Sitting of 9 December 1964

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  CLYDE NAVIGATION ORDER CONFIRMATION
  Bill to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act 1936, relating to the Clyde Navigation (to be proceeded with under section 7 of the Act), presented by Mr. Ross (under Section 7 of the Act); and ordered to be considered upon Tuesday next and to be printed. [Bill 45.]
ORAL ANSWERS TO QUESTIONS

  PAYMASTER-GENERAL
  Mr. Kershawasked the Paymaster-General where his official office is; and where he carries out his duties.
  The Paymaster-General (Mr. George Wigg): 70, Whitehall, S.W.1.
  Mr. Kershaw: Is it not a fact that, as we all know, the right hon. Gentleman has an office in No. 10, Downing Street? Why is he so ashamed of that? Why does he not own up? Is it really necessary for the Minister in charge of security services to be so constantly in the Prime Minister's pocket?
  Mr. Wigg: The last part of the hon. Member's supplementary question is in the same mood as one would expect from him. As regards the Question, if the hon. Member cares to turn to page 156 of Vacher's Parliamentary Companion he will get all the information he wants.
  Mr. Robert Cooke: Can the right hon. Gentleman be a little more explicit about his duties? Is he aware that this morning I went into one of the doors between Downing Street and Whitehall and asked whether somebody was there, and I—
  Mr. Speaker: Order. Neither the Question nor the Answer deals with duties. It is about the local situation.
  Mr. Cooke: Perhaps, Mr. Speaker, I can come on to the local situation. Is the right hon. Gentleman in charge of guarding all the doorways of Whitehall? Is he aware that several of his doorkeepers have never even heard of him?
  Mr. Wigg: I cannot be responsible for hon. Member's inquiries—I do not doubt that they are diligently and intelligently pursued—but if he looks at the Answer given by my right hon. Friend the Prime Minister on 12th November he will get all the information he wants.
  Mr. Kershawasked the Paymaster-General how many official letters he has written and received since taking office; and how many of them have been from or to hon. Members.
  Mr. Wigg: The information is not readily available and it would not be in the public interest to devote time and effort to obtaining it.
  Mr. Kershaw: Does the right hon. Gentleman seriously mean that he has written more than double figures in letters since he got into Downing Street? How does he carry on? Does he do it all viva voce? Will he recognise that there is a serious point here? Will he recognise that there is serious misgiving that in a democratic country the control of the security services should be in charge of a party political Departmental Minister? Will he realise that that is the basis of our anxiety about him?
  Mr. Wigg: It must be a matter for the House whether the hon. Member's supplementary question has anything to do with his original Question. If the hon. Member wants to question the nature of my duties, as he has done on a previous occasion, I suggest that he uses the Order Paper and endeavours to obtain the information.
  Brigadier Clarke: Does the Paymaster-General think that his new post pays as good a dividend as the last one he held with the Racecourse Betting Control Board?
  Mr. Wigg: If the hon. and gallant Member's innuendo means that I profited personally from the Racecourse Betting

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  Control Board, he knows perfectly well that not only could I take no salary, but that I took no salary, and I never even claimed expenses. I suggest, therefore, that he puts that in his pipe and smokes it.
  Brigadier Clarke: I was not being rude to the right hon. Gentleman. I was asking about the facts.
  Mr. Speaker: Neither rudeness nor anything else about this topic must continue.
  Mr. Kershaw: On a point of order. In view of the resolute refusal of the right hon. Gentleman—[Interruption.]
  Mr. Speaker: Even the notice was irregular, but I will treat it as though it was not.
  Mr. Manuel: He is an irregular fellow.

  SCOTLAND

    Young Children (Part-Time Education)
    Mr. Benceasked the Secretary of State for Scotland how many children aged five years are receiving part-time education in Clydebank and Kirkintilloch; and what steps he is taking to remedy the situation.
    The Under-Secretary of State for Scotland (Mrs. Judith Hart): None in Clydebank; 56 in Kirkintilloch, all of whom are beginners in the primary department of one school. The authority is seeking additional staff required to bring part-time education to an end.
    Mr. Bence: My information is that in the Burgh of Clydebank a considerable number of primary school children are receiving only part-time education, and as we had under the previous Administration very savage cuts in our school building programme, would my hon. Friend take emergency steps to see that by prefabrication we can get accommodation so that these children may have full-time education?
    Mrs. Hart: I understand that at the beginning of the session there was one class of beginners at Clydebank having part-time education. I think the difficulty is largely shortage of staff rather than
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    shortage of accommodation. We are looking very closely at all the means we can take to increase staff.

    Voluntary Nursery Schools, Dunbartonshire
    Mr. Benceasked the Secretary of State for Scotland how many voluntary nursery schools there are in the County of Dunbartonshire under the auspices of the National Association of Pre-School Playgroups; and what steps he proposes to take to encourage such schools.
    Mrs. Hart: I understand that the Association has two member groups in Milngavie—of which one is registered with the local health authority. I think that the extension of these activities is essentially a matter for voluntary effort, which I hope will be encouraged by the Milngavie initiative.
    Mr. Bence: Would my hon. Friend consider recommending that some aid be given to these organisations, because they are doing excellent work? I feel sure that they would submit themselves to some surveillance and control. This is a highly desirable project, and I feel sure that some grant in aid would be welcomed by the Association.
    Mrs. Hart: One is very glad indeed to see these play groups embarked upon, because they are very useful. We give a small grant to the Nursery Schools Association and some local education authorities make grants. It is a matter which my right hon. Friend would need to discuss with local education authorities.
    Mr. Buchan: Would my hon. Friend consider the possibility of encouraging local authorities to start a nursery class in each school as a means of encouraging married women teachers to return to teaching?
    Mrs. Hart: We are very glad indeed to welcome local education authorities' provision of nursery classes where there are married teachers and we shall continue to encourage them wherever we can.

    Teachers (Widows and Orphans Pension Scheme)
    Mr. William Hamiltonasked the Secretary of State for Scotland if he will introduce proposals for a widows and

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    orphans pension scheme for the teaching profession as part of a comprehensive plan to increase the attractiveness of teaching as a profession.
    Mrs. Hart: My right hon. Friend initiated on 4th December the formal consultations required by the Education (Scotland) Act prior to the introduction of such a scheme. My right hon. Friend hopes soon to have the views of the representatives of education authorities and of teachers who have been consulted on the terms of the scheme proposed.
    Mr. William Hamilton: Will my hon. Friend give an assurance that she treats this problem with the urgency which it deserves, and which has not been evident for many years past? Is she aware that there are cases of considerable hardship arising out of the lack of such a scheme, and will she give an assurance that the whole matter will be discussed with the teaching profession as a whole because of the tremendous teacher shortage we are cursed with?
    Mrs. Hart: I can assure my hon. Friend that we are regarding this as a matter of great urgency. We are consulting the various bodies concerned in presenting draft regulations by the beginning of the year and bringing the scheme into operation from 1st April. I can tell him that, as he probably knows, the working group with which the teachers themselves were closely involved was concerned in preparing the scheme we are to introduce.

    Scottish Planning Board
    Mr. Edward M. Taylorasked the Secretary of State for Scotland what will be the terms of reference of the proposed Scottish Planning Board; how many members will serve on the Board; and what is the estimated annual cost of administering the Board.
    The Minister of State, Scottish Office (Mr. George Willis): The Board will, under my right hon. Friend's general direction, co-ordinate the relevant work of the Government Departments concerned in the formulation and execution of plans for regional development in Scotland. Its chairman will be an officer of the Scottish Office and its members will be drawn from the various Departments concerned. It may not be possible
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    for the annual costs of administering it to be separately identified in the expenditure of the various Departments.
    Mr. Taylor: While thanking the hon. Gentleman for his reply, may I ask him whether he will not agree that, while this work of the Scottish Planning Board has been promoted with some enthusiasm for many years by hon. and right hon. Members opposite, the people of Scotland still, even after his reply, have no clear idea as to precisely what the Board is to do? Would he state once for all whether the Board will have any executive powers, because if it does not have executive powers it will merely be a talking shop of well-meaning people clogging up the administrative machinery in Scotland?
    Mr. Willis: Yes, it will. I think probably the best thing would be for the hon. Gentleman to await the announcement which is to be made by the First Secretary of State within the next day or two concerning these boards.
    Mr. Noble: While being only too delighted to await the statement, may I ask the hon. Gentleman to tell me whether there is any difference between the answer he has given on this and what the Scottish Development Group has in fact been doing for the last two years?
    Mr. Willis: The important difference will, of course, be that this will be a much better equipped group to deal with the question of economic planning. In other words, we intend to give it some economic content.
    The Earl of Dalkeith: While, no doubt, nobody would deny the need for planning, can the hon. Gentleman say whether he is having any effective discussions with the Chancellor of the Exchequer as to whether the necessary money will be made available for implementing these plans?
    Mr. Willis: I think the hon. Gentleman had better wait till the announcement is made by the First Secretary.
    Mr. Woodburn: Is my right hon. Friend keeping in mind the necessity of not waiting till complete plans are ready before action is taken, so that where it is clear that certain money can be made available and a plan is

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    already in existence, as, for instance, that for the Great Glen, and it can be seen to fit in with the ultimate plan, action can be taken on each part as it becomes possible?
    Mr. Willis: This will in fact be done. Work which is to be done and can be seen to be of a kind which will fit into the plan will in fact be proceeded with.

    Local Government
    Mr. Edward M. Taylorasked the Secretary of State for Scotland if he is aware that comprehensive reorganisation of the structure of local government in Scotland is required; and when he intends to submit proposals to the House to achieve this.
    The Under-Secretary of State for Scotland (Dr. J. Dickson Mabon): I have nothing to add to the reply which my right hon. Friend gave to my hon. Friend the Member for Fife, West (Mr. William Hamilton) on 11th November.
    Mr. Taylor: While appreciating the guidance which the right hon. Gentleman gave on that occasion, may I ask whether he would not agree that what Scottish people are concerned about is that local government in its present form is increasingly unable to carry out the functions given to it in ever-increasing amounts since 1929? Can he give an assurance that he will further the impetus given to this programme by the White Paper issued last year?
    Dr. Mabon: On the first part of the question, yes. On the second part, we are taking every step we can to have this very complex matter properly examined before making a decision. A precipitate decision would probably be the wrong one.
    Mr. G. Campbell: Can the hon. Gentleman say whether the Government are continuing the committee of local authority associations which has been studying this problem?
    Dr. Mabon: Yes.
    Mr. Gregor Mackenzie: Is my hon. Friend aware that the principal concern is with local government finance, particularly the burden placed on many local authorities in the past decade, and that we shall make little progress in
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    modernising the structure of Scottish local government till we solve this basic problem of money?
    Dr. Mabon: Yes. My right hon. Friend made that point perfectly clear in his Answer on 11th November, and it is absolutely essential to our consideration.
    Mr. Brewis: Is the hon. Gentleman aware of the difficulty of administering remote rural councils if the centre of regional government is to be over a hundred miles away? Will he be able to get representatives to go all that distance?
    Dr. Mabon: I really cannot anticipate whatever recommendations there may be from the working party. I am sure that very pertinent point will be uppermost in the working party's mind.

    New Hospital, Airdrie
    Mr. Dempseyasked the Secretary of State for Scotland if, in view of the need for modernised hospital accommodation, he will bring forward the starting date of the new general hospital to be built at Airdrie.
    Mrs. Hart: My right hon. Friend is at present reviewing the whole hospital building programme, but I think it is unlikely that he will be able to bring forward the starting date for this scheme.
    Mr. Dempsey: Is my hon. Friend aware that competent medical opinion has described hospital accommodation, with the exception of the new Bellshill Maternity Hospital, as being half a century out of date, and is she aware that part of the delay is due to the planning taking place at the present time? Will she ask her right hon. Friend to get cracking on the project? Let us have this hospital much earlier than was anticipated, because of the urgent need in this community.
    Mrs. Hart: I appreciate much of what my hon. Friend has said. In fact I can assure him that there have not been holdups because of planning delays. The regional hospital board has been planning seven district hospitals in this area. On that part of my hon. Friend's supplementary question about bringing the work forward, the problem is the urgent need

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    for hospital accommodation all over Scotland. That is why we shall be reviewing the hospital programme as a matter of urgency.

    New Schools, Airdrie and Coatbridge
    Mr. Dempseyasked the Secretary of State for Scotland if he will authorise the starting of the new schools for Airdrie High School and Coatbridge St. Patrick's High School, for January-February, 1965; and if he will make a statement.
    Mrs. Hart: I understand that Lanarkshire education authority proposes to start these projects as soon as it is ready; the likely dates are, respectively, autumn and spring 1965.
    Mr. Dempsey: Yes, but is my hon. Friend aware that on two or three occasions we were told that these schools were earmarked to be started at the beginning of 1964? Is she aware that at Airdrie High School we are using accommodation condemned 40 years ago and that at St. Patrick's School we have the most deplorable and shocking overcrowding situation imaginable in Scotland at present? In view of the urgency, and the high rate of unemployment in this part of Lanarkshire, will my hon. Friend give us some hope of starting the work earlier, even though the money may be borrowed in the next financial year?
    Mrs. Hart: The difficulty here is not one of anticipating the money allocation. Airdrie High School is a large and complicated project, and it is now going to start in the autumn. I do not see that there is any possibility of the education authority itself bringing it forward. St. Patrick's High School is due to start in the spring, but if it should start a little before the present financial year ends, there will be no objection coming from us.

    Fishing Limits (Conservation Zones)
    Mr. G. Campbellasked the Secretary of State for Scotland to what extent, following the recent extension of fishing limits, he has considered the possibility of alternating conservation zones so that they are not permanently fixed, as at present, within the three-mile belt; and if he will make a statement.
    Mr. Willis: The restrictions on certain methods of fishing inside the threemile
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    belt were made primarily in the interests of small boat fishermen; where their purpose is conservation it is to protect plaice nursery grounds, which are nearly all inside the three-mile belt. My right hon. Friend can see no advantage, therefore, in the hon. Member's suggestion.
    Mr. Campbell: Is the hon. Gentleman aware that this idea is supported by experienced skippers of inshore fishing boats in the north of Scotland, and probably elsewhere, and that the idea is that over periods of perhaps five or 10 years some of the area between three and six miles might be put into conservation, while the area from the shore up to three miles might be brought into fishing use? A long-term rotation of this kind could be beneficial.
    Mr. Willis: It is difficult to see how this proposition would affect the plaice beds. It would not affect them at all. With regard to other forms of fishing, fish migrate from belt to belt. There does not seem to be anything to be achieved by changing the present procedure.
    Mr. Hector Hughes: Does my hon. Friend realise that the complications from which Scottish fishermen in the North Sea suffer already are great enough, and that the solution to their difficulties is not that indicated in the Question, but lies in protecting the existing rights—something which has not been done—and seeing that the fishing industry is properly preserved?
    Mr. Willis: I am not quite sure what my hon. and learned Friend is suggesting, or what he wants an answer to, but if he is suggesting that the Moray Firth should be closed, perhaps I might point out that this was debated when the new limits were imposed, and the decision at that time was that in the best interests of fishing nothing further should be done.

    Scottish Development Group (Studies)
    Mr. G. Campbellasked the Secretary of State for Scotland if the studies of the Highlands, the Border, the northeast and the south-west of Scotland, which were undertaken by the Scottish Development Group, are being continued.
    Mr. Wolrige-Gordonasked the Secretary of State for Scotland whether he is continuing the study of the development plan for the north-east of Scotland; and what immediate proposals he has to make.
    Mr. Willis: All these four studies are being pressed forward as quickly as possible within the framework of the Government's policies for the country as a whole.
    Mr. Campbell: Will the hon. Gentleman give us an assurance that the thorough studies and sincere searches for solutions which have been carried out, and are being carried out, through the Scottish Development Group with the local authorities and other bodies concerned will not be prejudiced by ill-considered decisions and measures taken for purely doctrinaire reasons?
    Mr. Willis: Yes, Sir.
    Mr. Wolrige-Gordon: Is the hon. Gentleman aware that my Question applies mainly to the north-east development area of Scotland where recent Government measures, in particular the surcharge and the petrol duty, are causing real difficulty to two firms, due to the geography of the area, and also to the varied nature of their businesses? Is the hon. Gentleman aware that this has come at a time when we have just begun to break the unemployment difficulties of the area, and that there is a real need for him to treat the development areas as special areas and to try to gain some alleviation for their economic problems in that way?
    Mr. Willis: That is hardly related to the hon. Gentleman's Question which asks whether the study of the plan for the North-East is continuing. The answer to that is "Yes". The second part of the Question is whether there are any immediate proposals to be made. The answer to that is that we are awaiting the report of the Planning Group on the North-East.
    Mr. Bruce-Gardyne: Will the hon. Gentleman assure us that there will be no delay in the publication of the study for north-east Scotland, and that the north-east section will not be delayed to enable the Government first to complete their plans for a Scottish Planning Board?
    Mr. Willis: Yes, Sir.
    Mr. Monro: Can the hon. Gentleman give any indication of the approximate date when the south-west plan will be published?
    Mr. Willis: We expect all the plans to be put forward by the middle of next year. It has not yet been decided how best to publish them.

    School Building (Finance)
    Mr. Russell Johnstonasked the Secretary of State for Scotland whether he will review the allocations of money for school building in Scotland over the next three years.
    The Earl of Dalkeithasked the Secretary of State for Scotland what proposals he has for altering the existing financial provisions for school building in Scotland.
    Mrs. Hart: The factors determining the amount of investment for school building include the capability of the building industry, the general economic position, and the rate of economic growth. Whilst at present my right hon. Friend can hold out no prospect of increasing the allocations, he will keep the position under close study.
    Mr. Johnston: Is the hon. Lady aware that that reply will cause some disquiet, as indeed did the announcement of the allocation of money during the last Administration? This cut-back in allocation will postpone the much needed improvement of school buildings, and, secondly, it seems to be in direct contradiction of the intention to raise the school leaving age to 16 by 1970.
    Mrs. Hart: The raising of the school leaving age by 1970 presents its own special problems. On the general question of the allocation of money for school building, we are confronted with the economic circumstances in which we find ourselves, and there can be no way out of this at the moment.
    The Earl of Dalkeith: Does the hon. Lady realise that during the election campaign her party made considerable play of the school building cuts? Does her Answer mean that that campaign was mere electioneering, and was sheer humbug?
    Mrs. Hart: It means that we had not quite anticipated the extent of the economic disaster which the party opposite left us.
    Mr. Noble: Will not the hon. Lady admit that the economic situation of the country as a whole—and I do not accept her description of it—has very little to do with the particular needs of Scotland for which her right hon. colleagues have done nothing?
    Mrs. Hart: The right hon. Gentleman will, I think, be looking back at his own period as one of rather less than nothing if this is the definition he applies to what we are trying to do.
    Mr. Noble: Is the hon. Lady suggesting that over the last two or three years Scotland has not had very considerably more than her share of money both for education and for other things, and is not this to continue?
    Mrs. Hart: What is quite clear is that Scotland will continue to get her fair share of everything that is going. What is also clear is that we have a great deal of catching up to do.

    Educational Facilities, Inverness
    Mr. Russell Johnstonasked the Secretary of State for Scotland whether he will take steps to assist the county council of Inverness to provide the necessary educational facilities for the incoming population anticipated as a result of the pulp mill, without detracting from their programme in other parts of the county.
    Mrs. Hart: This assistance is already being given.
    The last of the projects required by the pulp mill development should be started by the end of the financial year. The investment allocations take account of these additional needs.
    Mr. Johnston: But is not the hon. Lady aware that what in fact happens is that money which would otherwise be spent in other parts of the county has to be channelled to meet the problems of the pulp mill? Does not this detract to some degree from the regional development benefit which one gets from such a scheme?
    Mrs. Hart: I appreciate the point made by the hon. Gentleman, but less than half the value of the work in the Fort William area is directly attributable to the pulp mill. The rest was in the normal course of the school building programme. The allocation ahead took full account of the authority's need to provide new places and to make reasonable progress with modernisation and replacement in the rest of the area.

    Strome Ferry Bypass
    Mr. Alasdair Mackenzieasked the Secretary of State for Scotland when work will start in the Strome Ferry bypass on road A.890.
    Dr. Dickson Mabon: I cannot say when it may be possible to authorise this bypass. My right hon. Friend will review highways needs in the Highlands in the light of the Highland study to be completed by the Scottish Planning Board next year.
    Mr. Mackenzie: Is the hon. Gentleman aware that the last Administration promised the local authority that this road would be started in 1963, and will he bear in mind the increase in tourist traffic in the area over the past few years?
    Dr. Mabon: I am so aware, and of the sins of the fathers as well. It is a fact that the Secretary of State for Scotland as far back as 1961 reached such an understanding, but this was based on a diversion of certain other road funds to which the Highland Panel itself took exception. I can only repeat the assurance that my right hon. Friend will review this in the light of the Planning Board's submission.
    Sir Harmar Nicholls: Is the hon. Gentleman aware that his right hon. Friend does not appear to be winning Cabinet battles for money as effectively as my right hon. Friend did?
    Mr. Speaker: That could not possibly arise from the Answer.

    A.9 Road (Conon Bridge)
    Mr. Alasdair Mackenzieasked the Secretary of State for Scotland when work will be started on a permanent replacement for the temporary Bailey bridge on the A.9 road at Conon Bridge.
    Dr. Dickson Mabon: My right hon. Friend is seeking powers to build the bridge. The design work for the bridge and the making of a Trunk Road Order are expected to take at least a year. We hope, therefore, that work will start early in 1966.
    Mr. Mackenzie: Will the hon. Member remember that this Bailey bridge has been in existence for eight years and that it was made necessary because of the heavy traffic going to Dounreay, and also that. the Counties of Caithness and Sutherland were given all the bridges necessary to carry that traffic? Will he bear in mind the special circumstances that apply at Conon Bridge.
    Dr. Mabon: Yes. It is because I am aware of that, and also because we have a new Administration which is anxious to remedy many of the these difficulties, which have persisted for 13 years under the Government of the party opposite, that we are most anxious to proceed with this matter. My right hon. Friend is winning the battles in the Cabinet for road bridges such as this.
    Mr. Noble: If that is so, will the hon. Gentleman tell us why his hon. Friend, when answering a supplementary question just now, said that all that we wanted for Scotland was a fair share on a population basis?
    Dr. Mabon: I am surprised at the right hon. Gentleman, with all his knowledge, quarrelling over a phrase like that. It is the fact that we are arguing the case on a population basis and, as my hon. Friend said in her concluding remarks, on a basis of need. This work we shall pursue with more success—I say this in all modesty— than the right hon. Gentleman and his predecessors.

    Solway Barrage Scheme
    Mr. Monroasked the Secretary of State for Scotland if he will initiate a full investigation into the Solway Barrage Scheme.
    Mr. Willis: A preliminary investigation of these proposals has already been made. The next step is for the new planning machinery to examine the project, along with similar proposals for Morecambe Bay, in the context of the very substantial and competing claims on the nation's capital investment resources over the coming years.
    Mr. Monro: I thank the hon. Gentleman for that reply, but can he assure me that the county councils and local authorities concerned will be brought into the discussion before a decision is made?
    Mr. Willis: The Scottish Development Group has already had discussions with the local authorities on both sides of the Border and also with the North-West Study Group on this matter, as a result of which they have reached certain conclusions. They have also had discussions with Dr. Drew and experts from Strathclyde University. This has established the fact that the feasibility of impounding fresh water in the way proposed requires a further technical survey, which in itself would be a very considerable undertaking. That will be considered in due course.
    Mr. Dalyell: Can pressure be put upon the Atomic Energy Authority to be helpful also?
    Mr. Willis: When the planning machinery is set up and takes over the consideration of this project it will consider anything that is likely to assist it.

    Burghs (Grants)
    Mr. Bakerasked the Secretary of State for Scotland if he will regard burghs of population of 2,000 and under as part of the landward areas of counties for grant purposes.
    Dr. Dickson Mabon: The general grant distribution formula will be considered as part of the comprehensive examination of local government finance which is now in progress. The question whether burghs of under 2,000 population should be regarded as part of the landward area for grant purposes is being kept in mind, but we must look at the whole pattern of grants and rate levels.
    Mr. Baker: Is the Under-Secretary aware that in the county of Banff there are 11 small burghs, seven of which have a population of under 2,000, as a result of which great hardship is felt throughout the county? Is he aware that this applies not only to Banffshire but to other Scottish counties, and that we feel that these counties have a real hardship problem? Will he take urgent action to see that they receive redress and assistance?
    Dr. Mabon: I agree that the formula has not been to the advantage of Banff County, but the average rate payment per household in Banff is £20 19s., which is still well below the Scottish average of £32 14s. I am afraid that my right hon. Friend could not contemplate any change in the present grant arrangements until the general review has been completed.
    Mr. G. Campbell: I realise that no formula will suit every county, but after the review will the hon. Gentleman give special consideration to the problem of Banffshire and similar counties, because they really have a special difficulty?
    Dr. Mabon: It will all be considered when the review is going on—not before or after, but in the review—because the review must be essentially a Scottish one as well as having a relationship to the whole of the United Kingdom.

    Moray Firth (Fishing Limit)
    Mr. Bakerasked the Secretary of State for Scotland if he will remove the three-mile fishing limit in the Moray Firth, particularly with reference to seine net boats.
    Mr. Willis: My right hon. Friend is advised that there are important plaice nurseries within the three-mile limit in this area and that it would not be in the best interests of the fisheries to do as the hon. Member suggests.
    Mr. Baker: Is the Minister aware—in fact, I know that he is, because he has already said so—that the three-mile limit was imposed to protect the small line net boats? Cannot he say that areas could be designated for the protection of plaice beds and so on, instead of the lineal areas that exist at the moment? Is he aware of the frustration of the seine net boat fishermen at not being able to fish in areas where there is an abundance of fish in bad weather?
    Mr. Willis: I am aware that some—not all—seine net fishermen would like this arrangement to be made, but we must also consider the line and creel fishermen, who would also have very strong objections if we gave effect to the proposal made by the hon. Member.
    Mr. Wolrige-Gordon: Is the hon. Gentleman aware that there is not only
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    a need for conservation of our fish stocks in many instances but also a need for their active development?
    Mr. Willis: Yes, Sir.

    Feu Duties
    Mr. James Hamiltonasked the Secretary of State for Scotland if he will set up a committee to examine the operation of the collection of feu duties in Scotland.
    Mr. Willis: My right hon. Friend is aware that the feudal system of land tenure has features that are open to criticism in modern conditions and he has the question of review under consideration.
    Mr. Hamilton: I thank my hon. Friend for that information, but is he aware that one of my constituents who is living in one of 16 flats which have been built in one feu was asked to collect all the feu duties of the remainder of the tenants or pay all the feu himself—and was told that if he refused he would be evicted from the house? Bearing this in mind, is my hon. Friend now prepared to give the matter further consideration?
    Mr. Willis: I am aware of the case to which my hon. Friend refers and, as I have said, my right hon. Friend is considering this together with the other aspects of the problem.
    Mr. McInnes: Will my hon. Friend consider the introduction of legislation to abolish the feudal system?
    Mr. Willis: As I said in my original Answer, we are at present considering the whole question with the object of seeing what steps should be taken to bring it into line with modern conditions.

    School Accommodation, Irvine
    Mr. Manuelasked the Secretary of State for Scotland if he will consult the Ayr County Council regarding the shortage of school accommodation in the Burgh of Irvine, and give it additional financial help, because of the educational problems arising from the development of this growth area.
    Mrs. Hart: My right hon. Friend is aware of the difficulties of providing new school accommodation in Irvine and

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    will remain in close touch with the education authority on its future school building programme. The investment allocations will continue to allow for the new education needs of expanding areas.
    Mr. Manuel: Is my hon. Friend aware of the expanding industrial growth in the Burgh of Irvine, leading to a larger school population? Does not she agree that that, coupled with the Glasgow overspill commitments, is leading to a situation in Irvine which is causing resentment among parents, teachers and others who are interested in school education? Will not she agree to consult Ayr County Council so that appropriate steps can be taken to deal with the problem, which arises as a result of Government policy and not education authority policy?
    Mrs. Hart: I know the general problem involved. My right hon. Friend will keep the needs of Irvine very fully in mind and will continue to discuss them with the education authority. He will certainly ensure that the educational implications of further population development are kept very closely in mind in considering future allocations. One is aware of the difficulties Irvine is facing. The authority is coping with the problems very well, although it cannot do everything at once.

    Forestry
    Mr. Nobleasked the Secretary of State for Scotland what consideration he has given to the setting up of a small department within the Scottish Office to deal with forestry; and if he will make a statement.
    Mr. Willis: The organisation of the Forestry Commission and the arrangements made by the Forestry Ministers for the discharge of their responsibilities are at present being reconsidered in the light of the Report on the Commission last Session by the Estimates Committee.
    Mr. Noble: Now that forestry interests are to go to a separate Ministry in England and as I am sure that the Minister of State believes that forestry is of the very greatest importance to Scotland, does he not think that there is a case for a small addition to the Scottish Office staff to deal particularly with forestry
    1538
    so that the Forestry Commission, landowners, farmers and others may have an independent body they can go to advising his right hon. Friend?
    Mr. Willis: Private woodland owners made certain complaints to the Estimates Committee about the present set-up, but they did not make this suggestion. With the establishment of a new Ministry this is clearly one of the questions which must be examined.
    Mr. Malcolm MacMillan: Will my hon. Friend consider at least the last Report of the Forestry Commission, whose main complaint with regard to the future planning of forestry was that the Commission was not getting the co-operation of landlords in the acquisition of land? Will he try to strengthen his Department in that respect to ensure that the Commission is able to plan forward for several years?
    Mr. Willis: I can assure my hon. Friend that we shall certainly ensure that the Commission gets the land it wants.
    Mr. Hendry: What steps are being taken under the new organisation to ensure that there is no misuse of public money by the giving of grants for forestry when grants have already been given for the use of land for agriculture in the past? Is there liaison between the forestry Ministry and the Department of Agriculture?
    Mr. Willis: The hon. Gentleman ought to wait until the appropriate Question is reached.

    Scottish Council
    Mr. Nobleasked the Secretary of State for Scotland what rôle he envisages for the Scottish Council; and if he will make a statement.
    Mr. Willis: I am sending the right hon. Gentleman a copy of a letter on this point which my right hon. Friend has written to Lord Polwarth as Chairman of the Scottish Council.
    Mr. Noble: I shall await anxiously the receipt of the letter. I am sure that the Secretary of State appreciates, as we all do, the amount of really hard and successful work the Council has done and I hope that he will be able to find real use for the Council in the future.
    Mr. Willis: We would wish to be associated with that tribute to the work of the Council. Arrangements for the future will allow the Council to continue the kind of work that it is doing at present.

    Economic Development, Aberdeen and North-East Scotland
    Mr. Hector Hughesasked the Secretary of State for Scotland what consultations he is planning to hold with Aberdeen Trades Council, Aberdeen Chamber of Commerce and Aberdeen Corporation in preparing national and regional plans to promote economic development in Aberdeen and north-east Scotland.
    Mr. Willis: When the Scottish Development Group has made further progress with the North-East Study on which it is engaged, there will be on-the spot consultations with a number of bodies in Aberdeen, such as those mentioned by my hon. and learned Friend.
    Mr. Hughes: Does the Minister realise that that Answer will give great satisfaction in northern Scotland? Does he also realise that during the last few years the inadequacy of such consultations has gone far to negative and frustrate any such plans for north-east Scotland, with the result that trade, industry and commerce have been neglected there and unemployment has grown?
    Lady Tweedsmuir: Is the Minister of State aware that his hon. and learned Friend has shown by his supplementary question that he is quite misinformed and that a great deal of work has gone on in consultation? Indeed, it was my right hon. Friends who initiated the North-East Study Group which the present Government are now continuing.
    Mr. Willis: I think that both my hon. and learned Friend and the noble Lady are quite correct.

    Welfare Foods
    Mr. Hannanasked the Secretary of State for Scotland if he is aware of the increase in the incidence of rickets in children in Glasgow, and that the uptake of vitamin welfare foods has declined by two-thirds in the last eight years, particularly since the imposition of increased
    1540
    charges in 1961; and if he will restore the free distribution of these foods.
    Mrs. Hart: My right hon. Friend is aware that there has been a sharp increase in the number of children treated for rickets in Glasgow, and that the uptake of welfare foods in Scotland is now about a third of what it was in 1956. I do not think that abolition of payment for welfare foods would in itself ensure that they are taken by the larger families in poorer housing areas who need them most.
    My right hon. Friend proposes to initiate more extensive studies of the prevalence of rickets and the diets and environment of young children in Glasgow and in other areas.
    Mr. Hannan: Although that Answer is not wholly satisfactory, there is, nevertheless, the hint of a change from the policy of the previous Administration, which initiated these higher charges, putting children's health at risk. Can my hon. Friend say anything of the results of Dr. Arneil's investigation in Glasgow into the nutritional value of these foods and the need for the education of young mothers? Is the return of this disease due to the lack of nutrition or to the latter reason, or to both?
    Mrs. Hart: Dr. Arneil's report, for which I think everybody must be very grateful, shows that there are several possible factors, one of which certainly is that young mothers tend not always to know what are the best foods on which to put their young children when they have been weaned. Another factor, however, is lack of sunshine, which affects families in tenement areas in Glasgow. Lack of sunshine leads to lack of vitamin D. These are the kind of factors which merit a more comprehensive survey so that more definitive answers can be given.
    Mr. Galbraith: Does what the hon. Lady has just said mean that it is really lack of education, not knowing the right diet, rather than lack of money which is at the root of the problem?
    Mrs. Hart: If the hon. Gentleman had listened more carefully, he would have heard that what he is suggesting is one factor. Clearly there are others. It is for this reason that a further study will be carried out.

    Agriculture and Forestry (Land Use)
    Mr. Brewisasked the Secretary of State for Scotland what outside impartial advice is available to him when deciding competing claims for land use between agriculture and forestry.
    Mr. Willis: In each case the views of the chairman of the Agricultural Executive Committee are sought in confidence to supplement the advice given by agricultural and forestry officials. Where crofting interest is involved the Crofters' Commission is consulted.
    Mr. Brewis: Would the Minister of State agree that, if fewer viable agriculture holdings had been planted up in earlier years, probably farmers would have been willing to give much more ground to forestry? Is it not essential that justice should appear to be done in land utilisation? Will he consider setting up a proper tribunal?
    Mr. Willis: I am not quite certain what kind of land the hon. Gentleman is referring to, whether privately-owned land or land which is acquired by the Forestry Commission.
    Mr. Brewis: Land which could be economically used for farming.
    Mr. Willis: There is a proper procedure for determining the use of land acquired by the Commission. The hon. Gentleman was given a full description of this on 16th July. He probably remembers it. No planning permission is required to devote part of land which is privately owned at present to forestry. I should have thought that the farmer would use his land to the best advantage.
    Mr. George Y. Mackieasked the Secretary of State for Scotland whether he is aware that, while the Forestry Commission has to satisfy the Department for Agriculture before using agricultural land for forestry, private owners are able to plant large areas of good agricultural land; and if he will take steps to control this situation.
    Mr. Willis: I would refer the hon. Member to the Answer my right hon. Friend gave to the hon. Member for Aberdeenshire, West (Mr. Hendry) on 1st December.
    Mr. Mackie: Is the Minister aware that this question relates very largely to
    1542
    the competing interests of farming and forestry; and that unless he takes steps to control the situation on private land he will find great difficulty in getting the two interests to co-operate over Forestry Commission planting? I hope that this forms a large part of the Minister's plans for development in Scotland. Does he not agree that this is an extremely important situation, and that he needs to take steps to control it?
    Mr. Willis: This problem does not arise to any considerable extent on land owned by the Forestry Commission. I think that during the past few years there has been an average of only one case a year coming to my right hon. Friend.
    Mr. Mackie: I am talking about private land. Is the Minister aware that in the north-east of Scotland large areas of good agricultural land have been planted because there are immense taxation advantages to a really rich landlord, and that this arouses immense resentment?
    Mr. Willis: I am aware now of the land to which the hon. Gentleman was referring, though he did not make that clear in his first supplementary question. As I said earlier, there is no control at the present time, and control could be obtained only by legislation. Up to the present it has never been thought that legislation should be introduced for this purpose.
    Mr. Galbraith: Does not land used for forestry rather than for agriculture give greater employment prospects, and is it not very useful to encourage it in those areas where we are worried about lack of jobs making people leave the land?
    Mr. Willis: There are a great many arguments about the respective merits of forestry and agriculture. As I understand that the land to which the hon. Gentleman refers is quite suitable for forestry there does not seem any reason why it should not have been afforested. I must admit that I did not know anything about the special taxation benefits that can accrue. We are certainly quite prepared to keep the matter under observation in order to see what happens, but up to now we have not really come across this problem in such serious form as to warrant legislation.

    Small Farmers (Scotland) Scheme
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland what plans he has for extending the Small Farmers (Scotland) Scheme.
    Mr. Emrys Hughesasked the Secretary of State for Scotland what plans he has for improving the Small Farmers (Scotland) Scheme.
    Mr. Willis: The question of how best to assist small farmers is one of the matters which my right hon. Friend will be considering in consultation with the agricultural industry in the coming months. I cannot anticipate the result of these discussions.
    Mr. Bruce-Gardyne: When the Secretary of State reviews the Scheme, will he bear in mind that there are a number of small holdings which were set up by the Department after the First World War and that the present distinction between farms of 22 acres and farms of 18 acres which the occupant is farming whole-time is somewhat illogical? Would the Government seriously consider whether the time has not come to eliminate the minimal level for the application of the Small Farmers Scheme and make it purely dependent on the number of days worked by the applicant on a holding?
    Mr. Willis: A large number of factors have to be considered. Clearly this is one of them.
    Mr. Emrys Hughes: Is my hon. Friend aware that one of the best ways to help small farmers in Scotland is to do something to reduce their rents? Is he aware that the disquiet of small farmers about their rents was recently expressed in a very interesting article in the Scottish Farmer? Some rents have doubled or trebled. That means as much as 2d. a gallon on milk. When the Government are revising their proposals for dealing with small farmers, will they keep in mind the absolute necessity for reducing their rents?
    Mr. Willis: My attention was drawn to that article.
    Mr. Baker: When considering help for the small farmers, will the hon. Gentleman bear in mind that some small farmers go in for potato growing, and
    1544
    so have more than the 500 man-days laid down in the Scheme? Will he consider that fact very carefully, and not too rigidly regard 500 man-days as the line of demarcation for future help?
    Mr. Willis: These matters are familiar to the farming interests, and to the organisations representative of farmers. As I said before, these questions are to be considered.

    Fishing Limits
    Mr. Hector Hughesasked the Secretary of State for Scotland if he will make a report on the recent operation of the extensions of Scottish fishing limits indicating the number and nature of international fishing incidents which have resulted from that extension; and if he will make a statement.
    Mr. Willis: Since the new fishery limits came into operation on 30th September, only one foreign fishing vessel, a Frenchman, has been detected fishing within the new limits off Scotland. This incident occurred on 1st October in the Firth of Clyde, and the vessel was warned and escorted outside the limits.
    Mr. Hughes: Does my hon. Friend realise that the fishing fleets in the North Sea are exposed to great danger and to limitations owing to recent legislation? What steps is he taking to see that the patrol vessels in the North Sea are sufficient for the purpose, having regard to modern scientific discoveries and inventions?
    Mr. Willis: As I understand it, the question of the patrol vessels has been looked into.

    Employment, Helmsdale
    Mr. George Y. Mackieasked the Secretary of State for Scotland if he is aware of the employment position in the Helmsdale district of Sutherland; and whether he will assist the Forestry Commission to obtain planting land in the Strath of Kildonan and elsewhere in order to double its planting programme.
    Mr. Willis: My right hon. Friend is aware that there is unemployment in the Helmsdale area, and he hopes that the Forestry Commission may be able to help. It wants to acquire more land there, and has recently begun a survey

    1545
    of the Strath of Kildonan to assess its forestry potential. It is also in touch with a number of landowners in the district.
    Mr. Mackie: Is the Secretary of State for Scotland prepared to use the compulsory powers for acquiring land that I understand he has if he wishes to use them?
    Mr. Willis: I think that we had first better wait for the result of the inquiry, and also for the approach to the land-owners. Up to the present, most landowners have been quite co-operative.
    Sir J. GilmourCan the Minister give an assurance that no agricultural land in the Helmsdale area will be planted with trees?
    Mr. Willis: It depends on what the hon. Gentleman means by "agricultural land".
    Mr. Noble: Does not the Minister think it a little odd that the hon. Member for Caithness and Sutherland (Mr. George Y. Mackie) should be trying to stop employment in the planting of trees in other constituencies, and gaining it in his own?
    Mr. Willis: I think that both supplementary questions were quite reasonable.

    Traffic Problems, Edinburgh
    Mr. Clark Hutchisonasked the Secretary of State for Scotland what asistance or advice his Department is giving to Edinburgh Corporation about the traffic problems affecting the city.
    Dr. Dickson Mabon: My Department is giving all posible help to the working party which the Corporation has set up to advise on Edinburgh's future road network and ancillary matters. The Corporation also consults the Department about short-term traffic management measures.
    Mr. Clark Hutchison: Does the Minister agree that the abolition of the suburban rail services has added to the trouble, and will he consult his right hon. Friend the Minister of Transport with a view to altering the law, and taking powers to reintroduce those services?
    Dr. Mabon: I agree that this is very relevant, although this Administration can hardly be held responsible for some of the plans of the past. The work now
    1546
    being done by the survey should demonstrate the extent to which the city depends on public transport. A wider survey may be undertaken later on, but that is very much a matter for consideration depending on the initial report.

    Taxi Fares
    Mr. Clark Hutchisonasked the Secretary of State for Scotland if he will seek power to control taxi fares in Scotland.
    Dr. Dickson Mabon: Town councils have adequate powers to control taxi fares by means of byelaws if they wish.
    Mr. Clark Hutchison: Does the Minister realise that taxi fares in Edinburgh are going up next month as a result of the fuel tax that has just been put on; and that this is hitting many of my constituents, and those of his hon. Friends? What does he intend to do about it?
    Dr. Mabon: The hon. Gentleman is strangely misinformed on that point. The increase was permitted by Edinburgh Corporation under legal enactments after the proposals had been advertised, and my right hon. Friend considered that adequate control. It has really no bearing on recent Government action.

    Civil Defence (Recruiting Campaign)
    Lady Tweedsmuirasked the Secretary of State for Scotland whether he will make a statement on the results of the Civil Defence recruiting campaign to date.
    Mr. Willis: During the third quarter of this year, when the campaign was at its height, 1,284 persons joined the Civil Defence services in Scotland, compared with 1,005 during the comparable period last year. Figures for October onwards are not yet available.
    Lady Tweedsmuir: What does the Minister intend to do about future recruiting campaigns for Civil Defence in order to try to get these figures?
    Mr. Willis: This matter has to be considered. It has not been considered yet.

    Wheatley Report
    Mr. Hannanasked the Secretary of State for Scotland when he proposes to introduce legislation to give effect to the proposals of the Wheatley Report.
    Mrs. Hart: Before the Christmas Adjournment, if at all possible.
    Mr. Hannan: I thank my hon. Friend for that reply. Is she aware that this stands in favourable contrast to the policy of delay, dither and procrastination of the party opposite, when in power?
    Mrs. Hart: My right hon. Friend will be grateful to my hon. Friend for those remarks.

    Local Authority Houses (Rents)
    Mr. Galbraithasked the Secretary of State for Scotland what proportion the average annual rent of local authority houses bears to the gross annual value of such houses.
    Dr. Dickson Mabon: Approximately three-quarters.
    Mr. Galbraith: That is only about 75 per cent. of the gross annual value. Does not the hon. Gentleman think that this is a very low figure for local authority tenants to pay? As most of them could pay the equivalent of the gross value, will he get his right hon. Friend to try to get local authorities to bring their rents up to the gross value figure, so that they will have more money to spend on helping those people who are really in need of houses?
    Dr. Mabon: The statutory obligation, as the hon. Member most assuredly knows, is on local authorities to decide these matters. The wider question of the financial relationship between local authorities and the central Government is under very thorough review but I cannot add anything at the moment.
    Mr. Galbraith: When will the result of the review be made public?
    Dr. Mabon: I hope that the review will be concluded some time in the spring or early summer, but I cannot say. It is an extraordinarily complex matter which the previous Government did not do much about.
    Mr. Edward M. Taylor: Apart from exceeding the average figure which the hon. Gentleman mentioned, does the hon. Gentleman know that there are many local authorities where the rents are well below that average? Is he in the meantime prepared to take steps to deal with
    1548
    that, particularly in cities like Glasgow where the average rent is less than half of the total cost of housing?
    Dr. Mabon: This Administration is very confident. We will trust the local authorities.

BUSINESS OF THE HOUSE
The Lord President of the Council (Mr. Herbert Bowden): Mr. Speaker, with permission, I should like to make a short business statement.
On Thursday, 10th December, the House will be asked to consider, in addition to the business already announced, the Motion on the Highlands and Islands Shipping Services.
In relation to Monday, 14th December, the business now proposed is the Second Reading of the Cereals Marketing Bill, which it is hoped will be obtained by seven o'clock, and of the Severn Bridge Tolls Bill.
Mr. Rankin: May I thank my right hon. Friend for the commendable speed with which he has proceeded in dealing with the Highland shipping undertaking?

AIRCRAFT INDUSTRY (COMMITTEE OF INQUIRY)
The Minister of Aviation (Mr. Roy Jenkins): With permission, Mr. Speaker, I will make a statement about the Committee which is to examine the future place of the aircraft industry in the British economy.
Lord Plowden has accepted the Government's invitation to serve as Chairman, and the Committee will have the following terms of reference:
To consider what should be the future place and organisation of the aircraft industry in relation to the general economy of the country, taking into account the demands of national defence, export prospects, the comparable industries of other countries. and the relationship of the industry with Government activities in the aviation field; and to make recommendations on any steps and measures necessary.
From this House the right hon. Member for Birmingham, Hall Green (Mr. Aubrey Jones), and my hon. Friend the

1549
Member for Edmonton (Mr. Albu) have agreed to serve on the Committee. The other members will be:

Mr. David H. Barran, who is a managing Director of the Shell International Petroleum Co. Ltd.

Mr. Fred Hayday, the National Industrial Officer of the National Union of General and Municipal Workers, and a former Chairman of the Trades Union Congress.

Admiral of the Fleet Sir Caspar John, who was, on his retirement, in 1963, the First Sea Lord, and is now Chairman of the Housing Corporation.

Mr. Christopher McMahon, an economist with the Bank of England and Fellow of Magdalen College, Oxford.

Sir William Penney, Chairman of the Atomic Energy Authority.

The Secretariat will be headed by Mr. Norman Craig, an Assistant Secretary in my Department, and the Committee will have every assistance it requires from my Department.
I would like to thank all the members of the Committee for agreeing to take part in this most important inquiry, and to wish them success and speed in their deliberations.
Mr. Maude: Is it intended that this inquiry should cover the whole of the aero-space industry rather than only the airframe and aero-engine industries?
Secondly, could the right hon. Gentleman give the House an assurance that the sitting of this Committee, which, presumably, will last not less than six months, will not cause postponement in the urgently necessary decisions to be made on the projects now under review in the industry?
Thirdly, could the right hon. Gentleman say what he expects the Committee to find out which his Ministry, with its considerable expertise and its access to expert sources, does not already know or can very easily find out?
Mr. Jenkins: The Committee will cover the whole field of what is now known as the aero-space industry.
I can give the hon. Gentleman and the House the assurance that there will be no question of postponing decisions on
1550
projects. These decisions, which, I hope, will be arrived at as quickly as possible, will be important fixed points for the Committee in its deliberations.
I would certainly hesitate to tell the hon. Gentleman or the House what I expect the Committee to tell me when it has deliberated.
Mr. Snow: Not with particular reference to the Concord project, but with reference to international collaboration on production, may I assume that the Committee will have that within its terms of reference to investigate the possibilities?
Mr. Jenkins: Yes, Sir. My hon. Friend will be aware that I specifically mentioned within the terms of reference the comparable industries of other countries. I am particularly anxious that the Committee should bear in mind in its work the possibility of international collaboration.
Sir A. V. Harvey: In this very important matter will the right hon. Gentleman bear in mind that in view of the many statements which have been made, and others which have not been made, many people employed in this and allied industries are going through a period of great anxiety? When the Government consider whether or not they should proceed with projects, will the right hon. Gentleman take into account the possibility of continuing the projects with other countries, which is very important? Finally, can the right hon. Gentleman say how long this inquiry will take?
Mr. Jenkins: I will bear in mind the points which the hon. Gentleman has mentioned. As for the period of inquiry, I have not attempted to set a fixed term to Lord Plowden and his colleagues. I want them to make a thorough review, a review which will lead to a long period of stability for the industry in the future. But I shall be very disappointed, and Lord Plowden knows and accepts this, if, a year from now, we have not only received the report of the inquiry, but have set to work to carry it out.
Mr. Bessell: Do the terms of reference permit the Committee to examine the future rôle of the Transport Aircraft Requirements Committee, or does this replace that Committee?
Mr. Jenkins: No, Sir. It does not replace it.
Sir Harmar Nicholls: In view of the Importance of the decisions which can flow from the report, may I ask the right hon. Gentleman whether, if the inquiry takes more than six months, he will consider calling for an intimate—[Laughter.]—interim report, so that he can take some action upon it?
Mr. Jenkins: I would hesitate to call for an "intimate" report. I did not fix a term of six months, though I hope that the Committee will not take very much longer. We had better see what approximately will be the time the Committee will need before we consider the question of a possible interim report.
Mr. Hastings: Will the right hon. Gentleman do his best to secure that the Committee pays particular attention to collaboration with European industries? Does he not agree that only in this way, in the long run, will Europe be able to compete with the American aero-space industry?
Mr. Jenkins: The hon. Member will not expect me to prejudge the findings of the Committee. I can only say with greater emphasis, in reply to him, what I said in reply to my hon. Friend the Member for Lichfield and Tamworth (Mr. Snow).

BILLS PRESENTED
  MINISTERIAL SALARIES AND MEMBERS' PENSIONS
  Mr. JenkinsBill to prescribe new rates of salary for Ministers of the Crown, for the Leader of the Opposition in the House of Commons, and for Mr. Speaker; to authorise the payment of salary to the Leader of the Opposition in the House of Lords and the Chief Opposition Whips in both Houses; to establish a contributory pensions scheme for Members of the House of Commons; to make further provision with respect to the pensions of Prime Ministers; and for purposes connected with the matters aforesaid, presented by the Prime Minister; supported by Mr. Herbert W. Bowden, the Chancellor of the Exchequer, and Mr. John Diamond; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 46.]
  REPRESENTATION OF THE PEOPLE ACT, 1949 (AMENDMENT)
  Mr. JenkinsBill to enable the wives of persons, who are employed abroad and prevented by the nature of their occupation from going in person to a polling station, to vote as absent voters in parliamentary elections, presented by Mr. Eric Lubbock; supported by Mr. Roderic Bowen, Dame Joan Vickers, Mrs. Lena Jeger, Dame Edith Pitt, and Mrs. Braddock; read the First time; to be read a Second time upon Friday, 29th January and to be printed. [Bill 47.]
ORDERS OF THE DAY

  MACHINERY OF GOVERNMENT [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to make provision with respect to the departments and salaries of certain Ministers, it is expedient to authorise the payment out of moneys provided by Parliament—

  (a) of any increase attributable to provisions of the said Act of the present Session in the sums payable out of moneys so provided under the Ministers of the Crown Act 1937 or any other enactment which provides for the salaries of Ministers;

  (b) of any sums payable under the said Act of the present Session out of moneys so provided in respect of the expenses of Ministers, including salaries or remuneration of members of their departments.

  Resolution agreed to.

  MACHINERY OF GOVERNMENT BILL
  Considered in Committee.
  [Dr. HORACE KING in the Chair]

  Clause 1.—(ADMINISTRATIVE PROVISIONS RELATING TO NEW MINISTRIES.)
  3.40 p.m.
  Mr. William Roots: I beg to move Amendment No. 1, in page 1, line 6, to leave out from the beginning to the second "the".
  The Chairman: I think that it will be for the convenience of the Committee if, with this Amendment, we take Amendment No. 18, in Schedule 2, page 5, to leave out line 5.
  Amendment No. 21, in Schedule 2, page 5, to leave out lines 13 and 14.
  Amendment No. 27, in Schedule 2, page 6, to leave out line 21.
  Amendment No. 31, in Schedule 2, page 7, to leave out line 8.
  Mr. Roots: Yes, Dr. King; I am much obliged.
  The Amendment I have moved relates, in particular, to the authorisation of the appointment of a Minister of Land and Natural Resources. The first thing that strikes me on reading the Clause is that it is so worded as, apparently, to apply
  1554
  to a Minister who is already in existence although, judging from the Bill, there is no existing authority for his appointment. I should be interested to know, first, whether, prior to the Bill, there was an existing authority for his appointment and second, apart from what is contained in the Bill, what are the statutory functions, if any, which he has been performing and what staff he already enjoys for the carrying out of the functions, statutory or otherwise. It seems to my right hon. and hon. Friends and myself that questions such as this must be answered before the Committee can properly decide whether to sanction the appointment.
  Some information was given to my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) on 26th November, in reply to a Question put to the Prime Minister. At the beginning of his Answer, the Prime Minister said that
  "The Minister of Land and Natural Resources will participate in the formulation of the national and regional plans for which the First Secretary of State has overall responsibility."
  My first comment is that, while it is, no doubt, vital that the Minister of Land and Natural Resources should participate in the formulation of those plans, I would hope that all Ministers would participate and I would not expect that in itself to be a justification for the appointment of a new Minister. So far as I know, these national and regional plans have not been defined in terms of statutory powers and duties, and, moreover—I say this subject to correction by the right hon. Gentleman—whatever is produced will not have statutory authority. So we still wait to see what place in the constitution those plans, valuable though they may be, will attain. Apparently, this Minister is limited to participation.
  The next heading given by the Prime Minister was that the Minister of Land and Natural Resources
  "will be generally responsible for the availability of natural resources".
  The Committee will realise that this covers an immense field which calls for further definition. On the face of it, it would include all mineral extraction and products from minerals such as cement, bricks and other commodities. I can put the question quite

  1555
  shortly: does it? The Committee is entitled to enlightenment on just how far this general responsibility for availability goes. If it covers what one might call the whole range, the Government will be taking over a vast new field which has not been primarily the responsibility of the Government before. Equally, if we think in terms of natural resources, the first which spring to mind are coal, gas and oil, and I assume that this could not be right. Plainly, further definition is called for.
  We are told that the Minister of Land and Natural Resources is to take over Forestry Commission policy. This leaves the further problem of his duties in connection with private forestry development and the extent to which he is to be responsible for private forestry policy or even private advisory functions such as those which have hitherto been the interest of the Minister of Agriculture.
  We are told that the Minister is to be responsible for water conservation. I presume from that that he is to be overlord of the river boards, but, arising immediately from that, is the vital if detailed matter of their land drainage functions. Is the opportunity to be taken to grasp the problem of responsibility for sea defences, or is this also to be left with another Ministry? As the Committee knows, the split in the functions between river boards for land drainage and other authorities for coast defences has proved a disadvantageous division of work.
  I come now to what appears to be the main function. The Prime Minister said:
  "Land is the most important and urgent problem, and he will be responsible for the establishment of the Land Commission." —OFFICIAL REPORT, 26th November, 1964; Vol. 702, c. 214–5.]
  At this stage, it is fair to ask: when is this to occur, and what are to be the powers of the Land Commission? We heard yesterday that the much heralded Ombudsman was finding his journey rather difficult; apparently, he is still engaged on the marathon of advancing and is not yet ready to enter the stadium for public gaze.
  It is even more important that the Committee be given some knowledge of what is happening as regards the Lands Commission. Will a holding Bill be necessary? Can people buy and sell land
  1556
  for development without fear that their plans will be rendered bankrupt by the powers of the Commission? If land is subject to planning permission, will it still be liable to the administration of the Lands Commission? These are all real and pressing problems which are facing the public, not only the land owning but the land developing public. I am sure that it will be accepted on both sides that land development in its various forms cannot be dismissed as undesirable.
  Returning to the statement that
  "Land is the most important and urgent problem".
  there arises the biggest query of all. What is to be the position under the Town and Country Planning Acts? According to the Prime Minister's Answer, the Minister of Land and Natural Resources is not to have any positive powers, yet he is said to be responsible for the
  "availability of land as the community needs it".
  How does he do it if he is not responsible for supervising the preparation and amendment of development plans which are concerned with just that? Apparently, the preparation and functioning of these plans is left with the Minister of Housing and Local Government.
  In the Answer we also find that the Minister of Land and Natural Resources is not even to have powers over the general system of planning control—in other words, the right of enforcement of plans. That, also, is reserved to the Ministry of Housing and Local Government. It is the latter who has to ensure that policies in regional plans are implemented in the development plans of local authorities. The more we consider the position of the proposed Minister the more empty we see it becomes. It may be that the Minister's absence today is caused by the fact that he is searching for something to do and the staff to do it. Certainly, on what is known to us, he must be feeling distinctly lonely.
  The Minister's positive powers, so far as I can ascertain, relate to the control of river boards, the Forestry Commission, common lands and a non-existent Lands Commission. For everything else he is forced to wander around cap in hand to see whether someone else will be gracious enough to let him do a little talking. He has no positive powers

  1557
  officially that I can find. If land—by which I take it is meant "land use"—is the most important urgent problem—and I dare say that few hon. Members would quarrel with that—how can the Minister of Land and Natural Resources be divorced from all effective powers to plan and to ensure that his plans are implemented?
  The fact is that, certainly in the Bill—and it is almost as much in the Answer to the Question to which I have referred—the whole matter of responsibility of the Minister, the justification for his appointment, what he is to do and whom he is to employ, is completely vague. I suggest that unless a far stronger and more positive case can be made out for a proliferation of Ministers it would be wrong to set up a fresh Ministry, with all that that involves not merely in staff but in additional complications for the person who wants to use, develop and plan his land and plan the national resources. It would be wrong simply to give carte blanche to set up a Ministry and see whether something can be found for the Minister to do by means of a subsequent Bill. It is for this reason that I move the Amendment.
  Mr. J. Grimond: There is clearly an onus lying on the Government to show the Committee the necessity for any further new Ministry, and it is clearly the duty of the Committee to ask the Government why they require further Ministries and further Ministers in charge of them. These were questions put to the Government on Second Reading, and they are questions to which we got no answer. I hope that during the Committee stage we shall get an answer about each of the new Ministries.
  There may well be a need for better co-ordination of development, but if that is the case the Committee may need some convincing that the way to get quicker decisions and better co-ordination is to set up yet another Ministry. The tendency in the last Parliament was to bring Ministries together; the tendency now appears to be to proliferate. There may be good cause for this, or there may not, but so far no possible argument has been addressed to the new tendency by the Government.
  If the Ministry of Land and Natural Resources were a high-level unit which
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  was designed to ensure better liaison between the Ministries concerned with development, I believe there might well be a case for it, but so far it appears that this is the sort of job which should fall upon the First Secretary and his Ministry. The first question that I should like to ask is what will be the relationship of the Minister of Land and Natural Resources to the First Secretary and to long-term economic planning.
  The next point of particular importance is what is to be the relationship of the new Ministry to local authorities. Local authorities have the main responsibility for town and country planning, and one of the difficulties is to get quick decisions in matters which affect both local authorities and the central Government. What powers will the new Ministry have in this matter? What planning powers will it have? It appears from the Answer to the Question which has been quoted to be a Ministry which will control certain matters, such as the Lands Commission, about which we do not yet know very much, but what general powers will the Minister have over planning? Finally, why is it necessary to create a new Ministry instead of equipping the First Secretary with the means of overseeing the Minister of Housing and Local Government and others of his colleagues who may be concerned with land development?
  From what we have heard so far, I cannot see a strong case for creating a new Ministry and thereby setting up another centre to which correspondence will be directed and from which correspondence will flow and from which minutes will pass and to which minutes will pass back. The more Ministers there are, the more calls there are on our Civil Service, and so forth. The Government owe the Committee a much more detailed justification for the proposal than we got on Second Reading.
  Mr. Peter Walker: I regret that the Minister for Land and Natural Resources is not present, because I was hoping to hear him explain why he exists. I see the Chancellor of the Duchy of Lancaster sitting on the Government Front Bench. I fear that we shall hear from him one of his usual robust performances in which he condemns the

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  Zurich bankers and others who are stopping us from obtaining land at a very cheap price. He will probably make a vigorous case for having a Ministry of Land and Natural Resources which will do away with all the evils that previously existed.
  We must have an explanation of what the Ministry will do. Is the object of it to have the fiscal effect of ensuring that people do not make a profit out of land? If that is the main object of the land side of the Minister's activities, I should have thought that it could have been far better dealt with in the Treasury by the imposition of an appropriate form of taxation.
  If the general objective is that the Minister should purchase all land which will be used for development, we must know the principle upon which he will thereafter use the land. Will it be used purely by local authorities, or is it the intention to lease the land to private developers, and, if the latter is the case, what steps will be taken to ensure that the developers do not make bigger profits by that means than if they had purchased the land in the normal way?
  We must also discover what delays the Ministry would cause in the development of land for house building. This is a matter of real concern to the Opposition. During the election campaign it was suggested that the Labour Party's target in terms of housing would be the same as ours—400,000. It was also suggested that there should be more local authority houses. This presumably means that there will be fewer houses for owner occupiers. We must know how the Ministry of Land and Natural Resources will fit in with the programme and housing policy that we desire, one which will enable home ownership to take place to a larger extent.
  I cannot see anything which has been said so far about the Minister of Land and Natural Resources which will reduce the price of houses. If one uses the method of compulsorily purchasing the land at relatively low prices, the prices will be below the market prices. If the land is released for the purpose of private use development, the price of the house will not be the component cost of the lease of the land and the building cost; it will still represent the supply and demand position in houses. Eventually,
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  the price of houses can be reduced only by meeting the supply and demand position. I cannot see how the Ministry of Land and Natural Resources in any way eases that situation, but I see many ways in which it can substantially delay the house building programme.
  We have had no explanation so far of the duties of the Minister. What about the iron ore industry? We have a substantial iron ore industry, and it might well be affected by the Minister. Will he use his Ministerial powers to take that into public ownership as part of the general steel plan? There are many activities of his which are unknown as yet. I hope that the Chancellor of the Duchy of Lancaster will avoid giving us one of his very enjoyable performances at the Dispatch Box, making a vigorous and rumbustious case about the errors of Toryism, but will give us the details that we want to know about the Minister.
  Unless the right hon. Gentleman does that, I hope that the Committee will support our Amendment and reject the creation of the proposed Ministry.
  4.0 p.m.
  Mr. David Gibson-Watt: The Chancellor of the Duchy of Lancaster always answers debates most amiably, but I wish that we had the Minister of Land and Natural Resources here to tell us what he will do and what his responsibilities will be.
  There are one or two particular spheres in which I should like to question the Minister on how these responsibilities will work out. Take, for instance, the river boards and water resources, forestry and also common land. With regard to the river boards and water resources, these, previously, were under the executive authority of the Ministry of Housing and Local Government. Forestry, which includes both the public sector of the Forestry Commission and the private sector as well, came under the Ministry of Agriculture, Fisheries and Food. These are, therefore, two very big departures which will affect very much large areas of the countryside.
  The first question that I ask in a general sense is: how does the Minister think that the new Minister will carry out his responsibilities and how far will he be executively responsible for both these? Secondly, concerning Wales, there is a very special problem with regard to

  1561
  executive responsibility. Take, first, the river boards and water resources. Will the new Minister be responsible for them, or will they come under the new Secretary of State for Wales? As to the Forestry Commission, are we, in fact, to have the position, important as it is, of the integration of forestry and farming, not only in the Principality of Wales, but in the country as a whole? Is there to be a definite executive responsibility under the new Ministry of Land and Natural Resources?
  Quite shortly, I would ask him those two questions, particularly with regard to the river boards and water resources and also forestry, which is such a very big industry, particularly in Wales. Can he be quite specific as to what the responsibilities of this new Ministry will be?
  I hope that if the Government cannot satisfy us on these most important sides of this issue we shall press for this Amendment.
  Mr. John Tilney: I would have liked to ask the Minister of Land and Natural Resources what his plans were to increase the supply of land and natural resources. Perhaps the Chancellor of the Duchy of Lancaster will be able to say what his right hon. Friend's plans are and what his powers to do so are likely to be. We have not many natural resources in this country other than the great skill of our own people and of coal, about which the Minister can do nothing. But he can do something about water, much of which runs to waste. The more one goes round the world, the more one realises the immense luck of this country in having an adequate rainfall spread reasonably over all the months of the year.
  One has only to have fine weather for a few weeks in various areas of the country to talk about drought. My own City of Liverpool has done much to bring the water of Wales both from Lake Vyrnwy and from Treweryn via the natural aqueduct of the Dee to the city, yet one is only allowed to use in one's garden a hose if one holds it in one's hand. It hardly seems to me as if the Socialist government of Liverpool has reached the technological age, because if one has an ordinary mechanical
  1562
  sprayer one has to pay a very large sum for a meter, even though one only uses this bit of mechanical apparatus for a very few days during the year.
  Compare that with the dryest state of the dryest continent, South Australia, where the sprinklers can be seen in the fields, or even with Alice Springs, where one sees the sprinklers going in gardens in an area which has about three inches of rain in 10 months. It seems to me that the Minister will have to look into this problem and that it is tied up to some extent with an increase in the supply of land and of land reclamation, especially along the shores of the Duchy of which the right hon. Gentleman is Chancellor. So far as I know, no Ministry has been responsible for this.
  There has been talk on the Mersey of the creation of an artificial island. The Institute of Hydraulics, a few years ago, looked into this to see whether money could not be saved on dredging by increasing the scour of the river and also providing, for the whole of Merseyside possibly, quite a substantial recreational area. What will be the powers of the Minister in relation to the statutory body of the Mersey Docks and Harbour Board? Who is to go into a matter of that kind?
  I am not suggesting that we should start reclaiming the Wash, because that is an area where reclaimed agricultural land is a long way from the great cities. Where land is really badly wanted is near the great urban conurbations, particularly in the north-west of England. It seems to me that as capital invested in industry produces much more than capital invested in agricultural land, it is in that sort of area where land reclamation could be considered.
  It is not the job of any impoverished local authority—there are too many of them—and it is not the job, as I see it, of any Ministry so far, to see whether we cannot transform say Morecambe Bay or the Dees Estuary into freshwater lakes. Yet both water and recreational facilities for sailing or fishing are required there. They would be of immense benefit. I would like to ask the Chancellor when he replies to tell us what thought has been given by the Government to these areas.
  The Chancellor of the Duchy of Lancaster (Mr. Douglas Houghton): It may help the Committee if I say something about this Amendment now. It is the first of three Amendments to Clause 1, each of which proposes to delete mention of the Minister referred to in the Amendment from Clause 1. I judge from that that right hon. and hon. Members opposite do not want a Minister of Land and Natural Resources, [HON. MEMBERS: "Justify it."] I judge that they do not want a Minister of Overseas Development. I judge that they do not want a Minister of Technology. I am only trying to understand what the Amendments mean. The Amendments propose to delete from Clause 1 references to each of these three Ministers.
  Sir Rolf Dudley Williams: On a point of order, Dr. King. We are, as I understand, considering the first Amendment, which refers to the Minister of Land and Natural Resources. The right hon. Gentleman's reply on behalf of the Government is referring also to Amendments Nos. 2 and 3. While I support Amendment No. 1, I do not think that I support Amendment No. 3, and, as we have not agreed to take all these Amendments together, should not the right hon. Gentleman confine his remarks to Amendment No. 1.
  The Chairman: The hon. Gentleman will find that the Chancellor of the Duchy of Lancaster is going to confine himself to the first Amendment, but the right hon. Gentleman is entitled to make passing reference to the other Amendments which are to be discussed.
  Mr. Houghton: I hope that the hon. Gentleman, who has just blown in, will allow me to deploy my case in a reasonable manner. I am grateful to the hon. Member for Worcester (Mr. Peter Walker) for referring in complimentary terms to my customary robustness. I am not feeling particularly robust. However, I may gather strength as the day goes on. At the moment. I am anxious to be helpful to the Committee, if hon. Members will only listen to me.
  I was trying to understand the general strategy behind the Amendments. Each of the three we are discussing seeks to destroy a Minister who has been appointed under the Royal Prerogative
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  and for whom this Bill proposes, in Schedule 1, to provide statutory authority for his Ministry. Clause 1 proposes to bring each of the three Ministers within Schedule 1, which gives statutory authority for the creation of their Ministries.
  There have been many questions about what the Minister of Land and Natural Resources is to do and how he will do it, and I do not think that any hon. Member provided reasons for not having such a Minister. There were numerous questions about how the Lands Commission will work, whether it will restrain the use of land, whether it will increase the value of land—whether my right hon. Friend will do this, that or the other. But those questions are related to the policies of the Minister, the proposals which he may, in due course, bring before the House. They are questions of policy and have no relation to the creation of the Ministry itself.
  I suggest that what I have to do now is to defend the creation of the Ministry and not to explain all its policies and say exactly what the Lands Commission will do, or what powers it will possess or anything of that kind. These are matters for another day when proposals are brought before the House for setting up the Lands Commission. Then will come the opportunity to go into all these questions relating to the Commission. At the moment, the Government have to justify the creation of the Ministry.
  Reference has been made to the absence of my right hon. Friends concerned. I will be candid. I advised them that I saw no reason for them to come here to defend their existence when this is a Government Measure giving statutory authority to the new Ministries and making proposals for other changes which the Prime Minister believes to be essential to the conduct of government under the present Administration. We are thus dealing with machinery, with Ministers and Ministries, the boundaries of their activities, their functions and their responsibilities. We are not dealing with detailed questions relating to possible steps which a Minister may take in due time and bring before the House for debate in the usual way.
  My right hon. Friend the Prime Minister decided to advise the Crown

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  to appoint a Minister of Land and Natural Resources because he felt, as the Government feel, that it is time that general oversight of the use of our scarcest commodity should be undertaken, so that land use can be looked at in the broad to see whether the best use is being made of it for forestry, agriculture and urban development and whether and how land at present unused can be brought into use.
  These are all factors connected with the use of land with which, in recent years, the country has become increasingly concerned. Other factors include the rising prices of land, whether steps may be necessary to curb the exploitation of land value, the high cost of land for development and other aspects of the shortage of land with which all right hon. and hon. Members are familiar.
  4.15 p.m.
  The Prime Minister, therefore, made an announcement to the House on 26th November giving in some outline the functions of the new Minister of Land and Natural Resources. My right hon. Friend mentioned, in reply to one question which I have also been asked today, that the new Minister would become responsible, with the Secretary of State for Scotland, for the Forestry Commission and for forestry policy, which seems to put that responsibility firmly within the scope of the new Ministry.
  I have been asked about water. This, also, was dealt with in the Prime Minister's statement:
  "… the Minister will also have responsibilities for the conservation of water and its availability for the various needs of the community. The precise allocation of the statutory responsibilities of the several Ministers concerned with water is a complicated matter and a detailed statement about this will be made in due course."—[OFFICIAL REPORT, 26th November, 1964; Vol. 702, c. 215.]
  I cannot add to that at the moment. It is clear that the new Minister is intended to be responsible for the conservation of water, which is another commodity which is becoming scarcer as the population increases and as there is more and more use of water for all purposes, both domestic and industrial.
  Mr. Gibson-Watt: There is a point here which I hope the right hon. Gentleman
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  will make abundantly clear. Responsibility for water conservation in Wales has so far lain with the Ministry of Housing and Local Government. Will that responsibility now go to the Secretary of State for Wales, or will the, Minister of Land and Natural Resources take it over, although the Prime Minister said that it would be taken over by the Secretary of State for Wales?
  Mr. Houghton: In England, water conservation will be in the hands of the new Minister of Land and Natural Resources. What may be the relationship between him and the Secretary of State for Wales in his responsibility is part of the consideration now being given to the relationship between the Minister of Land and Natural Resources and those Ministries now responsible for water. I hope that the Committee is trying to understand the distinction between the justification of the Ministry and the precise boundaries of its activities and responsibility and details of its future policies.
  With this new Ministry, we are trying to bring together a body of knowledge about land and its uses in a way which has never previously been brought together under one Minister. This will include the survey of land resources and the development of techniques for evaluating the comparative uses of land. The Minister will be in a position to bring expert advice to bear on general national and regional plans. Hitherto, Ministries which have wanted land have simply sought to get it. There has been no Minister providing a general survey of land use throughout the country.
  I have been asked about the First Secretary. He is First Secretary in charge of economic development. He may want land for industrial and other development. The Minister of Housing and Local Government will want land for housing and for new towns, and so on. The Secretary of State for Education and Science will be building new schools and there will be new universities, and so on. In general, all Ministries wanting land have used the machinery available to them to get what they wanted, subject to planning permission, but not subject to any general oversight or assessment of the use of land throughout the country as a whole.

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  My right hon. Friend felt that this was something which should now be done. I believe that it is long overdue. Had there been a Minister of Land and Natural Resources years ago, we would have been spared some of the hideous things which have happened to land in the intervening years. The case for this Ministry rests on the urgent need to match the new and great importance of the problems for which it will be responsible with an adequate focus for study and initiative in the Government machine and sound technical backing.
  When a particular problem becomes very important in our national life, it is entirely in accordance with pragmatic British traditions to appoint a Minister, with proper departmental support, to concentrate and co-ordinate Government policy where it may previously have been diffused through many Departments. I do not think that hon. Members can question this.
  We find examples of it in almost every branch of government administration. When pensions and social security became a matter of great national importance, a Ministry of Pensions and National Insurance was set up. The Ministry of Health, the Ministry of Housing and Local Government and the Ministry of Aviation have all reflected mounting public interest in and concern with new aspects of the development of our economy, or the use of our resources. If we are to tackle the central problem of land use and land value and the wide range of related problems throughout our natural resources, it is appropriate that some Minister should have the responsibility. He will be able to advise other Ministries as to their demands for additional land and how their requisitions may have a bearing upon the most efficient and economical use of land throughout the country.
  Obviously, this Ministry will have to work very closely with others, because it will not have a veto over others. It will have to work in co-operation with other Ministers who have land requirements. However, the system of interdepartmental co-operation is nothing new. The genius of public administration in this country and the common sense and tolerance of Ministers of all Administrations have made this form of interdepartmental co-operation possible and
  1568
  fruitful, and I am sure that right hon. Gentlemen opposite found that when they were in office.
  Co-operation will undoubtedly be the keynote of the success of this Ministry, but at least there will be a Minister who can tell all the other Ministers his broader view of the use of land. [Laughter.] I suppose that it is very amusing. Hon. and right hon. Gentlemen opposite will probably tell us when the giggling has to stop. I do not know whether it will be at three in the morning, or eleven o'clock tomorrow, or when it will be, but we are here and we shall stay here.
  Hon. Members: Who? Where are they?
  Mr. Houghton: As long as I am on my feet for the moment, that is all that matters. I am trying to throw some serious argument and consideration into the discussion of the need for a Minister of Land and Natural Resources.
  I repeat that in none of the speeches I heard did anyone say that this Minister would be useless and would not be able to do anything and that there was nothing for him to do so that there was no reason to have him.
  Sir Rolf Dudley Williams: I will.
  Mr. Houghton: The hon. Gentleman will say anything when the time comes, wise or unwise. I assume that he is here as a responsible Member of Parliament, with a responsibility to his constituents, who have a very close interest in the use of land. I hope that we may have a little sobriety and wisdom brought to bear on this subject.
  Governments operate in a living world of rapidly changing conditions and we have to adjust the machinery of government to changes in national need. We are a very flexible Administration. We see the need for changes in government administration probably a little clearer than hon. Members opposite, perhaps a little further ahead. We have our own ideas about what we want to do.
  This new Ministry is part of the expression of a new initiative and a new vigour and a new survey of the use of land in these crowded islands, where, if judgment is not brought to bear, we may destroy the remaining beauty and be congested with an urban sprawl for scores of miles on

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  end. The prospect of what might happen to Britain in the next 50 years unless there is some oversight and control is quite frightening to those of us who care for the beauty of this country and the way of life which we have built up here.
  The problems of commuters and the horrible conditions in which many people have to go to and from work, the congested towns putting great strain on services and on transport, the need to preserve the green belt and to prevent the kind of urban sprawl which took place years ago leaving permanent marks on the countryside are all part of the responsibility of the Minister who will advise the Government about them.
  I sincerely hope that the Committee will see that there is justification in the appointment of a Minister of Land and Natural Resources with this overriding responsibility, giving the best possible advice to all Ministries who wish to use additional land, advising the First Secretary about the economic plan, possibly advising any regional organisation which we may have, and considering the use of land by all authorities throughout the country.
  Here is something which ought to be separated from other Ministries and which is worth while. It will especially relieve the Ministry of Housing and Local Government, with its many other complicated tasks, and is undoubtedly a good thing in the interests of the machinery of government. I therefore hope that the Committee will approve the inclusion of the Minister of Land and Natural Resources and will resist the Amendment.
  4.30 p.m.
  Mr. John Boyd-Carpenter: The right hon. Gentleman the Chancellor of the Duchy of Lancaster said one thing with which all of us can agree—that he was not very robust today. Indeed, his speech recalled to mind the remark made of another speech in similar circumstances—that no cliché was omitted except, "Please adjust your dress before leaving". The point raised in this Amendment—it is necessary to remind the right hon. Gentleman of this, if not the Committee—is: is this Ministry really necessary?
  The right hon. Gentleman waved his hand airily and said that by putting
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  down this Amendment we were saying that we did not want a Minister of Land and Natural Resources. I do not think that he understood the point put very clearly by the right hon. Member for Orkney and Shetland (Mr. Grimond), that the onus is on the Government to justify the creation of a new Department by showing that there are functions whose performance demand the appointment not only of a Minister but a Parliamentary Secretary, a Permanent Secretary and a full official staff, to discharge them. Unless the Government can discharge the onus of showing that for good administration such a Department is required, the expense and charge on the taxpayer of creating such a Department cannot be justified.
  It is not good enough for the right hon. Gentleman to make a speech in genial and, if I may say so, very imprecise terms and merely rely on the allegation that we had not demonstrated the contrary. It is for him and his colleagues to demonstrate positively to the Committee that his right hon. Friend is a necessary part of the Administration.
  That brings me to the point on which several hon. Members have remarked, namely, the conspicuous absence of the right hon. Gentleman whose Ministry we are discussing. The choice of Government speakers is a matter for the Government. Why they should choose the Chancellor of the Duchy of Lancaster to speak on this matter, I do not know. I should have thought that a Minister whose ministerial existence was being challenged would insist on coming forward himself and justifying his existence, or that he would at least have paid the Committee the basic courtesy of being present to hear the discussion.
  I understand that the responsibility for that is that not of what I may call our absent friends but of the right hon. Gentleman because he says that he advised the Minister of Land and Natural Resources not to be present. I think that it was very bad advice. The reason which he gave for it was even worse. It was that the Prime Minister had decided that there should be such a Ministry and that therefore, apparently, all argument, whether on behalf of the right hon. Gentleman who is put in the office or of this Committee, was somewhat superfluous: the Prime Minister wishes

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  it. Some of us who served in the 1945 Parliament have heard those accents before. We do not like them, and they did no good to those who used them at that time. I hope that the right hon. Gentleman reflects very seriously before he takes that line again.
  It shows contempt of this Committee for the Minister not to be here to tell us what his plans are and what he proposes to do. It is no good the Chancellor of the Duchy of Lancaster saying that the question of ministerial functions is a matter for another occasion. The question is whether there are any ministerial functions the discharge of which demand the appointment of a full-blown Minister of the Crown.
  It is no good saying that the Prime Minister, for reasons which he himself has not divulged to us, desires to create this Ministry, as he apparently desires to create many additional appointments, and that, therefore, we are not to hear from the Minister or from a Treasury Minister in discharge of the Treasury's responsibility for the machinery of Government why this innovation has been effected. Instead, we have heard from the Chancellor of the Duchy of Lancaster, whose functions, we have been told, are wholly different. That of itself is an extremely unsatisfactory state of affairs.
  This is part of the general policy of the Government of not so much 100 days of dynamic action, but 100 appointments of undynamic Ministers.
  Mr. Marcus Lipton: Second-class Oxford Union stuff.
  Mr. Boyd-Carpenter: That is a great deal better than the hon. Gentleman.
  What have we heard about the Minister's functions? We are told that he is to apply his serene intelligence to brooding generally over the problems of land and to advise his colleagues upon them. No doubt they need advice, but they would do better to take it from the House of Commons. If an adviser was wanted, was there not a Hungarian going who would have done it perhaps a little more cheaply? [HON. MEMBERS: "Cheap."] I agree; it would have been cheaper.
  Most of us like personally the Minister of Land and Natural Resources, and if he had been here I should have told
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  him so. But to appoint him to give advice to his colleagues who have the real responsibility for these matters, as I shall hope to demonstrate, is not the beginning of a justification for appointing a full Minister of the Crown for this job. Those of us who, in the Chancellor of the Duchy of Lancaster's words, were not necessarily thinking that we did not want such a Minister before he spoke, are convinced by the inadequacy of his justification that there is no need for one.
  Let me take what was, perhaps, a more serious attempt to justify this constitutional innovation, namely, the Written Answer of the Prime Minister to which the Chancellor of the Duchy of Lancaster referred. The Prime Minister said:
  "My right hon. Friend the Minister of Land and Natural Resources will participate in the formulation of the national and regional plans for which my right hon. Friend the First Secretary of State has overall responsibility."
  Therefore, the Minister of Land and Natural Resources is only a participant and not the responsible Minister in these matters.
  The Prime Minister went on:
  "My right hon. Friend the Minister will be generally responsible for the availability of natural resources to meet the needs of the community and it will be, for him to consider the use made of natural resources, the development of new resources and the better use of natural resources of which inadequate use is made at present."
  That simply is not true.
  The late Aneurin Bevan once observed on the subject of natural resources, that this island was mainly composed of coal and almost completely surrounded by fish. With neither of those natural resources is the Minister concerned. One is the responsibility of the Minister of Power, and the other the responsibility of the Minister of Agriculture, Fisheries and Food. If one goes through the list of natural resources and responsibilities for them, there are other Ministers whose duties, I understand, remain unabated. The greatest natural resource is agricultural land.
  We have yet to hear that the Minister of Agriculture has been eliminated. As I understand, he is responsible for agricultural land. The Minister of Power is responsible for the extraction of sources of power from the land, be it coal or oil. It is not true to say, as the Prime Minister

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  said in an apparently considered Written Answer, that the Minister of Land and Natural Resources was generally responsible for these natural resources.
  The Prime Minister had a burst of candour at the end of his Answer when he pointed out, "to avoid misunderstanding", as said:
  "the Minister of Housing and Local Government will have an important interest in the preparation of the national and regional plans, because of his responsibility for housing and for the conditions in which people live, and for the general system of planning control. He will be responsible for seeing that the policies in the regional plans are implemented in the development plans of planning authorities…"—[OFFICIAL REPORT, 26th November, 1964; Vol. 702, c. 214–5.]
  Here, of course, we come to the nub of the matter. The effective instrument for controlling the use of land is planning control. That, as I understand it, remains with the Minister of Housing and Local Government. It is he who hears appeals from the local planning authorities on the use of land. It is he, for example, who was responsible for the decision the other day to create a commuter village in the urban green belt in Kent.
  I think that I should be out of order if I made any comment on that decision, but it is a decision—[An HON. MEMBER: "Shocking."] Whether shocking or not, that is the effective decision on land use. It is the Minister of Housing who decided that that land, which it had previously been thought would be part of the green belt, should be used to create a commuter village.
  That is the effective control of land use. It is no use the right hon. Gentleman the Chancellor of the Duchy of Lancaster coming forward and saying that his right hon. Friend the Minister of Land and Natural Resources is concerned with controlling land use when the effective decision lies with the right hon. Gentleman the Minister of Housing and Local Government. If the Minister of Land and Natural Resources was really to be a Minister charged with controlling the use of land it would have been necessary to transfer to him responsibility for planning control, because, after all, a planning decision can affect the use of any parcel of land. From time to time, planning decisions do affect large parts of the land. It is creating a sham to suggest that there
  1574
  is a Minister controlling land use, when he has no authority to decide planning matters, which are the effective instruments in determining the way in which land is used.
  In those circumstances, I still pose the question: is this Ministry really necessary? Much of what the right hon. Gentleman said might well have been relevant to installing an adviser, to an advisory committee, or to some method of ministerial co-ordination in dealing with what is, in a small island like this, a matter of the very greatest importance. But the setting up of a Department headed by a Minister outside the Cabinet, with no control over planning, only participating in the preparation of plans for which more senior colleagues are responsible, is not a reality.
  It is either part of the Prime Minister's plan, for whatever reasons he has, in creating a large number of Departments, or it is an attempt to delude us that this real problem of land use is being given a new approach and new and effective handling. It is the very antithesis of this "streamlined Government" which the Prime Minister promised us. It is the creation of a Department which will involve some public expense and which, so far from serving the great purpose of securing effective use of our land, will make its effective use more difficult. slower and more expensive.
  I would suggest, therefore, that we should seek to remove this office from the Bill.
  4.45 p.m.
  Mr. Ian Gilmour: The Chancellor of the Duchy of Lancaster, the right hon. Member for Sowerby (Mr. Houghton), used an extraordinary doctrine when he complained about this side of the Committee not having produced any reasons for not having this Minister at all. It is not for us to show this. His justification for this particular piece of balkanisation of Whitehall was that this Ministry would bring together a body of knowledge which had never been brought together before.
  Of course it has not, because this body can only be produced by tearing limbs off a great many other Ministries and thereby making the functions which this Ministry is designed to carry out far

  1575
  more difficult to perform. Everything which the Minister mentioned can be done far better—with regard to water, for example—by the Minister of Agriculture and other Ministers.
  The right hon. Gentleman said that, historically, British tradition had always been to create a Ministry when there was an objective need for it. I should have thought that, historically, this is not so. Ministries have far more often been produced as a result of personal and political factors than by an objective need. For at least one of the examples he gave this is certainly true. What is odd about this Ministry is that it is not produced to give somebody a job. It is produced to take away a job from somebody else. It is designed to take away functions from the right hon. Gentleman the Minister of Housing and Local Government. The job of the nationalised Lands Commission most naturally belongs to that Minister and it is from him that it has been taken away.
  As a result, now that we have two Ministers concerned with housing and land, the functions of one of which we are still doubtful about. The other, the Minister of Housing and Local Government, has already said of mortgages that he is not going to do anything at all, because he has not yet found what he can do. It seems to me very odd that the Minister of Land and Natural Resources should have taken the advice of his right hon. Friend not to come here. He said on the steps in Downing Street, after he had been offered his appointment, that it was a very difficult job. No doubt he meant that it would he very difficult to find something to do. I prefer to believe that it is because he still has not found anything to do that he has not come here today, and that his absence is not the result of advice from his right hon. Friend.
  Mr. R. H. Turton: Like my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), I was very disappointed with what the Chancellor of the Duchy said, because, although new Ministers have been appointed in the past, in every case when a new Ministry has been formed there has been an explanation from the Government Front Bench not only of the functions of the Ministry, but
  1576
  of what staff they would have and of what staff they would be taking from other Ministries. There was no attempt in the speech of the right hon. Gentleman to show what part of what Ministries would be taken over by the Ministry of Land.
  As my hon. Friend the Member for Norfolk, Central (Mr. Ian Gilmour) said, when one gets to planning, the Chancellor of the Duchy said that the green belts would be under the authority of the Minister of Land, but in fact that is not true. The green belts will remain the function of the Minister of Housing and Local Government, and the town maps which are being prepared will be the function of that Minister also. National and regional planning, which were itemised by the Chancellor, will not be the function of the Ministry of Land and Natural Resources; they will be the function of the First Secretary of State. Therefore, on this side of the Committee, we have a very difficult picture to understand, or to have any reason for justifying the new Ministry.
  I want to turn to two other points. The first is the Forestry Commission. In the period of the Forestry Commission from 1945 onwards, under Sir Roy Robinson, as he then was, the Chief Forestry Commissioner, there was a complete divorce of forestry planning. That meant that we had large forests that were often using good agricultural land. The policy of the Forestry Commission and the successive Ministers of Agriculture recently has been to bring forestry and agriculture into harmony and to have in the forest areas both agriculture under the Forestry Commission and forestry. although the agricultural part is managed by the Lands Commissioners of the Ministry of Agriculture.
  What is to be the policy for the administration of these forest areas under the new Ministry? Part of the land which has been taken over, presumably by the Minister of Land and Natural Resources will be land that is not devoted to the growing of a crop of trees, but to the growing of agricultural crops, and, therefore, should be hived off from the Ministry of Land and kept with the Ministry of Agriculture. What part of the Ministry of Agriculture is to be taken away from that Ministry and put into this new Department? Are all the Lands

  1577
  Commissioners, who, presumably, will have something to do with the Ministry of Land and Natural Resources, to be transferred, or will they remain with the Ministry of Agriculture?
  I know that it is difficult for the Chancellor of the Duchy of Lancaster, who deals with the Welfare State, to have to answer detailed questions on the Bill, but he is responsible for all this. If these arrangements are to be justified, we must know what is to be the set-up and the division of staff in the Ministries. If the right hon. Gentleman does not have either his right hon. Friend the Minister of Agriculture or his right hon. Friend the Minister of Land and Natural Resources here to advise him, I suggest that he must get that information before the House of Commons can justify the creation of the new Ministry.
  I understand that the river boards will be transferred to this new Department. Do we understand that all the drainage authorities will also be transferred to the new Department? If so, what will happen to the drainage advisers of the Ministry of Agriculture? At the moment, we have an efficient regional system in the Ministry of Agriculture with each county aiding the production of food. Under the new arrangement, it looks as if there will be a complete divorce in every region between the work carried out between the Ministry of Land and Natural Resources and that carried out by the Ministry of Agriculture. I beg the right hon. Gentleman to realise that we cannot possibly vote for a new Ministry and its creation unless we know what is to be the division of responsibility between that new Ministry and the existing Departments.
  After the sketchy outline that we have had from the right hon. Gentleman, I can find no reason why I, representing my constituency, should think that the proliferation of Ministries to this extent will bring any value to any of my constituents.
  Sir Henry d'Avigdor-Goldsmid: I realise that there is no point in asking questions of the Chancellor of the Duchy of Lancaster, because he is not answering them. We are faced with a diktat. That is the method chosen by right hon. and hon. Members opposite to impose their will.
  1578
  As there is no need to ask questions, I should like to follow up what my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) has said about the Forestry Commission. In many of these matters, there is a great element of dubiety. Opinions differ. To use a canned phrase with regard to the Forestry Commission, there is no need to peer into the crystal when one can read the book—and the book is the Seventh Report of the Estimates Committee, Session 1963–64, Cmd. 274. This Report has not yet been answered, no doubt because the Minister who would normally be expected to answer it has probably been able to shelve it.
  Although numerous criticisms were made in that Report, it shows that it was agreed by all parts of the forestry world that the working arrangements with the Ministry of Agriculture were extremely good and, furthermore, prevented conflict about the use of land which the Minister of Agriculture, in his capacity as Forestry Minister, was able to deal with with the minimum of extraneous questions and the maximum satisfation for the parties concerned.
  We are now moving to a situation in which the forestry Minister is to be the Minister whose appointment we are now discussing. In the event of future discussion, business will have to be carried on between the Minister of Agriculture and his colleague. No argument has been deduced to show that this will in any way speed up the conduct of Government business, improve upon the decisions or give any greater satisfaction to the parties concerned. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has indicated forcibly that in planning matters the new Ministry will be relatively powerless. I emphasise that in the question of forestry the new Minister will not only be redundant, but will be a nuisance.
  Sir Rolf Dudley Williams: On a point of order. May I seek your guidance, Dr. King? It is obvious that the Chancellor of the Duchy of Lancaster, one of the most courteous of hon. Members, is severely embarrassed because he cannot answer numbers of the questions which have been put by right hon. and and hon. Friends. In view of this, and

  1579
  as we are trying to justify this considerable expenditure of public money, would it be in order for me to move to report Progress so that we may save the right hon. Gentleman from further embarassment and he can secure the attendance of his right hon. Friend the Minister of Housing and Local Government? To the extent that all this may well impinge upon the authority of the Secretary of State for Scotland, perhaps we may secure his attendance, also.
  I should like to know, Dr. King, whether it would be in order for me to move, That the Chairman do report Progress and ask leave to sit again.
  The Chairman: The hon. Member is a sufficiently experienced and old Parliamentarian to know that the point which he has raised is not so much a point of order as a point which is argued in the debates upon the Clause.
  Mr. A. P. Costain: The Chancellor of the Duchy of Lancaster has asked—I do not quite know why—that we on this side should make a case against the establishment of the new Ministry. The first reason which I put forward is that the confusion which the right hon. Gentleman has described will become more confounded; the second, that delays will be caused to local authorities with their building programme; and thirdly, the cost of the new Ministry. Those are three straightforward reasons against establishing this new Ministry.
  I had the privilege of serving under the right hon. Gentleman when he was the last Chairman of the Public Accounts Committee. At that time, he was extremely jealous of the work of Ministries. At one stage in that Committee, we discussed in detail the overlapping of Ministries. The right hon. Gentleman will recall that one of the Ministries which had the greatest difficulty with its accounting officer was the Ministry of Housing and Local Government, because certain Votes went through that Ministry for which it was not responsible. The Committee was extremely critical and the right hon. Gentleman, its Chairman, was in agreement.
  On this occasion, the right hon. Gentleman has been put in the unfortunate position of completely changing ground. He
  1580
  has not in any way explained to us under what Vote the new Ministry will come. He has not explained what the accounting officer will be responsible for in the Ministry. These are fundamental factors which need to be brought before the House of Commons in justifying the establishment of a Ministry.
  Hon. Members on this side have brought out a number of specialised individual points. I will not waste time recapitulating them, but I agree with them all. I merely emphasise that in my constituency, the Borough of Folkestone has already pressed me to get a ruling from the new Minister. The letter has not been replied to. The borough has pointed out clearly that its housing programme is held up until it can get a decision from the Ministry. If that is the sort of progress that is to be made, there is no justification for a new Ministry.
  We sympathise with the Chancellor of the Duchy of Lancaster in having to deal with a difficult case. The best that he has done is to give a possible reason for appointing a consultant. All the things that the right hon. Gentleman has spoken about could be better done by a consultant without this great proliferation of Ministries and Ministry officials who must get together round the conference table. If the House of Commons cannot decide what the duties of these people are to be, how will it be done? I strongly suggest that the Committee should reject the idea of forming this new Ministry.
  5.0 p.m.
  Mr. Simon Wingfield Digby: I really think that the reply—or the brief, or whatever it was—which the right hon. Gentleman gave us was most disappointing. I think that I saw a general point in this Ministry before he got up, but now I am very much at a loss, because he pitched his claim for it so high, saying that it was essential to the conduct of the Government to have this Ministry. I really wonder. Essential to the conduct of the Government, which cannot carry on without this Ministry? It is sometimes difficult, when one goes to the Table Office about Questions, to have Questions accepted as being in order, but it is almost impossible to say what Questions will be in order if they are about this Ministry.
  The right hon. Gentleman spoke about consultation with this Ministry on land use, as though it had not long been the practice of all Ministries acquiring or disposing of land to consult other Ministries. It has long been the case, but, so far as I can see, this is to be only one more Minister to consult in each case and so will lead to delays even further to those there are at present. Anyone acquainted with administration in these matters will know that these delays have tended to be very vexing.
  I come now to another question which has been raised by my hon. and right hon. Friends and that is about the Forestry Commission. Although, generally speaking, its connection with the Ministry of Agriculture has worked well, there has always been the complaint that the Permanent Secretary and the Parliamentary Secretary were not responsible for forestry while it was under the Ministry of Agriculture. Is that still to be the case, or is the responsibility to be one of a changed kind?
  One of the biggest questions about overall land use is whether certain land should be under agriculture or under forestry. For many years we have had the position where this dispute could be settled within one Ministry, the Ministry of Agriculture. Now it is to become once again a war between Departments, and I cannot believe that that is satisfactory. Nor can I really see how a new and not very powerful Ministry like this will be the best one to conduct the affairs of the Forestry Commission.
  I hope we shall be told a little more about this arrangement for forestry. We have been told very little so far. I understand that an Order will have to be made later, but I think that now at this stage we are entitled to be told more about it, because this is one of the definite responsibilities being given to this new Ministry, which has been so ill justified this afternoon.
  Question put, That the words proposed to be left out stand part of the Clause:—
  The Committee divided: Ayes 255, Noes 235.

  Division No. 36.]

  AYES

  [5.3 p.m.

  Abse, Leo

  Craddock, George(Bradford, S.)

  Garrow, A.

  Albu, Austen

  Crawshaw, Richard

  George, Lady Megan Lloyd

  Allaun, Frank(Salford, E.)

  Cronin, John

  Ginsburg, David

  Alldritt, w. H.

  Grossman, Rt. Hn. R. H.S.

  Gourlay, Harry

  Allen, Scholefield (Crewe)

  Cullen, Mrs. Alice

  Greenwood, Rt. Hn. Anthony

  Armstrong, Ernest

  Dalyell, Tam

  Gregory, Arnold

  Atkinson, Norman

  Darling, George

  Griffiths, David (Rother Valley)

  Bacon, Miss Alice

  Davies, G. Elfed (Rhondda, E.)

  Griffiths, R. Hn. James (Llanelly)

  Bagier, Gordon A.T.

  Davies, Harold (Leek)

  Hamilton, James (Bothwell)

  Barnett, Joel

  Davies, Ifor (Gower)

  Hamilton, William (West Fife)

  Baxter, William

  Davies, S.O.(Merthyr)

  Hannan, William

  Beaney, Alan

  Delargy, Hugh

  Harrison, Walter(Wakefield)

  Bellenger, Rt. Hn. F. J.

  Dell, Edmund

  Hart, Mrs. Judith

  Bence, Cyril

  Dempsey, James

  Hattersley, Ray

  Bennett, J.(Glasgow, Bridgeton)

  Diamond, John

  Hayman, F.H.

  Binns, John

  Dodds, Norman

  Hazell, Bert

  Bishop, E.S.

  Doig, Peter

  Heffer, Eric S.

  Blackburn, F.

  Donnelly, Desmond

  Henderson, Rt. Hn. Arthur

  Blenkinsop, Arthur

  Driberg, Tom

  Herbison, Rt. Hn. Margaret

  Boardman, H.

  Duffy, Dr. A. E. P.

  Hill, J.(Midlothian)

  Boston, T.G.

  Dunn, James A.

  Hobden, Dennis(Brighton, K' town)

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

  Dunnett, Jack

  Holman, Percy

  Boyden, James

  Edwards, Rt. Hn. Ness (Caerphilly)

  Horner, John

  Braddock, Mrs. E.M.

  Edwards, Robert(Bilston)

  Houghton, Rt. Hn. Douglas

  Bradley, Tom

  English, Michael

  Howarth, Harry(Wellingborough)

  Bray, Dr. Jeremy

  Ennals, David

  Howarth, Robert L.(Bolton, E.)

  Broughton, Dr. A.D.D.

  Ensor, David

  Howell, Denis(Small Heath)

  Brown, Rt. Hn. George(Belper)

  Evans, Albert(Islington, S.W.)

  Howie, W.

  Brown, Hugh D.(Glasgow, Provan)

  Evans, Ioan (Birmingham, Yardley)

  Hughes, Emrys (S. Ayrshire)

  Buchan, Norman (Renfrewshire, W.)

  Fernyhough, E.

  Hughes, Hector (Aberdeen, N.)

  Buchanan, Richard

  Finch, Harold (Bedwellty)

  Hunter, A. E. (Feltham)

  Butler, Herbert (Hackney, C.)

  Fitch, Alan (Wigan)

  Irvine, A. J. (Edge Hill)

  Butler, Mrs. Joyce(Wood Green)

  Fletcher, Sir Eric (Islington, E.)

  Irving, Sydney (Dartford)

  Callaghan, Rt. Hn. James

  Fletcher, Ted (Darlington)

  Janner, Sir Barnett

  Carmichael, Neil

  Foley, Maurice

  Jeger, George (Goole)

  Carter-Jones, Lewis

  Foot, Sir Dingle (Ipswich)

  Jenkins, Hugh (Putney)

  Chapman, Donald

  Foot, Michael (Ebbw Vale)

  Johnson, Carol (Lewisham, S.)

  Coleman, Donald

  Ford, Ben

  Jones, Dan (Burnley)

  Conlan, Bernard

  Galpern, Sir Myer

  Jones, Rt. Hn. Sir Elwyn(W. Ham, S.)

  Corbet, Mrs. Freda

  Garrett, W. E.

  Jones, J. Idwal (Wrexham)

  Jones, T. W. (Merioneth)

  O'Malley, Brian

  Solomons, Henry

  Kelly, Richard

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

  Soskice, Rt. Hn. Sir Frank

  Kenyon, Clifford

  Orbach, Maurice

  Spriggs, Leslie

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

  Orme, Stanley

  Stewart, Rt. Hn. Michael

  Kerr, Dr. David(W' worth, Central)

  Oswald, Thomas

  Stonehouse, John

  Lawson, George

  Owen, Will

  Stones, William

  Ledger, Ron

  Padley, Walter

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

  Lee, Rt. Hn. Frederick (Newton)

  Page, Derek (King's Lynn)

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

  Lee, Miss Jennie (Cannock)

  Paget, R. T.

  Summerskill, Dr. Shirley

  Lever, Harold (Cheetham)

  Palmer, Arthur

  Swain, Thomas

  Lomas, Kenneth

  Pannell, Rt. Hn. Charles

  Swingler, Stephen

  Loughlin, Charles

  Pargiter, G. A.

  Symonds, J. B.

  Mabon, Dr. J. Dickson

  Park, Trevor(Derbyshire, S.E.)

  Taverne, Dick

  McBride, Neil

  Parkin, B. T.

  Taylor, Bernard (Mansfield)

  MacColl, James

  Pavitt, Laurence

  Thomas, George (Cardiff, W.)

  MacDermot, Niall

  Pearson, Arthur (Pontypridd)

  Thomas, Iorwerth (Rhondda, W.)

  McGuire, Michael

  Pentland, Norman

  Thomson, George (Dundee, E.)

  McInnes, James

  Popplewell, Ernest

  Thornton, Ernest

  MacKenzie, Gregor (Rutherglen)

  Prentice, R. E.

  Tinn, James

  McLeavy, Frank

  Pursey, Cmdr. Harry

  Tomney, Frank

  MacMillan, Malcolm

  Rankin, John

  Tuck, Raphael

  MacPherson, Malcolm

  Redhead, Edward

  Urwin, T. W.

  Mahon, Peter (Preston, S.)

  Reynolds, G. W.

  Varley, Eric G.

  Mahon, Simon (Bootle)

  Rhodes, Geoffrey

  Wainwright, Edwin

  Mallalieu, E.L.(Brigg)

  Roberts, Albert(Normanton)

  Walden, Brian(All Saints)

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

  Roberts, Goronwy (Caernarvon)

  Walker, Harold (Doncaster)

  Manuel, Archie

  Robertson, John(Paisley)

  Wallace, George

  Mapp, Charles

  Robinson, Rt. Hn. K.(St. Pancras, N.)

  Warbey, William

  Marsh, Richard

  Rodgers, William(Stockton)

  Watkins, Tudor

  Maxwell, Robert

  Rogers, George(Kensington, N.)

  Weitzman, David

  Mellish, Robert

  Rose, Paul B.

  Wells, William(Walsall, N.)

  Mendelson, J.J.

  Ross, Rt. Hn. William

  White, Mrs. Eirene

  Mikardo, Ian

  Rowland, Christopher

  Whitlock, William

  Millan, Bruce

  Sheldon, Robert

  Wilkins, W. A.

  Miller, Dr. M.S.

  Shinwell, Rt. Hn. E.

  Willey, Rt. Hn. Frederick

  Milne, Edward (Blyth)

  Shore, Peter (Stepney)

  Williams, Alan (Swansea, W.)

  Monslow, Walter

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

  Williams, W. T. (Warrington)

  Morris, Charles (Openshaw)

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

  Willis, George(Edinburgh, E.)

  Morris, John(Aberavon)

  Silkin John(Deptford)

  Wilson, William (Coventry, S.)

  Murray, Albert

  Silver-man, Julius (Aston)

  Winter-bottom, R. E.

  Neal, Harold

  Silverman, Sydney (Nelson)

  Woodburn, Rt. Hn. A.

  Newens, Stan

  Skeffington, Arthur

  Woof, Robert

  Noel-Baker, Francis (Swindon)

  Slater, Mrs. Harriet (Stoke, N.)

  Vales, Victor (Ladywood)

  Norwood, Christopher

  Slater, Joseph (Sedgefield)

  Oakes, Cordon

  Small, William

  TELLERS FOR THE AYES:

  Ogden, Eric

  Smith, Ellis (Stoke, S.)

  Mr. Grey and Mr. Harper.

  NOES

  Agnew, Commander Sir Peter

  Buchanan-Smith, Alick

  Errington, Sir Eric

  Allan, Robert(Paddington, S.)

  Buck, Anthony

  Farr, John

  Allason, James (Hemel Hémpstead)

  Bullus Sir Eric

  Fell, Anthony

  Amery, Rt. Hn. Julian

  Burden F. A.

  Fisher, Nigel

  Anstruther-Gray, Rt. Hn. Sir W.

  Butcher, Sir Herbert

  Fletcher-Cooke, Charles (Darwen)

  Astor, John

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

  Fletcher-Cooke, Sir John (S'pton)

  Atkins, Humphrey

  Campbell, Gordon

  Forrest, George

  Awdry, Daniel

  Carlisle, Mark

  Foster, Sir John

  Baker, W. H. K.

  Carr, Rt. Hn. Robert

  Galbraith, Hn. T. G. D.

  Bainiel, Lord

  Chataway, Christopher

  Gibson-Watt, David

  Barlow, Sir John

  Chichester-Clark, R.

  Gilmour, Ian (Norfolk, Central)

  Batsford, Brian

  Clark, Henry (Antrim, N.)

  Gilmour, Sir John (East Fife)

  Beamish, Col. Sir Tufton

  Clark, William (Nottingham, S.)

  Glover, Sir Douglas

  Bell, Ronald

  Clarke, Brig. Terence (Portsmth, W.)

  Glyn, Sir Richard

  Bennett, Sir Frederic (Torquay)

  Cole, Norman

  Goodhart, Philip

  Bennett, Dr. Reginald (Gos & Fhm)

  Cooke, Robert

  Goodhew, Victor

  Berry, Hn. Anthony

  Cooper, A.E.

  Cower, Raymond

  Bessell, Peter

  Cooper-Key, Sir Neill

  Grant-Ferris, R.

  Biffen, John

  Costain, A.P.

  Griffiths, Eldon (Bury St. Edmunds)

  Biggs-Davison, John

  Courtney, Cdr. Anthony

  Griffiths, Peter (Smethwick)

  Birch, Rt. Hn. Nigel

  Craddock, Sir Beresford (Spelthorne)

  Grimond, Rt. Hn. J.

  Black, Sir Cyril

  Crosthwaite-Eyre, Col. Sir Oliver

  Gurden, Harold

  Blaker, Peter

  Cunningham, Sir Knox

  Hall-Davis, A.G.F.

  Bossom, Hn. Clive

  Dance, James

  Hamilton, Marquess of (Fermanagh)

  Box, Donald

  d' Avigdor-Goldsmid, Sir Henry

  Harris, Frederic (Croydon, N.W.)

  Boyd-Carpenter, Rt. Hn. J.

  Digby, Simon Wingfield

  Harrison, Brian (Maldon)

  Boyle, Rt. Hn. Sir Edward

  Dodds-Parker, Douglas

  Harrison, Col. Sir Harwood (Eye)

  Braine, Bernard

  Doughty, Charles

  Harvey, Sir Arthur Vere (Maccles' d)

  Brewis, John

  Douglas-Home, Rt. Hn. Sir Alec

  Harvey, John (Walthamstow E.)

  Brinton, Sir Tatton

  Drayson, G. B.

  Harvie Anderson, Miss

  Bromley-Davenport, Lt.-Col. Sir Walter

  du Cann, Rt. Hn. Edward

  Hastings, Stephen

  Brooke, Rt. Hn. Henry

  Eden, Sir John

  Hawkins, Paul

  Brown, Sir Edward (Bath)

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

  Hay, John

  Bruce-Gardyne, J.

  Emery, Peter

  Heald, Rt. Hn. Sir Lionel

  1584

  1585

  Heath, Rt. Hn. Edward

  Marten, Neil

  Rodgers, Sir John (Sevenoaks)

  Hendry, Forbes

  Mathew, Robert

  Roots, William

  Higgins, Terence L.

  Maude, Angus E.U.

  Royle, Anthony

  Hiley, Joseph

  Maudling, Rt. Hn. Reginald

  Russell, Sir Ronald

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

  Mawby, Ray

  Sandys, Rt. Hn. D.

  Hirst, Geoffrey

  Maxwell-Hyslop, R. J.

  Scott-Hopkins, James

  Hobson, Rt. Hn. Sir John

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

  Sharpies, Richard

  Hogg, Rt. Hn. Quintin

  Mills, Peter (Torrington)

  Shepherd, William

  Hordern, Peter

  Mills, Stratton (Belfast, N.)

  Sinclair, Sir George

  Hornby, Richard

  Miscampbell, Norman

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

  Hutchison, Michael Clark

  Monro, Hector

  Smyth, Rt. Hn. Brig. Sir John

  Irvine, Bryant Godman (Rye)

  More, Jasper

  Spearman, Sir Alexander

  Jenkin, Patrick(Woodford)

  Morrison, Charles(Devizes)

  Speir, Sir Rupert

  Johnston, Russell(Inverness)

  Mott-Radclyffe, Sir Charles

  Summers, Sir Spencer

  Jopling, Michael

  Murton, Oscar

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

  Joseph, Rt. Hn. Sir Keith

  Neave, Airey

  Thatcher, Mrs. Margaret

  Kaberry, Sir Donald

  Nicholls, Sir Harmar

  Thomas, Sir Leslie (Canterbury)

  Kerby, Capt. Henry

  Nicholson, Sir Godfrey

  Thomas, Rt. Hn. Peter (Conway)

  Kerr, Sir Hamilton (Cambridge)

  Noble Rt. Hn. Michael

  Thompson, Sir Richard (Croydon, S.)

  Kimball, Marcus

  Nugent, Rt. Hn. Sir Richard

  Thorneycrott, Rt. Hn. Peter

  King, Evelyn (Dorset, S.)

  Onslow, Cranley

  Thorpe, Jeremy

  Kitson, Timothy

  Orr-Ewing, Sir Ian

  Tilney, Arthur (Bradford, W.)

  Lagden, Godfrey

  Osborn, John (Hallam)

  Tilney, John (Wavertree)

  Lancaster, Co. C.G.

  Osborne, Sir Cyril (Louth)

  Turton, Rt. Hn. R. H.

  Langford-Holt, Sir John

  Page, R. Graham (Crosby)

  Tweedsmuir, Lady

  Legge-Bourke, Sir Harry

  Pearson, Sir Frank (Clitheroe)

  Van Straubenzee, W. R.

  Litchfield, Capt. John

  Peel, John

  Vaughan-Morgan, Rt. Hn. Sir John

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

  Percival, Ian

  Walker, Peter (Worcester)

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

  Peyton, John

  Wall, Partick

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Pickthorn Rt. Hn. Sir Kenneth

  Walters, Dennis

  Longbottom, Charles

  Pike, Miss Mervyn

  Ward, Dame Irene

  Longden, Gilbert

  Pitt, Dame Edith

  Weatherill, Bernard

  Lubbock, Eric

  Pounder, Rafton

  Whitelaw, William

  Lucas, Sir Jocelyn

  Powell, Rt. Hn. J. Enoch

  Williams, Sir Rolf Dudley (Exeter)

  Lucas-Tooth, Sir Hugh

  Price, David (Eastleigh)

  Wills, Sir Gerald (Bridgwater)

  McAdden, Sir Stephen

  Prior, J. M. L.

  Wilson, Geoffrey (Truro)

  MacArthur, Ian

  Pym, Francis

  Wise, A. R.

  Mackenzie, Alasdair(Ross & Crom'ty)

  Quennell, Miss J.M.

  Wolrige-Gordon, Patrick

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

  Ramsden, Rt. Hn. James

  Wood, Rt. Hn. Richard

  Macleod, Rt. Hn. Iain

  Rawlinson, Rt. Hn. Sir Peter

  Woodhouse, Hn. Christopher

  McMaster, Stanley

  Redmayne, Rt. Hn. Sir Martin

  Woodnutt, Mark

  McNair-Wilson, Patrick

  Rees-Davies W. R.

  Wylie, N. R.

  Maginnis, John E.

  Ridley, Hn. Nicholas

  Younger, Hn. George

  Maitland, Sir John

  Ridsdale, Julian

  Marples Rt. Hn. Ernest

  Roberts, Sir Peter (Heeley)

  TELLERS FOR THE NOES:

  Mr. McLaren and Mr. Ian Fraser.

  5.15 p.m
  Mr. Robert Carr: I beg to move Amendment No. 2, in page 1, line 6, to leave out
  "the Minister of Overseas Development".
  The Temporary Chairman (Mr. Jennings): I think that it will be for the convenience of the Committee if with that Amendment the following Amendments are discussed: No. 19, in Schedule 2, page 5, leave out line 6.
  No. 22, in page 5, leave out lines 15 and 16.
  No. 28, in page 6, leave out line 22.
  No. 32, in page 7, leave out line 9.
  Mr. Carr: This is an exploratory Amendment. We on this side of the Committee support the objective of the new Ministry of Overseas Development. We want to see the momentum of aid for the developing countries sustained, and indeed increased.
  There is a sharp distinction between our attitude to this Amendment and to the last one. As we made clear, not only
  1586
  by our speeches but by our vote, we believe that the Ministry of Land and Natural Resources is a badly designed instrument for achieving an ill-conceived purpose. We want to bring this new Ministry of Overseas Development as it were out for inquiry and questioning before Parliament legitimises the Minister and her Department. We want to seek information about a number of important points concerned with this Department, and, because in principle we approve of the objectives of this Ministry, we do not intend to divide the Committee on the Amendment, provided—and I must enter this proviso—we consider that the answers we get are reasonably full and satisfactory. But whereas I had little doubt about that on coming to the Committee this afternoon, I cannot help having some doubt about it in view of what has recently transpired. I hope that we may have an early reply from the Government in response to my questions, because I think this will help us to complete our consideration and come to a decision on the Amendment.

  1587
  I am concerned about who is going to reply for the Government. I presume, from what has been said earlier, that it will be the right hon. Gentleman the Chancellor of the Duchy of Lancaster,—
  Mr. Houghton indicated assent.
  Mr. Carr: —for he is to reply to most debates in this Committee. I cannot help saying, however, that we had hoped and expected that it would be his right hon. Friend the Minister of Overseas Development, because the questions which I am going to ask are naturally mostly concerned with overseas development and I would have thought could properly be answered only by the Minister herself.
  However that may be, I take it very much amiss that neither the Minister nor her Parliamentary Secretary has done the Committee the courtesy to be present to listen to this debate. I regard it not only as a discourtesy, but as gross contempt for the Committee. I thought it was an elementary duty on Ministers to be present in this House, whether we were sitting as a House or as a Committee of the whole House, when their Department's affairs were being debated, discussed and questioned, and I want to register the strongest possible protest against this discourtesy and indeed contempt. It worries me for other reasons, too, because it makes me wonder how, with the best will in the world, the Chancellor of the Duchy of Lancaster can possibly give adequate answers to some of the questions which I propose to ask.
  The appropriate machinery for administering this country's aid effort depends on two main factors. First, the quantity of aid that we are giving. Obviously if the country were giving very little aid, it would not be necessary to have a separate Ministry and Minister to administer it. I am glad to say that the last Conservative Government gave increasing priority to aid as a theme of national policy and purpose, and that under our Administration Government aid expenditure doubled in the last six years, and in the last financial year, 1963–64, reached the record level of £175
  1588
  million. So a very big aid expenditure is being made by the Government and, therefore, we need special and proper machinery to administer it.
  In 1961 the late Government set up the Department of Technical Co-operation. This was a recognition of the growing priority and scale of our aid at that time, and as it has increased further since then to the record high level of last year, which I mentioned, it may well be that there is now a case for expanding the responsibilities and scope of the Department of Technical Co-operation which we set up in 1961 and which was appropriate to the needs of that time.
  This, however, is very much a question of judging promise and performance. New machinery, I suggest, is in essence a response to the growing momentum of aid, and in justification of the new Ministry we shall want to have an assurance that the momentum of aid which we have been giving will be maintained and, indeed, increased. We have heard a great deal about this from the Labour Party leaders in the last 12 months, and I should like to draw the Committee's attention to some of the statements and promises that have been made by leading members of the Government. For example, the right hon. Lady who is now the Minister of Overseas Development said in the House on 3rd February when we were debating the International Development Association:
  "We are all agreed that the amount of aid which we give ought to be increased: 1 per cent. is no longer adequate and 2 per cent. ought to be the goal."—[OFFICIAL REPORT, 3rd February, 1964; Vol. 688, c. 844.]
  So the first question that I want answered by the right hon. Gentleman the Chancellor of the Duchy is whether that is still the goal of the Labour Government—2 per cent. or 1 per cent. of our national income—and whether we can be given some idea as to how quickly that target is to be reached.
  The Labour Party manifesto in the recent General Election said on page 20:
  "Labour will increase the share of our national income devoted to essential aid programmes."
  Therefore, we should like to know something about the statement of the right hon. Lady which I quoted a

  1589
  moment ago. If I may quote her again, she said on 28th July this year, only just over four months ago:
  "… the burden of aid on the balance of payments has been exaggerated, and … this should therefore not be advanced as a reason why the Government should not immediately increase their overseas aid …".—[OFFICIAL RFPORT, 28th July, 1964; Vol. 699, c. 1213–14.]
  The present Minister made that statement, that the balance of payments argument should not be advanced as a reason why the British Government should not immediately increase their overseas aid. Can we be assured that the present Government are going immediately to increase their overseas aid as the right hon. Lady said should be done?
  Mr. Michael Foot: Will it be in order, Mr. Jennings, for the rest of the Committee to discuss the full question of how much aid is to be given? Does that come into the field of discussing whether we should set up a new Ministry or not?
  The Temporary Chairman: I think that is a valid point, but this could be a fairly wide debate when dealing with a Department that takes in overseas development. If hon. Members keep well within that broad generalisation, I think that that would be in order.
  Mr. Carr: I will not, of course, broaden my argument further than I need, but the point I am trying to make is that we believe that there may well be a real justification for this Ministry if we really intend, as the previous Government stated publicly before and during the General Election that they intended to do if re-elected, to go on increasing our aid effort. If this is intended then there is a justification for the new Ministry, but if that is not so and if the Government are going back on the statement which I have quoted then the need for the new Ministry becomes much more doubtful.
  The second factor affecting what is the appropriate aid machinery is the state of the political and economic development of the countries which we are trying to assist. The major part of our aid in the past has, of course, gone to Commonwealth countries. Although I am glad that with the rapid increase in the aid programme in recent years an increasing amount of aid has been able
  1590
  to be given to foreign countries outside the Commonwealth, it will undoubtedly continue to be the case that the lion's share of our aid programme will go to the Commonwealth. So it is, I suggest, the structure and the state of development of the Commonwealth which determines, as much as anything, what is the appropriate machinery for us to have in this country for administering our aid programme.
  Some time ago, when nearly all our aid went to dependent territories in the Commonwealth, there was obviously no need for any separate aid Ministry, but as the number of independent countries grew and aid increased in priority it was appropriate to set up the Department of Technological Co-operation. Now, since further great strides have been taken under the administration of the late Conservative Government in converting the Commonwealth into a partnership of independent countries, the position has developed, and so it may well be that the appropriate moment has now come with this great growth in the number of independent countries in the Commonwealth to take a further step in adjusting our system of aid in this country and to create this new Ministry. But it must be clearly defined in its purpose and responsibility, and it is not so defined at the moment.
  On 10th November this year the Minister of Overseas Development came to the House and explained at some length the assumption by her Ministry of responsibilities previously discharged by the Treasury, the Department of Technical Co-operation and by the Overseas Departments. Her statement has left in its wake a great deal of confusion which we would like cleared up this evening. Since the Minister's statement on 10th November, my right hon. and hon. Friends tabled Questions on aid to the Commonwealth Secretary, in some cases to find them transferred to the Minister of Overseas Development and in other cases to find them not so transferred. The final peak of absurdity was reached a week ago yesterday when my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) tabled two Questions of a similar nature to the Commonwealth Secretary only to find that one relating to aid to Zambia was transferred to the Minister of Overseas Development, but that the other, on aid to Ceylon, was answered

  1591
  by the Commonwealth Secretary. Both Questions had been tabled on the same day and both after the Minister's statement on 10th November which claimed to define the issue of responsibility.
  What we want to ask the right hon. Gentleman, therefore, is where, then, does the underlying responsibility for Government aid now really lie, because, without far clearer and more detailed answers to this question, it is difficult to form a proper judgment of the value of the new Department. It seems to us that the disbursement of aid involves moral, economic and political considerations. The acceptance of aid as a prior call on the national wealth may represent a predominantly moral decision by this country, but its distribution will be determined principally on economic and political grounds.
  Given the fact that the supply of aid resources which we have is unlikely in any foreseeable future to be nearly as great as the demand for it from the developing countries, we are faced with the fact that major political decisions have to be taken which are basic to Britain's Commonwealth and foreign policy, as to which countries shall receive aid from Britain and among those which do receive it what proportion of our total aid shall be allocated to each.
  5.30 p.m.
  Hitherto, the prime responsibility for making these political decisions rested clearly with the Commonwealth and Foreign Secretaries. What I want to ask—and what I want a very clear answer to—is the question: what is the present position? It may well be right—I am one of those who think it is—for the management of all forms of aid now to be concentrated in a single separate Ministry. It would certainly be right that such a single separate Ministry should be given full opportunity to contribute to the making of the basic policy questions of the kind to which I have referred. But I feel equally sure that the prime responsibility for those actual decisions should rest, as it has done hitherto, with the Commonwealth and Foreign Secretaries, because these questions are absolutely basic to this country's Commonwealth and foreign policies. We therefore ask for an unequivocal statement from the Government, telling us
  1592
  how this responsibility is now to be divided between the new Ministry and the Overseas Departments.
  I also ask for something else, in due course. Not immediately, but in some months' time, the new Ministry should agree to publish a White Paper setting out, in far more detail than it was possible for the right hon. Lady the Minister of Overseas Development to give in answers at Question Time, the organisation, objectives and methods of the new Department. About nine months after the Department of Technical Cooperation was set up such a White Paper was issued, giving a similar account of the Department's work. I ask the right hon. Gentleman to undertake to see that the new Ministry will take a like step at some reasonable time in the future. I do not want to be dogmatic as to when that should be. I fully understand that the new Ministry needs some months to get on its feet before it can publish a significant White Paper of that kind, but it would be helpful to have a White Paper, say, about nine months or a year after the setting up of the new Ministry. I hope that we can have an assurance on the matter.
  Before I leave the overall question of the Ministry and turn to my final rather constitutional point, I cannot help reflecting on the difference in the way in which the Department of Technical Co-operation was set up under the previous Conservative Government, in 1961, and the way in which this Ministry is being set up today. In the former case the Government, as was their job, took a decision that such a Ministry was needed, but before taking further action they consulted the House and persuaded the House to pass legislation. Then and only then did they set up the Ministry. We are passing this legislation after a month of the new Parliament's life. I simply cannot believe that it was necessary, except as a bit of political gimmickry, to rush ahead and set up this Department without doing Parliament the courtesy and, as I think, fulfilling the proper constitutional duty of a Government, of seeking permission of the House of Commons and getting a proper Act passed before doing it.
  What we got from this Government was a diktat from the Prime Minister, who then came to Parliament to whitewash

  1593
  his actions afterwards. Even if, as in this case, they are actions that we approve of, it is wrong in constitutional principle, and is to be deplored for that reason.
  I have one more point to raise, of a detailed constitutional nature, concerned not with overseas development as such but with the constitutional procedure of the actual establishment of the new Ministry of Overseas Development. My right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) raised this point a week or two ago in the Second Reading debate. He asked several questions, and although the Chancellor of the Duchy of Lancaster replied to the debate I am sorry to say that he did not answer those questions. I must therefore repeat them.
  Paragraph 2 of Schedule 1 provides that:
  "The Minister may appoint such secretaries, officers and servants"
  as are required. Have the secretaries, officers and servants already been appointed? If so, by what authority? Paragraph 3 provides that
  "There shall be paid to the secretaries … such salaries or remuneration as the Treasury may determine".
  Paragraph 4 provides that
  "The expenses of the Minister, including any salaries or remuneration payable under paragraph 3 of this Schedule, shall be defrayed out of moneys provided by Parliament".
  Have the salaries been paid? Were they determined by the Treasury? Has Parliament voted the money, as laid down in Schedule 1? If they have all been appointed, and all these actions have been taken, we want to be told under what authority they were taken.
  I am sure that in bringing individuals into this question the Committee will realise I am nevertheless introducing an entirely impersonal point. Many distinguished public servants affected by this legislation were my excellent advisers when I was Secretary of Technical Cooperation in the Last Administration. I am glad to rate many of them as my personal friends, and I am delighted for their sakes and for the country's sake that their responsibilities are being increased in this way. Nevertheless, I feel that the Committee should also be concerned with maintaining Parliament's authority, and I do not think that these things, however desirable they are,
  1594
  should take place until every proper authority has been given.
  Those are the questions which my hon. Friends and I want to have answered. If we feel that they are answered reasonbly and fully we shall not advise the Committee to divide on this issue, because, basically, we welcome the establishment of this new Ministry and want to wish it well.
  Mr. Houghton: I rise now only in response to the right hon. Gentleman's request that he should not have to wait too long before his questions were answered. I have no desire to stand in the way of other Members who wish to join in the debate later, and any further points that are made can no doubt he dealt with subsequently.
  I am sure that the Committee listened with great interest to the right hon. Gentleman, because of his special responsibilities in a former Administration as Secretary for Technical Co-operation, and we are bound to hear his views not only with interest but with respect. It is gratifying to know that on this Amendment the Government have a measure of good will, which was not in very clear evidence on the last Amendment. On overseas development hon. and right hon. Gentlemen opposite are with us; on land—especially on any cure for land racketeering—hon. and right hon. Gentlemen opposite are not with us. That is the difference between their approach to the two Amendments.
  I am anxious to respond to the mood which the right hon. Gentleman has expressed so far. First, he referred to the setting up of the Department of Technical Co-operation and said that the then Government brought to the House a Bill which was properly debated and passed through all its stages before the Ministry was set up. That is true. But Parliament was then in being. Parliament was in session, and there would have been no excuse for the Government's having acted otherwise than they did on that occasion. I should hope that any Government would do the same thing. But on this occasion we were at the beginning of a new Parliament. Parliament was not sitting. Steps had to be taken by a newly appointed Prime Minister to arrange his Ministerial strategy, look at the policy of his Government, and find Ministerial ways and

  1595
  means of giving effect to it. In creating new Ministries at that stage no opportunity existed to come to the House of Commons for approval. The Prime Minister had to use the Prerogative for appointing Ministers in those circumstances. These are the Ministers referred to in Clause 1.
  Having used the Prerogative for appointment, my right hon. Friend then has to come to the House of Commons for the necessary sanction for expenditure and the creation of the Ministries appropriate to the Ministers. The constitutional position seems to be this. The House of Commons has no control over the exercise of the prerogative. Therefore, the House of Commons cannot destroy a Minister appointed by the Crown. What it can do is to deny funds to a Minister so appointed. It can decline to pay him any salary. It can decline to provide any machinery for his functions. It can, indeed—we shall deal later on in the Bill with some aspects of this matter—exclude him from the House of Commons, but it cannot destroy him. Clearly there is no point in having a Minister without a department, without the approval of the House of Commons, and without a seat in the House of Commons. He cannot carry on very long like that, can he?
  Mr. R. Carr: Are there equal rights for women in these exclusion powers that the right hon. Gentleman has been talking about?
  Mr. Houghton: Yes. I am sure the right hon. Gentleman understands that. I did not want to refer especially to women, because it comes a little closer to my right hon. Friend the Minister of Overseas Development. I think that is a pretty good explanation of the difference in procedure on the setting up of the Department of Technical Co-operation and the Ministry of Overseas Development. We are coming to the House of Commons for the necessary approval for the creation of these Ministries.
  That brings me to the next point, because the right hon. Gentleman complained, rather bitterly and in quite strong language for him, at the absence of my right hon. Friend the Minister of Overseas Development. I can only tell the Committee that I take full
  1596
  responsibility for that on this matter, as I did before. I will explain why. The right hon. Gentleman said that it is the normal custom in the House of Commons for a Minister to be present when the work of his Department is under discussion. With great respect to the Committee, the work of this Ministry is not under discussion. What is under discussion is the creation of the Minister of Overseas Development and the provision of the constitutional framwork under which that Minister can function. That is what we are discussing today. In due time there will come before the House of Commons Transfer of Functions Orders and Estimates, when the work of the Department will be debated and when the full delineation of its function before the Committee and the House of Commons and everything connected with the work of the Department will be available for debate.
  I am sorry to keep stressing the fact that we are now discussing the creation of a Ministry and the provision of the constitutional framework for it to function. That is what we are doing today. Therefore, it does not rest upon the Minister to come here and explain the work of the Department. This is a Machinery of Government Bill. This is not a debate on a Supply Day or on Estimates or on a Transfer of Functions Order. I submit that what we have to do, difficult as it is within the framework of today's debate, is to keep strictly to the question of the justification for the creation of the Ministry.
  Mr. Richard Hornby: The right hon. Gentleman rightly says that we are discussing the creation of a new Ministry and the constitutional means of its functioning. Would he not agree that the only way in which one can seriously argue whether it is right or wrong to approve of that decision is by looking to some extent at the duties which the Ministry has to perform? Unless one includes that in one's thinking, as my right hon. Friend did, it is very difficult to come to a conclusion on the questions which we have posed and which his right hon. Friend the Minister concerned is not here to listen to.
  5.45 p.m.
  Mr. Houghton: I do not deny that, as a matter of order and of defining the scope

  1597
  of the debate, there are obvious difficulties. But we are discussing what the new Ministry will do. We are not entitled to ask the Minister to come here this afternoon and answer the question, "What are you doing?"—[Interruption.] This is hard going for the dull intellects, but we shall have to get on as best we can with these difficulties in mind. My job, on behalf of the Government, is to try to satisfy the Committee that this Ministry should be set up. One can distinguish between that responsibility and calling the Minister to the Dispatch Box to answer questions about what she may he doing or what her exact functions are at the moment, when we are still dealing with the constitutional framework of the Ministry. There will be plenty of opportunities later for discussing what the Minister is doing, what is the policy of her Department, and all matters connected with the transfer of functions from other Departments to her own. I think that should satisfy the Committee as to the direction—
  Mr. Stratton Mills: On a point of order. The Committee has been put in an absurd position, in that the Minister concerned is not present, for the reasons that the Chancellor of the Duchy of Lancaster has stated. Would you, Mr. Jennings, be prepared to accept a motion to report Progress while the Minister is asked to attend?
  The Temporary Chairman: This point of order was raised previously. I cannot accede to the request.
  Mr. Houghton: The hon. Gentleman is slipping. I thought that we had the good will of right hon. and hon. Members opposite. I am doing my best to steer the debate on a rational course at the present moment. I am trying to avoid getting unduly mixed up discussion which is appropriate to a Machinery of Government Bill for the creation of the constitutional sanction for these Ministries and the natural interest of right hon. and hon. Members in matters which can more appropriately be dealt with when the Minister can be held to account for her actions and policy and when the House of Commons will be asked to approve Transfer of Functions Orders which will then define the boundaries of her responsibility and what responsibilities will be released from other Departments to the newly created Department.
  Mr. Nigel Fisher: The right hon. Gentleman is always so disarming and charming that one is tempted not to interrupt him, but this is a very unsatisfactory position. We on this side just do not know where the division of responsibility comes between the right hon. Lady's Department, the Commonwealth Secretary and the Colonial Secretary. It is not helpful to try to evade the issue. The right hon. Gentleman does it beautifully, but he will not be able to answer the legitimate questions which will be asked throughout the debate by hon. Members on this side. He will prolong the debate. I hope that the hon. Lady the Under-Secretary of State for the Colonies will be able to help us. She is the only Minister concerned who has had the courtesy to attend.
  The Joint Under-Secretary of State for the Colonies (Mrs. Eirene White)The Joint Under-Secretary of State for the Colonies (Mrs. Eirene White) indicated dissent.
  Mr. Fisher: I warn the right hon. Gentleman that, with all his charm, he will delay the debate, because with the best will in the world he will not be able to answer questions on the division of responsibility.
  Mr. Houghton: It is very difficult when an hon. Member opposite says, "What we want is answers to our questions but the right hon. Gentleman will not be able to give them".
  Mr. Fisher: The right hon. Gentleman will not, with the best will in the world.
  Mr. Houghton: At least the hon. Gentleman might give me a chance. I am prepared to put up with any criticism that is reasonable in the circumstances after I sit down, but I am still trying to convince the Committee that our task this afternoon is to erect the constitutional framework to support a Minister already appointed under the Prerogative. That is what we are doing. I must keep on ramming that home, otherwise we shall roam over the whole field of overseas development, aid to other countries, the economic situation, whether momentum is to be maintained, whether what the right hon. Lady said in July still holds good, and many other questions that the right hon. Gentleman has asked.

  1599
  The whole purpose behind the new Ministry is to bring together overseas aid which up till now has been in the hands of several Ministries. The Department of Technical Co-operation was a similar, an earlier, exercise. I very well remember that debate on the setting up of the Department of Technical Co-operation, and the purpose in doing so. The purpose was to bring together under one Minister the calls that were being made throughout the world, and particularly in the Commonwealth, for all types of personal service, and assistance in economic, scientific and civil engineering projects in different parts of the Commonwealth.
  It was, as it were, the recruiting agency and clearing house for the services of persons. If countries wanted teachers in English, or scientists, or bridge builders, research workers or doctors, and the rest, it was to the Department of Technical Co-operation that they applied. That Ministry was able to deploy the available resources to the best advantage in meeting the calls made upon it.
  I remember that when I was Chairman of the Public Accounts Committee we examined the accounting officer of the Department, and were most interested to hear how it was getting on, and how its work of co-ordination and centralisation of supply of services to the Commonwealth and other countries was progressing. It seemed to us at the time that it was a good step in the right direction.
  We propose to carry it further, because although the Department of Technical Co-operation was responsible for providing the services of persons it was not responsible for the provision of economic aid. It did not have responsibility for financing projects in other countries. That rested with the Commonwealth Relations Office or the Colonial Office as the case may be—and, in some cases, probably the Foreign Office, especially if the call was for some assistance to projects undertaken by U.N.E.S.C.O. or the United Nations Organisation.
  It therefore seemed to my right hon. Friend the Prime Minister, well before the General Election, that there was a case for bringing together a still wider range of overseas aid under one Minister. The Committee will remember that my right hon. Friend said, before the General
  1600
  Election, that if he became Prime Minister it was his intention to create a Minister of Overseas Development, with a seat in the Cabinet. That has been done. So, to the extent to which my right hon. Friend's views were made known before the election, we can say that there is at least some sanction for what he did in our being on this side of the Chamber at present.
  This new Ministry, and new Minister with a seat in the Cabinet, will give fresh prestige and significance to what he hope to do—indeed, what we are doing—in economic aid and in the work of the Department of Technical Co-operation which is being transferred to the new Ministry.
  I would here digress for a moment to refer to the right hon. Gentleman's questions about the authority for any expenditure already incurred in connection with the new Ministry. Since the same point arises in connection with all three of the new Ministeries mentioned in Clause 1, I suggest that it would be for the convenience of the Committee if we dealt with it on the Question that the Clause stand part of the Bill. It is the same point in all cases.
  Returning, now, to the reason for the setting up of the new Ministry, I say at once that there was no dissatisfaction with the work being done by the Department of Technical Co-operation. We fully approved of its being set up. We watched its progress with interest and approval. I am sure the right hon. Gentleman will say that whenever he spoke to the House on the work of his Department he received the closest interest and warmest approval from us, when in Opposition, for his work. I want to pay tribute to the right hon. Gentleman's own work there, and to that of his Department. Those of us who know the officials to whom he referred realise what strength and enthusiasm and administrative ability lay there for the task that his Department had to discharge. I am happy to say that a good deal of that, if not all of it, is available in the new Ministry.
  The Committee will probably agree that, having seen the work in the past and wishing to propel it forward with a new initiative, a new significance and a higher prestige throughout the Commonwealth and the world, this is a natural

  1601
  step for us to take. It brings the whole complex of overseas development under the surveillance, and to a large measure under the control, of one Minister. It will be the job of the new Minister to bring the varying requirements of Commonwealth and other countries and of the United Nations together in her Ministry in order that what aid we can give—and we hope that it will be an increasing volume of aid—can be deployed to the best advantage in the interests of developing nations and the improvement in their economic and social conditions that they wish to achieve—
  Mr. Tilney: Does that mean that it will be the decision of the right hon. Lady what aid, capital or otherwise, shall be given, and not the decisions of the Secretaries of State for the overseas Departments?
  Mr. Houghton: I was just coming to that point. I would remind the Committee that on 10th November my right hon. Friend made a statement to the House to which reference has already been made, and which can be found in columns 840 and 841 of the OFFICIAL REPORT.
  On the point just raised by the hon. Gentleman and raised also by the right hon. Member for Mitcham (Mr. R. Carr), I can, say that in the past few weeks there have been extensive discussions between the Ministry of Overseas Development and the three overseas Departments about the detailed implementation and practice of the transfer of responsibilities on which the Government have decided. Here, again, we are in difficulties in giving to the Committee the completed picture of the transfer of functions and responsibilities when, so far, all we can embark upon is the constitutional sanction for the Ministry itself. Hon. Members will have the opportunity to debate this matter of the transfer of functions when it comes up in the customary way, on the Estimates of the Department, and so on.
  I submit that what we have to be satisfied about at this stage is that there is a prima facie case for the creation of the Ministry—[Interruption.] Surely, that is so. When the Bill creating the Department of Technical Co-operation was before the House, about all that the Government could ask the Opposition to interest themselves in was whether there
  1602
  was a prima facie case for the new Ministry—
  Mr. Eldon Griffiths: If what the right hon. Gentleman seeks to do is to establish a prima facie case, the best person to do it is the Minister, and that is the complaint that we on this side make. The right hon. Gentleman has gone on to define the functions of the Ministry. It is very gallant of him to protect his right hon. Friend, a lady, from the Committee, but the point is that if the right hon. Lady does not know what her Ministry is doing, how on earth can the right hon. Gentleman? I must ask him this very simple question. He is trying to tell us what the Ministry is, but he does not, apparently, intend to allow us to ask the Minister what her Ministry will do. It seems to me quite absurd to make this distinction. Surely it is not too much to ask, and not really a party point, that the Minister should come here and tell us what it is her Ministry proposes to do. We are not asking very much more.
  6.0 p.m.
  Mr. Houghton: We are getting back into the old dilemma and into the old confusion. It is my right hon. Friend the Prime Minister who has said that he wants a Minister of Overseas Development.
  Mr. Griffiths: And where is he?
  Mr. Houghton: Therefore, it is the Prime Minister's responsibility to advise the Crown on the use of the Prerogative to create the Minister. That is the first stage. It is then the Government's responsibility to ask the House of Commons for the necessary approval in the constitutional way for the step which the Prime Minister has taken. I submit, therefore, that it is not the responsibility of the Minister concerned to be accountable to this Committee for her existence.
  It is the Government's responsibility to satisfy the Committee that this Minister is required. I can see that hon. Members opposite are still having difficulty in their minds about this, but I am making it as clear as I can. It is as clear as a pikestaff to me, because I understand these fine distinctions in constitutional procedure.
  Mr. Griffiths Mr. Griffiths rose—
  Mr. Houghton: Oh, no, not again. I repeat that we are not discussing the functions of this Department, because they will come before the House of Commons in proper fashion and in due season. That is when the House of Commons will look at the functions of the new Ministry. I shall not go on repeating myself on this question, but I submit to the Committee once more that here we are asked to give constitutional sanction to a step taken by the Prime Minister and to make provision for this new Ministry. It is, therefore, only common sense to suggest that before giving approval to the creation of the new Ministry the Committee naturally wishes to know whether the new Ministry is justified.
  It is not a responsible attitude for hon. and right hon. Members opposite to ask for satisfaction on every conceivable point of detail, and not even on some questions of importance, in connection with the functions and the policy of the new Ministry. The Committee has to see whether there is a prima facie case for it, and give its approval if it thinks so and reject it if it does not think so.
  Mr. R. Carr: With respect, I did not put to the right hon. Gentleman questions of detail. I put to him questions of broad policy and principle. The Committee should not be insulted by being asked to give its approval if the Government cannot take the trouble to explain to us what they wish the Ministry to do. [An HON. MEMBER: "Mischief."]
  Mr. Houghton: All right, it is mischief then, is it?
  Mr. Carr: We want a reasonable answer.
  Mr. Houghton: I am trying to give a reasonable answer. I was in the course of explaining to the Committee that the several directions in which aid is given should be brought together under one Minister. It surprises me that the right hon. Member for Mitcham, who was himself Secretary for Technical Co-operation, does not appreciate the need for the steps which the Government are now taking.
  Mr. Carr: I am sorry to interrupt the right hon. Gentleman. I made it absolutely clear that I appreciated the step. I made clear the good will of this side of the Committee for what we believe
  1604
  to be the principle, but we are entitled to know something about the broad functions and polices which justify the setting up of the Department. We want to give good will to this, but this way of going about it is calculated to lose the good will and also to delay the proceedings of the Committee. I simply cannot understand why the right hon. Gentleman and the Government as a whole cannot reasonably give us the answer for which we ask. I am sorry for the right hon. Gentleman. He says that I know about this subject. I therefore appreciate how terribly difficult and almost impossible it must be for anybody except the Minister to give broad assurances on questions of policy which the Committee ought to have before they are asked to take this step.
  Mr. Houghton: The right hon. Gentleman says that hon. and right hon. Members opposite are anxious to help and that they agree with the broad principle. Is not that the whole point, and is not that what the Committee is asked to do? It is being asked to agree to the principle of setting up a new Ministry and to discuss its functions in detail when those functions come before the House of Commons in the proper manner and to look at the level of aid and other expenditure of the Department when those come before the House. I am surprised that a former Secretary for Technical Co-operation is not more forthcoming in accepting the principle of the new Ministry, because the right hon. Gentleman must have seen the limitations of his own functions and activities very clearly when he was in office. He must have wished many times that he had wider responsibilities than were given to him in that Department.
  This is what the Government are proposing. It is the Government's responsibility and the Government spokesman's responsibility to convince the Committee, if possible, that there is a prima facie case for this new Ministry and to ask the Committee to approve the principle. When the right hon. Gentleman says that his hon. and right hon. Friends are anxious to have answers to questions, I can only point out to him that my right hon. Friend the Minister of Overseas Development made a long statement on 10th November which covered a pretty wide field. I invite hon. Members to cast their eyes down her

  1605
  statement. They will see that she referred not only to the Commonwealth and other countries but to aid to be given to the United Nations Organisation, to U.N.E.S.C.O. and to the F.A.O. That is a clear enough answer about the general scope of the new Ministry and the direction in which it proposes to go.
  The right hon. Member for Mitcham asked whether it was the Government's intention to maintain the momentum of aid. He referred to a speech made by my right hon. Friend in the summer, but with great respect I am not called upon to say now what the level of aid can be next year, or what may be the financial limits of the activities of the new Ministry. All I say is that it is the pledge of a Labour Government to increase the momentum of overseas development as rapidly and as extensively as circumstances allow. No one can be expected to go further than that.
  The Committee is aware of the economic problems now besetting the country, which one cannot ignore even in the field of overseas development, especially where they affect the balance of payments. But just as the Labour Government resolved that the social benefits to bring overdue relief to old people, the sick, the disabled, the widows and others should not be deferred in present economic circumstances, so a Labour Government has resolved that we should maintain the momentum of overseas aid to the limit of economic possibility—and that will be the function of the new Ministry.
  Naturally, there are considerations of policy at the Foreign Office, the Commonwealth Relations Office and the Colonial Office. As I have said. discussion is in train for the transfer of functions, and this will come before the House in due course. In the meantime, my right hon. Friend will act in co-operation and consultation with the other overseas Departments. Obviously, she will need to act in harmony with the policies of the overseas Departments, and all sorts of considerations will arise in regard to which harmony and cooperation in policies will be needed. But I stress again that here is a function for a Ministry which expresses the hope and will of the new Government to bring overseas development within the responsibility, as far as possible, of one
  1606
  Minister, so that there may be coordination of the aid given and there may be a general review of needs throughout the Commonwealth and the world. We believe that it will make more sense to have this work concentrated in the hands of one Minister rather than divided as hitherto.
  I have done my best to satisfy the Committee that there is a case in principle for the new Ministry and that there is a convincing enough case for sanctioning the setting up of the new Ministry as provided by the Clause. I hope that we shall have the co-operation of the Committee in the establishment of this new Department with such noble work to do on such an extensive scale which will surely be the expression of the good will and intention of the nation as a whole.
  Mr. Grimond: I do not want to add to the amount of heat rather than light which has been generated so far this afternoon. I had intended to ask one or two rather simple questions, but I do not think that we can allow the right hon. Gentleman's speech to pass without comment. His argument appears to be that the Committee should agree to a prima facie case that, in principle, a new Ministry should be set up. How can the Committee agree unless it knows what the new Ministry is to do?
  I agree with the Chancellor of the Duchy in not wanting the Minister here, but I want to be told what the functions of the new Ministry will be. The right hon. Gentleman says, "Set up the new Ministry, and we shall find some functions for it". He does not know what the functions are. In the debate on the last Amendment, it was clear that he did not know what the planning functions of the Ministry of Land and Natural Resources will be, or what its relationship with the Forestry Commission will be. He could not answer a very pertinent question about ultimate decisions in those matters. These are not details. They are the functions of the Ministry.
  Mr. Houghton: Has the right hon. Gentleman read the statement which my right hon. Friend made to the House?
  Mr. Grimond: Of course, I have.
  The House of Commons is not, as he implied at one point, concerned here with standing up to land racketeers. It

  1607
  is examining, as is its duty, what the Government are doing in setting up more Ministries and, as a related matter, causing more public expense. This is an issue for the whole House, not just for the Opposition. I am rather surprised at the attitude taken by the Chancellor of the Duchy himself, because when he sat on this side of the Committee, he was a great one for examining accounts in some detail; and rightly so. He was a stickler for the rights of the House of Commons, demanding that the Government should account for their actions. Quite right. That is what we are doing now. It is our duty.
  There were moments when the right hon. Gentleman did not seem to me to resemble the hon. Member whom we used to know. He seemed to be more a sort of emanation from Mr. Ramsay MacDonald in his latter years. We were told that the Government would go on and on and up and up, and that, if they thought anything important, they would set up a Ministry. There will be a Ministry for the sun and moon at this rate. The right hon. Gentleman has made no real attempt to justify these Ministries, and I do not think that we shall improve the speed of progress today unless he can answer some questions about their functions, not questions about details of policy but about what they will try to do.
  I should regard it as Alice in Wonderland if we were to accept the setting up of a Ministry without knowing what its functions were and having had no more than a promise that, at some future date, an Order would be brought before the House telling us what they would be. If the Government do not know what the Ministry will do, what is the urgency in setting it up?
  Mr. Nigel Birch: We all know that.
  6.15 p.m.
  Mr. Grimond: The right hon. Gentleman reiterated something which he had said on Second Reading, that the Prime Minister, in a sober and constructive spirit, had made known over television and radio the changes necessary in the Government. So he did. One of the points he made was that a Cabinet of 23 was far too big. He has set up a Cabinet of 23, and this Minister is in it. There
  1608
  may be reasons for it, but it is not something which was explained to the nation at large over television and radio.
  I feel some concern about the relationship of this Ministry to various other Ministries which, in my view, should take a keen interest in aid to overseas countries. I do not believe that a country in Britain's state, with a vast deficit, is in a very good position, at present, to invest very largely overseas. As far as direct investment is concerned, I should not have thought that this was the ideal moment to set up a Ministry primarily for that purpose. However, there are very important functions as regards trade, education, technical assistance and technical training, and these all affect other Departments of the Government, and I should be extremely sorry if, for instance, the Ministry of Education were to plan for places available in further education without taking into account the number of applications which may come from overseas students. The Board of Trade should be vitally concerned in aid to under-developed countries, and the Foreign Office should, too.
  It would be extremely difficult for this or for any other country to support really effective programmes of overseas aid on its own. Therefore, the co-operation of this new Ministry with representatives of the United Nations and with the other overseas Departments will be extremely important.
  I have read the statement by the right hon. Lady the Minister of Overseas Development, 10th November, and I am glad to know that the Chancellor of the Duchy has read it, because I thought, from his speech, that he regarded it as unnecessary to read it. At one point, the right hon. Lady said:
  "In addition, because of the importance of aid and technical assistance in the activities of U.N.E.S.C.O. and F.A.O.. the Ministry of assume the prime responsibility for relations with these bodies from the Department of Education and Science and the Ministry of Agriculture, Fisheries and Food respectively."—[OFFICIAL REPORT. 10th November, 1964; Vol. 701, c. 841.]
  I do not suppose that we shall have an assurance today, but I should like to leave on record the point that I very much hope that this Ministry will work in the very closest co-operation with the other Ministries concerned and that the setting-up of the new Ministry, of which

  1609
  I approve, will not mean that the other Ministers will feel that they can set aside those responsibilities as they will no longer be within their strict terms of reference.
  Mr. Charles Longbottom: The Chancellor of the Duchy of Lancaster has treated the Committee in a quite extraordinary way this afternoon, asking us to accept what he regards as a prima facie case for instituting the new Ministry without giving us any details of what it would do. It is extraordinary to expect us to give carte blanche in that way without answering the most pertinent questions which my right hon. Friend the Member for Mitcham (Mr. R. Carr) asked in moving the Amendment. I think that the whole Committee agrees in principle that co-ordination in our aid effort is very much needed. Many of us argued that case long before this, and many of us have welcomed the new Ministry, but, before we pass from the Amendment. we are entitled to be told a little more about what the broad functions are to be.
  What are to be the broad functions of the new Ministry as regards the United Nations Trade and Development Council? What harmony will there be between it and the Board of Trade and the Treasury as regards Britain's policy towards this new United Nations body, a body which was set up after a great deal of hard work by the President of the Board of Trade in the last Administration, a body which went forward from Geneva to the United Nations in New York, a body which, I am sure the right hon. Gentleman will recognise, as many others will, is being looked to with great enthusiasm and great expectation by developing countries in the Southern Hemisphere? What will be the broad policy and the broad relationship between the Ministry of Overseas Development, the Board of Trade, the Treasury and the other overseas Departments with regard to this most important new body? It is not clear from the Minister's statement.
  Perhaps the right hon. Gentleman could answer this question. One has noticed in recent weeks, and has been glad to notice it, that the right hon. Lady has been seeing a number of
  1610
  Commonwealth Finance and Trade Ministers who have been passing through London on their way to the United Nations. No doubt she has been having talks with them in broad general principle about aid for their countries, and this we welcome. But perhaps the Committee could be told whether it has yet been decided whether the right hon. Lady will have her own representatives serving overseas and attached to embassies or whether she will have to rely upon staff from the Foreign Office, the Commonwealth Relations Office and the Colonial Office according to the territory.
  Will the right hon. Lady have her own representation abroad? How is it being organised? This is very pertinent. If she and her Department are to make decisions in this country in conjunction with Finance and Trade Ministers from overseas territories, we must know how the aid projects are to be carried forward. Are they to be carried forward by her Department with representatives of its own attached to our embassies, or will she have to rely on the staff of other overseas Departments?
  Finally, looking at the whole broad question, I would ask the right hon. Gentleman whether he does not appreciate that in setting up the Ministry of Overseas Development the Government have created great expectations in the minds of people in the developing countries. They are not just expecting another Ministry. They are expecting great things to happen through this Ministry. It would be very wrong to ask the Committee to approve the establishment of a new Ministry just on a prima facie case put forward by the Chancellor of the Duchy when so many people in so many countries are looking with great expectations to the new Ministry. The Committee is entitled to know in a little more detail whether those expectations will be satisfied.
  Mr. Turton: When we were discussing the previous Amendment my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) pointed out that the proposal was in conflict with a recommendation of the Estimates Committee, but this proposal, whether it is right or wrong, is in direct conflict with the recommendation of the Select Committee on Estimates in its Fourth Report in the

  1611
  1959–60 Session. I hope that before they go forward with this the Government will explain why they have rejected the recommendation of the Select Committee.
  It was suggested in the Select Committee, after a very full inquiry, that there should be a merger of the Colonial Office and the Commonwealth Relations Office and that there should be created one large Commonwealth Office divided into three Departments, one to deal with relations, one to deal with responsibilities and one to deal with overseas aid. I am open to be convinced that the Select Committee was wrong and that the Government have a better system. I suspect, however, that the new proposal is wrong in that it is keeping a division between the Commonwealth Relations Office and the Colonial Office.
  According to the explanation given by the right hon. Lady on 10th November, the responsibility for aid in any particular country is hers and not that of the Commonwealth Secretary or the Colonial Secretary. Aid being a principal instrument of policy within the Colonial Office, it is wrong to have a separate Minister who is not under the Minister for Overseas Development. The only justification for the proposed set-up, as explained partially by the Chancellor of the Duchy and in fuller detail by the right hon. Lady in reply to a Question, would be to have the right hon. Lady as Minister for Overseas Development in the Cabinet and for her to have two Ministers of State—the Colonial Secretary and the Commonwealth Secretary, for I cannot see how they can properly administer their Departments without having any responsibility for aid. We have been tabling Questions during the last fortnight about the future of land in Kenya. Our whole policy towards Kenya depends upon aid. The Commonwealth Secretary and his Department have nothing to do with it. It is the Minister for Overseas Development who is ably interviewing visiting Ministers. The others are shorn of all responsibility. I fear that the Prime Minister's set-up will be very wasteful in manpower and will create a great deal of confusion between Ministers, because we shall have two Ministers who will be completely emasculated in regard to their responsibilities.
  1612
  The right hon. Lady has inherited the responsibility in the domain which was so very well looked after by my right hon. Friend the Member for Mitcham (Mr. R. Carr). The weakness of the old Department of Technical Co-operation was that it had some 950 staff all of whom were home-based. We ought to be told before we finish the debate whether the right hon. Lady will have any staff overseas. I cannot see how she can operate unless she has her advisers in every country in the Commonwealth and a number of foreign countries. At the present time those advisers are on the payroll of the Colonial Office or the Commonwealth Relations Office. How can one justify the continuance of the three Departments if one is to have the Minister for Overseas Development doing the work that both sides of the House want her to do? There is no real division in the House about the work to be done, but I have very grave hesitation in voting for this proposal when we have these three Ministers all ineffectively trying to do the same piece of work.
  I hope that before we finish the debate the Chancellor of the Duchy will try to go back to the very clear evidence of Sir Hilton Poynton in column 1147 of the Report of the Select Committee to which I referred, who put out the picture of how he saw the merged Commonwealth Office working. Anyone who reads that will be struck by it. Sir Hilton knows more about it than any man living in Britain, and that was his recommendation. It was overturned in a sudden access of power in October without real thought being given to it. I hope that in this debate the Chancellor of the Duchy will not wait for any transfer of functions Order but will tell us how it will be an efficient set-up.
  6.30 p.m.
  Mr. Hornby: There are, I believe, a number of very good reasons why we probably should have a Ministry such as the one we are discussing. I start on that point because I think that the right hon. Gentleman the Chancellor of the Duchy suggested to my right hon. Friend the Member for Mitcham (Mr. R. Carr) that he was not in sympathy with the proposal. My concern is that I do not think we have heard good reasons from the right hon. Gentleman in his speech this afternoon.

  1613
  It seems to me that he really let the cat out of the bag, and I think I quote his words rightly when I say that he said that this Ministry will give fresh prestige and significance to what we are doing. It is my feeling that prestige is not, in fact, what we are about. What we are after is efficiency in what we are doing and in the deployment of the resources that we have available for overseas aid. That is the way that the prestige will come. It will not come by setting up yet another Ministry in Whitehall. Prestige may accrue to the right hon. Lady in charge of the Department in personal terms, but the prestige that we want is the efficient distribution of the aid that is available, and on that we have heard nothing in this debate. It was on that score that I interrupted the right hon. Gentleman, who was good enough to give way to me earlier, but I think that we should have had a more careful examination of what this Ministry is to be about.
  The right hon. Lady answered a question of mine earlier in which she gave the broad outlines of what was intended, hut, in fact, as my right hon. Friend said earlier, there are still very grave gaps in our knowledge of how this Ministry is to work. Certainly, there would be added significance to the deployment of our aid and added reason for giving a warm welcome to this Ministry if, for instance, we were to know that the money we spend here meant more aid in real terms on the spot, in the overseas countries to whom we give aid.
  If there is that better organisation and better operation in mind, we have not been told so this afternoon or on previous occasions in what way the new Ministry will achieve more than the old methods were doing. This is what we should like to know. Again, one of the questions in our mind is: are we giving the aid which we do give to the most appropriate places? One would like to know in what way the new machinery is likely better to answer this question. We have not had any answer to it this afternoon.
  Again, we should like to know and to feel that when requests are made to us in this country they are met as quickly as possible. Very often in the recruitment of a particular person it is of vital importance that the right person should he found and then have satisfactory conditions
  1614
  of employment agreed, and that he should then be got to the place where he is wanted. Are we to know whether the new Ministry—I think that it is quite possible that this may happen—will make it easier for this to be done? We have not had a word said about this from the Government this afternoon.
  On recruitment itself, will the new Ministry make it easier, in fact, to get the right man into the right job as quickly as possible? I hope that it will—I believe it may—but we have been given absolutely no explanations of why this is likely to happen in the justification for the new Ministry for which—and this is an important point—we are asked to provide public funds.
  I hope that the Government will respond to the requests made by my right hon. Friend for a White Paper, in wider explanation of what is intended, at the earliest possible moment, because on present evidence we cannot tell how this Ministry is working or whether it is likely to work well. I hope, therefore, that this proposal will go through. I believe that it can be effective, but I certainly think that the House of Commons needs to be told a great deal more about how it will work.
  Sir Godfrey Nicholson: I think this debate is important for two reasons, first, on the broad matter of principle underlying the foundation of this new Ministry, and, secondly, because it is treating the Committee rather casually without giving it adequate information. The right hon. Member for Orkney and Shetland (Mr. Grimond) thought that it was an Alice-in-Wonderland sort of debate. I think that it is much more like the hunting of the snark. The House will remember that the map provided to the crew by the skipper was one admirably suited to their intelligence, so he thought, because it was "a perfect and absolute blank". Then, by the constant repetition of his arguments, the right hon. Gentleman reminded me of the character who kept on saying, "What I tell you three times is true". Finally, he seems to be like the poor man who forgot everything, including his own name, and the climax of the tragedy was that he had 28 boxes all carefully packed with his name printed clearly on each, but since he omitted to mention the fact, they were all left behind on the beach. All the

  1615
  arguments of the right hon. Gentleman have been left behind on the beach.
  But, seriously, will the right hon. Gentleman tell us anything about the relations between this new Department and the Treasury? It is vital for the House to know what measure of control the Treasury can exercise over this Department. Will there be a limit to the aid in any particular case that can be given to a Commonwealth or foreign country? Will there be a block grant given under the Estimates to this Department and will its distribution be entirely at the disposal of the Minister? That is one of the things that I want to know. But these are questions of relative detail. The really serious aspect of the matter was brought forward by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) that the establishment of this Ministry is a thoroughly retrograde step.
  I was interested in his reference to the Report of the Estimates Committee, for I was chairman of the sub-committee that produced that Report. We had masses of evidence which swung our minds round to the conviction that from the point of view of the unity of the Commonwealth in relation to the Commonwealth and colonial countries it was essential that the two Departments should be merged, and the particular point was made by the witnesses of the need for technical and other aid to be under the same directions.
  Since this Government have been formed I think that there has been a demerging operation. That is a most retrograde step. This is the final act to have technical aid questions considered with no reference at all, other than departmental negotiations, to the C.R.O. or the Colonial Office, and the dividing of those two Departments is really ridiculous.
  Other hon. Members have pointed out that in our relations with the Commonwealth countries, aid is the most important subject of all. Kenya has been quoted. How can relations be carried on with Kenya when one Department is distributing aid and help, and when, on the other hand, political relations are being conducted through the C.R.O.? This is a tragic and retrograde step. We have been having fun
  1616
  with the Chancellor of the Duchy of Lancaster in accusing him about the way in which he has treated the Committee this afternoon, and I am sure that he takes that fun in good part.
  It is indeed rather sad to see such a watchdog and guardian of Parliamentary propriety reduced to the position taken up by the right hon. Gentleman, but that is trivial compared with what I am convinced is the grave blow at Commonwealth unity implied by this fissiparous tendency among Departments which deal with the Commonwealth. Leaving aside the fun and games and teasing in which we have been indulging today, I issue a solemn warning to the right hon. Gentleman that the Government, in splitting up the Ministries that deal with the Commonwealth and the Colonies, are doing a great deal of harm.
  Sooner or later they, or a subsequent Government, will have to return to a unified Department. I hope that the right hon. Gentleman will address his mind and remarks to these considerations.
  Sir Charles Mott-Radclyffe: I must tell the Chancellor of the Duchy of Lancaster that he has left the Committee in a very difficult position. He has failed to answer perfectly proper and pertinent questions. He has tried to fob off these questions with generalities. He seems under the impression that we are really debating the Second Reading of a Bill to set up a new Department. We are discussing in Committee an Amendment concerning a Department which has already existed for two months.
  We want to know what the divisions of responsibility are. Where do the functions of the right hon. Lady the Minister of Overseas Development begin and end? That is what the discussion is about. The discussion has been prolonged because the right hon. Gentleman cannot tell us what the functions of the new Department are nor the divisions of responsibility. In view of the fact that her responsibilities are being discussed, it is almost incredible that neither the right hon. Lady nor her Parliamentary Secretary are here at least to listen.

  1617
  I hope that we shall not be told again that this is just one of those prestige projects that do not matter. We want to be told why this new Department has been set up and what its functions are and have been hitherto. Up to now, all attempts to discover where the responsibility begins and ends and where it overlaps have been fruitless. My view is that the functions of the Department should be to administer the funds available in the territories in question as well as technical aid, including the technicians. But I find it very difficult to believe that the right hon. Lady, as the Minister responsible, is really the right member of the Government to decide priorities as between one part of the world and another.
  Is the right hon. Lady to decide whether Malaysia has higher priority than Kenya, or whether Uganda must have priority over Ghana or Malawi over Jamaica? These are matters which are surely the fundamental responsibility of the Commonwealth Relations Office and the Colonial Office. As my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) pointed out, aid is one of the principal weapons of Colonial Office policy.
  The right hon. Lady made a statement on 10th November which appears to have been a sort of bible, tablets of stone drifting down from No. 10 Downing Street. The right hon. Gentleman says that we have all read that statement about the functions of the Department, and asks what more we want. Among the functions of the Minister mentioned in that statement—I will not weary the Committee by reading them all out—there are three, which I wish to refer to in particular:

  "(b) Terms and conditions of capital aid and the principles on which technical assistance is granted.

  (c) The size and the nature of the aid programme for each country.

  (d) The management of capital aid and technical assistance."—[OFFICIAL REPORT, 10th November, 1964; Vol. 701, c. 841.]

  6.45 p.m.
  It seems to me that this could cover export credits, whether short-term or long-term, and the capital investment programme. But surely it is for the Treasury to decide to what extent we invest money overseas. In what circumstances investment is made and in which part of the world are principally the concern of the Foreign Office, the
  1618
  Commonwealth Relations Office and the Colonial Office. If the right hon. Lady's apocrypha is correct, then, again, my right hon. Friend the Member for Thirsk and Malton is right—such machinery could only function efficiently within the Government if the right hon. Lady had, so to speak, under her both the Secretary of State for Commonwealth Relations and the Secretary of State for the Colonies as Ministers not in the Cabinet. But that is not so. They are all in the Cabinet.
  I was not surprised to be told by the right hon. Gentleman that during the last two weeks there had been discussions. I should think that there had been plenty of discussion. Until they are completed and the areas of responsibility sorted out, there must be utter chaos in Whitehall and in the Cabinet, with three Ministers of equal rank all bunched together two fences from home. It is anybody's race.
  This is not good enough. I ask the right hon. Gentleman not to treat it with complete contempt. We are in Committee on the Bill. We want to know where responsibilities begin and end. We want an assurance that, at least in future, unlike the past month or two, there will not be complete overlapping and uncertainty as between these three Departments concerning what they can do and what they cannot do and which does what.
  Mr. Frederic Harris: I am sure that the Chancellor of the Duchy of Lancaster realises the confusion and difficulty he has put the Committee in. I say with great respect to him that it is entirely of his own creation. The fact that he advised the Minister not to be present has made it impossible for us to get the facts we want. When I first heard of the creation of this Minister, with Cabinet rank, I was under the impression that it was being done because there was to be a considerable increase in overseas development expenditure. That, indeed, was the basis of manifestos and statements made by the party opposite during the election. But the right hon. Gentleman has held out no hope that this expenditure will be increased.
  I am proud that my own party, last year, reached a record £175 million a year in overseas development expenditure. How important such expenditure

  1619
  is I know particularly from those countries I am interested in, in East Africa. Naturally, I wish the new Department every good fortune and my good will. Indeed, I extend my good wishes to the Minister in coping with her responsibilities. But will the right hon. Gentleman say whether it is the intention of the Government to live up to what they propose during the election, and increase overseas development? If that is their intention, to what extent will it be increased?
  We must avoid uncertainty about the aid to be provided. This is a very important factor. Can the right hon. Gentleman say when such aid is to be decided upon? Will we know approximately the amount of aid the Minister will be able to dispense for a year ahead? What about the priorities? Obviously, we all have different views about priorities and which countries should have priorities. We should have clarification of this aspect.
  Another very important point is the question of dispensing of this aid. It is common sense that it cannot be done just from Whitehall. It must be done by having people in those overseas countries with specific knowledge which enables them to say that this valuable aid, which is costly for this country, will be devoted to the best advantage of the peoples of all races in those countries. How is that to be done? I have not gathered from anything said by the right hon. Gentleman today that he can state quite clearly that the new Ministry will have overseas representatives to see these projects through.
  I have the impression that the right hon. Gentleman does not know the answers to our questions. Frankly, I do not see how he can. He has the good will of most of us on all occasions, for he is very knowledgeable, but I do not see how he can have sufficient knowledge of these various subjects to be able to answer the important questions put to him this afternoon. My right hon. Friend the Member for Mitcham (Mr. R. Carr) asked some very pertinent questions and the right hon. Gentleman answered hardly one of them.
  I hope that the right hon. Gentleman will give us more detailed answers. On
  1620
  the face of it, he does not have any information to his hand. Unless he gives us further information, he will leave the Committee disturbed and disappointed, because, although we want the Ministry of Overseas Development to get off to a good start, and to have even more financial resources to its elbow, we know nothing about how it is to be run.
  Mr. Tilney: The right hon. Lady the Minister of Overseas Development, whose absence the Committee deplores, has frequently been on record as expecting an increase in aid. The public aid of this country does not compare all that well with the aid provided by some other European countries, but that is more than made up by our private investment overseas. I do not intend to go into that today, other than to say that yesterday's announcement by the Chancellor of the Exchequer may make it much more difficult to get the private investment which we all want to see in certain developing countries in Asia and Africa. Limited it obviously is at a time of financial crisis, be it public or private. Therefore, some decision must be made about where it goes.
  Surely our friends in the world are bound to come first, not only because they are our friends, but to forward British policy as a whole. As my hon. Friend the Member for Croydon, North-West (Mr. Frederic Harris) and my hon. Friend the Member for Windsor (Sir C. MottRadclyffe) asked with great clarity, who, in the end, is to decide where that aid should go? We all know of the differences of opinion among Departments. They will continue in future as they have been present in the past. What is the position of the Treasury to be? Is the right hon. Lady to be a kind of super-Treasury? I can only say that the speech of the Chancellor of the Duchy of Lancaster was as unclear as a pike in a muddy pond.
  Mr. Fisher: With great respect to the right hon. Gentleman, this debate has been disgracefully handled. I mean "with great respect", because I have a great personal respect for the right hon. Gentleman, but I have never seen a debate worse conducted.
  The right hon. Gentleman rose very early, made a very long speech, which added precisely nothing to our knowledge, and quite unnecessarily provoked

  1621
  many speeches from this side of the Committee which might otherwise not have been made. He delayed his own business simply and solely because the right hon. Lady the Minister of Overseas Development did not wish—goodness knows why not—to explain her own Department.
  It was extraordinary that the right hon. Lady should not even wish to appear before the House of Commons during the Committee stage of the Bill, when we are entitled to ask certain questions. Through no fault of his own, the right hon. Gentleman does not know the answers. Why should he? He cannot be briefed on the sort of questions we want to ask, which he has been asked and which I propose to continue to ask.
  As my right hon. Friend the Member for Mitcham (Mr. R. Carr) said, there is a perfectly good general case for the co-ordination of economic aid and technical assistance, so that we do not oppose this policy in principle. However, in practice, it is very difficult to know where the division of responsibilities lies and where it should lie. In the debate on the Address, I ventured to make a short speech on this subject. I did not expect an answer then, because the right hon. Lady had no reason to be present on the Front Bench or to answer on that occasion; but I had hoped that in this debate we could get a proper answer from the responsible Minister. Apparently, we are not even to have that now.
  I gather from the right hon. Lady's statement of 10th November that she is to be responsible not only for deciding the terms and conditions on which aid is to be made available and for carrying out all the aid programmes, but that she will also initiate all aid projects, except in very special circumstances which have not been defined. How will she do this? If she is to initiate new aid projects, that must mean an enormous duplication of work and the people who do the work in all the Departments concerned, if it is to be done properly.
  I will give an example. If, for political reasons it becomes necessary to launch an aid project in a territory—it does not matter where—what used to happen; and I am now talking about the Colonies of which I have some little experience—
  1622
  was that the Colonial Office officials were entitled to approach the Treasury direct. They could argue the case from their own day-to-day knowledge, reinforced by the telegrams and reports from the people on the spot. They knew what they were talking about because they were involved. They might succeed or fail—the Treasury is composed of hardhearted, parsimonious men who would probably resist the plea—but at least the people making the case were equipped to succeed, because they knew what they were talking about.
  I do not know what is to happen under the new dispensation, but I suppose that the Colonial Office officials—and the same will apply to the C.R.O.—will first have to try to convince the right hon. Lady's officials. I presume that, if they succeed, the right hon. Lady's officials will then take the case to the Treasury. However, it is clear that they will not be as good advocates as the people actually involved, because they will be speaking only at second hand. I may have this wrong, but it is important and I should like to have the answers. These are questions which we are entitled to have answered. How is the machine to work? How is the right hon. Lady's Ministry to function?
  What applies to her officials applies to the right hon. Lady herself. If she has not visited these places and is not in touch with day-to-day events, if she is not framing overseas policy—and I gather that she is not—how can she possibly decide and argue the different priorities? How can she be as well equipped to do this as the Ministers personally concerned and involved? I have no doubt that the argument applies in the same way to the independent countries.
  Answering the hon. Member for Barking (Mr. Driberg) after her statement on 10th November, the right hon. Lady made the most extraordinary statement. She said that economic considerations would always predominate. This is a totally unrealistic conclusion to draw. If economic considerations were always to be the governing factor, the right hon. Lady would be spending all the money she could get on neglected little Colonies in the South-West Pacific and the Indian Ocean, places of which hon. Members have scarcely heard, but where the need is greatest—the Solomon Islands,

  1623
  the New Hebrides, Pitcairn, the Seychelles, Tristan de Cunha and others which have been neglected. There is a very good case for spending money where the need is greatest. But, unfortunately, that is not the way things work in practice.
  7.0 p.m.
  If the right hon. Lady really believes that the money available will be spent in that way, and if economic need is to be the governing factor, either she will be proved wrong very quickly—it was a very charming and endearing thing which she said, but very naïve—or she will be unable to contribute in any way to carrying out the overseas policy of the Foreign Secretary, the Commonwealth Secretary and the Colonial Secretary. In these days, when gunboats are no longer fashionable, the main method of giving effect to overseas policy is through economic aid programmes—the timing and withholding or granting of aid. If the Minister is not taking part in shaping these policies, I genuinely do not understand how she can initiate aid projects irrespective of the political considerations.
  I am sorry if this sounds cynical, but it is my experience that, in a battle between politics and economics, politics almost invariably win. I simply do not know where the right hon. Lady's Department fits in, and we are entitled to know. We have had no explanation on any of the points which my hon. Friends have raised. I do not see how the Chancellor of the Duchy of Lancaster can give us the explanation, but I hope very much that before the debate closes he will at least try to allay our anxieties, because some of these things are important. This is the Committee stage of the Bill, and if we do not have an explanation this evening we shall never have one and we shall not know what the division of responsibilities is between the Departments concerned.
  Mr. Selwyn Lloyd: I want to press the Chancellor of the Duchy of Lancaster, because I think that the Committee has been put in a difficult and, indeed, intolerable position. The trouble began when the Attorney-General described this as a technical Bill. That is the trouble from the Government's point of view. Throughout they have regarded it as a technical Bill.
  The Attorney-General (Sir Elwyn Jones): So it is.
  Mr. Lloyd: It is not a technical Bill. Although I accept the right hon. and learned Gentleman's argument that new Ministers can be created by exercise of the Prerogative, it does not apply to new Ministries. We in Parliament vote Supply for the new Ministries. We are the paymasters.
  Mr. Houghton: This Committee is not voting Supply now.
  Mr. Lloyd: No, but by the Schedule we are making it possible for Supply to be voted for these Ministries. Until we pass the Schedule, it is impossible for Supply to be voted for these Ministries. In dealing with the Bill, we have the right to say whether or not we agree that the money should be found for the new Ministry. That is the point.
  We do not want to vote against this new Ministry. Whatever may have been said in the previous debate, or whatever may be said in the next debate, as I indicated on Second Reading, we feel that there is a rôle to be played by a Ministry of Overseas Development following the lines of the former Department of my right hon. Friend the Member for Mitcham (Mr. R. Carr). However, we feel that it will fulfil a useful function only if it is properly organised and if its duties and responsibilities are clearly defined. We are still in complete ignorance about where the policy decisions and priorities will lie.
  I ask the Chancellor of the Duchy of Lancaster to help us because the Government are trying to get not only the Committee stage but the Report and Third Reading stages of the Bill tonight. I must say to the right hon. Gentleman that this is just not on. Even if he cannot deal with all out points tonight, he must have the opportunity to deal with some of them. We must have a clearer explanation of what the new Ministry will do. I ask the right hon. Gentleman to help us in the interests of progress with his own Bill.
  Mr. Eldon Griffiths: I rise with a great deal of trepidation at what appears to be the end of this debate in which so many more experienced speakers than I have taken part, but I should like to revert to a point made by my right

  1625
  hon. Friend the Member for Mitcham (Mr. R. Carr). He said that we on this side hoped to greet the Bill with good will and support, because there is no doubt that hon. Members on both sides recognise the importance of aid. Those of us who have seen some of the great need in poor countries certainly want Britain to do its best to relieve that need. Therefore, there can be no doubt that we on this side support in every way, as we did in Government, the principle of British overseas aid for the relief of suffering.
  If the British taxpayers' money is to he spent overseas for that purpose, surely we are entitled to know whether the machinery for spending it will be efficient. That is the question we have been asking, but so far we have had no answer from the Chancellor of the Duchy of Lancaster. The right hon. Gentleman himself does not know what the function of the Ministry will be, and he feels under no obligation to explain it to us. He has said that the right hon. Lady the Minister of Overseas Development knows, but she is not here. Therefore, we must take it from the statement in HANSARD of 10th November, which I believe all of us have read.
  But surely the Chancellor of the Duchy of Lancaster knows that when the right hon. Lady made her statement there was no opportunity for hon. Members to ask her what she meant. We are entitled to investigate some of the things which she said. We are entitled to know precisely what the various points which she made, some of which were very good, mean. I believe that the taxpayer, whom we are trying to help in this matter, is entitled to an answer.
  I should like to raise two very small practical considerations, having seen something of the expenditure of aid in underdeveloped countries. There is, as we all know, a very great deal of waste, and frequently aid goes down the drain. If the representative of an underdeveloped country, whether it be in Africa or Asia, goes to the British mission, be it the High Commission or embassy, and asks for assistance in a project—perhaps a bridge or a road—who will do on the ground the feasibility studies and the costing and see whether it makes sense for the economy of the country concerned that this road or
  1626
  bridge should be built? Will it be done, as it has been done in the past, by officials of the Colonial Office in the case of Colonial Territories, or by members of the Foreign Office? Will the technical representatives of the Minister carry out those feasibility studies and find out what the cost is and decide whether the project makes sense for the country in question? We do not know the answer, and in discussing the machinery of Government surely we are entitled to know the answer.
  At the second stage, when the recommendations filter through to London from the officials who have done the costing and studied the job on the ground, to whom do they go? If the examination in the field has been done by a member of the Colonial Service, does the matter go to the Colonial Secretary—I presume that it does; and, in turn, to the Secretary of State for Commonwealth Relations and the Foreign Office? Or are the recommendations simply passed horizontally to the right hon. Lady so that she can decide the matter? Since we are discussing the machinery of government, the Chancellor of the Duchy of Lancaster should, in fairness, tell us how it will work. That is not too much to ask.
  Lastly, since the right hon. Lady and her two assistants are not able to be with us today, will the right hon. Gentleman tell us what is more important to her and to this country than being here when her Ministry is being debated? Surely we are entitled to that courtesy. I ask the right hon. Gentleman to give us answers to these questions, as is his duty.
  Mr. Houghton: This is three debates rolled into one.
  Sir K. Pickthorn: I wanted to ask a question which the right hon. Gentleman could answer. He has told us that the constitutional position is that the Prerogative has appointed a Minister, and that now it is only left for us to find out what the Minister has done or has to do, but especially has to do. It is easier to find out what has been done than what is to be done. Perhaps it is easier still to find out what has not been done. A Minister is not made by merely being named. I do not think that the right hon. Gentleman is right in using the word "Prerogative" as he has done.

  1627
  I happen to have it in my notes here that when Sir Edward Fellowes was appearing before the Spens Committee, in answer to a question, he said:
  "I should not have thought that new offices could be created by the Prerogative, because I do not think that they could be paid for without some sort of Money Resolution."
  It did not occur to him that the offices could be created by Prerogative.
  A person can be appointed to an office by Prerogative no doubt, but not necessarily an office created. The questions I wish to put are these. Since, in the right hon. Gentleman's judgment, there has been a Minister created by the Prerogative, has that Minister performed any of the functions which would have been expected if the creation had been in the more usual manner? Has there been any taking of oaths of allegiance, any taking of the official oath, any appointing of Permanent Secretaries, and so on? Has there been any offering or indication of the offering of remuneration as from the date of the Minister's appointment, or as from some later date, or as from some future date, whether or not retrospective?
  These are questions clearly relevant to the matters now before us and, in particular, to this list of three Amendments. I think that this is a technical Bill in one sense, though, as I have tried to explain on Second Reading, just because it is so technical it is a matter of great constitutional importance. I think that it is a machinery Bill in some sense, but no one may say, "A mere machinery Bill". I think that it is a machinery Bill in this sense, which is important, that nothing which this side chooses to argue against or vote against now on grounds of machinery should he taken as evidence that this side is opposing something which Members on the other side mean to get done by means of this machinery.
  I feel, on this question, that whatever line we take about overseas aid and all that—and I take a much meaner, more Scrooge-like line than most of the generous hon. Gentlemen opposite, who can afford to be generous since they find it so easy to borrow so many thousands of million of pounds—that any vote on this Amendment has no relevance to that. I think that this Amendment should be voted on the ground that the Bill is a bad piece of machinery, that it has not
  1628
  been put before us in a good mechanical way. Will the right hon. Gentleman answer my questions, which are negative but concrete questions, about what the Minister has not done, or, possibly, has?
  Mr. Houghton: What the right hon. Baronet the Member for Carlton (Sir K. Pickthorn) has just asked is perhaps more appropriate to the debate on the Question, "That the Clause stand part of the Bill," but it might be for the convenience of the Committee if I answer him straight away.
  Sir K. Pickthorn: Thank you very much.
  Mr. Houghton: The present activities of the new Departments are those which the Minister can appropriately carry out as a legal person, or through the exercise of the Prerogative, and are of a kind which Departments have customarily carried out without specific parliamentary authority. This is the normal practice. One case that might be instanced is that of the Welsh Office, set up in 1951 by the Conservative Administration. The Office of Minister for Welsh Affairs has been held by Conservative Home Secretaries and by Conservative Ministers of Housing and Local Government.
  The Minister's functions include the general responsibility for all Welsh affairs, as well as for matters which might be deemed proper to a Minister of Housing and Local Government. There has been no transfer of functions Order, nor any specific legislation in this respect.
  Sir K. Pickthorn Sir K. Pickthorn rose—
  Mr. Houghton: No, no.
  Sir K. Pickthorn: Any Secretary of State can do anything.
  The Deputy-Chairman (Sir Samuel Storey): Order.
  7.15 p.m.
  Mr. Houghton: The right hon. Baronet must contain himself for a moment longer. The Minister of Education and Science was created by Prerogative. At the time, he was Lord President of the Council, and no staff had to be authorised by Statute, but functions were transferred to him by orders under the Transfer of Functions Act, 1946.
  This brings me to the nub of this debate, as in the previous one, as to what the Bill is about. It is the first phase in

  1629
  a series of steps which have to be taken to bring about the full constitutional existence of these Ministers. It is, so to speak, a paving Bill, so far as Clause 1 is concerned. What it is doing is relating the three Ministries concerned to the provisions of Schedule 1. In fact, Clause 1 specifically says that these Ministers shall be brought within the scope of Schedule 1 of the Bill. Schedule 1 does not deal with functions at all; it deals with various matters which are requisite to the setting up of the framework of a new Ministry. Later, other steps have to he taken, which will be brought before the House, and those will be the proper occasions for many of the questions to be asked which we have had in the course of this debate, and answers given.
  I was in the middle of one sentence when the right hon. Baronet the Member for Carbon interrupted me. I was saying that we had had three debates rolled into one. This Committee is not voting Supply. It is certainly enabling Supply to be voted. If the Committee rejects Clause 1, or deletes any one of the three Ministers from it, no Supply can be brought before this House for that Ministry. It virtually invalidates the creation of the Ministry—it strangles it at birth in other words. That is what rejection of this Clause would do.
  Mr. Selwyn Lloyd Mr. Selwyn Lloyd rose—
  Mr. Houghton: Just one moment.
  There is not only Supply to be voted and Supplementary Estimates to be brought before the House. There are also transfer of functions Orders which will be necessary to transfer some functions from certain of the Departments and to vest them in the new Ministries. Those are two separate steps which have to be taken before the new Ministries can be fully effective. That is why my right hon. and learned Friend the Attorney-General said that this was a technical Bill. The right hon. Baronet has just admitted that it is, in a sense, a machinery Bill, and it is. Therefore, I defend the absence of the Ministers concerned because they are not concerned with this stage in their Ministerial lives.
  We are, in fact, making the initial preparation for the other steps to be taken, which the House can decline to take on subsequent stages, if it is not satisfied by the account then given by
  1630
  the Ministers concerned, and by the Government, for the work of their Departments and such policies as are relevant to the discussion of Supply or the transfer of functions Orders. That is why the Committee will appreciate that I am in the difficult position that I do not believe I am called upon to answer many of the questions which have been put because, strictly speaking, they are not relevant to this stage of the creation of the new Ministries. I must ask the Committee to understand that clearly.
  There is no reluctance on my part to help the Committee all I can. Still less is there any discourtesy in the absence of my right hon. Friends. Had my right hon. Friends come, it is obvious from the discussion so far that they would have become embroiled in a debate on matters which are not relevant to this stage of the creation of their Ministries and for which they are properly accountable only at a later stage. Therefore, the Committee should distinguish between the several stages in the process of the creation of new Ministries.
  Mr. Wingfield Digby Mr. Wingfield Digby rose—
  Mr. Antony Buck Mr. Antony Buck (Colchester) rose—
  Mr. Houghton: I do not know, Sir Samuel, whether there are any provisions for a ballot to be held for interruptions. I will, however, give way to the hon. Member who is being insistent.
  Mr. Buck: I am obliged to the right hon. Gentleman. Would he not agree that this is a legitimation Bill, causing the Ministers now to become legitimate? Is it not in all decency appropriate for people to be present at such a process when they are being legitimated? Further, would not the right hon. Gentleman agree that he is usurping the functions of the Chair? Is it not the duty of the Government to be in a position to answer all the points put by hon. Members on this side which are in order?
  Mr. Houghton: I would not call this a legitimation Bill. It is a registration of birth. A little later the House will be able to decide whether it likes the

  1631
  look of the child. [HON. MEMBERS: "Where is the child?"] At present, all we are asking the Committee to do is to authorise us to bring the child forward for inspection later, by which time it will be in full voice and able to answer for itself.
  This is a distinction which the Committee must appreciate if we are to make headway with our business this afternoon. I fully appreciate that many of the questions which have been asked are genuine, although so many of them are asked that I begin to wonder what this is all about. I hope I may be forgiven for discerning a degree of Parliamentary conspiracy on the benches opposite. Let us be candid about these things.
  If the Committee is seeking genuine satisfaction, I have done my best to give it and I am still doing by best to give it. I must, however, maintain that the Committee is pressing me to give answers to questions which are not fully mature. [HON. MEMBERS: "Are not the questions in order?"] It is not for me to say whether they are in order. I am, however, entitled to say whether they are relevant, which is a quite different matter. Having regard to the constitutional position of the Bill, many of the questions about the level of economic aid, the distribution of aid throughout the Commonwealth, and so on, are matters which can be dealt with at a later stage.
  In reply to the hon. Member for Croydon, North-West (Mr. Frederic Harris), I hope that I gave no impression in an earlier speech that there was any intention on the part of the Government to curb aid to developing countries or any relaxation of our determination to increase it and to press it as far as economic conditions will allow. That is a positive part of the Labour Government's policy.
  Mr. Wingfield Digby: The right hon. Gentleman keeps saying that the transfer of function Orders will be dealt with by affirmative Resolution of the House. Is that an undertaking by the Government despite the terms of Section 3 of the Ministers of the Crown (Transfer of Functions) Act, 1946?
  Mr. Houghton: It is the negative procedure.
  Mr. Fisher: Will we not have a chance to debate this?
  Mr. Houghton: All I can say is that this is the way in which the matter is dealt with under our procedure.
  Mr. Wingfield Digby: It is misleading. I received a similar reply from the Prime Minister on 10th November that there would be an affirmative Order for the transfer of the Forestry Commission. It now turns out that it is a negative Order, which is something different.
  Mr. Houghton: As I understand, it is the negative procedure as it comes under the Ministers of the Crown (Transfer of Functions) Act, 1946. That disposes of that point. [Interruption.] The hon. Member for Dorset, West (Mr. Wingfield Digby) asked a question on a matter of fact and I have given the answer. If I say that that disposes of the question as to a matter of fact, it is not an inadequate reply to the hon. Member's question.
  Mr. Fisher: The right hon. Gentleman has said, both in this speech and in his first one, that we will have other opportunities later to find out what the responsibilities and functions of the Department are. In answer to my hon. Friend, it has now been revealed that there will not be these opportunities as the right hon. Gentleman had implied. When will we have the opportunity to get answers to the questions which, not as a Parliamentary manoeuvre but genuinely seeking information, a number of us have asked?
  Mr. Houghton: The voting of Supply will be a positive procedure. When Supplementary Estimates come before the House, that will be a positive procedure, because they will have to be voted for. Those opportunities will occur.
  I regret that I cannot pursue many of the lines of thought in the debate affecting questions of function and the vesting of responsibility. I have already said that discussions are in progress regarding the limitation of responsibilities with a view to concentrating as much central control over overseas development in this new Ministry as is possible. There is nothing unusual about several Ministries being concerned with particular activities.

  1633
  Foreign Office considerations enter into a great many matters which are the responsibility of other Ministries. Their views have to be listened to even though there may not be overriding control by one Department over the activities of another. There is, however, the machinery for co-ordination within the Government, as right hon. Members opposite fully know.
  At the conclusion of this debate, right hon. and hon. Members opposite will have to decide whether, on the evidence before them, they are in favour of a Minister of Overseas Development. If they are not so satisfied, they have a clear duty to vote against the first phase of its creation. I am sorry that I cannot assist the Committee further at this stage.
  7.30 p.m.
  Mr. R. Carr: The Chancellor of the Duchy of Lancaster says that he has done his best to satisfy the Committee. I have no doubt that he has, but I must tell him that he has utterly failed to do so. He puts us on this side in a position which we find genuinely difficult.
  The right hon. Gentleman has referred to a suspicion which is growing in his mind about a Parliamentary conspiracy. I assure him that this is not the case. We genuinely meant and wished to dispose of the Amendment without a Division in a relatively short time, because we wanted to get on and have a much longer and, perhaps, even more controversial debate on the next Amendment, as we did on the first one. That was our genuine wish and I hope that the right hon. Gentleman will believe it, because that is the case.
  The right hon. Gentleman keeps on telling us about this being a machinery Bill, as did the Attorney-General. He said in his earlier reply that the work of this Department is not under discussion today, but how can we decide whether we ought in this Committee, or in Parliament as a whole in due course, to agree to the establishment of this Ministry unless we know something about its functions and what it is to do. The right hon. Gentleman keeps saying that this is not the appropriate stage to go into this. But when is the appropriate stage? Because once we have passed this, this Minister and this Ministry are legitimised and set up. What opportunity then will there be to go back on that decision, when
  1634
  we have got the information, and were we then to think it necessary to do so? This is a ridiculous position to put the Committee in. Before Parliament can genuinely make up its mind about this, it must have this information.
  Let me briefly sum up the feelings on this side of the Committee. We want to see the momentum of overseas aid maintained and increased, as we showed when we were in power. As I said in my opening remarks, aid expenditure doubled in the last six years. Most of us, if not absolutely all of us, on this side think it might well be helpful in achieving this objective to set up this Ministry, but we are genuinely in doubt on some matters, about the relationship of this Ministry with other Ministries, about the method of financing it, how it should be represented overseas and how its work should be carried out overseas. There are large and genuine gaps in our knowledge about what is intended. Surely it is reasonable and not unreasonable for us to ask for enlightenment on all these matters—in broad principle: not in complete detail, I agree—before being asked to pass the existence of this Minister and Ministry.
  Surely it is not only reasonable for us to do so; it is our responsibility as Members of Parliament to do so, because once we have passed this we have created a possibility of being asked to vote Supply, to spend large sums of the taxpayer's money on this proposal. It is all very well to talk about this not being the right stage. As I said a moment ago, if we let this stage go by without getting the information, then when it is obtained, if it is not satisfactory to us, it will be too late.
  So we are put in a difficult, and, indeed, I submit, a farcical position by the stubborn refusal of the right hon. Gentleman to give us this enlightenment. It is ridiculous on a matter like this, when we are so nearly in agreement, when we are genuinely sympathetic with the proposal, to be frustrated, and, I admit, irritated, by this failure to get answers to a number of reasonable questions. We are only irritated and frustrated, and the only reason why this debate on this Amendment has gone on so long is because we have been treated in a shabby, careless, contemptuous manner by the Government.

  1635
  The right hon. Gentleman could not even vouchsafe a reply to what is surely a reasonable request that at least the Government should undertake to publish—in due course, not immediately—a White Paper giving the details of this Ministry's organisation and methods and work. I pointed out that the previous Government did this nine months after setting up the Department of Technical Co-operation. I would have thought that we would at least have been given this very minor assurance. This feeling of frustration is widespread, and it must be obvious to the right hon. Gentleman that it is widespread. He heard how it was partly reinforced by the right hon. Gentleman the Leader of the Liberal Party.
  In these circumstances we are in a difficult position. I feel that I ought to advise my hon. and right hon. Friends to divide on this issue, but if we do, what will be the effect? We are united in this Committee in this purpose of giving aid. There may be lots of matters about which we are disunited, but, as the right hon. Gentleman said himself, there has for a long time been a very large measure of common consent and common purpose about giving aid to developing countries, and we want that to be maintained, and it is maintained, and if we were to vote, because of our doubts which we have expressed about this Bill, what would be the effect on the world outside? We want the world outside to know that we are united about this, particularly our Commonwealth. If we divide we destroy that assurance. So it is a difficult position that we are in. As Parliamentarians we on this side think we ought to divide because we have not been fairly and properly treated, but in the circumstances which I have just mentioned—[Laughter.] Hon Members opposite may laugh if they like, but I wonder whether, if the Government go on treating Parliament in this way, they will be laughing when they go to the polls in a year or two's time.
  So reluctantly and, I am sorry to say, resentfully, I want to ask leave to withdraw this Amendment, but also at the same time to say that we shall seek opportunity to return to this matter at a later stage of the Bill, when, I hope, we shall be given at least the broad outlines of the information for which we have
  1636
  so reasonably asked. I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  The Deputy-Chairman: With the next Amendment we can also take Amendments Nos. 20, 23, 29 and 33.
  In Schedule 2, page 5, leave out line 7; leave out line 17; in page 6, leave out line 23; in page 7, leave out line 10.
  Mr. Quintin Hogg: I beg to move Amendment No. 3, in page 1, line 7, to leave out "and the Minister of Technology".
  I ventured to say when we were discussing the Queen's speech that I thought that this Committee, and Parliament generally, tends to pay too little attention to the actual machinery of Government. If the debates which we have been having, of which this is the third, carry any message to the Government, it is the illustration of the importance and truth of this, because I believe that in its modern rôle, we have tended to leave questions of Government machinery too much to the Executive, and perhaps too much to the actual discretion of the Prime Minister of the day. If we are to retain an active part in the control of Government business, as I know we all, on all sides of Parliament, desire to do, we ought to address ourselves to the questions of machinery; and, after all, we know, whether this is a technical Bill, as the right hon. and learned Gentleman said on Second Reading, or whether it is a constitutional Bill, as some of us on this side think it is, it is a Bill about the machinery of Government, and though we may talk about principles all night and argue about policies all night, none of us knows better than hon. Gentlemen opposite that principles and policies can be frustrated and defeated by a bad piece of machinery.
  Therefore, we are surely entitled to know, as the right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) said in the last debate, what are the functions of the piece of machinery which we are being invited to institute. Is it to be a good piece of machinery or a bad piece of machinery? Surely we are entitled to know these things before we set it up, and as part of the process of setting it up.
  The Attorney-General: The right hon. and learned Gentleman is most eloquent in insisting on consideration of a review on the machinery of Government. That being so, can he explain how the Prime Minister in the last Administration refused such a suggestion, which came from this side?
  Mr. Hogg: I was not discussing a review of the machinery of Government. The Attorney-General has misunderstood what I was saying. I was describing the importance, which I did not think had been quite fully in the mind of his right hon. Friend in the last two debates, of the discussion, on the Floor of the House of Commons, of the machinery of Government, and I was saying that when we are being asked, as we are being asked this evening, to set up a new piece of machinery we are entitled to ask what this piece of machinery is proposed to do, and whether it is likely to achieve its purpose. I had hoped that he would agree with me.
  The Chancellor of the Duchy of Lancaster has had a horrible time this evening, and my heart went out to him. I do not know whether they are going to change the bowling and give us the Attorney-General to reply this time.
  Mr. Houghton: No. I am going to stick it out.
  Mr. Hogg: If I may change my metaphor, I hope that the right hon. Gentleman makes a few more runs on this Amendment than he managed to make on the last two. If he has had a horrible time, it is partly his own fault. I say partly, because I do not blame him entirely. Nevertheless, he deserved it, because his general attitude towards these Amendments has been that he seemed to think that the mere ipse dixit of the Prime Minister in setting up a new Ministry was a prima facie reason why Parliament should agree to its institution. We on this side of the Committee do not agree with that.
  The second line of country was that if there had been, as there was last time, and as there is in relation to this Amendment, a Written Answer setting out the functions of the new Ministry as they had been decided on up to this date, we were in very bad taste if we wanted to hear a little more about them. We do not agree with that either. What we want
  1638
  from the Government is not an amiable speech from the right hon. Gentleman, but a reply from a Minister, whoever it may be, who knows something about the subject and about the piece of machinery which is proposed.
  I cannot ask, as my right hon. and hon. Friends did in the previous two debates, for the presence of the Minister of Technology. The by-election at Nuneaton has not yet taken place, and for aught I know the hon. Member for Nuneaton (Mr. Bowles), whom we know and like so much, has not yet been translated to another sphere. But surely we could have had a Minister who knows something about technology? Why not the Secretary of State for Education and Science, who has consented to the mutilation of his own Department as a term of his appointment, and who replied on the technological debate? Why not the Minister of Aviation who has more scientists and technologists than any other Government Department, or all the Government Departments put together? Why not the President of the Board of Trade, or one of the Economic Ministers, since technology is something which presumably at some stage in the proceedings will have something to do with industry?
  Instead, we have the right hon. Gentleman. My right hon. and hon. Friends complained that he was treating the Committee with contempt because on previous Amendments the relevant Ministers were not present. I do not think that it is the right hon. Gentleman who is treating the Committee with contempt. It may be the Ministers who are absent, but not the right hon. Gentleman, who, as he rather endearingly said, is doing his best. It is the Government who are treating the Committee with contempt on this occasion by putting up the right hon. Gentleman, who can know nothing about the subject, to answer for them. No doubt that is why he has been chosen.
  They think that it is indecent that we should question the ipse dixit of the Prime Minister, but what we are discussing on this Amendment is the creation of a separate Minister of Technology. There are things about which I fancy we would all be agreed. We are all agreed, I think, about the importance of the application of technology to industrial processes in our

  1639
  changed economic position. That is something which is common between both sides of the Committee, and I had hoped to make that clear in the debate on the Address.
  7.45 p.m.
  Nor do I think that in this debate, although we may at some subsequent stage be at variance, there is any particular argument about the methods to be employed. I was at pains to read the statement by the Parliamentary Secretary in another place, and also the Written Answers made here by the Prime Minister and, I think, the Secretary of State for Education and Science. They contain certain vague and threatening phrases about starting new industries and Government enterprises, which we shall want to probe, but they reveal no concrete new idea which was not being actively pursued in the previous administration, and as recently as 1st December, when my hon. Friend the Member for Weston-super-Mare (Mr. Webster) asked the Secretary of State for Education and Science what new projects had been authorised, or what existing projects had been cancelled, the answer in each case was none as yet. Thus, we are not arguing now about policy. We are arguing the simple point about the machinery, and that I know will be gratefully received by the right hon. Gentleman who has been trying to confine himself to that point on the other two Amendments.
  I want the right hon. Gentleman to tell us what is the real justification for creating a Minister of Technology, such as is proposed, a Ministry separate from the Board of Trade, separate from the Economics Ministries, separate from the Ministry of Aviation, separate from the Department of Education and Science, and the Lord Presidency of the Council. What is the justification for asking him to take over a direct rôle—as distinct from the indirect rôle, which since 1915 has been axiomatic—of administering the industrial functions of the D.S.I.R.? What is the justification for his responsibility, for the Atomic Energy Authority, whose future is apparently wholly in doubt—when I asked this question of the Secretary of State I received no answer and have received no answer to date as to what
  1640
  is the future of the Atomic Energy Authority. Thirdly, what is the justification for the kind of roving commission separated from the sponsorship of any particular industry except three, separate from procurement, and separate from research and development in science? What is the justification for it? I ask that because this arrangement is the worst which could have been devised if the object was to bring a new spirit of innovation into British industry, which was the prospectus on which voters were invited to cast their votes a few weeks ago.
  The appointment of a separate Minister of Technology, which is what is in question here, represents a solution to the problem which bears no resemblance whatever to the solutions adopted by any other industrial country in the world. Hon. Gentlemen opposite never tire of comparing the technological situation here unfavourably with that of other countries, such as the United States, France, Germany, Russia, Japan and so on. These unfavourable comparisons are, as I have endeavoured to show in the past, both unfair and based on a number of misrepresentations of the actual state of affairs.
  But hon. Gentlemen opposite cannot have it both ways. If the situation in technology in these various countries is, as they claim, so superior to ours, it is surely most imprudent to ignore the whole of their experience and to go it alone by the light of nothing but their own hunch, such as it is, illumined by no experience. In another place the Parliamentary Secretary attempted to claim that the Russian arrangement was not dissimilar to the proposal which the Government have made in this Bill. I am not sure that even if this were so it is an arrangement which ought to commend itself to this Committee because, whatever else can be said about scientific organisation, it must surely be geared to the political, economic, and social system which obtains in the country in which it is to work, and one hopes that our system will remain as it is now, profoundly different from the Russian system. But the Russian system bears no relation to what is proposed here.
  In Russia there is a Council of Ministers under the chairmanship of a Deputy

  1641
  Prime Minister. There is no divorce between science and technology, so the Deputy Prime Minister is responsible for both, as I think I am right in saying he is, at any rate through the Council of Ministers, for technical education. In other words, the situation there much more closely resembles the status quo than the proposals that hon. and right hon. Gentlemen opposite are making.
  It is true that matters of pure science are controlled in Russia through the Academy of Sciences, rather as we control research and development in the industrial scientific field largely through the D.S.I.R., but as the Deputy Prime Minister arranges the budget of the Academy of Sciences and, as a Communist party cadre, functions within the Academy of Sciences to ensure that it is in normal conformity with the policy of Government, the unity of science, technology and higher education is expressly preserved. But if, as I suppose, the experience of Western countries is more germane to our problem than is the Russian experience, it is worth saying that there is nothing remotely resembling this solution anywhere in the Western world.
  Secondly, as far as I know there is no considerable body here which favours the solution proposed in the Bill. In conformity with so many other decisions taken by the Government during their first weeks of office, the Prime Minister has simply blundered ahead in this matter without consulting any of those who would be most nearly affected by the decision when made, or most capable of giving him constitutional advice.
  He has not consulted industry before appointing his new Minister of Technology. He has not consulted civil servants, who, I believe, are absolutely aghast at the shambles which has been made of our administrative machine. He has not consulted the unions particularly concerned, notably the Institution of Professional Civil Servants, which has made a public protest both about the decision and about the absence of consultation. He has not consulted the Advisory Council on Scientific Policy, which is the constitutional adviser of Governments in such matters, and whose retiring Chairman, Lord Todd, has gone on record against the suggestion. He has not consulted the D.S.I.R., which is to be abolished as a result of this decision, and which I know
  1642
  to be violently opposed to anything of the kind. He has not consulted the Atomic Energy Authority, whom I would expect to be equally opposed—nor has he consulted the other research councils.
  How is it that the House of Commons, in Committee, is being asked to approve a piece of Government machinery which is simply a product of some inner process of ratiocination, unsupported by any precedent and without any previous consultation with those concerned?
  Mr. Michael Foot: Can the right hon. and learned Gentleman give us any evidence that the Civil Service is aghast at the steps which have been taken?
  Mr. Hogg: I only said that that was my opinion, and I was giving no other evidence. It is true that in the past individuals have declared themselves in favour of what they called "a Ministry of Technology". Some have favoured turning the Ministry of Aviation into a Ministry of Technology. Indeed, the Prime Minister, in one of the six previous inconsistent policies which he tried unsuccessfully to sell to the country, at one time favoured that solution.
  But that is not the solution that is proposed here, and if it were it would not require the proposals in the Bill. Under the Bill the Minister of Aviation is to continue as before except that the sponsorship—whatever that may mean in the context; and I hope that we shall be told—for electronics, is to be separated from the sponsorship for aircraft and transferred to the new Ministry, together with the sponsorship for telecommunications, which is to be transferred from the Post Office, and the sponsorship of computers, which is to be transferred from the Board of Trade.
  It is also true that some people were in favour of amalgamating part of the D.S.I.R. with the National Research Development Corporation and transferring responsibility for that to the Board of Trade, and then adding to the President of the Board of Trade, among his other titles, the title of Minister of Technology. But that is not what is proposed here. The Board of Trade is to continue, so we believe, as it is.
  I hope that I may be not forgiven again for saying—since I have had the honour of being a Minister for that Department

  1643
  —that it is somewhat woefully unscientific in its outlook. Indeed, its one window into the technological field—the National Research and Development Corporation—is now to be snatched from the Board of Trade and handed to the new Minister. Not unnaturally, Lord Halsbury, a former Chairman of the Corporation who, like everybody else, was not consulted, has declared himself unequivocally as opposed to the present arrangement.
  The position at this stage, therefore, is that without a word of consultation with those most qualified to judge and those most nearly affected, and without any precedent in any other country to go on, the Prime Minister, with that unique blend of inexperience, truculence and conceit that has characterised his every action, has gone blundering on with an arrangement which, prima facie, has nothing and nobody to commend it.
  The right hon. Gentleman the Chancellor of the Duchy of Lancaster knows nothing whatever about technology. [HON. MEMBERS: "Neither do you."] I have been responsible for the development of science and technology for about eight years. Since hon. Members do not seem to have heard it, let me tell the Committee that during that period and the period of my immediate predecessors we enlarged the proportion of the national income spent on research and development from the 1·7 per cent. at which hon. Members opposite left it in 1951 to 3 per cent. of the enlarged national income that we left six weeks ago, and increased the amount of Government money spent on civil science from the much smaller proportion which was then spent by hon. Members opposite mostly spent on defence. We enlarged the sum of Government money spent on civil research and development during that period from a beggarly £30 million to the £170 million which it is at present.
  I turn from the experience of other countries and the opinion of those most affected to the statement of the Government. Since he is at present the only Minister in Parliament responsible for the Ministry I turn first to the justification for his appointment offered by the Parliamentary Secretary in another place a week ago. He said that of course there
  1644
  was an overwhelming reason why the new Ministry should be set up. He said:
  "We believe … that it is passionately necessary"—
  I ask hon. Members to note the phrase "passionately necessary"—
  "to give a new dynamic to industry, a new dynamic to technological innovation in industry."
  If this sentence, somewhat strangely illiterate on the lips of so renowned a national author, means anything, it means that he has fallen into the age-long fallacy, which was demonstrated more than once in the preceding debates, of supposing that because we have succeeded in identifying a problem and because we attach importance to the solution of the problem we are therefore entitled to propose a new Ministry to deal with it.
  This is not the case. Nine times out of ten this is nothing but a recipe for administrative chaos. In my submission, in order to justify a separate Ministry we require to do two things. First, we must show—and the right hon. Gentleman has already twice signally failed to do so—that the work proposed by the new Ministry is not being and could not be better done by another existing organisation. That is the first question to which the right hon. Gentleman ought to attach his mind—not whether it is passionately necessary to introduce innovation into British industry, but whether the function of innovation is properly performed by the proposed piece of machinery.
  8.0 p.m.
  Secondly, it must be shown that the proposed range of functions is a single subject and that it is not necessary to deal with it, as very many subjects have to be dealt with, interdepartmentally. That is the case which the right hon. Gentleman must make. To say that a separate Ministry is justified or necessary, or, for that matter, passionately necessary, whatever that may mean, simply because there is a problem and it has suddenly been identified and it is desired to solve it, is to beg each of these two separate questions.
  Turning from his justification for his appointment to his prospectus, I confess that I was not particularly reassured by the Parliamentary Secretary's own prospectus for his work and for that of Mr. Cousins. This is what the Parliamentary

  1645
  Secretary said about what he was going to do:
  "This country has to earn a living."
  When Ministers are in doubt, they always seem to take the refuge in platitudes.
  Hon. Members: The right hon. and learned Gentleman should know.
  Mr. Hogg: The Parliamentary Secretary said:
  "This country has to earn a living …We will do that by every conceivable means which come to our hands; every conceivable idea which floats through our heads."—[OFFICIAL REPORT. House of Lords, 2nd December, 1964; Vol. 261. c. 1117–21.]
  So much for the prospectus of the Parliamentary Secretary in the House of Lords. Never since the South Sea Bubble has Parliament been offered such a pig in a poke as a justification for a Cabinet Minister and his Parliamentary Secretary.
  There are three distinctive features of the proposed organisation, each of which I submit is disruptive of administrative efficiency and technology. The first distinctive feature is the removal of the organisation for scientific and industrial research from the operation of a research council—that is, the D.S.I.R. or, as we would have made it, the I.R.D.A. research authority type of organisation—and handing it over to an executive Ministry. That is the first characteristic of what is proposed—the destruction of the D.S.I.R. and the substitution of direct for indirect rule.
  The second characteristic is the division both of ministerial responsibility and of administrative responsibility somewhere between science and technology, as if they were two separate things which could be dealt with separately at any stage of the process. No one believes that, but that is what is proposed to be done.
  The third distinctive characteristic is the divorce of responsibility for any particular technical innovation in individual industries from the N.E.D.C. and the economic ministries, on the one hand, and from the Ministries responsible as sponsors of those industries, on the other.
  It has the further characteristic and disadvantage that it divorces technical education and, above all, technological education from the subject of technology. Each of those disadvantages was absent
  1646
  from the status quo which we left the Government only six weeks ago.
  When he defended the present proposals during the debate on the Gracious Speech, the Secretary of State for Education and Science, whom I am distinctly sorry not to see in his place at the moment, made two propositions by way of defence. He first claimed that the Department of Education and Science, as it was conceived by the previous Administration, covered so large a sphere of activities that no one man could possibly manage it. I do not believe that the Secretary of State would have made that claim if he had had, as I have had, experience of the undivided Ministry.
  The right hon. Gentleman argued, secondly, that, with some minor improvements, what was being proposed by the present Government did not really differ, except in unimportant matters, from the proposals accepted by their predecessors. We shall have an opportunity of debating the second proposition in its more general bearing during the Second Reading of the Science and Technology Bill on Friday.
  What is material, however, is the present argument and the present Amendment is that the proposition is incorrect as regards the Ministry of Technology. When one looks at the actual transfer of functions proposed, as they were disclosed in Written Answers on Thursday, 26th November, one sees that the whole effect of the present appointment is simply to substitute direct rule by the new Minister for indirect administration through the Department of Scientific and Industrial Research in the whole of the traditional rôle of the Department of Scientific and Industrial Research, except for university grants and its fairly new activities in space research and nuclear research, which are to be transferred to the new Scientific Research Council.
  This is a totally new departure from recent practice and in my opinion at least, is a most retrograde step. Ever since 1915 it has been considered axiomatic that responsibility for industrial research and development is better exercised in conjunction with research in the medical, agricultural and other fields on what I have called the Haldane principle through an independent council of industrialists, scientists and other eminent persons and not directly by a Government Department itself.

  1647
  It is this principle which is in issue in the present case. The Minister is apparently to take over this function. Apparently he is to be aided by a small advisory council, of which I understand he is extremely proud. As Lord Todd pointed out in another place, this substitution of a second advisory council on scientific policy for the Advisory Council on Scientific Policy which still exists and which is advisory to the Secretary of State for Education and Science and which presumably, so far as we know, will continue to exist in that capacity, is a disastrous blunder. As Lord Todd said, we must have one scientific policy in this country and not two or three.
  Now we are to have one Minister to be responsible for technology, advised by one scientific council; one Minister responsible for science, advised by another scientific council; and somewhere swinging in the trees by its tail on the outside a third—the Ministry of Aviation, which employs more scientists than either. This is the set-up we are asked to support tonight. Hitherto it has been axiomatic that the same Minister responsible for industrial research should be responsible through the other research councils—medical and agricultural—for medical and agricultural research, because the relationship between those councils has hitherto been both close and of the greatest importance. Industrial research cannot be separated from industrial medical research. They are different facets of the same subject and hitherto they have been carried out by joint projects under the same Ministry by the two Councils. The somewhat traumatic experiences of the last few years have led me at any rate to the conclusion that the same Minister should also be responsible for the University Grants Committee. It is true that this was also the view of Lord Robbins.
  If it had been thought—I did not think—that it was too much to ask the same Minister to be responsible for education at well, there was available to right hon. and hon. Members opposite the solution proposed by Lord Robbins which I originally favoured as a temporary expedient during the period of the crash programme. Nobody can rationally defend the present arrangement. Had the Secretary of State tried it—had he continued with the arrangements in force
  1648
  at the Election—he would not have been at all overworked. The idea that the Department of Education and Science as it is constituted—[Interruption.] I am afraid the hon. Member for Dunbartonshire, East (Mr. Bence) is rather out of his depth. It is not true that the Department of Education and Science was one of the harder worked Ministries. It was nothing like as big as the Ministry of Defence, the Foreign Office, or the Ministry of Transport. Indeed, all its operations were carried out indirectly—the schools through the education authorities, the universities through the U.G.C., and science and technology through the research council.
  One more point I must make. Underlying the new Ministry is the apparent belief that Government have an important rôle to play in the encouragement of the application of new techniques to industrial processes. That has emerged in about every speech that has been made on the subject. That is a proposition with which I can wholeheartedly agree—I have said this repeatedly both in and out of office—but the new Ministry is emphatically not the way to do it.
  Despite the prospectus offered to the country, it is already clear that it is not the way in which it is being done, or the way in which it will be done. Nor, in fact, can any single Ministry do it, because it is in the nature of things that the function implied cannot be divorced from procurement and sponsorship. Admittedly, there are small development contracts which can be negotiated through the N.R.D.C. or the D.S.I.R., or whatever successor bodies there may later be to them. But that is not true of the larger development contracts.
  If we are to have a nuclear ship, for instance, it must be arranged through the Ministry of Transport, which sponsors the shipbuilding industry. If there is to be a supersonic airliner—and, of course, we now do not know whether or not there is to be a supersonic airliner—because this is a real development contract it must be done through the Ministry of Aviation. It cannot be done through Mr. Cousins.
  If there is to be a communications satellite, as I personally would hope—unless that has a chance to be dunked, too, as a purely prestige project—that

  1649
  would be an important development contract, and would have to be done through the G.P.O.—not through Mr. Cousins. Mr. Cousins has not collected an adequate technical staff to develop a cornmunications satellite.
  If industrialised methods of building are to be adopted to help with our housing problem— and I sincerely hope that what has been done so far will be continued—it will not be done through Mr. Cousins or the Building Research Station but through the Minister of Public Building and Works. If we are talking about advances in textile machinery or textile processes, presumably the research associations will have something to say, and so, I hope, will the technological colleges under the Secretary of State for Education and Science, but the sponsoring Ministry will not be that of Mr. Cousins but the Board of Trade.
  If it is agricultural machinery or methods, again, it will not be Lord Snow who takes it on, but the Ministry of Agriculture. If it is steel and steel processing, it will be the Minister of Power—at any rate, until we know what horrors the Government have in mind for the steel industry. The schools that are needed for technological advance will be designed in Curzon Street. We do not quite know now what is to happen to the Atomic Energy Authority, but if there are to be development contracts for new reactor designs, it will be the Atomic Energy Authority, or whatever successor there may be to it, and the development contracts will go through the Central Electricity Generating Board, and the responsibility will be that of the Minister of Power.
  The motor industry will be the affair of the Board of Trade. If we are to have a proper Social Services Research Council as the result of Lord Heyworth's Committee, that must come under the aegis of the Ministry for Education and Science. Technology, in any rational definition of the term is far too wide for a small trencher fed pack under the guidance of Mr. Cousins and Lord Snow.
  8.15 p.m.
  The whole nature of this unfortunate arrangement betrays the fact, as I believe, that the Prime Minister has wholly misunderstood the nature of the problem with which he is faced. Technological innovation is a form, but only one form
  1650
  of investment. Specifically, it is that form of investment which invests in new projects, new processes, new materials and new knowledge. It has to compete with other forms of expenditure—wages, pensions, amenities, sales, purchases—which cannot be divorced at any stage either from economics or from education, and particularly from technical or technological education.
  It is far more needed in the docks, in the railways, in the London Passenger Transport Board—which Mr. Cousins has left, and where he has not so far played a notable part in innovation. It is far more needed in the established industries than in the computer, the electronics and aircraft industries which he has now taken on. In any case, the dynamic that has brought innovation in the past, and particularly in the advanced countries which we are always being invited by hon. Members opposite to copy, has been a dynamic of economic profit and the probable availability of a market on a scale commensurate with the investment. The latter has been gravely jeopardised by a number of different actions of the present Government; the former have done, and could do, a great deal to help if they once get out of their minds that it is a bad thing to win profits by innovating investment.
  I do not say, and I have not said, that the Government have not a great and increasing rôle to play in all this technological advance. I think that they have. The research stations have a rôle, and a most important rôle, but they are better run by a research council such as the D.S.I.R. or the I.R.D.A. would have been than by the heavenly but slightly incongruous twins, Mr. Cousins and Lord Snow. The research councils have a rôle, but would be better if placed under the D.S.1.R. Government buying has a very big rôle to play, but we cannot divorce Government buying from the procurement Ministries. This is a function of procurement. Development contracts have a rôle to play, and the Government information services have a rôle to play that must be based on the functions of the Department of Education and Science.
  The truth is that the arrangement that has been made by the Government, and which is now proposed and under discussion—the new Ministry—is nothing

  1651
  more than a kind of receptacle, a sort of wastepaper basket for the functions of the I.R.D.A. in the Trend proposals, and its only distinctive nature, apart from the picturesque but incongruous nature of the two appointments, is a disastrous move towards direct rule, and away from the beneficent principle of indirect administration of a research council or authority hitherto favoured by all parties and initiated by the late Lord Haldane, who was a far more distinguished man than the Labour Party has ever harboured since or is ever likely to harbour again.
  Sir Harry Legge-Bourke: My right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg) has been in great form. I should like to support a great deal of what he has said, but I think that he would be the first to agree that it is not very easy in this case to choose which is black and which is white. Whatever decision we come to on this front is bound to have its disadvantages. Before we go any further, perhaps I had better make clear exactly what I mean by the word "technology".
  I shall take as my guide and mentor in this respect Lord Todd, and if I adopt his definition of technology perhaps it will help to make clear what I am not talking about. Technology is the application of the scientific method and the results of scientific research to the solution of industrial problems. I believe that definition to be as reliable as any that one is likely to get and one has to ask whether the proposed setting up of the new Ministry is the best way to ensure that that process is furthered as rapidly and as effectively as possible.
  I have been trying to discover from the various writings of hon. Members opposite and their friends outside the House of Commons the origin of this conception of a Ministry of Technology. Perhaps I need go no further back than to the famous document published in March, 1961, with a foreword by the present Prime Minister, "Science and the Future of Britain". On the front of the document there is a picture of the nebulae from the constellation Andromeda. It bears a strange resemblance, in my mind, to pie in the sky.
  There is a great deal of spurious stuff in this document. We start off with:
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  "A man-made satellite, adventuring into Space, circles this small planet once an hour; it might be carrying an H-bomb."
  and we are told that science can destroy the world's population or help it to standards of life inconceivable a generation ago. I think that it was Lord Bowden who once said that if scientists went on increasing at the rate of the last few years, in the year 2,000 not only every man, woman and child, but every ox, goat and ass, and every other animal would be a scientist. In our lifetime, the rate of increaes in the number of scientists has been absolutely phenomenal.
  The important thing which we have to decide is whether or not the proposal to have a separate Ministry is the best way of making use of what these scientists have disclosed for us by research. "Science and the Future of Britain" I understand, was written before the 1959 General Election, but the Labour Party could not get enough agreement to publish it. They then slightly doctored it and published it in 1961 when the one major recommendation in it had already been implemented by a Conservative Government, to wit, the appointment of a Minister for Science by the creation of my right hon. Friend the Member for St. Marylebone in that capacity.
  The more one studies the way in which D.S.I.R. and all the other scientific bodies in the country have been built up the more convinced one becomes of what was so very forcibly and rightly emphasised in the Trend Report on the Organisation of Civil Science, and that is that the one thing one cannot ever hope to have done is to have scientific research and development conducted by people ther than scientists. As I see the conception of this Ministry, it is an attempt to do something which Lord Snow himself, in "Science and Government", said the scientists did not lend themselves to do, and which was not in the nature of their creative abilities, and that was to turn themselves into administrators.
  There is no one in the Committee probably more qualified to talk on the abilities, the limitations and the general organisation of the Civil Service than the right hon. Gentleman the Chancellor of the Duchy of Lancaster. I know that he has dedicated his life to its well-being. One can see from "Science and Government" that Lord Snow himself

  1653
  is in some difficulty in having to argue in another place the case for having this Ministry. If he is to man the Ministry with people other than scientists he will run the risk very quickly of having people controlling scientific research and development who are totally unqualified so to do. If, on the other hand, he is going to have nothing but scientists in the Ministry he will have people who are not particularly gifted at administration. They are not to be condemned for that because that is not their métier.
  I suggest to the Government that the one thing which they must tell us in this debate, before we decide whether this is the right thing to do, is whom it is intended to have as the manpower in this Ministry. Are they to be ordinary civil servants drawn from other Departments, taking advice from one of the Permanent Under-Secretaries to the Treasury? Or are they to be people hand-picked from the scientific world? It may be that there will be a blending of the two. We have little idea today of the intended size of this Ministry. Is it to be a corps d'élite of scientific intelligentsia going round and pontificating to people on what they should be doing? Is it to be a major Department injecting money in the right places as it thinks fit, or perhaps sending personnel into other Departments and into industry, to show how the money should he spent. We have had a list of four great industries which will be brought under the purview of this Ministry—automation. electronics, computers, and another.
  Dr. Jeremy Bray: Machine tools.
  Sir H. Legge-Bourke: Is this a case of grandmother being taught to suck eggs, or is it not? Will we have people detached from the Ministry and going into industry and telling people how the job should be done? The industries selected are the middleman industries. They are not primary industries or end-product industries. They are all making components or equipment for other industries to use to produce eventually some important manufacture which we hope will earn this country its keep. If we have any dislocation at that level of industry what a catastrophic effect this can have on the eventual output of British manufacturing industry.
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  We must, therefore, be made clear in our minds by the Government what sort of people will be in this Ministry and what will be their function when they get there. A great deal of status symbol prestige bunkum is talked these days. This country will not earn its money through talking about prestige. It will earn its keep by what our engineers will produce, and on the assumption that they are in sufficient numbers and are properly trained.
  8.30 p.m.
  Here I agree with everything which Lord Todd emphasised several times in his speeches in another place. I regard this as the biggest problem we have today. I see the hon. Member for Middlesbrough, West (Dr. Bray) in his place. He and I have today been listening to Professor Parkinson elaborating on how to get more engineers. Some of us suspect that there is too great a vested interest in the humanities and various other aspects of learning in the universities on the part of those whose business it is to teach and there is a deliberate attempt in some quarters to prevent our having enough engineers. This may be one of the problems, but I am not at all sure that having a Ministry of Technology which is divorced altogether from the Ministry of Education is the right way to set about getting enough engineers.
  I was with my hon. and learned Friend all the way during his tenure of office as Minister for Education and Science in his insistence that, unquestionably, education and science must be kept together. We cannot divide the two, certainly not when we come to post-graduate university study. It is essential that there be a very clear link between the two maintained by the Government. Yet here the Government are deliberately separating the two. In the debate in another place, Lord Halsbury pointed out that a very big price has had to be paid. There has been a split. I notice that, although Lord Bowden, speaking on behalf of the Government, spoke of an "indivisible robe", a split has had to be made in it. The noble Lord went on to say that he hoped that we should be able to do what the Americans had done, that is, keep the Department of Education and Science and the Ministry of Technology together. But how are we to do it?

  1655
  The Government's action in proposing to set up this new Ministry is, automatically, a step to divide them. I fully understand the inherent difficulty that any federal Ministry concept has in it, the danger that the Secretary of State at the head of a federal Ministry will have so many things which he could consider that it will be beyond the power of one man to make a careful appraisal of detail. But the essence of the federal system is that the detailed day-to-day business can be taken away from the Secretary of State, who can then see things in their grand perspective.
  Yet we are taking away one of the vital interests of the Minister in charge of education, the translation of all that has gone through the education machine and all the research into positive action in industry.
  We are not yet fully in the picture. Even those of us who have carefully studied, as I have, everything said in another place last week, do not know what the Government's proposals really are. The debate in another place was intensely interesting, and I humbly suggest that all hon. Members who wish to take part in the debate today and on Friday would be well advised to study most carefully all that was said in another place on 2nd December. Everyone who took part had either had an active part in the scientific life of the nation or had some part in Government scientific activity or Departmental activity. I feel that those of us here who lack the experience which noble Lords have should be all the more careful that we do not commit ourselves to something which, perhaps because of our lack of adequate knowledge, might cause very great disruption in British industry.
  Looking back on what the present Minister of Housing and Local Government said when he was in charge of science matters when the Labour Party was in opposition, at what the present Prime Minister has said and what various Labour Party publications have said, it always seems to me that, fundamentally, the whole of Labour Party policy in this matter has been based on a complete misconception, the idea that not enough money was being spent on the things necessary for industry.
  I have here a copy of a memorandum which was prepared for me before we
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  went off last May to Vienna to represent this House at a conference of Parliamentarians and scientists from the O.E.C.D. and the Council of Europe. Some of the information here completely belies the presuppositions of hon. and right hon. Members opposite about all this business. The idea that we have made no progress and that things have been lacking is completely inaccurate. Here is a quick summary of some of the major achievements. National expenditure on research and development in 1955–56 amounted to £300 million, and the civil part of that was only £122 million. By 1962, the total had risen to £634 million of which £388 million was civil. In 1950–51, total Government expenditure on civil scientific research was £30 million, and by 1963–64 it had risen to £172 million, a nearly sixfold increase. The total expenditure on research councils, which will come within the purview of the new Ministry, amounted in 1952–53 to £10·8 million, and the estimate for the current year is £49 million.
  Never in my experience have hon. Members opposite voted against more money being provided out of the public purse for some purpose or another. It is a safe bet that there will not be a Division if more public money is being spent; the Labour Party will never oppose it. It may be that this is the sort of doctrine behind the Labour Party thinking in proposing to set up this Ministry—that the Ministry can spend public money faster. But we must be certain whether the Ministry will be able to ensure that the money has been better spent than it would otherwise have been.
  However good right hon. Gentlemen opposite are at approaching matters from a Treasury point of view, what matters here is whether the right men are in charge of the operation. What matters is whether the Department, whatever Department it is which is picking the people to do the research, is capable of picking the best men available, and whether, having picked them, it is prepared to put sufficient confidence in them to let them get on with the job and not interfere with them on political grounds while they are at work.
  The whole of the Ministry's conception reeks of the likelihood that we shall have Lord Snow or somebody else sailing in and saying, "I am sorry. That is inconsistent with Labour Party philosophy.

  1657
  You must lay off for a bit." If we are to have that sort of thing brought into the scientific effort and the application of science and technology to industry, this country will not earn its living no matter what Lord Snow says is his object.
  If right hon. Gentlemen opposite want the best machinery, they had better make certain that in making the proposals which they do in the Bill they do not throw away something which will be utterly irrecoverable once it is thrown away. It is all very well to talk about the brain drain in the past. If right hon. Gentlemen opposite set about D.S.I.R. breaking it up completely and going much further than the Trend reorganisation and, as a result, finishing up with something which will mean political control of science and research and development, whatever money they spend will not ensure the safety of the British economy.
  I find it lamentable that we should get this doctrinaire approach to science. I have always thought that this was one of the few issues in politics where we really could get off party politics. Yet the whole of this reeks of a dogmatic Socialist approach—that unless the Government control everything, everything cannot be done as well as it should be. In science it is utter nonsense to take that view.
  My right hon. Friend the Member for Mitcham (Mr. R. Carr) and I and several other hon. Members and several distinguished men from outside the House worked for 2½ years to produce a report called "Science in Industry: The Influence of Government Policy", which was published in November. 1962. We stressed throughout it what I think is far and away the most important thing to stress today—that what matters is not whether one should have a Ministry in charge of science, but whether every Government Department, and especially those concerned with anything in the least industrial, has a sufficient number of people adequately qualified to understand the vernacular in which scientists and technologists speak and think. In no Department is this more important than the Treasury.
  I wonder very much how the new Ministry will get on with the Treasury if Lord Snow and Lord Bowden start talking in the terms in which they have been talking in another place or in the terms in which Lord Snow has been writing books and articles. The Treasury
  1658
  will not know what they are talking about unless the right people have been put in the Treasury. The right hon. Gentleman opposite is perhaps more qualified than any of us to say whether he is satisfied that what has happened in the Treasury has so geared that part of the machinery of Government that it will be capable of meeting modern needs of science and technology.
  The Treasury is the Department with its hands on the money strings. They are the people who will decide whether or not the right amount of money is spent in the right place on scientific effort of this nature. I would say that at present there is still need for a lot of improvement. What we wanted to see in the report which we produced two or three years ago was a re-gearing of the Government machine, not breaking up Departments, not destroying the good, but building on what had proved itself and ensuring that the Government machine itself, especially in the Civil Service sector of it, was better equipped than ever before to make the best of what these men had to offer. If the Government can give us an assurance that that is the way in which they approach the problem, my opposition to this Ministry would be less intense than it is.
  But I recognise at once that if we do not have the Ministry, we must replace it with something else which is not included in the Bill which we shall be debating on Friday. If we do not have the Ministry we must have something that will be the equivalent of the proposals in the Trend Report of I.R.D.A., the Industrial Research Development Authority.
  It is a very finely balanced argument as to which is the right way. There is something to be said for a Ministry as distinct from an authority because the Ministers, once they become Members of Parliament, will at least be capable of being questioned on the Floor of this House, whereas if we have an authority it will not be possible for it to be questioned unless the Minister agrees. Whatever we have, it must be a better machine than has existed so far to enable hon. Members On both sides of the House to be able to get at the permanent officials of the bodies that have been set up, many of them over a number of years.

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  I know that the objection to that has been from the Treasury and not from the Departments concerned. This is the real business of who controls the Civil Service. I shall not go further into that, because the Chancellor of the Duchy of Lancaster knows already that this is something which we have debated before. Nevertheless, I would say that if we are to have a really great drive to apply technology in industry better than it has ever been applied before, the way to do it is to ensure that the men who are appointed to this or that job know the best scientists and technologists to employ and who, having selected them, will let them get on with the progressing of research and development. That is the way to do it—not to have the Government deciding the progress on political grounds.
  This is the great danger of having a Ministry, and for that reason I must oppose the setting up of the Ministry and much prefer the idea originally put out in the Trend Report, namely, an Industrial Research Development Authority. I believe that that would be the better way. Both, I know, have disadvantages, but, on balance, I would say that I would prefer the Authority to the Ministry.
  8.45 p.m.
  Mr. Houghton: We were promised a long and vigorous debate and I was waiting for it to develop. I do not think that we should be afraid of innovation in public administration or in the machinery of Government. Listening to this debate very carefully and especially to the hon. Member for the Isle of Ely (Sir H. Legge-Bourke), I thought that it was too academic altogether. I think that both the right hon. and learned Member for St. Marylebone (Mr. Hogg) and the hon. Member for the Isle of Ely missed the psychology of the matter which is not unimportant in a crucial stage in the development of our country.
  There have been times when new Ministers have been appointed to capture the mood of the nation, or to deal with a special problem pressing upon the public conscience and providing anxiety to the Government. I remember the appointment of a Minister for Central African Affairs. It carried with it special responsibility to take care of a crisis in Central Africa. From the standpoint of sound administration and the
  1660
  delineation of functions and the disposition of civil servants, it would have made very little sense, but it had to do with something that, in the view of the Government of the day, needed to be done.
  Notice taken that 40 Members were not present;
  Committee counted, and, 40 Members being present—
  Mr. Houghton: I cannot say that I am particularly grateful for that interruption. I was saying that there are occasions in the development of public policy when the creation of new Ministries with special tasks is justified.
  I think that the Prime Minister captured the public imagination and gave inspiration to a great many people in the country by the speech he made at the Scarborough conference of the Labour Party last year. He generated in the minds of many executives, scientists and technologists the feeling that at last there was a party, and possibly a Government, which would appreciate the importance of technological advance and scientific development to a greater extent than had been visible before. After all, the visibility of things matters in public affairs.
  Government and Parliament are representative institutions. We have to respond to public demand, to the needs of the times. It is not possible always to put public administration to the rather arid test of O & M. There are times when one must rise above that and provide some inspiration in a direction badly needed at a particular time. I believe that this new Ministry is just such an inspiration needed just now. The job of the Ministry of Technology is to procure, develop and sell technology—and the selling of technology is an urgent need in the country on both sides of industry.
  It is not without significance that my right hon. Friend the Prime Minister has appointed perhaps the best-known trade union leader in Britain to be Minister of Technology. This is where the influence of a Minister like Mr. Frank Cousins is of such great importance. On this side of the Committee, we believe that this Ministry can offer a new thrust and a new drive behind the

  1661
  acceptance of technological advance throughout industry and provide a central point for the encouragement of development, innovation and the acquisition by industry and the acceptance by the trade unions of technological equipment, new methods and the use of the latest types of machinery, the plunge into the electronic age which is needed if Britain is to survive. All this is part of the work of the new Ministry.
  There has been an announcement about the intentions of the new Ministry and there has been a debate in another place and there is to be a debate in the House on Commons on Friday dealing with some aspects of the new set-up. Hon. Members must bring their best judgment to bear on the situation as they see it. I looked at the Economist last week and saw an article on who does what and to whom. There was an article in the Statist of the same week on the rôle of technology. There is support in the Statist and criticism in the Economist. Referring to a list of things which need to be done, the Statist said:
  "Action on the problems in this list is bound to make somebody squeal, but if Mr. Cousins avoids treading on people's toes we shall know that he is not doing his job."
  That sums it up There will be no central control in the Ministry of Technology over the whole of the nation's scientific and technological activities and research. It is a central generating point for the work which has to be done in research and especially in the acceptance by industry of the fruits of research and technological advance.
  This comes very near to the future of Britain. We all know what is the challenge before the country today, and we all accept the need for faster economic growth. We all accept the need for buoyant and expanding exports. This is the foundation of the nation's economic survival, and any step which may help and further the progress of our ability to produce goods for export is surely to be encouraged.
  Everybody knows that if we are to get economic growth, we must release and foster those forces of rapid technological advance and innovation which alone can sustain our future survival. We believe that we have the men and we believe that we have the ideas. It is the urgent responsibility of any
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  Government to ensure the maximum opportunity and freedom for those who are engaged in research and in the application of the fruits of our own brains and research.
  The export industries will have to modernise themselves in many respects before they are fully equipped to compete with the rapidly developing nations in Europe and elsewhere. Developing countries are ambitious for industrialisation, and it will be our job to show the way for their own economic development. As we import so much of our food and raw materials, we have to become the most efficient converter of raw materials into manufactured goods in the world if we are to fulfil all the hopes and expectations for social advance and for an improvement in our standard of living and at the same time discharge what we believe to be our moral obligations—obligations which are also enlightened self-interest—in giving as much help as we can to other countries in the form of technological development and industrialisation.
  It is against this background that my right hon. Friend decided to appoint a Minister of Technology—[Interruption.] The hon. Member for Colchester (Mr. Buck) is very fidgety. He has been in this condition for quite a long time. Probably, like me. he is desperately hungry. If so, he can go out and get something to eat, but I must stay.
  Mr. Buck: The right hon. Gentleman has spoken of the urgency which the Government feel about research. I was hoping to be able to ask someone more directly concerned with science—perhaps the right hon. Gentleman can answer this—why it was found necessary on the first of this month for one of the right hon. Gentleman's hon. Friends to inform the House of Commons that no new research project had been authorised by the Ministry. Does not this strike the right hon. Gentleman as surprising in view of the fact that, apparently, the Ministers in the Ministry of Technology came to office bursting with new ideas?
  Mr. Houghton: I regard these questions as most impertinent, if I may say so, from right hon. and hon. Gentlemen opposite who have just quit these benches after 13½ years of dreary, incompetent

  1663
  government. I know how it must feel for hon. Members opposite to be in Opposition having spent so long on the Government benches. Do not we know how frustrating it is to have to oppose everything which the Government propose?
  Mr. Hogg: Answer.
  Mr. Houghton: I will answer if the right hon. and learned Gentleman will be quiet for one moment.
  We have been in office only a few weeks. The new Minister has been in office only a few weeks. The new organisation is being brought together. Surely it is not surprising that in this short time it has not been possible to launch new and, possibly, expensive and ambitious projects. These will come. Give us time. We know that time is running against us. [HON. MEMBERS: "Hear, hear."] I am speaking of the country now, not of the Government. In the few weeks that we have been in office we have had to energise the nation in quite a few respects.
  This is not just a matter of seeing that certain functions are competently discharged. As I said earlier, it is necessary at this time to capture the mood of the whole nation and to interest and inspire it in the direction of technological advance. If we can do that, such difficulties as there may be in administration, co-operation, lines of demarcation and the rest will be overcome in the interests of the major objective. This is where the genius of public administration in this country has expressed itself many times in improvisations and innovations which we have adopted in order to achieve an overriding purpose, notwithstanding administrative difficulties which would otherwise be regarded as important disqualifications for embarking upon them.
  9.0 p.m.
  What we are doing is commending to this Committee, yet again, the first phase in this new Ministry. Then subsequent stages of the fulfilment of the purpose of the Ministry will be discussed in the House. We are strongly of the opinion that it is something worth doing. We think that this innovation will not only make a good deal of difference to the psychology of the situation but will also encourage, co-ordinate and, to some
  1664
  extent, centralise the direction of research and technological advance.
  I hope that the Committee will feel that there is enough behind the proposals for the new Ministry to justify writing it into this Bill. A later stage, as I have said, will enable hon. Members on both sides to go further into the functions and the activities of the Ministry. Is this worth doing? Do hon. and right hon. Gentlemen—notwithstanding the trenchant criticism that has been made—say that this is not worth doing? If they say that, which was said by the hon. and gallant Member for the Isle of Ely, then they must say what else is to be done. Obviously, the present situation is not producing the results which are imperative for the advance of our prosperity and for the strengthening of our economy.
  If hon. Members wish to criticise what we are doing, they should get up and say what the alternative would be for them. I suggest that this is as good a solution to a difficult and complicated problem as any that has been mentioned so far. The Committee should give it strong encouragement and hope that it will contribute something more to the future development of the country and of our economy.
  Mr. David Price: The right hon. Gentleman the Chancellor of the Duchy of Lancaster has only brought forward one reason—I would say one distinctive reason—why he suggests that it is necessary to create a Ministry of Technology in order to give a greater stimulus to technology throughout the country. The reason which he gave us was psychological. He showed a good deal of contempt for organisation and methods in public administration which, I would have thought, ill becomes a right hon. Gentleman who is pleading for this country to take a more technological approach to our affairs.
  I have at least this advantage over the right hon. Gentleman, that I started my industrial career as a work study man and I know a little about the analytical approach to these problems. If technology means anything, it surely means precision. Indeed, even the right hon. Member for Easington (Mr. Shinwell), who is always so keen on interrupting—[Interruption.]—will be reminded that the

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  essence of a scientific approach is precision.
  The right hon. Gentleman will recall the famous words of that great engineer and physicist, Lord Kelvin:
  "When you can measure what you are speaking about and can express it in numbers, you know something about it; and when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind."
  The right hon. Gentleman has been inviting us to approve the setting up of a Ministry of Technology, not in the arguments of technology but in the sort of arguments one might use to address a revivalist meeting.
  I think that it is necessary, when considering the appropriate machinery of government for technology, to make one or two general points. The first is that science and technology have from time to time to be separated for purpose of organisation, but we must never lose sight of the fact that they are a continuum. I do not know how many hon. Members read the address of the President of the Royal Society, Sir Howard Florey, a few weeks ago, when he said:
  "no hard and fast line can or should be drawn between those who apply science, and in the process make discoveries, and those who pursue what is sometimes called basic science."
  One could produce an extremely good case to show that many of the advances that have been made in recent years in basic science—that is, in fundamental knowledge about how our natural universe is constructed—have arisen as a result of technological improvement, by which I mean improvement in the capabilities of instruments of measurement both in the macrocosm and in the microcosm. It is not possible to separate the two, although one recognises that from time to time organisationally one must attempt it.
  Secondly, the distinction that we can use is a distinction of ends. Applied science is where one is dealing with science and technology in relation to specific purposes—in relation, for example, to preparing a road with a nonskid surface. With pure science, one does not have any specific use for one's knowledge when setting out and attempting to attain it. One is researching into the unknown. The social justification for basic research is that greater knowledge
  1666
  of the unknown has in the long run human use.
  It means, furthermore, that in any given human situation today in the modern world, technology is only part of a problem and never the whole. Technological problems cannot be divorced from economics or from human problems. Hon. Members would, I am sure, agree that one of our biggest problems is not so much getting new scientific knowledge or even getting new technology, but getting known knowledge applied in a particular situation. The obstacles are as frequently human obstacles as they are economic or scientific.
  If it therefore follows that there is a technological content in every modern problem, surely, in looking at the machinery of Government, we must look at it rather in terms of how we ensure that every Department of State is more capable of looking at the technological side of a problem and how it is better technically equipped. This point was made by my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke). Therefore, I reject the whole of Lord Snow's approach—before he went to the Ministry—in his concept of the two cultures. What we must aim at, and what through the machinery of Government we must aim at, is to be both literate and numerate. I believe that by setting up a separate Ministry of Technology, we will be reducing the chances of making the Civil Service throughout all Departments numerate as well as literate.
  The Chancellor of the Duchy of Lancaster has, as I expected, having heard the earlier debates, told us nothing about the justification for a Ministry of Technology as being the appropriate method of getting this extra stimulus into technology, over which there is nothing between himself and myself. The right hon. Gentleman has told us nothing of the reasoning behind the creation other than that he felt that psychologically this was the moment to do it.
  In our efforts to try to discover the precise purpose and the rôle of the Ministry of Technology, we on this side have to go back to earlier stages. I suppose that the best starting point is the "ark of the covenant" of the new Government, the Labour Party's recent election manifesto, in which we were promised a Ministry of Technology

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  "to guide and stimulate a major national effort to bring advanced technology and new processes into industry."
  [HON. MEMBERS: "Hear, hear."] It is generally recognised that that is the purpose. I am glad to get from back-bench Members on the Government side agreement that I find difficult to get from the Government Front Bench.
  Since the Government took office, I have been waiting patiently to learn more precisely how the new Ministry intends to quide and to stimulate. How can we in the House of Commons know whether this new Department of Technology is a necessary or a right vehicle to take the country in the direction that right hon. and hon. Members opposite want us to go? I have got sufficient respect for the intelligence of right hon. Gentlemen opposite to be certain that they have something more in mind than a general exhortation.
  Therefore, I want to know, how do they intend to guide and stimulate industry? So far we have had three different pronouncements on three different occasions. I will examine them in inverse order of chronology. The most recent pronouncement, what I call the first pronouncement was made by the First Secretary of State answering a Question yesterday in his capacity as Deputy Prime Minister. He told us:
  "The Ministry of Technology will use whatever measures seem right to promote technological advance in these industries and in industry generally."—[OFFICIAL REPORT, 8th December, 1964; Vol. 703, c. 1320.]
  That does not get us very much further. Indeed, I think that that Answer, in terms of sheer stonewalling, would have done credit to the Foreign Office at the height of a difficult international crisis.
  We come to Lord Snow speaking in another place on 2nd December. He gave us. I am glad to say, a good deal more of an idea of how the Government see this Ministry operating. He enumerated three techniques which the new Department intends to use in order to guide and to stimulate. The first of these was the development contract, and I quote:
  "This has been done in the defence industry for 20-odd years. The possibility that this is going occasionally to look arbitrary cannot be removed: it has not been removed ever in the defence industry."—[OFFICIAL REPORT,
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  House of Lords, 2nd December, 1964; Vol. 261, c. 1122.]
  Of course, there is rôle for a civil development contract, but I do seriously put it to the right hon. Gentleman that it can never be a major stimulant to technology and technological advance in civil industry, because there is great danger in placing development contracts which are divorced from ultimate orders for hardware. Just to give an example, last summer I spent a quite considerable amount of time going round some of our major electronics firms, and discussed with them how much we, as a Government, could make use of the civil development contract, and whereas they said that there were certain things which could usefully be done, the general answer I got was that it is not generally an appropriate method, that this is no substitute for orders for hardware.
  I think the Committee ought to remember that if we look at the use which the Americans have made of development contracts we see that they have nearly always been on specific projects to which a development contract is going to make a contribution; specific projects in defence and in civil space work where the Government are also the customers. There is, I think, a very big difference between a development contract which is to look at something in a vague sort of way and a development contract which is part of the applied research leading up to an ultimate piece of hardware for which the Government Department concerned, or one related to it, will be the ultimate customer. There is no substitute in research for the discipline of a tight timetable.
  Secondly Lord Snow told us:
  "The second technique which we propose to use is an intelligent adaptation of Mr. McNamara's purchasing. This Mr. McNamara has done with astonishing ingenuity for a number of years, and the effects on American industry, in fields I know a little about, have been dramatic."—[OFFICIAL REPORT, House of Lords, 2nd December, 1964; Vol. 261, c. 1122.]
  I do not doubt for a moment that Mr. McNamara does use the purchasing power of the United States Government to considerable purpose, but do not let us in this Committee forget the fact that Mr. McNamara is Secretary of State for Defence in the United States and not a Minister of Technology. This seems to me, if this argument is to be used, an

  1669
  argument in favour of putting technological responsibility on to the Ministry of Aviation and incorporating the Ministry of Aviation as a fourth leg in the Ministry of Defence.
  There is a fundamental difference between what the Government can do to advance technology where they are the major, or even the sole customers, and what they can do over the wide range of industry where they are at best only marginal customers. If the Government are the major customers, they can technologically force the pace, as they do in the defence fields. I do not say that there are not some products which the Government buy for civilian use which may not be amenable to this approach, but surely this is best effected by the Department or the nationalised industry concerned? Unless, of course, it is the intention of right hon. Gentlemen opposite that the Ministry of Technology is to become the central purchasing department for Whitehall and Central Government generally.
  9.15 p.m.
  Mr. E. Shinwell: Of course not. Talk sense.
  Mr. Price: The right hon. Gentleman says "Of course not." Will he ask his right hon. Friend how the Ministry of Technology is to follow the pattern of Mr. McNamara, which is what Lord Snow said? I did not say it, nor did the right hon. Gentleman.
  In the last Parliament, under the able guidance of Mr. Geoffrey Rippon, the Ministry of Public Building and Works was the pioneer of the catalytic rôle of a civil Department between the purchasers of buildings on the one hand, and the building industry and the manufacturers of components and materials on the other. This is a precedent which could well be followed. It does not require the creation of a Ministry of Technology, but rather the radiation of all Departments with technological energy and expertise. Clearly there are opportunities for the Ministry of Health to take on the rôle of active catalyst between regional hospital boards and manufacturers of chemical equipment. The field of medical electronics is the most obvious one.
  Much of the current expenditure by the public sector on civilian equipment is not carried out by central Government but rather by the nationalised industries, by local government, by
  1670
  regional hospital boards, by local education authorities, and the like. Unless purchasing decisions are to be taken out of their hands and put into the hands of the Ministry of Technology, I do not see how this Ministry can model itself on Mr. MacNamara, unless it is intended that Mr. Frank Cousins should take over the Ministry of Defence. This may be one of the new treats that we shall get after Washington.
  Whereas I am of the firm opinion that individual Departments can, and should, take on the rôle of an active catalyst between suppliers and customers in the public sector, I do not believe this can be done by the Ministry of Technology as conceived by the right hon. Gentleman the Prime Minister, unless it intends to take over the technological responsibilities of all other Governments, because to take away the individual technologies from individual Departments is to dehydrate them.
  I cannot think of any major question in any Department of State which has not got this technological content. The Government will find, as they come to grips with individual situations on the civil side, that there is far less in the MacNamara approach than Lord Snow appeared to think. Where it is appropriate I believe that this approach should be carried out by the Department concerned, and not by the Ministry of Technology.
  The third great technique which Lord Snow told us would be used as a justification for this Department was listening. He said:
  "The third matter method we are going to use is rather surprising and very prosaic. It is listening. We propose to listen to everyone who has an idea and who cares to talk to US …".—[OFFICIAL REPORT, House of Lords, 2nd December, 1964; Vol. 261, c. 1122–3.]
  That is fine. I hope that it is not necessary for every Department to come to Parliament and say that it is prepared to listen. I have no doubt that listening will come easily to one who has for so long experienced the corridors of power. But that listening must have a purpose, and I trust that the Ministry of Technology listeners will not respond like Walter de la Mare's listeners:
  "And he felt in his heart their strangeness
  Their stillness answering his cry."
  What matters is not listening to fine phrases and great ideas. What matters

  1671
  are specific propositions which lead to new projects, new processes, or improved ones.
  It is better hardware that matters. Is it for this that the Ministry will be listening? Having heard, what can it do, and what will it do, that could not have been done by an expanded N.R.D.C.? Does the right hon. Gentleman agree or disagree with the proposals that my right hon. Friend the Member for Bexley (Mr. Heath) put forward last summer in order to expand the N.R.D.C.? What sort of people does the right hon. Gentleman think will be caught into this listening net which could not be brought in through the N.R.D.C.?
  The third pronouncement that we have had on the way in which this Department will operate was on 26th November, when the Prime Minister gave us his version of the means to be used by the Minister of Technology. He said:
  "The methods employed will include an intensified use of the appropriate Research Stations and of the National Research Development Corporation, civil development contracts and studies to identify particular industries or parts of industries suitable for action."—[OFFICIAL REPORT, 26th November, 1964; Vol. 702, c. 216.]
  Let us see what this means in practice. Does it justify the creation of this new Department. What is meant by
  "an intensified use of the appropriate Research Stations"?
  I would remind the Committee that in 1956–57 D.S.I.R. spent £8¼ million and in 1962–63, £19½ million. Does this mean that more money will be made available to the former D.S.I.R. stations, and a bigger grant to research stations? Does it mean new research stations? Will the Ministry take over directly the work of the D.S.I.R. Council and all its committees?
  As for the N.R.D.C., is the Prime Minister proposing to go a great deal further than was proposed on 28th July by my right hon. Friend the Member for Bexley? Does he agree with that statement, and agree on the need for expanding the terms of reference of the N.R.D.C.? Is the independence of the N.R.D.C. Council to be left or not?
  1672
  If it is to be left, and things are to go on under the plans already announced on 28th July, why remove it from the Board of Trade? Why set it up in the Ministry of Technology? This debate is about the machinery of Government, and the movement of the N.R.D.C. to the new Ministry of Technology is a piece of movement of that machinery that I thought the right hon. Gentleman would tell us something about it.
  I have already said something about development contracts, but there is an important personnel side of the machinery of Government with regard to these contracts. I ask the right hon. Gentleman whether we are to gather that development contracts will be placed in future by the Ministry. If they are to be placed by the Ministry, what size of staff will it have to have to cover the entire spectrum of possible industries and technologies in which the Ministry may be minded to place development contracts?
  As my hon. Friend the Member for the Isle of Ely said earlier, it is no good asking a Department to devise and formulate the specification for a complicated development contract unless it has adequate staff to do it. We have been told about none of these things. Under the indirect principle, through the D.S.I.R. and it committees we had the machinery to do this. We have been told nothing about this. We are asked to agree to the annihilation of the old D.S.I.R. structure and system, so we must have answers to these questions.
  We have the general injunction
  "to identify particular industries or parts of industries suitable for action."
  We are entitled to ask—by what criteria will they be identified? Is it to be the criterion of profitability? Is it to be the criterion of growth potential, or export potential, or employment potential? How are these criteria to be judged? Without this knowledge it is a meaningless and vacuous phrase.
  Then we have the phrase "suitable for action". Suitable for what sort of action? Action by whom? Is it to be action for its own sake? Who decides?
  Mr. Shinwell: How many pages has he got to read?
  Mr. Price: The right hon. Gentleman must be a little more patient. Because

  1673
  he has changed sides he must not get in league with the Executive.
  Mr. R. Gresham Cooke: On a point of order. Is it correct for a right hon. Gentleman to make interruptions in an hon. Member's speech from a sedentary position?
  The Temporary Chairman (Mr. Thomas Steele): No, it is not in order.
  Mr. Shinwell: I was merely asking: how many pages has the hon. Gentleman got to read?
  Mr. Price: The right hon. Gentleman clearly is not very interested in technology Dr in economic affairs. He has still not taken in the lesson which I read from Lord Kelvin. Until he has done that, he will still be 100 years out of date. We were discussing the proposition—[Interruption.] If the right hon. Gentleman thinks that the proposition I was discussing is boring, he can have it out with his right hon. Friend the Prime Minister, because it is the Prime Minister's proposition we are discussing.
  Mr. Shinwell Mr. Shinwell rose—
  The Temporary Chairman: Order. If the hon. Gentleman does not give way, the right hon. Gentleman must resume his seat.
  Mr. Shinwell: I was seeking your protection, Mr. Steele. The hon. Gentleman was attacking me.
  Mr. Price: If the right hon. Gentleman needs the protection of the Chair from a younger hon. Member, he really is slipping. I was discussing the idea of the Prime Minister that the Ministry of Technology is to identify industries suitable for action. I was asking a number of questions about it to which we are entitled to have replies. Even if it is right that suitable industries should be indeterminately and indiscriminately selected for indiscriminate and indeterminate action, we are entitled to ask why it is necessary to create a Ministry of Technology to do this. What is the Ministry of Economic Affairs supposed to be doing? What is the Board of Trade supposed to be doing? We realise that the Treasury has been demoted into being merely the counting office to the First Secretary of State.
  1674
  Then the Prime Minister told us:
  "The Ministry of Technology will in future be the sponsor department for the machine tools, electronics, telecommunications and computer industries."—[OFFICIAL REPORT. 26th November, 1964; Vol. 702, c. 216–17.]
  What does the Prime Minister mean by sponsorship? Is it the same as purchasing? Is it, on the other hand, acting in some way as a catalyst? We have had no replies to any of these questions.
  The plain fact is that if the Government really want to put an economic impulse into technology they will do it from the general management of the economy and from their economic policies. It will be done by trying to expand the British market and making it larger. Therefore, our whole approach to bodies like E.F.T.A. and the Common Market is relevant if we are to have a higher technological impulse in industry. The whole question of taxation, of investment, of investment allowances—these are the relevant things and I do not believe, when we see the sort of policies that right hon. Members opposite are pursuing, that it is necessary to have this Ministry at all, and it is a complete bind.
  The one hopeful sign that the Government realise that the real need is to get more competition into the economy came from the First Secretary of State when he said in a very early debate, quoting the Economic White Paper:
  "The plain fact is that British industry needs to be more competitive and aggressive."
  The right hon. Gentleman went on to say:
  "In general terms, we need to create a competitive climate in which efficiency is rewarded and inefficiency penalised."—[OFFICIAL REPORT, 4th November, 1964; Vol. 701, c. 219–20.]
  More bankruptcies for the weak and unsuccessful and more profits for the strong and aggressive! It sounds to me more like Adam Smith than Keir Hardie, but it is none the worse for that.
  From what we have been told, this new Ministry is an ill conceived child. In so far as it has an economic purpose, that purpose would be better carried out by the economic Departments, and more particularly by a relevant economic policy on the part of the Government. In so far as the Ministry of Technology is taking over the work of the D.S.I.R., the Ministry will be doing nothing that the

  1675
  proposed Industrial Research and Development Authority would not have done better.
  9.30 p.m.
  In so far as the whole Government machine needs to be more numerate and more technologically conscious, the creation of the new Department is positively counter-productive. As to the means by which it will fulfil its purpose, we have little to go on besides a few sweeping generalisations and platitudes, and a vague threat by the Prime Minister to take action unspecified against industries unspecified.
  What a change from the brave words of September, when right hon. Gentlemen opposite were fresh, virile and naïve. Then they were saying,
  "Labour is ready. Poised to swing its plans into instant operation. Impatient to apply the New Thinking that will end the chaos and sterility."
  It must be evident to the whole Committee that precious little thinking has
  been done about the Ministry of Technology. I wonder whether all those who were impressed by the brave words of September would have believed that by December one of the primary weapons of the new Ministry of Technology—this knight in shining armour who was to rescue the British economic maiden from the slothful dragon of Tory management—was to be listening.
  Here is the great dynamic that was missing before. Here is planning in action. And the new St. George is to be armed, not with a lance but with a hearing aid. Is it any wonder that we have no alternative but to advise our right hon. and hon. Friends to vote against this proposed Ministry of Technology, which is no more than part of the large public relations exercise that will be known as Mr. Wilson's 100 days.
  Question put, That the words "and the Minister of Technology" stand part of the Clause:—
  The Committee divided: Ayes 230, Noes 188.

  DivisionNo.37.]

  AYES

  [9.32 p.m.

  Abse, Leo

  Davies, Ifor(Gower)

  Hayman, F. H.

  Allaun, Frank (Salford, E.)

  Davies, S. O. (Merthyr)

  Hazell, Bert

  Alldritt, W. H.

  Delargy, Hugh

  Hoffer, Eric S.

  Allen, Scholefield (Crewe)

  Dell, Edmund

  Henderson, Rt. Hn. Arthur

  Armstrong, Ernest

  Dempsey, James

  Herbison, Rt. Hn. Margaret

  Atkinson, Norman

  Diamond, John

  Hill, J. (Midlothian)

  Bacon, Miss Alice

  Dodds, Norman

  Holman, Percy

  Bagier, Gordon A.T.

  Doig, Peter

  Horner, John

  Barnett, Joel

  Donnelly, Desmond

  Houghton, Rt. Hn. Douglas

  Baxter, William

  Driberg, Tom

  Howarth, Harry (Wellingborough)

  Bellenger, Rt. Hn. F. J.

  Duffy, Dr. A. E. P.

  Howarth, Robert L.(Bolton, E.)

  Bence, Cyril

  Dunn, James A.

  Howell, Denis (Small Heath)

  Bennett, J. (Glasgow Bridgeton)

  Dunnett, Jack

  Hoy, James

  Binns, John

  Edwards, Rt. Hn. Ness (Caerphilly)

  Hughes, Emrys (S. Ayrshire)

  Bishop, E. S.

  Edwards, Robert (Bilston)

  Hughes, Hector (Aberdeen, N.)

  Blackburn, F.

  English, Michael

  Hunter, A. E. (Feltham)

  Blenkinsop, Arthur

  Ennals, David

  Irving, Sydney (Dartford)

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

  Ensor, David

  Jackson, Colin

  Braddock, Mrs. E. M.

  Evans, loan (Birmingham, Yardley)

  Janner, Sir Barnett

  Bradley, Tom

  Fernyhough, E.

  Jeger, George (Goole)

  Bray, Dr. Jeremy

  Finch, Harold (Bedwellty)

  Johnson, Carol (Lewisham, S.)

  Broughton, Dr. A. D. D.

  Fitch, Alan (Wigan)

  Jones, Dan (Burnley)

  Brown, Hugh D. (Glasgow, Provan)

  Fletcher, Ted (Darlington)

  Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

  Brown, R. W.(Shoreditch & Fbury)

  Floud, Bernard

  Jones, J. Idwal (Wrexham)

  Buchan, Norman (Renfrewshire, W.)

  Foley, Maurice

  Jones, T. W. (Merioneth)

  Buchanan, Richard

  Foot, Sir Dingle (Ipswich)

  Kelley, Richard

  Butler, Herbert (Hackney, C.)

  Foot, Michael (Ebbw Vale)

  Kenyon, Clifford

  Butler, Mrs. Joyce (Wood Green)

  Ford, Ben

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

  Carmichael, Neil

  Galpern, Sir Myer

  Kerr, Dr. David (W'worth, Central)

  Carter-Jones, Lewis

  Garrow, A.

  Ledger, Ron

  Chapman, Donald

  George, Lady Megan Lloyd

  Leo, Rt. Hn. Frederick (Newton)

  Coleman, Donald

  Ginsburg, David

  Lee, Miss Jennie (Cannock)

  Conlan, Bernard

  Gourlay, Harry

  Lever, Harold (Cheetham)

  Corbet, Mrs. Freda

  Gregory, Arnold

  Lever, L. M. (Ardwick)

  Craddock, George (Bradford, S.)

  Grey, Charles

  Loughlin, Charles

  Crawshaw, Richard

  Griffiths, David (Rother Valley)

  McBride, Neil

  Cronin, John

  Hale, Leslie

  McCann, J.

  Crosland, Anthony

  Hamilton, James (Bothwell)

  MacColl, James

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

  Hannan, William

  MacDermot, Niall

  Cullen, Mrs. Alice

  Harper, Joseph

  McGuire, Michael

  Dalyell, Tam

  Harrison, Walter (Wakefield)

  McInnes, James

  Darling, George

  Hart, Mrs. Judith

  McKay, Mrs. Margaret

  Davies, G. Elfed (Rhondda, E.)

  Hattersley, Ray

  MacKenzie, Gregor (Rutherglen)

  McLeavy, Frank

  Pearson, Arthur (Pontypridd)

  Swingler, Stephen

  MacMillan, Malcolm

  Pentland, Norman

  Symonds, J. B.

  MacPherson, Malcolm

  Popplewell, Ernest

  Taverne, Dick

  Mahon, Peter(Preston, S.)

  Pursey, Cmdr. Harry

  Taylor, Bernard (Mansfield)

  Mahon, Simon (Bootle)

  Rankin, John

  Thomas, George (Cardiff, W.)

  Mallalieu, E. L. (Brigg)

  Rhodes, Geoffrey

  Thomas, Iorwerth (Rhondda, W.)

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

  Roberts Albert (Normanton)

  Thomson, George (Dundee, E.)

  Manuel, Archie

  Roberts, Goronwy (Caernarvon)

  Tinn, James

  Mapp, Charles

  Robertson, John (Paisley)

  Tomney, Frank

  Mellish, Robert

  Robinson, Rt. Hn. K. (St. Pancras, N.)

  Tuck, Raphael

  Mendelson, J. J.

  Rodgers, William (Stockton)

  Urwin, T. W.

  Mikardo, Ian

  Rogers, George (Kensington, N.)

  Varley, Eric G.

  Millan, Bruce

  Rose, Paul B.

  Wainwright, Edwin

  Milne, Edward (Blyth)

  Ross, Rt. Hn. William

  Walden, Brian (All Saints)

  Molloy, William

  Rowland, Christopher

  Walker, Harold (Doncaster)

  Monslow, Walter

  Sheldon, Robert

  Wallace, George

  Morris Alfred (Wythenshawe)

  Shinwell, Rt. Hn. E.

  Watkins, Tudor

  Morris, Charles (Openshaw)

  Shore, Peter (Stepney)

  Weltzman, David

  Morris, John(Aberavon)

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

  Wells, William (Walsall, N.)

  Murray, Albert

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

  White, Mrs, Eiren

  Neal, Harold

  Silkin, John (Deptford)

  Whitlock, William

  Newens, Stan

  Silverman, Julius (Aston)

  Wilkins, W. A.

  Noel-Baker, Francis (Swindon)

  Silverman, Sydney (Nelson)

  Wiley, Rt. Hn. Frederick

  Oakes, Gordon

  Slater, Mrs. Harriet (Stoke, N.)

  Williams, Alan (Swansea, W.)

  Ogden, Eric

  Slater, Joseph (Sedgefield)

  Williams, Mrs. Shirley (Hitchin)

  O'Malley, Brian

  Smith, Ellis (Stoke, S.)

  Williams, W. T. (Warrington)

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

  Snow, Julian

  Wilson, William (Coventry, S.)

  Orbach, Maurice

  Solomons, Henry

  Winterbottom, R. E.

  Orme, Stanley

  Soskice, Rt. Hn. Sir Frank

  Woodburn, Rt. Hn. A.

  Oswald, Thomas

  Spriggs, Leslie

  Woof, Robert

  Owen, Will

  Stewart Rt. Hn. Michael

  Yates, Victor (Ladywood)

  Page, Derek (King's Lynn)

  Stonehouse, John

  Palmer, Arthur

  Stones, William

  TELLERS FOR THE AYES:

  Pargiter, G. A.

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

  Mr. Lawson and Mr. Howie.

  Parkin, B. T.

  Swain, Thomas

  NOES

  Agnew, Commander Sir Peter

  Cunningham, Sir Knox

  Hogg, Rt. Hn. Quintin

  Allan, Robert (Paddington, S.)

  Currie, G. B. H.

  Hooson, H. E.

  Allason, James (Hemel Hempstead)

  Dance, James

  Hordern, Peter

  Astor, John

  Davies, Dr. Wyndham (Perry Barr)

  Hornsby-Smith, Rt. Hn. Dame P.

  Atkins Humphrey

  Deedes, Rt. Hn. W. F.

  Hutchison, Michael Clark

  Awdry, Daniel

  Digby, Simon Wingfield

  Irvine, Bryant Godman (Rye)

  Baker, W. H. K.

  Dodds-Parker, Douglas

  Jenkins, Patrick (Woodford)

  Balniel, Lord

  Douglas-Home, Rt. Hn. Sir Alec

  Johnston, Russell (Inverness)

  Barlow, Sir John

  Drayson, G. B.

  Jopling, Michael

  Batsford, Brian

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

  Joseph, Rt. Hn. Sir Keith

  Bell, Ronald

  Errington, Sir Eric

  Kaberry, Sir Donald

  Bennett, Sir Frederic (Torquay)

  Farr, John

  Kerby, Capt. Henry

  Bennett, Dr. Reginald (Gos & Fhm)

  Fisher, Nigel

  Kimball, Marcus

  Berry, Hn. Anthony

  Fletcher-Cooke, Charles (Darwen)

  King, Evelyn (Dorset, S.)

  Bessell, Peter

  Fletcher-Cooke, Sir John (S' pton)

  Langford-Holt, Sir John

  Biffen, John

  Fraser, Ian (Plymouth, Sutton)

  Legge-Bourke, Sir Harry

  Biggs-Davison, John

  Galbraith, Hn. T. G. D.

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Bingham, R. M.

  Gardner, Edward

  Longbottom, Charles

  Birch, Rt. Hn. Nigel

  Giles, Rear-Admiral Morgan

  Longden, Gilbert

  Black Sir Cyril

  Gilmour, Ian (Norfolk, Central)

  Lubbock, Eric

  Bossom, Hn. Clive

  Gilmour, Sir John (East Fife)

  Lucas-Tooth, Sir Hugh

  Boyd-Carpenter, Rt. Hn. J.

  Glover, Sir Douglas

  McAdden, Sir Stephen

  Boyle, Rt. Hn. Sir Edward

  Goodhew, Victor

  Mackenzie, Alasdair (Ross & Crom'ty)

  Braine, Bernard

  Gower, Raymond

  Mackie Goorge Y.(C'ness & S'land)

  Brewis, John

  Grant, Anthony

  Macleod, Rt. Hn. Iain

  Brinton, Sir Tatton

  Gresham-Cooke, R.

  McMaster, Stanley

  Bromley-Davenport, Lt.-Col. Sir Witer

  Grieve, Percy

  McNair-Wilson, Patrick

  Brown, Sir Edward (Bath)

  Griffiths, Peter (Smethwick)

  Maitland, Sir John

  Buchanan-Smith, Alick

  Grimond, Rt. Hn. J.

  Marten, Neil

  Buck, Antony

  Hall-Davis, A. G. F.

  Maude, Angus

  Bullus, Sir Eric

  Hamilton, Marquess of (Fermanagh)

  Mawby, Ray

  Burden, F. A.

  Harris, Frederic (Croydon, N.W.)

  Maxwell-Hyslop, R. J.

  Butcher, Sir Herbert

  Harris, Reader (Heston)

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

  Campbell, Gordon

  Harrison, Brian (Maldon)

  Miscampbell, Norman

  Carlisle, Mark

  Harvie Anderson, Miss

  Mitchell, David

  Carr, Rt. Hn. Robert

  Hastings, Stephen

  Monro, Hector

  Cary, Sir Robert

  Hawkins, Paul

  More, Jasper

  Channon, H. P. G.

  Hay, John

  Morrison, Charles (Devizes)

  Chataway, Christopher

  Heald, Rt. Hn. Sir Lionel

  Mott-Ra clyffe, Sir Charles

  Clark, William (Nottingham, S.)

  Heath, Rt. Hn. Edward

  Murton, Oscar

  Cole, Norman

  Hendry, Forbes

  Neave, Airey

  Costain, A. P.

  Higgins, Terence L.

  Nicholls, Sir Harmar

  Craddock, Sir Beresford (Spelthorne)

  Hiley, Joseph

  Nicholson, Sir Godfrey

  Crawley, Aidan

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

  Noble, Rt. Hn. Michael

  Crosthwaite-Eyre Col. Sir Oliver

  Hirst, Geoffrey

  Nugent, Rt. Hn. Sir Richard

  Crowder, F. P.

  Hobson, Rt. Hn. Sir John

  Onslow, Cranley

  1678

  1679

  Osborn, John (Hallam)

  Ridley, Hn. Nicholas

  Walder, David (High Peak)

  Osborne, Sir Cyril (Louth)

  Ridsdale, Julian

  Walker, Peter (Worcester)

  Page, R. Graham (Crosby)

  Rodgers, Sir John (Sevenoaks)

  Wall, Patrick

  Peel, John

  Roots, William

  Ward, Dame Irene

  Percival, Ian

  Sharples, Richard

  Weatherill, Bernard

  Peyton, John

  Sinclair, Sir George

  Whitelaw, William

  Pickthorn, Rt. Hn. Sir Kenneth

  Smyth, Rt. Hn. Brig. Sir John

  Williams, Sir Rolf Dudley (Exeter)

  Pike, Miss Mervyn

  Spearman, Sir Alexander

  Wills, Sir Gerald (Bridgwater)

  Pitt, Dame Edith

  Talbot, John E.

  Wilson, Geoffrey (Truro)

  Pounder, Rafton

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

  Wood, Rt. Hn. Richard

  Powell, Rt. Hn. J. Enoch

  Taylor, Frank (Moss Side)

  Woodhouse, Hn. Christopher

  Price, David (Eastleigh)

  Thomas, Rt. Hn. Peter (Conway)

  Woodnutt, Mark

  Pym, Francis

  Thompson, Sir Richard (Croydon, S.)

  Wylie, N. R.

  Quennell, Miss J. M.

  Thorneycroft, Rt. Hn. Peter

  Younger, Hn. George

  Ramsden, Rt. Hn. James

  Thorpe, Jeremy

  Rawlinson, Rt. Hn. Sir Peter

  Tiley, Arthur (Bradford, W.)

  TELLERS FOR THE NOES:

  Redmayne, Rt. Hn. Sir Martin

  Van Straubenzee, W. R.

  Mr. McLaren and Mr MacArthur.

  Renton, Rt. Hn. Sir David

  Vaughan-Morgan, Rt. Hn. Sir John

  The Chairman: The Chair is of opinion that the principles and matters arising from the Clause have been adequately covered in the debate on the three Amendments. I propose, therefore, now to put the Question, That the Clause stand part of the Bill.
  Mr. Selwyn Lloyd: On a point of order, Dr. King. I have, of course, great respect for your decision, but may I draw to your attention—I am not sure that you were in the Chair at the time—that there was a discussion about what action had been taken by the various new Ministers pursuant to the powers which, it is said, have vested in them, and the Chancellor of the Duchy of Lancaster said that it would be more convenient to deal with that point in discussing the three Ministries. The clear impression we got on this side of the Committee was that it would be done on the Question, "That the Clause stand part of the Bill".
  I wished not to make a long speech, but merely to invite the right hon. Gentleman to carry out his promise, as we understood it, which was to answer some of the questions asked by my right hon. Friend, he having said that it would be more convenient to answer them in relation to the three Ministries rather than in relation to only one.
  The Chairman: I am grateful to the right hon. and learned Gentleman. If the facts are as he has stated them, and if some undertaking was given from the Government Front Bench that the matter would be referred to on this Question—I was not in the Chair at the time—I am quite prepared to withdraw what I have just said.
  9.45 p.m.
  Mr. Michael Foot: On the same point of order, Dr. King. Is it not the case
  1680
  that my right hon. Friend said at one stage of the proceedings, I think in the debate on the first Amendment, that there might be matters which he would prefer to deal with on the debate on the Question, "That the Clause stand part of the Bill", but that those matters were, in fact, subsequently debated on the second Amendment, in particular in reply to an intervention made by the right hon. Baronet the Member for Carlton (Sir K. Pickthorn), who raised this point and my right hon. Friend said that he would deal with it at once? Therefore, I submit that the point raised by the right hon. and learned Gentleman does not cover the whole matter, and that our debates have covered the general contents of the Clause.
  The Chairman: I think that the Committee will be well advised to leave it to the Chair. In view of what has been said, I call Mr. Selwyn Lloyd.
  Question proposed, That the Clause stand part of the Bill.
  Mr. Selwyn Lloyd: This is not really a debating point. We are seriously concerned about this proposition. We have accepted—I am not sure that all my hon. and right hon. Friends went quite as far as I did in accepting it—what the right hon. Gentleman said about the appointment of a Minister by exercise of the Prerogative. I said that I thought it had to be done by the kind of enabling powers which there are in the Schedule to the Bill. The right hon. Gentleman had an interchange with me about how supply was voted for them and how they got the money for their expenditure. However, I think that we are in agreement that it is the Bill which, in law, constitutes the Ministries.

  1681
  What we want to know—this is the point with which the right hon. Gentleman promised to deal—is to what extent the Ministers appointed by exercise of the Prerogative have been seeking to exercise powers in the interim stage. What have they been doing? Have they been purporting to exercise any statutory powers? I know that my right hon. Friend the former Secretary for Technical Co-operation had given to him by Parliament certain statutory powers. I shall not list them; the right hon. Gentleman has indicated what they are. We want to know whether any of those statutory powers have been exercised by any of these three Ministers. What action have they purported to take? What legal contracts have they entered into? Whom have they sought to employ? By what right have those people been paid? In other words, has the whole paraphernalia of the exercise of ministerial right been happening, and if so, by what right? The right hon. Gentleman undertook to deal with the matter in relation to the three Ministers.
  I particularly ask, in relation to the question which arose about the appointment and payment of secretaries, about the matter of the exercise of statutory powers. I want to know whether the Minister of Overseas Development has exercised any of the statutory powers which were entrusted to my right hon. Friend the Secretary for Technical Co-operation. We are entitled to know what the position is, what has happened, and by what right. That is the matter with which I understood the right hon. Gentleman would deal on this Question.
  Mr. Houghton: The answer to the right hon. and learned Gentleman is that, in the first place, there is the exercise of the Prerogative. Then there is the machinery to write the new Ministries into the Schedule of the Bill which gives a list of Ministers and to provide for formal steps to be taken to give sanction to the existence of the Minister. The third step is the definition of the Minister's functions, and authority for those functions will need statutory cover, and that will be sought either through Orders in Council transferring functions from other Departments or through the presentation of appropriate Bills.
  1682
  The question asked was whether the new Ministries were already active without the benefit of that authority. The answer is that the present activities of the new Departments are those which the Ministers can properly carry out as legal persons or through the exercise of the Prerogative and are of a kind which Departments customarily carry out without specific Parliamentary approval. [HON. MEMBERS: "Such as?"] I gave that reply to the right hon. Member for Carlton (Sir K. Pick thorn) and mentioned that this is normal practice.
  The Welsh Office was set up in 1951 by a Conservative Administration and the office of Minister for Welsh Affairs was held first by the Home Secretary and then by the Minister of Housing and Local Government of the day. The Minister's responsibilities included general responsibility for all Welsh affairs as well as the duties properly falling to the Minister of Housing and Local Government. There was never a transfer of functions Order or specific legislation in that respect. I quote that case really as a precedent for the exercise of functions which have not required either transfer of function Orders or statutory authority.
  In the case of the new Departments, there has been no transgression of the normal practice of Ministers exercising responsibilities which fall to them either by reason of the functions of other Ministers or under the Prerogative itself. If the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) wishes to know how expenditure incurred by the new Departments has been met, the answer is that advances from the Civil Contingencies Fund are being made use of by all five new Departments—Land and Natural Resources, Overseas Development, Technology, Economic Affairs and Welsh. This, apparently, is in accordance with previous practice. I do not know whether there is anything more that the right hon. and learned Gentleman wishes me to say.
  Mr. R. Carr: I do not know whether we have understood the Chancellor of the Duchy of Lancaster correctly or not, but I do not think he dealt with a specific point I made in relation to the

  1683
  Ministry of Overseas Development. Has a Permanent Secretary been appointed? If so, has he been paid? If he has been appointed and is being paid, since when and on what authority? Have the Deputy Under-Secretary and extra Under-Secretaries been appointed? As I said, these are all appointments which I and most hon. Members welcome in principle, but we want to be sure that they have been made with proper parliamentary authority and not in advance of that authority.
  Mr. Hogg: Will the Chancellor of the Duchy of Lancaster answer a question exactly parallel to that of my right hon. Friend the Member for Mitcham (Mr. R. Carr)? It relates to a matter I raised. In Schedule 1, certain specific things are spoken of as in future to be authorised by this House for Ministers to do. For instance,
  "The Minister shall take the oath of allegiance, and the official oath …"
  Has Mr. Cousins been acting without taking the oath of allegiance and the official oath? If so, can we not be told? If he has taken the oath of allegiance and the official oath, is it to be said that he must now do so again?
  The Schedule also says that
  "The Minister may appoint such secretaries, officers and servants as he may with the consent of the Treasury determine."
  This, again, is spoken of as a future step, subject to the permission of the House, but we read in the Press that a most distinguished civil servant, who was one of my own Permanent Secretaries, has already been appointed to the Ministry of Technology and I understand that he has been acting. Has that been done without the authority of the House? If so, can we not be told?
  It is rather a peculiar situation if we are to be asked to pass legislation providing for the oath of allegiance and the official oath and the appointment of Permanent Secretaries if these things have already been done without the authority of the House. If it be the case that Ministers can be appointed by Prerogative and start their official functions without taking the official oath or the oath of allegiance, we should be told at once.
  Mr. Houghton: The oath of allegiance has been taken by those Ministers who have been sworn in as members of the Privy Council. The oath will be taken
  1684
  by other Ministers covered by the Bill when the Bill becomes law. That is provided in Schedule 1.
  As regards the expenditure of officials in the new Ministries; the salaries of permanent officials are being carried on the Votes of their previous Departments. [HON. MEMBERS: "Why?"]
  The Secretary of State for Scotland (Mr. William Ross): Why not?
  Mr. Houghton: It has frequently been the practice to transfer civil servants from other duties, pending the passing of legislation creating a new Ministry. For example, the Ministry of Overseas Development is already covering and absorbing the work of the Department of Technical Co-operation and is using the staff of that Department for its duties. There are some temporary civil servants and advisers who have been appointed in several Departments, and to pay them use is being made of the Civil Contingencies Fund, again in accordance with previous practice. All this, we are advised, is strictly in accordance with previous practice and precedent and nothing improper or irregular has been done. We are taking a more straightlaced view of the use of the Civil Contingencies Fund than has been the case on some previous occasions. Wherever necessary, Supplementary Estimates will be presented for covering authority for expenditure which has been incurred.
  Mr. R. Carr: I understand about the new Ministry of Overseas Development making use of the officials of my old Department, but my old Department did not have someone of the rank of Permanent Secretary. I do not understand how the Permanent Secretary of the new Ministry can, as it were, be carried on the cadre of my old Department which did not allow for such a rank.
  Hon. Members: Answer.
  Mr. Selwyn Lloyd: I think we are entitled to be answered. This is a serious matter. I know that we have dealt in fairly exhaustive debates with the merits of each of the three Ministries, with lamentably little result from the Government Front Bench. These three Ministries have been subjected to devastating criticism in a series of remarkable speeches from this side of the Committee.

  1685
  The Government have failed to produce rational arguments to justify or explain the new Ministries. It is clear that they have been very prolific in words, now as in the General Election, but bankrupt in argument.
  On the narrower issue of what has been done; it is not enough to say that this is all in accordance with previous practice and so on. What we want to know is whether these Ministers have purported to act in their new capacities. Have they entered into contracts? My right hon. Friend the Member for Mitcham (Mr. R. Carr) has asked about a Permanent Secretary being carried on an old establishment when the old establishment did not allow for a Permanent Secretary. What is the constitution of these new Ministries? What have they been up to? What documents have they been signing? What contracts have they been entering into? What certificates have they been giving?
  I warn the right hon. Gentleman that unless he satisfies us rather more than he has, we shall feel it right to divide against the Clause.
  The Attorney-General: I do not rise in answer to threats but to assist the Committee and, first, to assure hon. Members that everything done by the Government has been done according to law, according to precedent and according to the former requirements of Parliament. The appointment of the Ministers themselves is an exercise of the Prerogative, as right hon. Gentlemen opposite know perfectly well. That is how the previous Administration—
  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
  Motion made, and Question put,
  That the Procedings on the Machinery of Government Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Lawson.]
  The House divided: Ayes 218, Noes 181.

  Division No. 38.]

  AYES

  [10.0 p.m.

  Abse, Leo

  Dalyell, Tam

  Harrison, Walter (Wakefield)

  Allaun, Frank (Salford, E.)

  Darling, George

  Hart, Mrs. Judith

  Alldritt, W. H.

  Davies G. Elfred (Rhondda, E.)

  Hattersley, Ray

  Allen, Scholefield (Crewe)

  Davies, Ifor (Gower)

  Hayman, F. H.

  Armstrong, Ernest

  Davies, S. O. (Merthyr)

  Hazell, Bert

  Atkinson, Norman

  Delargy, Hugh

  Heffer, Eric S.

  Bacon, Miss Alice

  Dell, Edmund

  Herbison, Rt. Hn. Margaret

  Bagier, Gordon A. T.

  Dempsey, James

  Holman, Percy

  Barnett, Joel

  Diamond, John

  Horner, John

  Baxter, William

  Dodds, Norman

  Houghton, Rt. Hn. Douglas

  Beaney, Alan

  Doig, Peter

  Howarth, Harry (Wellingborough)

  Bence, Cyril

  Donnelly, Desmond

  Howarth, Robert L. (Bolton, E.)

  Bonnett, J. (Glasgow, Bridgeton)

  Driberg, Tom

  Howell, Denis (Small Heath)

  Binns, John

  Dunn, James A.

  Howie, W.

  Bishop, E. S.

  Dunnett, Jack

  Hoy, James

  Blackburn, F.

  Edwards, Rt. Hn. Ness (Caerphilly)

  Hughes, Emrys (S. Ayrshire)

  Blenkinsop, Arthur

  Edwards, Robert (Bilston)

  Hunter, A. E. (Feltham)

  Boston, T. G.

  English, Michael

  Irving, Sydney (Dartford)

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

  Ennals, David

  Jackson, Colin

  Braddock, Mrs. E. M.

  Ensor, David

  Janner, Sir Barnett

  Bradley, Tom

  Evans, Ioan (Birmingham, Yardley)

  Jeger, George (Goole)

  Bray, Dr. Jeremy

  Fernyhough, E.

  Johnson, Carol (Lewisham, S.)

  Broughton, Dr. A. D. D.

  Finch, Harold (Bedwellty)

  Jones, Dan (Burnley)

  Brown, Hugh D. (Glasgow, Provan)

  Fletcher, Ted (Darlington)

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

  Brown, R. W. (Shoreditch & Fbury)

  Floud, Bernard

  Jones, J. Idwal (Wrexham)

  Buchan, Norman (Renfrewshire, W.)

  Foley, Maurice

  Jones, T. W. (Merioneth)

  Buchanan, Richard

  Foot, Sir Dingle (Ipswich)

  Kelley, Richard

  Butler, Herbert (Hackney, C.)

  Foot, Michael (Ebbw Vale)

  Kenyon, Clifford

  Butler, Mrs. Joyce (Wood Green)

  Ford, Ben

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

  Carmichael, Neil

  Galpern, Sir Myer

  Kerr, Dr. David (W'worth, Central)

  Carter-Jones, Lewis

  Garrow, A.

  Ledger, Ron

  Chapman, Donald

  George, Lady Megan Lloyd

  Lee, Rt. Hn. Frederick (Newton)

  Coleman, Donald

  Ginsburg, David

  Lee, Miss Jennie (Cannock)

  Conlan, Bernard

  Gourlay, Harry

  Lever, L. M. (Ardwick)

  Corbet, Mrs. Freda

  Gregory, Arnold

  Loughlin, Charles

  Craddock, George (Bradford, S.)

  Grey, Charles

  McBride, Neil

  Crawshaw, Richard

  Griffiths, David (Rother Valley)

  McCann, J.

  Cronin, John

  Hale, Leslie

  MacColl, James

  Crosland, Anthony

  Hamilton, James (Bothwell)

  MacDermot, Niall

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

  Hannan, William

  McGuire, Michael

  Cullen, Mrs. Alice

  Harper, Joseph

  McKay, Mrs. Margaret

  MacKenzie, Gregor (Rutherglen)

  Pearson, Arthur (Pontypridd)

  Symonds, J. B.

  MacMillan, Malcolm

  Pentland, Norman

  Taverne, Dick

  MacPherson, Malcolm

  Popplewell, Ernest

  Taylor, Bernard (Mansfield)

  Mahon, Peter (Preston, S.)

  Pursey, Cmdr. Harry

  Thomas, George (Cardiff, W.)

  Mahon, Simon (Bootle)

  Rankin, John

  Thomas, Iorwerth (Rhondda, W.)

  Mallalieu, E. L. (Brigg)

  Rhodes, Geoffrey

  Thomson, George (Dundee, E.)

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

  Roberts, Albert (Normanton)

  Tinn, James

  Manuel, Archie

  Roberts, Goronwy (Caernarvon)

  Tomney, Frank

  Mapp, Charles

  Robertson, John (Paisley)

  Tuck, Raphael

  Mellish, Robert

  Robinson, Rt. Hn. K.(St.Pancras,N.)

  Urwin, T. W.

  Mendelson, J. J.

  Rodgers, William (Stockton)

  Varley, Eric G.

  Mikardo, Ian

  Rogers, George (Kensington, N.)

  Wainwright, Edwin

  Millan, Bruce

  Rose, Paul B.

  Walden, Brian (All Saints)

  Milne, Edward (Blyth)

  Ross, Rt. Hn. William

  Walker, Harold (Doncaster)

  Molloy, William

  Rowland, Christopher

  Wallace, George

  Monslow, Walter

  Sheldon, Robert

  Watkins, Tudor

  Morris, John (Aberavon)

  Shore, Peter (Stepney)

  Weitzman, David

  Morrison, Charles (Devizes)

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

  Wells William (Waisall, N.)

  Murray, Albert

  Short, Mrs. Renée (W'hampton,N.E.)

  White, Mrs. Eirene

  Neal, Harold

  Silkin, John (Deptford)

  Whitlock, William

  Newens, Stan

  Silverman, Julius (Aston)

  Wilkins, W. A.

  Noel-Baker, Francis (Swindon)

  Silverman, Sydney (Nelson)

  Willey, Rt. Hn. Frederick

  Oakes, Gordon

  Slater, Mrs. Harriet (Stoke, N.)

  Williams, Alan (Swansea, W.)

  Ogden, Eric

  Slater, Joseph (Sedgefield)

  Williams, Mrs. Shirley (Hitchin)

  O'Malley, Brian

  Smith, Ellis (Stoke, S.)

  Williams, W.T. (Warrington)

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

  Snow, Julian

  Wilson, William (Coventry, S.)

  Orme, Stanley

  Solomons, Henry

  Winterbottom, R. E.

  Oswald, Thomas

  Soskice, Rt. Hn. Sir Frank

  Woof, Robert

  Owen, Will

  Spriggs, Leslie

  Yates, Victor (Ladywood)

  Page, Derek (King's Lynn)

  Stewart, Rt. Hn. Michael

  Palmer, Arthur

  Stones, William

  TELLERS FOR THE AYES:

  Pargiter, G. A.

  Swain, Thomas

  Mr. Law son and Mr. Fitch.

  Parkin, B.T.

  Swingler, Stephen

  NOES

  Agnew, Commander Sir Peter

  Davies, Dr. Wyndham (Perry Barr)

  Hutchison, Michael Clark

  Allan, Robert (Paddington, S.)

  d'Avigdor-Goldsmid, Sir Henry

  Irvine, Bryant Godman (Rye)

  Allason, James (Hemel Hempstead)

  Deedes, Rt. Hn. W. F.

  Jenkin, Patrick (Woodford)

  Astor, John

  Digby, Simon Wingfield

  Johnston, Russell (Inverness)

  Atkins, Humphrey

  Dodds-Parker, Douglas

  Jopling, Michael

  Awdry, Daniel

  Douglas-Home, Rt. Hn. Sir Alec

  Joseph, Rt. Hn. Sir Keith

  Baker, W. H. K.

  Drayson, G. B.

  Kaberry, Sir Donald

  Balniel, Lord

  Errington, Sir Eric

  Kerby, Capt. Henry

  Batsford, Brian

  Farr, John

  Kimball, Marcus

  Bell, Ronald

  Fisher, Nigel

  King, Evelyn (Dorset, S.)

  Bennett, Sir Frederic (Torquay)

  Fletcher-Cooke, Charles (Darwen)

  Lancaster, Col. C. G.

  Bennett, Dr. Reginald (Gos & Fhm)

  Fletcher-Cooke, Sir John (S'pton)

  Langford-Holt, Sir John

  Berry, Hn. Anthony

  Fraser, Ian (Plymouth, Sutton)

  Legge-Bourke Sir Harry

  Biffen, John

  Galbraith, Hn. T. G. D.

  Lloyd Rt. Hn. Selwyn (Wirral)

  Biggs-Davison, John

  Gardner, Edward

  Longbottom, Charles

  Bingham, R. M.

  Giles, Rear-Admiral Morgan

  Longden, Gilbert

  Birch, Rt. Hn. Nigel

  Gilmour, Ian (Norfolk, Central)

  Lubbock, Eric

  Black, Sir Cyril

  Gilmour, Sir John (East Fife)

  Lucas, Sir Jocelyn

  Bossom, Hn. Clive

  Glover, Sir Douglas

  Lucas-Tooth, Sir Hugh

  Boyd-Carpenter, Rt. Hn. J.

  Goodhew, Victor

  McAdden, Sir Stephen

  Boyle, Rt. Hn. Sir Edward

  Gower, Raymond

  Mackenzie, Alasdair (Ross & Crom'ty)

  Braine, Bernard

  Grant, Anthony

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

  Brewis, John

  Grant-Ferris, R.

  McLaren, Martin

  Brinton, Sir Tatton

  Gresham-Cooke, R.

  Macleod, Rt. Hn. Iain

  Bromley-Davenport, Lt.-Col. Sir Walter

  Grieve, Percy

  McMaster, Stanley

  Brooke, Rt. Hn. Henry

  Griffiths, Eldon, (Bury St. Edmunds)

  McNair-Wilson Patrick

  Brown, Sir Edward (Bath)

  Griffiths, Peter (Smethwick)

  Maitland, Sir John

  Buchanan-Smith, Alick

  Grimond, Rt. Hn. J.

  Marten, Neil

  Buck, Anthony

  Hall-Davis, A. G. F.

  Maude, Angus

  Bullus, Sir Eric

  Hamilton, Marquess of (Fermanagh)

  Mawby, Ray

  Butcher, Sir Herbert

  Harris, Frederic (Croydon, N.W.)

  Maxwell-Hyslop, R. J.

  Campbell, Gordon

  Harris, Reader (Heston)

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

  Carlisle, Mark

  Harrison, Brian (Maldon)

  Miscampbell, Norman

  Carr, Rt. Hn. Robert

  Harvie Anderson, Miss

  Mitchell, David

  Cary, Sir Robert

  Hawkins, Paul

  Monro, Hector

  Channon, H. P. G.

  Hay, John

  More, Jasper

  Chataway, Christopher

  Heald, Rt. Hn. Sir Lionel

  Morrison, Charles (Devizes)

  Clark, William (Nottingham, S.)

  Heath, Rt. Hn. Edward

  Mott-Radclyffe, Sir Charles

  Cole, Norman

  Hendry, Forbes

  Murton, Oscar

  Cooper, A. E.

  Higgins, Terence L.

  Neave, Alrey

  Cooper-Key, Sir Neill

  Hiley, Joseph

  Nicholls, Sir Harmar

  Costain A. P.

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

  Noble, Rt. Hn. Michael

  Craddock, Sir Beresford (Spelthorne)

  Hirst, Geoffrey

  Nugent, Rt. Hn. Sir Richard

  Crawley, Aidan

  Hobson, Rt. Hn. Sir John

  Osborn, John (Hallam)

  Crosthwaite-Eyre, Col. Sir Oliver

  Hogg, Rt. Hn. Quintin

  Page, R. Graham (Crosby)

  Crowder F. P.

  Hooson, H. E.

  Peel, John

  Currie, G. B. H.

  Hordern, Peter

  Percival, Ian

  Dance, James

  Hornsby-Smith, Rt. Hn. Dame P.

  Peyton, John

  1688

  1689

  Pickthorn, Rt. Hn. Sir Kenneth

  Rodgers, Sir John (Sevenoaks)

  Wall, Patrick

  Pike, Miss Mervyn

  Roots, William

  Ward, Dame Irene

  Pitt, Dame Edith

  Sharples, Richard

  Weatherill, Bernard

  Pounder, Rafton

  Sinclair, Sir George

  Whitelaw, William

  Powell, Rt. Hn. J. Enoch

  Talbot, John E.

  Williams, Sir Rolf Dudley (Exeter)

  Price, David (Eastleigh)

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

  Wilson, Geoffrey (Truro)

  Pym, Francis

  Taylor, Frank (Moss Side)

  Wood, Rt. Hn. Richard

  Quennell, Miss J. M.

  Thompson, Sir Richard (Croydon,S.)

  Woodnutt, Mark

  Ramsden, Rt. Hn. James

  Thorpe, Jeremy

  Wylie, N. R.

  Rawlinson, Rt. Hn. Sir Peter

  Tiley, Arthur (Bradford, W.)

  Younger, Hn. George

  Redmayne, Rt. Hn. Sir Martin

  van Straubenzee, W. R.

  Renton, Rt. Hn. Sir David

  Vaughan-Morgan, Rt. Hn. Sir John

  TELLERS FOR THE NOES:

  Ridley, Hn. Nicholas

  Walder, David (High Peak)

  Mr. MacArthur and

  Ridsdale, Julian

  Walker, Peter (Worcester)

  Mr.R.W.Elliott.

  MACHINERY OF GOVERNMENT BILL
  Again considered in Committee.
  Question again proposed, That the Clause stand part of the Bill.
  The Attorney-General: Before that encouraging Division took place, I was saying that there is ample precedent for relying temporarily for the payment of the salaries and expenses of new Departments on the authority of the Appropriation Act obtained through the presentation and approval of Estimates. When there is a clear intention to present Supplementary Estimates for any services, the convention is that the Treasury may authorise Departments to meet the costs of those services by making advances from the Civil Contingencies Fund in anticipation of the provision made or to be made by Parliament becoming available. It could be argued that none of the services so far being carried out by any of the new Departments is a new one, but to place the matter beyond peradventure the Civil Contingencies Fund has been used in these cases.
  The Bill seeks authority for the payment of salaries to certain Ministers, including those in new Departments, and those Ministers have, of course, not been paid. The expenses of Ministers and the salaries and expenses of their departmental staff who have been appointed directly rather than transferred from other Departments are all being met by advances from the Civil Contingencies Fund which have been approved by the Treasury for the purpose in accordance with established convention.
  The salaries and expenses of the remaining staff who have been transferred from other Departments and whose
  1690
  duties are closely related to the functions for which moneys have already been voted to those other Departments and covered by the Appropriation Act, 1946, are being met from funds available to those other Departments. Supplementary Estimates will be presented in due course in respect of all the new Departments and will cover the expenditure which has been financed from the Civil Contingencies Fund as well as the expenditure which has been incurred by the other Departments. Therefore, the requirements of the system of parliamentary control of expenditure have been, and will be, thoroughly observed.
  These arrangements are, in principle, in line with those which were made when the previous Administration, for instance, established the office of the Minister for Science. The expenditure on salaries and expenses of that office ran from 3rd November, 1959, and a Supplementary Estimate was presented on 23rd November, 1959, covering the period from 3rd November, 1959, to 31st March, 1960. I emphasise, however, that, unlike the present instance which the Committee is considering, statutory provision such as that embodied in paragraphs 3 and 4 of Schedule 1 to the Bill for payment of salaries and expenses was never made in relation to the office of the Minister for Science. So that, if anything, this Administration has been more constitutional and more legal than the other, although I do not suggest that our predecessors erred in this matter. I may say that we on this side are as conscious of the necessity for legality as hon. and right hon. Members opposite.
  On the specific question of contracts, my information is that no contracts have been entered into by the new Departments.
  10.15 p.m.
  Sir John Hobson: The right hon. and learned Gentleman has not dealt with the point as to the transfer not of Prerogative powers but of statutory powers, as to which we have had no answer at all from any right hon. Gentleman opposite.
  The position, as I understand it, is that the Ministers of the Crown (Transfer of Functions) Act, 1946, has given power by Parliament for the statutory powers which Parliament has committed to a particular Minister to be transferred to another Minister, but not to a non-existent Minister of whom Parliament has never heard. There is surely—is there not?—the position that of course the Crown can appoint Ministers to exercise the Prerogative functions of the Crown—no one would deny that—and, of course, the Prerogative functions can be assigned to any servant of the Crown to whom the Crown chooses to commit them without any approval by Parliament, but the vast majority of the functions which are performed by Ministers are performed under statutory duties and statutory functions which Parliament has committed to a particular Minister in order that that Minister should be answerable to Parliament for the discharge of those functions. I have never heard it suggested that it would be possible without the authority of Parliament to transfer statutory powers to some person whom Parliament has never approved.
  Indeed, that seems to be the view of the Government because they have already tabled, on 20th November, an Order in Council, purporting to be made under Section 1 of the Ministers of the Crown Act, transferring all the statutory duties which formerly belonged to the Minister of Technical Co-operation to a Ministry which has not yet been approved by Parliament, and when this Bill was still under consideration. This Order was due to come into operation on 27th November. So that the statement by the Chancellor of the Duchy of Lancaster that no statutory functions have been improperly performed by any of the new Ministers would not seem to be very likely, if the position is that they have purported to transfer to a Ministry
  1692
  which Parliament has never heard of the statutory duties which were formerly conferred upon the Minister of Overseas Development. It was very carefully laid down in the Order in Council in 1961 what were to be the statutory duties of the former Minister of Overseas Development. They consisted of duties under the Overseas Service Act, 1958, under the Colonial Development and Welfare Act, 1959, under the Commonwealth Scholarships Act, 1959, under the Commonwealth Teachers Act, 1960, and the Overseas Service Act, 1961.
  I certainly heard on my wireless, in those Government snippets given on Friday mornings between 12.30 and 1 o'clock, an advertisement on behalf of the new and so far statutorily unauthorised Ministry of Overseas Development, a request for doctors to apply for service overseas and to make application to that Ministry for the purpose, presumably, of acting under and in accordance with the Overseas Service Act, and the duties which Parliament has, so far, committed to a Ministry which exists, and not Ministries which do not exist.
  I would be grateful if the Government could explain whether the true position is not that they have already purported to transfer not Prerogative duties but statutory duties to new unauthorised Ministries which Parliament has never heard of, and are not those Ministries already making contracts and offering to make contracts with people who are to be employed under them?
  Mr. Graham Page: I have waited patiently for the Government Front Bench to admit this Statutory Instrument which came into operation on 27th November, to which my right hon. and learned Friend the Member for Warwick and Leamington (Sir J. Hobson) referred. This Statutory Instrument was laid on 20th November, and came into operation on 27th November. It is No. 1849 of 1964.
  The Government may have power by Statutory Instrument under the 1946 Act to transfer functions from one Minister to another, but is it not a disregard of the House to transfer these functions by Statutory Instrument when there is a Bill before the House providing for these functions of this new Minister? This seems to me nothing short of an insult to the

  1693
  House, arid this has not been admitted until brought out by my right hon. and learned Friend a few moments ago.
  It is quite disgraceful that this Statutory Instrument should purport to transfer these powers to the Minister of Overseas Development when a Bill to deal with this matter is in the course of being debated and passing through the House. This Minister may have the powers transferred by the Statutory Instrument, but she will have none of the duties and responsibilities of Schedule 1 of the Bill. It seems a half-hearted attempt to jump the gun of this Bill.
  Mr. Selwyn Lloyd: This is becoming a very serious matter. [Laughter.] I listened with great attention—and very few of those who are laughing now were present at the time—to the statement of the Attorney-General. I believe that he meant what he said when he told us that in the future there would be action under this power to transfer functions. He did not reveal that Orders had already been laid. That fact was concealed from the Committee. We were not told that action had been taken to transfer the powers. We were told that it would be all right in the future. We were not told about this Statutory Instrument No. 1849. Does the right hon. Gentleman wish to intervene?
  Mr. Ross: How did the right hon. and learned Gentleman manage to get a copy of it in his hands?
  Mr. Lloyd: A very diligent hon. Friend of mine put it in my hands, whereas apparently nobody put it into the hands of the right hon. and learned Gentleman. There was a time when the right hon. Gentleman was very diligent on the back benches, hurrying backwards and forwards with this kind of document. He no longer carries out that kind of function. He now looks in for a moment or two and interrupts from a sedentary position.
  This Statutory Instrument is dated 20th November, 1964. I shall not go through the citation, but it says:
  "Transfer of functions from Secretary for Technical Co-operation."
  We were not given the impression that any functions had already been transferred. The right hon. and learned Gentleman never gave us the impression
  1694
  that under this Order the functions transferred are those under
  "section 3 of the Pensions (Increase) Act 1962 (supplements in respect of certain colonial and other pensions) and the Overseas Service (Pension Supplement) Regulations 1963 made under that section;
  (b) those functions under the Overseas Service Act 1958 and the Overseas Service Act 1961 which, by virtue of the Department of Technical Co-operation Order 1961, became exercisable by the Secretary for Technical Co-operation concurrently with the Secretary of State."
  These are matters which we would have liked to know about, because this is not an exhaustive list. There are certain other statutory powers to which my right hon. and learned Friend referred which apparently have not been transferred. Why not? What has been going on? Why were we not told the true facts?
  Mr. Edward Gardner: The legal arguments which the Attorney-General has put before the Committee do not satisfy my hon. Friends and myself. There is a sense of deep disquiet, which is made even deeper by the attitude of the Government. The Attorney-General has said that the money which is to be spent, and is being spent at the moment, comes from funds already available, but there has been a dramatic increase in expenditure. In order to meet this, and without the approval of the House, the money has been drawn from the Civil Contingencies Fund.
  To hon. Members on this side of the Committee this seems a very sinister development. It is not the first time that a Socialist Government have turned to this Fund at a time when they have not been prepared to be entirely frank either with the House or the country. We remember all too well—and I am afraid that we will remember what is happening tonight—that it was during the term of office of the Socialist Government in the 1940s—
  The Chairman: It may be interesting to remember that, but we are now discussing the Question, That the Clause stand part of the Bill. I ask the hon. and learned Member to keep to what is in the Clause.
  Mr. Gardner: With respect, Dr. King, what I was attempting to deal with was the question of where the money was coming from. It has been said that it

  1695
  was coming from the Civil Contingencies Fund. I was seeking to remind the Committee of the occasion when the Fund was used for another purpose, and was seeking to make an analogy between the purpose of the Bill and the purpose that operated in the 1940s. With your approval, Dr. King, I shall confine myself strictly to that point.
  It has never been denied that when the Socialist Government were developing the atom bomb, and were—for reasons that may have been proper at the time—attempting to keep from the country the fact that funds were being used for this purpose, they turned to the Civil Contingencies Fund. They are now doing the same thing, and we do not like it.
  The arguments that have been adduced by the Government during the debate have satisfied no one on this side of the Committee. All the legislation that is contained in the Schedule looks to the future. If the Committee passes the Clause and the Bill becomes law certain of the provisions which are set out here will become operative. They are not operative at the moment, but the Government are acting as though they were. What we would like to know—and what the country would like to know—is what will be the effect of the Government's actions which have been taken without the necessary authority from this House? Until the Bill becomes law these provisions do nothing to give authority to what has happened in the past.
  Our disquiet arises from the fact that the Government are clearly doing something without any statutory authority. It is by virtue of statutory authority that certain contracts must inevitably be concluded, and have been concluded in the past—and by statutory authority only that they can be given validity. Are we to understand that those contracts, and the actions that form part of them, have no validity? If they have, how is that validity derived, and from what is it derived?
  10.30 p.m.
  The Attorney-General: I would assure the hon. and learned Member for Billericay (Mr. Gardner) that the present Government will be a little more astute and careful about the expenditure of public funds than were their predecessors. However, avoiding the provocation he
  1696
  inspired, I assure him that what has been done by the Government has been in accordance with constitutional practice, with Treasury requirements, with Parliamentary convention and with the law. I repeat that, I withdraw nothing, and I qualify it in no way.
  The powers of the new Ministers are of two kinds, and had the hon. and learned Gentleman honoured us with his presence rather more in this debate, if I may say so, he would have heard that repeated ad nauseam—if my right hon. Friend does not mind it being so described—by the Chancellor of the Duchy of Lancaster. Two kinds of power have been exercised—Prerogative powers and statutory powers. In respect of their exercise of the Prerogative powers, the Ministers do not need to come to this House for approval or authority, and in so far as those powers have been exercised by these new Ministries since their creation, that is lawful and constitutional. Statutory powers, of course, cannot be exercised without the authority of Parliament itself.
  As the Committee has already been told, certain statutory powers were transferred last month to the Ministry of Overseas Development from the Department of Technical Co-operation. With that transfer, the Ministry of Overseas Development can exercise statutory powers. The Committee has also been told that transfer of function Orders under the Transfer of Functions Act will be brought before the House, when there will be abundant opportunity for the exercise of statutory powers by these Ministries to be debated. There is ample precedent for what has been done so far. It is fully legal, and fully constitutional.
  Sir Harmar Nicholls: I confess that I have not followed all the legal arguments of the last half-hour, but I did understand one point, not a legal one, put by my right hon. and learned Friend. I understand the Attorney-General's argument that an existing Ministry has been transferred to take over the functions of a new one, but my right hon. and learned Friend made the point that the existing Ministry did not have a Permanent Secretary. We were led to understand that the new Ministry has a Permanent Secretary. I

  1697
  should like to know where he came from and whether it was a matter of taking over an existing Ministry. That is a clear question to which we are entitled to have an answer. There are no legal ramifications about it.
  Sir Douglas Glover: The Government or their back-benchers think that this is a matter of no importance, that it is something for hilarity, jokes and fun. If we on this side of the Committee were the Government, and were doing tonight what hon. and right hon. Members opposite are doing, the hon. Member for Ebbw Vale (Mr. Michael Foot) would be making a most vitriolic speech, and rightly, full of vigour and anger at the disrespect for, and the whitling away of the sovereignty of, the House of Commons which, in the country, he is reputed to believe in and fight for and defend.
  The hon. Member for Ebbw Vale knows that what we are debating tonight is the fact that the House of Commons has been reduced in stature and the Executive has been increased in stature. This is something which the House of Commons has been fighting against for 300 years. [Laughter.] Hon. Members opposite can make as much fun of this as they like, but all of us, when we show people round the Palace of Westminster, show the painting of Mr. Speaker Lenthall establishing the sovereignty of the House of Commons against the Executive.
  The Royal Prerogative of that time, of course, allowed the king to appoint Strafford to a position, but we have established a totally different process. Now the Executive is increased in stature by the action of the Prime Minister so that half of the party opposite are now part of the Executive. Ministers and Departments are created and, by Statutory Instrument, are given the right to carry out their functions and to spend money which has not been voted by the House of Commons, when those Ministers and Departments do not exist as far as the House is concerned.
  I accept that it is right that the Prerogative entitles the Prime Minister and the Monarch to appoint these people to carry on certain functions, but what the Government have not made clear tonight is why it was so urgent that these
  1698
  people should be put in positions of State just because Parliament was not sitting for a fortnight. Was it so vital and urgent that the Minister of Overseas Development should be appointed without waiting a fortnight to obtain proper sanction from Parliament? The whole attitude of the Government is complete disrespect for this legislative Assembly and the raising of the Executive to a position of complete disrespect for what goes on in the House of Commons.
  The Attorney-General: The hon. Member for Ormskirk (Sir D. Glover) asked whether the introduction of these Ministries as quickly as possible was so urgent. The answer is, "Yes, it was". [HON. MEMBERS: "Why?"] The creation of the Ministry of Land and Natural Resources was urgent to prevent the waste of natural resources. It was essential to prevent the racket in land.
  The Ministry of Overseas Development was essential to carry out the purposes to which right hon. Members opposite paid lip-service during an earlier part of this debate and then searched their consciences whether they should vote against its introduction.
  It was urgent in the case of the Minister of Technology because the country has been falling behind every other country in Europe, because we have fallen behind in the field of technology. [HON. MEMBERS: "Oh."] If political questions are asked, political answers will be given.
  To come to the specific question which was asked, it is true that a Permanent Secretary has been appointed to the Ministry of Overseas Development. He was previously the head of the Department of Technical Co-operation, and his salary is being paid from the fund provided for by the Vote for the old Department. In due course, a Supplementary Estimate will be presented in respect of that salary.
  Mr. Hogg: The right hon. and learned Gentleman the Attorney-General has opened up a whole new avenue of discussion. Hitherto, we have been refused any intimation either as to what these new Ministers will do or as to why their appointment was in any way urgent. The right hon. and learned Gentleman, without the presence of any one of them,

  1699
  has purported to say why their appointment was urgent. I wish that we could be told a little more about it.
  The right hon. and learned Gentleman ventured upon a proposition which he could not possibly have sustained if he had known the slightest thing about the subject. He told us that this country's technology was lagging behind all other countries of Europe. The right hon. and learned Gentleman is very learned in the law, but he has made absolutely no study of this subject or he would know that the facts are just the opposite. The amount spent by this country on research and development is about 3 per cent. of its gross national product, equalled on this side of the Iron Curtain only by the United States. There is no country in Western Europe which approximates to about half of it.
  The vice of all this is that the Government have put up to answer this most important debate about the functions of the new Ministers two Ministers who know nothing about the subject. If either of them had known the slightest bit, they would not have landed us with the proposition that the sanction of the House was to be given in the future when transfer of powers Orders had already passed the Privy Council. There was no lack of evidence for them. There were, of course, the Ministers themselves.
  There was the right hon. Lady the Minister of Overseas Development, the Pussy Galore of this Goldfinger outfit. She should have been here, but she is not. So should the right hon. Member for Sunderland, North (Mr. Willey), whose main training for dealing with what the Attorney-General called the land racket was to study, for the first time, the subject of education, and who was appointed to his present office only because he was discarded in favour of the right hon. Member for Fulham (Mr. M. Stewart).
  What about the Leader of the House, who is Lord President of the Council? He must have known, if anybody did, that an Order in Council had been laid in respect of a matter for which the Government were bringing a Bill before the House, but all reference to it was completely suppressed by the right hon. and learned Gentleman.
  1700
  I do not accuse the Government of bad faith in this matter. I know that the Attorney-General would have told us if he had at that time known of the Order in Council. The Chancellor of the Duchy of Lancaster would have told us if he had known about it. Either of them would have been grossly misleading the Committee had he deliberately suppressed it. But why have we not the presence of the Lord President of the Council, who, as Lord President, is directly responsible for Orders in Council? Where is he? Where are these Ministers who are, in fact, responsible? The Chancellor of the Duchy, with great chivalry, took it upon himself to say that he had himself advised their non-attendance at this debate. I do not know who he thinks he is so to advise Ministers who are intimately concerned.
  As the right hon. and learned Gentleman reminded us, this situation has existed before. What would have happened when the Department of Education and Science was created a year ago, if I had not come here? [Laughter.] Why, the present Secretary of State for Scotland would have been on my tail in an instant! Having discovered that Scotland's position was not altered in that situation, he would have said that it was an insult to Scotland that I was not here to explain that Scotland's position was not altered. But since he has taken on his present office he has become unexpectedly coy.
  Now we are in the situation that we have Ministers who have entered upon their functions, who are deliberately provided by the Schedule, and in respect of which the functions had already been, as it were, surreptitiously provided for by an Order in Council of which the two Ministers who replied on behalf of the Government apparently betrayed no previous knowledge and about which they have kept silent throughout the debate.
  10.45 p.m.
  Sir J. Hobson: The Attorney-General said that one of the reasons why he was so anxious about the Bill was that the proposed new Minister of Land and Natural Resources was urgently needed to deal with the racket in land. We were not told that he was going to do that. The impression was that he was going to be advisory.

  1701
  The House has been concerned a good deal about the activities of the Ministry of Housing and Local Government introducing Bills since the Government got into power. Why the Ministry of Housing and Local Government is to be emasculated by the absence of the Minister for Land and Natural Resources I find it difficult to imagine.
  Perhaps I might return to some of the more technical questions which are important. I am sure that the right hon. and learned Gentleman was anxious to assure the Committee that everything was being done in order, but would he say whether he knows of any other case at all where statutory functions have been transferred under the Transfer of Functions Act. 1946, to a Ministry before that Ministry had ever received sanction for its existence from Parliament? That is my first question.
  As to my second question, we were, I understood from the Chancellor of the Duchy, led to believe that these Ministers were just performing Prerogative functions, that they were not fully Ministers yet. We were told that they had taken the oath as Privy Councillors, but we were not told—but so I understood from the silence—that they had not yet taken the official oath. Is the position that they have, in fact, got full and absolute status and have taken oaths as Ministers for the purposes of the Bill? If that is the position, there is no purpose in introducing the Bill.
  The Government just create Ministries as they please, transfer functions to them, and tell Parliament nothing about it until Parliament sees the Order in Council. Is that the position? Or is the position as we really understood it, that these Ministers are acting within the Prerogative only and have not taken the official oath of office, have not assumed the corporate soul that they have to assume as Ministers for the purpose of entering into contracts, and are not for the purposes of the House of Commons Ministers yet? If that, as I understand it, is the real position, how on earth is it possible to transfer to them under the 1946 Act any statutory functions at all?
  Mr. Graham Page: Before the right hon. and learned Gentleman answers the questions, put by my right hon. and learned Friend, I would point out that
  1702
  he has not answered the main question about the Statutory Instrument. Why was it necessary to bring it in ahead of this Bill? Was it necessary in order that the Minister of Overseas Development should have powers? Could the Minister of Overseas Development have acted without that Statutory Instrument? One must assume that it was brought in because it was necessary? Surely the Government did not produce the Statutory Instrument ahead of the Bill just to tease us. It must have had some useful, necessary purpose. If a Statutory Instrument was necessary for the Minister of Overseas Development to act legally, why was not a Statutory Instrument necessary for the two other Ministers? Have they been acting illegally all this time without any Statutory Instrument, because if it is necessary in one case, why not in the others?
  Sir Rolf Dudley Williams: I want to answer the scandalous allegation that was made by the Attorney-General against scientists and engineers of Britain. He said in the course of his speech that it was necessary for the Ministry of Technology to be brought within the scope of this Bill because this country is lagging behind the scientific development in the whole of Europe. I have never heard a more disgraceful suggestion.
  I would wish to draw the right hon. and learned Gentleman's attention to one great development that has taken place in Great Britain, the development of the supersonic airliner, the Concord. We heard a lot during the election about how clever the Prime Minister is—what a brilliant scientist and engineer—although, of course, he is nothing of the sort; he is a mathematician. What happened? He got into power, and what did he do? I would have thought this was a reason for not having the Ministry of Technology; he took steps to kill the greatest breakthrough in Britain in science since the invention of the jet engine.
  Did the right hon. Gentleman, before putting forward the proposal that we have in the Bill that we should have a Minister of Technology, consult with the Minister of Aviation? I do not believe that he did. I have some respect for the Minister of Aviation. I think he ought to have resigned by now because

  1703
  of the actions of the Government, but I have some respect for him. The Minister of Aviation must have been very embarrassed in handling our relations with Europe.
  For the Attorney-General to say tonight that scientists and engineers in this country are lagging behind the whole of Europe is a public scandal when his own Government came in and destroyed the finest development we have made for 10 years. The right hon. and learned Gentleman should get up and apologise.
  Mr. R. Carr: The right hon. and learned Gentleman, the Attorney-General, told us a little while ago that the new Ministry of Overseas Development had got a permanent secretary. We first asked about this on Second Reading, as long ago as 19th November. It is really a sorry comment on the way the Government have debated this Bill that it is only after as much pressure as this that we have at last got the answer.
  I do not think any of us object to this appointment. I think it is a good one. But the point I made was how, and on what authority, was it made and when was it made. I simply do not understand why we have had to wait until this late stage to be given this simple piece of information.
  The Attorney-General said that the position was dealt with under the Vote of my old Department, the Department of Technical Co-operation. If my memory is correct, the Vote of my Department did not allow for the post or rank of permanent secretary. I do not understand either how the answer he gave justifies the position about timing. It is matter of importance. I have no objection to the individual concerned or to the position he is holding. My point is a constitutional one. A position should not be created unless Parliament has given the proper authority for it.
  The Attorney-General saw fit to describe our attitude to overseas aid as paying lipservice to it. In six years, the amount of overseas aid expenditure under the late Government was doubled, and if that is paying lipservice to overseas aid I suspect that the developing countries would like more lipservice of the same kind. If the present Government can double the amount in six years they will have something to talk about.
  The Parliamentary Secretary to the Treasury (Mr. Edward Short)The Parliamentary Secretary to the Treasury (Mr. Edward Short) rose in his place and claimed to move, That the Question be now put.
  Question put, That the Question be now put:—
  The Committee divided: Ayes 199. Noes 167.

  Division No. 39.]

  AYES

  [10.55 p.m.

  Abse, Leo

  Coleman, Donald

  Fool, Michael (Ebbw Vale)

  Allaun Frank (Salford, E.)

  Conlan, Bernard

  Ford, Ben

  Alldritt, W. H.

  Corbet, Mrs. Freda

  Galpern, Sir Myer

  Allen, Scholefield (Crewe)

  Crawshaw, Richard

  Garrow, A.

  Armstrong, Ernest

  Cronin, John

  Ginsburg, David

  Atkinson, Norman

  Crosland, Anthony

  Gourlay, Harry

  Bacon, Miss Alice

  Cullen, Mrs. Alice

  Gregory, Arnold

  Bagier, Gordon A. T.

  Dalyell, Tam

  Grey, Charles

  Barnett, Joel

  Davies, G. Elfed (Rhondda, E.)

  Griffiths, David (Rother Valley)

  Baxter, William

  Davies, S. O. (Merthyr)

  Hamilton, James (Bothwell)

  Beaney, Alan

  Delargy, Hugh

  Hannan, William

  Bence, Cyril

  Dell, Edmund

  Harper, Joseph

  Bennett, J. (Glasgow, Bridgeton)

  Dempsey, James

  Harrison, Walter (Wakefield)

  Binns, John

  Dodds, Norman

  Hart, Mrs. Judith

  Bishop, E. S.

  Doig, Peter

  Hattersley, Roy

  Blackburn, F.

  Donnelly, Desmond

  Hayman, F. H.

  Blenkinsop, Arthur

  Driberg, Tom

  Hazell, Bert

  Boston, T. G.

  Dunn, James A.

  Heffer, Eric S.

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

  Dunnett, Jack

  Holman, Percy

  Braddock, Mrs. E. M.

  Edwards, Rt. Hn. Ness (Caerphilly)

  Horner, John

  Bradley, Tom

  Edwards, Robert (Bilston)

  Houghton, Rt. Hn. Douglas

  Bray, Dr. Jeremy

  English, Michael

  Howarth, Harry (Wellingborough)

  Broughton, Dr. A. D. D.

  Ennals, David

  Howarth, Robert L. (Bolton, E.)

  Brown, Hugh D. (Glasgow, Provan)

  Ensor, David

  Howell, Denis (Small Heath)

  Brown, R. W. (Shoreditch & Fbury)

  Evans, Ioan (Birmingham, Yardley)

  Howie, W.

  Buchan, Norman (Renfrewshire, W.)

  Fernyhough, E.

  Hoy, James

  Buchanan, Richard

  Finch, Harold (Bedwellty)

  Hughes, Emrys (S. Ayrshire)

  Butler, Herbert (Hackney, C.)

  Fitch, Alan (Wigan)

  Irving, Sydney (Dartford)

  Butler, Mrs. Joyce (Wood Green)

  Fletcher, Ted (Darlington)

  Jackson, Colin

  Carmichael, Neil

  Floud, Bernard

  Jeger, George (Goole)

  Carter-Jones, Lewis

  Foley, Maurice

  Johnson, Carol (Lewisham S.)

  Chapman, Donald

  Foot, Sir Dingle (Ipswich)

  Jones, Dan (Burnley)

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

  Neal, Harold

  Slater, Joseph (Sedgefield)

  Jones, J. Idwal (Wrexham)

  Newens, Stan

  Snow, Julian

  Jones, T. W. (Merioneth)

  Noel-Baker, Francis (Swindon)

  Solomons, Henry

  Kelley, Richard

  Oakes, Gordon

  Soskice, Rt. Hn. Sir Frank

  Kenyon, Clifford

  Ogden, Eric

  Spriggs, Leslie

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

  O'Malley, Brian

  Stones, William

  Kerr, Dr. David (W'worth, Central)

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

  Swain, Thomas

  Lawson, George

  Orme, Stanley

  Swingler, Stephen

  Ledger, Ron

  Oswald, Thomas

  Thomas, George (Cardiff, W.)

  Lee, Rt. Hn. Frederick (Newton)

  Owen, Will

  Thomas, Iorwerth (Rhondda, W.)

  Lee, Miss Jennie (Cannock)

  Page, Derek (King's Lynn)

  Thomson, George (Dundee, E.)

  Lever, L. M. (Ardwick)

  Palmer, Arthur

  Tinn, James

  Loughlin, Charles

  Pargiter, G. A.

  Tomney, Frank

  McBride, Neil

  Park, Trevor (Derbyshire. S.E.)

  Tuck, Raphael

  McCann, J.

  Parkin, B. T.

  Urwin, T. W.

  MacColl, James

  Pentland, Norman

  Varley, Eric G.

  MacDermot, Niall

  Popplewell, Ernest

  Wainwright, Edwin

  McGuire, Michael

  Pursey, Cmdr. Harry

  Walden, Brian (All Saints)

  McKay, Mrs. Margaret

  Rhodes, Geoffrey

  Walker, Harold (Doncaster)

  MacKenzie, Gregor (Rutherglen)

  Roberts, Albert (Normanton)

  Wallace, George

  MacMillan, Malcolm

  Roberts, Goronwy (Caernarvon)

  Watkins, Tudor

  MacPherson, Malcolm

  Robertson, John (Paisley)

  Weitzman, David

  Mahon, Peter (Preston, S.)

  Robinson. Rt. Hn. K. (St.Pancras,N.)

  wells, William (Walsall, N.)

  Mahon, Simon (Bootle)

  Rodgers, William (Stockton)

  White, Mrs. Eirene

  Mallalieu, E. L. (Brigg)

  Rogers, George (Kensington, N.)

  Wilkins, W. A.

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

  Rose, Paul B.

  Willey, Rt. Hn. Frederick

  Manuel, Archie

  Ross, Rt. Hn. William

  Williams, Alan (Swansea, W.)

  Mapp, Charles

  Rowland, Christopher

  Williams, Mrs. Shirley (Hitchin)

  Mellish, Robert

  Sheldon, Robert

  Williams, W. T. (Warrington)

  Mendelson, J. J.

  Shore, Peter (Stepney)

  Wilson, William(Coventry, S.)

  Mikardo, Ian

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

  Woof, Robert

  Molloy, William(

  Short, Mrs. Renée (W'hampton,N.E.)

  Yates, Victor (Ladywood)

  Morris, Charles (Openshaw)

  Silkin, John (Deptford)

  TELLERS FOR THE AYES:

  Morris, John (Aberavon)

  Silverman, Julius (Aston)

  Mrs. Harriet Slater and

  Murray, Albert

  Silverman, Sydney (Nelson)

  Mr. Ifor Davies.

  NOES

  Agnew, Commander Sir Peter

  Errington, Sir Eric

  Kimball, Marcus

  Allan, Robert (Paddington, S.)

  Farr, John

  Kitson, Timothy

  Allason, James (Hemel Hempstead)

  Fisher, Nigel

  Lancaster, Col. C. G.

  Anstruther-Gray, Rt. Hn. Sir W.

  Fletcher-Cooke, Charles (Darwen)

  Langford-Holt, Sir John

  Astor, John

  Fletcher-Cooke, Sir John (S' pton)

  Legge-Bourke, Sir Harry

  Atkins, Humphrey

  Fraser, Ian (Plymouth, Sutton)

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Awdry, Daniel

  Galbraith, Hn. T. G. D.

  Longbottom, Charles

  Balniel, Lord

  Gardner, Edward

  Longden, Gilbert

  Batsford, Brian

  Giles, Rear-Admiral Morgan

  Lubbock, Eric

  Bell, Ronald

  Gilmour, Ian (Norfolk, Central)

  Lucas, Sir Jocelyn

  Bennett, Sir Frederic (Torquay)

  Gilmour, Sir John (East Fife)

  Lucas-Tooth, Sir Hugh

  Berry, Hn. Anthony

  Glover, Sir Douglas

  McAdden, Sir Stephen

  Biggs-Davison, John

  Goodhew, Victor

  Mackenzie, Alasdair (Ross & Crom'ty>

  Bingham, R. M.

  Gower, Raymond

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

  Birch, Rt. Hn. Nigel

  Grant, Anthony

  McLaren, Martin

  Black, Sir Cyril

  Grant-Ferris, R.

  McMaster, Stanley

  Bossom, Hn. Clive

  Grieve, Percy

  Maitland, Sir John

  Boyd-Carpenter, Rt. Hn. J.

  Griffiths, Eldon (Bury St. Edmunds)

  Marten, Neil

  Boyle, Rt. Hn. Sir Edward

  Griffiths, Peter (Smethwick)

  Maude, Angus

  Braine, Bernard

  Grimond, Rt. Hn. J.

  Mawby, Ray

  Brewis, John

  Hall-Davis, A. G. F.

  Maxwell-Hyslop, R. J.

  Brinton, Sir Tatton

  Hamilton, Marquess of (Fermanagh)

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

  Bromley-Davenport, Lt.-Col. Sir Walter

  Harris, Frederic (Croydon, N.W.)

  Miscampbell, Norman

  Brown, Sir Edward (Bath)

  Harris, Reader (Heston)

  Mitchell, David

  Buchanan-Smith, Alick

  Harvie Anderson, Miss

  Monro, Hector

  Buck, Antony

  Hawkins, Paul

  More, Jasper

  Butcher, Sir Herbert

  Hay, John

  Morrison, Charles (Devizes)

  Carlisle, Mark

  Heald, Rt. Hn. Sir Lionel

  Mott-Radclyffe, Sir Charles

  Carr, Rt. Hn. Robert

  Heath, Rt. Hn. Edward

  Murton, Oscar

  Gary, Sir Robert

  Higgins, Terence L.

  Neave, Airey

  Channon, H. P. G.

  Hiley, Joseph

  Nicholls, Sir Harmar

  Chataway, Christopher

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

  Noble, Rt. Hn. Michael

  Clark, William (Nottingham, S.)

  Hirst, Geoffrey

  Nugent, Rt. Hn. Sir Richard

  Cooper, A. E.

  Hobson, Rt. Hn. Sir John

  Page, R. Graham (Crosby)

  Cooper-Key, Sir Neill

  Hogg, Rt. Hn. Quintin

  Peel, John

  Costain A. P.

  Hobson, H. E.

  Percival, Ian

  Crawley, Aidan

  Hordern, Peter

  Peyton, John

  Crosthwaite-Eyre, Col. Sir Oliver

  Hornsby-Smith, Rt. Hn. Dame P.

  Pickthorn, Rt. Hn. Sir Kenneth

  Crowder, F. P.

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

  Pike, Miss Mervyn

  Currie, G. B. H.

  Irvine, Bryant Godman (Rye)

  Pitt, Dame Edith

  Davies, Dr. Wyndham (Perry Barr)

  Jenkin, Patrick (Woodford)

  Pounder, Rafton

  d'Avidgor-Goldsmid, Sir Henry

  Johnston, Russell (Inverness)

  Powell, Rt. Hn. J. Enoch

  Dean, Paul

  Jopling, Michael

  Price, David (Eastleigh)

  Digby, Simon Wingfield

  Joseph, Rt. Hn. Sir Keith

  Pym, Francis

  Dodds-Parker, Douglas

  Kaberry, Sir Donald

  Quennell, Miss J. M.

  Douglas-Home, Rt. Hn. Sir Alec

  Kerr, Sir Hamilton (Cambridge)

  Ramsden, Rt. Hn. James

  1706

  1707

  Rawlinson, Rt. Hn. Sir Peter

  Thorpe, Jeremy

  Whitelaw, William

  Redmayne, Rt. Hn. Sir Martin

  Tiley, Arthur (Bradford, W.)

  Williams, Sir Rolf Dudley (Exeter)

  Ridley, Hn. Nicholas

  Turton, Rt. Hn. R. H.

  Wilson, Geoffrey (Truro)

  Ridsdale, Julian

  van straubenzee, W. R.

  Wise, A. R.

  Rodgers, Sir John (sevenoaks)

  Vaughan-Morgon, Rt. Hn. Sir John

  Wood, Rt. Hn. Richard

  Roots William

  Walder David (High Peak)

  Woodnutt, Mark

  Sharples, Richard

  Walker, Peter (Worcester)

  Wylie, N. R.

  Sinclair, Sir George

  Wall, Patrick

  Younger, Hn. George

  Talbot, John E.

  Ward, Dame Irene

  TELLERS FOR THE NOES:

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

  Weatherill, Bernard

  Mr. Ian MacArthur and

  Taylor, Frank (Moss Side)

  Mr. R. W. Elliott.

  Question put accordingly, That the Clause stand part of the Bill:—
  The Committee divided: Ayes 195,Noes 165

  Division No. 40.]

  AYES

  [11.6 p.m.

  Abse, Leo

  Ginsburg, David

  Noel-Baker, Francis (Swindon)

  Allaun, Frank (Salford, E.)

  Gourlay, Harry

  Oakes, Gordon

  Alldritt, W. H.

  Gregory, Arnold

  Ogden, Eric

  Allen, Scholefield (Crewe)

  Grey, Charles

  O'Malley, Brian

  Armstrong, Ernest

  Griffiths, David(Rother Valley)

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

  Atkinson, Norman

  Hale, Leslie

  Orme, Stanley

  Bacon, Miss Alice

  Hamilton, James (Bothwell)

  Oswald, Thomas

  Bagier Gordon A. T.

  Hannan, William

  Owen, Will

  Barnett, Joel

  Harper, Joseph

  Page, Derek (King's Lynn)

  Baxter, William

  Harrison, Walter (Wakefield)

  Palmer, Arthur

  Beaney, Alan

  Hart, Mrs. Judith

  Pargiter, G. A.

  Bence, Cyril

  Hattersley, Ray

  Park, Trevor (Derbyshire, S.E.)

  Bennett, J. (Glasgow, Bridgeton)

  Hayman, F. H.

  Parkin, B. T.

  Binns, John

  Hazell, Bert

  Pentland, Norman

  Bishop, E. S.

  Heffer, Eric S.

  Popplewell, Ernest

  Blackburn, F.

  Holman, Percy

  Pursey, Cmdr. Harry

  Blenkinsop, Arthur

  Horner, John

  Rhodes, Geoffrey

  Boston, T. G.

  Houghton, Rt. Hn. Douglas

  Roberts, Albert (Normanton)

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

  Howarth, Harry (Wellingborough)

  Roberts, Goronwy (Caernarvon)

  Braddock, Mrs. E. M.

  Howarth, Robert L. (Bolton, E.)

  Robertson, John (Paisley)

  Bradley, Tom

  Howell, Denis (Small Heath)

  Robinson, Rt. Hn. K. (St. Pancras, N.)

  Bray, Dr. Jeremy

  Howie, W.

  Rodgers, William (Stockton)

  Broughton, Dr. A. D. D.

  Hoy, James

  Rogers, George (Kensington, N.)

  Brown, Hugh D. (Glasgow, Provan)

  Hughes, Emrys (S. Ayrshire)

  Rose, Paul B.

  Brown, R. W. (Shoreditch & Fbury)

  Irving, Sydney (Dartford)

  Ross, Rt. Hn. William

  Buchan, Norman (Renfrewshire, W.)

  Jackson, Colin

  Rowland, Christopher

  Buchanan, Richard

  Jeger, George (Goole)

  Sheldon, Robert

  Butler, Herbert (Hackney, C.)

  Johnson, Carol (Lewisham, S.)

  Shore, Peter (Stepney)

  Butler, Mrs. Joyce (Wood Green)

  Jones, Dan (Burnley)

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

  Carmichael, Neil

  Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

  Short, Mrs. Renée(W'hampton,N.E.)

  Carter-Jones, Lewis

  Jones, J. Idwal (Wrexham)

  Silkin, John (Deptford)

  Chapman, Donald

  Jones, T. W. (Merioneth)

  Silverman, Julius (Aston)

  Coleman, Donald

  Kelley, Richard

  Silverman, Sydney (Nelson)

  Conlan, Bernard

  Kenyon, Clifford

  Slater, Joseph (Sedgefield)

  Corbet, Mrs. Freda

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

  Snow, Julian

  Crawshaw, Richard

  Kerr, Dr. David (W'worth, Central)

  Solomons, Henry

  Cronin, John

  Lawson, George

  Soskice, Rt. Hn. Sir. Frank

  Crosland, Anthony

  Ledger, Ron

  Spriggs, Leslie

  Cullen, Mrs. Alice

  Lee, Rt. Hn. Frederick (Newton)

  Stones, William

  Dalyell, Tam

  Lee, Miss Jennie (Cannock)

  Swain, Thomas

  Davies, G. Elfed (Rhondda, E.)

  Lever, L. M. (Ardwick)

  Swingler, Stephen

  Davies, S. O. (Merthyr)

  Loughlin, Charles

  Thomas, George (Cardiff, W.)

  Delargy, Hugh

  McBride, Neil

  Thomas, Iorwerth (Rhondda, W.)

  Dell, Edmund

  McCann, J.

  Thomson, George(Dundee, E.)

  Dempsey, James

  MacColl, James

  Tinn, James

  Dodds, Norman

  MacDermot, Niall

  Tommy, Frank

  Doig, Peter

  McGuire, Michael

  Urwin, T. W.

  Donnelly, Desmond

  McKay, Mrs. Margaret

  Varley, Eric G.

  Driberg, Tom

  MacKenzie, Gregor (Rutherglen)

  Wainwright, Edwin

  Dunn, James A.

  MacMillan, Malcolm

  Walden, Brian (All Saints)

  Dunnett, Jack

  MacPherson, Malcolm

  Walker, Harold (Doncaster)

  Edwards, Rt. Hn. Ness (Caerphilly)

  Mahon, Peter (Preston, S.)

  Wallace, George

  Edwards, Robert (Bilston)

  Mahon, Simon (Bootle)

  Watkins, Tudor

  English, Michael

  Mallalieu, E. L. (Brigg)

  Wells, William (Walsall, N.)

  Ennals, David

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

  White, Mrs. Eirene

  Ensor, David

  Manuel, Archie

  Wilkins, W. A.

  Evans, Ioan (Birmingham, Yardley)

  Mapp, Charles

  Willey, Rt. Hn. Frederick

  Fernyhough, E

  Mellish, Robert

  Williams, Alan (Swansea, W.)

  Fitch, Alan (Wigan)

  Mendelson, J. J.

  Williams, Mrs. Shirley (Hitchin)

  Fletcher, Ted (Darlington)

  Mikardo, Ian

  Williams, W. T. (Warrington)

  Floud, Bernard

  Milne, Edward (Blyth)

  Wilson, William (Coventry, S.)

  Foley, Maurice

  Molloy, William

  Woof, Robert

  Foot, Sir Dingle (Ipswich)

  Morris, Charles (Openshaw)

  Yates, Victor (Ladywood)

  Foot, Michael (Ebbw Vale)

  Morris, John (Aberavon)

  TELLERS FOR THE AYES:

  Ford, Ben

  Murray, Albert

  Mr. Ifor Davies and

  Galpern, Sir Myer

  Newens, Stan

  Mrs. Harriet Slater.

  NOES

  Agnew, Commander Sir Peter

  Glover, Sir Douglas

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

  Allan, Robert (Paddington, S.)

  Goodhew, Victor

  Miscampbell, Norman

  Allason, James (Hemel Hempstead)

  Gower, Raymond

  Mitchell, David

  Anstruther-Gray, Rt. Hn. Sir W.

  Grant, Anthony

  Monro, Hector

  Astor, John

  Grant-Ferris, R.

  More, Jasper

  Atkins, Humphrey

  Grieve, Percy

  Morrison, Charles (Devizes)

  Awdry, Daniel

  Griffiths, Eldon (Bury St. Edmunds)

  Mott-Radclyffe, Sir Charles

  Balniel, Lord

  Griffiths, Peter (Smethwick)

  Murton, Oscar

  Batsford, Brian

  Grimond, Rt. Hn. J.

  Neave, Airey

  Bell, Ronald

  Hall-Davis, A. G. F.

  Nicholls, Sir Harmar

  Bennett, Sir Frederic (Torquay)

  Hamilton, Marquess of (Fermanagh)

  Noble, Rt. Hn. Michael

  Berry, Hn. Anthony

  Harris, Frederic (Croydon, N.W.)

  Nugent, Rt. Hn. Sir Richard

  Biggs-Davison, John

  Harris, Reader (Heston)

  Page, R. Graham (Crosby)

  Bingham, R. M.

  Harvie Anderson, Miss

  Peel, John

  Birch, Rt. Hn. Nigel

  Hawkins, Paul

  Percival, Ian

  Black, Sir Cyril

  Hay, John

  Peyton, John

  Bossom, Hn. Clive

  Heald, Rt. Hn. Sir Lionel

  Pickthorn, Rt. Hn. Sir Kenneth

  Boyd-Carpenter, Rt. Hn. J.

  Heath, Rt. Hn. Edward

  Pike, Miss Mervyn

  Boyle, Rt. Hn. Sir Edward

  Higgins, Terence L.

  Pitt, Dame Edith

  Braine, Bernard

  Hiley, Joseph

  Pounder, Rafton

  Brewis, John

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

  Powell, Rt. Hn. J. Enoch

  Brinton, Sir Tatton

  Hirst, Geoffrey

  Price, David (Eastleigh)

  Bromley-Davenport, Lt.-Col. Sir Walter

  Hobson, Rt. Hn. Sir John

  Pym, Francis

  Brown, Sir Edward (Bath)

  Hogg, Rt. Hn. Quintin

  Quennell, Miss J.M.

  Buchanan-Smith, Alick

  Hooson, H. E.

  Ramsden, Rt. Hn. James

  Buck, Antony

  Hornby, Richard

  Rawlinson, Rt. Hn. Sir Peter

  Butcher, Sir Herbert

  Hornsby-Smith, Rt. Hn. Dame P.

  Redmayne, Rt. Hn. Sir Martin

  Carlisle, Mark

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

  Ridley, Hn. Nicholas

  Carr, Rt. Hn. Robert

  Irvine, Bryant Godman (Rye)

  Ridsdale, Julian

  Channon, H. P. G.

  Jenkin, Patrick (Woodford)

  Rodgers, Sir John (Sevenoaks)

  Chataway, Christopher

  Johnston, Russell (Inverness)

  Roots, William

  Clark, William (Nottingham, S.)

  Jopling, Michael

  Sharpies, Richard

  Cooper, A. E.

  Joseph, Rt. Hn. Sir Keith

  Sinclair, Sir George

  Cooper-Key, Sir Neill

  Kaberry, Sir Donald

  Talbot, John E.

  Costain, A. P.

  Kerr, Sir Hamilton (Cambridge)

  Taylor, Frank (Moss Side)

  Crawley, Aidan

  Kimball, Marcus

  Thorpe, Jeremy

  Crosthwaite-Eyre, Col. Sir Oliver

  Kitson, Timothy

  Tiley, Arthur (Bradford, W.)

  Crowder, F. P.

  Lancaster, Col. C. G.

  Turton, Rt. Hn. R. H.

  Currie, G. B. H.

  Langford-Holt, Sir John

  van Straubenzee, W. R.

  Davies, Dr. Wyndham (Perry Barr)

  Legge-Bourke, Sir Harry

  Vaughan-Morgan Rt. Hn. Sir John

  d' Avigdor-Goldsmid, Sir Henry

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Walder, David (High Peak)

  Deedes, Rt. Hn. W. F.

  Longbottom, Charles

  Walker Peter (Worcester)

  Digby, Simon Wingfield

  Longden, Gilbert

  Wall, Patrick

  Dodds-Parkar, Douglas

  Lubbock, Eric

  Ward, Dame Irene

  Douglas-Home, Rt. Hn. Sir Alec

  Lucas, Sir Jocelyn

  Weatherill, Bernard

  Errington, Sir Eric

  Lucas Tooth, Sir Hugh

  Whitelaw, William

  Farr, John

  McAdden, Sir Stephen

  Williams, Sir Rolf Dudley (Exeter)

  Fisher, Nigel

  Mackenzie, Alasdair (Ross & Crom'ty)

  Wilson, Geoffrey (Truro)

  Fletcher-Cooke, Charles (Darwen)

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

  Wise, A. R.

  Fletcher-cooke, Sir John (S' pton)

  McLaren, Martin

  Wood, Rt. Hn. Richard

  Fraser, Ian (Plymouth, Sutton)

  McMaster, Stanley

  Woodnutt, Mark

  Galbraith, Hn. T. G. D.

  Maitland, Sir John

  Wylie, N. H.

  Gardner, Edward

  Marten, Neil

  Younger, Hn. George

  Giles, Rear-Admiral Morgan

  Maude, Angus

  TELLERS FOR THE NOES

  Gilmour, Ian (Norfolk, Central)

  Mawby, Ray

  Mr. Ian MacArthur and

  Gilmour, Sir John (East Fife)

  Maxwell-Hyslop, R. J.

  Mr. R. W. Elliott.

  Clause ordered to stand part of the Bill.
  11.15 p.m.
  Mr. Selwyn Lloyd: I beg to move,
  That the Chairman do report Progress and ask leave to sit again.
  I am delighted to see the Leader of the House here. In his capacity as Lord President of the Council, if I may say so with great respect, he has not shown that diligence to his duties we had hoped. However, we forgive him that, and are very glad indeed to see him here with us. I think that he will bring the light of common sense to his colleagues on the Front Bench.
  1710
  I move this Motion much more in sorrow than in anger. We are perfectly willing to co-operate with the Government in getting their legislation, provided that reasonable time is given for its proper consideration. We said from the very beginning that it was ridiculous to expect that we should take this important constitutional Measure through Committee and Report right away afterwards, and then give it its Third Reading all in one Parliamentary day, without having an effective Report stage and no adequate time for consideration before Third Reading.
  This is, in fact, a major Measure. Right hon. and hon. Gentlemen opposite

  1711
  cannot pretend that these new Ministries are important without, at the same time, accepting that it is an important Measure. It seeks to give validity to setting up the new Ministries. We have had debates in which no time has been wasted at all. [Laughter.] If the Leader of the House had been here he would have known that we deliberately curtailed the first debate so that we could have a Division on that question at a reasonable time and get on with the business. It was not until the Chancellor of the Duchy of Lancaster was so obtuse on the question of overseas development that discussion began to be rather prolonged. As I say, this is a constitutional Measure. I do not think that it was because the Government would have had a majority of only one or two upstairs that they decided to take it on the Floor of the Chamber. It was because they regarded it as a very important Measure that they brought it to the Floor. I am sure of that. It validates new Ministries, and we have had considerable debate about that, but there is very much in the Bill which is still to be debated. We are really only just at the beginning of some very important constitutional matters.
  Clause 2 deals with questions of salaries, which, I gather, are not unimportant, and may, perhaps, be part of the reason for the desire to press on with the Bill. [HON. MEMBERS: "Cheap."] What is cheap about the idea of paying people a fair wage? I am astounded at the intervention of hon. Members opposite, from a sedentary position. I do not think that these Ministers will be cheap at all at this price.
  The second point which then arises is—not only the question of salaries of the new Ministers—their numbers. Clause 3 raises one of the most important constitutional matters to have been debated for a long time—the number of placemen in the House of Commons. All those arguments were put forward on Second Reading, but there are many detailed points to be raised in Committee. The hon. Member for Nelson and Colne (Mr. Sydney Silverman) laughs. He would have been the first to be on his feet to protest against this, and it is
  1712
  not consistent with his character that he should object to the Opposition taking this kind of action.
  The hon. Member for Ebbw Vale (Mr. Michael Foot) is a great judge of efficiency in opposition. I wonder how much he opposes what the Government are doing, and about which he is absolutely silent. What are his views about the communique? But I must not be drawn by provocative interruptions from below the Gangway.
  We want to give the Measure proper consideration and to deal with it in a serious way at a reasonable time of day. I do not think that the Committee is at its best when discussing things into the small hours of the morning. If a reasonable proposition is made to deal with the Measure, I am sure that we will co-operate. It is unreasonable for us to continue through the night trying to get through the whole of the Committee stage, the Report stage, and the Third Reading. I have moved the Motion to find out the Government's intentions in the matter.
  Mr. Houghton: It is not as late as all that. I see no signs of undue fatigue on the benches opposite. Everyone seems in very good heart. It is the right hon. and learned Gentleman who has moved this Motion. It is he who has asked, "Is it not time that we went away and sat again another day?". He must have been having some consideration for the state of right hon. and hon. Gentlemen opposite. As I can see them very much better than he can, I can tell him that all is well with them, and there is no need for us to break off just now. Let us see how we get on. I am only using the formula which the right hon. and learned Gentleman has used very frequently in the past—"Let us see how we go".
  Sometimes we wanted to break off, and he used to coax us to go on and say, "If speeches are kept short, and if no time is wasted, we can probably make good progress". Many important matters have been discussed through the night, and in my experience of Parliament I have found that sometimes more sense is talked during the night than during the day.
  I think that on reflection the right hon. and learned Gentleman will see

  1713
  how unreasonable it is for him to move this Motion. It is still early, and I suggest that we get on with the job and see how we go. There is no need to dilly dally over it. Let us go on. If the right hon. and learned Gentleman wants to discover the wishes of the Government a little later, we shall be very happy to tell him then, but I see no reason for a premature adjournment of the debate on this important Bill.
  Mr. Selwyn Lloyd: Is the right hon. Gentleman saying that it is for the Opposition to consider the wishes of the Government and never for the Government to consider the wishes of the Opposition?
  Mr. Houghton: It depends largely on how important the business is to the Government. That fact is surely in the experience of the right hon. and learned Gentleman. When we wanted to break off when his Government were in office, if the Government wanted a Bill, they usually said, "We want the Bill tonight" and went on, and we had to co-operate as best we could to bring the business to a conclusion. I hope that we can rely on the co-operation of the Opposition to bring this Bill to a conclusion and that we can do so within a reasonable time.
  Mr. Grimond: I am sure that the whole Committee has been greatly encouraged by the complimentary remarks of the Chancellor of the Duchy of Lancaster. He is not looking too bad, considering the afternoon he has had. I agree that the hour is reasonably early, and that this is a highly important Bill, upon which the Government are only too willing to spend some more time. I congratulate the right hon. Gentleman on having picked up the tricks of Government so quickly. The deadpan expression, the emollient remark and the barbed shaft have come from him as though he had been there for thirteen years.
  But there is one concession he might make, and I put the point in all seriousness. It might not be possible to get the remaining stages of the Bill tonight. Whether or not he thinks that this is a simple machinery Bill, it raises important questions. There are Amendments in the right hon. Gentleman's own name. I believe that it would be to the advantage
  1714
  of the Committee if he could assure us that, although he may want to complete the Committee stage, the remaining stages may be taken on another occasion. I am not saying that he ought to complete the Committee stage tonight, but he might want to go as far as that. But it would be convenient to the Committee if he could indicate the Government's intentions concerning the Report and Third Reading.
  Sir Lionel Heald: I want to make a serious appeal to the Leader of the House in this matter. This is the first occasion of this kind on which we have had the advantage of his presence. I am sure we all regard this as an important Bill, and we are in the middle of a serious discussion of it. I ask him to advise the Committee whether he thinks that it is desirable to proceed through the night with a matter of this kind.
  It is true that during the last week or two, owing to the introduction of a Finance Bill at this time of year, which is unusual, we have had some late sittings, but it is not good for anyone. We have heard the right hon. Gentleman himself and other hon. Members opposite speak on this subject before. These all-night sittings do no good to anyone, and very little good to the reputation of Parliament. We have noticed—we cannot help noticing—that one of the results is that matters which are awkward from the Government's point of view can be discussed in the early hours of the morning when there is little chance of their being reported in the Press. The people of this country, surprising though it may be to some hon. Members opposite, are interested in what goes on in the House, and they are watching the Government and the behaviour of hon. Members opposite.
  We now have the proposal that we should go on discussing this Bill into the early hours of the morning. As my right hon. and learned Friend has pointed out, we shall be dealing with a very serious matter in Clause 3—the question to what extent the Executive can be enlarged. Millions of our people are interested in this subject. If we debate it in the early hours of the morning it will receive very little publicity. I do not think that on the first occasion on which he has to advise about such a matter the Leader of

  1715
  the House would wish to appear to be arguing from a political point of view. I hope that we shall have the opportunity of hearing from him a statesmanlike speech on the subject.
  11.30 p.m.
  I warn him that many hon. Members on this side of the House and many people in the country have the view that the Government are adopting a dictatorial point of view. In order to prove that, I want to give some brief quotations from the speeches of Government spokesmen on this very Bill. I start with the Attorney-General who, as reported in col. 649 of HANSARD, said:
  "The figure of 91 which we propose is quite simply the number of Ministers whom the Prime Minister wishes to have in the House of Commons. That is the beginning and end of the matter."
  That is the statement of a dictator. [HON. MEMBERS: "Oh."] I withdraw that, Sir Samuel. It is the statement of a would-be dictator.
  The Attorney-General The Attorney-General rose—
  Sir L. Heald: I cannot give way.
  Hon. Members: Dictator.
  Lieut.-Colonel Sir Walter Bromley-Davenport: Sit down.
  Mr. Julian Snow (Lichfield and Tam-worth): It is no wonder they sacked the right hon. and learned Gentleman.
  The Deputy-Chairman: Order.
  Sir L. Heald: The Chancellor of the Duchy, as reported at col. 751, said:
  "As I remarked the other day, we are the Government now."
  Mr. Houghton Mr. Houghton rose—
  Sir W. Bromley-Davenport: Sit down!
  The Chairman: Order. If the right hon. and learned Gentleman does not give way, other hon. Members must resume their seats.
  Mr. Thomas Swain: On a point of order. Since I came to the House, I have been under the impression that only the Chairman of Committees or Mr. Speaker can order an hon. Member to sit down. I am personally getting "fed up" with listening to the "nut" from Knutsford telling us to sit down.
  The Deputy-Chairman: That is not a point of order.
  Sir L. Heald: Let me tell the Chancellor of the Duchy that at least his remark was an improvement on that made by his famous predecessor, Sir Hartley Shawcross, who said, "We are the masters now". At least the right hon. Gentleman said, "We are the Government now".
  Finally, the right hon. Gentleman, as reported in the next column, said,
  "I suggest that the justification for the new Ministries is a matter for the Government"—[OFFICIAL REPORT, 19th November, 1964; Vol. 701, c. 649–752.]
  The impression has been created that the attitude adopted by the Government on this Measure is that they are the masters and that they do not intend to encourage discussion or to listen to any argument. Perhaps one of the most striking proofs of that is that no back bench Member of the Government side has taken part in the debate.
  Mr. Charles Longbottom: I do not think anyone can deny that this is a Bill of considerable constitutional importance. More Ministries are being set up than the House has ever known in its history. We are also in an age when we seek the modernisation of industry and the machinery of Government, but we are setting up a number of Ministries the functions of which have not been explained to us in the debate. During this debate we have discussed three most important Amendments dealing with the Ministry of Land and Natural Resources, the Ministry of Overseas Development and the Ministry of Technology, but the Committee has not given any idea about the functions of these Ministries. Nor has there been any information on the great number of detailed points which greatly affect the view of the Committee on the Bill.
  The Chancellor of the Duchy has said that the Prime Minister, with his prerogative, had decided to use that power to appoint these extra Ministers and then merely put a prima facie case to the Committee for that action. It was upon that, the Chancellor added, that we have to make these decisions, and he went on to say that the details would come when the functions came to be discussed. He said that particularly in relation to the Minister of Overseas Development.

  1717
  But does he not know of the existence of Statutory Instrument No. 1849 of 1964? If he does, he will also know that there will be no opportunity to discuss this new appointment unless a Prayer is moved in the House within forty days of the Order being made, when hon. Members will be able to go into the functions of this new Ministry.
  This is a most important matter. For example, is the Ministry going to have any overseas staff?
  Mr. Sydney Silverman: On a point of order, Sir Samuel. I know that the range of debate on the Motion to report Progress is fairly wide, but is it in order for an hon. Member to debate the previous Question, "That the Clause stand part of the Bill", which already has been decided?
  The Temporary Chairman: I hope the hon. Member will not stray too far.
  Mr. Longbottom: It is interesting to see the lion. Member for Nelson and Colne has turned gamekeeper for the Government side.
  I was saying before I was interrupted that we were promised that we should have an opportunity under a Transfer of Functions Bill of looking at this Ministry of Overseas Development. It is important that we should be absolutely clear about how this Ministry is going to work, what its staff will be, and so on. The only repetitive remark that I shall make, whatever the hon. Member for Nelson and Colne may think, is that a lot of countries overseas are expecting a great deal from this new Department, but I do not think that much will be achieved unless the functions are made very much more clear than they have been so far today.
  I support this Motion because of the manner in which the right hon. and learned Attorney-General and the Chancellor of the Duchy have treated the Committee. They have come here with cursory briefs and have failed to give any sort of answer to a lot of important questions. They should be given the opportunity now of going away to study this much more carefully and closely so that they can come back and give the Committee a lot more information. The Chancellor of the Duchy seemed to
  1718
  imply just now that it is not late, but for several hours—
  Mr. Sydney Silverman: On a point of order, Sir Samuel. The hon. Member is now saying that the reason why the Committee should report Progress and ask leave to sit again is so that my right hon. Friends may go away and discuss what has already been discussed and decided. Is that in order?
  The Temporary Chairman: The hon. Member did not, I think, say that we should discuss what has already been discussed. As I understood the hon. Member, he wants further information about the Bill as it stands.
  Mr. Longbottom: Had the hon. Member been paying attention he would know that I said that they should go away and then come back with better answers than we have had so far. This is a very important point. The Chancellor of the Duchy of Lancaster and the Attorney-General have given totally inadequate answers on a very important constitutional Bill. There are equally important points in the subsequent Clauses, to which the Committee is entitled to complete answers. If what we have had so far is any guide to what things will be like later, I think it is time that we accepted this Motion so that at least the Committee may be treated to proper and full answers on very important constitutional problems.
  Mr. Ian Mikardo: I am a little at a loss to understand what all this fuss is about. I have listened with my usual care to the speeches on the Motion by three Members opposite—for Wirral (Mr. Selwyn Lloyd), for Orkney and Shetland (Mr. Grimond), and for Chertsey (Sir L. Heald)—or rather two right hon. and learned Gentlemen and one right hon. and intelligent Gentleman—and I do not know what they are getting at.
  We have been here for a little over nine hours—[HON. MEMBERS: "Not the hon. Gentleman."] I have been here every minute of it. The three right hon. Gentlemen have said that this is a very special Bill; in other words, they said that there was an important job for this Committee to do on it. We have been here a little over an hour beyond the normal time of the normal shift in

  1719
  any productive establishment. If there were a factory at which a very important job needed to be done—a job as outrageously important as the right hon. Gentlemen have said that this one is, and the workers insisted on not working more than an hour beyond the normal shift, what would hon. and right hon. Members opposite say? They would say what they said between 15 and 20 years ago—that those workers were a bunch of "Weary Willies" and "Tired Tims". I say that hon. and right hon. Gentlemen opposite are "Weary Willies" and "Tired Tims".
  The right hon. and learned Member for Chertsey talked at great length about what would be the reaction in the country to what is going on here. He would discover that the first reaction of his constituency Conservative association, and the other 629 Conservative associations would be to want to know why, on this Bill, and others that have gone before it in the last few days, the Government have had a majority several times greater than they have on paper. That is what he will have to explain this weekend in Chertsey. When he goes to the workers in the Vickers works at Weybridge, I wish him joy of his explanation. And all the other "guys" over there will have to explain how it comes about that they are such a bunch of "Weary Willies" and "Tired Tims".
  I take their word that this is a very important and special job in our production and our output. On that account I, and I am sure that I carry with me my hon. and right hon. Friends, am prepared, as an exceptional measure, to do a double shift. We would not want to do it after every shift, but it is exceptional and we are prepared to do it. I invite the Committee to join us.
  11.45 p.m.
  Mr. Hogg: I congratulate the hon. Member for Poplar (Mr. Mikardo) on being the first back-bencher opposite to break silence more than sedentarily, but the hon. Member has changed a lot since he represented Reading, some years ago. I can remember that then he spoke with a very cultured, university accent. Now that he represents an East End constituency he is speaking, although not a Londoner, with something like the original London dialect, but it is, I fear,
  1720
  a highly artificial proceeding which most of us who remember him before have noted.
  I was extremely disappointed, as I know my hon. and right hon. Friends were, that the only word we heard from the Government in response to the Motion moved by my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) came from the Chancellor of the Duchy of Lancaster. We are all very fond of him, but on this occasion I would have preferred to hear a word from the Leader of the House. After all, it was his absence as Lord President of the Council which caused us most of the trouble in the previous debate, because if he had only been here to guide his right hon. Friend the Chancellor of the Duchy of Lancaster, and his right hon. and learned Friend the Attorney- General, who are bearing the heat and burden of the day, about the existence of that Order in Council, about which the Committee was kept in complete darkness until it was elicited from this side, we should have saved ourselves a great deal of trouble.
  I wish that the Leader of the House could have said a word about the Motion moved by my right hon. and learned Friend because, fond as we are of the Chancellor of the Duchy of Lancaster, he has not been at all himself today. He was the first to say that he was not feeling particularly robust.
  Mr. Houghton: I said that as the day went on I would gather strength, and I have.
  Mr. Hogg: As the day goes on we may gradually begin to see a little resumption of strength, but the right hon. Gentleman has been extraordinarily weak up to the present time. It is for that very reason that I should have thought that the Leader of the House would have been the first to come to his aid. I am putting this in a bantering form, but it is a very serious point. The whole trouble into which the Committee has got this afternoon and evening has been due to the high-handed and superficial attitude of the Chancellor of the Duchy of Lancaster in refusing to answer our questions properly.
  As the Leader of the House was not here, I am sure that he will wish to be informed of what has been going on.

  1721
  It emerged during the debate that the Chancellor of the Duchy, who was having a most miserable time, had been guilty of an extraordinary error of judgment. He had advised his right hon. Friend the Minister of Overseas Development and his right hon. Friend the Minister of Land and Natural Resources not to come here although they were precisely the Ministers who could have answered the questions which were quite properly put from this side of the Committee.
  I do not want to take a false point, and I concede at once that Mr. Cousins could not be here, although we should much have liked to see him, and Lord Snow could not be here although we should much have liked to see him, too. But the right hon. Gentleman deliberately did not bring to the Committee those Ministers with Portfolios overlapping those of Science and Technology who could, perhaps, give us a rational answer to the arguments which have been put from this side.
  When my right hon. and learned Friend the Member for Wirral moved the Motion he did it for the excellent reason that, if the Committee were to accept it, the Chancellor the Duchy could then report to the Leader of the House that a serious error of judgment had been made and that, in the circumstances, it was not good enough to leave him alone to defend the Government's position.
  Mr. Houghton: If that was the right hon. and learned Gentleman's intention why, in heaven's name, did he not say so?
  Mr. Hogg: I thought that I had said so several times. This is the opportunity for the right hon. Gentleman to tell the Leader of the House that a serious error of judgment has been made and that the Committee in many quarters, in the Liberal Party, too—the right hon. Member for Orkney and Shetland (Mr. Grimond) expressed this view forcefully—feels that it has been treated with contempt. Matters could readily be put right now by the Chancellor of the Duchy reporting what has happened to his right hon. Friend the Leader of the House and bringing here the Ministers who could answer at least the later stages of the debate properly. I do not know what is stopping the right hon. Gentleman from doing it.
  1722
  We have had the most unfortunate experience of seeing the right hon. and learned Gentleman the Attorney-General, who, for once, did not stick to his lawyer's last as he should, drop those abominable "clangers", the first about Britain's science and technology in comparison with other countries of Europe, and the second his claim, which is wholly without foundation, even in law, that his right hon. Friend the Member for Sunderland, North (Mr. Willey) was in a position, and had power under the Bill, to deal with land racketeering, which, of course, bore no relation to the contents of the Bill at all.
  The Committee feels a genuine sense of grievance and frustration at having been treated with contempt by the Government. not only by the Chancellor of the Duchy of Lancaster, who has had to bear the brunt of our remarks and has been put up to do it, and not only by the Attorney-General, but by the Government as a whole. All these mistakes having been made, cannot the Leader of the House now tell us that the time has come to put the proceedings in order and to see that, on the future Amendments and stages of the Bill, the proper Ministers will be here?
  My hon. Friend the Member for East-leigh (Mr. David Price) and others of my hon. Friends made a careful argument showing why the appointment of a separate Minister of Technology is, in fact, a most dangerous and inefficacious piece of machinery. The only answer that we got from the Chancellor of the Duchy was the psychological effect which such an appointment of Mr. Cousins and Lord Snow would have on the population at large. This is the substitution of government by witchcraft or totem worship for statesmanship—the psychological effect of a wholly useless piece of machinery.
  Did the right hon. Gentleman give us a single argument why the piece of machinery would be valuable? He did not. He brought out Mr. Cousins and Lord Snow as the Chinese brought out their cannons, not to fire them but so that the appearance of them should terrify the enemy. I do not know what they do to our competitors in Europe, but, like the Duke of Wellington, I can say "My goodness, they frighten me!"

  1723
  All I can say is that it is time that the Leader of the House did his duty both as Lord President of the Council and as Leader of the House and gave us a satisfactory assurance.
  The Lord President of the Council (Mr. Herbert W. Bowden): I should have thought that the very last thing that the right hon. and learned Gentleman the Member for St. Marylebone (Mr. Hogg) would have spoken to us about would have been colossal mistakes. He seems to have forgotten that not very long ago, with his hand on his heart and hope in his eyes, he descended upon us; but perhaps I had better not pursue that line.
  I am very conscious of the importance of the Bill. The former Leader of the House has said that he is, too, and he felt that we should make good progress with it. In the exchanges that took place in the House on Thursday last week, I said that we would see how we would get on, and we have seen how we have got on. In six hours we have got Clause 1, and that is hardly progress. [HON. MEMBERS: "There have been no answers."] The Committee stage of the Bill could have been got quite reasonably during today, and the Government would have considered what would have happened subsequently to the Committee stage if there had been the co-operation one would have expected from the Opposition. But we have not had it.
  My right hon. Friend the Chancellor of the Duchy has said that the night is young. In another five minutes the new day will be very young. There is plenty of time to make further progress. The right hon. and learned Member for Chertsey (Sir Lionel Heald) referred to Press comment during the last week. The proposal from some of my hon. Friends for a change in the sittings of the House to half-past ten in the morning has received a great deal of appreciation not only from the general public, but from the Press. This sort of happening late at night or early in the morning on an extremely important Bill when there has been no attempt at all to co-operate—[Interruption.] We were given to understand by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) that there was no desire to delay the Bill, but things do not appear to have been working
  1724
  in that direction over the last six hours.
  I really feel that we must make very much more progress before the Government can consider, or before I as Leader of the House can consider, when and at what point we should stop consideration of the Bill.
  12 m.
  Sir D. Glover: I am sure that the whole Committee must be bitterly disappointed at the reply of the Lord President of the Council. He has gone down very much in my estimation. The Lord President of the Council is also Leader of the House and is not just a party politician. He is supposed to gather the mood of the House and not just that of the Government.
  I can tell the Leader of the House that when the debate started today—and he will agree that I know something about what goes on in the Conservative Party—there was no intention of delaying this Bill. We expected by this time to have completed the Bill and gone home. This was our approach to the Bill when we entered the House this afternoon.
  The hon. Member for Nelson and Colne (Mr. Sydney Silverman) and the hon. Member for Ebbw Vale (Mr. Michael Foot) know perfectly well—they have been in the House for a long time and are arch exponents of delaying matters—that if they had been in the House and listened to the debate, that if they had been on this side of the House and one of our Ministers had replied in such a way as right hon. Gentlemen have today, they would not have let any item go through without debate.
  Mr. Sydney Silverman: The hon. Member is an old Member, as I am. He told us a minute or two ago that it was the intention of the Opposition to get through all stages of the Bill as far as they could by midnight. But on one Amendment four separate occupants of the Opposition Front Bench made speeches on the same point. In his opinion, was that a way of helping progress and getting the subject matter finished by midnight?
  Sir D. Glover: The real answer is that all the time my right hon. Friends were trying to get sensible replies out of the Government and failing time after time.

  1725
  My right hon. Friend the Member for Mitcham (Mr. R. Carr), on the Amendment dealing with the Ministry of Overseas Development, made such a convincing speech that the right hon. Gentleman the Chancellor of the Duchy of Lancaster, without waiting for anyone else to speak, immediately replied. His reply was so fatuous that from that moment everyone on this side was trying to get answers to the questions which had been posed in a most conciliatory and statesmanlike manner by my right hon. Friend the Member for Mitcham. We do not intend to divide on this, but we want clear-cut answers to a great many problems affecting this Department.
  This is why the debate has gone the way it has. It did not start with any of us wishing to delay Government business. But I would point out to the Leader of the House and his right hon. Friends that this is a constitutional Measure. I was appalled, quite honestly, at the reaction of hon. Members on the Government side. I do not understand what has happened to the fire for democracy that I understood burned in the belly of the hon. Member for Ebbw Vale. I presume that it has been doused with water from the Ministry of Land and Natural Resources. At any rate, the fire has gone out. There is none of that fighting for the rights and dignity of the House of Commons that the hon. Member used to bring out to delay the proceedings of the House in the last Parliament hour after hour. I listened to the hon. Member with a great deal of admiration, because he was doing the back bencher's job to protect the Legislature against the Executive.
  This Bill is only a measure to strengthen the Executive. It was brought in to put right what was done by the Prime Minister, who created these Ministers under the Royal Prerogative, as he was entitled to do. But these Ministers have been carrying out duties and appointing staff. It appears now that they have been spending money as well before the House of Commons has decided whether it will legalise their functions and the functions of their Departments.
  These are not minor issues. They are great issues which concern whether the stature of the House of Commons goes
  1726
  up vis-à-vis the Executive or whether the Executive becomes all-powerful and can ride roughshod over, the House of Commons—as it can with hon. Members opposite as cannon fodder under the leadership of the Lord President, who can get anything through without argument, discussion and debate by them.
  The frightening thing in this Parliament—and I congratulate the Patronage Secretary on it—is the discipline he has been able to instil into his own back benchers, so that debate after debate can take place without even the small voice of reason from them. There is a deathly silence from them. All one can hear is the rattling of the bars in the iron cage. Not one of them has the guts or the back bone to speak out when, in fact, many of them cannot agree with half the Measures in detail even if they agree in principle.
  Is it really the case that, out of 317 people, there is not one who has a question, not one who has a query, not one who would like an explanation of some point or other, that all is clear to them? Indeed, the Chancellor of the Duchy of Lancaster must be a soothsayer if he thinks that his speeches have been clear to his own supporters. If they have been clear to them, then they must be most wonderful people with second sight because to everyone who understands these problems his explanations are as clear as mud.
  The speeches of the Chancellor of the Duchy of Lancaster have been turgid and long-winded. I think one should point out that, although no hon. Member opposite has taken part in these proceedings, when we study HANSARD tomorrow we shall find that the right hon. Gentleman has taken an inordinate amount of nine hours since we began the Committee stage. He has not been able to say "yes" or "no" without putting in "by", "to" or "from" and all sorts of explanations to drag it out. Indeed, once or twice I thought he was filibustering his own Bill.
  I have never heard from that Dispatch Box such long, turgid and unintelligible explanations, going on for 30 or 40 minutes, in the Committee stage of a Bill as the right hon. Gentleman has tried to make something clear which even now I do not think he understands. The

  1727
  right hon. Gentleman orders his right hon. Friends concerned not to come—I do not quite understand his position in the Government—in case someone could give an intelligible explanation of some of the matters under discussion.
  I presume that if we could have proper explanations not only would we on this side go into the Lobbies against the Bill but all hon. Members opposite would accompany us. I believe that the Government tried to get this Measure through without explanation because, if it was understood, no one would vote for it. That is why the right hon. Gentleman cannot let the Ministers concerned into the Committee. If he did, he could not get any more business and that is the problem he is up against.
  It is interesting that one right hon. Gentleman, the right hon. Frank Cousins, who, of course, not being a Member is not so far subject to the discipline of the Whips, did have the courtesy to come and listen to the debate. He came, but was not present. As you know, Sir Samuel, it is the tradition of the House of Commons that nobody who is not a Member is present, and I am therefore slightly out of order in drawing attention to the fact that he broke all the rules and instructions of the right hon. Friend the Chancellor of the Duchy and came here.
  I appeal to the Leader of the House. This is an important Bill. I am sincere in saying that there was no wish to filibuster and no desire to delay the proceedings. I honestly believe that if the right hon. Gentleman had been here to listen to some of the explanations given by his right hon. Friend the Chancellor of the Duchy of Lancaster, who will not represent Lancashire in that capacity for very long if he goes on as he has today, for we shall repudiate him and send him back over the Pennines to Yorkshire where he belongs—and I begin to think that it was a disaster that he ever came over the Pennines—and had heard the lack of reply and the lack of clarity, he would have understood why these debates have taken as long as they have.
  So far we have not had one conciliatory move from the Government Front Bench. The right hon. Gentleman, getting stronger in body as the night goes
  1728
  on—and weaker in the head—wants us to go on all night. I can understand that. When we are all comatose, some of his speeches will probably appear intelligent, but that is about the only condition in which they will. Of course he wants to get the Bill through in the early hours of the morning, because that is the only way of re-establishing his reputation for getting Government business.
  Can the Leader of the House, who is not solely a Government spokesman, give us some indication—perhaps if we get Clauses 2 and 3—of when the Government will be satisfied? That would be reasonable and would probably get the co-operation of the Committee. If we are to be faced with a stone wall of opposition to any conciliation and any understanding of our problems as the Opposition, I can warn the right hon. Gentleman that I for one will see that the Government do not get very much more business tonight.
  Mr. Peter Walker: May I, first, express my sincere disappointment that the hon. Member for Poplar (Mr. Mikardo), after exhorting us to go on for a double shift, should, within 10 minutes, have taken a tea-break? May I also say how sorry I am to have heard the first effort of the Lord President of the Council, in his capacity as Leader of the House, answering a Motion of this kind? When we have a constitutional Bill such as this, I would have thought that we would have had the attendance of the Leader of the House for most of our debates, but, in fact, we have seen very little of him throughout the day.
  When, at last, the right hon. Gentleman has put in an appearance, it has been to say that he intends to give no indication of what his ideas are. He pays no heed of the arguments put to him, for example, the important argument of the right hon. Gentleman the Leader of the Liberal Party, who asked whether it was his intention to get through only the Committee stage of the Bill this evening and to take the other stages of the Bill later.
  When the Leader of the Liberal Party put that question, for once the right hon. Gentleman the Patronage Secretary was seen to nod agreement with the point which was being made. Perhaps it was a nod to urge some discipline on his

  1729
  own back benchers, a secret code, but we were hopeful that this man of iron would at last relax and agree to some indication being given.
  The Lord President of the Council has the reputation of being a charming man. It was predicted, when he became the Leader of the House, that he would be a very good and popular Leader. I must say that his first performance is exceedingly disappointing. I hope that he will carefully reconsider the points which have been put to him, and again come to the Dispatch Box and give us some indication of the Government's intentions.
  12.15 a.m.
  Mr. Geoffrey Hirst: I would not have spoken had it not been for the Leader of the House going to the Dispatch Box a short while ago. I must protest at the right hon. Gentleman's coming into a debate, after what has taken place, and asking for our cooperation, when he ought to have known—if he did not know—that the reason why the co-operation was not forthcoming was that the Chancellor of the Duchy of Lancaster persistently, consistently and consecutively refused to answer the questions put by the leaders of my party.
  I cannot understand this. I, like many hon. Members, have a sincere regard for the Leader of the House. I just cannot understand how he could possibly be so arrogant as to go to that Box and state his opinion in that way. I mean this sincerely, because I am genuinely upset that this could be so. His remarks were obviously made completely unthinkingly and must have been made without regard to, or knowledge of, what had occurred.
  I feel the right hon. Gentleman should save his own reputation, and a good deal of the reputation of Parliament in the eyes of the country, by showing now that he understands the point at issue. Being an honourable man, he must make way for his right hon. Friends to give us the answers, which alone—I repeat, alone—are the slightest hope of enabling the Committee to make progress tonight.
  Sir Harmar Nicholls: From a purely practical point of view, the Committee should forget what has gone so far. The Government have got Clause 1, and we ought to be giving thought to what we
  1730
  can achieve in the future. If we look on the Notice Paper, we see that there are still 33 Amendments to be dealt with. We are burking the issue if we do not take into account what has happened to the Bill in the discussion so far.
  The Leader of the House ought to recognise that to expect to get the whole of the Committee stage, Report and Third Reading tonight has been proved to be quite unreasonable. In the light of what has happened, that is clear. [An HON. MEMBER: "Not at all."] The Leader of the House and the hon. Gentleman who interrupted know full well that the idea of moving the Motion to report Progress is to give the Government a chance to take into account what has happened and what the real position is.
  I believe that the Leader of the House would be doing the Government a service and helping them to get their business if he faced this issue. While it may seem a presumption from someone on the back benches on this side to say this, if he could give an indication that he recognises the situation, if he could say that he is prepared to find another day or half-day and that the Government expect to get up to Clause 3 today. I am certain that he would put the Opposition in a wrong light if they did not co-operate. If he does not give any sort of leeway, I suggest that he would be putting himself and the Government in the wrong.
  I believe that, taking everything into account, and understanding the bantering and the enjoyment which some hon. Members get out of this sort of exchange, we have reached the point at which the Leader of the House, without losing face, by doing his duty and helping his colleagues in the Government, could say that if he could get Clause 3 tonight he would consider giving half a day—[HON. MEMBERS: "No, no."] Well, the Leader of the House would get the support of hon. Members like myself on the Opposition benches. At the moment, the Leader of the House cannot have my support, because he is being unreasonable. I must say to my hon. Friends that if they did not accept my solution, there is a chance that they would be unreasonable. That is the position which I believe the Leader of the House could legitimately take. If he could get, say, Clause 2 and agree to set aside another

  1731
  day or half a day on Report, I believe that that offer would be accepted.
  I urge the Leader of the House to take that reasonable and sensible line in the light of all that has happened. If he did I am convinced that he would get the co-operation of the whole Committee.
  Mr. R. J. Maxwell-Hyslop: This debate has proved to be of such absorbing interest that during the course of the last three speeches Government support on the back benches has increased from 13 to 20. This shows that the debate on the Motion is far from being run into the ground.
  The basic issue is that a certain amount of debating from this side of the Committee has enabled right hon. Gentlemen opposite, who do not know their own case, to send out their Parliamentary Private Secretaries to get them further elucidation. When, however, time and time again, their P.P.S.s come back without the answers which those right hon. Gentlemen seek, it is right that the Committee should report Progress so that those who are conducting the Bill from the Government Front Bench can decide what they are endeavouring to do in their own Bill. If they have not decided that, how can they expect to convince the Committee?
  The hon. Member for Poplar (Mr. Mikardo) used the analogy of people being asked to work overtime in a factory, but it would be unreasonable to ask people in a factory to work overtime when the foreman does not know how to read his own drawings. That is the analogy here.
  Mr. Eric S. Heffer: The hon. Member has never worked in a factory.
  Mr. Maxwell-Hyslop: As it happens, I worked in a factory for six years. Despite the disparaging remarks of the Attorney-General, it was a factory which, in six years, increased its exports from £15·7 million to £57 million, in an industry which, despite what the right hon. and learned Gentleman said, drove two of the largest American companies right out of the industry and reduced
  1732
  a subsidiary of General Motors to taking a licence.
  The Government cannot expect to make progress if they do not know their own case. It would have been obvious to the Leader of the House, had he been here, that his own Front Bench speakers did not know their case and that they could not get the answers for their case from their professional advisers. That is why the debate has lasted so long and to such little purpose.
  Mr. Selwyn Lloyd: I am very disappointed at the attitude of the Leader of the House. I know something of the difficulties of that position. It depends a good deal upon the good will and co-operation of the Opposition, but it also means that in government one must give and help a little.
  The whole trouble today has been that from the beginning the Patronage Secretary and right hon. Gentlemen opposite have stated that they intended to get the Bill—the whole of it—today. That was a completely unreasonable proposition. I do not think that any hon. Member, on either side, thinks it reasonable to take a Bill of this sort, the whole of the Committee stage and Report, with the difficulty of having to put in manuscript Amendments, of which we have a lot to put in, if we reach Report tonight, and Third Reading. It is completely unreasonable and an insult to the intelligence of the Committee to expect it to do all this in one day.
  As long as the Leader of the House exhibits this inflexible attitude, he is in for serious trouble. It needs a bit of give and take to get Government business through. We do not intend to obstruct or to delay unreasonably, but we mean to see that legislation gets proper consideration. Under the Government's timetable, it was impossible for the Bill to get proper consideration and we intend to see that it does. Unless the Leader of the House is a little more forthcoming than he has been, I shall ask my right hon. and hon. Friends to divide in support of the Motion.
  Question put:—
  The Committee divided: Ayes 135, Noes 171.

  Division No. 41.]

  AYES

  [12.25 p.m.

  Agnew, Commander Sir Peter

  Gilmour, Sir John (East Fife)

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

  Alison, Michael (Barkston Ash)

  Glover, Sir Douglas

  Miscampbell, Norman

  Allan, Robert (Paddington, S.)

  Goodhart, Philip

  Mitchell, David

  Allason, James (Hemel Hempstead)

  Grant, Anthony

  Monro, Hector

  Anstruther-Gray, Rt. Hn. Sir W.

  Grant-Ferris, R.

  More, Jasper

  Astor, John

  Grieve, Percy

  Morrison, Charles (Devizes)

  Awdry, Daniel

  Griffiths, Eldon (Bury St. Edmunds)

  Mott-Radclyffe, Sir Charles

  Balniel, Lord

  Griffiths, Peter (Smethwick)

  Murton, Oscar

  Batsford, Brian

  Grimond, Rt. Hn. J.

  Neave, Airey

  Bennett, Sir Frederic (Torquay)

  Gurden, Harold

  Noble, Rt. Hn. Michael

  Berry, Hn. Anthony

  Hall-Davis, A. G. F.

  Page, R. Graham (Crosby)

  Biggs-Davison, John

  Hamilton, Marquess of (Fermanagh)

  Peel, John

  Bingham, R. M.

  Harris, Frederic (Croydon, N.W.)

  Percival, Ian

  Birch, Rt. Hn. Nigel

  Harvie Anderson, Miss

  Peyton, John

  Bossom, Hn. Clive

  Hawkins, Paul

  Pickthorn, Rt. Hn. Sir Kenneth

  Boyd-Carpenter, Rt. Hn. J.

  Heald, Rt. Hn. Sir Lionel

  Pitt, Dame Edith

  Boyle, Rt. Hn. Sir Edward

  Higgins, Terence L.

  Pounder, Rafton

  Brinton, Sir Tatton

  Hiley, Joseph

  Powell, Rt. Hn. J. Enoch

  Bromley-Davenport, Lt.-Col. Sir Walter

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

  Price, David (Eastleigh)

  Brown, Sir Edward (Bath)

  Hirst, Geoffrey

  Quennell, Miss J. M.

  Buchanan-Smith, Alick

  Hobson, Rt. Hn. Sir John

  Rawlinson, Rt. Hn. Sir Peter

  Buck, Antony

  Hogg, Rt. Hn. Quintin

  Redmayne, Rt. Hn. Sir Martin

  Butcher, Sir Herbert

  Hobson, H. E.

  Ridley, Hn. Nicholas

  Carlisle, Mark

  Hornby, Richard

  Rodgers, Sir John (Sevenoaks)

  Carr, Rt. Hn. Robert

  Hornsby-Smith, Rt. Hn. Dame P.

  Roots, William

  Channon, H. P. G.

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

  Scott-Hopkins, James

  Chataway, Christopher

  Irvine, Bryant Godman (Rye)

  Sharples, Richard

  Clark, Henry (Antrim, N.)

  Jenkin, Patrick (Woodford)

  Taylor, Frank (Moss Side)

  Clark, William (Nottingham, S.)

  Johnston, Russell (Inverness)

  Thorpe, Jeremy

  Costain, A. P.

  Jopling, Michael

  Turton, Rt. Hn. R. H.

  Crawley, Aidan

  Joseph, Rt. Hn. Sir Keith

  van Straubenzee, W. R.

  Crosthwaite-Eyre, Col. Sir Oliver

  Kaberry, Sir Donald

  Vaughan-Morgan, Rt. Hn. Sir John

  Crowder, F. P.

  Kitson, Timothy

  Walker, Peter (Worcester)

  Currie, G. B. H.

  Lancaster, Col. C. G.

  Wall, Patrick

  Davies, Dr. Wyndham (Perry Barr)

  Legge-Bourke, Sir Harry

  Ward, Dame Irene

  d' Avigdor-Goldsmid Sir Henry

  Lloyd, Rt. Hn. Selwyn (wirral)

  Wearherill, Bernard

  Deeds, Rt. Hn. W. F.

  Lucas-Tooth, Sir Hugh

  Williams, Sir Rolf Dudley(Exeter)

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

  MacArthur, Ian

  Wilson, Geoffrey (Truro)

  Errington, Sir Eric

  Mackenzie, Alasdair (Ross & Crom'ty)

  Wise, A. R.

  Fisher, Nigel

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

  Woodnutt, Mark

  Fletcher-Cooke, Charles (Darwen)

  McLaren, Martin

  Wylie, N. R.

  Fletcher-Cooke, Sir John (S' pton)

  Maitland, Sir John

  Younger, Hn. George

  Gardner, Edward

  Maude, Angus

  TELLERS FOR THE AYES:

  Giles, Rear-Admiral Morgan

  Maxwell, Hyslop, R. J.

  Mr. Ian Fraser and Mr. F. Pym.

  NOES

  Abse, Leo

  Corbet, Mrs. Freda

  Griffiths, David (Rother Valley)

  Alldritt, W. H.

  Crawshaw, Richard

  Hamilton, James (Both well)

  Allen, scholefield (Crewe)

  Crosland, Anthony

  Hannan, William

  Armstrong, Ernest

  Cullen, Mrs. Alice

  Harper, Joseph

  Atkinson, Norman

  Dalyell, Tam

  Harrison, Walter (Wakefield)

  Bacon, Miss Alice

  Davies, G. Elfed (Rhondda, E.)

  Hart, Mrs. Judith

  Bagier, Gordon A. T.

  Delargy, Hugh

  Hattersley, Roy

  Barnett, Joel

  Dell, Edmund

  Hayman, F. H.

  Baxter, William

  Dempsey, James

  Hazell, Bert

  Beaney, Alan

  Dodds, Norman

  Heffer, Eric S.

  Bence, Cyril

  Doig, Peter

  Horner, John

  Bennett, J. (Glasgow, Bridgeton)

  Driberg, Tom

  Houghton, Rt. Hn. Douglas

  Binns, John

  Dunn, James A.

  Howarth, Harry (Wellingborough)

  Bishop, E. S.

  Dunnett, Jack

  Howarth, Robert L.(Bolton, E.)

  Blackburn, F.

  Edwards, Robert (Bilston)

  Howie, W.

  Blenkinsop, Arthur

  English, Michael

  Hoy, James

  Boston, T. G.

  Ennals, David

  Irving, Sydney (Dartford)

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

  Ensor, David

  Jackson, Colin

  Braddock, Mrs. E. M.

  Evans, loan (Birmingham, Yardley)

  Jones, Dan (Burnley)

  Bradley, Tom

  Fernyhough, E.

  Jones, Rt. Hn. Sir Elwyn(W. Ham, S.)

  Bray, Dr. Jeremy

  Fitch, Alan (Wigan)

  Jones, J. Idwal (Wrexham)

  Brown, Rt. Hn. George (Belper)

  Fletcher, Ted (Darlington)

  Jones, T. W.(Merioneth)

  Brown, Hugh D. (Glasgow, Provan)

  Floud, Bernard

  Kelley, Richard

  Brown, R. W. (Shoreditch & Fbury)

  Foley, Maurice

  Kenyon, Clifford

  Buchan, Norman (Renfrewshire, W.)

  Foot, Sir Dingle (Ipswich)

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

  Buchanan, Richard

  Foot, Michael (Ebbw Vale)

  Kerr, Dr. David (W' worth, Central)

  Butler, Mrs. Joyce (Wood Green)

  Ford, Ben

  Lawson, George

  Carmichael, Neil

  Galpern, Sir Myer

  Ledger, Ron

  Carter-Jones, Lewis

  Ginsburg, David

  Lee, Rt. Hn. Frederick (Newton)

  Chapman, Donald

  Gourlay, Harry

  Lee, Miss Jennie (Cannock)

  Coleman, Donald

  Gregory, Arnold

  Loughlin, Charles

  Conlan, Bernard

  Grey, Charles

  McBride, Neil

  1734

  1735

  MacColl, James

  Page, Derek (King's Lynn)

  Stones, William

  McGuire, Michael

  Palmer, Arthur

  Swain, Thomas

  McKay, Mrs. Margaret

  Park, Trevor (Derbyshire, S.E.)

  Swingler, Stephen

  MacKenzie, Gregor (Rutherglen)

  Parkin, B. T.

  Thomas, George (Cardiff, W.)

  MacMillan, Malcolm

  Pentland, Norman

  Thornton, George (Dundee, E.)

  MacPherson, Malcolm

  Popplewell, Ernest

  Tinn, James

  Mahon, Peter (Preston, S.)

  Rhodes, Geoffrey

  Tomney, Frank

  Mahon, Simon (Bootle)

  Roberts, Goronwy (Caernarvon)

  Urwin, T. W.

  Mallalieu, E. L.(Brigg)

  Robertson, John (Paisley)

  Varley, Eric G.

  Manuel, Archie

  Rodgers, William (Stockton)

  Wainwright, Edwin

  Mendelson, J. J.

  Rogers, George (Kensington, N.)

  Walden, Brian (All Saints)

  Mikardo, Ian

  Rose, Paul B.

  Walker, Harold (Doncaster)

  Milne, Edward (Blyth)

  Ross, Rt. Hn. William

  Wallace, George

  Molloy, William

  Rowland, Christopher

  Watkins, Tudor

  Morris, Charles (Openshaw)

  Sheldon, Robert

  Wells, William (Walsall, N.)

  Morris, John (Aberavon)

  Shore, Peter (Stepney)

  Wilkins, W. A.

  Murray, Albert

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

  Willey, Rt. Hn. Frederick

  Newens, Stan

  Short, Mrs. Renée(W'hampton,N.E.)

  Williams, Alan (Swansea, W.)

  Noel-Baker, Francis (Swindon)

  Silkin, John (Deptford)

  Williams, Mrs. Shirley (Hitchin)

  Oakes, Gordon

  Silverman, Julius (Aston)

  Williams, W. T.(Warrington)

  Ogden, Eric

  Silverman, Sydney (Nelson)

  Wilson, William (Coventry, S.)

  O'Malley, Brian

  Slater, Mrs. Harriet (Stoke, N.)

  Woof, Robert

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

  Slater, Joseph (Sedgefield)

  Yates, Victor (Ladywood)

  Orme, Stanley

  Snow, Julian

  Oswald, Thomas

  Solomons, Henry

  TELLERS FOR THE NOES:

  Owen, Will

  Spriggs, Leslie

  Mr. Ifor Davies and Mr. McCann.

  Clause 2.—(PROVISION FOR SALARIES OF CERTAIN MINISTERS. 1937 C. 38.)
  Mr. Houghton: I beg to move Amendment No. 35, in page 1, line 14, after "to", to insert:
  "the Chief Secretary to the Treasury and to".
  The Temporary Chairman (Mr. J. C. Jennings): I think that it would be for the convenience of the Committee if this Amendment and Amendment No. 36, in page 1, line 17, to leave out paragraph (c), were discussed together.
  Mr. Houghton: Because of the dwindling numbers on the benches opposite, and the modest and uncontroversial nature of the Amendments, we might make a little speedier progress. The Amendment would enable the Prime Minister to have the same degree of flexibility in determining the salary of the Chief Secretary as he has in determining the salaries of Ministers of State. It was the Conservative Government who created the office of Chief Secretary to the Treasury, but it was not necessary for them to create a separate paid office of Chief Secretary because they used for that purpose another office already provided for—the Paymaster-General.
  My right hon. Friend the Prime Minister has appointed to the office of Paymaster-General a right hon. Gentleman who is not the Chief Secretary to the Treasury, so it was necessary to make separate provision for the Chief Secretary for the first time. That was done by relying on the definition of, and provision for. Ministers of State in Section 13(1) of the
  1736
  House of Commons Disqualification Act. 1957. When the Government framed the Bill they decided that it would be appropriate to set out in it, for the approval of the House, just what the Prime Minister had done—no more; no less. Therefore, the office of Chief Secretary was separately provided for.
  It is provided for in subsection (1,c) and, as hon. and right hon. Gentlemen will see, the reference to Chief Secretary to the Treasury is to be found on page 5, line 9, in Schedule 2. Since the Chief Secretary has been appointed at a salary of £4,500, as provided for in subsection (1,c) he is distinguishable from Ministers of State, for whom there is provision in subsection (1,b) for the salaries to be fixed by the Prime Minister at an amount not exceeding in any case £5,000. In that respect the Chief Secretary is distinguishable from Ministers of State, because Ministers of State may be given salaries not exceeding £5,000 a year, whereas the Chief Secretary has a fixed salary of £4,500.
  In looking at the Bill which implements the Report of the Lawrence Committee—the Ministerial Salaries and Members' Pensions Bill, which was introduced today—we find that it will be necessary to distinguish the Chief Secretary from all other Ministers, in respect of salaries. It now seems that it would be more convenient to include the Chief Secretary in the provision for Ministers of State. [HON. MEMBERS: "Why?"] So that the Prime Minister can have the same flexibility in fixing the salary of

  1737
  the Chief Secretary as he already has in fixing the salaries of Ministers of State.
  I would also refer to the comments made by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) in the Second Reading debate about the office of Chief Secretary. He said that he thought that the Chief Secretary to the Treasury should be in the Cabinet. He also said that he must deal with his senior colleagues from a position of equality, and that in this change the Minister is deliberately downgraded, and so on. It would be impossible to include the Chief Secretary to the Treasury in the Cabinet if he remained in a position on the salary list below that of Minister of Cabinet rank. [HON. MEMBERS: "Why?"] I am not suggesting for a moment that my right hon. Friend has any intention of putting the Chief Secretary in the Cabinet at present. I have no means of knowing what his wishes or intentions may be, but if the Committee accepts the Amendment, then for this and subsequent Parliaments a Chief Secretary thus appointed would be in a position to go into the Cabinet if the Prime Minister wished, because the Prime Minister has the power, under Clause 2(1,b), to fix the salary of the Chief Secretary at an amount not exceeding £5,000 a year, which is that of a Minister of Cabinet rank—
  Several Hon. Members Several Hon. Members rose—
  Mr. Houghton: No, no, no, no.
  Mr. Hirst: Give way.
  Mr. Houghton: The hon. and gallant Member for New Forest (Sir O. Crosthwaite-Eyre) has just come into the Chamber and I will certainly not give way to him.
  Mr. Charles Fletcher-Cooke Mr. Charles Fletcher-Cooke (Darwin) rose—
  The Temporary Chairman: Order. The hon. Member knows quite well that if the Minister will not give way he must resume his seat.
  Several Hon. Members Several Hon. Members rose—
  Colonel Sir Oliver Crosthwaite-Eyre: On a point of order. I have been present at the debate for a long time.
  The Temporary Chairman: That is not a point of order.
  Mr. Houghton: I hoped that the Committee wished to make some progress.
  Mr. Hirst: Stop being arrogant.
  Mr. Houghton: I was in the course of a perfectly reasonable argument. If hon. Members have questions to ask, we can deal with them during the debate.
  Sir O. Crosthwaite-Eyre Sir O. Crosthwaite-Eyre rose—
  Hon. Members: Sit down.
  Mr. Houghton: See what humbug we have all been listening to about wanting to make progress. What wretched hypocrites hon. Members are. They never intended to make progress.
  The Temporary Chairman: Order. The right hon. Gentleman must confine himself to the Amendment.
  Sir Herbert Butcher: On a point of order. I ask you, Mr. Jennings, whether the word "hypocrites" is customary Parliamentary language.
  The Temporary Chairman: It is a regrettable word to use and I think that the right hon. Gentleman should be magnanimous enough to withdraw it.
  Mr. Michael Foot: On a point of order. Is it not a fact that you are called upon to rule on order, Mr. Jennings, not on what may be your opinion on magnanimity?
  The Temporary Chairman: The word "hypocrites" is one of the proscribed words in the House. On that basis I gave my Ruling. It was not an opinion, it was not a thought. It is the tradition of the House that the use of the word is proscribed.
  Mr. Charles Loughlin: Further to that point of order. Is not the use of the word "hypocrite" proscribed only when it applies to an individual? If that is so, in view of the fact that my right hon. Friend attributed it to all hon. Members opposite in general—
  Mr. Michael Foot: Accurately.
  Mr. Loughlin:—and accurately—is not the word in order?
  The Temporary Chairman: If the hon. Member looks at page 471 of Erskine May he will find that the word "hypocrites" is used in the plural. I am, therefore, perfectly justified in my Ruling.
  Hon. Members: Withdraw.
  12.45 a.m.
  Mr. Houghton: As I was saying, I was in the course of explaining to the Committee not only what the Amendment proposes to do—
  Hon. Members: Withdraw.
  Sir H. Butcher: Having ruled, Mr. Jennings, that "hypocrite", in the plural, is not permitted, may I ask you to request the right hon. Gentleman to withdraw it?
  The Temporary Chairman: I have so ruled that the word "hypocrites", used in the plural, is a proscribed word, and I ask the right hon. Gentleman to withdraw it.
  Mr. Houghton: I did not use the word in the plural.
  The Temporary Chairman: Order, order. If the word was not used in the plural, then the case is made much worse. I ask the right hon. Gentleman to withdraw it and let us try to get on with the business.
  Mr. Houghton: Since you have now formally asked me to withdraw it, of course, I most readily do so.
  I was saying, when this most unhappy interlude blew up, by way of explanation of this Amendment, why the Government had thought it proper for it to be put down. We hope that it will appeal to the Committee as a convenient and suitable course to take.
  When hon. Members study the Ministerial Salaries and Members' Pensions Bill, they will see that the Chief Secretary to the Treasury is out on a limb. He is specially listed, and has a separate salary arrangement fixed for him, and it would be more convenient if he could be listed with other Ministers of State. It would certainly give the Prime Minister more flexibility. That is all. There is nothing sinister about this at all. It is not imperative that the Amendment should be made, but it
  1740
  would be convenient and appropriate if, in the circumstances, it is made.
  The present Chief Secretary has a salary at present below £5,000 in order to distinguish him from other Ministers of Cabinet rank who are receiving £5,000. Existing provisions limit the salary which the Prime Minister may make to Ministers of State to £5,000; although it can be £5,000, and can then be an office of Cabinet rank. However, the Chief Secretary to the Treasury could not be included in the Cabinet, in accordance with the conventions of the matter, if he remained on a salary which was permanently below that for Ministers of Cabinet rank.
  I hope that the Committee will now feel that this is an appropriate Amendment, and allow us to add it to the Bill.
  Mr. Selwyn Lloyd: I welcome the fact that the Chancellor of the Duchy has moved this Amendment and, incidentally, I am glad that reinforcements have appeared on the Treasury Bench, including the right hon. Gentleman the Member for Belper (Mr. G. Brown), who will, we hope, bring to our business that moderation and sense of calm deliberation for which he is famed. I should like to know why £4,500 was ever put in the Bill to begin with—
  Mr. Houghton: I should like to answer that straight away. It was because the salary of the Chief Secretary is £4,500, and it was thought better to include in the Bill the existing position of the Chief Secretary.
  Mr. Selwyn Lloyd: That is not quite an answer to the question. I understand why it was put in the Bill, but why was the salary ever fixed at £4,500? That was not the case before. As the right hon. Gentleman has said, when my right hon. Friend was Chief Secretary he was also Paymaster-General—and we are all grateful that the present Paymaster-General is not also Chief Secretary. That does not quite dispose of the point of having it put at £4,500. We are surprised that it was done, and that the salary was ever fixed at that amount.
  I think it an improvement to move the Chief Secretary up to paragraph (b). It gives him the hope of better things,

  1741
  but I must say that it only puts him in a position in which his salary is fixed by the Prime Minister. I cannot believe that to be satisfactory. Whatever may have been the practice under any Government before, I do not think that it is right that the salaries of Ministers should be decided by the Prime Minister according to their personality and not according to their position. It is an interesting point, but it is an important constitutional one, and I do not think that it means the position of Chief Secretary is necessarily improved.
  What we sought to establish on Second Reading was that this was an important post; that its purpose was to relieve the Chancellor of the Exchequer of some of his heavy responsibilities for dealing with his colleagues over matters of public expenditure. Now that the right hon. Member for Belper will not have the Chancellor on the National Economic Development Council, the Chancellor may perhaps have more time to deal with matters of public expenditure.
  I cannot believe that it is an improvement, or that the right hon. Gentleman means it to be a permanent set-up, but it makes nonsense of the N.E.D.C. that the Minister responsible for monetary and fiscal policy not to be a member of that Council. Perhaps it is a matter for debate on another occasion but, up to the present, the right hon. Gentleman has got his way and has succeeded in excluding the Chancellor of the Exchequer.
  I believe that the responsibility of the Chancellor for individual items of expenditure has, in the past, made it difficult for him to attend to this as much as he attends to his other duties of dealing with economic policy, fiscal policy and monetary policy. It was a substantial improvement in the organisation of the Government for the Chief Secretary to be a member of the Cabinet, and to be able to deal with his colleagues on a basis of equality over matters of expenditure. I do not think that it is satisfactory to have the Chief Secretary in a degraded position as compared with his colleagues with whom he deals.
  I admit that this is an improvement, but I should have been much happier had there been a clear statement that it
  1742
  is the intention of the Government that the Chief Secretary should be a member of the Cabinet. I acknowledge that the Government have come some way to meeting my point of view and, subject to the many questions that my hon. Friends will no doubt have to address to the right hon. Gentleman on this interesting point, I should be disposed to advise them not to vote against the Amendment.
  Mr. Fletcher-Cooke: The Chancellor of the Duchy of Lancaster has advanced the very strange argument for giving the Prime Minister an option in the matter of wanting the Chief Secretary to come into the Cabinet, and that no Chief Secretary could be a member of the Cabinet unless he was paid at least £5,000 a year. That is a new doctrine, and one which we do not understand. No doubt the Chancellor of the Duchy of Lancaster, with his long knowledge of English constitutional history, will recollect that from 1841 until 1846 the Duke of Wellington was a member of Sir Robert Peel's Government without taking any salary at all, and it did not seem to inhibit him from giving the views and accepting the responsibilities that the Duke of Wellington normally did.
  I do not know why a man cannot be a member of the Cabinet if he is receiving only £4,500 a year. That was the right hon. Gentleman's chief argument, and if ever there was a feebler argument than that I should like the Committee to name it. There is no special quality, no charismatic quality, in a salary of £5,000 in order to be in the Cabinet. Some get more, and no doubt in the past some have had less. If that is the only argument, it is not enough. To increase the number of people whose salary is at the whim of the Prime Minister is an extremely dangerous constitutional state of affairs.
  I do not know why Ministers of State should be able to have their salaries varied by the Prime Minister, but no doubt I should be ruled out of order if I were to elaborate that, which I would be perfectly happy to do and will proceed to do unless I am ruled out of order. I can hang this argument on the peg of the Chief Secretary to the Treasury, whom we all admire and like very much. As is well known, he is a dedicated European. He believes strongly, and has said so on many occasions, that we should join the European Economic Community.
  The Temporary Chairman: I hope that the hon. and learned Member will get back to the narrow path of the Amendment, and leave Europe alone.
  Mr. Fletcher-Cooke: Bowing to your Ruling, Mr. Jennings, I am trying to imagine circumstances in which the Prime Minister might be so angry with the Chief Secretary to the Treasury that he might seek to reduce his salary. The Amendment would give him power to do so. It would give him power to punish the Chief Secretary if he were to revert to his European ideal and therefore I think it is extremely relevant—
  Mr. Maxwell-Hyslop: Might the Prime Minister not wish to punish the Chief Secretary to the Treasury for not being present in the Committee when the Committee would have liked to have seen him?
  Mr. Fletcher-Cooke: It might well be that the Chief Secretary might revert to his previous loyalties to the European ideal and might wish to promulgate his previous ideas. I am glad that the deputy Prime Minister is here, because this is a matter dealing with the machinery of government. We have been most surprised, on this side of the Committee, that the deputy Prime Minister, who is at present carrying on the burdens of the premiership, has not been here at all, as far as I know, during the course of the afternoon and evening on a Bill that concerns the machinery of government. It is interesting that at one o'clock in the morning he should decide to come here. [Interruption.]
  Mr. Loughlin: On a point of order. Is the word "renegade" in the list of words which it is out of order to use in this Chamber?
  The Temporary Chairman: I did not hear the word used, but to my knowledge it is not on the list of proscribed expressions.
  Mr. Fletcher-Cooke: It is a dangerous principle that the Prime Minister may vary either upwards or downwards the salary of a Minister according to his whim, and this is what the Amendment seeks to permit. It seeks to add to the number of Ministers whom the Prime Minister may either promote or reduce in salary without presenting the matter
  1744
  to the House or in any way amending legislation, and without even laying an Order.
  It seems to me that we should not increase the numbers. If anything, we should reduce them. If we are urged, as we are by the Chancellor of the Duchy of Lancaster, that the only reason for doing this is that the Chief Secretary to the Treasury may be asked to be a member of the Cabinet, which I would very much welcome, it seems to me a very inferior and inadequate reason. I therefore oppose it.
  1.0 a.m.
  Mr. Maxwell-Hyslop: Flexibility of salary is applicable least of all to the Chief Secretary to the Treasury, because I understand it to be his function to ensure that the budgets of the various Departments are strictly adhered to. If his own salary is not fixed, but is under the control of someone who is not under the control of the Chief Secretary, this puts him in a most embarrassing position. It is disappointing that the hon. Gentleman is not here. If it is asked why he should be, I answer with this analogy.
  Later in the Session, the House will probably have to discuss the salaries of individual Members, and, if the same precedent is followed, there will not be anyone in the Chamber to discuss them. Apparently, it is the policy of the Government not to have anyone on the Front Bench who can speak with firsthand knowledge of the subjects under debate. This does not augur well for progress either on this Bill or on any other which may be presented in this Parliament, short though we hope it will be.
  We understand that Amendment No. 36 is consequential on No. 35, but we have yet to perceive the consequences on which it is sought to justify No. 35. We have heard the proposition that, constitutionally, people without salary or people with lower salaries cannot be in the Cabinet, but this was based on nothing but the desire of the Chancellor of the Duchy to produce an argument, however hollow. He has not justified it at all. The Prime Minister is paid a lot more than other members of the Cabinet. Does this mean that the other members must now be brought up to his level?

  1745
  No case for flexibility in this respect has been made out. A very good case has often been made for greater control over public expenditure, and this, I promise the right hon. Gentleman, the Government will hear about increasingly from this side of the Committee. Already, there may well be something amiss in the way of unauthorised expenditure. An Amendment moved specifically to enable public expenditure further to be increased, without the sanction of the House and, presumably, without even a Royal Warrant—I am not sure how it will be done—augurs badly for the task which the Chef Secretary has specifically in his charge.
  Sir Frederic Bennett: The Chancellor of the Duchy of Lancaster can hardly blame us if we take a little time in asking for elucidation. He ought to know that it is no good making a rather brief exposition and then making Hitlerian gestures across the Floor in order to try to silence critics. If he does that, he must expect questions and speeches afterwards. If he had given way, I for one should not have wanted to ask some questions now. [Interruption.] Interjections of that kind from "Mutt and Jeff" below the Gangway have not the slightest impression on me, except that they make me more assiduous in probing these matters than I otherwise would be.
  Where is the constitutional rule to be found in history, statute or common law which lays down that a Minister must have a certain salary if he is to be a member of the Cabinet? If the right hon. Gentleman wants this stage of the Bill to be passed, he must give an explanation.
  Why are the Government having this Amendment at all? Presumably they have given the Bill the same careful thought that they have given to all their Measures so far. All their Measures have been carefully thought out and discreetly handled at home and abroad so that everybody is satisfied with the diplomatic way in which the Government have handled them. Why is there, then, a sudden Amendment in the name of the right hon. Gentleman? What has happened to make the Amendment necessary?
  It has already been remarked that the Chief Secretary, who will benefit from
  1746
  this, is not here. We do not know the arrangements, but I should have thought that the Minister who is the subject of this keen and eager debate might have been here to hear his fate decided. This brings me to my next point, that we understand that even if the right hon. Gentleman were here and heard his salary decided, we could give him only an approximate figure because apparently the Prime Minister is able to vary it at any moment he wishes to do so. Is that salary to be altered annually, quarterly or monthly, or in what circumstances? Will it be according to whether the right hon. Gentleman is doing a good or a bad job? In what circumstances, as the Prime Minister can fix it, is the salary to be fixed or varied?
  Unless these questions are answered, I shall have great delight in contemplating, during the next few minutes, whether there are other questions to be asked before we can make progress.
  Mr. Grant-Ferris: May I ask you, Mr. Jennings, whether it would be in order to ask the right hon. Gentleman a question relating to paragraph (c), which appears in the Bill in italics, and its relationship to paragraph (b), which is not in italics? Would it be in order for me to ask that question now, or should I leave it until we reach the Question, "That the Clause stand part of the Bill", in which case I can go out and prepare a longer speech?
  The Temporary Chairman: If it is relevant to the Amendment, it is all right. Otherwise, it will be all right on the Question, "That the Clause stand part of the Bill".
  Mr. Grant-Ferris: I am sure that you will stop me if I ought to stop, Mr. Jennings, and I shall gladly sit down and wait. I was about to ask the right hon. Gentleman why the words in paragraph (c) are printed in italics. I believe—I do not know whether I am right—that it means that another place cannot amend the paragraph. If so, what is the subtle difference in the case of the words in paragraph (b) which are not in italics? Am I to understand that they can be altered in another place?
  Mr. H. P. G. Channon: I hope that the Chancellor of the Duchy will appreciate that there is a

  1747
  very serious point behind this Amendment. The Opposition appreciate very much that the seriousness of the Amendment has been shown by the fact that we have the First Secretary of State with us. He has been here on many occasions late in the evening when matters like this have been discussed. We are delighted that he has taken over the duties of the Leader of the House. He has obviously been summoned here to take charge of our proceedings.
  At an earlier stage I wanted to move an Amendment to make it inevitable for the Chief Secretary to the Treasury automatically to have a salary of £5,000, but it would probably have been outside the terms of the Money Resolution had I moved it at that time. I wanted to do it because I thought that the Chief Secretary to the Treasury had been very unfairly treated. I say this on two counts. Perhaps the Chancellor of the Duchy will correct me if I am wrong, but I think that the hon. Member for Gloucester (Mr. Diamond) is the first Chief Secretary to the Treasury ever not to have been made one of Her Majesty's Privy Councillors. It is a very serious point.
  The second reason why the Chief Secretary to the Treasury has been unfairly treated is because he has not been given the same salary as so many of his more senior colleagues. But my illusions were somewhat shattered when we came to the Committee and Report stages of the Finance Bill and had the privilege and pleasure of listening to some of the Chief Secretary's speeches. Any Hon. Member present then would agree that it is doubtful whether the Chief Secretary did earn the salary of £4,500 he is to be paid to come to the House.
  The serious point in this, regardless of the practice of the previous Government, is whether or not it should be proper for the First Lord of the Treasury to be able to fix the salaries of the junior Ministers who serve beneath him. I do not know whether junior Ministers would like their departmental Ministers to be able to fix their salaries. I hope we shall have some justification for this, because it seems to me to be totally reprehensible.
  1748
  The Chief Secretary has important functions. He should be placed on the same level as other Ministers of State. They should not be able to have their salaries arbitrarily fixed. They should have fixed salaries and the same sort of salaries as members of the Cabinet. I hope that the Chancellor of the Duchy of Lancaster when he replies will deal with this constitutional point.
  Mr. A. R. Wise: I am reluctant to take part in this debate at all. Frankly, I could not care less what public money is wasted on these Ministers of the Crown, because I am convinced that it will not be for long. I think that we shall be able to put this right in due course.
  On the other hand, the Chancellor of Duchy of Lancaster packed so much nonsense into such a short time, that I really did feel compelled to make some observations on what he said. The first thing I wish to, refer to is his astonishing statement about parity of salaries in the Cabinet. This is really carrying union rules too far. The Chancellor of the Duchy has only got to look at the past records of Government after Government for a large number of years to find out that members of the Cabinet have had different salaries and have been none the worse for that. His is the shop steward outlook instead of the statesman's and I deeply regret that the right hon. Gentleman should have followed that.
  I do not think that our efforts to try to improve a bad Bill justified the reaction of the wolf howls, such as I have never heard before from a Minister, coming from him. I must say I enjoyed them and hope that I will hear more again. I was terrified, however, that the right hon. Gentleman was going to sling the water bottle across the House before his neighbour on the Treasury Bench had a chance to pour it over him and cool him down. We cannot really encourage this sort of attack which, I consider, would be unparliamentary.
  The other point I wish to bring up is that to allow salaries to be varied up and down at the will of the Prime Minister is not just constitutional nonsense, but constitutional treachery.
  1.15 a.m.
  Mr. Swain: On a point of order. Whilst appreciating the limited vocabulary of the hon. Member for Rugby (Mr. Wise), and sympathising with his apparent impediment, may I ask whether the word "treachery" is a proscribed word in the House of Commons?
  The Temporary Chairman: I did not hear the word "treachery", but if I had it would not have applied to any particular person. Therefore, I rule it to be within order in the term used.
  Mr. Robert Cooke: Further to that point of order. It would be greatly to the benefit of the Committee if you could read out the list of proscribed words, Mr. Jennings.
  The Temporary Chairman: If the hon. Member will see me I will give him a list of proscribed words.
  Mr. Robert Cooke: Further to that point of order. Would it be in order, during the course of the speech I hope to make if I am fortunate enough to catch your eye, to read out the list of proscribed words purely for the guidance of hon. Members and not about anyone in particular?
  The Temporary Chairman: Not on this Amendment.
  The Secretary of State for Scotland (Mr. William Ross: If, Mr. Jennings, you did not hear the word "treachery", how do you know the term in which it was applied?
  The Temporary Chairman: Hypothetical powers.
  Mr. Wise: I think, whatever the limitations of the hon. Member for Derbyshire, North-East (Mr. Swain), he is just capable of reading the list himself, but possibly only just. I see no reason why he should not be encouraged to do his own homework, although I would listen with pleasure to my hon. Friend the Member for Bristol, West (Mr. Robert Cooke) reading out the list of proscribed words to which I hope that, shortly, the word "leper" will be added.
  The suggestion that salaries can be varied up or down is astonishing. It is reducing the Committee to saying, "Ours but to do the Fhürer's will" in
  1750
  this matter. The Prime Minister has already reduced half his party to voiceless slaves and the Bill completes the process—unless, of course, next year the Prime Minister takes all the hon. Members below the Gangway into the Government as well.
  Mr. Swain: They would be more intelligent than the last Administration.
  Mr. Wise: The hon. Member suggests that this assemblage of 120 Members is more intelligent than the last Administration. I would be prepared to admit that it takes at least 120 hon. Members opposite to have the equivalent I.Q. of about 10 of ours.
  We have not had from the Chancellor of the Duchy of Lancaster replies to many of these pertinent questions. First, there is the constitutional problem which I hope he will deal with. Secondly, there is the question whether there is or is not to be any limitation of the Prime Minister's powers to vary salaries up or down, according to the state of his liver at breakfast time. I do not know whether the First Secretary of State can speak for his Führer in this matter, but I hope that somebody will be able to do so.
  There is another explanation I should like. The Bill was introduced less than five weeks ago. Surely those who drew it up—those who are supposed to be so much more intelligent than their predecessors—could have thought of the Chief Secretary's salary while doing so. Probably they forgot, or did not realise there was a Chief Secretary or something of that sort. Why, after five weeks, is it necessary to introduce an Amendment to a Bill which, presumably, was thought out before it was brought in? Or was it not thought out? Does this represent just one mad rush to pacify the intransigent element by giving them office at the earliest possible moment and then remembering afterwards that the mess has to be cleared up?
  These are pertinent questions and I hope that we are to have some answers to them before proceeding to the next Amendment. I also hope that the Committee will have the opportunity to divide twice—on the first Amendment and the second. Having defeated the first, we should vote for the second quite

  1751
  firmly in order to deprive the Chief Secretary of any salary. That would be just about as much as any right hon. Member on the Front Bench opposite is worth.
  Dame Patricia Hornsby-Smith: We have fixed by Statute the salaries which are paid to Ministers, Ministers of State, Secretaries of State and Parliamentary Secretaries. That there should be a fluctuation in salary of up to £5,000 for a particular Minister is a complete departure from our practice. I would not quarrel with the Chancellor of the Duchy of Lancaster, as some of my hon. Friends would, about withdrawing paragraph (c), because I agree with his second thought that the Chief Secretary to the Treasury should have the £5,000 which we customarily pay to members of the Cabinet.
  What I find repugnant, and what would be a great embarrassment, is the provision that the Prime Minister of the day should be able to chop and change the rate for the job for a specific appointment, so that a new Chief Secretary would not know until appointed whether he was to get more or less than his predecessor. I always thought that hon. Gentlemen opposite stuck rigidly to the principle that a man or woman should be paid the rate for the job.
  I can imagine the embarrassing circumstances which might arise if a Chief Secretary were promoted or went out of office and someone were appointed to succeed him. It would be no compliment to and no expression of confidence in the successor if he were to be paid less. He would be placed in an extremely invidious position in relation to the other members of the Cabinet who would know that they were to get £5,000 a year, or whatever might be the future fixed rate for the job.
  A very small category of Ministers would be at the disadvantage of having their salaries fixed by the Prime Minister of the day instead of being laid down by Statute, as has hitherto been our practice. Paying a newly appointed Chief Secretary a lower rate than his predecessor would place the unfortunate successor in an invidious position and it would be a departure from tradition. I hope that the right hon. Gentleman will reconsider his proposal.
  Mr. Bowden: May I, at this point, in rather calmer atmosphere, say that we have had discussions through the usual channels about further progress with the Bill, and I think that we have reached a reasonable compromise—that we should tonight complete Clause 2—the Clause now under discussion—and tomorrow, as first Order, take the whole of the remaining stages of the Bill by eight o'clock, which is the agreed time. After that, we would take the remaining stages of the Severn Tunnel Bill. If that is acceptable to the Opposition, I am quite sure that it is workable, that the Amendments could be discussed in detail, and we shall all get home rather earlier.
  The Temporary Chairman: We are discussing an Amendment. We are in the middle of one. If this is to be discussed, the right hon. Gentleman will have to move to report Progress.
  Mr. Bowden: Then I formally beg to move,
  "That the Chairman do report Progress and ask leave to sit again."
  Mr. Selwyn Lloyd: I cannot resist saying that had the Leader of the House adopted this attitude a little earlier in the day a good deal of time might have been saved. I certainly would be disposed to agree that it would be for the convenience of the Committee to try to complete Clause 2 tonight. In my judgment, four hours later today should be sufficient to conclude the remaining stages of the Bill.
  Mr. Grimond: I think that everybody will be obliged to the Leader of the House for his announcement. I am interested in the business due to come on last tomorrow, that is, the Motion on the Highlands and Islands Shipping Services. Is it intended to take that or not?
  Mr. Bowden: Yes. It is the intention to take that Motion.
  Mr. Hirst: If this arrangement has been made, there is not a great deal which I, as an ordinary back bencher, can say about it. As I said to the right hon. Gentleman earlier—firmly, but, I hope, respectfully—I appreciate his willingness to meet the Committee in this matter. I would like to make an appeal, none the less, for the future. If

  1753
  this arrangement is to be made—as it often has to be made by Governments with the Opposition—it should not be made so suddenly. It is very inconvenient to many hon. Members to be suddenly faced with a change of business on the same day—though not the same parliamentary day—in a matter of this kind. It should have been arranged for Monday.
  I hope that the right hon. Gentleman will give rather more consideration in future to the convenience of the House. It is extremely inconvenient for many hon. Members to be suddenly faced, at 1.30 in the morning, with the announcement that the business, effectively on this day—though not a Parliamentary day—is to be changed. This is a constitutional Bill. I hope that my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) will not mind my saying that he should not have agreed to this arrangement. I hope that he, too, will have more consideration for ordinary hon. Members in the future.
  I am deeply disturbed that this arrangement has been made, though I am grateful to the right hon. Gentleman for his intended courtesy to the House. I think, however, that he should also show more consideration for other hon. Members. He will find, I believe, that this arrangement is inconvenient to the majority of hon. Members here.
  The Temporary Chairman: Mr. McLoughlin.
  Mr. Loughlin: May I point out, for the purpose of the record, that my name is Loughlin? I do so with deep respect to you, Mr. Jennings.
  The Temporary Chairman: I apologise to the hon. Member for my mistake.
  Mr. Loughlin: I left the Chamber for a moment or two. I hope that my right hon. Friend will reconsider the question of reporting Progress when we have got Clause 2. Many of us on this side have been more than patient with hon. Members opposite, who have persistently obstructed by speeches—
  Mr. Wise: On a point of order. Am I not correct, Mr. Jennings, in saying that the use of the word "obstructed" is disorderly and should be withdrawn?
  The Temporary Chairman: I am sorry, but I cannot hear the hon. Member.
  Mr. Wise: Am I not correct, Mr. Jennings, in saying that the word "obstructed" is unparliamentary and should be withdrawn?
  The Temporary Chairman: I do not consider that unparliamentary. If we do no worse than that, we will get along happily.
  1.30 a.m.
  Mr. Loughlin: I am surprised that the hon. Member takes exception to a word which I used in a gentle manner. He should know, because he sometimes attends debates in the House of Commons—not very often, but sometimes—that my choice of language can be a little stronger than the word "obstruction" as used in that context. Hon. Members opposite have been making speeches that were unnecessarily long and were not always as closely related to the Amendments and the discussion as they should have been.
  Sir H. Butcher: On a point of order, Mr. Steele. Is not that a reflection upon the conduct of your predecessor in the Chair, and should it not be withdrawn?
  The Temporary Chairman (Mr. Steele): I am sorry, but I did not clearly hear what the hon. Member said.
  Mr. Loughlin: I merely said that the speeches of some hon. Members opposite were not as closely related to the Amendments as they should have been. I recollect that on a number of occasions this point has been raised in Committee and has been discussed.
  I cannot see why we should suddenly decide to go home at an early hour, at an hour which we have passed on a number of occasions when right hon. and hon. Members opposite occupied this side of the Committee, when they wanted to get the business through and they were prepared to keep us here until breakfast time. On a number of occasions in the last Parliament, when right hon. Gentlemen opposite were in charge of legislation, I well remember being here until breakfast time. In view of the remarks made by hon. Members opposite about the importance of tonight's legislation, the legislation that we discussed on those occasions was certainly, if I may take

  1755
  the word of hon. Members opposite for it, not as important as this legislation.
  I am rather surprised that the Leader of the House—
  Hon. Members: Oh.
  Sir F. Bennett: The hon. Member will not get a job.
  Mr. Loughlin: I not only will not get a job, but I will not get knighted, either. The services for knighthood have not yet been defined. I should like to know what they are. When I look at the benches opposite, and see the number of knights there—
  The Temporary Chairman: Order. We are discussing another kind of night.
  Mr. Loughlin: I thought that it would be a long day's night, but, unfortunately, it appears that it is not to be. I should have thought that my right hon. Friend would give us the opportunity of carrying on our debate until we reached some of the Clauses in which hon. Members on this side are particularly interested. We have been patient with hon. Members opposite in listening to the debate on the Clause in which they have been interested.
  I should like my right hon. Friend to reconsider the arrangement which, apparently, has been made. Instead of conceding to right hon. Gentlemen opposite, who are obviously so tired, the opportunity of going home, as they want to do, I do not see why we who are not so tired should not continue with our work. I do not see why we should be sent home simply because the right hon. and learned Gentleman the Member for St. Marylebone (Mr. Hogg) is fatigued as a result of the way in which he has been jumping up and down and shouting. I do not see why we should be treated in this manner.
  I hope that my right hon. Friend will not be too impetuous. The night is young. I would ask him not to succumb to the blandishments of hon. Members opposite, but, instead, decide that we shall get the Bill. If the Bill is necessary, as in the earlier part of the evening we said it is necessary, we ought to go all out to ensure that we on this side intend to govern completely. We ought to say to the people of Britain that certain
  1756
  legislation is necessary, that the situation with which we are faced is one of urgency, and that we are prepared to work, and to work additionally long hours, to carry out the mandate which has been given to us.
  I see no reason at all why this important Measure should not be got tonight—through Committee, Report, and Third Reading.
  Mr. Grant-Ferris: The hon. Member is not getting much support from his own side.
  Mr. Loughlin: I hope that some of my hon. Friends, having been so patient for so long, will be prepared to ensure that their voice will be heard and that even if we do not get the Bill hon. and right hon. Members opposite will still be here at breakfast time, because what they are worried about is that all their troops are going home, as one can see in Division after Division—
  Sir D. Glover: On a point of order. It seems to me, Mr. Steele, that though, as I admit, this was started by the Leader of the House, we are wildly out of order, As I understand, we are halfway through a discussion on an Amendment to Clause 2.
  The Temporary Chairman (Mr. Thomas Steele): The question whether this is out of order or not is a matter for the Chair.
  Mr. Loughlin: My hon. Friends are urging me to keep going. We are in Committee, and one may make 10 speeches. I have made 10 speeches in Committee before on a matter when it was necessary. [Interruption.] I can wait till hon. Gentlemen have finished their private committee meeting. I am quite prepared to stand here and wait till they keep order. I want, finally, to say that hon. Members opposite are desirous of finishing now only because of the reduction of their numbers here, as can be ascertained in each Division. The only reason they want to go home is that they do not want to be exposed further as unable to maintain real opposition. They are not an Opposition. They are as incapable in opposition as they were in Government. Let us forget this nonsense about going home. Let us stay and complete the proceedings on the Bill.
  Mr. Robert Cooke: While the Leader of the House is considering what to do about that somewhat hysterical outburst from the hon. Member for Gloucestershire, West (Mr. Loughlin) perhaps I could ask him to put the record straight. I assume that it needs to be put straight. The right hon. Gentleman referred to some of the issues tomorrow being concerned with the Severn Tunnel Junction Bill. I was not aware that any such Bill was before the House. I am sorry if the right hon. Gentleman has had some experience of waiting at that unpleasant railway station, but surely the Bill in question deals with the Severn Road Bridge, a vital matter started by my right hon. Friends? I hope that he will make it clear that this is the Measure to be taken, and that perhaps even tomorrow will be an opportune moment to take it.
  With regard to the remarks of the hon. Member for Gloucestershire, West, the Severn Road Bridge is designed to connect the civilised territories which I help to represent with the somewhat barbarous land represented by him.
  Mr. Bowden: I stand corrected. I was referring to the Severn Bridge.
  My hon. Friends, many of them quite new to the House, may not have appreciated that the usual channels make the working of Parliament possible. They may not have appreciated, too, that it is part of my duty, as Leader of the House, to see that the Government get their business through. It is extremely important for the Government to get this Bill through all its stages before the end of the year.
  We have reached agreement through the usual channels. We would have preferred to have got all the stages of the Bill through yesterday and during the night. It is obvious that that could not have happened. We have reached this agreement, and I hope that hon. Members on both sides of the Committee will adhere to it so that we can get Clause 2 of the Bill and continue with the debate, as I have suggested, at half-past three tomorrow.
  Sir Harry Legge-Bourke: As a result of the arrangement to which the right hon. Gentleman referred, to which I take no exception, presumably the Motions on the Army and Air Force Acts will have to be stood over. They
  1758
  were to be taken formally so that we could have a general debate on the Armed Forces. I hope that we shall not lose the opportunity of having that debate.
  Mr. Bowden: There is no intention of losing that. I beg to ask leave to withdraw the Motion.
  Hon. Members: No.
  The Temporary Chairman (Mr. Thomas Steele): The Question is—
  Mr. Eldon Griffiths: I am somewhat unfamiliar with the usage of the Committee, and I should be obliged for your guidance, Mr. Steele. When the football began to be kicked around the Chamber, a few minutes ago, it seemed that we were discussing the Bill now before the Committee, and, in particular, the Clause dealing with the salary of the Chief Secretary to the Treasury. I am a little lost as to where we have got to, and before continuing I shall be obliged if you would give me some guidance.
  The Temporary Chairman: We have got to the point where I have to put the Question. There was some objection to the Motion being withdrawn, so I must put the Question.
  Question put and negatived.
  Mr. Bryant Godman Irvine: If we are back on the Amendment which we were discussing before we got on to the Motion, perhaps I might put a point to the Chancellor of the Duchy of Lancaster which, I think, it may be worth looking at carefully. If he will look at subsection (2,b) he will see that it deals with "any Minister of State", and that subsection (2,c) deals with the Chief Secretary to the Treasury. If he then turns to Schedule 2 and looks at the list of ministerial offices he will see that the Minister of State comes in line 24 and the Chief Secretary in line 25. In the Amendment he proposes to delete subsection (2,c), so that we shall have subsection (2,b) reading:
  "to the Chief Secretary to the Treasury, to any Minister of State"
  which will mean that the Chief Secretary will come before the Ministers of State, whereas in Schedule 2 the Ministers of State come before the Chief Secretary.

  1759
  This seems to indicate that whoever drafted the Amendment it was somebody other than the person who drafted the Bill. It will look peculiar if we find the Chief Secretary coming before the Ministers of State in the Clause and following them in the Schedule. In those circumstances it may be that the Chancellor of the Duchy of Lancaster, on Report, will want to alter the order of Ministers, either in the Clause or in the Schedule.
  1.45 a.m.
  Mr. W. R. van Straubenzee: After that remarkable repudiation of the Leader of the House we resume consideration of the Amendment. I want to remind the Committee of one of the main arguments put forward by the right hon. Gentleman—who might address himself to my remarks. If I remember rightly, he suggested that the Bill, as it was, was a reflection of the action which the Prime Minister had taken and a reflection of the Government as it was actually constituted.
  Mr. Houghton Mr. Houghton indicated assent.
  Mr. van Straubenzee: The right hon. Gentleman nods assent. That was his justification for making an alteration so early in the life of the Bill. Will he cast his eye a little further along the Clause? Right at the end he will find mention of a person called the Secretary for Overseas Trade. As I understand, the Prime Minister has not appointed a Secretary for Overseas Trade. I cannot go into the matter in detail at the moment, but at a later stage this morning—probably much later—we shall be able to have a detailed discussion on it, because there is an Amendment dealing with it.
  The point is that on his own argument the Bill is not a reflection of the Government as constituted by the Prime Minister. There is a significant variation in it, and that significant variation is the one to which I have just drawn attention. We are, therefore, entitled to ask why, so early in the life of the Bill—so soon after it was drafted—it was found necessary to make a major change from a fixed salary for the Chief Secretary to one that makes it dependent upon the whim of the Prime Minister of the day.
  Throughout the right hon. Gentleman's remarkably good-humoured remarks—in
  1760
  view of the long innings he has had on the Government Front Bench today—he used the phrase "enables the Prime Minister to fix the salary of the Ministers of State". As we are now discussing the Chief Secretary to the Treasury I should be grateful for some clear guidance, when he replies, on the question—it has been asked before, but it should be re-emphasised—whether it is his understanding, as the Bill is drafted, that it also enables the Prime Minister to vary the salaries.
  Is that the right hon. Gentleman's reading of subsection (2,b), as it will be amended if the Committee accepts the Amendment? Is it possible for the Prime Minister to vary it? My reading is that it is possible, but we should like to have the right hon. Gentleman's authoritative confirmation. It seems to my hon. Friends and myself very undesirable to add yet further, in a very important particular, to the lists of those whose salaries can be varied by the Prime Minister. The arguments have been fully deployed and I will not repeat them, although in the light of recent events we can take the subject leisurely. We should like to hear authoritatively whether variation is possible.
  I should also be grateful if the right hon. Gentleman would confirm whether a minimum value is stipulated anywhere by the Bill. Does he feel that the correct interpretation of subsection (2,b), even as it will be when amended, is that there is no statutory minimum at all? Does he feel that that is a satisfactory position?
  This leads me to ask for a simple explanation why Governments in the past and the present Government have wanted to perpetuate the method set out in subsection (2,b). The right hon. Gentleman did not deal with that. He merely said that it gave the Prime Minister greater flexibility. There may be very good reasons why he feels that the Prime Minister should have this flexibility. Particularly for new hon. Members like myself, it would be useful to know why it is felt, and why the structure of Government is such, that it is helpful to have flexibility in this way, and why, in particular, it should be necessary to make it flexible in the case of the Chief Secretary. Clearly, it does not hang on the question whether he is in the Cabinet.

  1761
  Those are three serious questions in connection with the Amendment to which the right hon. Gentleman will perhaps reply.
  Mr. Houghton: I will do my best to answer the questions asked, although it is a little difficult to recall some of them, in view of the intervening debate on the Motion, "That the Chairman do report Progress and ask leave to sit again".
  I was asked about the significance of Clause 2(1,a) and (1,c), which are in italics. I was asked whether Clause 2(1,b), if amended, would be open to amendment in another place whereas, as at present drafted, subsections (1,a) and (1,c) would not. I am informed that there is no significance of that kind in the different printing of the several paragraphs. Apparently subsection (1,a) and (1,c) would impose a new charge and therefore had to be printed in the Bill in italics until a Money Resolution had been passed by the House to cover the additional charge. That Money Resolution has been passed by the House and, therefore, there is no need to continue the italics for the two paragraphs. It makes no difference to the power of another place to amend the Bill.
  I was asked about the Minister of State. The Prime Minister has always had the power to fix the salary of the Minister of State ever since the Reelection of Ministers Act, 1919, which first gave statutory authority to their salaries. This practice has continued under the House of Commons Disqualification Act, 1957.
  The hon. Member for Wokingham (Mr. van Straubenzee) asked about the Prime Minister's power to fix the salary. "Fix," in a Parliamentary sense, is a colloquial term, because it means that the Prime Minister has the power to decide what salary shall be included in the Estimates to be presented to the House. As I understand the position, the Prime Minister, having fixed the salary—that is, in theory, because the House really fixes it—the House may vary it. The constitutional answer would appear to be that, when the House has fixed the salary at whatever the figure may be, it remains the salary for the rest of the year. The Prime Minister could vary the salary but putting it into the Estimates for
  1762
  the following year, but I do not think that it is open to my right hon. Friend to vary it when the matter has been settled through constitutional procedure and been passed by the House.
  This Clause does two things which have never been done before in relation to Ministers of State in that whereas, there was previously no limit on their number, we are now fixing a limit—and that, I hope, will be thought to be to the credit of the Government—and the second thing is that never before has there been fixed a maximum salary. So, although hon. Members opposite are taking a renewed interest in Ministers of State since the Bill came before the Committee, the truth is that during the whole 13½ years they have been in office there has not been a maximum number, nor a maximum salary.
  Section 13(1) of the House of Commons Disqualification Act, 1957, states that
  "Minister of State' means a member of Her Majesty's Government in the United Kingdom appointed at a salary, who neither has charge of any public department nor holds any other of the offices specified in the Second Schedule to this Act".
  Sir K. Pickthorn: Are they appointed at a salary?
  Mr. Houghton: What does the hon. Member mean? What does he think they are appointed at?
  Sir K. Pickthorn Sir K. Pickthorn rose—
  The Temporary Chairman: If the right hon. Gentleman does not give way, the hon. Member must resume his seat.
  Mr. Houghton: I think that mine was a rhetorical question, needing no answer.
  Sir K. Pickthorn Sir K. Pickthorn rose—
  Mr. Houghton: It is very difficult to get matters clearly in one's mind if interruptions continue, but I want to say that the 1919 Act provided for payment of Ministers of State. I presume that prior to 1919 Ministers of State could be appointed in any number, but without salary. However, since then a Minister of State has been a Minister appointed at a salary, neither having charge of any public Department nor holding any other office specified in the 1957 Act.

  1763
  Now we propose a maximum salary and a maximum number. Successive Conservative Governments have varied the amounts paid to Ministers of State—varied, that is, with the importance of the office—so that it is clear that a fixing of salary by reference to persons or functions has been within the power of the Prime Minister of the day at least for all those years. Ministers without Portfolio have ranked as Ministers of State and received £5,000; but Ministers of State in several Departments, including Education, Science, and Defence, received £4,500, while others received £3,750. So there have been three distinct salary ranges paid to Ministers of State.
  2.0 a.m.
  No Ministers of State have so far ever been paid more than £5,000 a year, so the Bill provides that that should be the limit, subject, of course, to the variation in the Ministerial Salaries and Members' Pensions Bill. The highest salary yet paid to a Minister of State is put in the Bill as the maximum that shall be paid to a Minister of State. But the Prime Minister should be able to recommend to the House a salary lower than £5,000 where-ever he thinks fit. That flexibility is in Clause 2.
  We now propose that the Chief Secretary to the Treasury should be grouped with Ministers of State. However, by the Amendment he will be separately named, because Clause 2(1,b) will read "to the Chief Secretary to the Treasury and to any Minister of State". He is separately named, although he will rank for the purpose of the limitation of salary as a Minister of State, for he will not be included in the number of Ministers of State—that is a separate matter. The Chief Secretary will rank as a Minister of State for salary purposes, but will not be included in the number of Ministers of State. Therefore, the reference to him in Schedule 2 in page 6 will still be in order. There will still be the Chief Secretary to the Treasury, and whether he appears in the line below or the line above the Ministers of State does not matter; he will appear alongside Ministers of State.
  I have been asked why there have been second thoughts about this. I should say at once that the argument I used earlier about the facility to include the Chief Secretary in the Cabinet if his salary
  1764
  were £5,000 was an argument—a perfectly valid one—that I thought might win the heart of the right hon. and learned Gentleman the Member for Wirral (Mr. Selwyn Lloyd), because in a speech he made on Second Reading he was rather concerned that the Chief Secretary was not in the Cabinet, but at least I could put the Chief Secretary in a position to be put in the Cabinet without any inconvenience or difficulty.
  I know enough constitutional history to realise that there is no statutory proviso that a member of the Cabinet shall receive remuneration appropriate to a Minister of Cabinet rank, but it has become the tradition, the convention, that members of the Cabinet do receive the salary of Cabinet Ministers, and other Ministers outside the Cabinet are defined as Ministers of Cabinet rank. So it was not really the Cabinet argument that led to the Amendment, but a bit of makeweight, if I may say so, that I hoped would weigh with the right hon. and learned Gentleman.
  It has had to be thought of afresh because of the Ministerial Salaries and Members' Pensions Bill which, when translating all this into a new Schedule, led to the Chief Secretary being a Minister out on a limb, so to speak, on a different salary from any other single Minister, and separately from Ministers of State who could receive remuneration up to £5,000 a year. That seemed to be anomalous, and not a suitable position for the Chief Secretary to be in. When we come to revise the salaries of other Ministers who receive the same salary as the Chief Secretary they will be included in the Ministerial Salaries and Members' Pensions Bill as Ministers of State with the maximum salary prescribed for them, which will be the amount adjusted in accordance with the recommendations of the Lawrence Committee, as modified by the announcement made by my right hon. Friend the Prime Minister.
  In reply to the hon. Member for Wokingham, the reason why the Secretary for Overseas Trade is mentioned in line 26—right at the end of Clause 2—is that the office is now in existence, and it was originally thought right that he should be continued there in case it was necessary ever to take up the office again.
  The curious thing is that in the 1957 Act, I think, the Conservative Government

  1765
  provided for an increase in salary to be given to the Secretary for Overseas Trade even though there was not one and even though there has not been one since. It shows how curiosities creep into Bills dealing with Ministerial salaries and the machinery of government.
  The Committee will find from the Notice Paper that we are quite ready to meet the point on the obsolesence of the Secretary for Overseas Trade and there is probably no need to continue to include him in the Bill. I hope that what I have said has been satisfactory to the Committee. This is just a desire to make the whole thing now look tidy and rational and not to leave the Chief Secretary to the Treasury in a position which would be lower than his prestige and position in the Government. If we include him within the scope of the salary adjustments of Ministers of State it will be open to the Prime Minister at any time to submit to the House that his salary should be varied. If we do not do so, his salary will be written into the Bill which is to follow this Measure and it will be troublesome then to vary it.
  Sir K. Pickthorn: I cannot think that I could make a useful speech at this stage. [HON. MEMBERS: "Hear, hear."] I do not think that that is my fault. The wisdom of others has landed us in a situation in which it is not possible to make a useful speech, but I do not think that the Committee ought to allow to pass the question of what a Minister of State is and when is a Minister of State not a Minister of State, and when he should be paid and when he should not be paid.
  I must mention it now, perhaps in the hope of being allowed to say rather more about it tomorrow. I wanted to try to be sure that I was not going to be then met with a ruling that it was too late. The principle of unripe time and the point at which it meets the principle of too-lateness is a very dangerous one.
  The Chancellor of the Duchy of Lancaster told us that a Minister of State is a Minister appointed at a salary. So he is by statutory definition, but I remind the Committee, if my memory is right, that we have been told on other occasions that there are now considerable numbers of Ministers of State who are not paid a salary and who were not
  1766
  appointed at a salary. We have had nothing yet, and the Attorney-General ought now to give us full explanation, unless he is sure that he will find an explanation and give it us tomorrow, how it can be that the only positive statutory qualifications of a Minister of State is that he is appointed at a salary, and two negative ones—he may not be the top Minister and he may not be the bottom Minister.
  Are there now Ministers of State not appointed at a salary? If so, in what sense and on what authority are they Ministers of State? I am sorry if this is an inconvenient moment.
  Mr. Archie Manuel: The right hon. Gentleman is out of order.
  The Temporary Chairman: I am not sure that this arises at this point. We are dealing with the Chief Secretary to the Treasury. If the right hon. Member for Carlton (Sir K. Pickthorn) wishes to continue I hope that he will address himself to the Amendment now under discussion.
  Sir K. Pickthorn: I cannot feel very guilty, but I am sorry if I have not understood the point we are at. I thought that we were on the Question "That the Clause stand part of the Bill." [HON. MEMBERS: "No".] I apologise in that case.
  Amendment agreed to.
  Further Amendment made: In page 1, line 17, leave out paragraph (c).—[Mr. Houghton.]
  The Solicitor-General (Sir Dingle Foot): I beg to move, in page 2, line 15, to leave out "eighteen" and to insert "nineteen".
  The Committee will be delighted to hear that this simple Amendment raises no possible point of principle and that I can commend it in a very few words. Its purpose was fully explained by the Attorney-General during the Second Reading debate. As he then pointed out, there is one rather strange feature of the 1957 Act, that there is no limit on the number of Ministers of State who may be paid, nor is there any limit on the salaries which they may receive. By the Bill, we propose to introduce, for the first time, a limit upon both the number

  1767
  and the salaries, but it should be understood that the effect of the Amendment will not be to add to the number of Ministers.
  At present, my hon. Friend the Member for Grimsby (Mr. Crosland) occupies the post of Economic Secretary to the Treasury. That office we propose by the Bill to abolish, and, as the Committee will have noted, we abolish his salary by subsection (2). It is envisaged that, in future, there will be only two Treasury Secretaries instead of three, so the effect of the Amendment, put shortly, will be that my hon. Friend will cease to be Economic Secretary and will become Minister of State for Economic Affairs. Thus, we do not add by this part of the Bill to the number of Ministers.
  Mr. Robert Cooke: The Solicitor-General was most ingenious in what he told the Committee about the Amendment, and I thought it all good political stuff when he said that no increase in the number of Ministers was involved. I hope that what I have to say will be strictly in order. If it is not, perhaps an expanded version of it might be necessary on the Question, "That the Clause, as amended, stand part of the Bill".
  I should not favour the proliferation of Ministers, but there is something to be said for giving the Ministers who are necessary the right status. It appears from what has been said already that the title Minister of State is something of a status symbol, though not the salary which goes with it, which can be rather the reverse if it be one of the lower ones. It might be argued that, because there are so many more of them now, some of the glamour is removed. It will not have escaped attention that the present Government have had to have their names printed in small type in the official list which appears in the OFFICIAL REPORT in order to fit it into half a dozen pages.
  It may be appropriate to have Ministers of State for the various Departments which are listed, but there are other Ministers who might merit, or who do merit, the same status.
  2.15 a.m.
  It would appear that the Amendment might prevent a sufficient number of Ministers being given the status of
  1768
  Minister of State. Last Friday, the House debated the important subject of leisure, the arts and sport. It has several times been suggested in the House that the subject of the arts would merit a special Minister, a Minister of State, to deal with it, and perhaps sport might be included with a separate Minister of State, perhaps equally important, certainly so in the eyes of many hon. Members. Here are two important subjects newly recognised by the Government. They were recognised by the previous Government but have been recognised again by the present Government by the appointment of Ministers with special responsibilities, but merely with the rank of Parliamentary Secretary. It would appear that if we passed the provision in its present form it would prevent the Government from giving these people the right status.
  This is a real point of concern. It would seem important to clear up the position of these Ministers, especially in view of the very considerable changes which have been taking place. I am sure that the Committee would not want the Prime Minister to be stuck with a rigid and perhaps rather bloated pattern for his Government, and perhaps when the new Minister for Technology gets to work with his work studies and organisation and methods he may find that the pattern which we are setting in the Bill will be an unduly rigid one.
  I hope that the right hon. Gentleman will be able to satisfy the Committee on this point, because I would not want the Bill, although it is so unsatisfactory in so many ways, to do anything to impair the remaining vestiges of efficiency in the present Administration.
  Sir J. Hobson: We ought not to let pass the event which has occurred. It is the first intervention since his assumption of office by the Solicitor-General. He has been able, with his usual clarity of mind and diction, to explain to us how 18 has become 19, and we are very grateful to him for doing so.
  Amendment agreed to.
  Mr. Houghton: I beg to move, in page 2, line 21, to leave out "subsection" and to insert "section".
  This is purely an editorial correction.
  Amendment agreed to.
  Mr. van Straubenzee: I beg to move Amendment No. 6, in page 2, line 25, at the end o insert "and".
  The Temporary Chairman: I suggest that it might be for the convenience of the Committee to deal, at the same time, with the next Amendment, in line 26, to leave out from "General" to the end of line 27.
  Mr. van Straubenzee: If I understood the earlier comments of the Chancellor of the Duchy, we can dispose of this quickly. The Amendment that I move is a short and simple one taken in conjunction with the next, and the object is to remove from the Bill reference to the Secretary for Overseas Trade. As I understood, the Chancellor of the Duchy was in sympathy with the object and was able to "pull the leg" of the Opposition gently by saying that they had fallen into the error at an earlier stage. I am sure that we do not want to argue about this at this late hour. It will probably be a better Bill if we remove this reference.
  Mr. Houghton: We are willing to take the purpose of the Amendment, but unfortunately it is defective and, indeed, will produce a result quite opposite to that which the hon. Member for Wokingham (Mr. van Straubenzee) and the Committee now desire. I feel sorry for the hon. Gentleman. He is now suffering all the anxiety we have had for some time, in trying to draft an Amendment that is watertight to achieve the purpose he has in mind. I am advised that the effect of the Amendment is to allow the payment of up to 36 paid Parliamentary Secretaries, plus a 37th paid Minister—the Secretary for Overseas Trade.
  I was very puzzled about this when I was advised that this was the effect, but I think the hon. Gentleman will see that when he has simply deleted the words "and the Secretary for Overseas Trade" the Clause will read:
  "… Parliamentary Secretary includes any Parliamentary Under-Secretary of State and the Assistant Postmaster General."
  But unless we clear away all the last vestages of the Secretary for Overseas trade, all that this Amendment would do would be to provide an additional post as Parliamentary Secretary, because it is not to be adhered to by Secretary for Overseas Trade. I am sure that was
  1770
  not the intention of the hon. Gentleman. A lot has to be done to make his purpose foolproof. For example, the hon. Gentleman has failed to put down an Amendment to repeal the provision that the Secretary for Overseas Trade which is in the Ministers of the Crown Act, 1937, as amended by the Transfer of Functions Act, 1946, and the Ministerial Salaries Act, 1957. All this tidying up has to be done.
  I am going to make the hon. Gentleman a fair offer. If he will withdraw his two Amendments, then I will undertake that we will submit to the Chair tomorrow, at the Report stage, a manuscript Amendment that will achieve fully the purpose that the hon. Member has in mind and plunge the Secretary for Overseas Trade into oblivion. In anticipation that this might come on during the Report stage, I have arranged for numerous copies of the manuscript Amendment that I am prepared to move to be available to hon. Members so that they can see the full text of the manuscript before it is offered to the Chair. It is not a long Amendment but it does, I am advised, do the job that it is intended to do.
  The Attorney-General: The Amendments have to be accepted.
  Mr. Houghton: I have now got some further advice. I overlooked the fact that Amendments must be accepted. If the Committee accept these Amendments, we can then put the matter right. If they were withdrawn we would have to embody in our Amendment more than there is now there. I will therefore recommend the Committee to accept the Amendments and undertake to put them right when we offer a manuscript Amendment tomorrow. I am sorry about my mistake, but it is getting a bit late.
  Mr. van Straubenzee: It would be easiest for the Committee if I co-operated with the Chancellor of the Duchy of Lancaster and placed myself entirely in his hands. I therefore think I have said all I can say and should sit down.
  Amendment agreed to.
  Further Amendment made: In page 2, line 26, leave out from "General" to end of line 27.—[Mr. van Straubenzee.]
  Question proposed, That the Clause, as amended, stand part of the Bill.
  Sir Martin Redmayne: I find that I have even less enthusiasm for making this speech than I had earlier but there are still some points which should be raised and some on which the Government might still have second thoughts about.
  As an ex-Chief Whip, I think perhaps I have had a more significant insight into what may or may not have happened at No. 10, Downing Street in late October. I do not doubt that, before the election, the Prime Minister and the Lord President of the Council, in their previous capacities, had considered very carefully all the manoeuvres that were necessary to form a Government which would not at once disrupt the Labour Party.
  I think that the existence of this Bill in this form is due to the fact that they had not foreseen, or had disregarded, that rather irritating pro forma which is thrust at once into the hands of any Prime Minister who is making a Government or thinking of reforming it. It is given to him by the permanent staff at Downing Street and I am fairly familiar with it, as are all Chief Whips. It sets out the existing offices of the Government and at the end of the second page says,
  "… of whom not more than 27 shall be in the House of Commons ".
  At the end of page 5 it says,
  "… of whom not more than 70 …"
  I know very well, as does my right hon. Friend the Member for Bexley (Mr. Heath) and, indeed, as the Lord President, if he lasts long enough in the job, will know, that that pro forma, now to be amended by the Bill, adds enormously to the difficulty of completing the jigsaw of Government.
  Of course, the Prime Minister did not obey the rules. He did not accept the advice given to him. I can well imagine the mounting irritation with which he and the Lord President and the Patronage Secretary found that, if they were to include, as they hoped, A, B and C, X, Y and Z, and Tom, Dick and Harry in the Government, they had to break the rules. So the Prime Minister, with a little arrogance—perhaps I must not use too strong a phrase now after such a pleasant evening—told his P.R.O. to go out and chat about Queen Anne and chose to do as he pleased.
  But, his having stepped outside the bounds, there was no holding the Prime
  1772
  Minister. That is the secret of the Bill and this Clause. I think that on Second Reading, the Attorney-General said there was no magic in the figures before 70 or 60 in these days—in other words, that we need not show a decent restraint as to how large the Government should be. Of course, there is no magic in the figure of 91 either, for 91, I gather, is a mistake anyhow. But it was done to keep the party wolves from the door and it kept the Labour Party happy—all except one hon. Member who went to Downing Street expecting a job and went away without one. But he is now Second Church Commissioner, so all ended happily there as well.
  I say to my hon. Friends, from masters I have served, that a little discipline is good even for Prime Ministers and this pro forma, which is a common factor on these occasions, has served at Downing Street to prevent the unlicensed patronage which comes easily to Prime Ministers and prevents that peculiar kind of political gimmickry, the creation of new offices, although, in a real Administration, that is not fatal. In this Clause the Government have shown themselves to be very guilty of that crime.
  2.30 a.m.
  I do not want to go into detail about this business of the numbers and the pay of Ministers of State. It is perfectly certain that the uses of that office have very greatly changed in the comparatively few short years since it was first set up. It is perfectly certain that the uses to which it is being put today by the present Prime Minister are a long way from its beginnings. It must clearly be said that he has used the office of Minister of State in this present Government too much as a form of patronage and with far too great an eye to the personalities involved.
  One looks at the list of Ministers, now printed so small that one can hardly read it. This list, again, is one of the work papers of a Chief Whip. I could read it with the naked eye in my day, but now I have to use the very strong glasses which I have to wear.
  Mr. Houghton: Growing old.
  Sir M. Redmayne: I am growing old. We are growing old together and the right hon. Gentleman need not throw

  1773
  that kind of thing across the Committee to me.
  Looking at the list, one wonders why it should be necessary to have four Ministers of State at the Foreign Office when we had three, and three Ministers of State at the Board of Trade when we had two. I cannot really think that—I should not like to think that—Ministers appointed by a Labour Prime Minister are necessarily so less efficient that it needs three to two and four to three.
  We have dealt with the Chief Secretary to the Treasury, but I must say that that was a peculiar initiative. I can forgive the Lord President of the Council. I know that when Governments are set up, everybody gets very heated and the whole thing is always rushed and one cannot really blame the Government for making so many mistakes.
  I am very sorry that a fault, which I think was made by the preceding Government, has now been carried into permanent form. We were wrong in our time to make a special salary for the Defence Ministers under the new arrangements. This is what created the precedent for what are now to be three levels of Minister of State and even more for the Prime Minister to exercise this special discretion which he has. There can now be a Minister of State in the Cabinet paid £5,000 a year and what is called a "Senior Minister of State". We have still not learned who the senior Ministers of State are and I ask the Attorney-General to make that clear. On Second Reading, he said that the Chief Secretary to the Treasury had a status comparable with that of a senior Minister of State. Who are the senior Ministers of State?
  I do not want to weary the Committee by repeating arguments already used quite shortly, but the office of Chief Secretary is quite pointless unless he is in the Cabinet. The whole aim and object of that office when it was originated by my right hon. Friend, Mr. Macmillan, was that he should be in the Cabinet to provide support for the Chancellor of the Exchequer against the importunities of the spending Departments, and in that form the office has some use. If he is outside the Cabinet and not a Privy Councillor, which he must be, he is no more than an upgraded F.S.T. The office of F.S.T. has been perfectly honourable
  1774
  for a great many years, but I do not see why there was any need to upgrade it to Chief Secretary.
  There is another strange bird in the list which has not been noticed in these debates. He is the Deputy Secretary of State for Defence and Minister of Defence for the Army. I am very intrigued by this character. What is a Deputy Secretary of State? I have not heard of one before. The essence of the office of Secretary of State is that those who hold it—and they number eight, by Statute—are interchangeable in their responsibilities. With whom is a Deputy Secretary of State interchangeable? Is it some magic office which enables the holder to have a certain interchangeability with the existing Secretary of State, or is he interchangeable with himself? I think that the Attorney-General should tell us the answer.
  Much more important, at what rate is he to be paid? He seems to be a very senior Minister of State. Being a Deputy Secretary of State, I should have thought that he would be paid more than the Chief Secretary to the Treasury, who ranks as a senior Minister of State. If the answer is not satisfactory to the Chief Secretary, he too must form up and say that he must be paid a higher rate. In this class of Ministers, the Prime Minister has left himself a very wide area of financial patronage. I do not complain about that, but it is bad Government, and certainly not good form.
  In this matter of Ministers of State, if the right hon. Gentleman had really been a reformer—and the rather grandiose title of this Bill merely exaggerates any reform in it—he would have scrapped the rank of Minister of State altogether. I would have scrapped the rank of Parliamentary Secretary altogether, too. That is what has been the structure of Government in the past. I would have built a Government on a structure of Ministers and Deputy Ministers. Then one would have the set-up of having to employ fewer men for less money, who would really share the full responsibility of their Departments. All of us who have been in Government know that the situation of the Parliamentary Secretary is hopelessly out of date.
  I see no excuse for increasing the number of Parliamentary Secretaries by this Clause. The object of the Bill brought

  1775
  in by Prime Minister Macmillan was to enable the creation of Parliamentary Secretaries, particularly in the Lords, so that in the Lords, Departments could have better, and better informed, representation. All that has gone by the board, and I will not weary the Committee by retailing the ways in which the Lords have been robbed. That will be discussed in their Lordships' House with much more fire and in much better time than we could do it now. The effect of this is twofold—the Prime Minister, by robbing the Lords, has provided more jobs for the boys in the Commons, and must further increase the number of Parliamentary Secretaries in the Bill to provide more jobs still.
  I should like to turn to another part of the Bill which has not been mentioned today, though it was on Second Reading. That is the appointment of a Secretary of State for Wales, and the increase of the number of Secretaries of State to nine. The number of Secretaries of State has been eight for many years. The Committee should bear in mind that although the number was eight, the defence reorganisation left two Secretaries of State free, and in the last Conservative Administration there were seven Secretaries of State, one under the limit. When the Attorney-General a little innocently and quietly said, "… as another Jones", which is a nice expression—" Jones the Attorney"—he joined in the enthusiastic reception for the appointment of a Secretary of State for Wales. That enthusiasm is not so heartfelt in Wales. [An HON. MEMBER: "How does the right hon. Gentleman know?"] Because I can read. Even though I was a Chief Whip for so long, I can read.
  He played it a little quietly. Although the statutory limit on the number of Secretaries of State is eight, he said, "We are just adding one more." In fact, they have added two more from the situation under the last Conservative Administration. That is understandable, of course, because they had, by hook or by crook accumulated this mass of people who had to be kept satisfied. They had to find jobs for the right hon. Gentleman the Member for Rossendale (Mr. Greenwood) and the right hon. Gentleman the Member for Middlesbrough,
  1776
  East (Mr. Bottomley), so they resurrected the Secretary of State-ship for the Colonies, an out-dated post. That is not a shrewd move.
  Lastly, I should like to deal with the much more domestic problem of Assistant Whips. The Attorney-General said that six had been the customary number for some years. That is not strictly true. The number has for some years been three, four or five. When the last Labour Government were in power, the number of Assistant Whips was three, then for a time it was four or five and for the last two years it was six.
  In any event, the number of Whips on the Government side—or in any party, for that matter—must be related to the size of the party, and particularly of the back-bench party. Since the Government have reduced the number of their back benchers in proportion to the total size of their party to the minimum in any party in political history, it means that if the Government consider that they want 14 Whips in addition to the Chief Whip, they are providing one Whip for every 16 back-bench Members. Some hon. Members opposite look somewhat cowed from time to time, and I do not blame them if one Whip is looking after 16 of them. I hope that the Government are selective in the 16. I could look after that lot with my left hand while dealing with other Members in another way. That, however, is being a little severe.
  I was attracted by the well-informed arguments used on Second Reading by my hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill), who was for a long time a colleague in the Whips' Office. He realises, as I do, that there are considerable advantages in having three, four or five Whips who have not wholly sold their souls to the devil, the devil being me or my opposite number, as the case may have been.
  If the Assistant Whips are volunteers, they are regarded with much greater tolerance by their colleagues on the back benches. There is the additional advantage, whipping not being a pleasant job and the task of a junior Whip being very hard work, that these amateurs, these unpaid volunteers, can resign if they find the job distasteful without all the fuss that inevitably accompanies the resignation of a Minister, however junior.

  1777
  I think I am being fair, although I do not doubt that some of my former colleagues will think that I am being a little severe about it, in saying that I doubt very much whether any Whips have quite the same claim to a Ministerial scale of pay as other Ministers, because for more than one-third of the year, when the House is in recess, they have no function, certainly not the Assistant Whips. The Lords Commissioners of the Treasury have, of course, to sign the warrants and be available to go round, and so on, but the six Whips whom the Government now propose to pay will have literally nothing to do for one-third of the year. This should be carefully reconsidered.
  Although it is not immediately and directly in the Bill, the difficult question of the payment of the Opposition Chief Whip is relevant to what I am saying. I admit that my opposite number in the last Parliament thoroughly deserved it. I suspect that I would have done in this Parliament and I am sure that my successor would have done also. I am still not sure, however, that it is other than what my right hon. Friend the Member for Carlton (Sir K. Pickthorn) described as an absurdity, because one just does not know where to stop.
  Indeed, in another Bill which has been published today I see that there are propositions about paying Opposition Members—the Chief Whip, I think, and the Leader—in the Lords. Already, therefore, we have gone another step forward. If it were a choice between paying six Assistant Whips in Government and paying the Opposition Chief Whip, I would pay the Opposition Chief Whip and not the Assistant Whips in government. That would be the fair and proper thing to do. On consideration, however, in spite of the fact that I have admired the hard work which is done for nothing by people who hold this office, I think that it is wrong to pay the Opposition Chief Whip also.
  We are to have the truncated Report stage later today. The Government have admitted that they are prepared to put down an Amendment. I ask them particularly to think, even overnight, about paying Assistant Whips, whom I wish no harm, and see whether it would not be wiser to go a little slower in
  1778
  adding to the endless payroll of both the Government and the Opposition, in the Commons and in the Lords. After all, why should not our Whips be paid? There are only six or seven or eight of them, rather fewer than the Government have, and probably working much harder, because we do not have a great mob of Whips, as the Government have, If they are to be paid, why not the Chairman of the Kitchen Committee and what have you?
  2.45 a.m.
  As I said, I think that this Bill arises out of a great deal of muddle and confusion which took place in the early days of this Government, and, indeed, is still taking place. I think it was put to the House in a very arrogant way. Although peace has now broken out apparently, I hope that in recompense the right hon. Gentleman will at least consider very carefully this main point of the payment of Assistant Whips.
  Sir K. Pickthorn: I think I agree with almost every word said by my right hon. Friend the Member for Rushcliffe (Sir M. Redmayne), and I agree with him particularly in his passing reference to the increase in the number of Ministers permissible in the House, and that 40 was not a magic number, 60 was not a magic number, 90 was not a magic number. But by the time we are getting there it is a different sort of thing: it is not merely a quantitative change; it is a qualitative thing compared with the 36 or 40 with which the escalation began.
  Unwilling as I am to speak now I think it absolutely necessary to do so in order to ask, even if ineffectively, whether we are to get some explanation here of what my right hon. Friend hardly did allude to, and that is this. It is not only 40 or 60 or 90, but with the present doctrine about Ministers of State it is any number of Ministers of State provided they are not paid, and so far as I can understand it, if this Bill is passed, it will continue to be any number of Ministers of State provided they are not paid. That, plainly, cannot be right, and I think it could not be right that we should pass from this Clause without somebody saying that.
  I would remind those hon. Members who are still present who may not have memorised it of what is the statutory

  1779
  definition of a Minister of State. The statutory definition is:
  "A member of Her Majesty's Government appointed at a salary."
  I do not say it is not explicable by a lawyer. I do say that the Attorney-General did not explain it on Second Reading in a way which could be satisfactory to one who is not a lawyer. I think it is quite obvious, if I may say so, that the right hon. Gentleman, to whom I am devoted, who wound up for him on that occasion, was not going to be led by any cajolery or driven by any bullying into attempting to meddle with the question at all: he left it strictly alone. So, in spite of provocation and temptations, we have had no explanation of this.
  I do not say that this is the right moment, but if it is not the right moment I ask the Attorney-General to tell us when he is going to have the right moment. If a Minister of State is somebody appointed at a salary, what are those persons at present purporting to be Ministers of State and not appointed at a salary? If they are Ministers of State then the Government are now in breach of the existing Statutes. The Government then have more Ministers of State in the House than is statutorily permissible.
  What is more, the Government have not got a majority, because if these people are purporting to be Ministers of State, but who are really disqualified, they are not entitled to sit and vote in this House, and every Division that we have had for the last 50 days, or whatever it is, is therefore open to suspicion of illegitimacy.
  The purpose of the Statute which the Bill purports to revise was to limit the numbers in this House. Unless we can be made to understand about Ministers of State better than any one yet does, there has been no such effect. In fact any number of Ministers of State may be appointed on top of the 90, so long as they do not take pay. The other way of looking at it is to say that they are not Ministers of State because they have not had a salary.
  Those are the difficulties about the concept of a Minister of State which, in my judgment, have never been clarified in this House, and which I thought ought
  1780
  to be mentioned so that there may be some hope of some kind of clarification.
  Mr. Ian Percival: I should like to follow my right hon. Friend the Member for Carlton (Sir K. Pickthorn) in his train of thought relating to Ministers of State. On Second Reading the Attorney-General said that Section 13(1) of the 1957 Act was statutory authority for paying Ministers of State, and, furthermore, that it was statutory authority for paying an unlimited number of Ministers of State an unlimited salary, and this has been reaffirmed several times during the debates today both by the right hon. Gentleman the Chancellor of the Duchy of Lancaster, and the Solicitor-General.
  I should like the Attorney-General to tell the Committee how that view is arrived at. I know the wording of the definition. It must be imprinted on the heart and mind of every lawyer who has looked at the Bill and taken an interest in it, but what construction does the right hon. and learned Gentleman put on the definition in Section 13(1) which he says leads to the conclusion that it is authority for paying Ministers of State, and authority for paying them without limit on the number and without limit on the amount?
  The Attorney-General: May I first be permitted to congratulate the right hon. Member for Rushcliffe (Sir M. Redmayne) on his maiden speech from the Opposition Dispatch Box. I confess that for me it was almost a traumatic experience and, junior as I am to him in experience in these matters, I should also like to congratulate him on his most helpful speech—helpful at least in several parts of it.
  I hope that the right hon. Gentleman and other hon. Members who have spoken at this late hour will forgive me if I make the point that whether the Bill constitutes any infringement of constitutional principle in regard to the increase in the number of Ministers will be the major subject matter of the debates tomorrow, arising from Amendment No. 8. Accordingly, I hope that I may be spared having to traverse all the matters which will arise on that matter tomorrow, including the question of the status and position of Ministers of State.
  The right hon. Gentleman described the office of Minister of State as a form of

  1781
  patronage. Without, I hope, being provocative or controversial at this late hour, perhaps I might point out that the comparison between the present Administration and the last one is that there are 19 Ministers of State now, and there were 16 in the previous Administration, and one Economic Secretary, so that the difference is not substantial.
  I noted the admission of the right hon. Gentleman at the beginning of his observations that if those who form, and have the responsibility of forming, Administrations find themselves confined within the Procrustean bed of an arbitrary figure on limitation, it is clearly a thoroughly unsatisfactory arrangement and one which has no basis or justification in principle at all. These are matters which will fall to be discussed tomorrow, and I hope that I may be forgiven for not pursuing them further at this stage.
  There was the question referring to the Deputy Secretary of State for Defence. His position is that he is the Minister of Defence for the Army, and in addition, he is charged with additional duties as deputy to the Secretary of State for Defence. I understand that his salary is £5,000. As to the matter of substance, as the right hon. Gentleman described it, in regard to the proposed payment for six Assistant Whips, the principle that has influenced the Government is that they do precisely the same job as the other junior paid Whips, and it was felt right that they should be paid—borrowing a phrase from the trade union world—the rate for the job.
  Sir D. Glover: There is another well-known saying from the trade union world, which is that an apprentice does not earn the same amount of money as the trained worker.
  The Attorney-General: If the hon. Member knew the quality of the six unpaid Whips at present referred to he would not describe them as apprentices. They have had great experience and are rendering valuable service to Parliament in the performance of their duties. It was therefore felt just that they should be paid the same as the other junior Whips.
  Mr. J. E. B. Hill: The right hon. and learned Gentleman says they should be paid the rate for the job. In the Second Reading debate I
  1782
  asked whether, once the Clause had gone through, it would be possible for an Assistant Whip to be unpaid if the Prime Minister wished it, so that he would not have to sever any outside interests he had. In other words, could we still have an amateur if we wanted him?
  The Attorney-General: I imagine that any Whip, or Minister of the Crown, can refuse to take his salary if he wishes to do so. It is an obligation that falls upon no man. If such a person desires not to draw a salary there is nothing to compel him to do so. It does not normally require any element of compulsion to bring it about.
  I can say, as was said in the Second Reading debate with regard to unpaid Ministers of State, that there is no intention of creating unpaid offices in the Government. The Government have been established on the basis of a requirement of 91 Ministers in the House of Commons, and there is no intention of increasing that number, whether by way of unpaid Assistant Whips or any other officers of the Government.
  Sir M. Redmayne: The Bill reads "There shall be paid …" Does that allow a Minister to refuse to receive his salary? What happens to his salary if he will not take it?
  3.0 a.m.
  The Attorney-General: If he refuses the cheque he can return it to the place from whence it came. There is an obligation to pay him a salary but there is no obligation on him to retain it if, out of an exercise of generosity, he wants to give it back again. There is no compulsion about that. If he desires to return the money, there is nothing to stop him from doing so.
  Sir J. Hobson: There is a local government case in which a former councillor who could not be employed in a paid office, by Statute, offered to serve for a year without any salary, but the court held that he was disqualified because, though he was not accepting the salary, his status by Statute was that of a paid officer. Will not the same result eventuate here and should not further consideration be given to the fact that, even though the salary is not taken by the Ministers mentioned, they will become statutorily paid officers of the Crown and

  1783
  will be unable to escape from that position?
  The Attorney-General: My understanding of the position is that there is a requirement that Members of the House shall be paid salaries, but I understand that one such hon. Member at least returns the salary which he receives. I fail to see that the language of the Bill creates any difficulties. The Bill creates maxima by way of salaries, and I understand that the formula used has been used previously, and it has never been construed as forcing a Minister to accept his salary. I should be surprised if any such construction were possible. I do not know whether there was any special local government provision in the case to which the right hon. and learned Gentleman referred. But it is not a matter which either complicates the Bill or ought to be allowed to complicate it.
  Mr. Percival: I appreciate that the major discussion on Ministers of State will arise tomorrow, and that is why I was careful to limit myself to one simple question. It arises on Section 13(1)—a definition which is retained in the Clause. Even if the right hon. and learned Gentleman is good enough to answer me now, there is little time to consider the matter before we resume the proceedings later today. That is why I asked that one short question in order that there will be an opportunity to consider this construction between now and the resumption later in the day. I therefore repeat my question—for the right hon. and learned Gentleman to consider whether he would be good enough to explain what is the construction which he puts on Section 13(1) and which he says leads to the conclusion that it is the statutory authority for the payment of Ministers of State.
  The Attorney-General: It has always been deemed to be so. The definition of a Minister of State is that it means
  "a member of Her Majesty's Government in the United Kingdom appointed at a salary …"
  That has always been deemed to provide the statutory authority for paying a Minister of State. It has been accepted all along by the Treasury as providing the statutory basis. I should have thought that there was no problem of
  1784
  construction. A Minister of State is clearly defined as
  "a member of Her Majesty's Government in the United Kingdom appointed at a salary, who neither has charge of any public department nor holds any other of the offices specified in the Second Schedule to this Act".
  A Minister of State who is not appointed at a salary is not a Minister of State for the purpose of the disqualfication provisions of the 1957 Act.
  Question put and agreed to.
  Clause, as amended, ordered to stand part of the Bill.
  To report Progress and ask leave to sit again.—[Mr. Bowden.]
  Committee report progress; to sit again this day.

  IRONSTONE MINING, EAST CLEVELAND (SUBSIDENCE)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lawson.]
  3.6 a.m.
  Mr. James Tinn: It is surely one of the most generous customs of this House that enables a new and untried hon. Member like myself to stand equal with the most distinguished and senior of Members in applying for the privilege of drawing the attention of the House to some matter of importance to his constituents. At the same time, it would be a churlish abuse of this privilege if I were to take up the time of the House for one moment longer than is absolutely necessary for me to put my case as effectively as I can. So, I address myself to this task without further courtesies which would surely be misplaced at this hour.
  The hillsides of East Cleveland are honeycombed with mine workings from which were extracted the ironstone which was originally the raison d'être of the prosperous iron and steel industry of Tees-side and the north Yorkshire coast. One by one these mines have closed—the last of them only this year—leaving behind certain problems for the settlements and townships of this otherwise highly attractive coastline. Not the least of these problems is the damage to public and private property which has resulted

  1785
  from earth movements which have every appearance of resulting from these abandoned workings.
  It is a tragic irony for the victims that, if the damage had occurred a few miles further north, across the Tees, as a result of coal mining, the issue would have been comparatively simple. Under legislation passed when the coal mines were nationalised, it is only a matter of proving that the damage is due to mine working and, if this could be done, all that would remain would be to make an assessment of the damage, which the National Coal Board would then have the statutory obligation to pay, regardless of whether or not the Board had carried out the mining operations.
  There is no comparable legislation which imposes on the iron and steel industry, or on individual firms, a responsibility for subsidence damage similar to that imposed on the National Coal Board. Remembering that it was only with the nationalisation of coal that this responsibility was unequivocally accepted by the industry, I am emboldened to draw the attention of my hon. Friend to this precedent, confident that it will be borne in mind when framing the Statute for the public ownership of the steel industry, of which the steel workers of my constituency have so long been advocates. I realise that my hon. Friend cannot anticipate the details of this future Measure, but the moral responsibility of this industry is undeniable.
  It was, indeed, accepted, although only to a limited extent and with important reservations, by one of the largest firms in a case to which I will refer later. What I ask the Government to do is to translate this moral obligation into a binding statutory duty, with retrospective effect.
  My confidence in the success of this plea is strengthened by the reflection that the scale of the damage and the cost of the compensation is so minute in comparison with the vast capital assets of the industry on Tees-side alone, and the wealth, much of it traceable to these very workings, to the labour of generations, to the loyal, strike-free work of the very people who now find their homes and hard-won security threatened without realistic right of redress.
  1786
  In June, 1962, subsidence occurred to two bungalows and four flats owned by Loftus Urban District Council. These cost £1,150 and £1,232 each respectively, and they are still uninhabitable. The loss of rent to the council amounts to approximately £500 a year, but the council still has to meet its loan obligations and has had to rehouse the occupants.
  Further subsidence occurred on a larger scale on 11th May, 1963, and this time affected privately-owned terrace houses in Gladstone Street and East Street, Loftus. This time, 116 dwellings were affected, and the council surveyor reported that 7 were dangerous, 9 had suffered major damage and another 7 were considerably affected. The Council rehoused several families and, at present, 10 houses are empty.
  In April of this year yet another instance occurred, this time some miles away at North Skelton. On this occasion, however, the owners of the recently closed pit nearby, Messrs. Dorman Long (Steel) Ltd., whilst disclaiming any legal responsibility, did meet the cost of repairs and redecoration which came, at that time, to £1,560. This action was welcomed by everyone concerned, but it presumably left the legal position unchanged, and certainly left the much more serious plight of the people of Loftus entirely unrelieved.
  I am sure that I need no oratory to gain the sympathy of hon. Members for the plight of the victims. The private houses damaged at Loftus last year were worth some £700 to £800 each, although one of the most seriously damaged houses, now completely unhabitable, had been modernised and decorated at considerable trouble and expense. It would touch the heart to see it now, with windows shattered and walls cracked beyond repair. Some of these victims were elderly people who through hard times had skimped and saved to buy, as they thought, some security in their old age. Others find themselves burdened with debt on houses they can neither occupy nor sell. The sums involved are small and the legal responsibility is obscure but, in contrast, the consequences to these people are clear and considerable.
  The mineral rights of the land are owned by Zetland Estates Ltd., representing landlords who have done well out of these mines in the past, and whose

  1787
  consciences seem to have sufficient resilience to allow them to shelter behind what they no doubt regard as legal invulnerability. Zetland Estates originally leased these rights to Pease and Partners Ltd., who subsequently assigned the lease to Skinningrove Iron Co. Ltd., by whom it was terminated in December, 1959. The conveyancing of the land on which the council and the private houses were built contains clauses excluding the right to compensation.
  It may be argued that these were contracts freely entered into, but if one considers the local circumstances, the ownership of the land, the contrast between the wealthy landowner and the humble purchaser, this argument must be seen to be as much a legal fiction as were similar arguments which were advanced about free contracts of labour in the early days of trade unionism.
  It has been suggested that the local authorities concerned might promote a Private Bill to empower them to meet the cost of this damage. This is an argument, I feel, of little merit other than expediency. It would fix a legal responsibility where no moral responsibility could by any stretch of the imagination be laid, and would be a heavy charge falling mainly on the people of the area who have worked so hard for the prosperity of the industry and the landowners who now ignore their obligations.
  Surely this House, even at this late hour, is the last court of appeal, in a sense, for my constituents in their distress. Parliament can, by the exercise of compassion and ingenuity, help them. I am counting on my hon. Friend not merely to express sympathy or to spell out difficulties, but to promise action where his predecessors failed. If the present responsibility cannot be brought home to those who enjoyed the wealth those mines produced, then let us at least follow the precedent set in the case of coal, where the problem was so much more massive, and make the payment of compensation a charge on the industry as a whole. If we cannot now do justice to the wealthy, at least let us see that it is done to the poor.
  3.15 a.m.
  The Parliamentary Secretary to the Ministry of Power (Mr. John Morris: May I first congratulate my hon. Friend
  1788
  the Member for Cleveland (Mr. Tinn) on his speech? He has raised what is undoubtedly a very important issue to his constituents. He has told the House at this late hour that this is the last court of appeal for his constituents. I do not wish to be legalistic but, after all, a court of appeal is the place to which one should resort if one has exhausted all the remedies. I want to make some suggestions, which I hope will be useful to my hon. Friend, on the line that his constituents have not yet exhausted all the remedies which are before them. His constituents should be proud of the manner in which he has placed their case before the House tonight and I add my congratulations that in the short time he has been here he has seized this opportunity to present his case so admirably.
  This is undoubtedly a local issue, but that fact does not minimise its gravity to the people concerned. It has not been proved conclusively that the damage at Loftus in my hon. Friend's constituency is due to subsidence. There may well be other causes of ground movement and they cannot be ruled out entirely. Even if this doubt were removed it would not mean that the Government would adopt a different view about this matter; so for the purposes of my argument tonight I will assume that the damage which has occurred to houses in my hon. Friend's constituency is the result of subsidence.
  The damage at Loftus was the first to be reported in this area since 1937 and, as I understand, there has been no damage there since May, 1963, apart from a minor incident at North Skelton in April, 1964, when the mining company to which my hon. Friend referred made an ex gratia payment. Future damage cannot be excluded, but there is no reason to suppose that damage will occur frequently or on a large scale.
  I am making no attempt to minimise the hardship which undoubtedly has been suffered by my hon. Friend's constituents. He has drawn tonight a comparison with subsidence from coal mining. The Acts dealing with coal mining subsidence were passed as late as 1950 and 1957 but surely there is a difference between an essentially local issue to which my hon. Friend has referred and a widespread national problem in coal mining subsidence. In the latter case there is widespread damage and great hardship.

  1789
  I suggest very tentatively to my hon. Friend that a better comparison than with this national issue is the example of houses which have become liable to flooding, houses built on a hillside which has started to slip, or on reclaimed ground which turns out to be unstable.
  None of these comparisons may be entirely adequate, and while I have sympathy with my hon. Friend, the Government's difficulty is in drawing a line between one case and another; and in my submission there is no obligation on a Government automatically to help individuals although they may well suffer hardship. Contracts have been freely entered into, and, where there is no misrepresentation—I understand that there is no suggestion of it here—very strong argument is needed for a Government to intervene if one party finds himself in an unfortunate position.
  For a Government to intervene, the whole of the circumstances must be looked at. This was so as regards coal. There was a national problem which had to be tackled nationally by means of national legislation. This is a local problem, and for the Government to intervene there must be a much stronger argument for national action. I appreciate the strength of conviction and sincerity with which my hon. Friend has argued his constituents' case, but, with respect, I suggest that, first of all, local remedies should be thoroughly exhausted before he makes his case for national action.
  What are the Government's powers? The Government cannot compel the former companies to pay compensation. It is suggested that the Government should themselves pay compensation to private owners? In the past, such help has been given only when damage and loss have been of disastrous proportions over a known area. This is not so here.
  1790
  Moreover, even in those cases—flooding over a known area is an example which springs to mind—Exchequer grants were not made directly to individuals. The contributions of the Exchequer were made to bona fide relief funds which had been set up locally, and certain contributions were expected from the areas concerned. Here, although the loss, damage and suffering are undoubtedly serious, they are not disastrous over a known area in terms of the comparison which I am putting to the House.
  I shall reflect again very seriously on what my hon. Friend has said, but I feel that the suggestion which has been made to the local authority, that it should seek local Act powers to set up a fund from the rates for the relief of distress, has more to commend it than my hon. Friend has acknowledged. Such a fund would, subject to Treasury approval, attract a rate deficiency grant, so that there would be, in effect, a national contribution to the local fund. Naturally, the Treasury cannot be committed at this stage, but, subject to this, I can say that Government Departments would be ready to give all the help they could. I emphasise that.
  I hope, therefore, that the local authority, with which the decision to promote a Bill would lie, will give this suggestion most careful consideration. I can tell my hon. Friend tonight, on behalf of my right hon. Friend the Minister of Housing and Local Government, that he would be very willing to discuss this matter with the local authority again if, after further thought, it wished to come back to the Departments concerned, and my own Department would certainly be ready to join in any such discussion.
  Question put and agreed to.
  Adjourned accordingly at twenty-five minutes past Three o'clock, a.m.

SCOTLAND
  New Hospital, Edinburgh
  New Hospital, Edinburgh
  North-East Scotland
  North-East Scotland
  Land (Change of Use)
  Land (Change of Use)
  Seed Potatoes
  Seed Potatoes
  Scottish Planning Board (Staff)
  Scottish Planning Board (Staff)
  Housing, Glasgow
  Housing, Glasgow
  Nursery Schools
  Nursery Schools
  Brucellosis
  Brucellosis
  School Building
  School Building
  Hypomagnesaemia
  Hypomagnesaemia
  Lime Subsidy Scheme
  Lime Subsidy Scheme
TRANSPORT
  Rural Bus Services (Scotland)
  Rural Bus Services (Scotland)
  National Insurance and Petrol Duty Increases
  National Insurance and Petrol Duty Increases
  National Parks and Beauty Spots (Traffic)
  National Parks and Beauty Spots (Traffic)
  National Transport Advisory Council
  National Transport Advisory Council
  Breathalysers
  Breathalysers
ROADS
  Great Cambridge Road (Footbridge)
  Great Cambridge Road (Footbridge)
  Humber Bridge
  Humber Bridge
  Ellerby Bridge
  Ellerby Bridge
  Road Accidents (Christmas Period)
  Road Accidents (Christmas Period)
RAILWAYS
  Glossop-Manchester, Piccadilly, Line
  Glossop-Manchester, Piccadilly, Line
SHIPPING
  Docks (Congestion)
  Docks (Congestion)
MINISTRY OF AVIATION
  London Airport (Glide Path and Night Flights)
  London Airport (Glide Path and Night Flights)
  London-Belfast Flights (Delays)
  London-Belfast Flights (Delays)
  Airframe and Aero-engine Manufacturers (Payments)
  Airframe and Aero-engine Manufacturers (Payments)
  B.O.A.C. Passengers (London-Prestwick)
  B.O.A.C. Passengers (London-Prestwick)
  London-Prestwick Flights
  London-Prestwick Flights
AGRICULTURE, FISHERIES AND FOOD
  Norfolk Whelk Industry
  Norfolk Whelk Industry
  Cereal Imports
  Cereal Imports
  Brucellosis
  Brucellosis
  Liquid Egg
  Liquid Egg
  Fishmeal
  Fishmeal
  Feedingstuffs (Bone and Meat Meal)
  Feedingstuffs (Bone and Meat Meal)
DEFENCE
  R.A.F. Married Quarters, El Adem
  R.A.F. Married Quarters, El Adem
  B.A.O.R. (Military Police)
  B.A.O.R. (Military Police)
  Chelsea Hospital
  Chelsea Hospital
KENYA
  Mr. Richard Beeston
  Mr. Richard Beeston
COMMONWEALTH RELATIONS
  Commonwealth Secretariat
  Commonwealth Secretariat
NATIONAL FINANCE
  Bank Rate
  Bank Rate
  Dollar Securities
  Dollar Securities
  Calderpark Zoo
  Calderpark Zoo
HOSPITALS
  Gravesend Hospital
  Gravesend Hospital
MINISTRY OF HEALTH
  Hostel, West Mailing
  Hostel, West Mailing
  CYPRUS (UNITED NATIONS FORCE)
  CYPRUS (UNITED NATIONS FORCE)
PAYMASTER-GENERAL
  Chelsea Hospital (Visit)
  Chelsea Hospital (Visit)
COAL
  Old-age Pensioners
  Old-age Pensioners
HOME DEPARTMENT
  Mr. Zoledziewski
  Mr. Zoledziewski

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

BARONESS BROOKE OF YSTRADFELLTE
Dame Barbara Muriel Brooke, D.B.E., having been created Baroness Brooke of Ystradfellte, of Ystradfellte in the County of Brecknock, for life—Was (in the usual manner) introduced.
The Earl of Elgin and Kincardine (Lord Elgin)—presented his Writ as Earl of Elgin and Kincardine and took the Oath accordingly.
The Baroness Northchurch—Took the Oath.
The Viscount Leverhulme—Took the Oath.

SALMON DRIFT NET FISHING
2.48 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the ban on drift net fishing for salmon, due to expire next February, will be renewed until such time as the Hunter Commission's final report has been received and considered.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, Her Majesty's Government will shortly seek Parliamentary approval to the extension of the present prohibition to enable the Hunter Committee's Report to be received and its recommendations considered.
LORD BALFOUR OF INCHRYE: My Lords, arising out of that reply, may I
88
ask the Minister whether he is aware that his Answer will give great satisfaction to all parties who are interested in preserving this great national asset, including the fish themselves?
LORD HUGHES: I thank the noble Lord.

NATIONAL HEALTH SERVICE PRESCRIPTION CHARGES
LORD AUCKLAND: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware of the concern among family doctors over their proposal to abolish all National Health Service prescription charges and whether any consultations have taken place with the medical profession in respect of this proposal.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (LORD TAYLOR): My Lords, my right honourable friend the Minister of Health is aware that at the Annual Representative Meeting of the British Medical Association this year a resolution was passed withdrawing the Association's long-standing opposition to prescription charges. He is to discuss this with representatives of the profession to-morrow.
LORD AUCKLAND: My Lords, whilst thanking the noble Lord for that reply, may I ask the Government whether they are aware that many family doctors of all grades and in all areas have expressed grave concern at the arbitrary removal of all these charges? Are the Government aware that many wage-earners can well afford to pay the charges, that abuses can easily happen, and that doctors who are already overworked will be further encumbered by this policy?
LORD TAYLOR: My Lords, Her Majesty's Government have not canvassed the opinion of all doctors in all areas. With regard to "arbitrary" abolition, may I say that this has been the policy of the Labour Party for many years and the decision is not made arbitrarily. As to the work-load on general practitioners

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and their fear that it may be added to, Her Majesty's Government do not think that a prescription charge is the best method of reducing the heavy work-load. Indeed, many doctors feel that the best way is to examine the patient properly and then prescribe without having to worry too much about what medicine is to cost.
LORD AUCKLAND: My Lords, may I ask whether the noble Lord has read the letters in the British Medical Journal, which leave no doubt as to the attitude of many doctors to the policy; and will he urge on his right honourable friend the need to think very carefully before going forward with this policy?
LORD TAYLOR: My Lords, I have not read all the letters. It is, however, clear that until recently the majority of doctors in this country were in favour of the abolition of prescription charges. Indeed, the evidence they gave to the Hinchliffe Committee made this quite clear. It was only at the last Annual Representative Meeting of the British Medical Association that a change of policy took place; and one may guess that doctors were unhappy for many reasons and that this was reflected in their decision.
BARONESS HORSBRUGH: My Lords, as the noble Lord said that doctors will be glad not to have to worry about the cost of these prescriptions, may I ask whether it is not correct that the cost to the country will be £25 million a year?
LORD TAYLOR: My Lords, I think that is doubtful; but one cannot predict in advance what the; cost will be. When I said that doctors will not have to worry about the cost of the prescription, I should have said "about the cost of the prescription to the patient". One of the effects of the charges: is that doctors have over-prescribed in order to give the patient who is poor as much medicine as they can for the two shillings.
BARONESS SUMMERSKILL: My Lords, is it not right to say that for many years doctors, who are people of high principle, have supported the policy that the prescription charge was unfair to the poorest in the country; and would not the noble Lord agree that it was probably on the grounds of expediency only that three or four months ago they changed
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their policy, because they felt that the family doctor had not been sufficiently protected by the previous Government?
LORD TAYLOR: My Lords, I think that the first underlying point of my noble friend's question is certainly true: that the prescription charges bear heavily on the poorest section of the community. Many people on National Assistance whom I know personally are unwilling to get prescriptions, because it is an extra burden that they have to meet and cannot afford: many are entitled to claim relief but do not do so because of the technical difficulties involved. With regard to the second point of my noble friend's question, I do not think I should try to read the minds of the British Medical Association.
LORD DRUMALBYN: My Lords, surely the noble Lord must be aware that those on National Assistance do not have to pay the prescription charges and that there are no technical difficulties involved.
LORD TAYLOR: Yes, my Lords, the "noble Lord" is aware that they have to pay for them and then claim reimbursement. This is the difficulty.

IRRESPONSIBLE TRAVEL AGENCIES
VISCOUNT MASSEREENE AND FERRARD: My Lords, I beg leave to ask the first Question which stands in my name of the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they contemplate taking any action to prevent a repetition of the chaotic conditions that many British holiday makers had to endure this Summer owing to the irresponsibility, financial and otherwise, of some travel agencies.]
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD RHODES): My Lords, my right honourable friend the President of the Board of Trade is studying this matter. His conclusions will be made known as soon as possible.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I thank the noble Lord for his reply. But is the noble Lord aware that a great many people in this country are extremely worried about

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this question? It is true that we have the Travel Association; but all agents do not have to belong to the Association. Does the noble Lord think it will be possible for Her Majesty's Government to devise some scheme to ensure that all travel agents must have some proof of their financial standing?
LORD RHODES: My Lords, if the noble Lord was in the House on November 12 when I was replying to a debate on the Consumer Council, I think he would have no doubt as to where I stand in the matter. It is a very important matter which affects a large number of people, considering that the number who are going abroad is now approaching 4½ million a year. But it is not an easy problem, because registration of all applicants with no known past record of fraud or insolvency would lull the public into a false sense of security. On the other hand, selective registration, with tests sufficiently stringent to eliminate, or virtually to eliminate, the possibility of future insolvencies, might well eliminate a larger number of existing tour operators than most people would think right.
VISCOUNT MASSEREENE AND FERRARD: I thank the noble Lord.

CEYLON: FREEZING OF INVESTORS' DIVIDENDS
VISCOUNT MASSEREENE AND FERRARD: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper, and I also declare an interest.
[The Question was as follows:
To ask Her Majesty's Government what action, if any, is being taken on the freezing of British and other foreign investors' dividends in Ceylon.]
LORD TAYLOR: My Lords, the Government have made strong recommendations to the Ceylon Government about the adverse effect on British businesses and individuals of a number of measures taken by the Ceylon Government since July. These representations are in line with those made by the previous Government. The measures that were taken by the Ceylon Government on which representations have been made include suspension of the remittance of interest, profits and dividends. The most recent
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of our representations was made by my right honourable friend the Secretary of State for Commonwealth Relations during the course of a talk with the Ceylon Finance Minister on November 16.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I thank the noble Lord for his reply.
LORD ALPORT: My Lords, may I ask whether any action has been taken by the Ceylon Government to meet the views of Her Majesty's Government in this matter?
LORD TAYLOR: Yes my Lords. As has been stated in another place, we have received assurances that it is not the policy of the Government of Ceylon to squeeze out British-owned businesses, and that the recent Budget measures were intended primarily to safeguard Ceylon's foreign exchange reserves; that individual cases of hardship will be considered by the Ceylon authorities, and that there is no desire whatever on the part of the Ceylon Government to discriminate against British interests.

BUSINESS OF THE HOUSE
LORD CHAMPION: My Lords, I should like to inform the House that in view of the large number of noble Lords who have put their names down to speak this afternoon, arrangements have been made for a cold supper to be available this evening. I should like also to inform the House that at a suitable moment after 3.30 p.m. my noble friend Lord Shackleton will be making a Statement on the aviation industry.

FINANCE BILL
3.0 p.m.
Order of the Day for the Second Reading read.
LORD SHEPHERD: My Lords, on behalf of my noble friend the Leader of the House, I beg to move the Second Reading of this Bill. I think it is the general practice, over a large number of years, that we use this occasion for a wide-ranging debate on the economic situation of our country. My task this afternoon, I think, must be to deal with the Bill. There is considerable ground to cover and my noble friend the Leader

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of the House has thought it right, since the Government are forward-looking, that we should have another Minister intervening later in the debate to give some of the thoughts of the Government about the future, in particular about the future of the export trade.
I hope that we shall have a constructive debate, without any form of rancour. From the list of speakers, I am sure that we shall have a number of useful and constructive speeches. May I say immediately that we will consider them carefully? And may I say how pleased we are that the noble Viscount, Lord Watkinson, is to intervene this afternoon? I shall listen to his speech with particular interest.
We have passed through a period of very great anxiety during which serious charges have been made against Her Majesty's Government. It is said that we created the crisis of November, that we have been impetuous and hasty, and that we have failed to produce the programmes required to meet the dangers and difficulties that face this country. Another accusation is that we have dismayed our friends abroad and created uncertainty in the City of London and in other financial circles. These are serious charges. I shall refute them and explain the circumstances of our actions. But I think it is true to say—and I do not think any noble Lord opposite will disagree with me—that when we set out with new ideas, and break with the old, traditional methods which in themselves have failed, the new methods, whatever they may be, create uncertainties in their early stages. I cannot help but feel that that is one of the reasons for the uncertainty which undoubtedly exists.
To use the words of Mr. Maudling, we inherited the difficulties of the previous Government. I do not think noble Lords opposite can suggest that we created them. When I look at the figures, I am reminded of the "creeping danger" which my noble friend Lord Snow spoke of in a debate some days ago. I think it is true that this country had been lulled into feeling that all was well and did not recognise—and I think that this may be true of the Party opposite—the creeping danger, not only in our national economy, but also within industry.
Any Government, of whatever political persuasion, would hope to find two things
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when taking office: first of all, a sound base from which they can proceed and honour the pledges they made at the Election and, secondly, and perhaps more important, time—time to translate beliefs and ideas into plans, plans that will interlock, because I do not believe that it will be disputed that the plans for economy, foreign affairs, defence and social services must all interlock. I do not think that it will be disputed that on October 16 Her Majesty's Government had neither of these things. We inherited a weak and dangerous economic base. We found events pressing upon us, events that required decision and action. I do not believe that any Government have inherited the problems we have inherited with so little time in which to act. I do not wish this afternoon to be controversial, but it is clear that it was the Party opposite which had the responsibility until October 15, and it was they who decided to retain that responsibility to that date.
Perhaps noble Lords opposite did not recognise the gathering storm clouds. Perhaps they may have recognised them and preferred to look the other way. But noble Lords cannot say that they had no warning. If we look at the trends in 1959 and 1960, which should be indelible on their minds, we see that they were basically similar to the trends in 1963 and 1964. For the first half of 1960 our visible and invisible trade, seasonally adjusted, showed a deficit of £91 million. For the same period of 1964 and on the same basis we had a deficit of £182 million. I think that that was sufficient warning to the Administration which had the responsibility until October 15.
Imports were at a high level and we had what were called disappointing exports, stagnant production and increasing Government expenditure. We had the warning signals, even though, like the typhoon, they did not presage the severity of the situation. But the Party opposite decided that they would not raise the storm warning. I believe that if we had taken action earlier a great deal of the severity of the position in October and November, if not avoided, could have been largely mitigated. Therefore, noble Lords opposite must bear a great responsibility in that matter.
When this Government took office, on the best advice available to us we believed

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that at the end of 1964 we should be facing a deficit, on current and long-term capital account, in the region of £700 million to £800 million—one of the largest deficits in the long history of this country. It is true that these figures include large items of a temporary nature, such as an abnormal level of stock-building and of overseas investment by the oil industry. But that does not excuse the previous Government for not acting to bring the total deficit under control. It may well be that 1965 will be better, but it is the case that these temporary and abnormal capital items tend to be repeated. It was expected that the deficit might fall to about half this year's figure. But in the view of Her Majesty's Government a deficit of that size, coming on top of that of 1964, was totally unacceptable.
It has been said that the position of our imports this year is due largely to stockpiling; and this may well be so. They are certainly at a high level, and I think great care will be needed in assessing their particular character. No one would deny that large increases of stocks of raw materials and semi-manufactures were a necessary accompaniment of the expansion of the domestic output; and the rise in fixed investment was bound to draw extra imports of machinery. But there must be considerable concern regarding so large an increase in the import of manufactured goods as a whole.
If we take the average of the nine months to September, we see imports of manufactured goods rising from £46T million a month in 1961, to £533 million a month in 1963, and (I ask the House to bear this figure particularly in mind) to a figure of £70 million a month in 1964. It was this sort of increase which made it imperative to take some action to reduce the growth of imports. There was some criticism (I remember the words of the noble Earl, Lord Ferrers, in a supplementary question) in regard to the imposition of surcharges in relation to EFTA. I do not think that this can be a matter of pride, but it may be of interest that during the first nine months of this year the published figures of our imports exceeded those of our exports to that area by about £90 million.
Two questions obviously presented themselves to the Government when we took office: whether action was
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necessary; and what action had to be taken. Could we be like Mr. Micawber and wait for something to turn up? If action was required—and I think it is clear from the figures I have already given that some action was required—what action had to be taken? Could we rely upon long-term measures to develop the efficiency of our industry, to obtain an incomes policy, and to promote a greater export drive? Could we rely upon such long-term plans? The Government decided that the situation was so serious that short-term and temporary measures could not be avoided.
Once we had come to that decision, a number of other questions immediately arose. There are some people who have advocated that we should have devalued the pound sterling immediately. Her Majesty's Government absolutely rejected that suggestion. We could, of course, have adopted the 1961 "Stop-Go" policy with all the damaging consequences to employment, the fall-back of investment, and the slowing down of production. If we were to consider that particular one, we had to take into account what was the overall position of our economy. Was it overloaded or overheated? It was the view of the Government that this was not so. As to the "Stop-Go" policy, I would remind the House that it has been the policy of my Party to oppose that method, which was adopted by the previous Administration, and we have opposed it rigorously in this House.
The Government thought it was essential to strike where the greatest danger lay, which was within the balance-of-payments field, and in particular our imports, and, at the same time, to introduce a limited help to our exporters. We felt that that would meet the situation that then existed. Having accepted that imports had to be curbed, how were we to do it? Were we to adopt quantitative restrictions? Well, there was one advantage there in that it would comply with international trade agreements. But Her Majesty's Government found that the system of quantitative controls would be far too rigid: it would restrict freedom of choice; it would "freeze" patterns of trade, and certainly it would raise the whole question of existing contracts. Further, administrative machinery would have had to be set up. It would have imposed a delay during which time we

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could well have had a flood of imports into this country which would have been quite intolerable.
The Government therefore decided to adopt the system of a temporary import charge. As your Lordships will see in the Bill, we are proposing a surcharge of 15 per cent. on a wide range of manufactured goods. I recognise that this is in some ways a contravention of our international agreements, but it is the view of Her Majesty's Government that it is less injurious to trade; it has a great deal of flexibility; and, above all else, it can have immediate effect. I must say that I was very pleased indeed to hear from the noble Viscount, Lord Amory, when he was speaking on the gracious Speech, that he felt that the surcharge system was infinitely better than the quantitative restriction. We believe that this 15 per cent. surcharge will reduce our imports in a full year by something approaching £300 million.
Perhaps I should remind your Lordships of our import position. In 1963 we imported about £1, 350 million worth of the goods covered by the new charge; in 1964 it is estimated that the figure for these goods would have risen to about £1, 700 million, an increase of 25 per cent.; and in 1965, unless some corrective measures have been taken, this trend might well have continued. Apart from reducing, or (shall I say?) holding in curb, the import figure, the revenue of about £200 million in a full year from this charge would have a deflating influence on our economy.
LORD DRUMALBYN: My Lords, may I interrupt the noble Lord on this matter because I think it is most important? He is, I take it, basing his calculations on the assumption that this charge will go on for a full year until 1965, without any reductions as provided for in the Bill.
LORD SHEPHERD: I am grateful to the noble Lord, Lord Drumalbyn. He has, in fact, corrected something. It would be wrong—and it is the one impression that I do not want to give—to think that there is any fixed period for this particular charge. I was coming on to that, but the noble Lord's interruption helps me to put forcibly to your Lordships' House that this is a temporary charge. The figure I have quoted would
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apply if the charge were in existence for a full twelve months. It is true that this charge can be reduced by Order in Parliament. I cannot find words strong enough to emphasise that this is not a protective barrier behind which some of our suppliers and manufacturers can shelter. It will not be removed in the interests of any particular organisation, but it will be removed as soon as the general economic position permits; and it will be under review in a few months. There has been a considerable criticism in your Lordships' House of Her Majesty's Government in regard to consultations. The Government recognise their responsibilities in international agreements, and carefully considered their obligations before taking this step. It is said that there should have been consultations. But consultations with whom? Were we to consult with EFTA, the Common Market countries, the United States, the Commonwealth, and some of those developing countries with whom we have been developing trade? Surely, if we had consulted with one, we should have had to consult with all. If it was a question of secrecy, could we have retained the secrecy with consultations over such a wide field?
What do we mean by "consultations"? Do we mean, by "consultations", extending the period of notice, or do we mean when there is a possibility for negotiations? If that is what we mean, how would it have been possible for Her Majesty's Government in that position to obtain speed and to retain secrecy? In the circumstances, however regrettable it was—and Her Majesty's Government recognise this—I do not think there was any alternative to the action that we have taken.
Now I wish to turn to the second part of our steps dealing with the balance of payments, the export incentive. I believe that, by and large, our manufacturing costs are competitive in the export markets; but there are some impediments and discouragements. The Government have decided to introduce a scheme for the repayment to exporters of sums broadly equivalent to the amounts of certain indirect taxes which enter into the cost of production of exported goods. The rates of rebates will range from approximately 1 per cent. to 3 per cent., and the House will know

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that oil and petrol taxes will also be affected. There will also be the full rebate of import charge paid on imports incorporated in export goods.
I have seen in the Press some criticism that this is a niggardly gesture. This is a first step, I believe, in the direction of giving direct help to our exporters. But it is only a first step, and we are having urgent and sustained investigations and discussions as to how we can help our exporters. We have set up the Commonwealth Export Council and the British National Export Council, and I am quite sure your Lordships would agree with me if we were to express our thanks and appreciation to Sir William MacFadzean, who has agreed to be Chairman of both these Councils. It has been estimated that some 200 firms are responsible for 50 per cent. of our exports. There is clearly scope for a large number of firms to do much more, and if this could be achieved our exporting problems could be substantially solved.
The Government have announced the introduction of a number of proposals to improve the quality and range of help which the Government presently afford to exporters, and this matter is now under review by the President of the Board of Trade. Our aim will be twofold: to secure the redoubling of effort by those firms that already make a substantial contribution but, above all, to broaden the base of our exporting effort to include those firms which are at present chiefly concerned in selling their goods in the home market.
A marked increase in the rate of expansion of British exports is a fundamental element in the Government's economic and social policies. Those policies themselves will contribute to the strengthening of our industrial performance, so that we may achieve a steady economic growth, sustained by a strong balance of payments. Perhaps I may speak for one moment as one who used to be an exporter. I cannot help feeling that sometimes in this country there is a reluctance to try to export because the task is difficult. But our competitors overseas are not supermen. There is no reason whatever why we should not expand our trade if we remember one thing: they do not buy from us; we sell. If we adopt the spirit
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of going out to sell, and not expecting persons to come to us and buy, I am quite sure that we shall make tremendous strides in our export business. The cost of this aid will be £75 million. The two proposals—the proposals for the import charge and for the export rebate—your Lordships will find in Clauses 3 and 7, with the appropriate Schedules.
I must now come to the other two measures in the Bill. I said earlier that it is the view of Her Majesty's Government that our economy to-day is finely balanced. There does not appear to be any great overloading; there is some strain in one or two industries, in particular the building industry. But we do not think that there is any need as of now to carry out strong deflationary policies. If we reduce our imports by £300 million a full year (and here the noble Lord, Lord Drumalbyn, is right), that is bound to create some strain on our productive capacity. Her Majesty's Government, and the Chancellor of the Exchequer in particular, have therefore thought it right that there should be some corrective measures to this. It is for this reason that the Chancellor has decided to increase the hydro-carbon oil tax, and the increase came into immediate effect by a Resolution in another place.
I think we should look at this particular operation as one stage. We shall be increasing the revenue at the rate of approximately £200 million in a full year, as a result of the temporary import charge, and by £93 million, through the increased tax on oil. The cost of our export rebate will be approximately £75 million. We believe that by this Budget we are easing the demand on our resources by about £218 million. With effect from April, 1965, the Chancellor proposes the raising of income tax by 6d. in the pound. I think it is right, when one considers this, to take into account the proposals and measures, which will shortly come to your Lordships' House for consideration, dealing with the increase in pensions and the abolition of prescription charges.
We on this side of the House believe that, whatever may be our difficulties, we have a duty and a responsibility to those many thousands of old folk who undoubtedly live in distress and misery

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to-day. I think it was for many of us an eye-opener when we went round at the General Election and canvassed at the street door. It was only when we were asked into the house that we really appreciated the poverty and the misery of these people. I think we were absolutely right to do what we propose in this Bill. I believe that the country as a whole agrees with us.
Let us also recognise that what we have done has been misunderstood. This will be a heavy cost, a cost of approximately £345 million. Therefore, some corrective measures are necessary. The Chancellor of the Exchequer proposes that the major part of these pension increases should be met by increased contributions. Contributions will be raised shortly and the increases will bring in approximately £274 million, leaving a balance of £71 million to be found by the Exchequer. The Chancellor now feels that in April not only should we raise that sum, but we should provide an excess; and the additional income tax of 6d. in the pound will bring in £122 million in a full year.
This rise in income tax will affect only the taxpayer in the higher bracket. A married man with no children earning £16 a week will not pay any increase. This will apply equally to a married couple, with two children, earning £22 a week. I have seen some criticism that this will be a disincentive to our young scientists and our young executives, but I think this is a great exaggeration. If one takes a married couple, both working, with a combined income of £2, 500 a year, this increase will mean an extra tax payment of £20 a year. For a married couple with no children where the husband is earning £3, 000 a year, the increase will be £42 per annum. I should have thought that to those people—and I think this will be true—these relatively small increases will be a reasonable price for an easy conscience when one looks to the old people.
My Lords, there has been much discussion as to whether this Budget is inflationary or deflationary. The Government's view is that by itself it maintains the present balance, but, in conjuction with the 7 per cent. bank rate, it would appear that the balance is now slightly tilted towards reducing pressure on our economy. As I said earlier, there is some pressure, but within a relatively
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small number of industries. It has been said that these tax increases will be cost inflationary. Whenever taxes are. raised there is a tendency for costs to rise, but it is the view of Her Majesty's Government that what has been done does not justify any considerable increase in costs, both in production and in the retail shops, and that in our position one should make an appeal to all those persons who are in some position of authority and responsibility to see that these increases are kept to the minimum.
I do not think I need say a great deal about the corporation and capital gains taxes. Your Lordships' House will no doubt have read the statement that was made by the Chancellor of the Exchequer yesterday, which goes a great deal forward and I think will quieten many of the previous uncertainties.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I should like, if I may, to interrupt the noble Lord for one moment just to ask whether the Government have really fully considered this attempt to work through a corporation profits tax. My memory of the occasions way back, just after the first war and again later on, when a good number of corporations were to be mulcted by unfair taxation is not very happy. I do hope this matter has been adequately considered.
LORD SHEPHERD: May I say to my noble friend—and I am so pleased he is here this afternoon—that he perhaps will see that the Statement of my right honourable friend the Chancellor yesterday specifically sought advice and comment by all interested parties. This is an effort to reframe our tax system and all advice and comment is obviously welcome. But we believe that this corporation tax is vitally necessary in that it will encourage companies to plough back profits so that we can increase our production through modernisation and efficiency. No doubt there will be points raised during the course of the debate, and I am quite sure that my noble friend the Leader of the House will be ready to answer them. But we have had a great deal of discussion on it, and we set great store by this in an effort to obtain an incomes policy.
Apart from these measures, I would remind the House that the Government

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propose a Rent Bill in an effort to curb increases of rents and keep them in relation to wages, and to set up a National Price Review Body to try to prevent unnecessary rises in prices in our shops and factories.
My Lords, with regard to sterling, undoubtedly we have gone through a most anxious time. We have obtained a breathing space with the aid that has been made available. But I am bound to remind the House that this is not the first time that we have had a financial crisis, or a run on the pound. I would remind the House of the situation in 1957, and, again, the seriousness of the present situation as compared with the deficit of 1960. Nor can the previous Administration claim that there have been no warnings. The current account was deteriorating in 1963. By the last quarter of that year it had gone into deficit, and the deficit, seasonally adjusted, grew to £69 million in the first quarter, and to £113 million in the second quarter, of this year, not to speak of the outflow of long-term capital.
It has always been recognised that the autumn is a dangerous period and the position and facts were all known in financial circles. Therefore, there is no question, as has been suggested, of our being talked into the crisis. Through November the pound was under heavy pressure, the bank rate had to be raised to 7 per cent., and we had to get support from the Central Banks abroad amounting to 3,000 million dollars to defend the pound. Here, if I may, I would express a word of great appreciation to all those who were involved in these negotiations. What is clear from this immediate support is the recognition that one currency depends upon another.
There has been some case made, and some criticism, that we should have carried out a much stronger deflationary policy. This view has been canvassed abroad, and on the Continent. Her Majesty's Government do not believe that in the present circumstances there is any need to deflate the economy, but we shall be watching very carefully any trend; because, obviously, any increase in demand might tilt this finely balanced position in which we find ourselves. We shall watch with the utmost care. As noble Lords already know, the Govern-
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ment are also carrying out a very careful and thorough investigation into Government expenditure. Our overseas rate of expenditure is in the region of £500 million a year. Certainly—and I think noble Lords opposite will welcome this—I think that here a full and careful and impartial inquiry is required.
My Lords, I think I have covered the Bill, and I should like to close with this comment. I read the other day that Sir Geoffrey Crowther (I think he was speaking at the Trust Houses annual general meeting) had said that this country was fighting for its life. I would not accept that: we have ample reserves still. But this I would say: if that were to be the spirit and the sentiment of all of us in this country during 1965, we could at last make a great step forward and break through our difficulties. Equally I do not think we should talk ourselves into being a second-rate management or a second-rate working country. There is a great deal that we could improve. This, I am afraid, cannot be legislated for. If it could, no doubt we might be able to achieve the end more quickly. We can obtain it only by co-operation. Her Majesty's Government are willing to co-operate with everyone. We are not the enemies of business or of commerce; we want cooperation with them. We want the co-operation of our workers. We have a formidable task ahead of us. We believe that we have the plans and the ideas that can give us that break-through. But we shall need the co-operation of all, and I hope that in the months and years to come we shall share and obtain the co-operation of noble Lords opposite. I beg to move.
Moved, That the Bill be now read 2a—(Lord Shepherd.)

FUTURE OF THE AIRCRAFT INDUSTRY
3.40 p.m.
THE MINISTER OF DEFENCE FOR THE ROYAL AIR FORCE (LORD SHACKLETON): My Lords, with your Lordships' permission, I should like to repeat a Statement which is being made by my right honourable friend the Minister of Aviation in another place on the appointment of a Committee to

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examine the future place of the aircraft industry in the British ecenomy. The Statement is as follows:
"Lord Plowden has accepted the Government's invitation to serve as Chairman and the: Committee will have the following terms of reference:
'To consider what should be the future place and organisation of the aircraft industry in relation to the general economy of the country, taking into account the demands of national defence, export prospects, the comparable industries of other countries, and the relationship of the industry with Government activities in the: aviation field; and to make recommendations on any steps and measures necessary.'
"From this House"—
that is to say, the other place—
"the right honourable Member for Birmingham, Hall Green, and my honourable friend the Member for Edmonton have agreed to serve on the Committee."
I might translate that into the right honourable Aubrey Jones and Mr. Austen Albu.
"The other members will be: Mr. David H. Barran, who is a Managing Director of the Shell International Petroleum Company Limited,
Mr. Fred Hayday, the National Industrial Officer of the National Union of General and Municipal Workers, and a former Chairman of the Trades Union Congress,
Admiral of the Fleet Sir Caspar John, who was on his retirement in 1963 the First Sea Lord, and is now Chairman of the Housing Corporation,
Mr. Christopher McMahon, an economist with the Bank of England and Fellow of Magdalen College, Oxford,
Sir William Penney, the Chairman of the Atomic Energy Authority.
"The Secretariat will be headed by Mr. Norman Craig, an Assistant Secretary in my Department, and the Committee will have every assistance they require from my Department.
"I should like to thank all the members for agreeing to take part in
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this most important inquiry, and to wish them success and speed in their deliberations."
EARL JELLICOE: My Lords, I am very grateful to the noble Lord for repeating this Statement. I would say straight away that, if it is desirable to set up a review Committee of this sort—and in this respect I would only comment that I well remember over the last year or so on a number of occasions the then Opposition castigating the then Government on setting up reviews rather than taking decisions themselves on the information available to them—I should like to congratulate the Government and the Minister of Aviation on the strength of this particular Committee. This is a vastly important industry into which they will be inquiring. Their job will therefore be a very important one indeed, and I am very glad to see that the Minister of Aviation has managed to recruit for this job a really first-class team.
I would also congratulate the Government on the aspect of security. I think this is one of the few important Statements by the Government which do not appear to have been fully anticipated by one means or another by our alert and enterprising Press. I think this is a considerable feather in the Minister of Aviation's cap, and I hope it is one which some of his more voluble colleagues will be able to wear.
Having said that, may I ask the noble Lord the following questions? Is it intended that when the Committee have finished their studies their report will be made public? Secondly, I have noted what is said in the Statement about speed. Can the noble Lord give us any indication of when it is hoped that this review will be completed? In this connection I would remind your Lordships that there are, of course, a number of associated reviews going on in this sphere. We learned from the noble Lord, Lord Walston, in the absence of the noble Lord, Lord Shackleton, during the debate on the Address, that the Government were reviewing a number of important defence projects, such as the TSR 2, the P. 1154, the HS 681, the Phantom project, the Wessex 3, the AJ. 168 and so on. We also know that the Concord project is being reviewed—perhaps the most important of all. May I ask the noble

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Lord whether decisions on these military and civilian projects which I have enumerated will be deferred until the Plowden Committee have reported?
I think there is obviously a very strong case for that course, but unless the Committee are going to be able to report very quickly this will of course mean continuing uncertainty on the part of the Services and the industry, and it is difficult to see, if the Government follow that course, how those amicable negotiations with the French on the Concord, about which we have learned so much recently, can meanwhile proceed. Can the noble Lord let us know what are the Government's intentions on that? Finally—and the noble Lord will not be surprised to have me put this question—can he let us know whether this review will include the activities of the British aircraft industry in space, projects such as Black Knight, Blue Streak, our participation in ELDO, and so on?
LORD SHACKLETON: My Lords, the noble Earl extracted a lot from a fairly brief Statement. I will try to answer some of his questions. First of all, on the question of publication my right honourable friend will undoubtedly do his best to provide, one way or another, as full an account as possible of the committee's conclusions. But the noble Earl will be very well aware that this inquiry will cover matters of national security and also commercial confidence, and this will inevitably restrict the amount of information that can be disclosed. But it is equally clear, I think, that it is very important that as much as possible should be published; I fully accept that.
I think the noble Earl also said we had castigated the former Government with setting up inquiries when they might have got on with the job themselves. We either can say that they should take satisfaction in our emulation of them, or we could urge, which I believe to be the case, that this is a problem which is particularly well suited for this type of inquiry. Of course, we recall the inquiries the former Government made in regard to certain parts of industry, the shipbuilding industry and so on, about which I heard no word of criticism of the conduct of the inquiry; there was criticism of the failure to take action afterwards. On the timing, I cannot, I am afraid,
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give an answer. The Chairman, who has only just been appointed, has been asked to press on with his deliberations as quickly as possible. I do not think we should wish the desire for urgency—and I agree it is an urgent matter—to influence the thoroughness of the Committee's review.
The final point was: will the Committee report before or after the review of certain projects? I should like to make clear that the review of certain projects is part and parcel of the whole of the Government review on Defence expenditure and other expenditure, and it is of a quite different nature from a far-reaching examination in depth of an industry. The Committee will have a large body of work on which they can start while the reviews are going on, but it is to be expected that the results of the project reviews will be available to the Committee in good time for them to take them into account in forming any conclusions and making any recommendations.
THE EARL OF SWINTON: My Lords, I appreciate that the Government's decision cannot be held up while this inquiry is going on—I think that is not unreasonable; but surely it would be reasonable for the Government to give an assurance that in these inquiries, which, in their result, may entirely cut across the whole structure of the aircraft industry, and indeed other industries, the Government will take the Committee into their confidence and will use them as a consultative committee while they are conducting inquiries into the Concord and other matters? Otherwise, the Government's action might completely stultify any action that the Committee is going to take. It seems to me an admirable Committee, and it would be a great misfortune if they were not used by the Government on these critical matters at a critical time.
LORD SHACKLETON: My Lords, I appreciate the way in which the noble Earl has put these suggestions. I am rather doubtful whether it would be appropriate for a Committee of Inquiry, which is in a sort of semi-judicial capacity—certainly in an independent capacity—to take part in discussions with the Government. It would bring the Government much more deeply into the work of the

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Committee. Obviously, it would be desirable if the Committee could report; but I do not think the Government can abrogate their present-day responsibilities both in relation to expenditure and defence. I certainly have noted the point of the noble Earl, and will pass it to my right honourable friend.
LORD BALFOUR OF INCHYRE: My Lords, obviously, this Committee is a high-powered Committee, with a wide range of most important subjects to cover. Inevitably, it must take a considerable time before it can report to Her Majesty's Government. I am sure we all agree that the one thing we want to avoid is industrial lack of confidence and industrial uncertainty. In view of that, would the Government consider asking the Committee to make a series of interim reports upon various projects, and for Her Majesty's Government then to give an endorsement or a rejection of such recommendations as the Committee may make, in order that there shall be an avoidance of the possibility of industrial lack of confidence in a most important industry?
LORD SHACKLETON: My Lords, again I appreciate the noble Lord's suggestion. Like the noble Earl, Lord Swinton, he knows a great deal about the aircraft industry. But here again, I think I can only say that I take note of what the noble Lord said. I do not think I can quite go along with him in his reference to projects. I feel that there are urgent decisions in regard to particular defence projects on which it will simply not be possible to expect an interim report. But I should like to have an opportunity to consider it. As the noble Lord said, it certainly is highly desirable that this Inquiry should be conducted in an atmosphere of goodwill and, I hope, confidence.
LORD MERRIVALE: My Lords, I recognise that it may be necessary to set up this Committee. No doubt the noble Lord opposite will have read Robert Heller's report in the Observer of November 8 last, entitled "The Agonies of Air Appraisal". Equally, there can be no more appropriate chairman than the noble Lord, Lord Plowden. But as the Committee includes an ex-member of the Trades Union Congress, Mr. Fred Hay-day, it seems to me fair that some executive member of the aircraft manufacturing side should be appointed in order to
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give his views in a permanent capacity to the Committee.
May I, finally, ask the noble Lord one question? Last week, in regard to the Concord project, he said that there was no question of cancellation, so will he assure the House that progress on that project will not be suspended while the Committee is studying the position of the British aircraft industry? According to the Observer on November 1 last:
"Whitehall expects that the Concord project will be a dead duck by Christmas",
I understand the words "dead duck" to be a Whitehall expression. Would he assure the House that that is not so?
LORD SHACKLETON: My Lords, I really think that the noble Lord is taking advantage of a Statement which was concerned with the setting up of a Committee. I do not think I will follow him into his Press researches on the Concord. I stand by the remarks that I made in this House only a few days ago. Nor can I understand his suggestion that somehow Mr. Hayday, who is a member of the Committee and is a most able and well respected trade union official, should be equated with a member of the aircraft industry. I do not see that this is relevant at all. This is, in fact, a well-balanced Committee. There is experience of all kinds—from the Services and from the Government service. There is a well-known economist—I know he is good because he is my son's tutor at Oxford, and I hope he will continue to be. Then there is Mr. Barran, who is managing director of Shell International Petroleum. It seems to me that this change would in fact damage the nature of the Inquiry. The important thing is that all those who wish to give evidence should be free to do so. I think that if they were represented on the Inquiry—indeed, if there were, say, a serving Air-Marshal, or someone of that sort—this would inevitably rather weaken the position of those who wished to put forward views.
EARL JELLICOE: My Lords, I appreciate the further information that the noble Lord has given in reply to supplementary questions, and I hope he will go back to his right honourable friend on the points which my noble friends have put, because it seems to me that the projects which we have in mind

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are really the guts of the industry, or will be a large part of the guts in the late 'sixties and the 'seventies. May I just ask him whether he is able to answer my last question—namely, whether Lord Plowden's writ will run into the British aircraft industry's activities in space?
LORD SHACKLETON: My Lords, I am sorry; I had forgotten to answer that. I am afraid I cannot specifically answer the question. I have a recollection that it will cover aero space. Certainly, I will look further into that, but I am afraid I cannot give a specific reply. I am pretty certain that it must be concerned with this side of the matter.
I cannot give any undertaking that, beyond the general points that have been made by noble Lords opposite, there could possibly be a hold-up of decision on particular projects. It may well be that some of them can go along. But I think noble Lords will also agree that it is highly important that decisions should be taken, and I am most doubtful whether the Committee would be able to issue an interim report soon enough to be helpful. But I will pass this suggestion on.

FINANCE BILL
4.0 p.m.
Second Reading debate resumed.
THE EARL OFDUNDEE: My Lords, we are all very grateful to the noble Lord, Lord Shepherd, for his clear and capable exposition both of the Finance Bill itself and of the background to it. I believe that this is the first major speech which the noble Lord has made from the Government Front Bench; anyhow, it was a very good speech. If I may say so, it lends some distinction to our debate that the Finance Bill should be introduced by so romantic and colourful a figure as the Captain of the Gentlemen-at-Arms, which is the English Royal Bodyguard. In Scotland I am not a captain; I am only a very humble private in the Scottish Royal Bodyguard of Archers. And if I loose off a few arrows this afternoon in the general direction of the noble Lord, I am sure he will understand they are not intended to hit him. They are intended to go over his head in a great parabola, like the
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arrows of the Norman bowmen at the Battle of Hastings which flew over the heads of the English front rank and hit the leader of their party, whose name also happened to be Harold, in the eye.
I hope to be short, for the list of speakers is long, and I do not feel inclined to criticise the general economic policy of Her Majesty's Government until I know what it is. Perhaps we shall know a little more about it when we have heard the noble Lord, Lord Shackle-ton. As for the Finance Bill itself, we cannot amend it—or, at least, if we tried to amend it I do not think we should be likely to get very far. All that we can do is to offer advice and counsel, mingled perhaps with a little criticism.
This is the second Budget of the year 1964. When the first Budget was introduced in April of this year, Mr. Maud-ling told us that he expected that the adverse balance of payments would continue to grow throughout the year. His reasons were, first, the abnormal amount of stockbuilding which he expected would take place; second, the rise in the world price of primary products, which may in itself be a good thing in the long run for the volume of world trade but which, meanwhile, must mean less favourable terms of trade for us; third, the exceptionally large outflow which he anticipated of British investment abroad, and also the rapidly growing volume of investment at home, which meant the importing of more raw materials. Mr. Maudling said that, for those reasons, a large adverse balance of payments for the year 1964 would be neither surprising nor necessarily undesirable, because the increased stock-building would lead to more exports later on, and the increased outflow of investment abroad would mean that our income from abroad would become greater.
He then enumerated what he called our strong defences against this expected adverse balance. Besides our ordinary gold reserves and our dollar portfolio of 1,000 million dollars, there were also our drawing rights of 2,500 million dollars from the International Monetary Fund, the special 500 million dollar "swop" arrangement with the United States, and the new arrangement, called the Basle

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Agreement, with the European Central Banks. All these fairly recent advances in international liquidity were welcomed by all parties in this country, who had advocated them for a long time both before and after the Radcliffe Report. I think that both the late Government and the Labour Opposition had demanded these and even greater measures of international liquidity, which we thought would not only help the growth of world trade and keep it more stable but would avoid those sudden deflationary actions which so often had to be taken to correct a temporary imbalance in certain individual countries. So the adverse balance of payments was fully expected. The provision against it was in my view adequate, and I still think, in spite of all that the noble Lord, Lord Shepherd, has said, that our economy is basically sound. I have not yet been given any convincing evidence that it is otherwise.
At the end of last week I put down a Question to the Government for Written Answer, to which I received the Answer yesterday and it is to be found in yesterday's Hansard. I asked how much of the official estimate of the balance-of-payments deficit of £700- £800 million is accounted for by repayment of foreign debts, by the setting up of British companies abroad, by the buying of shares in foreign companies (such as the Shell Montacatini deal), by the Government's overseas aid or loans, and by other capital transactions. I am grateful for the Answer which I received, but it does not give any answer for the third and fourth quarters of this year. All it says is that figures for the third quarter will be known at the end of this month, and for the fourth quarter next March. Of course I did not ask for the actual figures which obviously cannot be known till after they happen; what I asked for was an estimate. I thought that if the Government were able to estimate that our total deficit would be £700- £800 million they might also perhaps be able to estimate how much of that deficit would be due to long-term capital transactions. But it may be that the Government are reluctant to probe too closely into the component parts of their own estimates. I know very well that it takes a long time to compile and verify final figures.
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As for the first two quarters, the first half of this year, I received a very full answer, which I think we all knew already, as to the deficit of £341 million, at the rate of about £2 million a day. Of that £341 million no less than £216 million was due to long-term capital transactions—that is to say, getting on for two-thirds. It is not only right, but in the interests of our own trade and economy, to mention these things when we talk about the trade deficit or adverse balance, because, if we do not do so, people will all think that we are going "down the drain", which we are not. I repeat again that in my view our economy has been sound and I have so far been given no evidence to the contrary.
So far as the first half year's figures were concerned, we knew them at the time of the General Election. The noble Lord, Lord Shepherd, suggested in his speech that Mr. Maudling (I think this is the phrase he used) ought to have given us more warnings of the gathering storms. Mr. Maudling talked a great deal during the Election about these matters. I have some notes here of what he said on various occasions, chiefly at his Press conferences, but also at a speech in his constituency. At a Press conference on October 1, he said:
"I accept that we have an urgent problem and a real problem of closing the trade gap, particularly by expanding our exports".
Again, on October 9 he said:
"The need is still for a real and urgent drive to expand our exports."
Then, just before the Election, on October 14 he said:
"I have never sought to minimise either the real or the urgent nature of the problem of increasing our export trade."
On this question of exports, I think, again, that it is not in our interests that we should denigrate or minimise what our exporters have done. The figures for 1963 showed an 8 per cent. increase over the previous year, and the figures for 1964 so far show an increase in exports of 4 per cent. over the corresponding period of last year. That is a very good achievement. But what Mr. Maudling had the candour to point out continually during the Election was that for the last two or three months of the summer exports had not been good enough, and that they would have to be better still if we were to hit our economic objective. I thought it was rather refreshing—and it seemed to

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me that he rather went out of his way to do it—that a leading politician should lay so much stress on those difficulties immediately before the General Election.
When, immediately after the Election, first the Prime Minister and then Mr. George Brown stated that Mr. Maudling had sought to conceal the difficulties of our trade position for electoral reasons, I am bound to say that my deepest suspicions were aroused about the political integrity of the new Government. I have so often noticed that when people make a ludicrously false statement of this kind, their motive usually is to cover up or to distract attention from some delinquency of their own.
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, may I interrupt the noble Earl? It is not just delinquency which brings me to my feet, and I hope to speak later to-night about export figures, but I can hardly hope that more than perhaps a tenth of the noble Lords who are now listening to the noble Earl will be here when I rise during the shades of evening. Is the noble Earl aware that during this year the general movement of exports has been downwards, and profoundly disappointing?
THE EARL OF DUNDEE: My Lords, I hope that the noble Earl will cut out that part of his speech from what he says at 10 o'clock to-night, in order to save time then. I have stated correctly—I think one must take both sides of the picture—that this year so far our exports are 4 per cent. higher than our exports for the same period in 1963. It is true that for certain months in the summer they were disappointing, but the general figure for the first nine months of 1964 is higher. The point I was making was that Mr. Maudling had been extremely frank about stating the position before the Election, and I was trying to discover what delinquency—not the noble Earl's of course; I know he never commits any delinquencies at all, although he would probably be the first to admit that he does, but he is a man of exceptionally undelinquent character—the Government were trying to cover up.
There is this import surcharge which has been imposed, and which was described and first announced in the White Paper of October 26. I am not yet
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certain from the evidence which I have so far been given whether it was necessary or not. I told your Lordships in the debate on the Address that so long as there is any doubt about the matter I think we ought to give the Government the benefit of the doubt. But I am not at all convinced of the necessity of this surcharge. What I am convinced of, my Lords, is that the manner in which it was announced and applied has done immeasurable damage to our foreign relations and to our credit abroad. Here in this White Paper it is stated that:
"there is ample support for sterling in the facilities available to us".
Then, again, it is stated:
"Apart from special problems of individual areas and a limited number of industries there is no undue pressure on resources calling for action."
My Lords, that does not mean, of course, that action perhaps ought not to have been taken. I am not suggesting that the noble Lord should fulfil the rôle of Mr. Micawber and wait for something to turn up, if he thinks that something has to be done. It does not mean that no action need be taken, but—even more so, in view of these facts, that there was no urgency and that we had ample support for sterling—it is inexcusable that action should be taken without any previous thought, which is the only conclusion I can draw from this White Paper.
The noble Lord has asked what we mean when we talk about consultation with our friends and EFTA partners, and whether we mean negotiation. I do not think we mean any of the things he suggested; at least, I do not. I am not suggesting that, if the Government thought that these surcharges were necessary and in the interests of our economy, they should have made the imposition of those charges conditional upon reaching agreement either with EFTA or with anybody else. I am not suggesting that we should have had lengthy negotiations. What we do suggest, and what we think is very important, is that since the imposition of these surcharges were unquestionably a breach of our EFTA engagements, we ought to have had the courtesy to inform our EFTA partners in advance of what was going to be done. It would not have taken—
LORD SHEPHERD: My Lords, this is most important. I can draw the noble Earl's attention to a reply that my noble

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friend Lord Rhodes gave in this House some ten days ago. in which he informed your Lordships that these Governments were informed by this Government of the imposition of this charge. They were informed.
THE EARL OF DUNDEE: For how long?
LORD ST. OSWALD: Five minutes.
LORD SHEPHERD: Over the weekend.
THE EARL OFDUNDEE: I have said that I am not suggesting that we ought to have spent a long time in negotiations. But I think we ought to have taken a little more trouble to point out to them that we realised this was a breach of the EFTA Agreement, that we were very reluctant to do it, that we would take it off as soon as possible, and that we hoped they would understand. We did say all these things after we had announced the imposition and published the White Paper, but I do not think we took much trouble to talk to them about it beforehand. I think that if we had done so, it would have made all the difference to the confidence which our friends have in the sincerity of our intentions towards them. I think that if you had taken more trouble to do this in a more considerate manner, you would not have had the Danish Parliament passing a unanimous resolution condemning this country for its breach of the EFTA Agreement; and you would not, I think, have had these bitter cartoons in the Swedish newspapers of John Bull sending out the signal: "England expects that every foreigner this day will do his duty". The manner in which this was done created a very deep bitterness. I know the noble Lord will agree that the continuance and cohesion of the EFTA organisation is of very great importance indeed to the future of our commerce—also, perhaps, to the political stability of the world, and, it may be, to the unity of Europe.
As for our Commonwealth, were they informed, too? We never heard of it if they were. I wonder what they thought of the words in the Queen's Speech about the Government's intention to
"foster … close consultation between Member Governments and … promote Commonwealth collaboration in trade and economic development…."
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I think, my Lords, that it is the manner in which this thing has been done, which has rightly been described as a ham-fisted process, which has done a great deal to diminish the confidence of our friends in our good intentions and in our good will.
I am not trying to say it is wrong to warn the country that you think a crisis is serious; but perpetual exaggeration of it does make it serious when it need not be. I think there is one very significant remark that was made in another place by the Prime Minister only the other day, on November 23—and this was after the 7 per cent. bank rate had had to be imposed, which, again, nobody had thought of when the Budget was introduced at the beginning of November. What he said was:
"We are dealing with a situation where what matters is not what our trade and payments position is, but what people overseas think it is."—[Official Report (Commons), Vol. 702 (No. 18), col. 931, November 23, 1964.]
Yes, my Lords, but who made people overseas think it is different from what it is? We are criticised for not raising a "storm warning". We are criticised for not having gone round last September declaring that there was going to be a crisis, and for not taking some preventive action. I think that if we had done that, our statements would have been untrue and our action would have been unnecessary. I think it is largely because the Government, for reasons which I do not fully know yet, seem determined to put across the idea that there is a crisis that the position has got so much worse.
In the same speech, my Lords, the Prime Minister said this:
"… so far as the trade gap is concerned … there were reserves and borrowings more than adequate to meet this … "[col. 933].
That does not seem to justify the suggestion of the gathering storm and all that. He said:
"… there were reserves and borrowings more than adequate to meet this, but in the course of the past week"—
this was on November 23—
"there has been this new development arising from confidence factors … "
My Lords, I think that when the Prime Minister said that, he said a mouthful. It is probably about the truest remark he has made since he came into office.

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I am not going to anticipate what the noble Lord, Lord Shackleton, may say about the general economic situation, which we quite realise the noble Lord, Lord Shepherd, had not time to touch on. Of course, the fundamentally important things to our economy, as I know the noble Lord, Lord Shackleton, will agree, are the getting rid of restrictive practices and the attempt to work out an incomes policy. I shall not pursue these matters now. I would say only this—and I say it in all sincerity and not in any desire to be controversial: that if the idea of the Government is to procure the consent of industry, trade unions and employers to take some action that will put a stop to the continual cost-wage inflation which has been going on at so many times, though not continuously, and if they are trying to procure this by passing an Act to allow the trade unions to insist on the dismissal of some man by his employers, which has now been judged illegal, and by a capital gains tax, I wish them good luck, but I say only this: Don't pay the price before you have got the return for it, because you may find yourself in the position of having done all these things, which may not be of very much advantage to the country, and then you may find that you will still get no wages policy at all.
As for this Bill, my Lords, we cannot amend it, and therefore I do not propose to go into detail on the surcharges. Perhaps some of your Lordships may do so. It might be very interesting if you do, perhaps, for future reference—if, unfortunately, we should ever have to do it again. I think it is rather insane that the surcharges should apply to so many things which would have to come in anyhow, and which British industry cannot do without, and I think it might have been possible to make them very much more selective if it had not been one of these cases, as I have suggested already, of action preceding thought, of leaping before you look. I hope that the surcharges will be abolished as soon as possible.
I hope, also, that the 6d. increase in income tax will be taken off as soon as possible. I am not convinced at all that the Labour Party were not right in the Election when they told the people that all the increases in pensions which they proposed could be paid for, without
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any increase in taxation, out of natural economic growth. That is one of the things that the Labour Party said with which I agreed, and I am very disappointed to find that they have gone back on it now. I do not want, any more than the noble Lord, Lord Shepherd, to over-state it, but this 6d. increase on the income tax will be a serious disincentive to a large number of able, young, professional and business men who are of the utmost value to our economy. It will not help the brain-drain. As for the tax on fuel, I hope, my Lords, that that will come off very soon, too. Two-thirds of it, at least, will fall, not on private motoring but on commercial vehicles, which will put up the price of our products and lower our competitive power in foreign markets.
As for the measures to help exports, it seems to me they are likely to be marginal. The noble Lord, Lord Shepherd, suggested they were only the beginning of something better, and I think we shall all agree in pursuing anything which does not lead to retaliation by other trading countries, which may hurt us more than our action benefits us. But with this one exception (which I will not go into now) of the measures to help exports, I think it ought to be the primary objective of the Government to repeal and undo the entire contents of this Bill at the earliest possible moment.
4.30 p.m.
LORD GRANTCHESTER: My Lords, I should like to express gratitude to the noble Lord, Lord Shepherd, (who apologised to me for having to leave) and to congratulate him on going rather further than his colleagues in expressing the will to consider, at least, any suggestions made in the course of this debate. Like the noble Earl, Lord Dundee, I have been unable to get details of the estimated deficit of £800 million. I feel sure that this estimate, bandied about as it has been, helps to increase the deficit from day to day. There are people who derive satisfaction from being talked about and from being at the centre of controversy. They do not much mind whether the fame they enjoy, while it lasts, springs from their merits or from their sins. Doctors say that such people suffer from a sick mind, and psychologists talk of an inferiority

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complex. I have heard more unpleasant things of (his sort said, and said over a wide area, about the doings of Britain and the manner of the doing of it during the past few weeks than I have had to listen to during many years of political contacts in Continental Europe.
I am not exaggerating when I say that I fear that Britain's reputation in Europe will suffer for a generation from the happenings of the past few weeks. In the countries where it stood highest, the reaction has been strongest: disloyalty to her friends; a blow to the sanctity of treaties and agreements; perfidious and stupid, as well as ill-advised. These are a few of the plain words to which we have had to listen; and it is well that we should realise that we cannot just pass them off. During these weeks not one word of regret has fallen from the lips of a single Minister; all seemed determined to brazen it out. There was not a word of dismay that so many imports should appeal to British buyers in preference to our own products, in spite of sometimes higher prices. And, what is worse, on more than one occasion when a friendly hand of help and sympathy in our difficulties was held out to one of our Ministers he remained silent and unappreciative.
This lack of response to the sympathy and understanding shown, particularly by some French Ministers and officials, was an opportunity most regrettably missed, showing what appeared to be both a lack of courtesy and a lack of political nous which was noted with understandable annoyance in Denmark. Denmark, perhaps more than any other country in Europe, regrets the estrangement between France and Britain and hopes to see a change for the better in this relationship.
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, I must interrupt the noble Lord because I have been in closer contact in the last few months with the Ministers to whom he has referred than, perhaps, he himself; and I must totally reject his account of these discussions and of any suggestion that there was any discourtesy on the part of my colleagues.
LORD GRANTCHESTER: My Lords, if the noble Earl reads some of the comments which have been made, and which are on public record, I think he will find
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that the impression created was as I have recounted. I would say to the noble Earl that I listened to a number of Ministers giving explanations, and I know a number of speakers who were trying to help them; but they did not respond. I observed some of the cases myself.
My Lords, we are not the only country in Europe which has had to face up to unpleasant facts. There is much wisdom in Europe, and I would urge Her Majesty's Government to realise that on the Continent there is still a lot of good will towards this country. If they would go about it differently they would be surprised at the response they would find from countries that share with us a common heritage of greatness, tempered by pain and common suffering over the centuries. But it is necessary to appreciate that it is a fight against inflation that the Continental countries are waging, in which we ought to be joining. It is from this point of view that our actions are judged.
The rate of the creeping inflation which Europe has experienced has averaged 50 per cent. since 1950. Dr. Karl Blessing, Governor of the German Central Bank, said at the Tokyo meeting of the International Monetary Fund in September last:
"I think it is high time that the process of creeping inflation be stopped. One cannot suffer a continuous erosion of the value of savings without endangering the whole system of free enterprise."
Creeping inflation is not compatible with sustained growth which is the primary aim of every European country. Mr. Robert Marjolin warned the European Community in the same sense. Dr. Holtrop, President of the Netherlands Central Bank raised the question at Tokyo of how far temporary over-expenditure caused by excessive investment or unwarranted expansion of consumption, which, he maintained, necessarily exercises an inflationary impact on other countries should be financed too easily by short-term or bilateral facilities. This is the crux of the complaint against countries running a deficit: that this has an inflationary impact on countries which are exercising a tighter discipline in their monetary policy. It is in this atmosphere that Britain's difficulties must be discussed if co-operation is to be

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maintained with our friends on the Continent and our partners in Efta and Western European Union.
Perhaps I may say a word, in addition to what was said by the noble Earl, Lord Dundee, on the question of consultation. There are in the treaties with our European friends definite agreements to consult. This is a most important provision. What would be the normal process of consultation under these treaties would be to call a meeting of the Council of Ministers. If this is too clumsy a procedure to deal with a crisis, then what suggestions are going to be made? I personally do not believe that it is so difficult and clumsy. The Western European Union is situated in London. The Ministers have deputies, who are the Ambassadors of the countries concerned here in London. They meet at Grosvenor Place once a month, regularly, and could be got together at very short notice. The EFTA Ministers, all of them, can reach Geneva in a few hours. If it is a matter which requires urgent consultation, owing to a crisis arising in one of the countries, surely it is not too much to ask the Council of Ministers to meet at Geneva within a matter of a day of two, at the most. If not, they have deputies who often take the place of Ministers.
It cannot help very much in the long run, as suggested in some reports that have been coming in, that Her Majesty's Government should fall back on discussions with the United States on an alleged inadequacy of international liquidity. The United States themselves are in a difficult position. I blame a number of members of the present Government for having pressed this idea upon the former Government for tiding over a period of difficulty and now for denying that it is a suitable way of carrying on. Anyway, the inadequacy at present of international liquidity is disputed in every country on the Continent. It is disputed by the International Monetary Fund and it is disputed in the findings of the Group of Ten, which investigated this matter during last year.
THE EARL OF LONGFORD: My Lords, I am sure that the noble Lord means to be fair, but he is aware that the former Chancellor of the Exchequer, Mr. Maudling, took a very strong initia-
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tive in favour of extending international liquidity?
LORD GRANTCHESTER: My Lords, I am aware of that, but that does not mean that I agreed with it. In a speech in this House I urged that he paid more attention to the views which were expressed by the Netherlands, by Germany and by France on this matter. It is interesting to see that the two countries that are pressing for an extension of international liquidity are the two key currency countries, the United States and Great Britain. Both are in deficit, so perhaps it is understandable that they may take a different view from the rest of the countries in the Group of Ten. I differed from the former Chancellor of the Exchequer on this matter, and I differ from the Government, who seem to be adopting the line he took in pressing for an extension of international liquidity at the present time. This is because I believe that it is no more possible for a nation to live for long on an increasingly large overdraft than it is for an individual. If a surplus on our balance of payments account is not earned, and cannot be earned, it is nothing but hypocrisy to talk of helping underdeveloped countries. These are the truths and realities which Her Majesty's Government should be explaining to our people. Unfortunately, Ministers have not been giving the impression that they themselves understood this matter. This is what is said, anyway, and it is not said just in malice.
It may be desirable and necessary to shake up the nation to a consciousness of the realities of its position in a Europe which is feeling its feet and beginning to feel its strength. We needed something more than the statement made by a member of the Economic Development Advisory Council that the average measure of our uncompetitiveness in price in the world market is I per cent. I do not feel that a statement like that makes a great deal of impression, and averages conceal a lot of variations.
I agree that we needed in this country a call for honest relationships and for service one to another, a call to exorcise all that is embodied in the expressions we hear so often—"Don't care" or "Couldn't care less". I shall be told that Her Majesty's Government set great store on the achievement of an incomes

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policy, but I fear—and the noble Earl, Lord Dundee, also had some doubts—that we cannot be very optimistic on this account, for investigations show that on the Continent the experience has been that No 1ncomes policy can halt inflation and that, without inflation, No 1ncomes policy is necessary. Least of all can the Government afford to shake confidence or destroy trust. Plain speaking, yes; plain dealing, yes.
I have spoken a little of the international repercussions to the subject matter of this Bill and the way it has been presented. The internal effects, I fear, have been scarcely less damaging. Talk to anyone who might do business in the export field and what does he say? "The cost of opening up markets is high. If we fail, we bear the loss. If we succeed, the rewards are small." This Bill makes them smaller still, by raising income tax. What is in store for the man who earns the princely salary, at pre-war rates, of £500 a year? In subsection (1) of Clause 1 of the Bill, there are no words of assurance that the rates over £2, 000 will not be altered. Of course benefits for the needy must be paid for. But I would ask whether the introduction of a direct tax on income may not complicate the administrative arrangements by introducing an element of double taxation in many cases. I will not spend time on this question now, because there are more important matters than this rather technical problem.
Before I finish, may I raise the question of the fundamental defect in the existing monetary system which allows a difficult situation, such as that in which we find ourselves, to assume considerable proportions before remedial action can be taken, which then requires disretionary action, always considered discriminatory, and which therefore becomes a source of international friction? This is one of the undesirable features of the gold exchange standard as it is practised to-day. As your Lordships know, there has been a great deal of study and talk on this subject during the past year. Ministers of the so-called Group of Ten have decided to meet regularly and watch developments, in the light of the confidential information which the B.I.S. are to collect from member countries. These Ministers are instructing the O.E.C.D. to study the
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most appropriate methods for a country to take to correct imbalances.
All this is to the good; but it is not enough. Studies are hampered by agreements between the key currency countries and the International Monetary Fund. The study last year was hampered by conditions imposed in the terms of reference given in September, 1963, to the Committee set up under the chairmanship of Mr. Rousa, the United States Treasury Secretary. What I believe is needed to avoid international misunderstandings, is agreement upon a code of conduct and rules in the operation of monetary policy, with built-in correctives to restore balance which are automatic in their operation.
There are, of course, many questions involved, into which I cannot go now, but the problems of rising prices, inflation and sound currencies are involved. I have already referred to the difficulties of the United States. I doubt whether they are generally realised here, and they are certainly not generally realised in the United States. During the years 1951 to 1960 the overall deficit of the United States was some 18, 000 million dollars. During this period the gold reserves fell only from 22, 800 million dollars to 17, 500 million dollars. I find it difficult to think in billions, so I have to express these figures in thousands of millions. Thirteen thousand million dollars was added to the foreign holdings of dollar credits in the United States. The United States has been forced to take steps to correct its imbalance in her balance-of-payments account. Up to September of this year the deficit was running at the annual rate of 2,000 million dollars a year, as compared with 3,300 million dollars in 1963, and 3,900 million dollars in 1960. So we are not the only people who experience these difficulties, and a little discussion and consultation is very desirable in dealing with them.
In deciding upon an increase in the quotas of members of the International Monetary Fund in September last the difficult position of the two key currencies—that is, of the United States and Great Britain—was noted, and the Fund was instructed to have regard to their reluctance to transfer any more gold from their national reserves to the International Monetary Fund. This shows

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the difficulty of building a greater fund with the International Monetary Fund to provide increased liquidity. In fact, the dollar could come under pressure, and there is the danger, if it should do so, that the whole monetary structure might collapse again as it did in the 'thirties.
The position has been disguised for the American public by the acquiescence of foreign holders of dollars to hold them rather than use their rights to convert into gold. The general depreciation of European currencies has been masked so far as the public in the European countries is concerned by the maintenance of stable exchange rates (except with Germany) over the last ten years. It should be appreciated that it is the fear of the repetition of the disaster of the nineteen-thirties, when every nation started raising barriers to try to isolate themselves, that was behind the storm caused by the 15 per cent. imposition in this Bill. It was, they feared, the start of the same process which brought about the collapse of the 'thirties. The reason for this strong reaction was not, I think, realised.
These, I suggest, are some of the urgent problems which the Government should tackle. The Continental Governments are more worried than we have been. Their co-operation in our present difficulties, as well as in solving the long-term problems upon which I have touched, is essential. It is of vital importance to us all that Her Majesty's Government should realise this fact and change the attitude they have so far adopted by moving to a policy of consultation and co-operation with the rest of Europe, with most of which we are linked by specific treaties.
We have been told—and we were told a lot during the Election—by those who support the present Government, that among the most undesirable features of our society to-day are the chase after money, and the comparative affluence of the young compared with the poverty of the aged. The chase after money, surely, is natural while everyone feels its value is slipping away. The young are paid in money adjusted to the current purchasing power of the currency, whereas the aged are relying upon provisions made some years ago, and now sadly depreciated in value. In these comments
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are expressed the injustices, as well as the evils, accruing from the present monetary system. If the Government are serious in expressing concern at these admittedly undesirable features of our society, they should give immediate attention to the subject of the reform of the monetary system upon which I have laid such stress to-day.
4.58 p.m.
VISCOUNT WATKINSON: My Lords, may I ask your indulgence on this occasion? It is more confusing, I think, because, as with some of my noble friends, this is in fact the second maiden speech that I have made in this Chamber. They have been made from opposite sides of the House, but both in Opposition; so I find myself a little confused. However, I am heartened by the fact that in the last circumstance, anyway, the Government soon changed and we found ourselves back again on the right Benches.
In any event, I should find it difficult to deal with the strict matter in front of us, because I disagree fundamentally with almost everything in the Finance Bill, and therefore it would be extremely difficult for me to keep within the normal rules of relative non-controversiality. On the other hand, it is clear from what the noble Lord, Lord Shepherd, said in introducing the Bill that the Government are paying great attention, as they should, to this problem of exports. I might say that some of us who have spent our political lives trying to preach the doctrine up and down the country that this country either exports or perishes, have slightly wry smiles now at the sudden conversion to exports of quite a lot of people. However, if this means that, on the whole, the country is united in this desire and this recognition of the necessity for more exports, so far, so good. It only remains to translate the universal desire, if it exists, into action.
I may say that I make these comments against the background of some 34, 000 miles that I have just travelled on business to Australia and North America. It is not going to be an easy task to make a major increase in this country's export trade, for the simple reason that most of our manufacturers who are already in this business are trying extremely hard, and, as has already been said, very fairly, are, on the whole, doing extremely well. So there

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are no particularly easy means to be found.
On the other hand, if I might comment on one or two markets which I now know from a recent visit, the business is there. There is a great deal more business to be done by British exporters in Australia, North America, and in Europe too, but there are plenty of Japanese, German and Italian businessmen who mean to have their share of it, and all of it if they can get it This is why I said initially that I see no particularly easy way in this task. It really is going to require the very utmost that the nation can give to it, if it is the nation's will that this should be done.
What about the machinery for doing it? One hears a great deal of criticism about British commercial services overseas. I can be quite impartial about them now, and I want to say, as clearly and as frankly as I can, that I think most people who criticise these services—the services of the Board of Trade, the services of the Consular offices and the services of the Ministers commercial—have not done their homework. They have not looked into the information and the help which is available. I think that this should be said, because it is true; and it is really very sad that British businessmen who are seeking more export opportunities do not take the trouble to find the help, guidance and assistance that is available to them, both here in this country and in markets overseas. I know that your Lordships will realise that I am not criticising the firms on whom our present large export trade depends. They are doing a first-class job, and trying very hard; but if we are to do any better in this field then we have to persuade more British manufacturers to enter it. I want only to say that the help and practical assistance is there for them if only they will use it.
There are the usual criticisms about British products. Again I do not think that these are nearly so bad as some of our critics would make out. I believe that there are some failings in after-sales service, as there are with other countries' products, too. But on the whole, in my view much of the criticism one reads here at home of the job that existing British manufacturers are doing is somewhat misplaced. It may be that
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this is thought, therefore, to be a somewhat easy description of everything that is right. Of course, there are a great many things that are not right in export markets, and, as I have said, the task is a very difficult one. One of the more difficult problems is that more and more foreign countries look for a direct involvement by a British manufacturer in their country and in their industry, and straight exporting is not always good enough.
If the Government want to be helpful over this—and I noticed that the noble Lord said he would listen to any points raised—I would hope that in future anything they do for exporters will be done by stealth and not by putting on 1½ per cent. export bonus, or whatever they call it, which has already been deducted off the invoices of some of our foreign customers. However, if they want to look in two spheres I think they might look first at remitted profits from overseas enterprises. I hope that these are not threatened by the proposals of any new corporation tax, because more and more British firms, if we are to build up our business overseas, will have to get involved to the extent of setting up enterprises, either in partnership or alone overseas. Therefore our export becomes largely the remitted profit of that enterprise.
The second point the Government might look at is this difficult problem, particularly for the small or medium manufacturer, of the large sum of money that has to be invested in a sophisticated overseas market merely to test the market out, merely to do your initial promotions and the rest. This, for a smaller manufacturer, can be a very large sum, and it is entirely at risk, because at the end of all this he may well decide that the gamble is not worth it. If these sums could be treated more in terms of capital, and capital investment, and perhaps less in terms of straight expenditure, I think that this, again, might be a useful aid for those people who are at the moment shivering on the brink and wondering whether they should try to do what I hope they will recognise is now in the national interest; that is, to make a greater penetration in overseas markets.
The last genera] point I should like to make is, if the machinery is there, if the markets are there—as I believe they

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are—are we still acceptable as a trading nation? I will not follow the noble Lord who preceded me, because I am striving to be strictly non-controversial. I believe that recent events have somewhat damaged our status in the eyes of many of our customers, but they have not damaged the long-term belief that this country is a good ally, a good trading partner and, on the whole, the manufacturer of good products. This belief remains, and nobody could have had a warmer welcome than I had everywhere as a British businessman, whether it was from our fellow citizens in the Commonwealth or from the Americans, or anyone else. I think they want to do business with us, and it is a great pity that more senior businessmen do not go and give themselves the pleasure—and it is indeed a pleasure—of meeting their opposite numbers to see whether they can find some mutually profitable way of trading together.
Having said all that, my Lords, I go on to ask: what ought the three partners to do about it?—and I will explain what I mean by "the three partners". If Her Majesty's Government say that they want to increase exports, then I think it is right for them to say that, on the whole, this should not be too controversial a matter. But then it is, in a sense, taking businessmen and trade union leaders into partnership. They must therefore, I think, have regard to certain general considerations for which, if I wished to be more controversial, I think I might say they have had very little regard so far. But let me start with the employers.
The greatest problem here is that too many firms still think there are much lower profits in export markets. This often is true, and therefore these firms want a firm directive from their board, and in a way a defence against their shareholders, that if they take these risks and thus make a lower profit, they are doing something at the moment very much in the national interest. Perhaps the Government could help a little in this, too. I will only add that there are such things in industry as run-on costs, and all the rest, and I must say that among the successful exporters whom I know I do not know many who really regret their export ventures, because in
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the end they have covered their lower margins by longer runs and greater efficiency at home. But it does need a greater assurance to the chairman or managing director of the company that in giving his salesmen and executives a firm directive that they are to turn away from the softer home market to the harder export market they are doing something which is firm company policy and generally in the national interest.
Subject to that, my only comment would be the one that I have just made—namely, the wish that more businessmen at the top would go and have the kind of fascinating trip that I have had, and find how welcome they are. For example, in British-American Chambers of Commerce in Chicago, Los Angeles and New York, one finds that the predominantly American members of these Chambers are anxious to do more business with us, and only too anxious to take British businessmen around and introduce them to their friends and business colleagues and try to smooth the way for them. The answer, clearly, in my view, is to go and have a look at these fascinating markets, and see if you do not find some very interesting opportunities. I know this is not so true of Europe where, on the whole, British businessmen go regularly and make a good penetration. It is often thought to be a long way to the Pacific coast of America, for example, or to Australia, but it is not very long in terms of jet travel.
Just a word, if I may, with some hesitancy, perhaps, in the presence of my old friend Lord Williamson, about the trade unions. But I must say what I believe, and I have said it before. Most trade union leaders are converted men, but they must do more to see that their members accept a very simple truth, and that is that in strikes, in "go-slows," in trouble in the docks, in all sorts of restrictive methods and practices, there is only one victor to-day, and he is our foreign competitor. He will be very happy to fill the orders we fail to fill through delays at the docks, industrial strife or anything else. Equally, he will be very happy to fill it through industrial mismanagement by directors and managers and all the rest. It bears equally on both sides, but I wish that in the trade union movement there was perhaps a slightly clearer view that,

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while we have to fight our industrial battles, we really ought to have a very firm eye to-day on the damage that these can do both to our reputation and indeed to our actual orders in overseas markets while we are fighting.
I hope that the Government, our third partner—and again I do not wish to be controversial and I wish, above all things, to be short, but there really are somethings here that worry me—the noble Lords on the Front Bench opposite, will listen to what I say, for it is meant to be aimed at one purpose only, to give our exporters a better chance to do their job. The Government are, in my view, in charge of our national image. We shall succeed in the export field only if we are thought to be an advanced technological nation. After all, what else have we to offer? We have no particular raw materials and no particular assets. We have only the skill of our hands and brains. Therefore, we are cither in the forefront of modern technology and selling our brains and our skills, or we have really very little to sell at all; and if we are going to live on getting tourists to see thatched cottages and no drains, we shall not get very far.
This is why the controversy about the Concord and our adventure into space at Woomera, the TSR.2 and many other projects which lie on the present frontiers of man's technological knowledge are so damaging to our reputation in the world; and uncertainty here is as damaging as anything else. I do not think noble Lords would have enjoyed, any more than I did, addressing businessmen in America and Australia, trying to explain what was in Her Majesty's Government's mind on these matters. I am not saying that the Government were always fairly represented in the Press from which these queries arose among the businessmen with whom I talked, both in public and in private, but the thought that this country is backing out is not a happy situation with which to be faced; and that is how it is looked at with regard to these advanced projects on which our reputation as a skilful engineering nation so largely depends.
Having regard to the Plowden Committee, I do not want to pursue this matter further. I think there could be nobody better than the noble Lord, Lord Plowden, in charge of this very difficult task. But I hope that Her Majesty's
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Government and that Committee will bear in mind that there is a matter outside pure questions of immediate cost and pure questions of immediate expediency, political or otherwise, and it is this: that if we are not an advanced technological nation, we are nothing. If we are going back to being the industrial hewers of wood and drawers of water there will not be a very fat living for anybody in this small island, and there will not be very many exports either.
This may well present the Government with some difficult problems. I am seeking only to ask that at least they be considered with this sort of background in mind. If we cannot do these things ourselves, it is right to do them with our European friends. I am very fond of our American Allies, but they are so large and the skill of their industry so great and complex that it is rather like being hugged by a grizzly bear: he may love you very much, but you are dead all the same. The size and scope of their technology—and I would pay a tribute to it—on the frontiers of science, in the moon race and all the rest, is such that they are not very easy partners for us in the sense of doing joint projects. The Europeans are nearer our standards of development, science and financial resources. That is why I think it was right to build the Concord with our French Allies, and it would be terribly wrong to let them down on this project.
My Lords, I do not want to go on. I have tried to give a few random impressions about the export business, in which I suppose I should declare an interest for two reasons: one, I am involved in it, and, two, it was the previous Government—and I think the noble Lord, Lord Shepherd, got this wrong—who set up the British National Export Council. It was the previous Government that bullied me into becoming the Chairman of the Committee on Exports to the United States of America. We must go on and try to make a success of this export task because it is in the national interest to do so. And if we are willing to do so—and we in industry are anxious and willing to do so because it is a job to be done—I think we have a right to say to the two other partners, the Government and the great trade union movement, in which I have many friends, that they, too, must play their part.

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I do not feel now that I am enough in touch with current Government affairs and politics to give advice to Her Majesty's Government on what they should or should not do, but it is perfectly plain to me that if they do things which inhibit rather than help our export trade—and these are the things we are discussing this afternoon—then they cannot grumble if, however hard we in the business fraternity try, we do not get as many orders as we should like and as would be good for our country. So here is a job that should be done, and I only ask this afternoon—and I apologise if I have been controversial—that the Government see their responsibility on this a little more clearly than they appear to me to have seen it in the first weeks and months of office.
5.17 p.m.
LORD SAINSBURY: My Lords, it gives me very great pleasure to be the first to congratulate the noble Viscount, Lord Watkinson, not on his maiden speech in this House, but on his maiden speech as a Member of this House. He is, as all noble Lords know, a man of great Parliamentary and Ministerial experience. He has recently entered the ranks of big business, and here perhaps I should declare an interest because my firm happens to be one of his many thousands of customers. I feel that what he has said, with his great experience of the export trade, is of considerable value, and I am sure that we on both sides of the House will look forward greatly to his future contributions when he will not suffer under the restraints imposed by a maiden speech.
Taking part in the debate on the Address a month ago, I said:
"… the present payments crisis is not of financial origin; speculation does not come into it."—[Official Report, Vol. 261 (No. 5), Col. 170, November 5, 1964.]
True as it may have been at that time, it would not be possible to repeat that statement to-day. As we all know, we have lived through a very critical period in recent weeks, with the great strain on sterling, but we have also witnessed a great example of international co-operation in the financial field because the countries concerned recognise the interdependence of all trading nations, and our overseas friends acted on the principle of enlightened self-
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interest when they rallied to the support of our currency.
The Opposition may criticise the Government's handling of the situation, but what they cannot escape by so doing is their responsibility for the country's present economic situation after thirteen years of power. As the Observer newspaper said in a recent article:
"… The Government's freedom of action was severely limited by the economic situation it inherited from its predecessors. The blame must rest on those responsible for the conduct of the country's economic affairs for the past thirteen years."
However, recriminations over the past will not help us at all. It certainly will not sell more goods abroad, nor make our economy more efficient. What is wanted is leadership, with understanding and response from the community as a whole. There is a human problem involved as well as economic and financial problems. The Times recently called for
"the long overdue re-awakening of the British people, "
but in my view there are already signs of a new spirit, reflected in the attitude both of the employers' organisations and of the trade unions in their approach to the problems of an incomes policy.
There has been criticism of the November Budget, that it did not go far enough to deflate the economy. In my view, it would be unfortunate if the fact of ours being an international currency forced the nation's policies on to the wrong lines. The sudden application of the deflationary brakes is not the solution, in my view. By cutting down the home trade you do not necessarily stimulate exports. It may in point of fact have the opposite effect, by reducing output, raising costs and worsening our competitive position abroad. Therefore, in view of the fact that industrial production has been static this year and that there is no evidence of consumer expenditure running at an unduly high level, I consider the Government's policy correct. Already we have what the City Editor of The Times describes to-day as
"A mild and selective credit squeeze … in the way … but certainly"—
I underline this—
"nothing of the 1957 and 1961 varieties."
Further deflation, in my view, would endanger the level of private investment, which is so necessary for both efficiency

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and growth. Our production to-day is still suffering from the effects of the 1961 deflation on private capital investment. It has been estimated that £100 million to £150 million of fixed investment was lost. Without large investments we shall not get the modernisation, the efficiency, the increased production and exports we all talk about.
As we all know, the Finance Bill contains provisions for the export rebate. Criticism has been made that the average of 1½ per cent. is an insufficient stimulant. The German equivalent is already 5-6 per cent., and one might well ask why they are in a position to give this much higher incentive. Immediately we get involved in the intricacies of GATT regulations, and, quite frankly, I am a little out of my depth. One could argue that a decisive new system of export incentive, if it is not to offend GATT, probably demands a substantial re-casting of the domestic tax system. The object would be to put a far larger burden on indirect taxes, which the international codes do allow to be remitted to exporters. But a re-casting of our domestic tax system would, in my opinion, be altogether wrong, because indirect taxes are indiscriminate, bear most heavily on the lower income groups and increase the cost of living.
There are experts who say that one of the mistakes of recent British official policy has been to run too few risks with export credit guarantees, and that the rules are at present too strict to be in the widest national interest. Other criticisms are the all-or-nothing attitude to individual firms and the length of credit available. I do not know the strength of these criticisms, but your Lordships will remember that Her Majesty's Government have already indicated in their statement on the economic situation, that
"export credit facilities will be improved wherever this will lead to an immediate increase in our overseas earnings".
Political and Economic Planning—P.E.P.—recently investigated export problems and said that
"Tariffs, foreign competition and low profits compared with the home market are stated to be the chief obstacles to the expansion of exports. More competition in the home market is needed to make exports relatively more profitable".
But in any discussion of our economy one is always driven back in the end
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to the basic problem of productivity. Unfortunately one is never short of disturbing evidence of wasteful use of manpower. According to the recent Report of the Iron and Steel Board, productivity in the steel industry is only about 50 per cent. of the United States level. It is also lower than in the European Coal and Steel Community, and our productivity has recently been overtaken by Japan. Two main reasons are advanced for this: the relatively small size of many of the older plants in Britain and, more important, certain labour practices. The Board points out that the present output could be achieved by a considerably smaller labour force than at present and suggests that management and organised labour should take a critical view of manning practices.
My Lords, may I say this in conclusion? It is my view that one is entitled to ask the critics of the Finance Bill and Government policy and actions since they took office, what would the Opposition have done if they had been in power? Would they have devalued? And if they had—bearing in mind that sterling is an international currency—would it not have done more harm to international confidence than the temporary surcharge? Or would the Opposition have favoured a Selwyn Lloyd type of drastic deflation, which would have prejudiced economic growth for years ahead, and caused a considerable increase in unemployment within twelve months? We are entitled, I consider—if not in this place, in the country at large—to challenge the Opposition with two more questions: whether or not they would have increased widows' and old age pensions; and, in view of the statement of one of the leading occupants of the Opposition Front Bench in the other place—namely, Mr. Enoch Powell, who talked of an incomes policy as "dangerous nonsense"—whether or not they truly believe in an incomes policy as vitally necessary for the nation's economic health?
5.30 p.m.
LORD LUCAS OF CHILWORTH: My Lords, before I come to the subject upon which I am going to venture to address your Lordships, I would join with the noble Lord who has just spoken in congratulating the noble Viscount, Lord Watkinson, on what I thought was an

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excellent maiden speech. I hope that with his vast experience he will often address your Lordships. In a couple of weeks' time I am going to follow the path that he has followed, into Australia and the East. Although I absent myself from your Lordships' House for three months every year in the winter, it is not only to chase the sun; it is also to learn precisely the lessons that he has learned—that there are marvellous opportunities for British exporters if they will use their brains and their energies. But I shall come to that in a moment.
I should like also to congratulate the noble Lord, Lord Shepherd, on his first major speech from that Dispatch Box. In this regard I join with the noble Earl, Lord Dundee. I thought he was excellent. I thought he put up a splendid show from the poorest kind of brief. Unfortunately, he could not say anything new: we had heard it all before. But there is one thing that I am glad he did say, because I am certain that he, and the Government, are right. We do not want any more deflation of the economy of this country. If we have learned one lesson over our history since the war, surely it is that to deflate an economy and to try to deflate home demand never yet exported a single article overseas. As the noble Lord, Lord Sainsbury, said, all it does is to put up export costs. We depend for any good export business on a virile home market. As Lord Watkinson rightly said, profits in the export market are thin, and British manufacturers must cover them by having a good home market.
I sincerely hope that the Government will stop listening to these unpractical economists, from whatever country they come. There is no more real inflation than you get in the ordinary course of conditions under which we live, when we are so close to Europe. There is no shortage of capacity. It is futile for these economists to say that we are over-pressed by our capacity. Our unemployment figures are the most "phoney" figures that have ever come from a Government, because there is so much underemployment. The noble Lord, Lord Williamson, and I tried to impress this upon your Lordships on the occasion of the last economic debate.
I should like to quote again the figures that I quoted to your Lordships
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then. Out of a gainfully employed population of 23, 393, 000, the total employed in manufacturing industries is 8, 912, 760. Of that 8 million odd one-third are under-employed. Quite one-third of those employed in our productive industry should not be working in these factories at all. May I quote one other figure? This is what I said on March 18:
"From June, 1959, to June, 1963, the increase in manufacturing industry was 2-8 per cent., and in the distributive trades the increase was double that, 6 per cent."—[OFFICIAL Report, Vol. 256 (No. 52), col. 897.]
We are the most wasteful country in this world when it comes to our most precious asset—labour.
The noble Lord, Lord Sainsbury, quoted from an article in The Times on the steel industry. The noble Lord, Lord Thomson of Fleet, made an outstanding speech in your Lordships' House on the Address, when he asked: "Why is it that in America, with higher wages, they produce per man three times more than is produced in this country; yet in America they have a 6 per cent. figure of unemployment?" They are not afraid to disclose their unemployment. We have been hagridden for years, ever since the war, by the sacred cow of the trade unions—namely, redundancy. At all costs we must not have redundancy! So we keep in employment men who should never be kept in that employment. We have too many non-producers.
We have been building up ever since the First World War the position in which we now find ourselves. We have become restrictive minded—anything for restriction; restrictive practices on both sides of industry. One had only to sit and listen to the debates we had in your Lordships' House on the Resale Prices Act to hear the restrictive mentalities at work. I should think that the noble Lord, Lord Shepherd, and other noble Lords opposite, as well as the whole of his Party, must now bitterly regret that they did not give more thought and more support to the then Government in strengthening the Resale Prices Act when it was going through Parliament. That was one of the blots on their escutcheon. They had to play politics instead of economics.
LORD SHACKLETON: My Lords, if the noble Lord will allow me to intervene, I do not know how much he heard of the debate, but I recall that a number of my noble friends—the noble Lord, Lorn Shepherd, the noble Lord, Lord Sainsbury—and I myself all in fact advocated strengthening it, and objected to some of the rather absurd precautions that were put in. I do not think the noble Lord could have heard it.
LORD LUCAS OF CHILWORTH: Oh, yes, I did. I can assure your Lordships that I am not hard of hearing. I heard it.
LORD SHACKLETON: Perhaps misunderstanding it?
LORD LUCAS OF CHILWORTH: No, not misunderstanding it, either. I was not referring so much to the speeches of noble Lords on that side of the House; rather was I referring to the speeches made by those who I always thought were some of the captains of British industry.
LORD SHACKLETON: Lord Shepherd?
LORD LUCAS OF CHILWORTH: No; I would not go so far as that. It was indicative of the fact that you still have this spirit in the country. When we were at that stage which the noble Lord, Lord Shepherd, referred to this afternoon—I think he used the expression "fighting for our lives" some two weeks ago—it was reported that there were about 700 applications made to the Registrar of Restrictive Trade Agreements by manufacturers, suppliers and trade associations for exemption from the provisions of that Act. Right in the middle of this period, these people were trying to get back to the days of restrictive practice.
At the same time, a trade union leader, Mr. Ted Hill, the President of the Boilermakers' Union, was pressing the President of the Board of Trade to consider some form of tax on ships built by United Kingdom owners in Japan, as a protection for British shipyard workers. Sir Donald Anderson pointed out to him, I think quite rightly, that they had to build the ships in Japan. They had to get them down to a price and with a delivery that would enable them to go into the market
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of the seven seas of the world which was the monopoly of foreign shipowners. It was not a case of either building them in Japan or building them in Britain; it was a case of having them built in Japan or not at all. At that very time, when we were trying to awaken the country to this need, a leading industrialist in the North was being held at pistol point with the threat of strike action to employ twice the number of men he needed on a three-day week basis. That is the sort of thing we have got to battle against; that is the mentality we must fight.
I should like to ask the Government what they propose to do. There is no proposal of which I have learned which is going to solve the problem of great burning priority, and that is how in the future we are to earn our daily bread. It is no good the noble Earl, Lord Dundee, trying to put figures forward that our exports are good. Our exports are bad. We have been losing our place as an export nation. We have gone down in the league table for years. We may have increased our exports on previous years by 4, 6 or 8 per cent., but every one of our foreign competitors has outpaced us by increasing its exports double or treble. Why? That is what we have really got to address our minds to, and it is the first priority. How are we going to increase our exports? We have the 1 to 3 per cent. incentive, but is it enough?
The noble Lord, Lord Sainsbury, was thinking around a complete revision of our taxation system. As he quite rightly said, we come up against GATT. Yet the French manage to get round it; the Germans manage to get round it. I would ask Her Majesty's Government—Lord Shackleton will perhaps tell me, or will pass the suggestion on to his colleagues—to have another look at a turnover tax. I know all about the Richardson Committee; I know the objections. But the the Richardson Committee were considering a turnover tax in the context of a substitution for purchase tax. I am looking at a turnover tax in the context of a rebating exporter. At least it is worth looking at.
One thing which I think the Government could do is to make it possible for exporters to obtain finance. I do not mean the finance which E.C.G.D. provide, for that is an insurance, but finance so that they can give the very long-term

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credit which they must give to foreign and overseas purchasers. Perhaps the best thing I can do is to illustrate the point by quoting an actual industry, the motor industry. I do not want it to be thought that I am the spokesman for that industry, but it is an industry which I know something about. This coming year they will have exported £734 million-worth of their products overseas. As to the bulk of those products, especially the most expensive ones, the huge vehicles, they have to give a credit of anything from four to six years; they have to find the money. At the beginning of that period they must estimate what the bank rate is going to be for the next six years—a rather hazardous occupation to-day. They have to pay very high rates. I should have thought it would be possible for the Government to give exporters—I am using the motor industry only as an example—finance on preferential terms, terms which are static over the period of the contract for sale. It would help enormously, because a change in the bank rate can mean a difference of as much as £300 per vehicle they sell.
Another point is that the Board of Trade may perhaps be a little narrow in their outlook on this in regard to some of the products we sell overseas. The Americans are very clever in this respect, for they look on an export to a foreign country as only the beginning of a chain. It is estimated in the motor industry of this country that when a vehicle of £5, 000 value is exported it takes with it, during its lifetime, another £5, 000-worth of export value in regard to the spare parts and other supplies which are necessary.
LORD SHACKLETON: It must be a Rolls Royce.
LORD LUCAS OF CHILWORTH: It is not a Rolls Royce.
LORD SHACKLETON: They do not need spares!
LORD LUCAS OF CHILWORTH: The noble Lord should recognise that some of these 20-ton vehicles and 64-seater buses which are exported in large numbers to foreign countries are very expensive items. They are not Rolls Royces. Our heavy vehicle manufac-
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turers in this country are pre-eminent in the world in this class of vehicle.
While I am on the export question, I would beg Her Majesty's Ministers to be very careful about some of the things they say and some of the utterances they make. I was told the other day by a leading manufacturer in the motor industry that he has had an import licence withdrawn, costing the company a very big order in Spain, because of what the Spaniards thought was the very foolish attitude we were adopting over the naval exercises. Again, in regard to South Africa perhaps the Government have a formula; but when does a 20-ton truck which is shipped out to South Africa become a warlike vehicle? All this talk about arms embargoes is very disturbing to some of the buyers in overseas countries, and, as the noble Viscount, Lord Watkinson, quite rightly said, our competitors are waiting on the sidelines to fulfil the orders which we do not fulfil.
My Lords, those are just two suggestions which I have to make about exports. There is one other that came into my mind while the noble Viscount, Lord Watkinson, was speaking, and when he said that very many of our exporters do not know the services which they can obtain from the Government Departments. That is quite true. But there is also an equal number—and a very large number, I am afraid—who do not know what financial assistance, such as allowances, they can get from various Government Departments. That fact was brought home very vividly in an article written by the Editor of the Financial Times some two weeks ago. No publicity is given by the Board of Trade to all the help that the Government can give developing industries all over this country. The ignorance of some of these people whom we are wanting to help is sad, and they do not know the help is available.
There is only one other point that I would make, and I do it with a certain amount of diffidence. We have talked and heard a lot about an incomes policy. I have not yet been told all the details; perhaps we shall learn something this afternoon. But I must confess I am very sceptical, because, call it by whatever name you like, an incomes policy is a restraint of incomes policy. That is its object. But I cannot think we shall ever

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get to the stage where a manufacturer or a producer who wants first-class brains will be prevented from paying for them. Also, I do not think we shall ever stop a first-class man from getting first-class money, if he goes out to get it. There is one thing I do not want to see, and that is the wage-earners and the young executives, or anybody like that, being brought down to a level of mediocrity.
I do not think the Government will have much difficulty in persuading the T.U.C. about an incomes policy; I do not think the T.U.C. will have any great difficulty in getting the support of the individual unions. But when one gets down to the bed-rock, the grass roots, on the factory floor, where the conditions to-day are really archaic and where the shop steward's movement, which is now almost an industry in itself, has a grip of the whole position, I have my doubts. My Lords, base wages negotiated between management and labour to-day are but a clocking-in fee. After that, the local bargaining and guerrilla warfare starts. What are we going to do about labour, with the restrictive practices and the unofficial strikes? It is a great problem. Because, my Lords, to-day an unofficial strike starts with somebody who is not being paid a bad wage but being paid a very good wage, but who suddenly hears that somebody is getting more. That is where the strike starts, and I do not know how the problem will be solved.
There is only one thing which I wish the Government would do—and I expect many of your Lordships will think this is harsh and strong. All restrictive practices on both sides of industry should be outlawed. After all, we must do something. We must learn how to utilise our labour to the best advantage. We are the worst country in the world in this regard. I dare swear to your Lordships that in South Wales there are 25, 000 redundant workers in the steel industry. There are 10, 000 in the Steel Company of Wales. What has been done about the position? Nothing.
There is another nettle we must grasp and it must have a high priority; I would say second only to that of stimulating the exports of this country. I refer to Government expenditure upon Defence and similar other matters. From 1952 to the end of last year, £20, 000 million were taken out of the pockets of the taxpayers
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of this country for Defence. That is what successive Conservative Governments took out of the taxpayers' pockets. How can we go on bearing this expense? Take the case of Germany. It is costing us £80 million-odd a year, and they have never kept their bargain that they would buy their military equipment from us; they buy it from America. How long are we going on with this kind of situation? How long can we, as a nation, with our resources, play the part that we thought we did in the days of Queen Victoria? I think the Government are seeing the dawn. Was it not the Chancellor of the Exchequer who only the other day said that we can be either an economically sound nation and a power in the world, or a military nation and unsound, or words to that effect? We have to do something, and when we start on that path I think we shall be viable, and we shall be able to give the people of this country the economic state they not only desire but deserve.
5.58 p.m.
LORD MOLSON: My Lords, the late John Strachey was not only a remarkable political philosopher but he was, indeed, a remarkable prophet. It was on February 6, 1954, that he wrote in the New Statesman and Nation,
" The next Labour Government will come into office in a situation which, if it even attempts to implement its social reform 'fair shares' programme without doing anything else, (he national reserves of gold, dollars and foreign exchange will pour out of the country in a torrent."
I wish he had lived to see how true his prophecy has been.
But I think that we must realise that the very acute crisis which we are facing is of two kinds. There is the long-term unfavourable balance-of-payments situation, due largely to our inadequate exports, and there is the crisis of credit which the Prime Minister himself has said came on only after this Government came into power. I want to speak frankly. First, we must, I think, recognise that the position of exports was unsatisfactory at the time when the present Government took over. I had long felt that the Conservative Government, like the Socialist Government between 1945 and 1951, had been overdriving the economy.
There is the obsession about never allowing unemployment to rise to a level at which it is possible for growth indus-

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tries to recruit labour without inveigling that labour away from other existing industries. The noble Lord, Lord Lucas of Chilworth, has referred to the need for reorganisation, and to the excessive amount of Labour which is engaged in various industries. I have recently been reading a remarkable book, which I commend to your Lordships, called The Rebirth of Britain. In this book it is calculated that, with reorganisation—nothing frightfully revolutionary—it would be possible for our present total national output to be produced by half of the existing labour force.
We are, of course, confronted with the problem of trying to do too much at the same time. I well remember the noble Earl, Lord Attlee, making that remark in a philosophical commentary upon his own Administration. I cannot quote his exact words, but I think they were to the effect that
"with the very best intentions in the world, we have perhaps tried to do too much too fast".
If that is a criticism which can rightly be applied, as I think it can, to the Socialist Government between 1945 and 1951, it can also undoubtedly be applied to the Conservative Government between 1951 and 1964. The programme of public expenditure which the late Conservative Government announced in February of this year was an indication that this further inflationary policy was intended to be pursued. It was a forecast of expenditure up to the year 1967-68. It was based on an increase of expenditure of 4-1 per cent. each year, and on the optimistic assumption that there would be an increase in output of 4 per cent. per annum. My Lords, Chancellors of the Exchequer can be quite sure that expenditure will go up, but they cannot be equally sure that national production will go up.
Now Mr. Colin Clark, who is also a contributor to the book to which I have referred, The Rebirth of Britain, has long argued that taxation amounting to more than 25 per cent. of the national income is likely to lead to inflation. In 1957, according to The Times, taxation was 36 per cent. of the national income; in 1963, it had gone up to 40 per cent.; and in 1966, on the late Government's intended expenditure, it was to go up
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to 41 per cent. Unless it is possible to make sure that production really is going to increase, and that these restrictive practices and this uneconomic use of labour will be brought to an end, it is most imprudent to plan ever-increasing expenditure over a number of years to come.
My Lords, in the same way, this last spring I ventured, in your Lordships' House, to criticise the late Government's Bill, providing for £75 million to be advanced to shipowners to have their ships built in British yards, because the £75 million was made available quite unconditionally: there was nothing about restrictive practices, nothing about strikes due to demarcation disputes and so on. My noble friend Lord Dundee, in reply, expressed kindly sympathy and a good deal of personal agreement with the argument which I had put forward, but was of the opinion that it was impracticable. What do we find to-day, after this "shot in the arm" of £75 million? We find that the Canadian Pacific Railway Company, which has always had its ships built in Great Britain, is now obliged to give three-quarters of a very large order to Japan, and that the P. & O. Company, which, as was referred to by the noble Lord, Lord Lucas of Chilworth, is trying to enter a new kind of shipping activity, has found itself obliged to do the same kind of thing.
My noble friend Lord Dundee has elicited what is interesting about the amount of the unfavourable balance of payments this year that was due to exports of capital, but I wonder whether there was any justification for such large exports of capital as were then undertaken—for example, the £60 million (I think it was) of Shell's investment in Italy. With an unfavourable balance of payments on industrial account, it is obviously impossible for us to go on investing overseas in that way. I fear also that the overseas aid which we have been giving, however desirable in itself, has also been beyond our powers.
My Lords, I have made those remarks in criticism of the last Government, and to that extent I have perhaps been concurring in some of the things that have been said by the then Opposition. But whatever the long-term difficulties may have been, the acute crisis which has now

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arisen is undoubtedly due to an almost incredible sequence of follies committed by the present Government in the short time, the fifty days, that they have been in office. The first was the 15 per cent. import charge. In the last few years we have heard arguments between the Six and the Seven; there has been criticism from the Commonwealth that we were seeking to enter Europe; and there was a difference of opinion between all these bodies. What a remarkable feat on the part of the new Government to have introduced a measure like this, which has simultaneously alienated the Commonwealth and offended EFTA and the Common Market!
There have been breaches of no fewer than four international agreements: so far as the Commonwealth is concerned, the Ottawa and subsequent trade agreements; then the agreements with EFTA; and, as regards the Six, the European Free Trade Association Convention and GATT. My Lords, I realise the argument in favour of this 15 per cent. import charge. I do not agree with it, but I can see the force of the Government's argument. But I would say there was not at that time that urgent hurry. That was before the crisis of confidence in sterling had started. There was no reason why there should not be at any rate a rapid consultation with the Governments concerned. To say that there was a danger of a breach of confidence is really unreasonable. No one is suggesting that they should have consulted the exporters: it was a matter of urgent consultation with the Governments concerned.
This blunder inevitably led to another. When the Foreign Secretary and the President of the Board of Trade met our EFTA partners, and sought to justify this sudden and arbitrary imposition of the 15 per cent. duty, they had to paint the picture as black as possible in order to justify what they were doing. And when they painted the picture so very black it was inevitable that foreigners with deposits in London should assume that what they were saying must surely be true: and as a result they proceeded to withdraw very large sums from London. How large those sums were we do not, of course, know.
The present published reserves, at £837 million, are the lowest since December, 1957. But that is nothing like the whole story. Considerable withdrawals had
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taken place in September and October; sums estimated at some £150 million were borrowed from the Central Banks; and on December 2 we borrowed £357 million from the International Monetary Fund. As that was borrowed the day before the reserves were published, it must be assumed that the reserves, which include our foreign exchange, as well as gold, took that into account. Therefore all one can say is that during these last few months there have been withdrawals on a really appalling scale, the total amount of which is not known to us.
The noble Lord, Lord Shepherd, spoke about this not being the first financial crisis we had had. He took pleasure in referring to the last two which happened while the Conservatives were in power. I am sure that he will not mind my reminding him that there have been no fewer than seven crises since the end of the war and the results of two of them were: one, under the late Mr. Dalton, the end of convertibility of the pound; and the other, under Sir Stafford Cripps, the devaluation of sterling. All this goes to show that we have the problem of trying to maintain our position as one of the greatest banking nations in the world with an inadequate export trade and with inadequate reserves; and it is a position which this country cannot permanently maintain. Something far more fundamental is required than anything that either of the two Parties in power since the war have yet undertaken. I would say also something about the proposed increase in pensions.
LORD SHACKLETON: My Lords, if the noble Lord is changing the subject, may I interrupt at this point? I have been following his speech, as have other noble Lords, with great interest. Would the noble Lord care to develop a little his thinking on this fundamental approach to the problem?
LORD MOLSON: My Lords, I will just hand out a prospect to the noble Lords opposite. When I have finished my criticisms, I am going to commend the Government for one or two things that I believe they are doing and which I hope they will have the courage to carry through. Other noble Lords, like my noble friend Lord Watkinson and the noble Lord, Lord Lucas of Chilworth, have referred to the export trade and they know far more about it than I do.

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I am sure that something will have to be done to foster our exports, very likely on the lines they have indicated.
On the matter of pensions, the Chancellor of the Duchy of Lancaster made a remarkably stupid remark in another place when he said that if the International bankers do not like it, they can "lump it". My Lords, when we are on the verge of a financial crisis, and are borrowing money to pay our way, it is not wise and not statesmanlike to talk in that way. Perhaps, since then, he has noted what the Chancellor of the Exchequer has said about this matter:
"As to whether one has freedom of action when one goes cap in hand to the Central bankers, the answer is … that that is not a posture any Chancellor enjoys. It is an attitude from which the whole House and the country will want to see us escape at the earliest possible moment."—[Official REPORT. Commons, Vol. 702 (No. 21), col. 1479. 26th November, 1964.]
My Lords, on this matter of pensions I do not dissent from what the noble Lord, Lord Shepherd, said about giving increased assistance to those in this country who are in need. But I did criticise the Conservative Government's last Pensions Bill, and I criticise the Pensions Bill introduced by this Government. I give my reason in about four sentences. First, all those who are in need are able to go to the Assistance Board. What they receive in the way of pensions is taken into account when determining what assistance they shall receive. With every year that passes under the ten-year rule, an ever-increasing proportion of those who are in receipt of pensions are not, in fact, in need of them. Almost all Members of your Lordships' House who live long enough will qualify to draw pensions. If the Government really wanted to use the money most effectively, in order to give money where there is need, they would have increased in a suitable way the amount paid under the Assistance Board regulations, and they would not have gone in for an inflationary measure of increasing payments to all pensioners, regardless of whether or not they are in need.
I pass from that matter to the things which have been done by the Government just recently. The blunder which followed was that when the Prime Minister had announced that the
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Government were going to defend the pound, there was no raising of the bank rate the following week. It was then that the real crisis of confidence set in, and it became necessary to raise the bank rate to 7 per cent. on a Monday morning. I believe that that was entirely the right step for the Government to take; I believe that it will have a salutary deflationary effect.
I noticed that the noble Earl the Leader of the House took exception to a question that my noble friend Lord Eccles asked him the other day, as to when the credit squeeze would begin. The noble Earl was quite indignant about it. He recommended my noble friend to read the Labour Party Manifesto, and said he could only assume that the question was meant ironically. He said, with great dignity and indignation: "So far as we are concerned we regard these matters as too serious for irony." I am glad to say that the Chancellor of the Exchequer on November 24 had already begun to announce a salutary credit squeeze, when he said, in moving the Second Reading of the Finance Bill:
"As to bank lending, the position of the banks is such that they will wish in the coming months to moderate the expansion of their lending … and the normal seasonal pressure will reinforce this tendency. Some tightening up should have the natural result in the present situation, of making a contribution to preserving a proper balance in the economy."—[Official Report, Commons. Vol. 702 (No. 19) col. 1104, November 24, 1964]:
The noble Earl will say that taking steps to obtain a proper balance in the economy is not a credit squeeze, but I do not know what else it is. I am glad to read in the paper to-day that a request has gone out to banks to exercise a discriminating squeeze where it will have the effect of reducing consumption inside this country, and that I imagine is what is going to be done in order to release labour, in the way that was indicated in the statement by the Government, to increase exports.
THE EARL OF LONGFORD: My Lords, since the noble Lord has referred to me and I am sitting here, perhaps it is difficult for me to keep silent. I cannot believe that the word "squeeze" was used by the Chancellor of the Exchequer, by the Governor of the Bank of England or by the banks themselves. They refer to some moderation of the expansive process, but I am afraid that I

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cannot agree that a squeeze has been adopted.
LORD MOLSON: My Lords, of course, squeezing is a relative term and some people squeeze more than others squeeze, but I think that the House will agree with me that what the Chancellor has indicated, and what has now been officially requested by the Bank of England in letters to the banks, is something which is normally known as a careful and discriminating squeeze where it is appropriate. I believe that this will have the effect of a satisfactory internal deflation, which will have the beneficial effects which the.15 per cent. surcharge may have had without the ill effects. I believe that it will discourage imports, encourage exports and tend to keep down prices, and I think that it will increase the sense of urgency in industry. The great disadvantage of the 15 per cent. surcharge, which 1 [know was imposed purely for balance-of-payments reasons, is that it gives heavy protection to all British industry, including industries which do not need it and industries which do not deserve it.
As regards the future, I am thinking of the rationalisation of industry and the discouragement of restrictive practices, both of which have been referred to in a number of speeches to-day. But I believe that the Finance Bill itself does nothing to solve our two problems, which I would say are, first, the backwardness of many industries and services, especially the docks. At the present time weekend working has not been fully resumed despite the inflationary increase in wages that has been recommended. Secondly, foreigners' mistrust of the way in which we manage our economy, which has been made worse by needlessly increasing taxation and by the feather-bedding of our industries.
I said that I would end on a slightly different note and, having said that the Finance Bill is wholly irrelevant to our problems, I welcome some indications that the Government are tackling our problems now with some realism and, I hope, with some courage. I welcome what they are doing about the bank rate. I welcome what I believe them to be doing about the credit squeeze. I welcome their review of all expenditure, and I hope that they will have success with an incomes policy, without which I can-
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not believe our problems will be permanently solved.
6.24 p.m.
LORD CITRINE: My Lords, no thoughtful citizen can be without anxiety about our financial situation. It has not leapt on us overnight. The present position has been going on insidiously for almost the whole of the post-war period, with a growth of 2 per cent. in our actual production, as against the estimated requirement by the National Economic Development Council of 4 per cent., and with the decline in our share of world markets, which in 1924 was 24 per cent., in 1957 19 per cent., and in 1962 14 per cent. In the London and Cambridge Bulletin No. 52, published in The Times Review of Industry and Technology, December, 1964, the survey on the economic position contains this conclusion on exports:
"The brutal fact remains, however, that exports have never reached the NEDC line, and that the United Kingdom's share of the world's exports of manufactures in the second and third quarters of 1964 established new low records."
I do not suppose we can assume that the Finance Bill before us is expected to cure all the basic causes which underly our present position. They are not temporary causes. What we are seeing now are symptoms rather than causes, the causes lie very much deeper than that. I firmly believe, as I have said before in this House, that the fundamental cause lies in the character of our people. We have an innate conservatism, not, I hope, of a political kind. We are reluctant to change. We always ask first of some new idea: what is wrong with it? If we find it is no good or if we think it is no good, we go on saying so for about forty years and then finally adopt it, and do it better than anybody else.
This attitude of mind runs right through our people, not merely on the side of the employers in industry, but equally on the side of the workers and our citizens generally. It is the basis of all the restrictions that honeycomb our present industries, and I am not nearly so optimistic as the noble Lord, Lord Lucas of Chilworth, that they can be effectively outlawed. I do not know what kind of mechanism will be established to achieve that result, and I think that the attempts which have so far been made, through the restrictive trade practices courts and their attendant legislation, have shown how complicated and

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how slow the process is in dealing even with the most obvious restrictive practices. If and when legislation is introduced to deal with the practices which exist among workpeople throughout industry—in addition to dealing with business practices, as existing legislation docs—goodness knows how long it will take to identify these practices and propose some cure which will not be worse than the disease itself.
Last night, as many others must have done, I saw a programme on B.B.C. television. I forget its title, but it might have been called "The Sins of Management" because almost the whole of the witnesses (as they might be called) who were interrogated or gave their opinions in that broadcast blamed management for the difficulties we are in to-day. The managers themselves, practising managers and managers of American firms in this country, gave similar testimony. I would not go so far as that. I do not believe that all the sins lie on the said of management. I think that in a period of full employment the powers of management to do the things they want to do for efficiency are very much curtailed. I would not lay all the blame on their shoulders. I think it lies in the apathy of our people; the sort of sublime indifference that we have to things that concern us very deeply. I can recall in two wars, when we were actually fighting the enemy, the difficulties there were in the way of convincing people of the need to change their mode of life and adapt themselves to the circumstances of a war-time economy.
Side by side with this, the inevitable is going on with inflation. Incomes are high; profits are good; and wages and earnings are higher than they have been for many years. So, as I have said once before in this House, I can hear workers saying: "If this is inflation, let's have more of it"; because, as they think, they benefit from it. Everybody is used to this. Yet it is the most dreadful canker which lies at the roots of our economic position to-day. I am well aware that it has been going on from time immemorial. I am not much of a Biblical expert—I know very little other than what I learned at school and in Sunday School—but I recall the parable of the men who thought they were not properly
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paid when they received 1d. a day for a 12-hour day.
There have been, of course, periods of stability; but they have been relatively short, and the decline in monetary values has been going on steadily throughout my lifetime. Some years ago I came across a report in The Times which was evidencing a question that had been put by Mr. John Diamond, a Labour Member, who asked the Secretary of the Treasury to publish in the Official Report a table showing the internal purchasing power of the pound sterling at 20s. in 1914, and then the value for each year since in shillings and pence. I am not going to read it in detail to your Lordships, but the 20s. sovereign in 1914 had declined by 1938—that is, the year before the war—to 12s. 10d. In 1960, four years ago, it was 4s. 6d. I am certain that its value to-day is considerably lower than that, and it would be interesting if we could receive figures which brought the present value of the 1914 pound up-to-date. So that a man now earning, say, £12 a week—and let us remember that there are many who do not receive anything like that sum—receives the value of about £2 14s. a week in 1914. Of course, hours of work have been reduced considerably since that time, but this shows the real value in purchasing power of these fantastically high wages. No wonder there are claims for continuous high earnings, with this inflation going on all the time. No wonder that wives, to a greater extent than ever before in our social history, go out to work to supplement the income of the family. That is not the only cause. I know—there are other things which induce them to do this—but I think it is the most serious one.
So far as I can judge, in no quarter of the community, except such as the Members of this House and Members of another place, economists and people engaged in the study of these questions, is there any sort of awareness of the tragedy that lies ahead of us unless something is done. I remember Mr. Hugh Gaitskell, when he was Chancellor of the Exchequer, warning the Trades Union Congress in 1951 of what would happen if there were continuous increases in wages, year after year. He dealt with that subject very adequately, and showed the disaster that would result in unemployment, as well as poverty, unless those tendencies were checked. That was in

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1951. We are now in 1964. I well recall, too, Mr. Thorneycroft, when he was Chancellor of the Exchequer, going to the National Production Advisory Council on Industry, of which I was then a member, and telling them that we were paying ourselves about £900 million per annum more than we were earning. I tried to follow that up. I asked those present to make an analysis of that statement and say how far they thought the facts presented were correct; whether they were challengeable; and, if they were, in what respect. Needless to say, there was no follow up, except by me, and the whole thing lapsed.
Following that, and almost simultaneously with it, we had an appeal for wage restraint, with the very natural consequence that the trade union people said: "Why wages only? If we are in a situation that requires something that we did not do even in two world wars, then it should cover the whole community and not merely the wage earners". Then, without attempting to make political capital out of it—I am not intending to do that in any way-one cannot forget the mistakes that were made by (I will not mention the name) a Conservative Chancellor of the Exchequer in the wages pause, which antagonised not only trade unions generally, but people who normally in their dealings with their employer—the teachers, civil servants and others—are well-balanced and not extravagant in their demands.
A White Paper followed that, in February, 1962, which took away almost every one of the major arguments that can be presented to justify wage increases, and said that these were not, in the then circumstances, relevant. If ever there was a method of whittling down our traditional systems of collective bargaining, that was it. In the circumstances, many people who normally had faith in arbitration, and unions who were ready to submit their claims to arbitration, lost faith. They believed that the arbitration courts were receiving, in substance, a direction from the Government. As for the Government themselves, the normal distrust which existed in labour circles was very much intensified.
Now a Labour Government have to deal with this situation, and they are trying to work out an incomes policy.
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A prominent Conservative has said that an incomes policy is nonsense, but I am glad to see that there is not complete unanimity on this point. Certainly the Labour Government are trying their best to come forward, after adequate consultation, with some kind of equitable policy which will apply not merely to wages but to all forms of income. They have had consultation with the representative bodies in industry. I cannot think of anybody they have left out who is really in a representative capacity. They have consulted the British Employers' Confederation, the Federation of British Industries, the Trades Union Congress and a body that was called the National Union of Manufacturers, who now have a title which I do not recall. These have all been brought together in consultation and in serious discussion, and to give their advice to the Government on this question. And we have been told that it is possible that a wages policy, at least in outline, will be worked out by Christmas.
I have no doubt whatever that restraint in wages applications, as in demands in all other sections of incomes, is an essential ingredient in trying to cure this situation. I have said this publicly and privately, and there is no need for me to expand it. But there must be some firm assurances that the same kind of action is going to take place with regard to dividends and profits, not merely by limiting dividends which can be postponed or put into reserve or something of that kind—and this sort of thing can easily be done—but by devising mechanism which can cover the whole of the incomes of this country. This is going to be a very difficult task indeed.
I do not know whether it is feasible, for example, to control prices. I have read something about European experience on this point, and it seems to be very patchy. For a time it seemed to be effective and then, as in the last war, irrefutable cases could be made for increases in costs, and legislation had to be modified until we had what we called permitted increases; and as the war developed even that broke down, so far as my memory serves me. So let us not minimise the task of the Labour Government. Let us have a little more charity for them in struggling with this position. It would tax the ingenuity of

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the cleverest body of men who could be brought together. After all the consultations are done, we have still to convince those people on the shop floor, who form the bulk of our purchasing power and create the pressure of demand which in the main causes or is one of the causes of inflation, and about whom the noble Lord, Lord Lucas of Chilworth, spoke.
I have for years seen the defects in trade union organisation which—how can I say it?—widen the gap between the trade union official, negotiating with the employers' organisation, and the men in the workshop. There should be many more trade union officials; and bargains made in the workshop between bodies of shop stewards (some of them very irresponsible) and the employers in the workshop (some of them completely unknown to the trade unions) can lead to a measure of inflation by reason of the employers, rather than have trouble, making concessions which are basically unjustified. All factors of that kind will be involved in trying to work out an incomes policy.
I do not know enough about the methods available to Governments, but while it is quite demonstrable what will be the effect of, say, a wages restraint, a wages pause, a long-term agreement, or whatever method may be used for the time being to stablise wages, it must be seen and understood by the men. But what means are going to be taken to show workpeople on the workshop floor that the men in the higher income brackets are making anything like a comparable sacrifice? I do not mean to say that the means cannot be found to make that sacrifice essential, and inescapable perhaps, but how is it going to be administered? How are the workpeople going to be shown that? At the moment I am not able to suggest an effective remedy. Of course, it is too much to expect in any policy devised under pressure, as this incomes policy must be, to be able to deal effectively in a first round, as it were, a first pronouncement, with this problem. Whether we can get beyond or expect to find anything more than a declaration of intent on this matter, a declaration of a readiness to co-operate and to show the measure of good will that exists between the various consulting bodies, is extremely dubious.
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That brings me back to the inevitable, the need for adequate and sustained publicity. It is rather amusing to anybody who has tried in any way to develop a system of communciations in a large-scale industry or firm to see how crass are the methods employed to-day. It is regarded as some kind of waste to spend money in this respect. Large sums of money are spent by progressive firms without cavil on new machinery and on the latest devices. But when it comes to getting down to their human material, which is the most precious of all and the most precarious and difficult to deal with, the methods taken are elementary in the extreme. So when I speak of adequate and sustained publicity, I am thinking of something much better than anything we have attempted to do up to now.
I think all available means will have to be used to get this policy understood and accepted by the public and the workers at large through the organisations, through the B.B.C. and on the platform, too. To-day, the platform does not play so extensive a part as in my young days, but it is still a medium and one of the few media left where speakers can be questioned at length by their audiences. So I hope that that will be used to try to get over to the public how important it is, how crucial to the success of the new incomes policy and the prosperity of this country, that that policy should be accepted and loyally worked by all of us; and all of us must hope that it will succeed. I have a long experience of the trade union movement behind me, and I know something of the difficulties. So far as I personally am concerned and, I am sure, so far as your Lordships are concerned, the greatest measure of good will will go out to those who are trying to devise this essential national policy.
6.46 p.m.
LORD DENHAM: My Lords, may I first of all add my congratulations to those which have already been expressed to the noble Viscount, Lord Watkinson, whose maiden speech we all heard with so much pleasure earlier this afternoon? In the gracious Speech from the Throne at the opening of Parliament, Her Majesty's Government undertook to pay special attention to the interests of consumers. The previous sentence in the

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same paragraph referred to the Government's intention to promote reforms in taxation. This juxtaposition seems now to be unfortunate, as certainly one aspect of Her Majesty's Government tax reform programme will have a disastrous effect on the interests of consumers. I refer to the proposed capital gains tax.
The efficiency of small tradesmen is vital for providing for the needs of the consumer. It may be larger businesses which manufacture most of the consumer products, but it is to a large extent the small man who deals direct with the public. The small man provides services. The raw materials are made by the manufacturers, but the quality of the finished product is the responsibility of the small man, and he provides after-sales service for larger consumer products. The retailer has to ensure that he stocks the kind of goods best suited to the needs of his customers, and, since the passing of the Retail Prices Act, he also has the opportunity to supply them at the most competitive prices.
What I am going to say this afternoon refers to the problems of small businesses. It may be that some of the points I have to make also apply to a greater or lesser extent to large businesses, but on this I cannot speak from experience. I speak from the viewpoint—perhaps rather unusual from these Benches—of a small shopkeeper. I have a small business which consists of a workshop and two retail shops, and as such I should like to declare my interest. In the interests of the consumer, it is vital that new small businesses should continually be formed, and for two reasons: first, in order to provide goods or services not at present available and, secondly, to provide competition to existing businesses which will force them to make sure that the services they supply are kept up to the mark. It is also necessary, in the interests of the consumer, for existing businesses to expand. Your Lordships will realise that no organisation can with impunity sit back and feel that it has achieved its target. If you are not continually trying to improve and expand, sooner or later standards are bound to go. If you do not try to go up, sooner or later you are bound to go down.
The first essential for starting a new business or expanding one is capital, and, broadly speaking, there are three sources
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from which the owner of a business can hope to get the capital necessary. He can get the capital from himself, he can use his own savings; he can approach other private individuals with a view to their investing money in his business; or he can go to his bank. To take the third possibility first, it is almost impossible to borrow money from a bank of an amount between £1, 500 and £10, 000 on the security of a business and its assets alone. In the end, a bank will only lend money to a business proprietor either if he has outside assets of his own against which an overdraft can be borrowed, or if he can persuade a third party to guarantee the overdraft, which brings him back eventually to the necessity of either putting up his own money or of getting a third party to come in on the venture.
To invest money in a new business or one that needs to expand is of necessity speculative. The Oxford English Dictionary defines the verb "to speculate" as:
"make investment, engage in commercial operation that involves risk or loss".
I mention this because "speculation" nowadays seems to have become a dirty word, not least in the mind of Her Majesty's Government. If you speculate and lose you are looked upon as a fool; if you speculate and win, you are looked upon as a knave. In fact, someone who puts money into a business, either his or somebody else's, balances the chances of a partial or total loss of the money against the extent to which he can gain if the investment is successful. The greater the risk—and there is always risk—the greater must be the prospects. Conversely, if by taxation the prospects are cut down, the more difficult will it be to find people prepared to take a particular risk with their money. This must mean that a number of businesses which would otherwise have started and, if successful, have proved of great benefit to the consumer, will now never get off the ground for lack of capital.
This will be true when the full details of the capital gains tax are known next April. The present state of uncertainty is even worse. Nobody in his senses will lend money—unless he is absolutely certain his investment is going to be successful—until several questions about this capital gains tax have been answered. First of all, he will want to know what is the fullest extent of the upper limit of the

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capital gains tax; secondly, whether the tax will be graduated according to the length of time the money is invested; thirdly, whether any allowance will be made for change in the purchasing power of the pound; and, fourthly, whether a capital loss will be allowable against income tax if it represents the entire capital of the investor. Surely, if a small investor puts his limited capital into one thing and stands the chance of losing it, he is in a very much worse off position than a richer man who has a lot more to invest and will probably have a capital gain or two against which his capital loss can be offset.
Until these questions are answered, and satisfactorily answered, a small business will not be able to get the capital it needs to provide the best services to the consumer. I do not expect answers to these questions from the noble Lord. Lord Shackleton, or the noble Earl, the Leader of the House, this evening but I must say that I did expect them from their right honourable friend in another place yesterday. The answer to these questions will probably at this moment be: "Wait and see". This may be all very well as far as the investor is concerned, because the lender may be able to wait six months, but in any case the borrower will not be able to. It is from the point of view of the man who needs to raise the money that I think this matter wants to be considered.
My Lords, who will suffer most from these difficulties? The man who wants to start a new business will suffer to a certain extent in that it will be harder for him to raise capital and he will have much less incentive to risk his own; but he is not compelled to start his business, and if he thinks the risks are no longer worth while he probably will not do so. The man who wants to expand his business will also have difficulties in raising the money; he will also have No 1ncentive in putting up his own money, and he will not, if there are fewer businesses started, be forced so much to make his business efficient by new competition. The one man who is going to lose all along the line is the consumer. Perhaps Her Majesty's Government will bear in mind their undertaking to look after his interests when considering how. and, indeed, whether. to impose a capital gains tax.
6.57 p.m.
LORD SHACKLETON: My Lords, the noble Lord, Lord Denham, is quite right; he will not get an answer tonight. I must say that what I was going to call his moderately Poujadist speech was very pleasantly delivered, and I would equally say: would he rather have had a warning or not? This is the difficulty: it is almost impossible to find the right time to make any announcement. Either you do it without telling people and you are in the wrong, or you tell people and you are equally in the wrong. It seems, listening to some of the speeches that we have heard to-day, to draw attention to the total impossibility of government in any form at all.
I do not propose to make a very long speech. I am in fact going to endeavour to deal with some of the more long-term aspects of the Government's policy. My noble friend Lord Shepherd dealt mainly with the immediate measures which the Government are being compelled to take in order to deal with the balance-of-payments problems. But he also referred—not. very fully because there is never time to do this, I fear—to the more positive and more enduring side of the Government's policies which are designed (and I stress this) to bring about what I hope will be a fundamental improvement in the efficiency of this country's economy in the longer term: the fundamental improvement that the noble Lord, Lord Molson, in, I thought, an extremely interesting but very depressing speech, seemed to think impossible. He said that fundamental changes were necessary, but when I asked him what they were, he rather slid away. I thought it rather unpatriotic of him, if he knew the answer to the country's problems, not to give them to us. Perhaps if he returns later he will do so. I am therefore going to deal with some of the longer-term measures.
I should like to remind noble Lords, particularly the noble Earl, Lord Dundee, that when we criticised the last Government's economic policy, especially in the debate last June, this criticism was not directed so much at the short-term as at the absence of a long-term economic policy; and it is, I

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think, rather characteristic that certainly his speech and certain other speeches, but not all, from the Opposition Benches have concentrated solely on the short-term aspects of the Government's Budget.
Admittedly we are technically debating the Finance Bill, but we in this House have always sought to turn this into a general economic debate, and when we look at the remarks of noble Lords who spoke for the last Government—and I shall leave this aspect mainly to my noble friend Lord Longford—last June, there was not the slightest sign of any alarm. They are so tempting that I should like to quote those very complacent speeches. My criticism has been of general complacency among the members of the Party opposite, and certainly their official spokesman, about the longer-term prospects.
I am not sure that I would accuse the noble Lord, Lord Drumalbyn, as much as certain other noble Lords. But it was quite obvious last summer that we were going to be in a difficult situation on balance of payments; and, indeed, at the risk of trying to boast that I was a prophet—because it was a very easy sum to do—I would say that I did hazard a guess that the deficit for the year on combined current and capital account was likely to be at least £600 million; and I think it was the noble Lord, Lord Molson, who said that on this very narrow base of our reserves this confronted us with a difficult problem. But I would entirely agree that defences were erected, and I would admit to the noble Earl, Lord Dundee, that those defences are valuable. We have from time to time congratulated the Government, and particularly the former Chancellor of the Exchequer, on the initiative he has shown in these matters.
Where I find it so difficult to deal with certain noble Lords on the other side is that they apparently do not seem able to interpret the facts. The noble Earl, Lord Dundee, referred to stock building. I have not checked the figures of stock building that has taken place during this year. There was an increase in stock building. The rather distressing and surprising thing—or it may be in certain circumstances a good thing—is that stock building has fallen off again. There has been a steady rise in investment. I must
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draw to the attention of the noble Lord, Lord Drumalbyn, if he is checking on the long-term aspect—and one has to look at it long term—that it will not be found that the stock building is abnormal. I hope he can get through to the end of the rather lengthy article he is reading before he comes to speak.
May I now turn to the long term? This Government has not had a very long time, as a Government, yet to formulate its policies, but certainly some of the patterns of them, which were already foreseen in the Party policy statements, are beginning to take effect. I would deal first with prices and incomes policy, mainly because the Government attach the utmost urgency to it. I am sure all noble Lords will particularly welcome the very constructive and wise speech of my noble friend Lord Citrine. The noble Lord, Lord Watkinson—and we were all delighted to hear his maiden speech—will know that among the leaders of industry and trade unions the gap is not so great. It may be difficult to obtain a satisfactory policy, and it is fair for noble Lords opposite to ask, "Why should the present Government think that it has a better chance than its predecessors of introducing an effective incomes policy?" It is at this point that I think the fundamental disagreement or difference of approach takes effect. I think the answer must lie—and this is the case we maintain—in our general approach to economic and social issues and in the specific measures we have already taken in this Budget. That is why I would firmly say that this Budget is not irrelevant in regard to these particular social improvements: to help the economically weaker members of the community is essential to a policy of some measure of control over incomes and prices.
If we are to achieve an incomes policy and to frame it and implement it in a free society, it must depend on the voluntary co-operation of all sections of the community, and this in turn depends on the country's being persuaded that the Government's policies take proper account of prevailing inequalities of income and capital wealth. One may argue that the 6d. increase in income tax must militate against this. No one can deny that there are certain disadvantages—certain rather painful disadvantages—but we must face this question fairly and squarely. It has

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been a fundamental part of the policy of the Labour Party that we should be able to achieve more against a socially just background, quite apart from the desirability of obtaining it. It is the Government's view that the present Finance Bill sets the stage for a really purposeful drive to secure an incomes policy.
The Government propose to advance as quickly as possible in three main stages. The first stage will be to secure with both sides of industry an agreed statement of general intent. The second will be to decide what machinery and procedures are needed to keep trends and development over the whole field under review and to deal with exceptional cases. The third stage will be to agree on a normal annual rate of wage and salary increase consistent with sound economic growth and on a code of rules to determine exceptions.
As regards the first stage, my right honourable friend is at present discussing with industry the need to agree upon and publish a statement of general intention which will both set up the broad objectives of policy and express the determination of all concerned to work together to achieve them. I am glad to say these discussions are being carried on in a spirit of good will and mutual understanding, and I am sure noble Lords will not expect me to be in a position to give any details at this stage. But of course this statement of general intention is no more than a first step along a very difficult road. It will need to be followed by further discussions designed to make the agreed policy effective. Here there are several aspects to be covered, of which I will refer to two—namely, profits, and wages and salaries.
If a reasonable degree of stability can be assured in the general level of prices, there is no reason, in my view, to suppose that profits would in total grow too fast. Nevertheless, this is something that will need to be kept under review. If the Government were to find—and I stress again against the socially acceptable background—that aggregate profits were outpacing the growth of total wages and salaries, after allowing for short-term fluctuations, they would want to consider dealing with the situation by fiscal methods or in any other appro-
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priate way. On the other hand, it is no part of the Government's policy to say that profits are in any sense a bad thing. I am very anxious to put the case as fairly and as unemotively as possible. The Government are fully aware—anybody who has been in industry must be fully aware—that to penalise the making of profits unduly and rashly, without purpose, might well be damaging to the economy. Let us face reality. The United Kingdom has a mixed economy, part of which is in public and part in private ownership. Both sectors need all the enterprise and competitiveness which can be injected into them.
On the side of wages and salaries and other personal incomes, the need will be to secure agreement on a normal rate of annual increase which will be consistent with the objective of overall price stability. But it is quite clear from experience that a rigid policy in this matter will never be effective. That is the trouble with the sort of pay-pause approach that was introduced by the late Government. This is the straitjacket which the present Government are trying to keep out of. We must get on to long-term policies. This again is a reflection of what Radcliffe and others have said about monetary policies. But if we do get on to this long-term policy, I think it will be easier to provide room and techniques for exceptional treatment of exceptional cases. At the same time the policy would fail if the exceptional became the normal.
What I am saying about this, my Lords, is that it is not enough in this field simply to establish principles. If the policy is to be effective, procedures and machinery will need to be devised to make it effective. The Government have already announced their intention of creating a body to which could be referred for examination the more important cases in which the behaviour of prices appeared prima facie to conflict with the public interest. It seems likely that some parallel machinery will be needed to examine individual cases in which movements of wages and salaries, or other types of personal income, are thought to justify departure from the norm.
Some of your Lordships will no doubt think that the difficulties inherent in what I have just said are such as to make the attainment of this policy unlikely. But this is so essential, in my view, that it

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would be a counsel of despair if we were to give up seeking a policy which both the last Government and this Government regard as of primary importance. In the economic situation, especially, in which this country finds itself, with the dangers to which we are exposed, and to which the noble Lord, Lord Molson, referred, particularly our vulnerability in relation to the balance of payments, the alternative will be a slower rate of economic growth with a lower level of employment. This would not merely be an unwelcome setback but would seriously handicap our determination to bring about a more just distribution of the national wealth and to help those members of the community who are least able to look after themselves. Of course, it would continue to endanger our world-wide responsibilities in the Defence field, too.
I would criticise the last Government for the fact that they went about this rather rashly. I will not go into details. But I think the noble Lord, Lord Molson, will probably agree that the approach to the National Incomes Commission was an unfortunate one at the time. We hope possibly to profit by the experience of our predecessors and the mistakes that they made. But I would also maintain that we are in a better position to bring this about; and I hope that one of the achievements of this Government will be to take us a very considerable way along the road towards attaining a viable incomes policy.
I should like now to turn briefly to other ways in which the Government's strategy for strengthening the underlying position of the United Kingdom economy is being developed. All these measures are directed towards one end—namely, fostering a faster rate of increase in productivity. You can say, if you like, that this is the other facet of an incomes policy; or, equally, that an incomes policy is a facet of increased productivity. I had intended at this point to say a few words on exports, but my noble friend Lord Shepherd dealt with that matter fairly fully. I would only say that certainly I and the Government have noted the points raised by a number of noble Lords—the noble Lord, Lord Lucas of Chilworth, the noble Viscount, Lord Watkinson, and the noble Lord, Lord
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Molson, and others—on the export question.
Many of us who have had experience in exporting will be aware of the difficulties. It is extremely difficult (and I appreciate the difficulties in the board room) for a board responsible, in the main, to the shareholders to enforce a policy that may be damaging to their apparent short-term profitability. But, of course, they are endangered anyway by a failure of the country as a whole. I strongly support the views of the noble Viscount, Lord Watkinson, that somehow we have to get across that it is in their own long-term interests for companies to go into a field which will always (except for the obvious enjoyment which the noble Viscount, Lord Watkinson, obtained from his tour) present certain difficulties.
Perhaps the last Government had not so many people with business experience in the days when they talked about exporting being an "adventure". This was just a laugh to any businessman, including my noble friend Lord Shepherd and myself, who had attempted to indulge in this rather painful and trying occupation—there are more attractive forms of adventurous activity. Nevertheless, this matter is fundamental, and certainly any suggestions that come from anywhere in industry towards developing exports are of great value. I agree that the morale of the businessman is important. It is surprising to find, when you go abroad—here I agree with Lord Watkinson—how little value is attached to the services of commercial Ministers and others. When you find yourself alone with a number of the more responsible members of the community, they will admit that these people give great help. In fact. in certain areas our missions are doing possibly more than those of any other country. I have seen some of this in South America. Time is short, and I am afraid I shall have to leave the question of exports to deal with certain other aspects of the Government's long-term plan.
The Government's purpose is to achieve increased productivity. This involves pursuing a five-year national plan. I hope that we shall not be depressed at the phrase "a five-year plan". I know that we have often heard other countries talking about five-year plans. But the

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Labour Party take planning seriously. I admit that there has been a good deal of conversion in the Conservative Party to this idea, but accompanied by a slight reluctance to face all the semantic implications of the policy which, rather unwillingly, they adopted in the face of hard facts. This five-year national plan will guide the general development of the country and influence all aspects of the Government's economic policy. Our main task must be to create the conditions in which a rate of economic growth of 4 per cent. per annum may be achieved. This was the objective set by the last Government, but it is clear that more purposive action is needed if such an objective is to be won.
We have seen the depressing aspect of a really plateau situation with regard to production figures during this last year. We have seen a decline in exports—and this is. another figure that I would give noble Lords. During the course of 1964 exports have actually fallen by 4 per cent. in volume between the first and third quarters of the year, while imports have continued to rise. I should be the first to admit that there are various ways of presenting figures that can give different implications, but none the less the basic nature of our problem has been that imports have continued to rise while exports have either stood still or fallen back a little. It is against this background that we see that it will not be possible to attain the 4 per cent. per annum growth this year. We are determined, however, in order to achieve this in the future, to create the conditions necessary for a high and steadily rising level of industrial investment. Let me admit that there has been some improvement in industrial investment, especially in the private sector, in the last year.
Secondly, we propose to press vigorously for the removal of restrictive practices. We shall engage in a massive effort to modernise British industry. We shall do our utmost to increase the mobility of labour: and we shall embark on a vigorous policy of regional development. Perhaps I can say a few more words about each of these items. I shall be dealing a little later with industrial investment, because it is within the framework of the national plan that industrial investment will be considered. I would only
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say now that, in our view. the comparatively low rate of investment in this country since the war is one of the main reasons why the rate of increase in productivity in this country has lagged behind that of many of our competitors.
It is not the only thing; there are other factors with which we are all familiar. Restrictive practices are certainly recognised to be among the more serious obstacles to economic growth and efficiency. Existing legislation on monopolies will be strengthened, though this alone will not solve the problem, and we shall talk with industry about the more efficient utilisation of labour. It is against this background that the speech of my noble friend Lord Citrine was so valuable. Our efforts in this direction, we believe, will be strengthened by what we have done, and are now doing, to evolve a socially just approach to the country's economic problems.
Modernisation and innovation in industry, in methods both of production and of management, are in the Government's view a task of the first priority. It is for this purpose that the new Ministry of Technology has been set up and this Ministry is actively preparing its programme. I would say to the noble Viscount, Lord Watkinson, and others who have spoken on this subject that the debate in this House last week on technology, in which my noble friends Lord Snow and Lord Bowden both spoke, is perhaps almost more fundamental to the advance of this country than some of the fiscal measures which we are talking about to-day.
Several Noble Lords: Hear, hear!
LORD SHACKLETON: It is in its approach to the development of a more professional and more energetic attitude to modernisation and innovation, that this country, which has been lagging and which has certain basic difficulties to overcome, has suffered in the past. This is something on which I would take issue with the noble Viscount, Lord Watkinson. I do not wish at this stage to enter into a debate on the subject of the Concord or the TSR 2, but it was the present Prime Minister and other members of the Party to which I belong who in fact gave very much of a lead. I admit that in both Parties there has been talk of modernisation, but I would not for one

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moment accept that there is anything other that an absolute determination on the part of the Government to develop innovation and improved technology. This is going to be difficult in a situation when the economy is so stretched. This is the basic problem with which we are faced, and this is why it is so necessary to establish priorities.
Lack of mobility of labour I think we all recognise to be a serious impediment. It is our intention to do everything possible to remove disincentives to changing jobs. Greater inducements will be the key to this, and the Government are examining ways of improving existing schemes for facilitating the transfer of labour from one place and, even more important, from one occupation to another as the technological revolution goes on. We intend to implement vigorously the Industrial Training Act, for which we are indebted to our predecessors. We criticised it as being a rather small start in a very important problem; but none the less it was a start. We shall certainly consider urgently the scale of provision of Government training centres. Work is also being done on a new scheme for severance payments and on an improved system of transfer grants.
It is true that, rather late in the day, the last Government in office instituted the National Economic Development Council. On these grounds it is fair for them to claim some credit for the reintroduction of economic planning. But the national plan of which I am speaking will, in our view, represent a significant advance upon the work done by the N.E.D.C. First of all, it will be a Government plan and it will produce not recommendations but policy decisions. I shall explain this a little more fully. Secondly, public expenditure plans will be fitted into the plan and will form part of it. Thirdly, the plan will provide a framework for regional development. This plan will, I hope, still be a co-operative effort, with industry playing a major part in its construction, as well as in putting it into effect. We shall not depart from the principles of indicative planning in this matter.
Individual industries will be asked for estimates of their output in 1970 corresponding to a level of national income following a period of substantially (we hope) faster growth than in the past.
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They will also estimate exports and the resources of manpower, capital and materials and fuel they will need. These estimates will be compared with one another, with the estimates of Government expenditure and with the estimated manpower available and the needs of the balance-of-payments situation. They will be adjusted to form a consistent whole and to indicate the changes that are necessary if this level of national output is to be achieved.
Throughout the process the Government will be responsible for co-ordination and will take responsibility for the plan's fulfilment, not by directing firms—again I would stress this—as to what they should make and where they should sell it, but by creating conditions in which they will be willing and, as we hope, able to play their full part, and by helping them to deal with the difficulties which the planning process reveals in advance and with the unforeseen difficulties as they occur. The first estimates of public expenditure will be adjusted to fit in with the rest of the economy. I could go on at some length, but I do not wish to take up the time of the House for much longer. All I can do is to give some indication of how, in the long term, the Government are approaching this problem.
Within the framework of the national plan, regional planning, where again there was a beginning on the part of the previous Government, will play an important part. My right honourable friend the First Secretary of State will, I believe, be making a statement, possibly to-morrow, but certainly shortly, on regional planning. The aim is that unused resources, particularly of manpower, in some regions of the country shall be brought into use, and that the congestion which threatens other regions, such as South-East England, is dealt with. Regional planning will therefore make an important contribution.
I would say only one further thing on communication between Government and industry. This will be achieved under the auspices of the economic development Committees. These committees will include representatives of both sides of industry, the Department of Economic Affairs and the industries' sponsoring departments. Nine of these smaller committees, the "little Neddies", have already

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been set up, and it is hoped to add to their number very soon.
My Lords, I think I have said enough to demonstrate that, despite the serious short-term situation, the Government are losing no time in adopting measures which we genuinely and confidently believe will increase the underlying strength of this country's economy. The policies are ones which the Government are confident that, with the good will and co-operation of both sides of industry, they can carry out. Whatever may be said in Party political exchanges, I am sure it will be possible to harness the good will of the people of this country, bearing in mind that we have to operate under particularly difficult conditions in relation to liquidity. I am sorry that the noble Lord. Lord Boothby, is not here to make his regular speech on this subject. Unless we take steps of this kind, we shall continue to be vulnerable to the sort of situation in which we now find ourselves. It is the determination of the Government that we shall somehow or other help the country to get itself on to a more stable long-term basis.
7.29 p.m.
LORD COLERAINE: My Lords, may I add my congratulations to those which my noble friend Lord Watkinson has already received on a speech which struck me as a model, not just of a maiden speech but of a Parliamentary speech. It was concise, it was cogent, it was fertile in ideas and suggestions and it was altogether constructive. I think my noble friend felt slightly at a loss, inasmuch as he felt himself debarred from the more controversial aspects of the debate. I am not sure that that really is such a loss, because the matters that we are discussing to-day ought not, I think, to be matters of Party controversy. Of course, there are differences of opinion about the remedies to be applied in our situation, but I think it is extremely dangerous to take too violent a Party attitude on these matters. The plain fact is that all of us, wherever we sit, are living in glass houses, with all the limitations on our activities which such a habitation imposes.
I remember in the years immediately following the war how we all congratulated ourselves on the fact that we had made the transition from war to peace so much more easily than we did after
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the First World War. There were none of these strikes, none of these social tensions, none of the mass unemployment and the poverty and the misery. That was true. But I think we deceived ourselves in saying that we had achieved the transition more easily. I do not believe that we have achieved the transition at all. In the summer of 1945 we were faced with that hideous problem of how to maintain and improve our standards and, at the same time, maintain the balance of payments. In the winter of 1964 we are faced with exactly the same problem and, I think, possibly in a more dangerous form.
Our position is not due to want of trying. Whatever Governments we have had have done their best. We have tried everything. We have tried physical controls. We have tried, and are trying again, monetary controls. We have tried "Neddy"; now we are going to try, as the noble Lord has just told us, a "super-Neddy" with teeth in it. We have tried every expedient. We have tried a free economy and a planned economy. Now we are to have that ominous plan, a five-year plan, which has never worked, I think, anywhere in the world where it has been tried. We are trying that again. And after it all we are back to Square 1. All we have done at the end of the first 50 days of the "dynamic economy" is really, I think, to exchange an economy of "Stop-Go" for one of "Go-Stop".
I agree with my noble friend Lord Molson, who said earlier on that no Government that we have had since the war has really tackled the fundamental problems which face us to-day and which have faced us for twenty years past. The noble Lord, Lord Shackleton, rebuked him for this and said that he should develop that argument. I shall try to develop it briefly now. It seems to me that in everything we have done since the war we have taken the view that the economy is subject to some relatively minor disorder, and if only we can find the right specific, the right pill, the right poultice, the right patent medicine, we can put it right—I think the noble Lord, Lord Shackleton, said just now that he was taking a wide and long-term view and, certainly, he trotted out a great number of different remedies—and I am afraid that is still true. I am afraid that the Government still believe that, fundamentally, this is a minor ailment or some

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minor series of ailments which can be put right if only we can find the appropriate specific.
My own view, for what it is worth—I am not an economist, though I think, like most of your Lordships, that I devote a good many of my working hours to pondering these problems—is that the malady is a grave one and a general one. My noble friend Lord Dundee said that, fundamentally, there was nothing wrong with the economy, and that anybody who said that there was, was in some way doing a disservice to his country. I do not agree with my noble friend on either point. I think there is something fundamentally wrong, and that the greatest service we can do is to try to focus attention on it. I know from my own experience, and I have no doubt other noble Lords know it, too, that a great deal of criticism comes from our foreign friends, from industrialists and so on, with whom we are in contact, not because we are not making efforts to get out of our difficulties, but simply because we do not seem to realise the gravity of our difficulties and we seem almost to wear an air of complacency over a situation which to the rest of the world seems almost desperate when they look at this country.
It seems to me that the economy is suffering from a grievous and general disorder, and it is no use just shopping around for patent medicines, whether you call them a "pay-pause" or whether you call them an "incomes policy." I am perfectly prepared to accept what the noble Lord, Lord Shackleton, said about an incomes policy: that the Government, with their own special social philosophy, their own approach to these problems, have a greater possibility than the late Government had of achieving an incomes policy. I think they probably have a greater possibility, but I think, too, that the possibility does not really exist. I agree entirely with the prominent Conservative to whom the noble Lord, Lord Citrine, referred in his speech. I believe that an incomes policy is a shibboleth which cannot be imposed; it is only an incantation. But we have this malaise, and it seems to me that what we must do for the first time since the war is to submit to a pretty searching medical examination, and to submit after it to some fairly rigorous medical treatment. This will not just be a question of find-
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ing the right pill and swallowing it, but will involve diet, exercise, discipline and, possibly, even an operation.
Perhaps I should put what I mean in these terms. The noble Lord, Lord Shackleton, said very rightly that we were a mixed economy; there was the public sector and the private sector, and both had to be encouraged. I think, if he were honest with himself, he would probably go further than that and say that the private sector is more important even than the public sector, because the private sector is carrying the public sector on its back. I would submit to the House that the crucial task of any Government, of any complexion, is to try to create an atmosphere in which the private sector can develop and thrive. The private sector, if one can use disagreeable terms, is based on the idea of profit and on the idea of competition.
I think I would say that there were two essentials for the efficient working of a profit-making economy: the first essential is that profits should be very hard to get, and the second essential is that they should be relatively easy to keep. If profits are not hard to get it means that there is lack of competition; things come too easily; it is just a question of exerting oneself to the necessary amount and letting things take their chance. I am quite sure that in this country ever since the war profits have been far too easy to get, and I think that applies pretty well over the whole field of industry. They have been easy to get and they become increasingly difficult to keep. That means that not only do you have no competition, or imperfect competition, but you do not even have a sufficient incentive to try to put the lack of competition right.
The noble Lord, Lord Citrine, referred in his interesting speech to a television programme that he saw last night and which I saw—and I have no doubt others of your Lordships did, too. The message of that programme was, as the noble Lord said, that what was wrong here in this country was the fault of management; and I think, broadly speaking, that is true. I think that, if anything is wrong with a firm, whether it is labour relations or anything else, it is ultimately the responsibility of management to put it right. What this programme also underlined was that,

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although we told ourselves perpetually that we were in a period of over-full employment and that all the strains and stresses under which we labour came from over-full employment, we were in fact in a period of under-employment, and a great deal of labour was being wasted throughout industry.
That is probably quite true; but, if it is true, it is partly the effect of heavy taxation combined with easy profits. The noble Lord, Lord Shepherd, raises his eyebrows. Perhaps I could very briefly develop what I mean when I say that it is the effect of too heavy taxation. It works in this way. If you have a firm which ought to dispose of labour so that that labour can go to some other industry where it is more badly needed, that firm will tend to hang on to that labour, even at some cost, because it knows that the Chancellor of the Exchequer is carrying half or more of that cost. In that sense, I think taxation is definitely a contribution to inefficiency.
The lack of competition, of course, derives from tariffs, protection, restrictive practices and so on; but, at the risk of being called a Poujadist I should like to stress the important and, I think, the dangerous rôle that Government expenditure plays in all this. I do not say that all Government expenditure is bad—obviously, it is not—but it is probably fair to say that it is a characteristic of Government expenditure that it generates purchasing power without generating any production to offset that purchasing power. My noble friend Lord Molson referred to Mr. Colin Clark and his calculations, and certainly it would appear that those countries which have the highest level of public expenditure, where Government expenditure takes the biggest part of the national income, are the countries where inflation is highest and costs are highest. Where public expenditure is lowest, that is where inflation is least, and costs are lower, too.
Now if that is true of public Government expenditure generally, as I think it is, it is especially true of social expenditure, and I think it is time we all took a good hard look at the Welfare State. We were told by leaders in The Times and elsewhere that the last General Election was a very disappointing show because it was not about any particular issues;
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it was a matter of personalities; it was dull, and so on. But the thing that depressed me about the last Election was the way in which both the Labour Party and the Conservative Party—for all I know, the Liberal Party, too, but certainly the Labour Party and the Conservative Party—went on the basis that, as growth occurred, so expenditure on the social services would increase; that nobody would be any the worse off but everybody would be the better off. I think that is one of the prevailing assumptions that we ought to examine.
I am not suggesting the dismantlement of the Welfare State. Like everybody else of my age, I remember conditions as they were before the war. I remember them in my own industrial constituency in the North of England in the early 'thirties, and I would not, for any consideration, go back to those conditions. We have advanced tremendously, and I am myself perfectly willing to give the Party opposite the credit for that advance. But it is one thing to say, "Yes, there has been a social revolution; it has been a beneficial one": it is another thing to say that this great ark and covenant of the Welfare State must never be examined. I do not think it should be dismantled, but I think that probably it ought to be reformed. A lot of the things the Welfare State does I am sure could be done more economically and more effectively by other agents. But what I am convinced is wrong is the assumption on which both Parties seem to be proceeding—and that is that it is right to extend the idea of the Welfare State infinitely, provided growth continues. It seems to me that as long as that is our attitude, growth will not continue.
My Lords, I think the economic situation is far more serious than does my noble friend Lord Dundee, but, on the economic level, I do not think the problem is at all insoluble. Where I think the weakness lies is at the political level, and what I am afraid of, looking to the long future—and perhaps not so long; looking only five or ten years ahead—is that this political machinery of ours, this Parliamentary democracy of which we are so justly proud, may of itself make a solution to our economic problem impossible.
THE EARL OF LONGFORD: My Lords, may I interrupt the noble Lord, whose speech is of exceptional interest, if I may say so? Does he not feel, though, that as our society grows richer and our standards of civilisation rise we should recognise, quite irrespective of Party politics, a greater duty to provide for those who cannot provide fully for themselves—including, for example, a tremendous expansion of university education, which I am sure the noble Lord would support?
LORD COLERAINE: My Lords, I do not think I would go the whole way with the noble Earl. I think that, as standards advance, so people ought to be able to make provision for those standards themselves, or, if they cannot, to go without them. I agree that university education should be made as widely available as possible, but I do not think that the Health Service should be extended indefinitely. I do not even think that university education should be extended indefinitely. I think there must come a point, if you really want growth, where you must say, "The Welfare State looks after the unfortunate; it locks after those who are incapable of looking after themselves; but it cannot look after an increasingly higher level of society." I think that is an abuse of the Welfare State; and I think, too, that it really and effectively inhibits any possibility of economic growth.
What I was going to say before the noble Earl made his, perfectly legitimate interjection, my Lords, was this. If I could be quite sure that the Party opposite was intent on solving this problem without any thought of the next General Election I would support them with my voice and my vote. Similarly, if I could be quite sure my own Party was thinking out its own policy primarily in terms of this economic problem, this tremendously important problem, and not primarily in terms of the next Election, I would give them even more enthusiastic support than I give them now. But I do feel very strongly that this is not only a test of our economy; this recurring crisis is a test of the workings of our Parliamentary democracy.
7.51 p.m.
LORD ELLENBOROUGH: My Lords, in the last Election the impression was given by the Party opposite that there would not be any increase in direct taxation; but, despite that, they rushed with almost indecent haste to do just that, even though there was clearly no necessity to do so. It has been pointed out by others, far better than I could hope to do, that the increased social services and benefits—that is to say, the increased pensions, National Assistance rates and the abolition of the prescription charges—will cost about £345 million, and that these will be paid for by taxes and contributions other than income tax. There will be £215 million coming from the increased National Insurance contributions and the balance from the import surcharge estimated at about £125 million net after allowing for the export rebate. So I think it is difficult to resist the conclusion that the increase in direct taxation is prompted by little else than doctrinaire Socialism. It is bound to add to the cost of industry, as will, of course, the increased petrol and oil duties, and it will act as a considerable disincentive and depressing influence at this crucial time.
In the months before and the weeks during the Election campaign we heard a great deal, especially from the Prime Minister, to the effect that this was to be a dynamic, exciting, modernistic and technological age; that he would do away with the dead wood of the board room and the "old boy" network. The Labour Party at the last Election went all out to appeal for support from that vital section of the community, the tens of thousands of highly trained young and rising executives, scientists and technologists, and it is many of these people who will now have to pay the price. Earning as many of them will be, perhaps, about £1, 500 to £2, 000 a year, they will now have to pay some £20 or £30 a year more in tax, plus, of course, the additional cost of insurance stamps and of petrol. And such people as these will hardly be encouraged by news of the possible, even probable, scrapping of important technological projects such as the Concord. These men will have to make some economies somewhere, and I suggest the most likely source will be

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savings. And so the Government can congratulate themselves that they will have done much to encourage the "brain drain" about which they waxed so eloquent when they were in Opposition.
In less than half their hundred days of dynamic action the Government have managed, as we have heard this afternoon, to convert a serious economic position into a crisis of the worst order. I think it was the noble Lord, Lord Molson, who quoted Strachey. It was, I think, Sir Stafford Cripps who said that he could not imagine the Labour Party coming into office without a first-class financial crisis. This time the crisis is aggravated by the tactlessly imposed import restrictions and so on. But I feel that a major contributory factor was that opinion overseas, as well as at home, considered that the proposed new tax reforms as announced by the Chancellor of the Exchequer were likely to increase uncertainty and prove dangerous for investment.
As one who works in the City (I must confess, as a member of the Stock Exchange) I think I may have some idea as to what has been going on in those parts during the last few weeks. I know only too well that the Chancellor's premature announcement of his new taxes demoralised and knocked the stuffing out of the City and the Stock Exchange in particular. We were told that we were to have a corporation tax and we were told we were to have a capital gains tax; but we were not given any details for such information to be of any use. The whole thing was left looming in the air, a menacing source of fear and uncertainty, causing indecision and dismay to private and institutional investors alike both at home and abroad. The whole thing is rather too much like reading a children's horror comic: one always has to wait for next week's thrilling instalment.
It was the noble Lord, Lord Shepherd, who, in speaking on behalf of the Government last Thursday, said that there was no evidence that the statement of the Chancellor of the Exchequer on November 11 in regard to the capital gains tax and corporation tax had in itself resulted in any loss to investors. I cannot say that I agree with that, and I am sure that if the noble Lord were to address a meeting of investment trust holders who perhaps have had something like 20 per
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cent. knocked off the value of their shares at one time in the past few weeks, he might get a somewhat hot reception. This was perhaps not entirely due, but was substantially due, to the Chancellor's premature announcement, the implications of which had not been thought out properly. The Party opposite has had 13 years in Opposition in which to think out the details of these new taxes.
LORD SHEPHERD: My Lords, I appreciate that there has been a falling in price in the stock market. May I ask the noble Lord whether there has been a large sale of stocks and shares in the last week?
LORD ELLENBOROUGH: My Lords, there have not been large sales but there has been quite a substantial fall in values since the last Election, and particularly in investment trusts.
LORD SHEPHERD: My Lords, surely the noble Lord will agree that there will not be a loss to the investors unless they sell. I think it is true that there has not been a large sale and I would suggest that my reference on Thursday was quite accurate.
LORD ELLENBOROUGH: My Lords, no one expects the Labour Party to have very much time for the City; but I think it is rather frightening if now, in 1964, the Government are so naive as not to understand that confusion in the City, utter indecision, and a weak and demoralised stock market is a luxury that cannot be afforded for long even by a Labour Government. The rottenness that infects the market will infect industry and business throughout the country. However, perhaps some noble Lords opposite will realise this. We know the noble Earl the Leader of the House has a long and distinguished career in the City. Perhaps the Chancellor of the Exchequer is now making amends. Certainly his statement yesterday will help to some extent, but not, I am afraid, nearly as much as one would have hoped. There is bound to be a lot more uncertainty, which will continue to have a bad effect on business activity.
Recently the Association of British Chambers of Commerce said of the corporation tax that
"The uncertainty and confusion which will prevail during the next few years, while the

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corporation tax is being introduced and its inequalities removed, will certaintly not provide any company with an incentive to rapid development; rather will it set a high premium on costs."
Again, Britain's 500, 000 miners have something to say. Mr. Roberts, who is chairman of the management committee of the National Coal Board staff superannuation scheme, said:
"The next Budget might seriously affect the fund's future. It would be ironical if taxes levied to enable us to pay the higher pensions had the effect of reducing the pensions of retired honorary officers and their widows."
Perhaps I may say a brief word on the capital gains tax. The capital gains tax will increase taxation by broadening the scope from the limited field of the speculator, as it is supposed to do at present, to the mass of long-term investors. It will be a powerful disincentive to investment in industry. It is sure to mean that money, instead of going into savings, will tend to go to such inessentials as collector's items and various forms of gambling. I cannot really believe that this is what the Government wish to happen. The fantastic position will be that only those investments which help industry and raise the prosperity of the country will be singled out for special taxation. I am afraid that it is hardly a coincidence that personal saving, which was only a paltry £100 million in 1951, rose to something like £2, 000 million in 1963. I am very much afraid that the events of the past few weeks will have done much to arouse fears that savings in the form of long-term investments are a prey to punitive taxation under the Labour Government.
8.2 p.m.
LORD FRANCIS-WILLIAMS: My Lords, your Lordships' House seems to have reduced itself to what I may perhaps describe as an economic minimum. For that reason I shall deny myself the pleasure, which I had otherwise hoped to have, of revealing in all their decrepitude some of the more bizarre claims of noble Lords opposite that a situation arising directly from thirteen years of their Administration is not really their fault. Nor shall I even follow the noble Lord, Lord Ellenborough, in his extremely partisan and biased interpretation of affairs, much as I should have delighted in
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dealing with it at an earlier hour in the evening. I will devote myself, briefly, I hope, to one point which seems to me of some importance and which has not perhaps, so far, been dealt with at any length. I do not wish to examine in any detail the general economic situation. That, I think, has been very well covered. The usual shots have been made from both sides, but a number of wise, intelligent and valuable things have also been said.
I want to consider more particularly the position of the pound as an international currency. The history of sterling crises is a very long one. It goes back certainly to 1924, when it was resolved under a Conservative Government, with Mr. Churchill, as he then was, at the Treasury (and Mr. Churchill's genius never flowered most profusely when dealing with finance), by the decision to return to the gold standard at the pre-war rate in order that the pound should "look the dollar in the face"—a decision which led directly to the coal strike and the General Strike, and ultimately to the financial crisis of 1931.
I suggest to your Lordships that, important though the pound is as an international exchange currency, we must avoid the danger of surrounding it with a kind of emotive, emotional aura, which makes it impossible to look at the international monetary system in a cold and practical way. I well remember in 1931, when I was writing on financial matters, being invited to the Treasury for a conference with the then Permanent Secretary of the Treasury, Warren Fisher. After we had been told about the serious situation and so on, I said, as I had written publicly, that it seemed to me that the sensible thing to do was to leave the gold standard and pay the exchange rate. Warren Fisher rose, with all the might of the Permanent Secretary of the Treasury, and said to me, "Sir, if Britain were to leave the gold standard, I should feel it as a personal affront to my own honour, and I believe that every man and woman in the country would feel the same." About four days later, I was invited to another conference at Hoare's Bank in Fleet Street to meet Warren Fisher, along with a number of eminent bankers, to be informed

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that Britain had decided to leave the gold standard and that, therefore, everything would soon be all right and trade would expand—as, indeed, it did.
I well remember, 20 years ago, when I had the privilege of attending some part of the Bretton Woods Conference, the attempt that was made by Maynard Keynes, who was to a substantial extent the architect of the International Bank and of the International Monetary Fund which emerged from Bretton Woods, to get agreement on a much more flexible international monetary system, giving a greater degree of liquidity. Although he and the British delegation succeeded in getting a good deal, they did not get enough. They laid the foundations, but not the full structure. Of course, when the American loan came along and we were required, as part of the price of that loan, to agree to sterling convertibility, again we headed for a sterling crisis and a devaluation.
What I want to suggest to your Lordships is that it is time for us to consider whether, in fact, for sterling to act as the main instrument of international exchange is not as out of date and, in its way, as dangerous as it would be if we were still to believe that the British Navy could alone defend the freedom of the seas. What we ought to be bending our minds to, and what I hope the Government are bending their minds to, is the creation of a genuine international bank, issuing its own international currency certificates and accepting the maintenance of an international currency as a genuine international responsibility.
I think one thing that this latest crisis has done to great advantage is that it has brought out, in a clearer and more definite way than ever before, the fact that so long as sterling is an international currency its maintenance is a world obligation, and not simply a British one. The great credits to maintain sterling were not given to save Britain or to save the British Labour Party, or because the Governor of the Bank of England has nice blue eyes which all international bankers like: they were given primarily as an appreciation of the American Federal Reserve Bank, which played the greatest part in mobilising these credits, in the realisation that the maintenance of an international exchange is
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as much a matter of international obligation as the maintenance of world peace. I suggest to your Lordships that the development of a genuine international bank with its own monetary certificates, in order to take the strain off the pound, is as important for the future stability of the world as the maintenance, in another field, of NATO or the United Nations.
My own hope is that, having accepted the obligations, the Government will accept, also, that they should be conducting a holding operation until the time comes—as I hope it will before too long—when that historic responsibility can be passed to international institutions, in the same way as other historic responsibilities which fell upon Britain when she was the great imperial and industrial Power of the world have also been passed on to international organisations and international alliances. I think we were right not to devalue at this moment. I think we were right to appreciate that we have a responsibility to maintain this international currency. But I think we also have a right and an obligation to insist that the price required of the British people for doing so shall not be too high. Deflation is a respectable policy in banking circles. I hope that the Government will not allow themselves to be pushed along that road, because, like other respectable projects and policies, deflation, if carried too far, can be as deadening as other respectability is.
8.15 p.m.
LORD MILNE: My Lords, I had not meant to-night to follow other speakers, but the remarks of the noble Lord, Lord Francis-Williams, bring to my mind that I have long wondered whether we can afford the sterling area as it at present conceived. The noble Lord, Lord Shepherd, mentioned the Government's tax proposals, and he included in his remarks to-day's printed statement. The paper is so recent. and really so incomplete in detail, that only rather cursory and perfunctory remarks are possible, and, on a subject that is not really very gay, I will do my best to be short and, therefore, I am bound to omit many points.
I have nothing against a capital gains tax as such, although, in fact, in a Report in 1955 it was rejected. At this moment and overnight it seems a pity to jettison

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something—and I refer to income tax—which has proved fair, and of which the effects are known, and to take on something which is untried, unthought-out and, as the noble Earl, Lord Alexander of Hillsborough, said, probably unfair, when meantime—and perhaps only meantime—the adjustment of the present system could perfectly well achieve the same result.
The Chancellor of the Exchequer at the bottom of the first page invites suggestions. This rather reminds me of the advice that you always give a chairman of what not to do at a meeting when he wants to do something quickly. I dread to think what is going to happen at Somerset House during this year, for they will be swamped with representations and by the fan-mail of angry taxpayers. On the general proposals, the most notable one is on the question of preference shares. A highly-geared company with large preference capital will be penalised. So presumably there will be a rapid changeover again to loan stock and loan issues. Then capital allowances, unless the corporation tax is at the rate of 55 per cent., will, so to speak, have a devalued value. This is a discouragement to investment at the very moment when change to technical plant is wanted for our economy.
The position with regard to overseas taxation is so complicated and obscure that I will say very little about it now. But the statement says that relief for corporation tax will be only in this country; relief here will be given on the rate of corporation tax. So, if the rate abroad is high, how the surplus is suffered we do not know. What happens in regard to the negotiation of foreign tax treaties in a year, I cannot think. Then, on the basis of charge, it will apply to the year following the 1965-66 assessment. The company year up to April 4, 1965, is the basis of that year, so that companies whose year ends before that date will probably be heavily penalised and will want to change their basic periods.
On dividends, we are told there is a forestalling provision. So, presumably, if dividends are paid out of past profits they will have already borne tax. So dividends paid, which it is theoretically thought to forestall, will, from the look of it, suffer corporation tax again. On the franking provisions—that is, where
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income comes in that has already suffered the tax—we find that investment and unit trusts will not bear double tax on the dividends or incomes they pass on. So, presumably, on that which they retain they will suffer twice. The income of subsidiary companies will be franked in the parent company. So, presumably, there will be some grouping notice. Under the special classes we find that the usual classes to-day exempt from income tax will be exempt from corporation duty.
To turn to the capital gains tax, in spite of what the noble Lord, Lord Denham, said, I think it is more or less accepted by all reasonable people that the principle of taxation of capital is a reasonable one, in spite of the effect on capital formation. The present tax is highly discriminatory and is unfair. Provided the rate is not unreasonable, I think the new tax will really be welcomed as a preference. But I should have thought that it would be better, or fairer, for there to be two rates—a higher rate for the more recent investments in the more speculative fields, and a lower rate for investments which have been held for some time.
LORD COLERAINE: My Lords, the noble Lord said, as I understood him, that most reasonable people agree that a tax on capital is reasonable. Did he mean on capital, or did he mean a capital gains tax?
LORD MILNE: My Lords, I do not remember exactly how it was said, but I understood it was felt that a tax on capital as such (and, after all, a tax on capital gains is a tax on capital) effectively damages capital formation. But I think we have come round to realising that a tax on capital gains is not an unreasonable thing.
LORD COLERAINE: The noble Lord is not advocating a capital levy?
LORD MILNE: No, I am not. On the occasion and the charge, we learn that the difference between Budget-day value and subsequent realisation will be the method of computation, and presumably the words later on are put in as some comfort for the points that have been raised recently with regard to gilt-edged investments. The statement says:
"Moreover, the charged tax on a gain realised after next Budget day will not be

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on a greater amount than any gain that is realised."
On transfer of ownership, there appears to be no provision for reinvestment, though on exchange of investment one is taxed one way and, no doubt, in due course will be taxed or carry forward a loss the other way. It is interesting to note that capital gains tax will be liable for estate duty. I think this is rather misleading, because if my mathematics are right it appears to me that this is really a veiled increase in estate duty. There are provisions for company reorganisation.
THE EARL OF LONGFORD: My Lords, since the noble Lord raises that point, I would say that I do not think he is right. I do not think we can draw that conclusion from it.
LORD MILNE: I can only say that in the short time I have had the paper I have done some exercises, and that is how it appeared to me.
THE EARL OF LONGFORD: I do not think that is right.
LORD MILNE: That may be—we shall see. On the provisions for company reorganisation, the provisions referred to here are those where the shareholder or the party is the same before and after. Of course, this proposal will definitely slow down mergers and amalgamations where the parties are different. I should have thought that that was a great pity, because the smaller companies are not the high exporting companies. It is the groups that export, and I should have thought that this provision was rather damaging to merger capability. On the assets chargeable, I feel it is rather a quaint comment on our feelings to-day that pools wins, betting and Premium Bonds gains are exempt, whereas gains on chattels, where the price exceeds £1, 000, are assessable. Presumably here the restrictions in the losses which you can carry forward on chattels will deal with the rather complicated question of depreciation where it is applicable.
Lastly, commenting on this subject, I feel that the taxation of capital gains is acceptable, and that the present system needs so much improvement that a new one can hardly be worse. But I think the corporation tax raises the most appalling problems. I wonder how on
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earth Somerset House can deal with it in a year. It seems to me that the Government are attempting too much too soon. As for the remarks which have been made before, about the damage to confidence, I feel that it might have been better not to say anything and to produce the tax suddenly, rather than to let us have this incomplete information at this point.
8.26 p.m.
LORD GEDDES OF EPSOM: My Lords, I cannot forbear to comment, although he is absent, on the opening speech of the noble Earl, Lord Dundee, because, as I understood him, he said this. He was challenging the noble Lord, Lord Shepherd, who was suggesting that the late Government had made no attempt whatever to warn the country about the economic position. The noble Earl said, "But Mr. Maudling on many occasions drew attention to the lowering clouds and the hoisting of the cone." This may well be true. But there is equally no doubt about one thing: if that is true the cone was immediately pulled down when the date of the General Election was fixed, and thereafter it was the late Chancellor of the Exchequer who, in the course of the Election, blamed the Labour Party for daring to refer to the fact that there was anything like an economic crisis.
The noble Earl's comments, and some of the speeches of noble Lords opposite, remind me irresistibly of the neglectful housewife who, having swept a lot of dirt under the carpet, blamed the husband who revealed it—and not only blamed him, but challenged the instruments he used to sweep up the dirt. It seems to me that if noble Lords opposite, and the Party they represent, had the cure for the economic difficulties of the country and did not bring them in, then they were guilty of the greatest dereliction of duty. If they did not have the cure, then it ill-behoves them, it seems to me, to criticise those who are now trying to bring about a change in the economy of the country.
The speech which terrified me more than any other was that of the noble Lord, Lord Lucas of Chilworth. He was followed—to a lesser extent, I agree—by the noble Lord, Lord Molson, who, like the noble Lord, Lord Lucas of Chilworth, terrified me, for this reason. He appeared to be trying to solve, or to make a contribution to solving, the economic ills of

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the country, and his cure seemed to be a very simple one: all that was needed was to reduce the number of people employed in this country. He argued that it was possible, by the introduction of machines, to reduce the labour force by one-third. He went further: he suggested that the same amount of steel as was produced to-day could be produced with 20, 000 fewer men in South Wales. He went even further than this, as I understood him—and I apologise if I misquote him—when he said that it was possible to justify the 6 per cent. unemployment in America because they paid high wages.
Does the noble Lord really seriously suggest that he could obtain the co-operation of the workers of this country by telling them that 20, 000 of the men in the steel industry ought not to be there at all, but ought to be unemployed? Do he and noble Lords opposite really believe that it would be possible to secure the co-operation of the workers in this country over the introduction of machines by telling them that the machines are being introduced for one purpose, and one purpose only—to save labour and reduce the number of people employed? This is quite fantastic. There can be only one real justification for introducing machines into the economy of this country, and that is in order to increase the gross national product and to improve the productivity of the country.
My Lords, if you are going to try to tell the workers of this country that what you are really striving to do is to find ways and means by which the number of people employed can be reduced, you cannot expect to get, and will not get, the co-operation of the workers in achieving increased productivity through machines. The only way in which the co-operation of the: workers will be obtained is by impressing upon them the absolute need for an increase in productivity. You must induce into them a sense of urgency, convince them of the critical stage in history through which this country is now going. You must impress upon them that the aim is not to dismiss them and put them on the unemployment market, but to put so much more power into their elbows and their hands that they can produce more and more, and so bring this
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country out of the crisis and, as it were, safely into harbour.
I wonder, my Lords, whether we are right in setting our sights as low as we do. I know that it is said, and said with truth, that when "Neddy" fixed the increase target at 4 per cent. per annum this had never been achieved and was unlikely to be achieved. But can we, in fact, induce this sense of urgency by merely trying to survive—because, as I understand it, 4 per cent. is no more than that? Is the only way really to sink to the point at which the only possibility of our taking a place in the councils of the world is to have a weapon that can destroy mankind? Is it not far better to have the power within us, the industrial power and wealth, to be able to relieve the sufferings of mankind and achieve greatness that way?
Can we do this merely by thinking only of our own survival? Have we not to set our sights much higher? Have we really not to think in terms of increasing our gross national product by 10 per cent., so that we not only can help the underdeveloped countries, but can prove to the world that we are still a great nation, capable of still greater things, and can throw back into their teeth the words of those people who tell us that we are now only a third-rate or fourth-rate nation? We can do this; but only, as I have said before, if we can induce into the minds of management, and the minds of the men and women who are working on the floor, the sense of urgency and the need to become great through wealth and productivity.
One of the things that I believe will prevent this possibility of increasing our production and getting a good incomes policy—a policy in which I am a great believer, and have been for many years—is the unofficial strikes. I know the difficulties, to which the noble Lord, Lord Citrine referred, but this is something which is not to be dismissed because of difficulties; it is something which has to be met and overcome because of the difficulties. For the greater the difficulty, the more essential it is that it is overcome.
We must find some way in which we can prevent—not merely discourage—unofficial action. I believe this to be true

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for this reason: this sort of action undermines the ability of management to take steps which they otherwise would take; because all the time they are faced with the possibility that, having reached agreements at the proper national or local level through the proper machinery, the agreements may be repudiated by people who have a complete disregard for their rights. If we are going to allow that, and if we are going to allow the trade unions and the employers to get together and decide what is a reasonable norm for increased wages and then to have that agreement completely undermined by these, as I call them, little Hitlers, out on the various shop floors, it will be impossible to get a proper incomes policy.
I believe that we cannot stop these insidious murderers, as I call them, of industrial relations unless we have a different attitude. We cannot stop them merely by creating a law which allows a civil action to be taken against a trade union. That is no good. In my view, what we have to do is to use and strengthen the laws of conspiracy, and I cannot believe that the noble and learned Lord on the Woolsack could not find some means to do this. I know there are difficulties of trying to distinguish the people who are responsible, of singling them out and of being able to prove that it was this or that man, or these or those men. But in these circumstances everyone knows who are the people concerned. I agree that it may be difficult to distinguish them, but I believe absolutely firmly that you cannot deal with unofficial strikes on the basis of civil action. You have to make it much more emphatic and you have to make the punishment more severe. I mean this and, believe me, I am not talking on behalf of the T.U.C.; I am sure the T.U.C. will completely repudiate every word I am saying on this. Nevertheless, I believe that I am right, and I think that a much stronger law can be devised to prevent this unofficial action. I am absolutely certain that if we are going to succeed in overcoming the diffidence of management in introducing new ideas and in making an incomes policy possible, we must make it impossible for people to disrupt and to undermine agreements by unofficial action.
My Lords, my last comment is perhaps an unusual one. We have been talking about the need for exports. No one will
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challenge or deny the need for incentives to be offered. Whether the 1½ per cent. rebate is big enough or small enough, and whether it ought to be applied in a different way, I am not going to argue. But I want to put forward what may to some of your Lordships be a novel idea. At the present moment it is possible to recognise public service, and from time to time we do so. Surely we have now come to the stage where encouraging exports, taking part in exports and improving exports has become a public service. It is a service to the community. Is it not possible for us to recognise this sort of public service in the same way as we recognise a political or other public service?
It may well be that I shall be told that this is No 1ncentive at all. I would profoundly disagree with any of your Lordships who suggested to me that any recognition of this kind of those people who are obviously making a great contribution to the export trade would not be an incentive. I agree that at the moment you have to be—perhaps I should not say what I was going to say—a certain type of person who can always be recognised, but I will leave that aside as a sheer transgression. However, I believe there is something to be said for this idea. If we can look a little wider when we are considering this sort of recognition, if we can look at industry and particularly at those industrialists who are making a great contribution to exports, then we ought to do so. I think it is our duty to do so, and I believe it would make a not inconsiderable contribution towards improving our export trade.
8.40 p.m.
LORD ST. OSWALD: My Lords, at this relatively late hour, and in a fairly depopulated though evenly divided House, and seeing how anxious noble Lords opposite are about dinner, I do not intend to follow the noble Lord, Lord Geddes of Epsom, with his permission, either repudiating or corroborating what he has said; he clearly expects both from others. I intervene very briefly to raise two points. The first concerns extension of the capital gains tax to include works of art and other personal chattels. This was included in the Chancellor's statement yesterday. I am making no reference to the personal effect it will have on vendors, but to the effect it will have nationally, and I am bound to wonder

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whether this has fully been taken into account by the Chancellor.
It is well known to noble Lords and many others that in recent years London has become famed as the centre of the world art market. This has been achieved by a small number of highly reputable dealers and auctioneers. Their achievement is significant not simply in terms of prestige but in terms of foreign exchange. Two particular firms of auctioneers alone last season—that is, the season from October, 1963, to July, 1964—brought into this country something like £5 million in foreign currencies, mainly in dollars and Swiss francs, as a result of direct sales to foreign buyers. This, I am told, is no more than a small proportion of the full amount in foreign currencies earned by this market. Most foreign buyers in fact appoint a British representative to bid for them in pounds and will later pay him in their own currency. Here, therefore, is an important source of foreign exchange flowing into this country.
I am told that to-day dealers in London have been asking, "Is the art market dead from April onwards?". It is fair to say what they mean is "Is the reputable art market dead?". People will continue, no doubt, to sell works of art, but they will sell them under the counter in private undeclared deals, and it is the reputable, respected firms, by whose efforts this market has been created since the war, which will suffer. There will emerge a new black market and a new lively population of "spivs", and since in many people's minds, fairly or unfairly, these are concomitants of Socialist Governments it is very much in the interest of the present Government to think again more carefully of whether this is to be worth while, or whether doing it will prove as contra-productive as other intended solutions applied in the first rollicking fifty days of their reign.
I am not asking the noble Earl the Leader of the House to think fast enough to answer to-night, but I should be grateful if he could clarify one phrase used in the Chancellor's statement—that is to say:
"Gains arising out of the sale of chattels will not be within the charge to tax except where the price realised from a single transaction standing alone: is £1, 000 or more."—
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[Official Report, Commons, Vol. 703 (No. 29), col. 166, December 8, 1964.]
Does "standing alone" mean a single lot in a sale or a whole property in a single sale which may consist of ten, twenty or a hundred separate lots?
The second point I have in mind I shall touch on very briefly indeed, since my noble friend who follows is infinitely more competent to deal with it. During the speech of the noble Earl, Lord Dundee, earlier this afternoon the noble Lord, Lord Shepherd, assured him that proper warning of the 15 per cent. surcharge was given to our trading partners, and when questioned further he said it was given over the week-end. Furthermore, he said this information had been given to the House by his noble friend Lord Rhodes in debate. The only reference by the noble Lord, Lord Rhodes, that I can find is in column 156, on November 5, during the debate on the Address. The noble Lord, Lord Rhodes, then said:
"… before I sit down, I want to say just a few words on the 15 per cent. surcharge."—[Official Report, Vol. 261 (No. 5).]
The noble Lord was commendably as good as his few words, but those few words did not include any reference to the warning given to other countries. However, it may be that the noble Lord, Lord Shepherd, was referring to some other instance that I have not been able to trace.
LORD SHEPHERD: My Lords, I suggest to the noble Lord that he might look at some supplementaries. I cannot give him the date now, but I will afterwards. The noble Lord, Lord Rhodes, did give definite assurance in regard to this in supplementary answers.
LORD ST. OSWALD: I am delighted to hear it. I am sorry I did not check more carefully. I must say this. In spite of what the noble Lord has said, to my own personal knowledge and dismay a firm impression exists among our foreign neighbours in Europe that virtually no warning was given. An authoritative and specific correction of this idea from the noble Earl the Leader of the House, to-night or at a later date would undoubtedly be given the proper publicity by our many friends abroad. It is only right for me to say that in the visit I paid to the Continent shortly after

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the surcharge had been announced, I was told the only man who had made any sort of persuasive excuse for the Government's action was my noble friend Lord Aldington when he addressed a gathering of eminent European bankers. It is, therefore, perhaps providential for Her Majesty's Government that he is about to wind up for the Opposition.
8.50 p.m.
LORD ALDINGTON: My Lords, by some accident I have been chosen to speak last for this side of the House. It is an accident to the bottom of which I have not yet been able to probe. It is the first time I have spoken at this Box, and I hope I may ask from my noble friends as well as noble Lords opposite a measure of understanding. Indeed, having listened to practically every speech in the debate, one cannot but feel very humble after the wide-ranging and often very challenging speeches from both sides of the House. I think that in order to put the fears of some of my noble friends at rest, and those of some of my right honourable friends and honourable friends in another place too, I should hasten to add that I am not attempting to speak, for certain at any rate, for all my friends here, or for the official Opposition. There are some things that I should like to say to your Lordships with which I hope they will agree, but I have not been able to assure myself that they will before I speak, except, I think, in one respect, and that is about the speech of my noble friend Lord Watkinson. I have often listened to him in another place and in industrial gatherings, and I was delighted to be here to hear his maiden speech to-night. He has been complimented by many of your Lordships, and I would only say how helpful it is to hear his wise advice on exports and on other matters in which he is a master in our industrial affairs, particularly in industrial understanding. I look forward to hearing more often from him than I was able to when we were separated by the long corridor in this building.
I think the next thing I have a duty to do is to remind your Lordships that I have an interest to declare in some of these matters—various interests, as I happen to be chairman of a British overseas bank; and I think in the face of the noble Earl opposite it is nothing
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very disadvantageous to be chairman of a British overseas bank. I also happen to be chairman of a great industrial company and am connected with one or two others. Perhaps I should add that what I say is not in any way designed to commit them or any of my business colleagues. But I hope the House will feel—I know there has been some differences of opinion about this—that in a debate like this it is not a disqualification to have this kind of interest; indeed, it is rather the reverse. Perhaps the House will remember that some of the things, at least, that I am going to say I have to practise as well as to preach.
I should like to group my remarks under two headings: first, the pound and the balance of payments; and, secondly, national output, efficiency and exports. If I am critical from time to time I hope I shall also be constructive. First, the pound and the balance of payments. I think it is generally agreed now between us that the crisis that we have is one of confidence. This is acknowledged by the Prime Minister himself. Who has lost, or who first lost confidence? I think it is fair to say that the people who have to decide where to place their money, whether in London or elsewhere, were the first people whose confidence affected us. These are not speculators, at least in the pejorative sense of that word. My noble friend Lord Denham reminded us that the word "speculation" in the Oxford English Dictionary has a more respectable sense. But they are not speculators in the sense that some friends of noble Lords opposite are apt to use the word. Indeed, the noble Earl, as a banker, will know that speculation is the one thing that they must not do. They are entrusted with other peoples' money, and they have to look after it.
Others whose confidence mattered in this field are those concerned with deciding whether payment in trade transactions should be early or late—those concerned with what is called the "leads and lags", which can greatly affect the size of our reserves at any given time. And, finally, when confidence gets disturbed, there is always the danger that our own industrialists may lose confidence in the immediate future. I say there is that danger. Among those with whom I work I do not myself detect any presence of that feeling of loss of confidence yet.

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If we are to understand this crisis of confidence, and if we are to put an end to it, then I think it is essential to examine its causes. It would be a mistake to try to single oat any one of several components of the cause as decisive by itself. But one must, at first and at once, start with the underlying economic situation and the balance of trade. The problem is well known to your Lordships: exports not up enough, imports up too much and for many more months than most of us expected. I should like to examine part of this point later, but for the moment it is enough for me to say that until October there were several possible explanations for the rise in imports to justify delay in deciding on what, if any, action was necessary. I think I should also add that in the present Government's policy statement of October 26, as my noble friend speaking from this Box earlier has already reminded your Lordships, the Government stated, in paragraph 7:
"Apart from special problems of individual areas and a limited number of industries, there is no undue pressure on resources calling for action."
Lord Shepherd, in moving the Bill in what all of your Lordships thought, I know, because many of you have said so, was an agreeable and informative speech, said that action ought to have been taken in September or October. But though I am being asked to amplify what I have just said, he did not tell us what action, when action should have been taken, or why. Perhaps the. noble Earl who is going to reply will enlighten us upon that. Lord Shepherd also told us that the present Government had inherited a weak and dangerous economic base, but later he went on to say that our manufacturing costs are competitive with the world, which indeed I know to be true, and I think we all know to be true; and he also went on to confirm again that there is no overloading.
I am not complacent about the economy. There are some things I have to say in the second part of my remarks on the lines of Lord Shackleton's speech that indicate that I think there are some things which need improvement, and there always will be. But I do not regard a situation in which our manufacturing costs are competitive with all the world as a weak and dangerous economic base. If it is, then the noble Lord and I do not
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use the same form of language. Certainly, as my noble friend Lord Dundee said, the situation in October was not of the kind of panic urgency that required any action without thought. It has passed through the minds of many people to ask what would have happened had a different Government been elected. That is a purely hypothetical question.
LORD SHEPHERD: Interesting, though.
LORD ALDINGTON: It is an interesting question. One thing on which I feel fairly certain is that there would not have been even this crisis of confidence.
Furthermore, I go so far as to say that those people who told us that immediately a Socialist Government was elected there would be a run on sterling, were proved quite wrong, too. The crisis did not occur until the present Government began to take action.
LORD SHEPHERD: My Lords, might I ask—
LORD ALDINGTON: It was not a crisis caused by the world's distrust of noble Lords and their friends opposite just because they are Socialists: it was a crisis that occurred when they had begun to take action. Does the noble Lord wish to interrupt me?
LORD SHEPHERD: No; that is all right.
LORD ALDINGTON: The noble Lord follows me so far, at any rate.
LORD SHEPHERD: Oh, no!
LORD ALDINGTON: It is in the field of Government action that I find the main components in the cause of crisis. Here we come to the import surcharge.
As my noble friend Lord St. Oswald has said, quite early on I had the task of defending the Government's position on this surcharge in front of a half-yearly meeting of European bankers. My noble friend was kind enough to say that I did quite well. The arguments I used then, because I believed what the Government said, were that this surcharge was going to be temporary; that it was more sensible than quotas; that Britain was not seeking to be protective again, nor was she retreating from Europe. I reminded

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the bankers that our costs as manufacturers had, in fact, risen less than theirs. Mr. Paul Chambers has reminded us all of that in a recent speech, which was printed by Mr. Harold Wincott in the Financial Times yesterday. In the end, I persuaded them to wait and see how the British Government and the country were going to tackle the problem that faced them; and I ventured to say that I thought the size of the problem had been overpainted.
But the Government, as it were, pulled the carpet from under my feet because, far from doing anything like that, they proceeded to go on overpainting the crisis. And when I made another visit overseas I found the position, looked at from the overseas point of view, to be that the Government themselves appeared to take no notice of the inflationary position which they were describing to the world and appeared to be most surprised when other people did. I was told—I hope it is an apocryphal story—that one of the leading Ministers of the Government actually told an audience, in Switzerland, of all places, that our economic position was much worse than anyone had imagined. Then he went on to explain why the import surcharge was necessary. But its effect in Switzerland—well, we know now what happened.
Then there were many other confusing and rather disturbing things happening here, in what I can describe only as the artificial, high-pressure hose of Government statements and actions about that time. They have been referred to to-day: taxation statements not cleared up; not explained to begin with, and still, I think (though one must be grateful for what the Chancellor of the Exchequer said yesterday), not cleared up, because they cannot be until the time comes for the Budget next year. Then there were the Concord comings and goings, or what some wags have called the Concord discords; the rumours about overseas forces and bases, and so on.
I cannot help thinking, too, that the members of the Government have underestimated the effect upon thinking, both overseas and at home, of the possibility of devaluation; the effect of the inclusion among their economic advisers of a self-avowed believer in devaluation.
THE EARL OF LONGFORD: My Lords, since the noble Lord is referring, not obscurely, to a leading economist, I must say that, though I have not a complete review of his works in front of me, I am under the impression that any views which he expressed on devaluation were not up to the minute. In other words, they were views expressed some little while ago.
LORD ALDINGTON: My Lords, I have in mind, though not in front of me, a letter or series of letters written to The Times in the early part of the year. I must admit, of course, that the other economic adviser was the man who contradicted him, so that there is room for some fun. Nevertheless, I venture to say to noble Lords opposite that this has had, in my opinion, judging from conversations I have had, some effect which they may have underestimated.
The main point on this is that in economic and financial affairs it seems to many people that the Government have been talking, and indeed shouting, about a very bad inflationary situation—a situation which I believe to have been greatly over-stated—but until recently appeared to be doing nothing about it. If we are to get out of this crisis mood, all this has to be corrected; and I think quite soon. I believe that some people think that there may be a period as long as six months. Perhaps there may; but I understand that a substantial part of the large loans and credits recently negotiated with such skill by the Bank of England, and also, I would add, by a bit of courage by the Chancellor and the Government, last only for 90 days, so that does not give us much time.
A little earlier I was interested to hear the noble Lord, Lord Francis-Williams, recounting to us some of the background of earlier troubles with the pound. He explained to us that he looks forward to an international currency taking over from the sterling area. That may be right, but for the time being we have the sterling area, and I believe that the existence of that area is a substantial net gain to our economy. And even if we did not have it, it would still be necessary to run our economy properly. I consider that we should be making a mistake now if we were to blame the existence of the sterling area for any of our troubles. I do not think noble Lords opposite do so.

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I believe that we should also be making a mistake if we thought that devaluation of the pound would do anything to solve our troubles. It would be bad for the world as well as for us, and must not be allowed to happen. I agree very much with what was said by Harold Wincott in his article in the Financial Times. I also agree, as I have said before, that devaluation is quite unnecessary because our costs are competitive with the world, though, of course, if they were substantially to increase, the position might alter. Finally, devaluation would not tackle the roots of the present problems which face us.
I think those problems can be put under two heads: our nation's resources are subject to too high a demand; and, secondly, efficiency is growing, or has been growing, too slowly. I say that there is too great a demand on our resources because that frankly is the effect of what the Government have explained from time to time and, indeed, again to-day as the facts of the situation.
Here I would come back to the balance-of-payments position and imports. There have, of course, been too many imports. How does one tackle them? My experience, both as a member of the Government and in business, has led me to regard a policy of import controls as a mad and wrong-headed policy for Britain. It is wrong-headed because we want everyone else to abandon these controls against our exports. And wrong-headed, too, because when we apply them they disturb the proper pattern of our industry. They are postponing, even to-day, the shift of resources to modernisation and to more profitable and efficient purposes. To that extent they lead to waste. It is simply no use our making things here which are not competitive in our own country.
Why have we had this high import bill? One noble Lord, I think it was the noble Lord, Lord Shackleton, said earlier that it was a mistake to say that this was due to stocking up or expansion. He said there had not been abnormal stock-building. I know that statisticians do not always record the same things in each table which is presented to us, but I have here the latest edition of the National Institute Economic Review, and on page
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59 appear the figures of the gross domestic product. They show quite clearly that in the fourth quarter of 1963 and in the first and second of 1964 there was abnormal stock-building. I know of nothing from my own experience which would prove that to be wrong.
LORD SHACKLETON: My Lords, what does the noble Lord mean by abnormal stock-building? Is he looking at the whole trend of stock-building? Has he looked at the relation between stock-building and production?
LORD ALDINGTON: My Lords, I have read the economic trends very quickly where all this is written down. I am now quoting from a summary statistic of the gross national product, and I am quoting figures which show the increase of the physical stocks. In the fourth quarter of 1963 the increase was £151 million, whereas previously it had been up and down by twenties and thirties. In the first quarter of 1964 it was up by about £96 million; in the second quarter up by £146 million.
LORD SHACKLETON: Not abnormal.
LORD ALDINGTON: My Lords, I do not quite see what the noble Lord is getting at. I thought it was generally accepted that there must be some increase in stocks if we were to prepare for expansion. I am not saying that these are the only two reasons. I am merely try to analyse the situation accurately. There must have been some forestalling, after mention by the previous Chancellor of the Exchequer that he was prepared to consider import controls. But the other part of the reason—
LORD SHACKLETON: My Lords, I am sorry to say this to the noble Lord, but the rate of stock-building has declined since a date before the Chancellor of the Exchequer announced this. The noble Lord really must get his facts right on this matter.
LORD ALDINGTON: It may be, but the figures I have given explain quite clearly why, in the course of the last nine months, imports have been higher than they have been before. The noble Lord has at the back of his mind some abstruse point on something that is not relevant to my argument, and perhaps we can have a discussion about it at some other time. The other reason for the high imports is

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that there has been—and this was mentioned by Mr. Paul Chambers in his recent statement—sufficient money here to buy from outside what industry could not supply out of its present resources and methods. It is not just that I think there is a shortage of labour. There may have been—and, in fact, the noble Lord, Lord Lucas of Chilworth, and my noble friend Lord Molson both mentioned this point—and there almost certainly is, quite severe under-employment. I suppose there is a similar explanation for the failure of exports to rise. That can only be corrected—and here I agree with Lord Molson—by tackling home demand and also by tackling our efficiency. It cannot, I think, be corrected by annoying our friends overseas.
Then it is said—not said to-day by noble Lords opposite, but said by some of their friends—"But we cannot have 'Stop-Go' again." In the first speech I ever made to your Lordships I inveighed against "Stop-Go", and I am still against "Stop-Go". All I would say is that "Stop-Go" is better than "Stop-Stop". But I am not here referring to "Stop-Go", nor, I think, in the delightful phrase that the noble Earl used in the course of an interruption when he referred to the "moderation of the expansive process" was he referring to "Stop-Go". He was referring to the proper methods to keep the economy in balance.
It is, I think, the great virtue of my right honourable friend Mr. Reginald Maudling and of the present Chancellor—because this is what he must want—that they both sought, and seek, to avoid "Stop-Go" by taking early steps to keep expansion to a reasonable rise. The trouble is that in this field of economic policy we have got used to just these two words, "deflation" and "inflation", which have become very emotive. I thought I detected something emotive in a remark of the noble Lord, Lord Francis-Williams, when he said that deflation is very respectable for bankers. If it is respectable for bankers, I must say that it is not at all profitable. I am against policies of deflation, but I am greatly in favour of policies that keep our economy in balance. I think the present Government have been keeping our economy in balance, and I do not here say whether they have been driven to it,
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or whether they have decided to do it on their own account.
We shall always have to quicken up and slow down the economy as it is required, and all this talk about "Stop-Go" being wrong, of which I, myself, am guilty, must not, I think, allow us to hide the fact that we shall always have a problem in keeping our knife-edged economy in balance. I would say that, whether or not the word "squeeze" is the right expression, the present Chancellor of the Exchequer has, as a net effect of his Budget, the increase in bank rate and the new "squeeze" instructions, given a definite "slow-down" to the rate of expansion. I would say that he was right to do so. I would only question whether he would not have been more right to impose them all together, because I think they are always then that much more effective.
Whether more is needed, I do not know; we do not have the facts. I think the Government are right to take account of the fact that when there is a lack of confidence growth is, anyway, likely to be temporarily impeded. In my view, the noble Lord, Lord Sainsbury, was quite right to remind us that there is no consumption boom. In that respect this is different from earlier crisis periods that we have had in the last fifteen or twenty years. But even though we may say that there is no consumption boom, if it is proved that the demand upon our resources is still too big we shall have to do something to get that demand down; for if we do not, costs will go up.
I am detaining your Lordships much too long, but in the nature of things I have been extremely interested in the debate and I have still some few things that I wish to say on the other side of the problem, on the question of output and efficiency. In the long term—and here I agree with much of what the noble Lord, Lord Shackleton, had to say to us—the key to our problem is to be found as much in output, efficiency and productivity, as in the handling of our financial affairs. I would say that we sometimes make a mistake in avoiding the use of the word "efficiency". The noble Lord talked about growth. He also talked about efficiency. I should like to concentrate noble Lords' attention for a few more minutes to-night on this question of efficiency.

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Efficiency is related to the overstrain on our resources, for when we say that there is too much demand on our resources we often forget that this is caused by the failure to use many of them efficiently, and that we should be able to do much more if only we got efficiency right. We often talk about the components of a policy of efficiency—more competition, abandonment of restrictive practices, technological progress, computers, automation and so on—about which the noble Lord, Lord Snow, was talking in that very interesting and encouraging debate last week. All these things help or hinder efficiency.
The noble Lord, speaking last week on technology, told us that "the climate is stale", and that "we still do not believe in the technological revolution". I took a note of both of those statements and, with great respect, I think he is right. I think he is right, too, to remind us of the importance of attitudes, which are just as important as the installation of new plant. I think that the noble Lord, Lord Citrine, was absolutely right to remind us to-day that efficiency includes the right attitude on the part of management to its employees, and that this is every bit as important as the right attitude on the part of management to new plant.
Therefore, I suggest to the Government that they should have as their test of policies now: Do we believe in efficiency? Do we reward it or do we hinder it? Do we encourage it? Here I would say that I thought that in his attitude to profits—which has to-day become a dirty word; I think very wrongly—the noble Lord, Lord Shackleton, was saying exactly the right things to encourage more efficiency. Another question I would raise is: do we spend public money on propping up inefficiency? I have sufficient respect for the Parliamentary Secretary to the Ministry of Technology, and for the Minister himself, to know that they will not do that. But I think that mistakes have been made in the past in spending public money in propping up inefficiency; and this is a mistake.
Further, do we encourage those who delay modernisation, whether in industry or transport? Do we encourage those, whether managements or unions, who block the changes in techniques? Do
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we encourage those who arouse public clamour every time a factory is closed, even when there is full alternative employment for everyone in the district? We have to ask ourselves these questions, and if we get the answers right we shall be helping industry to become more efficient.
On Government organisation, I agree with what the noble Lord said about regional development. I have a question to ask the Government about the new organisation affecting the important industries, about which the noble Lord, Lord Snow, spoke to us. Have they got the right relationship between the Economics Ministry, the Ministry of Technology and the "mini-Neddies"? Are there not too many bodies dealing with electronics, machine tools and other things? Does it make sense having a "mini-Neddy" for electronics and a "mini-Neddy" for machine tools when the noble Lord is the sponsor of the subject? The Minister of Technology, besides being a powerful man in himself, has the power and the responsibility of being a Minister. The "mini-Neddies" have neither the power nor the responsibility.
I could go on with other matters. I have often wanted to challenge statements about growth. I am sorry that the present Chancellor of the Exchequer has selected particularly bad months for his comment that our growth rate has dropped 2 per cent. He could have looked back a bit and made the average considerably higher. One thing I would say to the Government on these growth targets is that the figure of 4 per cent. is itself a very misleading figure. Many people think it is very small, but if we are going to get a 4 per cent. average for the nation the industries that are really going to grow and achieve that rate must grow by more than 10 per cent., which is very difficult indeed. I think the Government would be wise to issue publicity to management and the unions to stress that aspect of the matter as well.
We have had, rightly, a great many speeches to-day referring to exports. When I was a member of the Government it fell to me to encourage exports and to go all over the world. Since then I have tried to practise some of the things that I used to preach, and to learn more, too. I am afraid I did not agree

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wholly with what the noble Lord, Lord Shackleton, said about the need to export even though it was unprofitable. I think we have to make exporting profitable. We do that if we make industry efficient. If we do not, we deprive management of one known test for deciding what it is they should be doing.
I am not so gloomy about exports being profitable as the statements of some noble Lords indicate they may be. On the other hand, we know that other countries give export incentives. I think the idea behind the Government's 1½ per cent. incentive was a good idea. I do not take the view that this is no help at all; it is some help, but not a very great help, and I hope the Government will be examining some of the other export incentive schemes which are practised by our competitors. One possible one arises in connection with the redundancy payment schemes and other social service schemes to which industry may be forced, and rightly forced, to contribute. I would ask the Government to consider whether it would not be right, in these kinds of cases, that the Lord of social charge borne by industry should be borne by them on the home front and not on the export front. I think it is the Italian Government which has a scheme which gives effect to that.
My Lords, I must apologise again for having detained your Lordships at this late hour for more minutes than I meant to speak for, and for a great many more minutes than many of your Lordships would have wished. In the nature of things, many of the points I have made have been rather too "moneyish" or industrial, and perhaps too little human. I do not intend that to be so. We are all partners in this enterprise of greater efficiency and greater output. Change, with whose opportunities we are blessed by science and technology, brings with it much hardship unless those who manage our affairs have humanity. This has long been realised. Training schemes, redundancy payments and schemes for all kinds of improvements and movement have been discussed for some time now, and have gained support—and many of them have been put into practice. But there are other aspects of change which I think want more acceptance even than this. I am in favour of the publication
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of more information by companies, not just for Stock Exchange reasons, but so that the free enterprise system can react more immediately in various ways to the troughs of inefficiency, and to changes in technology and demand.
In so much that I have been saying there has been nothing very Party political. I have been away from active Party politics now for eighteen months or so, and I have probably forgotten about it. Some of your Lordships may feel that I have not said anything very profound, but this is largely because I have developed a feeling that very often we are over-complicating the problem that faces us, and therefore the answers that we give. Sometimes, when we take pride in arranging foreign loans, in bank rate changes, or in organising science, technology or business schools, we are apt to make the mistake of thinking that, just by having accomplished this particular success, we have done something of real importance. Some of these things are important, but they are not the fundamental point.
I may not agree with everything that my noble friend Lord Coleraine had to say to us about the fundamental problems—in fact, I do not—but I agree with him that we must, all of us, look to the fundamental problems more than we have been doing in recent years. Some people, I think, forget the simpler truths that underlie any economy. We cannot spend more than we earn, and we earn more only if we are more efficient. It does not matter, I think, whose fault it is, but it is the simple fact that we have very few months to show ourselves and the world that we acknowledge these simple truths.
9.25 p.m.
THE EARL OF LONGFORD: My Lords, I am sure that all noble Lords for whom I can speak, and I have no doubt many others, will be very grateful to the noble Lord for the notably fair-minded speech that he has just delivered on his first appearance at the Dispatch Box in this House—although, of course, he is an old Minister. I had the feeling—it is not always easy to achieve this in Opposition—that he was genuinely trying to help and would be pleased if we in fact did better than perhaps, in his gloomy moments, he thought we were doing. One cannot ask for more than that in an Opposition speaker. The noble

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Lord, Lord Elleborough, announced at one moment that we had knocked the stuffing out of the City, but this I venture to question, in view of the words at this late hour of the noble Lord, Lord Aldington; and I think it will take a lot more than any Government to destroy the indestructible City.
I was struck by the speeches on our own side for more than one reason. There were, or are, altogether, three Ministers speaking from this; Bench, all of whom, at some point or other in their lives, have been or are businessmen. I think this must be a record in the history of the Labour Party; so one must not assume that nothing changes in the history of great movements. A fourth spokesman, also very powerful, was the noble Lord. Lord Sainsbury, whose name is better known in business than that of any of us taking part to-day. But, from our point of view and I think from the point of view of the House as a whole, the two most powerful speeches were made by the noble Lord, Lord Citrine, whose speech I unfortunately missed, and the noble Lord, Lord Geddes of Epsom, whose remarks will certainly be studied with particular care by the Government, as will be those of other noble Lords.
I must now attempt to refer to some of the Opposition speakers. I was going to say a few minutes ago that they had all gone. There was a moment when the Conservative Benches—not just the Front Bench, but all the Conservative Benches—were void of humanity for the first time in my many years in this House.
A Noble Lord: They are always void.
THE EARL OFLONGFORD: No; we are all sweetness and light this evening. But I must at least join in the tributes paid to the noble Viscount, Lord Watkinson—visibly restraining himself from partisanship, but giving us a most interesting account of his journeys and the lessons to be learnt. The noble Lord, Lord Molson, and I must agree to differ on the semantic point of what is and what is not a "squeeze", but I think we have pursued that particular topic so far as it can be carried this evening.
I must also refer to, among other speakers who have stayed with us on the opposite Benches, the noble Lord, Lord St. Oswald. I will not attempt to answer his main point about the taxa-
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tion of works of art. Of course, I will certainly see that the Government study his observations carefully, but it would be quite wrong for me to give the impression at this stage that a change of policy was likely. But he raised a point within a point, so to speak, about the £1, 000 limit. While I will give him a longer answer afterwards, if he wishes, perhaps I could tell him this now. The answer is that the £1, 000 limit is intended to apply to single lots. That would allow a number of pictures, even belonging to the same person, which were being sold separately on the same day and in the same sale room to be treated individually. But there is a qualification: it is the definition of what is really one asset. A set of chairs—and this I know might interest the noble Lord very much—
LORD ST. OSWALD: Not because I am selling them.
THE EARL OF LONGFORD: I was under the impression that no one had a better set of chairs in the country than the noble Lord.
LORD ST. OSWALD: They are not for sale.
THE EARL OF LONGFORD: We are sometimes pushed. At any rate, the qualification to what I have just said is that where there is what is really one asset—for example, one lot—it cannot be split up for the purpose of avoidance of tax. I hope I have answered the noble Lord in his entirely altruistic inquiries.
LORD ST. OSWALD: Correct.
THE EARL OF LONGFORD: I am sorry to express a certain sadness about the speech of the noble Earl, Lord Dundee. When he was a Government spokesman, I always admired him because I felt sure that he had never shown his speech to the civil servants. He would also make admissions which I am sure no official would ever have tolerated. To-day he seemed to have fallen under the influence of a new set of officials, Central Office officials whom he has not defied in the way he used to snap his fingers at the old gang. In other words, I did not think his speech to-day was quite so balanced as those he has made for many years as a most acceptable Government man.

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Surely, my Lords, we start from the point that this year, 1964, has been, on any objective assessment, a deeply disappointing year. I am anxious to follow the example of the noble Lord, Lord Aldington, to go as far as I can with the noble Lords opposite to find some sort of consensus. I should have thought one had to agree about that, whether it gives one any pleasure to say that the economy is full of underlying strength, and certainly so long as there is a Britain—and we know from President Johnson that there always will be—there will always be an underlying strength, in the British economy, just as there will always be in the British character. But that kind of remark does not help a great deal, and this has been a very depressing year on the economic front.
As was explained by my noble friend Lord Shackleton, exports have tended to decline in value and still more in volume. That could be seen from the figures for the first three quarters. The figures for the last month which are not published yet showed a marginal increase but as a whole it is right to say that exports have tended to go down.
THE EARL OF DUNDEE: My Lords, I must repeat what I said. I said that in the first nine months of this year our exports are 4 per cent. higher than for the first nine months of 1963. That is a perfectly reasonable comparison to make.
THE EARL OF LONGFORD: My Lords, it could be a very misleading comparison. But let me pursue the point. I do not intend to speak for as long as the noble Earl—not that he spoke for too long; but I do not intend to speak as long as he did.
THE EARL OF DUNDEE: My Lords, I spoke for only 20 minutes. I wager the noble Earl will speak longer.
THE EARL OF LONGFORD: My Lords, if the noble Earl continues to interrupt me then he will win his bet. But assuming there is a reasonable quiescence I shall get through in less than that time. The point is that exports did increase at the end of last year but during this year they have in fact tended to go down quarter by quarter and it has been really a very disappointing year. I do not
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want to dwell on these figures; but in April, Mr. Maudling was pinning a good deal of hope to an improvement in exports. He said that the prospects for exports—he said this on April 14 in the Budget debate—were encouraging. On November 4 he went on to explain that the opposite had occurred. He said the figure in respect of exports was by far the most disappointing. That he said on the November 4.
THE EARL OF DUNDEE: My Lords, the noble Earl must do him the justice to add that he said that in September before the Election. For the last few months of the summer, they had been disappointing.
THE EARL OF LONGFORD: My Lords, I am not arguing on that point; I am saying this has been a disappointing year. Those exports that we hoped to go up tended to go down. That is the simple fact and nobody can dispute it. We must try to proceed in some correspondence with the facts before we impute motives and all the rest. Those are the facts. It has been a very disappointing year.
THE EARL OF DUNDEE: My Lords, there is no inconsistency between that and what I said.
THE EARL OF LONGFORD: My Lords, I was not setting out to see whether there was inconsistency. Your Lordships may find some before I have finished. But I am saying that it has been a very disappointing year for our country and it would have been so whoever had won the Election. I will quote once more. The National Institute of Economic Surveys in November commented:
"A completely flat trend in exports seemed at the start of the year an unbelievably depressing prospect."
That was thought at the beginning of the year. This is how it turned out. Against that background it is fair to ask—and I come on to something the noble Earl is interested in—the question of whether warnings were given. I do not want to go over ground that has been covered elsewhere, but let us turn to the last debate on these subjects in July. The noble Viscount, Lord Blakenham, on that occasion deputising for the noble Earl, Lord Dundee, was, I am bound to say, a great deal more optimistic than

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the noble Earl, Lord Dundee, has shown himself on these occasions. In July, the noble Viscount, Lord Blakenham, speaking for the Government, struck a very cheery note indeed. He said that there would be some deterioration in the overall balance of payments, but he said that this should give rise to neither alarm nor dismay; that the deterioration was foreseen and it was ready to be dealt with.
"So far, as I have indicated, this year we have had an encouraging rise in exports."—[Official Report, Vol. 260 (No. 99), col. 119, 14th July, 1964.]
In July the noble Lord informed your Lordships' House, speaking for the Government, of an encouraging rise in exports.
THE EARL OFDUNDEE: For the first six months.
THE EARL OF LGNGFORD: It would not have been true for the first six months. In July he had only the May figures. I am trying to remind the House of what we had been told this year. In the last main debate we were told that there had been an encouraging rise in exports. He went on to say that there were good prospects for further increases in exports. In the light of that, without going on with endless quotations, I can say that we, the public, have been seriously misled, no doubt unwittingly, by the noble Viscount and his colleagues in another place; not once, but again and again. I could quote many illustrations of that. It may be said that they were doing it deliberately; but I know the noble Viscount well enough and I certainly would not impute this disingenuity to him and to his colleagues. I think they hoodwinked themselves. No doubt the noble Viscount, Lord Blakenham, believed everything he said. But things turned out differently; and not long after those statements were made.
I do not want to pursue that topic much more except to remind the House, and to confirm what my noble friend Lord Shackleton said, that Lord Shackleton gave the clearest warning of what he thought would happen in respect to the trade balance this year; and he has been proved right—though perhaps he was not pessimistic enough—and the Government spokesmen were proved wrong.
THE EARL OF DUNDEE: My Lords, can the noble Earl say in what respect
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he means that the late Government spokesmen were proved totally wrong?
THE EARL OF LONGFORD: In respect of the statement of the noble Viscount, Lord Blakenham. I gave him notice, but he is not in the House; we do not seem to see him much these days. The remarks of the noble Viscount, Lord Blakenham, look remarkably foolish now. Even if the noble Earl does not accept that, I suspect that his colleagues versed in these affairs will be inclined to agree with me. However, the noble Viscount, Lord Blakenham, is on record and I think that we have, in fact, been misled, even though unwittingly. The noble Earl still feels that all is well. And here I am bound to say, but not on all the points, that I find Lord Blakenham's observations very strange indeed. But, in his absence, we have done full justice to that speech of his in July.
On that point only I think I tended to agree with the very deeply interesting speech of the noble Lord, Lord Coleraine, who has apologised for leaving. He feels that there is a serious, a grave, problem in regard to our economy. The noble Earl, Lord Dundee, does not. I cannot coerce him; but he is still as cheerful as ever. He does not look very cheerful, but I can see that inside he is enormously cheerful at the prospect; and I suppose in these hard times it is better perhaps that the Opposition should bear up. But all I am saying is that, if he were now in a responsible position in the Government, he would have to face very grave problems: he would have to face the mess, the very grave mess that he and his colleagues left us. Having said that—
THE EARL OF DUNDEE: My Lords, I must remind the House that my argument was that this grave mess has been caused very largely by excessive pessimism of the Government since they came into office.
THE EARL OF LONGFORD: My Lords, that is not worthy of the noble Earl. I think, for the moment, I am in possession of the Box. When the Government took over they faced a deficit for this year of £700 million to £800 million, and a very heavy deficit next year—and I am at liberty to call that, and I intend to call that, a grievous

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mess. I will not try to attribute the blame. But it was the case that these facts had not been fully disclosed to the Government or previously disclosed to the public.
LORD ALDINGTON: They have been fully disclosed.
THE EARL OF LONGFORD: My Lords, I assure your Lordships, after careful thought, that when my colleagues, particularly my senior colleagues responsible for policy, found what the real situation was, they said it was much worse than they supposed and, if anything, there was not sufficient warning given to the public. That was the situation inside the Government when they took over, as I happen to know.
Let me proceed to one or two other main issues. We have not really been challenged seriously to-day about what we ought to have done. If noble Lords opposite had been in office I do not know what the noble Earl, Lord Dundee, would have done.
THE EARL OF DUNDEE: My Lords, it would not have been in such a mess if we had been in office.
THE EARL OF LONGFORD: My Lords, I will not reply to a sort of running commentary, because sometimes one sinks to the level of the commentator. I am afraid that I must be allowed to finish my remarks. The noble Earl, who is deeply esteemed on this side of the House, would, I feel, not necessarily have taken strong action. I think that the rest of his colleagues would have taken strong action. The question, of course, is, what action would they have taken? They have not shown their hand about this. It has been suggested that they would have continued borrowing to keep going, in the hope that it would turn out all right. I do not think that was the mood of the noble Lord, Lord Aldington, or the mood of the late Government, but I am sure they would have taken strong action of some kind. From what the former Chancellor of the Exchequer said when surcharges were first announced, I am inclined to think that he would have taken steps of this sort. I cannot be sure, but noble Lords opposite have not given any indication at all that we should have done other than what we did do.
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I should like to say one thing about the increases in old-age and widows pensions. Here I want to be careful to avoid saying anything which seems to imply that the other side are less humanitarian than we are. I think it is right to assume that noble Lords opposite would have increased these pensions, whether to the precise extent or more readily I do not know, but it seems to be fair and honourable to make that assumption. But we must face the fact that this increase of pensions, given at the time when we were admittedly describing the situation as grave, was liable to be misunderstood in certain quarters abroad; that was inevitable. I deliberately pitch my remarks as low as possible, and I do not try to link this particular measure with any particular loss of confidence; but the problem of how to carry out a radical programme, and at the same time retain the full confidence of those people abroad who may not understand our proposals as well as we do, does arise, and it has arisen in a very acute way.
Having worked as the chairman of a bank for many years, I am fully aware that there are more ways than one of looking at a great programme of radical legislation. Yet I very much hope that the House agrees—if I have said anything more or less aggressive to the noble Earl, Lord Dundee, I apologise, because I know that he is very soft-hearted where people in distress are concerned—that we are absolutely right to go ahead with this essential legislation. If that is so. it places on us a responsibility for making sure that in every case our immediate friends will understand our principles and our methods and appreciate what we do.
It is not for me to say that every step taken, every diplomatic move, every pronouncement, was inspired, but I cannot accept the picture which the noble Lord, Lord Aldington, gave of our going round shouting about inflation. I think that that is being said a good deal, but I should like to see some of these statements. I do not accept these reports about what Ministers are supposed to have said at some hour of the night in some smoke-filled room. I do not agree that this crisis must have been created in this way. But it places a heavy responsibility on us to make our policy and our short-term and long-term remedies understood. I hope that they will become better understood now, and

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that my noble friends have contributed to that to-day.
I must say this for myself, and I say it as carefully as possible: that we in Britain, and in the Government in power, could not allow what we regard as a right and just social programme, one for which the British people had voted, to be set aside because our purposes were misunderstood, even by enlightened foreigners. So, in the last resort, our social programme must and will proceed. But I do not accept the view that there is here a conflict, and that one side of the equation has to give way. I do not accept the view that we cannot go through with a radical programme without disturbing confidence. I believe that in many ways noble Lords opposite have as big a part to play in making sure that, not in the interests, Heaven knows! of one Party or of one Goverment, but in the interests of Britain, what we are trying to do is properly understood. It may or may not be successful to the full, but I am sure that we are going forward on lines which, in the end, will be calculated to benefit everyone in this country, irrespective of class interests, and which, in the end, will be the interests of the world.
I do not ever claim infallibility. The noble Earl, Lord Dundee, was so wise in that: he did not, either. Every Govern-
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ment makes mistakes. But we have a great purpose. We are filled with determination to achieve more than any Government has ever achieved. If we have tried to move too fast, it may be that that could be right—better perhaps than lagging by the wayside. But if we obtain reasonable co-operation, which I think one can ask for, not in vain, from an acutely, patriotic Opposition, we shall achieve far greater things in a way that will do credit, not just to our Party, which is one element in the State, but to the whole of this country, Britain, which is equally dear to all of us.
On Question, Bill read 2a; Committee negatived.

PROTECTION FROM EVICTION BILL
Brought from the Commons; read 1a and to be printed.

MUSEUM OF LONDON BILL [H.L.]
Referred to the Committee on Unopposed Bills.
House adjourned at eleven minutes before ten o'clock.