentleman reads HANSARD tomorrow a little more accurately than he read remarks which he attributed to my right hon. Friend the Member for Barnet (Mr. Maudling).
    I was equally surprised when the hon. Member for Lichfield and Tamworth (Mr. Snow) said that it was about time that other countries realised that we would not be kicked around. It is the other countries who consider that they have been kicked around by Her Majesty's Government. The sooner hon. Members opposite appreciate that, the further they will go to putting the matter right and putting it right quickly.
    Mr. Snow: Surely I was not so ambiguous and unfair as all that. Surely I made it quite clear that what I was getting at was that, for a long time past and under the feeble leadership of the party opposite, we had been kicked around economically.
    Mr. Burden: Again the implication is that we are now kicking back. What an extraordinary way to kick back!
    This action was not successful. The hon. Member for Ebbw Vale said that there was not time for consultation, that decisions had to be taken quickly and that the Government had to take this action because of the pressure of events. But it has not been successful and there has been a run on the £ and a crisis which left the Government apparently completely impotent. That good old Tory institution, the Bank of England, quickly consulted the credit world and put the matter right. There was plenty of time to consult then when the crisis was much graver than it was weeks before when the Government put on these charges without consultation with anybody. The Bank of England had co-operation by consultation.
    I hope that the Amendment will be accepted. The worst feature of these charges is that hon. Members opposite, not having much knowledge of industry and trade, have treated overseas countries as if they were suppliers in a buyers' market, entirely forgetting that they are

    339
    also our very important customers. That is where the grave danger of what has been done with the surcharges will be felt in future. How can we ever expect these overseas countries to want to enter into trade contracts with us if they believe that the contract can be thrown out of the window at the Government's will and that the action in throwing them out of the window will be supported by Labour Members?
    I hope the Government also realise this, that this blow has gone far deeper than among the statesmen and politicians of the countries concerned; that it has struck at the industries and the economic well-being of the ordinary people of those countries. Resentment against the action of our Government has gone very, very deep. I hope again that they will consider taking the surcharge off as quickly as possible, because if they retain it its very retention will defeat their aims to give some stimulus to our exports by means of the export rebate.
    I can speak from knowledge and experience and I know that people in Norway and in some of the other countries are demanding that the 2 per cent. rebate which will be given to exporters should be passed on to them in order to give them some rebate for what they have lost by the imposition of the surcharge. These are facts.
    What the Government ought to have realised when considering this Amendment is that the sooner the surcharge goes off the less deep will be the hurt to the ordinary men and women in the streets and the homes and people going into the shops in those countries. If this surcharge goes on many of them will be thrown out of work. Do the Government really think that the people in countries affected are then going into their shops to buy our British consumer goods, when this country has helped to bring about their unemployment, their difficulties and their problems? That is how deep a thing this is.
    I hope that the Foreign Secretary will respond to a question I wish to put, so that we can see how imperative it is that this surcharge be removed at the earliest possible moment. The question I put to him is this. I ask him to produce a transcript of all the speeches which were made at the last meeting of the E.F.T.A.
    340
    countries. I think that that would show how deep is the wound and how strongly they feel about the summary abrogation of the treaties by our Government who are supported in breaking them by hon. Gentlemen opposite.
    The Minister of State, Board of Trade (Mr. Edward Redhead): This debate has ranged extremely widely, far beyond the somewhat limited scope of the Amendments which we have been discussing. I suppose that that was inevitable in the circumstances, and I make no complaint about it, except that I do not propose to traverse the whole field of the debate which, in many respects, could be more appropriately dealt with on the Question, "That the Clause stand part of the Bill." I want, if I can, to bring the Committee to an understanding and appreciation of these Amendments and of the Government's attitude to the proposals before us.
    The right hon. Member for Bexley (Mr. Heath), in moving the first of these Amendments, made considerable play, as, indeed, other hon. Members have, with what they say is the harm and damage which has been occasioned by the temporary import surcharge in many various respects to which they have alluded, and said that it is in order that that harm and damage may be limited and removed as quickly as may be that it is desirable to put a limit upon the term of the surcharge by the Amendments which have been proposed.
    I only want to say, first of all, that in introducing this surcharge—and I want to make it abundantly clear—the Government had no illusions whatsoever but that it was bound to inflict some hurt, that it was bound to create concern, anxiety—if hon. Members like—in the manner of its application, some inevitable degree of misunderstanding or doubt, and soreness, even on the part of our friends, and particularly our friends in E.F.T.A. I want to say most emphatically that while, perhaps, all the soreness has not been removed and that there still remain, naturally enough, aspects of concern among our friends overseas, to describe the present situation as one in which confidence in this country has been completely shattered is a gross exaggeration.
    Mr. Burden: What I would suggest the Government ought also to realise is

    341
    that the impact of this surcharge has not yet come upon those countries, because there were forward orders covering the period since the surcharge was imposed, and it is only after those orders presently in the factories have dried up that the full effects will be felt in the countries upon which we have placed the surcharge.
    Mr. Redhead: The hon. Gentleman has only repeated what he said before, and I in my turn want to repeat that to suggest that the measure of concern which may well exist about this import surcharge can be correctly assessed as meaning that confidence in this country has been completely shattered is indeed a gross exaggeration.
    It has been my privilege and opportunity in these last few weeks to meet not only Ministers of some overseas Governments who have been here to talk about this matter but the representatives of many industrialists, manufacturers and exporters from those countries, and while I do not pretend for a moment that they have not perfectly natural anxieties about the matter—anxieties which we fully appreciate—I have found that, on the whole, they are exceedingly understanding about the situation, that they are still well-disposed towards this country, and quite a number of them have been ready to admit, when the situation and the purpose of this has been explained to them, that they might well have found themselves in a comparable situation if they had faced the same facts. Indeed, the most impressive thing in the minds of most of us is something which I think we must all bear in mind, that whatever may be the transient hurt or the irksomeness of this measure, either to our own people or to our overseas friends, in the long run it would be a greater hurt if the situation which gave rise to this measure were not remedied and healed as quickly as may be.
    I submit that the real source of harm and damage to our economy, and whatever harm or doubts there may be overseas, lies in the situation which was inherited by this Government, and not in the admittedly unpalatable medicine which has had to be applied, for when an ailment is ignored and neglected, and neglected for a long time, there is always the tendency for the development of an acute disease, and, in consequence, the
    342
    application of the requisite medicine and surgery is often very unpleasant and very unpalatable.
    The right hon. Gentleman clearly stated the effect of the Amendment. I am bound to say, however, that I was not persuaded by his solicitous desire to help the Government. I wish that I could believe that, but he does no service to the Government or, indeed, to the country by placing, as he and some of his hon. Friends did, such unwarranted emphasis on the protectionist character of this import surcharge. This can only be calculated to excite suspicion, where suspicion is now being allayed, that fundamentally this does lie at the root of this measure. It has been said time and again, and I repeat it now, that such is not the purpose of this measure, and that all the actions of the Government in the future in this regard will be directed to making it abundantly clear that that is not its purpose.
    As I understand it, the Amendment seeks to put a term to the import charge—I hope that the right hon. Gentleman will accept this—to give a closer definition than he found in the Bill to the expression "temporary" which has so far been used in this connection. There is one very surprising thing about the whole of this debate. Not one hon. Member who has spoken has taken note of the fact that subsections (11) and (12) do not in themselves determine the duration of the charge. They merely determine the duration of the powers to impose the charge, and it is necessary, therefore, not merely to take account of the dates mentioned in those two subsections but to take account of subsection (9), too.
    The right hon. Gentleman asked for some indication of the Government's intentions. I can only repeat—and this is a genuine expression of intention—that the Government will not keep this surcharge on for one moment longer than is necessary, for one moment beyond the period when the balance of payments position has so improved as to make it possible to remove or to abate the charge.
    It is for that reason, therefore, that while the Bill provides the power to impose that charge—and that power will lapse in November, 1965, unless renewed by an Order in a year's time, subject to the approval of the House of Commons

    343
    in draft—under subsection (9) there is a power to reduce the coverage of the scheme and/or the rate of the charge so that the incidence of the scheme can be lightened or the charge abolished by Order at any time.
    8.45 p.m.
    Mr. Birch: What the hon. Member is saying is that the surcharge will be maintained as long as the Government consider it to be necessary. Does that mean that he does not support what the Foreign Secretary and the President of the Board of Trade said at Geneva, when they definitely referred to a "matter of months"? A matter of months is not a year.
    Mr. Redhead: What I am saying is that if it becomes possible to abate or remove this surcharge in a matter of months the power to do so exists already in subsection (9), by way of an Order, and there is no need for the Amendments. These Amendments refer to Clauses which put a duration upon the power but not upon the charge itself. In other words, the Amendments are quite unnecessary, in the sense that the maximum duration of the powers as provided by the Bill in no way prejudices the assurance that the Government have given that they will address themselves to a review of the surcharge within a matter of months.
    I suggest that no one could possibly expect an absolutely close forecast of precisely when it will be possible to remove this surcharge. It would not be reasonable to expect that. The Bill provides that if the Government cannot see their way clear completely to abolish the surcharge within a limited time, the House, in the first instance, shall have an opportunity to debate the matter by way of the submission by a draft Order and, in the second place, if it goes beyond the final date it will be necessary to consider fresh legislation. But the provisions in the Bill are long-stop provisions—provisions which set a time limit of one year and two years respectively.
    Mr. Peter Emery: Temporary!
    Mr. Redhead: Temporary within the ambit of long-stop provisions.
    Mr. Emery: I am sorry to interrupt the hon. Gentleman. He did not interrupt
    344
    me when I was speaking, and I am grateful to him for giving way, but whenever possible we must define matters clearly, and the Minister has referred to a period of two years. That is a terrifying proposition to go out from this House. I shall be glad if he will make it absolutely clear that it is not the Government's intention that a temporary provision shall at any time be in force for longer than merely a matter of months.
    Mr. Redhead: I made it perfectly clear that in the unhappy event of its not being possible to remove this surcharge by November, 1965, it could be extended only by way of a fresh debate, when the House will have an opportunity of considering the matter. This is not an indication either of hope or intention; it is a realistic proposal whereby, in the light of the circumstances, provisions can be made to retain this power but not necessarily to exercise it. The power clearly exists under subsection (9) to reduce or abolish the surcharge at any time, by Order, within the outside time limits of the Bill.
    The alternative proposed by the Amendment would compel the House to debate this matter again in March, 1965. It might well be that the degree of progress and the improvement in the situation that could be seen by then would render it entirely unnecessary for the matter to be debated at all, because it would then be possible to invoke the powers under subsection (9). Within the ambit of their intentions, the Government will use that power.
    Mr. Gower: Why does the right hon. Gentleman find it so objectionable that the House should debate it again in March, 1965? Why is that such a repugnant prospect—that there should be a debate so that the House should reconsider it?
    Mr. Redhead: I did not say that it was repugnant. I said that it was unnecessary, because if the circumstances exist whereby this charge can be abated or abolished, then the power exists in this Bill and it is the full intention of the Government to utilise that power. There is no advantage in the Amendments that are proposed. They give no advantage, because that power that is not already in the Bill.

    345
    For that reason I suggest to the Committee that the Amendments are unnecessary, and, quite obviously, hon. Members who have taken part in this debate just have not appreciated the significance of Clause 3(9). No hon. Member has made any reference to it at all in the whole course of the debate. Believing that, I ask the Committee to reject the Amendments before us.
    Sir Herbert Butcher: We are all grateful to the right hon. Gentleman the Minister of State for his clear explanation of what it is possible to do under Clause 3(9). He will forgive me saying so, however, but his explanation was little clearer than the actual words of the subsection itself. What was quite obvious was that the Treasury may in various ways make orders reducing or revoking, in whole or in part, the surcharges now imposed, and that they shall be made under subsection (9, b) by statutory instrument, subject to annulment. But these statutory instruments will be in the narrowest possible terms. They could, for example, reduce the surcharge on imported timber from 15 per cent. to 12½ per cent. and that would be the sole matter that the House would be capable of discussing at that time.
    This is why I support the Amendment. There are two Amendments before the Committee, and if the Government prefer the Amendment in the names of members of the Liberal Party, I dare say that they could be accommodated. But that would have the disadvantage of ensuring a debate after a Budget instead of before it. The advantage of the first Amendment is that at a time when these surcharges have been in operation for five months, a debate takes place in this House and the Government have to come before us and secure a renewal of their powers. As the Bill is drawn at present this matter need not come before the House again until some time just prior to the end of November, 1965. It is right that these matters should be reviewed before then, and I am surprised that hon. Gentlemen opposite did not welcome an opportunity to take part in a further debate on this subject.
    The Government have been supported this afternoon by three speakers. The hon. Member for Lichfield and Tam-worth (Mr. Snow) made a most attractive
    346
    speech on a basis which was, to paraphrase, "We can override the wishes of these people, our partners in E.F.T.A., because we are so valuable and important a market that they cannot do anything about it". The two other hon. Members who spoke—the hon. Member for Ebbw Vale (Mr. Michael Foot) and the hon. Member for Nelson and Colne (Mr. Sydney Silverman)—did not speak in any way like that. I listened carefully to both speeches and there was no suggestion at all, no word of regret, that we are breaking our pledged word to our partners in E.F.T.A. These hon. Gentlemen had a look over their shoulders. They looked for the ordinary rebels inside the party and said, "This is the place where loyal, faithful party men must stand up and support Government policy". We congratulate them on their loyalty to the party. The next time they appear before a disciplinary committee, may it be remembered in their favour.
    Mr. Heath: We welcome the reply of the Minister of State. As he said, it has been a long debate covering a fairly wide field and I do not propose to go over it all. There are one or two main points which I should like to mention before I come to the remarks of the Minister.
    The hon. Member for Lichfield and Tamworth (Mr. Snow) made an interesting speech. The logical conclusion of its general tenor was that we ought to abandon the multilateral trading system and try to create a bilateral trading system with those countries where we thought the advantage would be the greatest. The hon. Gentleman omitted to mention those countries where we have a favourable balance of trade, as is inevitable with a multilateral trading system. We have to decide whether to continue a multilateral trading system and ensure that the economy is competitive and efficient or try to proceed with a bilateral trading system and to strike equal bargains with other countries. All our experience since 1945 has pointed to the advantages of a multilateral trading system and I believe that we should continue in that way.
    The hon. Member for Nelson and Colne (Mr. Sydney Silverman) asked about the policy which should be followed. If he looks at the speech made in Swansea by the Prime Minister

    347
    on 25th January he will see that the right hon. Gentleman set out clearly the policy which in his view ought to be followed, and it was exactly the policy of my right hon. Friend the former Chancellor of the Exchequer. In case of balance of payment difficulties we should draw on all the international reserves available to us, and secondly, if necessary, we should use short-term interest rates. The right hon. Gentleman has found himself forced to do both.
    Mr. Sydney Silverman: Is the right hon. Gentleman really saying to the Committee that a policy which may have been right in January, 1964, ought not to have been affected in the last year by the catastrophic trend of events between January, 1964, and November, 1964?
    Mr. Heath: It is the use of such words as "catastrophic" by the hon. Gentleman and his friends which has got them very largely into the mess in which they are now. The Prime Minister was at that time addressing himself precisely to the problems which he foresaw would arise during 1964. He answered at that time with a serious economic speech in which he stated the policy I described.
    Mr. Sydney Silverman: I may have used too dramatic a word and I concede that for the sake of the argument—though I do not myself think so. Whether it was "catastrophic" or whether some other pejorative adjective would have been more appropriate, is the right hon. Gentleman really saying that the position in November, 1964, was so similar to the position in January, 1964, that a policy announced in January, 1964, ought not to have been affected or modified by it?
    Mr. Heath: I am saying that the Prime Minister specifically addressed himself to the problems which would arise during 1964, throughout the whole year. This policy had been set out by my right hon. Friend the Member for Barnet (Mr. Maudling) and it was a perfectly logical and sensible thing for the Prime Minister to discuss in his Swansea speech. He did it with great deliberation and great skill. It was later at Norwich that he started to turn it into political terms.
    The hon. Member for Ebbw Vale (Mr. Michael Foot) spoke with his usual
    348
    eloquence and I was flattered by the attention which he paid to me. The hon. Gentleman dealt with aspects of this matter which I think are to be regretted. The old tag used to be, "If you have no case, abuse the attorney". It has now become, "If you have no case, impugn the other fellow's patriotism". This is to be deplored. All hon. Members greatly value the good name of our country. The fact that one points out things that have caused harm to that good name is in no way to impugn the patriotism of anybody. I hope that in this House we shall abandon the impugning of the other fellow's patriotism.
    9.0 p.m.
    The Minister of State produced an answer which was far from satisfactory. I assure him, with respect, that my hon. Friends and I had read Clause 3(9) most carefully. No hon. Member on either side of the Committee mentioned it simply because no one except the Minister thought that it was particularly relevant. With respect, the rest of the Committee is right. It is not relevant to the Amendment because we all recognise that the Government, if they so wish, can abolish the surcharge, reduce it or change it by order.
    The Amendment is designed to take the Chancellor at his word, when he said that it would last for only a matter of months, and to ensure that the Government will bring the matter before Parliament for full consideration before the end of March. We believe that that is desirable and I regret that the Minister did not address himself to that point.
    I asked him to tell us what information had been given to other countries about the surcharge. He did not give that information and he did not say whether any undertakings had been given about the period involved. My hon. Friends have pointed out the difficulty of getting information about the figures the Chancellor has already given. Having been in the House of Commons for 15 years I can honestly say that it has never been more difficult to get information out of a Government than it has been from this Government. [Interruption.] Everybody except the House of Commons seems to have this information.

    349
    I am afraid, therefore—since the Minister ignored this point, since the Chancellor said that it would last for only a matter of months and since we consider it desirable that the Government should bring the matter to the attention of Parliament before the end of March—that I must advise my hon. Friends
    to register our disapproval in the Lobby.
    Question put, That "November" stand part of Finance the Clause: —
    The Committee divided: Ayes 223, Noes 198.

    Division No. 19.]

    AYES

    [9.2 p.m.

    Abse, Leo

    Gourlay, Harry

    Monslow, Walter

    Albu, Austen

    Gregory, Arnold

    Morris, Charles (Openshaw)

    Allaun, Frank (Salford, E.)

    Griffiths, David (Rother Valley)

    Morris, John (Aberavon)

    Alldritt, W. H.

    Griffiths, Rt. Hn. James (Llanelly)

    Murray, Albert

    Allen, Scholefield (Crewe)

    Hale, Leslie

    Neal, Harold

    Armstrong, Ernest

    Hamilton, James (Bothwell)

    Newens, Stan

    Atkinson, Norman

    Hamilton, William (West Fife)

    Noel-Baker, Francis (Swindon)

    Bagier, Gordon A. T.

    Hamling, William (Woolwich, W.)

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

    Barnett, Joel

    Harper, Joseph

    Norwood, Christopher

    Baxter, William

    Hayman, F. H.

    Oakes, Gordon

    Beaney, Alan

    Hazell, Bert

    Ogden, Eric

    Bellenger, Rt. Hn. F. J.

    Heffer, Eric S.

    O'Malley, Brian

    Bence, Cyril

    Henderson, Rt. Hn. Arthur

    Orme, Stanley

    Benn, Rt. Hn. Anthony Wedgwood

    Herbison, Rt. Hn. Margaret

    Oswald, Thomas

    Bennett, J. (Glasgow, Bridgeton)

    Hobden, Dennis (Brighton, K'town)

    Owen, Will

    Bishop, E. S.

    Holman, Percy

    Page, Derek (King's Lynn)

    Blackburn, F.

    Horner, John

    Palmer, Arthur

    Blenkinsop, Arthur

    Houghton, Rt. Hn. Douglas

    Pannell, Rt. Hn. Charles

    Boardman, H.

    Howarth, Harry (Wellingborough)

    Pargiter, G. A.

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

    Howarth, Robert L. (Bolton, E.)

    Pavitt, Laurence

    Boyden, James

    Hoy, James

    Pearson, Arthur (Pontypridd)

    Braddock, Mrs. E. M.

    Hughes, Cledwyn (Anglesey)

    Pentland, Norman

    Bradley, Tom

    Hughes, Emrys (S. Ayrshire)

    Popplewell, Ernest

    Bray, Dr. Jeremy

    Hughes, Hector (Aberdeen, N.)

    Probert, Arthur

    Broughton, Dr. A. D. D.

    Hunter, Adam (Dunfermline)

    Pursey, Cmdr. Harry

    Brown, Hugh D. (Glasgow, Provan)

    Hunter, A. E. (Feltham)

    Rankin, John

    Brown, R. W. (Shoreditch & Fbury)

    Irving, Sydney (Dartford)

    Redhead, Edward

    Buchan, Norman (Renfrewshire, W.)

    Jackson, Colin

    Rhodes, Geoffrey

    Buchanan, Richard

    Janner, Sir Barnett

    Richard, Ivor

    Butler, Herbert (Hackney, C.)

    Jeger, George (Goole)

    Roberts, Albert (Normanton)

    Carmichael, Neil

    Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)

    Roberts, Goronwy (Caernarvon)

    Carter-Jones, Lewis

    Jenkins, Rt. Hn. Roy (Stechford)

    Robertson, John (Paisley)

    Coleman, Donald

    Jones, Dan (Burnley)

    Rose, Paul B.

    Crawshaw, Richard

    Jones,Rt.Hn.SirElwyn(W.Ham,S.)

    Ross, Rt. Hn. William

    Cronin, John

    Jones, J. Idwal (Wrexham)

    Rowland, Christopher

    Cullen, Mrs. Alice

    Jones, T. W. (Merioneth)

    Sheldon, Robert

    Dalyell, Tam

    Kelley, Richard

    Shinwell, Rt. Hn. E.

    Davies, G. Elfed (Rhondda, E.)

    Kenyon, Clifford

    Shore, Peter (Stepney)

    Davies, Harold (Leek)

    Kerr, Mrs. Anne (R'ter & Chatham)

    Short,Rt.Hn.E.(N'c'tle-on-Tyne,C.)

    Davies, Ifor (Gower)

    Lawson, George

    Short, Mrs. Renée (W'hampton, N. E.)

    Davies, S. O. (Merthyr)

    Leadbitter, Ted

    Silkin, John (Deptford)

    de Freitas, Sir Geoffrey

    Ledger, Ron

    Silkin, S. C. (Camberwell, Dulwich)

    Delargy, Hugh

    Lee, Rt. Hn. Fredrick, (Newton)

    Silverman, Julius (Aston)

    Dell, Edmund

    Lever Harold (Cheetham)

    Silverman, Sydney (Nelson)

    Dempsey, James

    Lever L. M. (Ardwick)

    Slater, Mrs. Harriet (Stoke, N.)

    Diamond, John

    Lewis, Ron (Carlisle)

    Slater, Joseph (Sedgefield)

    Dodds, Norman

    Lomas, Kenneth

    Small, William

    Doig, Peter

    Loughlin, Charles

    Smith, Ellis (Stoke, S.)

    Driberg, Tom

    Mabon, Dr, J. Dickson

    Snow Julian

    Dunn, James A.

    McBride, Neil

    Solomons, Henry

    Dunnett, Jack

    MacDermot, Niall

    Spriggs, Leslie

    Edwards, Rt. Hn. Ness (Caerphilly)

    McGuire, Michael

    Stonehouse, John

    Edwards, Robert (Bilston)

    McInnes, James

    Stones, William

    English, Michael

    McKay, Mrs. Margaret

    Summerskill, Dr. Shirley

    Ennals, David

    MacKenzie, Gregor (Rutherglen)

    Swain, Thomas

    Ensor, David

    McLeavy, Frank

    Swingler, Stephen

    Fernyhough, E.

    MacMillan, Malcolm

    Symonds, J. B.

    Finch, Harold (Bedwellty)

    MacPherson, Malcolm

    Taylor, Bernard (Mansfield)

    Fitch, Alan (Wigan)

    Mahon, Peter (Preston, S.)

    Thomas, George (Cardiff, W.)

    Fletcher, Sir Eric (Islington, E.)

    Mahon, Simon (Bootle)

    Thomas, Iorwerth (Rhondda, W.)

    Fletcher, Ted (Darlington)

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

    Thomson, George (Dundee, E.)

    Fletcher, Raymond (Ilkeston)

    Manuel, Archie

    Thornton, Ernest

    Foley, Maurice

    Mapp, Charles

    Tinn, James

    Foot, Michael (Ebbw Vale)

    Mendelson, J. J.

    Tuck, Raphael

    Fraser, Rt. Hn. Tom (Hamilton)

    Mikardo, Ian

    Urwin, T. W.

    Freeson, Reginald

    Millan, Bruce

    Varley, Eric G.

    Galpern, Sir Myer

    Miller, Dr. M. S.

    Wainwright, Edwin

    Garrow, A.

    Milne, Edward (Blyth)

    Walden, Brian (All Saints)

    Ginsburg, David

    Molloy, William

    Walker, Harold (Doncaster)

    Wallace, George

    Willey, Rt. Hn. Frederick

    Winterbottom, R. E.

    Warbey, William

    Williams, Alan (Swansea, W.)

    Woodburn, Rt. Hn. A.

    Watkins, Tudor

    Williams, Mrs. Shirley (Hitchin)

    Woof, Robert

    White, Mrs. Eirene

    Williams, W. T. (Warrington)

    Whitlock, William

    Willis, George (Edinburgh, E.)

    TELLERS FOR THE AYES:

    Wilkins, W. A.

    Wilson, William (Coventry, S.)

    Mr. McCann and Mr. Grey.

    NOES

    Agnew, Commander Sir Peter

    Giles, Rear-Admiral Morgan

    Miscampbell, Norman

    Alison, Michael (Barkston Ash)

    Gilmour, Sir John (East Fife)

    Mitchell, David

    Astor, John

    Goodhew, Victor

    Monro, Hector

    Atkins, Humphrey

    Gower, Raymond

    More, Jasper

    Awdry, Daniel

    Grant, Anthony

    Morgan, W. G.

    Baker, W. H. K.

    Griffiths, Peter (Smethwick)

    Morrison, Charles (Devizes)

    Barlow, Sir John

    Grimond, Rt. Hn. J.

    Mott-Radclyffe, Sir Charles

    Bell, Ronald

    Hall, John (Wycombe)

    Murton, Oscar

    Bennett, F. M. (Torquay)

    Hall-Davis, A. G. F.

    Nicholls, Sir Harmar

    Berkeley, Humphry

    Hamilton, Marquess of (Fermanagh)

    Noble, Rt. Hn. Michael

    Berry, Hn. Anthony

    Harris, Reader (Heston)

    Nugent, Rt. Hn. Sir Richard

    Bessell, Peter

    Harrison, Col. Sir Harwood (Eye)

    Onslow, Cranley

    Biffen, John

    Hawkins, Paul

    Osborn, John (Hallam)

    Biggs-Davison, John

    Hay, John

    Osborne, Sir Cyril (Louth)

    Bingham, R. M.

    Heald, Rt. Hn. Sir Lionel

    Page, John (Harrow, W.)

    Birch, Rt. Hn. Nigel

    Heath, Rt. Hn. Edward

    Page, R. Graham (Crosby)

    Black, Sir Cyril

    Hendry, Forbes

    Pearson, Frank (Clitheroe)

    Blaker, Peter

    Higgins, Terence L.

    Percival, Ian

    Bowen, Roderic (Cardigan)

    Hiley, Joseph

    Pickthorn, Sir Kenneth

    Box, Donald

    Hirst, Geoffrey

    Pitt, Dame Edith

    Boyd-Carpenter, Rt. Hn. J.

    Hornby, Richard

    Pounder, Rafton

    Braine, Bernard

    Hornsby-Smith, Rt. Hn. Dame P.

    Powell, Rt. Hn. J. Enoch

    Brewis, John

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

    Prior J. M. L.

    Brinton, Sir Tatton

    Howe, Geoffrey (Bebington)

    Pym, Francis

    Bromley-Davenport.Lt.-Col.Sir Walter

    Hunt, John (Bromley)

    Ramsden, Rt. Hn. James

    Brooke, Rt. Hn. Henry

    Hutchison, Michael Clark

    Rawlinson, Rt. Hn. Sir Peter

    Brown, Sir Edward (Bath)

    Irvine, Bryant Godman (Rye)

    Redmayne, Rt. Hn. Martin

    Buchanan-Smith, Alick

    Jenkin, Patrick (Woodford)

    Renton, Rt. Hn. David

    Buck, Antony

    Jennings, J. C.

    Ridsdale, Julian

    Bullus, Wing Commander Eric

    Johnston, Russell (Inverness)

    Roberts, Sir Peter (Heeley)

    Burden, F. A.

    Jones, Arthur (Northants, S.)

    Rodgers, Sir John (Sevenoaks)

    Butcher, Sir Herbert

    Jopling, Michael

    Roots, William

    Campbell, Gordon

    Kaberry, Sir Donald

    Scott-Hopkins, James

    Carlisle, Mark

    Kerby, Capt. Henry

    Sharples, Richard

    Carr, Rt. Hn. Robert

    Kerr, Sir Hamilton (Cambridge)

    Shepherd, William

    Cary, Sir Robert

    Kershaw, Anthony

    Sinclair, Sir George

    Channon, H. P. G.

    Kilfedder, James A.

    Smyth, Rt. Hn. Brig. Sir John

    Chataway, Christopher

    Kimball, Marcus

    Spearman, Sir Alexander

    Chichester-Clark, R.

    King, Evelyn (Dorset, S.)

    Stainton, Keith

    Clark, William (Nottingham, S.)

    Kitson, Timothy

    Stanley, Hn. Richard

    Cooke, Robert

    Lagden, Godfrey

    Summers, Sir Spencer

    Cooper-Key, Sir Neill

    Lambton, Viscount

    Talbot, John E.

    Costain, A. P.

    Lancaster, Col. C. G.

    Taylor, Edward M.(G'gow,Cathcart)

    Courtney, Cdr. Anthony

    Langford-Holt, Sir John

    Taylor, Frank (Moss Side)

    Craddock, Sir Beresford (Spelthorne)

    Legge-Bourke, Sir Harry

    Thatcher, Mrs. Margaret

    Crawley, Aldan

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

    Thomas, Sir Leslie (Canterbury)

    Cunningham, Sir Knox

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Thompson, Sir Richard (Croydon, S.)

    Curran, Charles

    Loveys, Walter H.

    Thorneycroft, Rt. Hn. Peter

    Currie, G. B. H.

    Lubbock, Eric

    Tilney, John (Wavertree)

    Davies, Dr. Wyndham (Perry Barr)

    Lucas, Sir Jocelyn

    Turton, Rt. Hn. R. H.

    Dean, Paul

    Lucas-Tooth, Sir Hugh

    Tweedsmuir, Lady

    Deedes, Rt. Hn. W. F.

    McAdden, Sir Stephen

    van Straubenzee, W. R.

    Digby, Simon Wingfield

    Mackenzie, Alasdair (Ross&Crom'ty)

    Walters, Dennis

    Dodds-Parker, Douglas

    Mackie, George Y. (C'ness & S'land)

    Ward, Dame Irene

    Donaldson, Cmdr. C. E. M.

    McLaren, Martin

    Weatherill, Bernard

    du Cann, Edward

    McMaster, Stanley

    Whitelaw, William

    Eden, Sir John

    McNair-Wilson, Patrick

    Williams, Sir Rolf Dudley (Exeter)

    Emery, Peter

    Maginnis, John E.

    Wills, Sir Gerald (Bridgwater)

    Fell, Anthony

    Maitland, Sir John

    Wilson, Geoffrey (Truro)

    Fletcher-Cooke, Charles (Darwen)

    Marlowe, Anthony

    Wolrige-Gordon, Patrick

    Forrest, George

    Marten, Neil

    Wood, Rt. Hn. Richard

    Foster, Sir John

    Mathew, Robert

    Woodhouse, Hn. Christopher

    Fraser,Rt.Hn.Hugh(St'fford & Stone)

    Mawby, Ray

    Woodnutt, Mark

    Galbraith, T. G. D.

    Maxwell-Hyslop, R. J.

    Wylie, N. R.

    Gammans, Lady

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

    Gardner, Edward

    Meyer, Sir Anthony

    TELLERS FOR THE NOES:

    Gibson-Watt, David

    Mills, Peter (Torrington)

    Mr. Batsford and Mr. Ian Fraser.

    Question put and agreed to.
    Clause ordered to stand part of the Bill.
    Mr. Charles Loughlin: On a point of order. Is it in order for a Member to stand behind the Bar and shout "No" when the Question is put?
    The Chairman: It is not in order for an hon. Member to stand behind the Bar and shout "No".
    Sir Rolf Dudley Williams: On a point of order. In view of the fact that there was some confusion, could the Question be put again?
    Mr. Godfrey Lagden rose—
    The Chairman: Order. The hon. Member for Hornchurch (Mr. Lagden) must wait until I have dealt with one point of order before I deal with another. The answer to the hon. Member for Exeter (Sir Rolf Dudley Williams) is that I do not propose to put the Question again. The Question has been put, and I said that the "Ayes" had it.
    Mr. Lagden: Further to that point of order. I was wondering, Dr. King, if, in the excitement and uproar which was caused over here, you heard a Member, namely, myself, who was in the Committee shout "No"?
    The Chairman: May I assure the hon. Gentleman that I did hear the hon. Members who were in the Committee say "No". As a matter of fact, the Chairman often hears more than the hon. Gentleman thinks he hears.
    Mr. Sydney Silverman: Further to that point of order, Dr. King. Having regard to the tradition of the House of Commons in protecting the rights of minorities, even when a minority is a minority of two, do you not think that the hon. Gentlemen who wanted to shout "No" might be given the opportunity to do so and show up the rest of their colleagues who speak against measures but do not express their opinions by a vote?
    The Chairman: I am not sure whether the hon. Gentleman's memory is at fault. The hon. Members who desired to say "No" were given the opportunity and did say "No" when I collected the voices.

    Clause 4.—(GOODS EXEMPTED FROM DUTY.)
    Mr. Edward du Cann: I beg to move Amendment No. 19, in page 4, line 35, at the beginning to insert:
    (1) Duty under section 3 of this Act shall not be charged on goods in transit to the United Kingdom on 26th October 1964 from a source outside the United Kingdom.
    The Chairman: I think that it would be for the convenience of the Committee if we were to discuss with this Amendment the following four Amendments: Amendment No. 13, in Clause 3, page 2, line 41, after "Kingdom" to insert:
    " with the exception of any goods for which bills of lading specifying a British port of entry had been despatched by an exporter to the United Kingdom before 27th October 1964 ".
    Amendment No. 14, in Clause 3, page 3, line 43, to leave out subsection (8).
    Amendment No. 20, in Clause 4, page 4, line 35, at the beginning to insert:
    (1) Duty under section 3 of this Act shall not be charged on goods for which a contract has been entered into before 27th October 1964, expressly or impliedly making the buyer liable to purchase the goods specified at an agreed price.
    Amendment No. 22, in page 4, line 35, at the beginning to insert:
    (1) Duty under section 3 of this Act shall not be charged on goods for which part-payment of not less than 25 per cent. has been made before 27th October 1964.
    Mr. du Cann: Yes, Dr. King; I am obliged.
    I shall try to deal with the point raised by these Amendments fairly shortly, without in any way, I hope, leading the Government to suppose that we take the matter lightly. Quite the reverse—we take it very seriously indeed.
    Amendments Nos. 19 and 14 are, basically, alternative. Amendment No. 19 deals with the position when a contract has been entered into before 27th October, 1964, that is, the date from which the surcharge is run, and Amendment No. 14 is alternative to that since acceptance of No. 19 would remove the need for subsection (8) which ensures that, whatever contracts have been entered into, the burden of the surcharge falls on the United Kingdom buyer. However, I hope that the Government's attitude will be sympathetic towards the main point which we are putting forward under the umbrella of Amendment No. 19.

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    Amendment No. 13, the Liberal Party's Amendment, is to some extent on the same point as Amendment No. 19, and it seems to us to be an added indication of the general support there is in the Committee and, perhaps, also in the country for the point which we are advancing.
    As the Bill stands, goods under contract before 27th October will have to be imported regardless of the surcharge. Specific agreements have been made, and the goods will come in whether there is the surcharge or not. Two consequences flow from this. First, in such cases the surcharge is not achieving its objective, which, presumably is to reduce imports. That is what we have been told on more than one occasion, first, in the White Paper and thereafter in debates in the House. The second consequence is that manufacturing costs and prices all down the line in respect of the particular class of goods will be increased to no practical purpose whatever.
    Proof of the existence on 27th October of a binding contract would not be difficult to produce. The Liberal Amendment has suggested a highly practical way of doing it. The Government may think that that method is not entirely suitable, but, if I may presume to speak for the Liberal Party as well as for my right hon. and hon. Friends, I am sure that we should not mind what method was adopted provided that one were found, as, in equity, it should be. We believe that it is perfectly simple to find a method. Here is one. There may be others. Let the Government choose what they regard as appropriate.
    Administrative machinery to check the validity of submissions for exemption would have to remain in existence for only a short time. What we propose would be easy to do and, second, it would not require the establishment of a complicated apparatus which would have to remain in existence for months and months. It would be a once-for-all operation and very quick.
    The cost to the Government in loss of surcharge by the exempting of imports of this kind could not be very great, and it would present no argument for not doing what we suggest. It would be a once-for-all cost, and, judging from pre-
    356
    vious Government statements, revenue raising was not, in any case, the main reason for the introduction of the surcharge.
    I refer now to something said by the Financial Secretary in his maiden speech at the Dispatch Box, if I may so describe it, which we very much enjoyed on 24th November. I fancied myself back in court at one point, but that did not detract from the attention which we paid to his remarks. The hon. and learned Gentleman said:
    " It is essential, if this charge is to operate, that it should bite and bite at once, and take effect at once."—[OFFICIAL REPORT, 24th November, 1964; Vol. 702, c. 1215]
    That is entirely true if it is to deter imports, as we understand the object to be, but the effects of the surcharge will be judged by businessmen, if not by the Government, on its purely economic aspects. Penalising those whose goods must come in anyway, because the importers are bound by contract to import them will not affect the economic basis for any later decision about whether or not to import additional goods. Why should it? All it will do is merely annoy those who are bound by contract, and this is one factor out of many which has already affected confidence in the Government's intentions.
    I could give many examples of the way in which individual firms are affected. I am sure that the Minister without Portfolio will not wish me to weary the Committee with detail. Many of my hon. Friends, and, I am sure, members of the Liberal Party could produce many examples of extreme irritation at this situation. I produce only one example, which, I admit, is extreme, from a steel company which says in a letter which some of us have received:
    "Imports cannot be halted because irrevocable letters of credit have been opened. The balance of payments is in no way improved, and the sole result will be that many firms like ourselves who cannot pass on price increases to their customers or to the general public because they are committed by firm contracts face financial ruin through absolutely no fault of their own."
    "Financial ruin" may be too strong a term but to penalise in financial terms firms whose only crime is that they honourably entered agreements which they thought they would be able to keep in circumstances which existed at the

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    time, is going too far and there is an element of retrospection in this matter to which we object.
    The object of Amendment No. 20 is to exempt goods in transit or not entered with Customs before 27th October. The arguments in favour of this Amendment I can again sum up briefly by saying, first, that it is customary, as the Minister will know, in raising import duties to give at least a week's notice. In this instance this was not done, with the result that numerous cases of hardship are being brought about. There is substantial evidence of this. I hope that the Minister will take it as read, but that it exists in good quantity there is no doubt. Including goods in transit or those which for one reason or another have not been entered with Customs before 20th October does nothing to reduce imports, but merely creates unnecessary hardship. As in the case of the other type of goods I referred to, costs and prices all down the line in respect of goods in transit will be raised to no purpose whatever.
    The cost to the Government of accepting this Amendment on a once-for-all basis must be small. To return to what the Financial Secretary said on the fateful evening of 24th November, if I may speak like Edgar Lustgarten about so a criminal trial—for we have a heavy representation of the legal profession on the Government Front Bench at present:
    "it is imperative for the success of this scheme that we should establish that it is non-discriminatory and that we should establish that it is non-protective."—[OFFICIAL REPORT, 24th November, 1964; Vol. 702, c. 1215.]
    I do not want to talk about it being non-protective, which it obviously is, whether we like it or not, but I shall discuss whether it is non-discrimatory.
    The argument of the Financial Secretary was a largly hypothetical one. The fact that some goods coming from a great distance may be in transit for two or three months does not get round the fundamental point of the argument, which is that the object of the surcharge is to reduce imports. One might ask why the Government should be so concerned about discrimination in regard to this tiny matter when they completely fail to take into account what one might call world opinion by introducing the surcharge in the first place. To suggest, as he did, that discrimination cannot be justified
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    in this example when there is discrimination against exporters to Britain from all all over the world through the very introduction of this surcharge, seems to make no sense whatever.
    Here we have two broad categories: those who entered into contracts before 27th October and those who have goods in transit. Both are categories of persons or firms which are entirely innocent and both are now to be put into difficulty and penalised by the action which the Government have taken. Many of us feel that this broad measure has not been too well thought out, as evidenced by the substantial number of Amendments already put down in the name of the Chancellor of the Exchequer and I hope the Government will be able to say tonight, "Yes, we agree there is a category of persons here whose interests should be looked at again and whose cases should be examined."
    I do not think that anyone on this side of the Committee would be unhappy if the Government said that they could not accept the particular wording of this Amendment or that they wanted to do this in another way, but I hope very much that they will be reasonable in the matter and say to the Committee that they think there is good case here and they will be willing, if not to accept these Amendments, at least to table their own at a later stage. What is happening at the present in respect of goods in transit and under contract is not reducing imports but putting up prices unnecessarily and creating If the Government do not wish to accept these Amendments they must take the responsibility for doing these things and I suggest that it is a heavy one.
    Sir H. d'Avigdor-Goldsmid: I hope I am not out of order in congratulating my right hon. Friend the Member for Taunton (Mr. du Cann) on his elevation. I listened to his speech and noticed that he used the word "ruin" and then withdrew it. I want to cross the t's and dot the i's a little more closely on this situation out of my own direct knowledge.
    As hon. and right hon. Members opposite may or may not be aware, most important import business is not done directly between as it were sellers on the Continent and buyers in this country but

    359
    through the use of agents. It is a daily experience for me as a banker for one of those agents to come to me, possibly a man with very modest capital, and to say, "I want to open a letter of credit for £100,000 for sale from Germany", and I say to him, "What is going to happen to it?" He says, "I have a firm contract, from a buyer in England for this sale."
    9.30 p.m.
    If I am shown the buyer's contract and I am satisfied that the contract is firm and binding and I am satisfied with the bona fides of the agent, I am inclined to meet his request and open a letter of credit on his behalf for the amount of the purchase, because I know that when the goods arrive here—and they are fully insured—full payment will be received. But the agent has contracted at a firm price. He has contracted to his seller in Germany at one price and to his buyer here at a firm price.
    There is no provision in any of these contracts for the interposition of a duty, of the sort we are now discussing, of 15 per cent. on the value of a contract. It may be argued that, though a very large and disqualifying impost, 15 per cent. does not mean ruin to the buyer. But it falls not on the ultimate consumer, but on the agent, who has firmly contracted to both the seller and the buyer and who expects to make a margin of perhaps 1 or 2 per cent. on a transaction of this magnitude, because he is dealing between two first-class principals.
    As the Minister without Portfolio will appreciate, these are the facts of life. When my right hon. Friend the Member for Taunton used the word "ruin", he withdrew it, but there are cases when the word "ruin" would literally apply, cases when a firm with a capital of £10,000 has a contract of this sort and when the imposition of the 15 per cent. duty would mean £15,000 loss, which would be ruin to the firm which in good faith had contracted as an agent.
    The Minister without Portfolio (Sir Eric Fletcher)indicated dissent.
    Sir H. d'Avigdor-Goldsmid: I notice the hon. Gentleman shaking his head. I should be very grateful if he would tell me where I have gone wrong.
    Sir E. Fletcher: Perhaps I should correct this misapprehension at once. Both the right hon. Member for Taunton (Mr. du Cann) and the hon. Gentleman have overlooked the fact that Section 10 of the Finance Act, 1901, in the case supposed by the hon. Gentleman protects the parties to the contract and enables the seller to pass on the impost to the buyer and enables him to pass it on to his buyer and so on down the chain, so that there is no question of any party being ruined.
    Sir H. d'Avigdor-Goldsmid: I cannot say that my client has had access to Section 10 of the Finance Act, 1901, as the hon. Gentleman has had, and I doubt whether many hon. Members on either side of the Committee have consulted it. We have not had a reference to it before.
    Sir E. Fletcher: I hesitate to interrupt again, but if the hon. Gentleman would look at Clause 3(8), he would see that Section 10 of the Finance Act, 1901, is not only expressly mentioned, but that its ambit and operation are extended by virtue of that subsection.
    Sir H. d'Avigdor-Goldsmid: That is indeed a point for which I am grateful. It is a perfectly good point and would seem to do away with the argument which I was propounding. However, it does not in any way change the fact that although the agent may not suffer the loss, the ultimate buyer does, even if he is not ruined. I am very glad to have the hon. Gentleman's assurance that the agent does not suffer, but it does not in any way improve the position of the ultimate buyer.
    Mr. Fletcher-Cooke: This difficulty has occurred more than once. It is due to a difference in the use of the word "agent" by a lawyer and a business man. A business man uses the word "agent" when he means "principal" and a lawyer uses the word "agent" when he means "agent". My hon. Friend will find that his agent is in law the principal in many cases, really the buyer, and he will therefore suffer a great loss because, although commercially he is an agent, legally he is a buyer, and under the Section mentioned by the hon. Gentleman, the loss will fall on him, although for practical purposes he is still an agent.
    The Chairman: I do not think that it will help the Committee if we have triangular debates.
    Sir H. d'Avigdor-Goldsmid: I am grateful to you, Dr. King, for your interposition, for I am the least suitable to take part in the legal struggle which we are now having between eminent members of the Bar. The fact is that there is a loss which will fall on the man who, although contracting as a principal, is in fact an agent and who obtained his credit because he had sold the goods on, as it were. I am glad to have the confirmation of the hon. Gentleman that he will not suffer. I do not suppose that my client will be in a position to brief the hon. Gentleman—he is probably not able to afford it—but, however that may be, the position is clearly doubtful, if we are to judge by the interposition of my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke).
    Sir E. Fletcher indicated dissent.
    Sir H. d'Avigdor-Goldsmid: The hon. Gentleman shakes his head. This is a matter of administrative convenience which raises very important problems. We have decided that this tax shall bite, I think the word is, from midnight of the day on which it was introduced. That has been done for reasons of administrative convenience. It is not proper that Her Majesty's subjects should suffer the sort of loss, if not ruin, which the Clause unamended would inflict, and I therefore hope that my hon. and right hon. Friends will do their best to convince the Government that this is an injustice which we ought not to tolerate.
    Mr. Russell Johnston: I think that what is common to the Amendments which are being debated together is the restrospective effect of the Clause, and it is that to which hon. Members on this side of the Committee object. I shall not directly follow the right hon. Member for Taunton (Mr. du Cann) but concentrate very briefly on Amendment No. 22 and give a specific example. I shall not keep the Committee very long, but this is a point which I particularly want to make.
    In my constituency we have an industrial project which occupied the attention of the House for quite a long time, the plup mill at Fort William. This is one of the very hopeful projects in the
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    North of Scotland, as hon. Members on both sides will know. This project is directly relevant to the Amendment, I assure you, Dr. King, and you may remember that this project attracted a loan of some £8 million which was to be interest-free to the end of 1966.
    Mr. Snow: Was it not an interest waiver?
    Mr. Johnston: The interest was waived to 1966 and the value was about £1·3 million.
    The fact that this assistance was made with the agreement of both sides in this Chamber was an indication of the importance which hon. Members attached to the scheme. Certain machinery necessary in the work of the mill was purchased from abroad, from Sweden, because no similar machinery was made in this country. It was ordered way back in 1963 and by now some 30 per cent. of that machinery has been paid for. None the less, delivery has not yet been made. Therefore, all that machinery will now become subject to the 15 per cent. import charge.
    I do not want to play politics, as the hon. Member for Ebbw Vale (Mr. Michael Foot) said, in any party sense at all. I have already had correspondence with the Board of Trade on this matter and I would not raise it now if I had received satisfaction on that occasion. I have no desire to embarrass the Government on a matter of this kind. I know they face a difficult situation, which I feel some hon. Members on this side of the Committee have tended to exploit. I quite understand that if the Government are going to make exemptions of a general character that would impair the effectiveness of the general measures they propose, but I think that if the Government were to accept my Amendment, No. 22, it would in no way impair the effectiveness of the import surcharge
    My case is quite simple. To make this machinery subject to the import charge makes no sense at all in the terms in which the charge was levied or in the terms of regional development which the Government propose in the Highlands area. First, the object of the import surcharge is to save foreign exchange—in the words of the letter

    363
    which I received from the Board of Trade on 18th November,
    " to achieve an immediate reduction of our import bill and so arrest the deterioration of our balance of payments".
    But, in fact, no foreign exchange is being saved in this case. More than 30 per cent. of the machinery has already been paid for; the foreign exchange has already gone. The remainder is, naturally, subject to a firm contract.
    Secondly, the value of the interest waiver, to which the hon. Member for Lichfield and Tamworth (Mr. Snow) drew my attention, of £1·3 million, which the House as a whole recognised as being necessary, will be reduced by the amount payable in import surcharge. This, again, does not seem to me to be logical. Thirdly—and I have only three points to make—I believe it ought to be taken into account that when the pulp mill is completed it will save in the first year of its operations three times the value of the foreign machinery in foreign exchange gained.
    I would beg the Minister to look at this question again. I think it is a very special case indeed, and to make an exception in the case of the pulp mill, and in the case of other firms similarly situated, would not in any way impair the effectiveness of the Goverment's measures but would remove some very unreasonable and possibly damaging anomalies.
    Mr. Anthony Fell: I shall take up only a very few minutes of the Committee's time, but I also have a case in my constituency—I am sure that almost everybody here has a case from his constituency—of somebody who will suffer because of this imposition. I understand the surcharge is not chargeable on raw materials. At least, it is supposed not to be, although there is some dispute as to what is a raw material and what is not. I presume that it is not be placed on raw materials because they are basic to manufacturing the goods which will be re-exported from this country. Now we come to the question of expensive machinery which is even more basic because it fashions raw materials into goods to be exported.
    I have a constituent, who is known to an hon. Gentleman opposite as well,
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    because he is building a factory in the north of England, who got a contract for machinery for making paper sacks. This machinery is extremely expensive, and were it not for certain help which, I believe and am confident, he will receive from certain quarters to help with these difficulties, he would probably not be able to go ahead with building the factory, plus the fact that he is having to pay a surcharge on his raw material which is paper.
    This puts people in the most difficult situation. I hope that the hon. Gentleman and the Financial Secretary will think about these things. It is all very well making fine legal points to people who try to argue in a commonsense way in this Committee, but it does not wash a lot with hon. Members.
    I do not want to flatter the Government too much—I am much too modest to wish to do that—but I think that it would not be untrue to say that they have some regard for contracts, at any rate in principle, and that, despite anything that may occur to them to do themselves, they believe that contracts should be kept. At any rate, I am sure that they believe that other people should keep their contracts.
    9.45 p.m.
    I am sure that the Government do not want the position to arise in this country—I know that they do not wish to damage our industry—in which traders are literally forced to break contracts involving large sums of money with countries abroad who have already been offended by matters which it would not be fair to the Government to mention. This machinery comes from one of the countries which has already been offended in a way which I am too modest to describe in the presence of the Government.
    I hope that the Government will look at this very seriously and consider whether they have now come to the conclusion that contracts should be honoured, or whether they really believe that it is a good thing for industry to be pushed into the position in which it is forced to break contracts.
    Sir Richard Thompson: I do not want to repeat the general argument so well put by my hon. Friend—[HON. MEMBERS: "Right honourable."] I accept the correction,

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    and offer him my congratulations on this happy event—by my right hon. Friend the Member for Taunton (Mr. du Cann), because he has done it so well already.
    I want to do what others have done, namely, to relate this problem to a case in my constituency. The firm I have in mind is very much affected by the proposed action of the Government. This firm is called DIAC (Aircraft) Limited, and it describes itself as prototype experimental production machinists and 3-D copying specialists, electronic and mechanical fabricators and assemblers. It may be that from that description hon. Members are not fully aware of what the firm does, so I shall try to put it in the plainest terms. It is a medium-sized firm employing about 170 people including the office staff, and is engaged in highly sophisticated production techniques mainly for the aircraft and electronic industries.
    This firm has had on order—and I have a copy of the contract here—for the past eight months, for delivery during the next few weeks, a unique type of vertical milling machine called a copying mill. This machine will be associated with a completely automated tape path control system developed by Ferranti. [Laughter.] I do not think that there should he any ribaldry over that. This firm is unique in its achievements and has few competitors in the world. I welcome the fact that a firm in my constituency is so advanced in the automation field that it is capable of engaging in this type of work.
    I am informed that this machine is absolutely unique. None exists in this country, or, indeed, outside the United States of America. The machine costs a little over £40,000, and if, as a result of this impost, my constituents were to seek to cancel the order, they would incur a penalty of £10,000 under the penalty clause. That is a considerable sum of money for a small-to-medium-sized company. It is certainly not a sum which it took into account when it entered into the contract. With the installation of this machine Diac Ltd. expects to reduce to about six months processes which at present take up to four years. The machine is fully automated, and requires no additional labour force to operate it.
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    As I have said, my constituents are engaged in some of the most highly experimental and sophisticated subcontract work, mainly for the aircraft industry, working on such projects as the VCIO and TSR2, and also the Concord, in association with SudAviation. They are working on the very frontiers of technology, making equipment not for the aircraft age but for the space age. Surely it is wrong, by means of this indiscriminate surcharge, to penalise people like this. An extra £6,000 on the cost of this machine is not something which this firm can easily swallow.
    A Government who proclaim their devotion to science and technology, and their application to our industrial processes, ought not to act in this way. Here we see the application of science and technology to industry, and yet this firm will be penalised if this impost goes through in the form contemplated.
    Furthermore, the Government want more exports and we are absolutely with them in this, but here we have equipment of immense export potential and significance, the installation of which is being made more costly and more difficult. Again, we understand that the Government want to encourage automation and the most efficient use of labour resources. Why, then, must we hamper re-equipment which serves this very end?
    Finally, I understand it to be the objective of the Government to reduce by their fiscal policies the pressure of demand at home. None of the products which this firm will produce is of a consumption kind. With the aid of this machine the firm will not produce things to sell in the shops. Therefore, it cannot be said that by installing these machines the firm will add to the pressure of demand here. Perhaps the Government would prefer Diac Ltd. not to import this machine. Perhaps they would prefer it to take the hint that it will have to pay an extra 15 per cent., and call the whole thing off. But would the Government feel that the £30,000 also saved, after paying the penalty for default, was an adequate compensation for the loss of an export potential and the failure to modernise plant and equipment?
    My right hon. Friend made the point that the surcharge is said to be temporary.

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    In recent days we have heard that its reduction, and possibly its total elimination, is to take place in a matter of months. We all hope that that is so, but if it is so, there is even less point in penalising the go-ahead, efficient firm, on which our industrial future depends, whatever the Government may be.
    The truth is that we ought to be helping firms like this, not piling obstacles in their way. If the Minister could reconsider his proposals and work out a better set, we should be grateful. I do not profess to try to write them for him; I am only directing my arguments in favour of Amendment No. 20. If he could look at it again so that he could contrive a set of proposals which did not infringe nearly all the things which his Government believe in, I for one, on this side of the Committee, would be ready not to press this Amendment to a Division. I hope that, on reflection, the Minister will be able to say that he is taking this part of his proposals back to have another think about it and produce something less damaging to the progressive, efficient firms and to our national economy.
    Mr. Bessell: I do not want to weary the Committee, so I shall be very brief, but I would like to support, as simply and as quickly and as strongly as I am able, the arguments deployed by the right hon. Member for Taunton (Mr. du Cann). If I may, in parenthesis, offer congratulations as one West Countryman to another, I should like to take this opportunity of doing so.
    Amendment No. 13, which is in the names of my hon. and learned Friend the Member for Montgomery (Mr. Hooson) and myself, is merely a device. We accept the Amendment proposed by the Conservative Party, No. 19, but it has been suggested that there are very real difficulties in applying this exemption. Therefore, my hon. and learned Friend the Member for Montgomery and I decided that this might be a way of making possible to make this exemption without undue difficulty or embarrassment for Her Majesty's Government.
    I have had considerable experience over many years of the import and export business, on both sides of the Atlantic,
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    and I am quite certain that by imposing this levy without warning upon all imported goods to this country with the exception of those which have appeared in the separate list, a great deal of hardship has been caused to a large number of small business people.
    It is on that ground—perhaps only on that ground—that I would implore Her Majesty's Government to look at this matter again. It may well be that the larger companies can afford to take the loss, that they must accept to some extent the risks which are inherent in any business and which may occur at any time when new taxes or import duties are levied, but in this case it is an indiscriminate charge and it has caused a considerable hardship to a number of small business people, as I have stated.
    I believe, therefore, that it would not only raise the stock of Her Majesty's Government in the country as a whole, but it would certainly be regarded as no less than an act of common justice if the Amendment—whichever Amendment it may be—can be accepted. Thus, many people will feel that their grievance has been removed, and I think that this would give great satisfaction to almost every section of the community.
    Sir Harmar Nicholls: On a point of order. All the speeches that we have heard over the last half hour have been purely on trade. Is it within the power of the Committee to see to it that a Minister from the Board of Trade is here? There are Treasury Ministers present, but none from the Board of Trade.
    The Chairman: The hon. Gentleman knows very well that that is not a matter for the Chair. It is not a point of order.
    May I apologise to the hon. Gentleman I am going to call for not calling him earlier? I thought that he was merely seeking to interrupt the last speaker. Mr. Percy Holman.
    It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
    Committee report Progress.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Proceedings of the Committee of Ways and Means may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Lawson.]

  FINANCE BILL
  Again considered in Committee.
  Question again proposed, That the proposed words be there inserted.
  Mr. Percy Holman: We have had a number of speeches dealing with individual firms and their difficulties which have arisen out of this special temporary impost of 15 per cent. on all manufactured or semi-manufactured goods. As an importer for the last 45 years I would say to the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) that I am surprised that he had not a clause in his contract and on his quotation forms to the effect that any import charge should he on the buyer's account. I have seen that on the forms of many merchants and importers.
  We are told of the difficulties relating to a particular machine for Messrs. Wiggins Teape. I hope that this firm is buying the bulk of its machinery in Great Britain. When I was a young man practically every paper-making machine in Scandinavia was a British product and there is no reason why a British firm, financed largely by help from the British Government, should not buy British in respect of a major part of its machinery.
  We spend vast sums on research and it may be that this temporary impost may be unlucky in respect of a particular piece of machinery, but it may not be possible to obtain the machine during the period of the imposition of the surcharge. Most hon. Members opposite must have got a shock when they heard of the figure of our balance of payments deficit. I wish to apologise to my constituents for never mentioning a figure of more than about £450 million as the adverse trade balance. It is now turning out to be considerably in excess of that. I hope that it will not prove to be anything like £800 million, but it looks as though it will be £700 million.
  The Government had to take rapid and drastic action. I have discussed
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  this matter for months past and long before the General Election. Quick action was necessary in an emergency. We destroyed the organisation which could have imposed quotas and action had to be indiscriminate and immediate because contracts are often signed for many months ahead. They can be broken, in most cases without any question of compensation. Several producers on the Continent have written to me saying that a number of orders were cancelled, although some were subsequently reinstated. I do not think that Messrs. Wiggins Teape need to be too unhappy about having to pay a little extra, because of this impost. Most of that company's paper has gone up by £4 a ton since the present Government took office. I can speak with knowledge of that.
  The introduction of the 15 per cent. surcharge has been a nasty, unfortunate, but nevertheless necessary, act on the part of the Government and I can assure hon. Members opposite that I am a sufferer from it. A steamer was in collision while coming out of one of the Norwegian fiords, the result being that goods coming to a firm with which I am concerned arrived after the impost came into operation. I mention this to show that despite the adverse effect of the surcharge, I am prepared to stand by the Government's policy.
  It should be realised that an impost of this description can be spread by firms over many months. It has the advantage of helping our export trade and I would like, if it were possible, bigger incentives to be given to exporters from the money which will be raised by this temporary impost. I regard the surcharge as an inevitable part of the heritage left by the party opposite. The Government realised that quick action was necessary, and thus the surcharge came into being.
  Exemptions can be extremely unfair. It should be realised that contracts can be spread over anything from a month or two to 12 months and while some firms are unlucky in the hardships suffered by any Government policy, equal hardships arise with the establishment of quotas or any other method of restricting imports. I say "Good luck" to the Government because they have done the right thing in the right way.

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  Exemptions of one sort or another are either impracticable or unfair to other importers.
  Mr. H. P. G. Channon: I do not take the same philosophical view of the 15 per cent. surcharge as the hon. Member for Bethnal Green (Mr. Holman). It is all very well for him to say that exemptions make hard law, so to speak, but the Government have completely given away any case of that description by themselves having tabled one Amendment after another to the Bill.
  The hon. Member said that surcharges of this nature were absolutely essential and that no exemptions should be made. It is vital that they should be made. How can he possibly suggest that exemptions are unfair when the Government have themselves, for various reasons, no doubt all good, tabled Amendments to make exemptions? I submit that, although it may be true that many large firms may be able to absorb or offset the 15 per cent. surcharge, there are many small firms which will find the surcharge a severe shock indeed. The hon. Member was being less than fair to the smaller firms which are affected by it.
  It is ironic that the Government should have called this a temporary surcharge. Many small firms which have been caught by contracts they cannot get out of are in an even worse position because they realise that had they waited six months or so they would not have suffered severe consequences resulting from the surcharge.
  There is a case in my constituency, which I have referred to the Board of Trade, and, like my hon. Friend the Member for Peterborough (Sir Harmar Nicholls), I regret that we will not have the advice of a Board of Trade spokesman in the debate tonight. I hope that I will not be thought impertinent in saying that it always seems suspicious when a Government put up two lawyers to present a case. We have heard a good deal about the legal qualifications of the Minister without Portfolio in regard to the legal matters with which he will be involved, but this matter should surely be dealt with by a Board of Trade Minister.
  The Financial Secretary to the Treasury (Mr. Niall MacDermot): I thought that hon. Members opposite might be glad of some variety. I am the Minister who is responsible for matters concerned with Customs and Excise and, consequently, for this part of the Bill. The Committee had the advantage of hearing my hon. Friend the Minister of State, Board of Trade, and will now have the advantage of hearing my hon. Friend the Minister without Portfolio. Perhaps at a later stage in our proceedings they will have the tedium of listening to me, but I can assure them that there is always a responsible Minister present.
  Mr. Channon: I am grateful to the Minister. I am sure that everyone is eagerly awaiting the speech of the Minister without Portfolio, because he always addresses us in such a charming and convincing way. If the Financial Secretary is responsible for this part of the Bill, it is extremely odd that my representations are answered by the Board of Trade and are not forwarded to him.
  Sir Harmar Nicholls: Would my hon. Friend think it proper in his argument to say that the Minister of State, Board of Trade should be prepared to listen to arguments as well as to produce his own?
  Mr. Channon: I am grateful to my hon. Friend. I am sure that he will agree with me that the fact that the Board of Trade has taken upon itself the burden of answering my representations when the Financial Secretary is responsible is another clear indication of the fact that the Government do not know who is responsible for what.
  I hope that the Committee will forgive this somewhat frivolous start to my remarks, because I have a serious point to raise. I hope that the Minister without Portfolio will not think that I do not genuinely have a serious constituency point to put to him.
  There is in my constituency a small firm—this matter affects small firms in particular—which has been caused extreme hardship. It is the importer of certain kinds of yarns which are obtainable in this country, but they are extremely difficult to obtain. There is a considerable waiting list and a considerable shortage of this type of yarn. It becomes virtually impossible for the firm

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  which wishes to import it to get the supplies that it wants.
  To make matters worse, the margins in this trade are extremely tight. This firm has, for example, entered into an extremely tight contract to buy things abroad and to import and sell them at a fixed price which it has already negotiated. The 15 per cent. surcharge will make a very substantial difference to this concern, and even if it does not result in financial ruin it will come jolly close to it. This is only one of many examples of small firms which are genuinely hit by this surcharge.
  What makes matters worse is the fact that the Government originally said that they would exempt raw materials. I do not think that what they have exempted includes all raw materials. Nevertheless, contracts have been placed by this firm to buy yarn, produce the finished article—
  Sir Eric Fletcher: I do not want to interrupt the hon. Gentleman, but it is not clear how the difficulties of his constituent would be improved if these Amendments were accepted. It seems to me that he is, perhaps, concerned with the inclusion of further items in the Schedule.
  Mr. Channon: The point that I am making is this. This firm entered into contracts which it is extremely difficult, if not impossible, to get out of. If it had the opportunity to get out of them, it would no doubt cancel them and it would not be hit by the surcharge. There is a case for further exemptions to which we will come later in the Bill. Even a few pennies difference in this trade makes all the difference between a profit or a loss. This is a small firm which faces bankruptcy as the result of the surcharge. I have approached the Board of Trade on its behalf, but, unfortunately, I have not managed to get any satisfaction.
  My hon. Friend the Member for Bath (Sir E. Brown) only a few moments ago brought to my notice a case of a slightly different kind. A firm in his constituency bought a certain type of crane from America. It was exempted from import duty. The Board of Trade recognised that, owing to the special circumstances of the case, it should be entitled to a licence to import it duty free. When the surcharge was imposed on 27th
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  October the crane was in transit. It was due to arrive—in fact it may have arrived—in the third week in November. This firm is unable to cancel the order and, at the same time is faced with what is to it the insurmountable problem of possibly having to pay duty of about £10,000. No doubt it is extremely difficult to devise a method to get over this, but I cannot believe that it is impossible.
  These Amendments are being pressed because there is a serious point behind them.
  Mr. Stanley Orme: With no sincerity.
  Mr. Channon: The hon. Gentleman may disbelieve me, but I assure him that there is a serious point behind these Amendments and many people are affected by them. If he thinks the contrary, perhaps he will get up and say so and then we can have it on record.
  10.15 p.m.
  Mr. Orme: The hon. Gentleman said that he was pressing these cases, and I said "With no sincerity", and I meant it.
  Mr. Channon: As far as I know, I have never had the privilege of speaking to the hon. Member for Salford, West (Mr. Orme) before, but I am astonished that someone should make that accusation against another hon. Member who is doing his best to represent his constituents.
  Mr. J. M. L. Prior: On a point of order, Dr. King. Is it in order for an hon. Member to accuse another of no sincerity or complete insincerity? Ought not the remark to be withdrawn?
  The Chairman: It is not in order for hon. Members to make personal attacks upon one another or to impute false motives to one another. I hope that the hon. Member for Salford, West will withdraw his remark.
  Mr. Orme: Dr. King, I withdraw any imputation which may be thought particularly to reflect on the Chair—
  The Chairman: Order. No reflection is made upon the Chair. Any attacks in the Committee are made between hon. Members who differ politically. All such political attacks and the clash of ideas are quite within order. It is not in order for an hon. Member to impute

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  personal or false motives against another hon. Member, and I hope that the hon. Gentleman will withdraw what he said.
  Mr. Orme: My remarks were not made in a personal sense, Dr. King. [HON. MEMBERS: "Withdraw."] If hon. Members will wait, I shall, perhaps, be allowed to make my point. [HON. MEMBERS: "Withdraw. That is all that is necessary."] The point I was making was to question not the individual sincerity of the hon. Member for Southend, West (Mr. Channon) but the sincerity of the argument.
  Lieut.-Colonel Sir Walter Bromley-Davenport: On a point of order, Dr. King. The hon. Gentleman said no such thing. He made a definite charge against my hon. Friend of personal insincerity.
  The Chairman: It would be more in keeping with the spirit of the House if the hon. Member for Salford, West made the statement he has just made and then withdrew his first remark. I ask him to withdraw the charge of insincerity which he made.
  Mr. Orme: Very well, Dr. King. I withdraw the personal implications but stick to the broad premise.
  Mr. Channon: I am grateful to the hon. Gentleman for that withdrawal, as far as it went. I can assure him—I hope that he will not find this insincere—that when he is addressing the Committee on a constituency matter he will not have to meet the same kind of treatment from this side.
  I am sure that the Minister agrees that this is a serious point, even though he may disagree with the substance of it. I accept that there may be difficulties in exempting either goods in transit or goods the subject of a contract entered into, but considerable hardship is being caused to a number of small and medium firms. I refer to the purpose of the import surcharge as stated by the Financial Secretary of 24th November:
  "May I remind hon. Members, first, what the object of this charge is? It is to reduce imports, reduce them substantially and reduce them quickly".—[OFFICIAL REPORT, 24th November, 1964; Vol. 702, c. 1215.]
  Acceptance of this Amendment will make no difference to the level of imports.
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  These are goods which will come in anyway. I hope that the Government will reconsider the matter and give help to the many people who are genuinely affected and genuinely in deep trouble as a result of the present wording of the Clause.
  Mr. Peter Emery: I realise that it is late, but three very important Amendments are being discussed at the same time as Amendment 19. I call attention first to Amendment No. 14, to delete subsection (8). By their action, the Government are altering contracts freely entered into by willing buyer and willing seller. If this is not so, I hope that we shall have the proper correction. There is a great deal of worry among industrial buyers about the subsection as a whole.
  I reinforce what was said by my hon. Friend the Member for Southend, West (Mr. Channon). We are delighted to have the Minister without Portfolio to answer the debate, but industry is concerned about the industrial aspects of these questions and it will judge the Government very harshly for not having even one of six Ministers at the Board of Trade present. This is no reflection upon hon. Gentlemen now on the Front Bench, but it underlines the fact that the Government do not care about the way they deal with industry. This is a terrifying prospect to emerge from this most important debate.
  Mr. Prior: Perhaps the reason why Ministers of the Board of Trade are not represented on the Government Front Bench is that they are so disgusted with this whole business that none of them dares to come to listen.
  Mr. Emery: I did not want to go to those extremes, but my hon. Friend may well be right.
  On subsection (8), as I understand the Amendment, we transfer automatically from the seller to the buyer, indeed, to the ultimate buyer, this particular surcharge. If that is so—and the right hon. Gentleman seems to be nodding—it means that where a buyer has brought in a contract exempting himself in a specific clause of that contract from any increase in the surcharge, that clause is null and void. It seems very strange and unusual for the Government to be encouraging a breach of a freely negotiated contract.
  The right hon. Gentleman must realise that over the last three months, because

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  of the fear of a Labour Government coming into power, a considerable number of buyers attempted to ensure that their figures in their purchase prices were at all times absolute. I heard an hon. Member opposite say, "All the more reason for this Clause". He is suggesting that buyers in industry do not know their own business and that they should be lectured from the Government Front Bench. That is a strange statement., particularly if it comes from a Minister of the Treasury and not of the Board of Trade.
  What industrial buyers have attempted to do over this period is to make the best bargains for their firms. They have bought only when they were absolutely certain that the prices at which they would be purchasing would not be reflected to their own customers. What the Government are saying is that it does not matter how good the contract was, nor how well buyers attempted to reinforce their position, a contract by this action of the Government will be rendered null and void. That needs a lot of explanation by the Government.
  I turn to the position about delivery. I cannot for the life of me see what possible advantage the Government can have in not allowing this Amendment to be passed. Perhaps the wording is not adequate and perhaps they would like to change it, but what possible advantage can they obtain in demanding a surcharge on goods which have been bought and are already on the way of delivery? There are many ways of wording this Amendment, but we on this side of the Committee urge that this is the most simple of all. Where goods can be proved to be on the way of delivery, where there is a delivery note and they are in transit, the surcharge should not be made to the buyer.
  The Financial Secretary said that it was imperative to make this bite, but it cannot do anything useful by encouraging the cancellation of orders of goods already on the way and being delivered. There is not any common sense in this, nor any business sense. Cannot the Government reconsider this aspect to see whether they can meet the genuine objections of industry in regard to the delivery of goods? I am told—I should like to be corrected if I am wrong—that even before the Bill becomes an Act the Customs and
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  Excise are demanding surcharges before they will release goods from the docks. Is this so? If it is, there is a very strange position. It seems that they are taking firms' money on deposit—I am told that it is put into a separate account, but it has to be paid—and presumably the interest is obtained before the goods are released and before the Bill becomes an Act of Parliament.
  I turn to the aspect which perhaps is the most important, that of contracts. We have heard much said about small businesses and that is of particular importance. This aspect of contracts entered into affects not only small businesses, but also very large firms. I shall quote two examples dealing with tens upon tens of thousands of pounds affected by this surcharge. In November, 1963, a firm decided to construct at its factory a plant for the manufacture of a certain type of product. A substantial portion of its product will be exported. When the decision had been made a programme for constructing and equipping the plant was laid down. According to plans, the plant was to be operational in 1966.
  The total cost of the plant and equipment is about £3 million, of which approximately £600,000 is for specialised equipment obtainable only in America. The specialised equipment was ordered in February, 1964, the delivery phased to coincide with the building operations. Approximately £100,000 worth of the equipment has already been delivered, leaving a balance of £500,000 worth to come. Building for this equipment has begun. This machinery is absolutely essential for the continuation and expansion of the firm's export business. The Committee will readily understand that the project is getting into very large sums of money. This firm is considering what is the meaning of the words used by the President of the Board of Trade. What is "a temporary impost"?
  Hon. Members: Where is he?
  10.30 p.m.
  Sir Harmar Nicholls: On a point of order. References in speeches are entirely Board of Trade references. Would you be prepared, Sir Samuel, to accept a Motion that you do report Progress and ask leave to sit again? There are five Ministers at the Board of Trade.

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  These are arguments which ought to be heard and answered by a Board of Trade Minister.
  The Deputy-Chairman: That is not a point of order and I am not prepared to receive such a Motion.
  Mr. Emery: We well understand that you cannot accept a Motion, Sir Samuel, but the debate is on matters more and more affecting the Board of Trade. An hour ago it was suggested that one of the Members on the Government Front Bench should send for a Board of Trade Minister to listen to the debate. If this state of affairs had occurred in the last Parliament what an uproar there would have been.
  Mr. Channon: Has my hon. Friend observed that the Leader of the House has arrived? Could he ask, through the Leader of the House, for the presence of a Board of Trade Minister?
  Mr. Emery: I see the Leader of the House at the end of the Front Bench. Good evening. Before I am called to order, may I acquaint him with the fact that there is considerable disquiet arising from the situation that we are dealing with legal aspects of contract and delivery, all arguments having to do with trade, and that although there are six Ministers at the Board of Trade, not one has been sufficiently courteous to the Committee to attend and listen to the arguments. I hasten to add that we are delighted to see the two legal representatives of the Government, but it must be wrong for there to be no Minister from the Board of Trade present when the whole debate is on trade.
  May I continue with the example which I was giving? The equipment costs £500,000. The firm is trying to decide what is meant by the temporary basis of the surcharge mentioned by the President of the Board of Trade. If it is to be temporary, the firm is willing to try to postpone the contract in order that it has not to pay 15 per cent. on £500,000. The benefit of the improvement in plant will go largely to exports. Surely the Government only lose by demanding 15 per cent. on a contract which has already been negotiated. It is of the greatest importance to the efficiency of the firm that it should be able to go forward with this equipment knowing that the Govern-
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  ment are not "taking the firm for a ride".
  Another example, again involving a considerable sum of money, is of a company building a plant at Dundonald, in Ayrshire. I am pleased to speak for Scotland when there are so few Scots present on the Government benches. This company is in a development area, the contract was made many months ago and the plant costs £260,000. My informant says that firms are offered inducements in the form of capital grants to assist employment in development areas but that the new levy can seriously detract from such advantages and in future would have to be taken into account when carrying out any economic evaluation of further operations in the United Kingdom.
  The firm is saying that it is being encouraged to go into a development area yet it finds immediately that part of the risk which it is taking and its capital investment are being "upped" by an extra 15 per cent. These are on past contracts, and it is on the aspect of contracts entered into that I wish strongly to urge the Minister without Portfolio to reconsider the whole of the Government's position. Will the hon. Gentleman realise that if the contractor attempted to safeguard himself, subsection (8) would not allow him to do so and that is that?
  Mr. Holman: In going to the special area the person concerned still has the same net advantage because the 15 per cent, impost is universal.
  Mr. Emery: I am delighted to take that point, because it is so easily answered. The point is that these people did not necessarily want to go into the area. They were induced to go, and in going they are taking a number of risks which they did not want to take. They are attempting to deal with specific economic problems. They should not be induced with one hand and then slapped down with the other. This must have an effect on anybody else who is considering that type of action.
  What have I said? [Laughter.] I specifically said that, because it had seemed to me once before that hon. and right hon. Members opposite think that this is a laughing matter. They do not think that a serious argument is being put forward. It is in that spirit

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  that they have dealt with the Amendments throughout. This is why no representative of the Board of Trade is present. The Financial Secretary to the Treasury appears to shake his head, but industry will have to decide, not the hon. and learned Gentleman. This proposal in the Bill considerably increases capital costs on contracts entered into which have been finally costed and
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  which may now bear a considerable loss. If they bear a loss, the Government must realise that the larger firms will probably stop these extensions. Do the Government wish to stop the further development of large-scale industry? If they do not, they must somehow make an allowance on the lines of these Amendments.
  Sir Eric Fletcher: I should like to begin by offering most cordial congratulations to the right hon. Member for Taunton (Mr. du Cann) on the honour bestowed upon him as indicated in the late Prime Minister's Dissolution Honours List today.
  A number of arguments have been addressed to the Committee in support of the five Amendments which we are discussing. I will do my best to deal with as many of them as possible. Perhaps I should indicate, however, that some of the speeches made do not seem to have been directed to these Amendments at all.
  I must remind hon. Members that the Committee has just adopted Clause 3 without a Division. In other words, we start from the premise that the Committee has agreed to the principle of the temporary surcharge of 15 per cent. on imports. These Amendments are directed to making exemptions in two specific classes of goods—goods in transit and goods which have been the subject of a contract already made. I shall seek to show that it would be contrary to the object of Clause 3 and to the Government's objectives in this surcharge operation if either of those suggestions were accepted.
  I appreciate, as we all do, that a certain amount of hardship is imposed on a number of people when an additional Customs duty is imposed. Obviously, no taxation can be imposed without somebody suffering as a consequence, but the Committee has recognised that our balance of payments position is such that steps have had to be taken to reduce the deficit. We have heard criticisms from various hon. Members, and hon. Members on either side of the Committee are naturally impressed by complaints which they have received from their constituents. We have heard of a number of hard cases.
  Sir Harmar Nicholls: I understand the hon. Gentleman to be arguing that, because we have passed Clause 3 without a Division, we have therefore completely accepted the principle that the surcharge should be applied. However, we accepted that Clause without a Division in the knowledge that the Government themselves had already put down Amendments to exempt certain categories. would not the hon. Gentleman agree that
  384
  the Government have breached the principle themselves and that we are therefore entitled to push for further exemptions if the arguments for them are justified?
  Sir E. Fletcher: The hon. Gentleman is mistaken. When we discuss the Schedules, we shall be able to discuss whether certain goods are properly included in the surcharge, but at the moment we are arguing whether it is possible or practicable, even wise and just, to exclude from the operation of the surcharge all goods in transit and all goods subject to a contract. I shall seek to show that it would be quite impossible to do that.
  I shall first deal with goods in transit, the subject of an Opposition Amendment and a Liberal Amendment. One of the difficulties about exempting goods in transit is that it is quite impossible to define "goods in transit". I will seek to explain why. One can determine the point at which goods arrive in this country and thereby when they are entered for Customs and become liable for duty, but it is impossible to decide what goods were ever destined to come to this country.
  Hon. Members who are familiar with commercial operations will know perfectly well that many shipments of goods from foreign countries take place in circumstances in which the port of destination is not known at the time of shipment. The port of destination is very often changed during the course of the voyage, often by telegraphic or telephonic instructions to the captain of the ship. It would open the door to considerable evasion if goods intended for some other country were diverted to this country and thereby enabled to escape liability for surcharge. There is a major difficulty about giving exemption to goods in transit, partly because of the difficulty of deciding which goods in transit were originally intended to come to our shores.
  10.45 p.m.
  The second difficulty, of course, is that it would produce a whole range of anomalies, because goods in transit may come from some other European country or may come from the Far East, in which case there would be a long period of transit, and it would in effect be giving an unfair discrimination against goods

  385
  from Europe, if there were relief given to goods shipped perhaps a month or two or even more before from other ports. It would really produce intolerable difficulties.
  The right hon. Gentleman said that as this is a temporary surcharge intended to be of only short duration the administrative difficulties could be ignored, but as a matter of fact the argument is exactly the opposite to what the right hon. Gentleman put forward. The administrative difficulties of dealing with goods in transit are precisely the same whatever the duration of the charge, and it is exactly because this is a charge intended to be of temporary duration that it is not worth while going to the cost and expense and difficulty of erecting all the administrative machinery which would be required to disentangle legitimate goods in transit from cases of evasion.
  Mr. Bessell rose—
  Sir E. Fletcher: Let me finish this part of my argument. I am dealing now with goods in transit. Then I will give way. All right, I will give way now.
  Mr. Bessell: I am grateful to the hon. Gentleman. The whole point of my Amendment, and that of my hon. and learned Friend the Member for Montgomery (Mr. Hooson), Amendment No. 13, is that it specifically applies exemption to goods for which bills of lading specifying a British port of entry have been already dispatched, that is to say, dispatched prior to 27th October. The arguments which the hon. Gentleman is advancing, I would suggest, are covered by that Amendment.
  Sir E. Fletcher: I had not overlooked the hon. Gentleman's Amendment. I was coming to deal with it in a moment. I was going to say that, as so often happens in these cases, I found the Liberal Amendment on this subject of goods in transit more intelligent and more sensible than the Amendment of the right hon. Gentleman. [HON. MEMBERS: "Oh."] T was just coming on to say that I am perfectly prepared to give credit to the hon. Members on the Liberal bench, that their Amendment goes some way to overcome the objection to the Conservative Amendment, which I call the difficulty of controlling legitimate as distinct from evasive goods in transit. The Liberal Amendment is more specific. It
  386
  would enable one to rule out the ambiguous cases in which one did not know to what country the goods were originally consigned.
  It is general Customs practice, and always has been, in this country, and, as far as I know, in all other countries, that Customs duties operate on goods in transit, that is the universal practice in our country and all countries down to date. There has been an attempt in recent years in Canada and Australia, to exclude from charge goods in transit if so defined in the kind of way the Liberal Amendment suggests, and we have examined that. But I must tell the hon. Member quite candidly that we have come to the conclusion that, although it might be possible to make that kind of exclusion in the case of Canada and Australia, where the countries from which goods are imported are far more limited, it would really not be practicable in our case, and moreover it would act against the basic principle of Government policy, which is that this surcharge should operate immediately, that it should have a quick immediate effect on all goods as from a precise, definite date. If one were to exclude goods in transit from liability to a temporary charge of this kind, there would be the further difficulty that when the surcharge was removed it would be only equitable to retain the charge in respect of goods which were then in transit.
  Mr. Heath: When the hon. Gentleman says that the Government's objective is to make this surcharge effective, he presumably means keeping imports out. Goods in transit, or on order, will not be kept out by this provision. They are bound to come in in the same way. All that they do is bear the surcharge, which is a burden on industry and on the whole working of the economy. The method suggested by the Liberal Amendment is one practical way of identifying them, but would not the hon. Gentleman also agree that now, one month after the date of the imposition of this surcharge, there can be very few cargoes in the world which can be diverted? They are all here now.
  It is only a question of looking at the bills of lading and seeing that the date was 27th October, or earlier, to distinguish them. This does not require great administrative machinery, or anything

  387
  like that. It can be done easily at the ports.
  Sir E. Fletcher: The right hon. Gentleman made three points. He said, quite rightly, that if the surcharge bites on goods in transit it does not keep those goods out. Quite obviously it does not, but it may indirectly limit the quantum of other goods which are coming in subsequently. I should have thought that that was obvious.
  The whole intention of the surcharge is to limit the totality of goods which come in. If one makes an exemption in respect of these specific goods, one gives an unfair advantage to others. I hope that the right hon. Gentleman will bear in mind that during this debate three hon. Members on the benches opposite have pointed out that many importers have been forestalling the operation of this surcharge, because they anticipated it, and have been trying to send goods—some of which are now in transit—to this country before the introduction of the surcharge. It would be morally wrong to give those importers a benefit over those who have not made imports into this country.
  Mr. Peter Emery: The hon. Gentleman said that he saw great difficulties in being able to define this. He said that on the whole he could not see an administrative way of getting round it. Would he be willing to have discussions with the professional bodies dealing with this matter? They believe that they can quite definitely and objectively define this. Before he forces this matter through, would he be willing to do what the Board of Trade has not so far done, namely, have discussions with the professional bodies affected to see whether they can advise him on the method of applying this?
  Sir E. Fletcher: I am not prepared to give that undertaking because, as I pointed out, these administrative difficulties are only one of the various objections to the acceptance of the Amendment. The Board of Trade and the Customs have been into this matter very thoroughly already.
  I pass briefly to the other Amendment which we are discussing, namely, the one dealing with contracts which have been entered into. Here I must refer to the speech of the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid), be-
  388
  cause there seems to have been a good deal of confusion about the operation of the Act of 1901.
  In this connection I would refer to the valuable observations, as I thought them, of my hon. Friend the Member for Bethnal Green (Mr. Holman). He pointed out that there may be contracts of three different kinds. There may be a contract in which it is provided that all Customs duties are for the buyer's account. In that case no problem arises. There may be contracts in which that is not provided. In answer to the hon. Member for Walsall, South, as I told him at the time, the Act of 1901—which has been in operation now for 63 years—provides that whenever there is a new imposition of Customs duty the seller, in the absence of an agreement to the contrary, is able to add that additional Customs duty in his price to the buyer, and the whole intention of subsection (8) is to go on to provide that even if there is an agreement to the contrary that shall not operate, and the seller can still pass on that liability to the buyer.
  The hon. Member for Reading (Mr. Peter Emery) took exception to that. He took an exactly contrary view to that of his hon. Friend the Member for Walsall, South. What the Government have done in this respect is to have regard—as I am sure the right hon. Member for Bexley (Mr. Heath) would wish them to do—to the wishes of some E.F.T.A. and Commonwealth exporters. Subsection (8), which the right hon. Member for Taunton wishes to remove, is introduced for the specific purpose of protecting those E.F.T.A. and Commonwealth exporters who otherwise might have had a legitimate grievance in this respect.
  Mr. William Baxter: I am most interested in that part of my hon. Friend's speech dealing with passing on to the consumer any increase in costs caused by an alteration in the import duty, irrespective of the contents of the contract. If, perchance, a retailer passed that on to another contracting company which was under a set-price contract, say, with a local authority, could it then get a nullification of its contract, if it were on a fixed-price basis?
  Sir E. Fletcher: In the ordinary case, if there is an existing contract the Act of 1901 enables a seller in this country

  389
  to pass on the surcharge to a buyer in this country.
  I want to conclude by dealing with the cases raised by a number of hon. Members about the difficulties which they say arise where specific pieces of machinery have already been imported, or have been agreed to be imported, under contract. Everyone recognises that there may be difficulties for various importers where they have committed themselves to buying machinery, but it is relevant to remind the Committee that it is largely because there has been such an excessive importation of machinery in recent months that these steps are necessary, in order to correct our balance of payments. I would add that importers of machinery, as distinct from importers of raw material, will get the benefit of the initial allowances and the investment allowances, as a result of which they will not suffer to anything like the extent of the 15 per cent. surcharge. The figure in their case will be substantially reduced.
  For all these reasons I must advise the Committee, consistent with the provisions of the Bill, that the Amendments should be resisted.
  11.0 p.m.
  Mr. Prior: I want to take up the time of the Committee for only one minute. The hon. Gentleman could have given me a chance to make my few comments before he got up, as I have listened to the whole of this debate so far. I want to make a constituency point. This point backs up the speech of my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid), because I have details of a case where a contract was entered into on 5th October with a firm in Norway to buy 2,000 tons of fertiliser. This was at a fixed price, duty free at an East Coast port.
  According to Clause 3(8), the extra 15 per cent. surcharge can now be passed on in the original price—it was £23 10s. a ton and it now becomes £26 a ton or thereabouts. But this supposes that this company which has imported this fertiliser can pass it on in turn to its customers.
  Sir Eric Fletcher: If there has been a contract pre-existing he can, under the 1901 Act.
  Mr. Prior: In agriculture, it is quite usual for no contract as such to be entered into. So this firm has now agreed to import 2,000 tons, it has to pay the extra duty, and it stands no chance at all of being able to pass this duty on to the farming community, because they can obtain at least part of the fertiliser they want at a lower price from the British market.
  The object of the surcharge is to keep down imports and increase home production thereby. At the moment, we are producing, flat out, all the nitrogenous fertiliser we can, and therefore all we are doing by putting on this surcharge is either to cause this firm the grave embarrassment of having to pay the extra duty and hold supplies it cannot sell or we are denying to the farming community the chance to buy this fertiliser and improve their production. That is the sort of case which could be dealt with under one of these Amendments.
  If we are to have no remission in the case of contracts entered into before 26th October, then this firm will be placed in very serious trouble. Ruin, as my right hon. Friend said in opening this debate, is not too strong a word in a case like this. The Government have not had any speeches from their own back benches, and hon. Members opposite have made no constituency points. That is very strange. I cannot believe that we are the only people with constituency points. There must be many hon. Members opposite who have them. This is a serious matter, and I hope that the Government will look at this again to see whether they cannot make provision, which is covered by one of our Amendments, to put this matter right.
  Mr. G. B. Drayson: I am very sorry that the Minister without Portfolio has not been able to distinguish in these Amendments the difference between materials in transit and orders for machinery to increase the efficiency of firms which have ordered machinery from overseas because they have not been able to get comparable machines in this country. If there were anybody on the Government Front Bench from the Board of Trade, they would know that I have been in correspondence with that Department on the subject of machinery ordered by a firm in my own constituency which wishes, naturally, to

  391
  increase its efficiency and production and to increase its exports as well.
  These machines are subject to a contract which has been entered into over many months, after very careful investigation as to whether the appropriate machines were available in this country. I wish that the Minister would look at this whole matter again, because what the Government are doing is taxing efficiency. We do not claim that we have machines manufactured in this country which will do every job, and, therefore, we are relying considerably on the export of our machine tools overseas, and there is a give and take in the machine tool industry. Some firms overseas may have machines which we need, while we have machines which companies overseas wish to import from us. Where a contract is in existence—and the Minister specifically referred to contracts in existence—it should not be impossible to differentiate and make an exception so that where a machine has been ordered and the necessary financial arrangements entered into, a remission of duty should take place.
  Mr. du Cann: I should like, first, to thank the Minister without Portfolio and the whole Committee for the kind things they have said about me this evening.
  There is overwhelming evidence, from the admirable speeches made by my hon. Friends—including my hon. Friend the Member for Yarmouth (Mr. Fell), my hon. Friend the Member for Reading (Mr. Peter Emery), my hon. Friend the Member for Lowestoft (Mr. Prior) and my hon. Friend the Member for Skipton (Mr. Drayson)—that the situation which the Government have themselves created is thoroughly unfair in respect of these two categories. There is further overwhelming evidence to show that there will be no saving in imports because the Government are, apparently, unwilling to accept our reasonable Amendment. There will be no saving in foreign currency, an unnecessary increase in
  costs and a sense of injustice throughout industry.
  The whole of industry will be bitterly disappointed by the Minister's speech. We entirely appreciate that there might be difficulties over the drafting of the Amendment, but I pointed out at the outset that we were not particularly wedded to the wording. We are concerned only that this injustice be removed. Hard cases make bad law. I was weaned on that phrase and I dare-say the Minister was, too. I beg him to remember it.
  We appreciate that it may not be possible for the Chancellor of the Exchequer to be present tonight. That may create certain difficulties for the Committee as a whole, but the absence of a Board of Trade representative, certainly for most of this discussion, cannot be so easily excused. I hope, therefore, that the Minister without Portfolio will bring what has been said in this debate to the notice of the Chancellor, and perhaps the Government may decide to table an Amendment to deal with the position on Report because, with the greatest respect for the Minister, I positively refuse to believe that the matter cannot be dealt with.
  To hear the Minister say that it was not practical to deal with the matter surprised me. Frankly, I was shocked to hear the word "impossible" come from the lips of a Minister of Her Majesty's Government on a question relating to righting an injustice. [Interruption.] Hon. Members opposite below the Gangway should realise that there is an injustice. As we have pointed out, some manufacturers, agents and others are facing ruin. It is right that we should take this matter seriously and I must advise my hon. Friends to vote in favour of the Amendment.
  Question put, That the proposed words be there inserted:—
  The Committee divided: Ayes 160, Noes 187.

  Division No. 20.]

  AYES

  [11.9 p.m.

  Agnew, Commander Sir Peter

  Bennett, F. M. (Torquay)

  Blaker, Peter

  Alison, Michael (Barkston Ash)

  Berkeley, Humphry

  Bowen, Roderic (Cardigan)

  Astor, John

  Berry, Hn. Anthony

  Box, Donald

  Atkins, Humphrey

  Bessell, Peter

  Boyd-Carpenter, Rt. Hn. J.

  Awdry, Daniel

  Biffen, John

  Braine, Bernard

  Baker, W. H. K.

  Biggs-Davison, John

  Brewis, John

  Barlow, Sir John

  Bingham, R. M.

  Brinton, Sir Tatton

  Batsford, Brian

  Black, Sir Cyril

  Bromley-Davenport,Lt.-Col.Sir Walter

  Brooke, Rt. Hn. Henry

  Heath, Rt. Hn. Edward

  Morrison, Charles (Devizes)

  Brown, Sir Edward (Bath)

  Hendry, Forbes

  Murton, Oscar

  Buchanan-Smith, Alick

  Higgins, Terence L.

  Nicholls, Sir Harmar

  Buck, Antony

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

  Noble, Rt. Hn. Michael

  Butcher, Sir Herbert

  Hirst, Geoffrey

  Nugent, Rt. Hn. Sir Richard

  Carlisle, Mark

  Hornby, Richard

  Onslow, Cranley

  Carr, Rt. Hn. Robert

  Hornsby-Smith, Rt. Hn. Dame P.

  Osborn, John (Hallam)

  Channon, H. P. G.

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

  Osborne, Sir Cyril (Louth)

  Chataway, Christopher

  Howe, Geoffrey (Bebington)

  Page, John (Harrow, W.)

  Chichester-Clark, R.

  Hunt, John (Bromley)

  Page, R. Graham (Crosby)

  Clark, William (Nottingham, S.)

  Irvine, Bryant Godman (Rye)

  Pickthorn, Sir Kenneth

  Cooke, Robert

  Jenkin, Patrick (Woodford)

  Pitt, Dame Edith

  Cooper-Key, Sir Neill

  Johnston, Russell (Inverness)

  Pounder, Rafton

  Crawley, Aldan

  Jones, Arthur (Northants, S.)

  Powell, Rt. Hn. J. Enoch

  Cunningham, Sir Knox

  Jopling, Michael

  Prior, J. M. L.

  Curran, Charles

  Kaberry, Sir Donald

  Pym, Francis

  Currie, G. B. H.

  Kershaw, Anthony

  Rawlinson, Rt. Hn. Sir Peter

  Davies, Dr. Wyndham (Perry Barr)

  Kilfedder, James A.

  Redmayne, Rt. Hn. Martin

  d'Avigdor-Goldsmid, Sir Henry

  Kimball, Marcus

  Rees-Davies, W. R.

  Dean, Paul

  King, Evelyn (Dorset, S.)

  Roberts, Sir Peter (Heeley)

  Deedes, Rt. Hn. W. F.

  Kitson, Timothy

  Roots, William

  Douglas-Home, Rt. Hn. Sir Alec

  Lambton, Viscount

  Russell, Sir Ronald

  Drayson, G. B.

  Lancaster, Col. C. G.

  Scott-Hopkins, James

  du Cann, Edward

  Legge-Bourke, Sir Harry

  Sharples, Richard

  Eden, Sir John

  Litchfield, Capt. John

  Spearman, Sir Alexander

  Emery, Peter

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

  Stainton, Keith

  Fell, Anthony

  Lloyd, Ian (P'tsm'th, Langstone)

  Stanley, Hn. Richard

  Fletcher-Cooke, Charles (Darwen)

  Lloyd Rt. Hn. Selwyn (Wirral)

  Summers, Sir Spencer

  Forrest, George

  Longbottom, Charles

  Taylor, Edward M. (G'gow, Cathcart)

  Foster, Sir John

  Loveys, Walter H.

  Thompson Sir Richard (Croydon,S.)

  Fraser,Rt.Hn.Hugh(St'fford & Stone)

  Lubbock, Eric

  Tilney, John (Wavertree)

  Fraser, Ian (Plymouth, Sutton)

  Lucas-Tooth, Sir Hugh

  Turton, Rt. Hn. R. H.

  Gammans, Lady

  Mackenzie, Alasdair (Ross&Crom'ty)

  van Straubenzee, W. R.

  Giles Rear-Admiral Morgan

  Mackie, George Y. (C'ness & S'land)

  Walters, Dennis

  Gilmour, Sir John (East Fife)

  McNair-Wilson, Patrick

  Ward, Dame Irene

  Goodhew Victor

  Maginnis, John E.

  Weatherill, Bernard

  Grant, Anthony

  Marten, Neil

  Whitelaw, William

  Griffiths, Peter (Smethwick)

  Mathew, Robert

  Wilson, Geoffrey (Truro)

  Grimond, Rt. Hn. J.

  Mawby, Ray

  Wolrige-Gordon, Patrick

  Hall, John (Wycombe)

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

  Wood, Rt. Hn. Richard

  Hall-Davis, A. G. F.

  Meyer, Sir Anthony

  Woodnutt, Mark

  Hamilton, Marquess of (Fermanagh)

  Mills, Peter (Torrington)

  Wylie, N. R.

  Harrison, Col. Sir Harwood (Eye)

  Miscampbell, Norman

  Younger, Hn. George

  Hawkins, Paul

  Mitchell, David

  Hay, John

  Monro, Hector

  TELLERS FOR THE AYES:

  Heald, Rt. Hn. Sir Lionel

  Morgan, W. G.

  Mr. McLaren and Mr. More.

  NOES

  Abse, Leo

  Delargy, Hugh

  Hamling, William (Woolwich, W.)

  Albu, Austen

  Dell, Edmund

  Harper, Joseph

  Alldritt, W. H.

  Dempsey, James

  Harrison, Walter (Wakefield)

  Armstrong, Ernest

  Diamond, John

  Hayman, F. H.

  Atkinson, Norman

  Dodds, Norman

  Hazell, Bert

  Bagier, Gordon A. T.

  Doig, Peter

  Heffer, Eric S.

  Barnett, Joel

  Driberg, Tom

  Holman, Percy

  Baxter, William

  Duffy, Dr. A. E. P.

  Hordern, Peter

  Beaney, Alan

  Dunn, James A.

  Houghton, Rt. Hn. Douglas

  Benn, Rt. Hn. Anthony Wedgwood

  Dunnett, Jack

  Howarth, Harry (Wellingborough)

  Bennett, J. (Glasgow, Bridgeton)

  Edwards, Rt. Hn. Ness (Caerphilly)

  Howarth, Robert L. (Bolton, E.)

  Bishop, E. S.

  Edwards, Robert (Bilston)

  Hoy, James

  Blackburn, F.

  English, Michael

  Hughes, Emrys (S. Ayrshire)

  Blenkinsop, Arthur

  Ennals, David

  Hunter, Adam (Dunfermline)

  Boardman H.

  Ensor, David

  Hunter, A. E. (Feltham)

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

  Fernyhough, E.

  Irving, Sydney (Dartford)

  Boyden, James

  Finch, Harold (Bedwellty)

  Jackson, Colin

  Braddock, Mrs. E. M.

  Fitch, Alan (Wigan)

  Janner, Sir Barnett

  Bradley, Tom

  Fletcher, Sir Eric (Islington, E.)

  Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)

  Bray, Dr. Jeremy

  Fletcher, Ted (Darlington)

  Jones, Dan (Burnley)

  Brown, Hugh D. (Glasgow, Provan)

  Fletcher, Raymond (Ilkeston)

  Jones,Rt.Hn.SirElwyn(W.Ham,S.)

  Brown, R. W. (Shoreditch & Fbury)

  Foley, Maurice

  Jones, J. Idwal (Wrexham)

  Buchan, Norman (Renfrewshire, W.)

  Foot, Michael (Ebbw Vale)

  Jones, T. W. (Merioneth)

  Buchanan, Richard

  Fraser, Rt. Hn. Tom (Hamilton)

  Kelley, Richard

  Carmichael, Neil

  Freeson, Reginald

  Kenyon, Clifford

  Carter-Jones, Lewis

  Galpern, Sir Myer

  Kerr, Mrs. Anne (R'ter & Chatham)

  Coleman, Donald

  Garrow, A.

  Lawson, George

  Crawshaw, Richard

  Ginsburg, David

  Leadbitter, Ted

  Cullen, Mrs. Alice

  Gourlay, Harry

  Ledger, Ron

  Dalyell, Tam

  Gregory, Arnold

  Lever, L. M. (Ardwick)

  Davies, G. Elfed (Rhondda, E.)

  Griffiths, David (Rother Valley)

  Lewis, Ron (Carlisle)

  Davies, Harold (Leek)

  Hale, Leslie

  Lomas, Kenneth

  Davies, Ifor (Gower)

  Hamilton, James (Bothwell)

  Loughlin, Charles

  Davies, S. O. (Merthyr)

  Hamilton, William (West Fife)

  Mabon, Dr. J. Dickson

  394

  395

  McBride, Neil

  Palmer, Arthur

  Swain, Thomas

  MacDermot, Niall

  Pargiter, G. A.

  Swingler, Stephen

  McGuire, Michael

  Pavitt, Laurence

  Symonds, J. B.

  McInnes, James

  Pentland, Norman

  Thomas, George (Cardiff, W.)

  McKay, Mrs. Margaret

  Probert, Arthur

  Thomas, Iorwerth (Rhondda, W.)

  MacKenzie, Gregor (Rutherglen)

  Redhead, Edward

  Thomson, George (Dundee, E.)

  MacMillan, Malcolm

  Rhodes, Geoffrey

  Tinn, James

  MacPherson, Malcolm

  Richard, Ivor

  Tuck, Raphael

  Mahon, Peter (Preston, S.)

  Roberts, Albert (Normanton)

  Urwin, T. W.

  Mahon, Simon (Bootle)

  Roberts, Goronwy (Caernarvon)

  Varley, Eric G.

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

  Robertson, John (Paisley)

  Wainwright, Edwin

  Manuel, Archie

  Rose, Paul B.

  Walden, Brian (All Saints)

  Mapp, Charles

  Ross, Rt. Hn. William

  Walker, Harold (Doncaster)

  Mikardo, Ian

  Rowland, Christopher

  Wallace, George

  Millan, Bruce

  Sheldon, Robert

  Warbey, William

  Miller, Dr. M. S.

  Shore, Peter (Stepney)

  Watkins, Tudor

  Milne, Edward (Blyth)

  Short,Rt.Hn.E.(N'c'tle-on-Tyne,C.)

  White, Mrs. Eirene

  Molloy, William

  Short, Mrs. Renée (W'hampton,N.E.)

  Whitlock, William

  Morris, Charles (Openshaw)

  Silkin, John (Deptford)

  Wilkins, W. A.

  Murray, Albert

  Silkin, S. C. (Camberwell, Dulwich)

  Williams, Alan (Swansea, W.)

  Neal, Harold

  Silverman, Julius (Aston)

  Williams, Mrs. Shirley (Hitchin)

  Newens, Stan

  Silverman, Sydney (Nelson)

  Williams, W. T. (Warrington)

  Noel-Baker, Francis (Swindon)

  Slater, Mrs. Harriet (Stoke, N.)

  Willis, George (Edinburgh, E.)

  Norwood, Christopher

  Slater, Joseph (Sedgefield)

  Wilson, William (Coventry, S.)

  Oakes, Gordon

  Small, William

  Winterbottom, R. E.

  Ogden, Eric

  Snow, Julian

  Woodburn, Rt. Hn. A.

  O'Malley, Brian

  Solomons, Henry

  Woof, Robert

  Orme, Stanley

  Spriggs, Leslie

  Page, Derek (King's Lynn)

  Summerskill, Dr. Shirley

  TELLERS FOR THE NOES:

  Mr. McCann and Mr. Grey.

  Mr. Geoffrey Lloyd: I beg to move Amendment No. 23, in page 5, line 6, at the end to insert:
  (4) Duty under section 3 of this Act shall not be charged on goods which, on 26th October 1964, were exempted from duty by Treasury Direction under section 6 of the Import Duties Act 1958 or on goods which may be so exempted at a subsequent date.
  The Deputy-Chairman: I suggest that it would be convenient to discuss with this Amendment Amendment No. 113, in page 5. line 6, at the end to insert:
  (4) Duty under section 3 of this Act shall not be charged on goods which, on 26th October 1964, were exempted from duty under sections 3(6) and 13 of the Import Duties Act 1958.
  Mr. Lloyd: Yes, Sir Samuel.
  I shall develop the case for this Amendment briefly. The purpose is to exempt from the surcharge a very special class of imports. In the first place, they are not obtainable in this country, and, in the second place, they have to be exempted by the action of the Government themselves. Not only that, but the whole operation is very closely restricted by statute. The three classes of goods concerned are mentioned in the Fourth Schedule to the Import Duties Act, 1958, and they comprise only certain types of machinery, scientific instruments and organic chemicals.
  It is not mandatory on the Treasury to exempt goods of this type from duty. The Treasury has to take action only if
  it considers it desirable, and the onus of proof is firmly upon those who make application. Moreover, the application has to be made not in respect of classes of goods but in respect of specific importations. Thus, the Treasury is able to examine the argument in regard to specific importations coming within the classes covered by the Schedule.
  It will be seen, therefore, that we are concerned with a very highly restricted type of imports which have received, so to speak, a certificate from the Treasury, on the advice no doubt of the Board of Trade, because they are highly desirable for this country and are, in fact, excused ordinary duty. I have already mentioned the formal position, and the Committee will understand how restricted it is, and how, furthermore, it is completely within the control of the Government. I should like to give one example of the type of goods dealt with in this way. They are highly specialised electronics items, some used by industry, and some in university laboratories.
  These are goods which our own country is very good at producing—that may be said—but we do not produce every kind. Some of our products are better in this field than any in the world, but sometimes we have to import—there is no other expedient—and the Government are always the judge. We feel that the surcharge, as it has been explained today, is certainly not appropriate for this very

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  special class of import, over which the Government maintain full control. I ask that this Amendment, in the interests of a very special class of goods, should be favourably considered.
  Mr. Humphrey Atkins: At this hour I will very briefly support this Amendment and draw the attention of the Committee to five particular items which have come to my notice. They were ordered from abroad and are due to arrive here within the next few months, and in every case the Government has examined the application for free admission and in every case has agreed that these items are so essential that they should be allowed in without any duty.
  I want to point out to the Committee that this is something which has already happened. These items are on order and I suggest that, since these particular items of which I am speaking—and no doubt, many others like them—have already been identified by the Government and licences granted for their admission, there is no case at all for charging the extra 15 per cent. surcharge. If the Government persist, it will have no effect on the delivery, but will simply add to the cost of manufacture and production in this country for the people who buy the completed articles.
  It has already been admitted by the Government in the action they have taken so far that these goods are so essential for us to have that they are being allowed into this country duty-free. I am not talking of minor pieces of machinery. What I have in mind are items all concerned with the printing trade and they amount to a value of about £½ million. Considerable sums are involved and the only possible effect of charging the 15 per cent. duty on these items will be to increase production costs. It surely cannot be the Government's idea to load British industry with unnecessary burdens.
  The Government want to restrict imports, but since these items about which I am speaking are so readily identifiable, and since the Government admit that they are so essential, and they are bound to come here in any case, then I submit that my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd) has a strong case for arguing that the surcharge should not
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  be applied to goods in this very narrow category.
  Mr. MacDermot: The right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) and the hon. Member for Merton and Morden (Mr. Atkins) have urged this Amendment with brevity and persuasion. I shall try to emulate their brevity to make up for the length of my Second Reading speech.
  As they have pointed out, there is under the Import Duties Act, in the Fourth Schedule, a list of classes of goods which may be exempted by Treasury direction from the protective duties. What is being urged is that we should apply a similar exemption to this duty for any goods which are covered by such a direction. I think we can go some way to meet the hon. Members, but not all the way, as I shall show. On the face of it, there is nothing illogical in refusing to apply to a temporary and non-protective duty a carefully selected list of exemptions from a permanent protective duty. That is what this list is.
  The list includes aircraft and spare parts and equipment for them which are intended to be used in maintaining overseas services, machinery, certain optical and scientific instruments and apparatus, dyestuffs, articles for test and examination with a view to promoting or improving the manufacture in the United Kingdom of comparable articles intended to be used non-commercially in scientific research or for the promotion of learning, of art, or of sport. As hon. Members will see, it is a very varied list.
  Representations have been made from many quarters, including the F.B.I., on the lines of these Amendments. We have considered them very carefully, but point out that the reliefs given under the Act do not cover all types of machinery and other equipment used in machinery, and are limited in their scope partly from considerations of what would be protective criteria laid down under the Act and partly from practical considerations and special arrangements agreed with the interested parties. As an example, the remission is not granted to machine tools. I think hon. Members will agree that a remission system which has only limited application and is automatically tied to protective and other criteria would be inappropriate for this new charge, which is temporary, which is intended purely for

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  balance of payments purposes, and which—as we have repeated, I fear ad nauseam—must be defensible as being non-discriminatory and non-protective in character.
  To apply a non-availability test only to these goods which happen to be covered by the protective duty system would be indefensible. To try to apply them to the whole field of plant and machinery and that of semi-manufactured goods and processed materials would be unacceptable on policy and practical grounds, indeed it would undermine the whole basis of the charge.
  However, we have looked very carefully at the list and we find that there are certain classes in that list which we think we can make the subject of exemption without offending against the general principles on which we have sought to draw the line for this charge. These will be the subject of Amendments which will be moved at a later stage. They cover the categories of goods, firstly parts of aircraft where they are to be parts of large aircraft of a kind already exempt with a maximum total weight exceeding 18,000 lb. This is a corollary of the removal of large aircraft as announced by my right hon. Friend the Chancellor of the Exchequer at an earlier stage.
  Secondly, we find that articles imported for non-commercial purposes and intended to be used in scientific research or for purposes connected with the advancement of any branch of learning or art or promotion of sport are again of a type which we think we can legitimately exempt. To do so would accord with our obligation under the U.N.E.S.C.O. Agreement not to charge for goods which are for educational and research purposes and for non-commercial purposes.
  This is as far as we can go without undermining the whole basis in principle of the distinction which we sought to draw.
  I hope that for these reasons the right hon. Member will not feel it necessary to press the Amendments.
  11.30 p.m.
  Mr. du Cann: I wonder if I could just say this. I listened with some care and attention to what the Financial Secretary had to say, and I am sure we
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  are all grateful to him for going some part of the way to meet us.
  What we shall plainly require to do, I think, is to examine his words in the cold light of dawn, on the one hand, and to examine his Amendments, on the other.
  It occurred to me in listening to him that in fact the list of exemptions he was proposing to deal with would in truth be rather narrow. If that is the case, then I must tell him in advance that my right hon. and hon. Friends and I would be far from satisfied. As my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd) and my hon. Friend the Member for Merton and Morden (Mr. Atkins) made clear, and this surely is a good point, it must be logical and reasonable for us to suggest that categories of goods which fall for exemption under the Import Duties Act, 1958, should be exempted under this particular head of surcharge.
  Whatever is the sense of one Act of Parliament saying "No duty" and another Act of Parliament saying You must pay duty"? This seems very plain to us.
  I do not wish to pursue the matter now, but we shall have to look at the Amendments which the Financial Secretary is proposing to table. We are grateful for his sympathetic attitude to the matter, but we think that there is a very large number of categories of goods here which could justifiably be regarded as being proper exemptions under the Act, avid we must inevitably—and I hope the Financial Secretary will understand my putting it in this way—reserve our right if we are not satisfied with the Amendments he puts forward, to table further Amendments ourselves.
  Mr. Geoffrey Lloyd: In view of the conciliatory attitude of the hon. and learned Gentleman, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Clause ordered to stand part of the Bill.
  Mr. Diamond: I beg to move, That the Chairman do report Progress and ask leave to sit again.
  I do this in view of the very conciliatory spirit which is abroad, and the

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  remarks of the right hon. Member for Taunton (Mr. du Cann) that he would wish to examine certain things in the cold light of dawn, from which I take it that it was implicit in his remarks that a little sleep between now and dawn would not be harmful to his examination.
  Mr. Heath: We have made very considerable progress today on this Bill. There have been some long and detailed discussions, but I think that progress might have been easier if it had been possible for one of the many Board of Trade Ministers to be present during our debates. I hope that tomorrow, when we come to the Schedule, the Leader of the House will be able to arrange that one of the five Board of Trade Ministers is here. After all, the Board of Trade is becoming a smaller and smaller Department, but it is having more and more Ministers. It would help if we had one of them here to assist us in the matters we are discussing.
  The Financial Secretary seemed to be going some way to meeting us on the last point, but I am not sure that the Government have gone very far. They are going to put some Amendments on the Paper, and then we can consider them, but I hope that the Financial Secretary or the Board of Trade Ministers will be able to help us tomorrow when we come to the details of the Schedule.
  Question put and agreed to.
  Committee report Progress to sit again Tomorrow.

  WAYS AND MEANS
  Considered in Committee.
  [Sir SAMUEL STOREY in the Chair]

  SEVERN BRIDGE
  Motion made, and Question proposed,

  1. That the Minister of Transport (hereinafter referred to as "the Minister") shall be authorised, in accordance with orders to be made by him, to levy tolls in respect of vehicles using the carriageways comprised in those parts of a new road constructed, or in the course of being constructed, by the Minister which cross the Rivers Severn and Wye by bridges or constitute the approaches to such bridges.

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  2. That it is expedient to provide—

  (a) for imposing restrictions and other requirements in respect of vehicles stopping or remaining at rest on the said carriageways, and for securing the removal of such vehicles and the imposition of charges in respect of their removal;

  (b) for securing the operation (either by the Minister or by other persons) of a service of removing such vehicles from the said carriageways;

  (c) for extending, in relation to the said carriageways, the powers of prohibiting or restricting the use of roads, and, in particular, of regulating the use of special roads, conferred by the enactments relating to road traffic; and

  (d) for imposing other prohibitions and restrictions in relation to the parts of the new road which are referred to in paragraph 1 of this Resolution and in relation to structures, works and apparatus on, under or over those parts of that road or connected therewith or with the regulation of traffic thereon or with the levying of tolls as mentioned in that paragraph.

  3. That, in any case where by reason of any accident or other emergency vehicles which would otherwise use the said carriageways are authorised to use the cycle track or the footway comprised in those parts of the new road which are referred to in paragraph 1 of this Resolution, the Minister shall be authorised to levy tolls in respect of the use of the said cycle track or the said footway by those vehicles; and, for the purposes of any such case, paragraph 2 of this Resolution shall have effect in relation to the said cycle track or the said footway as it has effect in relation to the said carriageways.

  4. That it is expedient to provide for the extinguishment of any franchise to operate a ferry across the River Severn in the vicinity of the said new road and for the payment by the Minister of compensation in respect of any such ferry which is discontinued in consequence of the provision of that road.

  5. That tolls levied as mentioned in paragraphs 1 and 3 of this Resolution, and any sums received by the Minister in connection with the removal of vehicles as mentioned in paragraph 2 (or in that paragraph as extended by paragraph 3) of this Resolution, shall be paid into the Exchequer.

  6. That it is expedient to provide for other matters incidental or supplementary to the matters specified in the preceding paragraphs of this Resolution.—[Mr. MacDerntot.]

  11.37 p.m.
  Mr. J. Enoch Powell: I feel that it would be wrong for the Committee, even at this hour of the night, to pass this Resolution, which will, after all, determine the ambit of the Bill which in due course will be founded upon it, without some outline indication of the policy to be followed in implementing the Resolution eventually

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  —in the form, presumably, of regulations which will fix the tolls.
  This Resolution implements the policy in regard to the Severn Bridge which was announced some years ago by my right hon. Friend the Member for Wallasey (Mr. Marples), and I congratulate the Labour Party on bringing it forward, since for many of them it represents a change in point of view—for example, a change in point of view for the hon. Member for Fife, West (Mr. William Hamilton), who only a year ago said that the only people still in favour of tolls were the then Government and the Tory Members for Scotland, and a change in point of view for the Secretary of State for Commonwealth Relations, who a few years ago considered
  "the introduction of a toll system … a retrograde step."—[OFFICIAL REPORT, 2nd February, 1955; Vol. 536, c. 1102.]
  However, we are all now toeing the same line, and I must assume that the Government accept that in the case of these large projects, which bring about a really substantial economy, and which for practical purposes can be isolated from the rest of the road and bridge system, there is a sound justification for the system of tolls. I think that it would, however, be reasonable if the Government gave some indication of the broad policy which is intended to be followed. I quite understand that initially the fixing of any toll must be empirical. One cannot tell in advance exactly what toll or system of tolls will produce a given financial result. Nevertheless, I think that it would be, helpful to the Committee and only right if the general policy were known.
  Is it the intention that the tolls should recover the whole cost of the bridge or the whole cost together with the current maintenance of the bridge? If they are intended to recover the cost or part of the capital cost, over how many years is that to be calculated for this purpose?
  Finally, is it intended that in due course they should accumulate a surplus, or will they be extinguished when the initial purpose has been accomplished? These are matters of general policy and it is only right that in bringing forward this Resolution which will make it possible to impose tolls, the Government should indicate broadly the financial relations they intend between the system of tolls and the
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  cost of the bridge. I hope that we shall have a brief explanation on these lines from the Government Bench.
  Mr. Charles Loughlin: I must plead that I have a constituency interest in this matter. I should like to add to the plea made to the Government to give a clear indication of their intentions. It was to some extent impudent of the right hon. Member for Wolverhampton, South-West (Mr. Powell) to have indulged in the type of speech which he delivered. He is the last person who should talk about tolls, because he believes in them and has done so for a considerable time.
  I do not believe in the toll system for bridges, and where the tolls are given to private enterprise, as in the many instances which my hon. Friend the Member for Fife, West (Mr. William Hamilton) has raised in the House, they are a crying scandal. They are not just tolls for bridges. They are tolls in spite of bridges in many instances.
  Mr. Geoffrey Wilson: Not all.
  Mr. Loughlin: I remind the hon. Member that I have just said that I was talking about the instances given by my hon. Friend the Member for Fife, West who has repeatedly complained not solely that there are tolls but that the bridges for which tolls have been paid have been poor substitutes for bridges.
  Mr. Geoffrey Wilson: I said "not all" because among the bridges referred to by the hon. Member for Fife, West (Mr. William Hamilton) was the Whitney bridge, the private enterprise beneficiaries of which have received no benefit from it for some years because maintenance costs have been greater than the receipts.
  Mr. Loughlin: It is a pity that an intervention in reply to an intervention is not permissible, because I should have liked my hon. Friend the Member for Fife, West to have intervened on that intervention. I do not know all the bridges—
  The Deputy-Chairman: We are dealing only with the Severn Bridge at present.
  Mr. Loughlin: That is perfectly true. I do not want to pursue the matter because it is not germane to my case, but

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  in fairness to the Committee, and because it will be going on the record, I respectfully submit that it is in order when talking about tolls which will be applied to the Servern Bridge to make one's comparisons, provided that one does not spend too great a time on the point one is making. The only toll bridge of which I have personal experience is that at Selby, to which my hon. Friend the Member for Fife, West has often referred. If there is anyone who will say that that is a bridge, his concept of a bridge is different from mine.
  The Severn Bridge just touches my constituency and will undoubtedly provide a tremendous improvement in transport communications in the area. Why in this age we should be considering imposing on transport users charges which would be more in keeping with the 17th and 18th centuries, I do not know. As the right hon. Member for Wolverhampton, South-West has said, we are continuing the policies of the previous Government in this respect, but we have expressed ourselves in no uncertain terms about those outdated and outmoded policies.
  Some of the tolls on motor vehicles, especially those engaged in trade, will be an onerous burden in certain respects. If transport costs for the people of the Forest of Dean are increased, that will be unfortunate for an area facing difficult employment problems. Transport costs may be cheapened, but it is incumbent on the Government now to state clearly what is in their minds.
  My area is faced not only with the closure of two pits with 720 redundancies, but with the closing down of an A.F.I. factory with 850 employees. The A.E.I. is then to have Government assistance to expand at Birtley. If new employers considering moving into the area are to be faced with additional transport costs, it will be extremely difficult for me or the Board of Trade to persuade them to come to the area.
  I know that some of my right hon. Friends have indicated a degree of irritation that I should have the temerity to get up at this time of night, but I am bothered not about the time, but about looking after the people who sent me here to represent them. I am not sure about What the Government propose to do about tolls on vehicles. All in-
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  dustrialists and traders in my constituency are faced with possible additional transport costs—I do not say that transport costs will be increased—as a consequence of the policy which the Government are now pursuing.
  It is very important, when we invite employers to come into a constituency to provide work—and some have already come in mine, to some extent in consequence of efforts I have made here on the Floor of the House—not to present them with a situation in which their transport costs render them uncompetitive. So I should be failing in my duty if I did not rise to speak on this matter, even though the hour is near to midnight.
  On principle I am opposed to levying tolls on bridges. It is a retrograde step. It is the sort of thing I expect from right hon. and hon. Gentlemen on the other side of the Committee, because I think their concept is that we should exploit any situation, and if they think they can get money from anywhere they will get it. But we on this side ought to be a little more forward-looking and progressive in our attitude, and consider that the roads of this country are used by all and sundry. We build the M1 and major motorways, and no one dreams of suggesting that because they cost an enormous amount of money we should impose tolls on the vehicles using them.
  We are building, in effect, a road over the Severn. We are doing no more than building a road. If the hon. Gentleman who smiles so sweetly thinks there is anything wrong in that statement I will willingly give way to him.
  Sir John Gilmour: I was just amused because, having heard so many of the hon. Gentleman's hon. Friends using this argument which he is repeating, it seems odd to hear his right hon. Friends on the Government Front Bench proposing tolls for this bridge.
  Mr. Loughlin: I accept that. I am not going to quarrel with the hon. Member. But it was a sweet smile, and I thought it was directed at me, not my right hon. Friends.
  Dame Patricia Hornsby-Smith: Would not the hon. Member agree that, in the main, bridges save many miles of transport round by roads? He is not alone in having tolls—on

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  bridges going over the top. My constituents use a bridge which goes underneath, through a tunnel and we are paying tolls, and heavily and willingly subscribing, because of the hours saved and the mileage saved by the DartfordPurfleet tunnel.
  Mr. Loughlin: That seems, on the surface, a very logical and well-thoughtout argument, but we can build a road which curves round many miles—as we have done in this country—or a road which is comparatively straight. We can have a road from Birmingham to Ross which is a straight road; we can use a road from Birmingham to Worcester, going round the Malverns. It is the same argument. The right hon. Lady ought to recognise that the only purpose in building a motorway is to have a straight, direct road which saves many miles and transport costs. If the right hon. Lady disputes that, perhaps she will say why.
  Dame Patricia Hornsby-Smith: It is more expensive to span a river. No doubt I shall be corrected if I am wrong, but I think that it costs about £1 million to build a mile of motorway, whereas it cost about £13 million to build the Dartford to Purfleet tunnel. That tunnel avoids the necessity of travelling 20 or 30 miles up to London and then going down to Kent. Whether one goes over the river, or underneath it, one saves the cost of going round it, and the congestion caused by doing so. It is much more expensive to build a means of crossing a river than it is to build a road, and that is why, against opposition in my own area, I have supported tolls on the Dartford to Purfleet tunnel, and why I accept that it is not unreasonable to impose tolls where heavy expenditure has been incurred to provide a short cut.
  Mr. Loughlin: In a rather lengthy intervention the right hon. Lady merely shifted her ground. She first argued that tolls should be imposed on bridges because they provide a direct route from one point to another and thus save transport costs. A similar advantage accrues from building a motorway as opposed to building the old type of road. The right hon. Lady and her hon. Friends have never suggested that tolls should be imposed on motorways.
  Finding that her first point was rather a sticky one, the right hon. Lady moved
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  away from it and said that it cost £1 million to build a mile of motorway—I think that that is a bit of an exaggeration, and that in recent years the costs have been estimated at between £400,000 and £500,000 a mile, but even that is too high, and there should be an investigation into road building costs—but considerably more to span a river.
  If it can be argued that because bridges over rivers cost more to build than motorways, there should be tolls on the former, it can equally be argued that as motorways cost so much more to build than ordinary roads, there should be tolls on them, too. The argument goes full circle.
  My right hon. Friend ought to think again about imposing tolls on bridges. He ought to accept that such a proposition is outworn and out of date. I know that I would be in difficulties if I had to face the situation which the Government have had to face after 13 years of Tory Governments, but we are not bogged down by internal economic difficulties. We are bogged down by an external financial crisis.
  The bankers may suggest that we ought to impose tolls on our bridges, but I very much doubt it. I can see no earthly reason why we should not dispense with tolls, a practice which was initiated by the previous Government, and get down to the job of providing an adequate transport system in all areas for use by both industry and the private individual. Our job is to provide an efficient transport service. If an efficient transport service involves the provision of bridges we should not take a different attitude to bridges from that which we take to motorways.
  It is about time that my hon. and learned Friend gave us some indication of the Government's intentions in this respect. I should like to see him take the whole of this provision back and ask the Government to think anew about their attitude to bridges, and forgo any suggestion of imposing tolls.
  12 m.
  Mr. Geoffrey Wilson: I do not want to follow all the ground covered by the hon. Member for Gloucestershire, West (Mr. Loughlin). He covered rather a wide field. I shall not follow him into the argument about toll bridges, except to say that it is unfair to accuse the

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  owners in all cases of being profiteers—which seemed to be the substance of his remarks—because in the case I have mentioned the owners have received nothing at all for some years, and they have spent all the tolls they have received in maintaining the bridge—a burden that otherwise would have fallen on the taxpayer or ratepayer.
  I am in favour of tolls in respect of bridges like the Severn Bridge, in appropriate cases, because—and this concerns the point raised by my right hon. Friend the Member for Chislehurst (Dame Patricia Hornsby-Smith)—there is also the question of the total expenditure involved in road maintenance. Whatever Government are in power, they must have some target, and if they are going to spend a large proportion of that target on bridges, which are very expensive, there will be less money left to spend on major and minor road improvements. There is bound to be a shortage in this respect, whatever target is chosen.
  I am pleased that tolls are proposed for the Severn Bridge, because of the experience that we have had with the Tamar Bridge. For years the Cornwall County Council and the City of Plymouth were agitating for a road bridge across the Tamar. I was partly responsible for the building of the bridge, because I pointed out to the then chairman of the Cornwall County Council that he should not expect the Minister of Transport of any Government to spend a large sum of money in building an expensive high bridge across the Tamar—and it had to be high, because the Royal Navy uses the water underneath—when there is an urgent need for other bridges, particularly bridges such as the Severn Bridge, for which there must be a higher priority, because there are more people in Bristol and South Wales than there are in Plymouth and Saltash.
  The Cornwall County Council and the Plymouth County Council then decided to ask for statutory powers to build the bridge themselves, and that bridge was built without any assistance from the Ministry of Transport. It was built under a Private Act as a toll bridge. The cost of building it will be recouped in the course of years. Indeed, the bridge has already proved to be so popular that more money is being made than was
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  expected, and the bridge will pay for itself much earlier than was expected. If the Severn Bridge can collect money in this way it will not be a burden on the general taxpayers, and it will allow more money to be spent on the motorways and the major and minor road improvements which are so necessary. The more money spent on the roads the better it will be, because we shall in any case have a great problem in building sufficient roads to keep pace with the growing amount of motor traffic.
  If, by the imposition of reasonable tolls on the Severn Bridge, there is a little more money available for other urgent purposes, so much the better.
  Mr. Tam Dalyell: As the representative for the area at the southern end of the great bridge over the Forth, I want to ask my hon. and learned Friend one or two simple questions. Is it right that a motorway over sea should be taxed, and a motorway over land untaxed? What is the qualitative difference between a major roadwork such as the Severn or the Forth Bridge on the one hand and the M.1 or the Preston by-pass on the M.6 on the other? It is certainly our experience that imposing tolls is not only a questionable way of raising money, but it also brings about some bad physical difficulties.
  Before making a final decision on tolls over the Severn, I think that the Minister ought to look at the traffic delays that have been caused Sunday after Sunday and weekday after weekday in the summer, with cars queueing up in order to pay their 2s. 6d.
  The Financial Secretary to the Treasury (Mr. Niall MacDermot): May I begin by assuring my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin), that I, for one, will never find it irritating, whatever the hour, to listen to him putting forward so cogently the interests of his constituents? I have great sympathy with the point of view which he was expressing. I assure him—and I hope I can substantiate the assurance with some figures later—that as we envisage the operation of these tolls, it is quite clear that anyone who will be required to pay a toll for the use of this bridge will still be a net gainer as a result of the construction of the bridge, because of the great saving there will be for him on the

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  present costs he has to incur without the facility of the bridge.
  I was invited at the outset by the right hon. Gentleman for Wolverhampton, South-West (Mr. Powell), to give some information to the Committee, in a broad sense, about the way in which the Government envisage the operation of these tolls, and what the policy would be. Obviously, it would not be right for me to go into this matter in any detail. It is a matter which will be dealt with when the Bill itself is considered, a Bill which will have an Explanatory Memorandum to set out the financial provisions.
  Perhaps I may first deal with the general principle on why we think it right that tolls should be charged in the case of river crossings, and why we treat them differently from motorways, the point which my hon. Friend the Member for West Lothian (Mr. Dalyell) just raised. First, let me remind the Committee that tolls are charged already on other large river crossings in this country that have been constructed in recent times. I think they have been mentioned already—the Forth Bridge, the Tamar Bridge and the Dartford Tunnel; and recent Acts authorised tolls on the Tay Bridge and the Tyne Tunnel, when completed.
  It was, I think, in 1960 that the last Government announced their intention of charging tolls on the Severn Bridge in the same way. We have considered the matter, and propose to make no change in that policy. As was pointed out by the right hon. Lady the Member for Chislehurst (Dame Patricia Hornsby-Smith), the cost of constructing bridges of this kind is exceptionally heavy, and the Severn Bridge itself, like the tunnel to which she referred, will cost over £13 million. There is no doubt that, while the cost of constructing such bridges is exceptionally heavy, they do bring exceptional savings to the users of them—which is the real distinction which can and should be drawn between the position of users of these bridges and that of users of motorways in general.
  One can point precisely to the saving and the gain, which each individual using the bridge will achieve as a result of the presence of that bridge, though when someone uses a stretch of motorway, one cannot say what saving, if any, he has achieved. The motorist who uses the
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  M.1 instead of the A.5 is making a very slight saving, if any, in terms of petrol. One cannot draw a parallel.
  I will give a few figures to illustrate the point. People who at present travel by road will save about 45 miles of travel as a result of the construction of this bridge. The journey by road from, for example, Bristol to Cardiff is at present about 90 miles. That will be cut by about 45 miles. The consequent saving in expenditure on petrol at 5s. 3Y1. per gallon for a 30 m.p.g. vehicle would be about 8s. or for a 25 m.p.g. vehicle it would be about 9s. 6d.
  The proposed toll rates have not been determined. It would, in the first instance, be a matter for Parliament to determine the provisions of the Bill, but I can say that what is proposed is that the actual rates should be fixed by regulation, subject to the principles being laid down in the Bill. This would enable, if it were necessary, changes and modifications to be made in the rates from time to time. Although they have not been fixed, the sort of toll rates envisaged would certainly be considerably less than the savings in petrol I have illustrated.
  Mr. Loughlin: The question of distances is not an easy one to understand. The Severn Bridge will cost £13 million. This will represent a saving of 45 miles in the journey my hon. and learned Friend described. Considering the matter on the basis of mileage, it is obviously cheaper to build the Severn Bridge—based on the figure of £400,000 per mile of motorway—than it would otherwise be to build a motorway. On some future occasion we will have to face the problem of constructing a motorway from Bristol to Cardiff. I am endeavouring to show that the construction of bridges, certainly some bridges, is not such a dear business after all.
  Mr. MacDermot: If my hon. Friend's point is that it is a good economic proposition to construct a bridge of this kind, I entirely agree with him. But the question is on whom is it right to impose the burden of the cost of its construction? We think that whereas here there is a clearly defined category of people who derive the benefit and who can, without great administrative cost, be made to pay for it, it is right that they should be the ones to pay, rather than the general taxpayer or ratepayer.

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  I have given some figures relating to roads. I understand that the figures relating to the ferry are that the present cost of use of the ferry is 7s. 6d., together with Is. for the driver and 1s. for each passenger, up to 15s. for medium-sized vans. As hon. Members will see, comparing that with the savings I mentioned on petrol, the savings on the use of the bridge compared with using the ferry would be at least as large, if not larger than, the saving for a person who is making the road journey.
  These are the general reasons why we think it right that the burden of these exceptional costs should fall on the users, but I wish to make it abundantly clear that this decision and recommendation which we are making to the Committee is entirely without prejudice to the question of the financing of motorways. I hope that no hon. Member will think that, because we have come to this conclusion in regard to bridges, we have any intention in our minds of imposing similar charges on motorways.
  Mr. Powell: Is the Financial Secretary saying that the principle behind tolls is to recover the capital cost or the capital cost and maintenance? Will he enlarge on this matter?
  Mr. MacDermot: I will deal with that briefly. I cannot go into great detail on it at this stage but, in general, the intention is that the tolls should cover amortisation of the capital cost over a period of 30 to 40 years, with interest, and also the maintenance costs of the bridge and the cost of collection.
  If I could give some indication of what that might mean in terms of figures, on the latest estimate of the cost of the bridge, which I said was over £13 million, amortisation over a 30-year period at 6 per cent. would involve annual payments of approximately £1 million. In addition, if the revenue from tolls is to cover the cost of collection and maintaining the bridge, the scale of the tolls would have to be fixed at a level which would produce an annual revenue of £1,128,000—something of that order.
  I do not want to be tied to these as final figures. I am only giving them in the spirit in which I was invited to do so, as a broad indication.
  12.15 a.m.
  Mr. Anthony Kershaw: On the figures which the hon. and learned Gentleman has just given, may we have some indication of what the tolls are likely to be? As it must be known approximately what number of vehicles will use the bridge, and as we know what the revenue each year will be, we ought to be able to be told what the tolls will be. We have a long time ahead of us tonight so perhaps the Minister would take the opportunity to tell us, because it is a matter of very particular moment to those who live in Gloucestershire, in my constituency in particular, and who very often have business which takes them to South Wales. At the moment they have to make up their minds whether to go by way of the City of Gloucester, which is a difficult bottleneck, or whether to go down to the ferry, which is an extremely frustrating experience on a summer day. Even if one can eventually get on to the ferry one may have to wait several hours to do so.
  Therefore, this bridge is of very particular importance, and in assessing whether it is likely to be an amenity or not my constituents would very much like to know how much they will have to pay. The hon. and learned Gentleman has given us all the figures except the last two, and in the time at my disposal I have not been able to work out what the tolls will be. I might, perhaps, be able to work out what the figure will be were I seated, but I cannot do it on my feet.
  Mr. Loughlin: The hon. Gentleman should take his shoes off.
  Mr. Kershaw: I do not think that to take my shoes off would help. Perhaps as the hon. Gentleman is in a more comfortable position than I am, and has in his hand a pen with which he has been doodling away in order to keep himself awake, he will calculate the number of vehicles of different sorts which will have to pay a toll in order to produce a net annual revenue of £1,128,000.
  I dare say that the vehicles will increase in number each year so we have to allow for a sort of sliding scale. The hon. Gentleman would have to calculate how many vehicles would be able to get over the bridge and then, perhaps, he could make another intervention and tell us the result of his calculations.
  Mr. Loughlin: The hon. Gentleman is asking the impossible because there are so many imponderables in the matter. We do not yet know what kind of vehicles they are going to be. We only know that at the present time there are vans, wagons, motor cars and cycles. In the last few years we have had motor cycles, mopeds and various kinds of cycles. I do not know what sort of scientific or technological developments will be made in the next 10 years. There may be vehicles of which we do not dream at present. My hon. and learned Friend might still be a member of the Government then and might decide to bring in amending regulations which would change the calculations completely. He might charge twice as much toll for the new vehicles as for motor cycles. I know that I can do most things, but the hon. Gentleman knows that I cannot do the impossible.
  Mr. Kershaw: The hon. Gentleman and I are at a certain disadvantage. The Minister has all the cards in his hand, or has one or two up his sleeve, and it is disappointing that he has not shown us the full extent of them.
  I hope that, when rates are considered, a sense of equity will prevail. The hon. and learned Gentleman will not wish to become, in the rather hackneyed cliché, a desiccated calculating machine—something which it is dangerous for anyone on his side to be—and he will have regard to what ordinary people fairly close to the bridge will feel reasonable in wishing to use the bridge not so much for trade or business but for normal amenity purposes.
  As regards those who will wish to use the bridge for the purposes of trade, the calculation which the hon. and learned Gentleman gave about saving 8s. on a journey from Bristol by a car doing 30 miles per gallon is interesting, but what about lorries? Users of lorries will save a great deal more not only in £ s. d. but in the vital element of time. As is well known, a great many lorries come up from South Wales during the night in order to bring fresh produce for sale in Covent Garden market, and it is most important that they should be able to come up in good time. The users of these lorries will not only have the immediate financial benefit of the bridge but will have a rather more distant interest
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  and be willing to pay for the time and trouble saved.
  I do not regard tolls in themselves as offensive. They represent a "pay-as-you-use" concept which, I think, is quite agreeable to many hon. Members and which seems in all the circumstances reasonable. I do not believe that transport costs will be increased, as the hon. Member for Gloucestershire, West (Mr. Loughlin) thought, for people living in his constituency or in mine. The inconvenience of having to go round is very great. We have had the welcome assurance that the charges will not be calculated at the full saving. I understand that the cost of the toll will be rather less than the saving which will result, and we in Gloucestershire are very grateful for that assurance.
  There will be countervailing advantages not only from the point of view of transport. The value of houses and of land, particularly in the Forest of Dean, a remote and hitherto rather barbarous area—
  The Deputy-Chairman: Order. The hon. Gentleman is getting very far from the Severn bridge.
  Mr. Loughlin: On a point of order, Sir Samuel. I live in the Forest of Dean. Is it in order for the hon. Gentleman to refer to me as a barbarian?
  The Deputy-Chairman: I did not hear the hon. Gentleman so referred to.
  Mr. Kershaw: I should not dream of doing so, Sir Samuel. I am entitled to say that communications with the Forest of Dean have in the past been extremely difficult and, therefore, the value of land and property in that area has been much lower than elsewhere. One of the consequences of the building of a motorway is that land near it becomes more expensive. This effect is already to be seen near the site of the Severn bridge—doubtless, the hon. Gentleman will rejoice in it—where land, although the bridge is not yet open, is rising in value in anticipation of the event and the wish of people to come to live there. As it is the policy of the present Government to reduce the price of land, one wonders how the hon. and learned Gentleman feels about that.
  There will be the further advantage in that roads which will be relieved of their present traffic will become much more

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  agreeable than they are now. Those who know it will agree that the A38 as it goes through my constituency and the road from Gloucester—
  The Deputy-Chairman: Order. The hon. Gentleman must come back to the Severn Bridge tolls.
  Mr. Kershaw: With respect, Sir Samuel, although, of course, I bow to your Ruling, I feel that I am not very far out of order in referring to the effects which the bridge will have on the neighbourhood roads. It is a matter of very real importance, in two ways. At present, the bridge is well under construction but I am not satisfied, nor are the local people, that the approaches which lead to it are in an advanced enough state for them to cope with the increased traffic.
  In that case, the Severn Bridge will not be able to be utilised to its full capacity simply because people will not be able to get to it. This, Sir Samuel, is of distinct relevance because the tolls from the new bridge will, consequently, not be so large as is calculated, and the hon. Member for Gloucestershire, West may be entirely out of line in the figures which he claims to have but which he has refused to give to the Committee tonight. I should very much like to know what they are so that I might try to determine whether the feeder roads into the Severn Bridge will be adequate for their new purpose. I should like also to know more about the point raised by the hon. Member for West Lothian (Mr. Dalyell) about the collection of tolls.
  In common with other hon. Members, I have travelled on roads, notably in Italy and the United States, where tolls are collected, and I was rather surprised to hear the hon. Member say that on the new Forth Bridge congestion is caused by the collection of tolls. I think he said that the congestion was very great. On the roads abroad where tolls have to be paid, the collection system seems to work without delay. There appears to me to be no congestion at the entrances to motorways or bridges, and we in Gloucestershire would be interested to know what system it is proposed to adopt and whether it is to be the same as that employed on the Forth. If so, it might seem that we are to have inconvenience and delay in getting on to the new bridge.
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  If the system is throughly faulty—and there are those with some experience who say that there will be difficulties—then perhaps the great boon which the Severn Bridge is supposed to be will not prove to be the case in fact. We may regret having spent £13 million of public money on this bridge when we find we cannot get on to it easily because of inadequate approach roads and because of inadequate entrance arrangements. We may not have the amenities which were expected from the bridge.
  I would say finally that if the bridge is properly run, and the approach roads properly built, it will be of great benefit to our county because expenditure on other roads, which at present is very high—and these are roads which are seriously overloaded—will be diminished by a considerable margin. That, at least, will be a great relief to the ratepayers of Gloucestershire and for that reason alone, they will welcome tolls on the Severn Bridge.
  12.30 a.m.
  Mr. Robert Cooke: I should like to add something to the points raised by my hon. Friend.
  Mr. Loughlin: The hon. Member has only just come into the Committee.
  Mr. Cooke: The hon. Member for Gloucestershire, West (Mr. Loughlin) is much given to interrupting from a sedentary position. I was not here all the time, but I heard enough to know that he made reference to a point in which I am interested. I have in my constituency the Clifton suspension bridge—an old-fashioned type of bridge of this sort, but from which much can be learned in the matter of levy of tolls.
  It seems to me that this whole question of the Severn Bridge and its tolls will not be adequately discussed. In any case, it is a pretty late hour to bring on a discussion on this matter. I hope that the Minister will be able to answer the questions my hon. Friend asked because there have been cases of great road improvements where the whole scheme has not been of sufficient benefit because the question of access has not been properly thought out.
  Mr. MacDermot: I suspected that I have already said too much. When I learned that I had tantalised the

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  hon. Member for Stroud (Mr. Kershaw), I became convinced that I had said too much. This, after all, is a Ways and Means Resolution. I was led by what the hon. Member said to give some figures, but it would be quite wrong to go further into the matters raised by the hon. Member.
  I was not sure at one stage whether we were listening to his Second Reading Speech on the Bill or merely a trailer for a speech in Committee. In any event I cannot go further than to give the indication I have given as to the level of tolls which might be imposed if the Committee approves of the Ways and Means Resolution and the House passes the Bill.
  All that the Committee is concerned with at the moment is deciding the question of principle of whether by this Resolution we are entitled to the levying of tolls. If the Committee does so decide, all the questions which have been raised will be gone into carefully at a later stage.
  Question put and agreed to.
  Resolved,

  1. That the Minister of Transport (hereinafter referred to as "the Minister") shall be authorised, in accordance with orders to be made by him, to levy tolls in respect of vehicles using the carriageways comprised in those parts of a new road constructed, or in the course of being constructed, by the Minister which cross the Rivers Severn and Wye by bridges or constitute the approaches to such bridges.

  2. That it is expedient to provide—

  (a) for imposing restrictions and other requirements in respect of vehicles stopping or remaining at rest on the said carriageways, and for securing the removal of such vehicles and the imposition of charges in respect of their removal;

  (b) for securing the operation (either by the Minister or by other persons) of a service of removing such vehicles from the said carriageways;

  (c) for extending, in relation to the said carriageways, the powers of prohibiting or restricting the use of roads, and, in particular, of regulating the use of special roads, conferred by the enactments relating to road traffic; and

  (d) for imposing other prohibitions and restrictions in relation to the parts of the new road which are referred to in paragraph 1 of this Resolution and in relation to structures, works and apparatus on, under or over those parts of that road or connected therewith or with the regulation of traffic thereon or with the levying of tolls as mentioned in that paragraph.

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  3. That, in any case where by reason of any accident or other emergency vehicles which would otherwise use the said carriageways are authorised to use the cycle track or the footway comprised in those parts of the new road which are referred to in paragraph 1 of this Resolution, the Minister shall be authorised to levy tolls in respect of the use of the said cycle track or the said footway by those vehicles; and, for the purposes of any such case, paragraph 2 of this Resolution shall have effect in relation to the said cycle track or the said footway as it has effect in relation to the said carriageways.

  4. That it is expedient to provide for the extinguishment of any franchise to operate a ferry across the River Severn in the vicinity of the said new road and for the payment by the Minister of compensation in respect of any such ferry which is discontinued in consequence of the provision of that road.

  5. That tolls levied as mentioned in paragraphs 1 and 3 of this Resolution, and any sums received by the Minister in connection with the removal of vehicles as mentioned in paragraph 2 (or in that paragraph as extended by paragraph. 3) of this Resolution, shall be paid into the Exchequer.

  6. That it is expedient to provide for other matters incidental or supplementary to the matters specified in the preceding paragraphs of this Resolution.

  Resolution to be reported.
  Report to be received this day; Committee to sit again this day.

  RIVERS (PREVENTION OF POLLUTION) (SCOTLAND) [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to make further provision for maintaining or restoring the cleanliness of the rivers and other inland waters in Scotland, it is expedient to authorise the payment out of moneys provided by Parliament of any expenses incurred by the Secretary of State under that Act and of any increase attributable to the provisions of that Act in the sums so payable under any other enactment.
  Resolution agreed to.

  WELSH GRAND COMMITTEE
  Ordered,
  That for the remainder of the present Session the following paragraphs shall have effect:

  (1) There shall be a Standing Committee to be known as the Welsh Grand Committee to consider such specified matters relating exclusively to Wales and Monmouthshire as may be referred to them and to consist of all Members sitting for constituencies in Wales and Monmouthshire, together with not more than five other Members to be

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  nominated by the Committee of Selection, who shall have power from time to time to discharge the Members so nominated by them and to appoint others in substitution for those discharged;

  (2) A Motion may be made by a Minister of the Crown at the commencement of Public Business, to be decided without amendment or debate. to the effect that a specified matter or matters relating exclusively to Wales and Monmouthshire be referred to the Welsh Grand Committee for their consideration;

  (3) If such a Motion be agreed to, the Welsh Grand Committee shall consider the matter or matters to them referred on not more than four days in a Session, and shall report only that they have considered the said matter or matters.—[Mr. Bowden.]

  SCOTLAND (CADCO PROJECT, GLENROTHES)
  Motion made, and Question proposed, That this; House do now Adjourn,—[Mr. Ifor Davies.]
  12.34 a.m.
  Mr. William Hamilton: A few years ago, from a small butcher's shop in Victoria Street, Hove, Mr. Dennis Lorraine successfully sold sausages. So successfully that in 1960 the Royal Victoria Sausage Company was started by the same gentleman. This enabled Mr. Lorraine to buy an ex-Government Nissen hut at Partridge Green, from which he made a profit of £7,000 in 1961.
  Mr. Lorraine appears to have been something of a genius as a salesman, and probably fancied himself as a tycoon. In 1961, he looked around for capital with which to expand his business, and through business connections, Mr. Lorraine was put in contact with Mr. Thomas Roe, an international lawyer who has lived in Lausanne in Switzerland for several years now.
  Mr. Roe is a director of more than 30 companies, but he operates mainly from Lausanne. Roe decided to put up some money for the Lorraine expansion, and Mr. George Sanders, the film actor, and his wife Benita, were also persuaded to put up some cash.
  Unfortunately, the proposed expansion in Sussex was refused by the planning authorities, and encouragement was given to the firm to expand in a development district, in fact in Glenrothes, in Fife. The name "Cadco" was that
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  of Mr. Sanders' personal company registered in Curacao in the Dutch West Indies, but operating in Lausanne where Mr. Sanders lives.
  By the autumn of 1962, Mr. Thomas Roe had joined Cadco Developments, which had been registered in London. and so, in May, 1963, the project was launched in Glenrothes, in my constituency. It was supported by the Scottish Development Department, by the Scottish Council (Development and Industry), by the Glenrothes Development Corporation, by the Board of Trade, and by the Treasury.
  The Scottish Council was clearly impressed by the size of the project and its potentialities, otherwise I do not think that it was involved. Glenrothes Development Corporation was at that time, I think, asked by the Scottish Council whether a credit check had been made on Cadco, and the Corporation assured the Scottish Council that that check had, in fact, been made. That was probably not true, or if it were true, it had not revealed the true facts, as I will try to demonstrate.
  That, I think, was the initial error, and the possible explanations of it were, first, that Glenrothes was desperately anxious to get some big project. The failure of the Rothes Colliery is still a very painful memory in that part of my constituency, and, indeed, in Scotland. Secondly, the General Manager of the Development Corporation, Brigadier Doyle, had known Roe in his Army clays, in the 14th Army. There was no personal friendship—Roe was merely known to Doyle as a capable staff officer. But no doubt the other names associated with Cadco appeared to him and to others to be dazzlingly impressive.
  To launch the project, Glenrothes Development Corporation needed sanction from the Scottish Development Department and cash from the Treasury. They got both. One million pounds of public money were being committed, yet no one at that point seemed to have probed into the expected profitability of the venture, nor, indeed, into the availability of capital to Cadco, but an extraordinary thing then happened. The Cadco Developments Company had created a whole lot of subsidiary companies, including the Cadco Building Company. Immediately on getting access to Glenrothes and getting permission to go

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  ahead, Cadco Developments Company suggested that its subsidiary, Cadco Building Co., should do the building of the piggeries, the factories and all the rest of it.
  There may not have been anything intrinsically suspicious that that should happen, but there appears to have been no check at this point on either the financial or the technical resources of the Cadco Building Company. In fact, the entire paid-up capital of the company was £2. They had to take two architects from Glenrothes Development Corporation and quantity surveyors from outside, too. In other words, they had no financial status whatever, nor had they the technical resources to carry out the projects which they were contemplating getting. Why was a company of such dubious standing given a contract worth more than £1 million when the paid-up capital was £2?
  Having got the contract, the Cadco Building Company obtained an initial loan of £160,000 from the Royal Bank of Scotland, guaranteed by Sanders, Roe and others. At this point there appeared to be no consultation whatever between the bank and the Development Corporation as to the financial standing and strength of Cadco Building Company.
  From these relatively small beginnings the empire began to grow and the debts began to mount. Each extension of the project was apparently approved by the Scottish Development Department. Whether the extension did or did not make sense in business terms, there is no evidence to suggest that there was ever any detailed examination of the financial status and soundness of Cadco Developments Limited and the associated companies, such as the Building Company, the Haulage Company, the Live-stock Company, the Refrigeration Company, the Royal Victoria Sausage Company, the Victoria Wholesale Meats Company, Superfine Food Products and Loch Ness Foods.
  The overdraft with the Royal Bank of Scotland gradually mounted to £460,000. Mrs. M. M. Elliott then placed with the Royal Bank of Scotland securities to the extent of £200,000 against the overdraft which I have mentioned. Mrs. Elliott is a very wealthy lady, who lives off the Finchley Road.
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  I have not her telephone number. She has substantial interests in the manufacturing of plastic goods. I understand that her assets are mostly outside the United Kingdom. She is a very great friend of Mr. Dennis Lorraine, the sausage maker. It is anybody's guess as to why Mrs. Elliott invested her money. Apparently she was given personal indemnities by the other directors of Cadco, including Lorraine.
  During the last two weeks, Mrs. Elliott has been to Italy to see Lorraine, and she has issued a very curious statement since that visit in which she states that she has been repaid her £200,000 by Mr. Lorraine, who enjoys her confidence. I am sure that he does. In what form did Lorraine repay Mrs. Elliott? On what bank was the cheque drawn? Was she paid in cash? If so, in what currency? Where is the money now? Most important of all, where did Lorraine get the cash? Five years ago he was a small-time sausage butcher in Hove. There is very strong evidence to suggest that the moneys raised for the Cadco project in Glenrothes have been transferred to other associated companies outside that town and also overseas.
  I might give an example from the report of the proceedings at a meeting of the creditors of Cadco Building Company on 7th October. They show that £241,000 had gone to Cadco Developments, £100,000 to Victoria Wholesale Meats, £48,000 to Royal Victoria Sausages, £4,000 to Cadco Livestock, £1,000 to Andromeda Films, £31,000 to Superfine Foods and £12,000 to Loch Ness Foods. Enormous sums, in addition to these, have left the country in the form of travellers' cheques and business allowances and the like. This is why the Treasury is now, despite its denial in the House, investigating possible infringements of exchange control. This was reported in the Fifeshire Advertiser on 21st November this year.
  In addition, there has been enormously wasteful expenditure in other directions, for instance on the purchase of motor cars. Mr. Lorraine had a Jaguar Mk. X, a Rover 3-litre, an Aston Martin and a fleet of cars in Glenrothes. There was lots of air travel, all first-class, and of staying in first-class hotels, all on unnecessary jaunts. The Treasury, the Board of Trade, the Development Department and the Development Corporation

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  were supposed to be keeping a check on the wonderful 2,000 jobs in the pipeline—the prospect held out to us.
  At least one high official in Glenrothes had an Italian holiday at Cadco's expense and was offered a senior executive job with Cadco Italiano, which was supposed to process fruit and vegetables in Italy. It may be that that is why the money has gone from Glenrothes—to finance the project in Italy. This high official in Glenrothes—and I have been given his name—was in a position of great trust and responsibility. I have no evidence, and I do not think that there is any evidence, that he was corrupted by this holiday or the offer, but it shows—to put it no higher—the kind of naive, unbusinesslike approach which made some contribution to the collapse of this project.
  Indeed, one of the characteristics of this whole operation was that anyone connected with Cadco was tainted by various means. Cadco was unceasing in its endeavours to obligate people. Repeated warning signs of the coming crash were ignored or brushed aside. I have given some examples already. I can give one or two others. I understand that in September, 1963, Cadco applied to the Board of Trade Advisory Council for a substantial grant. I was given a figure, but I will not quote it here.
  The refusal of the Board of Trade came in August this year. In other words, it took B.O.T.A.C. very nearly a year to reach that decision. Anyone who has had dealings with B.O.T.A.C. knows that it goes thoroughly into the applicant's accounts. It must do. It is the law. B.O.T.A.C. must, therefore, have had access to the financial records of Cadco. Did it not see the warning signs in those accounts? If it did, did it not convey its findings to the Glenrothes Development Corporation, or the Scottish Development Department?
  There was another warning sign. In July of this year, £250,000 was due to be repaid to the Royal Bank of Scotland. It was not paid, yet the bank does not appear to have warned either the Scottish Development Department, or the Development Corporation, and nor did either of those bodies appear to have sought information from the bank. I myself heard numerous and ominous
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  rumblings here in London from hon. Members opposite, southern England Members, Devon Members, as long ago as last February and March. I wrote to the General Manager of Glenrothes Development Corporation on 30th March saying what I had heard.
  I quote his reply, dated 1st April:
  "The reports of which you speak have, of course, been filtering through to us and we had, in fact, two Lobby Correspondents on to us earlier this week for our comments on such reports.
  I have been in contact with Roe, the Chairman, to whom I put the situation bluntly, and I am attaching a copy of his reply."
  He went on:
  "I think myself that one of the problems this Group has had to face is that plant for this type of industry is changing almost overnight, and rather like the aircraft industry, before plant is installed it is overtaken by improved patterns, and Cadco have been trying to get in the most up-to-date plant."
  It was a plant of a different kind from what he was talking about. He went on:
  "They were further delayed, of course, by the 'go-slow' in the building trade … the building industry has clamped down on anything more than 10 hours overtime per week …"
  There were all the excuses in the world about why this project was not going according to plan.
  I have the Telex message from Mr. Roe which was attached to that letter and in which he said:
  "We are prepared to have a press conference in London or Scotland to dispel any rumours. We are as you know in correspondence with the Board of Trade and we are at their request compiling a number of accounts and financial statements regarding the Group."
  I do not know whether they were presented at that time. If so, what action was taken about them? Mr. Roe said that it was hoped to get into production by 31st May, but there is no production yet; the group is in liquidation.
  In some quarters there was a strong demand to start investigations months ago. Impartial investigations of the project were made and reported to the Development Corporation months ago. The then Government stalled because of the imminence of the General Election. I am not making any criticism of the present Government. The previous Government are to blame for this, as I shall try to show.

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  The project was played up by the former Secretary of State for Scotland as a glittering and exciting example of the then Government's success in attracting industry to Scotland. I am now accusing all the then Government Departments responsible—the Treasury, the Board of Trade, the Scottish Office, and the Development Corporation of a grave dereliction of their duties.
  There is now a liquidator. The Cadco Building Company has collapsed. The liquidator will no doubt adequately investigate the affairs of the building company, but he will not investigate the role of the Government Departments in the affair, nor the rôle of the Development Corporation. I am well aware that the Development Corporation would rather that I kept quiet about this whole affair. Curt letters have passed between myself and the Development Corporation and I have made my objection to the terms of them to my right hon. Friend. It has refused to provide me with documents essential to the performance of what I conceive to be my public duty, and documents which I know exist.
  It points to the fact that it has now some wonderful assets: the finest piggeries you ever saw in your life are in Glenrothes—which a lot of people on housing lists would like to live in—and the most modern food processing plant in Europe, standing idle. Glenrothes says, "Fine, they are ours." But they have been got at the expense of the bankruptcy of several small building firms which cannot get their money, including firms in other constituencies than mine, including the constituency of my hon. Friend the Member for Kirkcaldy Burghs (Mr. Gourlay), who provided me with information, and that of the hon. Member for Fife, East (Sir J. Gilmour). Although he has not bankrupt firms, he has got firms which are in very great financial difficulties as a result of this experience. Further, great hardship has been caused to many workers who have been thrown out of a job.
  What I am asking my hon. Friend for is a completely independent inquiry—not a Departmental hushing-up inquiry, but a completely impartial, independent one; or the handing over of the entire case to the Crown Office for criminal proceedings. At the best, this has been
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  a story of unexampled negligence and incompetence; at worst, a tale of fraud and corruption on a gigantic scale.
  12.57 a.m.
  The Under-Secretary of State for Scotland (Dr. J. Dickson Mabon): The whole House is grateful, I am sure, to my hon. Friend the Member for Fife, West (Mr. William Hamilton) for raising this matter tonight. Since he has a Question down for answer by the Chancellor of the Exchequer on 15th December concerning Treasury investigations in Glenrothes, he will not expect me to anticipate the reply. Nor will my hon. Friend, I am sure, expect me to comment on fresh rumours which have appeared in the Press concerning alleged currency offences. I can assure my hon. Friend, however, that I have taken very careful note of all that he has said, and I am sure that the Corporation will do the same. With this in mind I propose to invite the Corporation to discuss the whole history of the project with me. During the course of our analysis I have no doubt we shall look at these past events in sequence and in some detail.
  As my hon. Friend said, the Royal Victoria Sausage Company sought Board of Trade permission to expand its factory in Sussex. This was refused, and the company was invited by the Board of Trade to consider a development district. Glenrothes was selected by Royal Victoria Sausage Company and negotiations began between the company, and the Glenrothes New Town Development Corporation. These were superseded in May, 1963, by the parent company of Royal Victoria Sausage which was described to us as Cadco Developments Limited.
  Cadco Developments Limited, as my hon. Friend has emphasised, was to purchase three advance factories which were to be adapted and extended to form a major food processing unit. The ultimate cost was to be about £2 million and the employment over 2,000. At the time the project held out every prospect of a substantial move forward for the new town. This was, no doubt, the reason why so many Departments concerned gave endorsement to the idea. The Corporation might well have been open to criticism if it had missed this opportunity of helping to provide such employment.

  429
  In addition, to this, there was every evidence that the company was fully committed to carrying through the scheme. The terms negotiated with the company provided for the purchase of the buildings by the company over a period of 20 years at a rate of interest which would bring a profit to the Corporation. These terms were similar to those negotiated for earlier projects with other firms at Glenrothes and other new towns. The Corporation look up bankers' references for the company, and, in the usual way, obtained from the company a form of indemnity under which, if anything happened to prevent the completion of the scheme, the company would pay for work done on its behalf.
  The proposal was that building works were to be carried out by the Cadco Building Company, a subsidiary of Cadco Developments Limited, at a cost certified from time to time by an independent quantity surveyor. Sanction was given by the Scottish Development Department on 20th September, 1963. Work went ahead on building and adaptation works for a first phase development to the value. including existing buildings, of about £1 million.
  In September, 1964, it became clear that the Cadco Building Company was in financial difficulties and unable to meet the claims of its creditors. It then emerged that the building company had itself loaned money to its parent, Cadco Developments Limited, and to other associated companies, all of which my hon. Friend has mentioned, and following that it seemed that the whole project was accordingly in jeopardy.
  Despite these difficulties, it was hoped for some time that the building company would be able to raise sufficient funds to complete the buildings and meet the creditors' claims, but at the beginning of November one of the creditors forced the liquidation of the firm. It is important to make clear that once the Development Corporation had paid the amounts due to the Building Company under its contracts, it had no knowledge of, or influence over, the disposal of these funds by the company to its associates or otherwise.
  It is true that recently it has been made public that in August of this year the Board of Trade turned down the company's application for a standard grant
  430
  under the Local Employment Act. It may be argued, as my hon. Friend has argued, that the Corporation should not have embarked on expenditure until the outcome of the grant application was known. Prior to this, however, the company had assured the Corporation that it intended to proceed with the scheme whether or not assistance approved by B.O.T.A.C. was given, and this assurance was repeated even after the Board of Trade turned down the company's application for a standard grant under the Local Employment Act.
  To return to the original agreement—and I am sorry that I have to rush this—the Development Corporation undertook to provide the buildings to the company's requirements, and the company was itself to be responsible for the installation of special fittings and plant. The contract provided for the first deposit to be paid by the company to the Development Corporation before the end of August this year, and it was open to the Corporation, if the payment was not made within 14 days of the due date, to renounce the arrangement, and any fittings installed by the company became the Glenrothes Development Corporations' property. This, of course, is what happened.
  So far as the Corporation's relationship with the Cadco Building Company is concerned, the Corporation's position was fully safeguarded. In the first place, the agreement provided that work done would be paid for on certificates granted by an independent quantity surveyor, and at rates settled by an independent quantity surveyor on the basis of prevailing rates for comparable work in the area. Payments would be made in instalments as the work proceeded, subject to the retention of a proportion of the sums due at each stage.
  Once again, bankers' references were taken up, and the Corporation was informed that the bank concerned would make available more than sufficient funds to finance building operations over the period until payments for work done became due. The building company made it clear that it was interested in establishing itself as a major contractor in the area, and, I believe, subsequently tendered for other public contracts.
  Cadco Developments required a particularly tight time schedule, and this the Cadco Building Company claimed to be

  431
  able to meet. In a case of this kind, where the buildings are to be purchased by the occupier and the reimbursement of the cost is therefore provided for, it is not unusual for a nominated contractor. to be employed.
  No money was paid by the Development Corporation to Cadco Developments Limited and, subject to one exception, the only money paid to the Cadco Building Company is the total due under the various certificates granted by the quantity surveyors, less the retention
  432
  moneys still held by the Corporation. The exception is a limited sum, to be offset against a payment due for architectural services provided by Cadco Developments Limited—
  The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at four minutes past One o'clock.

CEYLON
  Retired British Employees (Pensions)
  Retired British Employees (Pensions)
MINISTRY OF POWER
  Power Stations (Warm Water Effluents)
  Power Stations (Warm Water Effluents)
  Overhead Power Lines
  Overhead Power Lines
  Nuclear Power Programme
  Nuclear Power Programme
  Gas (Underground Storage)
  Gas (Underground Storage)
  Oil and Gas Deposits, North Sea
  Oil and Gas Deposits, North Sea
  Fuel Policy
  Fuel Policy
  Underground Power Cables
  Underground Power Cables
  Colvilles Ltd. (Interest Payments)
  Colvilles Ltd. (Interest Payments)
  Steel Industry
  Steel Industry
COAL
  Domestic Supplies (Quality)
  Domestic Supplies (Quality)
  Fuel Policy
  Fuel Policy
  Differential Prices
  Differential Prices
OVERSEAS DEVELOPMENT
  Designated Officers, East Africa (Salaries)
  Designated Officers, East Africa (Salaries)
  Kenya (Resettlement Scheme)
  Kenya (Resettlement Scheme)
  Zambia (Aid)
  Zambia (Aid)
  Kenya (Farms, Ol Kalou Salient)
  Kenya (Farms, Ol Kalou Salient)
  Tanzania (Aid)
  Tanzania (Aid)
  Dahomey (Agricultural Training)
  Dahomey (Agricultural Training)
NATIONAL FINANCE
  Corporation Tax
  Corporation Tax
  Income Tax (Public Service Pensioners)
  Income Tax (Public Service Pensioners)
  Basingstoke District Valuer's Office
  Basingstoke District Valuer's Office
  Town Expansion Schemes
  Town Expansion Schemes
  Railway Season Tickets
  Railway Season Tickets
  Development Areas (Tax Differentials)
  Development Areas (Tax Differentials)
  Bank Rate
  Bank Rate
  Public Service Pensioners
  Public Service Pensioners
  3½ per cent. War Loan
  3½ per cent. War Loan
  School Building (Interest Charges)
  School Building (Interest Charges)
  Life Assurance Companies (Taxation)
  Life Assurance Companies (Taxation)
  Local Government Finance (Education)
  Local Government Finance (Education)
  Foreign Currency Securities (Purchase)
  Foreign Currency Securities (Purchase)
  Plaster Board and Lath
  Plaster Board and Lath
  Single Women (Taxation)
  Single Women (Taxation)
  Local Authorities (Educational Expenditure)
  Local Authorities (Educational Expenditure)
  Purchase Tax
  Purchase Tax
  Shipbuilding Conference (Letter)
  Shipbuilding Conference (Letter)
  Civil Servants, Harrogate
  Civil Servants, Harrogate
  International Agreements
  International Agreements
  Employment, Scotland
  Employment, Scotland
POST OFFICE
  Special Stamp Issues
  Special Stamp Issues
  Stamp Policy
  Stamp Policy
  Collections, Bramhope
  Collections, Bramhope
  Greetings Telegram Service (Loss)
  Greetings Telegram Service (Loss)
  Letter (Delivery Delay)
  Letter (Delivery Delay)
  Deliveries, Hampshire
  Deliveries, Hampshire
  Post Office Savings Bank, Harrogate
  Post Office Savings Bank, Harrogate
WIRELESS AND TELEVISION
  Broadcast Receiving Licences
  Broadcast Receiving Licences
TELEPHONE SERVICE
  Southend Area
  Southend Area
HOUSING
  Cost (Import Surcharge and Petrol Duty)
  Cost (Import Surcharge and Petrol Duty)
  Rent Control
  Rent Control
  Mortgages (Interest Rates)
  Mortgages (Interest Rates)
  Housing Target, 1965
  Housing Target, 1965
  Compulsory Purchase Orders, Southend
  Compulsory Purchase Orders, Southend
LOCAL GOVERNMENT
  Local Authorities (Interest Rates)
  Local Authorities (Interest Rates)
  Land, Pinfold Lane, Bridlington (Industrial Development)
  Land, Pinfold Lane, Bridlington (Industrial Development)
  Allen Committee's Report
  Allen Committee's Report
  Water Supply (Fluoride)
  Water Supply (Fluoride)
  South-East Study (Banbury)
  South-East Study (Banbury)
  Essex County Plan
  Essex County Plan
WALES
  Welsh Vote
  Welsh Vote
  Secretary of State (Responsibilities)
  Secretary of State (Responsibilities)
MINISTRY OF TECHNOLOGY
  Research Projects
  Research Projects
  Automation
  Automation
MINISTRY OF TRANSPORT
  Iron Ore Imports, South Wales (Transport Facilities)
  Iron Ore Imports, South Wales (Transport Facilities)
BOARD OF TRADE
  E.F.T.A. (Ministerial Council Meeting)
  E.F.T.A. (Ministerial Council Meeting)
BRITISH GUIANA
  Elections (Observers)
  Elections (Observers)
  SOUTHERN PHILIPPINES (TYPHOON)
  SOUTHERN PHILIPPINES (TYPHOON)
  N.A.T.O. (NUCLEAR FORCE)
  N.A.T.O. (NUCLEAR FORCE)
  TRIBUNALS OF ENQUIRY (EVIDENCE) ACT, 1921
  TRIBUNALS OF ENQUIRY (EVIDENCE) ACT, 1921
AGRICULTURE, FISHERIES AND FOOD
  Bank Rate Increase
  Bank Rate Increase
  Export of Animals for Slaughter
  Export of Animals for Slaughter
  Covent Garden Market Authority (Private Bill)
  Covent Garden Market Authority (Private Bill)
MINISTRY OF DEFENCE
  Corporal Missiles
  Corporal Missiles
  Abbotsinch Air Station (Flights)
  Abbotsinch Air Station (Flights)
HOSPITALS
  Blood Donor Organisers
  Blood Donor Organisers
EDUCATION AND SCIENCE
  Grammar School Places, Yorkshire
  Grammar School Places, Yorkshire
HOME DEPARTMENT
  Commonwealth Students
  Commonwealth Students
EMPLOYMENT
  Insured Workers, Harrogate
  Insured Workers, Harrogate
  Registered Dock Workers Liverpool and Garston
  Registered Dock Workers Liverpool and Garston
PENSIONS AND NATIONAL INSURANCE
  National Insurance Fund
  National Insurance Fund
SCOTLAND
  Uncertificated Teachers
  Uncertificated Teachers
  Hill Cattle and Sheep, Banffshire
  Hill Cattle and Sheep, Banffshire
  Forestry (Agricultural Land)
  Forestry (Agricultural Land)
  Educational Institute of Scotland (Representations)
  Educational Institute of Scotland (Representations)
MINISTRY OF HEALTH
  Mosquitoes, Dorset Area
  Mosquitoes, Dorset Area

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Liverpool
The Lord Iliffe—Took the Oath.
The Lord Williams of Barnburgh—Took the Oath.

A.34 TRUNK ROAD
2.37 p.m.
EARL FORTESCUE: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was follows:
To ask Her Majesty's Government whether they are aware of the congested and dangerous state of the A.34 trunk road running south from Oxford to Newbury and Winchester; and whether they can hold out any prospect of improving the section between Oxford and Abingdon.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD LINDGREN): My Lords, my right honourable friend is aware that major improvement of the A.34 trunk road south of Oxford is needed. His longterm plan is to provide dual carriageways on this road with by-passes as required. A length of the Oxford Southern By-pass is already being constructed to this standard, and my right honourable friend has asked the Berkshire County Council, as agent authority, to prepare plans for extending the dual carriageways for a further twelve miles southwards to by-pass Abingdon. Meanwhile, other improvements are scheduled to start next year.
EARL FORTESCUE: My Lords, I thank the Minister for his reply, but I think the local inhabitants will not find it completely satisfying. Is the Minister aware that this is the only route directly connecting the Birmingham area and Southampton, and that an increasing amount of traffic is being funnelled on to it as the motor roads in the neighbour-
982
hood of Birmingham are connected up? Also, when the Oxford By-pass is completed is it not likely that even more traffic will be funnelled on to this very poor road going south from Oxford?
LORD LINDGREN: My Lords, a considerable amount of work is already programmed for next year. There is to be work on a relief road within Abingdon itself, which will cost £72,000; there is the Rowstock crossroads, where work will be commenced next year, at a cost of £30,000; and construction of the by-pass at East Ilsley also will start next year, at a cost of £600,000. For the noble Earl's information, too, the Member for Abingdon is bringing a deputation to see us some time next week in regard to the by-pass; but I cannot hold out any hope that the by-pass will be commenced in the near future.
LORD LUCAS OF CHILWORTH: My Lords, is the noble Lord aware that it was quite evident as soon as the project of the Oxford ring road was mooted, now 25 years ago, that the A.34 required reconstruction? That is, as the noble Earl stated and as the noble Lord admits, the main road from Birmingham to Southampton. Is the noble Lord also aware that the plans for by-passing Abingdon have now lain on the Minister's desk for over twelve months? Is he further aware that the Minister has not yet been able to make up his mind? Moreover, is he further aware that no major reconstruction of the A.34 has taken place since before the First World War, when the Winchester By-pass was started and completed to absorb unemployment and when the Oxford By-pass was started and completed for the same reason? Is this not—the noble Lord will perhaps agree—further evidence of the new-found philosophy of the Ministry of Transport, that forty years' delay is "not a day too much"?
LORD LINDGREN: My Lords, with the greatest respect, I can answer for only the last forty days, and all the decisions I have referred to already were decisions of the previous Administration. I think it is only fair to say that that Administration had made arrangements for the spending of a considerable sum in the area apart from the Abingdon By-pass. My information is different from that of the noble Lord. It is a question of whether the by-pass should go east or

983
west of Abingdon, and the Berkshire County Council cannot make up their minds in regard to it. There are vested interests in regard to the ownership of land.
LORD LUCAS OF CHILWORTH: Will the noble Lord accept an assurance that my information is directly contrary to his? My information is that that the Berkshire County Council put before the Ministry of Transport two alternative plans twelve months ago, and that the Ministry of Transport have not been able to make up their minds. How long, might I ask the noble Lord, are we to be fobbed off with the answer that the acquisition of land takes so long that we cannot have proper highways in this country?
LORD LINDGREN: My Lords, I do not think I ought to be drawn into arguments between the Ministry and the local authority. It is true that the local authority have tried to place the responsibility for the decision on to the Ministry, while the previous Minister, rightly or wrongly, said that the local people ought to determine, as far as they could, where the road should go and, in the light of that decision, he would make his decision.
EARL FORTESCUE: My Lords, further to my Question may I ask whether the Minister is aware that the strip of road between Oxford and Abingdon has not been changed in dimension, line or fencing since I drove a four-in-hand along there fifty years ago—and it was barely wide enough then? Further, is there any reason why the fences on the bends should not be removed and iron railings substituted, and the trees which obscure the view felled?
LORD LINDGREN: Yes, my Lords, I would agree, and so would the Ministry, that the A.34, together with many other roads throughout the country, is substandard. Improvements were made by the previous Administration, which will be continued and, I hope, improved on by the present Administration. But there must be priorities and on this road the density of traffic and the accident rate are not as high as on other roads. Priorities have to take account of density of traffic and the accident rate on the roads.

REAR SIDE WINDOWS ON VANS
2.45 p.m.
EARL FORTESCUE: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware of the danger resulting from the restrictions on rear side windows on trade vans, and whether they do not consider that the abolition of such restrictions without penalising the user would be justified.]
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD RHODES): My Lords, I do not doubt that the restrictions which the noble Earl has in mind are those arising from the scope of the purchase tax on road vehicles. The law provides that tax is chargeable on any vehicle which has to the rear of the driver's seat roofed accommodation fitted with side windows or constructed or adapted for fitting side windows. It is necessary to draw a clear dividing line between those vehicles which are subject to purchase tax and those which are not. The conclusion that rear side windows should be one of the main criteria employed was arrived at after exhaustive consideration of the problem, in consultation with the motor trade. The road safety aspect of the matter was fully taken into account in the discussions at that time.
EARL FORTESCUE: My Lords, I thank the noble Lord for his reply, but is the Minister satisfied that the extra purchase tax on these vehicles, which might or might not be collected, is sufficient to offset the number of casualties caused by these vehicles?
LORD RHODES: No, my Lords, we have no evidence to that effect. If the noble Lord has any we shall be pleased to look at it. In any case, these vehicles were presumably bought for a commercial purpose and, that being the case, they will be loaded and there is in that event no possibility of one being able to see out of the side windows, anyway.
EARL FERRERS: My Lords, to which does the noble Lord attach the greater importance: the saving of life on the roads or ensuring a modest recoupment of purchase tax for Inland Revenue?
LORD RHODES: My Lords, I do not think that question is involved at all. I think that just a clear definition has been required, and the criterion we have is good enough to suit the purpose.
VISCOUNT BRENTFORD: My Lords, can the noble Lord indicate how much purchase tax is involved in regard to these particular vehicles?
LORD RHODES: Yes, my Lords, of course: 25 per cent.
A NOBLE LORD: Of what?
LORD HAWKE: My Lords, will Her Majesty's Government not agree that it is time to revise these old rules which, by tending to draw a rigid line between what is a commercial vehicle and what is not for fiscal purposes, definitely militate against safety al the roads? Would it not be much better to consolidate the purchase tax on all motor vehicles at the same rate?
LORD RHODES: My Lords, this question was first considered in 1940, then in 1950 and again in 1963. I am obliged to the noble Lord for his suggestion and I will convey it to the proper quarter.

WOOLWICH POWER STATION SITE
2.47 p.m.
LORD WAKEFIELD OF KENDAL: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether it has finally been decided to allocate for housing the site at Woolwich intended by the Central Electricity Board for the erection of a power station; and, if so. what alternative site is now proposed in view of the urgent need for a further power station as close as possible to London.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF LAND AND NATURAL RESOURCES (LORD MITCHISON): My Lords, yes. The Government see no reason to alter the decision which was announced in another place on July 16 to offer the site to the London County Council for housing. The Central Electricity Generating Board have the statutory responsibility for pro-
986
viding bulk supplies of electricity to London and elsewhere, and it is for them, in the first place, to consider what arrangements to make in the light of this decision. No proposals for particular sites have yet been received by my right honourable friend the Minister of Power.
LORD WAKEFIELD OF KENDAL: My Lords, while thanking the noble Lord for that reply may I ask him whether he is aware that this decision will cost the electricity consumer over £20 million, and that before any housing is built at all there will be an expenditure of at least £5,000 per house on the site alone? Further, in view of all this, and the need to stop increasing inflation and increasing the cost of living, is it not possible to reverse this decision?
LORD MITCHISON: My Lords, I am sorry that the noble Lord is so strongly critical of a decision of the previous Government. We are less so; and on balance we think this site ought, as the previous Government proposed, to be used for housing. As regards the figures which the noble Lord has given, as we do not yet know what the Central Electricity Board propose to do the figures are obviously hypothetical. Although the figure of £20 million was mentioned to the previous Government before they made their decision, it must finally depend on what are the proposals of the Board.
LORD WAKEFIELD OF KENDAL: My Lords, while thanking the noble Lord for that further reply, I would ask, is it not a fact that the conditions have greatly changed since July, in that the policies of Her Majesty's Government are undoubtedly leading to increased inflation and an increase in the cost of living, so that it is very desirable that we should try to stop this trend? And is this not one way in which that trend might be stopped?
LORD MITCHISON: My Lords, of course there has been a considerable change in the position of the country, for the better. We are no longer incurring an increasing deficit as regards other countries without taking any steps about it. However all that may be, I fail to see how these matters affect the particular question which the noble Lord raised—namely, whether this site should

987
be used for housing or for the purposes of the Central Electricity Generating Board. No doubt it is quite clear in his mind; but it is not in mine.

MOTORWAY CROSSING OF LANCASTER-KENDAL CANAL
2.52 p.m.
LORD WAKEFIELD OF KENDAL: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether an assurance can be given that, where the extension of the M.6 from Lancaster to Penrith crosses the Lancaster-Kendal Canal, bridges and not culverts will be used, in order to ensure navigation of the canal in Westmorland.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD LINDGREN): My Lords, the extension of the M.6 will cross the canal at several points. My right honourable friend has agreed to provide sufficient clearance to permit pleasure boats to continue to use the 42 miles of the canal they at present use, except possibly for a few hundred yards at Tewitfield, at the extreme northern end of this usable section. The remaining twelve miles stretch north of Tewitfield is, however, not in a fit state for navigation. In view of the high additional cost on the motorway and the cost of restoring the canal, my right honourable friend and the British Waterways Board have agreed that it would not be justifiable to build bridges on this northern stretch. The Board have therefore agreed to promote a Private Bill seeking relief from the statutory requirements relating to the part of the canal which will be affected.
LORD WAKEFIELD OF KENDAL: My Lords, in thanking the noble Lord for that reply, I would ask whether he is aware that it will be received with deep disappointment by people in Westmorland and Lancashire, who were hoping that, in this new construction and extension of the M.6, it would be possible for navigation to continue northwards into Westmorland. It was hoped to make this part of the canal, to which
988
the noble Lord referred as being at present unnavigable, navigable in future, and the announcement which he has made will mean that it will be quite impossible for future generations to navigate this part of the canal, should this work be carried out. In view of the importance of providing recreational facilities of this nature in Westmorland would the noble Lord not reconsider this decision?
LORD LINDGREN: My Lords, the twelve miles between Tewitfield and Crowpark Bridge have not been navigable for many years, and four miles are already closed to navigation. In the remaining eight miles stretch much of the bottom is already cracked and the water is low to avoid excessive seepage. In fact, part of the canal is already dry.
LORD WAKEFIELD OF KENDAL: My Lords, I thank the noble Lord for that further reply. These facts are all well known, but it was hoped to repair and use this further extension for recreational facilities, for agriculture, for fishing and various other activities, which all noble Lords are fully aware take place in waterways and canals. The Minister's decision will stop all that.
LORD LINDGREN: My Lords, the question was about the extension of the M.6, and I have given a reply in regard to the construction of that motorway. In order to close to navigation the part of the canal which has not been so used for many years, it will be necessary to promote a Private Bill. When that Private Bill comes before the House, there will be an opportunity for objections and I suggest that that will be the correct time to raise these matters, not now.

ARMY ACT 1955 (CONTINUATION) ORDER 1964
2.55 p.m.
THE MINISTER OF DEFENCE FOR THE ROYAL AIR FORCE (LORD SHACKLETON): My Lords, I think it might be for the convenience of your Lordships if we had one debate on the two Orders we have to consider. Therefore, if the House has no objection, I propose to deal with both the Army and the Royal Air Force in moving the first Order,

989
and subsequently to move formally the Order relating to the Royal Air Force.
Taking one year with another, previous practice in regard to this matter has not been the same. Last year, these Orders went through without debate, but this seems to be an opportunity to say something of the state of the Army and the Air Force, particularly in relation to discipline and to those matters with which the Army Act and the Air Force Act a re concerned.
As your Lordships will be aware, the Army and Air Force Acts, 1955, brought to an end a system of annual Army and Air Force Acts and substituted a system of continuation annually by Orders in Council for a maximum period of five years. The Acts came into force in January, 1957, and would normally have expired in December, 1961. As your Lordships will recall, they were extended for a further five years by the Army and Air Force Acts, 1961, subject, of course, to the annual Order in Council procedure. The continuation Orders which are before your Lordships today are the third made under the 1961 Act, no Order being necessary in the first year.
The Army and Air Force Acts, 1955, are concerned primarily with the discipline of the Army and the Royal Air Force and with recruiting to the two Services. Perhaps I may say a few words about discipline. This, I am happy to be able to say, remains, as the noble Earl, Lord Jellicoe, would expect, of a high order. In the Army, there have been no striking changes in court-martial statistics during the last year—that is, to September 30, 1964, Twenty-two officers were convicted, compared with 19 the year before and 28 the year before that; 2,199 soldiers were convicted, compared with 2,521 in the previous year. There were 50 appeal petitions to the Army Board, compared with 59 the year before, and 27 applications were made to the Courts Martial Appeal Court for leave to appeal, compared with 31 the previous year; and none of these 27 applications for leave to appeal was granted by the Appeal Court, whereas in the previous year 9 appeals were heard.
In the Royal Air Force the incidence of court-martial has dropped for the third successive year, reaching this year a new
990
low level of only 2·04 courts-martial per 1,000 officers and men. I apologise to the House because I am giving percentages for one Service and figures for the other. If the noble Earl, Lord Jellicoe, would like the exact figures, I would hope to be able to give them later, but, broadly, the position is that there has been a decline in the number of courts-martial in both Services. The number in the Royal Air Force is a remarkably low figure. The number of petty offences also shows a marked decrease. I have the figures of these, but I do not think that I need weary the House by giving them, unless any noble Lord wishes me to do so.
Of course, we ought not to judge any Armed Force primarily by the number of offences. My right honourable friend's concern, and the concern of all Defence Ministers, is with the morale and discipline of the Services for which they are responsible. These are not just a matter of court-martial statistics. They depend upon the good sense and judgment of commanding officers, officers and, indeed, the men themselves. I think one can properly claim that both morale and discipline are excellent, despite—your Lordships will be aware of this—the considerable strains that have been placed on the Services in the last twelve months.
I should now like to turn to recruitment. I am in some ways sorry to see that the noble Lord, Lord Carrington, is not here to join me in what he used to call the "numbers game". Here we have a quite encouraging situation to report. At the beginning of 1964 the other rank strength of the Army was about 151,500, a deficiency of 8,500 against the target of 160,000 other ranks, or rather more than 5 per cent. The year 1962 was a good recruiting year. We recruited over 28,000 men from civil life and built up the other-rank strength of the Army by more than 13,000 men. This was followed by a relatively bad year in 1963, when less than 18,000 men were recruited from civil life and the Army strength increased by little more than 1,000.
Results in 1964 have fallen between these two extremes. We have recruited 20,589 men from civil life in ten months, and we have so far built up the other rank strength of the Army by 5,481, to 156,980. Of course, included in these figures are the young soldiers of 17–17½, who are making an important contribution. As we have noted before in our

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debates, they are our great hope for the future in the Army, and the high quality of these young men is something that any of us who have had some contact with them can pay tribute to. The build-up to 156,000 is rather more of an achievement than might appear, because of the heavy run-out of men completing their engagements in 1964. This run-out is expected to be over 9,000 this year, as compared with some 6,000 in 1963. It is mainly due—and it is never quite possible to avoid these peaks and troughs—to the introduction of the six-year engagement at the end of 1957, and the heavy recruiting of 1958. The higher run-out has been partly offset by a slightly lower rate of wastage than last year. The Army is now nearing its target of 160,000 soldiers. Most of the major corps are up to strength, but there are still difficult problems in filling certain corps, such as the infantry and in particular brigades, and in getting the right balance of trades and skills in each corps.
The Royal Air Force, I am glad to say, generally speaking, is up to strength. There are marginal shortages in some trades, mainly on the administrative side. such as nursing attendants, but these shortages have no serious effect on the operational efficiency of the force. Of the operational efficiency of the force, with which I am particularly concerned, I have no doubt whatever. I may say that I had no doubt when I was in Opposition, and I am happy to be able to say that everything I have seen since I took up my present post confirms this view. Over the past eighteen months the reduction in the size of the force consequent upon such things as the disbandment of the Thor missile squadrons, has meant that we have had very few vacancies for airmen and airwomen, and there has been no real problem in filling the vacancies available. This year, as a result of normal wastage, our requirement for recruits will be rather higher, but again we expect no real difficulty in filling the majority of the vacancies. All initial engagements for airmen will be for a period of not less than five years.
As your Lordships will be aware, we decided earlier this year also to recruit men between the ages of 17 and 17½ who
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had their parents' consent. Up to the end of October we had enlisted 168 of these young airmen. The quality of boy entrants and apprentices has also been well maintained. As has already been announced, from October this year we started recruiting boys for the new categories of technician apprentice, craft apprentice and administrative apprentice. Technician apprentices will provide a higher standard of boy entrant than ever before. Entrants have to have four "O" level passes in the General Certificate of Education, including mathematics and a science subject. To match this, their training will be of such a quality as will enable them to meet the really extraordinarily complex servicing problems of present and future equipment. Craft apprentices will, however, provide the bulk of our technical tradesmen and will be trained to a slightly lower level. Administrative apprentices will be trained for such jobs as clerks. They too will have an important job to play.
Our first quotas for craft and trade apprentices were easily filled, and we expect no difficulties in meeting future requirements. As regards technical apprentices, we cannot be quite so sure, but personally I believe we shall continue to attract the highest quality of youth entrant, as the R.A.F. always has done. The quality of the training we offer will, I think, be a guarantee to that. It is worth noting that boys who undergo this training are given a really first-class training, which many of them are able to put to use later on in civilian life.
The Women's Royal Air Force, like the women in the Army, continues to make an invaluable contribution. Our great problem is that so many of them leave the Service in their early years to get married that there is a shortage of non-commissioned officers. While this is no doubt a tribute to the quality of our air women it does bring awkward problems. To try to meet the problem we have introduced a bonus scheme for those girls who complete a six-year engagement—I should say a six-year engagement in the Service, because, of course, an engagement to marry may also last that long. Similar schemes are being introduced by the other Services.
My Lords, it is to me a great satisfaction to give witness to the healthy state, in the respects in which I have been discussing them, of the Army and my old

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Service, the Royal Air Force. Although no doubt we shall have some occasions when we shall dispute matters dealing with the Services, I should like to acknowledge the debt that I and my colleagues owe to certain of our predecessors, particularly the noble Earl, Lord Jellicoe, and the noble Lord, Lord Carrington. I can only say that, from my brief experience of the Ministry of Defence, they were very highly regarded there, and I think we have been very well served by them in this House. I beg to move.
Moved, That the draft Army Act 1955 (Continuation) Order 1964 laid before the House on November 3, 1964, be approved.—(Lord Shackleton.)
3.10 p.m.
EARL JELLICOE: My Lords, I am grateful to the noble Lord for the way in which he has introduced these matters, and for what he said at the end of his short speech. I remember that when we were discussing education a week or so ago he congratulated a noble friend of mine on having made an admirable winding-up speech for the Government. May I return the compliment and thank the noble Lord for the admirable and favourable statement which he has made about the way in which the late Government administered the two Services about which he has been speaking?
There are a number of questions on Defence policy as a whole which I am tempted to put to the noble Lord, but I will resist most of the temptation. We shall, I trust, have plenty of time before and after Christmas to discuss this country's Defence policy, and I suspect that in any event the noble Lord will merely tell me, in reply to most of my questions, that this or that matter is under review. As the Secretary of State has made clear in another place, the Government are reviewing their Defence policies right across the board, and I, for one, have no quarrel with that. Very big, very complex and interlocking questions are involved here, and it is only natural, as I see it, for the Government to wish to have a fresh look at these things, especially since they have been out in the wilderness for thirteen years or so. Of course, when we come back, we shall obviously not require so much time in which to review these matters.
More seriously, I would express the hope that the Government's review of
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the Defence policy will be completed before much longer, and that the results of it will soon be made public, certainly to Parliament. I hope that we shall not be treated to a sort of running preview in the Press, such as we have had in the last few days or so, of what the Government may or may not be contemplating. They have managed to create a certain amount of uncertainty, at home and abroad, on a certain number of issues, and there is a danger that they may be creating the same sort of doubt and anxiety among the Services and among those industries that provide the sinews of war for the Services. That is why I hope the noble Lord will be able to assure us that the shape of Mr. Healey's new Model Army, new Model Air Force and new Model Navy will soon be unveiled to Parliament. I hope that he will be able to tell us when we may expect to see this marvellous new creation.
Meanwhile, having said that, I would say how glad I was to hear what the noble Lord had to say about Army recruitment, and about various other measures which have been introduced, such as this long engagement for the Service women. When we discussed Defence, I think it was last February, the short-fall in other ranks for the Army was, as the noble Lord has said, something like 5 per cent. The gap has now been narrowed to something like 2 per cent.; and these figures are, I feel, a real tribute to the intense effort which has been put into Army recruitment over a very long period by everyone concerned, including, not least, successive Secretaries of State for War.
That said, may I put the following questions to the noble Lord? Does he share his colleagues' optimism that we shall hit this total target of 180,000 for the Army not later than the end of next year? Can he perhaps tell us when we shall attain the never attainable 55,000 men in B.A.O.R.?—and here I am using his phraseology. Can he tell us a little more about whether the increased figures for the Army mean that the sharper shortages in certain specialist categories, like the Medical Corps, the Dental Corps and the Education Corps, have been significantly diminished? The noble Lord mentioned this aspect, but anything more he can tell us on this point will be welcome. If he could throw more light on

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the reduction in shortages in certain infantry units it would, I think, be a great relief to many of your Lordships.
Then can the noble Lord tell us anything further about the net loss by wastage? He mentioned that the figure was being reduced. Three years ago it was 14 per cent., and two years ago it was 10 per cent. What is the figure now? And can the noble Lord say anything about officer recruitment for the Army? Penultimately, can he throw any light on the reports which we have been reading lately that the Government are thinking of raising the manpower ceiling for the Army from 180,000 to, say, 186,000? Finally, since this concerns the Service for which the noble Lord is directly responsible, can he give us any more information about the various limited deficiencies in the R.A.F. manpower position? I take it that when he said the majority of the vacancies are being filled by recruitment, and that, generally speaking, the manpower situation is satisfactory, this means that there are no serious deficiencies in R.A.F. manpower in any categories. If he could confirm this, so much the better.
This House has to some extent pioneered what I might call the functional approach to Defence matters by discussing Defence right across the board, and being the first of the two Houses to depart from the traditional method of discussing Defence Service by Service. I think that is a good thing. and I, for one, should welcome the chance of discussing these manpower problems, which are so vital, and the Armed Forces, at greater length some time after Christmas, presumably after the Government's White Paper has been published. With that in mind, I wonder whether I could take this opportunity of feeding in a number of Defence suggestions to the noble Lord: suggestions to which I should like to revert if and when we discuss Service manpower in greater detail.
I believe that most of us would agree that pay in the Armed Forces nowadays is more or less satisfactory. I am inclined to believe that there might in certain instances be more direct and more immediate financial inducements to re-engagement. I would hope that the possibility of a re-engagement grant was being considered. But although, broadly
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speaking, pay is, I think, satisfactory at the moment, with the biennial review procedure, I am not satisfied that this applies with the same force to pensions. I feel myself that the link between the cost of living and the rate of Service pensions might be closer and more direct; and, given the biennial review procedure, this could, of course, be achieved by securing a more direct relationship between pay and pensions. I hope that the noble Lord will at least consider pursuing those tentative suggestions with his colleagues.
May I, without in any way wishing to teach my new "grandmother" how to "suck these Service eggs", put two or three more quick suggestions to the noble Lord? I suppose it is a truism, in this era of early marriage, to say that family separation is probably one of the main causes why young men may not join the Services or, having joined, may not wish to stay in them. Of course, this separation can be mitigated by good administration and by accompanied tours abroad. But I think there are various other things which might be considered. A separation allowance, although it sounds a slightly radical suggestion, is something which I believe is worth considering, especially as and when the unaccompanied tour becomes more normal. The possibility of using air transport, so that young men who are abroad for even a relatively short space of time have a chance of a leave at home, or their families a chance of going out to see them, is another idea worth considering, and is one to which the Select Committee drew attention in their recent Report.
In any event I am sure that all your Lordships would agree that when the Serviceman goes abroad unaccompanied he must do so in the certain knowledge that his family is being really well looked after at home; and, above all, is really well housed. That is why I should like, just for a moment, to lean again on this question of Service housing. I am thinking here not only of married quarters—the Service equivalent of the council house—but of more than that: of hirings of caravan sites, of the extension of the housing society schemes and of means of helping Servicemen to buy their own houses. I personally believe that at the present time the rules, so far as hirings are concerned, may be unduly

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restrictive. Also, I think we could possibly do more for the Service caravanner.
In conclusion, y Lords, I should like to dwell on two points, married quarters and the purchase by Servicemen of their own houses. So far as married quarters are concerned, the noble Lord knows as well as I do that the present three-year programme is by far the largest on which the Services have ever embarked. Because of this I must confess that I was a little disappointed last week at the reply I received from the noble Lord, Lord Mitchison, about the possible renewal of the Armed Forces (Housing Loans) Act. This Act was first introduced by a Labour Government, and it has been reenacted by successive Governments, with the support of all Parties. I naturally welcome the noble Lord's assurance that there is not to be any slow-down in the Services' housing programme, but in view of this assurance, I find it rather hard to understand the hesitation of noble Lords opposite about saying that they will renew this particular measure. Because I believe that this system of loan financing provides the best insurance against possible cuts in Service housing programmes, I shall continue to feel some disquiet, despite the assurance I have received from the noble Lord, Lord Mitchison, until either he, or perhaps the noble Lord, Lord Shackleton, is able to give me a more definite assurance than the noble Lord was able to give last week.
I would remind noble Lords that Servicemen, like other people, are tending more and more to buy their own houses; and this is, of course, an entirely healthy trend. But quite a few Servicemen who would like to buy their own houses are inhibited from doing so by their inability to make the initial down-payment. If a scheme could be devised—and I believe it could be—in which they were aided in this respect, and if this scheme were linked in some way to re-engagement, then I think the Government would be killing two birds with one stone. That, my Lords, is all I have to say on these matters. I believe that these suggestions which I have tentatively put to the noble Lord opposite are both practicable and desirable, and I hope that when we come to debate Service manpower questions in greater detail—possibly in the New Year—he will be able to tell us that he has not only converted his colleagues to these suggestions but has also managed
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to steer these proposals, or possibly better ones, past the Treasury watch-dogs. With that, I should like to say that I, for one, am in full agreement with these particular Orders which the noble Lord has commended so ably to your Lordships' House.
3.35 p.m.
LORD SHACKLETON: My Lords, the noble Earl, Lord Jellicoe, is at last freed by the electorate to urge all those matters which he was unable to carry out when he was in the Government.
EARL JELLICOE: My Lords, may I interrupt the noble Lord just to say, only through the accident of lack of time.
LORD SHACKLETON: We have had but six weeks so far, and the noble Lord had thirteen years. Admittedly he was not there all that time, but if my own speech paid tribute to some extent to the achievements of the Government, the noble Lord certainly very properly drew attention to the deficiencies of the matters which had to be dealt with. Let me say that I think it is likely—though I hope we shall not be compelled to make too much use of them—that we shall find a number of skeletons in the cupboard, but I certainly have no intention of referring to them to-day.
On this broad question of the Defence review, I think that while it is very desirable that this should be carried out as quickly as possible, I am sure noble Lords will appreciate that it is also very desirable that it should not be carried out too hastily. And I think that the noble Earl, who used phrases such as "marvellous new creation", was indulging in a degree of hyperbole which is not entirely helpful. Indeed, I would not say that all the remarks—though I would not accuse the noble Earl, Lord Jellicoe, of this—of the Opposition have been helpful to a calm approach. I think it is highly desirable that there should not be undue speculation of a misleading kind, though clearly none of us can, or would wish to, limit speculation. None the less, this review must properly take place and it will be done as quickly as possible.
I would only say that this review must take place against the background of the economic situation. I do not propose to make any points on this matter beyond the fact that all noble Lords will agree

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that, whatever the pattern of Defence that emerges at the end, it must clearly relate to our economic strength; and, as the noble Earl knows very well indeed, of course any Government are legislating in the Defence field not for the current year or the next year but conceivably for ten or fifteen years ahead. Therefore, the plans that are debated to-day, as with the plans of the previous Government, will extend for many years beyond at least the life of this Parliament, if not of this Government.
The noble Earl made a number of points some of which I should like to deal with, and some which frankly I think it would not be profitable to pursue at this stage, though I would say I have noted them very carefully—and this is no empty formula. I would refer particularly to this really tremendously important question of housing for the Forces, and I am at one with him in recognising the great importance of this. As the noble Earl knows, there has been a change of arrangement by which the previous Government transferred responsibility broadly for housing to another Ministry. But this should not, and I am sure will not, lead to any loss of efficiency in this particular field. Of course, the Act to which he referred, and to which I in the past have equally attached great importance, is essentially a technique rather than an actual provision of funds. None the less, I appreciate the importance of this Act and the role it has fulfilled, and I would only say that all these matters are being taken into account against, of course, a background of a very heavy legislative programme. I do not think the noble Earl would want me to say anything more on this.
EARL JELLICOE: My Lords, at the risk of interrupting the noble Lord, may I say it is my understanding that the renewal of this Act will not add very greatly to the weight of the legislative programme? I think it is a matter of a one-line or one-paragraph enabling Bill.
LORD SHACKLETON: If the noble Earl is prepared, as I am sure he can do, to give an undertaking on behalf of his noble friends in this House as well as of his honourable friends in another place that such a Bill will go through very quickly, I am sure this will
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be a powerful consideration; but I think we are going a little far afield, apart from my saying that I have noted what he said. There were many other aspects of the noble Earl's speech, some of which I had not anticipated. He made certain points in relation to pay and to family separation, which are matters clearly having to be taken into account. The problems of family separation and of early marriage are of major concern, as the noble Earl himself knows, and are of course frequently under discussion in the Ministry of Defence.
The noble Earl asked certain specific points some of which I should like to answer. He referred to the progress made in reducing the deficiency in regard to manpower in the Army, and it is true that a deficiency of 5 per cent. at January 1, 1964, was reduced to a deficiency of 2 per cent. at October 31. He was undoubtedly aware of the remarks made by my right honourable friend in another place, when he said he was satisfied that the target of 160,000 men would be reached towards the end of next year. That is, of course, assuming that recruiting goes on at the same sort of rate, and we have every hope that it will. But, remembering the disappointments that followed the sometimes over-complacent remarks of the previous Government in this matter, I think one must take into account that recruiting figures in the last two months of this year may not be so encouraging.
Of course, these figures are taken into account in the forward projection, but November and December are traditionally unfavourable for recruiting. I think I would only say that I am confident in the sense that any Minister is confident but with not absolute certainty. I think this is something that any Minister who is making pronouncements in this field, given an opportunity to speak freely rather than shortly, must reserve to himself, because, as I have said, we have in the past had quite a lot of complacency which has led in the end to disappointing results.
There were certain particular points the noble Earl asked me. He asked me about the short-fall in certain branches and the extent to which the general reduction in deficiency, or the improvement, has covered all fields. The reduction in deficiency (I feel one might find a happier way to express this, but since we have

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been accustomed to deficiency it may be reasonable to talk about it in this way) in the Royal Army Medical Corps has been from 15 per cent. to 10 per cent., and in the Royal Army Dental Corps, where the deficiency was very much greater, as has also been the case in the Royal Air Force, it has been from 41 per cent. to 32 peg cent. The infantry has been a matter of particular concern for a number of years and many discussions have taken place on it. The reduction in deficiency has been from 9 per cent. to 6 per cent. This reduction, of course, has not been uniform. In some units there have been difficulties, but in the great majority of units quite sizable improvements have been made.
Then the noble Earl asked about wastage, and, I think, in particular the percentage of recruits who purchased their discharge. He referred to a figure of 14 per cent. In 1961 up to August the figure was 14 per cent.; in 1962, 10·8 per cent.; in 1963, 11·7 per cent., and it is the same figure for this year. So the marginal, but none the less significant, improvement has been maintained.
The noble Earl asked about officer recruitment. I would rather not go into figures to-day, beyond saying that there is still a deficiency in officer recruitment for the Army. He also asked me a question about the British Army of the Rhine. Again I would rather not attempt any forecasts on this. I think the noble Earl is as aware of the position as I am. We have had some very heavy commitments in other parts of the world, particularly in the Far East, which this Government have fully accepted, as had the previous Government, and which have delayed the build-up of the British Army of the Rhine to 55,000, which is the figure we have discussed so often in the past.
The noble Earl asked also about shortages in the R.A.F. These shortages are, I think, mainly on the administrative side. I am glad to say that in the operational, engineering and technical side there is no significant shortage. I should like to look at these figures again, but, broadly speaking—indeed more than broadly speaking—the position of
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the R.A.F. is pretty satisfactory in this field. I think I have answered enough questions in what is a very short debate for the moment, but if there are any points which the noble Earl, or any other noble Lord, wishes to pursue I shall he glad to deal with them when we come to discuss the Defence Services. I agree with the noble Earl that your Lordships' House has set a pattern, although we were not able to carry it out last year owing to shortage of time, in seeking to discuss functions and particular aspects of Service operations, rather than just following the pattern of the Estimates. The form these debates take will clearly be largely determined in this sort of matter by the wishes of the Opposition working in consultation with us through the usual channels, and I hope we shall be able to have some of these rather far-reaching debates of the useful kind which your Lordships' House is particularly well fitted to carry out.
LORD GRENFELL: My Lords, I wonder whether the noble Lord would pass on a tribute to the War Office in respect of a rather sad occurrence which happened a few weeks ago. The wife of the porter in my block of flats was dying very quickly. I got on to the compassionate leave department of the War Office. This was at about 12 o'clock in the morning. They had the son at home by 11 o'clock that night, which was a brilliant piece of administration, and he saw his mother before she died. I know that both Gibbons and his son would like to thank the War Office for all they did in what was, as I say, a brilliant piece of administration. I think this shows what can be done to raise the morale of the Army in such circumstances.
LORD SHACKLETON: My Lords, I am very grateful to the noble Lord. I am sure that will be noted. I am sure any noble Lords with experience in this field would pay tribute to the humanity of the personnel and the human side of the Armed Forces. It is something which in certain respects one would hope industry might equally be able to take note of.
On Question, Motion agreed to.

AIR FORCE ACT 1955 (CONTINUATION) ORDER 1964
LORD SHACKLETON: My Lords, I beg to move that this Order be approved.
Moved, That the draft Air Force Act 1955 (Continuation) Order 1964 laid before the House on 3rd November 1964, be approved.—(Lord Shackleton.)
On Question, Motion agreed to.

EXPIRING LAWS CONTINUANCE BILL
3.39 p.m.
Order of the Day for the Second Reading read.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I beg to move that this Bill be read a second time. It proposes the continuance for a period of twelve months of three Acts and parts of four others which would otherwise expire on December, 31, 1964, or in March, 1965. I hope that it will meet your Lordships' convenience if I make only brief reference to five of them. First there are the Furnished Houses (Rent Control) Act, 1946, and the Rent of Furnished Houses Control (Scotland) Act, 1943, which afford some protection in respect of rents and security of tenure to furnished lettings. As your Lordships will be aware, it is the Government's intention during this Session to afford much greater protection to tenants, through substantial amendment of the Rent Acts. It is, however, unlikely that the proposed changes can be brought into force before these Acts to which I have referred expire, and it is therefore necessary to continue them for a further year.
The Accommodation Agencies Act, 1953, makes it an offence to charge a fee for supplying information about houses and flats to let. Here again, it is possible that this protection against fraud may be incorporated later in permanent legislation, but it seems sensible to wait for the report of the Milner Holland Committee before deciding what fresh measure is needed for the protection of tenants, and meanwhile to continue the present Act for another year.
Section 3 of the Emergency Laws (Repeal) Act, 1959, extends the powers
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of the Minister of Aviation under the Ministry of Supply Act, 1939, by continuing in force, with amendments, provisions which widen the definition of "articles required for the public service" in that Act and remove the limitations contained in the proviso to Section 2(1) of that Act. It also keeps in force Section 10 of the Ministry of Supply Act, 1939, which gives the Minister of Aviation power to require production of documents and keeping of records.
Part VII of the Licensing Act, 1964, makes provision for licensing planning—namely, for co-ordinating the functions of licensing justices and local planning authorities in the redistribution of licensed premises in areas affected by serious war damage. Of the original 33 licensing planning areas, 15 have been brought to an end in the last eight years. In April of this year the former Home Secretary appointed a Committee, under Mr. J. Ramsay Willis, Q.C., to inquire, among other things, whether there is a continuing need for this machinery. It is hoped that the House will have an opportunity to consider the Committee's Report before we come again to the Expiring Laws Continuance Bill. Meanwhile, I hope that your Lordships will agree that the present position should continue for a further twelve months.
The two remaining Acts covered by this Bill are of considerable importance and require that I should state, at some length, the policy of Her Majesty's Government and our reasons for asking the House to agree to their renewal for a further year. The Aliens Restriction (Amendment) Act, 1919, provides the only power we have in peace time for controlling the entry of foreigners into the United Kingdom, and their activities after admission. It was passed in 1919 to keep in power emergency legislation introduced in 1914 and has been renewed on a temporary basis every year since. The emergency has lasted half a century.
I think most of us would agree that the word "alien" has a somewhat unpleasant ring, yet there can be few noble Lords who do not owe their presence in this country, and indeed in this House, to ancestors who, in their day, came to these shores as aliens, and probably unwelcome ones at that. My own forbears were Huguenots who came here in the

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17th century and, like so many other groups and individuals, have added their own particular skills and qualities to the building of the composite whole which is 20th century Britain. Fortunately, the process continues, and I, at least, dare to hope that it may one day do so without the restrictions which we now feel obliged to impose.
Under this Act of 1919, and the Orders in Council made thereunder, the Home Secretary decides, through his immigration officers, which foreigners should be allowed to enter. Their particulars are recorded and filed on landing cards, and the process is repeated on other cards when they re-embark. We control their employment here, we register their addresses and personal particulars. We have power to refuse entry and power to deport undesirables. During the year ending September 30 last the total number of passengers using United Kingdom ports—that is the "ins" and "outs" combined—was 15¼ million people. Out of this total, nearly 2½ million aliens were allowed to land. I am happy to say that only 3,515 were refused admission—one in 700. These figures are proof, if proof were needed, that our immigration officers carry out their difficult task in a humane and civilised way, particularly as out of the 3,515 only 290—or One in 9,000 of all aliens who were allowed to land—were excluded as undesirable.
The figures also invite the question whether, having regard to the tiny proportion of exclusions, we could safely return to the "open door" of the last century. Unhappily, we cannot. There are already some 400,000 aliens in this country, and 16,000 more are accepted for settlement every year. They all satisfy the present conditions governing entry and settlement, and all are most welcome. But under contemporary circumstances in the world we cannot accept unlimited entry. However, my right honourable friend the Home Secretary is giving serious consideration to a number of valid criticisms: first, the anomaly that the existing powers of control have been retained for 50 years on the basis of annual renewal. The crowded nature of the legislative programme which has already been referred to once this afternoon makes it impossible to give a firm undertaking, but my right honourable friend accepts that some of
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the powers contained in the Aliens Order would normally be found in a Statute. He hopes it may prove possible to submit permanent legislation to Parliament.
This would also give the opportunity to consider whether a way can be found to give a right of appeal to aliens who are refused permission to land, and perhaps to make other improvements. It must be recognised that there are many difficulties about giving a right of appeal, some of which it may not be possible to surmount. Obviously, however, we have no chance of making these changes now, within the next few weeks, and for this reason we are obliged to ask Parliament to continue the present provisions. Meanwhile, we do not dissent from the proposition that the treatment of aliens is one of the tests of how a country conducts itself, and whilst maintaining effective control we shall afford the fairest and most humane treatment for everyone who arrives on our shores asking to be admitted. The other Act which I want to discuss at some length is—
LORD REA: My Lords, before the noble Lord proceeds, may I ask him to clarify one point? I think he said that between 3,000 and 4,000 aliens were refused permission, but only 200 or 300 as being undesirables. Could he explain what the others were if only 200 or 300 were undesirable? What about the other thousands who were not allowed in?
LORD STONHAM: There were 3,515 who were not allowed in; 290 were regarded as miscellaneous but undesirables—dope addicts, crooks and people like that. Of the others, far more than half either did not have any papers, or their papers were not in order: in other words, they had no right to come at all. Then there were various other smaller groupings. I could give the noble Lord the exact groupings, or I could write to him about them, because we have in fact dissected them. But now, for the moment, I would ask him to take it from me that none of the others, apart from the 290 I mentioned, were rejected because they were thought to be criminals or undesirables, or for security reasons.
The Commonwealth Immigrants Act, 1962, of whose working we have now had 2¼ years' experience, was opposed by the Labour Party when it was introduced—

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not because we rejected the control of immigrants but because we objected to the imposition of control without adequate consultation with the countries of the Commonwealth. Now we are asking Parliament to renew the Act for another year, and I will give our reasons. It has been reliably estimated that people from the Asian, African and Caribbean countries of the Commonwealth living in this country now number, including their children born here, some 800,000. The net increase in the number of people from all the new Commonwealth countries and the dependent territories since Part I of the Act came into force on July 1, 1962, is about 124,000, an average increase of rather more than 4,800 a month over the 28-month period. This net increase of 124,000 is, of course, included in that total figure of 800,000.
The Act provides that we should admit immigrants holding vouchers: Category "A", people for whom employers have actually asked; Category "B", those who have special skills such as doctors, teachers, nurses and so on; and Category "C", which is for the others, mainly unskilled workers. Vouchers are issued at a rate determined from time to time by the Government. In recent months they have have been issued at an annual rate of about 20,000, some 1,600 a month or rather more. Latterly this quota has been insufficient to satisfy the "A" and "B" categories alone—the "B" category, of course, being people we actually need who are of great value to our economy. For some time now no vouchers have been issued under Category "C". Indeed, the backlog of "C" applicants reached 300,000 in June of this year and it was then decided to accept no further non-priority "C" applications from India and Pakistan, whence the great majority of such applications come.
In addition to the voucher holders, we admit their wives and children up to age 16. They, of course, have a right to come, but, in addition, we admit other dependants at discretion, generously interpreted. By that I mean a generous interpretation of the term "wife" and a generous interpretation of "the age of 16". We also admit genuine students and a relatively small number of persons able to maintain themselves.
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I should like to give your Lordships a few figures, which you will find vary from those which were quoted two weeks ago in another place by my right honourable friend because the figures I now give have been brought right up to date to the end of October. Since the Act came into operation in July, 1962, we have admitted in total nearly 50,000 voucher-holders and 65,000 dependants. That is a total of 115,000, most of whom were legally entitled to come here. But the actual net total admitted during the period was 142,000 of whom 17,000 were from the older Commonwealth countries. There is thus a difference of about 27,000 between the net balance admitted and the total of those admitted as dependants and voucher-holders. Some of these 27,000 we can account for among other small categories of people admitted for settlement, but we are left with a substantial number, about 17,000, which we cannot explain.
If last year's pattern is repeated, the number may be reduced by people going home for Christmas before the end of the year, which is what happened last year. It appears that there may be, or must be, some evasions of the regulations, although the control has not vet been in operation long enough to enable any accurate estimate to be made of its extent. Presumably, the evaders are visitors or students who have not yet returned or do not intend to return home. This is a matter which my right honourable friend is closely watching.
Meanwhile, I would point out that the figure I have given of average intake over the last three years, of 50,000 a year, compares with Australia's hope to attract 70,000 migrants from this country next year. It compares also with about 60,000 Irish who enter into insurance in the United Kingdom every year. If, which Heaven forbid! their countenances were as green as their lovely land, it would put some of our problems in a different and truer perspective. The major problem is not the present number of new entrants, but the 800,000 who are already here. If we cut off the flow, we handicap ourselves economically. Economically we need them, but socially we have failed to cope with their needs. As in so many other fields, regrettably, the Party opposite had done nothing like enough to solve this problem, and we are left to

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solve the problem of integrating 800,000 people into our crowded community.
Inevitably, they are gathered in areas where work is readily available, and just as inevitably they are crowded into the decaying parts of cur cities under conditions which frequently constitute an offence to recognised standards. The problem is not basically economic or ethnic, but social, and the longer it is left the worse it will get. As my right honourable friend said in another place two weeks ago [OFFICIAL REPORT, Commons, Vol. 702 (No. 14), col. 286.]:
"It would be quite appalling if in our country, with all its great it tradition of tolerance and fair play … there were allowed to develop some sort of division between citizens in this country according to which they became first or second class citizens."
My Lords, it requires a great and combined effort by Government, by local authorities, by voluntary organisations and by ordinary people if we are to find the way to live in peace and charity with those who belong to the Commonwealth, of which our Queen is the acknowledged Head, but who are different in colour and background from ourselves. Let us not forget that it is idle to talk of building a successful multiracial Commonwealth of 750 million people if we cannot integrate a million citizens of that same Commonwealth into a multiracial Britain. We must look at the problem in the round and in its world context.
First, we have to tackle urgently the problems of overcrowding, of schools, of health and of welfare. My right honourable friends the Ministers of Housing, Education and Health are studying the matter and will in due course announce their plans. Housing is generally believed to be the most acute problem, for which the only lasting remedy is to provide more dwellings to let at reasonable rents—a need which is not confined to the immigrants in our community. In the meantime, local authorities have powers, which the Government will encourage them to use, to tackle the abuses which arise from overcrowded conditions. They can control numbers by issuing, directions to prevent or reduce overcrowding in houses in multiple occupation. They can require houses to be kept in reasonable repair, and certain facilities to be provided in them. In the worst cases they can take
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over the management of houses. There is also the general power to acquire property compulsorily, if need be, which can be used if it seems necessary in the interests of the community.
Health, too, is important and in relation to the immigrants is not a one-sided problem. Immigrants present some special problems for our health services, but they also make an important contribution to those services and to their development. We should be in great difficulties if we were suddenly deprived of the invaluable help of coloured doctors and nurses. It is sometimes suggested that immigrants are a threat to the health of the community because, it is alleged, they bring disease in with them. I should say, however, that it is apparent from surveys that have been made that much of the ill-health among immigrants is due to the conditions under which they live in this country. It is not to be friend, for example, that every Asian immigrant suffering from tuberculosis has brought the disease here with him.
My right honourable friend the Minister of Health has plans for immigrants to be given leaflets in their own languages on arrival, advising them how to bring themselves within the care of the National Health Service. Also, he is considering, with the medical profession and the local authority associations, arrangements for collecting and sending the destination addresses of immigrants to the appropriate medical officers of health.
As regards education, the schools of this country can obviously play a major part in the absorption of immigrant families. Small children, thank God! are not colour conscious and integration is possible within the school community. My right honourable friend the Secretary of State for Education and Science regards it as important that immigrant children should not be concentrated in particular schools. Serious strains develop where a school contains more than 30 per cent. of immigrant children. It would he an obstacle to integration if particular schools became generally known as "immigrant schools". Experience has shown that the parents will recognise this if the matter is properly explained to them, and be ready to cooperate in arrangements to disperse immigrant children among a number of schools. The presence of immigrant

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children, of course, creates other problems for schools, the most obvious being the need to provide special training in the English language. This can best be done through special reception classes for children, and I am sure that no one would suggest that that would constitute segregation. Special classes, of course, require special staffing and my right honourable friend has told local education authorities, that he is prepared to adjust their teacher quotas where necessary to facilitate this.
At this point, I should like to pay a warm tribute to the Commonwealth Immigrants Advisory Council, under the chairmanship of my noble friend Lady Reading. As your Lordships know, the Council has produced three most valuable reports on housing, education and the employment of school-leavers, and we shall listen with interest to what the noble Lady has to say later in the debate.
The second plank in the Government's policy is to evolve a sound scheme based on the number of new entrants we can assimilate within the services we are able to provide, and so avoid the bitter problems which would arise if too many were allowed to come in. Thirdly, we are aware that we shall achieve nothing unless we are prepared to face up to the people who, for political or pathological reasons, will continue to exploit ignorance, fear and hate, and we shall therefore introduce legislation to prevent discrimination in public places.
Fourthly, we shall try to bring the Commonwealth countries into discussion with us on the questions of control. From this I hope will come the realisation that this task cannot be accomplished by Britain alone as the recipient country, but that it should be tackled by the whole Commonwealth as a mutual problem. Finally, we shall act in recognition of the fact that the root cause of the excessive demand for entry here is poverty in the country from which the immigrants come. Most would prefer not to come here but are forced to leave their homes through economic circumstances. The situation will be transformed only by the development of these countries, so that Commonwealth citizens everywhere have in their own country a prospect of worth while employment and fuller living standards. The appointment of the Minister of Over-
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seas Development testifies to the anxiety of Her Majesty's Government to tackle this major objective.
In this connection we must not, as I think we do, underestimate the tremendous contribution towards the development of their native land which is being made by immigrants who train here land return, home to important jobs. May I quote in this from my own experience, which I readily acknowledge may not accurately represent the national picture? In the last few years I have presented hundreds of certificates to student nurses who have qualified here as State Registered Nurses. In my experience, in any given batch of twenty at a hospital prize-giving there is a cheer if one English girl comes up to draw her certificate or prize. The rest are from the countries of the Commonwealth. I have always made a point of asking each one of the girls her future plans, and almost invariably after they have done their midwifery they are going home, not merely as skilled persons to places where their skill is desperately needed, but as ambassadors of good will for Britain. I spoke about evaders, but it is often the case when one is at a nurses' prizegiving that perhaps two or three girls out of twenty have married. Sometimes one of the married girls will come up in an advanced state of pregnancy and you realise that there will be not one evader but two evaders in the very near future when we add up the figures. It may be in this way that these figures are reached, but what would one suggest could be done about that?
In my experience many of the ordinary workers who come here also do good work. I am not speaking of students now, but of ordinary workers who come here, particularly Africans. Again I speak from personal knowledge of those who were until a few weeks ago my own employees. The man comes alone and after a year or so he sends for his wife and family. Meanwhile, apart from his daytime bread-and-butter job, he seeks at evening classes a technical or semi-professional qualification so that he can return home as a man of standing and able to teach others. This uncovenanted dividend arising from the entry of Commonwealth immigrants into Britain has a value which can scarcely be overestimated. It immensely

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strengthens the Commonwealth as a force for peace in the world, and we should be wise to make sacrifices to ensure its continuance.
My Lords, the Government are convinced that, fully implemented and given a fair run, our policy will prove that the fears expressed in some quarters, that we should be swamped by immigrants, will prove groundless. Meanwhile, we shall not be stampeded into any measures before we have had an opportunity to consider the many complex problems involved. We must also have a full opportunity to discuss this with the Commonwealth. The solution of the social problems will take a long time, my Lords, but we are determined to make solid progress towards the ultimate goal of building in Britain a society which, for fairness and justice to all, and for tolerance o 7 racial issues, will provide a model for the rest of the world. My Lords, I beg to move,
Moved, That the Bill be now read 2a.—(Lord Stonham.)
4.10 p.m.
THE DUKE OF DEVONSHIRE: My Lords, as I understand it, the reason why we have an Expiring Laws Continuance Bill is because there are certain measures which Parliament considers pro tem, but does not wish to have on the Statute Book in perpetuity. A time limit is set on their operation, thus reserving to Parliament the right to have another look at them when they come up for renewal. Now among the Acts that this Bill will renew is the Commonwealth Immigrants Act, and it is on this Act that I should like this afternoon to say something.
No one will deny that there is serious concern in many quarters over the problem of immigration. So far as this side of the House is concerned, we welcome the fact that the Act is to be renewed; and the fact that it is being so represents a remarkable volte-face on the part of Her Majesty's Government, considering that when in Opposition they voted in another place against both the Second and Third Readings of the original Bill and against the renewal of the Bill last year. Such a complete change in policy in such a short time must, even to the least cynically-minded man, raise doubts as to the motives of the present Government in opposing the original Bill.
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The noble Lord, Lord Stonham, in proposing the Second Reading just now, said that his Party did not oppose control in principle but that it was only because of lack of consultation. To the matter of consultation with the Commonwealth before the Act was introduced I will come later. My noble friend Viscount Dilhorne—and I am sure that Members on all sides of the House would like to join with me in congratulating him on the honour we read about in this morning's papers—took a very active part in the Second and Third Reading debates in another place when the Bill was first introduced, and, although I cannot, of course, speak for him, it is possible that he will have something to say that may make it a little difficult for the noble Lord, Lord Stonham, to justify the fact that it was not the principle of control but only the lack of consultation to which they were opposed.
My Lords, I had the good fortune to work in the Commonwealth Relations Office for four years, and, as a result, I have a passionate interest in furthering the cause of the Commonwealth, in strengthening its ties and in making a reality of the ideals for which the Commonwealth stands. As the first of those ideals is that all men are equal, regardless of race, colour or creed, it is perhaps understandable that I should be concerned about this Act. Racial discrimination is an odious and barbaric practice, and we in this country are fortunate that the majority of the people are not prepared to see it practised. It is the duty of those who lead this country to maintain conditions so that the number of any minority who might wish to see discrimination on the grounds of race or colour should diminish rather than increase, and this will not be achieved by an ostrich-like attitude to the problem posed by large-scale immigration.
That there are problems, a number of problems, there is no doubt, and to admit that the problems exist does not mean opposition to the principle of immigration to this country; still less does it mean the favouring of racial discrimination. Of course it does not: it is merely facing facts squarely. It is a great misinterpretation to see, as we have seen on occasions, that, because people announce the problems, they are immediately dismissed as avowed racialists. Nothing is further from the truth. Indeed it is the

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reverse. Until the problems are faced fairly and squarely, the tensions caused by substantial immigration—immigrant communities being built up in certain areas in Britain—will never be relieved.
Of course, the overriding problem is that of physical numbers. Now I will not weary the House with a mass of statistics, but let it be said that 136,000 immigrants from other parts of the Commonwealth entered this country in 1961, the last full year of uncontrolled immigration, and that it was perfectly clear that demand for passages to this country was continually on the increase. I hope that noble Lords on all sides of the House will agree that the then Government had no alternative but to introduce legislation—reluctantly, I agree, but it had to be done—to control this veritable flood of men, women and children from other Commonwealth countries. We simply could not absorb the ever-swelling numbers of those wishing to come here. My Lords, it was the old, old question of trying to get a quart—or, indeed, even a gallon—into a pint pot.
I should like to join the noble Lord, Lord Stonham, in paying a tribute to those immigrants who have come here. All of us who have any knowledge—indeed, all of us who keep our eyes open in any way at all in our daily lives—can see to what extent this country depends for its national life on our fellow Commonwealth citizens. The noble Lord mentioned hospitals, and made reference to nurses. Indeed, that is true; but there are also a large number of doctors who play a very substantial part in making the National Health Scheme work. Many of our national or regional transport systems would very soon grind to a halt were it not for the labour of these people. I should like to make it absolutely clear to anyone who has a slightly sneering attitude to those who are immigrants, or who indeed treats them with a patronising attitude, that nothing is worse, nothing is more wrong; because they are one of us and, although they benefit from being here, we gain equally great benefits from them. But, as I have said, the problem remains.
There is a long-term problem and a long-term cure, to which the noble Lord made certain reference, and I should like, at the risk of wearying the House, to amplify a little what he said. What we
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want to do—and, as I see it, this is the only real long-term solution—is for the rich, developed countries of the West to so help the developing countries to help themselves that their citizens will lose their wish to leave their own countries and will prefer to stay in their own land among their own people. The reason why such a large number of people wish to come here is that there is this appalling, vast gulf between the standards of living in the highly industrialised and developed countries like ourselves in the West, and parts of the developing countries of Africa and Asia. My Lords, it is a shocking thing, but I believe it to be true that there are very many Pakistanis who wish to come here because to them the payments of National Assistance—the bare, perhaps too hare, amount of money on which people in this country can exist; the barest you could have to exist at all—represents riches beyond the dreams of avarice. That is a fact which is true and should be a permanent prick on all the consciences of right-thinking men.
This afternoon I do not wish to dwell on the challenge to the developed countries, to the "have" countries, which the "have not" countries represent. It is outside the scope of this debate. Nevertheless, it is a problem that must be solved, both on obvious moral grounds and because, since poverty is the breeding ground of Communism, and since we as a nation are opposed to Communist oppression, it is in our interest first to alleviate that chronic poverty and then to see it progressively removed as a scar on the face of the earth. I realise that Her Majesty's Government are aware of this problem—and, indeed, as the noble Lord, Lord Stonham, said, they have created a new Ministry: that of Overseas Development. I must confess that I am not one who considers that the way to solve national or, indeed, world problems is by creating whole new Ministries to cope with them. I believe that the most efficient Administrations are those with the fewest Ministries, and certainly those with the fewest Ministers. In that I realise that I do not carry Her Majesty's Government with me. I can assure the noble Lord, Lord Stonham, that we on this side of the House will watch with the greatest interest and the closest attention how this new Ministry develops and works.

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There is one other important factor bearing on the long-term cure for this massive immigration from certain developing Commonwealth countries: the immense difficulty posed by the fact that these countries have ever-increasing populations. Comprehensive steps must be taken to encourage and persuade peoples of the emergent countries to curb their alarmingly rapidly growing populations. Otherwise, efforts to improve their standard of living, and ill the help that the richer countries in the world give them to achieve this, will be set at nought. As it is, owing to their over-increasing populations, many countries in Africa and Asia must run very fast indeed to stay economically where they are.
In the last Parliament this subject was discussed at least twice; and, as I said on the subject of development overseas, this is not the time to discuss it again. I would, however, offer just one suggestion. Could not ways and means of helping countries faced with this grave problem be included among the tasks of the Permanent Commonwealth Secretariat to be set up as a result of the deliberations of this summer's Commonwealth Prime Ministers' Conference? In addition, perhaps, co not funds from the Commonwealth Foundation, also to be set up as a result of that Conference, be provided for an inquiry to be made into the whole subject? But these are long-term cures. We shall be faced with this problem at any rite for the remaining decades of this century. Meanwhile, steps must be taken to tackle the problem at once. In so far as the Act is to be renewed it means that action is still being taken. What I and my noble friends are wondering is whether sufficient steps are being taken, and whether positive action is being done to tackle the real problem.
When this subject was debated in another place on November 17, the right honourable gentleman the Home Secretary made some alarming disclosures. These have been repeated this afternoon, with more up-to-date figures, by the noble Lord, Lord Stonham. He gave the alarming information that there are 27,000 Commonwealth immigrants entering this country who cannot be explained away. I will accept that some will be bona fide visitors and that a substantial number may be students, and I am sure that all of us with the Commonwealth
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at heart will do all we can to encourage bona fide students to come and learn our ways, have the best of our teaching, and go back not only qualified for the difficult tasks ahead but as lasting friends of this country.
LORD STONHAM: My Lords, would the noble Duke allow me to interrupt? He has used, quite rightly, the figure of 27,000, which I quoted; but I should not like it to be thought that that is necessarily the number of people who have, as it were, evaded the regulations. At most, that number would be 17,000 and by the end of the year it might be as low as 12,000 or 15,000.
THE DUKE OF DEVONSHIRE: My Lords, I am grateful to the noble Lord. On these figures—I may have misheard the noble Lord, and if I have done so, I apologise—I thought that a little later in his speech he said that the number of legal immigrants to this country in the last year had been running at the rate of 50,000. That, of course, is true; but the figure we want to look at is 142,000, which is the total figure. I know that it includes 50,000 who come in on vouchers.
LORD STONHAM: My Lords, the figure of 142,000 is for 28 months. I said an annual intake of 50,000 which includes everybody: those who have a right to be here and those who have not.
THE DUKE OF DEVONSHIRE: My Lords, I accept that figure. Then, as I see it, for 28 months, the annual legal intake has been 100,000 but the actual intake has been 142,000. It is up by 33 per cent., that is, by one-third. This is a serious matter and it is one to which we should give very close attention. It is clear beyond all doubt that the control of immigration is not working as it should. In the debate on the gracious Speech in your Lordships' House on November 11, my noble friend Lord Dilhorne asked a number of questions of Her Majesty's Government on their policy on immigration. We on this side of the House are still waiting for the answer. The noble Lord, when winding up his speech just now, said that the Government are determined to stick by their immigration policy. I listened closely to the noble Lord's speech; I gave it my best attention; but, to be honest, I am still not clear

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what is the Government's policy on Commonwealth immigration.
I tried in the days before this debate to learn something from studying the Labour Party Manifesto at the recent Election and it is true that some vague references were made to the need to achieve with our Commonwealth partners a satisfactory agreement covering immigration, but it was cast in pretty vague terms. If this means that Her Majesty's Government hope to persuade those countries from where there is large-scale emigration voluntarily to take steps to restrict their citizens from leaving, then I feel I must warn the Government that I have the gravest doubts whether such a policy would succeed.
In the opening part of his remarks, the noble Lord, Lord Stonham, said that the reason why his Party had voted against the initial Act and its renewal, was that they felt that there had not been enough consultation. I do not think the facts fit the case. For 18 months prior to the introduction of the Bill the then Government tried, and tried again, to come to an agreement with the main immigrant-sending countries: India, Pakistan and the West Indies. It was because of our determined efforts to -try to achieve this without the need of legislation, and by agreement, that the introduction of the legislation was delayed so long until we had an annual figure of 136,000 coming in any one year. The West Indies refused to consider such restriction on their own people from leaving. India and Pakistan made attempts, but in the end it was conclusively clear that they were either unwilling or, more likely, unable to take such a step.
Of course, Commonwealth consultation on immigration is to be welcomed. I hope it will be vigorously pursued. But I do say this: unless it is underpinned by the continuation of the present Act, I cannot see consultation by itself achieving anything. Again, perhaps the services of the Commonwealth Secretariat might be a useful vehicle for the further carrying on of such consultations.
LORD STONHAM: My Lords, I can assure the noble Duke that although we hope for successful consultations we still agree that control will have to continue.
THE DUKE OF DEVONSHIRE: A great many of your Lordships here this afternoon know far more about the art of government than I do, but lesson one I have learned in my experience as a Minister is that decisions which have to be taken are only on rare occasions the simple choice of what is the right, as opposed to the wrong, thing to do. All too often, one has to decide which is the lesser of two evils. So it is in this case. On the one hand, you can argue—and I do not dissent—that it is wrong that we, a rich country, should deny the good things of life here to our fellow, less fortunate, citizens of the Commonwealth. But, to my mind, it is a far greater wrong to allow them to come here in such numbers that all the inherent dangers in large-scale coloured immigration come to the fore. There is the danger of immigrants becoming second-class citizens, the hewers of wood and drawers of water of the nation. There is the danger, owing to their poverty and different backgrounds, of their being prepared to accept housing conditions which are unacceptable to their more fortunate neighbours. In turn, overcrowding brings with it the associated problems of strain on the local health, welfare and educational services, thus causing understandable resentment.
The first aim of this country's immigration policy must be that all those we welcome to our shores should be treated as the equals of our own people. They must be considered one of us. There is a small minority of bad people who would not hesitate to exploit, for their own evil ends, the problems that arise when immigrants do not become assimilated. Certainly so far as good Commonwealth relations are concerned, I have no doubt in saying that it is better to have control, even very strict control, of immigration rather than allow control to become so lax and loose that explosions of racial tension take place. The tragic happenings of Notting Hill Gate a year or two ago did far more harm to the Commonwealth than the imposition of the Commonwealth Immigrants Act.
For these reasons, I would urge Her Majesty's Government to look very closely at the working of the Act, so that the admitted evasions that are taking place can be stopped. Nor should the current rate of issuing visas—I think about 1,600 to 2,000 a month—be regarded as sacrosanct. It might well be

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in the interests of all concerned, of the relations between ourselves and our Commonwealth partners and of our own people, that this rate should be reduced. I am not asking that it be reduced, but saying that the Government should not regard the figure as sacrosanct and as one that cannot be reduced. So we must face the fact that, for the foreseeable future, we need this Act. It is for these reasons, which I have tried to outline, that we on these Benches welcome the fact that it is to be renewed.
4.32 p.m.
LORD ROYLE: My Lords, although it is over nineteen years since I made my maiden speech in another place, albeit in this Chamber, I approach my first speech in your Lordships' House, if not with trepidation, with hesitancy, and, I hope, with due modesty. I intend to speak only on the Commonwealth Immigrants Act part of the Bill which we are discussing this afternoon. I suppose that it is inevitable that I shall repeat some of the things that have been said by the two noble Lords who have preceded me, but maybe I shall say them in a different way.
Having taken son-le part in the Second Reading and Committee stage debates of the original enactment, I must begin by expressing my utter distaste for this Act. That distaste has not been reduced by the passage of two and a half years. In my view, the Act was introduced under undesirable pressure, with a lack of thought of the details and, in spite of what the noble Duke said, I assert, without full consultation with the Commonwealth countries concerned. Consultation had taken place with regard to the number of immigrants coming into this country, but after conversations with Sir Grantley Adams and other leaders of the West Indies, in particular, I am sure that consultation in regard to the Bill itself was very much lacking. Having said that, I want immediately to add that I appreciate the necessity at this moment for Her Majesty's Government to mark time until greater consideration can be given. Listening to the noble Duke, one would have though that the Labour Party had been in power during the two and a half years the Act has been in force. In fact, it was a Conservative Government that failed to give further consideration during these years to the
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problems which have been brought about by the Act. Until consideration can be given and further consultations can take place, obviously Her Majesty's Government must mark time.
About seven years ago, I was concerned in the foundation of the British Caribbean Association, and until last July I was Joint Chairman. Our aim has been to establish a better knowledge and understanding between the West Indies and their peoples and this country. Accordingly, my main interest in the Act has been with its application to West Indians, though I recognise that they are far from being the whole problem, and I admit at once a real bias towards them. My love of the West Indies and its people is only second to my love of my own land and its people.
There are four main reasons why I opposed the Bill when it was introduced in 1962, along with many of my honourable friends in another place. The first is that I know the economic and social conditions under which the West Indians live. Our colonial rule over the years brought many advantages to these territories, but we cannot be very proud of the economic, educational and social conditions that we left, for example, in Jamaica after 300 years. They provided us during those years with essential and luxury commodities, but the people of those islands did not benefit proportionately by that trade. Small wonder, therefore, that the stories of our prosperity brought thousands of them here—a country where they saw prospects of a fuller life and greater opportunities for their children, in spite of their superb climate as against our atrocious winters.
Secondly, they are all members of the Commonwealth family and so have a right to express priorities over other immigrants. My noble friend Lord Stonham told us this afternoon that there are 400,000 aliens in this country and that the numbers are increasing year by year. There are only 800,000 coloured Commonwealth immigrants in the country. Yet we seem to have exercised much more concern about our own family than we exercise with regard to the aliens
Thirdly the immigrants have come here to meet the demand for workers in certain sections of our community life. In some places our transport services would have come to a standstill without them;

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some of our hospitals might have been closed—or, at least, there would have been fewer beds. An honourable friend of mine in another place told me a story not long ago. He was visiting his constituents, and at one door the lady complained to him that the neighbourhood was deteriorating in every respect because a West Indian family had come to live next door, and the value of their House was falling accordingly. When the door closed, my honourable friend went to the house next door. The door was opened by a West Indian lady, and in the course of conversation he said to her, "May I ask you what your occupation is?" She said, "I am a sister in Bristol Royal Infirmary." That is the sort of thing we have to remember when we hear criticisms levelled against some of the newcomers.
Fourthly, I opposed the Bill because I believe that in many cases immigrants are taking back to their own countries the skills learned here, and in this way are helping in the economy and social services of their own land. As has already been said, many send money home; and that also is a great help to their own countries.
Because I should hate to be accused of bitterness, at any length I resist the temptation to discuss the incidents of Smethwick and Perry Barr, where undoubtedly racial and colour problems were exploited for Election purposes. But I am concerned about the spirit that is creeping in. Perhaps I may be allowed a personal allusion. My wife and I, because of my connection with the Caribbean Association and similiar organisations, have not enjoyed answering the telephone at frequent intervals at all hours of the night to be told by an anonymous yet cultured voice that I was "a bloody nigger-loving bastard", and they were going to "do a Kennedy" on me. This is what is creeping in, my Lords, and this is my deep concern.
These things express the spirit which is developing in this so-called Commonwealth-loving country, and I have no hesitation in saying that it is very largely due to the passing of the Commonwealth Immigrants Act two and a half years ago. This spirit has to be eradicated. Over the centuries we have welcomed to our shores the Flems, Huguenots, Poles, Hungarians, and Jews, many of them
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fleeing from persecution and unhappy conditions. They have all, in their turn, contributed to our economy and our culture. Who is to say that our latest newcomers will not so contribute? Or is it that different pigmentation makes a different welcome? We do not see the Europeans: Asians, Africans and West Indians are prominent by their colour. The housing shortage is used as a reason for control of immigration, but it is rather a get-out for the overall shortage: in fact, it has been shown, unfortunately, that many of the immigrants live with more people to a room than we do ourselves.
So many things must happen before another year expires, and I have the nerve to offer one or two suggestions to Her Majesty's Government. First, there must be full consultation at a special Commonwealth Round Table Conference to prove the responsibility of all member Government for a new multiracial family of nations. It is not just a problem of Britain or the exporting countries; it concerns the whole Commonwealth. I learned some facts from the Commonwealth Migration Council. In 1963, Canada accepted 93,000 immigrants: of these, 27 per cent. came from the United Kingdom; 15 per cent. from Italy, 12 per cent. from the United States and 7 per cent. from Germany. I can see no mention whatever of coloured peoples. In nine months to October last, 42,000 applications for entry into Canada were made from the United Kingdom, and so far 25,000 have their documents.
Australia, between July, 1963, and March, 1964, received 50,000 immigrants from the United Kingdom: 9,500 from Italy, 9,500 from Greece, 3,500 from Yugoslavia, 2,500 from Germany and 2,000 from Holland; and they hope, they say, to have 127,000 settlers in 1965. How many will there be from the coloured Commonwealth, I wonder. New Zealand, between April, 1963, and April, 1964, took 16,000 from the United Kingdom. The Dutch population of New Zealand has grown from 128 to 17,800 in ten years. I plead, with all the power and sincerity that I can muster, with these countries to open their arms and their hearts and to share our responsibility and burden.
Secondly, there must be inaugurated at national level a campaign of education in the background of immigrant peoples,

1025
the causes of racial prejudice and the facilities for integration. My noble friend Lord Walston has done great work in this regard by the organisation of week-end schools for British teachers. Thirdly, I believe that there must be introduced, as my noble friend has said, legislation making racial discrimination illegal. I wish we could have succeeded without it, but I am afraid that legislation has to take the place of education and mutual understanding, at all events for the present.
Fourthly, there should be a tremendous effort at dispersal of the immigrants with a view to integration in the general population. The Observer on November 15 pointed out that 33 cities and towns in this country had taken the bulk of the estimated 800,000 coloured immigrants, half of whom are West Indians. These 33 cities and towns have 20,000 or more coloured immigrants in their midst. This situation brings about ghettoes, and the coloured people are very busy. Is it beyond our wit as a nation—I say this to Her Majesty's Government: is it beyond the wit of the Government?—that there should be friendly consultations with immigration officers? Meanwhile, every local authority might have been taken into consultation and asked to co-operate with the local office of the Ministry of Labour in regard to the provision of accommodation and work, particularly in the towns where coloured immigrants have not so far settled. I should not mind, my Lords, if far the time being the accommodation were in the form of hostels. Goodness knows! they would be very much better than the housing conditions from which so many of them have come. Any noble Lord who knows Jamaica and Shanty Town, on the Spanish Town Road at Kingston, knows exactly what I mean. That illustration can be multiplied a thousand times.
On the question of labour, the Guardian pointed out on October 16 that the London County Council Planning Committee estimate that the demand for labour will he greater than the supply over the next year, and this applies to most of the South-East. I am imagining a conversation at the ports. The immigration officer says, "Where are you going?" The immigrant says, "Notting Hill or Birmingham". The immigration officer asks, "Why?", and the immigrant says, "I have a cousin there; he has
1026
been there for two years". I believe that if work and accommodation were to he found and shown to be possible in some other town, almost all the incoming people would be prepared to accept a different place to go to. I use the town as an illustration because it is my old constituency, but let Salford, say, take 2,000; let Lower Slaughter take a couple of families and many others would be ready to move from the ghettoes.
I believe that these have to be the approaches to the problem or we shall find ourselves drifting into the situation which prevails in the United States. These approaches have to be humanitarian ones, and Christian in their outlook. All of us in this country are made up of Romans, Normans, Danes, Picts, Scots and Welsh. It applies even to noble Lords—perhaps more so than anybody else. Should we be much worse off for a dash of darker blood? It may be that the peace of the world will be assured when all of us are coffee-coloured. I apologise for keeping your Lordships so long. I apologise if my speech has been somewhat controversial. I can excuse myself only by saying that this is a matter about which I feel very keenly indeed.
4.53 p.m.
THE LORD BISHOP OF LIVERPOOL: My Lords, on the last occasion on which I had the temerity to put my name down to speak in your Lordships' House, I found that on the list of speakers I came next to a noble Lord who was to make his maiden speech. I had the privilege, and, I must admit, the anxiety, of facing the unexpected hazard of congratulating him upon his maiden speech in your Lordships' House. This afternoon I have a similar privilege, again quite unexpected, of voicing the appreciation of your Lordships to the noble Lord, Lord Royle, for his admirable maiden speech this afternoon. He has already reminded us that for nineteen years he represented his constituency at Salford in another place. During that time he had the esteem of all sides of that House, and was for a time a Government Whip. His chief interest has been the Magistrates' Association, of which he has been the Chairman. We are glad to welcome him into your Lordships' House, and if his speech this afternoon is an indication of the standard of what he is going to give us in days to come,

1027
we hope we shall frequently hear him speaking in this House.
My Lords, when the Commonwealth Immigrants Bill was at the Committee stage in your Lordships' House, I was one who expressed fears lest the would-be immigrants should be dealt with officiously and without due consideration to family and other circumstances. From what information I have been able to collect, and that mainly from Merseyside, I am of the opinion that such fears have proved groundless. The Act seems to have been administered with charitable flexibility. Special care has been taken to enable family units to assemble in the United Kingdom. While there are restrictions upon the number of children over 16 years of age who may accompany or join their parents, the instructions given to immigration officers have extended the age limit to 18. In some special cases, sons of 21 and unmarried daughters who have formed part of a family unit are also allowed in without employment vouchers. This flexibility is to be greatly appreciated.
The housing problem, admittedly, is a difficult one, but in places where workers are needed and housing accommodation is scarce the problem would be there in any case, altogether apart from the immigration of coloured people. It is a matter of quantity in the areas where work is available, and at rents which workers, whatever their colour, can afford. There is, however, a strong case to be made for linking housing of coloured immigrants with welfare provisions for them, in order to facilitate their adjustment to British social conditions and standards of house maintenance. An Octavia Hill type of scheme would be valuable. This is a piece of work which Churches and Christian groups could well undertake through setting up housing associations to purchase and manage properties for this purpose, rather than to leave it to doubtful speculators, some of them coloured, to buy and let out dwelling space. Action along these lines could well prevent the establishment of an undue concentration of coloured people. While this is undesirable, some concentration of coloured immigrants is wise to enable them to feel at home. These should not be large groups, and certainly not whole quarters of the slummier areas of our cities.
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There is very little colour prejudice on Merseyside, but that is mainly due to local circumstances. The coloured population of the city of Liverpool is a settled one—it has been there for years. It has been accepted as such, and most of the immigrants who land at the port of Liverpool do not stay in the city but go into the Midlands and into heavy industry. Some students on Merseyside have difficulty in obtaining suitable accommodation, but most of them manage to do so in very good university halls of residence, where they are accepted by the other students, and in the hostels provided by the Churches, of which International House, run by the Methodist Church, and World Friendship House, a Church of England hostel, are outstanding examples. Liverpool already seems geared into an acceptance of the fact that a multiracial Britain may be necessary if we are to be the centre of a multiracial Commonwealth.
But that is not so in many parts of the country. Our own economic necessities demand immigration. The economic conditions in parts of the Commonwealth demand emigration. Before either of these conditions can be met by other means, even if that is desirable, we in the United Kingdom have, and will continue to have, a sizeable group of coloured citizens. It is, however, of first-rate importance to prevent any social issue from becoming a racial issue, for once passions of this kind are aroused they become uncontrollably cruel and irrational. The temperature must be kept down even if the number of immigrants has to be controlled to gain time and experience of how to do it. During such a period it will be the duty of every responsible agency in the country dealing with social conditions to decide and state clearly what we mean by integration and by a multiracial society; and, more than that, to persuade people of the virtue of the meaning we proclaim. That is the central concern of the situation as it is to-day.
It would appear, therefore, that continued control of immigration is necessary. The means of control I think could with advantage be re-examined to see whether by consultation it could be better achieved by treaty than by legislation. The control must, however, be accompanied by a continuous, thorough

1029
and deep examination of experience, leading to the formulation of policies and programmes consistent with our faith and experience. Such policies and programmes must be not only both right and just but made acceptable to the very large number; of unreflective people who must be helped to understand the situation as it really is.
5.2 p.m.
LORD HAILES: My Lords, I should like to add a word in congratulation to the noble Lord, Lord Royle, on his maiden speech, which was, as one would have expected, very sincere and filled with that real interest and love which he has for the West Indians which is common knowledge and which is so deeply appreciated by them. I venture to intervene briefly and shall confine my remarks, as did the noble Lord, to the Commonwealth In migrants Act because. as your Lordship; may know, I spent four and a half years as Governor General in the West Indies, from where so many have come to live among us, and for whose people I cherish feelings of deep affection and respect. I do not think that anyone who has lived among them could possibly have any other feelings. if they have there must be something wrong with them themselves.
Before I went to the West Indies in 1957 I visited several of our cities where immigrants, then mostly West Indians, were living, and although conditions were far from perfect I thought that, on the whole, there was a good atmosphere and even some sense of integration. But of course at that time, compared with the figures of to-day, there were far fewer immigrants living in this country. Therefore, in 1962 when I was in the West Indies I naturally felt regret at the introduction of the Commonwealth Immigrants Bill and could share in the hurt resistance it met with in the West Indies, with all of whose problems of poverty and overcrowding I was then only too well acquainted. The Bill was, of course, regarded by the West Indians, as the larger part of immigrants to this country still were West Indians, as a colour Bill in general and a colour Bill against the West Indies in particular.
I might say at this point that, although there were some fiery speeches about turning out the white people from the West Indies, it was extraordinary how
1030
little discourtesy there was and I never met in public or anywhere with any discourtesy, all the time there was that strong feeling. But during the years since 1957 the picture of immigration into the United Kingdom has greatly changed. Subject to correction I think the entry of immigrants (nearly all West Indians) into the United Kingdom in 1957 was approximately 42,000. In the first six months only of 1962, before this Act was passed, the total entry of immigrants—West Indians and Asiatics—was approximately 95,000. Although after the Act there was a sharp drop, from the figures that the noble Lord, Lord Stonham, has given us, the figures have now soared out of all recognition.
We know well that the present immigrant population is 800,000 people, and when one considers the position now that the Categories "A" and "B" (those with jobs to go to and with special skills) have quite crowded out the Category "C" applicants, so that there are 300,000 people on the waiting lists, one gets some idea of what the position would be if there had never been this Act.
LORD STONHAM: As the noble Lord might be aware, there is also a waiting list for Category "A".
LORD HAILES: I did not know that. However, in view of the figures we have been given (which I will not quote as I might get them slightly wrong, and we have been well supplied with them in another place and by the noble Lord, Lord Stonham, to-day) one is bound to conclude, however reluctantly—and the noble Lord, Lord Royle, and I myself know that "reluctantly" means that in our hearts—that some form of control must continue. For if the floodgates were opened, neither could this country contain the numbers involved, nor could the immigrants be contained. Even more tragic would be the real danger of a deterioration of race relations in this country and, most tragic of all, arising out of that, the strong probability of a chain reaction of race feeling throughout the Commonwealth and beyond, which would only give comfort to the enemies of our way of life.
I do not think that as a people we are race conscious, for we are essentially tolerant and understanding and take

1031
pride in the vast multiracial Commonwealth of which Her Majesty is Head. But I think that much of man's unkindness to man in history has very often arisen from fear, fear of the unknown, fear of the unfamiliar. And in an already crowded island when, because of newcomers, jobs, housing, education and so on are at risk, or it is thought that they are at risk, then differences of complexion and of ways of life are called in aid to increase resentment and tension, and are exaggerated, often grossly exaggerated, in the process. This is something which is human nature, but we must see that it never gets out of hand in this country.
Provided, then, that it is agreed, as I think it now is by everyone in this country, that there cannot be a "free for all", I think it should be generally recognised that since 1962, when this Act was first passed, the rate of entry and the administration of the Act has surely not been illiberal. I think we should also make it more clearly known, and I am glad it has been mentioned by your Lordships to-day, how much value we place upon so many of these new citizens, especially the doctors, nurses and teachers, as well as those in the various fields of transport and others, who are playing not only a valuable but an essential part in our economy and bringing with them special qualities of their own, such as Lord Stonham's ancestors did, from which we can all benefit.
The Government have said that they intend to review the working of the Act and perhaps replace it with something voluntarily agreed with Commonwealth countries. But this matter had—although it has not apparently been acknowledged—I thought quite a long history under the former Government; I do not think it is anything new. I wish the present Government all luck, seriously, in that effort, but I am not sanguine, in view of the result of the valiant attempts that have already been made. But if there are to be any changes in the law or changes in administration, I trust that no rigid system will ever be adopted, and that the question of entry of dependants and students, bona fide visitors, and perhaps other categories, will always be ridden with a light rein; and—if this is not incitement—I hope that even the risk of
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a little evasion may be taken into account.
It must always be remembered, as I think has already been mentioned by your Lordships, that the immigrants do not come here from choice. West Indians, for instance, do not from choice move from a simple, warm-hearted multiracial society, with the sun ever shining, to a highly-geared, complex, non-multiracial society living in what one noble Lord said, and I agree, must seem to them to be a perfectly ghastly climate. Nor do I suppose immigrants from Asia seek a language difficulty on purpose. They come here because they are compelled by poverty and overcrowding to find a living, and where could they turn except to us? As for their capacity for work, I have often heard people say they do no work. There may be many statistics, but I always think of this interesting fact: that every year approximately £6 million is sent back from here in savings to the dependants of Jamaican immigrants in this country, and if that is not an earnest of seriousness of purpose and good character I do not know what is.
While we hope that gradually economic conditions in those countries from which immigrants come will improve—and, certainly, if we can help we should, but it is not as easy as all that—so that they may find, as they want to do and it is right they should, a living in their own countries, there will none the less always be a substantial so-called coloured population in this country. Therefore, whatever difficulties of integration there are in certain districts—and I fully appreciate those difficulties—I hope everyone will learn to resist the temptation to make the colour of a man's skin a special target for criticism or abuse.
I have always understood that colour is very much regulated by the sun, of which in this country we have a limited amount, both as regards quantity and quality. If the answer to that is that people should stay where they belong, there are two rejoinders to that; first, that we in the past have quite liberally exported our own Nordic complexions over a quarter of the earth's surface, and not least among people with darker skins than our own; and secondly—and these are my last words—that in the course of so doing, while we have conferred very great benefits indeed, we

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have also received much from our former Empire and have contracted obligations which we cannot ignore, and which to the best of our ability we should repay.
5.15 p.m.
BARONESS SUMMERSKILL: My Lords, the continuation of the Commonwealth Immigrants Act gives us on both sides of the House the opportunity to comment on a situation which I believe is without precedent in the social history of our country. That is, of course, the establishment of a multiracial society. I welcome, as I am sure all your Lordships do, the contributions which are being made in order that we can analyse this situation in a constructive way, because I think we should examine it both in the interests of the people of this country and in the interests of the people of the Commonwealth countries. During the last few years, in order to promote world harmony and remove injustice, we have sought to share our technical knowledge and our technicians with the underdeveloped countries. It seems to me that if this is to achieve the optimum effect we must surely co-ordinate our immigration policy with our emigration policy.
We have heard mentioned the people who have been coming from Pakistan and from India. I would remind your Lordships that in those two countries, and many others, there is a desperate fight against disease and illiteracy. We know about Category "A" and Category "B". Category "A", I understand, includes men who have a skilled training and who are asked for by employers in this country; Category "B" includes people with professional training—let us say, all the health workers and teachers, It seems to me rather curious that it is from those countries, where they, is a very short expectation of life in comparison to ours, a high rate of disease and a high rate of illiteracy, that we are encouraging the professional people and the skilled people they need, to come here. For many years we were blamed for being an imperialist Power and for taking the wealth from the Colonies, and we decided, quite rightly, as I am sure both sides of the Home now will agree, to give the Colonies their freedom. But now, it seems to me, we have put on the Statute Book a law which enables the cream of the trained people in those
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countries to come here. Surely that is another form of wealth, a most important form of wealth, a form of wealth which they have been trying to establish for many years. And we say that those people can come here.
We have been told this afternoon—and I have listened very carefully to every speech—that although these countries have been asked not to export so many of their people, they feel that they cannot comply. They cannot stop their people from coming here. But we are in effect inviting them to come here, by saying, "You can come here in Category 'A' if you have a special skill, and you can come in Category 'B' it you belong to a profession." And what is happening in this country? From this country doctors are leaving for America and the Colonies at the rate of 350 to 400 a year, which is the equivalent of about one-quarter of all the students who graduate. Surely it is illogical or hypocritical to promise to help underdeveloped countries while our legislation permits us to drain them of some of their best trained people. I hope I shall not be misinterpreted. I agree with the fact that North of the Wash our hospitals would be closed if we had not Commonwealth doctors. But by encouraging the finest people from these under developed countries to come here, we have encouraged a kind of laissez faire attitude; and we have said, "Well, let them come here and let a quarter of our qualified doctors leave."
We find ourselves in a most curious situation, and I should have thought that before Category "A" and Category "B" were admitted (I am saying this in the interests of their own countries) the immigration authorities should seek assurances from the Ministry of Overseas Development that the country of origin regarded those experts as being surplus to their needs. If we do not do that, in a few years' time the young people in these countries—I say the young people because they are the people who agitate and think; and we are perhaps rather inclined to blame them without too much consideration—will say that we have stopped taking their wealth in another form, but have simply returned to an exploitation of such a nature that it will take them many years to recover.

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When my noble friend replies I should like to know whether the five departments concerned—the Home Office, the Ministry of Overseas Development, the Ministry of Education and Science, the Ministry of Health and the Ministry of Labour—co-operate in this way in the interests of the underdeveloped countries. Do they, in any perhaps limited form, say to the countries of origin, "Can you spare these key people?" If there is no interchange of this kind, then I say that far from any of us sitting back and saying how generous we are to have this Act on the Statute Book, we are not being generous at all, we are draining these countries of their best citizens. Therefore, do not let us be too smart and hypocritical about this.
LORD DILHORNE: My Lords, may I ask the noble Lady one question? Am I to understand from what she is saying that she thinks there ought to be more rigid control exercised, and that the numbers of skilled people allowed to come to this country should be cut down?
BARONESS SUMMERSKILL: That is a lawyer's interjection, and one which I am quite ready for. Let me give the noble Lord an illustration. Suppose one takes a large area in Pakistan. I went to Pakistan before independence, and among other places I went to Karachi. Suppose there were a large area which was dependent upon the services of a couple of excellent doctors. Whereas in this country you may have 5,000 patients to a doctor, they have something like 40,000 or 50,000, or even 100,000, to one doctor. If this key person said that he wanted to come here, I would say that it was in their interest, and the interest of humanity, that we in this country should say that his duty was to stay with these people. So when the noble Lord tries to tie me down to a yea or nay, I want him to realise that I am thinking in terms of special situations.
LORD DILHORNE: My Lords, I was trying to follow, as best I could, the noble Lady's argument. I thought she was coming to the conclusion that, as is possible under the present Act, which allows for a more rigid control, we should take power to impose a more rigid control and prevent that kind of individual from coming to this country.
BARONESS SUMMERSKILL: My Lords, I would say in answer to that point, that I believe control should be selective in precisely the way I have described. But we are not being kind and generous to the people we appear to be helping if we take the cream of their population. That is the case I am putting, and it seems to me logical.
SEVERAL NOBLE LORDS: Hear, hear!
BARONESS SUMMERSKILL: I am glad to hear noble Lords say that. I am not here demanding that there should be an exclusion of coloured people from this country. I am saying, let their own people be cared for; let that be the first consideration.
The other aspect of immigration I should like to comment upon concerns integration. Any comment I make upon this so far as facts are concerned, I took from an excellent book, which I recommend to your Lordships, a sociological analysis of the situation, written by Sheila Patterson and called Dark Strangers. I was going to ask the noble Duke a question when he said just now that he believed (he explained quite understandably why he did so) that many people came here because to them, of course, the National Assistance scales represented great wealth. I should like to know from which sociological report he got this information. Or does he perhaps express his own opinion?
THE DUKE OF DEVONSHIRE: My Lords, I am afraid I got it from no sociological report. I got it from many close contacts with Pakistanis during my four years in the Commonwealth Relations Office.
BARONESS SUMMERSKILL: My Lords, on a careful analysis, made over a series of years, it was discovered (at least, many people believe this, though I bow to the noble Duke if, perhaps, he has something which he considers as superior in quality to this analysis) that a small minority of migrants do come for that reason, and they are on National Assistance. They comprise mostly single women with young children.
Perhaps I ought to be completely accurate, in that when I say they come for that reason I mean that they may be pregnant when they come here, or they may become pregnant here. According

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to the figures contained in this careful report to which I have referred, that is the group which has to rely on National Assistance. And, of course, it is quite understandable. They have nobody to support them they find it difficult to look after their children, and therefore they go to the National Assistance Board. But there is no evidence to support the charge that National Assistance was a major attraction for the majority of migrants. In fact, I would ask the noble Duke, who has devoted four years of his life to the Commonwealth: would he not agree with me that in life, whether it is in Pakistan, in India or here, it is the energetic man and not the lazy layabout who says, "I will change my lot and go to another country and face strangers, different conditions, bad climate and so on"? It is not the lazy man, the man who says, "If I undertake all this, then I may be able to sit back in some cold and miserable slum and take National Assistance."
THE DUKE OF DEVONSHIRE: My Lords, I think it is fair to say, in reply to the noble Lady, that I would not for a moment quarrel whir her figures. But let us remember that there are something between 150,000 and 200,000 Pakistanis waiting for Class "C" vouchers. As we have been repeatedly told to-day, it is mostly "A" and "B" voucher-holders that we are concerned with. Very few "C" voucher-holders have been admitted. And since he "A" and "B" voucher-holders are those who have a job to come to, they do not, broadly, require National Assistance. I think I may have been technically inaccurate when I said "are here". Perhaps I should have said "who wish to come here", because there are these large numbers of unskilled people who would mostly be in need. That is perhaps the explanation of the difference between my understanding and the noble Lady's researches. But I shot Id like to take this opportunity to say that the last thing I meant was that it was a slur on the Pakistanis. Of course I do not mean that. My reference to the appalling conditions in which, through no fault of their own, large numbers of people in Africa and Asia have to live, and to the fact that National Assistance represents considerable affluence to these people, was no criticism of them but merely a slur on the whole rich Western world.
BARONESS SUMMERSKILL: Thank you. When the noble Duke comes to read Hansard to-morrow he will see that he did not make those qualifications when he made his speech.
The other point I want to comment upon is this. Although there is a postwar shortage of labour, yet most industries do not employ coloured workers above a quota of between 3 and 10 per cent. This is chiefly because among the workers there is a persistence of old hatreds and fears of all outside labour based, I think, less on prejudice than on private memories of unemployment, undercutting and dilution. I have heard people suggest that after the migrants have been here for some time they return to their own countries. I dissent from that. I think it must be recognised that most of the migrants who are already here will settle permanently, that there will be further additions, and that the initially high birth-rate among the women must he taken into account. I was most impressed by the report of the Medical Officer of Wolverhampton, in which he said that 30 per cent. of the women confined in institutions were migrants.
As has already been said, there is no doubt that employment and housing constitute the two aspects of our social life which tend to cause most ill feeling, and we should be naive if we assumed that unemployment and a shortage of accommodation might not provoke some further incident, like that of Notting Hill. We cannot stick our heads in the sands and establish a large community of coloured people in what was previously, of course, a white town, and say that there might not at some time be trouble. In my opinion, no time should be lost in considering what social action should be taken on a national scale to improve relationships. Of course, the ideal situation is one in which race should not determine rights and privileges, and a coloured skin, like a minority creed, should no longer be associated with strangeness and inferiority. But, unfortunately, we do not live in an ideal society and it is our duty to anticipate race antagonisms.
What is it proposed to do? The Home Secretary proposes to introduce legislation to prevent discrimination against coloured persons in public places. I think we should do our best to ensure that this Act is observed in the spirit as

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well as in the letter. I am sorry that the right reverend Prelates representing the Church have gone at this stage. I think we are inclined to underestimate the obsessional nature of prejudice. The most learned can be prone to prejudice as can the most illiterate, and in my opinion no Act of Parliament can offer full protection against discrimination in its broadest sense. I would remind your Lordships that as long ago as 1919 the Sex Disqualification (Removal) Act was put on the Statute Book, but there are many women who are still subject to injustice associated with latent prejudice. And although on this occasion we have heard the voice of the Church, and the voice of the Church in the country, on the subject of racial prejudice, I must say quite gently—I was going to say it to the right reverend Prelates had they been here—that prejudice still dominates the thinking of the Church. For, after all, it is the only profession that still keeps its doors closed to women.
BARONESS HORSBRUGH: Thank heavens!
BARONESS SUMMERSKILL: Perhaps the noble Lady is right—it depends on the kind of women.
BARONESS HORSBRUGH: Hear, hear!
LORD HAWKE: My Lords, may I remind the noble Lady that she can at least be a deaconess, which is a very honourable title.
BARONESS SUMMERSKILL: I know the noble Lord, with his six daughters, listens to these things. I point this out because the Church has on many occasions—I would not have mentioned it if I had not seen the Church well represented here this afternoon—pronounced on this matter, and one cannot help remembering that it is the most prejudiced profession in the country.
Of course, there may he no infringement of an anti-discrimination Act such as the Government are hoping to draft. But we all know that there can he slighting references there may he a disparagement of an individual which can tend to embitter relationships and which can cause trouble in public places. I think that undoubtedly the British who are
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native to these islands often reveal an antipathy to strangers. No doubt it is because we are an insular people. This may well be intensified in their relations with coloured people, who suffer from the effect of myths concerning their origin and their customs.
This is what I should like to see done, and I hope that the noble Lord will convey it to the Ministry of Education and Science. Unfortunately, our children are taught from textbooks which entirely fail to present a true and sympathetic picture of the background of the migrants. I do not know what history book noble Lords were brought up on, but my history for the London Matriculation was limited to the Tudors and the Stuarts. I did not know about any other period in history, and certainly I knew nothing about any history apart from the history of this country. If we are going to tackle this problem we must recognise that the children of this country must be taught that the migrants in our midst have a history. I think there should be a complete revision of the school textbooks with a view to presenting these new social trends. I should like to see Margaret Meade's books on anthropology taught.
A NOBLE LORD: Hear, hear!
BARONESS SUMMERSKILL: I thank the noble Lord for supporting me. Our children should learn the history and geography of the new social trends. I am not now just expressing a pious wish. I believe that it is absolutely vital that this should be done soon if we are going to establish a multiracial society which is a happy society.
Lessons in race and human relations make me think back to my own history lessons. How dry and impossibly dull they were! When I think how colourful lessons can be made and how interesting they can be, I think they could probably he the most interesting periods in the school curriculum. As we all know, the teachers themselves are often in need of instruction because prejudice is not unknown among them. This is rather tragic. and it is not unknown among teachers in those areas where we need more enlightened people. Of course, the work of educating the next generation can be destroyed if the child returns to a home where the old antipathies prevail.

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Therefore, we have to face up to the fact that we must educate the adult population. This should take place on television. Surely, television time could be devoted to a little instruction on this matter. Then there are the Press, the trade unions and all those societies and organisations which are interested in this. Unfortunately, clashes which involve some racial element make news, friendly exchanges do not. It is like chastity: there is no place for chastity in the columns of our newspapers, but plenty of place for divorce. Nevertheless, I believe that there are many people associated with the mass media of propaganda who are dedicated to improving race relations. I believe that the Government should approach the television authorities in this matter, the Press and all these various organs. To-day I have simply sought to focus attention on a nationwide effort to promote harmony in our multiracial society in order that the Act which we are asked to continue may operate to the benefit of the whole of humanity.
5.40 p.m.
LORD CONESFORD: My Lords, we are dealing to-day with a topic that is both extremely important and, I think, extremely difficult and controversial. May I, at the outset of my remarks, join those who have congratulated the noble Lord, Lord Royle, on his maiden speech? Some of us on both sides of the House were his friends in another place and we very much welcome his first speech in this assembly.
My Lords, I have no idea whether I suffer from racial prejudice. I do not know how one finds out. It is rather like impartiality. I always remember the famous remark of my friend the late Lord Hewart, the Lord Chief Justice, when he said:
"The only impartiality possible to the human mind is that which arises from understanding neither side of the case."
Nevertheless, my Lords, I do not think that I suffer from racial prejudice; but I find it far more difficult to be as dogmatic on this subject as so many, both here and in another Place, find it possible to be. Fortunately, the debate in another place the other day—I am thinking particularly of the speeches of the right honourable and learned gentleman the Home Secretary, and my right honourable friend Sir Edward Boyle—and the
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speeches that have been made in this House this afternoon make me hope that there may be a large measure of agreement on some aspects.
May I deal at the outset with something which I am glad to say has not appeared in this House this afternoon, but of which examples can be found in the debate in another place and of which examples teem in the Press, both in leading articles and in contributions to their correspondence columns? It is the contention that seems to me to be absurd, that it is wrong for electors to be greatly concerned about this topic and it is wrong for it to influence the way in which they vote. Democracy no doubt has many faults, but, thank heavens, no one can yet dictate to the people what should concern them and what should not, and the criteria on which they should judge the persons or policies submitted for their choice. The people can determine these matters for themselves. I had some twenty years in the House of Commons and have been about the country a little since then, and my own experience is that the people of this country from time to time reach conclusions with which I disagree; but they are at least as wise as their dogmatic critics, and this applies particularly to those dogmatic critics who take what is known as "a high moral line".
My Lords, I see nothing wrong whatsoever in this question of immigration being a matter in which the electors take a very great interest. It will no doubt be said that it would be better if the issues raised were not issues between the Parties. But, my Lords, that must surely depend on what is the attitude of the Parties. I have often thought it would be a good thing if there were no Party issues on Defence. Many of us, on both sides of the House, no doubt think that. Yet we know that there must be Party issues on Defence, because the Parties take opposing lines on important points connected with it.
What about this question of immigration? As we know, and as the electors know, the Conservative Party introduced the measure which it is to-day proposed we should continue. They introduced that measure and believe in it. The electors also knew that it was strenuously fought by the Party opposite; that it was denounced on Second Reading by the then Leader of the Party

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opposite, whose early death we all deplore, as, "this miserable, shameful, shabby Bill". Well, my Lords, if those are the known opposing attitudes of the two Parties on the Bill, how can it conceivably be either possible for the electors, or their duty, not to be divided on Party lines if they think the control of immigration under this Bill to be very important indeed?
LORD HENDERSON: My Lords, may I interrupt the noble Lord? I agree with a great deal of what he is saying, but would he agree that in the discussion of the two different points of view on any issue a slogan like, "If you want a nigger for your neighbour, vote Labour" does not help either side to come to a proper conclusion?
LORD CONESFORD: My Lords, I hope the noble Lord knows me well enough to know that I do not consciously or willingly evade any issue. I was not going to come very near to that, because I am frankly ignorant of what took place in the particular constituency and I do not like speaking of matters of which I have no knowledge, but I will approach the topic about which he has questioned me.
I have given the reasons why I think at the last Election there was necessarily an issue, and a Party issue, in many constituencies on this subject. But as I say, the speech of the Home Secretary in another place the other day, the speech of the noble Lord, Lord Stonham, this afternoon, and other speeches that have been made, all make it possible that there will be a greater measure of agreement on this topic at a future Election. It is possible. For reasons I will later give, I do not regard it as at all certain, because it is perfectly possible that a really bona fide, honest difference of opinion should persist on what is the right policy, and particularly the right numbers of the immigrants.
I now come to the point that the noble Lord, Lord Henderson, mentioned. I have said that these matters must inevitably be discussed and must be a matter of controversy. I expect that he and I are in agreement in thinking that we would very much rather they were discussed with light rather than
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with heat. But I would rather myself even risk the heat, in preference to the alternative policy of sweeping the whole thing under the carpet and pretending that these great issues of policy did not exist. Having said that, I do not think the noble Lord, Lord Henderson, thinks the particular remark he quoted is the sort of thing in which I or my friends indulge, but I fought enough elections to know that some pretty rough things are said on both sides. That does not necessarily mean that the electors are very crude or very dishonest, and I have managed, I am glad to say, to preserve great respect for the electors, both of my own Party and my opponents.
But now I come to this strange fact. I quoted what was said on Second Reading of the original measure, "this miserable, shameful, shabby Bill", but now we get the present Home Secretary saying quite categorically that effective control is "indispensable." That was his word, and I think the noble Lord, Lord Stonham, said the same thing—and quite rightly—this afternoon. Nevertheless there persists this extraordinary idea, it seems to me, that this measure is somehow very illiberal, or is a denial of human freedom. I do not like quoting the rules of logic, but I wonder what is what we used to call the major premise on which this view is based. Does anybody really think that everybody is entitled to enter and settle in any country, whatever the Government and people of that country think about it? I do not suppose there is any noble Lord in this House who takes that view. My Lords, I say that such a view would not be tenable even if there were many countries which accepted it: but the view becomes preposterously absurd when no other country accepts that view and the only country invited to practise the principle is one of the most overcrowded countries in the world.
My Lords, I cannot help being puzzled sometimes when contrasting what members of the Party opposite say, on different occasions, about population and overcrowding. When they are dealing with such topics as the South East Study—I am thinking of a debate in which there was some agreement between myself and Members of the Party opposite—they seem to have a very different attitude to population and immigration, even into a

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part of our own country by our own people, from that which they show when they appear to plead for an increase in immigration by foreigners.
My Lords, if control is to be exercised—and I think we in this House, at any rate, are unanimously of the opinion that control must be exercised—what principles ought to be applied? On the first principle, I am glad to say that I think there is complete unanimity between both sides, both of this House and of another place. We are all agreed that it is absolutely essential to have fair, humane and equal treatment for all who are accepted as residents here. There must be no such thing a; first and second class citizens. On that, I think, there is no difference whatsoever among the Parties. But on the second principle, I think, there is no such great agreement. My second principle is that the numbers that we allow to come into this country must be determined by us in accordance with our conception of the public interest. It is not a task that we either can or are entitled to throw off on to any other Power whatsoever.
My Lords, I desire, as I think every friend of the Commonwealth desires, frequent consultation and the most friendly relations between different members of the Commonwealth, but I do not think it at all fair to ask them to impose a control to carry put our conception of the public interest. I think it is wholly unfair to ask them to do that. I do not think it is possible nor do I think it is a case where there will be any reciprocity whatsoever. The other members of the Commonwealth will not consult us before they determine whether they will allow an Englishman to settle in their country or not. Indeed, I am told that there are some Commonwealth countries that you cannot enter unless you show a return ticket. I do not like that aspect of the policy of Her Majesty's Government which appears to show that they are thinking of what I should regard as shuffling off our own responsibilities. I hope I am wrong. I hope I have misunderstood them; but I have never thought it desirable that we should say that we should not, cannot or will not operate this control, or that we should try to get agreement with other Commonwealth countries for them to operate it at their end. I do not think that is right.
LORD STONHAM: But, if I may interrupt the noble Lord, we have not said that.
LORD CONESFORD: I am very glad.
LORD STONHAM: We have not said that. We are not seeking to abrogate our responsibilities, but to discuss with Commonwealth countries better ways of arranging for immigrants from the Commonwealth.
LORD CONESFORD: So long as it is quite clear that they are not contemplating in any circumstances relaxing their controls, I am glad. I am going to give some reasons why, in my view, they ought to increase their controls and make them even more exclusive than they are. Here, I do not pretend to know whether I am speaking for anybody but myself.
My Lords, what are the principles? I have said that we must operate this control ourselves in accordance with our conception of the public interest. What are the considerations which we ought to take into account? It is perfectly true, as has been pointed out by noble Lords on both sides, that these immigrants perform (and perform, I think, attractively and charmingly) great services in this country, and some services that are certainly badly needed. I am thinking of their services to medicine; I am thinking of their really splendid services as nurses; and there has also been mention of their services in transport. In answer to the noble Lady whose speech immediately preceded mine, and to whom I listened with the greatest interest, I think she had a most interesting point when she described what might be a possible Commonwealth attitude to our receiving these very useful citizens. But I think I am right in saying that, in the case of nursing, at any rate, although they do perform, and perform most excellently, services in our hospitals, they also learn the art of nursing, and I think that many of them thereafter go back to their own countries. I think I am right in that: and that, perhaps, ought to be borne in mind.
BARONESS SUMMERSKILL: I do not want to be cynical, but I have an idea that many go back because they are better paid in the Commonwealth than they are here.
LORD CONESFORD: Good luck to them! That seems slightly to negative

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the frightful conditions we have left in the Commonwealth. But, although I admit, of course, frankly, the great services they perform for our economy, I stress this definite view: that economic values must not be sought at the expense of all other social considerations, the most important of which are housing, education and public order, all of which can be threatened if the numbers of immigrants are too great.
Now, my Lords, the idea of limiting immigration, which, on the facts of the case, will apply mostly to coloured immigrants (because from no white country are great masses wishing to enter this country), is sometimes thought to be wholly illiberal and wrong. I confess that I have never taken that view and I do not take it now; but I should like to quote one paragraph from a great liberal who will not be suspected of any of those reactionary sentiments that I know noble Lords opposite probably associate with me. I want to quote from Don Salvador de Madariaga, from the last paragraph of his letter to The Times the other day. He uses the term, "transplantations" to mean transplantations of people of one colour into the natural habitat of people of another. This is the paragraph that I wish to read:
"New transplantations had better be avoided, for surely we prefer the varied landscape of our day to the dull grey of a monochrome humanity uniformly spread over the planet. Therefore, there is nothing illiberal in either any European country taking measures to keep itself white or any African country taking measures to keep itself black. Indeed, the right of any nation, provided it is free and knows what it is doing to regulate its demographic composition should be considered as sacred by any liberal-minded man."
I have quoted that paragraph from a famous liberal thinker. It may be noted that he uses actually the expression any European country taking measures to "Keep white white". I mention that phrase because noble Lords may have noticed that one of the things for which I think some neo-fascists have been denounced here is for saying "Keep Britain white". I mention that, not of course to justify any of these parties or the things they advocate, but to show that that particular idea is not necessarily a disgraceful or improper idea. The noble Lord who made such an admirable maiden speech a little earlier thought that, if we could really manage it properly, by obtaining
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a greater flow of immigration we should be performing something valuable for the peace of the world. I wish I shared his view; but I do not. I fear, although I do not for one moment doubt the honesty of his intentions, that a continued flow of immigration even at the present level will do harm to nearly all those causes of progress which we have in mind.
My Lords, I do not wish to deal with so many of those questions that have been mentioned, like assimilation, integration and multiracial society and the rest, because, frankly, I do not know what all these phrases mean, and I think they need more examination than I can now give to them in the short time at my disposal. But the numbers foreshadowed by the Home Secretary and by the noble Lord this afternoon, as coming in, if we let things go as they are going at present, I believe to be more than is desirable for any of the interests that we are rightly considering: our own, the immigrants' or the world's.
My Lords, I would repeat a very wise thing said by my right honourable friend Sir Edward Boyle, in winding up the debate the other day for the Opposition in another place. He said, "We must be careful not to confuse racialism with realism." I agree with that sentiment. I have said that I do not think I suffer from racial prejudice but I cannot be certain, because I do not know how anybody finds out whether he suffers from prejudice. What I do know is that I have endeavoured to give the House the truth as I see it. I sometimes think that the voters of this country on this issue are more far-sighted than any of the political Parties.
6.7 p.m.
LORD ELTON: My Lords, I should like to begin by offering my congratulations to the noble Lord who introduced this Bill, on his accession to office. It fell to my lot to speak immediately after the noble Lord, Lord Stonham, in the debate in which he made his maiden speech. I made certain prognostications then and it is pleasant to see them so rapidly and deservedly justified. I am sure he will realise that the strictures I propose to make are directed not to him, nor, indeed, primarily, to his Government, but rather to the situation he has inherited.

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I should also like to say as a preliminary that I would echo and share almost everything that has been said in praise of the virtues and the attractiveness of the West Indians—very little has been said about the Pakistanis and Indians—and as to the services which they and other immigrants from the new Commonwealth are undoubtedly rendering to his country. And if I do not discourse on that theme at the same length as other noble Loris it is in the hope of sparing your Lordships' time; and although I shall deal mainly with the darker side of the picture—and I think it is right that the darker side should be presented, and teat it should not be all a matter of mutual congratulation—it is not because I am unaware there is a brighter side.
Eight years ago I moved a Motion in your Lordships' House to draw attention to the problems connected with migration. It was, I think, the first occasion on which your Lordships had debated this subject, and I explained that my object in moving the Motion was to enable the Government of the day to make a considered statement on what was still only a complex problem and had not yet begun to assume the dimensions of a crisis. The Government spokes-man replied, I well remember, with characteristic Governmental caution and in characteristic Governmental phraseology:
"It is necessary to contemplate the possibility that it may he necessary to think in terms of some measure of control in the interests alike"—
as he added very rightly—
"of the immigrants themselves and the inhabitants of these islands."
That was in 1956 when the intake of immigrants from India, Pakistan and the West Indies was 37,000. We constantly get slightly different figures given us in articles and speeches. That is, I think, because different countries are dealt with; I am now dealing with the three countries which are the main contributors to our intake; India, Pakistan and the West Indies.
By 1961 that figure, for my three countries, had risen to 115,000 in the year. In the following year came the Act, which was deplored and opposed by the noble Lords who are now very prudently asking us to renew it. In
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this voile face, as the noble Duke called it, and it is indeed a most abrupt voile face, they are undoubtedly reflecting the views not only of their own supporters but of the country as a whole; for towards the end of last summer a Gallup poll reported not only that a majority of the supporters of all Parties were in favour of tighter controls than those in force at present but that the small minority which was in favour of total prohibition came more numerously from the Labour Party than from the Conservatives.
The Home Secretary has told another place that he estimates or conjectures—I am not quite sure which procedure it has to be for a figure of this sort, but, however it is arrived at, we are to assume that about 800,000 immigrants from the new Commonwealth are at present resident in this country; the Economist Intelligence Unit reckons that by the year 2002 (which sounds a long way off but is not so distant as it sounds; some noble Lords present may even live to see it) there will probably be 3½, million. I think myself that that estimate is probably on the conservative side.
Since in common, I think, with the majority of the electorate, as evidenced by that Gallup poll to which I have referred, I take the view that we have swallowed more than we can at present digest, and that we are laying up for ourselves, and still more for our children and grand-children, problems political, economic, social and cultural which there is no evidence as yet that we can solve, and that therefore the brakes should be put on more firmly than they are at present—since I take this view, I should explain that it is numbers rather than colour that cause me and so many more grave and increasing anxiety. My own personal experience, and I am sure that many of your Lordships have shared it, when I see an isolated West Indian or Indian is that my instinct is to go up to him and say that I am glad to see him and that I hope he is prospering in his new country. And when we have had black friends from the West Indies staying in our home, and have taken them round our village, they have been received everywhere with open arms. In fact, if there was any colour prejudice about, it was all too evident that it was prejudice in their favour.

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But it would have been a very different story if two hundred of them had taken over a section of the village. The sudden incursion of a large number of strangers with unfamiliar standards and unfamiliar habits, possibly the habit of dancing and singing all through the small hours, is bound to cause shock and resentment. Why, if fifty right reverend Prelates descended on our village and kept their neighbours awake in the small hours by admonishing each other with psalms and hymns and spiritual songs, as recommended by St. Paul, there would probably be a riot. And Bishops are easier to integrate than West Indians; and very much easier than Indians and Pakistanis.
The most praiseworthy efforts to promote integration are going on all over the country. The noble Baroness on the Cross Benches is a distinguished example, prominent in that admirable work. Much that one reads and hears said about integration appears to assume that if only these efforts are multiplied and intensified, sooner or later they are bound to succeed. I fear very much that we should be unwise to base our calculations on success within the foreseeable future. Consider for a moment the United States. As your Lordships are well aware, there has never been legal segregation in the North; yet everywhere and inevitably, if regrettably, wherever the blacks move in the whites move out. To take only one, and the most flagrant, of many, very many, examples: the centre of Harlem is 99·5 per cent. black. Even in the District of Colombia itself, under the shadow of the White House and all the rest, 88 per cent. of the children in elementary schools are black—because the whites have been moving out into the suburban districts.
And now the same ugly phenomenon is steadily and increasingly taking shape in Hackney, in Leytonstone, Southall and a score of other British towns. Comparatively few Pakistanis or Indians even desire integration. They have their own ancient customs and religions; and as for the Indians, they have been brought up in the most rigid structure of social segregation known to man, the caste system. There are Indians in England to-day who have been resident here for twenty years
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and can still not speak a dozen words of English.
This sad spectacle of the whites moving out as the coloureds move in, which stultifies and contradicts all our efforts at integration, is accelerated by the fact that in so many towns nowadays the coloured can offer a higher price for a house than the native would-be competitor for purchase. In Leytonstone at the moment a would-be coloured purchaser can offer at least £300 more for a £3,400 house than a native competitor, the reason being of course that he can then pack it with so many tenants that he will draw £20 a week in rent. Your Lordships may have seen a description a little while ago in the Sunday Times of a house in North Hammersmith. That house contained eight rooms and it was inhabited by nine families, one of which consisted of seven members. These houses of course are decrepit and insanitary, condemned or ripe to be condemned. In an article in the Sunday Times on Smethwick there was a detailed description of one such house which ended with,
"It is a little bit of a Karachi slum, unadulterated in its impurity."
Such conditions are fair neither to the immigrants nor to their hosts. They are making nonsense of our sanitary regulations. They are making nonsense of slum clearance. They are making nonsense of the Welfare State itself. They are taking us rapidly back to the days of Charles Dickens. Is it surprising that the Labour deputy mayor of Deptford has exclaimed in relation to immigration, "Is it progressive to let the workers of Deptford be dragged back to the conditions we have only just managed to struggle out of?"? And there is many a mayor and deputy mayor, both Labour and Conservative, who will soon be likely to be echoing that cry.
What can the local authorities do? They have not the staff to inspect these places, particularly at night when they are fullest; and if they issue a closure order they will only have to re-house the occupants on some council estate, ahead of native citizens who may have been waiting their turn for several years. It is the unavoidable tolerance by the public authorities of these wholly new and atrocious slum conditions which masks from the public the basic truth that we have at present taken in more than we can absorb; the basic fact that

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we simply have not room to house these people decently.
As I said at the beginning, one is always being driven back to the crux of numbers. Numbers, my Lords! Of course, colour, customs, standards and religion all contribute, and contribute greatly, to the problem; but they are all aspects of which would be manageable if it were not for the numbers. So many in such a short time! That is the tragedy. In Birmingham, for example, the resident population of immigrants from the new Commonwealth has risen from 4,000 to 80,000 within a decade—and that in addition to 70,000 newcomers from the Republic of Southern Ireland. So there you have an addition of 150,000 newcomers in ten years, on top of an original local shortage of 40,000 houses.
If the 800,000 immigrants, which is the estimate of the Home Secretary, represent, as I believe they do, an intake too large and too rapid for us to absorb, what are we to expect in the years immediately ahead of us? Well, my Lords, the right honourable gentleman the Home Secretary told another place that the present Government intend to continue issuing vouchers on the scale which they inherited from their predecessors, and I a ink I am right in saying that he gave it as 1,600 to 2,000 per month—although I think this differs slightly from what the noble Lord, Lord Stonham, said. That might tempt a simple citizen to suppose, at first sight, that it meant that the maximum intake for the year would be 24,000. But, of course, it does not mean anything of the kind, or anything remotely like it. I will not go into t le elaborate figures that I have prepared, because so much has been said about figures already, but I think we should always bear in mind, when we hear a Government say that they propose to admit such and such a quota, that the matter is largely out of their control. And it is out of their control, first, because of the dependants. After all, the Government cannot decide how many children, or, indeed, how many wives, some of the immigrants are to have. And so, between the passing of the Act and the end of September of this year, whereas 46,000 immigrants were admitted as voucher-holders, 61,000 were admitted as dependants.
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Then, of course, there is the much more incalculable and faintly sinister factor of the extent, whatever it may be, of evasion. If your Lordships take the figures from the passing of the Act to the end of last September, the total of voucher-holders and dependants—that is, those admitted legally and officially under the Act—was 107,000; but the net number of immigrants who arrived here was 138,000. This mysterious over-plus of 31,000, owing to lack of the necessary statistics cannot be entirely explained. But the right honourable gentleman the Home Secretary in another place evidently though it was mainly attributable to students and visitors. Well, my Lords, if that is so, it looks a little odd that the size of this over-plus should have increased so startlingly from 1963 to 1964. In the first nine months of 1963 the excess of the actual net arrivals who landed here over the official voucher-holders and voucher-holders' dependants was 16,000. The excess in the first nine months of this year was 29,000. So far as I know, there has been no explanation of why students or visitors from the new Commonwealth should have arrived in such startlingly larger numbers in 1964 as compared with 1963.
LORD STONHAM: My Lords, will the noble Lord allow me to interrupt? If last year the end-of-September figure had been taken of the discrepancy it would have been much larger than it in fact was in December, at the end of the year. It is expected that the same reduction will take place this year.
LORD ELTON: Of course, that is a matter of speculation. The fact remains that over the period which was measured by the Home Secretary there was this startling increase, which I should have thought cannot be accounted for by any movement of students and visitors from the new Commonwealth. Your Lordships may have seen the day before yesterday, in one of the Sunday newspapers, a detailed account of a racket by which illegal immigrants are imported from Pakistan by way of Southern Ireland. There have been over the last two or three years a number of similar descriptions of black markets in vouchers and rackets of various kinds. So it looks as if there may be a considerable degree of evasion, which we

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can only hone we shall be able to measure and check. I would add that a speaker in another place actually estimated that by the end of this year we shall find that the total of immigrants amounts to nearly 100,000. I think that must be an over-estimate, but I am not at all confident that it will be so terribly wide of the mark.
We have not really begun, in my view, to assimilate our immigrants. Tens of thousands of them are living under atrocious slum conditions, and intractable problems are being created. Is this fair either to the immigrants or to our own native citizens? The population of England and Wales (and I was glad to hear my old friend Lord Conesford deal with this question of population) is 790 to the square mile, whereas Australia, which is taking no immigrants of this kind, has a population of 3 to the square mile, and Canada 5 to the square mile. It is reckoned that in less than 40 years the population of this island will he no less than 72 million. Is it wise to add to the mounting problems which spring from over-population—problems of transport, housing and the rest—at this rate and in this way?
And what of the balance of payments, of which we have been acutely reminded in recent weeks? When Western Germany, for example, needs additional labour, what it does, I understand, is to import temporary workers from Italy and Spain, men who come and go. It surely must be a strain on our monetary structure if, when we want a job done, we have to bring in a man for life, who may bring four or five children and a wife with him. Has not the time come when we must say that we have done our best to keep the door wide open; that we shall go on doing our best for those who have come here; but that henceforth, in the interests of all concerned, we shall have to say goodbye to Category "C" (which is at the moment closed down), and take in only Category "A" and Category "B"—that is, those with jobs promised to them, and those with special skills—and scale down even these categories until we show more signs of absorbing what we have, and until there is more evidence—for I etirely agree with much that the noble Baroness, Lady Summerskill, said—that
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their countries at home do not need them there.
I see no objection whatever on religious or moral grounds to tightening the partial controls which we have already imposed. True, these men and women are my brothers and my sisters; and, indeed, many of them, particularly of the West Indians, are Christians from whom we have very much to learn and whose presence here can be of inestimable value to us. But all these considerations are equally true, not a whit the less, of the aliens—the French, the Dutch, the Norwegians—whom we have been excluding for the last fifty years without any religious or moral scruples whatever. True, these are our fellow citizens of the Commonwealth, and we may therefore feel political scruples about tightening the existing controls.
But surely the doctrine, if it be a doctrine, of the indefeasible right of all the 600 million of the new Commonwealth to take up permanent residence in this country is a mere historical accident. In the eighteenth and the early nineteenth centuries, when British citizens were peopling the waste spaces of Australia and Canada, it was evidently proper that an adventurer who had chanced his arm out there and had failed to take prosperous roots should return without let or hindrance to his native country. The tacit assumption that this right has devolved upon every citizen of Pakistan or Nigeria. though wholly irrational, was of comparatively little significance until the postwar transport revolution; but that has changed the world, and our policy should change with it. Should we not revise it so that the conditions of entry which we impose on other Commonwealth countries may approximate more closely to those which other Commonwealth countries impose on us?
6.32 p.m.
LORD HAWKE: My Lords, I think there has been a most remarkable change of thought between the presentation of the original Commonwealth Immigrants Bill in 1962 and to-day. At the time of the original Bill I was one of the few who welcomed it, but I think I was in a pretty small minority. Everybody talked about regrettable possible necessities, and rather queried the necessity part of it. But to-day I think it is quite clear, from the debate in your Lordships' House, that

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the sentiment is entirely different; everybody realises that this Bill is absolutely vital to our future, and I should like to say how much I agreed with my noble friend Lord Conesford in what he said.
At the time of the original Bill, I was very apprehensive indeed about the situation should we not have the Bill. I was not worried about the West Indies because they have a very small population. They speak English; they are Christians—in fact, better Christians than most of us—and, barring being noisy, they have few habits which annoy us. My apprehensions were based on the idea of having an unlimited open house, an unlimited free house, to one-third of the world's population, as represented by the Asiatic countries of the Commonwealth.
Moreover, having lived for a number of years in what was then British India, I knew that no one is quicker than the Oriental businessman to see chances of a profit. It seemed to me that there were some obvious prospects of commercial exploitation of immigration. In fact, a lucrative racket was in sight for merciless Oriental capitalists to exploit. I expressed the fear that the in migrants would be exploited; that the landlord of slum property would arrange for their arrival in order to fill up his house, to charge a huge rent; that he would pay no taxes because for hundreds of years he and his ancestors have never paid taxes; that his money would snowball so that he would buy one house after another on this system until whole neighbourhoods were grossly over-populated and turned into slums. Moreover, it would be overpopulation by our standards, but not over-population by tie standards of the people we are talking about, because anybody who has worked in the Oriental quarters of cities knows that the overcrowding and sanitation are not akin to 1964 Britain, but nearer to London before the Fire of London. I feared that their normal life in some ways would cause offence to their Western neighbours, and that this would create hostility which would be called or assumed to he a colour problem, when in reality it was a problem created by difference of up-bringing, habits, and so on.
My fears have not proved groundless. Many illustrations turn up in the newspapers at frequent intervals. This one, if I may be permitted to outline it to
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your Lordships, was a case of two Pakistanis who were up before the magistrates in Bradford on November 4. One was charged with bringing in as his own a wife and two children who were not his own; and the other one—which is a more interesting case—was a young man of nineteen who was charged with coming in as a boy of fourteen; that is, free of restriction through a false age. The boy, Ali, his defence counsel said, had been a pawn of an unscrupulous operator. He was a student in Pakistan and his father was approached by a man who invited him to let Ali emigrate to Britain. The man, who was probably one of those deeply involved in the traffic in false passports, arranged for the passport application to he made. Ali did not know that his age had been wrongly stated until he received the passport, and then he was Persuaded it was of minor importance. While in Britain Ali had worked regularly earning £14 a week, but the man who met him in this country allowed him only 6s. a week in addition to his accommodation and food. That is the modern slave trade.
One does not know how many victims the landlord had, but perhaps it was twenty in a house. If he made a clear £10 apiece out of these twenty for even six months, he would be getting something like £5,000 a year out of one house and I think the Inland Revenue are much too young and innocent to be able to charge people of this kind with tax.
What do we get out of it? We get a supply of labour to fill our more unpopular jobs, which means that we are postponing rationalisation and automation which we ought to be doing. On the other side of the card, we have declining standards of housing and sanitation. The noble Lord, Lord Elton, spoke about the days of Dickens, but I should have said that some of the evils were akin to two hundred rather than one hundred years ago. People from a semi-tropical climate are coming here. They are a bad risk for tuberculosis; they may bring with them the seeds of tropical diseases which can he passed on in various ways, and so we may find ourselves faced with the problems of diseases which we thought had never existed in this country.
We face tremendous educational difficulties because, although the adult may

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possibly speak English and may in some cases even be able to write English, it is almost certain that the wife and family if and when they follow will be completely ignorant of English, and probably illiterate. We have to teach those children English somehow or other in order to place them in our educational stream. We are possibly laying up the seeds of future racial difficulties which have occurred in all those countries of the world where large Asiatic populations have sprung up, originally from indentured labour, and so on, in places like Mauritius, Natal. Fiji, East Africa, British Guiana, and so on. The answer is that the Indians and Pakistanis have never assimilated themselves anywhere in the world to any other race.
The whole problem leaves a great dilemma: either we have unlimited immigration which, so long as National Assistance exists in this country, means that the influx is only limited by transport possibilities, or we limit it in some way with the result that the limited amount of opportunities for places to come into this country is subject to all kinds of devices on the other side in the shape of bribery and forgery, things we do not like in this country. This Bill, I thought in 1962, was a vital necessity, and to-day I believe that the vast majority of the people of this country would be extremely unhappy if it was not continued and not administered fairly closely.
6.42 p.m.
BARONESS SWANBOROUGH: My Lords, I feel very diffident at standing up, because my contribution to your Lordships' debate must be at the humdrum and domestic level. My experience is on the ground, at the county borough level, working with local authorities; and, unlike noble Lords who have spoken before me, I have experience of immigrants working at that level as welfare officers, clerks, and a number of immigrants who have been taken into local authority work in order to ease the problem of communicating with immigrants coming into the country.
For just over two years I have had the honour of chairing the Commonwealth Immigrants Advisory Council, which was set up by the Home Secretary of the day, and this Council represents
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a much broader variety of views than these Councils usually do. The members comprise both elected members and officials of local authorities, members of industries and trade unions, as well as a member of one of the Commonwealth countries that sends a great number of immigrants to this country, representatives of voluntary societies and so on. We have worked very hard during the time we have been in existence, and have had submitted to us a tremendous amount of evidence. And we have sent reports on three occasions to the Home Secretary which, I must admit, to our great astonishment have been published as White Papers.
We have taken a tremendous amount of technical evidence on the different problems which we thought it was important for us to have if we were to be able to suggest anything to the country which would he of value in absorbing the entrants into the life of the country. As a result of this evidence we have all been tremendously impressed by the efforts that have been made at local level to absorb the people that are coming in, and to deal with the problems which, though obviously various and complicated, are not, to my mind, insoluble.
The problem, my Lords, is one that we have all met before. It is that of entrants of a different culture, speaking a different language, even if it is only in pronunciation, and having different climatic habits, who have to be absorbed into a community. I do not believe that the British people who are going to absorb them have ever even thought of first and second-class citizens. I am not quite so pessimistic as most of the speakers to-day have been. I acknowledge the very great difficulties but I do not think for one moment that great contributions cannot be made to overcoming those difficulties. I do not for a single moment minimise the difficulties, but I do believe—and this has not been mentioned—that this is really, if one can look at it with a very broad view, entirely a localised problem, as problems exist. I do not agree with those who decry the work being done in that it is not sufficient. I believe that what local government is doing at the operational level, to absorb into the life of the community persons coming into the country, is quite staggering when one gets to know of it. At the

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same time, I believe that one local authority does not know what the other is doing, and that it is necessary to communicate and find ways of passing on ideas and possibilities from one authority to another.
As I see it, the immigrants of to-day are divided into two kinds of people, coming in under two different sorts of permit: a labour permit and an educational permit. A vast number of those who come in on labour permits either come to stay or decide to stay after a period of time. I was very interested a couple of weeks ago to discover that in a locality where a great number of Pakistanis had come to work, although everybody expected them to go home pretty soon they had found conditions sufficiently good for them to indicate that they would like to make their homes here. If this is true, and if they are to be assimilated into the country (and we need them as workers), a great deal of work has to be done by everybody. This is a question of men and women who have moved into this country, first of all, because of the benefits they get from living here and, secondly, because they think it will make a better life for their children.
I feel that the problem is one of immigrants and no: one of coloured people. Nobody has mentioned the immigrants from Cyprus and others who do not speak the language that we expect them to speak, and who do not, in fact, present less trouble in the way of assimilation than the coloured people themselves. We need all these workers. If we did not, they would not be coming, and I think it behoves us to find out, for ourselves, what we can do to show them the part they can play and to show the community itself what it can do to make the entrants part of the whole community.
The biggest problem, obviously—this has been stated met and over again; and it is at the base of every single trouble—is the problem of housing. Next to that comes education, and then employment. As with so many other situations, housing at the base of most of the difficulties that have occurred, and it has every sort and kind of ramification. Multi-occupation is a vast problem, and I was glad to hear the courageous way in which the noble Lord, Lord Hawke, tackled a side of this problem of which all of us are well
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aware and about which we are worried. In its related problems housing goes a very long way, and I was delighted to hear the right reverend Prelate put forward the suggestion that the Churches will really do a practical job of housing of immigrants. If this could go through quickly, well and with great efficiency, this would make the biggest contribution I can think of to the housing of immigrants coming into the country.
The Advisory Council with which I work has made a series of recommendations regarding practical measures, and especially in respect of housing of immigrants, and has urged very strongly that not only should those measures be put into operation as soon as possible, but alongside such measures local authorities and others, who are ultimately responsible, should encourage everyone concerned to use tolerance in every way possible to each other.
I was delighted to hear the noble Baroness, Lady Summerskill, mention Margaret Meade's book. This is a book well worth reading because of the anthropological study she has made of the American himself, and from it I think we may learn many lessons
If we are going to examine the questions that are difficult, next to housing comes the difficulty of language. Pronunciation, intonation and emphasis make some immigrants difficult to understand and almost impossible to converse with on the telephone. This is one of the difficulties which should be tackled speedily, because communications today are so vital, not only in education but also in any sort of employment. We feel that school-teachers require just the sort of help that has been suggested in the way of knowing more about the background of the immigrants themselves. We feel that the employment of school-leavers is also a point which has to be kept in mind, because there are so many different ways in which a particular boy or girl can be helped. But we are convinced that for both youth employment officers and teachers solutions will be much more difficult until they know more about these youngsters: about their country of origin, their culture, the foundations of their habits, and all the other things which are dependent on climatic conditions.

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In this direction we should like very much to see a great deal more done in the way of week-end courses for teachers, language laboratories and, in addition, an opportunity for residential schools which would give people who are in authority the background that they require about the people they are trying to deal with. I realise that in the past (and I, like other noble Lords, am a descendant of an entrant: my forbears were all Huguenots, and I am quite sure it was really difficult for them when they first came to the country), the only way they were absorbed was through an effort on behalf of the entire community, and I do not think we are going to achieve this by talking centrally. I believe that what is needed is support at the local government level to undertake, carry through and then pass on the suggestions that have been found useful: this is one of the most important of all recommendations. Today the aim of absorption is entirely, or almost entirely, in the hands of local authorities. They, in their turn, invoke local endeavour in a variety of ways, whether it be voluntary service, school teachers, youth employment officers or whatever it may be. I should like to pay a very real tribute to the support being given at local level, and especially to members of local authority committees who have encouraged so much special work in this direction. But I think that unless more support comes from the centre and unless experiments that are successful are taken up quickly somewhere else, endeavour will fail, enthusiasm will flag and we may have situations in which people no longer want to help.
This country is not an anti-colour country. But it is very well bedded in its habits and in its outlook. It thinks it is right to have roast beef on Sunday. It thinks it wrong to have too strong a smell of curry prevalent in the house, and it is in this sort of thing that the difficulty starts. It is usually thought that a woman is at the base of the trouble. It may be lucky that in many of these cases women are kept under very tight control, but in the long run, unless the mothers of the children learn English, the children themselves, as has -been shown by Margaret Meade, will start looking down on their mothers, which
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would be a bad thing, and we should reach quite different difficulties but, nevertheless, very severe ones.
So, my Lords, at the very low level at which I work, I would beg Her Majesty's Government to back those things that will help the teachers, youth employment officers and the local authorities, so that they can do their work amongst the many people within their local bailiwick and in that way begin to solve a difficulty which obviously is a very severe one.
6.58 p.m.
LORD MILVERTON: My Lords, after so many remarkable speeches, and speaking at this late hour, one must necessarily be brief. But there are one or two points which I would underline. To begin with, I should like to congratulate the noble Lord, Lord Stonham, on the way in which he introduced the Second Reading of this Bill. I thought, I believe rightly, that he was endeavouring to make a non-political approach to the whole subject, and that is the sort of approach that I feel is very important because this subject is itself of such vital importance. I should like to say, let bygones be bygones, and deal with it now with the impartiality which it deserves. The worst thing that could possibly happen to this problem is that it should become a bone of contention in the arena of Party politics. If ever there was a question on which there ought to be a bi-partisan approach it surely is this one. It is a matter for statesmen and not politicians or sentimentalists, and in my opinion one should approach it stripped of all emotion and endeavour to do, as I think the noble Lord, Lord Stonham, also said, what one considers to be right.
I do not regard this as a racial problem at all. To my mind, fundamentally race and colour do not enter into it. But as the noble Lord, Lord Elton, stressed, it is very largely a matter of numbers. But as a majority of immigrants happen at the time to be coloured it is likely if mishandled to become, or to acquire the appearance of, a racial and/or colour question. I should like also entirely to endorse what has been said in praise of the services rendered by immigrants in various activities in this country, but again I think that is irrelevant to the point I am trying to make, which is that

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this is a very great world problem which we are facing in this country. I agree with the noble Lord, Lord Stonham, that one would like to have fairness and justice to all in this country. It has been one of our aims throughout history. But if this question is not regulated strictly and severely, conditions will arise which will preclude the possibility of fairness and justice.
I think the long-term solution, if there is a satisfactory one, is clearly that which was mentioned by the noble Duke at the beginning of this debate—namely, that one should endeavour to give such assistance, on an increasing scale, if possible, to these countries from which the immigrants are coming at present, which would in the future make their own countries sufficiently attractive to take away the temptation to come here for conditions which are so manifestly better than their own. As I regard it, the first duty of a Government—of the Government of this country—is to look after the interests and happiness and welfare of its own people. It is only with that as a basis that we can be strong enough to do for our partners in the Commonwealth all those services which we should like to be able to render, but shall not be able to do unless we have the sure base of a country such as I have pictured. As I see it, it is only by getting one's priorities right that our nation will be in a position to give this assistance to others.
The figures mentioned by the noble Lord, Lord Elton, are rather staggering. I do not propose, nor is there time, to go into them, but they underline the need for rigid control in the interests of all parties to this problem. It is also, as the noble Lord, Lord Elton, said, quite clear that the majority of people in this country are in favour of control; only a small minority would open the flood-gates and face the results of such lack of prudence.
I do not propose to deal with all the questions which now have to be considered by the Government—the health and housing difficulties, the distribution difficulties, the assimilation of these people and also their high birth rate, which gives rise to problems. But I should like to mention one point which I think needs to be dealt with. I gather that a Commonwealth immigrant cannot be deported from this country, even if he has all sorts of unsavoury facts against
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him, if he chooses to destroy his own identification documents and it is not possible to prove here what is his nationality. I gather that then there is no legal power to deport him.
In regard to the planning of this matter of immigration, I have no doubt that noble Lords are aware that in Trinidad Sir Eric Williams, the Prime Minister, has instituted a system of planning, of sending immigrants to countries such as the United States or Canada which happen to want them; but it is on a definitely stated agreement with those countries that certain types of people are needed, and they are carefully hand picked in Trinidad, given a preliminary training, and then sent as suitable representatives of their country abroad.
May I once more emphasise that this a world problem and we should not recklessly build up in this country conditions which up to date the world has found quite insoluble in other countries which I need not mention. I should like to say once more that it is a subject which cannot be treated emotionally; it should be the object of cool and unbiased study by the Government concerned. Nor will I emphasise the points which have already been made about this overcrowded island obviously having severe natural restrictions upon immigrants of whatever race or colour, or from wherever they come.
There is little more I can say at this hour of night, except to implore the Government to remember that you cannot hurry history, and, if we want to integrate immigrants into this country whose customs and language and habits take a great deal of integration, it has to he done slowly and in adequately regulated and small numbers.
7.6 p.m.
BARONESS GAITSKELL: My Lords, it is not easy at this point of the debate to be original, and I promise to be brief. I am glad that the noble Lord, Lord Conesford—I am sorry he is not here to hear what I have to say—twice, and with great disapproval, quoted the words of my late husband, then the Leader of the Opposition. My husband was a passionate opponent of the first Bill controlling immigration because he was a passionate believer in the Commonwealth, and at best this Bill and its Second Reading is an affront to the

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Commonwealth, whatever the good reasons for it are. My husband regarded this free association of nations, the Commonwealth, as a real force for good in the world. The noble Lord, Lord Conesford, has an indulgent estimate of his own impartiality and his lack of racial prejudice; certainly his approval of the slogan "Keep Britain White" has a distinctly Nazi flavour.
Immigration control is the melancholy decision of all the political Parties in this country, but all the Parties agree that full integration is Desirable for the immigrants here. I think this is the important thing that we have to discuss. Just to assert this is really not much use. Of course we all want improvement in general welfare and housing; all that goes without saying. But there is a great need for information and facts about these minority groups. We have a great need to know what kind of discrimination exists, say in employment, perhaps in the white-collar jobs, or for coloured children leaving grammar schools. We need to know how much segregation is developing in these neighbourhoods and schools. We need to know how many white people move out of areas where coloured people are moving in, so that we may not get to the point when we have schools with a majority of coloured children. This will happen if this segregation goes on. We need to know whether coloured people pay more for their mortgages or their car assurance, as I am told sometimes happens. We need information as to what immigrants regard as their needs. We need to know the facts in order to educate public opinion; this is the great need.
Many of the noble Lords opposite have taken a really pessimistic view of the whole of this problem. To take this view is utterly defeatist. In regard to what the noble Lord, Lord Conesford, said about electors, if some of the electors in the places where racial prejudice was simmering had perhaps known the facts, had been educated, maybe the result would have been different. We have in existence to-day a Commonwealth Immigrants Advisory Council of which the noble Baroness, Lady Swanborough, is the illustrious chairman. It has done most valuable work. It was set up by Mr. Henry Brooke, with very limited terms of reference.
BARONESS GAITSKELL: I am sorry; Mr. Butler. I thought it was Mr. Henry Brooke. It was set up to advise the Home Secretary about the welfare and integration of immigrants and to examine the arrangements made by local authorities in this way, and to say whether further Government action was needed. In fact, it was set up to examine the official and the voluntary efforts involved and to make one annual report, as Lady Swanborough said. Within its limitations it has done immensely good work, but lack of money and lack of a big enough secretariat are absolutely crucial factors in this field.
Something much stronger is needed here. This is inadequate to deal with the scale of the problem, and we have heard the scale of the problem expressed in all the defeatist views of noble Lords opposite. We need a Government body in this field with members of high calibre so that their views can carry really good weight. We need a big enough research staff with sufficiently wide terms of reference. Immigration control, by itself, solves very few problems: it is only a beginning. What we now need is to tackle the problem of integration, which we have not done in the last thirteen years.
7.15 p.m.
LORD DILHORNE: My Lords, I have heard most of this debate, and it has carried my memory back to debates in another place during the course of the passage of what is now the Commonwealth Immigrants Act. But before I say anything about that, I should like to touch upon one other subject to which Lord Stonham drew attention at the outset of his speech. I think he is the only noble Lord who referred to it in the course of to-day's debate. It is the fact that this Bill proposes to continue in force for yet another year the Aliens Restriction (Amendment) Act, 1919. The noble Lord told us, if I got his words right, that under contemporary circumstances those controls must go on.
I do not think anyone would challenge the need for us in this country to have some powers at the present time, and in so far as can be seen for some years in the future, of control over the number of aliens admitted to this country, and

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some degree of supervision over them when they are within this country. Most people would accept that, but it is generally accepted by all Parties that the legislation dealing with aliens is most unsatisfactory. The present Home Secretary said this in another place [OFFICIAL REPORT, Commons, Vol. 702 (No. 14), col. 252]:
"I differ from nobody in the Committee in thinking that we ought to have permanent legislation. It is not satisfactory that matters which touch the freedoms of a large number of individuals should be left to delegated legislation consisting of an Order in Council, made under an Act passed in 1919 which, in a rather odd, lopsided way amended a war-time Act passed in 1914."
This is one occasion on which I can certainly express entire agreement with the right honourable gentleman. Indeed, he himself was in agreement with his predecessor, Mr. Henry Brooke, who, as Home Secretary in the last Government, expressed the view that it was essential in the next Parliament for Parliament to put this matter on a permanent basis.
I must say frankly to the noble Lord, Lord Stonham, that I was disappointed by what he had to say about the prospect of that being achieved. He gave no kind of pledge to introduce any such permanent legislation. All he did was to hold out some slight hope that something might be done. Now, twice to-day we have been referred to the pressure of Parliamentary tine. The noble and learned Lord the Lord Chancellor, as we know, takes a very keen interest in law reform, and your Lordships will remember the debate which we had in this House on that subject before the Election, in which I referred to the pressure of Parliamentary time. I was somewhat derided on that account. I am not trying to-night to arouse any controversy about this, but I should like to express the hope that the present Lord Chancellor will be more successful than I was in getting a measure of this kind introduced into the legislative programme, for I think there is a real need for it, as I gather he agrees.
I do not know whether the noble Lord who is going to wind up this debate could give me some information about this—I should be grateful if he would. Who is the Minister responsible for this facet of law reform? The Home Office and the Home Secretary have, of course,
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a particular responsibility with regard to aliens, but we are now concerned with the reform of the law of aliens, and it must go wider than just converting Orders in Council into a Statute. Who is the Minister who is now responsible for bringing that law up to date? We have heard a great deal said, of some vagueness, about this matter, but I should like to ask whether it is the Home Secretary, or the Lord Chancellor, who has a particular responsibility, or is it the Minister without Portfolio, whose duties have not so far been publicly defined, so far as I am aware? Whoever it may be, I ask Her Majesty's Government to note that the pressure for the introduction of some permanent legislation of this kind comes from all sides of the House, and the Home Secretary has himself recognised this need.
LORD STONHAM: Is the noble and learned Lord, in asking his question, referring only to the Aliens Bill? If so, a ready answer can be given by my noble friend. I would point out to him that even the enactment of the present temporary legislation would, in itself, be a measure that would be strongly contested. We think it better to wait until we can perhaps consider other adjustments and then bring in a new Bill.
LORD DILHORNE: I am grateful to the noble Lord for intervening to reply to the point I was making. Of course I appreciate that legislation on aliens might—I say, "might" I do not know that it necessarily would: it depends on its content—be highly controversial. But I should have thought it would be far less controversial than the Commonwealth Immigrants Act was.
I appreciate, too, that before a Bill of that sort could be introduced a great deal of hard work would have to be done. I do not know to what extent work on that has been going on in the Home Office—I expect a good deal. I was hoping for something more than a faint hope that something would be done, because it is rather bad that we cannot find time in the Parliamentary programme for a measure of this kind when we realise, as I think everyone agrees, the need for some control in relation to aliens. I merely touched on that, in the hope that what I said on it might lend a little weight to the elbow

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of the noble and learned Lord the Lord Chancellor, if he tried to do a little pushing on his own account to get this law reform advanced.
My Lords, I now turn to what has been the main subject of our debate—immigration. We have had a number of most interesting speeches, and I do not think your Lordships would like me at this late hour to refer to the speeches seriatim. Our debate has been distinguished by one maiden speech, that of the noble Lord, Lord Royle, and I apologise to him that I had to be out of the Chamber just when he was speaking. But I understand, and I am verily informed, that he adhered in this House to the opposition that he expressed in another place to the Commonwealth Immigrants Bill, and therefore he deserves credit at least for his consistency.
The noble Lady who spoke just before me referred again to the position when that Bill was introduced. It was, as she said, a Bill that was bitterly opposed. I do not doubt at all the sincerity of the view that was expressed by her: that by those who opposed it it was regarded as an affront to the Commonwealth. But she will also remember, I am sure, that those of us who had some responsibility for its enactment did not agree with that view. We felt (and I think that events have shown us to be right on this) that if the floodgates were left open, and immigrants poured into this country—more than we could assimilate or integrate, if that is the right word—then the consequences, so far as the Commonwealth was concerned, would be far, far more disastrous than the effect of passing that Measure. I think that what has happened has shown that. The consequences to the Commonwealth, which were foreshadowed at that time, have not eventuated at all.
The noble Lord, Lord Stonham, when he spoke, misrepresented the position with regard to the opposition to that Bill. He said that it was objected to by the Labour Party, not because they objected to control (these are his words) but because it was carried into force without adequate consultation. My Lords, it is in the light of such somewhat inaccurate phrases that myths are created, and I would, if I might, even at this late hour,
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remind your Lordships of the terms of the Amendment moved by the Labour Party to the Second Reading of this Bill. The following Amendment was moved by the present Foreign Secretary [OFFICIAL REPORT, Commons, Vol. 649, Col. 705]:
"this House declines to give a Second Reading to a Bill which, without adequate inquiry and without full discussion at a meeting of Commonwealth Prime Ministers. removes from Commonwealth citizens the long standing right of free entry to Britain, and is thus calculated to undermine the unity and strength of the Commonwealth; gives excessive discretionary powers to the executive without any provision for appeals; will he widely regarded as introducing a colour bar into our legislation; and, though providing for health checks and for the deportation of those convicted of certain criminal offences. fails to deal with the deplorable social and housing conditions under which recent Commonwealth immigrants and other subjects of Her Majesty are living."
My Lords, in the face of that Amendment it really cannot be said that this Bill was opposed by the Labour Party not because they objected to control. The terms of that Amendment show quite clearly—it must have escaped the noble Lord's memory—that the Labour Party was opposed to putting on any control over any immigration from the Commonwealth into this country. That was the theme of the debate that took place.
Now, of course, they recognise, and the noble Lady recognises, that this Commonwealth Immigrants Act must go on. The Labour Party having opposed it for many a long hour, line by line—indeed, so much that a timetable had to be imposed—the noble Lord now comes before this House and asks for Parliamentary approval for its continuance. We were told by the present Foreign Secretary at the time of the Second Reading (if I may remind your Lordships) that the Bill contained barefaced, open race discrimination, and that the Home Secretary at that time was advocating a Bill—and again I quote the present Foreign Secretary's words (col. 706)—
"into which race discrimination is now written—not only into its spirit and practice but into its very letter."
That, of course, was not our view, and I think the people who have spoken about how this Act has been operated have paid tribute to the fact that it has not been operated illiberally.
It is interesting that there has been really no criticism in this debate of the

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system devised by that Act. There has been no criticism of the "A", "B" and "C" vouchers and the machinery designed. I think that is very satisfactory. But the noble Lord, Lord Stonham, and indeed his right honourable friend the Home Secretary, drew attention to the extent of evasion which they suspected, as I gather, had been and was taking place. I must say that that is a matter which I think we must take seriously. It is one thing, of course, for a few students to marry and stay on here and so create a surplus, but I cannot believe that the surplus which has arisen is in any way due only to that happening. I think there must be more than that.
If there is evasion by, for instance, the concoction of forged vouchers and things of that kind, then I think that is very serious, because whit that means is that we are allowing people to jump the queue, assuming they would have been admitted. This is all based on a hypothesis, but if this is happening and there is this type of evasion some people are jumping the queue and getting in front of those who are behaving properly. We may also be getting into this country some who would be refused admission. That is why I am saying that, if there is this kind of evasion, I regard it as serious and unfair. Indeed, I am sure that when the noble Lord comes to reply he will say that, if there is this kind of evasion, the Government will take every step they can to prevent it.
LORD STONHAM: My Lords, if evasion through forged vouchers is taking place, and it may well be, those people with forged vouchers are included in the legal admissions because they will be included in those numbers admitted with vouchers. If the vouchers were forged and we detected them the people concerned would not he admitted.
LORD DILHORNE: My Lords, it is no use my speculating as to how the present system, however it is being administered, is being evaded. But the figures seem to me to indicate that the evasion is substantial, and I do not think that it is quite explained by saying that a number of people come here as visitors and students and stay on. What I am saying is that, if there is serious evasion, then I think that every possible step should be taken to stop it for the reasons I have indicated.
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The next question I want to turn to is this. How are the powers in the Act going to be exercised by Her Majesty's Government? The noble Baroness, Lady Summerskill, has suggested that we should in some way secure that there is not a "brain drain" from the Commonwealth territories to this country, of people who could usefully be employed in their own territories. I do not myself think it really would be for us to say who could or should leave those territories. That, I should have thought, would have been a matter for the Governments of those territories. What we have got to be concerned with, surely, is simply that we do not admit to our shores a greater number than we can properly deal with, assimilate, integrate and look after. That, surely, ought to he the governing factor. I do not think it is just a question of educating public opinion. I rather hope it is not, because educating public opinion can take such a very long time. Of coure, there may be something in that; but I agree with the noble Lady who said that immigration control by itself was not enough. I entirely agree with that.
The great and difficult problem—different in character from any we have had before, because of the wide variety of peoples who are coming in—is to secure their proper absorption into the area where they have chosen to reside. I am never very happy, my Lords, about the use of the word "integration". I am not quite sure what it really means. I think that to some people it has a very unpleasant ring; but it is a rather fashionable word. I prefer the word "assimilation". I suppose that if one were trying to put down in one phrase, or to say, what one was trying to secure, it would be that these visitors to our land should be able to reside happily and in peace with their neighbours wherever they might be, and play a proper and full part in our society. But there are so many facets of that problem that I quite agree it is a difficult one—and I thought that the contribution by the noble Baroness, Lady Swanborough, was of the greatest interest.
The noble Lord, Lord Stonham, gave an account of what had been done in the way of legislation, of the powers the last Government took to prevent overcrowding and to remedy the worst abuses; but here I rather agree with the noble Baroness,

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Lady Gaitskell: I am not sure whether the local authorities or the central Government really know quite enough, as yet, where the shoe pinches. It may be that if we are to solve the problem of assimilation or integration we shall have to give some discriminatory treatment or provide some discriminatory facilities, not with any intention of discrimination against individuals, but discriminating for their benefit so as to enable them to have special facilities—for instance, of learning languages.
My Lords, to-night, although we have touched on this subject, it is not really the issue. The issue is: should this Act continue in force? And, second to that, I should have thought: how are the powers under this Act going to be exercised? My noble and learned friend Lord Conesford rather incurred the displeasure of the noble Baroness, Lady Gaitskell. I will not pursue that controversy except to say that I support his view that one cannot just ignore a problem that really exists and pretend (although the noble Lady does not seek to pretend) that it does not exist, or seek to minimise it by attacking the language or phrases which some people may use, and misguidedly use, in relation to it.
If one starts from the basis—and it was the basis of the Act—that there must be some control over immigration so that we did not get more immigrants coming to this country than we can assimilate and look after, what is the present position to-day? I thought the noble Lord, Lord Elton, made a depressing—I will not use the word "defeatist"; that was the word the noble Lady used—but a very serious speech. He posed the question whether we had already taken in more than we could provide for by way of homes, education and so on; and I think that if we do take in more than we can cope with, then there is a serious possibility of disaster. I think I carry the noble Lord with me on that.
Therefore, if one is to err at all in this very difficult assessment, there is something to be said for taking a chance on being a bit below the figure rather than being above it. I hope I have made myself clear on that. I am not advocating any figure—I am not sufficiently in possession of the facts to do so—but, if
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there is too much of an inflow, too rapidly, the risks are so great and may be so disastrous that I should have thought a sound policy for the time being, until we have been able to do more by way of assimilation, might be to take a more restrictive attitude with regard to the admission of those whose admission can be stopped or deferred. Of course, as has been pointed out, there is no restriction with regard to the admission of dependants; nor is there with regard to students—and one would not want to see that. So, really, under this Act, the Government have got power to control only a certain portion. But it would be interesting to know whether the Government's decision, as I understand it is, to adhere to the rate of issue of vouchers followed at the end by the late Government, is based upon their assessment of the present situation or whether it is what I might call a mere holding operation until they have had further time for review. I hope that is not too difficult a question to answer. It is not posed with any animosity, because those of us who have had anything to do in a practical way with this trouble realise how full of complexities it is.
My Lords, as I have said, I am not going to refer to all the speeches which have been made. It was very nice for me to hear the noble Lord, Lord Hailes, make a speech, I having sat with him, or at least having been with him in another place for so long. It is the first speech I have ever heard him make, and I hope—and I am sure your Lordships do—that we shall hear him on more occasions in the future. My noble friend the Duke of Devonshire made, I thought, an excellent speech. I do not really know why the noble Baroness, Lady Gaitskell, attributed the epithet of "defeatist" to my noble friends—and presumably to myself, because she said "all noble Lords opposite". I think that perhaps her disagreement with my noble and learned friend Lord Conesford led her to attach that label to all of us; but I should just like to say that we are not defeatist. We do not want to see relations between the people of this country and the people of the Commonwealth damaged—and it may be irreparably damaged—by the consequences of more people coming over here than we as a country (and I use it in its broadest sense) can look after properly.
7.38 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION): My Lords, I must start by agreeing with the noble Lord, Lord Milverton, that there have been some quite remarkable speeches in this debate. It seems so often that one starts from this or the other Box by saying that the debate has reached an extraordinarily high level, but I think that that sort of term or phrase used in connection with this debate certainly would be an absolutely true description of the speeches we have heard to-day. I must start by congratulating my noble friend Lord Royle on his maiden speech. I am sorry he has had to go, but it so happened that he had an engagement which he had to keep, as is the case with so many of the other noble Lords who have spoken. But I am glad to add my congratulations to those so felicitously expressed by the right reverend Prelate the Lord Bishop of Liverpool. I cannot regard the noble Lord, Lord Royle, as a true virgin up to this point, for I remember listening to his maiden speech in another place; and I remember he impressed me later on as being a very accomplished speaker. But, my Lords, however practised one is in the other place, one has to adjust to the different atmosphere here, and this the noble Lord certainly has successfully achieved this afternoon. He is a personal friend of mine and I was delighted by his performance this afternoon. Clearly, he is going to be a very welcome addition to the debating strength on this side of the House. I rather think we shall need it in what I hope are to be the years to come.
The noble and learned Lord, Lord Dilhorne, is an old political enemy, but I hasten to add that I have never regarded him as an unfair one. As the Lord Chancellor this House undoubtedly respected him; as a political opponent we shall never underrate his skill in debate for he is pretty formidable. To-day we have had an example of his debating ability and of the formidable speeches that he can direct towards the other side of the House. I would add my congratulations to those already expressed about the honour which Her Majesty has conferred upon him, the announcement of which has appeared to-day. The noble and learned Lord,
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Lord Dilhorne, was the only noble Lord to make reference to the Aliens Act.
LORD DILHORNE: Apart from the noble Lord, Lord Stonham.
LORD CHAMPION: Yes, my Lords, that is correct: apart from the noble Lord, Lord Stonham. He was the only one after the noble Lord, Lord Stonham, to make any reference to it. He said there is still a failure to introduce permanent legislation on this extremely important matter. As I understand it, the Home Secretary is to study all aspects of this complex subject and formulate his own proposals. I would imagine that when he has done that a Bill would be prepared and presented to the House. Just how soon that will be, I do not know, but clearly the Home Secretary is bound to be in difficulties, as are the Government, because of the shortage of Parliamentary draftsmen: we have not enough to do the work.
I am not going to enter into the continuing discussions between the ex-Lord Chancellor and the present Lord Chancellor which have so much enlivened the House since they have changed places.
LORD DILHORNE: And before, my Lords.
LORD CHAMPION: I am sure the noble and learned Lord would not expect me to attempt to enter into them. Clearly the position of aliens is a matter which ought to be settled by permanent legislation, and I hope that this will be accomplished very soon. Whether as a result of the action of the Home Secretary or of the Lord Chancellor or of anybody else, it does not matter, so long as we get the Bill before this House.
I would say that if there have been criticisms levelled against this side of the House and against the Government to-day they have been made chiefly by the noble and learned Lord, Lord Dilhorne, and the noble Duke and others in reminding us of our opposition to the 1962 Act. This is part of the game of the "ins" and "outs". Those who are the "ins" are reminded of the things they said when they were the "outs" and the "outs" are rightly reminded of the things they did and said when they were the "ins". I have no fault to find with all this; for it is a salutary reminder that the deeds of the "ins"

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are on record, and the words of the "outs" as said to-day may one day be quoted against them. But, to get the record straight on this as I understood it at the time, the Labour Opposition's attitude on the 1962 Bill was that it might do irreparable harm to Commonwealth relations and that if a reduction in the number of Commonwealth immigrants was necessary it would be much better done by negotiation and after consultation with the appropriate Governments.
The fact that we in Government have to face to-day is, first, that the Act of 1962 did not do any irreparable harm to the Commonwealth; although, understandably, there was opposition to it at the time by some of the Commonwealth Governments, and with some of them it still rankles. Secondly, the control made possible by the Act has worked very well. We still feel, however, that so far as it is humanly possible the control of immigration into this country from Commonwealth countries would be better done by agreement with the countries concerned. This is why my noble friend Lord Stonham said to-day that we should try to bring the Commonwealth countries into discussions with us on the question of control. My right honourable friend the Home Secretary said in another place on November 17 [OFFICIAL REPORT, Commons, Vol. 702 (No. 14), col. 287]:
"My right hon. Friend the Secretary of State for Commonwealth Relations has, some little time ago, already taken steps to make contact with Commonwealth countries to bring about, when we have been able to carry out such review as we consider necessary of the working of our control, the necessary discussions at which that collaboration can take place between the Commonwealth and this country."
My Lords, we do recognise the difficulty here that was mentioned and so much stressed by the noble Lord, Lord Conesford. If the Government are charged, as they clearly have been, with inconsistency by continuing this Act or that Act by the Bill which is now before your Lordships' House, I am bound to reply, to use Emerson's words, that
"a foolish consistency is the hobgoblin of little minds".
I hope we shall not be charged with having little minds. Certainly in this connection we have not been consistent. I think we have done the right thing in the circumstances, which, I suppose, is pre-
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cisely what the Government of 1951 said when they continued the National Health Act, despite their having voted against it when in Opposition on both the Second and the Third Readings. I remember the advice that the noble Lord, Lord Morrison of Lambeth, gave some of us on another matter some years ago: "When caught out, come clean, and a tolerant Parliament will understand". To some extent we have here been caught out, and I think by my admissions up to now I have come clean on behalf of the Government.
Loin DILHORNE: My Lords, I am sure the noble Lord will acquit me of any desire to rub salt in the wound. I was not seeking to do that.
LORD CHAMPION: My Lords, the wound is not too deep. Politicians do become a little thick-skinned, as the noble and learned Lord well knows.
My Lords, I have already said that the Act and the control under it has worked very well. But this is not to say that, if our economic and social circumstances were different, the "open door" would not be better for this, the mother of a great Commonwealth of Nations. I agree with the noble Baroness, Lady Gaitskell, on this. Of course I do. If our economic and social conditions were such, there ought to be an open door to this mother of the Commonwealth.
The numbers permitted to enter have been just about right for certain grades of labour but, of course, it has not yet been possible to secure complete integration or assimilation of those whom we have permitted to enter. Doubt, fear and resentment exist in the minds of many people when strangers come to live in their midst. This doubt, fear and resentment is added to enormously if the newcomers have different habits, different standards of education, a different culture; and if to that is added a differently coloured skin.
LORD HAWKE: My Lords, before leaving the question of assimilation, may I ask this question? Is it not strange that the Indian and Pakistan communities in overseas countries, of which there are many, have never assimilated themselves with anybody, so far as I know? So that it is not our fault that there is no assimilation, but perhaps the fault of other people.
LORD CHAMPION: My Lords, even if we do not succeed, we must at least try to assimilate them; and this, I think, is the task that now lies before us.
I lived through the decade of the depression of inter-war years in Wales, when the only chance of a job for so many Welsh people was to leave Wales for Slough and other English towns. By a great many people in these English towns their coming was deeply resented. They took the houses that were in short supply and stretched to the utmost the educational facilities then available. Their accent was different when they spoke English, and if they spoke their native tongue that was much worse, for then they really were foreigners. Stories grew up that they used their baths for storing coal, and all the rest of the nonsense of their supposed inferiority to the old English inhabitants; just as, to-day, the story of the vice dens of the coloured people in our midst gains wider and wider acceptance. But with the passage of time the Welsh people in those communities have become completely integrated or assimilated; and now, in all probability, they are prepared to join in the resentment at the new strangers in their midst.
The cure for present resentments, as has been said often to-day, is partly time, and partly the solving of the housing, educational, health and welfare problems, as my noble friend said in his opening speech. Action to prevent coloured persons from being discriminated against is foreshadowed, and I think that it will not be long before we shall see a Bill on this vital subject before your Lordships' House.
The problem of the desire of so many to leave their warmer homelands is to be solved only by helping them to solve the problem of unemployment which drives them away. This has been referred to by the noble Lord, Lord Hailes, and by other noble Lords. People really do not want to come into hostile surroundings and into our climate, which certainly does not suit them. All they want is a job. The noble Duke and the noble Lord, Lord Milverton, both said that, despite our economic difficulties, we must accelerate our help, both in money and technical aid, to try to get as rapidly as possible to the point where Commonwealth citizens will not find it necessary
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to leave their homelands to come here in search of a job. The sooner this is achieved, the better for everyone concerned.
The noble Duke suggested that the Commonwealth Department might help through various agencies on birth control. This I would regard as being a matter on which we ought to give every help that is possible. Earlier this year the attention of the Commonwealth Governments was drawn to the fact that this country will accept requests for practical assistance in family planning. The Government are fully aware of the importance of the control of births where population explosions are taking place. But, of course, the noble Duke will know this, because he was in the Commonwealth Office at the time when this offer was made.
The noble Lord, Lord Dilhorne, talked about evasions. There is a study proceeding on the whole of this question, including the evasions of restrictions, but a solution is far from easy. As I understand it, we cannot impose on people coming in here from the Commonwealth restrictions that would be less favourable than those imposed on aliens, and this appears to be part of the difficulty. I am sure that the noble Lord knows much more than I do about the difficulties in this field, but I can assure him that the Home Secretary is now studying this aspect, and I hope that flowing from his study will be action both on evasions and on the whole question of the control of immigrants.
My noble friend Lord Royle suggested that coloured Commonwealth citizens in this country should be dispersed. This would be extremely difficult to achieve. For one thing, they want to go, and ought to go, to places in which they can find work; and even if it were right to consider spreading them over the whole country, that could hardly be achieved without some kind of direction of labour, supported by measures of compulsion. To this we would not agree. We dislike direction of labour. We do not like the compulsions that this sort of thing would necessitate.
My noble friend Lady Summerskill made an outstanding but disturbing speech. I am sure that she intended to do precisely that. The point she made, about the way we are draining so many of the Commonwealth countries of the skills and brains which they so badly

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need, is a problem which I must admit has disturbed me, as it has disturbed her. The people who come here under the Category "B" Voucher Scheme are clearly draining the brains and skills of these Commonwealth countries, and inevitably this will increase the difficulties of these countries in facing up to the problems which they must face in the future. Frankly, I am bound to admit that I do not see a solution.
But surely this is the sort of point that ought to be discussed with the Commonwealth countries concerned when the meetings which my noble friend and I have foreshadowed take place, and I will certainly do my uttermost to ensure that my noble friend's remarks are brought to the notice of the Ministers who will be discussing this whole question with the Commonwealth Governments. I cannot do more than that. But I certainly agree with my noble friend about the situation created by this brain-drain.
I am not going into the question of the revision of history books, though I would agree with my noble friend on this point. In my early days of study of the economic history of this country, I thought that the history books needed revision in a different direction. I was not so much interested in the kings and queens as in the social history of the people, and I wanted to get the history books turned in that direction. I understand my noble friend's point, which is certainly worthy of consideration.
The noble Baroness, Lady Swanborough, told us that her contribution to the debate would be humdrum and commonplace. No contribution by the noble Baroness could be either of those things. I am bound to thank her, on behalf of the past Government, and I am sure of this one, for the work of her Committee, at the centre of which she has been so very much a part. I thank her for the reports. Action has already been taken, I understand, on some of the recommendations of the first two reports—that is, on housing and education. The third report has been but recently received, as the noble Lady knows, and is now in process of being studied. I must say that hers was the sort of speech that I should have liked to make myself. I endorse her welcome of the Church's contribution to the
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housing problem for immigrants, mentioned by the right reverend Prelate the Lord Bishop of Liverpool. The ministry certainly strongly approve of the Church's practical approach to this problem.
I come now to the last point I want to make, and it is on intolerance. Part of the problem of the immigration of these people is that, whilst economically we needed them, socially we were, and still are, unprepared for them. Our hospital services would be in tremendous difficulties without them. London's Underground would be in a sorry plight if the stations and trains did not have them available to ensure that the system kept running. We were unprepared for them physically, and even more so mentally. We tend to pride ourselves on being a tolerant people, and possibly with some justification; but we cannot claim total immunity from intolerance. We have to try to understand the causes of intolerance, and by education and example endeavour to remove them. All of us who pride ourselves on our tolerance must show, by our every word and action, our abhorrence of racial discrimination wherever it is practised.
It is not enough that we say that we deplore apartheid in South Africa, or the colour bar in the United States, at thousands of miles distance. We have simply to educate ourselves out of it on our own doorsteps. The Nazis were intolerant of Jews and carried it to its logical conclusion. It led to extermination and to the horror of Auschwitz. The intolerance of the Africans for the whites, carried to extremes, led to the massacres in the Congo. To learn to tolerate and then to love our neighbour is, as I understand it, the Christian doctrine.
Racial intolerance I can understand, for its roots are deep in history, and if we are ever going to get a peaceful world we somehow have to educate ourselves out of it. To some extent, in this we have to show tolerance even for the intolerant, where that intolerance stems from ignorance, as so much of it does. That is why, to some extent, we want to revise our history books, because intolerance stems from ignorance. But where racialism rears its ugly head for personal profit or for unworthy political ends by people who should know better, then the only thing to do is to stamp it out.

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It was exploited, I would say deliberately, for political ends in Smethwick and Perry Barr, and I was glad to see that every responsible Tory leader repudiated it in the, debate in the other place. I would agree with the noble Lord, Lord Conesford, that it is right that electors should discuss this immigration, because it is a matter of importance to them. But to stimulate the feeling that existed in Smethwick and Perry Barr deliberately for political ends was a vile thing; and I very much agree with my noble friend Lady Gaitskell on this aspect. I should have thought it was quite right that this thing that happened in Smethwick and Perry Barr should be repudiated by every decent person. I am sure that what the Prime Minister tried to do, in his speech in the debate on the Address, was to stamp on racialism when it did raise its ugly head. And I certainly do not—and nor would he wish me to—make from this Box to-night the slightest apology for his speech.
LORD DILHORNE: My Lords, the noble Lord realises that we have not to-day, and quite deliberately, raised this issue of Smethwick and Perry Barr, which he has raised. If I had known he was going to do so, I should have had a great deal to say. We accept no responsibility for the kind of words the Labour Party have tried to put in our mouths about this. Our position was made plain in another place. When the noble Lord tries to introduce the words of the Prime Minister about leprosy, if he is not prepared to apologise for that, then I think he should think again.
LORD CHAMPION: The word "leper" was used c; early as a synonym for outcast, and I should have thought, in the circumstances, it was quite right that it should so be used. I probably should not have referred to this to-day had it not been referred to by the noble Lord, Lord Conesford, and others. I do not want to enter into this too deeply to-day, but I felt I ought to say what I have just said about the whole business. We shall have to forget the whole matter that occurred during the last Election as soon as possible. But I want to appeal to everyone to try to ensure that we bring about an integration or assimilation of those people who have come here, because I believe only
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in this way can we ensure a continuance of the Commonwealth in which we all believe.
LORD DILHORNE: My Lords, before the noble Lord finishes, may I remind him that I put to him some questions about the numbers to be admitted in future? He has not dealt with this point in his speech to-night, and I do not know whether he is in a position to do so. I do not press him to give me an answer to-night, but will he say he will give me some information as soon as he can?
LORD CHAMPION: I said that the whole question of the control, which included numbers as well as the other aspect, was under consideration by the Home Secretary.
LORD DILHORNE: I am afraid I must press the noble Lord on this point. It was not the whole question of control I was asking about. What I am asking—and I will put it quite specifically—is what numbers are going to be admitted under this Act in the next period ahead. I think that if the noble Lord does not know the answer he should at least find it out, because, if this Act is to be operated, a decision about numbers must be reached. I should like to know what the numbers are, and for what period.
LORD CHAMPION: The total numbers will not be available unfit the Home Secretary has completed his study. But I can give the noble Lord this assurance: that as soon as the Home Secretary has arrived at a decision we will try to ensure that it is made available, both to the noble Lord and to the House as a whole.
LORD DILHORNE: I really cannot leave it there. Does that mean that no immigrants are being admitted until the Home Secretary has reached his decision? If it is not that, how many immigrants are being admitted, and for what period does this ceiling which is being imposed run? I think the noble Lord must have misunderstood me, but I want that information, if he can give it to me.
LORD CHAMPION: My Lords, as I understand it, the Home Secretary is

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continuing the figure which existed when the last Administration went out of office, and this will be continued at what, I think, is 400 a week until such time as he has completed his survey.
On Question, Bill read 2a, and committed to a Committee of the Whole House.
House adjourned at eleven minutes past eight o'clock.