Sitting of 15 January 1964

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

    International Indian Ocean Expedition
    Mr. Hector Hughesasked the Civil Lord of the Admiralty if he will make a statement on the work, progress and results achieved by the international squadron of research vessels exploring the southern seas; and when they will turn their attention to the North Sea and adjacent seas.
    The Civil Lord of the Admiralty (Mr. John Hay):The International Indian Ocean Expedition will not complete its research programme until September of this year and it is too early to assess the preliminary results. In due course, data received from R.R.S. "Discovery" will be published by the Royal Society on behalf of the National Oceanographic Council.
    I would refer the hon. and learned Gentleman to the reply which I gave him on 19th June last in which I stated that there is no proposal that the group of ships which have converged on the Indian Ocean to play their parts in this international project of common world interest should transfer their activities to the North Sea or northern waters.
    Mr. Hughes: I am obliged to the hon. Gentleman for that reply, but does he realise that in fishing matters his first duty is to fishermen in British waters, and will he take steps to see that whatever scientific advantages ensue from the present expedition are made public so that the British fishing industry, and, in particular, the Scottish fishing industry, may be helped? Is he aware that
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    there are many problems outstanding which call for such assistance?
    Mr. Hay: Yes—I am much obliged to the hon. and learned Gentleman—but I must point out that I have no direct responsibility for fisheries or fishery research. However, it is true that some of the lessons being learned by this survey in the Indian Ocean may have beneficial results when applied to fishery research in general in other parts of the world.

    Royal Naval Auxiliary Service
    Mr. Loveysasked the Civil Lord of the Admiralty whether he is satisfied that the Royal Naval Auxiliary Service is organised to fulfil a useful function in the defence of the realm; and if he will make a statement.
    Mr. Hay: Yes, Sir. Without doubt, the Royal Naval Auxiliary Service makes a valuable contribution to national defence. The members of this spare-time civilian Service are organised and trained to perform important duties in war which would otherwise have to be done by active Service men. The country owes a debt of gratitude to the members of this Service for giving up their time to prepare themselves for these duties.
    Mr. Loveys: I thank my hon. Friend for that reply, with which I agree and which will be well received by the Service, but will he accept the special need for having more up-to-date equipment, especially R.T. sets, as many of the present ones being used are hopelessly out of date and, indeed, are of a type which can be purchased at many surplus stores for a few shillings?
    Mr. Hay:This is largely a question of priorities. We have demands of great complexity for telecommunications equipment for the Fleet and for shore establishments. We are at the moment looking at the problem of equipment for the Royal Naval Auxiliary Service, and I shall try to expedite a decision about it.

    Gannet Aircraft
    Mr. Critchleyasked the Civil Lord of the Admiralty what progress has been made in deciding upon the replacement for the Gannet aircraft in service with the Royal Navy.
    Mr. Hay: The Gannet Airborne Early Warning Mk. III aircraft has been in operational service for only about four years, but we are considering the characteristics of its successor and a preliminary study has been completed for us by the Ministry of Aviation.

  BRITISH ARMY

    Woolwich Arsenal
    Mr. Turnerasked the Secretary of State for War whether he will take steps to expedite the inter-Departmental inquiry into the future use of the remaining 700 acres of Woolwich Arsenal land, and in particular that land to be vacated by the Royal Ordnance Factory on its closure.
    The Under-Secretary of State for War (Mr. Peter Kirk):We are conducting the inquiry as quickly as possible.
    Mr. Turner: Does my hon. Friend appreciate the great difficulties confronting the London County Council or the Borough Council of Woolwich until it is known what is to happen to the remaining part of the Arsenal land? It is impossible for anyone, either public authority or private enterprise, to make any plans at all for Woolwich until it is known what has to be cartered for.
    Mr. Kirk: Yes, we do appreciate that and we are pressing on as fast as we can.
    Mr. Mayhew:In the meantime, will the hon. Gentleman give an assurance that he will not dispose of this land to other authorities without the agreement of the planning authority?
    Mr. Kirk: We shall, of course, be going through the normal procedures with the planning authorities in this matter.
    Mr. Mayhewasked the Secretary of State for War how many persons are employed in Woolwich Arsenal other than at the Royal Ordnance factory; and when he expects to reach a decision about the future of the Arsenal.
    Mr. Kirk: About 2,400. A decision will be made about the future of Woolwich Arsenal as soon as possible.
    Mr. Mayhew: In the meantime, will the Minister confirm that there is no
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    intention of closing down the Arsenal as distinct from the R.O.F.?
    Mr. Kirk: There is not, subject to the review at present being conducted by my Department

    Land
    Mr. Frank Allaunasked the Secretary of State for War what was the acreage of Army land in 1951, 1956, and 1963; and what was the acreage of land per man in the Army in those three years.
    Mr. Kirk:In 1951, 1956 and 1963, the War Department held and used in the United Kingdom 609,000; 568,000; and 461,000 acres of land respectively. Related to the field force units of the Regular Army in this country, the per capita figures were 16·2, 12·1 and 15·0 acres respectively.
    Mr. Allaun: Recently, it has gone up. Is the hon. Gentleman aware of the resentment that, despite smaller manpower, the Army is keeping its clutches on hundreds of thousands of acres of land badly wanted for housing, farming, or for access to the countryside? Some of the most beautiful parts of the country are still held.
    Mr. Kirk: The total figures have gone down, as I said The per capita figure appeared to have gone up with the end of National Service. In fact, since 1957, we have given up about 135,500 acres of land, and we dispose of it as soon as it becomes surplus to requirements.

    Sniping; Rifle (Standardisation)
    Mr. Shinwellasked the Secretary of State for War whether the British sniper rifle calibre has been standardised with the rifle adopted by the North Atlantic Treaty Organisation.
    Mr. Kirk: No, Sir. Not yet.
    Mr. Shinwell: Does the hon. Gentleman realise that there has been talk about the standardising of this rifle for the last 10 or 12 years? What is standing in the way? Who is responsible for the inhibition—the Americans, the Belgians, the Dutch or the French, or is it the War Office?
    Mr. Kirk: As I explained to the right hon. Gentleman on 11th December, the project for fixing the 7·62 mm. rifle with

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    a telescopic sight has not been very high in our priorities because the ·303 has been adequate, and the requirement for sniping rifles for the Army is extremely small.
    Mr. Shinwell:Why does the hon. Gentleman say that it is not high in the priorities? Is he aware that, in 1950, I headed a delegation comprising, in particular, two high-ranking officers from the War Office to negotiate with the Americans, the Canadians and other countries associated with N.A.T.O. on the subject of a standardised rifle? Why does the hon. Gentleman say that there is no particular priority?
    Mr. Kirk: One must make a distinction between the rifle and the sniping sight for the rifle. The rifle we have already; the sniping sight we have not yet got.
    Mr. Speaker: Mr. Shinwell.
    Mr. Shinwell: I am flabbergasted. Question No. 12.
    Mr. Speaker: I did not hear what the right hon. Gentleman said, but I called him to ask Question No. 12. I gather that he has.
    Mr. Shinwell: I merely said, almost sotto voce, Mr. Speaker, that I was flabbergasted.
    Mr. Speaker: It was so sotto voce that I was not sure whether Question No. 12 had been asked. But it has been.

    War Department (Staff)
    Mr. Shinwellasked the Secretary of State for War what reduction in the civilian and military staff of his Department will be effected when the Defence (Transfer of Functions) Bill becomes law.
    Mr. Kirk: When the Bill becomes law, some 500 military and civil staff of the War Department will be transferred to the central element of the new Ministry of Defence on 1st April, 1964. There will be no other immediate reductions in the present War Office staff as a directresult of the changes provided for in the Bill, but the progressive reduction maintained since 1961 will continue and may in due course be accelerated.
    Mr. Shinwell: Does that mean that, in spite of all the talk about the co-
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    ordination of the defenceorganisation, there is only to be the transfer of 500, civil and military, from the War Office to the new Defence Department, and no actual reduction in the War Office taking place? Was not this thought out before the Bill was introduced in the House?
    Mr. Kirk:Of course it was, but the initial step will simply be to transfer 500 from the higher echelons. The size of the War Office staff has been falling steadily during the past 10 years, and will continue to do so.
    Mr. Paget: It is rather worse than that,is it not, because the staff of the Defence Ministry is going up by more than the reduction which is going on in the number of civil servants employed by the other Ministries?
    Mr. Kirk: Questions about the staff of the Defence Ministry as a whole should be directed to my right hon. Friend the Minister of Defence.

    Royal Ordnance Factory, Woolwich (Mensforth Report)
    Mr. Mayhewasked the Secretary of State for War if he will publish, in part or in whole, the Mensforth Report on the Royal Ordnance Factory, Woolwich.
    Mr. Kirk: No, Sir. As stated by my right hon. Friend's predecessor and by my right hon. Friend on 10th April and 14th May, 1963, Sir Eric Mensforth was asked to give independent advice on the future of the Weapons and Fighting Vehicles Group of Royal Ordnance Factories which was currently the subject of Departmental examination. He did so confidentially and in a form not designed for publication as a self-contained report.
    Mr. Mayhew: Nevertheless, is the hon. Gentleman aware that it is hard to believe that there is any serious objection, for instance, from the security angle, to the publication of this report? The Government have not made out their case yet for closing down the R.O.F. Would it not be fair to those concerned to show the reasoningbehind the decision?
    Mr. Kirk: No, Sir; there are strong reasons why the report as such should not be published. We have made out

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    a very strong case, not only in my right hon. Friend's original statement but in the Adjournment debate which the hon. Gentleman was, unfortunately, prevented from attending.

    Cyprus
    Mr. Pagetasked the Secretary of State for War if he will make a statement on the Army's contribution in the Cyprus crisis.
    The Secretary of State for War (Mr. James Ramsden): Following the outbreak of violence in Cyprus last month, the Government of Cyprus accepted an offer by the British, Greek and Turkish Governments to assist in its efforts to secure the preservation of the cease fire and the restoration of peace.
    Since Christmas the 1st Battalion the Gloucestershire Regiment, the 3rd Green Jackets, 33 Field Squadron Royal Engineers and a squadron of the 14/20 Hussars, together with elements of the Strategic Reserve from this country, have been engaged in a wide range of tasks: these include the exchange of refugees; taking over road blocks and restoring normal traffic; providing survival rations for villages cut off from normal supplies; evacuating casualties; and restoring communications.
    I think that we can be justifiably proud of what we have achieved, and I believe that the people of Cyprus have welcomed the presence of British soldiers.
    Mr. Paget: Is the right hon. Gentleman aware that they have had every reason to welcome that presence, and for that not only the people of Cyprus but I think the people of this country and of all the N.A.T.O. countries have equal grounds for being grateful? Could the right hon. Gentleman tell us, however, whether the R.A.F. patrols have been equally engaged on these duties and whether in fact naval patrols have also been engaged and whether this form of urban support to the civil power is something which can be done by the three Services?
    Mr. Ramsden: I am obliged to the hon. and learned Gentleman, and so will the soldiers be, for the remarks in the first part of his supplementary question. He asked me about the use
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    of British soldiers, which is within my responsibility, so that was what I gave him in the Answer. It is, of course, true—I welcome the opportunity of saying this—that, Cyprusbeing principally a Royal Air Force base and the Air Officer Commanding in Chief being in overall charge, the Royal Air Force has been involved and the Royal Air Force Regiment has played its part in the truce force beside the soldiers of the British Army. I am not aware of any participation by the Navy.
    Mr. Emrys Hughes:Can the right hon. Gentleman tell us whether the cost of these operations is to fall on the shoulders of the British taxpayer, or are the Cyprus, Government, who, presumably, are using our soldiers in fact as policemen, being asked to pay any of the cost?
    Mr. Ramsden: I think that the hon Gentleman will have to put a Question down.
    Mr. Driberg:Could the right hon. Gentleman say whether, when troops are sent to Cyprus who have not been there before, they are given any briefing on the background to the troubles in which they are helping to keep the peace? If so, is that left to individual commanding officers, or is general guidance given by the War Office or any other Department? If the latter, will he put that guidance in the Library?
    Mr. Ramsden:I am not aware of anything I could make available to hon. Members in the Library. It is the normal duty of commanding officers—and we do everything to help them to be in a position to discharge it—fully to brief their troops on any background to any operation or exercise in which they are engaged.

    British Army of the Rhine
    Mr. Pagetasked the Secretary of State for War when it is now proposed to bring the British Army of the Rhine up to the level necessary to fulfil Treaty obligations.
    Mr. Ramsden:As I told my hon. Friend the Member for Wycombe (Mr. John Hall) on 18th December last year, as soon as possible. Our ability to reach 55,000 depends on a satisfactory

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    rate of recruitment and on the military demands of other overseas theatres. I am not therefore in a position to give a precise date.
    Mr. Paget:Can the right hon. Gentleman, however, reassure our N.A.T.O. allies that there is no weakening of our resolution to fulfil this duty to them?
    Mr. Ramsden:Yes, Sir, and I feel that they, too, accept that, certainly as regards the Cyprus aspect of this situation, what we are doing is a service to N.A.T.O. as a whole, in a dispute in which two member countries of N.A.T.O., indirectly at any rate, are involved.
    Captain Litchfield: Would not my right hon. Friend agree that troops employed on the flanks of N.A.T.O. are fulfilling just as important a in the interests of N.A.T.O. as those employed in the British Army of the Rhine?
    Mr. Lipton: Is it not a fact, as confirmed by The Times newspaper today, that the Government have in hand the return of three battalions from the Rhine Army and that most of the 17 battalions now in Germany are of less than 600 infantryman? In these circumstances, has not the time come to give very serious consideration to withdrawing the Rhine Army altogether and basing it in this country or somewhere else where it would be of much greater use?
    Mr. Ramsden: No, Sir. I understand that the article in The Times refers to the reorganisation of the British Army of the Rhine which my right hon. Friend the Minister of Defence announced on 26th June last year. This reorganisation, which does not involve reduction in manpower in the British Army of the Rhine, and which isaimed at achieving more balance and a more effective fighting force, is in no way connected with the present situation in which British troops in reserve have had to be sent overseas.
    Sir J. Eden: Given adequate air transport, is it not very possible that our duty towards our N.A.T.O. allies could equally well be discharged without having to have a full complement of troops on the ground in Germany?
    Mr. Ramsden: That is another question, and opens up wider issues which, I
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    think, are not appropriate to this particular Question.
    Mr. Bellenger:Will the Secretary of State really come clean, as one of his predecessors said he would some years ago? Is it not the case that this pretence of keeping the Rhine Army up to guarantee is impossible in circumstances like those we are now having? Why not say so, so that our allies and everybody else know it to be the fact?
    Mr. Ramsden: No, Sir. In the long term, the planned build-up to the Treaty figure will proceed in the way I have indicated previously to the House.

    Requirements
    Mr. Frank Allaunasked the Secretary of State for War by what number he estimates the Army will fall short of requirements in the coming year; and whether he will give an assurance that he will not reintroduce conscription.
    Mr. Ramsden: I cannot make an exact forecast, but I anticipate that by the end of 1964 the margin of some 5 per cent. by which the Army at present falls short of its target will be reduced to about 3 per cent.
    We have no intention of reintroducing conscription.
    Mr. Allaun:Yes, but as the Government, for obvious reasons, will not reintroduce conscription just before a General Election, will the Secretary of State give an assurance that in the unhappy event of this Government being returned they will not reintroduce conscription after the election?
    Mr. Ramsden:The Government will do their duty in any circumstances without regard to the dates of a General Election, but the present circumstances do not warrant a reintroduction of conscription.
    Mr. John Hall: Would not my right hon. Friend agree, in view of the recent statements about the defence policy which would be followed by the Opposition in the unlikely event of their filling the benches on this side of the House, that this particular Question might better be addressed to the Opposition Front Bench?
    Mr. Speaker: It is not part of a Minister's responsibility to answer that.
    Mr. Ellis Smith: Very interesting.
    Mr. Paget: Could the right hon. Gentleman say how the 3 per cent. is distributed amongst the various corps—where he really expects his principal shortfall?
    Mr. Ramsden: I would have to give the hon. and learned Gentleman the details.
    Mr. Allaun: Are there not very serious manpower shortages in the hospitals, in the schools and in the transport services? Why should the claims of the Army alone be sacrosanct? As there are 432,000 men in the three Services, could not some of those, if necessary, be transferred to the Army?
    Mr. Ramsden: What the hon. Member is saying, I think, is in support of our policy of raising the Army on a voluntary basis, where people have the opportunity of choosing what they wish to do.

    SCOTLAND

      Prerogative of Mercy
      Mr. Hector Hughesasked the Secretary of State for Scotland if he is aware that the present manner in which the prerogative of mercy is exercised is unsatisfactory; and if he will take steps to arrange in such cases that reasons are published for advising agreement to or refusal of such exercise of the prerogative.
      The Secretary of State for Scotland (Mr. Michael Noble): The answer to both parts of the Question is "No, Sir".
      Mr. Hughes:Does not the Secretary of State realise that the present practice is inconsistent with the time-honoured system of trial by judge and jury, the giving of evidence publicly adduced and cross-examined, and that the present practice of acting on extrinsic evidence given to him secretly is entirely wrong ethically and inconsistent with British justice? Will he look into that, and see that this practice is changed, so that British traditions and British justice may be honoured in the future?
      Mr. Noble: I am afraid that I cannot agree with the hon. and learned Gentleman that my practice is different from
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      that which has been carried out by my predecessors in the Scottish Office, or in the Home Office. I think the practice has been established by long tradition. I am carrying it out to the best of my ability.
      Mr. Hughes:On a point of order. The Secretary of State obviously misunderstood my supplementary question. I did not say that he was carrying out a different practice. I said that his practice—
      Mr. Speaker:Obviously, misunderstandings by Ministers, whether obvious or not, do not raise points of order.

      Hydro-Electricity Scheme, Laidon
      Mr. Millanasked the Secretary of State for Scotland why the North of Scotland Hydro-Electric Board's Laidon scheme in Perthshire has been included in the public inquiry into the Fada-Fionn scheme in Wester Ross, since there are no objections to the Laidon scheme and there is no connection between the two schemes; what matters concerning Laidon have been or will be considered by the inquiry; and on how many occasions in the past there has been an inquiry into a scheme to which there have been no objections.
      Mr. Noble: The Fada-Fionn inquiry was extended to cover the Laidon scheme because the problems that arise in assessing comparative costs of alternative methods of providing the power appeared to be similar in both schemes. I trust however that the inquiry will deal with all considerations relevant to either scheme. There has been no previous inquiry into an unopposed scheme.
      Mr. Millan:Is it not really extraordinary that we should have an inquiry into the Laidon scheme when there are no objections to the scheme, and when this is a scheme which the Mackenzie Committee specifically said met the economic tests laid down by that Committee and which the Government are now proposing to follow? Does not the introduction of evidence about the economics of different kinds of hydro-electricity schemes at a public inquiry tend to make the inquiry confused and, indeed, chaotic—as happened last week at this particular inquiry? Why does not the right hon. Gentleman take the

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      decision about economics, since this is something which ultimately has to be decided by him in any event? Why shuffle this off on to a public inquiry?
      Mr. Noble:I do not think it is extraordinary. Under the Act I can authorise schemes only if I think they are in the public interest; and quite clearly, the economics of a scheme are just as important in the Highlands as they are in the South. This inquiry is being carried out by a distinguished lawyer and a distinguished professor of economics, and it will be of advantage to me and to Scotland to have their assessment of the position.
      Sir John MacLeod:But is the Secretary of State satisfied that this inquiry honours the 1943 Act? Surely he could have had experts to inquire into the economics of this, without a prolonged public inquiry? How long is this inquiry going to take? It is very unsatisfactory that there should be delay and that people should not realise what the outcome is to be for, perhaps, some very long time.
      Mr. Noble: I do not think I can answer my hon. Friend by saying exactly how long it will take, but the procedures of the inquiry into the Fada-Fionn scheme are in accordance with the Act passed by this House, and the extra inquiry into the Laidon scheme will not, I think, add to any great extent to the length of time of the complete inquiry.
      Mr. Ross: Yes, but surely, is notthe position not only unsatisfactory but also really incredible, bearing in mind that this was one of the subjects which was supposed to be dealt with by the Mackenzie Committee, and secondly, that it was a subject which was supposed to be dealt with in discussions between the two boards in order to guide the Secretary of State? Now, for the first time, we have this unprecedented position of a scheme to which there is no objection being subjected to a public inquiry. Why does the right hon. Gentleman not take the decision himself? Has he received any representations from the local Member of Parliament about this, or has he discussed it with him?
      Mr. Noble: The answer to the last part of the hon. Member's supple-
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      mentary question is "No, Sir." On the first part, the Mackenzie Committee considered the economics in only one sphere and specifically excluded from its consideration the question of capital costs which, with hydro-electric schemes costing approximately three times the amount of equivalent generation by other methods, is clearly an important consideration.
      Mr. Woodburn:Is the right hon. Gentleman aware that there is a suspicion in Scotland that somebody is raising every kind of obstacle to the development of hydro-electricity? There is evidentlya complete misapprehension among some of the people who advise him about the purpose of hydro-electricity. It is not competing in any way with steam. It is complementary and supplementary to steam and is generally used for supply at peak load when electricity cannot be supplied economically by steam stations.
      Mr. Noble: These are exactly the points which one hopes this inquiry will bring out.
      Mr. Millan: In view of the unsatisfactory nature of the reply, I beg to give notice that I will raise the matter on the Adjournment.

      New Hospital, Motherwell
      Mr. Lawsonasked the Secretary of State for Scotland if he can now state when the building of the new Strathclyde Hospital at Motherwell is to commence.
      Mr. Noble: The published hospital plan said that this new district general hospital would be started between 1966 and 1971. On present planning it should start about 1968.
      Mr. Lawson: That is an exceedingly disappointing Answer. Is the Secretary of State aware that there is a very urgent need for this hospital in this area, which is part of a designated growth area where so much money is supposed to be spent? Taking these things into account, will the right hon. Gentleman ensure that this date is brought forward by at least three years?
      Mr. Noble: I think that it is fair to say that all the district general hospitals in the Western Region are of considerable importance. The regional hospital

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      board has studied them all. It is planning simultaneously a great deal of the work in building these hospitals and it is its view that 1968 is the suitable date. In fact, in view of the amount of work which has to be done in planning this hospital, it would be very difficult to advance it very much before that.
      Dr. Dickson Mabon: Since the right hon. Gentleman claims that a new hospital is being started every 19 days, will he confirm that the Strathclyde Hospital is the last hospital to go to Scotland?
      Mr. Noble: That is not true.

      Smoke Control Areas
      Mr. Millanasked the Secretary of State for Scotland if he will state, for each smoke control area order so far confirmed, the Exchequer grants paid to date in respect of adaptations required to private dwellings, the number of dwellings concerned, and the average grant per dwelling.
      Mr. Noble: Under the 46 orders which have been approved 67,000 private dwellings are estimated to qualify for conversion grant. The total Exchequer grant is likely to be about £800,000 or about £11 16s. per dwelling on average. I am sending the hon. Member a table with details for each area.

      Coatbridge Technical College (Examinations)
      Mr. Dalyellasked the Secretary of State for Scotland on what date Mr. Alexander Love, of Shaw Avenue, Armadale, in the West Lothian constituency, was told orally by staff at Coatbridge Technical College to submit application forms for his 1963 examinations in electrical and mechanical engineering.
      Mr. Noble:Investigation by Lanarkshire Education Committee has not established whether such information was given orally. In view, however, of the other means used to notify examination entry dates to students, the Committee decided that the college staff were not responsible for the failure of Mr. Love and two other students to apply in time.
      Mr. Dalyell: Since there has been so much confusion and correspondence over
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      this case, would it not be chivalrous to give the young man in question the benefit of the doubt?
      Mr. Noble: It would not be right for me to interfere with the arrangements which the education authority and the joint committee have made.They have allowed these two people not to have the rest of their programme held up but to sit the examination at the next opportunity, and I think that this is the right compromise.
      Mr. Dalyell: Does the right hon. Gentleman realise that it is asking a lot of a young man who has many other examinations to take to go on doing past examinations in which he has in any way been successful?
      Mr. Noble: I agree that it is perhaps bad luck for these young men, but they are not all that inexperienced. They had ample opportunity for studying the proper method of application for these examinations, and I think that we must give students of this age the credit for being able to take some responsibility for looking after their own affairs.

      ROADS

        Ring Road, Leicester
        Sir B. Jannerasked the Minister of Transport whether he has concluded his inquiries about the urgent need for construction of the twin highway ring road leading from Scudamore Road to Hinckley Road, Leicester; and if he will include the construction of this highway in his programme for the immediate future, as it is of importance to the industries in the area.
        The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett): As my right hon. Friend said in his letter to the hon. Member on 20th November, the ring road is not among the most urgent of schemes needing to be undertaken even in Leicester itself. We do not expect to be able to find a place for it in the road programme during the next few years. The construction of the small section of the ring road between the two roads referred to would have no value for through traffic and we could not justify grant for it.
        Sir B. Janner: That is a shocking reply. Does the Parliamentary Secretary realise that this road is being used by and is needed for very important industries, including the A.E.I., and that they are frustrated in not being able to get their products to their home markets as well as to their export markets? What is the idea in not providing for such a road as is asked for in the Question? Is the hon. and gallant Member saying that he proposes to open only 28 miles of motorway this year and also to do nothing in this respect? Will he do nothing to help exports? Will he consult the Secretary of State for Industry and Trade about this matter?
        Vice-Admiral Hughes Hallett:What I am saying is that both we and the city council believe that other schemes in the city should have higher priority than this one.
        Sir B. Janner: Is the hon. and gallant Member aware that the city council does not believe that that is so and that it is only because of the parsimonious way in which the Ministry is helping it financially in respect of its roads that it cannot get on with this one, which is essential to the industries of Leicester?
        Vice-Admiral Hughes Hallett: I cannot accept what the hon. Member says.

        Roundabouts
        Mr. Wingfield Digbyasked the Minister of Transport whether, in view of the finding of the Crowther Report that roundabouts are an obstruction to traffic, he will immediately curtail expenditure on construction of new roundabouts and spend more on flyovers instead.
        The Minister of Transport (Mr. Ernest Marples):The Report suggests that many of the more important new roads in cities should be free from crossroads and roundabouts if they are to carry the very heavy volumes of traffic that are likely in the future. I would agree with this. An increasing number of flyovers or underpasses are already being provided or planned in the larger towns, and on the more important roads outside towns, where their provision is justified by the volume of traffic and can be made economically.
        Mr. Digby: Is my right hon. Friend aware that this Report also says that America is a generation ahead of us in the motor age and that they havevirtually stopped making roundabouts in the United States, according to information which I received when I was in Washington?
        Mr. Marples: That is true, but the problem in the United States is somewhat different from that in this country. If we had the same density of population as the United States, we would have only 2½ million people.
        Mr. Popplewell:Roundabouts are entirely outmoded and outdated, particularly in the country areas. Is not the Minister aware that his Department and various local authorities have wasted a very large amount of money in building roundabouts which have had to be done away with and flyovers or underpasses erected in their place? Will the right hon. Gentleman have another look at this and ensure that in future roundabouts are not considered, at any rate on roads in the countryside?
        Mr. Marples:This depends on the volume of traffic. If the volume of traffic is exceedingly heavy, clearly a flyover or underpass is desirable. On the other hand, if it is extremely light it is an unnecessary extravagence, and it is better to build a roundabout at about one-fifth of the cost to start with and provide for the eventual building of an underpass or overpass.

        Motorways
        Mr. Wingfield Digbyasked the Minister of Transport whether,in view of the forecast of the Buchanan Report on the foreseeable increase in motor vehicles, he will now adopt the United States system of building all new roads of motorway standard with a broad central strip, which can later be used to provide two extra lanes.
        Mr. Marples:No, Sir. The number of lanes to be provided on motorways is determined by an assessment of traffic needs 20 years ahead. To provide space in the central reserve for additional lanes would cost almost as much as providing the full carriageway-width initially, since

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        land requirements are the same and embankments, cuttings, bridges must be built to accommodate the future requirements. While the extra lanes were being constructed, the capacity of the existing carriageways would be very seriously reduced.
        Mr. Digby:Is it not clear from the Buchanan Report—and the figures in that Report are very striking—that we have been underestimating the increase in traffic and that already some of the new motorways which we have been making, like the Meriden by-pass, are inadequate for the volume of traffic at the time that they are completed? Surely here again we can learn from the American example.
        Mr. Marples: We have studied a great deal of what has happened in America, but I should be glad if my hon. Friend would give me an example of any motorway in this country which is seriously overloaded.
        Mr. Holt: Does not the Minister accept that the rate of completion of the motorways which he is building now is deplorably inadequate? What does he propose to do to speed it up, not only in view of the information which we have already, but particularly in the light of the Buchanan Report?
        Mr. Marples: The Buchanan Report does not deal with motorways so much as with roads in the cities. Generally speaking, motorways are in between towns. With regard to urban motorways, we must be careful that we build them in the right place and in the right way, and that means traffic surveys.
        Mr. P. Williams: Is my right hon. Friend aware that most of the people who travel on the Great North Road will welcome the construction of dual carriageways as they are being constructed but that there is doubt about the construction of the bridges over the motorways? These bridges are constructed in such a way that the two lanes cannot at a subsequent date be made into three lanes. This is an unnecessary and wasteful economy.
        Mr. Marples: Technically, it is extremely difficult to build a road for only two carriageways and to extend it
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        to three. It is much better to build two or three carriageways in the first place and to leave it at that.

        M.1 Motorway (Enderby Spur)
        Mr. Farrasked the Minister of Transport by what date he now expects the Enderby Spur, connecting Narborough Road South with M.1, to be in use.
        Vice-Admiral Hughes Hallett: Spring, 1965.
        Mr. Farr:While thanking my hon. and gallant Friend for that reply, may I impress on him the urgent necessity of improving Narborough Road South which will connect with the motorway, because in its present condition it is liable to be choked with motorway traffic?
        Vice-Admiral Hughes Hallett:We appreciate that, but, as explained before by my right hon. Friend, there are statutory processes which have to be completed, and we are getting on with them as fast as we can.

        Road Accidents
        Mr. Spriggsasked the Minister of Transport if his attention has been drawn to the number of people killed and seriously injured on the roads; what steps he is taking to reduce road accidents; and if he will make a statement.
        Mr. Marples:Yes, Sir. This problem is one with which I am constantly preoccupied. During the past four years I have introduced many measures designed to improve road safety and this will continue to be one of my most important objectives.
        Mr. Spriggs: Is the Ministeraware that in the four months from July to October, 2,558 people were killed on our roads in road transport accidents and 32,941 were seriously injured? Is it not time that the Minister had another look at the Government's policy which aims at closing more stations and branch lines, and which will have the effect of forcing more people on to the roads long before our road transport system is ready to receive them? Will he undertake to look at the question of setting up a ministry of road safety, or, at the

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        least, a committee of inquiry to give this House a full report on the causes of these accidents, and give the committee real teeth with the power to make inquiries, so that we can be properly informed and the Government may have at least a policy which will reduce the number of deaths on the roads?
        Mr. Marples:No one takes the question of road accidents more seriously than I do. It is a most baffling problem. Ultimately, it comes down to the individual responsibility of the driver. I do not think the number of stations closed in the last four months has had an adverse effect, because hardly any have been closed. If the hon. Gentleman has any suggestions that I or the Government can consider to help road safety, we shall be very glad to receive them.
        Mr. Spriggs:I have made them. In view of the most unsatisfactory reply to my Question, I wish to give notice that I shall raise this matter on the Adjournment at the earliest possible moment.

        A.19–A.168 Road
        Mr. Bottomleyasked the Minister of Transport when work is to be started on the A.19-A.168 road from Tees-side to connect with the A.1 road at Dishforth.
        Vice-Admiral Hughes Hallett: The divisional road engineer is discussing with the North Riding County Council the programming of the comprehensive improvement of this route. Schemes have to be designed and Statutory Orders will be required to determine necessary realignments and diversions on some sections of the route. This preparatory work will be pressed ahead with all speed and I hope that work will start on some sections within two years and on all sections within five years.
        Mr. Bottomley: Is it not possible to push forward at a more rapid rate? This and other road improvements around Tees-side are necessary if the Government's programme for economic development is to be carried out?
        Vice-Admiral Hughes Hallett: I can assure the right hon. Gentleman that we are pressing these schemes forward as quickly as we can, and it is hoped to authorise the whole of the additional programme in the North-East in the next four to five years.
        Mr. Turton:Is my hon. and gallant Friend aware that the most dangerous section of this road is that between Thirsk and the Clack Lane End junction, and that any improvement to the north of that section will only aggravate the dangers? Will he tackle this improvement from the right end, in order to decrease the number of accidents on this road where the volume of traffic is increasing week by week?
        Vice-Admiral Hughes Hallett: That is a point that my right hon. Friend will bear in mind.

        Calder Bridge Design Competition
        Mr. Harperasked the Minister of Transport if he will give the names of the five judges who selected four designs for a road bridge to span the River Calder at Wakefield.
        Mr. Marples: Thejudges for the Calder Bridge Design Competition were—Sir Herbert Manzoni, Past President of the Institution of Civil Engineers and late City Engineer, Birmingham, who was the Chairman; Sir William Holford, Past President of the Royal Institute of British Architects; Mr. B. H. Broadbent, Chief Civil Engineer of John Laing and Son Ltd.; Mr. J. F. A. Baker, Director of Highway Engineering, Ministry of Transport; and Colonel S. Maynard Lovell, Past President of the Institution of Highway Engineers, County Engineer and Surveyor, West Riding County Council.
        Mr. Harper:I thank the Minister for that reply, but may I ask whether he thinks that this was necessary for a bridge? Can he say in which journals the advertisements for the designs were placed, and can he explain how civil servants are expected to come to a proper decision when ostensibly the experts cannot come to it? When can the public expect the winning designs to be published?
        Mr. Marples: The winning designs will be made public when they are displayed, with the unsuccessful designs, in the exhibition to be held at the Institution of Civil Engineers between 28th January and 7th February. The decision will not be made by civil servants but by me as the Minister. I am quite certain that it is good to have these competitions from

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        time to time so that new and younger designers can be given a good chance to show more adventurous designs. I think that it is wrong to continue placing designs with old-established firms without bringing in new blood.
        Mr. Harper:Why were the applicants not told to send the designs to the Minister instead of to five judges, because he could at least have selected one design instead of having four at his disposal, as he has now?
        Mr. Marples: They were examined by five individuals all of whom are very well qualified technically and only one of whom is a civil servant. The final decision cannot be shirked, because it can only be made by the Minister who it accountable to this House.
        Mr. Harperasked he Minister of Transport why he has awarded four prizes amounting to £6,000 for designs for one road bridge over the River Calder, near Wakefield.
        Mr. Jegerasked the Minister of Transport whether he will make a statement on the circumstances leading to the payment of £6,000 to be shared by four architects for designs for a bridge over the River Calder on the Leeds-Sheffield section of the M1; and who will decide which of the four designs is ultimately selected.
        Mr. Marples: In December, 1962, as an incentive to bridge design in this country, I promoted a competition for the design of a major motorway bridge over the River Calder near Wakefield. The panel of judges I appointed recommended the division of the major prize of £5,000 between two competitors.Further prizes up to £3,000 in total could be awarded at the discretion of the panel. In the event, the panel decided to award two subsidiary prizes of £1,000 each. I accepted the panel's recommendations; £7,000 will, therefore, be awarded as prizes.
        The winners are firms of consulting engineers; in one case an architect is associated with the engineers.
        The panel did not recommend which design should be selected for construction. That decision is mine. The competition conditions do not bind me to build any of the winning designs.
        Mr. Jeger:Will the right hon. Gentleman explain why it was necessary to award prizes to four architects when only one bridge is required and not four? Will he also explain why it was necessary to give a share in the major prize of £5,000 to the chairman of the Goole Conservative Association? [HON. MEMBERS: "Oh."]
        Mr. Marples: I can assure the hon. Gentleman that there has certainly been no bias that way. The matter has been decided by the five people I appointed, and any innuendo is, therefore, against them and not me. I know nothing about that. The idea of having this competition and of giving prizes is to encourage young people to concentrate on design. It is designed to encourage them and to give them a chance, and I am certain that that is the right policy to pursue.

        Accidents (Warning Signs)
        Commander Keransasked the Minister of Transport whether, in view of the increasing accidents, he will introduce legislation to compel motorists to carry warning signs in their cars, as is done in certain European countries.
        Vice-Admiral Hughes Hallett:My right hon. Friend is proposing to make regulations under the powers provided by Section 33 of the Road Traffic Act, 1962, which will authorise the use of such signs under prescribed conditions. The powers do not allow him to make the carriage of these signs in motor vehicles complusory, nor do we consider that it would be appropriate to do so before there had been some experience of their use in this country.
        Commander Kerans:I thank my hon. and gallant Friend for that reply. It is a great step forward and anything of this nature which will prove itself in the months ahead to prevent concertina-like accidents on the M.1 and other road accidents will be welcomed by the public.

        Christmas Road Accidents (Inquiry)
        Mr. Straussasked the Minister of Transport what steps he proposes to take to discover the cause and prevent the repetition of the doubling of road deaths and injuries during the Christmas period.
        Mr. G. Thomasasked the Minister of Transport (1) whether he is aware of public concern at the loss of life due to road accidents at Christmas; and what steps he proposes to take to prohibit motorists driving after drinking alcohol;
        (2) whether he will establish a committee to inquire into the relation between the Christmas road accidents and the drinking of alcohol by drivers: and whether he will make a statement.
        Mr. George Craddockasked the Minister of Transport what form the inquiry into the large number of fatal road accidents during the Christmas holiday will take.
        Mr. Gresham Cookeasked the Minister of Transport what form the special inquiry into road deaths at Christmas will take; by whom it will be carried out; whether it will take into account the questions of drink, road conditions, the wearing of safety belts, and the driving experience of the drivers concerned; and if he will make a statement.
        Mr. Marples: I have asked the Road Research Laboratory to conduct a full and detailed inquiry into the fatal road accidents during the Christmas holiday period. The investigation will be designed to establish, so far as the evidence is available, all the relevant circumstances of each accident so that a detailed statistical analysis can be made. It will cover the possible effect that drinking may have had. I must wait to see what facts the investigation reveals before considering what action to take.
        Mr. Strauss: I welcome such a comprehensive inquiry, but can there really be any doubt that the heavy incidence of road deaths during the Christmas period, which is invariable, is primarily the result of heavier drinking during the festive season? Since the Scandinavian countries, where much more drastic action is taken against drunken driving, had practically no road deaths during the Christmas period, will the right hon. Gentleman now consider adopting legislative measures similar to those operating in those countries, as my hon Friends and I pressed him to do when the 1962 Road Traffic Bill was before
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        the House, which proposals he rejected at that time?
        Mr. Marples: That would, of course, necessitate legislation. The new legislation introduced in 1962 altered the definition of drunken driving from "unfit to drive" to
        "…if his ability to drive properly is for the time being impaired".
        It required the courts to consider chemical tests and it increased the period of disqualification for a second offence within 10 years to a minimum of three years. That has been operative for nearly a year and we should see how it goes. [Hon. Members: "No."] If the report of the Road Research Laboratory shows conclusively that drink was a factor, I would not hesitate to bring proposals before the House.
        Mr. Strauss: Did the Minister say that if the report shows drunken driving as a cause of the accidents over the Christmas period he will introduce legislation similar to that in operation in the Scandinavian countries?
        Mr. Marples: If the Road Research Laboratory inquiry showed that drink was an important factor, and the power under the 1962 Act was insufficient, I would not hesitate to come forward with some proposal to the House.
        Mr. Craddock: I thank the Minister for the coverage he has given this matter, but is he satisfied that the existing regulations are being observed? Is he aware that I can take him to Whitehall at 9.30 on any morning during the week, where he will see vehicles being driven at 55 m.p.h.? I have been a driver now for 30 years. If this kind of thing is allowed to take place on our roads, are we not bound to have many accidents?
        Mr. Marples: The enforcement of the regulations is not a question for me, as Minister; it is really a question for the police.
        Mr. Lubbock: Does not the Minister agree that this inquiry by the Road Research Laboratory will not be successful in establishing whether drink is an important factor in the cause of accidents over the Christmas period, because the only statistics available are the cases where prosecutions are brought, and the police do not automatically make a

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        record that someone has been drinking when they do not subsequently bring a prosecution?
        Secondly, would the right hon. Gentleman agree that public opinion is strongly in favour of strengthening the law against drinking while driving? Has he had a chance to study the figures I sent to him, which show that the overwhelming majority of the people questioned in public opinion polls conducted in my constituency were in favour both of legislation along the Scandinavian lines and of imposing stiffer penalties for drunken driving?
        Mr. Marples: As for the first part of the hon. Member's supplementary question, it is not true that the Road Research Laboratory will not have the actual evidence before it. It will have not only the police reports, but the coroners' reports and any medical reports there may be when it goes into the cause of deaths; therefore, it will have a complete report. I have no doubt that the Laboratory's report will be better than the previous one, because the work has been started earlier and the staff there have already had experience of the work. With regard to the "Gallup poll" that the hon. Member conducted in his own constituency, I did not think the sample adequate, nor did I think the questions quite fair.
        Mr. John Hall: Would not my right hon. Friend agree that, despite the very stringent control in Sweden of drivers who have taken alcohol in extreme, nevertheless the numbers of deaths per 10,000 of population in Sweden are almost twice as many as those in this country?
        Mr. Marples: I think that I will confine my attention to this country, if my hon. Friend will permit me.
        Mr. Blackburn: Does the right hon. Gentleman think that another inquiry is necessary? Is he aware that many of us believe that he himself knows a good many of the answers, and that there are 629 hon. Members prepared to tell him any that he does not know?
        Mr. Marples: Unfortunately, there are 625 hon. Members, not 629, I think, and all of them have differing views.
        Mrs. Slater: Does not the Minister think that, while awaiting this report,
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        he should take the opportunity of consulting the Home Secretary on the great discrepancy there is between the fines imposed in different parts of the country for the same kind of accident? Is he aware that it is not only a question of the deaths of people, but of people who are injured, possibly for life, or who will suffer for a very long time because of road accidents? Would he, therefore, consult the Home Office immediately?
        Mr. Marples: I am in constant touch with my right hon. Friend the Home Secretary, and perhaps the hon. Lady will put a Question down to him.

      TRANSPORT

        Bus Services, London
        Mr. Vaneasked the Minister of Transport whether he is aware of the increasing inconvenience to the users of public transport in central London from the less frequent running of many of the more popular buses, involving ever longer waits at bus stops; and whether he will issue a general direction to the London Transport Board to ensure that the services should be run with full consideration for the interests of the travelling public.
        Vice-Admiral Hughes Hallett:We do not think this would be appropriate. Both we and the London Transport Board are aware of the difficult problems affecting its bus services at present. These are largely bound up with the board's manpower problems, which are relevant to the work of the Committee of Inquiry announced by my right hon. Friend the Minister of Labour on 20th November. The Committee is now busily engaged with its task. It presented an Interim Report in December.
        Mr. Vane:Is my hon. and gallant Friend aware that the problem is much more serious than the Answer would seem to indicate? Since Lent is approaching, would it not be a good thing if my right hon. Friend persuaded some of his colleagues to deny themselves the use of official cars so that they might appreciate at first hand what other people have to contend with?
        Mr. Mellish: Will the Minister confirm that while private motorists are using the roads in far greater numbers

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        than ever before, it is almost impossible for London Transport to arrive at any satisfactory schedule for the central part of London?
        Vice-Admiral Hughes Hallett: We are aware of this point and that is why my right hon. Friend has taken so much action, not always popular in the first instance, to establish non-parking zones, one-way streets and so forth.

      SHIPPING

        Safety at Sea
        Commander Keransasked the Minister of Transport if he will seek consultations with other Governments concerned to improve the safety arrangements in merchant ships operating from United Kingdom ports.
        Vice-Admiral Hughes Hallett:International consultations about improvements in safety at sea are carried out continuously, under the ægis of the Intergovernmental Maritime Consultative Organisation.
        Commander Kerans: Can my hon. and gallant Friend say whether the refit of the "Lakonia" at Southampton by Thorneycrofts was in all respects satisfactory in regard to safety installations and the warning system; and will he make every endeavour to conduct a full inquiry when the Greek Government have completed their inquiry?
        Vice-Admiral Hughes Hallett: The latter part of my hon. and gallant Friend's supplementary question anticipates a later Question on the Order Paper. The first part, I think, anticipates the result of the inquiry.
        Mr. Mellish:Our record in this is not very honourable, is it, since the Safety of Life at Sea Convention of 1960 has still not been implemented by this Government? Why not?
        Vice-Admiral Hughes Hallett: It has not yet been implemented because legislation would be required to do so. As the hon. Gentleman will be aware, there is a Bill before the House now for that purpose.
        Mr. Mellish: I can assure the hon. Gentlemon that the Opposition would be prepared to do anything they could
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        to help the Government get that legislation through, particularly on an important subject of this kind, which concerns safety at sea. The Government have had three years in which to implement this, so will we get this legislation quickly, perhaps in the next month or so?
        Vice-Admiral Hughes Hallett: I appreciate the fact that the Opposition will co-operate with us when the Measure comes up for its Second Reading.

        s.s. "Lakonia"
        Mr. Straussasked the Minister of Transport whether, as most of the passengers on the "Lakonia" were British, he will seek the co-operation of the Greek maritime authorities for holding either a separate British or a joint Anglo-Greek inquiry into all aspects of the "Lakonia" disaster.
        Vice-Admiral Hughes Hallett:There are no powers under which a joint inquiry could be held. It is accepted international practice that inquiries into wrecks are held by the nation in which the vessel was registered. The purpose of such inquiries is to determine the cause of the accident and, where necessary, to take disciplinary action against members of the crew.
        Witnesses can be subpoenaed provided that they are within the jurisdiction of the court. If, therefore, a British inquiry were held it might be difficult to obtain the attendance of the Greek crew, neither would the court have any power to discipline them.
        For these reasons, we consider it undesirable to hold a parallel inquiry, especially as we have no reason to doubt that the inquiry in Greece will be strictly and fairly conducted. We shall carefully consider the findings of the Greek court, after which my right hon. Friend will take any further action that may seem necessary.
        Mr. Strauss: One appreciates the technical and legal difficulties involved in holding an inquiry in this country—that is, a separate inquiry—but, since practically all the passengers were British and since there is nation-wide concern about the disaster, would it not be reasonable to ask the Greek maritime authorities to allow technical officers

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        from his Department to participate in the inquiry being conducted in Athens and, if necessary, to cross-examine any witnesses who might be called before the inquiry?
        Vice-Admiral Hughes Hallett: Arrangements are being made for the Ministry of Transport to be represented at the inquiry in Athens and also when statements are being taken from persons in this country.
        Mr. Strauss: Will the hon. and gallant Gentleman answer my point? May we be assured that the concern and allegations of British passengers will be satisfied? Surely, it is reasonable that technical officers from the hon. and gallant Gentleman's Department should be allowed to participate in the inquiry in Athens? Since that seems such a reasonable request, will the Minister put it forward to the Greek maritime authorities?
        Vice-Admiral Hughes Hallett: I take the right hon. Gentleman's point. The exact status of the representatives at the inquiry is now under discussion.
        Mr. P. Williams: Can my hon. and gallant Friend confirm that anyone who is an interested party in this matter, or any passenger who was on the ship, is having facilities made available so that they can give evidence, in London or elsewhere? Does my hon. and gallant Friend's original reply mean that the Ministry has not closed its mind to the possibility of having a further inquiry, dependent on the consequences of the Greek inquiry?
        Vice-Admiral Hughes Hallett: I can confirm my hon. Friend's first remarks. On his second point, after we have studied the results of the Greek inquiry we shall, naturally, consider holding an inquiry of our own.
        Mr. Shinwell:Is it not very difficult to intervene in what is, after all, a major responsibility of a Greek shipping line when at the present time we have a quarrel with the United States Maritime Commission, which wishes to interfere in the affairs of British shipping companies? On the other hand, is it not possible, when a foreign line is carrying a very large complement of British passengers, to ensure that when a passenger
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        ship of this character is in a British port steps should be taken by the Ministry to ensure that the safety regulations are complied with?
        Vice-Admiral Hughes Hallett: Yes, Sir. I very much agree with the remarks in the first part of the right hon. Gentleman's supplementary question. On the second part, we are bound by the Convention in this matter. I can confirm that a valid safety certificate was issued to the ship by the Greek Government and, in addition, as the right hon. Gentleman will no doubt have seen in the Press, our surveyors, by arrangement with the Greek line and other foreign lines, on occasions witness some of the tests of the lifeboats.

STEEL COMPANY OF WALES (DISPUTE)
Mr. K. Lewis(by Private Notice) asked the Minister of Labour if he will make a statement with regard to the present dispute at the Steel Company of Wales.
The Minister of Labour (Mr. J. B. Godber):I had meetings on Monday with representatives of the company and of the Amalgamated Engineering Union which led to direct discussions between the two sides yesterday. As the House will know, these talks have not succeeded in breaking the deadlock. I have met representatives of the company again this morning and have invited the union to come to see me later today.
Mr. Lewis: Is my right hon. Friend aware that both sides of the House will, I am sure, appreciate the efforts he is making to get a solution to this dispute? Is he further aware that there is a strong feeling—in the country, at any rate—that the unions reallyought to agree that this matter should go to some form of arbitration—[Interruption.]—and that if they persist in not so agreeing because they believe, as has been stated, that arbitration will not go in their favour, what they are really saying is that they will have arbitration only if it will be favourable to them in the end? Will my right hon. Friend therefore press both sides in this dispute to get back to work—because this stoppage is causing disruption of both our home and our export trade—and, after they have got

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back to work, allow a solution to be arrived at through some form of intervention by arbitration?
Mr. Godber: I am very anxious to get work started, but I think that it will be better if I do not comment now.
Mr. Gunter:Is the Minister aware—I am sure that he is—of the deep concern we all feel about the continuance of this very difficult and complicated dispute; and we wish him well in any efforts he makes today? I am very glad that he has continued the discussions during the day. I would only add, if I might, that it would be far better if hon. Members reflected a little before adding fuel to the fire.
Mr. Godber: I understand the hon. Gentleman's concern, which is general in the House. We all want to see this dispute brought to an end, but I really think that I had better not say any more.
Mr. J. Morris:May I thank the Minister for the part that he and his officers have so far played and press on him to continue to be personally interested in the matter, as he has been to date, and to ensure that there are no unjustifiable gaps to negotiations in the future and that no stone is left unturned to discover a solution to this dispute?
May I also ask him, on behalf of my colleagues and hon. Members in South Wales, to consult his right hon. Friend the Minister of Pensions and National Insurance about the widespread dissatisfaction that has so far arisen over many of the claims made by members of the A.E.U., the E.T.U. and other craft unions for unemployment benefit, particularly those employed by subcontractors, and also over claims for sickness benefits?
Mr. Godber: On the first part of the hon. Member's supplementary question, I will only say that I shall continue to do my best. On the second part, I will bring his comments to the notice of my right hon. Friend.

MONOPOLIES, MERGERS, RESTRICTIVE PRACTICES AND RESALE PRICE MAINTENANCE
The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath):With your permission, Mr. Speaker, and that of the House, I wish to make a statement on monopolies, mergers, restrictive practices and resale price maintenance.
The Government's policy of modernisation requires the promotion of the greatest possible efficiency in all sectors of the economy. Competitive trading conditions are an important element in helping to ensure that the nation's resources are efficiently used. Effective legislative measures in this field are essential if the nation is to enjoy the benefits of a high rate of economic growth and stable prices.
After a thorough review of the operation of the present legislation on monopolies and restrictive practices, the Government have reached the conclusion that this needs to be strengthened and extended.
The Government are satisfied that the "neutral" and uncommitted approach to monopoly on which present legislation is based remains fundamentally right and they do not propose to introduce into the law any presumption that monopoly or size are in themselves undesirable.
There are, nevertheless, occasions when the public and the Government need to know how a monopoly is operating in case intervention is necessary. The Government are satisfied that such inquiries are best carried out by an administrative tribunal like the present Monopolies Commission. But they have concluded that certain changes are necessary to make the Commission more effective, to give it greater authority, and to enable it to work more quickly.
With these objects in mind, the Government propose that the Commission should be strengthened and enlarged to enable it to work in groups. They also intend to enlarge their powers to implement the Commission's recommendations.
I wish to deal now with mergers. Many mergers are beneficial to the economy. They produce stronger units, economies of scale, better management,

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better research and better sales organisation. The Government do not wish to place any obstacle in the way of such mergers, or of the great number whose effects on the economy are not significant.
There is, however, a small minority of mergers which may lead to monopoly conditions damaging to the public interest. The enlarged powers to be taken by the Government to ensure that the recommendations of the Commission can be implemented should cover this type of case.
I turn now to restrictive practices. It is clear that the Restrictive Trade Practices Act needs to be amended to deal with certain loopholes which are weakening its effectiveness, for example information agreements on prices. The Government propose to close these loopholes.
As it stands, the law makes no provision for monopolies and restrictive practices in the field of services. The Government think that this legislation should now be extended to enable them to refer what I might describe as commercial services to the Monopolies Commission. They would need to take powers to deal with any practices contrary to the public interest which the Commission's reports might reveal.
The Government intend to present a White Paper dealing in more detail with the proposals I have outlined.
I come finally to resale price maintenance. The Government believe that this practice is, in general, incompatible with their objective of encouraging effective competition and keeping down costs and prices. They have reached the conclusion that resale price maintenance should be presumed to be against the public interest unless in any particular case it is proved to the contrary to the satisfaction of a judicial tribunal. They therefore propose to introduce legislation this Session designed to bring the practice to an end subject to the right to apply for exemption to the judicial tribunal to which I have referred.
The Government believe that if this comprehensive series of proposals are put into effect the economy will be strengthened, to the benefit of all sections of the community, and to the
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advantage of our competitive position in internal ional trade.
Mr. Jay: Is it not extraordinary that these very important proposals and legislation were not mentioned at all in the Queen's Speech only two months ago? Is it not even more extraordinary that it has taken twelve years of indecision by Ministers opposite and the Private Member's Bill of my hon. Friend the Member for Wednesbury (Mr. Stone-house) to get the Government to adopt proposals which we have been putting forward from this side of the House? Is the right hon. Gentleman aware that the Monopolies Commission worked in groups before 1956 and that this was altered by a Bill introduced bythe present Minister of Defence, that we opposed that alteration and that as a result of that Bill it has taken seven years to examine, for instance, the question of electric batteries for motor vehicles? Is the right hon. Gentleman also aware that Section 25 of the 1956 Act, which gives legal powers to manufacturers to enforce retail price maintenance was also introduced by the present Minister of Defence in the 1956 Act and that we on this side of the House voted against it?
Finally, is the right hon. Gentleman aware that his proposals to refer certain mergers to a public tribunal was suggested from this side of the House in the debate on I.C.I. and Courtaulds two years ago and was turned down by the Government? In view of this fantastic record, does the right hon. Gentleman not think that we ought to debate the whole of this matter very soon?
Mr. Heath: The right hon. Gentleman is quite wrong in thinking that there was nothing in the Queen's Speech in connection with these matters. The whole emphasis of the Queen's Speech was on the modernisation of the economy of Great Britain and making it more efficient and more effective. Nothing gives me greater pleasure than to know that we are to have the support of the right hon. Gentleman and his hon. and right hon. Friends in taking the measures necessary to modernise the economy in all respects. I am aware of the facts which the right hon. Gentleman has given It was perfectly well known at

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the time why the change in the Commission was made by my right hon. Friend. [Hon. Members: "Why?"] Because its terms of reference were very largely previously connected with restrictive practices, which were taken out of the Commission's hands under the 1956 Act. At that time it was believed that it was not necessary for the Commission to continue in its previous state. Therefore, after further experience it is now our conclusion that it should be reorganised and dealt with in the way I have suggested. I believe that this is necessary. I am very glad to have the right hon. Gentleman's support for the measures we are taking on resale price maintenance.
Sir J. Vaughan-Morgan: Is my right hon. Friend aware that there are very many on these benches who will also welcome his proposals, particularly those of us who unsuccessfully in debates have nagged his predecessor to take just this action? Could my right hon. Friend say whether the protective action for resale price maintenance before the courts, which is outlined, will be able to be made effective before resale price maintenance is finally abolished?
Mr. Heath:I must ask my right hon. Friend to await the actual detailed proposals in the Bill. I do not think that he will expect me to go into detailed explanation now. It would be right obviously that those trades which are applying for exemption should maintain the exemption from abolition while the case is before the court.
Mr. Oram:On the last point made by the right hon. Gentleman, may I ask whether he recalls that the investigation by the Monopolies Commission into resale price maintenance on electrical accessories for vehicles took six years? Does the right hon. Gentleman's statement not mean that anyone who practises resale price maintenance will be able to continue all the time the tribunal is investigating the case and that this means in practice that the resale price maintenance will be going on while the Government are pretending to stop it?
Mr. Heath: No, Sir. The hon. Member is quite wrong. The Monopolies Commission's investigation into a limited
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number of electrical goods in motor vehicles was an investigation into monopolistic tendencies, in the course of which the Commission came to certain conclusions about resale price maintenance. It was not an investigation into resale price maintenance as such. I do not believe that there is any comparison between the procedure I suggest here and what the hon. Member has been dicussing under the Monopolies Commission.
Mr. Emery: Does the right hon. Gentleman realise that there is great concern in industry about the way in which price leadership has been able to get round certain of the actions of the Monopolies Commission and that it will be most welcome that this is being dealt with? Will my right hon. Friend give an assurance that certain of the resale price maintenance field—and I speak particularly of the pharmaceutical field—will be thoroughly assured that their safeguards can be investigated before the action suggested by the Bill would take place?
Mr. Heath: I thank my hon. Friend for the first part of his remarks. As for the second part, that industry or trade will be in the same position as any other. It will have the safeguard under the Bill that if it applies for exemption it will retain powers of resale price maintenance until the matter is settled by the court.
Mr. Holt:Is the right hon. Gentleman aware that repentances are always welcome, even though they may be deathbed repentances? When can we expect to see the White Paper to which he has referred? If the right hon. Gentleman proposes to repeal Section 25 of the Restrictive Practices Act, will he also be making it illegal to enforce resale price maintenance at common law and bringing in Amendments to the Patents and Designs Act, 1949, which also gives protection to get round retail price maintenance?
Mr. Heath: The White Paper will be published in good time for a discussion in the House, if the hon. Gentleman so desires and can arrange it through the usual channels. Amendments to the 1956 and other Acts will be covered in the Bill and in the process resale price maintenance will become unlawful.
Dame Irene Ward:Is my hon. Friend aware that I think that he assumes too much in the way in which he has put all this to the House? Is he aware that without any guarantees about reduction of prices over a very wide field I have no intention of supporting throwing a lot of people to the wolves for pie in the sky?
Mr. Heath: I am not an authority on my hon. Friend's pie in the sky, but I would say that there is absolutely no justification for talking in terms of throwing people to the wolves. The proposals which I have put forward contain very full safeguards indeed, which I have explained to the House and which will be set out in the legislation which the House will then have the opportunity of debating. Perhaps I might say to my hon. Friend that there are very many small shopkeepers, as I think she would describe them, who are engaged in trades in which resale price maintenance is not practised and who carry on a very successful and effective living. There are many small shopkeepers engaged in trade in groceries, in which resale price maintenance has now broken down, who are carrying on a very successful, prosperous and efficient living. I therefore hope that on mature reflection she will withdraw any accusation of the kind which she made.
Hon. Members: Withdraw.
Dame Irene Ward: Why should I?
Mr. Heath: Perhaps I might tell my hon. Friend privately.
Mr. Wilson: Is the right hon. Gentleman aware that there is fairly general understanding that the splits on this matter are not confined to his back benches? We understand that his Front Bench is similarly split. Since no doubt the right hon. Gentlemen has studied the debate of 24th February, 1955, in which most of the proposals mentioned this afternoon were put forward from this Box, will he accept our congratulations on his speedy conversion to those ideas of nine years ago, and, indeed, to the points which we put subsequently on the 1956 Act? Secondly, will he tell us what he now thinks was wrong with the changes made by his predecessor which involved the Monopolies Com-
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mission in nearly seven years in reporting on the batteries case? Something must have been wrong somewhere. Will he tell us why his Department took nearly twelve months to publish that report once it was available? Finally, will he tell us the prospective date for the White Paper and for the Bill to which he referred?
Mr. Heath: I cannot at this moment give the right hon. Gentlemen the exact date for publication of the White Paper and the Bill,but it will be comparatively soon, obviously. This will give the House the opportunity of the discussion which it wants. The right hon. Gentleman referred to the points made in the debate in February. If he reads my statement carefully, and if the right hon. Member for Battersea, North (Mr. Jay) reads it, they will find that he has misunderstood part of it dealing with mergers and monopolies. I therefore suggest that he await the White Paper and that we discuss it in detail. The examination of the electrical goods for motor vehicles was very detailed and very complex, as he can tell from the size and length of the report. Nevertheless, there has been criticism for some time, not only since 1956, of the Monopolies Commission for the length of time which it took and also sometimes for the immense detail into which it went in comparison with the task which was required of it. This has been a general problem to which we have had to address our minds.
Mr. Wilson: After the eleven months which his own Department took to read and publish the report, will he tell us whether he intends to introduce forthwith a "cease and desist" order in respect of points affecting the public interest or which the Monopolies Commission reported? Will he take powers under the Act or shall we have further procrastination until finally we have a General Election and can settle these things?
Mr. Heath: There will be no procrastination and delay of action on this report. I shall make a separate statement about it.
Several Hon. Members rose—
Mr. Speaker: Order. We cannot debate this matter now.

BALLOT FOR NOTICES OF MOTIONS
  Road Accidents
  Sir H. Harrison: I beg to give notice that on Friday, 24th January, I shall call attention to the serious loss of life and limb on our public roads; and move a resolution.
  Tariffs
  Mr. Proudfoot: I beg to give notice that on Friday, 24th January, I shall call attention to the need to lower tariffs; and move a resolution.
  Machinery of Government
  Mr. John Page: I beg to give notice that on Friday, 24th January, I shall draw attention to the machinery of government; and move a resolution.
BILL PRESENTED
  FAMILY ALLOWANCES AND NATIONAL INSURANCE
  Bill to extend the meaning of the word "child" in the Family Allowances Acts, the National Insurance Acts and the National Insurance (Industrial Injuries) Acts, to increase widowed mother's allowance and certain other benefits under the National Insurance Acts and the National Insurance (Industrial Injuries) Acts paid in respect of or by reference to children, to require the disregard of part of any such benefit in arriving at the amount of a national assistance grant, and for certain other purposes, and to relax the earnings rules relating to widow's benefit and retirement pensions, and for connected purposes; presented by Mr. Wood; supported by the Prime Minister, Mr. Noble, Sir E. Boyle, Mrs. Thatcher, and Lieut.-Commander Maydon; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 60.]

  SHIPBUILDING CREDIT BILL
  Order for Second Reading read.
  3.57 p.m.
  The Minister of Transport (Mr. Ernest Marples): I beg to move, That the Bill be now read a Second Time.
  We have two Bills before the House today, and I will try to be as brief as possible in order to give hon. Members on both sides of the House a chance to participate in the debate. I will first explain the purpose of the Bill. It is to give me as Minister specific powers to lend money on favourable terms to United Kingdom shipowners to finance the building of ships in United Kingdom yards. There is a stated limit to the sums which I can lend and also a time limit. The Bill flows from the Shipbuilding Credit Scheme which was announced on the 29th May, 1963, and in fact the scheme has been operating since that date. This legislation gives me specific authority to make loans under that scheme.
  Why did the Government decide on this particular scheme? Because of the increasing difficulties our shipbuilders faced. There were two reasons for those difficulties. The first was the enormous growth of shipbuilding capacity throughout the world, and the second was the long depression into which world shipping fell six years ago. At the end of 1958, our shipbuilding industry had on hand two years' orders for merchant ships on which work had not begun. At the beginning of 1963 there was only about six months' work. Orders were very unevenly spread and yards were beginning to close down.
  Clearly something had to be done to tide the industry over this crisis, and one method widely canvassed at the time was scrap-and-build. There was a scrap-and-build scheme before the war, but precedents can be good or bad, and I believe that that precedent was definitely bad. One reason why we did not want scrap-and-build was that it involves an outright general subsidy, and this is not desirable. For a long time we in this country have been saying that we deplore the payment of subsidies in some other countries. How could we continue our efforts to stop their

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  subsidies if we ourselves started paying them? Some people argued that the purpose of the scrapping element was either to promote new building or to counter criticism that subsidising building without scrapping would increase the world surplus of tonnage and thereby prolong the shipping depression. But scrapping on a national basis could not have affected the world surplus, at any rate not enough to bring about an increase in orders for new ships. In any case, the British merchant fleet was already reasonably modern. The Government therefore decided to provide a sharp, once-and-for-all stimulus to building by offering long-term loans to owners at Government lending rates.
  I now come to the form of the scheme. First, it is restricted to United Kingdom owners. We decided against lending money to foreign owners, because that might well have given a new impulse to the international credit race and in any case foreign owners already enjoy special export credit facilities if they build here. Our purpose was to stimulate orders by United Kingdom owners who are such very important customers for the United Kingdom shipbuilding industry. Secondly, we excluded fishing vessels, because the owners of fishing vessels are eligible for help under other schemes which come within the responsibilities of my right hon. Friend the Minister of Agriculture, Fisheries and Food. Thirdly, we excluded ships of less than 100 gross tons. This was because the demand for small craft has been and still is quite high.
  Mr. E. Feruyhough: In restricting loans to United Kingdom owners, has the right hon. Gentleman also specified that the orders must be dealt with in British shipyards?
  Mr. Marples: Yes.
  I now turn to the way in which we handled applications for the loans. To get expert advice, we set up the Shipbuilding Credit Advisory Committee, under the chairmanship of Lord Piercy, to advise me as Minister. I am grateful to Lord Piercy and his colleagues for their very skilled and penetrating advice. The Committee advised on the merits of each application for a loan, the credit-worthiness of the applicants and the security available. We for our part had
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  to strike a very careful balance between the promotional requirements of the scheme and the need to protect public money.
  The promotional value of the scheme has been oar ability to offer loans of up to 80 per cent. for 10 years at Government lending rates of interest. On the other side, the Advisory Committee took into account the general reputation of the prospective borrower, his managerial efficiency, his past record of earnings and the likelihood of similar future standards of performance. The basic security which we have asked for has been a mortgage on the ship to be built and in some cases an additional security, usually a lien on another ship, a guarantee from a parent company, or a promise of employment for the ship, such as a long charter.
  We also made sure in each case that the ship would be built straight away. The reason for this was that our aim has been to get work for the shipyards now. Apart from the new Cunarder, we were not interested in projects to begin in 1965 or later. The problem was immediate and required an immediate solution. It is particularly appropriate that one of the first ships to be built under the scheme is being launched today in Sunderland. I shall expect tributes of gratitude from my hon. Friend this Member for Sunderland, South (Mr. P. Williams) in due course.
  All the provisions which I have described are covered by Clause 1. Clause 2 deals with finance.
  Dr. J. Dickson Mabon: The Minister said—and it is important that this should be explained on Second Reading—that he was not interested in what the position would be in 1965 and that that was the reason for the limitation. Would he explain his prognosis of the industry in 1965 and 1966 which enabled him to say that?
  Mr. Marples:I am coming to that later. What I tried to convey was that the shipbuilding industry was facing a crisis of a sudden drop of orders and of unemployment in the shipbuilding areas. The first thing to do was to get immediate orders projected into the shipbuilding industry so that ships could be built to provide employment and the yards made busy and then there could

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  be a survey of what remedial measures could be taken to meet the present fierce competition. The first thing to be done was to get orders. I will later deal with the position in 1965. The purpose of the Bill was to provide immediate and not long-term relief for the shipyards. That is the point I was trying to make.
  Clause 2 covers the financial arrangements. The money for the loans will come from the Consolidated Fund. This is normal. Up to now we have used the provisional authority of the Appropriation Act. This arrangement will enable me to remunerate the Ship Mortgage Finance Company which provided valuable and expert service to Lord Piercy's Advisory Committee. This arrangement also gave me authority to enter into commitments with borrowers, though no loans will actually be made under its authority. All the loans will be made under the authority of the Bill when it becomes an Act.
  I should now like to refer to the progress of the scheme. The shipping and shipbuilding industries have welcomed it. Last May, I said that initially £30 million would be made available, but applications soon exceeded that amount and in July the amount was increased to £60 million. In October, I announced the loan for the new Cunarder and an increase in the money available to £75 million. Applications have been received for all this. There is still some work to do on the later applications, but very shortly the last loan offer will have been made and accepted. This will provide the shipbuilding industry with about 850,000 gross tons of new building. So much for the volume of orders.
  I want now to spend a short time discussing the scheme's effect on the shipping industry and to discuss the types of tonnage ordered. This is most interesting. I cannot yet give absolutely accurate figures of the result of the scheme, but, apart from the new Cunarder, which is a special case, the most interesting feature of the tonnage ordered is the predominance of bulk carriers. These amount to more than 500,000 gross tons. Tankers account for another 150,000 gross tons and cargo liners, which are rather more complex and expensive, for nearly 120,000 gross
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  tons. The rest is made up of many types—small coastal and short sea vessels, tugs, dredgers and so on—adding up to about 22,000 tons.
  Although the scheme was intended primarily to help the shipbuilding industry—giving loans to ship owners was merely a method of helping ship builders; in my view, the best method—it also helped shipowners to maintain the modernisation of their fleets. Successful applicants have been free to place their orders with the builders of their choice, which is important, for it is no part of my job to tell shipowners where to place their orders. Some builders have done much better than others, which is only to be expected because they are more modernised and have better capacity, better productivity and so on. However, it is satisfactory that the share of the total tonnage under the scheme gained by the principal shipbuilding areas is roughly in proportion to their share of the industry's total capacity.
  I should now like to refer to the scheme's effect and likely effect on the shipyards over the next few years. In June, 1963, that is, before any work had started on credit scheme orders, about 1 million gross tons of merchant ships were under construction and about 53,000people were employed. If the rate of ordering of recent years had continued, it seemed more than likely that employment on merchant work would fall to about 44,000 by March, 1964, and to below 30,000 a year later. That would have been a tremendous drop in the number employed.
  We think that by March this year work will have started on more than three-quarters of the tonnage financed under the scheme and something approaching 1,500,000 tons of merchant shipping altogether will then be under construction in our yards. This level ought at least to be maintained for the remainder of this year and into next and employment on new building should rise quite rapidly as well, I would think to around 70,000 by the spring, and should be at least maintained at that level for the following 12 months. I want to be fair about this and not claim the whole credit. Since the credit scheme was introduced, there has been a slight improvement in general trading

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  conditions for shipowners all over the world. The improvement has been with us for too short a time to be sure that it will continue, but there are already signs that it is leading to some revival in the rate of ordering of new ships, and I have made some allowance for this in the estimates which I have just given.
  Mr. Paul Williams: I should like to check my right hon. Friend's figures. Did he say that 53,000 people were employed in the industry before the scheme and that by March 1964, as a consequence of the scheme, the number will have risen to 70,000?
  Mr. Marples:Yes, those two figures are correct. It would have gone down to much below 53,000 if we had not introduced the scheme, but now it should be 70,000 by the spring, which is very much more than before the scheme was introduced. I cannot predict how things will go after about the spring of 1965—this is the point made by the hon. Member for Greenock (Dr. Dickson Mabon). That is as far as we can get with firm prospects at the moment. It all depends on the prospects as the shipowners see them from now on, because the prosperity of our shipbuilding industry is inevitably tied up with our shipowning industry.
  There is one thing of which I am certain. If it had not been for the shipbuilding credit scheme, the fall in shipyard employment would have continued much further. As it is, the tide has been turned and the industry has been given a breathing space. Some people have wondered why no more loans are to be offered to shipowners. I think that they have misunderstood the purpose of the whole scheme. It has been so successful that, together with the improvement I have mentioned in what I might call the natural rate of ordering, the level of activity in our shipyards will soon be at a level greater than the industry may be able to sustain in the long term.
  It is no good for the nation, or for the shipbuilding industry itself, to prolong artifically an excess of capacity by continuing a scheme like this for too long. One of the biggest problems the industry faces is to reshape itself so that its production units can keep their order
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  books reasonably full. Only then will there be real security of employment, and, quite frankly, I believe that that is one of the keys to the future of this industry.
  Mr. Bruce Millan: Can the right hon. Gentleman be a little more specific about that and say what he would aim at in terms of annual tonnage for the industry?
  Mr. Marples: I am not going to be more specific at this stage, because I cannot predict further than the spring of 1965. All I can say is that we do not want an industry which has a tremendous volume of orders one year and none the next. We must have continuity, and this industry will have to be reshaped so that all its production units can keep their order books reasonably full. The purpose of the scheme was to provide a breathing space for the industry to take time to perform that very task. That is a job for the industry. It is not a job for me. If it asks for my assistance, I shall do what I can to help, but it is a private enterprise industry, and it is up to the industry to see what it can do.
  Finally, I have a word or two to say about the future of the industry. I would be misleading the House if I gave the impression that the Government thought that the considerable difficulties which the shipbuilding industry has had to face in the past two years, and which it is facing now, are over. They are not. A great deal will depend on how the improvement in shipping prospects continues. It is clear that non-credit scheme orders from United Kingdom owners came in at a better rate in the year as a whole than at any time since the depression set in. The improvement began in the third quarter of the year, and was more marked in the last quarter. Export orders were higher in 1963 than for years past, and I think that the industry should be congratulated on that. There were very valuable contracts among them.
  Competition between yards in this country, and between home and overseas yards as well, is likely to remain very fierce. For large tankers the pace has undoubtedly been set by Japan. She has emerged as one of the most powerful shipbuilding forces in the world for

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  tankers, and even Swedish builders, who are formidable competitors any way, are having to cut prices to the bone to compete with Japan.
  In those circumstances, our builders are likely to have to go on quoting very keen prices, and this means that they must do everything they can to cut their costs. I do not for a moment suppose that there is any easy solution or any short cut. I think that the builders must examine all the elements of the cost of a ship and reduce them all as far as they possibly can. This may involve a radical reshaping and concentration of the yards themselves, and, just as important—or perhaps even more important—of the shops where the engines are built. It means finding ways of cutting costs of the materials and equipment which go to make ships. This will not be easy, for these costs are largely outside the builder's direct control, but all the same, having studied and lived with this problem for more than four years, I believe that there are possibilities. This may involve the owners being readier to accept the builders' proposals than they have been in the past, and there may be other ways in which owners and builders can collaborate in this. We have the Shipping Advisory Panel with a lot of distinguished shipowners on it, and I hope to get advice and guidance from the panel as to what assistance we in the Ministry can give to bring about the desired state of affairs.
  I come next to the labour situation. This is a subject with which employers and unions have been wrestling for over two years in a working party under a Ministry of Labour chairman. I make no secret of the fact that progress has been disappointing and distressingly slow. I hope that with the recent settlement on pay and hours it will be possible for both sides to get somewhere. I am sure that it is as much in the interests of the men themselves as of the management that this should happen. Indeed, it must happen if this industry is to be healthy and vigorous in the years to come.
  With this competition from Japan, from Sweden, from Germany and from Holland, we cannot afford any inefficiency, and what is frustrating and distressing is that when one goes round
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  the shipyards one sees men who individually are highly skilled craftsmen, but yet, for some reason or other, we cannot get this harmonious relationship whereby we can get flexibility of labour. I beg the men and the employers to get together on this point if they wish to face and beat the competition from abroad.
  But all this is for the industry itself to tackle. It is not for the Government to tell the industry how to run its business. If the industry asks for our assistance, we shall do what we can to help. What we have done is to secure a breathing space at a time when fortunes had been brought dangerously low. This has enabled the industry itself to look up from its immediate preoccupation with survival and get employment going—in fact to increase it—and get ready for the future. I am sure that the shipbuilders recognise this, and that being so the shipbuilding credit scheme has served its purpose.
  I know that many hon. Members wish to take part in the debate, and I have deliberately kept my contribution short because we have a short debate. I should like the shipbuilding industry, both employers and employees, to know that in this Bill the Government made a sincere effort, which, as it happened, was successful, although doubts were expressed when I made the first announcement of it in this House. I hope that the industry will use this breathing space to get down to the question of the right size and shape of the industry, and to the question of improving its efficiency. If it does that, we in the Government will play our part.
  Many of the Bills which I introduce are controversial. This is one of the shortest and simplest of the Bills that I have brought in, and I think that it is one that will not arouse a great deal of controversy.
  Dr. Mabon: That is what the right hon. Gentleman thinks!
  Mr. Marples:I am sorry, but hope springs eternal. I always try to be non-controversial, but from time to time things happen which do not allow me to be that. I was hoping that all hon. Members would vote for the Bill; that they would think it was a good scheme, and would give me advice and guidance,

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  and at the same time perhaps give some to the shipbuilding industry. With those few words, I hope that the House will give the Bill a Second Reading.
  4.18 p.m.
  Mr. Frederick Willey: I am sure that on reflection the right hon. Gentleman will be bitterly disappointed with his speech. He has given us a few platitudes. He said that he had lived with this problem for four years. That being so, and knowing how desperately important this is, we had expected something constructive.
  Having said that, I at once take advantage of the rare opportunity which I am afforded on this occasion of welcoming the Bill; of welcoming something that the right hon. Gentleman has done. In fact, I have every reason to do that, because when we last discussed shipbuilding in 1962 I suggested it. In that debate I said, first, that the yards had a year's work ahead and that within that period something would have to be done. Secondly, I called attention to the low rate of orders from British owners and said that it was about half the normal replacement rate. Thirdly, I said that I was convinced that the position was not unrelated to credits. Fourthly, I called attention to the advice of Lord Piercy and said that he had pointed out that the competition from foreign yards did not seem to be due to prices or delivery dates but to the financial facilities they provided.
  Fifthly, I then welcomed the action which the Government had taken to persuade foreign owners to put in orders to British yards, by giving them facilities comparable with those which they enjoyed abroad, but I said that this aggravated the position of the British owner. Sixthly, I said that this was important to British shipyards, because 80 per cent. of the orders coming to them came from British owners. Seventhly, I said that in this situation British owners would refrain from putting in orders to British yards, and I concluded by pointing out that in the very sensitive and difficult twelve months that lay ahead of us British shipowners might continue to hold back, at a time when, in the national interest, it was necessary to encourage the placing of more orders.
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  The right hon. Gentleman then rejected all those propositions, and that argument. Now, very late in the day, he has taken action. When I say "late in the day", he should not smile, because the shipbuilding districts went through a desperate winter in 1962–63. We finished 1962 with completions standing at a figure 350,000 tons lower than the year before. We have not got the figure for 1963, but we believe that it may be just below 1 million tons. In other words, the level of output of British shipyards has been drastically changed in the past eighteen months, through the inaction of the right hon. Gentleman. Action could have been taken eighteen months ago when we called for it.
  Nevertheless, in this changed situation we welcome the aid that is afforded. I am sure that no one will make any point about this being retrospective legislation. Once the announcement was made it had to be implemented, or the position would have deteriorated, as the right hon. Gentleman said. But we expected far more from him today, because as he has said, this Bill offers only a breathing space. We feel that the right hon. Gentleman should have been more encouraging than merely to say that this is a once-for-all provision, without any reference to what is to be done in the breathing space.
  The right hon. Gentleman said that this Bill will provide temporary relief. I agree that it will provide sufficient relief to see the Government over the General Election, whether it comes early or late in the year, but it will do little more. He said that it will provide temporary relief to a hard-pressed industry, but his reference to a "hard pressed industry" is something of an under-statement. Since 1951, when his Government took office, there has been a catastrophic change in two of Britain's greatest industries—shipping and shipbuilding. When the Government took office the British mercantile fleet represented 20 per cent. of the world's fleet; it now represents only 15 per cent. The position has been entirely changed as a result of the development of flags of convenience, flag discrimination and all the other discriminatory practices.
  The Minister has said that shipbuilding depends on shipping. We have appealed to him to produce enabling

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  legislation, not for the purpose of retaliation but to negotiate on a level with those against whose actions we are protesting. He has said nothing about this. I acknowledge the action that the Minister has taken, but I also recognise that the shipping industry has called upon him to take further and firmer action. He has said nothing at all about that, and until he does so there will be disquiet in the industry.
  I now turn to the shipbuilding industry. When his Government took office we were the greatest shipbuilding country in the world. We have lost that position overwhelmingly to Japan. When his Government took office British yards provided 37 per cent. of the world's output. In 1962, the figure dropped to 13 per cent., and in the past year it will have undoubtedly dropped lower still. It dropped in 1962—and this is the important thing—when there was no crisis in world shipbuilding. World shipbuilding output increased in that year by 2½ million tons. That was when he rejected our appeal to provide credit facilities which could have tided us over that difficult year. I believe that he has deliberately reduced the level of output of British shipbuilding in the past eighteen months.
  If we remember the situation that existed before this Government took office we must regard the situation which obtained until recently as almost inconceivable—a situation in which the United Kingdom became the largest importer of new shipping in the world. Fortunately, that situation does not obtain today, but we are still fourth among importers of new shipping. Over 300,000 tons of our shipping is being constructed abroad for British owners and we now have 64,000 fewer workers in the industry than when the Conservatives came into office in 1951. In all our shipbuilding areas there is heavy unemployment, and the hon. Member for Sunderland, South (Mr. P. Williams) and I know that our town is not even recognised as a growth area.
  In these circumstances we naturally accept the Bill, and what has been done in anticipation of its provisions, as a breathing space, but we want to know what will be done during the breathing space. All that the right hon. Gentle-
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  man has mentioned is contraction. If he mentions contraction he must be more specific. He cannot go on talking continually about contraction and then expect a positive response from the industry.
  This is particularly important, for two reasons. During the summer Mr. Westphal, the chairman of the Association of German Shipyards, said that discussions were proceeding successfully for a scheme for the reduction of shipbuilding capacity. He said that these discussions had proceeded well in Europe, but that their success would depend upon the co-operation or non-co-operation of the Japanese. The right hon. Gentleman said nothing about this. I should like to know what is happening. If there are any cartel discussions about the reduction of an industry such as British shipbuilding we want to know about it.
  We know that the Minister's Department produced a scheme for the contraction of British shipbuilding, and we also know that it did not receive Cabinet approval. I believe that it was a two-phased scheme. This is relevant in present circumstances, because the second phase was to discourage orders being given to inefficient yards and, after a period, to close those yards. Only after that was consideration to be given to the question of aid to efficient yards.
  Mr. Marples: The suggestion that a scheme was proposed by my Department and was rejected by the Cabinet is a complete figment of the hon. Member's imagination.
  Mr. Willey:I will give the right hon. Gentleman the source of my information after the debate. However, I am partly obliged to him for saying this. I would like him to tell us—if he contradicts what I say—what was proposed by his Department.Is it a fact, then, that it has proposed nothing at all? I was being more generous to his Department. I understood that it had prepared a plan, but that it had not obtained Cabinet approval. In a sense, it is more disturbing if we have got no plan than if we have got a specific plan, because time after time the right hon. Gentleman has taken the easy course by saying that we should have more flexibility in the industry. He asks us

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  to consider what has been accomplished in Sweden. There is a big difference between Sweden and this country. In Sweden the worker has security. If we want flexibility in British shipbuilding we must create an established labour force, and for that we need a plan.
  It may be that this factor is exaggerated, but if we are to obtain the necessary response it is the right hon. Gentleman's responsibility to see that a fairly clear idea of the future of British shipbuilding is presented, and that we all know what its capacity is envisaged to be. Once we have that information we can obtain security for the workers, and then the greater flexibility which he wants.
  It is also necessary to do something about providing alternative work. I have already referred to my constituency. We have had heavy unemployment in our shipyards, but in the Government White Paper on the North-East it is made clear that Sunderland is not in a growth area. This does not provide the prospect of alternative work, and if there is contraction we must have this in order to create this sense of security.
  There is the question of bringing alternative work into the yards. This is not only a question of providing alternative employment. It is also a question of costs. Today I am in a welcoming mood. I pay credit to the Minister of Public Building and Works for what he has done. But it is minimal. It is a beginning. A few weeks ago the right hon. Gentleman said that he had set up three inquiry centres and that there had been 30 inquiries from shipbuilders. As one might expect, a shipbuilder in the North-East has set the pace. A subsidiary company has been set up in co-operation with the builders. This is only a start and more will have to be done.
  The Japanese are giving a lead. They are not complaining of a lack of orders. They are using their plant for dual purposes, for the construction of machinery, bridges and other things. This is a factor which has to be brought into our yards if we are deliberately to set out, as is conceded by everyone, to try to bring down building costs. These are the sort of things about which I expected to hear from the Minister. When he made a
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  statement in May of last year, I mentioned two things. One was the type of ships—the Minister has referred to that—and the nature of the orders put in, and the other was the general reorganisation of construction.
  Something is being done about the type of the ships. We talked about that years ago. We have the building of standard ships and batch production, and credit is due to firms like Swan and Hunter for what they have done. But this is something which should be pursued more vigorously. Reorganisation of construction is cardinal. Sir William Lithgow, who has set a good example himself, said that success in shipbuilding lies in management, and that is very true. We need a better lead for management planning particularly at the most difficult stage of fitting out. The Patton Report, to which the right hon. Gentleman did not refer, said that there was little experience of effective outfit planning in this country. I give credit to what the B.S.R.A. is doing at Fairfields. But more ought to be done. The position regarding shipbuilding is so difficult and desperate that it is not good enough to say that something is being done. It is a question of whether we are doing something with sufficient vigour and energy.
  It is not only a question of the organisation of yards and management planning—the right hon. Gentleman touched on this—but also it is a question of looking forward and thinking about the operational costs of a ship. Something is being done about that. But it is not enough, and it is being done very late. We are far behind countries like Japan. More research is required into the efficiency of loading and unloading and getting a shorter turn-round time, and into the carrying capacity of ships. I mentioned operational costs. The Japanese have set the pace. We have heard their claims about the automatic freighter. If the right hon. Gentleman has been faced with this problem for four years it is no use now shrugging off responsibility. It should be his purpose to promote and encourage the necessary research and development. It was alleged the other day that a British builder using British components would add 7 per cent. to the cost of a ship. We must pay more attention to the com-

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  ponents and design and to their efficiency and cost.
  The right hon. Gentleman mentioned the engine sector, the Achilles heel of British shipbuilding production. But he said little about it. The other day the Minister for Science suggested that we ought to have a development contract to speed up the work on an all-British high-powered marine diesel. The right hon. Gentleman did not mention that. Did not he know about it? Is there no co-operation and co-ordination? In debates over the last ten years we have discussed development contracts of this nature. We ought not to be dependent on the Swiss and the Danes. That is something about which the Government cannot abrogate responsibility. The right hon. Gentleman has travelled abroad and ought to appreciate that in countries like Japan, France, West Germany and Sweden there is public interest in a great national industry.
  The right hon. Gentleman has not referred to nuclear propulsion. This is still in an unholy muddle. The Minister loves undertaking personal responsibility, and so I invite him to take personal responsibility for seeing that this matter is put right. The Atomic Energy Authority and the industry are not working smoothly together. It is not a case of being out of sight of the development made by Russia and America. We now know that we are a long way behind West Germany. The West Germans will have their nuclear propelled shipping operating by 1967 at the latest. It is not only a question of Russia, the United States, Germany and Japan, but also other European countries.
  So far as one can see Europe is going nuclear in respect of shipbuilding. There are developments in Norway, Italy, Denmark, Sweden, France and the Netherlands. Yet we are still held back because of indecision and an inability to place responsibility anywhere. That is why I invite the right hon. Gentleman to accept responsibility. Let us have someone who is responsible. In shipbuilding and shipping it has always been true that the means of propulsion are all-important. If there is a chance of shipping going nuclear, as it is obvious
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  that many of our competing shipbuilding countries believe, we must always be in the van in order to retain our place. These are things about which we expected to hear from the right hon. Gentleman. They are the things which determine the future of the industry and the position it will occupy after the General Election.
  The right hon. Gentleman has talked about credit. This immediately accentuates the importance of price. I have been talking about matters which affect the efficiency of the industry and therefore affect price. There is one thing that affects price more than anything else and that is steel. It is the most expensive material item in shipbuilding. My hon. Friend the Member for Edmonton (Mr. Albu) raised the question of steel in our last debate. Prejudicial practices regarding the steel industry affect the shipbuilding industry, and there is reference to that in the Patton Report. I should like to know how effectively these things have been straightened out.
  More important is the price of steel. Mr. Allan J. Marr, president of the Shipbuilding Conference and the head of one of the yards in my constituency, said that some foreign countries are able to buy steel at prices substantially less than those in Britain and the difference has been as much as £7 a ton. The right hon. Gentleman spoke about Sweden. We know that the Swedes are getting cheaper steel from the Poles. This represents a dramatic change in the competitive position of British shipbuilding. A great advantage which British shipbuilders have always had was the benefit of cheaper steel than could be obtained by foreign yards with whom they were competing. There was a time when the price differential was as much as £20 in our favour against the Swedish shipyards.
  We are approaching a General Election and the right hon. Gentleman may as well face the fact that this is a political question. The British shipbuilding industry has been the victim of the denationalisation of the steel industry. As the Minister will know, I have said this repeatedly in my constituency and it has been raised during election after election. This is a fact. The Government denationalised the

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  steel industry and the increasing price of steel was an inevitable consequence. What was once the great advantage of the British shipbuilders has been translated into a disadvantage. Our steel industry is in production units smaller than in any competing steel industry in the world. It has been broken up and this is reflected in the price. We have had this unfortunate period of redundancy in the steel industry where the smallest unit carrying the heaviest redundancy has determined the price of steel. Shipyards have suffered. One of the most important factors when we are thinking of the costs of ships built in British shipyards has been the rapid increase in the price of steel.
  If we turn to the industry and what can be done in this breathing space, we have had nothing from the Minister in either fields. He has complained that we are competing with subsidised production but has not mentioned anything that he has done to ensure that we compete on level terms. He said that because there is unequal competition he cannot take any action about "scrap and build" because it would mean subsidy here.
  What about Soviet orders? Massive orders have been placed in Japan by the Soviets. We have had the satellite countries—Roumania, Czechoslovakia, East Germany and Bulgaria—placing orders. But none of them seems to be attracted to this country. Perhaps the Parliamentary Secretary will deal with this. What the Minister cannot do is to ride two horses—say that he cannot take any action which might involve a subsidy because foreign shipbuilders are subsidised and at the same time take no action about subsidisation by foreign countries.
  With regard to "scrap and build", the situation facing us is depressing. There have been a long series of discussions between the Minister and interested parties. The Minister has discussed the subject with shipping and shipbuilding interests and with the Trades Union Congress. The Trades Union Congress suggested that we should stabilise shipping at 20 million tons and accept a 5 per cent. replacement rate and ensure this by extended credits. If the Minister rejects these proposals, it is for him to produce others. I agree with him that
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  the British mercantile fleet is a modern one, but 2¼ million tons are more than twenty years of age. There is the ridiculous position of selling the old tonnage abroad and further depressing freight rates.
  We know that the French will be introducing a "scrap and build" scheme this year. If the right hon. Gentleman rejects all he proposals made to him, it is up to him to make his own suggestions. We cannot afford to say very late in the day after shipbuilding has been very seriously run down that we have given it a breathing space. What we want to know is what lead the Government are giving during this relatively short space of time which will in any case be interrupted by a General Election. The shipbuilders are suggesting that the scheme has been cut off prematurely and should have been continued. The right hon. Gentleman has aggravated the position by shrugging his shoulders and saying "It is a once-and-for-all. I have no further responsibility."
  It is in this sense that the Minister's speech is disappointing. It will be a serious matter for shipbuilding if after the General Election the right hon. Gentleman still occupies his present office. I hope that for both these great industries—shipping and shipbuilding—the General Election will ensure one thing if notaing else, that the right hon. Gentleman, who has failed to face up to his responsibilities, will no longer be responsible for them.
  4.44 p.m.
  Colonel Sir Leonard Ropner: It seems to me that if the Minister of Transport had dealt even shortly with all the subjects which the hon. Member for Sunderland, North (Mr. Willey) asked him to deal, we should have been here all night, unless, as I think highly probable, Mr. Speaker had ruled my right hon. Friend out of order
  I ought to proclaim my personal interest in the Bill. I am not a shipbuilder but I am a shipowner, and in that capacity I have made use of the shipbuilding credit scheme, the main purpose of which, as my right hon. Friend has said, was to bring more employment to the shipbuilding industry.
  In the early weeks of last year the outlook in many of our shipyards was

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  pretty bleak, and the consequence of high unemployment in the yards was, of course, made all the more serious because so many of them were situated in districts where the level of unemployment was much in excess of the national average when the credit scheme was introduced.
  No doubt the Minister of Transport had in mind also the fact that our shipbuilders are open to the direct competition of foreign builders who, directly or indirectly, in one form or another, are in many cases subsidised by their Governments. Certainly the scheme has stimulated the placing of orders for new ships in the United Kingdom by British owners, although I must add that it is impossible to determine the extent to which owners have been encouraged to place orders because of the credit scheme or, alternatively, by the improvement of the level of freight rates which went on over the last three quarters of last year. However, I think it will be found when the figures become available that in terms of tonnage about 40 per cent. of the 1963 orders are ships making use of the credit scheme. But, of course, it does not follow that if an owner used the credit scheme he would not have ordered a ship if no credit scheme had been available to him. It is certainly the case that without this stimulus of participation in the credit scheme foreign shipowners have recently placed many orders, particularly for those classes of ships which I think the Minister of Transport mentioned—namely, large tankers and large bulk carriers, dry cargo vessels.
  Some new orders from foreign owners have been secured by British builders in the face of very keen competition from foreign builders, who, as the hon. Member for Sunderland, North has reminded us, have had the advantage of being able to obtain cheaper steel supplies. This fact should be noted in South Wales today. The price of steel is the most important factor in the price of a ship, and a saving of only £5 on each ton of steel which goes into the construction of a 70,000 ton deadweight tanker represents a reduction in the cost of construction of £100,000. An order for a ship can be won or lost by a British ship-
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  builder for a very much smaller sum than £100,000.
  It seems too absurd for words, but it is nevertheless true, that until the credit scheme became operative a foreign shipowner who placed an order for a ship with a British builder was able to obtain from the British Government through export credit guarantees more advantageous credit facilities than a British owner. The Financial Memorandum of the Bill says:
  "…loans will not impose any eventual burden on the Exchequer."
  Why then, I ask the Minister, bring this credit scheme to an end in May of this year? I understand that the whole permitted total of £75 million has already been pledged or very nearly so. Therefore, no more loans can be authorised unless the sum available is increased. So the Government credit for British owners to build ships in British yards has dried up. Once again. British owners will be placed in a disadvantageous position by the Minister of Transport because for British owners the shipbuilding credit scheme will have gone but for foreign owners credit facilities through export credit guarantees will remain. To me, and. I would have thought, to most people, this seems completely potty and altogether wrong. Why should foreign owners be assisted to a greater extent than British owners by our Government?
  If the Minister of Transport is really going to allow this, I should like the Parliamentary Secretary to tell us why it is to be allowed. In any case, is it not unwise to terminate the shipbuilding credit scheme before the Government, the shipowners and the shipbuilders have really learnt its potential in helping owners and builders? We really do not know whether that potential has been exhausted. I should be grateful if the Parliamentary Secretary would give me an answer to that question.
  I conclude by referring very briefly to the future prospects of the shipping and shipbuilding industries. As has already been said, the shipbuilding capacity of the world is far in excess of normal demands, and sooner or later there must be contraction. No doubt British shipbuilders will not wholly escape from this painful process. British shipowners are the best customers of

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  our shipbuilders, but of world tonnage the proportion flying the Red Ensign grows ever less. Trade reservation in favour of their own ships, other forms of flag discrimination, subsidies and the use of flags of convenience—all these practices are pursued by foreign Governments and foreign shipowners, and they are spreading and growing in intensity. There are sections of the British Merchant Navy for which the outlook is pretty dismal, and it seems that there will be ever-lessening orders for the shipbuilders after the period covered by the provisions of the Bill, as the hon. Member for Sunderland, North said.
  The scheme has certainly been of assistance, but it will not solve the long-term problem of either shipowners or shipbuilders. I reinforce what the hon. Member for Sunderland, North said by expressing the hope that quite soon the Minister of Transport will give further thought to shipping and will let the House know what are his proposals for dealing with a problem which is already urgent and which may be far more urgent only two or three years ahead.
  4.56 p.m.
  Dr. J. Dickson Mabon: I agree with practically everything said by the hon. and gallant Member for Barkston Ash (Sir L. Ropner), but I disagree with his last remarks because I do not feel that the present Minister of Transport is the man to give us a new vision of the shipbuilding industry of tomorrow. He demonstrated that in the debate today.
  Mr. Marples: The reference was to shipping.
  Dr. Mabon: Shipbuilding and shipping—since they go hand in hand, if that is the right metaphor. There have been so many mixed metaphors today that I am afraid of using any.
  For four years the Minister has lived with the problem and has produced no solution. The Bill is his latest palliative, and I agree with my hon. Friend the Member for Sunderland. North (Mr. Willey) that it is no long-term solution to the troubles of the shipbuilding industry.
  But let us start at the beginning with shipping. It is my firm belief, which has been expressed by several of my
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  hon. Friends and on occasions by hon. Members opposite, that the Government must make up their mind on the position which they will adopt in the international field in relation to the protection of British shipping. Until now the Government have taken a classical laissez faire position, which is that we are a great shipping nation and that we disdain any restrictive or protective practices whatever and therefore we discourage these new countries from unfairly adopting uneconomic, nationalistic, Chauvinistic techniques or subterfuges, which interfere with the natural flow of commerce.
  This was a valid position to adopt in Edwardian days before the First World War, and perhaps—although I doubt it—even in the years between the wars, but it is certainly not a position for us to take in the mid-1950s and 1960s. I am not for a moment suggesting that we should recklessly embark on a legislative programme to arm ourselves with powers which we should then proceed to use against other nations. I accept that in the present state of commerce in the world that would perhaps hurt us more than it would help us, but it would not have been wrong to put Bills before the House to give us reserve retaliatory powers and the capability to hit back at those countries which have hit us hard over preceding years. This is the sadness of it—that in a Bill such as this, which is, after all, an attempt to help the shipbuilding industry, no effort has been made to get at the root of the problem, which is to help the development of our shipping industry. But I see that you are showing a little concern about this argument, Mr. Deputy-Speaker.
  Mr. Deputy-Speaker (Sir Robert Grimston): The purpose of the Bill is to make loans for the construction and alteration of ships. I have allowed the debate to go fairly wide and to include a number of subjects, but I think that to discuss legislation against the shipping practices of other countries is going too wide.
  Dr. Mabon: I thank you for allowing me to go so far. At least I have made my point and have backed up the comments of the hon. and gallant Member for Barkston Ash. If we had had such legislation perhaps our position in inter-

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  national conferences would have been stronger and we should have reached the settlements which we wanted. We have seen the position growing very much worse in past months, and no doubt this subject will be raised once again in the conversations which the Prime Minister will have with the President of the United States next month.
  I pass quickly to the shipbuilding industry itself. I agree very much with what my hon. Friend the Member for Sunderland, North said about the price of steel and the price which the shipbuilding industry has had to pay for the denationalisation of steel. It will be interesting to read what the Restrictive Trade Practices Court, about which we heard earlier from the Secretary of State for Industry and Trade, will say about the practice of the private steel industry of calling its maximum prices in fact its minimum prices to shipbuilders. It will be interesting to compare our prices when that court examines them in relation to Common Market prices, because our shipbuilding industry, both managers and men, has to face a very difficult problem of increasing competition from Common Market countries. These are matters which ought to engage the Minister's attention, and if we are to concern ourselves with trying to solve the problems of the shipbuilding industry he ought to have said this afternoon that he is concerned about the price of steel and about the situation in the steel industry and that he is most anxious to help the shipbuilding industry to meet its difficulties in this matter.
  I join my hon. Friend the Member for Sunderland, North in lamenting the Minister's phrase that the Bill represents a once-for-all, sharp, short assistance to the shipbuilding industry. I regret that very much. It is a very sad situation that after four years it emerges that this is the Minister's only solution, and that when we press him on the subject of what happens after the spring of 1965, he does not know what the situation will be in the shipbuilding industry then, nor, for that matter, can he outline what he hopes will be the position later in 1965.
  He keeps repeating pessimistic phrases and is for ever depressing the shipbuilders, whether managers or men,
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  with his phrases about the industry not being the right size or shape. If a man of his intelligence knows that the industry is not of the right size, why does he not tell the industry what size it ought to be? But he never does. He is for ever the pessimistic unfair critic of the industry, always lamenting its faults, sometimes, in fact, to the detriment of its interests by telling the world about it, as when he sent an accountant round the Western European countries to tell us how bad were the economics of our shipbuilding industry. Perhaps his pessimism is unintentional, but it appears that he is trying to run down the industry. He told us again that the industry is getting £75 million and that after this breathing space rigorous competition will quickly put it in its place and bring it down to the right size and shape. What is the right size and shape? I know that the Minister has his limitations, although he does not think so, but he ought at least to consult the Government's advisers in the National Economic Development Council, who assess the position of our different industries in relation to the plans for the development of the country—the famous 4 per cent. national increase at which the Prime Minister tells us the Government are aiming after 12 years of having failed to secure the target in any single year.
  Why not ask the National Economic Development Council? Why does not the Minister tell the Council, "I want a special study of the shipbuilding industry. I want to know what is the place of the United Kingdom shipbuilding industry in the 1960s and 1970s so that I know what kind of advice I can give to the Cabinet in relation to its help for this industry through the difficult years ahead. Will it be a complete write-off or will it be an industry one-third of the present size? Or can it remain substantially as it is? I can then tell the Cabinet the answer". The Secretary of State for Industry and Trade will then be able better to look after all the shipbuilding areas which may be affected adversely and declare them growth areas. My hon. Friend the Member for Sunderland, North pointed out that in the North-East plan Sunderland is not a growth area. The same situation applies to my constituency. Areas in which shipbuilding ceases and which, through the

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  Ministerial neglect, are in difficulties, will see unemployment but are yet not in the White Paper plan.
  If the Minister can do nothing to help us in the face of events today, at least he might tell us this and give, us a chance—those who represent these constituencies—to try to get consideration from other Government Departments in relation to the training or retraining of the many skilled men who will be put out of work. But the Minister is dilly-dallying. He is making no attempt to get to the hard core of the problem. He is not telling us what position the shipbuilding industry should take in the life of the country. When he tells us that the labour forcehas fallen and has been falling consistently for many years, he does so as if the revelation suddenly came upon him in the year 1961 with a crisis in the shipbuilding industry.
  In fact, the fall in orders has been going on since 1956. Indeed, in some places it started even before that. The modernisation of many yards was delayed to keep pace with full order books, and then they began the move towards modernisation, perhaps a little too late. We have had this problem of a falling labour force, a discontented labour force, an uncertain labour force and a dissatisfied management for many years, certainly all the years during which the Minister has been in charge of the Ministry. I believe that with the Order in Council which was approved by the House in the winter of 1959, transferring functions to the Minister of Transport, a serious mistake was made, because no one Minister can be responsible for all the affairs in the right hon. Gentleman's Department together with the problems of shipbuilding. Since then justice has not been done to the seriousness of the problem.
  I put it to the right hon. Gentleman that this is a controversial Bill—not because we shall vote against it, for we shall not, but because we realise that it could have been a thousand times better if it had been a Bill intended not as a palliative for the past, because the money has all been spent, but rather as a promise and intention for the future. This is a Bill which ought to have provisions allowing the Minister to extend the scheme from time to time as
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  he wishes and to move in different directions in regard to shipbuilding. There is no reason why such a Bill could not be the instrument by which the Government should provide money to finance nuclear reactors in ships. There is no reason why it should not be the instrument by which we made possible the development of other forms of marine propulsion. There is no reason why it should not be the instrument for development in many ways of which the Minister has not thought.
  But, instead, it dies with its entry on to the Statute Book. It is dead once it is approved, because the money has all been spent, and the Minister has to go through the whole rigmarole again of setting up committees, establishing machinery and approving applications. What a waste of time, effort and energy. How short-sighted when on Second Reading the Minister tells the industry, "This is the last hope you have. This is year of breathing space. After this you are on your own. After the election you are on your own, and through the rigours of competition you will find your own size and shape".
  The Minister said that the Committee set up to vet all these loans consisted of persons who were able to assess the managerial prowess, economic efficiency and various virtues of enterprise in this country and, having settled that, to award the loans to the applicants and to see which yards could meet the obligations sought by the shipowners.
  The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett):I think that the hon. Member misunderstood my right hon. Friend. The Committee had nothing to do with the yards to which the orders went. It was concerned only with recommending the shipowners appropriate to receive the loans.
  Dr. Mabon: I accept that. Perhaps I seem to have misled the House in this regard. But I take it that the Minister feels that he is in a position to make comments about the efficiency of shipping enterprises. Why does he not set up a comparable committee to give an impartial assessment of the shipbuilding virtues within the industry and all concerned with the industry? Then he would be able to talk in precise terms

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  without slandering everybody. He would be able to state who are doing well in the shipbuilding industry and, by omission, let those who are not mentioned know that they are not doing well.
  It is by that, and only by that, that the right hon. Gentleman can escape the charge that he is an enemy of the industry by his constant general criticism of it. I feel sincerely that unless the Minister withdraws his general charges against the industry he will depress it still further.
  Turning to the problem of the workpeople, how is it possible to get the co-operation which we so earnestly hope for if we do not give the men the feeling that they are part not only of a family but of a living family? The right hon. Gentleman constantly tells us that the shipbuilding industry is going down the drain. How does the Minister expect the men, whose only defence against unemployment is restrictive practice, to surrender that weapon? The whole thing it potty, to use the words of the hon. and gallant Member for Barkston Ash. If we want the men to accept the fact, and I hope that they will, that the industry should play as a team, that there should be flexibility and all the rest in the yards, then we can only do it if the men are given security of tenure in their jobs—not necessarily the jobs which they are doing at the moment but the jobs which they may be doing in the future.
  When confidence comes to the industry and justice comes to the men we shall have a contented labour force and one able to do more than it does at present by way of productivity, imagination and enterprise. That is what is needed. We cannot say to an industry in such a difficult situation as the Minister is saying, "This is the last time we shall help you, and that will be the end".
  5.30 p.m.
  Mr. Paul Williams: I think everyone will agree with some of the latter sentiments expressed by the hon. Member for Greenock (Dr. Dickson Mabon). There is no doubt at all that on the internal relations issue of the industry there is a dramatic and immediate need to reconcile two apparently contradictory points of view, points of view which the hon. Member for Sunderland, North (Mr. Willey) and
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  I have put repeatedly in shipbuilding debates. It is the apparent contradiction of the demand for flexibility by management and for security by trade unionists. I personally believe that the time has long since passed for Government initiative, whether by the Ministry of Transport or the Ministry of Labour, in the calling together of representatives of the two sides of industry, for at the moment the two sides never seem to come to the point of decision. I should have thought there was a rôle which could be played by the Ministry, not necessarily in order to come to an immediate decision but to encourage the two sides to come to a more fruitful understanding about securing the greater flexibility which must be the prerequisite for greater security.
  Having said that, I would, in a small, timorous voice, like to welcome the Bill. I believe that it has brought necessary but nevertheless short-term sustenance to a hard-pressed industry. It is, in fact, very sizeable help. Eight hundred and fifty thousand tons of orders is something not to be sneezed at in a shipbuilding world which is cutting its own throat because of its various overcapacities. However, I think that in the winding-up speech the Minister might give us a bit of detail on one element of this £75 million, more particularly the last £15 million or £17 million. I refer, of course, to the Cunard.
  We had a North Atlantic Shipping Bill a few years ago which, I am delighted to say, disappeared below the surface unlamented. I should like to know how this element of the credit facility is to be used to assist Cunard. I should like to think that we could get a more modern method of tendering in the industry. Rather than have three or four firms being invited to tender for the new Cunarder, the firm which would have got the order under the previous scheme should be asked to enter into negotiation, thereby having only one tender and not wasting the time, energy and expense of the other companies. This would secure justice in relation to the other Bill and would short-circuit negotiations on this scheme. It would achieve an economy for the industry which might be worth while.
  I welcome the Bill for two reasons. First, it releases a number of pent up

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  orders which have been pending in the shipowners' minds while awaiting the Government's decision. One might say that this scheme has been held up for too long, but, in fact, a number of orders were in train awaiting the announcement of the scheme, and the very fact that the scheme has been brought into being has brought these orders forward. Secondly, it was a stimulus to new orders. I am delighted with what the Minister said. He said that this was in no way an attempt to bolster up the inefficient, which, of course, is a perfectly sound and laudable ambition.
  Then one comes to phrases such as "rationalisation" and "rather inefficient". What yardstick are we to use? I am delighted with some of the figures produced by my hon. Friend. He gave the figure of 53,000 employees before the scheme was announced, rising to 70,000 by March this year. That is an appreciable increase. But are these figures going to be sustained? That is what is really important for the shipbuilding industry.
  Again, coming back to the point of security and flexibility, if we could say that 70,000 employees was a reasonable figure to turn out 1¼ million tons of shipping a year, this would be security not in fixed figures but in an estimate of what the industry needs. I personally believe that the nigger in the woodpile—or is it the white man in the woodpile, I am not sure—is that the Government—not this Government but any Government—have not sufficiently appreciated the rôle of shipping in the nation's economy. Every shipbuilding order is an export order even if it is for a British owner, because it saves in foreign currency. Indeed, it may do more. It may be a positive earner of foreign currency. Allied to that are the insurance associations that flow from British shipping crossing the oceans of the world. In this way, one begins to scratch at the surface of understanding the importance of the British shipping industry.
  Unfortunately, we find repeatedly that Governments, perhaps even Ministers of Transport, Presidents of the Board of Trade and Chancellors of the Exchequer do not understand the dramatic contribution which British shipping makes to
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  the sustenance of the economy and to high and rising standards of living. Therefore, I go further and say that if we are to assist our shipping industry effectively and in tangible terms it may mean making tax concessions to it of a sizeable nature. We must maintain a building capacity which is necessary for economic reasons and for strategic reasons too.
  Therefore, I say that there are two reasons for sustaining the British shipping industry and the British shipbuilding industry. One reason is economic. That is an argument sufficient to itself. The other reason is the strategic need to maintain a capacity which can be called upon in times of need and urgency. But there is doubt, I think, about this scheme in the minds of some people. One doubt is, as my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner) said, that we are possibly now going back to the position where foreign owners will again be preferred to British owners in the credit facilities available to them for placing orders in British yards. If we are going back to that scheme it will be Bedlam run riot again.
  With his visual candour, the hon. Member for Sunderland, North admitted that he made a speech about this matter some time ago. Again with his usual candour, he did not admit that anyone on this side of the House took the same line on the question of credit. But I think he would now admitthat there were a number of hon. Members on both sides who pointed out this contradiction. If we go back to this contradiction again it will create a disservice to the industry. It is something which must be guarded against if there is to be long-term confidence and security in the industry, which we all want to see.
  I say quite frankly that I am sorry that machinery was not included in the scheme. It would have been a help to a number of makers of smaller parts if machinery had been included, although I quite understand that there could be a hesitation about it.
  Vice-Admiral Hughes Hallett:Machinery is included so long as it is made in this country. If the marine engines are ordered abroad, the credit scheme cannot apply to the price of the engines.
  Mr. Williams:Will my hon. and gallant Friend confirm that it applies also to things like winches and machinery of that kind? I am not quite sure about that.
  Vice-Admiral Hughes Hallett: It applies to the entire ship.
  Mr. Williams: Then I withdraw the point I made. I am delighted that the matter is cleared up in that way. There was some doubt about it earlier.
  Whatever the scheme has done in providing orders and in providing employment, there is considerable doubt about whether it is providing profitable operations for the companies building the ships themselves. There is the difficult problem here—I do not know how the House can even begin to resolve it—that the orders are not sufficiently profitable, or may even be making marginal losses, so, although one is keeping yards operating and although the yards may be providing employment and paying wages, the total effect may not be a very great contribution to the financial solvency of the companies involved in those orders for a long time.
  I come now to one or two suggestions. I have already made one in relation to Cunard, suggesting that there should be a special form of tendering for that ship. Second, like the hon. Member for Greenock, I regret that no move was made in the application of this credit facility to take the plunge in nuclear power. We are delaying far too long about this. In the past, I took the view—I admit it frankly—that we ought to wait for a commercial ship, but we now see other nations not only catching up but overtaking us at a great rate of knots. We cannot much longer go on failing to get our feet wet in this matter. We must have some operating experience. Therefore, I hope that we shall hear in the winding-up speech something about what is happening in nuclear power, related to this particular Bill, and why an opportunity could not have been taken here and now to make the first step.
  I have already said something about labour relations. I firmly believe that an initiative can and should now be taken in this connection.
  Next, I mirror the remarks of my hon. and gallant Friend the Member for
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  Barkston Ash on the subject of steel prices. A reduction of £5 a ton on a 75,000-ton deadweight tanker, as he said, would represent an effective saving of £100,000, which is a lot of money, about 3 per cent. of the cost of such a vessel. It would be a very valuable contribution towards getting orders from foreign owners.
  I return to my point about having a right appreciation by the Government of these twin industries. We need a right appraisal both at the Treasury and at the Board of Trade of the rôle of British shipping allied to a resolve to secure its position in all trade treaties. I should like an assurance from the Government that this matter of trade treaties is properly borne in mind and that the Ministry of Transport, representing the shipping industry, makes its voice heard.
  There still remains the hoary old question of whether the Ministry of Transport is the right Ministry. In saying this, I do not in any way attack my right hon. Friend. I believe that he has become progressively more sympathetic to the shipping and shipbuilding industry. Nevertheless, I think that it is really too large a Ministry, embracing as it does roads, railways and other things. One puts them in that order of priority, of course. Shipping and shipbuilding should be first, but they always come last. It seems that shipping matters do not rate anything higher than a protest at a meeting between the Prime Minister and the President in Washington, and the protests are then shelved and forgotten.
  Over the years, those who have taken an interest in shipping matters have questioned a succession of Prime Ministers and Ministers of Transport about what representations have been made to the Americans. I agree with those who say that we should take power to take retaliatory action. The very threat of it might have a salutary effect. However, having said that, I welcome the action of the Minister in slapping back into the face of the American Federal Maritime Commission—
  Mr. Deputy-Speaker:Order. The hon. Gentleman is now straying into a subject which goes wide of the Bill.
  Mr. Williams: I bow to your Ruling, Mr. Deputy-Speaker.

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  I put one more question to my right hon. Friend. One of the burdens on the shipbuilding and marine engine industries is the fuel oil tax. Engines have to be shore-tested, and this may cost tens of thousands of £s not in fuel oil but in fuel oil duty. Surely, a concession could have been negotiated in preparing this loan scheme. Perhaps it may be done by development contract—it may now be in train—but there is no doubt that this duty is a heavy impost on an industry which is trying to develop new engines. I hope that something further can be said in this connection.
  I conclude by referring to steel and shipbuilding. I understand that there are those who would nationalise one or other or both of these industries. I cannot persuade myself that the nationalisation of either of them could, by the longest stretch of the imagination, be thought to be of any value whatever to British shipbuilding. On the contrary, it would be more likely to drive away foreign orders. I cannot persuade myself that a British nationalised shipbuilding corporation would be liable to get the sort of orders which our yards can get in competition with foreign yards, but, rather, the very fact of nationalisation would make foreign owners look elsewhere. In welcoming the Bill, therefore, I welcome also the enterprise of our free industry and reject the concept of nationalisation.
  5.26 p.m.
  Mr. E. Fernyhough: Years ago, I listened to the hon. Member for Sunderland, South (Mr. P. Williams), week after week, putting questions to his own Front Bench asking why the shipbuilding industry could not get from the privately-owned steel industry the plates which it required to carry out the contracts which it had obtained from both British and foreign shipping lines. It was a private industry, perfectly free to trade where it liked, without regard to the national interest; but, of course, had the steel industry been nationalised at the time of which I am speaking, the hon. Gentleman would not have needed to ask those questions.
  This afternoon, everyone has spoken about the price of steel and the part it plays in the cost of building a ship. It
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  was hon. Members opposite who made the chairman of the nationalised steel industry put up the price of steel when he did not think that it was necessary, thus making steel more expensive than it need have been for every shipbuilding yard in the country. I could go on arguing the merits of nationalisation, but, Mr. Deputy-Speaker, I think that you have been sufficiently tolerant in allowing me to go thus far, and I leave it there. We shall carry out that task in a very short time, and the hon. Gentleman will not be sitting there to see how it works.
  The hon. Member for Sunderland, South made a very important point about security in the industry. One of the most saddening experiences for anyone interested in shipbuilding and the men employed in the industry is to go to a launching. One sees there the men who are proud, and rightly proud, of the work which they have put into the ship. Very often, the launching takes place at about 12o'clock or, perhaps, 3 o'clock in the afternoon, and then, at 5 o'clock, hundreds of the men who contributed to the building of that magnificent vessel are told that they are not wanted, and they do not know when next they will be called back to work.
  This is 1964. Can one wonder why there is trouble from time to time in the industry when men are still treated in that way and they have no more security than there was in the docks years ago? One day, the industry will have to realise that it must have a scheme similar to what now obtains in the docks. There must be a system of fall-back pay so that, if there is no work, a man is sustained by the industry until he is wanted. Some such principle must be introduced into shipbuilding and ship-repairing if there is ever to be a decent management-worker relationship. Given the present casual basis of employment, it will be impossible to build up the understanding which is so necessary if the industry is to have a really successful future.
  Like the hon. Member for Sunderland, South, I welcome the Bill for what it is. We in the North-East have probably done better out of it than any other part of the country, and this reflects great credit on our yards and the men who work in them. In recent

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  months particularly, we have shown that we are able to compete successfully with foreign competitors.
  Those who tell us that the industry cannot compete successfully do not always see the picture in full focus. The shipbuilder is still dependent upon the private contractor for many of his supplies. No matter how tightly he controls his own prices, if contractors allow the prices of the goods which they supply to rise, he still finds himself facing difficulties which are not of his own making. Some attempt should be made, therefore, to try to get contractors to play the game so that the shipbuilders do not always receive the blame when they are charged with not being competitive.
  It is unfortunate that this is, as the Minister said, a once-for-all scheme, that there is to be this £75 million and then the industry will be left where it was before the £75 million was granted. It is noteworthy that the Bill has been introduced within the last 12 months of the present Administration. The new interest of the Minister of Transport in shipbuilding is paralleled by the sudden interest displayed this afternoon by the President of the Board of Trade in restrictive practices, resale price maintenance, etc. I do not believe that we should have had the Bill if the Administration had had two or three years to run.
  It is significant that, because of the Bill, there will be, in March this year, two months from now, 13,000 more people employed in the industry than there were before the scheme was announced. This is welcome news. We are all very happy that there should be full employment in the shipyards and the ship-repairing industry. But why has it taken the Government so long to decide that something had to be done? Why are they so certain that it will not be necessary after the present financial blood transfusion to do anything more to assist the industry's future? After all, the 850,000 tons of new shipping which this £75 million represents is equivalent to only eight months' work for the British shipbuilding industry. They are very welcome eight months, but what about 12 or 18 months from now? Suppose the indus-
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  try then is in the same parlous plight it was in 12 months ago. Will nothing further be done?
  The point, quite frankly, is that this has given everybody, I hope, a bit of a breathing space, and I hope that the Minister, and the industry, and all those concerned about the future of this industry, will get together to see what they can do to guarantee that it has a good future. We all know the problems which the industry faces. I hope they will be tackled, by the only people who can help, with a little more courage and determination than has been shown in the past.
  We are granting £75 million under this Bill to the British shipping industry. Leyland Motors has just secured from Cuba a big contract for buses, and Leyland Motors cannot find a British ship in which to take those British exports to Cuba. I think we have a right to know what hon. and right hon. Gentlemen opposite are going to do about this, because under this Bill we are giving credits to the tune of £75 million to British shipping lines, and Leyland's could not find a single British shipping line to carry to Cuba the buses for which it has secured a contract from Cuba. And the Admiralty could not help Leyland's. So this export is going to be carried by ships from the German Democratic Republic. This really is a scandal. At a time when we are discussing credits of £75 million to our own shipping lines it is monstrous that not a single one of those lines was prepared to carry British manufactured buses to Cuba and Leyland Motors had to go to a Communist country in order to get ships to transport their export orders.
  Everybody knows why this is. It is because those ships would be black-listed by our American allies if they were to carry those buses. I say that the Government have a great responsibility in this matter. I repeat they should have a little more courage, and stand up with a little more determination for the freedom of the seas to which we have always subscribed.
  Thirdly, may I repeat that I hope that we shall very definitely use the breathing space which this Bill gives us to try to bring greater security to the industry, and to make the prospects for those in the industry and those who own it a

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  little more certain and positive and prosperous in the years which lie ahead, than they have been during the last two or three years in particular.
  5.40 p.m.
  Mr. Rafton Pounder: I am very much indebted to have been given this opportunity to say something in this debate, and particularly to follow immediately after the hon. Member for Jarrow (Mr. Fernyhough), because on the last occasion I addressed this House—my maiden speech a month ago—he was kind enough to say some very complimentary things about me immediately after I sat down.

  Although it is probably too early to gauge the full effect of the Government's shipbuilding credit scheme, there have nevertheless been a number of encouraging indications that the long dearth of orders from which British shipyards have suffered in recent years may be beginning to come to an end. Whether or not it would be altogether accurate to attribute this improvement entirely to the credit scheme would be to dogmatise, and that is something I am not prepared to do, but I think that there can be no doubt at all that the Government's scheme did come at exactly the right psychological moment, a moment not only when British shipyards had made themselves perhaps more competitive than they had been hitherto, but also at the time when British shipowners were beginning to give serious consideration as to whether or not the time had come, or at any rate was approaching, when they should modernise and re-equip their fleets.
  Under the terms of the scheme, shipowners had an incentive to make up their minds quickly and to make their applications for assistance without delay, because both the amount of money to be allocated and also the period of time when applications for assistance had to be made were both limited. So far as one can gather from my right hon. Friend's opening remarks in this debate, the results to date have been gratifying. As he said, when the original loan of £30 million was announced some nine months or so ago the initial impression in British shipyards was that this was a useful beginning but that it was certainly no more than that, and that it would not be sufficient to lift the indus-
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  try out of its depression. Since then the figure has been more than doubled, and shipbuilders are becoming somewhat more optimistic. For the next year or so the overall prospects of the industry are reasonably bright.
  But, unfortunately, it is only for the next year or so. It would be quite wrong to suggest, as I have heard many people not in this House but outside suggest, that this once and for all Government shot on the arm would resolve the shipbuilders' problems. Further rationalisation see us to be almost inevitable. Certainly in Belfast the great shipbuilding firm there has already faced up to this need and has carried through an imaginative and far-reaching programme of modernisation.
  The new wave of orders has been very unevenly spread, and, at any rate excluding the project of the Q4, it is very unlikely that the orders placed under the scheme will be providing employment in, say, a year or eighteen months from now. Unfortunately, there is still a disquietingly large amount of shipbuilding capacity in the world unutilised, coupled with an enormous volume of shipping tonnage plying the high seas for trade. No action by any one Government can solve these critical problems, put what one can say is that the British Government have given the British shipbuilding industry a stimulus at a particularly opportune time, and I think it is fair to say, partly for that reason, and partly as a result of the improvements which the shipbuilding industry has made in itself, that it would be wrong to say that Britain is in a more parlous position now than most of her overseas competitors. Britain can no longer be fairly described as the most ill member of a world-wide sick industry. Nor, indeed, need she be in future if advantage is taken of the new flow of orders to carry out the programme of modernisation so urgently and desperately needed in British shipyards. These are almost as much a responsibility for the trade unions as they are for management.
  I think it is probably fair to say that in any event Britain's future as a shipbuilding nation almost certainly depends upon concentrating on the production of high quality shipping, because it is in this sphere that our main strength un-

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  doubtedly lies, and I would submit that no reference to high quality shipbuilding would be complete without a mention of the Belfast shipyard where for more than a century countless ships of many varying dimensions and designs have been produced, and where the very high quality of workmanship bears favourable comparison with that anywhere in the world.
  But although the clouds on the horizon may have appeared to have lifted somewhat, at least for the more efficiently managed firms, nobody should expect a quick end to the shipbuilders' troubles. The recovery has been somewhat selective. There is no doubt at all that some yards have benefited quite substantially inrecent months, whereas others have benefited barely at all, and nothing has emerged, in my submission, to alter the general impression that a major process of amalgamation and concentration in the shipbuilding industry lies ahead.
  Although the industry as a whole is no longer in the slough of depression, the prices at which business is being won are still devastatingly severe. The financial stability of many firms in the industry will require a long time to be re-established after the recent bad years, but at least the point appears to have been reached, whether a result of this Bill or not, where a certain number of orders are going to the more efficient firms in the industry. The indiscriminate slump in orders of eighteen months ago no longer seems quite to obtain as it did until very recently indeed.
  Thus far I have confined my remarks to the main issue of the shipbuilding credit scheme and the improved situation which it has in some part initiated. There is, I regret to say, a great deal of ill-informed talk on how shipyards can improve their methods. I wish to refer to only one of those ill-informed ideas. Times without number one hears people say that if only our shipyards and marine engine works would adopt the principle of interchangeability of parts then the prime costs of manufacture could be reduced and much time and expense would be saved in maintenance. Many things may be matters of opinion, but one thing is certain: the idea of interchangeability of parts as between one shipbuilder and another and as between
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  one manufacturer of powerful propelling machinery and another is simply academic nonsense.
  I would like to conclude by requesting—and thereby mirroring what has been said by other speakers today—the Government to give serious consideration to the extension of the principle of this Bill for a further period and also of providing, therefore, further financial assistance—say, another Bill which would provide a loan of, say, £20 million to £25 million per annum for the next three years. It is generally acknowledged, and rightly so, that this Bill has given a much needed fillip to the shipbuilding industry, but one sunny day simply does not make a summer. The industry does require additional assistance if it is to be given a reasonable opportunity of completing its necessary programme of reorganisation. Shipbuilding is an industry vital to the economic well-being not only of Northern Ireland but also of several regions in the rest of the United Kingdom, the North-East Coast, the Clyde and Merseyside, to mention three. If the £75 million injection proves to be insufficient, then I hope that the Government will consider an additional financial jab into the vein of this industry.
  5.48 p.m.
  Mr. Cyril Bence: I certainly agree with much the hon. Member for Belfast, South (Mr. Pounder) has said, especially the point he made that the British shipbuilding industry is not the most ill of sick industries. I certainly agree with that, because I have never believed the British shipbuilding industry to be as decrepit as some of its most vigorous critics have made it out to be. Certainly, in the last five years or so a famous firm in my own constituency has spent some £4 million to £5 million on modernisation.
  The British shipbuilding industry is as competent today as ever it was to meet fair and just commercial competition from whatever quarter it comes. Unfortunately, as the hon. Member for Sunderland, South (Mr. P. Williams) intimated, much of that competition is not, in the sense that we understand it, fair, reasonable, open, commercial competition, and, unfortunately, I must subscribe to the position which I am

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  sure will be taken by the Parliamentary Secretary and say that it is no answer to the problem of uncommercial and unethical practices by someone else to adopt them oneself. That is no answer. It is merely an exacerbation of the problem.
  The responsibility of the trade unions and employers in the efficient and economic production of ships of high quality is a truism. The main responsibility of producing anything in this country rests not with the Government but with those engaged in the production of wealth, from the managing director down to the office boy. I look upon this Bill as another instance of the Government saying to an industry, as they should say to every industry, that the function of the Government is not to make the nation prosperous. Governments cannot make the nation prosperous. What they can do is do give a lead and to create a feeling of confidence so that people get stuck into their jobs and are not afraid of the future, thus bringing prosperity not only to themselves but to the country as a whole.
  One thing about the Bill which disappoints me—[Interruption.] That is a good old trade union and Socialist philosophy. This is a case of earning the nation's income by good, conscientious work and not by speculation or gambling. This is creating wealth, not on the Stock Exchange but on the factory floor and in the shipyard. That is the difference between the hon. Member and myself. This Bill is a palliative. The Government are offering to take the place of the commercial banks for a short time. The commercial banks cannot give the extended credit which is necessary. They have not the resources to finance the shipbuilding industry. Therefore, the Government step in and finance to the tune of £75 million, an industry which at the moment cannot be financed by private enterprise.
  This is an admission that the shipowners of this country cannot get credit at sufficiently satisfactory terms from the commercial banks or any other financial institution. Therefore, the Government step in and act as the dispensers of credit to enable our owners to replace their fleets. They have been forced info this position by the practice of other nations in replacing their fleets. The
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  question whether the present Administration will be in power in 12 months' time is problematical, but I hope that this is not a temporary measure to help the shipbuilding industry but that it will become interwoven into our general structure for financing certain basic activities. I hope that the principle which apples in the case of the White Fish Authority and the nationalised industries wil1 apply in the shipbuilding industry.
  As I say, the Government have become a great financing institution for the shipbuilding industry. This is important because the shipbuilding industry has returned to the position of being an industry employing casual labour. In my constituency, John Brown & Co. Ltd., probably one of the best known yards in the country, has just launched a wonderful vessel, the S.S. "Centaur". It has a specially constructed hull which enables it not only to dock alongside a quay but to discharge its cargo on a beach.
  Now that this ship has been launched, there is nothing immediately on hand for John Brown. Therefore, much against the company's will, 750 men in the finishing trades have had to be dismissed temporarily, although it has told them that it hopes to take them back in a few months. This undermines men's confidence. Here is a famous yard, with a fairly good order book, mostly tankers, which has been forced to treat a great deal of its labour, particularly in the finishing trades, as casual labour.
  We have ended the system of casual labour in the dock industry. Why cannot it be ended in the shipbuilding industry? I feel sure that trade unions and employers in the shipbuilding industry and the Government can work out some means of ending casualisation. I have no doubt chat there are areas in the shipbuilding centres, such as the Wear, Tyne, perhaps Belfast and the Clyde, where men can move from yard to yard by agreement between the personnel managers. This mutual interchange in order to get rid of casualisation is very desirable.
  I have spent a large part of my life in the motor industry. One can manufacture motor cars in bits and pieces and put them on the shelf, so to speak, as stock. If the order book is not full, one

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  can stockup. This cannot be done with ships. I see major difficulties in maintaining a balanced labour force and in bringing about a continuity of employment. It is difficult to imagine shipyards building up stocks of ships because there are no immediate orders. It may be possible to produce standard hulls in a small number for merchantmen or tramp ships, but that does not provide for the finishing trades. It seems to be in the finishing trades that there is this casual employment of operatives.
  Mr. P. Williams: Everyone preaches in favour of standardisation for everyone else but himself. In this case, the owners—and I do not blame them—are the difficulty because they always want something tailor-made to their requirements. This is the weakness from the shipbuilding point of view, but the strength from the owning point of view. Unless an owner can get something tailor-made be cannot operate efficiently.
  Mr. Bence: I am not a shipwright or an expert on shipbuilding. I can understand a company which is trading with different parts of the world and engaged in heavy traffic wanting the hull and layout of a ship to be tailored to its demands, but that does not alter the fact that within a ship itself thousands of components could be standard equipment, such as valves, pipes and all the gadgets which go into a marine engine. I imagine that there could be a range of standardised pumps. Door handles, crockery and similar articles could be manufactured in tremendous quantities to go into different passenger vessels. There could be standardised units in diesel engines even when they are made by different engineering companies.
  The machine manufacturing industry is included in this. I understand that under Clause 1 the Minister can give credits to the manufacturers of propulsion machinery. Am I right about that?
  Vice-Admiral Hughes Hallett: The credits are given in respect of propulsion machinery as long as it is made in this country. We allowed three ships with foreign engines to be built, but in that case the cost of the foreign engine was not included in the credit sum calculated.
  Mr. Bence:I assume that the credit that was granted would cover the cost not only of the building of the hull but of the installation of the machinery if the manufacture of that machinery were in a British shipbuilding engineering shop, wherever it might be.
  Standardisation is a great feature in the economic processes of manufacture. Will the Minister have powers—such as were suggested by the Minister of Aviation when we had the shotgun marriage between the manufacturers of aircraft in order to get State subsidies to keep the aircraft industry going and to put it on an economic basis—when these credits are applied for—I see that any number of loans under this Clause may be made to the same person—to make loans? I can imagine the circumstances that might arise.
  If the firm of John Brown has an order for a hull from one of the big liner companies, in view of the fact that the Ministry has granted loans to the manufacturer of diesel engines, will the Minister have power under the Bill to insist that to get the full benefit of this credit the propulsion machinery in that ship must be provided by a certain company which had provided machinery for several ships of the same kind, and which was therefore able to provide it cheaper than perhaps the yard where the hull was being built?
  These are the sort of things that I can imagine happening. Is there the possibility within the Bill that, as the Government are now financing the building of the machinery and the hull, if the owner decides that the hull should be built here and wants a certain type of propulsion machinery, the Minister will be in a position only to accept the proposition provided that the owner submittingthe proposition for a new vessel has manufactured in certain engineering shops propulsion machinery, and that unless that is done the Minister can refuse a loan?
  I see here very great danger. I hope my assumption is wrong and that it will never come to this. I want the Government to undertake the financing of shipbuilding, which is a great national industry. I agree with what was said by the hon. Member for Sunderland, South. Unfortunately, some people in this country make a tremendous hullaballoo

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  about the farmers who use our land so intelligently, saving the nation hundreds of millions of dollars in foreign exchange by providing us with food. I wish that some people would shout as loud as the farmers do to show that the shipowners of this country are doing exactly the same thing. We are a maritime nation and the shipbuilders, the merchant seamen and the shipping owners, all of them co-operating, are providing a tremendous service to this country.
  This is the beginning. I do not think that the Government can finance an industry for one or two years and then drop it and allow commercial finance to take over, and when things get sticky again step in. This sort of thing cannot go on any longer. This is the beginning of the Government becoming the permanent financial institution for British shipbuilding. Therefore, I want to make sure that the industry, both the shipbuilders and the owners, will retain complete freedom in placing orders and specifying the type of ships they want. They know better about this than Whitehall. I do not want anyone in Whitehall to tell the shipowners, "We will give you a loan if you have the engines built here". I want to see the people who run those industries have the right to specify the type of ships they want. Although the Government is to lend them the money, I hope that they will have sufficient confidence in these industries and in the people who run them and who know their own business.
  It is the duty of any Government to see that the resources of our nation are not wasted. I hope that the Minister will give us an assurance that there will be no danger of Government intervention of the type I have described. There have been suggestions mooted many times in the shipbuilding industry that there should be a concentration of machinery building in one or two units. The Parliamentary Secretary knows this and the Minister of Transport. That has been said many times and in many quarters. There has been a suggestion that some of these yards should give up their engineering shops and that they should be centralised. I do not think that is desirable. It may be desirable to have large powerful units, but I think that it is always a good thing to have
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  a mixed economy, as we have on Clydebank in the firm of John Brown, which does the whole lot itself and where it can have a balanced labour force provided, of course, that the orders come in. I hope that this Bill will not lead to excessive Government powers in directing people as to where or how their ships should be built or the type of machinery that should be installed.
  I am assured by the people who ought to know in the shipbuilding industry that at the present time the British shipbuilder is having to pay a higher price for British steel relative to the general price structure than that paid by shipbuilders in Europe for their steel. It is not a sufficient answer to say, as I have heard it said, that Continental steel is more expensive than British steel, but Continental steel for the European shipbuilders, as a factor in the generalcost of shipbuilding, is lower than it is in Great Britain. The shipbuilders on the Continent buy their steel from the Coal and Steel Community at a figure which bears a lower relation to the general cost than the British shipbuilder who buys steel from the British steel industry. This ought to be looked into.
  I had always understood that British steel was the cheapest in the world. It certainly was at one time, even as recently as 1948. Is that no longer the position? If so, is this not one of the major difficulties facing the shipbuilding industry? If, as a cost factor in ship production, steel prices weaken our competitive position, we should know all the facts about it.
  The hon. Member for Sunderland, South said he was afraid that if the steel industry became nationalised its position might become worse. Is he aware that the price of steel has risen since the industry was denationalised? It must be remembered that the industry worked in the face of tremendous obstacles during the war. It had to produce steel at a terrific rate so that we could get the ships we needed. In the five or six years after the war little time was available for refurbishing the capital which had been created in the industry long before the war and which in many cases had been completely absorbed and, in terms of machinery, worn out.
  It must also be remembered that there are today many State-owned facets of

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  the steel industry. These make steel plate and sheet for use in shipbuilding and this shows that no one in the industry need fear the industry becoming State-owned. In fact, the Government nationalised one section of the industry a few months ago, the Drogheda Iron and Coal Company's works at Newport.
  In welcoming the Bill, I hope that it will not be long before another Measure is introduced to make the State the principal financing institution for shipbuilding. Only in that way will we get rid of the casualisation of labour, give stability to the industry and ensure continuity of orders. We must bring the position to an end when people are waiting for the next order and the next extension and advance, hoping for another Bill to be introduced to give the industry easier terms.
  6.12 p.m.
  Mr. Stanley R. McMaster: I do not intend, in rising to welcome the Bill, to delay the House for long at this stage. Attention has already been drawn to the fact that the proposals contained in the Bill were suggested to the Government a long time ago. I recall that about a year ago, when debating the position of the British shipping and shipbuilding industry, I pressed for measures such as those set out in the Bill. At that time they were not acceptable to my right hon. Friend.
  The Bill provides only a temporary respite. I was glad to note that in his speech my right hon. Friend pointed to the increase in employment which will occur in the industry as a result of the Bill. He hoped that the number of employees would increase from about 53,000 to about 70,000 by the spring of this year. That rise will be welcomed, but it is to be deplored that the conditions in shipbuilding in Britain have been the subject of so much uncertainty for those employed in it. As my right hon. Friend pointed out, we face competition from all parts of the world, particularly the yards in Japan, Sweden, Germany and Holland.
  It must not be forgotten that countries abroad give assistance to their shipbuilding industries, whether in the way suggested by the hon. Member for Dunbartonshire, East (Mr. Bence)—some
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  form of steel subsidy—by direct assistance, or even by a policy of scrap and build, which the French are about to introduce. Whatever may be said about the scrap and build policy, it is assistance.
  In many previous debates, I have pressed my right hon. Friend to study the assistance that is given abroad. I have urged him to use all the means at his disposal to persuade other countries to abandon unfair practices such as those I have mentioned, or even the practice of shipowning—since one practice can affect another—but until he is successful in persuading them to abandon these practices we must, if we are to maintain our shipbuilding industry, equal the assistance that is given abroad.
  Since there is no sign that we are being successful in persuading them to abandon these practices, I regret that the assistance given under the Bill has not been taken a step further. It is limited. One hon. Member opposite spoke about the assistance under the Bill being a grant to the industry. It is not a grant but a loan. Only by way of saving the industry some interest is it, I suspect, anything else, and I believe that that saving will not amount to many millions of pounds a year.
  Mr. Bence: Does the hon. Member know how much the saving will be?
  Mr. McMaster: Not exactly, but I suspect that it will not be more than £1 million or £2 million, but perhaps my right hon. Friend will correct me if I am wrong. The Bill does so much good for so little cost that it is a pity that it has not been extended, because it is the duty of the Government to ensure that British shipbuilders are not at a disadvantage compared with their overseas counterparts.
  How can uncertainty of tenure of employment come to an end unless there can be some certainty that there will be a continuing flow of orders to the British yards? I have been relieved to see the number of orders which have been placed with Harland and Wolff in Northern Ireland. I was also pleased to learn that that firm was the largest shipbuilder in the United Kingdom last year. The company has, perhaps, benefited to a greater extent than any other British yard, but the position on the Lagan and

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  Belfast is somewhat different to that on the Clyde, Tyne and Merseyside, where several builders are building on one estuary and river. In Belfast there is now only one shipyard, and that is owned by Harland and Wolff.
  I recently had the pleasure of going round that yard and of seeing the modernisation that has been carried out there. The improvements were seen by my hon. Friend the Parliamentary Secretary when he visited Northern Ireland, and I welcome the interest that has been shown by the Government to Northern Ireland. While there I saw the new craneage, although the modernisation has meant men being declared redundant in large numbers. In the past five years, since I came to this House, I have seen the number of men employed at Harland and Wolff's yard cut by half—from about 22,000 or 23,000 to about 10,000 or 11,000. Despite the new arrangements, men were being laid off before Christmas. However, this redundancy was overcome and the matter was soon resolved in the sensible way which these matters are usually dealt with in Belfast and the men returned to work.
  In a recent discussion with the trade unions, in Belfast, I received reassuring information about the measure of flexibility that had been accepted at Harland and Wolff. I must re-emphasise the point, because if we expect concessions from the trade unions on things like demarcation, designed to deal with contingencies such as those that have arisen over the past four or five years when men have been laid off, it is reasonable in return to offer the men left some continuing security of employment. This security can only be ensured by extending the terms of Bills like this.
  Another point concerns interpretation. The Explanatory and Financial Memorandum says that Clause 1
  "…enables the Minister to make loans for the construction, completion or alteration of ships in shipyards…"
  My information—and I have asked Parliamentary Questions on it—is that this provision applies only to major alterations—to "jungle-rising", as I have seen done in Belfast, by means of which boats are enlarged by putting in new sections. I should like to see this credit scheme extended to other forms of
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  repair. I do not see why it should be limited to this one sphere.
  If the Minister's aim in introducing this Bill is to assist British shipbuilders, all forms of modernising and repairing of boats should be covered, and it should be possible for British ship owners to apply for the same kind of assistance for such work, which benefits the shipbuilding industry directly but also benefits our shipping industry, because it improves our merchant fleet. It is a little late to do this in this Bill—we have heard that the money has already been used up—but I should like him to consider extending the terms for the future, not only in regard to time but in regard to the number of uses to which the money may be put.
  My hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner) spoke of trade reservation and flag discrimination. These practices are widely adopted throughout the world and injure British shipping. I strongly hope that when the Minister takes action to assist British shipping he will assist not only the large shipowners who are running liners but the many small tramp owners. These vessels are very often engaged in carrying not British but foreign cargo from one foreign port to another foreign port, and earn a great deal of money for the Treasury in the process. It is most important that these shipowners, sometimes operating in a small way, should be given the same assistance when replacing their vessels as foreign tramp owners can obtain when ordering ships abroad, or even when ordering them in Britain.
  I do not think that my right hon. Friend dealt satisfactorily with this point this afternoon. He said that the provisions laid down would come to an end in the spring of this year, but he did not give any indication at all that the credits given through E.C.G.D. to foreign owners building boats in Britain would come to an end at the same time. One of the points we argued a year ago in favour of this provision was that the British shipowner should not be put at a disadvantage vis-á-vis the foreign owner ordering in Britain. That argument is as true today as it will be tomorrow, and that fact alone is an overwhelming argument in favour of extending the provisions of the Bill. We are an island people and cannot neglect either our

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  shipping or our shipbuilding industries. The point has been made many times and does not need to be laboured, but I do not think that my right hon. Friend has given it proper weight.
  I also support what was said by my hon. Friend the Member for Sunderland, South (Mr. P. Williams) about building boats powered by nuclear engines. Not only would we obtain operating experience by ordering such vessels but we would get operating "know-how". There is a great danger that our shipbuilding yards—with the exception of one that is engaged in nuclear submarine building, which is in a quite different category—will fall behind in the building "know-how" that is so essential if they are to remain in business for the rest of the century.
  It has always rather surprised me, and here I agree with my hon. Friend the Member for Sunderland, South—though I do not wish to reflect on the Minister in any way—[Hon. Members: "Why not?"]—because that is the way I feel. I do not wish to reflect in any way on the energy and capacity of my right hon. Friend, but he has a great deal on his plate. We have a separate Minister of Aviation. Aviation is important, but surely shipping and shipbuilding are older and more important interests in Britain. I should like to see a separate Minister—with, perhaps, a separate voice in the Cabinet—to deal with these matters that are so vital to our country and to our prosperity. I hope that this point will be borne in mind by the Government, particularly in the changing circumstances of the coming year. I welcome the Bill, as far as it goes, but it is still lacking, and needs quite a lot of extension.
  6.27 p.m.
  The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett):I should like to answer the last point made by my hon. Friend the Member for Belfast, East (Mr. McMaster) before I forget it. It has often been argued, not only by my hon. Friend but by other hon. Members, that there would be advantage in having aseparate Ministry of shipping, but I can assure my hon. Friend that a great deal of time is spent in the Ministry of
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  Transport on shipping matters by a whole section of the Ministry and by my right hon. Friend himself—I daresay as much as he spends on inland transport. This idea of having a multiplicity of Ministeries dealing with different topics has to be balanced against the advantages of any given interests, such as those of shipping and shipbuilding, being under a Minister who is in the Cabinet. My hon. Friend no doubt will agree that if there were Ministries for one thing and another we would end up with a Cabinet of about fifty Ministers.
  We have had an interesting debate and, if I may say so, it started on a more acrimonious note from the Opposition benches than have previous debates on shipping and shipbuilding. I was glad to observe that, because I think that it reflects the better outlook for the shipbuilding industry. I think that is why the hon. Member for Sunderland, North (Mr. Willey) felt freer to lash out a little. We take that in good part, and perhaps I may say without impertinence that we very much appreciated the restraint shown by the Opposition a year ago, when the outlook for the industry was so very serious.
  Naturally, most of the debate ranged over the future long-term prospects of the industry rather than the immediate effects of the Bill. I want to go back to both of these points, because while no one would deny that the long term matters more than the short term, at the same time it would be foolish to underestimate the good which has already been done by this scheme. Before coming to those points, I should try to answer specific matters raised in the debate.
  The hon. Member for Sunderland. North began by accusing my right hon. Friend of speaking only platitudes and suggesting nothing constructive. Most of my right hon. Friend's speech was devoted to an exposition of the Bill, which was not unnatural since he was moving its Second Reading. The hon. Member then went on to claim that he had advocated a credit scheme in 1962. I recollect that he did, but I doubt very much whether a credit scheme at that time would have been effective, because the differentials at that time between prices in British yards and the prices of

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  our continental rivals were much greater than they are now and I do not think that a simple credit scheme would have done the trick.
  The hon. Member repeated the old chestnut about our being the largest importer of foreign ships. He must realise that this is not so. He must distinguish between genuine British shipping firms whose orders abroad are negligible and other firms who legitimately, for reasons of their own, register in Britain but who actually buy ships abroad.
  The hon. Member made a great deal of play about exactly what we mean by the contraction of the industry and the hon. Member for Greenock (Dr. Dickson Mabon) made the same point. The House will recollect that in March. 1961, we had the Report of the Dunnett Committee which made a very careful estimate of what the likely volume of annual orders would be for the British shipbuilding industry. We still see no reason to dissent from that estimate, and that is my answer to the hon. Member. The whole industry is familiar with the Report, and when we have been asked we have always told the industry that there is a long-term forecast of likely orders. We do not say that that forecast is right but we do not see that it can be improved as an estimate.
  The only hint of policy that emerged from the speech of the hon. Member for Sunderland, North struck me as a desire for a very considerable degree of Government interference in the control and direction of the various activities of shipbuilders. Heaven help the industry and the men who work in it if a Labour Government embark upon such an enterprise. I find myself far more in agreement with the views of the hon. Member for Dunbartonshire, East (Mr. Bence) on this subject.
  Mr. Willey: This is not a question of interference with or direction of the industry, but of whether we have a sense of national planning and whether the industry has a pretty clear idea of where it will stand in three or four years' time. Almost every country with which we are competing has such a conception and the shipbuilding industries of those countries do not hesitate to go to their Governments. When the hon. and gallant Gentleman talks about the
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  flexibility of labour, I must tell him that we shall not have that flexibility until there is a sense of an established labour force.
  Vice-Admiral Hughes Hallett:The only countries of which I can think offhand that can give their industries a fairly accurate forecast of the size of their merchant fleet, and consequently of building orders, are those countries which operate their shipping with a very heavy subsidy. What the hon. Member says would be true to a certain extent of the United States but in countries which operate a free shipping service it is very difficult to forecast with any certainty.
  My hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner) suggested that many of the orders placed under this scheme might have been placed anyway. I do not dissent from that, but I ask him as a shipowner himself whether he can place his hand on his heart and say what orders would have been placed in this country had it not been for this credit scheme. I have an uneasy feeling that many of the orders might have gone abroad.
  Arising from the same point, my hon. and gallant Friend made great play of the better credit facilities for export orders enjoyed by foreign shipowners when they come to order ships in this country. Incidentally, he was wrong to say that these better facilities are provided by the Government. They are provided by financial institutions in the City. The apparent anomaly arises from the world-wide competition to offer special export credit facilities and other export facilities. A Japanese shipowner would make exactly the same complaint in his own country, because he would find that the rate of interest for borrowing is different and the price he pays for steel is different from that which the non-Japanese shipowner pays if he orders in Japan. This is not done by subsidy but by private arrangements within the banks and within the industry.
  The hon. Member for Greenock went rather wide in the debate and eventually his discourse on shipping was stopped. I cannot follow it in detail, but I would reply to his remarks on our shipping policy by saying that he should calculate,

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  if he can, the consequences of this country going back to a policy of protection. He should ask himself whether the united stand now taken by this country and, largely under the leadership of this country and my right hon. Friend, by other great European maritime nations together with Japan, is not a better policy.
  Dr. Dickson Mabon:The fact is that we are losing this battle steadily and by not having reserve retaliatory powers we are demonstrating to the world that we have no intention of fighting; Britain will not flex her muscles in this respect.
  Vice-Admiral Hughes Hallett:This is a matter in which not only this country but all our friends in Europe find it difficult to go further than we are going now. I do not think it would be to the advantage of the shipbuilding industry, indirectly, if we found ourselves eventually forced to go back to a policy of protected shipping.
  The hon. Member asked whether the Bill might not have been made an instrument for finding money for nuclear propelled ships and nuclear research. No doubt it could have been, but we do not think that that would have been appropriate. The Bill was drawn up with a very narrow object in mind which has largely been achieved. The hon. Member went on to suggest that just as the Piercy Committee had been able to look into the managerial efficiency and credit-worthiness of shipowners who apply for loans, a comparable committee should inquire into the whole state of the shipbuilding industry. My answer is that we have had quite a number of inquiries recently.
  We had the Dunnett Committee in which both sides of the industry and Government officials participated. We had the D.S.I.R. Report on the industry's research needs, which the hon. Member will remember created a certain amount of excitement and furore when it was issued, and we had an investigation carried out by Peat, Marwick, Mitchell & Co. into the reasons why orders were being placed abroad. We had also the industry's own productivity report, the Patton Report. I do not think that a further inquiry would have thrown much more light on the general state of the industry.
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  My hon. Friend the Member for Sunderland, South (Mr. P. Williams) welcomed the Bill and laid stress on the need for better labour relations, with which I wholly agree. Referring to the new Cunarder, he asked whether Cunard might help the firm which would have got the order under the old scheme by not being required to put out a competitive tender, but merely to go back and place the order on the Tyne. As I understand it, the consortium which made the tender on the Tyne has not finally decided whether to tender or not. But supposing it does. It does not necessarily follow that it will win the order. A great deal has happened in the way of modernising other yards since the previous tenders were put in. Furthermore, my hon. Friend asked why firms should waste money by putting in tenders which they are not certain to win. They are under no obligation to undertake expensive tendering at all.
  My hon. Friend went on to say that shipbuilding orders were not profitable, and I agree. They are not always profitable, and I shall refer to this matter later. My hon. Friend made suggestions which we shall study, and he asked specifically whether we could assure him that when trade treaties are signed the shipping and shipbuilding industries in this country are taken into consideration. I assure my hon. Friend that they are. My right hon. Friend is invariably consulted, and wherever it is practicable and appropriate such safeguards are written in.
  The hon. Member for Jarrow (Mr. Fernyhough)—I think very rightly—at the beginning of his speech stressed that it was important for the happiness and efficiency of the industry to ensure that the people who worked in it had a feeling of security. His hon. Friend the Member for Dunbartonshire, East made very much the same point. The hon. Member for Jarrow gave the example of the sad scenes which occur when a ship is launched, when a large number of steelworkers are paid off that same evening. Curiously enough, his hon. Friend gave the reverse example of a large number of men in finishing trades being paid off until the next ship was on the stocks, when they would be taken on again.
  Surely those are striking examples of the advantages of the Continental and

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  Japanese systems of greater flexibility of labour, where the men are trained and able to carry out more than one job? Although it may not give complete uniformity, none the less it greately reduces these fluctuations, and is one reason why greater security is possible.
  Mr. Fernyhough:The incident which I mentioned showed that all the people who have been employed on building that ship walked off the yard and did not know when they would come back, because they would not be able to return until a new ship was on the stocks.
  Vice-Admiral Hughes Hallett:I do not accept that. It is true that if there is a period when no ships are being built the number of men employed in the yards is small, but if the men who have been helping in the finishing stages of the ship are also capable of being employed in the earlier stages when she is on the stocks, obviously the gaps in employment and the fluctuations in the way various trades are employed will be very much less. I think that that is a statement of the obvious, and that no one would dispute it. The argument that has been put forward from time to time against this flexibility is that it is impossible for a man to be fully skilled in more than one trade at a time. All I can say is that it is done in other countries, and I cannot believe that our people are of a lower standard. However, I shall come back to this subject later.
  Mr. Bence:I made the statement about people employed in the finishing trades. There are many functions in a shipyard where there is flexibility and the men can be moved from one operation to another, but the hon. and gallant Member must not ask plumbers to go up aloft and work on the layout, because they do not know the first thing about it. They are plumbers. They can do a variety of plumbing jobs, but we must not ask carpenters and joiners who build ships' furniture to try to weld plates, because they know nothing about that job. The hon. and gallant Member must not stress flexibility to that extent. He must not expect artificers to be first officers on the bridge, because it is not possible to stretch flexibility that far.
  Vice-Admiral Hughes Hallett: It is always possible to give extreme examples, but the fact remains—and it
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  is no good our ignoring this—that a remarkable degree of interchangeability is achieved in foreign yards, and if the hon. Gentleman had been with my right hon. Friend and me when we visited some of these foreign yards I think that he would have been surprised. I certainly was.
  My hon. Friend the Member for Belfast, South (Mr. Pounder) began by saying that he thought the timing of this Measure was correct. I was glad to hear him say that, because I am sure that he is right. I am prepared to concede that there may have been a certain element of luck in that the timing fitted in so well with the needs of the industry, but I am sure that the timing was right.
  My hon Friend went on to remind us of the great benefits which the firm in which he is interested, Messrs. Harland and Wolff, has gained from rationalisation, or modernisation. In that case the two words really apply to the same process. I agreed with a great deal of what my hon. Friend said about the various measures that were needed to make the industry more competitive. I also agreed with him when he called attention to the difficulties facing some of our foreign competitors as well as the difficulties facing this country.
  My hon. Friend was followed by the hon. Member for Dunbartonshire, East who followed up my hon. Friend's last point by reminding us that the industry is a great deal more efficient than it is often painted, and that cannot be said too often. We rightly concentrate on weaknesses in the industry, because we are trying to give a lead to improve it, but there are great areas where the industry is fully competitive with any other country in the world.
  The hon. Gentleman went on to point out that the function of the Government was not to create prosperity but to give a lead and create the climate in which it can come. He asked whether we had power under the Bill to impose standardisation, to give directions as to where orders should be placed, and so on. There are no such powers in the Bill, and I assure the hon. Gentleman that this Government at any rate would never dream of embarking on any enterprise of that nature. In fact, I cannot think that any Government would. After all, even in the nationalised industries

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  one does not interfere in that sort of thing. It is regarded as part of the commercial judgment of the board which runs the industry.
  My hon. Friend the Member for Belfast, East suggested at the beginning of his speech that most countries give assistance to their shipbuilding industries. Certainly some do, and I assure my hon. Friend that there is no lack of study of the subject by the Government. But the countries that give assistance are not very important in the context of what we are discussing today. The two dangerous competitors are Sweden and Japan and their industries are not directly assisted by the Government; at any rate, not to any appreciable extent.
  Mr. McMaster:My hon. and gallant Friend referred to the fact that Japanese shipping was assisted by the steel subsidy. Has he taken account of the fact that cheaper steel is provided for ships that are built for export?
  Vice-Admiral Hughes Hallett:That is not a subsidy by the Government. It is an arrangement between the Japanese shipbuilders and the Japanese steel companies. It is an arrangement within the industries.
  That brings me to my hon. Friend's intervention on the question of steel, on which the hon. Member for Sunderland, North, my hon. Friend the Member for Sunderland, South, and the hon. Member for Dunbartonshire, East spoke at great length. The facts are that the price of steel accounts for more than 20 per cent. of the cost of producing a big tanker.
  It is true that our shipbuilders have been worried about the prices that they have had to pay for steel, because the shipbuilders of Japan and Sweden have been able to get it more cheaply—just how much more cheaply it is not easy to establish. One sometimes hears the most sweeping statements about price differentials between one country and another, but on investigation they turn out to be based not on ruling prices but on prices for job lots or, at any rate, comparatively small quantities—too small to affect the average price.
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  Nevertheless, it looks as if the Swedish yards have been able to get their steel at prices far below that which our builders have to pay to account for a difference in the cost of a tanker of between 30s. and 35s. per dead weight ton, according to our calculations. That is a serious matter. It is not a negligible proportion. It works out at about £80,000 on a 50,000 ton dead weight tanker. The Japanese also have some advantage in this regard in respect of the ships they build for export, but it does not appear to be so great as in the case of Sweden.
  Our maximum steel prices are fixed by the Iron and Steel Board. The heavy steel makers have agreed among themselves to charge their customers these maximum prices, and these agreements are coming before the Restrictive Practices Court, starting in April. The shipbuilders are at present considering the nature of their evidence. I shall say no more than that tonight.
  Dr. Dickson Mabon: In the hon. and gallant Member's illustration concerning Sweden, what is the practice under E.F.T.A.? Is there anything in the E.F.T.A. Agreement which may shake the position of Sweden or affect our own?
  Vice-Admiral Hughes Hallett: I do not think that Sweden is doing anything outside the terms of E.F.T.A. It is not a question of subsidy, or anything like that. Although important, the steel question must not be exaggerated. I went to a Swedish yard a few months ago and I found there was no cheap steel there at all at that time.
  I now want to say something about the short-term effects of the Bill. I feel that the House has not entirely appreciated the magnitude of the change which took place in 1963. At the risk of boring the House I want to give one or two figures again. A year ago the total on our order books, including all work in hand, stood at just over 2 million tons. Six months ago it had fallen to 1·8 million tons. Today it has risen, and stands at 2·4 million tons. During 1963, at total of over 1½ million tons of orders was booked, of which about 41 per cent.—about 640,000 tons—was under the aegis of the Government credit scheme. It is clear that

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  there has been a dramatic upturn in the immediate outlook, but, as the figures show, it would be wrong to ascribe it all to the influence of the credit scheme.
  Mr. Fernyhough: I understood the Minister to say in his opening speech that orders under the credit scheme amounted to 850,000 tons.
  Vice-Admiral Hughes Hallett: That is the total, but it has not all been placed in 1963. Some orders are still to come.
  The first reason why the position of the industry has improved is that it has become more competitive, especially in respect of the more complicated vessels, such as passenger liners, specialised bulk carriers, dredgers and so forth. This was shown clearly in the first quarter of 1963, before the credit scheme took effect, when there were 400,000 tons of orders, 42 per cent. of which was for export, on foreign account.
  Secondly, the credit scheme itself has achieved almost exactly what was intended. Thirdly, freight rates have recovered a little from the disastrous level to which they fell during the shipping slump. This has encouraged the more enterprising shipowners to feel once again that shipping services may become profitable, especially for new and more economical ships.
  To this I must enter one caveat. Shipbuilding prices are still abnormally low, and we are far from satisfied that the orders placed in 1963 will yield a margin of profit sufficient for the health of the industry. Yet the orders are very much welcomed for the employment they produce in regions where the main industry is bound up with shipbuilding.
  In this connection I want to say a word or two about the effect on employment, which goes some way towards justifying the Bill. About 1,200,000 tons of merchant ships are under construction, and 58,000 people are engaged in shipbuilding at this moment. The last time when the volume of work under construction was as high as that was in the summer of 1962, when we had 66,000 men in the industry. These figures suggest that there has been an improvement in productivity, and we all know that there has been an increase in the speed of building. This, by itself, means an increase in productivity. Also, a
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  faster stream of orders is needed to keep a given labour force in steady employment. That is what modernisation is about. It is at once a reason and a justification for the £150 million spent by the industry in making some of its shipyards up to date. Had this not been done, orders would have gone abroad, and no amount of credit schemes would have saved the industry.
  In forecasting how employment in the yards is likely to be influenced by the credit scheme we have made some allowances for increased productivity. My right hon. Friend has indicated that later this year we expect to have about 1½ million tons of commercial vessels under construction, giving employment to about 70,000 men. Here again, there is an interesting comparison to be made. The last time that the level of activity was as high was in the middle of 1961, when about 80,000 men were employed.
  Another consequence of modernisation is that it augments the immense surplus of building capacity of the whole world, and the substantial surplus in this country—by how much is a matter of argument. But it would be unrealistic to imagine that every yard in the kingdom is likely to be fully occupied again.
  This brings me to the second lesson, that when an old-established firm goes out of business—painful though it is—it is a mistake to imagine that this is a bad thing for the industry as a whole. As my right hon. Friend indicated, some rationalisation is necessary if costs are to be kept to the minimum, and one form which rationalisation commonly takes is the closure of some yards so that others can work at full capacity. In this connection I repeat that the volume of employment is determined by the size of the total order book and not by the way in which it is divided between different yards.
  The livelihood of the workers can be secured only if they are employed in highly efficient and up-to-date yards. How secure will their employment be then? That is the great question, on the answer to which will depend the ultimate justification for the Bill. We wanted to give the industry a breathing space, not for the Government to breath down its neck but rather for its leaders to take stock of their position and to do what needs to be done to bring

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  their costs into line with those of their foreign competitors.
  As to prices, let us be careful not to equate them necessarily with costs. The facts have to be faced, and the position is fairly clear. There is nothing secret about it. We are least competitive when it comes to building the very large and simple vessels, such as tankers and bulk carriers. Our most formidable European rival is Sweden, and from all the information which the Government have been able to glean—most of it being published information—Swedish prices are anything from £5 to £6 lower per deadweight ton than our own, and Japanese prices are more like £10 lower. In terms of percentages that means that the prices are over 10 per cent. lower in Sweden and nearly 20 per cent. lower in Japan.
  Many reasons have been advanced to account for the differences, but this is not the occasion to go into them. Nevertheless, I can assure the House that the industry is using the time bought by this Bill to explore them with great care, and it is keeping us informed of its findings. We are satisfied that there is no fundamental reason why our industry should not be able to match Swedish prices. There cannot be any reason. That is why it would be wrong to go on supporting the industry indefinitely in some special way, such as by this credit scheme. The remedy is in the hands of those on both sides of the industry and it seems probable that the greatest single contribution which could be made would be through the more efficient employment of labour. That has been said at intervals for years. But its truth becomes even more apparent the more one analyses and compares our position with that of other countries.
  I am not thinking only of demarcation. The first requisite is that work should be carefully planned and well organised day by day. That is rendered immeasurably easier if demarcations are neither too numerous nor too rigid. Japan is a tougher competitor. Japanese labour is not only highly efficient, it is also cheap. I am not saying that this accounts for all the difference in price, far from it, or even that it accounts for most of the difference. But it is
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  probably the most important single factor and I therefore suggest that the best single step which the industry could take, in return for what Parliament is doing for the industry in passing this Bill today, would be to reach agreement, at long last, on the more efficient training, organisation and employment of shipyard labour. With this thought I commend the Bill to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Rees.]
  Committee Tomorrow.

  SHIPBUILDING CREDIT [MONEY]
  [Queen's Recommendation signified]
  Considered in Committee under Standing Order No. 88 (Money Committees).
  [Sir ROBERT GRIMSTON in the Chair]
  Motion made, and Question proposed,
  That, for the purposes of any Act of this Session to enable the Minister of Transport to make loans for the purpose of providing finance for the construction or alteration of ships in shipyards situated in the United Kingdom, any of the Channel Islands or the Isle of Man and the equipment of the resulting ships, it is expedient to authorise—

  (a) the issue out of the Consolidated Fund of sums not exceeding seventy-five million pounds to enable that Minister to make loans under the said Act;

  (b) the borrowing of money for the purposes of the said Act in any manner authorised under the National Loans Act 1939;

  (c) the payment out of money provided by Parliament of any administrative expenses incurred for the purposes of the said Act by that Minister and any sums required by him for making repayments of fees and other incidental sums received by him in connection with loans made or to be made under the said Act;

  (d) the payment into the Exchequer of any sums falling to be so paid by virtue of the said Act, and the re-issue out of the Consolidated Fund of such of those sums as fall to be so re-issued by virtue of the said Act.—[Vice-Admiral John Hughes Hallett.]

  7.5 p.m.
  Dr. J. Dickson Mabon: I should like to ask the Minister to clarify the content of paragraphs (a) and (b). During the Second Reading debate

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  on the Bill it was mentioned that most of this money had been disbursed in one way or another. I should like to have that specifically stated so that we know what is left. I wish to know how much remains of applications pending to 31st May, 1964, which could aggregate to this sum, or near to it. It is my view that the Money Resolution is drawn too tightly and may make nonsense of some of the applications which are outstanding, or the discharging of the duty which it was the intention of the Minister to achieve
  Regarding paragraph (b) I wish to know whether it is the intention that it is to be included under paragraph (a). If this is a misunderstanding on my part, I should be grateful if I may be told to what extent money borrowed for this purpose can come under the National Loans Act in addition to the £75 million laid down in Clause 1(6) of the Bill. This is very important in relation to the possibility of amending the Bill. I should be grateful if the Minister would answer the points which I have raised.
  Mr. Bruce Millan: I wish to support what has been said by my hon. Friend the Member for Greenock (Dr. Dickson Mabon). We wish to know whether this Money Resolution is so tightly drawn that there may well be virtually nothing to discuss during the Committee stage. As was made clear during the Second Reading debate on the Bill, a number of hon. Members would like the Government to spend sums of money additional to the £75 million at present provided for in the Bill which, as the Minister has told us, has already largely been spent.
  It seems clear from the content of paragraph (a) that if the Resolution is passed as it stands it will not be possible for us to move Amendments to increase the sums of money paid under the Bill during the Committee stage discussions, because the Money Resolution providing for £75 million, which is the sum provided for in the Bill, will effectively prevent discussion on this point. I repeat that it is virtually the only point which would be worth discussing during the Committee stage. I wonder, therefore—if that is the case—whether under paragraph (a) it would be possible nevertheless to discuss the kind of thing
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  which I have mentioned, because of the provisions of paragraph (b) which seem to give some additional power to the Government beyond the £75 million. If paragraph (b) does not do that, it is not clear to me what it does do.
  It is rather interesting that the money has been spent without there being any legislation it all. It has been possible for the Government to commit themselves to spending £75 million without coming to Parliament for approval. The Government having done that, I think that it would be more than ironic were the Money Resolution so tightly drawn that we should not be able during the Committee stage of the Bill to press on the Government the necessity to go beyond a figure of £75 million. In this case the Government will have had it both ways. They will have spent the money on their own determination before getting Parliamentary approval, and then on coming to Parliament for approval, they will have drawn the Money Resolution so tightly that we shall be hamstrung when it comes to putting suggestions to the Government for improving the sums of money going to the shipbuilding industry under the terms of the Bill.
  I hope that that is not the way in which the Money Resolution has been drawn, but it appears to be so from the content of paragraph (a). I hope that the Minister will be able to assure us that it is not the case, and that under paragraph (b), or in some other way, additional sums of money may be available, if the Government wish to avail themselves of the opportunity of extending the scheme. In that case we could have a much more fruitful discussion during the Committee stage.
  The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett): I must confirm the worst fears of the hon. Member for Glasgow, Craigton (Mr. Millan). He has correctly read the Money Resolution. The only term on which he was incorrect—as a matter of fact he corrected himself—is that none of the money has been spent yet, in the sense that the loans have not been made. The loans fall to be made when the ships are finished.
  This Bill gives legal authority to do what was announced by my right hon. Friend in two separate announcements in

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  this House. I suggest that the time to propose larger sums of money would have been then—either by a Motion or by a Resolution or some other means—and not now. My right hon. Friend made a clear statement of policy concerning the limits to be placed on these loans. Paragraph (b) will not help the hon. Gentleman to increase the amount being lent for this purpose, because it refers to Clause 2(2) of the Bill and authorises the usual procedure which is observed by the Treasury in providing sums to meet issues out of the Consolidated Fund.
  The hon. Member for Greenock (Dr. Dickson Mabon)—unless I misheard him—raised a question about paragraph (d)—
  Dr. Dickson Mabon: No.
  Vice-Admiral Hughes Hallett:In that case I misheard him and I will say no more.
  Dr. Mabon: I did not raise any point about paragraph (d). But may I be contented by getting an answer to my original question about paragraph (a)? How much money has been committed already? How much money would appear to be, or could be, committed in applications until 31st May, 1964? This is highly relevant in relation to whether the Money Resolution is wrongly drawn.
  Vice-Admiral Hughes Hallett: I cannot state precisely the sum committed at this date because I do not carry it in my head, but I can assure the hon. Member that the greatest care will be taken by the Department, and especially by its accounting officer, to ensure that more money is not committed than the sum mentioned in the Bill. On the other hand, we shall equally try to ensure that as near as possible the full sum is committed.
  Mr. Millan: Under what authority has the money already been committed? Are the Government legally committed already to giving loans up to £75 million? What happens to that commitment if the Government do not get the Bill?
  Vice-Admiral Hughes Hallett: In the hypothetical case of the Government not getting the Bill, I have no doubt that the money would have to be raised
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  above the line on a Ministry of Transport Vote. There is a certain amount of Parliamentary sanction. This point was raised at the time my right hon. Friend made the announcement about the loan. It was pointed out that an item was included in the Ministry of Transport Supplementary Estimate which covered the administrative expenses of the scheme, and in passing that, Parliament legalised the procedure under which the commitments have been entered into.
  Mr. William Ross: We have heard some rather strange prognostications about what may happen if we do not pass the Bill. If we do not pass the Money Resolution, what chance would there be of having a Supplementary Estimate or some sum included in the Ministry of Transport Estimate being accepted by the House?
  It is interesting that the last Money Resolution of this kind that we had was in respect of a ship which was never built. Now we have money committed but we have not the authority to spend it. We have not got the ships yet, and I wonder whether we are likely to get them. There may be doubt, certainly at the moment, whether the money will be available.
  I am interested in this from the point of view of procedure. The Government could very well have permitted flexibility in the Money Resolution in the interests of hon. Friends of mine from Clydeside and elsewhere in Scotland who are anxious to have a greater measure of generosity from the Treasury and the Ministry of Transport in regard to the shipbuilding problem. If the Government had allowed more flexibility, it would have enabled my hon. Friends to seek amendment of the Bill. But the way this has been done means that, although we could amend the Bill as much as we liked and extend the provisions in connection with the kind of ships which can be built, the sizes of ships and so on, or limit the provisions, we cannot get any more money.
  This makes a farce of the process of legislation in Committee. It means that the Minister can say, "I shall virtually be able to get the Committee stage through in record time." That will please the Chief Whip and his minions because it will mean less trouble for them, but

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  it is rather unfair in view of what has been said in this debate about not enough money being made available and the time limits being inadequate to the problem which the yards are facing.
  7.15 p.m.
  It is not right for the Parliamentary Secretary to say that this is in the usual form and the Treasury has accepted it. I do not see any Treasury Minister present who is prepared to defend it. It is not for the Minister to defend it; it is a matter for the Treasury. We ought to insist upon someone from the Treasury being present. Are the Government convinced that this is the limit to what they can get from the Treasury? Ought they not to unburden themselves and tell us why the sum is limited to £75 million? We are entitled to an adequate explanation why they have tied themselves to this sum. There seems to me to be no reason why the Minister should not withdraw the Money Resolution and do battle with the Treasury to get more money and allow greater freedom of discussion in Committee. That would be reasonable in the light of the arguments which have been put forward.
  I was interested in the remarks made about a Supplementary Estimate and a sum being included in respect of this. I presume that the Supplementary Estimate has already come before the House and that the House has accepted it. But, according to paragraph (c), we are being asked once again to authorise the payment out of money provided by Parliament for any administrative expenses incurred for the purposes of the Act. I presume that this is something which we have already provided for, according to the strange statement made by the Parliamentary Secretary. Presumably we are committed to spending money without any authority at all. Then we are told that we already have authority in respect of expenses, and now we are asking for it again. The Ministry of Transport has some strange ways.
  If the Minister of Transport would like to clear the matter up, we should be glad to have the information. Can he tell us what the administrative expenses are likely to be? Could he tell us what sum will be required by him for making repayments of fees and so on in connection with the repayment of loans? What fees are these, and how much is
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  involved? If we could have a breakdown of the moneys involved in paragraph (c), we could see more clearly whether or not the Parliamentary Secretary's statement about these things being already covered by a Supplementary Estimate was accurate.
  Mr. Frederick Willey: We are greatly obliged to my hon. Friends for raising a matter of considerable importance if we are to exercise the rights of the Committee in financial matters. We are in very real difficulty here. The right hon. Gentleman originally suggested £30 million. We understood that in due course we should have an opportunity to debate the matter. The £30 million was the right sum. Later the figure became not £30 million but £60 million. Later it became not £60 million but £75 million We have every right to challenge the right hon. Gentleman's judgment. Clearly he was wrong—
  The Minister of Transport (Mr. Ernest Marples):Perhaps I may make that point clear. When I first announced the £30 million, I said that we would see how it went and if it proved to be insufficient we would increase it. It was the same with the £60 million. But I said that the £75 million was the final figure.
  Mr. Willey: I am merely expressing the opinion that the right hon. Gentleman's judgment was not final. He expressed it to the House as not being final. Obviously, his original guess was hopelessly wrong. When he suggested £30 million, he indicated to the House that that was about right.
  Mr. Marples: No.
  Mr. Willey: I appreciate the right hon. Gentleman's difficulty now. I am trying to help him. If he does not want to be helped he will not be helped. He is very stupid. He has a habit of upsetting the House quite unnecessarily. I will tell him what the difficulty is if he does not appreciate it. If there is any suggestion that this is not the final figure it will affect orders being put in because British shipowners will hold back, thinking that the figure may be revised. That is why the House should have an opportunity thoroughly to discuss this matter. We want to know what the figure is. That is why we want a

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  debate now. I referred earlier to the president of the Shipbuilding Conference who suggested that the sum was probably not right. We want to know whether it is right or not.
  I am not unappreciative of the right hon. Gentleman's difficulties even if he himself does not appreciate them. At any rate, this is a greater reason for our trying to obtain a debate in order that we may discuss the matter now. We have reached the figure of £75 million which, incidentally, includes the Cunard project which we have not discussed. In fact, we have not discussed this sum on Second Reading. This is really a Committee point. One would accept that it was right to discuss the £75 million and the build-up of the £75 million, and, in particular, the money for the Cunard project in Committee.
  I want some assistance from the right hon. Gentleman. I say that he is stupid because he ought to appreciate that he owes the Committee an explanation on this point. I should have thought that he would have been willing to accept the responsibility for seeing that in one way or another we could discuss it in the Committee stage of the Bill. I do not think that this is raising a matter which is unimportant. On the contrary, it is of considerable importance. I also think that it would assist the Minister and the Parliamentary Secretary if we reached some finality about it, if we felt that it had been discussed and we had reached the conclusion that in present circumstances this was the right sum. The point having been raised, I hope we shall have some co-operation in ensuring that we shall have an opportunity to discuss the £75 million sum later in our proceedings.
  Vice-Admiral Hughes Hallett:I thought we had had a very considerable discussion over the last few hours on whether the scheme should be terminated now or extended. A great deal of the debate has ranged over that subject. If there is any doubt left about whether there is finality over this sum or not, I should have said that it is no fault of the Government side. My right hon. Friend and I have made it quite clear that we do not think it proper to continue the scheme beyond the present level, and that is why we
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  have published the Bill with the £75 million in it. That was a clear indication to the whole industry that the credit scheme had now reached its limit from the Government's point of view.
  The matter raised concerning paragraph (c) is one of rather greater complexity. The administrative expenses, in so far as they involve Ministry personnel, are borne on the Ministry of Transport Vote, Class IV, Vote 10. The work of the Ship Mortgage Finance Company, which is employed by the Advisory Committee to act as its agent to go into all this, will have been completed, we estimate, by the end of the current financial year. We also estimate that the fees of the Ship Mortgage Finance Company and any expenses which the members of the Committee might claim—I understand that none has been claimed up to date—will have been paid this year and the charges will have been borne on the Transport (Shipbuilding Loans) Vote, the Vote which appeared on the Supplementary Estimate for the first time shortly before we rose for the Summer Recess. That Vote will lapse after 1963–64 because these fees and expenses, if any, will by then have been paid.
  I was asked whether I could say what the total expenses would be. I cannot give the figure offhand, but I think the amount will be well under £100,000 for the entire scheme from beginning to end.
  Mr. Millan: In the last paragraph of the Explanatory Memorandum, the figure of £280,000 is given. How does that compare with "under £100,000"?
  7.30 p.m.
  Vice-Admiral Hughes Hallett:It arises from a different source altogether, I was about to explain that under the terms of the loan the shipowner borrowing has to pay an engagement fee of three-eighths per cent. on the value of the loan and a commitment fee of 1 per cent. on the total amount of the loan. These fees are paid immediately the acceptance of the loan offer is made. The engagement fee of three-eighths per cent. is retained by the Government, the object being to repay administrative costs. The commitment fee, on the other hand, is repayable to the borrower provided that he does not fail to honour his agreement to take up the loan. In

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  other words, it is repaid at the time the loan is made.
  The moneys received from borrowers by way of engagement and commitment fees have been credited to the Appropriation-in-Aid of the Transport (Shipbuilding Loans) Vote, 1963–64. Provision for the repayment of the commitment fees will be made in the Transport (Shipping and Special Services) Vote for 1964–65 and thereafter.
  The engagement fees which are being paid will reach about £280,000 and should be more than sufficient to meet all the administrative costs, including, incidentally, the fees paid to the Ship Mortgage Finance Company. It is not the Government's intention to refund any proportion of the engagement fees which may eventually be found to be in excess of the actual administration costs.
  This is a matter which could be raised when we reach Committee, but it is not our intention to refund this money because the administration costs over the next 12 or 14 years, when the scheme requires administrative work, are not easy to estimate with any accuracy. Furthermore, we have made no financial provision at all for bad debts in calculating the lending rate of interest. The lending rate is the minimum Government lending rate. We think that any margin in the £280,000 could justly be retained as some small offset against that risk.
  Dr. Dickson Mabon: Is it not unfair that the hon. and gallant Member should be able to say all that about paragraph (c), which covers barely £500,000, and yet be unable to tell us anything at all about paragraph (a), which concerns a figure of £75 million? He says that he does not carry that in his head. He did not carry the other information in his head, either; he carried it in his brief.
  The whole burden of my inquiry rests upon whether that figure is adequate. Are we not entitled to be told the breakdown of the commitments into which the Government have already entered within the £75 million? One of my hon. Friends said that these commitments involve £17 million—I do not know whether the figure is accurate—for the Cunarder. How much has been committed in actual contracts and how much is in the so-called pipeline? We are entitled to
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  know those figures. If the Government cannot provide us with essential information on paragraph (a), then the Financial Resolution ought to be withdrawn and resubmitted
  Vice-Admiral Hughes Hallett: I do not understand the hon. Member's argument. The reason I spent some time on paragraph (c) was that I was asked about paragraph (c) and I did my best to reply. Although the sums involved are relatively small, they are rather more detailed.
  The question which he asked me, and which I did not answer offhand, was how much of the loan money had been committed to date. I now have a note of the exact sum, but if I may say so, it is quite irrelevant to the matter and I am not at all sure whether I shall not be ruled out of order if I give it. At the moment it is £73·8 million.
  What I have told the Committee is that we intend eventually to commit the full amount allowed for in the Bill and the Money Resolution. As I understand it, it would not be in order to move Amendments to that figure in Committee, but, unless I am very much mistaken, it is not out of order in Committee to discuss the exact way in which the moneys have been divided up.
  Dr. Dickson Mabon:We have now extracted from the Minister—and I am sure, Sir William, that you are as glad as I am—that the commitment is £73·8 million, which leaves a balance, if the Committee agrees to put the figure at £75 million, of £1·2 million. That is the margin of our manœuvrability. It is not a very substantial margin. How much of the £73·8 million is involved in the commitment to the Cunarder? We are entitled to know, because it is very relevant to the full assessment of this so-called short, sharp help to the industry.
  Vice-Admiral Hughes Hallett:The figure has been stated publicly. It is between £17 and £18 million, which is included in the £73·8 million. That loan has been accepted by now. As to whether we go any further, I think that it would be in order, if the hon. Member wished, in Committee, to move that the scheme be halted at the present stage.
  Mr. Ross: We are told that the maximumis £75 million and that 73·8 million has been committed, leaving a margin of £1·2 million. The Minister told us that it includes something set aside for a Cunarder which is to be built on the Clyde. [Interruption.] If it is not to be built on the Clyde, then we shall speak a long time tonight. The Minister gaily tells us that that figure is between £17 million and £18 million—a margin of £1 million.
  Vice-Admiral Hughes Hallett: I never rely on my memory in these matters and I do not carry all these figures in my head. I am not as clever as is the hon. Member in this respect. The sum, in fact, is almost exactly £17 million.
  Mr. Ross: Is it exactly £17 million or between £17 million and £18 million? One is not required to be clever in order to ask a Minister for information which, if he is properly briefed, he ought to have. When a Minister asks the Committee for authority to spend £75 million he ought to be able to tell us exactly what he wants it for and to break the figure down for us.
  I do not know whether the hon. and gallant Gentleman has attended many debates on Money Resolutions. Certainly in the not very distant past Ministers were kept at the Box for a long time to satisfy the Committee on such sums of money. Some of his hon. Friends who make speeches outside the House on money matters are never here when it comes to the point at which we can control expenditure. They are never here to use the opportunity which is available to find out exactly what has happened. We can do with a little less of the hon. and gallant Gentleman's sarcasm about how clever we are on this side of the Committee or any other side. He has to justify to the Committee the authorisation of this sum of money. We ask him reasonable questions and we expect a reasonable reply.
  It is clear that the Government are not leaving much margin for manœuvre. It is not the first time that we have had miscalculations in the Government's estimate of the cost of a project. I was looking today at a comparison between the cost of the repairs to Downing Street and the original estimate. I hope that there has been no miscalculation about
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  the cost of some ships. If there has, £75 million will not meet the need.
  Vice-Admiral Hughes Hallett:That is entirely incorrect. It would not matter how much more a ship cost. That would not affect the amount of the loan. The one figure which I am required to make clear at this stage is the maximum limit for which the Financial Resolution asks, which is £75 million. If the hon. Member is right in thinking that the debate on the Financial Resolution is the correct time at which to itemise the way in which all the proposed loans will be given, then all I can say is that I was under a misapprehension. I did not think that it was an appropriate time to itemise the way in which all the loans have gone. The total figure for which we are asking in the Bill is £75 million, and we shall not exceed that figure.
  Mr. Ross:It is not a case of the hon. and gallant Member promising the House that he will not exceed the figure. Under the constitution, if the Financial Resolution is passed he cannot exceed it.
  I do not know whether he appreciates that we on this side of the Committee have had some experience of Money Resolutions and know how far we can go in the debates. The hon. and gallant Member will be amazed how far we can go about the £75 million. I could ask whether the shipbuilding yards in Scotland were getting a proper share of the £73·8 million at present committed and refuse to pass the Money Resolution until I was satisfied. I could ask him—and expect a reply—how much of it has been committed in respect of ships to be built on the Clyde. If I am not satisfied, it is open to me to oppose the Money Resolution. If I feel that we are not getting our fair share for the shipbuilding industry on the Clyde, I can oppose the Money Resolution.
  It may be a pity that the hon. and gallant Member has been landed with the responsibility for the Money Resolution. It is not the first time that I have complained that the name of a Treasury Minister appears as sponsoring a Money Resolution and then it is left to the Parliamentary Secretary dealing with the Second Reading of the Bill to give mumbled answers from a brief which he is probably reading for the first time.

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  In view of the history of this matter related by my hon. Friends, I think that the Government are wrong to tell the Committee that they are putting this figure in the Money Resolution and that we cannot alter it—that we can talk until we are blue in the face but it will have no effect because the Money Resolution has been passed by the Committee and no Amendment to it can be discussed. We could put down all the Amendments we like, but they could be ruled out of order because they conflicted with the Money Resolution, and it would simply be a matter on Second Reading of voting for or against a figure of £75 million with no scope for upward amendment.
  I am not satisfied by the explanation given about this figure. If we pass the Money Resolution, the figure of £75 million is final. We may deplore it in Committee but we shall have no opportunity to do anything about it unless we persuade the Government to take away the Money Resolution and to return with one which will enable them to bend to the persuasions of hon. Members from both sides of the House that it may well be desirable to have a higher figure. It may be that my hon. Friends should continue the persuasion now. I am far from satisfied either with the hon. and gallant Member's replies or with the rather fractious way in which he suggests that we should not raise these matters at all.
  Mr. Cyril Bence: I am grateful to my hon. Friends for raising a point which I had not noticed. During the last General Election in Scotland the Prime Minister made a statement promising the replacement of the Queens, and as a result a Bill was passed by the House. I well remember the Bill. We passed the Money Resolution providing £18 million advance to the Cunard Company to build a new Cunarder. That is now an Act of Parliament. It has never been repealed. The Financial provision was agreed by Parliament providing £18 million to finance the replacement of one of the Queens.
  That is a separate item from the subject which we are debating tonight. In this Money Resolution, attached to another Bill, the Shipbuilding Credit Bill, the figure is given of £75 million.
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  But we are told that in this Money Resolution is included the £18 million which was the subject of a Money Resolution in l960.
  We sanctioned that Money Resolution in 1960 giving the Minister power to pay out of the Consolidated Fund £18 million or to borrow under the National Loans Act, 1939 in order to finance the replacement of the Cunarder. That is already there. Are we then entitled to move in Committee that this £75 million does not include the £18 million in the other Money Resolution? We voted one sum of money four years ago. We are now pretending or appearing to vote another sum of money for £75 million. Anyone looking at the records of this Parliament would say that, in l960, the House voted £18 million for Cunard and, in 1964, voted £75 million for the shipbuilding industry. Anyone looking at it would imagine that this Money Resolution excluded the £18 million, so that, over the four years, we would have voted £94 million. But we have not. We have voted only £73·8 million. It is really a crazy situation. I do not know the answer to it.
  It seems absolutely ridiculous to bring forward a Money Resolution which relates to a sum of £75 million, authorising the Minister to pay such moneys out of the Consolidated Fund or to borrow for the purpose, when he has actually committed only £73·8 million and has, apart from this, according to another Act of Parliament, committed £18million four years ago which he wants to say is included in this. I refer again to my suggestion that it would be legitimate in Committee to put down an Amendment on the lines I indicated. I cannot see that it would be infringing any Money Resolution to do so. I have never heard that the Money Resolution passed in 1960 has been repealed or annulled because Cunard said that it could not afford to pay any money out itself. Did the decision of Cunard automatically nullify the powers we gave to the Minister? Is the Minister saying that, because Curard did not want to build the ship, the provision we made to provide £18 million for the purpose is thereby nullified and the Cunard Com-

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  pany repealed or made inoperative an Act of Parliament? If that is so, how can it be said that the £18 million is included in this? He cannot have it both ways.
  I suggest that the £18 million is additional to this, a different sum altogether under a different Act of Parliament. This is a new piece of legislation. It is not a Bill to provide an extra £75 million; it is a Bill to provide an extra £55·8 million. The Money Resolution is false; it is a misstatement. It should refer not to £75 million but to £55·8 million.
  The Minister ought to give us an explanation. I do not know whether I shall be a member of the Committee, but I hope that we shall in Committee put down an Amendment to exclude the £18 million or to have the £18 million added to the £75million. We want an answer from the Minister. I am not satisfied, and I am very grateful to my hon. Friends for directing my attention to this complication, which appears to be very serious. Once again, the House is much indebted to the lively attention of Scottish Members in raising the point.
  7.45 p.m.
  Dr. Dickson Mabon: I beg to move, That the Chairman do report Progress and ask leave to sit again.
  I do so on two grounds. First, there is the excellent point made by my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) which raises—
  The Chairman:I am not prepared to accept that Motion. If the hon. Gentleman wishes to address the Committee, he may do so.
  Dr. Mabon: With regret, Sir William, I have to accept your Ruling, although I believe that I have a very good case. Perhaps I may try again later, if we continue to have the same reception from the Government Front Bench.
  I sympathise very deeply with the Ministers in their difficulty. They have not all the information at their finger tips and, apparently, they are not able to obtain the necessary assistance from those who help them in the Ministry of Transport. It is a great pity. It is regrettable also that there is no Treasury Minister here because a Treasury Minis-
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  ter might be able to help on this point. If my hon. Friend the Member for Dunbartonshire, East, who seems to show more appreciation of the implications of Money Resolutions than Ministers do, is correct in his assumption that the £75 million does not necessarily involve the Cunarder and we can take that out of our consideration because it is already covered by the financial provisions of the North Atlantic Shipping Act, I can be much more content than I was before. This will be a splendid windfall of £17 million or £18 million.
  Mr. Ross: It is £17 million.
  Dr. Mabon:It is £17 million according to the Parliamentary Secretary, but my recollection of the North Atlantic Shipping Act is that it was £18 million.
  Mr. Bence: I thought that it was £18 million.
  Dr. Mabon:There we are. Members of Parliament are not expected to carry these things in their heads as Parliamentary Secretaries are. We are entitled to be told exactly what the position is.
  First, is the money for the Cunarder within the £75 million or is it not? Second, exactly how much money is involved? I thought that the Parliamentary Secretary was rather unfair to me—perhaps he is annoyed with me, and I can understand that—when he suggested that the intention of our intervention here was to restrict the level of loans to £73·8 million. That is not our intention. Every hon. Member who spoke on the Second Reading of the Bill made clear that he regretted that the Government were putting a ceiling of £75 million on the whole exercise. I reiterate that. I deeply regret that there is this ceiling.
  Is the Parliamentary Secretary confident that, between now and 31st May, 1964, the applications for loans can be satisfactorily dealt with up to the level of £1·2 million? The Resolution is put in such a strict way that he will have to refuse applications, perhaps applications approved as valid and desirable by the advisory committee, because of this arbitrary limit of £75 million. This is very important to those of us who represent shipbuilding areas. I represent a town which, like any other shipbuilding town, rejoices when an order

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  is received. In every home there is rejoicing even though not all the people are involved in shipbuilding. One order is a lot to a shipbuilding town.
  We are not engaged in a trivial exercise in arguing this point. It is not at all a matter of dilettante Parliamentary tactics. It is a matter of bread-and-butter concern to the shipbuilding towns. I want the Minister to give us the information for which we have asked. I would dearly like him to tell us why he thinks that his judgment is so good that he can decide on £75 million. We have had not a scrap of argument or explanation to show why £75 million is the golden figure. I very much hope that we shall get more from the Front Bench than we have had so far. It is a very important matter and I assure the right hon. Gentleman and his hon. and gallant Friend that this debate on the Money Resolution may well prove to have been more important than the debate which preceded it because people will see now why the Bill itself was accepted rather reluctantly.
  Vice-Admiral Hughes Hallett: Taking, first, what the hon. Member for Greenock (Dr. Dickson Mabon) has just said, he made the same point during the main debate. He said that he thought that the sum should be larger, and this is, I quite understand, an opportunity which he has taken to protest against the fact that we are limiting the total figure to £75 million.
  As regards the Cunarder, as I said before, this figure of £75 million will include the amount of the loan being given in respect of the ship commonly known as the Q4. When I was first asked what the sum was, I said that it was between £17 million and £18 million. Subsequently, someone whispered behind me that it was exactly £17 million, but I find that my original recollection was correct. The exact sum is £17·6 million, which, I hope the hon. Gentleman will agree, is between £17 million and £18 million.
  This figure must not be confused in any way with the figure of £18 million which was quoted in the North Atlantic Shipping Act. That was an enabling Measure which permitted my right hon. Friend to make a loan for a Cunarder
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  which was commonly called the Q3. The North Atlantic Shipping Act could not be used as authority for making the loan in respect of the ship now intended to be built because that Measure was narrowly drawn and defined the purposes for which the ship had to be used. The purposes for which the Cunard Company is now prepared to build go outside that Act. That was why it was decided—in response, I may say, to a certain amount of pressure from the House and from the industry—to make use of this shipbuilding credit scheme to authorise this particular loan and thus save coming to Parliament with an entirely separate Bill, as would otherwise have been necessary.
  As to the total sum—I do not know whether this answers some of the points made by the hon. Member for Greenock—I can only say that, of course, it is not necessary that we should end with exactly £75 million. What is necessary is that we should not exceed it. After all is said and done, the figure written into the Financial Resolution or the Bill does not relate to how much the industry may want to borrow—I am sure that many in the industry, like hon. Members opposite, would like to borrow a good deal more—but it relates to the amount which the Government are prepared to lend and are prepared to ask Parliament to authorise them to lend.
  I can only go back to the debate we had on Second Reading. In his opening speech, my right hon. Friend explained at some length why we thought that this sum was about the right size. It is thought to have generated a volume of orders last year somewhat in excess of what we believe to be the normal rate at which orders will be received by our yards, and the Government's view, rightly or wrongly, is that it would not be a good service to the industry to have a tremendous artificially generated spate of orders, with all the attendant difficulties that that would produce. After all, it was such a situation which was so largelyresponsible, in the years after the war, for the difficult situation in which the industry found itself when orders fell off. I am sure that hon. Members with experience of these matters will agree that it is not in the best interest of yards to go through a period when, first, they are choked with

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  orders and then the reverse. However, I cannot enlarge on what my right hon. Friend said in explaining how we arrived at the general magnitude of the scheme.
  Question put and agreed to.
  Resolution to be reported.
  Report to be received Tomorrow.

  EXPORT GUARANTEES BILL
  Order for Second Reading read.
  7.55 p.m.
  The Minister of State, Board of Trade (Mr. Edward du Cann): I beg to move, That the Bill be now read a Second time.
  This is a Bill authorising the Export Credits Guarantee Department in effect to continue its business and to increase that business. The Bill relates to the liabilities which E.C.G.D. is authorised to incur. When E.C.G.D. issues a policy it puts public funds at risk. Limits have always been set to the total volume of such risks which it may incur. As the Department's business has increased Parliament has successively raised the limits set by the Export Guarantees Act, 1949, as the right hon. Gentleman the Member for Battersea, North (Mr. Jay) particularly will be aware, and as will other hon. Gentlemen present in the Chamber tonight. Four amending Acts have been passed for this purpose, as the House will recall, in 1952, 1957, 1959 and 1961.
  Very large sums indeed are mentioned in the Bill. We do not, however, expect this Measure to involve any cost to the Exchequer through loss. The Department, again as the right hon. Gentleman and other right hon. and hon. Gentlemen will know, has so far been successful in conducting its business on a self-supporting basis. The limits contained in the present Bill involve a projection for some five years ahead, to 1969. However, I think I should make it clear that the Department's increasingly important in the export field—which does involve increasing complexities and the development of new techniques; all the time contracts seem to be petting larger and more difficult—must always involve the possibility that
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  a further request will be made to Parliament for a new extension of the limits before 1969. If this proves to be the case it will, I have no doubt, be further proof of E.C.G.D.'s progress and usefulness. Certainly, I should not complain if that were the case; nor, I am sure, would the House.
  I will now explain shortly the procedures under which E.C.G.D. operates, first, with relevance to Clause 1(1) of the Bill. The Department's insurance business is carried on under two Sections of the 1949 Act. Section 1 of that Act deals with the commercial business, so called because it is underwritten after consultation with the Advisory Council and is considered by the Council to constitute sound insurance. The Council is composed of eminent men from many sides of the banking and commercial world and constitutes a body of practical and informed opinion which has contributed greatly—I am so pleased to be able to say this here—to the soundness and financial viability of the Department's facilities. I should like on behalf of the Secretary of State to express the appreciation of the Government—and, I am sure of the whole House—to them for their services.
  The limit of liabilities under Section 1 now stands at £1,000 million. This limit has been unchanged since the amending Act of 1959. At the end of December, 1963, the latest figures which are available, the actual liabilities amounted to £918·7 million. Although only actual liabilities count against the limit one must also take account of the potential commitments which, at the same date, amounted to a further£96·3 million. These consisted of offers of cover which, in the nature of things, are not all taken up. The House will, therefore, understand that so far as Section 1 is concerned we are very near to our limit. As I have said, estimating the volume of E.C.G.D.'s business five years hence can never be a precise matter. The actual liabilities under Section 1 have increased by £111 million over the last 12 months and there is certainly no clear reason at present to expect any important change in the rate of growth and certainly no diminution. Accordingly, we think it right to provide for future growth of some £100 million per annum. It is on this basis that the Bill provides for the limit on

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  business under Section 1 to be increased from £1,000 million to £1,500 million.
  I now turn to Clause 1(2). Business not accepted by the Advisory Council, to which I referred a moment or two ago, can be insured under the 1949 Act—I quote it—"in the national interest" under Section 2 of that Act, although basic underwriting principles are still observed. The limit of liabilities under Section 2 now stands at £800 million. The limit was last increased by the amending Act of 1961 from £400 million to the present limit of £800 million. At the end of December, 1963, taking the same basis as I referred to in relation to subsection (1), the actual liabilities under Section 2 were £391·1 million. Potential commitments were a further £453·9 million. Again, as in the case of Section 1, we are theoretically nudging the limit, although in practice there is probably still some distance to go.
  It is particularly difficult to make precise forecasts of how liabilities under Section 2 may be expected to develop. Several distinct classes of business fall under the Section. I know that the right hon. Gentleman is particularly interested in this point. Indeed, his speeches in earlier years have indicated this, and I hope that some of the things I shall say will be of special interest to him. The two largest classes of business under Section 2 are financial guarantees and economic assistance loans. The financial guarantees, which were introduced in 1961, are all transacted under this Section. At present they account for over £80 million of firm liabilities and almost £290 million of potential commitments. Calculating the rate at which applications for financial guarantees are being received—and we now have some experience of this matter—and again taking account of the fact that a number will not be firm business, we think that we should provide for the issue of financial guarantees to the value of some £50 million a year. So much for that.
  Economic assistance loans are given to overseas Governments for the purchase of British goods or services. Although given under Section 3 of the Act they are required to be accommodated within the limit for Section 2 business. The future scale of this form
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  of economic assistance must depend upon two factors; first, upon Britain's capacity to provide economic aid, and second, on Government policy as to the form which such aid should take. Therefore, it is particularly difficult to forecast exactly the future volume of this type of aid. We consider it reasonable to provide for a further £50 million per annum. I must however—I think it is appropriate that I should do so—remind hon. and right hon. Gentlemen, for the record at any rate, that this cannot be regarded is a pointer to the composition of future aid, for these loans under Section 3 are, as the House very well knows, only part—at present about one-quarter—of our total aid effort, which has risen so very greatly in recent years.
  The terms of repayment under both these facilities, financial guarantees and economic assistance loans, are such that the rundown of our liabilities on existing guarantees, and loans will make little impact on the figures. There is nothing, therefore, in the immediate future on the credit side. We propose, therefore, to provide for total future commitments under Section 2 at a rate of £100 million per annum—that is, £50 million plus £50 million—and, secondly, increase the Section 2 limit by £500 million from the earlier limit of £800 million to £1,300 million. Perhaps I should add that the other two classes of business under Section 2, business in weak markets not acceptable to the Advisory Council and new, experimental types of cover such as the small exporter policy, do not at present make up a large total of liabilities and we consider this to be accommodated adequately within this new limit. Thus House may incidentally like to know that in two and a half years' operations 1,581 policies have been issued to small exporters. I am sure this is a record of encouraging progress.
  Although, counting in all potential commitments, we are, as I know such accountants as are in the House tonight will have rapidly calculated already, £15 million above our limit under Section 1 and £45 million above our limit under Section 2, I want to make it clear that we do not face an immediate prospect of having to turn away otherwise insurable business. Alas—I say it with feeling—our exporters cannot win every contract which they seek, and those which they

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  may get under offers of financial guarantees relate, of course, to large projects for which the usual commercial negotiations must inevitably be protracted. Nevertheless, I suggest to the House that it is right to consider the whole question of limits at this stage.
  The level of potential commitments is large and it is growing. The House may think that it would be not right to delay the introduction of this Bill till we are clearly about to exceed the level which Parliament has so far authorised. Indeed, I would go so far as to say this. E.C.G.D. could not offer a continuous service to exporters, as I believe it must, if we had to wait till actual liabilities reached the statutory ceiling before Parliament considered raising it.
  On a point of some detail, that is to say, relating to Clause 2, I should perhaps mention the new arrangements for the Channel Islands and the Isle of Man, under which exporters in those places will be able to obtain the same facilities as exporters in the rest of the United Kingdom. I am confident that any encouragement which the extension of the facilities provides to exporters in these islands will be to the benefit of the British economy. The House may again like to know that the authorities in these islands favour this step. There is, however, a corollary. It is this. Exporters in the United Kingdom will no longer be able, as they may now if they wish, to ensure with E.C.G.D. sales to buyers in the Channel Islands. This insured trade is small, and commercial insurance is, in any case, available for it. The balance of advantage, the House may think perhaps, clearly lies in making this change.
  To summarise, the purpose of this Bill is to enable E.C.G.D. to continue its increasingly important work of helping and protecting British exporters and thereby further promoting our export trade. Having described shortly, and, I hope, clearly, the individual Clauses of the Bill, I would make, similarly briefly, certain other general points regarding the Department. I think I should say a word particularly on the subject of its reserves.
  Reserves on commercial account are currently £41 million. This sounds a very great deal of money, but when considered in the context of the total of
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  E.C.G.D.'s business I believe it really a very small amount of money. Be that as it may, these reserves are not free reserves. Part consists of premium received on many transactions which have a considerable time to run and on which claims may have to be paid at some future date. I suggest to the House that the existence of a residuary reserve must be of real benefit to the British exporter, in that E.C.G.D. is enabled thereby to be, on suitable occasions, more venturesome in risk taking, particularly in the volume of risks which it can carry on any of the large and relatively unstable markets, by having this record of successful business to fall back on.
  The real evidence of the value of E.C.G.D. to Britain's export trade is the volume of business it insures. I have spoken of this in general terms already. Now I should like to be particular. In the past 12 months it insured £1,100 million worth of British exports on behalf of no fewer than 7,000British exporters. For the first half of the financial year E.C.G.D. covered more than 25 per cent. of our direct exports, double the proportion insured 10 years ago.
  I have no reason to think that this proportion will fall to any marked extent in future. Indeed, I would suppose quite the opposite. The E.C.G.D. is still the world's largest export insurer and the British export trade is still the most fully credit-insured in the world. The growth of business and the establishment of a reserve has in turn benefited policy holders. I have mentioned one aspect of this already. I now mention another. The average cost of insuring business on up to six months' credit has dropped during the last nine years alone from 11s. 8d. to 6s. 5d. per £100 insured—not quite a reduction of as much as 50 per cent., but, none the less, a substantial reduction.
  I am glad to have the opportunity to give the House a progress report on E.C.G.D. for which, under the Secretary of State, I now have responsibility. As the House is very well aware, and as the National Economic Development Council has made plain, increased exports are fundamental to the progress of our economy. The work of the Government in facilitating the task of

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  exporters is assuming an even greater significance year by year and month by month. The precise figures of exports in 1963 are now becoming available and will be announced before the end of this week in the ordinary course. I imagine, however, that the House would wish to have the best information I can give during this debate.
  I am happy to report that during 1963 exports were an all-time record at a figure in excess of £4,050 million, representing an increase of over 7 per cent. on the previous year.
  Mr. John Diamond: In money terms?
  Mr. du Cann:Yes. I was going on to say that by comparison with the early years immediately after the war, again in money terms—I recognise the distinction which the hon. Member rightly makes—this represents an increase of well over three times which, even taking into account the fall in the value of money, is a colossal achievement on the part of British exporters who work hard to achieve these results, and it is some compliment to the many and varied services which the Government endeavours to provide and of which the work of the Department is one.
  I wish to make it plain—this is the first occasion that I have had the opportunity to speak on this subject in particular and on these subjects in general—I shall not hesitate to authorise improvements in the service of E.C.G.D. in order to keep pace with changing conditions. The House will realise that there are practical limits on what can be done. For example, it would be wrong for the United Kingdom to start a credit race from which no nation would gain. On the other hand, the conditions available to British exporters must be as good as any in the world.
  One item which we are currently investigating is the Department's accounts, about which comments have been made in earlier debates, and related issues of policy.
  Mr. J. J. Mendelson: Is it not misleading to talk about starting a credit race? Surely all that can be usefully discussed is how much we can do in order to remain in the race at all.
  Mr. du Cann: I do not think that is altogether true. I agree that this question of competition between nations over terms of credit is thoroughly worrying and difficult. It is a matter to which we have given great attention both in our membership of the Berne Union and the work we have endeavoured to do in O.E.C.D. Senior officials of the Department have literally only just this minute returned from discussions in Paris on this point. I think that there is great substance in what I have said about the need to avoid leading a credit race, because it is plain that our techniques—and I hope that the hon. Member will accept this from what I have said—are as sophisticated as any. It is plain, too, accepting the fact that we are the most credit-insured nation in exports in the world, that other people are to some extent jealous of what we have done and will watch what we do in future with great interest. It would be easy for us to lead a credit race, but I am sure that no one would gain from it. I stand by what I said when I made the point that the facilities available to our people must be as good as any.
  Officials of the E.C.G.D. and the Treasury are at present engaged in a thorough study of the detailed matters to which I referred—the question of accounts and related matters of policy. In the context of what I have been saying in general, this is perhaps a minor point, but I make it simply as an earnest of our intentions in the matter, to improve the efficiency, effectiveness and, from the point of view of Parliament, the clarity of the Department's work whenever this is possible.
  I have spoken about the attitude of our overseas competitors. I think that perhaps the best possible tributes to the Department arise from time to time from our overseas trade competitors. It is, perhaps, ironic that the unusual number of cases when the Department facilitates business which would otherwise not have been done tend to attract less comment at home than the individual cases where the Department may find difficulty in meeting exporters' exact wishes. I always feel that this is rather like marriage. It is the difficult cases which hit the headlines but our own individual Dunmow flitches receive no attention.

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  The Department engages in a highly specialised business: export credit insurance against commercial and political-economic risks. It consistently conducts its complex affairs on sound commercial lines, and has a history, as the right hon. Member for Battersea, North will know, of 33 years of successful operation.
  Mr. Douglas Jay: Thirty-three years?
  Mr. du Cann:The right hon. Gentleman questions my arithmetic. I made most careful inquiries to ensure that my figure of 33 years was correct. It is possible to argue a number of different dates, beginning, perhaps, with 1919. I am taking as a basis the Niemeyer Report, with which the right hon. Member will be familiar. Whether we argue about 33 years or 35 years does not matter very much. What matters is the service which is given today and the fact that the Department has an unparalleled record of success, about which I know we all agree.
  Mr. Julian Snow: The hon. Gentleman has referred to the relatively few cases in which the requests of exporters have not been met by the Department for good reasons. Has he any information about the geographical locations concerned in these rejections? I refer to this because I am particularly interested in difficulties confronting potential exporters to emergent countries where commercial and mercantile practice is, perhaps, not very sophisticated.
  Mr. du Cann:The hon. Member does the House a service by raising that point. I cannot without notice give a specific reply to his somewhat technical question. An answer would require the collection of a mass of statistics. I am aware of the difficulties when perhaps less sophisticated techniques and less ordinary commercial understanding are current in some newly emerging countries, and these make difficulties for the Department; it is no good gainsaying it. Such experience as I have had in the Treasury and now at the Board of Trade prompts me to suppose that the attitude of the Department is to endeavour to be helpful. I should be satisfied that business is not refused unnecessarily
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  or wrongly. On the other hand, I recognise that the hon. Member has substantial commercial experience which makes his intervention all the more valuable. I invite him and his friends in commerce to let me know personally of any points of difficulty which I will be ready and happy to look into, as will officials of the Department. I will give him the information for which he has asked in the form of correspondence in the next few days.
  The Department has steadily extended the range of its facilities by innovations which make it not only the leading credit insurer in terms of turnover but a fertile innovator whose techniques are widely copied by its overseas competitors. This is one of the most striking developments of all in recent years. The Department has a lead which it can and will maintain. I commend the Bill to the House.
  8.19 p.m.
  Mr. Douglas Jay: We welcome the Bill for many reasons and we shall certainly support the Minister of State's request for another rise in the financial limit set for the E.C.G.D.'s activities. These two-yearly Bills—they have been two-yearly up till now, although, apparently, the Minister hopes that they will be five-yearly, but I think that that is nothing more than an aspiration—asking for higher limits are proof of the success of the Department in maintaining our exports. They are also, incidentally, a remarkable tribute by a Tory Government to a very important form of State insurance, for that is what export credit guarantee business is. This is from one point of view yet another example of the Government being forced either to extend the activities of existing Government enterprises or even to invent new ones as they have been compelled to do in recent times.
  This State insurance Department, as the Minister says, has seen its limit for liabilities under Section 1 actually increase—these are remarkable figures—from £500 million in 1949 to £1,500 million under this Bill. I agree that this is not direct expenditure. It is a guarantee of liabilities but, none the less, it measures the Department's activities, and under Section 2, the so-called national interest guarantees, from £100 million in 1949 to £1,300 million under this Bill.

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  The Department guarantees, according to the latest figures that I can obtain, are £976 million of exports in 1962–63—that is the E.C.G.D.'s year—under Section 1, and another £50 million under Section 2. That seems to correspond fairly closely to the figure of over £1,000 million guaranteed in the calendar year 1963 which the Minister gave us just now. This amounts to 25 per cent. of the total exports of the United Kingdom. I think that the figure in our previous debates was more like 18 per cent. to 20 per cent. Therefore the proportion of our exports covered by the Department's activities is steadily rising. It also made, on the latest figures that I have, a revenue profit, a net profit, of something like £7 million over the 1962 to 1963, and I gather that neither the insurance companies nor the Aims of Industry nor the Institute of Directors nor even the Steel Company of Wales wishes to close down this Department or to denationalise it or anything of that kind. Everyone knows that private insurance dare not take these risks and that E.C.G.D. provides a large slice of our export business and without which our assistance to underdeveloped countries could not be carried on at all.
  On the other hand, I am sure that the House is wise to examine the Department's operations every two or three years. I do not believe for one moment that it has yet reached final perfection, and I do not imagine that the Minister of State would argue that either. There has been a certain rhythm in these debates on this Department. We on this side usually suggest that the Department might go even further in providing services and meeting the competition of some foreign countries. The Minister usually tells us that nothing further is possible or desirable and then six months or a year later comes forward and introduces changes very much on the lines that we propose. I remember in the debate of July, 1959, the then Minister of State, the right hon. Member for Reigate (Sir J. Vaughan-Morgan), who has not stayed the course tonight although he usually does, had the job of explaining the Government's point of view that any further improvements were rather academic and that nothing further could be done along the lines which we propose.
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  But in the debate in November, 1961, the right hon. Member for Reigate was then on the back benches, and he spoke, as Stanley Baldwin once did, with appalling frankness. Commenting on my suggestions on certain bright ideas, he said this
  "…the reason is that this Department, although supreme in its own sphere, is largely—dare I say it—at the mercy of the Treasury.…it is only within the limits allowed that the Department can relax its regulations and provide a better service."—[OFFICIAL REPORT 10th November, 1961; Vol. 648, c. 1305.]
  This was a most interesting revelation from the hon. Member who two years before had actually introduced the Bill. Perhaps the Minister would now tell us, as he has just come from the Treasury, and no one is better fitted than he to answer this question, whether he is now secretly yearning to make further improvements in the service of the Department but is being frustrated by the machinations of a wicked Chancellor. Are there more improvements which the Department would like to make in the interest of exporters but which the Treasury is blocking? The right hon. Member for Reigate also said two years ago, and I agreed, that the House had up to then been really given grossly inadequate information about the activities of the Department under Sections 2 and 3.
  My hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes), who has stayed the course as we would expect of him, made the same point two years ago when he said that the Government's then explanation on this point was as clear as mud. We have been repeatedly told, for instance by the present Minister of Housing and Local Government when he was performing this office, that Sections 2 and 3 share a common limit, i.e., that the maximum of £1,300 million, which we are now being asked to approve under the Bill, covers both Sections 2 and 3 activities.
  The hon. Gentleman said something about this tonight, but I am not absolutely clear what he means, for this reason. Section 2 is concerned with guaranteeing liabilities, and therefore presumably these large capital sums refer to liabilities guaranteed. Section 3, on the other hand, is concerned with actual loans. The words used are, I think, "acquisition of securities by the Department." I am not clear exactly

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  how one adds up the liabilities guaranteed for loans made by the Department. Can we be told what loans have been made, perhaps less repayments, under Section 3 for the last year or perhaps since the last Bill was passed?
  I have studied the only statements made by the Secretary of E.C.G.D. and the rather obscure Civil Appropriation Account, which is published and which would appear to suggest—and this, strangely enough, gives us no more up-to-date figures than to March, 1962—that E.C.G.D. under Section 3 then had advances outstanding of something like £135 million, but for what period that covers or for what period these advances have been made I was unable to discover. I wonder whether the hon. Gentleman might give us this information. [Interruption.] If the hon. Member for for Willesden, East (Mr. Skeet) understands it all, no doubt he will explain it to us in a moment. There is plenty of time for him this evening to make the whole thing perfectly clear. In asking these rather critical questions, we are far from being unappreciative of the Department or indeed of the Advisory Council which, as the hon. Gentleman says, gives it invaluable assistance.
  There are two quite strong reasons for inquiring whether more needs to be done. First, in spite of what the hon. Gentleman said in his quite interesting figures about our exports in 1963, I do not think that we can be too complacent about the movement of British exports and imports, taken together, during this last year, in a year when, after all, the United States economy and those of most other industrial countries of the world were booming and when the terms of trade were moving against this country, and when also the Government seem to be bereft of any other ideas at the moment for stimulating our export trade.
  The hon. Gentleman gave us some figures which showed, as I understood him, that United Kingdom exports in 1963 in value were 7 per cent. higher than in the previous calendar year. I have the official figures for the three months from September to November, 1963, which show United Kingdom exports were actually 7·1 per cent. higher than in the corresponding three months of 1962. While the figures might seem
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  to correspond, the hon. Gentleman did not tell us the corresponding figures for imports which, in the three months' period, were 10 per cent. higher in 1963 than in 1962. When one looks at it from that point of view there is nothing about which to be too complacent.
  Indeed, at a time when imports are rising at the rate of 10 per cent. a year in value, when the terms of trade are moving against us and when the Government refuse to do anything to limit imports—except, oddly enough, for food; the most essential import of all—the picture is not at all cheery. Nor do the Government appear to be doing anything else to stimulate or encourage exports. The Richardson Committee was appointed about a year ago to inquire into possible tax incentives, but we have heard nothing about its work in the last 10 months.
  My hon. Friends and I have on many occasions suggested that to help the small exporting firms, which, on all the evidence, will not be able to do as well as most of the major firms, some form of Government co-operative export agency might be formed. The Government have not merely done nothing about that, but they have not even made any comment on the matter. We have now had the steel plant industry publishing a report on export credits in which it is suggested, for example, that a State guarantee corporation, independent of direct departmental control, might be useful for export credits. This suggestion came from industry and it would be interesting to know what the Minister of State thinks about the idea.
  The Federation of British Industries, in a recently published and valuable report on the whole question of exports, export credits in particular, made a number of detailed and constructive suggestions. I will not list them all but merely mention one or two to see whether the Minister thinks they are valuable suggestions. I appreciate that he may turn them down today and tell us six months hence, if he is still there, which is extremely unlikely, that they are admirable and practical suggestions.
  The F.B.I., for instance, argue that the E.C.G.D. has been too rigid. I appreciate that "rigid" is a word often used these days, but on this occasion it is an appropriate one to express the F.B.I.'s

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  view, which is that it has been too rigid in usually requiring what is called the spread of risk and thereby excluding credits for selective markets and customers. Does the Minister consider that this makes it harder for firms to break into new markets? I appreciate that there are selected market guarantees, but in the opinion of the F.B.I. the premiums in these cases are too high.
  I notice that both the F.B.I, and the Radcliffe Committee, which made a fairly thorough investigation of all this, argue that the Department should be more willing to cover what are called split risks, that is, guarantees at appropriate rates, confined to, say, commercial risks, on the one hand, or transfer risks on the other. What does the Minister of State think about that?
  There is another case where both the F.B.I. and the Radcliffe Committee believe that we can go further than we are. This is in the case of the minimum limit placed on medium-term business which, they believe, should be less rigid than it is at present. The F.B.I, thinks that the present limit of £100,000 might be lowered in appropriate cases.
  Does the Minister agree with the F.B.I, that the E.C.G.D. should be able to cover more fully than it does now exchange risks which, I gather, are largely left to the exporter himself to cover—the risk of large alterations in exchange rates? It is still the F.B.I.'s view that British interest rates for export credits are higher even now than comparable rates offered by Italy, Japan and, even more important, the American Export Import Bank which, I suppose, is the E.C.G.D.'s greatest competitor. Surely in the matter of interest rates the British exporter should be put on an equal basis with his competitors.
  It seems, whatever way one looks at it, that the export battle ahead of us is likely to be so stiff that we should press ahead on all these fronts—that is, unless the Minister and the Department have a much more convincing answer to the proposals that have been made than any we have yet heard from the Government. I agree that some of these suggestions are in many respects on technical issues affecting commercial export credits. However, I believe—and the Minister touched on this—that we need to do some rethinking on our
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  export credits policy on a more long-term basis find over a much wider sphere—that is, affecting economic assistance loans under Section 3, aid by way of Government loans to the less developed countries and special loans for the use of surplus capacity in this country in exports to the less developed countries.
  In the course of visiting India and Pakistan last summer it was made clear to me how nowadays in exporting to the less developed countries trade follows aid. That has not been fully realised by many people. If anyone is inclined to doubt this, he should study another excellent F.B.I. report on the Indian economy. That shows convincingly that in the last six or seven years the proportion of aid to India from the United States and Germany has been rising while the proportion from the United Kingdom has been falling. The proportion of India's imports from the United States and Germany has been rising while the proportion of her imports from us has been falling. This throws a new light on a lot that has been said in recent years on the proportion of fall in our trade with the Commonwealth.
  It has been argued that the proportion of our exports going to the Commonwealth is falling, but I do not believe that people have always realised that for India, Pakistan and similar underdeveloped countries in the Commonwealth this fall has largely been due to our aid and export credits policy—whether or not it is justified—to the fact that we have been offering less generous terms than other countries, particularly the United States.
  I can give a concrete example of this and I do not know whether or not the Minister of State is aware of this. Last year the Pakistan Government decided to set up a single, large-scale lorry manufacturing plant which was likely to have a monopoly of the whole lorry market in Pakistan for 25 to 30 years ahead, because Pakistan cannot afford the foreign exchange for imports. Leylands put forward a complete scheme by which they would construct and manage this factory, and the Pakistani authorities were anxious to prefer Leylands' proposals to those of the American firm which was competing. But the American aid and credit authorities were willing not merely to lend foreign exchange, as

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  we were, for all initial equipment of the factory, but for spares and other necessary facilities over a number of years afterwards.
  As a result of that, since Pakistan suffers from a famine of foreign exchange and is bound to accept the most generous offer which involves the lowest expenditure of foreign exchange from her side, the contract, the licences, and so forth, went to the American firm, and Leylands will be excluded for good. That means that the lorry market of a nation of 100 million people, which is likely to develop rapidly over the next 30 years, is virtually permanently lost to us. I understand that the same sort of thing has happened in the aircraft industry in competition between us and the United States.
  This is a solemn thought, because if we are to go on like this in many countries over many industries it is quite certain that our proportion of exports to these extremely important countries, which may well be the developing export markets of the future, will fall. I am very familiar with the Treasury argument that we do not export for fun, as the previous Prime Minister once said, nor do we export to give the goods away, but to earn foreign exchange, so that we must not go too far in making our credit terms too liberal. That is true, but if we push that argument to the point of always lagging a little behind the Americans—or, perhaps, the Germans or the Japanese—we will see our markets in these under-developed countries steadily declining.
  Here one has to take an over-riding decision of policy. Either we have to admit defeat—as, in fact, we are doing now—and lag behind the Americans, in particular, or we have to say, on a long-term view, that although we will not give our exports away we are prepared to see payment for them by the poorer countries deferred over a much longer period.
  I believe that we should take the second course, because I am convinced that it is our only way of remaining a great exporting nation in the sort of world in which we live today, whether it be to the underdeveloped countries or the Iron Curtain countries. I would not advocate free gifts of our exports, except in certain accepted forms of special
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  aid, nor would I advocate interest-free loans, which are often demoralising to the recipient as well as to the giver. But I believe, and I suggest this to the Minister, that when we go from the field of ordinary commercial credits into that of economic assistance loans, Government-to-Government loans, tied loans for certain specific big projects, and so on, even when we are dealing with poorer countries like India and Pakistan we should be willing to accept long periods of payment—30 or 40 years, perhaps, in some cases—and low, though not negligible, rates of interest.
  It may well be, we do not know—I am thinking, I admit, to some extent of India and Pakistan now—that those two countries will become economically viable in 30, 40, or 50 years' time. They will not be economically viable in 15 or 20 years, but may be in a longer period. Much more unlikely things than that have happened in economic history in the last 25 or 30 years. If that is true, or even likely, we would be wise to export to these nations, not for nothing but on deferred payment terms that would enable their economies to become viable, our exports to increase and payments to flow back to us—because, of course, we must have payment in the end—slowly at first, but on a growing scale as their economies develop.
  I think that, when we look at it from that wider point of view, this would be in the highest interests, not merely of ourselves but of the developing countries. That, as far as I can understand it, is really the principle on which American policy is being conducted in its credit and aid relations with these countries. I know that the Americans have much greater resources than we have—that is the main difficulty—but that is the principle on which they are working, and unless we, too, adopt that principle, when we look at the hard facts of the situation and the figures of the last five or six years, it seems to me that we are likely to see the present comparative decline continuing, not merely in our exports to these areas and in Commonwealth trade but also in British economic and political influence over very large parts of Asia, Africa, and Central and South America as well.
  8.45 p.m.
  Mr. T. H. H. Skeet: We ought to pay tribute to the E.C.G.D. for the remarkable work which it has done over recent years and also to the Government for the number of facilities it has introduced. The discounting facilities of the Bank of England over a period of 18 months prior to maturity is one of the useful things which the Government have introduced as also the assistance granted to small exporters.

  When the right hon. Member for Battersea, North (Mr. Jay) spoke about interest rates I am certain that he was aware of the grouping of the London clearing houses, the Scottish banks and the insurance houses to make provision for long-term credit facilities at fixed rates of interest. This is one of the singular contributions which have been made and it goes a long way to meet the point which the right hon. Member had in mind. He also mentioned long-term lending at advantageous rates. Are these to be twenty year or thirty year loans? If they are, there is the immediate problem that the seller in the United Kingdom will not receive payments for a number of years.
  A large part of the right hon. Gentleman's speech was concerned with the question of long-term lending as opposed to insurance not covered by the Berne Union. We can get into some difficulties about this. Under the Berne Union there is some law and order internationally although possibly it should be controlled under the auspices of the World Bank; but, on the other hand, long-term facilities which are outside the agency of Berne should also be subject to some sort of international control otherwise this sort of lending might well and truly get out of hand.
  We have met our obligations in India singularly well. In loans for economic development India has received since 1949 no less than £193 million under Section 3 loans. If account is taken of total foreign investment in India, about 60 per cent. is British and therefore we are well placed there.
  Mr. Jay:But it does not look too good from the point of view of the proportion of annual aid to India now through the consortium, of which about £30 million comes from this country out
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  of a total of £400 million a year. This is a rather small proportion.
  Mr. Skeet: The right hon. Gentleman has a point there, but it must be remembered that other nations, such as the United States and Japan, also operate in this business. The United States used to agree to an open-door policy, but it has gone away from that. As a great trading nation we should try to persuade other countries not to adopt this kind of procedure.
  The question of Section 3 loans has been raised. For accounting purposes these loans are considered under Section 2. Total lending under the Export Credit Guarantees Acts 1949 to 1961, according to my calculations, was £344 million and of that 71·1 per cent. has been allocated to Asia, 14·2 per cent. to Africa, 6·6 per cent. to the Middle East, if the U.A.R. is included, 7·0 per cent. to Europe, that is to one country, Yugoslavia, and 1·1 per cent. to South America. Five nations, India, Pakistan, Nigeria, Iran, and Yugoslavia received 86·3 per cent of the total, and two nations, India and Pakistan, receive approximately 70 per cent. of the total.
  Bearing in mind our world-wide commitments, are we right when Ministers go on global tours—and several have gone to South America—to allocate such a small figure as £3·8 million for economic assistance to South America which incidentally has gone to two countries, Bolivia and Chile? We should bear in mind that our contribution to the Asian Continent is £245 million, and to Africa £49 million where we have immense possibilities and the future is opening up in front of our eyes.
  Is the Minister happy about this global distribution which has been going on since 1949? We have been told tonight that the total is to be lifted considerably and that my hon. Friend hopes that the average allocation per year will be covered by about £50 million under Section 3. I would have thought that this was a useful way of extending the exports of the United Kingdom, and I would recommend that the figure should be higher still.
  Another matter to which I should like to refer, and to which the right hon. Member for Battersea, North referred, is the possible Treasury control of the

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  E.C.G.D. I think that we must be mindful of the fact that, as regards the financial guarantees, they are operated under Section 2 by the E.C.G.D. with Treasury consent. The right hon. Gentleman will recollect that a few years ago a consortium was established in London which raised considerable sums of money, but, because of difficulties with the Treasury—and I hope that my hon. Friend can explain this because he has had a foot in both camps—there has been some difficulty in utilising the funds available, and therefore in this respect the E.C.G.D. is not entirely in charge of its own affairs.
  As I said earlier, I pay tribute to my hon. Friend's Department. It has export insurance, but I regret to say that over a term of years it has not developed investment insurance. In 1959 Western Germany introduced this for the first time, and she is not the only country in the free world which has been operating such a system. That means that a company not merely exports its goods under guarantee, but has a right to export its capital with a guarantee, viz. by direct investment in enterprises abroad and by participation in enterprises overseas.
  Members on both sides of the House recommend that we should do our utmost to assist under-developed territories of the Commonwealth. The right hon. Gentleman said that trade is the best form of aid, and that aid brings trade to this country. If we try to encourage firms in this country to spend more abroad in the sense of building up investments there, they will make a direct contribution to that area, but so far the scheme I have mentioned has not materialised. Perhaps the Minister may have some rather good ideas on this point.
  Not immediately relevant to this question of the E.C.G.D., but I think extremely relevant to the export industry of this country, is a matter which was discussed in The Times, when on 6th January of this year a correspondent dealt with the paper war which has been engendered over recent years by a number of the newer countries, and it may be that some of the older countries have got themselves into this kind of difficulty.
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  One of The Times'scorrespondents referred to the number of invoices made out in connection with sending goods abroad.
  Mr. Snow: To the Commonwealth?
  Mr. Skeet: This was in connection with goods sent to Brazil. The correspondent reported that 18 copies of the invoice had been demanded and sent. They were distributed as follows: to the London agents of the Brazilian customer 7; to the shippers, and some had to be authenticated, 6; to the bank 2; miscellaneous 3; making a total of 18. The same firm—and I have had an opportunity of looking into the matter more carefully and I hope the Minister will be able to do something about this—dealt with an order from France for delivery to Iran. The number of invoices required was 24. In an order received from Washington for delivery in Nepal, the number of invoices required was 20. With an order received from New York for Peru, the number of invoices required was 18, and in other orders for Bolivia. Brazil and Venezuela, the numbers were 18, 15 and 15, respectively, and these did not take into account the individual requirements of the firms in question.
  Perhaps I may carry that a stage further, because I think it is important and is the cause of some of the difficulties being experienced by exporters. In The Times of 10th January there was a letter in which the correspondent referred to the number of papers he had to complete. There was a total of 24, but the actual documents totalled 60. The correspondent wrote:
  "While leaving out of account copies of invoices left with the Chamber of Commerce and the Brazilian Consulate, as well as those sent direct to the customers in Brazil, it may perhaps be worth mentioning that three copies of the list of items (21 pages) had already been sent to Brazil, to serve as a basis for obtaining an Import Licence."
  The Minister must be aware of the enormous burden that is being placed on our export industry while these sorts of things are allowed to goon. I would have thought that he would be in a position to influence the direction of this paper war. Perhaps he will be able to tell us tonight how the E.C.G.D. has fared with some of the new countries. I have a suspicion that its losses must be considerable, particularly in Brazil

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  if this is an indication of the States efficiency.
  I should like to mention the type of document required of a company of this nature. The invoice has to be authenticated.
  "We hereby guarantee that this invoice to"—
  and then the company is mentioned—
  "is authentic and that the value shown thereon…is the actual selling price for the export of the goods based on local market quotations. Further we are not purchasing agents of the importers in Brazil. The material is new and not used or secondhand. We declare also that the goods are in accordance with the exchange cover certificate and amendment."
  It is extraordinary that documents in this form should be required. Ghana has regulations of its own. Amongst the documents which the Ghana Commercial Bank requires are three copies of manufacturers' invoices. I can understand the exporter supplying his own invoice, but why should he have to supply, in addition, the manufacturer's invoice—the man further down the line? Hon. Members will appreciate that in the case of the supply of components no allowance is made to cover fees for designing, overheads and similar items. My plea to my hon. Friend is to look into some of these commercial matters and to see whether it is possible to find a way through the wilderness.
  In the past two or three years I have become rather concerned about the cash flow from the United Kingdom. The E.C.G.D. can do a lot by insuring our exports, but the best way to promote exports from the United Kingdom, apart from hard selling, is by investment. I have the figures relating both to public and private advances abroad, in relation to certain countries in 1962. For the United States of America it amounted to £1,370 million; for France it was £430 million, and for the United Kingdom, £298 million. We have therefore fallen far behind in this race. It may be that recent budgets have created a certain disincentive for money to migrate, but if this is to be so on the private front more should be done on the public front. I confess I would rather see more done on the private front, because in that case capital will be utilised to full advantage and commercial considerations will be taken into account.
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  A number or institutions have grown up recently. The Midland and International Banks has been formed—a private consortium to provide long-term credit. There is another body called the Atlantic Community. Development Group For Latin America for stimulating private investment in that region. I hope that the United Kingdom will participate in the second international organisation, which covers Japanese, European and United States interests. This would further our trade participations abroad.
  The course is full ahead for the United Kingdom. We have an enviable system of guarantees, although we should not be too complacent about our position. The facilities and enterprise in certain European countries are as good as ours, and they have guarantees which extend beyond export insurance: they cover investment insurance. If we are prepared to do our utmost to see that our trade advances considerably this money, which is now being allocated over the years, possibly to 1969, will be fully utilised.
  9.0 p.m.
  Mr. Julian Snow: I congratulate my right hon. Friend the Member for Battersea, North (Mr. Jay) on a speech which I thought was a fair, constructive and critical analysis of the situation. This has been my right hon. Friend's day, because hon. Members will recall his devastating attack on the Minister this afternoon regarding retail price maintenance.

  I wish to comment on one point made by the hon. Member for Willesden, East (Mr. Skeet). I agree that one matter to which we should direct more attention is the possibility of the export of capital investment. My attention was drawn to this quite recently through some information I received regarding the activities of Japan in this matter in relation to the new member of the Commonwealth, Malaysia. In the old days, those of us involved in normal manufactured goods exports regarded Japan as a formidable competitor, but never as a competitor in matters of capital investment. But what is happening in Malaysia is something to which this country must pay more attention.

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  I should like to thank the Minister for his courteous reply to my intervention in which I asked whether he had at his finger tips an analysis, or figures, concerning the territorial break-up of those cases where applications by small exporters have been rejected. I understand that he cannot produce this information straight away. But, nevertheless, I think that such an analysis would be worth while producing and I wish to enlarge on that a little.
  Our main export drive is obviously a three-pronged drive. We must devote far more attention in the future to our trade with the so-called Iron Curtain countries. When we consider the record of Western Germany in this matter, we realise that this is something over which the Government have fallen down. Secondly, there is the question of trade with the sophisticated industrial countries in Europe and outside Europe and, thirdly, Commonwealth trade, which must include trade with sophisticated and industrially developed countries, and countries which are emergent or developing. I wish to deal with the latter in a moment.
  Regarding the industrially developed countries, whereas the market is most important and must remain so for a long time, and therefore our competitive position regarding credit must continue to receive urgent consideration, in the long run in other manufactured goods, which form the substantial part of a small exporter's business, we shall get to the point where we shall be trying to export those things which the countries concerned are capable of producing for themselves. I may perhaps quote a remark attributed to Mark Twain, who referred to the precarious livelihood earned by the inhabitants of the Scilly Isles by taking in each other's washing.
  It is the less sophisticated countries to which I wish to refer. I think that E.C.G.D. will have to instigate a great deal more investigation into the question of dealing with countries where the private enterprise mercantile communities are in a rather simple state, lacking in experience and not subject to ethics which are now accepted in ordinary highly developed countries. We have to face the fact that in certain countries in West Africa—and this goes for the West Indies as well—exporters are
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  frightened about getting involved, and E.C.G.D. is not always in a position to help. I heard the other day of a substantial confirming house which got into great difficulties in this matter. I do not know whether this is a case for trying to secure some form of agreement with the countries concerned or whether it involves allowing for a special risk. But unless we get our feet into these emergent countries and take, if necessary, a substantially added risk, in the long term this country will suffer very greatly, because other countries are taking these risks.
  I am well aware that travellers' tales, the tales of Ministers and others when they come back from these countries, have to be examined very carefully. It is possible for one to have one's leg pulled—or perhaps I should say that the attempt is made frequently—about what our competitors are doing in respect of credit. It is very difficult—one of my hon. Friends was talking about this to me earlier on—to establish the facts. The only yardstick is: what are the results? We know, for instance, that in West Africa Germany has been securing a share of trade which is slightly alarming. Therefore, I say that this is a matter which will justify much more examination and the contemplation of additional risks.
  I remember a tale which I picked up when I was in Tokio three years ago. I could not substantiate it, but I reported it to the Board of Trade. I was told that the German Government were accepting through their exporters Germany's blocked currency. I got my information from a highly reputable English trading house in Tokio. The general proposition was that such blocked currency would become a Government responsibility and that in their major inter-governmental complex it would be possible for such blocked currency to be absorbed.
  We are all deeply concerned about what has happened over the failure to sell the Trident aircraft to Japan. Like most hon. Members, I suppose, I know only what I read in the newspapers. I know that we have lost a very important order and are getting to the point when the Trident is depending on sales to our own domestic airlines. What are the reasons for the loss of that order?

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  It does not appear as though there was a technical advantage on the part of the Americans. From what one can understand, there would have been a saving, if Japan had purchased the British aircraft, of about £1 million in the total outlay. Therefore, what were the reasons for our losing the order?
  It is a matter which must imply some credit aspects. It may well be that there were additionally advantageous terms over supplies of spare parts. It may have been that because of the close links with the United States and the vast amount of aid given to Japan, including expenditure on the Japanese armed forces, there was a desire on the part of the Japanese Government to reciprocate in this way. But I cannot get it out of my mind that somewhere along the line there has been a credit element in the loss of this extremely important order. The Minister will no doubt be aware that on the tape tonight there is a report that our exports of aircraft generally have suffered a rather severe reverse.
  There is another point about small exporters. I have a feeling—this goes not only for E.C.G.D. but for other Government agencies which try to help the enterprising small company—that the facilities available to small companies are insufficiently known in the provinces. I am talking not about the big companies in the big cities but about the smaller companies on the trading estates in the provinces, many of which are specialising companies which could contribute individually in a small way but collectively in a most important way to our exports. It is my impression that easily read and understood information about E.C.G.D. does not permeate down to these smaller companies. It has been said that exporting is not much fun. Indeed, it is hard work. Also, many of the smaller companies cannot afford the overheads of an export department. I appreciate that the debate is not about exports in general but about the financing of exports in particular. Nevertheless, I think that the E.C.G.D. has an important part to play and is insufficiently appreciated by the smaller companies.
  My right hon. Friend the Member for Battersea, North referred to the history
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  of the Department and said that there had been these rather frequent changes in its administration and overall expenditure. I do not think he was putting that in a critical sense. It is axiomatic that it must be a developing situation.
  The hon. Member for Willesden, East referred to the increasing part being played by private export guarantee organisations. I do not take the view that we should be doctrinaire in saying that the private sector of financing of guarantees is more important than the public sector. I believe that the two things are complementary, but the fact is that many of the emergent countries—it is to them that we must look for our long-term development—will tend more and more not only to buy in the cheapest market without a sentimental view about where they secure their principles and attitudes of mind, but will more and more tend towards a collective economy among the small nations, and Government agencies at this end will have to reciprocate—
  Mr. Skeet: My reading of the system is that it is a Government-to-Government matter. Other organisations can lend directly to commercial enterprises and stimulate private investment abroad, which is precluded by the Government plans.
  Mr. Snow: I think that that is a slightly rigid reading of it, because in the emergent countries about which I am thinking, if they do not have it now they will soon be forced into some form of decentralisation of credit acceptance. At any rate, that is my view.
  I should like to stress that the Government have continually underestimated the potential of the small exporter and the small manufacturer. When my right hon. Friend referred to some form of association of small exporters, I was reminded that I had made the same point in the debate on the Address—that there is room for a Government agency which could co-ordinate the potential of small exporters when they receive information of large orders which could be placed in other countries.
  In conclusion, I pay tribute once again by the House to the most excellent work of the Export Services Department.
  9.15 p.m.
  Mr. H. Rhodes: My hon. Friend the Member for Lich-field and Tamworth (Mr. Snow) has put his finger on one of the important aspects of the subject which we are discussing tonight in saying that the powerful elements which are making arrangements to export to under-developed countries, particularly Malaysia, are making headway.
  There is no doubt that the alliance of credit facilities, cheaper interest rates for manufacturers being prepared for export and the ease with which exporters can get their bills discounted in Japan all contribute to the ability of the Japanese to make a powerful impression on any market. This is precisely the point. The amount of export services which we have organised commercially as in E.C.G.D. to do a particular job is only a part of the whole as the Japanese see it.
  Not only have the Japanese the facilitiese which I have mentioned, but they have the advantage of being able to export and import through a small number of hands. In fact, 5 firms look after 70 per cent. of the exports and imports in Japan and the remaining 10 firms look after the remaining 30 per cent. of exports and imports.
  I do not blame the Japanese for this. If we are slow in getting off the mark, it is our own fault. When I was in Malaya a few months ago I found that the Japanese were busy as beavers offering a television service to the Malayans. They were offering not only to put it in but to run it, too. Think of the enormous advantages of the provision of services of that kind. I believe that the Japanese could make a great contribution in South-East Asia, and so could we if we were enlightened enough to have a go on similar lines.
  As in the two previous debates, the hon. Member for Willesden, East (Mr. Skeet) spoke of the desirability of using the facilities which exist through E.C.G.D. or parallel facilities to export to South America. He mentioned various South American countries, including Brazil and Bolivia.
  Mr. Skeet: I would make it clear that I made no reflection on the efficiency of E.C.G.D. I was merely indicating that
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  this was one of the difficulties which face exporters in dealing with South American countries.
  Mr. Rhodes: I did not intend to suggest that the hon. Member was throwing doubt on the efficiency of E.C.G.D.
  Not all that long ago a previous President of the Board of Trade made a journey to Bradford to an industry which is certainly holding its own and which has had an export record of 70 million this year. We cannot claim too much credit for the increase because of a factor which also applies when the Minister claims credit for the fact that exports are up by 7 per cent. in 1963; the element which is making our figures bigger is the element which is making his figures bigger—the fact that the cost of our raw materials is up by 25 per cent. The President of the Board of Trade went to Bradford and told a room-full of people, including myself, what fun it would be for them to export to South America. We are not exactly slow in knowing what are the good places to export to. We have had experience of doing it since mediaeval times. We do not need the E.C.G.D. or the Board of Trade to tell small exporters in Bradford what is a good risk. We have had generations and centuries of experience in this type of transaction.
  What happened in response to that suggestion of the President of the Board of Trade? The Romans used to turn their thumbs down when they condemned a fellow. The Yorkshiremen in that room imitated the action of the right hon. Member for Woodford (Sir W. Churchill) in putting two fingers upwards in a stabbing fashion; and he never did make any headway with the wool trade after that.
  In a facile way, people say that it is good to export here or export there, and they say how marvellous it is that the E.C.G.D. has done this and done that. Why should not it have done it? The E.C.G.D. is staffed by intelligent people. Their conditions of work are better than most. They have excellent facilities at their disposal and they have funds provided by the Government. All the Government need to do is to come to the Box and ask for what is necessary, and we all say "Yes" as quiet as lambs. Why should not they do well? They

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  are not unusual or marvellous people; they are just ordinary first-class administrators who are doing a job well.
  Are we doing as good a job in our own particular ways? The N.E.D.C. makes a projection or a forecast—whatever it be called—of 4 per cent. growth and then, because of Government action almost immediately afterwards through the failure of the E.E.C. negotiations, the forecast is altered from 4 per cent. to 5 per cent. This puts an additional burden on people engaged in exporting to keep up. Not only that, we must make quite sure that we hold our share in an increasing amount of world trade. The signs are that trade between industrial nations is on the decline. The comments in the December Bulletin for Industry bear this out, and it is very wise to warn the country about these things.
  This is what was said:
  "Exports of manufactures are of particular interest to the United Kingdom and the prospects are fairly good. World trade in manufactures may grow in 1964 at about the same rate as in 1961 and 1962".
  One can make one's own judgment on that. It goes on:
  "This growth in 1964 is likely to have a different pattern from before. The rate of expansion of trade in manufactures between industrial countries will probably decline, reflecting the slowing down in the growth of imports into the main continental European countries. On the other hand, exports of manufactures to primary producers may be growing as fast as exports to industrial countries, a phenomenon which has not occurred since the recession in 1958."
  If that means anything at all, it means that the provisions for which the Minister of State is asking in Clause 1(2) may have to be increased before the end of 1968. If that kind of pattern is to emerge as one likely to continue from one year to another, undoubtedly he is quite right in asking for more under Clause 1(2) and could be right in asking the House for more later.
  I come now to one or two questions to the hon. Gentleman. The first follows the comments of my right hon. Friend the Member for Battersea, North (Mr. Jay), who, I thought, gave a first-class analysis of what we are talking about. My right hon. Friend spoke of the bank guarantees. I think that it was the F.B.I. which made some criti-
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  cism about the minimum amount being £100,000. I put to the Minister of State a practical instance. If an exporter had, say, a £64,000 job for one destination and a £40,000 job for another, could those two figures be brought together in some way so that the facilities with respect to the guarantee could be taken up?
  I had a comment about the simplified policy for the small exporter, but I think that that has been adequately covered. It was encouraging to hear from the Minister of State that 1,500 had taken advantage of this type of assistance.
  I turn next to what are known as matching terms. It has been found, in days gone by, that there has been a considerable disparity between our terms and the terms offered by, say, America, Japan or Italy, which seem to be the three which are prone to go in for competition in this connection. Is it a fact that when a proposition is taken by a businessman to E.C.G.D. he has to prove off his own bat whether or not in the market to which he intends to export there are being offered better facilities by some other country? Has he to establish proof? Or do we have anything in the way of a reliable, first-class service which is gathering this information from abroad all the time?
  I do not think myself that we get the full benefit out of this debate on E.C.G.D. It is a very prosy and self-congratulatory festival. All we do is come along and say how marvellous we all are: at last we have discovered that the Government can run a Department and make a profit. Now, if only we could build this Department into the kind of organisation which would match the Japanese in flexibility, in supplying information about world markets, about questions of the decline of the older industries or the acceleration of the new—whether, we are getting our share of exports in which world trade is growing. We should get down to methods to analyse these things, with a strong organisation alongside E.C.G.D. I am perfectly certain that unless we do we shall lose our place as exporters in the forefront of industrial nations.
  It is not the job of the Department to do any of these things. I do not know whose job it is. When we have a debate on exports, usually the normal type of

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  export problems are discussed, with perhaps an occasional reference to E.C.G.D. I think it would be a good idea some time to discuss machinery which would lead to better exports. I leave it at that, because I feel I am getting to the end of my speech and my ability to keep in order.
  I would finally ask the Minister of State whether he would from time to time publicly and firmly deal with statements in the Press that suggest the inefficiency of this Department. The British machine tool industry published a document in November last year and in one paragraph about export policy it says:
  "It still remains true that in fair trading conditions coupled with the existing recognition by British manufacturers of the need for designs acceptable to the customer"—
  we could say something about that in another connection—
  "there is every reason for the industry competing successfully on technological grounds. What frustrates the individual manufacturer is his all too frequent experience of political and non-commercial factors which thwart his efforts to export and simultaneously provide opportunities for his European competitors".
  That seems to be loose generalising, perhaps. We are entitled to be told whether it is or it is not. The document also speaks of
  "sources which have stronger governmental support than is given in the United Kingdom".
  and of the
  "serious distortion of trade caused by the tying loans granted to the emergent countries".
  What is this? An excuse, perhaps, for some neglect of their own? It may be not.
  The Financial Times yesterday on this Japanese Boeing deal said:
  "Finance has also played a major rôle. Reports from Japan yesterday suggested that the British had offered financial arrangements to the Japanese airlines but Boeing had come back later with a better offer. Details of the financial plans were not revealed."
  I do not know anything about it. The Government may or the Government may not.
  However, wherever it is possible to disprove some of these suggestions about our inefficiencies in this field I would ask the Minister of State to deny them.
  9.35 p.m.
  Mr. John Diamond: My hon. Friends who have preceded me have spoken with great personal knowledge of the problems of exporting, far greater personal knowledge than I could possibly adduce in this discussion, and it is always valuable to hear their comments at first hand. Like them, and like the hon. Member for Willesden, East (Mr. Skeet)—the only Member on the other side so far to have spoken in the debate—all are concerned with the same point, to help exporters to export. In order to put the matter in what I regard as its proper perspective, I want to say this, that the way to help exporters to export is not to encourage them to lean unduly on preferential assistance but to stand on their own legs, and to think about exports morning, noon and night. There is still plenty of evidence to show that the medium and smaller British firm does not think sufficiently about the need to export the whole time.
  I was encouraged to receive only today—no doubt other hon. Members received the same publication—the official journal of the Institute of Exports which tells us two interesting stories. The first concerns a West Country firm which made it known that in future it would refuse to deal with any export inquiry unless it was accompanied by a stamped addressed envelope. This is an attitude which I accept exists. Those with professional responsibilities similar to mine know full well that the British attitude to exporting has still by no means caught up with the average German, Frenchman or Dutchman, who do not mind in the slightest whether they operate from, say, Holland or Britain, because it is all the same to them. Their markets are far flung and it matters not where the head office or centre of operations is.
  The attitude in Britain is different. The man in the British firm has been encouraged for far too long by a solid home market and reliable export markets. He has not gone out for orders but has received orders. As the example which I have given shows, he will not deal with inquiries unless they are accompanied by a stamped addressed envelope. I appeal to the Government to continue with the work which has been done previously and which I hope will continue in encouraging in every possible

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  way the medium and small firm which has not made full use of available facilities to think about exporting more.
  The second example is one in which hon. Members will be particularly interested. It concerns an advertisement for an export supervisor with
  "a thorough knowledge of export procedures, including shipping, documentation and customs drawback claims".
  The applicant must be between 25 and 40 years of age and for this man, with all his experience—and his age obviously would be nearer 40 than 25 if he had accumulated all this experience—the salary offered is between £800 and £850, slightly more than the salary of a shorthand-typist or about as much as that of a good secretary; or, to put it in more homely terms, about the average net amount which a Member of Parliament receives after the deduction of tax, expenses, and so on.
  I repeat that there is still plenty of evidence to show that more needs to be done to encourage manufacturers and merchants to realise that there is a market for their goods and that, although these matters are a bit complicated at first, they become easy subsequently. I go further and say that they should realise that the world is opening up in respects which they have not, perhaps, anticipated. There are many more areas to which exports can be sent than was previously the case.
  I was surprised by a publication of one of our banks, Barclays, which is a perfectly reasonable bank. It made an objective assessment dividing the world into nine trading areas of export opportunities. It put the E.E.C. and E.F.T.A. at the head and next the Eastern bloc. It said with regard to the Eastern bloc that the immediate outlook was reasonably promising, which is a better estimate than applies in the case of the others, apart from the Six and the Seven. With regard to delays in payment, the word used was "none".
  There are many people who do not realise that these possibilities are open. There are certain difficulties and technicalities, but it is because there are these difficulties and because people fall down when dealing with them that we have to encourage them more and more to realise that exporting is essential and
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  vital and that it is well worth while to overcome the difficulties.
  Nevertheless, having said that, I share the view that every speaker has expressed that it would be utterly wrong for any of our manufacturers unnecessarily to be put at a disadvantage in terms of guarantees or interest with their overseas competitors. This is happening and a specific instance which I want to discuss, although figures are difficult to discuss across the Floor of the House, is the case of the aircraft industry, because I have had detailed figures supplied to me by the secretary of the Society of British Aircraft Constructors. They have already been supplied to the Minister of Aviation, and correspondence has been going on which has not reached a satisfactory or agreed conclusion.
  I hope that the Minister, who brings experience both from the Treasury and now in his present position as Minister of State, will be able to look into these figures and see how we can help. Although there has been some contradiction by the Ministry of Aviation, it has not been fully contradicted. In comparison with America, which is exporting aircraft against us—and we have two very recent cases which my hon. Friends have indicated—although the agreed terms and the guaranteed terms are not known, they may have entered importantly into the unsatisfactory result. It is alleged that we are at an unnecessary disadvantage with our American competitors in the sale of aircraft to third markets.
  "In the United Kingdom"—
  and I am now quoting from a letter of July, 1963, and the terms may have altered slightly since then—
  "we borrow at 6 per cent. per annum (5½ per cent. for maturities up to five years, 6½ per cent. for later maturities—on 7-year credit this works out at 6 per cent. overall), but in addition we pay to E.C.G.D. and our bankers up to a further 6·6 per cent. of the contract price, which in terms of a rate per annum is equivalent to 2¼ per cent.—a total in all of 8¼ per cent. per annum."
  It is the all-in-all figure which matters, because the customer totals this up to see how much he has to pay to potential exporter A and to potential exporter B. That is the British position.
  Now we turn to the American position where this is at least 2 per cent. less,

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  which in terms of a number of large aircraft which sell at £2 million a time is a very relevant figure indeed. What S.B.A.C. are saying, after a most careful reconsideration, is exactly what I suggested in a speech I made as early as May of this year, that the fundamental cause of this is not necessarily E.C.G.D. at all. It is because of the supply of the money in the first place at higher interest rates which is borne here as compared with the cost at which the American Treasury makes the money available in the first place.
  The net result is that we compare something like 8¼ per cent. with about 5¾ per cent.—in some cases a spot more—with the Americans in this instance. That is a minimum of 2 per cent. difference and, in some cases, of 2½ per cent.
  The figures are detailed and I will not bore the House with them. However, the comparison I have made is as fully documented in terms of aeroplanes as can be the case. It has been supplied after the most thorough consideration by the Society of British Aircraft Constructors. I have a considerable constituency interest in this matter, but all hon. Members are interested in the sale of aeroplanes. Things have been going very much the wrong way recently and most hon. Members who have spoken today have referred to this subject.
  I do not expect the Minister of State to give a full answer to these points tonight. I will be grateful to him if he will prefer the other course and look at the matter with the care that is appropriate to the circumstances which possibly have lost us export orders in aircraft and which, if not altered, may continue to do so.
  9.46 p.m.
  Mr. du Cann:I will, by leave of the House, do my best to reply to the points that have been made in this fascinating and constructive debate. I am sure that those who have listened to it right through will be grateful for the contributions that have been made by hon. Members on both sides. After all, we share a common interest—the promotion of exports and the improvement of facilities for British exporters. We wish to do this, but, as the hon.
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  Member for Gloucester (Mr. Diamond) pointed out, not too far because nobody wants to be spoilt. All that any Englishman should ever require is a reasonable opportunity and fair competition.
  The snag to my replying tonight is that so many and varied have been the points raised that I doubt whether it is possible for me to answer them all. None the less, I will do my best within the compass of a short time to do so, and I would like to assure all hon. Members that the points they have raised I personally have greatly valued and the Secretary of State and I will do our best to pay strict attention to them in the future.
  Since those concerned are not in this forum able to speak for themselves, I can inform the House of how grateful the Council and the Department will be for the kind things that have been said about them. As the hon. Member for Ashton-under-Lyne (Mr. Rhodes) rightly said, this is not a moment for self-congratulation and they would not accept the praise which has been properly accorded to them in that spirit. However, I believe that they will go forward in their tasks fortified in the knowledge that tonight, as always, they have the goodwill of the House.
  The right hon. Member for Battersea, North (Mr. Jay) did a leg-pulling exercise, if I may call it such, about this splendid State corporation. He will not wish me to reply to that point in detail, other than to say that it has always seemed to me that the E.C.G.D. is not a wholly State corporation. It is more a joint partnership between the State and private business. Whatever may be said on this score, so long as it is effective I do not mind who founded it.
  There are certain risks that the State should take, particularly when the scale of business is becoming so vast and complex. There are private enterprise organisations in this sphere which are also doing a useful job, but the point is not who does the work but rather that it should be done effectively. While the constitution of the E.C.G.D. is not a matter for argument tonight, I do not regard its present constitution as fixed necessarily for all time. If we find that we can change its constitution and organisation in such a way as to make it more effective in the future, we should

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  not hesitate to do that. I do not suggest that we have these great changes in mind at the present time—far from it—but certainly let us be flexible in our thinking, as I can assure the House, we are at the present moment.
  Another point that the right hon. Gentleman quite rightly raised was that of improvements in E.C.G.D. activities. He suggested, and I make no quarrel with him on the suggestion, that it was, perhaps, the custom for Ministers of State, of whom there seem to have been an unholy succession, if I may say so, to say that nothing further is really desirable and then to come along a few months later and propose alterations. Whether or not that is so in detail, I am not quite clear—I should have to do a great deal of research, extending, no doubt, to 1945—but that is not the point.
  The point is that I am not sitting here secretly yearning to make improvements and being inhibited by my old friends at the Treasury with whom, I am glad to say, I remain on the most cordial and happy terms. That is far from being the case. It is the aim and ambition of the Board of Trade, severally and jointly, to find ways, if they exist, of improving the facilities of E.C.G.D, without argument and without dissension. As long as I remain Minister of State, so long shall that be done.
  A further word was said by the right hon. Gentleman on the subject of exports and imports. He was quite right to draw the attention of the House to the figures, which are very interesting and will well repay study. It is splendid that exports are 7 per cent. up on last year, but I say at once that it is not enough. We must have a further expansion in 1964, and as far as the Government can influence matters or, at any rate, encourage a spirit in which existing exporters will be more active and new exporters come into the field, that we shall do.
  I am not so bothered about imports at the present moment. I think that it is too early to make a specific judgment there. A degree of the import bill is due to restocking, and if certain manufactured goods are purchased by United Kingdom manufacturers of one sort or another because the equivalent manu-
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  facture cannot be obtained in United Kingdom markets, I hope that the shock of competition will do other United Kingdom producers a lot of good.
  It may be necessary to look seriously at imports as the year goes on, but it is precisely in order to accommodate this restocking period that my right hon. Friend the Chancellor of the Exchequer has arranged what one might call an overdraft—the new working capital facilities with which the House is familiar. I would not, therefore, say that at the present time I am necessarily bothered about the import figure, although I agree that it requires to be watched, but I hope that in 1964 we shall see exports continue to rise, and rise at a substantial rate.
  I liked what the hon. Member for Ashton-unda-Lyne said about exporters; it struck me that his whole mood and spirit was one of, "Let's go. Let's not have silly exhortations"—
  Miss Alice Bacon: Hear, hear.
  Mr. du Cann: The hon. Lady presumes far too much. It is, I know, a woman's prerogative always to presume. The hon. Lady does so with much charm, but is most terribly wrong in the narrow field she was considering. In the field of exports, certainly, "Let's go."
  As the House knows, I have recently been abroad for a very short time. I had four days in Venezuela and four days in Trinidad. In Trinidad, I met a man who had in the course of the previous ten days been in Montreal, in Washington, in Houston in Texas, and then in Trinidad. In each place he had done business with great profit to his company. In each place, as I understand, he had been to see the local Board of Trade representative before making his calls, which had previously been well prepared by his company. As a result, they were more effective. I thought that this was more typical of the new attitude of the British businessman than is sometimes suggested by some people who should know better.
  Exporting is extremely hard work. It is a difficult and arduous business. There is only one way to sell, and that is to get off one's backside behind a

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  desk and go out in the field. This is why the Board of Trade provides overseas services, and we are always delighted to know that these services are used or to hear how we can improve them. The attitude of British business, small or large, is infinitely better than it was, and I think that our people deserve great congratulation on all they have done. The House certainly wishes them success in future and is always ready to do what it can to help them.
  The hon. Member for Lichfield and Tamworth (Mr. Snow) raised the question of markets. There is no market of any size in the whole world for which the E.C.G.D. provides no cover at all. The degree of cover is bound to vary according to risk-worthiness, but that is a matter of fact. The hon. Member spent a good deal of time talking, quite rightly, about the small exporter. There is a lot that one could say on this subject. There are great problems possibly in encouraging the small exporter too greatly, because he is not in a position necessarily to provide after-sales service of the kind so often necessary in certain markets. Nevertheless, he has a great contribution to make. I hope that the figure of policies taken out by small exporters, which is 1,581 since the scheme started2½ years ago, is some indication of the progress made in this field. I want to talk in a moment about publicity and what is done in particular to try and bring the services of the E.C.G.D. to the attention of small exporters. I will not deny that there is a great deal to be done in education and that this is important and urgent.
  I hope that we shall be able to increase trade with the Eastern bloc, a subject which was also raised by the hon. Member for Lichfield and Tamworth and the hon. Member for Gloucester (Mr. Diamond). The prospects at present look good and there is no earthly reason why we should not do this. The Secretary of State has been clear about the intentions of Her Majesty's Government. I hope that as time goes by in the next several months it might be possible for us in various ways to indicate to the House the positive things which we may have achieved.
  The hon. Member for Gloucester particularly mentioned aircraft. It may be
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  that I misunderstood his figures. I had thought that the highest rate of premium in this case was only 5 per cent., but the hon. Member was good enough to invite me not to reply in detail at the moment and, therefore, I shall not. On the other hand, I promise him that I shall look at the matter with care. Like the hon. Member for Lichfield and Tamworth, who also mentioned the problem of aircraft, nothing has annoyed me more in reading the newspapers in recent months than to read about the way in which we have not been able to secure orders which the excellence of design and workmanship of British aircraft have deserved our obtaining in world markets. This is a serious matter.
  Mr. Jay: Is there not a good deal of evidence that finance in some form or another has been the obstacle?
  Mr. du Cann: Newspaper comment immediately recently has suggested this, but I do not feel that I am sufficiently well informed on the subject to give a firm opinion one way or another. I shall put myself in a position as best I can to make up my mind and to take positive action if such be open to us to deal with the matter.
  The hon. Member for Ashton-under-Lyne asked a question about grouping orders. Some day I should like to write to him and answer fully. This was a question asked of us by the F.B.I. who pressed us very hard to make relaxations. We have asked them in turn for clear evidence of a shortage of finance in this field. The subject, therefore, is under discussion.
  I come to a further point raised by the right hon. Member for Battersea, North on the breakdown of the total of actual liabilities and potential commitments under Section 2. This matter is difficult to follow, but I have a note to which I should like to refer. At the end of December, 1963, of actual liabilities under Section 2 of £391·1 million—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That the Proceedings on the Export Guarantees Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[The Attorney-General.]
  Question again proposed, That the Bill be now read a Second time.
  Mr. du Cann: Of the figure of actual liabilities of £391·1 million, £81·6 million was in respect of financial guarantees; £116 million in respect of other guarantees issued and accepted offers of cover; and £193·5 million disbursements under economic assistance loans. Out of the total potential commitment of £453·9 million, £287·3 million related to financial guarantees approved in principle but not yet issued; £14·3 million offers on other guarantees; and £152·3 million to undisbursed portions of economic assistance loans and prospective loans which have yet to be signed. I think that if the right hon. Gentleman will be good enough to look at those figures, he will find that they give him the information he wanted.
  My hon. Friend the Member for Willesden, East (Mr. Skeet), whose contribution we all so much welcomed, spoke, among other things, about investment guarantees. This is primarily a matter for my right hon. Friend the Chancellor of the Exchequer, but as I have had my leg pulled about having been at the Treasury for a brief but I hope not undistinguished period,—
  Mr. Diamond: The hon. Gentleman's period of office in that appointment will prove to be nothing like as brief as his stay in his present office.
  Mr. du Cann: I am very fond of the hon. Member for Gloucester, but the one characteristic of his which I regret is his pessimism.
  On the subject to which I was referring, I shall draw the attention of my right hon. Friend to what my hon. Friend said, but I am bound to point out from my previous experience that in the past the Government have always felt unable to give investment guarantees, partly because they are apt to lead to a diversion of investment from what one might possibly consider more desirable locations, and because investment overseas in any case forms a considerable strain on our balance of payments, amounting to no less than £300 million at current figures, so I would not hold out any hope for my hon. Friend that there is likely to be progress here.
  I was interested to hear what my hon. Friend said about documentation. I was horrified by some of the examples he gave of South American practice. On the question of home documentation. I think that
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  the E.C.G.D. goes to substantial lengths to make this as tolerably simple as possible. If my hon. Friend accepts, as I believe the House does, that much of this work of selling overseas is very much more complex than it used to be and that this complexity is likely to increase, and if he accepts, too, that many of these projects are for larger sums than have ever before been considered, inevitably the degree of information which the E.C.G.D. must have as a minimum must be substantial. That really is the basic point. If my hon. Friend, or any other hon. Member, has specific examples of excessive E.C.G.D. paperwork. I hope that I shall be informed, because we shall be ready to look into the matter.
  On the subject of the amount of documentation required by certain countries with regard to exports, I know that this presents problems for the exporter. The Government have played an active part in international discussions directed to reducing export documentation as far as possible, and I assure my hon. Friend that we shall continue to do that.
  I turn now to the question of the F.B.I. Memorandum I have here, which I read with great interest, together with the allied newspaper comment. It was one of the things which, soon after my appointment I had the opoprtunity to discuss, in particular with the Secretary of the E.C.G.D. There are many points about that report, and the right hon. Gentleman mentioned three main ones. Perhaps I may make some general observations about it from my experience of having looked at it and discussed it.
  The F.B.I is a most important body, and anything that it suggests must be taken very seriously. We did take the report very seriously. On the other hand, there were certain errors of fact in it, and we thought it appropriate to have certain discussions, in general and not formally, with the F.B.I., as a result of which I believe that there is a better understanding on both sides about the problems and difficulties involved. I am delighted that the E.C.G.D. should have had the opportunity to put its side of the question to the F.B.I., on a number of these cases, for that knowledge, in the hands of the F.B.I., can be nothing but beneficial, in general, for obvious reasons.
  It is not a question of not caring for criticism: that is not the point.

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  Criticism is welcomed. But a number of suggestions made by the F.B.I.—which the right hon. Gentleman was himself careful to avoid—were not accurate as matters of fact. To some extent that blunted the value of the document and of the surrounding comment.
  On the question of cover for exchange rate fluctuations, this is obtainable through the well developed existing market, where a large measure of protective cover can be obtained. It is always possible to deal forward in the foreign exchange market. We feel that in general this goes far enough, but I would welcome any evidence from the right hon. Gentleman or anyone else to the contrary.
  Mr. Jay: Is it possible to deal forward for more than a rather limited period, usually counted in months?
  Mr. du Cann: It depends very much on the currency and the type of operation.
  Mr. Rhodes: Does that cover dollar fluctuations?
  Mr. du Cann: Yes. One can deal forward in the dollar market without doubt. The rates are quoted every day in the financial Press. But if there is substantial evidence which shows that in some cases this is a genuine handicap to exporters, I should like to hear more about it so that the matter can be properly investigated.
  I now turn to the question of matching, which was mentioned by the hon. Member for Ashton-under-Lyne and which was also a point in which the F.B.I. were interested. This involves obtaining evidence of competition, as distinct from vague allegations seeking to play off one supplier against another. We recognise that the difficulties in securing evidence may be formidable, but our own inquiries do not bear out any contention that evidence is impossible to obtain. In fact, we have found the position to be rather the reverse. We are ready, through our embassies overseas and our Berne Union contacts, to investigate promptly and extensively any allegation which comes our way. The fact that we have done this in 370 cases since the introduction of matching cover, in October, 1960, is an earnest that we are
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  able to deal practically with the situation through these avenues. I could say a great deal more on that point, but I will pass from it.
  I now turn especially to matters raised by the hon. Member for Ashton-under-Lyne and the right hon. Gentleman, and the suggestion that the E.C.G.D. should be more favourable to "selected markets", "selected customers", "split risk" and "reduced percentage of loss" cover. These are important subjects. The F.B.I. suggested that selected market terms are heavily weighted in favour of whole turnover. On examination, we find that in general the whole turnover requirement is a reasonable one. "Selected markets" policies, on the other hand, are freely available, provided the markets offered to us give a reasonable spread of risk. This is essential in order to keep the E.C.G.D. on a sound commercial basis. Rates are never more than 30 per cent. above standard whole turnover rates. This is not excessive. As for cover for split risks, it is difficult to determine whether a particular loss is due to del credere or to a political risk. The right hon. Gentleman will understand the force of this point, as will the hon. Member for Ashton-under-Lyne, with his substantial experience of overseas markets, some of them very difficult ones. That to cover split risks would both increase costs and reduce the value of the policy as security for banking advances is a point which should not be ignored.
  After those short comments, let me go on to the other point which was made. It was suggested that there was a good case for lowering the minimum limit of £100,000. This has been discussed with the F.B.I. on several occasions, and I hope it has been made clear to the F.B.I. that we should not be justified in making this alteration without evidence of shortage of finance in the field for which bank guarantees are not available. If such evidence is produced we should be ready immediately to consider it. I can be quite clear and certain that that would be done.
  I had a memorandum prepared which summarised the points made by the F.B.I., and I have been looking at that with some care in the last few days. I am satisfied that, in general, a number

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  of the points made by the F.B.I., though valuable, are probably not points on which we could justifiably take action at present. But our minds remain open about every one of them, in so far as they do not result—as did one or two—from an honest misunderstanding of the position.
  A great deal was said about aid, a fascinating subject which we debate in this House much too rarely. We had the splendid White Paper which contained many striking points. But we have not had—for good reasons—an opportunity to thrash out the matter in detail. One suggestion was that we should take greater risks in our aid policy. It is our feeling that we already take great risks in certain territories. Obviously, I do not wish to name them. But I think that the House will be with me to some extent over this and I urge hon. Members not to underestimate the position.
  There is a limit to what we can do physically. Our aid is running at a record total. The precise figure for this year is not yet known but it is around £200 million. It may be a little below that figure because there is always the problem of the pipeline. But there is a physical limit to what we can do with the best will in the world. Nor do I think we should resent in any way the fact that other nations sometimes step in to assist countries which need aid. I do not resent the fact that, for example, the Americans, the Japanese, the French and the Italians have come into territories which were formerly British Colonies. If that be good for those territories, I say that it is fine.
  I am concerned—the point was made by the right hon. Gentleman—to see that we get our fair place in the sun and are not squeezed out unfairly or unnecessarily. Aid to independent Commonwealth countries increased two-and-a-half times between 1958–59 and 1962–63, from £25·8 million to £62·3 million. In the Queen's Speech it was made clear that it was the policy of the Government to have an expanding programme of capital aid and technical assistance.
  Mr. Jay: Surely the Minister will agree that it is disquieting if, for instance, the proportion of India's imports coming from this country is steadily going down?
  Mr. du Cann: I do agree. It is not for me to decide these matters, but I hope that we may have the opportunity to debate the whole subject of Commonwealth trade. I am sorry that tonight we are talking about E.C.G.D. and not that particular thing. But the reasons are well understood. However, I look forward to such an opportunity. It is essential that this House should get down to a detailed examination of the reasons why we are not doing as well in Commonwealth trade as we should all wish to do. Those reasons do not necessarily result from our own faults of commission. But there are facts which ought to be looked at seriously and remedies provided.
  Section 3, in relation to loan distribution, gives what, I think, is a misleading picture of distribution of aid. It is only a quarter of the total. So much of our aid, to the Commonwealth especially, is given through C.D. and W. Acts. The great bulk of our aid to Africa is given in that form.
  On the other hand, my hon. Friend, the right hon. Member for Battersea, North and the hon. Member for Lichfield and Tamworth talked about Section 3 aid, and I should like to go through that very quickly. It would take much too long to give details of all the loans made under Section 3 in the past 15 years. There have, in fact, been 54. I will ensure that the hon. Gentlemen concerned receive detailed in formation but I should just like to summarise the position now.
  The 54 loans, agreed for 21 countries, total almost £350 million. India received 16 loans totalling £193 million. Pakistan has received seven loans totalling £47 million. Pakistan has, in fact, done second best. Other loans have been agreed with Yugoslavia, Nigeria, Ghana, Sudan, Iran, Chile and Turkey, each receiving two or more loans.
  Part of the aid dealt with the surplus capacity provisions which the House welcomed. All those loans have been made to Governments. On the other hand, some have been made to public bodies but guaranteed by Governments. Most of the loans were made after the Montreal Commonwealth Trade and Economic Conference in 1958, when there was a move forward in Imperial loans, if I may use such a term, and all of them were tied to the purchase of

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  British goods and services. Disbursements have risen from £5·7 million in 1957–58 to £40·5 million in 1962–63.
  A good deal has been said about terms. There is an increasingly difficult task for some developing countries in servicing their external debt. This has led to extending the length. The longest term yet granted is 25 years, including an initial grace period of seven years before repayment of principal begins. The rate of interest charged is the rate at which the Government can borrow for comparable periods, plus a fixed management charge, usually ¼ per cent. As a further means of assistance to developing countries, we are always ready to consider waiver of interest payments where the economic circumstances of the recipient justify this. We have done this with recent loans to India, Pakistan and Turkey. A waiver of interest of 7 years offered to India and Pakistan in 1963 is equivalent to halving the interest charge, and that underlines the importance of the grace period.
  On the subject of Latin America, my hon. Friend the Member for Willesden. East may know that I have just returned from Venezuela. It was a short visit and not a world tour such as someone suggested that Board of Trade Ministers were in the habit of making. I feel that there would be great and continuous advantages if more hon. Members were able individually to travel and put the British point of view abroad, because it is far too little understood. I am certain that the opportunities in Latin America are good. We have had a disappointing experience there in the past but I do not think this should prevent us from taking advantage of taking good opportunities where they exist.
  Mr. Skeet:At least two or three Ministers have gone to South America recently, and the Section 3 loans are very minute for that part of the world. If we take our total investment there on Government account, it is next to nothing compared with our investments in Africa and Asia. If we want to encourage our trade with South America, ought we not to do more about it?
  Mr. du Cann: My hon. Friend interrupted me before I had finished what I was saying on this subject. There is one point of principle that I want to make,
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  that the claims on our resources are very great. I have said that our resources are not inexhaustible. I am old fashioned enough to think that when we have capacity which we can spare we should first consider the claims of our old friends in the Commonwealth, and I would hope that after that it might be possible in future to do a little more for the Latin American territories; and if that is possible, my hon. Friend will certainly be hearing about it.
  The hon. Member for Lichfield and Tamworth asked about information. He has now left the Chamber, which perhaps saves me from saying as much as I had intended to do. On advertising we spent £60,000 a year in E.C.G.D.—with good results, I think. Many hon. Members will have seen the advertising. I thought it first class.
  As to calls on exporters, in the 12 months ending in October officials from our 16 branch offices made nearly 28,600 calls on exporting firms, nearly 13,000 being uninsured firms, to introduce and explain their facilities. A good deal of work has been done with trade associations. There are 350 accredited brokers on the panel.
  With regard to banks, in July, 1960, a new booklet was produced called "E.C.G.D. and the Bank Manager" and 10,700 copies were supplied to the main banks head offices within a few weeks, and copies are now issued on request. In the year ending December, 1962, 3,500 copies were issued. In addition to that booklet we have produced a number of publications, which are, incidentally, available in the Vote Office, to explain the advantages of these facilities. In 1962, 40,800 were distributed, including 10,000 copies of the main booklet "Payment Secured". We shall produce a new comprehensive booklet dealing with E.C.G.D.'s development, and it will be called "E.C.G.D. services; the British Government's credit insurance facilities for exporters". This will be available, I hope, in the fairly near future. As to editorial comment, I am advised that during the year ended 31st October, 1963, we noticed 618 mentions of the credit insurance facilities provided by the department in the British Press.
  One could go on for a long time discussing the various ways in which we endeavour to bring the services of

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  E.C.G.D. to the notice of present and potential exporters. I thought the other day that the summit of publicity was reached when my photograph appeared in the newspapers signing the loan agreement with Chile for the purchase of ships, which came under the Chancellor's surplus capacity scheme. The only unfortunate thing I have to report to the House is that I am not aware that any increase of business has resulted since. However, I quote the example to show that in every way we do what we can.
  I have very much enjoyed this debate on the subject of exports and E.C.G.D. I am grateful for the welcome which the Bill has received. Those questions which I have not been able to answer in the long time I have spoken in winding up the debate I will do my best to answer in other ways. I wish again to assure the House that if there are constructive ways open to us in the future of improving the services, either of the Department which I have the honour to serve or of E.C.G.D., we shall be only too ready to take them. The whole House has been united in approving the Bill in a generous way. If any hon. Member knows of ways in which he thinks we could improve these services, I hope that he will not hesitate to let us know.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. I. Fraser.]
  Committee Tomorrow.

  EXPORT GUARANTEES [MONEY]
  [Queen's Recommendation signified]
  Considered in Committee under Standing Order No. 88 (Money Committees).
  [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]
  Resolved,
  That, for the purposes of any Act of this Session to amend the Export Guarantees Acts 1949 to 1961, it is expedient to authorise any
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  increase in the sums which, under section 3 or section 4 of the Export Guarantees Act 1949, are to be or may be paid out of moneys provided by Parliament, charged on or issued out of the Consolidated Fund, raised by borrowing or paid into the Exchequer, being an increase attributable to provisions of the said Act of this Session—

  (a) raising to one thousand five hundred million pounds the limit imposed by section 1 of the said Act of 1949, as amended, in respect of guarantees under that section and related transactions;

  (b) raising to one thousand three hundred million pounds the limit imposed by section 2 of the said Act of 1949, as amended, in respect of guarantees under that section and related transactions;

  (c) extending the application of the said sections 1 and 2, and section 2(1) of the Export Guarantees Act 1957, by treating the Isle of Man and the Channel Islands as if they were part of the United Kingdom.—[Mr. du Cann.]

  Resolution to be reported.
  Report to be received Tomorrow.

  COUNTRYSIDE AND TOURIST AMENITIES (SCOTLAND) [MONEY]
  Resolution reported,
  That, for the purposes of any Act of this Session relating to the countryside and tourist amenities in Scotland, it is exppdient to authorise the payment out of moneys provided by Parliament of—

  (a) grants towards expenditure incurred or to be incurred by any person in carrying out work which in the opinion of the Secretary of State is calculated to preserve or enhance the natural beauty of a country locality, to restore or improve the appearance of land in a country locality, or to improve the facilities available in such a locality to members of the public for enjoying the countryside;

  (b) allowances to members of a Scottish Tourist Amenities Council established under that Act;

  (c) any administrative expenses incurred by the Secretary of State under that Act; and

  (d) any increase attributable to that Act in the sums so payable by way of Exchequer Equalisation Grant under the enactments relating to local government in Scotland.

  Resolution agreed to.

  MR. ADRIAN AYRES
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. I. Fraser.]
  10.25 p.m.
  Mr. Dan Jones: I want to bring to the attention of the House the case of Mr. Adrian Ayres, who is a citizen in the county borough of Burnley and at the moment is a very despondent and unhappy man. I should like to outline the cause for that state of affairs. First, he wishes to make upon the Home Office and the Government a claim for an ex gratia payment in lieu of compensation for wrongful arrest. I should like to recount the facts of that unhappy affair.

  He spent three months in Her Majesty's prison with a capital charge over his head. We should pause there a moment and realise that this was indeed a terrible position for him to be in. At Lancaster Assizes on 22nd May, 1963, he was acquitted after a trial lasting only one-and-a-half days. I would draw that fact to your attention, Mr. Deputy-Speaker, and to that of the House, because that fact alone establishes this as a very exceptional case.
  I will not go into it in too great a detail, because I am not a lawyer. Nevertheless, my researches entitle me to say that the very fact that this man Adrian Ayres was acquitted on the direction of the judge and not merely found not guilty by a jury is a very important point. Indeed, I am entitled to say that at that point he could have been declared an innocent person and not a person found not guilty. I hope that the Home Office will bear that very important point in mind.
  This man's anguish while in Her Majesty's prison was made worse by the knowledge that his wife was pregnant. It was a terrible ordeal, and yet Ayres, who has pressed me on a number of occasions, and I believe with every justification, bears no malice to the police or to anyone else. But there is no doubt that, as a result of his imprisonment and the emotional strain, he suffered considerably. In the six weeks following his discharge at Lancaster Assizes he was a
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  sick man. He had a nervous breakdown. He lost his employment. I am certainly not blaming his employers; the man obviously had become very much less efficient. He claims that during this very anxious period when he had to undergo this terrible strain his financial losses amounted to some £300. That £300 was in debts of various descriptions which relatives had paid in homage to him in this very trying position, and included rent arrears—and we can imagine the position at home, with his wife in the condition I have already described.
  Mr. Ayres has pressed his claim on me and I have here a letter in which he wanted me to take up his case with the Prime Minister. I knew perfectly well that if there was a means of deciding his case in any terms satisfactory to him this certainly would have been—I say this with respect to the Prime Minister—rather the better way.
  I am comforted in bringing this case forward because I find that if the Home Office looks upon this case with any degree of compassion—and I feel it ought to—it will not be creating any precedent. That, I think, is very important. I find that in the last ten years eight people have been so treated, and that the sums of compensation have been from £80 to £400. I would not want to attempt to put the Home Office in the position of creating a dangerous precedent, though I am realist enough to believe that I would not succeed if I tried; but the precedent has already been created. Thus no precedent can be created, inasmuch as these eight cases have been established in the last ten years. Thus with that, coupled with the knowledge that this is undoubtedly an exceptional case, for the reasons which I have already dwelt upon, I think we can see that Mr. Ayres, who now feels he has been denied justice, can receive it. I appeal very much to the spokesman of the Home Office tonight to give very serious consideration to that indeed.
  I want to make some reference to the background of this man who has suffered such an unhappy period in his life. He has never at any time been in any trouble with the police in any part of the country. He possesses an honourable discharge from Her Majesty's

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  Forces. I have here a personal recommendation from a neighbour, and I am sure the House would be interested to hear it. It says:
  "I have known Adrian Keith Ayres over a long period of time, and have always found him to be kind, considerate, and of good manners at all times. He is industrious and hard working, completely honest in all his dealings with other people. In his domestic life I find him kind, faithful, compassionate; in short, a man happy in his wife and child, upon him they can rely. He is not given to any violent or turbulent impulses, but he is rather the sort of person who would 'go the other mile'."
  I am not quite sure what our friend means when he says "go the other mile." This is language which may be familiar to other hon. Members but is not familiar to me. It would seem to mean "turn the other cheek." The writer goes on:
  "I can quite honestly recommend him…and there is no doubt in my mind as to his complete reliability. I am, Yours faithfully, Howard V. Yates."
  This man is a licensed lay reader in the Church of England. I am sure that this gentleman, occupying such a position, would measure his words extremely carefully. I also have a recommendation from Mr. Ayres' employers who, after a period of time, found that his usefulness had become reduced. I am not blaming the employers, and it may be that they were justified in their action. In desiring to discover as much as I could about his background, I asked them to tell me what kind of a workman Mr. Ayres was. They informed me in a letter:
  "We confirm that the above named"—
  that is, Mr. Ayres—
  "has been in our employ as a production worker since May 1958. He performs the work allotted to him in a satisfactory manner, whilst his relationships with his supervisor and fellow-employees have always been most harmonious. There was general sympathy for him during the period he was prevented from working, and his return was welcomed by one and all."
  I have deliberately sought independent testimony about this man's character, and, as I see it, the facts show that there is not a person in the United Kingdom who, in the position of Mr. Ayres, would not feel entitled to seek redress. There cannot be anyone who, believing in justice, would refuse him. I say this
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  as a deeply held opinion. Indeed, I would like to meet the person who, having endured what Mr. Ayres has endured, would not feel that society owes him something in return.
  For these reasons, I humble ask the Joint Under-Secretary to reconsider this request on the basis of human compassion. When that reconsideration is made, I hope that one point will be borne in mind—that in my opinion this case is different from those which fall in other categories; that this is a man who was undoubtedly acquitted and who, I believe, was innocent rather than was found not guilty.
  I hope that I have said enough for the hon. Lady to tell me that this matter will be reconsidered and that when that reconsideration takes place it will be done on a basis of compassion with regard to a person who has suffered at the hands, of the law, I believe innocently, and that amends should be made.
  10.39 p.m.
  The Joint Under-Secretary of State for the Home Department (Miss Mervyn Pike):I am sure that we are all grateful to the hon. Member for Burnley (Mr. Dan Jones) for the manner in which he has approached this case. He has spoken persuasively on behalf of his constituent, and I can assure him that I have listened to him with attention and sympathy. I am the more sorry that I cannot give him the answer he is seeking.
  I can only repeat tonight what I have told the hon. Member in correspondence; that it is only most exceptionally that the Home Secretary feels able to make a payment to a person who has been prosecuted but not convicted of a criminal charge, and that he has not felt justified in making a payment to Mr. Ayres. To explain why the Home Secretary has reached that conclusion, I must first say something about the legal position and about the policy which successive Home Secretaries have adopted in these cases. In law there is as I am sure the hon. Member knows no obligation upon the Home Secretary, or any other member of the Executive, to pay compensation to a person who has been acquitted by the courts.

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  If such a person thinks he has grounds for compensation he can proceed in the civil courts and, if he is successful, recover damages. Any payment that the Home Secretary may make to such a person is paid as an act of grace. It is quite true that such ex gratia payments are made from time to time, but they are made in one set of circumstances only. The very long-standing policy has been to make a payment only where the claimant has suffered hardship through the negligence or misconduct of the police or of some other public authority or official. I will try to explain, first, why it has been thought right to restrict payments to this category of case and, secondly, why, in our view, Mr. Ayres' case is clearly outside the category.
  First, as to the general policy, it goes without saying that not every prosecution for a criminal offence results in a conviction. There is bound to be a substantial proportion of unsuccessful prosecutions; the safeguards that we have built up over the years into our judicial system would not be working if there were not. In round figures, there are more than 9,000 cases every year in which a person charged with an indictable offence is acquitted or discharged. That leaves out of account the very much larger total of summary offences. Ought all these 9,000 to be compensated? Their acquittals will have been for a variety of reasons. In one case, innocence will have been unquestionably established. In another, it will be more a question of the prosecution's having failed to discharge the onus of proof; in another, the acquittal may be on some wholly technical ground. It would be difficult to argue that compensation was justified, on merits, in each such case.
  Even those people who dislike the Home Secretary's present policy would concede, I think, that there would have to be some criterion for selection, and what we have to decide is what this criterion should be. There is a very real difficulty here which I ask the hon. Member to appreciate. Is the Home Secretary to make compensation only where he is satisfied that the claimant is really innocent and deserving? That sounds attractive, but let us consider its implication.
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  The implication would be that the acquitted person who had grounds for a claim but whose claim was rejected was not really innocent. The Home Secretary would be imposing his own standard of moral guilt or innocence on the standards applied by the courts. That would be an impossible policy, as I am sure the hon. Member would agree, and I am sure, too, that the Home Secretary would soon be in trouble in the House if he tried to work it. So it is that the Home Secretary confines compensation strictly to those cases where there has been not just a discharge or acquittal but a failure of the system through negligence or misconduct of the kind I have described.
  That brings me to the specific case of Mr. Ayres. I am sure that the hon. Member is not suggesting—he certainly did not seem to—that the police or anyone else concerned with the prosecution acted in bad faith, so we can, I hope, agree that no question of misconduct arises.
  Mr. Jones: I said that.
  Miss Pike:What, then, the Home Secretary has had to consider is whether there was negligence in prosecuting Mr. Ayres. I have studied the facts very carefully, and I should now like to go through them again.
  The murdered man, Mr. Porter, was Mr. Ayres' father-in-law. He lived in Burnley with a lodger, Mr. Ellis. At about ten o'clock on the evening of 18th February, last year, Ellis telephoned the police and told them that he had come home to find the living-room in the house in disorder, and a bloodstained axe on the table. He had not, he said, been upstairs. Upstairs, in bed, the police found Mr. Porter's body. He had been struck four blows on the neck and face with an axe, apparently while he slept. Police inquiries produced two witnesses who had seen Mr. Porter alive in the street, one of them at between 11.0 and 11.45 a.m. on that day, the other at 12.30. The medical evidence put the time of death at between 5.15 a.m. and 4.15 p.m. So the murder must, it appeared, have been committed in the earlier part of the afternoon.
  The police interviewed members of Mr. Porter's family, including Mr. Ayres. They took a statement from

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  Mr. Ayres on 19th February, the day after the murder. In this he said that he had gone to Mr. Porter's house at about two o'clock on the 18th. He had had no reply at the front, and had gone to the back. The back door was ajar, and he went in. The drawers of the living-room dresser were open and there was an axe on the table, but this was not unusual. He had called out, received no reply, and gone upstairs to Mr. Porter's bedroom. He had remained at the door and not gone up to the bed which, as far as he could see, was empty. A sheet was on the floor and the bedclothes were turned back as if Mr. Porter had just got out. There was an overcoat over the top half of the bed so that he could just see the pillow. Mr. Ayres had then, he said, left, closing the door behind him.
  The police also interviewed two of Mr. Porter's daughters, Mrs. Calvert and Mrs. Osborn. Mrs. Osborn told them that Mr. Ayres had called at her house between 12 and 12.30 on the afternoon of 18th February. He had said that he was looking for her father to speak to him about a job with which they were concerned. He had already knocked unsuccessfully at Mr. Porter's house on the way to her. She had suggested that her father might be in bed and Mr. Ayres had left saying that he would go and see. About 20 minutes to half an hour later he had come back and said that he had found the back door open and the drawers open. He had not, he said, been upstairs. He was looking, Mrs. Osborn said, quiet and pasty as though he had had a shock.
  Mrs. Calvert told the police that Mr. Ayres had called at her house at about 2.30 on the 18th. He told her that he had been to Mr. Porter's house and had found the back door and the living room drawers open. He told her, too, that he had been upstairs but her father was not in bed. Mr. Ayres made a second statement to the police on 24th February. He now said that he had been to the house twice. The first time he had knocked on the front door and received no reply. After visiting Mrs. Osborn he had gone back and gone in, thinking that Mr. Porter might be asleep. After seeing the open drawers and the axe he had gone upstairs and seen the bedclothes were pulled aside. He had re-
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  turned to Mrs. Osborn and had not heard that Mr. Porter was dead until next day.
  Mr. Ayres signed this statement. But then he told the police that he had in fact gone into Mr. Porter's bedroom, pulled down the coat which was on the bed and seen Mr. Porter's body, the head injured. He had decided not to disclose his discovery. The next day Mr. Ayres was charged with the murder. Mr. Ellis, Mr. Porter's lodger, had left Burnley after the murder and had gone to Northern Ireland where he was taken into police custody on another matter. On 24th March while in custody he told the police that they had got the wrong man in charging Mr. Ayres. He, Ellis, had killed Mr. Porter with the axe at about 6.45 a.m. on the 18th. He gave the police varying accounts of the circumstances of the killing. According to one of them, Mr. Porter had woken up while he was searching the bedroom for money and he had then attacked him. In a later statement he denied searching the room or that there was a quarrel with Mr. Porter. He said at first that he could not remember whereabouts he had hit Mr. Porter. Later he said that it was on the neck, but he could not remember which side or which way Mr. Porter was lying.
  As I have indicated earlier, there were witnesses who saw Mr. Porter alive long after 6.45 a.m. and there were indications that Mr. Porter was asleep when he was killed. Mr. Ayres came before the Burnley magistrates early in April and on 4th April they committed him for trial at Lancaster Assizes. Mr. Ellis gave evidence at the committal proceedings and retracted his confession to the murder. The witness, Mr. Berry, who had seen Mr. Porter alive after mid-day some hours after Mr. Ellis said that he had killed him, also gave evidence to that effect. But the witness who had told the police that he saw him between 11 and 11.45 a.m. now said that this had happened on an earlier date.
  The trial took place on 20th May and, as the hon. Member has indicated, Mr. Ayres was in custody meanwhile. At the end of the case for the prosecution Mr. Ayres's counsel submitted that there was no evidence against him to go to the jury and that it would be dangerous and unsafe to take the case further. On the

  375
  direction of the judge, the jury returned a verdict of "not guilty".
  It would be impossible for me in the time available for this debate to review all the circumstances of the case and I am sure that the hon. Member would not wish me to do so, but those are the essential and important facts. The question I have to ask is whether it can be said in the light of them that it was wrong or negligent to proceed against Mr. Ayres. It is not for the Home Secretary or for me to explain or justify a decision to prosecute in a particular case, but I ask the House to remember that the prosecuting authorities have, in the interests of the community, a very difficult duty to discharge: the duty, that is, of judging when there is such a case against a suspect that it should be brought before and decided by the courts.
  I am sure that that duty was discharged with all due thought and care in Mr. Ayres' case; and while realising that a frightened man may do foolish things—I have no wish to criticise or censure Mr. Ayres—it is right to stress that if there was suspicion of him it was accentuated by the lies he told the police.
  This is not, then, I submit to the hon. Gentleman, a case which comes into the limited category of cases to which I referred in which compensation may be paid because of misconduct or negligence by a public authority, and I am afraid that I must end as I began by repeating that, having listened sympathetically to the hon. Gentleman, and having previously investigated this case very carefully. I cannot feel that the Home Secretary could meet his request to pay compensation in this case.
  Miss Alice Bacon: I found the hon. Lady's reply somewhat disturbing and rather strange, because for five-sixths of it she seemed to be speaking in the guise of the prosecuting counsel. I cannot think of any speech which could have blackened Mr. Ayres' character more than the hon. Lady's. Nearly the whole of her speech was devoted to showing why it was right that Mr. Ayres should have been taken into custody and charged with this murder.
  Miss Pike: The last thing that I wish to do is to blacken Mr. Ayres' character
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  in any way, but, in trying to prove that there was no negligence, it is important to show why the police took the steps they did, and that is why I took particular care to indicate the circumstances in which it was thought right to prosecute. I want to underline very clearly that there is no intention at all to blacken the character of Mr. Ayres in any way.
  Miss Bacon: I am pleased to hear that, but I did not quite understand that to be the position during the hon. Lady's speech.
  The hon. Lady said that there are thousands of people who are acquitted every year, but surely there must be very few who have been imprisoned for three months with a murder charge hanging over their heads, and that, I submit, is something quite special and the reason why the Home Secretary should make an ex gratia payment to this man.
  The hon. Lady said that Mr. Ayres could take legal action, but she knows that in a case like this that could be very expensive, far too expensive for a man who suffered as this man did, and who lost his job because of his ordeal. I suggest that this is an exceptional case. Being in prison for three months is in itself a serious matter. I know that the courts do not sit very frequently, and we are trying to remedy this state of affairs, but it must be a terrible ordeal to be in prison for three months with a murder charge hanging over one's head. As my hon. Friend said, this was not a case of Mr. Ayres being found not guilty, but of him being acquitted for lack of evidence. If the right hon. Gentleman has the power, which he evidently has, to decide when an ex gratia payment should be made, I suggest that in this exceptional case he should use that power to compensate this man for his ordeal.
  Mr. D. Jones:May I ask the hon. Lady whether, before she finally says the last word on this case, she will discuss the matter with me?
  Miss Pike: In previous correspondence, I have told the hon. Gentleman that this case has been investigated very carefully. I listened with great care to what he said tonight. I should like to find some way to help him, but in all honesty I must say that we have

  377
  looked into this case very carefully. It is a very narrow category of cases in which my right hon. Friend is able to make an ex gratia payment. I hope that I have been able to prove that this case does not fall into that category, and I
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  believe that I would only be raising false hopes if I gave an indication that the decision on it could be reversed.
  Question put and agreed to.
  Adjourned accordingly at five minutes to Eleven o'clock.

ROYAL NAVY
  Personal Case
  Personal Case
  H.M.S. "Barbain"
  H.M.S. "Barbain"
SCOTLAND
  Title to Lands and Conveyancing (Report)
  Title to Lands and Conveyancing (Report)
  Secondary and Further Education (Report)
  Secondary and Further Education (Report)
MINISTRY OF AVIATION
  Royal Ordnance Factory, Patricroft
  Royal Ordnance Factory, Patricroft
  London Airport (Escalator)
  London Airport (Escalator)
SHIPPING
  Safety Certificates
  Safety Certificates
  Ships' Lifeboats
  Ships' Lifeboats
  Safety Standards
  Safety Standards
ROADS
  Bridge, Coalbournbrook
  Bridge, Coalbournbrook
  Dual Carriageways (Speed Restriction)
  Dual Carriageways (Speed Restriction)
  Motorways (Service Areas)
  Motorways (Service Areas)
TRANSPORT
  Windscreens (Safety Glass)
  Windscreens (Safety Glass)
  Road Safety
  Road Safety
  Wage Structure
  Wage Structure
  Road Accidents
  Road Accidents
  Old Age Pensioners
  Old Age Pensioners
  Studded Tyres
  Studded Tyres
RAILWAYS
  Members of Parliament (Letters)
  Members of Parliament (Letters)
  Closures
  Closures
POST OFFICE
  Robberies
  Robberies
  Motor Vehicle Licences
  Motor Vehicle Licences
SCIENCE
  Road Research Laboratory
  Road Research Laboratory
AGRICULTURE, FISHERIES AND FOOD
  Fluoroacetamide
  Fluoroacetamide
ADEN
  General Election
  General Election
SINGAPORE
  Defence Aid
  Defence Aid
MINISTRY OF DEFENCE
  National Service
  National Service
  N.A.T.O. (Mixed-manned Force)
  N.A.T.O. (Mixed-manned Force)
EDUCATION
  Teacher Training
  Teacher Training
  Polaris Submarines
  Polaris Submarines
  Aircraft Carriers
  Aircraft Carriers
PUBLIC BUILDING AND WORKS
  Officers' Mess Building, Aldershot
  Officers' Mess Building, Aldershot
  Prefabricated Buildings
  Prefabricated Buildings
GHANA
  Former Overseas Officers' Pensions (Income Tax)
  Former Overseas Officers' Pensions (Income Tax)
  PRESIDENT MACAPAGAL OF THE PHILIPPINES (COMMUNICATION)
  PRESIDENT MACAPAGAL OF THE PHILIPPINES (COMMUNICATION)
BRITISH ARMY
  War Department Property, Ashchurch
  War Department Property, Ashchurch
  War Cemeteries
  War Cemeteries
  Strength
  Strength

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

VISCOUNT ECCLES
The Right Honourable David McAdam Baron Eccles, K.C.V.O., having been created Viscount Eccles, of Chute in the County of Wilts—Was (in the usual manner) introduced.

LORD EGREMONT
John Edward Reginald Wyndham, Esquire (commonly called the Honourable John Edward Reginald Wyndham), M.B.E., having been created Baron Egremont, of Petworth in the County of Sussex—Was (in the usual manner) introduced.
The Lord Leconfield—Sat first in Parliament after the death of his brother.
The Lord Freyberg—Sat first in Parliament after the death of his father.

DUNDEE AIR SERVICE
2.25 p.m.
LORD HUGHES: 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 now in a position to make a statement about an air service for Dundee, and, if not, when they expect to be able to do so.]
LORD DENHAM: My Lords, two proposals have recently been put forward for providing a regular air service for Dundee. One is to serve Dundee by Herald aircraft operating a through service between Aberdeen, Edinburgh and Glasgow. This has raised questions about the adequacy of the landing facilities available at Riverside Park, about which I understand the Lord Provost of Dundee is in correspondence with British European Airways. The second is to oper-
572
ate a feeder service to Glasgow with a Heron aircraft. British European Airways estimate that this would result in a considerable annual loss. The whole matter is still being studied and a statement will be made as soon as possible.
LORD HUGHES: My Lords, while appreciating very much the Answer given by the Minister, may I point out that this matter has been under consideration now for very many years; and may I express the hope that urgent consideration may lead to a decision in weeks rather than months?
LORD DENHAM: My Lords, I will certainly pass on to my right honourable friend what the noble Lord has said; but I should just like to say that the matter of Dundee is being considered with the master plan as a whole which has been put forward by the Scottish Council.
LORD BOOTHBY: My Lords, arising out of that answer, is it not a fact that there is something to be said for establishing a new airport halfway between Perth and Dundee, to serve both centres? Is not this very necessary? I gather that that was a recommendation of the Council.
LORD DENHAM: My Lords, I am sure that my right honourable friend will also note what the noble Lord, Lord Boothby, has said.
LORD HUGHES: My Lords, may I come back to the matter by asking the Minister not to take the last remark as an excuse for further delay?

AGRICULTURE AND THE COMMON MARKET
2.30 p.m.
LORD GLADWYN: 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 to what extent they agree with the description of the agricultural policy of the European Economic Community given by Mr. Harold Wilson in his speech at Oxford on January 6 last; namely, that it is
"wrongly conceived, inward-looking, autarkic, unsuited to agriculture here and in

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Europe, to East-West trade, …, to the Commonwealth producer and to the freer trading Atlantic Community".]
THE MINISTER WITHOUT PORTFOLIO (LORD CARRINGTON): My Lords, the system adopted for agriculture by the European Economic Community is not itself necessarily autarkic or inward-looking. What matters is the way in which it is implemented. Her Majesty's Government hope that in the Kennedy Round of tariff negotiations the Community, as agreed in the Ministerial resolution of the GATT of last May, will work for the liberalisation and expansion of world trade in agricultural products.
LORD GLADWYN: My Lords, may I ask the Minister whether the Government are aware that in 1962 the European Economic Community imported nearly 25 per cent. more foodstuffs from the outside world than it did in 1959, whereas we imported only 3 per cent. more? Would he not therefore agree that this suggests, or seems to suggest, that it is rather we, and not the Six, who are inward-looking and protectionist?
LORD CARRINGTON: My Lords, I think that the Government have made it plain on a number of occasions that we welcome any decision by the Six to have a liberal and outward-looking agricultural policy, and any evidence of this is certainly welcome.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, although food imports increased in the Common Market Six during that period, did not the cost of living as regards food go up very sharply in all the countries concerned? Mr. Selwyn Lloyd, in a recent sound broadcast, said that when we complain about the cost of living here we should look at France, Germany, Italy and the other members of the Common Market. That was one of the Ministers of the Crown speaking. Does it mean that the Government want to change to the Continental system and to put the costs on to the consumer?
LORD CARRINGTON: My Lords, I am not quire sure whether that question was addressed to me or to the noble Lord, Lord Gladwyn. What I have said,
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on behalf of Her Majesty's Government, is that we hope very much that the European Economic Community will implement a liberal and outward-looking agricultural policy.
THE EARL OF SWINTON: My Lords, following on the Question which was put by my noble friend Lord Gladwyn, may I ask the Government for a firm assurance that the policy of maintaining a strong, healthy and prosperous agricultural industry in this country will remain a fundamental point of British policy?
LORD CARRINGTON: Yes, my Lords.
EARL ATTLEE: My Lords, may I ask whether the Government intend to ask the opinion of the country, at the next Election, before they embark on any further negotiations for entry into the Common Market?
LORD CARRINGTON: My Lords, I think that my right honourable friend the Prime Minister has made it plain that there is no question at this moment of re-entering into negotiations about entry into the Common Market.
EARL ATTLEE: My Lords, what does "at this moment" mean?
LORD CARRINGTON: My Lords, it means before the next Election.
LORD GLADWYN: My Lords, so far as the question of the noble Earl, Lord Alexander of Hillsborough, was addressed to me, however irregularly, may I say that what I said was designed merely to elicit the fact—which it did—that the policy of the Six is not inward-looking but rather outward-looking.
LORD CONESFORD: My Lords, if the noble Lord, Lord Gladwyn, wishes to debate with the Leader of the Opposition, Mr. Harold Wilson, is not this a very odd way of doing it?
EARL ALEXANDER OF HILLSBOROUGH: My Lords, may I ask the noble Lord the Leader of the House whether he is aware that there are many other things in the speech of Mr. Harold Wilson quoted in the Question on the Order Paper (the sort of Question which would never have been accepted at the Table in another place; but we are very free up here), and that in a recent

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speech Mr. Wilson pointed out that General de Gaulle had said that no community worthy of the name would be put into a position of not producing the whole of the food required for its own use? Is that not inward-looking? And has that not largely been the trouble of the Government in trying to get into the Common Market? They have been squeezing and squeezing our agriculture, so far as possible, to bring it into line with the Six.
LORD CARRINGTON: My Lords, the Leader of the Opposition in another place has made a great many speeches recently, and I must honestly say that I do not recall that he said that, but it would not surprise me if he did.
EARL ALEXANDER OF HILLSBOROUGH: Here is Mr. Wilson's speech: take it and read it.

GHANAIAN TAXATION ON CIVIL SERVICE PENSIONS
2.35 p.m.
LORD COLYTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what representations they have made to the Government of Ghana in regard to the imposition by the latter of a tax of seven shillings in the pound on the pensions of non-resident ex-civil servants of Ghana.]
THE MINISTER OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (THE DUKE OF DEVONSHIRE): My Lords, the attention of the Government of Ghana has been drawn to the fact that this new tax on income received from Ghana by nonresidents of Ghana can impose a serious extra burden on overseas pensioners. Following these representations discussions are proceeding with the Ghana authorities with a view to affording relief to these pensioners.
LORD COLYTON: My Lords, while thanking my noble friend for his reply, may I ask him whether he is aware of the fact that this tax makes no provision whatever for personal, marriage or children's allowances; and that, in addi-
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tion, for the month of December, 14s. in the pound was charged to cover the months of November and December; and that, together with British income tax on this amount, this left very little indeed for the pensioners?
THE DUKE OF DEVONSHIRE: My Lords, I am glad that the point has been raised by my noble friend. As regards the 14s., that was due to the fact that the tax in December was back-dated to November 1 and therefore covered two months. From now on, it will be 7s. As regards allowances, this is one of the main points of the representations that we have made to the Ghana Government and it is under discussion now.
THE EARL OF LISTOWEL: My Lords, may I say that I am very glad that the Government are discussing this matter with the Ghana Government? May I ask the noble Duke whether he does not think that there might have been some misunderstanding about double taxation?
THE DUKE OF DEVONSHIRE: My Lords, while the discussions are going on it would not be helpful for me to go into the details of this, but I think it is fair to say that perhaps the Ghana authorities were not fully aware of the implications of this tax.
LORD COLYTON: My Lords, I am afraid that we are going to see this sort of thing arising in other places in future, and is not this really an argument for the British Government's taking over ultimate responsibility for the payment of full pensions of all ex-members of the Colonial or Oversea Service?
THE DUKE OF DEVONSHIRE: My Lords, with respect to my noble friend, I think that that is a different and far larger question. Perhaps my noble friend would wish to put down a Question to that effect.

BUSINESS OF THE HOUSE
EARL ST. ALDWYN: My Lords, I should like to inform the House that at a suitable moment after 3.30 my noble and learned friend the Lord Chancellor will be making a statement on resale price maintenance.

THE STRUCTURE OF GOVERNMENT
2.39 p.m.
LORD SHACKLETON LORD SHACKLETON rose to call attention to the structure of Government, and to the problems that confront Ministers and Parliament as a result of ever-increasing responsibilities and complexities in the development of national and international affairs; and to move for Papers. The noble Lord said: My Lords, this Motion has been on the Order Paper for a very long time, and the longer it has been on the Paper the more trepidation I have had about initiating a debate on the subject at all. Your Lordships' House is so full of distinguished ex-Ministers and others, who know so much more about Government than I do, that it is only because of the fact that my noble friend Lord Taylor and I were Parliamentary Private Secretaries to one of the greatest of our public administrators—namely, my noble friend Lord Morrison of Lambeth—that I attempt it at all.
I should say that the original idea of this debate was Mr. Quintin Hogg's, and I am very sorry he is not here to reply. This is no reflection on the noble Viscount, Lord Blakenham, who is to reply, but we all know that if Lord Hailsham, who combines a great deal of brilliance with a certain happy irresponsibility, had been here, he would have produced some brilliant ideas. In a way, I thought this debate to that extent would be a little like Hamlet without the Prince of Denmark, until I saw the very distinguished list of noble Lords who are taking part in the debate. For every book I have read on the subject, apart from my own personal observations, I find that I have had to read two books; and when I had sat down to write my speech I found that I had written a thesis and not a speech. Therefore, the formidable bunch of papers that I have in my hand should not alarm your Lordships, because I intend to throw most of it away and seek rather more to introduce the subject and leave it to other noble Lords to find a solution if they can.
It is, of course, possible to argue that our British system of Government is as perfect as anything that has been devised. On the other hand, there are some critics, like Professor Chapman—
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and I do not propose to take his book as a theme for the debate.
LORD BURDEN: Hear, hear!
LORD SHACKLETON: I am sure the noble Lord will be relieved to hear that. However, Professor Chapman does say this and this is one of the texts that I will offer to the noble Lord, Lord Burden, and we can examine it and judge whether it has merit:
"I take it that there is little doubt that Britain has now reached her lowest point in international prestige for many years. The institutions of British government have been signally unsuccessful in keeping pace with the modern world. It is my contention that the source of many of our present ills is institutional and lies in a mistaken veneration for old ideas. Institutional failings have positively contributed to our decline in world status."
I might say, if this were not a non-Party debate, that the present Government have something to do with it. But that is if we accept the proposition at all.
There is another proposition. It is that we have a system that has enabled us to survive two world wars; to turn an Empire into a Commonwealth; to face the loss of unquestioned world leadership; to carry through a major social revolution and, as Donald McLachlan wrote the other day, to create a more or less affluent society. It is certainly true that the British Parliamentary system has successfully brought us into the twentieth century; and without any reflection on other countries, it is worth noting that this has not been the experience of other countries. Germany and Italy had to face Nazism and Fascism; France endured defeat, and in the end had to turn to a very different type of Government, and if anyone studies the Constitution of the Fifth Republic, he will see, among other things, that Members of Parliament are not allowed leave of absence.
LORD BOOTHBY: My Lords, if I may interrupt the noble Lord for one moment, they only sit for about six weeks in the year, so they do not want much leave of absence.
LORD SHACKLETON: The noble Lord is not quite correct; actually they sit for five months. But, even so, I agree that they do not sit quite as long as we do. It is rather more the freedom of our institution to which I am referring.

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We know, too, what has happened to Russia, and what is happening in Spain.
I would ask your Lordships to accept the fact that I am not seeking to make ideological or political points, but am merely trying to observe the world as I see it. As a very sympathetic North American observer, Professor Conway, of Harvard, wrote:
"There can be no question that, whatever the economic and political position of Great Britain internationally may be to-day, as a custodian of the fundamentals of free Government she is without equal."
It is against this background that it rather behoves us to consider whether everything is as perfect as it should be, and whether the criticisms that are being daily levelled against the Parliamentary and Governmental institution are valid; and it is also worth noting whether the same criticisms have not been made in the past. The weight of current criticism is not merely of Professor Chapman, but many students of Government have pointed to defects in our system; and we have to decide, as Walter Bagehot tried to do 100 years ago, what is the myth and what is the anti-myth. Here, unfortunately, the political philosophers do not offer us very much. The linguistic philosophers, if I understand them correctly, say: "You obey the police because you obey the police." On the other hand, there are those who say that institutions arise out of intimations of the particular circumstances of the societies in which you live, and there is no intrinsic moral validity between one system and another. But, however far the British institutions and Parliament have grown by good luck, there is no doubt that there have been men of resolution and principle who have sought to create a society which would give the greatest amount of freedom within the law that I believe it has been possible to devise in a modern civilised society.
Clearly, this debate could range so wide that we should have to retire and have a whole series of further debates on certain aspects of it. I think it does no harm, however, to at least arrive at a group of the institutions which we should study. First of all, there is Parliament; secondly, there is the Government; and thirdly, there is the Administration. Again, one can argue whether this is a natural arrangement, but it is a con-
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venient abstraction for our purpose. We operate within a well-established system—the two-Party system. To-day it might have been a three-Party system if the noble Lord, Lord Ogmore, had been able to speak in the debate as he intended to, but in this debate, at least, it is two-Party. I do not wish to-day to attack the Party system: indeed, I believe that the Party system is essential if one is to get any collective expression of will at our present state of development.
But there is one thing which I hope no one will challenge, and that is that the nature of Government is inevitably having to change as the result of the extraordinary developments in science and technology and all sorts of techniques which are now open to Government and to experts which we have to take into account. I am not suggesting that life has not been very complicated in the past indeed, over 100 years ago Walter Bagehot (I am sorry to keep referring to him, but he is unquestionably the most readable of all political writers) pointed out that the House of Commons was a place that lacked leisure—that is certainly a complaint one has to-day—and that they are busy all the time asking questions and dealing with issues arising from different parts of the Empire.
We are now, I believe, confronted by problems of a much wider and, indeed, different nature. It is only a few weeks ago that we in this House passed rapidly through all its stages a small Bill called the Continental Shelf Bill. That was a Bill which extended the area of the earth's surface to be open to exploitation by this country and others by hundreds of thousands of square miles, of the most profound economic importance. This is only a small thing. It will only be a matter of time, provided that they find it, before gas will be being pumped from under the North Sea; and a few years later on people will be talking about damming the Straits of Gibraltar—indeed, plans have already been put forward.
We may have to face the most startling scientific developments. I am sure that all your Lordships would welcome a system of weather control. One may say that this sounds like fiction; but these are things that may come about, just as the satellites which revolve round the earth have come about. I

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remember Mr. Quintin Hogg, when he was Lord Hailsham, saying in one of his early speeches as Minister of Science that he had no intention of flinging satellites around this earth. But this is precisely what he is planning to do at the moment. This is a matter which has scarcely been discussed by Parliament. It is a matter of a very exciting nature, but whether it is right or wrong is something that the Government, advised by their experts, have to decide.
When we look at the developments in the biological sciences, which are at a most exciting and critical stage, we wonder how many people are familiar with the relevance of ecology to the whole study of planning, the study of environment, animals, plants and human beings. These are techniques with which Parliament and Government must be familiar. The problem of the scientist or the expert in politics is a particularly difficult one. We are fortunate in this House in having a number who are both —I believe the correct phrase is numerate and literate, but certainly eloquent. They will be able to give us some information. At the moment Government and Parliament depend to a large extent on the wisdom shown by individual advisers—men such as Tizard, Charleswell, or Professor Zuckerman or Dr. Wiesner in the United States. These are matters which, frankly, I believe are to a large extent beyond the individual understanding of most of us—and, indeed, I would say of most members of Government. And even if they can keep up to-day, will they be able to keep up in the future?
I should like to refer to a paper written by a Member of another place, Mr. Austen Albu, published in Minerva in which he attempted to analyse the extent to which science enters into the affairs of Government, both as an instrument of policy and as a means of thinking. Several types of problem were mentioned. These were originally posed by Professor Aron. There is a whole range of economic problems. In the past, Governments have been reluctant even to recognise that they existed, so far as Government is concerned, and I expect the noble Lord, Lord Boothby, will have something to say about the Treasury on the subject.
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Then there is the choice of direction for scientific research. It is a myth—again I want to stress the word "myth", because it was Walter Bagehot's great contribution that he sought to look at the reality rather than the myth of our institutions—to think that decisions on scientific research will be taken by individual universities, and that however much we like we can insulate universities just by means of the University Grants Committee. It is no longer insulated to-day. Another problem is that of defence, and I shall have a few words to say on that. But if we go back to the economic and social planning; if we think of Professor Buchanan's Report, and of the problems that Parliament and Government will have to face, we have to consider very carefully whether our institutions are best suited to deal with these matters. Or do we leave it just to the experts and the expert committees?
Here, of course, we are in difficulty. We have only to remember the explosion of the rainbow bomb in the Van Allan belt which the experts—though not all—said was perfectly safe. Yet a hole has been torn in that area in space which has already had a most serious effect on the satellites and is likely to last, not as originally estimated for a year or two, but perhaps for 100 years. All these are matters that will have to concern Parliament and Government. When we look at the planning side, there are new horrors in store for us. It is now conceivable that they are seeking—indeed, they are trying to do it in Russia at the Cybernetics Institute at Kiev and the Laboratory of Mathematical Methods in Economics in Moscow—to put the economy into a computer. Professor Stone, at Cambridge, is trying to do the same thing. He has created a cybernetic model. It is a mathematical model, and by this I mean not a model such as we normally understand it, but one into which you establish circuits and ultimately feed all the variables into a computer, perhaps 3,000 or 4,000, and you may come out with the regulatory mechanism to plan your economy. How you can farm concepts (perhaps the noble Lord, Lord Robbins, can answer this) like marginal utility into a computer, I do not know. These are subjects with which we shall have to deal. It is therefore right, I believe,

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that we should look at the machinery of Government from the point of view of its suitability and function.
There is another side that we have to consider, and that is the problem of the massive increase in legislation. I am not sure whether it was Lord Palmerston or Lord Melbourne who made some remark to the effect that, "We cannot just be legislating all the time". This is precisely what we are doing. Even now there is legislation which does not come before us because there is not time. I should like to ask what has happened to the Bill which has been drafted to give effect to the Report of the Roberts Committee on Libraries. I am told we were not protected at Suez because certain steps had been taken under the International Red Cross Convention. The painful fact is that Parliamentary time gets more and more crowded. The Government exercise a rigid control over Parliamentary time, and it is, in my view, a futile wish that we shall be able to cut down on the amount of legislation. Public policies are becoming so much more complex that it may be difficult—though it may not be so yet on some, but it is on a few—for them to be subjected to the ordinary Parliamentary processes. We realise now that any Government are carrying out policies of a kind that will not only bind their successor but may exist even when they come back into Government again. It may well be that the noble Earl the First Lord of the Admiralty will be back in Government again by the time the carrier which it has been decided to build is built.
Although I would not propose that Parliament should sit longer than the present five years, we must take into account the fact that these are matters on which democratic control, as it has been understood in the past, gets more remote. When we look at the field of what might be called international legislation, and we look at the Bills that come before Parliament, sometimes with a Convention as an annexe and even a Convention in a foreign language, what chance has Parliament at that point of amending it? I do not see how we can do this unless some other institutions, possibly of an international kind, are set up to provide that sort of Parliamentary control—and there are such
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embryo institutions. As it is, we shall have more and more international agreements—and it is right that we should—but the subsequent legislation will not be subject to the same sort of Parliamentary control.
How, then, do we seek to make Parliament, and indeed the institutions, more competent? During the war there was a great influx of brains into Government: of professors from the universities; of leaders from industry. Examples were Mr. Hugh Gaitskell and Mr. Harold Wilson, who were both taken from the universities and had inestimable experience in the business of administration. At the end of the war, when my noble friend Lord Attlee became Prime Minister and my noble friend Lord Morrison of Lambeth led the House of Commons, there was still a knowledge, an experience and a skill which had spread much more widely through Parliamentary Government and academic areas of our life. I would say that my noble friends who led my Party at that time showed extraordinary skill in using these men and the knowledge acquired during the war, and in applying so much of the techniques of operational research and such like to Government. But that is a long time ago. We have settled back into our established patterns. Academics do not move freely from the universities to the Government as they do in other countries; nor do businessmen move freely into the Civil Service. I appreciate the difficulties of solving this and I am merely stating the problem. It will not be enough if we seek to conduct our affairs in this matter with the sort of silly cries one sometimes hears of "jobs for the boys". It is almost like running, not on last year's Bradshaw, but on the last Bradshaw which went out of existence several years ago.
My Lords, there is, too, the problem of secrecy in Government; and this is something that has been commented on by practically every academic observer. The secrecy which is preserved by the British Government in regard to matters which are not of a security nature is not matched in any other country in the world. There is not time to-day to discuss the effect of the Official Secrets Act, but we all know of cases where Ministers have, in fact, evaded giving information—as it is so easy to do if they are skilled at it—and, indeed, have

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been expected to evade giving information which Parliament required. I would refer to one particular recent example (and I do not say this as another means of giving a "backhander" to the Government)—the debate on B.O.A.C. and the famous Corbett Report. One accepts the fact that the Minister had given an undertaking that it was confidential but how was Parliament expected to judge these issues on the basis of a carefully worded and negative White Paper?
There have been other examples. What happened to the Ministry of Housing and Local Government survey which was carried out by the Government Social Survey organisation? It was a report that was never published. Apparently it has been shown to some experts, but I do not think it has ever been shown to Members of Parliament. There is, therefore, a need for more information. A subject to which we could well devote a whole day's debate is this whole problem of organising information, not merely for Parliament, but in doing the sort of work to coordinate documentation—words which are familiar to those who are operating in this field.
My Lords, here I come to the most difficult part of my speech, having attempted to point out some of the difficulties which I think must be apparent to us all: the fact that legislation is increasing and that we are concerned with so many matters that Parliamentary control must inevitably diminish. How, in fact, do we seek to deal with this problem? I know that there has been a good deal of discussion on whether there should be a further extension of the committee system, and I realise that this is a difficult subject. Some will say, "Save us from Committees", and then usually point to the American Constitution as an example of how damaging and harmful Committees are to Government. But the deficiencies or the difficulties in the American Constitution do not exist here. They not only have separation of powers, but divide their powers right down the middle. I cannot see why we cannot develop the idea of a Public Accounts Committee, an Estimates Committee, a Nationalised Industries Committee, and let them work on these particular, highly technical problems which are really unsuitable for discus-
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sion across the Floor of the House. It is not only that they are unsuitable; we simply have not the time along these lines to devote to them.
Some very interesting proposals were published in The Times on April 17 of last year by a Senior Clerk in another place, Mr. Michael Ryle. They were proposals of a kind that I should find it difficult to fault; they seemed to me to provide just the degree of opportunity for informed discussion which would enable Members of Parliament, and possibly Members of this House, assuming that they personally had the time (and that is another matter to which I shall come, very briefly) to give much more thorough and effective consideration. Moreover they would enable Members to check much more closely, by a reasonable degree of examination—some of it, if necessary, in private—on very technical questions. I hope that this idea will be further explored, because it was certainly true in the past that both the House of Commons and, I believe, the House of Lords did face much more difficult questions than they attempt to face to-day. It was not unknown for a House of Commons Select Committee to spend a great deal of time going into questions of the installation of electricity or gas, and especially into the railways; for the 200 railway M.P.S in the House of Commons knew a good deal about the technological questions of those days. I should have thought that there were some subjects which are demonstrably unsuitable for effective discussion across the Floor of the House.
I now come, my Lords, to perhaps the most difficult matter of all: how to handle the subject of Defence. I really do not know whether a special Committee, such as exists, indeed, in practically every other country in the world, could be given classified information. I do not know whether this is a possibility; and I do not propose to-day to go into this delicate issue of bringing the Opposition into private agreement or conversations with the Government on Defence. But I would point out that not only are we the only country that does not have special Parliamentary Committees; we are the only country that does not have specialised agencies studying defence problems on a need-to-know basis.

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In the United States there are quite a number: the Rand Corporation; the Hudson Institute; the Institute for Defence in Washington, all of which are independent; and there are others. They are being given classified information. The same is true of practically every other country. France, Sweden and Germany, for example, have similar bodies. We have none in this country. When noble Lords think of that admirable body, the Institute of Strategic Studies, I would emphasise that it is seeking all the time to develop much more into an international study centre; and although a good deal of information filters through on the "old boy" net, formal permission for access to classified information is not available. This is the one subject which is kept, as I understand it, almost wholly within Government circles and is not subject to informed examination outside. I do not point to disarmament. Perhaps I might just mention some of the serious mistakes that have been made in Defence. It may be that these are inherent in the very nature of the Defence problem. But it may well be that further brains should be operating on this matter.
That obviously brings us to the question of how Members of Parliament, underpaid and overworked, are to fulfil their duties to-day. We all know the historical development of the House of Commons. We all know that what has been called the economic underpinnings, in other words the private wealth which enabled the House of Commons to function, is only partly true to-day. I think the country has been both mean and cowardly in regard to payment of Members of Parliament. They are overworked; their health and life prospects are considerably worse than those of other people. And there is no earthly reason, other than this curious English reluctance to speak or think about ourselves, why they should not be a great deal more adequately paid. I personally am glad that at last a means—albeit somewhat un-Parliamentary from a precedent point of view—is being found to measure what their proper rate should be.
In passing I would remark that the word politician is a word of which
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we should not be ashamed; it should have the highest possible meaning. It is striking, despite their difficulties, how well Members of another place function—and there are many Members in this House who have been there and will know what honourable and decent people they are, and how hard they work. They have common sense and experience and, above all, political sense. And the essence of Parliamentary institutions is that the men and women should have a political understanding. But they need support, and they need, of course, more facilities, whether in the way of secretarial assistance or better facilities from the House of Commons Reference Library—to which we are very lucky to have access—and I am very glad that they have appointed some scientific librarians there. I am reasonably certain that the terms and conditions of Parliament and the House of Commons must alter if Parliament is to fulfil the rôle that rightly belongs to it.
I do not propose to deal to-day with the subject of your Lordships' House. I will say that I believe that the Second Chamber, whether the House of Lords or another (but I suspect it is likely to be the House of Lords for quite a long time), has a part to play. It was 100 years ago that Walter Bagehot said he thought it deplorable that the proposition put forward by Lord Palmerston for the creation of Life Peers had been turned down. He said:
"The House of Lords rejected the inestimable, the unprecedented opportunity of being tacitly reformed. Such a chance does not come twice."
My Lords, Bagehot was right so far as the following 100 years were concerned. I do not think I have time to develop this theme very much beyond saying that I believe that this Chamber also has a rôle, and a big rôle, to play in this particular matter.
I should like to look briefly at the subject of Government itself. One of the most fascinating subjects of controversy to-day is the rôle of the Cabinet and the rôle of the Prime Minister, and of course the position of Members of Parliament in relation to the Party machine, which has been the subject of a good deal of writing especially by those who have particularly suffered from it. I clearly am not competent to judge—and I shall be very

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interested to hear what my noble friend Lord Morrison of Lambeth has to say—whether the Prime Minister is a coordinating Minister or whether we are now advancing into Prime Ministerial Government. The noble Earl, Lord Avon, says that the Prime Minister is still nominally primus inter pares; but in fact his authority is stronger than that, and the present Prime Minister says:
"Every Cabinet Minister is in a sense the Prime Minister's agent—his assistant. There's no question about that. It is the Prime Minister's Cabinet, and he is the one person who is directly responsible to the Queen for what the Cabinet does. If the Cabinet discusses anything it is the Prime Minister who decides … A Minister's job is to save the Prime Minister all the work he can … if the Prime Minister wanted to take a certain step the Cabinet Minister concerned would either have to agree, argue it out in Cabinet, or resign."
John P. Mackintosh was going to rewrite a book, Keith's British Cabinet System, but he had to write a new one because he found it changed so much; he says the same thing.
This is not purely an academic question. If we are to examine the question of Government, we want to examine what is real and what is myth; and in so far as the Cabinet system may have changed—as undoubtedly in some respects it has changed—and if the Prime Minister's office is of a different nature, then possibly there is a need to give more effect to this. It may well be that the Prime Minister needs to be more fully served by his own chefs du cabinet, his own private organisation, particularly in the field of such matters as administration and Government reform. I am not competent to judge this, but I know that there are these different points of view, and it would certainly be of value if this matter could be recognised.
Then there is the question of the position of Ministers. I think it is absurd that the Foreign Secretary is paid the same rate as Lord Palmerston was paid. I think it absurd that the Under-Secretary of State for Air is paid at the same rate as a squadron-leader. There is either a right rate or a wrong rate. I do not believe that men and women come into Parliament or into politics, whatever rate they may be paid, simply for personal gain. I believe that the sanctions and controls over our public
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life are such that, for the most part, men who come into this field are men of integrity, and it is to my mind absurd that we do not recognise that there may conceivably be a proper rate for the job even in Government. Civil servants do not do so well, but at least they are able to organise. But nobody organises for the Government Front Bench; they just have to take it. They are able to get public-spirited people to be Lords in Waiting. This is something that clearly must be looked at.
I would turn briefly to one other subject. There is no time to deal with the whole problem of regional planning, the necessity, possibly, for Government to operate more widely within the Provinces plans with which the Government and the Opposition are both equally concerned. I would suggest that in our consideration of this matter we should look at what is done in other countries. We should look in particular at the French system of civil service and government. Our system has grown up quite differently. We have no Conseil d'Etat to examine legislation; we have no system of administrative courts. We have no Ombudsman. I am sorry myself that the Government missed the idea of an Ombudsman quite so quickly as they did. I would acknowledge that there are difficulties in it, but the Wyatt Report was a most serious examination of an institution that is working pretty successfully, and against this background of growing complexity and growing administrative control I would suggest that we should not lightly neglect any possible means of establishing some form of public accountability.
When it conies to the training of the civil service—here let me say straight away that I, like others, have the highest regard for the qualities, integrity and ability of the British civil servants —there are those who say that they all need a good brain washing, and there are those who say that a First in Greats thirty years ago is not enough of a qualification to deal with the complex economic problems of to-day. But if they had taken a First in Economics thirty years ago it would not help them much either, because economics has advanced since then. But there is one thing that the French do: every man going into the French higher civil service goes through

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one of the grandes écoles; and those who have met French senior civil servants—I think Lord Gladwyn might have something to say on this—will appreciate their quality. It is difficult to see how France in her political turmoil could otherwise have been governed. Furthermore, associated with the Ecole Nationale d'Administration is a centre of higher studies which is looking at problems of administrative and Government reform.
A beginning is being made in this country. It is possible now for an assistant principal to do a five months' course in economics, and obviously people from other fields than the humanities are coming into the administrative Civil Service. But it is not a question of taking one man from one culture and one from another. It is a question of informing them of what type of issues they will be dealing with. I wish it were possible to have a greater degree of mobility of the kind one had during the war, both into Government service and out of it. This is not a matter in which I want to start an argument but it is one which ought to be discussed, and I would ask the noble Viscount who is to reply: who is responsible in the Government? Which Ministers are looking into the question of administrative reform and development? Our Constitution consists of a mixture of dignified myth and not always easily observed reality. We have to judge whether these institutions need further development and whether they are capable of development. It is my view that we are in a much stronger position in this country in developing our institutions. There are no artificial constitutional restrictions, provided the will is there.
I hope this will be a beginning of discussion by Parliament on these problems. We need to consider whether our Parliamentary institutions and Government, and above all control, are adequate or will be adequate. I believe our system is capable of adaptation. We know that we are confronted with ever-increasing legislation of ever-increasing scientific complexity. I think we shall have to find a way for developing more discussion outside the two Chambers, and there should be less secrecy. There is one proposition I would make—namely, that on certain subjects of a
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non-controversial kind there might well be some consultation before the legislation actually comes to this House. The little Bill that I mentioned concerning the Continental Shelf is one that might easily have been agreed and, indeed, might have been subjected to a kind of Select Committee treatment, such as we give to Private Bills, except I would suggest that it be so done as to get the Bill right before it ever came to the Floor of the House.
Finally, I believe that the status of Members of Parliament and their pay, and that of Ministers, should be looked at. I would say that we ought to accept the logic of Prime Ministerial Government, but I would hesitate to do so when my noble friend Lord Morrison of Lambeth has yet to speak and may possibly defeat me in this particular argument. But there are consequences that flow from this. If we are to seek a society at home and in the world in which the rôles of the individual and his rights as a member of the community are harmonised, we have now got to decide whether we leave it still "to guess or by God"; or we can leave it to political scientists or men of the calibre of a Napoleon or a de Gaulle. Napoleon, of course, produced some fine administrative institutions.
I will give one more quotation from a Member of this House, the noble and learned Viscount, Lord Radcliffe—I wish he were able to take part in this debate. I think he said this in the course of the Reith Lectures:
"The British have formed a habit of praising their institutions which are sometimes inept, and of ignoring the character of their race which is often superb. In the end they will be in danger of losing their character and being left with their institutions, a result disastrous indeed."
It would be a tragedy if, with what I believe is an infinitely adaptable system, we fail to take the steps to adapt it so that we still can retain our position as the great holder of free institutions, and be able to make our contribution to polity by discussion, our great and irreplaceable contribution to political development, and I hope that we shall in fact set about doing that very thing. I beg to move for Papers.
3.28 p.m.
LORD MELCHETT: My Lords, I am sure the whole House is most grateful to the noble Lord, Lord Shackleton, for

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putting down this Motion this afternoon, and for the stimulating and interesting speech he has made in introducing the debate. Undoubtedly, there is an intense interest outside Parliament in this subject, and the impressive list of noble Lords who wish to speak this afternoon reaffirms the concern which exists inside Parliament at the same time. Indeed, no one involved in public life to-day can possibly fail to be worried about the inadequacy of the existing machinery of Government to cope with the increasing complexity of our affairs. This is not to say that we are not coping at all; on the contrary, in all the circumstances we are putting up a quite creditable performance. Nevertheless, there is a fairly massive range of subjects and problems about which it can reasonably be said that we have either acted inadvisedly or too late, or where we have so far taken little or no action at all.
I do not intend to burden the House with a catalogue of failures or shortcomings—every noble Lord will have his own examples in mind and will attach more or less political flavour according to his own point of view. Shortcomings have existed, and do exist, in the management or our economic and monetary policy, in the management of the nationalised industries, in the conduct of certain international affairs and in many other fields. It would be foolish to pretend otherwise. These shortcomings have been apparent under Governments formed by both the major Parties in the State since the last war. And if one sets aside the different political approach to matters of policy the deficiencies in the system are nevertheless apparent, to many of which attention was drawn this afternoon by the noble Lord, Lord Shackleton, in his opening speech.
As I see it, there is an urgent need to make a critical analysis of the existing machinery of Government and to try to decide how it can be improved. I hope it is permissible for somebody who has never held office under the Crown, and whose experience in Parliament is extremely limited, to take a few minutes of your Lordships' time to put forward some suggestions. The Motion of the noble Lord, Lord Shackleton, covers a very wide front, but the whole subject seems to fall into two main categories: the problems confronting Parliament and those confronting Ministers and their
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Departments. I am sure there are many noble Lords who will wish to speak from great experience about our Parliamentary procedures. It is the organisation and competence, in the widest sense of the word, of Government Departments about which I should like to make a few observations.
Most of us actively engaged in business affairs and with some public responsibilities have daily experience of working under Acts of Parliament and White Papers which have set out major policy decisions of Government during post-war years. As a result of my own experience, I have formed one or two firm convictions. The first is that at the policy-making stage it is wrong for us to rely to such a large extent on Royal Commissions. They no doubt have an important part to play in the broad social and national issues, such as were dealt with in the Royal Commission on the Press and by the Wolfenden Report, and similar issues; but where we are dealing with the practical day-to-day management of the nation's affairs and matters such as taxation and the nationalised industries, I believe that these policy-creating functions should essentially be the responsibility of Ministers and their Departments.
I think that it is wrong for the responsibility to be pushed off on to ad hoc Commissions which have no continuing interest or responsibility in seeing their recommendations put into practice and which, in any case, cannot commit Ministers. I believe it is wrong for two reasons. First, no part-time body of people, however expert, however hardworking or dedicated, can possibly deal expeditiously with these intricate matters of policy. Secondly, they are often dealing with subjects which cannot be adjudicated upon a once-for-all basis. Circumstances, technology, even opinions, change the whole time—and the process of making policy on these matters should be a continuous one. My conclusion is that the Government should resort to this form of inquiry much less frequently as a means either of influencing opinion or of making up their own minds about the policies of the main administrative Departments.
On the other hand, I believe that White Papers on many aspects of our affairs tend to be too infrequent, and,

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worse still, do not give sufficient information, or are so condensed as to be quite inadequate as a basis on which Parliament and the public can reasonably form opinions. Greater care—which I believe really means greater intellectual effort—should be applied at this stage in the formulation and presentation of policy. This would not only improve the quality of decisions, but also improve the subsequent legislation if it is required. It is rightly said that the clear, precise definition of a problem is ninety per cent. of its solution. Clearer and more detailed exposition of policy would not only improve legislation but obviate a great deal of the confusion which constantly arises at present over interpretation of Acts and White Papers at a later stage. It would also help to prevent sloppy thinking which itself is the origin of a good deal of ambiguous drafting.
In order to achieve improvements in the technique of policy-making which I have suggested, I believe that the Treasury and the major administrative Departments would have to add very considerably to the number, quality and range of experience and competence of their very top people. I should like to expand a little on the idea of the injection of new people and new techniques into Whitehall. Before doing so, there is another aspect of administration I should like to mention which equally, I believe, is in urgent need of attention. This is the question of executive action and follow-through. There is an exasperating inertia in the systems and procedures of Whitehall, and it often appears that even where correct decisions have been taken an extremely long time elapses before the wheels of the Departments get moving and things are effectively and efficiently put into operation. I believe this to be unnecessary. It could. and indeed must, be solved. This again is largely a question of getting a sufficient number of the most competent people into the key administrative jobs.
If one takes as a yardstick some of the outstandingly efficient and successful large organisations in either the private or public sectors in this country and in other parts of the world, I believe one is driven to the conclusion that our great
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departments of State have too few top posts and that the combined top level of manpower available for policy making and executive action, including Ministers, is inadequate to deal with all the business properly. It is, of course, common knowledge that Ministers and civil servants have been desperately overworked for all the years since the last war started. It is also common knowledge that if people are under constant pressure they do not have time to think. That really is a set of conditions which simply is a product of bad organisation. It is for this reason, above all, that I believe the whole system needs urgent re-examination.
It is my contention that a fairly large number of additional senior and middle-level posts should be created in a large number of the existing Departments—this is quite apart from the possibility of the creation of new Ministries, which has been advocated in various quarters during the last few months. I also believe that these new posts should be staffed largely from the professions, industry, the trade unions, the City and universities—in fact from experienced people coming into the machinery of Government from outside. This, of course, presents problems. It would probably be necessary to have some form of short-service commission, such as the Defence services have, and in addition there should be arrangements for pensions to be transferred. This should be a two-way trade both for civil servants leaving Government service and going into industry, who should be able to take their pension rights with them, and for people coming into Government from industry, who equally should be able to transfer their pensions. I suggest that if legislation were required for pension rights to be transferable, the Government should take a close look at that requirement. I should also like to see the basis of the regular recruitment into the administrative branch of the Civil Service widened at the entry stage, but also varied so that people could join at a different stage in their careers having first gained skills and experience in other walks of life.
Like Lord Shackleton, I also envisage a substantial increase in the pay for top appointments in Whitehall, although I

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believe the noble Lord was more concerned about the pay of political appointments than the Civil Service pay. Otherwise, I can see no hope of getting a free, lateral movement of people between Government service, industry, commerce and the nationalised industries, without the constant problem of hardship to the individual. To get some reasonable parity of pay—it need not be exact—for equally responsible posts seems to me an absolute essential; and the cross-fertilisation of ideas between people moving in the course of their careers from one walk of life to another, and particularly in and out of Government, would, I believe, be of inestimable value to the country. On a similar point, I should here like to add that I include the pay of Ministers and junior Ministers in my general views about the remuneration of people in Government service. It seems to me that the present level is nothing short of absurd.
My Lords, on the question of facilities for the people who carry these very heavy burdens, I find it almost embarrassing to see the almost total lack of facilities which are provided for these people carrying the very heaviest responsibilities in the country, as compared with, let us say, the top managing directors of the Royal Dutch Shell Group, and I can see no possible reason for this. We have devised in industry all sorts of techniques and means for taking the pressure off people, providing them with adequate qualified staff immediately around them in their private offices, harnessing all the modern techniques that science has given to us for removing pressure and easing people's tasks. So far, I think the Government offices and the general machinery of Whitehall have been starved of a great many of these facilities, which are really taken as an absolutely every-day part of life for those people working in industry.
I am very glad to see that the noble Lord, Lord Robens of Woldingham, is making use of an aircraft for his Coal Board business. It seems to me an excellent development and absolutely natural when there is a need to travel around the country rapidly. But why not helicopters and light aircraft for senior Ministers who have responsibilities all over the country? These things have been often the product of Government
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research and expenditure, yet we seem to be a litle shy about making use of them later.
It may be felt, my Lords, that I have levelled some rather severe criticism at the Civil Service. I believe that what I have said about the number, the calibre and the expertise of the people applies with equal force to Ministers. I hope to see more appointments in the future from outside Parliament, as has occasionally been done in the past; and your Lordships' House, of course, has been graced with a number of very distinguished Ministers who were not active politicians before they joined the particular Administration concerned. I should also hope to see quite a number of top appointments in the Civil Service open equally to people coming in from other walks of life. In case it is thought that I am criticising only the machinery of Government, and that I feel everything in the private sector is in good order, I should like to make it clear that I think there are the same sort of inadequacies in a great deal—but not all—of private enterprise; and, of course, where it can be found in the private sector, it is in equally urgent need of reform. What I am certain about is that we shall not become masters of the problems of modern Government simply by shifting the existing people around inside Whitehall and Westminster; it will be done only by drafting in some new people with a fresh approach and modern expertise.
Finally, may I say that I do not believe that it is a criticism, in any harsh sense of the word, to point out that the incredibly rapid development of the world, the complete revolution in the functions and responsibilities of central Government, which were virtually undreamt of thirty years ago, have rendered the existing people and machinery inadequate to carry out all the functions that are required of them to-day, without some help being injected from outside. The problem is to get first-class men into the really responsible positions. The world to-day is not short of ideas. Relatively we have adequate capital, plenty of raw materials and an adequate labour force. The real shortage is of management ability to carry out the supervision of all the necessary functions in order to achieve our aspirations, and there can be no greater

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or more urgent priority than getting a sufficient number of men of really high calibre into the business of the government of this country.

MONOPOLIES, RESTRICTIVE PRACTICES AND RESALE PRICE MAINTENANCE
3.45 p.m.
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, I should like, with your Lordships' permission, to read to the House a statement which my right honourable friend the Secretary of State for Industry, Trade and Regional Development has just made in another place. It will be convenient if I use his own words:
"With your permission, Mr. Speaker, and that of the House, I wish to make a statement on monopolies, mergers, restrictive practices and resale price maintenance. The Government's policy of modernisation requires the promotion of the greatest possible efficiency in all sectors of the economy. Competitive trading conditions are an important element in helping to ensure that the nation's resources are efficiently used. Effective legislative measures in this field are essential if the nation is to enjoy the benefits of a high rate of economic growth and stable prices.
"After a thorough review of the operation of the present legislation on monopolies and restrictive practices, the Government have reached the conclusion that this needs to be strengthened and extended. The Government are satisfied that the 'neutral' and uncommitted approach to monopoly on which present legislation is based remains fundamentally right and they do not propose to introduce into the law any presumption that monopoly or size are in themselves undesirable.
"There are nevertheless occasions when the public and the Government need to know how a monopoly is operating, in case intervention is necessary. The Government are satisfied that such enquiries are best carried out by an administrative tribunal like the present Monopolies Commission. But they have concluded that certain changes are
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necessary to make the Commission more effective, to give it greater authority, and to enable it to work more quickly. With these objects in mind the Government propose that the Commission should be strengthened and enlarged to enable it to work in groups. They also intend to enlarge their powers to implement the Commission's recommendations.
"I wish to deal now with mergers. Many mergers are beneficial to the economy. They produce stronger units, economies of scale, better management, better research and better sales organisation. The Government do not wish to place any obstacle in the way of such mergers, or of the great number whose effects on the economy are not significant. There is, however, a small minority of mergers which may lead to monopoly conditions damaging to the public interest. The enlarged powers to be taken by the Government to ensure that the recommendations of the Commission can be implemented should cover this type of case.
"I turn now to restrictive practices. It is clear that the Restrictive Trade Practices Act needs to be amended to deal with certain loopholes which are weakening its effectiveness: for example, information agreements on prices. The Government propose to close these loopholes.
"As it stands, the law makes no provision for monopolies and restrictive practices in the field of services. The Government think that this legislation should now be extended to enable them to refer what I might describe as commercial services to the Monopolies Commission. They would need to take powers to deal with any practices contrary to the public interest which the Commission's reports might reveal. The Government intend to present a White Paper dealing in more detail with the proposals I have outlined.
"I come finally to resale price maintenance. The Government believe that this practice is in general incompatible with their objective of encouraging effective competition and keeping down costs and prices. They have reached the conclusion that resale

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price maintenance should be presumed to be against the public interest unless in any particular case it is proved to the contrary to the satisfaction of a judicial tribunal. They therefore propose to introduce legislation this Session designed to bring the practice to an end, subject to the right to apply for exemption to the judicial tribunal to which I have referred.
"The Government believe that if this comprehensive series of proposals are put into effect the economy will be strengthened, to the benefit of all sections of the community, and to the advantage of our competitive position in international trade."
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I must thank the noble and learned Lord the Lord Chancellor for giving us this statement by Mr. Heath. I think it is a very important statement indeed. I notice that there is to be a White Paper issued—I believe it will be available to-day—and I think that that White Paper will require pretty careful study. The references at the end of the statement to the question of resale price maintenance may not satisfy everybody. There will be fairly extreme views on either side; but I think the basic idea of having any such questions resolved by a judicial tribunal might work out effectively. However, I should like to have a look at the White Paper myself.
Then, the statement is made that legislation will be introduced "this Session". In what sense are the words "this Session" used in this respect? Is it the Session that would normally end in July, or is it the Session that will be brought to an end at any moment which the Government choose to appeal to the country? I should like a little more detailed guidance as to what is meant by "this Session" in this context. Certainly the legislative powers that are required ought not: to be delayed, and the question therefore is whether it is intended to introduce this Bill within days or weeks, as a General Election might easily take place at any time from the end of March onwards.
THE LORD CHANCELLOR: My Lords, in reply to the noble Earl, who has asked me to elucidate the meaning
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of the words "this Session" in this context, I would say only that the Session usually ends about October or November. What I have said about "this Session" would certainly cover right up to the end of the Session, whenever that end may come. With regard to the other point which the noble Earl raised, the White Paper will not be published to-day: it will be published as soon as possible. It will not cover the proposals in relation to resale price maintenance, because they will be included in the Bill—which, again, will be published as soon as possible.
LORD MORRISON OF LAMBETH: My Lords, the statement envisages, as I understand it, either administrative or, quite possibly, legislative action on a number of related but nevertheless distinct subjects. Will the noble and learned Lord the Lord Chancellor tell us whether, where legislation is required, that legislation will cover the whole of these matters, and not only resale price maintenance?
THE LORD CHANCELLOR: I do not think that the Bill, which will be introduced, as I hope, after not too long a delay, will extend to subjects other than resale price maintenance and the few other matters which are closely related thereto. The subjects relating to the Monopolies Commission will, I think, have to await further legislation. The proposal in relation to that, as I hope I have made clear, is to publish a White Paper containing the Government's proposals.
LORD MORRISON OF LAMBETH: But does the Lord Chancellor realise that that means further delay? It may mean quite material delay, because there has been a considerable delay in the modification of the Monopolies Commission ever since it was established quite a number of years ago. Is it not a pity that these related matters should not be dealt with in the same legislation, rather than leaving it to a somewhat speculative future?
THE LORD CHANCELLOR: My Lords, I think that the legislation dealing with resale price maintenance would form a very comprehensive and good Bill. I think it would be covering too wide a field to include all the other matters—although, if I could be assured

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of the noble Lord's co-operation in getting such a measure through, I would certainly consider the matter with my right honourable friend.
EARL ALEXANDER OF HILLSBOROUGH: That will depend upon what is in the Bill, will it not?

THE STRUCTURE OF GOVERNMENT
3.56 p.m.
Debate resumed.
LORD STRANG: My Lords, this is an immense subject, and one can deal with only a part of it. I do not propose to follow the noble Lord, Lord Shackleton, along all the paths he covered in his speech. Nor do I propose, in particular, to discuss the special problems created for government by the new scientific and technological breakthrough. I do not feel competent to do this, and certainly there will be speakers later on who will be competent to speak about that subject. But there is an essential background to these problems to which I think it is worth drawing attention, and that background derives from our present system of government—a system which may be roughly described as Parliamentary democracy, or government by discussion. It is from this foundation that any reforms which we may contemplate—and I think we have some—will have to start.
Let us take, first of all, the question of legislation, to which the noble Lord, Lord Shackleton, has drawn attention. Nowadays, Governments are expected to undertake more and more economic and social responsibilities. They are called upon to introduce more and more legislation of increasing complexity, either for the management of public affairs or in order to regulate the social conduct of the citizen, to save him from some of the consequences of his own follies and to protect him from being cheated or exploited by his fellows. That all means careful consultation with the interests concerned during the drafting stage of legislation. After that, there is the passage of the Bill through all stages in two Houses of Parliament by a tediously repetitive process of debate. That process, as the noble Lord, Lord Shackleton, has said, is time-consuming;
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the result being that there is no Parliamentary time for other, much-needed measures, and a large legislative programme remains unfulfilled, sometimes for years. In defence of this elaborate legislative process it may be said that it is important to have general public assent for laws and to make sure that, as far as possible, they are accurately expressed, practicable; and enforceable. Parliament is not omnipotent: it has to carry the public with it.
How is this choking of the legislative channels to be remedied? The reform of the practices and procedures of another place was debated last Session, but without much promise of change. Nor can it be said that any of the more drastic remedies which have been put forward from time to time look very promising. One of these—I do not think it is a very good one—is that Second Reading debates should be decisive on principle and that Committee work should be non-partisan. But if this were to be made to work, Members of Parliament would have to reform their whole outlook; and this change of heart is not very likely to occur. Another suggestion is that there should be wide recourse to general enabling legislation, with liberty for the Executive to act or, if need be, to fill in any necessary legislative detail by decree or regulation without further reference to Parliament. That, my Lords, would be anathema to most of us. But there are some who think that we might well be forced sooner or later to some such course as this.
Secondly, after legislation, there is the problem of policy and administration, and the question of the relationship of Ministers to Parliament. It is said nowadays that, owing to the operation of the Party mechanism, Ministers are no longer in any real sense responsible to Parliament; and it is true that Parliament seldom, if ever, now destroys a Government, or hardly ever drives a Minister from office. Nevertheless, I think the responsibility of Ministers to Parliament is far from being the myth it is so often said to be. Those critics who hold this view would, I think, do well to ponder carefully the insight into the subtle inner workings and prevailing spirit of that unique and very human fraternity, the House of

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Commons, which was revealed in the recent discussions on the B.B.C.'s Third Programme with two members of another place, the Government Chief Whip and the Leader of the Opposition. Mr. Wilson and Mr. Redmayne are people who know very well what they are talking about in this regard.
The Parliamentary Question certainly keeps the Executive on its toes; but one could wish that in place of the too often trivial Parliamentary Question, and the too often inflated supplementary, there could be a deeper probing and a better-informed testing of larger policies, a positive attempt to sustain, guide and stimulate the Executive rather than to oppose for opposition's sake.
Certainly, as the noble Lord, Lord Shackleton, said, Ministers should have better material facilities than they at present possess for equipping themselves for their work; and they would probably do their work much better if they were better furnished. But some of the remedies proposed go further than this. As has been mentioned, in particular, by the noble Lord, Lord Shackleton, one of the remedies would be a complex of specialised Parliamentary Committees—with oversight over the various Departments of the Government and with power to call for papers and examine Ministers and civil servants. In addition to preparing for debates and preparing Answers to Parliamentary Questions, Ministers and their civil servants would have this further heavy and continuous call upon their time and energy. I think that such Committees, if used within the present system—and I repeat "within the present system"—would still further clog the conduct of public business. But that is not the only or even, perhaps, the chief objection. Other objections were put by the noble Lord, Lord Morrison of Lambeth, in his book Government and Parliament; and the Leader of the Opposition, in a recent broadcast, was also rather cool about such Committees. Indeed, Mr. Wilson said that he did not at the moment see any major change that he would like to introduce in the procedure of Parliament. The views of such experienced Parliamentarians as these must, I think, carry great weight.
My Lords, side by side with the question of reform of Parliament there is
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the argument for the reform of the Civil Service; and on that subject the noble Lord, Lord Melchett, had some valuable things to say. It is said by all sorts of people that civil servants are too hidebound and unimaginative; that they are too remote from the modern world, and are too powerful. As one Member of Parliament put it they should be "on tap and not on top". Here, again, I think it is fair to say that the background which I take as the basis of my remarks comes into play; and, more especially, the answerability of the Executive to Parliament. We have, in fact, the kind of Civil Service that is required by our present system of Government.
The burden which Ministers and their civil servants together bear is more easily bearable because civil servants are the kind of people that they are. Civil servants have the right and duty to express their views to their Minister; but, in the end, they will conform to the Minister's decision and will wholeheartedly carry it out. Speaking from my own experience, I may say that this imposes less strain on the conscience than outsiders appear to think. There is much common ground between the kinds of Government we are likely to get; there are more solutions than one to our major problems. It would be arrogant for a professional, except in the gravest case, to ask to be relieved of some particular duty. There is no need to attribute to the conforming civil servant, as some have done, either cowardice or sycophancy.
My Lords, the advice of civil servants can indeed be powerful, but competent Ministers who have graduated in the hard school of the House of Commons know very well how to test the advice they give. The myth of senior civil servants spending their time pulling the wool over the eyes of innocent Ministers hardly needs exploding. If civil servants were not of this ultimately conformist type, public business would not be smoothly done. The Civil Service certainly needs original and dynamic minds; and it needs, as the noble Lord, Lord Melchett, suggested, many more of them. They should, as he also said, be provided with greater facilities than they at present possess.

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As to the charge that civil servants are hidebound, there is this to be said: in their day-to-day work civil servants must operate strictly within the limits of legislation or within the limits of policy laid down by their Minister. There is no getting away from that. If civil servants started to interpret the law or to apply ministerial policy according to their personal whim, the public and Parliament would be the first to complain and the Minister would have to answer for it. How often have we seen a minor error blown up into a Parliamentary storm? People who advocate drastic reform of the Civil Service tend, I think, to underestimate the value to the community of the relations of confidence between the Minister and his professional staff and fail to recognise what a work of art their joint conduct of our multifarious public business is. Government administration is an art in its own right. In the last resort it means dealing with human beings rather than feeding data into a computer, however necessary that may be.
It is in the higher ranks of the Service, in the sphere of policy-making and policy execution, that the case for the wind of change in the Civil Service may be stronger. The job of the civil servant is not only to assist in the formulation of policy: it is also to devise the best methods whereby policy may be effectively carried out. In any good system of Government policy and administration, planning and execution, are not distinct but inseparable. That is the main objection to the device, so beloved of reformers, of a separate planning group entirely divorced from executive responsibility. Professional civil servants are, on the whole, likely to be better at this double task than the dons or business men, trade unionists or newspapermen, who, in the eyes of some, are strong candidates for their jobs.
Certainly, it would be better if more established civil servants had an economic or scientific or technological background. I do not myself share the view that an arts degree is, in itself, a better qualification for a civil servant than any other kind of degree. There has been much too much talk about the two cultures. Any well-educated man, with the requisite disposition, whatever academic discipline he may have followed, can
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be made into a skilled professional administrator. It is his education, not his speciality, that matters most. And there are more people, I think, with these varied attainments in the Civil Service than is generally supposed. The noble Lord, Lord Robbins, I think I am right in saying, recently observed that some critics are so ill-informed as to overlook the fact, for example, that more than half of the administrators in the Treasury have professional qualifications as economists.
Nevertheless, I think that the injection of non-professionals from outside, with specialised knowledge or wide experience, can be refreshing and fruitful. The noble Lord, Lord Melchett, has made a great point of this—and such cross-fertilisation already plays a notable part in Whitehall. Like the noble Lord, Lord Melchett, I think that there might well be more of it; but unlike him I think that this outside assistance is probably better supplied on a temporary and advisory basis than on a short-term established basis, since I think that non-professionals do not generally take kindly to the rigours of regular Civil Service routine. There is more to Civil Service life than just being in on great decisions. And if senior British civil servants were as remote from the modern world as some people say, it is surprising that they are in such heavy demand, in their later years or after retirement, for higher posts in industry or in university administration. By and large, the real but limited scope for useful reform of the Civil Service is well indicated in what I think is a very sensible article in the Economist this week.
There are, however, some spheres of British policy, and particularly in the sphere of defence in its relation to economics and foreign affairs, where a deliberate and comprehensive review upon a wide basis of experience, both official and unofficial, would, I think, be salutary. Something more might be done also to integrate the work of the Ministries of Housing and Local Government, of Public Building and Works, of Transport and of the Board of Trade, especially in the sphere of positive planning, where I think our planning system is weakest. Town and country planning could be made the joint concern of people with a variety of skills in land use. To use the current jargon,

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what is required is the environmental approach. From this point of view, it seems to me that there is much to be said for the proposal, made in a recent article in The Times, for a separate Ministry of Regional Development.
My Lords, I would close with a few short footnotes. To-day, the most important positive objective of Government action is economic expansion, on the basis of the new scientific and technological break-through. All Parties are agreed on this. As one Member of Parliament recently said.
"Economic growth is the essential basis for a liberal and humane society".
And yet, in practice, expansion is not by any means the overriding aim; most of us, at some time or other, value something else more highly. This may be some private interest, or it may be some other public interest. It was, for example, concern for some other public interest that dictated the insertion by your Lordships of the "amenity clause" in the Electricity Act and in other Acts of Parliament, or the rejection by your Lordships of the water clauses of the Manchester Corporation Bill.
It is, for example, in the main, concern for private interests that obliges the Minister of Transport, as he plaintively said, to go through 31 steps before he can build a motorway. We have to consult everybody before we can do anything. The Times was not far wrong when it suggested, some while ago (I quote from memory) that it was often an attitude of kindness to individual interests that stood in the way of national advance. I do not think that in this we go astray: on the contrary, this way sanity lies. I do not believe that expansion, as such, is the be-all and end-all. But it is the frustration resulting from this concern for other objectives than expansion that causes some people to hanker after what they call "positive government" or for the inculcation of "a national purpose". But positive government, if carried far enough, would in the end mean decisive priority for the public as against the private interest, and the negation of government by discussion. And the deliberate fostering of a national purpose, if it could not be self-induced by the various elements of our pluralistic society, could mean the moulding of
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opinion by Government agency, through such media as the schools, the universities and broadcasting, as is widely done in the world to-day.
It would take the gravest national emergency, I think, to make either of these things tolerable, and I do not believe that the mere objective of economic expansion would be a sufficient justification for that. Yet, short of this, it could be argued that if massive economic expansion is to be planned as an outstanding objective—I do not say an absolutely decisive objective—then it may well be that some sacrifice might have to be accepted. This might mean, at least, some streamlining of the legislative process, some strengthening of the Executive, some extension of the public as against the private interest. Yet even to this more modest extent, such a price would not be easily paid: first, because the strong trend of public opinion is against it—one has only to think of the Franks Committee's Report; secondly, because there is an obstinate resistance to change in established institutions; and, thirdly, because the nature and extent of the problem are not fully recognised. But the dilemma is there. If economic expansion is all that important, if these great tasks await us, ought we not to confront the coming years as we should confront a wartime emergency?
Professor Buchanan and Lord Robbins, and others, have faced us with mighty challenges. We know that our cities need reshaping; our stagnant industrial areas need re-vitalising; our roads, railways and ports need modernising. We know that our taxation system needs reconstruction. We know that our criminal law requires radical reform. We know that our trade unions belong to a bygone age. There is much else that cries out for overhaul. What we require, do we not, is another Buchanan, or another Robbins, to make a comprehensive study of the structure of our Government and of the strains that are bearing upon it in order to see what change, if any, may be required to fit it for the tasks of the coming decades. We need, do we not, something like a new but more comprehensive Haldane Committee on the machinery of Government. It is pretty clear that some reform will be needed. But no reform is likely to be feasible unless it grows naturally

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out of our present system of government. That, my Lords, is the main thing I am trying to say to your Lordships to-day. Let us hope that this debate will draw attention to this need, and that we shall once again find a means to reconcile public action with private liberty.
4.20 p.m.
THE EARL OF HALSBURY: My Lords in common with others who have spoken this afternoon, I should like to express my gratitude to my noble friend Lord Shackleton for the opportunity to discuss this fascinating subject. It is, of course, of interest to us all, as Members of this Chamber, and some of your Lordships have a double, treble or quadruple interest in it, having been members of a Government, civil servants, public servants or members of Government advisory bodies, and so on. I think all of us who have tried to work within the machine have at some time or another suffered the same sort of frustration when trying to activate a machine whose purposes appear to be quite extraneous to our own and which is apparently bent on inactivity. Why cannot we get the sort of decisions taken that we want taken? This is the question I ask myself over and over again. It is not the decision-briefing machine that gets stuck, but the decision-taking machine. Yards and yards of brief are churned out by the system, but still no decision emerges.
When I started to think about these matters I found myself in the same position as my noble friend Lord Shackleton: that I had to write an essay to find out what it was I really believed myself, and in due course I reduced this to a rather intimidating mass of notes, which, like his, I hope will not alarm your Lordships by their bulk. I feel that one of the reasons why we find decision-taking so difficult is that we are trying to apply to positive purposes machinery that was so often conceived in purely negative terms. There does not seem to be much difficulty in running Ministries which have positive terms of reference and simple jobs to do, like the Ministry of Pensions, the Post Office and so on. But the first kind of negativity emerges with the kind of work that the Foreign Offices does. The first thing it has to do is to take
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the rest of the world for granted, acknowledging that we are a fairly small unit in a fairly large world and cope with situations as they arise. Only too often its wisdom is the wisdom of inactivity; that if a decision gets put off long enough, it may not need taking. It is like answering a letter: if you do not answer it for long enough, no answer may be necessary, circumstances having changed in the meantime. This policy of masterly inactivity, which is such a good excuse for inaction, and may in some cases be the right thing to do, is in other cases the wrong thing to do. You will never keep death off the roads by a policy of masterly inactivity: something positive has to be done about it.
The second type of negativity in our system arises from the origin of our supply concept. This was originally a discovery by Parliament that it could control the Government by withholding the sources of revenue. But the purposes to which this system was dedicated were, in their origin, often negative purposes: the prevention of absolute government; the eviction of unpopular Ministers and so on. They were never conceived in positive terms. At the time of the Civil War and the Revolution of 1668 it was never contemplated that a Government would have to build thousands of miles of roadway network or would have to reconstruct the entire educational system right through from the schools to the universities. Serious social purposes of this kind were not appropriate to that day and age. The nearest our forefathers appear to have come to serious social purposes was the Poor Law, and their views on this were fairly simple; that is to say, it was regarded as a Christian duty to succour the deserving poor. Since this was a personal duty, it was handed over for action to the local parish. And, most important, succour should not be overdone or the poor would be demoralised and would cease to be deserving.
Government attitude toward public expenditure seems never to have evolved beyond the point at which the target of policy is regarded as, in a symbolic sense, one of the "deserving poor". Too much must not be spent on it or everyone concerned will be corrupted and cease to be deserving. That is why when reconstructing things like universities we seem to have an in-built prejudice in favour of

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doing it by halves, or so it seems to me. These, my Lords, are the reasons why I have come to my first conclusion: that we find positive action so difficult because most of our machinery was conceived in terms of negative purposes.
The other conclusion I have come to is that a training in expenditure control is not necessarily the right training for the policy-making civil servants of the future, who will be concerned not so much with revenue expenditure as with investment. One cannot run a business, whether it is a commercial or a governmental business, without accurate information as to what is going on. In commerce, this is the province of the accountant; in Government, it is the province of the Treasury and the Auditor-General. The Treasury share of the division of labour is to see that the money is properly authorised, and the Auditor-General's to ensure that it is properly expended. That is as I have always understood it. Each acts as a recorder. Neither functions as a creative critic, bringing out the character of what is going on. No-one seems to be concerned with projects and whether they are wisely conceived as opposed to properly authorised. This is left to the post-mortem procedure of the Committee on Public Accounts.
I yield to no-one in my admiration of the Treasury at. the nation's financial watchdog. It will be an ill day for the British people when the Treasury is popular with spending Departments. It contains the only body of men in this country dedicated to the proposition that the Government should spend less, not more. Everybody else can give good reasons why the Government should spend more rather than less, particularly if it is more of someone else's money and less of his own. But the function of the Treasury from this point of view is still that of a recorder. Nothing in the training of a man dedicated to this sort of work teaches him anything about creating the future, save on the supposition that it will resemble the past. It needs a more creative mind to tell us that the future will not resemble the past: that to-morrow's expenditure should not resemble to-day's, but should be conceived otherwise and dedicated to different purposes.
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My Lords, I do not believe that you can train a man in creativeness by employing him for years on expenditure control. He will not grow into the type of policy-maker who will procure a total arrest of expenditure in one direction, and its increase by an order of magnitude in another. This is why I am driven to my second conclusion: that we need to re-formulate the training of those who will be responsible for policy-making in relation to the investment required to endow our nation with modern facilities. Then we may get our new universities and roads built and conceived as if they were enterprises receiving the full support of a resolute nation.
If that were all that were wrong with our system, I do not think there would be any great difficulty in correcting it. One can readily postulate an administrative machine adapted to the fulfilment of creative purposes and the rebuilding of the nation's facilities of one kind or another. With regard to roads, for instance, and traffic control, we have a multiplicity of traffic authorities in London but only one traffic authority in New York. If that were the reason why New York's traffic at its present volume keeps on the move at least as well as London's, there would be no difficulty in principle in substituting one authority for many. The machine, however, whatever modifications one introduced into it, would still have to be used. It could prepare the brief necessary for the taking of decisions, and it could administer the decisions when taken. But someone would still have to decide, and what the Government seem to me to have needed all my lifetime is the resolution and sense of urgency to embark with despatch on the decisions and the action that are called for. But resolution and sense of urgency are just what we never seem to have had, except briefly in two world wars, and once out of active danger in each case we all fell to squabbling over the reasons why nothing could be decided. Seen in retrospect, it all seems to me to have been shadow boxing.
My third conclusion is a rather pessimistic one, based on the familiar principle that a nation gets the Government it deserves. I am not concerned with a Government of any particular complexion in this instance. I do not see how you can suppose the governing

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body to possess qualities that the nation from which it is recruited does not itself possess. A nation that does not itself want to grasp nettles will not have a Government that is good at grasping them. That is fundamentally why no Government or electorate of any complexion in my lifetime have ever been really honest with one another. They have never faced up to the decisions that need taking because they really do not want to incur the cost of taking them. Who has ever told us the whole truth, for instance, about the repairs and dilapidations overdue in a pioneer economy now obsolescent? Take the whole lot and add them together; work it out as an annual rate of reinvestment in the nation's capital facilities—the economic infrastructure, as it is sometimes called. The result would be rightening.
Take what is necessary to modernise the railways and docks over, say, fifteen years. Take what would be necessary to give us a proper road system over, say, twenty years—not the sort of road system we ought to have to-day, twenty years too late, but the road system that posterity will require in twenty years' time. Add the cost of modernising our cities on the lines of the Buchanan Report, say, over fifty years. Then consider the transfer of personnel to staff our new universities, and if all that immense sum were added up and presented as a bill to the nation, it would have to face a very unpleasant conclusion, that none of the 4 per cent. annual increment contemplated by N.E.D.C. could be handed out either as wages or as increased dividends. It all ought to be ploughed back into the economy. That is a decision I believe we do not want to take, or to face its concomitants. I do not blame any Government for this, whatever its complexion may be, past, present or future. I think it is the nation itself which does not want to face up to these things.
From this rather pessimistic conclusion I try to extract a note of optimism based upon one little acorn I can see, from which I hope one day a great oak will grow. We seem to me to need a deeper understanding of ourselves so as to take a more objective view of our troubles. For this the remedy seems to me to lie in the hands of sciences such
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as sociology which really do study the pattern of human inter-actions, and the way that societies tend to form a culture-pattern, some of them more and some of them less neurotic than others. In speaking of politics and the inter-action between the Legislature and the Electorate, I am not concerned to join issue with one Party or another. I am not myself a professional sociologist, but it has been my hobby for many years to study what sociologists have found out about human societies.
I would ask your Lordships' indulgence if I deal rather theoretically with these matters, because they cannot be dealt with in the present stage of our knowledge in any other way. There are three matters which constantly recur in public life, and which constantly recur in debates in this House. There is mutual suspicion, which is a phenomenon like any other social phenomenon, and there is preoccupation with status. Over and over again in debates in this House we have complained that the engineer does not have the same status as, for instance, the arts graduate. To say that he ought to have the same status as the arts graduate is rather like saying that somebody ought to bell the cat. How do we set about giving him that status? The other thing about which we frequently complain is complacency and conservatism, not in the political sense, but the psychological one—a sense of self-contentment, mutual admiration and so on.
All these very much interact, and I think they bear on what my noble friend Lord Shackleton was saying about secretiveness, because the man who has a secret feels that he has been upgraded in status, and he does not want his secret taken away from him because it means down-grading. The moment he starts being secretive the natural tendency for mutual suspicion to which all human beings are prone is again aroused. So I do not believe that attempts to cure this secretiveness will ever be successful unless we go to the roots of them. We all tend to think that our own reaction to the circumstances in which we find ourselves is a sort of norm, and any reaction which differs from ours is regarded as some form of aberrant behaviour generally to the disadvantage of the community. But in fact our own reactions on all these

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matters are merely points on a very wide range.
We have a certain level of mutual suspiciousness in this country. If one went to the Pueblo Indians in Arizona one would find a much lower level. They are an eminently reasonable people. If you went to a little group of islands near New Guinea you would find one called Dobu where the whole island is in a state of neurotic tension because everybody believes that his neighbour is trying to destroy him with black magic. This mutual suspiciousness is something which can occupy a wide ranging spectrum, and we are just one point on that range. if only we could learn how to control these factors we should be learning how to deal with the roots of the troubles from which we suffer.
As to complacency, it is in one sense a good thing. It has a stabilising effect on society that people should like the society in which they live and feel proud of belonging to it. If custom appears to have some sort of ancestral approval so that to conform to it unifies the present with the past, and the future, it stabilises society. But we have to be very careful where we apply this stabilising influence. We do not want to preserve British Railways in such a form that it would have ancestral approval. We should be introducing stability into our society at the wrong point.
The question of status we have been into many times. I am not suggesting that this whole nation is in some way at fault because our particular levels of obsession with status, complacency and mutual suspicion are very much worse than everybody else's. But I am sure in my own mind that our overall culture pattern is sub-optimal from the standpoint of the problems we have to solve, and if we only understood ourselves a little better we should know the various different ways in which we might be able to improve the society in which we live.
The official account of our constitutional democracy with its reference to the people's mandate relates to what I might call the front of our political life. Nearly all cultures have a front and a back. The front is the way things are supposed to work, which roughly correlates with how they did work a sufficiently long time ago to receive the
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benediction of ancestral approval. The back is the way they really do work, which represents the growing point. Our traditional picture of our Parliamentary democracy seems to me the front of our politics. A sociologist studying the techniques of market research and public opinion polls would note that there is generally a low level of correlation between what people think they would like before they have had it and what they report that they did like after they have been given it. People, in fact, are unreliable judges of what they have not actually experienced themselves, so that the results of an election, as regarded by sociologists, would more probably be felt to be a verdict on the past than a mandate for the future.
From this point of view we might perhaps regard our Parliamentary democracy as a sort of symbiosis between a decision-making machine and a means for ensuring a succession between Governments, so that unpopular Governments can be dismissed at intervals sufficiently regular to avoid the build-up of undue social tension. That, I think, is the chief way in which a sociologist would approach our problems. If this is so, then one of our tasks is to become aware of it and introduce the front of our society to its back, so that the decision-making machine can do what it is for, namely, take decisions. I suspect that the alternative is an unhealthy one, namely, to allow the back to become progressively more deeply buried, and the front to become decreasingly relevant to the realities of decision-making. I think that would end with a type of politics characteristic of Byzantium, France or America, where the front end of politics had or has no discoverable content and the back end of politics is an unacknowledged power struggle: the front end frivolous and the back end sinister.
These considerations may strike your Lordships as somewhat abstract and far from any sphere of practical application but I would claim a high precedent for them. On the navel stone at Delphi the God Apollo is said to have written the phrase, "Know thyself" for the edification of mankind. In the modern world it is the sociologists and psychologists who are his acolytes and who are attempting to help us know ourselves. At present the social sciences are com-

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pletely under-endowed compared with all the other sciences. If we get all our decisions wrong, if we fail to do what we should and blow the world to pieces, it will not be through a failure to control nuclear forces; it will be through a failure to control human forces. Therefore I believe, although it is only a small acorn from which a big oak may grow later, we ought to have a Social Sciences Research Council to sit beside the Medical Research Council, the Agricultural Research Council and the Department of Scientific and Industrial Research. This has been mooted many times; there have been many briefs on it. Once more, what we lack, as always, is a decision.
My Lords, we have many problems to solve and many decisions to take if we are to solve them; but one of them is critical and overriding and must be taken as a prerequisite to deciding all the others. Do we really, actually, honestly want our problems solved at the cost of solving them which solving them will entail? Will the social equivalent of a neurotic recognise that a neurosis is what he has got? That, for me, is the kernel of the problem at the heart of this debate.
4.46 p.m.
THE EARL OF SELKIRK: My Lords, we have listened to a very interesting speech from the noble Earl and he has raised some deeper problems which go a little beyond my interpretation of the debate as it is to-day. We are very grateful to the noble Lord, Lord Shackleton, for raising this Motion. My only comment is that he cast his net very wide and it would be possible to follow him in only some of the points he mentioned.
I am sure it is right that we should so completely discard what I believe perhaps in the 18th century would have been described as the perfect Constitution of this country, though I am bound to say, perhaps from being away for four years, that I am not quite as despondent in regard to what is happening here as some noble Lords seem to be. Let us, in a very simple way, not forget that we have been through two world wars in this century without having to make any major constitutional changes. In this I think we are alone of the coun-
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tries of the world who took part for as long as we did. I remember just after the First World War hearing a speaker talk about the Weimar Constitution in Germany which had just been drawn up. He "sold" it to me rather like a salesman selling a new car. It was full of gadgets; it had proportional representation initiative, the referendum; wonderful instruments which we ought to incorporate in our own old-fashioned Constitution. None the less, when the wind blew it was ours that stood the strain and not this brand-new model with all its wonderful institutions.
If I may, for a moment, look at this country from the outside, I think it is quite wrong to contend that our international prestige stands lower than it has done for a large number of years. I should like to take a simple example of those countries which are just setting out on the difficult track of national indepedence. To them we represent a fine and advanced example of social democracy, a word we do not use a good deal in this country. This is a country, to them, which has well-established social institutions but still retains its fundamental independence. I think we can be proud that that has been the case, and to say that our Parliament is in flagrant decay, as I read in a recent Fabian document, is, I believe, not only untrue but a disservice to this country, when probably in the long term the biggest problem facing the world is whether or not democracy will survive. I do not think it does the country much good to try to pretend that our attempt to solve these problems has been wholly and completely unsuccessful. The Westminster model has been copied in many countries. It is true that in some it has failed, but I think it is equally true that in very few has it ceased to be admired.
Of course, there are those who say—and noble Lords have probably heard this expressed, though I think it is a doctrine of despair—that democracy is an admirable instrument for getting rid of the British but is no possible use thereafter. There are many things that they admire in this country, and I think one of them we must recognise is the two-Party system. In many countries it is almost inconceivable how we could have an Opposition which is loyal: how, in

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fact, we could pay one man to be Prime Minister and pay another to say that he is a bad Prime Minister. This is a concept which is quite alien and impossible to retain in a large number of countries; none the less, we should recognise how much this is admired.
I go on to another thing which is admired and quite rightly so: our Civil Service; the concept of a service which has at once to serve any form of master and to keep its mouth shut. I believe it is right, as the noble Earl, Lord Halsbury, said, that there is an enormous increase in the size, the power and the complexity of the work which it has to do, and it is difficult to see how we are going to reorganise this and how we are going to face the new development which is taking place. It seems to me that there are three major points at which difficulties arise. The first is the nature of departmental overlapping. Here I would say at once that it is not overcome by the proliferation of new Ministries, particularly those which are suggested for purely political reasons. I hope very much that that course will not be taken. I believe it is desirable that the parties' responsibilities should be defined as closely as possible. But this is a matter which can be resolved only within Governments, and I do not believe it can be defended entirely by institutional changes.
The second point is one which has been mentioned by the noble Lord, Lord Strang, and which I would call the isolation of the Civil Service. They are, in a way, men apart; and the noble Lord referred to their remoteness. They occupy this curious position of having to develop any policy but, at the same time, not to express their own views. I think it is true that they have to become too isolated. I think they are in a special position, and there have been a number of suggestions—the noble Lord, Lord Melchett, mentioned one—to which I should like to refer again, because I believe this is a matter of considerable importance.
We have talked about greater flexibility of entry. I should like to see a regular entry at, say, the age of 35. At the present time the normal entry is in the early twenties, or something of that kind. I believe that it should
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be possible for civil servants with outside experience in industry or a profession to come into the Civil Service at 35. I am afraid that I would not follow the noble Lord, Lord Strang, in talking about temporary civil servants. I do not like temporary civil servants. I believe that a civil servant must attach himself fully to the loyalty of a Department. I have some doubts as to how much, except in limited spheres, use can be made of temporary men for purely advisory purposes. It is true that we require additional scientific men. What I believe is wanted is not scientific service men but scientific men in the administrative Departments, just the same as any other administrative officer.
I believe that the major problem which faces the Civil Service is the problem of centralisation. It is, of course, innate in the whole concept of the Westminster model that the Government should be considerably centralised. This is no doubt closely associated with ministerial responsibility: on the one hand Parliament, a highly political body; on the other, the Civil Service, a non-political body, joined together to some extent by the Minister. And it is his decision which no doubt has the effect in some way of acting as a centralising agent. But I believe that the real answer is that the head of any Department is responsible not only to Parliament but also to the Treasury; and the effect of this is that he inevitably wants, in answering the two major parties to whom he is responsible, to keep control both of executive action and of finance.
He is accordingly forced, I think almost inevitably, to exercise a very great degree too great a degree—of financial control and of executive control, and I believe that the problem we have before us is how to break that down, both as regards function and on a geographical basis. I think it is one of the causes of bad organisation, and also one of the things that cause Ministers to be overworked. The Civil Service do everything they can to make the Minister's job easy. I would even go so far as to say that the network in Whitehall, in the private offices, is probably the finest piece of organisation in the whole system; if it were not for that the Minister's task would be infinitely more difficult.

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I do not think it is possible to lay down a system of organisation which would effectively decentralise. I believe that this is a decision which Parliament must take. And in so far as Parliament takes a decision that it wishes decentralisation—which I believe would secure a major economy, in so far as those who spend money are responsible for it—I believe that ways and means can be found. But at the present time I think there is a feeling (it was voiced by the noble Earl, Lord Halsbury, when he said that he could not get decisions made), expressed in outlying parts of Wales and Scotland, that decisions are hard to come by because they are over-centralised, and until we have the decision that we do want to decentralise I do not believe that any decentralisation will happen. I will only add this caveat. I believe it is fundamental to our way of government that we should have strong government. The defects of democracies, in most cases where they have failed, have been that they have been weak. I believe that in a sense it is centralisation which has given our Government strength. Nevertheless, I think there must be a decision to give proper decentralisation in Departments an alignment of discretion, in both finance and execution, outside London if the present system is to maintain its vigour, as I am sure it ought to do.
4.55 p.m.
LORD MORRISON OF LAMBETH: My Lords, we have had from the noble Earl who has just spoken, as we would expect, an interesting and far-flung speech, because he has a wide variety of experience in Government of one sort and another, including local government. I should like to join with other noble Lords in saying how grateful we are to my noble friend Lord Shackleton for having initiated this useful and valuable debate to-day. If nothing revolutionary comes out of it, that is not a condemnation of him or me; that may be owing to the facts of life. But this general review of the machinery and the organisation of Government is a useful thing, and I think the House is indebted to my noble friend for bringing it in and for the ability of the speech he made, which I have no doubt will be matched by the ability of the speech
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of my noble friend Lord Taylor in winding up the debate.
One of the things I am a little apprehensive about is the tendency for growth in the number of Ministers. If there is need, then it is all right. But I think there has been a growth in some respects without need. There are a lot of people walking around or running around who, directly they are faced with any problem, say, "Let us have a special Minister for this subject". Some people wanted a special Minister for sport, and we got a bit of part time out of the former Lord Hailsham. That is the right thing to do, if you have to do it. During the Christmas Recess, on television in the north there was a question to a Member of Parliament—I will come clean; it was a Labour Member of Parliament—as to what he would do about the terrible problem of fatalities on the roads. He said, "I am quite clear. I would have a Minister for Road Accidents". It is an assumption that, if there is a Minister for something, the Minister will solve the problem he is put in charge of—
LORD LATHAM: Maintain his turnover.
LORD MORRISON OF LAMBETH: —as if you can separate road accidents from roads and the people who drive on them and the regulation thereof! That is absurd. I think there is a tendency to have in some places too many Ministers. I had a Written Answer on December 10 last as to the number of Ministers over a series of years, and the noble Lord the Leader of the House said in this Written Answer that at the end of July, 1937, there were 63 Ministers of all ranks—Ministers, Parliamentary Secretaries and even Whips—I put them in because Whips are part of Government. At the end of July, 1939, the number was 64; it had gone up one only. When the Labour Government were completely formed there were 77. A lot of them were an overflow from the war period when Ministers naturally increased in numbers. But they were reduced later on by my noble friend Lord Attlee. The office of Minister of Information, for example, was soon abolished. By the end of July, 1950, they had gone up from that 77, and later something less, to 83. At the end of July, 1955, they had gone

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up to 84; at the end of July, 1963, to 89; at December 3, 1963, to 90. That is a growth from 63 in 1937 to 90 in 1963—round about 50 per cent. I think that is rather strong going.
Let us have a look at some of these Ministries and as to whether they are justified or not. Dealing with the Commonwealth Relations Office, one must concede that that Department now includes the Colonies as well as the diminishing number of dependent territories. It has a Secretary of State, two Ministers of State, and three Parliamentary Secretaries. That is pretty heavy going. Then Foreign Affairs. I do not think the set-up here is heavy going, in the circumstances of the case, but I shall have something to say about it presently. In that Department there are a Secretary of State, two Ministers of State and one Parliamentary Secretary. Then. Health. That Department has one Minister and two Parliamentary Secretaries. That is a relatively small Department—a very small Department compared with the old Ministry of Health, which included town planning and the whole of local government. Even now, they have not proper financial control of it, from what I hear. Then Pensions and National Insurance. This is a job of some variety, but a lot of it must be done, according to the rules and policies, by civil servants; only the doubtful points need to come to the Minister. Here we have a Minister and two Parliamentary Secretaries, both in another place. I doubt whether it needs more than one.
The Scottish Office has a Secretary of State, a Minister of State and three Parliamentary Secretaries. Scotland has a population of about 5 million. Population is not the only factor, but it is materially less than Greater London, which has about 8,500,000. However, in the course of time the Scottish Office has been given added duties, including a number of economic functions. It has roads; it has electricity supply, and some other things that have been added to it, particularly by Conservative Governments in the hope of getting hold of Scottish Nationalist votes. The noble Lord who is going to follow me, Lord Boothby, will know more about the Scottish Nationalist vote than I do. I do not believe it has made two-penn'orth of difference to the casting of Scottish
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Nationalist votes in Scotland. After all, most of what the Scottish Office does is what the English Ministers advise it to do. That is true—
LORD BOOTHBY: Yes, but it is a sham.
LORD MORRISON OF LAMBETH: There would be chaos if they did not. But I am not going to stand up here and advocate the abolition of the Scottish Office. I have an eye on Scottish national sentiment, too.
But this idea that it is possible, by decentralisation, by transferring functions from the National Government to a Scottish Administration or to a Welsh Administration (because the Welsh are on the rampage, too), to save time, is really nonsense. Every decision about education has to be taken by England, Scotland and Wales, even if there are three Departments concerned with education. Similarly with health. Therefore, the idea that decentralisation saves time is not true; on the whole, it probably loses time. By all means let Scotland have its Scottish Office, though I think it is unwise to overdo it. For the result is that, although the population in Scotland, for which I have the most admirable and high regard, is limited, the amount of work the Scottish Office has to do because of the wide variety of its functions is considerable. That is the only case they have for this collection of a Secretary of State, a Minister of State and three Parliamentary Secretaries. I am not sure that they are needed.
Then I come to Transport. Here one would expect to see a body of some importance. The Department has a Minister, who is a man of some importance, and three Parliamentary Secretaries. I am a little doubtful whether that Department needs three Parliamentary Secretaries. I agree—and this applies particularly to the Foreign Office—that there may be a case for a Minister of State and one or two Parliamentary Secretaries if there is adequate delegation of executive decision, up to a point, from the Minister to the Minister of State and the Parliamentary Secretaries. My noble friend Lord Mabane, who is sitting opposite, will know what I did at the Home Office, where there were three Parliamentary Secretaries, one for the Home Office and two for the Minis-

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try of Home Security. God forbid that I shall any more have two Parliamentary Secretaries!—I shall not, anyway—because dividing up their functions between them is a most delicate operation. But I divided up the functions on a list in writing, and I said, "Now you get on with this; but if it is tricky, or if you disagree with the higher civil servants about it, or if there is likely to be a row, you must come to me. If you make mistakes and do not, then there is going to be a row between you and me". But that method worked; there was no trouble about it. I must say that in my experience in those days—it may have changed now—the civil servants preferred to deal direct with the Minister and not with one of the Parliamentary Secretaries.
However, another thing I decided was that everything that came to me must come through the Parliamentary Secretaries, so that it would be part of their education in experience. It may have made added work for the civil servants at the top, and I quite understand that it was a nuisance to them but it was part of the business of the delegation of the hard work of the Minister to the Parliamentary Secretaries, and part of the education of the Parliamentary Secretaries, who hoped to be full Ministers some day. Therefore, only on that basis is any number of Parliamentary Secretaries or Ministers of State justified; and I believe that in some of these cases they cannot be justified at all.
At the Foreign Office I had the same problem. I would say that the two hardest-worked Ministers in the Government, certainly ever since 1945, and perhaps before, are the Secretary of State for Foreign Affairs and the Chancellor of the Exchequer. Many tears are shed over the poor overworked Prime Ministers. My Lords, spare your tears! Most of the Prime Ministers are not worth all that sympathy, not because they are not able men—they are—but because, in fact, they are less overworked than the Foreign Secretary or the Chancellor of the Exchequer. I say this in no disparaging way of Prime Ministers. Good luck to them if they can get to bed at midnight, instead of at 2, 3 or 4 o'clock, as I did in some of the Departments in which I served!
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The Foreign Office is a heavy Department, and as Lord Strang, to whom we are indebted for a most able and thoughtful speech this afternoon, and who I found to be a most adaptable and co-operative Permanent Under-Secretary, will know, the curse of the place is that it is a hard show. Moreover, whereas the Home Secretary or the Minister of Housing and Local Government can, on the whole, control their own agenda, their own day's work, the poor Secretary of State for Foreign Affairs cannot. It is the foreigners—I nearly said the "something foreigners"—who control the work of the Secretary of State for Foreign Affairs. They are the chaps who can drop troublesome items on the desk of the Foreign Secretary. It must be so in the nature of the office. Consequently, it is a heavy job day by day.
Again, I pursued the policy of trying to delegate, which I think as regards Germany had started under Mr. Ernest Bevin. My noble friend Lord Henderson was in charge of Germany, and the policy worked very well. I put Kenneth Younger in charge of the Far East, so far as the Foreign Office was concerned. I was on the way to doing other things as well, but there was resistance, not from every civil servant, but from a number of them in the Foreign Office, partly for my own sake, because they told me: "You know, Secretary of State, if anything goes wrong your head will be on the block." I said: "I know. I will accept responsibility if something goes wrong, but I would sooner be a live man than a dead one—and the way you chaps are running me I shall be a dead one before long." Therefore, there had to be delegation, and Ministers must insist on it even if there is resistance in some parts of the Civil Service. There are some Ministers who do not want to delegate; there are some Ministers in this Government who treat their Parliamentary Secretaries very badly; and there were a few in the Labour Government, too. It is wrong. Parliamentary Secretaries should be treated as adult people who have a responsibility, and they should be brought into conferences so that they know what is going on.
There are two Ministers in this Government, one of whom is to reply

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to this debate, as to whom I am very doubtful whether they have a real job of work to do at all as Ministers. One is the Minister without Portfolio in charge of Government publicity. I did that job in my spare time, among a number of other jobs, when I was Lord President of the Council. It was hard going, but I did them. Now there is a Minister with nothing else to do but supervise the Government information services. I think it is a scandal. It is not a full-time job. I do not believe that in that capacity he needs to spend more than an hour or, at the outside, two hours a day on that work—about equivalent to the executive work of the Chancellor of the Duchy of Lancaster, which everybody knows is very small indeed. This Minister of Information is therefore tempted to become more than a Minister of Information or a Minister supervising the information services. He must be tempted to become a Minister of Party political propaganda. And that we should never allow in the Labour Government—and we did not.
I will give your Lordships an example. I do not think there is anything for anybody to resign about, but it is indicative of a tendency. I have here the report Central Scotland. A Programme for Development and Growth. So far so good. In the very first paragraph—and I do not want to make heavy weather of this, but I am going to make some weather of it—referring to some proposals about North-East England, it says:
"These contained proposals for regional development involving a major new departure from the policies which had hitherto been followed by the Governments of all Parties."
This is what my noble friend Lord Taylor calls giving a valued judgment in the course of a White Paper. It is comment. It is comment of a political nature claiming a particular virtue for the Government of the day. There is another one in paragraph 3:
"This programme"—
that is, the Central Scotland Pro-gramme—
"represents a more positive approach to regional economic development than any Government in this country has yet attempted."
It is not wholly true because much was done in this field by the Labour Government. I am not so much concerned as to whether or not it is true, but it is
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language which is inappropriate in a White Paper, for a White Paper should be devoid of anything in the nature of Party political propaganda. That is one of the temptations of having a full-time Minister in charge of information services with nothing else to do. He is tempted to go in for Government propaganda, and this is wrong.
Then there is the noble Viscount, the Deputy Leader of the House, the Chancellor of the Duchy of Lancaster. I dare say he has a little to do inside the Government. He has got the Duchy to look after, which, as Sir Oswald Mosley used to say, takes about half an hour a week; and he may have to deal with one or two Government committees. But I would say the major job of the noble Viscount the Chancellor of the Duchy of Lancaster is as Chairman of the Conservative Party organisation, and I think that is wrong. It is wrong that the taxpayer should be called upon to find the salary of a gentleman who is essentially in charge of Party political organisation and Party political propaganda. I think that somebody else should have that job, somebody who is not a Minister and who is paid by the Conservative Party for doing it. I do not want to make partisan points more than I can help, but I must make this point because it is related to the machinery of Government and its possible degeneration.
A Minister who is overworked—the previous two I mentioned are underworked—is the Chancellor of the Exchequer, under his wider functions of economic affairs as well as budgetary and purely financial matters. I think that here is an arguable case for a Ministry of Economic Affairs or Ministry of Production to relieve the Chancellor of much of the work of economic co-ordination and of fashioning the country's economic development, otherwise he might break down. If he has deputies—and he has the first Secretary to the Treasury, as I think he is called, the Economic Secretary and the Financial Secretary—again there should be real delegation so long as things are as they are now; but I think that there is a case for the appointment of such a Minister as I have mentioned.
I feel that other Ministers who may be underworked are, first, the Minister of Power, who supervises three public

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corporations—which should not take a lot of time—gas, electricity and coal, and I think he has responsibility for steel as well. I do not think that is a heavy enough job and I think he could do some other things as well. And the Ministry of Health is, I think, a little on the small side. I personally take the view that the proposal for the new Ministry of Defence is right. Under the old organisation there were possible conflicts between the three Armed Services—not of a brutal character, but they did happen. I should like to say that all of us on this side, and I imagine those on the other side, of the House who are taking part in this debate are speaking for ourselves. There is not sufficient coherent doctrine in any political Party for anybody to speak for a political Party collectively on a matter such as this. In my view it is wrong to try to carve up the Ministry of Education. I thought that the speech of the noble Viscount, Lord Eccles—who was then by some mistake a Baron, and has now rightly caught up with the political machinery and become a Viscount, on which I congratulate him—was convincing, and I think that it is a backward move to try to cut education in half in this way. Therefore, I think that it should be a Ministry of all education.
There is an argument going on in the columns of the Economist to build up a more comprehensive, somewhat more spectacular Prime Minister's Office, so that it should have a varied staff which could keep a grip on all the Government Departments and the whole machinery of Government. I think that this is contrary to British tradition and the British instinct. The Prime Minister is important—he ought to be important and ought to be the best man we can get as Prime Minister—but I do not think he should be more than primus inter pares. I think that to make him the actual declared boss of the Government in that crude sense is wrong. He is bound to have the major influence, he should be the strongest Minister, but to build him up so that every Minister is dependent upon him and his mere mouthpiece is contrary to the doctrine of Cabinet Government. It is bad for democratic administration and tends towards a sense of dictatorship. "But, ah!", it is said, "that is the way
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we are going. Modern Prime Ministers are presidential Prime Ministers". I do not know. All the Prime Ministers in history have varied from time to time.
We do not yet know what sort of Prime Minister we have now—he has not been there long enough for us to find out—but undoubtedly Mr. Chamberlain was a strong Prime Minister. It did not save him, but he was a strong Prime Minister, as they go. I should say that Mr. Baldwin was a weak Prime Minister, and that Mr. Asquith was a good Prime Minister, but not a very strong one. On the other hand, Mr. Lloyd George was a strong Prime Minister. The idea about the strength of the presidential Prime Minister is a new thing. It has been said that all the Prime Ministers of the 19th century were easy-going chaps who did not boss the show. Well, has anybody heard of Mr. Gladstone; has anybody heard of Mr. Disraeli? I should say they were pretty strong Prime Ministers, and the country thought so at the time.
Therefore I say: let the Prime Minister be the "number one," but do not let us build him up into a United States President or into a dictator. Let the Cabinet have a right freely to argue and to decide, and people who do not agree with a decision can resign, whether it be a Minister, a Prime Minister or anybody else; and, of course, that will be avoided if it can be avoided. But let the Cabinet argue and let the Cabinet rule. I do not believe in this idea of building another garden suburb at No. 10 Downing Street, with the Prime Minister's office built up into a powerful machine dominating the whole field of government.
In regard to the non-Departmental Ministers, I ought to say this, in fairness to the Ministers who I said are under-worked. There is a need in Government for a certain number of non-Departmental Ministers, as chairmen of Cabinet Committees, for co-ordination of a considerable variety of various functions, and for the purpose of relieving the Cabinet and the Prime Minister and, to some extent, the other Ministers. It was said by my noble friend Lord Shackleton that it is very unfair that Ministers—the Foreign Secretary, for example—should be getting only the same salary as—
LORD SHACKLETON: My Lords, may I interrupt my noble friend, because he has now moved on to another point? Nobody in this debate—certainly not I—has advocated approaching the presidential form of Government. The purpose of my remarks was to establish what was myth and what was reality; and it is, of course, on the record, as I mentioned before, not only by the noble Earl, Lord Avon, but by Sir Alec Douglas-Home, that the Prime Minister is more than primus inter pares. It may be that different Governments give different experience, but the point is that if the Prime Minister is more, then one needs to recognise this important fact. It may be that my noble friend is absolutely right: a Prime Minister should not be more. But I wonder whether my noble friend would comment on the statements I quoted from people like Sir Alec Douglas-Home.
LORD MORRISON OF LAMBETH: I was not myself replying to my noble friend. In fact, I am not sure that I had reached the House at the time he made these observations. I was getting at the Economist, and it is a very risky thing to do, to criticise any newspaper, because although they are good at criticising other people they get very cross when they are criticised themselves. But I was criticising the Economist and not my noble friend. But on the point my noble friend has raised, I would not yet take the present Prime Minister's word on the subject as gospel. He has become Prime Minister and he is obviously enjoying it up till now, and it is a natural instinct to want to make the job look as big as it can look. Therefore I shall let him have another few years—if he gets another few years.
LORD SHACKLETON: May I interrupt? Sir Alec said it when he had no expectation of being Prime Minister.
LORD MORRISON OF LAMBETH: Then that falls. I still think he was wrong. I think that if the Prime Minister is primus inter pares he is not on a bad wicket; he is in a pretty good position. Of course, some will be more primus than others, as I have indicated. But I do not think it is too bad a position. What I do not want is for him to be elevated into a position whereby he is determining the policy of every Government Department himself, which policy
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should be determined primarily by the Departmental Minister and should be a subject of controversy in the Cabinet itself.
There is something to be said for the case that was put by the noble Lord, Lord Melchett, for seconding out of Government into other walks of life, and into Government from other walks of life, if it can be done without abuse. It might be a very good thing if a number of civil servants—especially where they have to deal with local authorities—were sent out into local government for a limited time and brought back again, and if some important local government officers could be put into Whitehall and then sent hack to their local authorities; and, similarly, possibly with public corporations that could be done between the economic departments. I would even contemplate it as far as exchanges with private enterprise were concerned, but that is more difficult; not because I want to accuse private enterprise of corruption, but because of the possibility that, when the civil servant has been out into the field of private enterprise and comes back to the State Department dealing with governmental relations with private enterprise, he may be inclined to be a little more favourable, or suspected to be more favourable—which is nearly as bad—than otherwise to the firm with which he has associated outside. That is the difficulty about that. Nevertheless, in principle I think the idea is worth thinking about.
My Lords, it was asked: "Is it right that the present Foreign Secretary should get only the same salary as Lord Palmerston?" As a matter of fact he gets £750 more because of the Parliamentary allowance, so let us be just. I do not know about this. These questions of ministerial salaries are arguable. It may be held that they are a bit on the low side. I am sure the allowances of Members of Parliament are on the low side, and I am sure the allowances to noble Lords are on the low side, too. That we do know about. But I do not want the view accepted that being a Minister should be a highly remunerated and profitable job. That idea can be overdone. An element of sacrifice when entering the public service is not in itself a bad thing; it is a good moral experience. I got a kick out of being Leader

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of the London County Council for not a penny of pay, and it was a job which was equal to that of a full Cabinet Minister or some Ministers of State, though not all of them. I got a snobbish satisfaction out of doing that job for nothing. My Lords, one may laugh at that, but it is a worthy public spirit; the satisfaction of doing a job for nothing. That is clearly impossible in the case of Ministers, and I think there may be a case—I am not sure—for an increase. The other question we might ask is not whether the present Ministers are underpaid, but whether Lord Palmerston was overpaid. That is a legitimate question. For remember that Lord Palmerston, by drawing £5,000 a year. was then drawing the equivalent of what would now be £20,000 a year, possibly £25,000 or possibly even £30,000.
LoRD MABANE: Possibly £250,000.
LORD MORRISON OF LAMBETH: The noble Lord opposite says £250,000. That suits me very well, and I am not going to dispute what he said. But the case could be held that those gentlemen were overpaid in those days. By all means let that be thought about and considered, but I should not like to overdo it. In relation to the number of Ministers, I would say only this: one should add to those Ministers the Parliamentary Private Secretaries, because they have to vote with the Government; at any rate, they cannot vote against it. Therefore what we are doing is upsetting the balance of power in the House of Commons between the Executive and Back-Benchers.
I am not sure about Parliamentary Committees on given subjects. I think there may be a case for them on a particular problem for a temporary period. But the idea of Standing Parliamentary Committees in relation to the Departments of State, as is done in the United States Congress and as was done in the French Chamber (I do not know whether it is still done), is not, I think, good. There is a danger about it. The Minister will have to be in charge; it will be a drain on the energies of the Minister; the Opposition may be there and may get seduced by the Minister—I am not talking about anything
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wicked: I am talking only about something politically bad; they may be led astray by the Minister, and it may take the sting out of the Parliamentary Opposition. Anyway, I still think that the place for sharp Parliamentary debate is on the Floor of the House of Commons or the Floor of the House of Lords, and I do not believe in transferring departmental functions to Committees upstairs, except on special and particular occasions.
There is, of course, a problem about the composition of the House of Commons. When I first went there, there were quite a considerable number of Conservative aristocrats, proud of their aristocracy and of giving up their time to public service. My Lords, there are not many there now. There are some heirs, but there are not many aristocrats actively functioning in the House of Commons to-day. There were also a considerable number of "big business" men. There are not many there now; those that are there are on the second, third or fourth tier of economic affairs. There were quite a number of trade union men, General Secretaries, that it was good for the House of Commons to have as an institution—and good for the Labour Party, too, because it was a good liaison between the political and industrial sides of the Labour Movement. It is almost a universal rule of the trade unions now—not quite, but almost—that the General Secretary cannot be a Member of the House of Commons. So the House of Commons has changed in its class composition—and I do not think wholly for the better. This is one of the problems. Of course, noble Lords associated with big business become Members of this House. Sometimes we see them, but often we do not. That applies to noble Lords on both sides of the House. I wish we saw more of them, because one of the attractions of this place is that while it is not representative in its selection, it is varied in its composition and character, so that it can make a unique contribution to the debates of the nation.
As to regionalism, in this sense I think there is a case for decentralisation. I wish that all the Government Departments dealing with regional and local affairs had regional offices, preferably in one building, as is now contemplated at Newcastle and as existed, I think,

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to some extent, at St. Andrew's House in Edinburgh, although the Scottish Office makes that a rather different story. But, my Lords, there is a case to decentralise from Whitehall. Here again, from my own experience at the Ministry of Home Security, I found that they were rather tending to hold too much in Whitehall. I argued about it, and they said, "They may let you down, and you will be responsible". I said, "I will chance that"; and we argued and argued. I always believed in civil servants' arguing, so long as I had the last word. But in the end I had to send them a Minute (and there is a lot to be said for a written Minute: it settles things) saving that nothing that could be done regionally or by the local authorities was to be done in Whitehall. That idea worked, and there was no great trouble. I still think a lot might be done in that way now. Some of the councillors will not like it, of course, because they will not have so much excuse to come to London. Some of the town clerks will not like it, for the same reason. But never mind! Let Whitehall decentralise a lot of its administration—in housing, education, town planning, highways—to regional offices. I would not have a regional local government authority, because that means a third tier in local government in the main—the county, the county district and the region. But I would have a regional consultative committee, representative of the local authorities, who would meet the officers in the regional office—headed, perhaps, not by a Minister but by a person experienced in public affairs; not a traditional civil servant—so that they could consult, discuss and seek to reach agreement about planning and various other things.
In my view, too, Parliament ought to have more debates about public corporations, and about economic controls. Somehow, if another place could save time on some of the things on which it now needlessly uses up time, including some of the details of legislation, if it could be as expeditious but as effective as this House is in examining legislation, and thereby leave itself more time for debates and discussions about public corporations and economic controls and administration, I think that would be a good thing. There is, of course,
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another idea, that of shifting Parliament altogether from London and putting it up in the wilds of the rural parts of the Yorkshire Moors. This is another idea that the Economist is running—and probably it has got itself talked about quite a lot. But I do not like it. I must say that if I compare the capital of the United States in Washington, D.C., with the capital of the United Kingdom (this has nothing to do with my being a Londoner), I prefer the British model. I would say the same if I knew Canberra, and I am sure it is the same with the new artificial capital of Brazil. The seat of government should be with the people, or at any rate with a considerable number of the people: otherwise, it gets cut off and becomes artificial.
My Lords, I have spoken longer than I meant to, and probably longer than I ought to have done. If so, I apologise; but the subject is so fascinating and so varied that it is difficult not to go on. If I have not advocated some changes that some people would like advocated, I would plead this in self-defence: I am a Socialist, and I have spent my life in effecting changes—and I have had a fair amount of reward in that respect. But I never believed, and I still do not believe, in advocating change merely for the sake of change. I will advocate change if benefit is thereby to be anticipated; but unless that is shown to be reasonably so, then I think it is a bit of humbug to talk about change merely for the sake of doing it. That is the spirit in which I have tried to approach this very important debate, which I am sure will be valuable to the House and valuable to the country outside.
5.37 p.m.
LORD BOOTHBY: My Lords, I am sure we shall all agree with the noble Lord, Lord Morrison of Lambeth, that this subject is so fascinating that almost any one of us could happily go on for two or three hours. I hasten to assure your Lordships that that is not my intention, but I think that one of the reasons why we should be particularly grateful to the noble Lord, Lord Shackle-ton, for raising this question is that the structure of Government is not a subject that, among active politicians, has had very much consideration during the

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last fifty years. I have been looking up records a bit; and it seems to me that the only people who have given a good deal of time and study to the matter have been the late Lord Haldane, the late L. S. Amery and, in another place, Richard Crossman. Otherwise, it is not a subject which has been very much discussed in either House. I think that Ministers as such have been so driven and so busy that they have not had the time to give a great deal of thought to this subject, which, as the noble Lord, Lord Morrison of Lambeth, has said, is of immense importance.
My own excuse for intervening is that I have sat in one or other House of Parliament for just on forty years—a terrible thought!—and I ask myself: what has happened? I suggest to your Lordships, first of all, that during the past century (not half century, but century) we have passed almost unobserved from an era of what Bagehot would have described as classical Parliamentary democracy to one of machine democracy; and that makes a very great difference. The transition is now complete. The House of Commons has lost its status as an electoral college, and become no more than a forum of debate between two well-disciplined political armies, which is quite a different thing. In this process, my Lords, it has lost most of its old sovereign powers, and much of its influence. In some respects your Lordships' House has more influence upon Government policy to-day than another place. That is partly due to the absence of the whipping system, in the sense that it exists in another place.
I can think of one debate, that on Education, which took place in your Lordships' House in which all the "stars"—Lord Adrian and Lord James of Rusholme among others—took part; and there is absolutely no doubt that the effect of that debate was to alter, materially and substantially, Government policy, so far as university education was concerned, in quite a short space of time. I do not think that, with all the Whips on, the House of Commons could have had a comparable effect on Government policy.
There is another point arising from this transition from classic Parliamen-
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tary democracy to machine democracy. The point of decision—which the noble Lord, Lord Morrison of Lambeth, described as "sharp Parliamentary debate"—has been to a large extent removed from the Floor of the House of Commons and the Division Lobbies to Committee rooms upstairs. Here, in Committee rooms upstairs, the real battles of the Conservative Party over Munich, over the payment of Members and over Suez were fought. And the Labour Party have carried this further, because they vote in Committee rooms upstairs in the House of Commons, and in secret. The late Aneurin Bevan wrote:
"We get into a Party meeting upstairs. Then we come down to the floor of the House of Commons. We make speeches and if they do not accord with what has been decided in private upstairs we are threatened with expulsion. Is that democracy? It is conspiracy.…The caucus is getting more powerful than the electorate itself."
He wrote that, my Lords, towards the end of his career.
This is what has practically destroyed the independence of the Private Member, and has transformed the character of the House of Commons. The constitutional doctrine laid down by Burke, that a Member of Parliament is not a delegate but the representative of his constituency as a whole, and as such should vote always in accordance with the dictates of his own convictions, has been tacitly abandoned. To-day the primary responsibility of the Member of Parliament is no longer to his conscience or to his constituents but to the Party machine, which can make him or break him, and without the support of which he cannot hope to be re-elected.
Mr. Sydney Silverman summed it up when he said:
"The right to dissent in debate is no adequate compensation for being compelled to vote in conformity. The function of Parliament then becomes one of giving public assent to decisions arrived at secretly elsewhere."
That is the thing we all have to face; that is what is going on to-day in the House of Commons. By voting at private meetings the Labour Party have carried this process further than the Conservative Party. In my submission to your Lordships, votes in Parliament should never be taken in secret; but always in public. Nevertheless, such is

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the power of the Party machines and of the Whips, in my 34 years' membership of the House of Commons I can recall only one vote that I ever gave which could legitimately be described as of decisive importance. That was when I was one of 33 Conservative Members of Parliament who voted against the Chamberlain Government in May, 1940. One vote in 34 years is not a lot. Yet they still tell you—and we pay lip service to the idea—that the House of Commons exercises and wields real power.
To what has this led? In conjunction with irresistible economic forces, it has led to an immense concentration of power, and to an equally immense diminution of political control over the Executive. Where is this power? I should like here to take up a point raised by the noble Lord, Lord Morrison of Lambeth. This power, to a very large extent, is in the hands of the Prime Minister. We are approaching—if we have not already reached—a presidential system in this country. In fact the Prime Minister, in certain respects, wields greater effective power in this country than does the President in the United States of America. In the words of our present Prime Minister, which have already been quoted by the noble Lord, Lord Shackleton:
"Every Cabinet Minister is in a sense the Prime Minister's agent"
He said that long before he became Prime Minister and when, in fact, he never expected to become Prime Minister. But I believe it to be true. For some years now—in fact, since the war—the Secretary of the Cabinet has been in effect, if not in name, the Prime Minister's chef du cabinet; and I do not think this is a process that, with modern means of communication and, particularly, television and radio, can easily be reversed.
Here I dissent from the view of the noble Lord, Lord Morrison of Lambeth. At the next Election the ordinary elector is much more likely to vote for Sir Alec Douglas-Home or Mr. Harold Wilson than for the Conservative Party or the Labour Party. They will be projected to him on every screen. If this is the case, if it is difficult if not impossible to reverse this process, then I think we have to make the best of it. I shall make a few suggestions now as to how we might do this; but, of course, the noble Lord,
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Lord Shackleton, anticipated that I might have a few observations to make on the subject of the power which has passed into the hands of the Treasury. The late Aneurin Bevan, who knew a great deal about administration, was perpetually complaining about this.
No other finance Ministry in the world assumes the status, or adopts the pretensions, of the British Treasury: economic planning, such as it is; the Budget; ultimate control over all revenue and expenditure; the direction of monetary policy, exercised through the Bank of England in secret; and control over the personnel of the entire Civil Service in every Department, under the head of the Treasury. It is too much. And it has certainly not produced demonstrably superior results.
The course of events has led, I think, to a sharp decline in the system of Cabinet Government. The Cabinet is no longer, as such, an effective instrument of Government. It has become a rubber stamp for giving formal sanction to the decisions and actions of Ministers regarding which, in the complexities of the modern world, the Cabinet as a whole cannot be expected to have more than superficial knowledge. To-day we have the largest Cabinet in history. There are 23 members. The deference and respect for authority engrained in my nature make me hesitate to describe the Cabinet as "a rabble". But it is certainly an assembly, rather than a decision-making authority. What I do say is that executive power in this country is now exercised, on the authority of the Prime Minister and the Treasury, through a small group of Ministers chosen by him, or by Cabinet committees whose chairmen are appointed by him and who are his agents.
Finally, there is the point to which the noble Lord, Lord Shackleton, called our attention: the development of what Professor Brian Chapman has described in his book British Government Observed as privy Government. He writes:
"The whole structure of British Government is designed to protect the policy-making function of Government from public scrutiny."
And Sir Charles Snow refers, in Science and Government, to the "euphoria of secrecy" in Whitehall. I suggest that far too many decisions of vital importance are taken in the secret corridors

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of power, without Parliament or even the Cabinet being made aware of them, still less of the reasons for them.
Let me give one or two examples. First of all, the power wielded by Lindemann under the personal autocracy of the Prime Minister during the war, often in the teeth of informed scientific opinion. But war is war; and there may have been some excuse for this, if not justification. But what about peace? The decision to manufacture atomic weapons was taken by the noble Earl, Lord Attlee, without the knowledge of Parliament and without, I am told, the knowledge of the full Cabinet. The decision to make the plans and issue the directives for the attack on Port Said at the time of the Suez crisis was taken in the same way. Now take defence. I have been looking at the White Papers on defence from 1957 onwards; and, looked at quite objectively, in the cold light of after events, one would suppose from reading them that we had had a series of Ministers of Defence who had taken complete leave of their senses: one can only suppose that they were all mad. Every one of the Defence White Papers flatly contradicts the others and, jumbled up together, they do not make any sense. It is an "Alice-In-Wonderland" world. What is the reason for this? I am not suggesting that successive Ministers of Defence have been mad. It is simply because Parliament has never been in possession of the facts. Perhaps we could not be, on security grounds, though I am not so sure about that. I will come to that in a moment. The fact remains that these Defence White Papers make absolutely fascinating reading to-day; and, if any of your Lordships want an enjoyable evening, I recommend them to get them and skim through them, because they will give you a good laugh.
The concentration of power in Downing Street and the Treasury has been accompanied by a corresponding growth of what Mr. Crossman has described as an "oligoply" in finance and industry, in the trade unions, newspapers and in television. And in so far as it lacks any kind of effective democratic control, this power is irresponsible. It was Rathenau, the Foreign Minister of
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Germany in 1921 and 1922, and the originator of industrial rationalisation, who said of the modern State:
"It has already become a collection of separate semi-autonomous States, a multiplicity of slanting cones on the same level, the points of which are lost in the Parliamentary clouds.… They receive their popular admixture solely through the medium of the communal and completely inadequate central organism of the political Parliament."
Sooner or later, every one of these States will have to be given democratic roots of its own; but to-day we are dealing only with the structure of Government. With this subject, and in conclusion, I should like to put forward a number of tentative suggestions in what I might describe as telegraphic form. I have no time to give reasons, because there are a great many other speakers. if your Lordships want the reasons I commend to your attention Thoughts On The Constitution by L. S. Amery,Science and Government by C. P. Snow, British Government Observed by Professor Brian Chapman, and an altogether admirable book called My Yesterday, Your Tomorrow, the name of whose author modesty compels me to conceal.
In order to free the United Kingdom Parliament from a mass of unnecessary detail, I would go much further than the noble Lord, Lord Morrison of Lambeth, about Scotland and Wales. I would give them both Parliaments and Governments of their own, similar to the Parliament of Northern Ireland. No more, but no less. This Parliament would retain its Scottish Members. They are indeed indispensable, because without the Scots the English would be sunk. The United Kingdom Parliament would then slough off all this welter of detailed administration and local administration to Governments in Edinburgh and Cardiff. This is an admirable and excellent suggestion. It was, I think, the noble Lord, Lord Morrison of Lambeth, who pointed out that the entire population of Scotland is considerably less than that of London. I agree. But one cannot judge a nation simply by adding up the number of people it contains. Scotland is extremely important, not only to England, but to the whole world, and Scotland deserves a Government and a Parliament of her own. But she also deserves a say in what I would then hope would become the federal Government of the United Kingdom. I think

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there is a great deal to be said for this, because we have an example in Stormont which works.
Secondly, as I have already suggested, the supremacy of the Prime Minister should now be accepted. As First Lord of the Treasury—and he is First Lord of the Treasury—he should direct economic policy, as Chairman of a Cabinet Committee, which would include the Chancellor of the Exchequer, a Minister of Economic Planning (who would necessarily be much concerned with monetary policy), the Secretary of State for Trade and Industry, and the Ministers in charge of production, labour and transport.
Thirdly, I think that the size of the Cabinet should be reduced to a point at which, after hearing the submissions of Ministers, one at a time, it can think. decide and act on the basis of full knowledge, and not simply give formal sanction to actions about which under existing conditions it is bound to be ill-informed, and which, indeed, may sometimes have already been taken. Here there are two alternatives. There is the alternative of Mr. Lloyd George's War Cabinet of 1917—and this may be of some interest to your Lordships. I remember Mr. Lloyd George saying that, as an instrument of Government, it was by far the most effective he had ever known. There were five or six Ministers without Portfolio. He told me how much he relied on men of the calibre of Balfour and Smuts and, above all, of Milner, in 1917. These men met daily. They were free from routine work and from departmental responsibilities. They heard the Ministers, and then took the decisions. The Haldane Committee, on the other hand, recommended a Cabinet of not more than twelve. The choice, of course, must also depend to a large extent on the inclinations of the Prime Minister of the day; but I am sure that a Cabinet of 23 no longer meets the requirements of the second half of the twentieth century.
Fourthly, I would suggest that research should be intensified at all levels of Government, and co-ordinated under a Ministry of Research and Technology, adequately staffed. We have not such a Ministry at the present time, and we should have.
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Fifthly, I think that your Lordships' House should now be developed on functional lines. Gone are the days when the landed interests constituted in themselves an Estate of the Realm of sufficient importance to enable them to claim the preponderance. Let me give, as an example, the field of journalism. Our national newspapers are now controlled by eight men. Three of them sit in your Lordships' House. I suggest that the remaining five should immediately be ennobled; and that it should be put to them that they would be expected to come here at least twice a year and sit on these Cross Benches all eight of them: and a splendid sight it would be! We then should have the right to criticise them and compel them to listen to our criticism—and, indeed, some of them might be disposed to answer. If I can judge from a letter which I received this morning from Mr. Roy Thomson, he certainly would not be backward in replying to any criticisms that were made. I have a notion that this would be far more effective than any Press Council could possibly he. Just think of them—two Astors, Roy Thomson, Berry, Carr and King, flanked by Beaver-brook and Rothermere—it would he an awe-inspiring spectacle. It would do them good, and it would do us good.
My next suggestion in this field is that it nonsensical to assume that a Government should he expected to resign on "snap" votes in the House of Commons. Governments in the modern world should resign only if a formal Vote of no confidence is carried against them in the House of Commons—not in this House. That would relieve all the tension and unhappiness that goes on in another place, when a majority is not very large; and would stop ill people from being carried from their beds to the Division Lobby, which is a ludicrous spectacle.
Finally, I cannot agree with the noble Lord, Lord Morrison of Lambeth, about functional Committees of Parliament. I think that such Committees should be established, with power to send for persons and papers, and to sit in secret session, when the Minister deems it advisable. Thus, and thus alone, can Government policy be subjected to informed criticism before a policy is put into effect, and not afterwards. Clearly there should he such Committees on economics, defence, external affairs and

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internal affairs. I do not think there is any reason to fear here the log-jam that at present exists between the President and Congress, because these Committees would reflect in their composition the majority on which the authority of the Prime Minister rests, and would therefore reproduce in miniature his basic relationship and that of his Ministers with Parliament as a whole.
My Lords, I have nearly done. I should like to quote, before I sit down. from Mr. Amery's book. He had, as I am sure the noble Lord, Lord Morrison of Lambeth, will admit, vast political and administrative experience. He said, as against Lord Morrison of Lambeth:
"My own experience in the offices which I have held is that I should have gained by such regular opportunities of giving information and explaining my policies and of gathering the views of those interested, and that the effect upon the quality of debates would have been extremely beneficial."
The noble Lord, Lord Morrison of Lambeth, thought that that would not be the case, but that was Mr. Amery's views of functional committees. What, my Lords, should we be trying to do? We should be trying to combine efficient government in the modern world with individual freedom and responsibility. It is a formidable task. But, not for the first time, the world is looking to us to give a lead based on our vast experience; and, in my submission, we are not at present giving it.
6.2 p.m.
VISCOUNT CALDECOTE: My Lords, any speech after that to which we have just listened from the noble Lord, Lord Boothby, must, I fear, seem boring in the extreme, but this is indeed a fascinating subject for debate. To those of us who have never been in the Government service it presents considerable difficulty, and I am afraid it may well be a matter of fools rushing in where angels fear to tread for amateurs like myself. But the strength of your Lordships' House has always been that we are able to look at any subject of debate from a variety of angles, and I should like to make a few comments on these problems as seen from one section of industry which has a close relationship with Government Departments.
I well recognise the dangers: that false conclusions can be drawn from inade-
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quate evidence; it is all too easy to argue from the particular to the general; and that unfair criticism may be made due to incomplete knowledge from, a limited angle. I shall try to avoid those pitfalls. It is, I believe, common ground that there have been tremendous changes in the tasks of Government over the last thirty or forty years. No longer do the Government deal only with the political background of our lives. Now the Government intervene more broadly in everyone's affairs—in finance, in industry and in commerce. For instance, at home a major preoccupation of any modern Government is to maintain full employment without inflation, and that involves frequent intervention in economic policy. Abroad, too, the pattern has changed by the extensive growth of international institutions concerned with the growth of trade.
The first question to ask is, therefore, how successfully has the structure of Government adapted itself to these changed conditions as regards Parliament, the Executive and the Civil Service? To put the question into its right perspective, I should like to state two principles—perhaps they are platitudes. First of all, good men can produce results from a hopeless organisation. And the opposite is also true, that incompetent men can wreck a perfect organisation. But our objective must surely be to produce the best structure in which competent men can give of their best. Secondly, an ideal structure of Government is no substitute whatever for a policy. I think it is noticeable that in time of war or crisis we have obtained great and satisfactory results from a machine that before the crisis arose appeared to be creaking and outdated. The reason for that, I suggest, is that as soon as the crisis arises the policy becomes firm and the objective is clear, and those facts are felt in every corner of the organisation. In war-time every convenience, our liberty and even life itself, is sacrificed to achieve the objective that everybody sees, whereas in peace-time it sometimes seems so difficult to define a clear policy in many important fields as a basis for effective action.
In discussing this Motion we must beware of jumping to the conclusion that every failure of the Government machine that appears is due to a bad

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structure of Government. Often it may well be the manifestation of lack of a policy. But it would be equally wrong to jump to the other extreme and to assume that the structure of Government is therefore relatively unimportant. That is certainly not the case. For the structure itself has a great effect on the formulation of the policy. With those considerations in mind, I should like to make a few comments on the Government machine.
I will take, first of all, the position of Ministers, which has already been touched upon by many noble Lords. All your Lordships who have been Ministers know well the heavy burden of Cabinet office, and those of us who have had fathers who have been Cabinet Ministers have some idea of the great burden and the strains and stresses that this involves. That burden and strain has certainly increased many-fold over the last thirty or forty years. Now, as we have already heard from many noble Lords, Ministers are not only underpaid, but most of them are grossly overloaded in their Parliamentary duties, in their decision making and their policy forming. I believe that anyone who has had to make decisions, far less onerous than those Cabinet Ministers have to make, knows only too well that if he is not feeling in top form and fit, but is tired and overworked, he will find it much harder to make the right decision and to make it quickly than if he is fit and well. So believe that Ministers to-day are often working well below their optimum efficiency, and that is no sound way to produce a firm policy or correct decisions.
The classical answer to suit a situation is delegation. But to whom can Ministers delegate? The noble Lord, Lord Morrison of Lambeth, has already mentioned this point. They can to only a limited extent delegate to their senior civil servants, because they cannot answer in Parliament. Their function is to devise and administer settled policy. They can delegate hardly at all, although the noble Lord, Lord Morrison of Lambeth, seems to have achieved it, to Parliamentary Secretaries. They are, in effect, junior to many civil servants and their authority is strictly limited. But the function of the Chief Secretary to the Treasury and Ministers of State is
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entirely different. To them it is perfectly possible for Ministers to delegate adequately. Would it not be wise that such arrangements should be far more widely adopted? Should not every Cabinet Minister have to support him a Deputy Minister or Minister of State to whom he can delegate authority over a wide field? That in itself would not be enough, and to be fully effective Parliament would have to co-operate. It would be no use if Parliament continued to regard the Minister only as the fountain head of any decisions. Parliament would have to accept that the last word could also come from these Ministers of State or Deputy Ministers.
The second point, my Lords, is that there is frequent criticism of the Government machine in industry that it is too slow. Some say that this is simply a reflection of the complexity of the issues with which it has to deal. Others see in the Government machine some of the symptoms of inefficiency that have been recognised in large industrial units. Many of these great units in industry have found that the right answer is to replace responsibility of boards and committees by personal responsibility to the greatest possible extent. I believe that principle, too, could be adopted through the Civil Service with great benefit.
There is another important factor which I believe delays decision and action in Government Departments. This is that when an issue affects many different Departments it often has to be referred up and down two, three, four or five different Departments, perhaps to the Ministers at the top. This often seems to happen and appears to be accepted. But cases arise, such as arose not so long ago, when the Government became concerned and dissatisfied with the employment and development situation on the North-East coast, with the result that a temporary overlord was appointed with limited authority in the particular field necessary over certain Departments. Very soon a report was issued and action was under way. Should we conclude from this that the remedy for delays is the appointment of a number of overlords? Surely the experience of the first Conservative post-war Government is all against that. The failure, I suggest—I think it is well known, and it is not for me to suggest—of those overlords was

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that they had no Departments to support them. But I believe that the regrouping of Departments into a small number of large units, each presided over by a Cabinet Minister, could be an effective solution to many of our problems.
The new reorganisation of the Defence system has already set the pattern. But why stop at Defence? Why not have Secretaries of State for overseas affairs, for economic and trade development, for home affairs, for welfare services, for education and a number of others? Perhaps they would amount to ten or twelve in all, each with an adequate complement of deputy Ministers or Ministers of State. Such an organisation would surely combine many advantages. It would produce a smaller Cabinet, which the noble Lord, Lord Boothby, wants. It would enable a better sharing of the burden of day-to-day decision-making to be achieved and also of Parliamentary duties. It would, above all, bring more problems within the jurisdiction of one Cabinet Minister and, therefore, would lead to less interdepartmental discussion and more rapid decision taking.
Thirdly, there is the vexed issue of recruitment to the Civil Service, which has already been touched upon. Whatever reorganisation of Ministers and Departments takes place, no one can doubt the importance of the Civil Service. We are fortunate in this country in having a Civil Service with a wonderful reputation for devotion to duty and integrity. But there is often a criticism from industry that the Civil Service is remote and lacking in appreciation of the problems of industry. This, I think, is particularly said of the Treasury. In modern conditions relations with industry, for the reasons with which I started, are of the utmost importance, and above all these relations must be improved. The sad fact is that at the moment neither does industry understand the problems of the Civil Service, nor does the Civil Service fully appreciate the problems of industry. That is not surprising, considering that there is virtually no exchange between the two in peace time, in complete contra-distinction of what happens in war time, when a splendid spirit of co-operation was built up between industry and the Civil Service. So I
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believe, as the noble Earl, Lord Selkirk, has said, that it is of great importance to facilitate a two-way flow between industry and the Civil Service. I think we should aim to have in the Civil Service at the levels above principal, about one-third of the members recruited from industry, and the same would go for the executive grade.
We must also facilitate the reverse flow, and that will involve sweeping changes in the regulations for pension transfer. At the moment there is rather an incredible anomaly in that the civil servant can only come out of the Civil Service and take any pension rights with him when he has passed the age of 50. At a time when the Government are urging industry to make pensions readily transferable this seems to be rather a surprising survival from an earlier age. If there is to be an adequate flow between the Civil Service and industry and vice versa, these questions of pension transfers must be tackled.
I would not disagree that secondment to industry from the Civil Service for six months or a year is also valuable to gain experience, but I do not believe it is any substitute for a permanent policy for recruitment, such as I have described. Such a new avenue for recruitment would, I believe, also help the great difficulty which the Civil Service Commission is having in attracting an adequate number of recruits of a high standard at the present age of entry.
That brings me to my final point, the position of the Treasury. To industry, the Treasury is still very remote, and no doubt if we could obtain a flow between the Civil Service and industry as I have suggested, that would go far to eliminate the remoteness of the Treasury. But I must say that I should still like to see Treasury officials coming out to meet industrial leaders far more frequently than they do at the moment, and to discuss their problems face to face with them, instead of always having to do it through other Departments. There remains the function of the Treasury, and at this late hour I am certainly not going to embark upon a discussion of that. In any case, it has already been dealt with by several noble Lords, and it is well covered in the Plowden Report. But

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I should like to ask Her Majesty's Government whether the recommendations in that Report for the future organisation, activities and responsibilities of the Treasury are being implemented rapidly.
In conclusion, it is certainly not easy to combine our pattern of democracy and Parliamentary control with an efficient Government machine, but it is not the slightest good making proposals that would cut across and conflict completely with our system of Parliamentary democracy. But some changes must be made, and I believe that those suggested are compatible with our way of life and our way of Parliamentary Government. Also, they would go a long way towards reshaping the structure of Government to meet the needs of this fast moving and competitive age.
6.18 p.m.
LORD GLADWYN: My Lords, it is obvious that we can only skate over the surface of this vast subject this afternoon, but I think it is quite a good thing that the bees which are obviously buzzing in so many of our bonnets should be liberated so that they may fly around and sting somebody into doing something about this obviously most important matter fairly soon. Now, if we are to talk about the reform of Government as a whole, we must talk a little about the reform of this House. It has hardly been mentioned, but a few words might not come amiss, if only from a comparatively new boy. So I should like to say that it is not evident to me that there is any compelling reason to reform this House at all. I believe that we have little, if any, real power, and personally I think that is a very good thing. But we do have considerable influence, and also, as it seems to me, we do an effective job in revising legislation. What we want to aim at, therefore, is being more and more a sort of disinterested Council of State recruited from the professional classes, from industry as a whole, and from people with long experience of politics.
I have made a little calculation, although I do not know whether it is right. Peers of first creation and Life Peers, who are, after all, drawn from the three elements I have mentioned, already number about 140. So if we add in about another 30 or 40 Labour Life Peers, or, at any rate, Peers from the
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Left in general, there would, if we deduct the Cross-Benchers, be something like equality in this section between the major political Parties. If we add, possibly, 30 or 40 drawn, say, for each Session from the ranks of the hereditary Peers who have made their mark in this House, it would give, as it seems to me, a very workable Chamber, of about 200 or so, which any Government of any complexion could use to excellent advantage. It should, I think, be the convention that the Government, whatever Government it is, should not be defeated in this House on any major issue of policy. But, clearly, unless our debates are going to become extremely dull, it will be necessary to allow for the possibility that the Government may occasionally be defeated on a non-Money Bill, with the result, I suppose, of a certain legislative delay.
My Lords, in addition to this, all I need to say—and it completes my view on this point—is that all Members of the reformed House should be paid a living wage, provided that they attend more than a certain number of debates. All this seems to me to be eminently desirable and I cannot really see why it should be apparently regarded by all the major Parties as such a tremendously hot potato. I hope therefore that everybody will soon see the necessity, if the House is going to be reformed at all, to reform it broadly on these lines and as quickly as possible.
Now we approach what I think is the much greater problem posed by the other place, which I think I am not in order in calling by its name. Here, it seems to me—and I say this with the greatest deference because, though I have not been a Member, I am passionately in favour of the other place—reform is not merely desirable, as it is for us, but positively essential. Here, after all, is, or at any rate, should be, the ultimate seat of power; and it is therefore extremely important that it should function efficiently.
Some Members of the other place, I know, tend, or, anyhow, affect, to regard this House as a sort of gilded mausoleum where active politicians are often buried alive. Since the passage of the Peerage Bill this last accusation is obviously no longer valid. Nor is there any reason why active politicians

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in the other place should come here and be buried alive without their own consent. But, as things are, a number of very active and intelligent politicians in the other part of this building seem themselves to be enclosed in a sort of mausoleum. After all, between half and three-quarters of them can never expect any kind of office; while, owing to the fact that Privy Counsellors are always called on first, very few of them can get an opportunity to speak in any major debate except at rare intervals.
Even their Questions are often not now reached, and all they do, in practice, is vote, tramping through the Division Lobbies under the eagle eye of Whips, under an odd system where Divisions seem to take place all the time, even on questions of small importance. Also, and very properly, they act as welfare officers for their constituents, and since many of them cannot even afford a temporary secretary, this kind of activity occupies a great deal of their time. They may perhaps, if they are lucky, have some small rôle to play in a Standing Committee or something, but these bodies, we know, do not get much publicity; and, in any event, only a few M.P.s serve on them. For all this they are paid little more than an expert steelworker; and for this exiguous pay they have normally to support two residences. At the risk of being taken for a Mirabeau or a John Wilkes, I say that this is an extraordinary way to treat the representatives of the people! Why, in such circumstances, anybody goes into politics is something of a mystery. People say that, as a club, it is agreeable, and that the mere fact of being boxed up all the time, often far into the night, with old cronies, political opponents and deadly enemies, produces a strange sort of corporate feeling which is in itself enjoyable. That may be so.
LORD BOOTHBY: My Lords, may I interrupt the noble Lord to say that it produces a strange sort of animosity?
LORD GLADWYN: I am sorry to hear that. I thought it was the reverse and the experiences of other Members of Parliament seem to be different from that of the noble Lord.
However, apart from this, it is difficult for an outsider, at any rate, to under-
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stand how a system under which a majority of Members of Parliament have practically no opportunity of giving public expression to the presumptive wishes of their constituents can even be held to be particularly democratic; or how one which results in appalling legislative bottlenecks can be thought to be particularly effective. All this, unhappily, tends to reduce the prestige of the other place. If it were televised it might perhaps be a step in advance, but, of course, as things are it would be rather difficult to know exactly what to televise.
The fact is that modern inventions, and notably mass communications, greatly reduce the sense of individual and personal responsibility. They also tend to credit the notion that one man and one man alone must take the responsibility of deciding on all matters of crucial importance. This results, as we know and as so many of your Lordships have now said, in the increased and growing power of the Prime Minister. Short of illness or some national disaster, he is probably now in Downing Street for the quadrennial or quin-quennial period between Elections. His power is tremendous. Collective Cabinet responsibility in the old sense hardly seems to exist any longer. The Prime Minister can get rid of his colleagues if they are not congenial or if they just do not do what he wants. It is still true that if he gets rid of somebody who is very popular with his own Party there may be a row, but if he is determined to ride out the storm it is difficult to see how his own resignation can successfully be demanded at the obvious expense of a fresh General Election.
This tendency towards greater power in the hands of the ruler—and here I think I agree with the noble Lord, Lord Boothby—is, I think, inevitable, given modern conditions. Perhaps, given such conditions, it is even desirable. In the United States personal power is held in some check, as noble Lords know, by the Constitution, but, as Commander-in-Chief in the present nuclear age, it is evident that the President has at least one tremendous power. In France, in Russia, in Spain, in India, in Pakistan, in China—in all these great and ancient countries, to say nothing of the newer countries of Asia, of Africa and South

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America, one man and one man only seems now to be largely in charge, at any rate for a period of time. It has been calculated, I believe, that Parliamentary democracies more or less analogous to our system here, now exist in only about a dozen countries; most of them small.
If we do not look out, and if we really cannot bring it up to date, it may well be that our Parliament here will come to resemble the Palais Bourbon in Paris. Gaullism as a system seems to suit the French fairly well and might also suit the British. The power of Prime Ministers, as I have said, is growing all the time, and if one of them became a really popular personality and very good at television it might be that, even here in this country, we should reach a stage in which effectively he could not be turned out. In principle, therefore, the effective power and prestige of the parliamentarians should somehow or other be increased as a check in some way on the inevitable power of the Prime Minister.
What, if anything, can we do about it? In the first place, obviously, more pay. I know that this is being examined at the moment, but, in my personal view, Members of Parliament ought to get at least £2,500 or £3,000 a year, plus an expense account of up to £1,500, drawn on by vouchers out of which would come the salary of a secretary and all expenses shown which are necessary in the performance of their job. After all, this is only the salary of a manager, a professor or a moderately senior civil servant, and why M.P.s should not be considered as at least coming into these grades has always beaten me. Of course there ought also to be a pension scheme for M.P.s and Ministers too, dependent on the length of their service; it could easily be worked out. All M.P.s ought to have a secretary and a desk somewhere, if not an office. The Palace of Westminster could not accommodate all these offices. Why not therefore tear down all those horrible buildings on the other side of the street and build a great block where M.P.s offices could be situated.?
But what would the well-paid legislators in my reformed Parliament actually do? That is the great question. I am only liberating bees in my bonnet
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and they may be bad bees, but at any rate they are bees. In the first place, I would reduce them—the M.P.s, I mean—to about 400 or 450 by enlarging the constituencies. There is no reason why an M.P. should not represent 150,000 rather than 100,000 people. It is not less democratic. It would make the whole body more manageable. Of that reduced body those not in the Government should be divided up into various commissions—foreign affairs, economic, social, education and so on, and the existing Public Accounts. Here I agree absolutely with what the noble Lord, Lord Boothby, said. These commissions would take the place of the existing Standing Committees.
Before these commissions members of the Government and I think also, with due respect to the noble Lord, Lord Strang, senior civil servants should be cross-examined on matters of policy. I do not think, with my noble friend Lord Strang, that this would result in more bottlenecks and more work for Ministers. I think more or less the opposite would happen. There would be fewer Parliamentary Questions to answer; M.P.s would not bother to ask Parliamentary Questions if all had a chance of playing a rôle with the commissions. The civil servants would not be kept all the time answering these questions. There would be fewer major debates. It would streamline the whole thing and give Ministers much less work rather than more. Evidence might sometimes have to be given in camera, of course, particularly on foreign affairs and defence, but I am sure in general that the commissions should be shown classified or confidential documents. Here I entirely agree with what the noble Lord, Lord Shackleton, said. There is no reason why they should not be shown, not absolutely top secret but perhaps even secret papers. The smaller body of 400 or 500 people would on the whole be responsible. In certain circumstances it might not be possible to circulate some papers, but I think on the whole they should see papers which inevitably in our modern world do come out; they are nearly always known after a short time.
Everyone should have complete liberty to express his view in these commissions, and I think also that what the noble Lord, Lord Morrison of Lambeth

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said it is true: they might not always divide on strictly Party lines. That is so. But if in any case any particular Minister was considered to have put up a bad show in the commission it would be open to the Prime Minister to sack him. It would not matter; he would get rid of him. I think this would be all the more feasible if there were in the Government more Members of a reformed House of Lords than there are at present. For these technocrats could surely be regarded more as officials (in the American sense), and could therefore, if necessary, be "massacred" by the Prime Minister from time to time and nobody would mind. Naturally, I think, the major offices, except perhaps foreign affairs and defence, would normally be manned by Members of the House of Commons, but it would be to the corn-missions that many legislators might under my system be primarily attracted rather than towards the Cabinet itself, restricted, as I think it should be, to about twelve people who should be regarded more as the personal advisers of the Prime Minister. After all, many of the officers in the commissions would in fact be more important than many Ministers.
Even if the Minister of Defence were a Peer, the President of the defence commission of the House of Commons would be nearly as important and certainly a more permanent feature of the landscape. And, besides, by making a good speech in a commission a Back Bencher would have just as much influence, probably more, as if lie made a good speech on the Floor of the House of Commons itself. In any case there might well be advantage in allowing Ministers to speak (though not to vote) in either House. This system works quite well elsewhere; it is not regarded as undemocratic anywhere else.
By all such means I would endeavour to bring back more of the political centre of gravity to the Palace of Westminster and resist to some extent, or at any rate curb, the possibly inevitable tendency to transform the Prime Minister into something approaching a dictator. I am quite aware that such a reform on these lines might tend to weaken the present stranglehold on Parliament of the Party machines. But if you are going to inject some life
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into our democracy I think that this would be positively desirable.
My third reform—which is more questionable and perhaps more revolutionary; I do not know—would concern the Civil Service. There is not time to do anything except to put it forward quite summarily. I suggest that after each General Election the incoming Prime Minister, in agreement with the Leader of the Opposition, should nominate a Member of this reformed House or possibly some well-known organiser from outside Parliament, from industry perhaps, to be the Secretary to the Cabinet, responsible for carrying out the Government's decisions and for taking the minutes of Cabinet meetings—frankly a political appointment, but it should be agreed by the Prime Minister and the Leader of the Opposition. I think it is not impossible. It seems to me that this official could have authority over the whole machine of ministerial committees and, in agreement with the head of the Civil Service, who would of course remain a civil servant, and aided by a high-level civil servant of his own, be responsible for streamlining and restaffing the whole of this very important committee machine.
It would be for this man to recommend to the Prime Minister the possible employment for certain specific purposes of experts outside the Civil Service. I do not think they would necessarily go into the Ministries as temporary civil servants, but they might well be put on these commissions. I think, with great respect to the noble Lord, Lord Morrison of Lambeth, and the noble Earl, Lord Attlee, that this would do more to avoid Byzantinism and tendencies towards arteriosclerosis of the body politic than almost anything else. Since we cannot without long preparation introduce the French system of the grandes écoles, to which the noble Lord, Lord Shackle-ton, referred, I feel that the sort of system I am suggesting would nevertheless result in our present corps of excellent civil servants getting to know something more about the outside world, the world outside their immediate speciality, and getting them mixed up more with the outside world as a whole.
What I should like to see, in principle, is somebody like Mr. McNamara in charge of this whole operation. I am sure that it should not be for life, but

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rather restricted to the life of any one Parliament. Otherwise such a personality would become too powerful by half. However, I think that such an appointment would lessen the burden on Ministers, just as my proposals for another place might result in greatly improving the whole legislative machine. I hope that whoever comes into power this year will really get down at any rate to far-reaching, reforms, perhaps on the general lines that I have suggested, perhaps on other lines, and not just play around with patching up the existing machine and hoping for the best. I think that either side could do it perfectly well. It is obvious that such far-reaching reforms would not be agreeable to many people—that is evident from their apparent reception by many here in this House. Nevertheless, I think they might well be in the national interest.
6.41 p.m.
VISCOUNT HAWORTH: My Lords, I have little Parliamentary experience, and I would ask to be forgiven for putting forward the views I am going to put forward fairly strongly. They are views which I held to some degree before taking an active part in this House, and I think they represent the views of quite a number of people outside. Within six months or a year, perhaps, after getting used to the weight of experience and tradition that one finds in the House here and elsewhere, one might not be able to say the things that I am going to say quite so strongly. I am putting them forward in a strong form because I think this is the easiest way to make the point.
I think we are justifiably proud of our traditions of democracy and Parliamentary government, but if these are to endure we must be ready to adapt them to our changing needs. It follows that our Parliamentary system must continue to command the respect and affection of the electors. To-day there are many thinking people, both in and outside Parliament, who believe that the public image of Parliament is not as good as we should wish it to be. I should like to consider some of the reasons why this may be so. Students of our Constitution and Government may well discuss how far, under modern conditions, the day-to-day control over the running of our country still remains in the hands of Parliament; but in the
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minds of the majority it is still Parliament which is responsible. They appreciate the increasing burden of work which falls on Parliament and the difficulty of finding time to consider new legislation. They therefore find it hard to understand wily so much of the valuable time is taken up in airing minor Party differences, sometimes with little apparent relevance to the subject at issue.
In the years gone by some of the greatest speeches were made on Party matters, but then they could more often be equated with major national issues. Moreover, in those more leisured days the political peccadilloes of the great could, without much harm, rank as a source of interest to all classes. To-day, not only is time at a premium but issues arc more complex, the electorate is better informed, and Party differences often hinge not on the merits of a measure but on the priority it should receive from the limited funds available—for example, roads and the increase in old age pensions.
In the change of our social order to a more classless society there have been many hardly fought battles, and their after effects are still apparent in the bitterness of some of our Parliamentary traditions and behaviour. Seen from the outside, these can give the impression that we are living in a bygone age where class prejudice and not the national interest was sometimes the more important consideration. The electorate expect a debate to deal squarely with differences in Party policy on the issues involved, but they are not sympathetic when it degenerates into a game in which the object is to score as many Party points as possible before the whistle blows or the umpire intervenes.
Fortunate as we may be to-day in having men of the highest calibre in Parliament to lead this country, this state of affairs can continue only if new men are recruited and, perhaps I should add, most carefully selected from all walks of life. The proposal to increase the present rates of remuneration is an essential first step in this direction. I think we must also ask ourselves why Parliament does not seem to attract our leaders from other spheres, in particular industry; and why employers are so unwilling to make it possible for men to go into Parliament on a temporary or

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part-time basis. This country has never lacked men who would put the national interest before their own, and I do not believe that the loss of earnings, security or career prospects is the whole reason. I am afraid we must admit that Parliamentary office to-day no longer commands the respect it used to, and many able men feel that they could accomplish little worth while if they were to make the sacrifice. I do not pretend to offer a complete solution to this problem, but the situation must be improved if we are to retain a balanced and representative Parliament which does not suffer from the evils of professional politics with third-rate men in control.
Our Civil Service is probably one of the best in the world, but by its very constitution and traditions of service it was never designed to be the supreme governing authority of this country. Nor can it by itself be expected to initiate and co-ordinate new policies affecting the whole field of government. This was, and I believe still is, the responsibility of our Ministers. If they are to do this and be effective heads of their Ministries they must be selected with this end in view, and their debating burden eased. It must be accepted that on most matters it is sufficient for their Parliamentary Secretaries to speak for them.
Valuable as is Parliament's function as a guard against abuses and a watchdog of public morality, it would indeed be a tragedy if this became its major role, or became a part of a game played to embarrass Ministers for political ends. Government to-day is a serious matter—it is too serious to allow the judgment and efficiency of a Prime Minister, or, for that matter, of any other Minister, to be impaired by such treatment. On the two recent issues which have arisen the Opposition have shown restraint, but I cannot help wondering whether, if political circumstances had been rather different, they, or my own Party, would still have done so.
As I have already said, the general public is better informed and educated than it ever was in the past. It expects to be told the true and complete reasons for Government decisions wherever this is at all possible. Parliament, I believe, has a duty to lead public opinion and not to play down to the gallery, and
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this duty should be done above that of Party loyalties. If this principle is established, I believe it can do more to increase the value of Parliamentary debates than almost anything else. As it is, one sometimes wonders whether our administrators may not be tempted to consider the facts on which a decision is based and those required to justify it politically in public as two distinct and separate matters.
Turning for a moment to the Press, we may perhaps with reason regret that Parliamentary proceedings and personalities are so often misrepresented: but it is not unknown for speeches to be made with an eye towards the Press Gallery, and can we expect better treatment if the Ministries so often fail to provide the information which the Press needs? The cynics sometimes say that the only morality the Press understands is its circulation. Could it also be said that ours was governed by the electoral vote?
My Lords, I have tried, with some temerity, to suggest a number of areas in which I believe improvement should be made in our Parliamentary method of Government. I should like briefly to summarise these: first, that the minor political content and Party bitterness in debates should be reduced as far as possible, and the standard of debate raised; secondly, that Parliament should try to give the public less politics and more of the reasons on which its decisions are based; thirdly, that the catchment area from which Parliamentary representatives are drawn must be widened by increasing remuneration and by making Parliamentary office more attractive to leaders in other spheres; fourthly, that Ministers' Parliamentary tasks should be eased, and that they should be selected as much for their administrative as for their political ability.
If this country is to be a leader among the newer nations, which, we hope, will also set up forms of democratic government, we must show the way. It is not enough to say that our form of government is still the best that democratic traditions have produced. Those things which are unworthy of it in the modern age must be changed. We must make politics a sphere of life which is respected and which will continue to attract the

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best men that England can produce. If we do not do this, democracy and much else which we stand for may be in jeopardy.
6.50 p.m.
LORD AUCKLAND: My Lords, although for obvious reasons the impending General Election may well cause any legislation emanating from this debate to be delayed, nevertheless I believe one thing to be quite certain: that whoever wins the next Election, whichever Party comes to power, will really have to grasp the nettle very tightly. The House is extremely grateful to the noble Lord, Lord Shackleton, for allowing us the opportunity to discuss this vital matter. The noble Lord moved the Motion with his usual courtesy and conviction, and we have been regaled with a number of speeches from distinguished Parliamentarians from all Parties and from all walks of life.
We have now a small nucleus of noble Lords who have not actually sat in Parliament but who nevertheless have a great interest in this subject. I myself held office for several years as chairman of a branch of the Young Conservatives, and even there I came across problems—not always Party political problems—not entirely unrelated to the much vaster problems posed by the subject matter of this debate. Unless something is done to deal at least partly with the implications of this matter, Parliament will grind to a halt just as surely as traffic grinds to a halt on the Brighton sea front during August Bank Holiday—and I do not think that is overstating the case.
I believe the London Government Act, as it now is, is a case in point. This House sat for very long hours on this legislation and many Members, particularly the older ones, suffered acute mental and physical discomfort over it. It poses the point whether Parliament, sitting as it does for some eight months in the year, can seriously tackle five or six major Bills each Session. The London Government Bill was the kind of Bill which, to discuss properly, whether politically or otherwise, needed a Session in itself. It is, of course, difficult to conceive of a situation whereby to-day this could become a reality, because so much legislation is
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being asked for—legislation of a legal nature, Private Members' Bills and legislation regarding consumer protection, quite apart from foreign affairs matters. Therefore a real problem exists here, a problem which is going to need a superhuman brain to solve. If Bills such as the London Government Bill are going to get full and proper discussion, much more time has to be found for them.
It may be that in this House, rather than that we should have a Committee on the Floor of the House we need Standing Committees; but whether that would get support from the public is another matter. They may well think that this is a form of guillotine, although to my mind that is a misconception. In another place it is obvious that Standing Committees must he held, because with 600 or so Members of Parliament it is clear that if each and every one wanted to say something on a Bill time would not permit. But in this House, with a Bill such as the London Government Bill, which was a specialised Bill, I think it would be possible to appoint a Standing Committee of all those noble Lords who have an interest in the matter. As it happened, something like 30 or 40 noble Lords actually took part in those debates, and I think that it would be possible to take a Committee stage of that kind, which must necessarily be in considerable detail, upstairs, thereby leaving the Floor of the House for more general matters and saving valuable Parliamentary time.
Much has been said about the duties of Ministers and their Parliamentary Secretaries. One of the problems of Government to-day is that, with the vast changes in defence, medicine, housing and other matters, Ministers and their junior counterparts often cannot find the time or opportunity to travel around the country as much as they ought to do. I am thinking particularly in terms of their visiting hospitals, seeing housing schemes, visiting Army units, and so on. I know Ministers and Members of Parliament of all Parties do their level best irrespective of Party, but with the great changes which are taking place to-day it is questionable whether Ministers really devote enough time to seeing new projects in action. In the case of Defence,

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I do not suppose there are many Members in either House of Parliament who have actually served with the new projects which are being operated or planned to-day. We are all used to conventional weapons, but whether we are really conversant with these great new projects is another matter. In fact it can fairly be said that Ministers, and indeed Parliament generally, are too desk-tied. It is vital that Members of Parliament, whether Front Bench or Back Bench, and Members of this House should travel more and see the many new projects and ideas, at home and abroad and in the Commonwealth, which are being put forward.
The solution of this problem is, of course, much harder than the ideas which I and other noble Lords have put forward. I am thinking largely in terms of the future, because it is people of my own age group of all Parties who will have to grapple with these problems in ten or twenty years' time. What kind of conditions we shall have then is anybody's guess; nevertheless we cannot bury our heads in the sand and we must think about these problems.
There is some cynicism about the quality of our Members of Parliament and our Ministers of the present day. To my mind, this is entirely wrong. I have in another place a number of friends of my own age group of all Parties, men and women sitting on the Opposition Benches and on the Government Benches, with whose views I may not necessarily agree but who have original ideas and ideas which should be explored.
A good deal has been said about remuneration. Here, my Lords, there are obvious difficulties. There are some Members who can afford to serve Parliament quite easily; there are others, maybe who have young families with education problems, who find it a great financial strain, not to mention a strain on their health. Here there is a case for some kind of inquiry into salaries or the ancillary assistances. The matter of secretaries is an example. I know of two Members of Parliament of my own age group who cannot afford secretaries, and they have to start typing their own letters at about 8 a.m. That is an unsatisfactory state of affairs. They may be sitting until two in the morning
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or later and then they have to get up early, get on the typewriter, and deal with constituency problems. It is fairly obvious that the constituents concerned cannot obtain the benefit which they ought to get from their representatives. It is no fault of the representatives, but their constituents have a right to be served in a more adaptable manner.
The important point, however, is that it is the system, the organisation, which is at fault, not necessarily those who serve it. I am too young to have known great men like Mr. Baldwin, Mr. Chamberlain or even Sir Winston Churchill when he was Prime Minister, but I think our present leaders of all Parties have the same qualities as their predecessors. Perhaps their ideas are more novel, perhaps they are not so original, but I think they work just as hard, if not harder, and they have many new problems to solve.
One problem is that television and the new devices often project quite wrongly the views and the characters of our Parliamentarians. In programmes like "Any Questions", Gallery and so on, the politicians taking part are undoubtedly able, and it is often the fact that the general public gauge Parliament by people of that kind; and it is perhaps understandable that they should do so. But there are many politicians of all Parties who do not necessarily speak on the Floor of the House, who do not appear on television or on radio and who do not write books, but who nevertheless do an excellent job of work, either on Committees or elsewhere, and it is right—and this is particularly important for the future—that the country at large should know it. I would ask the Deputy Leader of the House whether he or the Government can devise ways and means of putting this over to the people.
Another problem which faces Parliament is the fact that the City, where I myself work, has become regarded as a kind of sinister bastion of Toryism, and the factory floor has become regarded by some as an equally sinister bastion of Socialism. This is a very wrong and dangerous conception. There are a number of people working in the City who are anything, but Conservative; there are many in industry, even on the shop floor, who are anything but supporters of the Labour Party. It is quite

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wrong that the general public should gauge these organisations as in a kind of biased political contest, because by this both the City of London and the trade unions get, quite unjustly, a bad name.
This is not helped by people like Professor Chapman—whose book I, and I expect other noble Lords, have read—who makes such an inaccurate survey of your Lordships' House. He says:
"The real objection to it"—
this being the House of Lords—
"is that it does not represent anything; neither industry, banking, labour, land, universities, nor even the Church of England."
My Lords, a more inaccurate statement can hardly be conceived, because my own impression of this House is that all these things are admirably represented—perhaps not necessarily in number, but certainly in quality. The danger is that people from abroad read these statements and often believe them, and unless and until these statements are contradicted our Government and our system of government are going to be very much derided and scorned by many people. There are, of course, other very real problems. In the summer this House, particularly, has an enormous amount of legislation to go through, and for obvious reasons it cannot be properly discussed, either because of the time or often because of the hot weather and other reasons.
Finally, may I put one or two brief suggestions to the Minister? First, in any Department, particularly a Department where there is more than one Parliamentary Secretary, at least one person holding ministerial office should travel the country rather than be tied to the desk. This is particularly important in such offices as the Ministries of Health and Housing, where new hospital schemes and new housing schemes need to be seen by the Ministers concerned, senior or otherwise. Secondly, there is the point which the noble Lord, Lord Shackleton, himself made so admirably: that consultations between industry and commercial concerns and the Government, and if necessary the Opposition leaders, should take place more often before a Bill is published. Thereby much time and much unnecessary political bickering would be saved, and the Bill would become a much
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better Bill. Thirdly, with such Bills as the London Government Bill, which need a lot of specialised discussion, consideration should be given to having a Standing Committee rather than a Committee of the Whole House. I know that here there are difficulties, but I think these can be overcome.
My Lords, I know that the Minister has a great many points to which to reply. He has been given a great deal of ammunition; but I think all those who have taken part in this debate have had one motive for so doing. We are very anxious to ensure that, whichever Party wins the next Election—and, indeed, future Elections—the quality of Government which this country has had in the past should be continued and, indeed, bettered in the future.
7.12 p.m.
LORD TODD: My Lords, I think it must be evident to everyone that the problems that face Governments to-day impose such severe strains on the machinery of Government that further increases in the complexity of these problems, which I think we can confidently expect, are likely to lead to its complete breakdown. Like other noble Lords, I am very glad that this subject has been brought to our attention to-day by the noble Lord, Lord Shackleton. I was particularly interested in his introductory speech and, in particular, in one point on which he touched. Matters relating to science and Government—using the word "science" in its broadest sense—have not been touched on to any extent, I think, by earlier speakers to-day, and it is to them that I should like to address myself.
The root of our troubles, it seems to me—and not merely our troubles, but most of tile troubles in the world at the present time—is the fantastic rate of scientific and technological progress during this century, and the disparity between this and the very slow rate of change in our social attitudes and, indirectly, of course, our methods of government. We must not imagine that it is just the appearance of tremendous, new, military weapons like the atomic bomb that has altered our lives: the mere increase in the speed of communication has completely revolutionised not only the internal affairs of nations but the relationships between nations. Almost every aspect of public life is

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to-day permeated by the advancing front of science, and the issues facing Government are affected by scientific considerations of ever-increasing complexity which, by their very nature, are simply not understood by the public at large, nor even by Parliament, and therefore cannot sensibly be debated here.
To say this is not to decry the function of Parliament—far from it! It would be absurd, to my mind, to demand or to expect that politicians should simultaneously be technical experts, just as it would be equally wrong to imagine that technical experts, merely by the fact of being technical experts, necessarily have any political capacity at all. But we have to recognise that the politician who rises to ministerial rank by the accepted route, via the House of Commons, now finds himself faced with the need to take political decisions which can sensibly be made only in the light of complex scientific considerations which he cannot fully understand; and so he must have available to him, I submit, the best possible advice. This applies to almost every Government Department and activity. I believe that this view will be generally accepted, but the question is whether we are doing enough about it. I doubt very much whether we are.
In the field of Defence, the importance of science has been, for a variety of reasons which I need not enumerate this evening, recognised for quite a long time, and the vital role which is, or should be, occupied by the scientific adviser in the field of policy is recognised in the recent proposals for the reorganisation of the Ministry of Defence. Now the problems of civil science are in some ways more complex than those of defence science, since they are, in a sense, a great deal less self-contained; but science is just as important on the civil as on the defence side—indeed, civil and defence science have considerable areas of contact and overlap. So much so, I may say, that there ought to be a good deal more intimate contact between the two sides than there has been in the past, and I hope that, as a result of reorganisations proposed, the position is going to get somewhat better.
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The Haldane Report on the Machinery of Government, which has been mentioned, I think, by the noble Lord, Lord Boothby, in particular, recognised in 1918 the growing importance of science in the affairs of Government; and in that Report there was laid down a basic pattern for research under Government auspices which is in its general conception, I believe, as valid to-day as it was then, although naturally enough, with the passage of time and the advance of science, there are some chances of detail which are perhaps necessary. Briefly put, the sense of the recommendations was that general background research should be conducted outwith executive Departments of Government, with a large measure of freedom on what could be called the Research Council pattern, and that Departments themselves should be concerned with their own practical day-to-day research needs. I think there is very broad agreement among scientists to-day that the Research Council pattern is sound, that the Councils should be under a Minister in the Cabinet free from the responsibilities of an executive Department, and that the same Minister, with the necessary assistance of a high-level Advisory Council, should be responsible for broad issues of national scientific policy.
But in the context of our debate to-day, and particularly in connection with the problems confronting Ministers, it is the role of the scientist in executive Departments to which I should like to draw attention. Since 1947 there has been an Advisory Council on Scientific Policy which has provided successive Governments with a great deal of advice on broad policy, although it is only fair to note that not all of this advice has been implemented. In its first Report in 1947 the Council discussed this very problem and advised that executive Departments should be responsible for identifying problems, for settling their order of priority, for deciding where any necessary investigations should be carried out and for applying the results of these investigations.
To this end, the Council proposed that Departments should, as a rule, appoint a chief scientific officer whose function would be to advise generally on the scientific aspects of departmental policy;

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that he should have a staff sufficient to carry out operational research, and that in some cases, at least, it might be advantageous to appoint an Advisory Council which would assist the Minister in formulating the scientific policy of his Department. Experience since 1947 suggests that these recommendations have not had the desirable effect that was hoped for. This is, I believe, due in part to the fact that the recommendations have, in some instances at least, received little more than lip service and there have been quite inadequate departmental staffs to carry out these recommendations.
What is not sufficiently realised is that science must be represented at the highest level in the Department if it is to be of any real value to a Minister. At present, the Permanent Secretary of a Department is usually an administrative civil servant without any scientific qualifications. I do not wish to belittle the senior administrative civil servants, and I must confess that I have the highest regard for the ability of those I have been privileged to meet. But I believe it is necessary in these days to have more than this. I think there should be in Departments, on the same level as Permanent Secretaries, someone whom we might call a Scientific Secretary, aided, where appropriate, by an Advisory Council, whose job would be to be in touch with scientific developments of actual or potential value to the Department, both inside and outside Government agencies, and who, with suitable staff, could deal with operational research and with the day-to-day scientific and technological problems of the Department's work.
To be sure, men suitable to perform adequately this function are not perhaps very numerous; but nor, for that matter, are the kind of people who make good Permanent Secretaries of the present type. I believe they might have to come from without, as well as from within, the Scientific Civil Service. They would be scientist-administrators of rather a special type; they would require to have judgment and a knowledge of the practicability as well as of the novelty of scientific advances. But to my mind there is no reason to believe that people of this type cannot be found among the ranks of those trained as
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professional scientists or technologists, any more than there is reason to believe that they exist, ready-made, among students of the classics or any other subjects. Capacity for this kind of thing is inherent in a man and is not produced by his professional training.
It is my belief that the introduction of suitable scientists at the highest level —even if it has to be done at times by temporary secondment of an idividual for a relatively short period of years—is something that should happen in all Departments. I am, of course, using "science" here in the broadest sense to include natural sciences, engineering and social sciences; because all in their different respects might be required in different Departments. I believe that the joint advice of the administrative and scientific secretaries, if I may so call them, would ensure that the Minister has all the relevant technical evidence and advice available to him to assist him in decision-making. This would lead not only to greater confidence in the correctness of decision but also, I think, to a forward-looking departmental policy which would, or could, be in tune with modern needs.
I am not arguing for a system which is sometimes described as technocracy; but to-day the problems that face Government rest ultimately on the accelerating pace of scientific advance which, inevitably, is going to create new and potentially explosive situations, socially, economically and in international relations. They demand for their solution that science, in the broadest sense of the term, should play a central role in policy determination. And this is possible only if the best scientific advice is always available—and at the highest level—in the machinery of Government. We should remember that the second-best is useless. The old cleavage which has been maintained between science, administration and policy is outmoded. The sooner we get rid of it, the better for all concerned.
7.25 p.m.
LORD SOMERS: My Lords, I think this is one of the most interesting debates I have ever listened to, and I should like to join with other noble Lords in giving my thanks to the noble Lord, Lord Shackleton, for having I initiated it. I do not think I have very

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much right to join in it, because I have never held office under Government and have not even had the privilege of sitting in another place. But, on the other hand, I have observed from outside and, for what they are worth, I will give the conclusions that an outsider can give.
Of course, the noble Lord, Lord Boothby, was quite right when he said that we have departed a very long way from what may be called democratic Government; in fact, I very much doubt if we ever had what was originally called"democracy"—in other words,
"Government of the people, for the people, by the people"—
since it is quite obvious that the people are not governed by the people. No person in this country who does not occupy a governmental or judicial position, or who is not a member of the police force, can have the slightest power to control the actions of his fellow citizens. He can appeal to the law to do so, but that is quite a different thing. It may be claimed that, in an indirect way, people have a hand in the making of the law, but is this really so?
Just look at what happens at the election of a Member of Parliament. The constituent has two men—I need not bother to say "or possibly three", since the Liberal Benches are empty—set in front of him and he is supposed to choose which of them he wishes to represent his interests in Parliament. He has not chosen the men; he may, in fact, think them unsuitable candidates; but he has not the slightest opportunity to choose any alternative. Then comes the election. Does the constituent then vote for the man or for the Party? I think we all know the answer to that. Let us take it a little further. When the successful candidate has taken his seat in Parliament, does he, in fact, represent the constituents who voted for him? The answer, is, again, No. He represents his Party's policy. Even if in his heart of hearts he does not approve of that particular detail of its policy which they are discussing at the moment and even, perhaps, if he knows it is not in the best interests of his constituents, the Party Whip makes quite sure of securing his support. However, my Lords, having
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said all this and having shown that democracy, even at its best, is not really what it was originally claimed to be, I am bound to admit that I think the general pattern of Government in this country to-day could not be better. I am quite certain that the purpose of the noble Lord's Motion is not to find a different system but to find means of bettering the present one.
The question has been raised whether candidates for Parliamentary election should have had some preliminary training before being allowed to stand. I think they should; or, at any rate, that they should have had some examination of their knowledge of national and international affairs. After all, we do not allow a man to drive a car, to teach in a school or even to play in an orchestra, without having had some previous experience. Why, then, should we allow an untrained man to be sent to Parliament to help shape the pattern of our national law? I am not suggesting that this training should be too intensive or too specialised. Indeed, the whole value of a two-Chamber Parliament lies in the fact that those in the first Chamber are, so to speak, the general practitioners, while in the second are the consultants or specialists. This is the system as we have it to-day, and in general it works very well.
Now I should like to deal with the Ministers and the various Ministries. I agree with the noble Lord, Lord Morrison of Lambeth, about the relations of Ministers with the Prime Minister. They should have more power to take decisions on their own. In the days of my more extreme ignorance, I used to think that the ideal would be to have an expert at the head of each Ministry, such as a soldier at the War Office, an ex-sailor as the First Lord of the Admiralty, and so on; but of course that would be not only impossible but also undesirable, because a Minister's first duty is political. None the less, I cannot feel that the periodic reshuffles, to which we are all used, can give the public any confidence that Ministers really know what they are doing. I think that a Minister should remain in office and learn a little more about the functions with which he is dealing.

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I should like to say a word about the Chamber in which Ministers sit. I have mentioned this before, I know. When the noble Earl, Lord Home, as he then was, was made Foreign Secretary, there was a terrific outcry from all quarters of Parliament and from outside as well. It was said that no Foreign Secretary should sit in your Lordships' House. Well, he soon proved that to be a fallacy. And I shall not forget hearing no less a person than the noble Earl who leads the Opposition (I think I am quoting him correctly) saying that we never had a better Foreign Secretary. Surely, with all the increased demands on their time Ministers would find things a great deal easier if they did not have to deal also with their constituencies. They have Parliamentary Secretaries, and these could sit in another House as a sort of deputy Minister and answer any questions which were asked of the Ministry. After all, the questions are directed to the Ministry and not to the Minister. I know that in some cases it would not be workable, but I think a much greater proportion of Ministers could be Members of your Lordships' House.
Now I would say a word about the relative status of the two Chambers. That a two-Chamber Government is desirable I do not think that anybody would deny, but though their functions and their natures are not alike, I feel that the status of the two Chambers should be much more equal than it is at present. Incidentally, I would say that this could be brought about only if we saw to it that the number of Peers who sit on the opposite Benches was roughly equal to that of those who sit on these Benches, and I think that that would be a most desirable thing. As things are at present, they can never hope to win any Division. This fact is widely known, and so any pronouncement which this House may make does not tend to bear much weight, and naturally our status falls.
I am not going to say anything about the hereditary system which to a large extent still prevails in our House, except to say that I am not among those who condemn it. I would just touch on one point which has been mentioned by both the noble Lords, Lord Gladwyn and Lord Auckland—that is, remuneration. The mere fact of holding an hereditary title
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does not mean that one necessarily holds anything else, and a great many of us are finding regular attendance a great strain on our resources. Indeed, many are prevented from attending at all owing to the fact that they have to earn their livings. I feel that if we want a full House we shall have to find some means of making it possible for Members to attend. After all, we have to look at things from a present-day point of view.
To sum up, I feel that the general pattern of our Government is as good as it could be. It just needs a few adjustments to make it the envy of the whole world.
7.38 p.m.
LORD TAYLOR: My Lords, I agree entirely with the penultimate remark of the noble Lord, Lord Somers, and shall be coming to it in a moment. I have two regrets about this debate. The first is that my noble friend Lord Shackleton, in his opening remarks "pinched" my opening line, which was to say that he and I had both served as sorcerers' apprentices to my noble friend Lord Morrison of Lambeth—and a jolly good sorcerer he was to serve under! One could disagree with him violently—and he would never take offence. Mark you! he never took any notice of one's disagreement; but he was a very good trainer.
My second regret is that only one ex-Cabinet Minister has spoken so far in this debate.
EARL ST. ALDWYN: Two. There was my noble friend Lord Selkirk.
LORD TAYLOR: I accept that correction. Anyway, I regret that we have not had more; because if more ex-Ministers had taken part in the debate we should have had a more realistic debate in one respect—that is, the relation of Ministers to the Prime Minister, whether he is primus inter pares, or an overlord. The Prime Minister must have certain powers in order to do his job—the power of dissolution and the power of the sack. In practice, he will not exercise the power of the sack against very powerful or influential or good colleagues. They have to arrive at a compromise, or Government could not go on. Whether he occupies the primus inter pares or the dictatorial position must depend enormously on the personality of the Prime Minister and on

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the personalities of the other chief Ministers. A chief Minister who has his policy thought out and is determined will nearly always get what he wants. That is my experience.
I remember, in our excellent debate on higher education, the noble Viscount, Lord Eccles, describing what actually happened in the Cabinet when it came to higher education. The only time that higher education has been discussed, so he told us—and he was not repeating a Cabinet secret—was in connection with the road across Christ Church Meadow. That, I am sure, is true. I am sure the picture we have had has been just a little unrealistic in that respect, but in that respect only. In every other respect I think that this has been a first-class debate. My noble friend Lord Shackle-ton, in his splendid opening speech, offered us a wide vista of problems to consider and try to offer solutions for; and from that speech have flowed some extremely interesting contributions, some perhaps more practical than others. I propose to try to make a few practical remarks to finish up the debate from our side. In so doing, I would again reiterate what my noble friend Lord Morrison of Lambeth said; that is to say, that we are speaking individually. This is not the sort of thing on which one can or ought to take a Party line.
It seems to me that there are three most essential processes in the work of any Government. The first is decision-making, on which the noble Lord, Lord Melchett, had some excellent remarks to make. The second is the right machinery for doing the particular jobs. This was something to which my noble friend Lord Morrison of Lambeth, when he was a Minister, devoted a great deal of time—and I shall say a little more about this in a few minutes. The third is selecting the right people to do particular jobs. If one does these three right—that is, if one makes the decision right, gets the machinery right and then selects the right people—one does not have much trouble.
I will deal first with decision-making. The quality of decision depends largely, but not entirely (and here I agree with my noble friend Lord Todd), on the data available to the person making the decision. The noble Lord, Lord Mel-
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chett, said that sloppy thinking leads to ambiguous drafting; and I agree with him. And sloppy thinking springs very often from inadequate data, badly expressed to start with. If the right relevant data are fully collected and before you, most decisions almost make themselves. A little while ago I was Chairman of the Labour Party Committee on Higher Education, and we, with inadequate resources, produced almost the same document, although much shorter, as the noble Lord, Lord Robbins, with all the resources of Government. We did this simply because we assembled the data and drew the conclusions. If one assembles the data and draws the conclusions, one gets the thing right.
I have carefully watched the Government over the past seven years to see how they did things, when they did them right and when I thought they did them wrong. I am not making any Party point here, but merely taking them as a subject for the art of government. I think that almost all their serious mistakes have been due to poor intelligence work; to not gathering the facts—and here we might err just as much as they have; and to allowing political preconceptions to operate in making decisions instead of basing action on dispassionate analysis of the available data. This does not mean that you reach flabby conclusions, but that you base your decisions on evidence and not on prejudice.
The two great fields where I think the intelligence supplied to the Government (I use "intelligence" in the technical sense) has been poor have been in demography and in the social field. I think that every Department of Government should be watching population trends; watching the movement of population and the best available forecasts, especially in those fields where the Government have to plan or make the actual provision for people, either immediately or in the years ahead. Here one is thinking of housing, education, factory building, and all the rest. Twelve years ago it was perfectly obvious to anybody who looked at the population statistics and the land-use statistics of this country that we were going to run into an increasing housing problem which could be solved only by the creation of many more new towns. There

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was no other way to do it; the people who were going to be there could not be accommodated in any other way.
I must say that I have been advocating all this time that we should start one new town a year; because even when the decision is taken, it takes four years to get a new town going, due to time taken for the provision of sewerage works, water supplies, roads and so on. No contribution flows in terms of housing for at least four years. It has taken the Government ten years to see that this was going to happen. Now we are getting a spate of new towns started which should have been started long ago if the needs were to be fully met. I believe that the minimum need now, if we are ever to catch up, is for two new towns a year to be regularly started as part of Government policy for the future.
It is the same in the case of the crisis over higher education. If somebody had been putting the statistical facts of population before the Government the moment they were available, and pushing them to the appropriate Ministers, they would not have been caught as they have been over the bulge in the birth rate as it reached higher education level. We have exactly the same crisis over the supply of doctors, the only difference being that in this case the Government apparently still do not know that there is a crisis, and that, were it not for the doctors from Pakistan, India, the West Indies, Africa and the rest, our hospitals just could not function. Although the population has steadily gone up, there has been no real increase in the output of our medical schools. Then there is the crisis of unemployment in the North, the North Midlands and the West. The facts were there for everybody to see if only someone had been pushing them before the appropriate Ministers.
I think we need a Department of democratic planning which will be constantly watching the situation and directing the attention of all the Departments to the indications of population changes. It may be said that this is the job of the Registrar General. He operates as an adjunct to the Ministry of Health, but it is significant that some of the greatest failures of demographic planning have been in the Ministry of Health. So there is no evidence that the Registrar General in fact impinges on the Minister
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of Health, and certainly no evidence that the Minister of Health is himself drawing the attention of his colleagues to the facts which they should be watching all the time. How you do this, I am not absolutely certain. I hesitate to suggest a Minister of Demography only because my noble friend Lord Morrison of Lambeth is sitting below me. Any suggestion of a new Minister is to him like red rag to a bull, and a Ministry of Demography would, I am sure, drive him round the bend. But I am sure this is the sort of thing we might do, because the fact of the number of people in this country is so vital to all social planning. The impact of this must be brought to hear at ministerial level in each Department, and each Department must be forced to face the fact of what inevitably will happen if they do not do something about it.
I now come to social intelligence. This means nothing more nor less than the impact of Government action on ordinary people; how Government action affects the life of the ordinary old-age pensioner, of the person who is paying 2s. as a prescription charge—which, incidentally, is one of the silliest measures ever to be persisted in. Ask any general practitioner how it works and he will tell you that in order to save poor people money—and most sick people are poor people, because most sick people are not able to work—he over-prescribes in quantity in order to cut down the number of 2s. they have to pay. So the net result in terms of saving to the nation is very little indeed. Equally, many old-age pensioners who are entitled to reclaim their 2s. from the National Assistance Board are too proud to go, and when they go to the doctor many of them have not enough money to pay the 2s., and they have to wait until the end of the week until they get their pension in order to buy the essential drugs they need.
This sort of social intelligence, the fact that these things are happening, should be being collected by appropriate social intelligence machinery. During the war I used to run such machinery for Her Majesty's Government, when it was called the Home Intelligence Division of the Ministry of Information. Probably rightly, this was wound up at the end of the war, but this can be done and, much more important, the Govern-

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ment have a good statistical social intelligence machine in the Government's social service which was part of our Home Intelligence Division when it was originally started. Having got the data, this Government still have—or those responsible still have—a creative job to do in reaching the right decisions. It is a process which might be called social engineering or social architecture. I am never quite sure which is the better term, because in making a good social agency there is an element of engineering, and also an element of social imagination which is required. In this, the first essential is creating the right type of agency to do the job.
To listen to most of our debate one might have thought that the whole machinery of Government consisted of Parliament, the Cabinet, the members of the Government and the Civil Service. But, of course, an immense amount of the function of Government is performed by agencies—by the University Grants Committee, the B.B.C., I.T.A., Regional Hospital Boards, New Town Development Corporations, and the National Coal Board, and very often it is not the Civil Service which is the appropriate agency for doing a particular job, for obvious reasons when one thinks about it.
I often wonder, for example, whether it is best for our prisons to be run by the Home Office, or whether they should he run by a body like a true Prison Commission, as it were, with lay members on it, just as the B.B.C. have lay members. There are, I know, special areas in connection with the prison service and the freedom of the individual which might make this inappropriate. But in essence it is a question of providing homes and treatment and care for a number of people over a wide area. I do not think these are the jobs which the Civil Service necessarily do well, and I am quite sure they are not the jobs which are suitable for continuous Parliamentary inquisition. I do not think it makes them any more efficient to subject them to that.
There is one other thing about the Civil Service which is admirable in some ways, but less so in others; that is its passion for absolute justice and equality as between individuals. This is some-
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thing one never achieves in any case, and I think it is far better in social legislation to achieve simplicity, even if it is not absolutely fair. For example, the television licence at £4 a year is universally accepted, and is jolly good value for money.
LORD SHACKLETON: It is too low.
LORD TAYLOR: I am inclined to agree with my noble friend. Take the whole of the National Insurance system: it is eminently fair, but it is very complicated, and if one could work out the amount of money and human effort which is spent on administering it, I think it would be found to be quite disastrous. I suggest that the keynote of all social legislation and planning which involves ordinary people should be simplicity.
Now a word about power and the lust for power. We have heard a good deal about power in relation to Ministers, but power to a large extent is in the hands of the civil servants. This is a direct result of the complexities of Government. I do not think civil servants have sought it, although some have. There are some people who seek power in every organisation. But civil servants exert an immense amount of power, and to me, at any rate, it is important that power should not come to reside in the Civil Service. Ministers are in fact the guardians of the public in this matter of power in the hands of the Civil Service. There is the power which comes from the control of the fount of honour, which operates very largely in the Civil Service. There is the power of appointment, a vast system of patronage, which is exerted by Ministers nominally but in fact by the Civil Service. It is not their fault. They have to do it. Somebody has to do it, but I often wonder whether the field from which they select is large enough.
A Question was asked by the noble Lord, Lord Reith, not long ago whether all members of nationalised bodies who had been civil servants should have a star attached to their names in the annual official list. The noble Lord was strongly attacked for what was thought to be a derogatory remark. I do not think it was derogatory at all. The Civil Service appoints a number of ex-civil servants to nationalised bodies. I do not say

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they do it wrongly, but they exercise a great range of power. I myself have long held the view that there are many types of higher public appointment which could and should be properly advertised, and that after advertisement should come the process of selection—for example, of the chairmen of Regional Hospital Boards. I think this is one of the most important functions which the Minister of Health performs. By his appointment of chairmen of Regional Hospital Boards he shapes the whole hospital service, because they will advise on the membership of Regional Hospital Boards. They will also largely direct the general trend of policy in each hospital region. Yet I doubt whether in many cases the Minister of Health necessarily knows or sees the people whom he appoints. I should like to see him have a choice and a committee of selection at which he would take the chair. Indeed, you can determine the result you obtain, either from an executive job or from a committee of inquiry, by the people you pick.
Now as to the work of the Minister in charge of a Department. The Minister, as is obvious, is both spokesman and managing director or chief executive. Some people in the Civil Service would like to think of the Minister as a chairman, but I think the worst Ministers are those who have sat back and exercised a chairman's functions only. Having watched my noble friend Lord Morrison of Lambeth, I should say that invariably he was chairman and managing director combined, and I think that when the Civil Service get a Minister like that they appreciate having someone who will not only form policy but make decisions and implement them. He will follow the thing through himself, and not wait for them to come to him. But the more legislation with which a Minister has to deal and Push through Parliament, the less time he will have for good administration. In my view we have far too much legislation and far too little administration by our Ministers.
Here I disagree radically with my noble friend Lord Morrison of Lambeth. I think that one of the very good changes that has occurred in the past ten years is the growth of Ministers of State. I do not see how Ministers can possibly control Departments unless, in fact, there
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are enough of them to do the job; and I believe that the combination of a Minister, a Minister of State and one or two Parliamentary Secretaries makes a good Parliamentary team to look after the Ministry. One of those, I should hope, would always be in your Lordships' House, because I think it is unfair upon Ministers to expect them to answer for Departments to which they do not belong. And, far more important, it is very desirable that one of the three Ministers should not spend his whole time in the House of Commons but should have time for doing what the noble Lord, Lord Auckland, said: getting out of the office, and also for doing general administrative work and studying problems. This, of course, all depends on one thing which my noble friend Lord Morrison of Lambeth stressed, the importance of delegation and one's assumption is that a good Minister having, as it were, picked his team of parliamentarians to help him in his work, will use them intelligently and will give them functions to perform precisely as my noble friend Lord Morrison of Lambeth described.
When Departments get too large I think they should be split into two. I am terrified of great size in administration. incidentally, I entirely agree with the noble Lord, Lord Melchett, about the importance of having more top administrators per Department. Each Department is far too much of a hierarchy under the principal civil servant and far too little of the committee of technical directors, as it were, under the committee of political directors, which is the structure which is now emerging. I regard this as very important indeed. But where I think Departments are far too large is at the lower administrative level, with a number of clerical officers and executive officers who would not be tolerated in ordinary business, but grow by ordinary Parkinsonian methods for which there is no cash control. I should like to see whether we can have automatic splitting beyond a certain size, and to begin to introduce a slight penalty upon those who grow too big. I should like to see the man in charge of a department which does a job with one or two members of the staff which it previously did with four appropriately rewarded. In fact, under the present system he

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would be down-graded, because the size of his emolument depends on the number of people he controls. That is quite ridiculous.
My Lords, with regard to the pay of Ministers, I could not agree more with what my noble friend Lord Shackleton said; and here I must again disagree with my noble friend Lord Morrison of Lambeth. In my view, what Ministers are paid is pathetic and ridiculous. It is quite fantastic. In this House, it is mad. They do not even get their ordinary M.P.'s allowance. I cannot conceive that any Minister in this House can serve as a junior Minister unless he has a private income. It is impossible otherwise, for he could not pay the rent —at least I do not think he could; or even pay for food for his family. This is a very bad situation. The noble Lord, Lord Somers, is quite right: many of us have nothing but our titles; we are poor Lords; and many of us earn our livings. I earn my living on Monday and Friday and Wednesday morning. In fact, I have had to adjust my life in order to serve in your Lordships' House. I make no complaint about this; but, quite frankly, if I were to go over there on to the Government Bench I should be "souped".
LORD MORRISON OF LAMBETH: You must be doing well.
LORD TAYLOR: My noble friend Lord Morrison of Lambeth says that I must be doing well. He is talking rot! I do not make an awful lot. I make about £3,000 a year, if the noble Lord must know. If I sat opposite, I should go down to near £1,000. I cannot do it. I should not be able to pay my insurance policies. How much does a Parliamentary Secretary get?
SEVERAL NOBLE LORDS: £2,500.
LORD TAYLOR: I should drop £500 or something more. One noble Lord who spoke pointed out this question of pensions. It is fantastic. I pay into a contributory pensions scheme. I pay 5 per cent. and my employer pays 10 per cent. If one goes over there, one is "souped". One gets a commuted value; but I think an absolute minimum is that we should treat Ministers as any decent business would.
LORD BOOTHBY: My Lords, may I interrupt the noble Lord for a moment? I served in the House of Commons for 34 consecutive years, and what is my pension?—Nought!
LORD TAYLOR: I think it is perfectly terrible. I entirely agree with the noble Lord, Lord Boothby. It is a fantastic system. I would suggest a 5 per cent. and 10 per cent. pension. Five per cent. paid in by the worker, as it were, and 10 per cent. by the employer would be a proper and reasonable kind of pensions system to have, both for M.P.s and for Ministers. It does not arise in the case of your Lordships who are not Ministers because we go on for ever.
I honestly think that we must treat our Ministers as well as we treat our civil servants. I do not quarrel with the top rates for the Civil Service. I think that when a civil servant gets to £8,000 or so a year he is doing as well as he would in industry, having regard to the security enjoyed and the chance of getting a job outside the Civil Service when he retires. I do not think that such men really have much cause for complaint. But I think the people at £2,000 or £3,000 in the Civil Service may well have some complaints. When it comes to mass transfer in and out of the Civil Service, this is a very difficult process to make work technically. I must say that in some ways I rather prefer the proposal of the noble Lord, Lord Todd to bring in someone parallel—and I think one can perhaps do an occasional spot for short periods. But there are great difficulties in working people into a Government Department. The opportunity for industry perhaps to get rid of those with whom it is not quite satisfied does arise, and there are other difficulties. On the other hand, I think it would be good for everybody to make a break after about fifteen or twenty years in a job, and if it can be done it should be, but it is not easy.
I should like to say one word about your Lordships' House. I think it is a most wonderful forum for informed debate. I agree entirely with what was just said on this side of the House about its influence being so much more important than its power. I think that the method of payment of expenses for attendance is better than a salary. It is

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a good idea, but the amount is quite ludicrous. I was talking to a great friend a little while ago, and he was telling me that on the D.S.I.R. Research Committees the normal attendance fee is 10 guineas. A little while ago I was appointed to such a D.S.I.R. Committee attached to the Building Research Station. In fact, I have not been able to attend, but the fee for attendance—that is, for a half-day attendance—is 10 guineas. I think that a proper fee for attending your Lordships' House is 10 guineas, with 5 guineas being expenses, and 5 guineas taxable. Moreover, I think that if noble Lords attend in the mornings for Committees they should get another 5 guineas. This is not a princely sum, but it would mean that a noble Lord who had no other source of income and who attended regularly might "knock up" £1,200 a year.
LORD BOOTHBY: Free of tax.
LORD TAYLOR: No, I suggested five guineas, free of tax.
LORD BOOTHBY: Nonsense—the lot of it.
LORD TAYLOR: I would say that if we got five guineas tax-free, I reckon we should not have done badly. However, fortunately this is all going to be decided by my noble friend Lord Champion who is an adviser of the Review Committee, which, I may say, is a very good invention. I congratulate the Government. They stole the idea from the medical profession. We have a Review Committee under the chairmanship of Lord Kindersley, appointed by the Prime Minister, with no doctors —rather like this with no politicians only an advisory panel. It works not badly. I suggest to the noble Lord, Lord Champion that if he tries out this we shall not be entirely fed up with him.
LORD CHAMPION: May I tell my noble friend that I am all ears on this point.
LORD TAYLOR: I am delighted to hear it. I would say one word about committees. Some think committees are good, some think they are awful. Properly used, they are a wonderful invention; improperly used they are a curse. I think the commonest mistake we make is mixing up executive committees and advisory committees. Executive com-
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mittees want to be small. Advisory committees can be as big as you like. But if you want a committee to do an executive job you must keep it small. It is possible sometimes with a large executive committee to "get away with it" if you are a very clever executive serving that committee. But, broadly speaking, the proper size for an executive committee is five or six or seven; the proper size for an advisory committee is eighteen, nineteen or twenty, perhaps a bit bigger still.
But time and again we find bits of Government structure where a job which is an executive job is given to a committee of advisory committee size. The great example is that mentioned by Lord Gladwyn or Lord Boothby, the Cabinet. The Cabinet should be six or seven because it is an executive committee. Such an executive committee will clearly call in a Minister concerned to put his case, to argue his case, and will argue it with him; they will decide without him, but will argue it with him because they do not know anything about technical things; they are experts on politics and life and with vast experience; and that is the proper way to do it. A huge Cabinet is as silly as a huge regional executive board or any other executive body.
I have said my say, but I should like to add that I think it has been a wonderful debate. I would congratulate my noble friend Lord Shackleton on having thought it up and on having started it in what I thought was a brilliant speech, and it has elicited some really wonderful speeches from your Lordships. If one cared to do a little sub-editing of it, we should have a very nice symposium which could be published as a Penguin, and we might split the royalties.
8.15 p.m.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT BLAKEN-HAM): My Lords, I would agree entirely with the noble Lord, Lord Taylor, when he said, both at the beginning and at the end of his speech, how delighted we were that the noble Lord, Lord Shackle-ton, had enabled us to have this very valuable debate. I hope Lord Shackleton also noticed that every single speaker who has contributed—and we have had some thirteen speeches—expressed the

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same emotion, and I am not surprised. I think it was the noble Lord, Lord Somers, who said that this was the most interesting debate he had ever listened to. So far as I am concerned, this is certainly true. I would also thank the noble Lord, Lord Shackelton, for his courtesy to me in giving me some idea of the ground to be covered. His opening speech laid bare the whole subject in a most comprehensive way and, if I may say so, not too long a time. I would also agree with Lord Shackleton when he mentioned my right honourable friend Mr. Quintin Hogg. I am sure he has considerable nostalgia in not being in his old place here, because this debate would have been very much after his heart. I think that every Member of your Lordships' House knows that this is a subject to which my right honourable friend has given a great deal of thought and hard work.
When one is talking on the subject of the machinery of Government, I think the first thing one can say is that anybody who has listened to this debate to-day must be aware of the fact that your Lordships' House is uniquely placed to discuss a subject of this sort. It is not only the variety of experience, which is immense; it is somehow the ability of your Lordships to be able to deal with a highly complicated subject in a spirit of wise reflection, to stand back and look and examine how we run our affairs, which is a spirit which I think some of us who were in another place did not find quite so easy to produce.
I do not think anyone would expect me to give a clear "Yes" or "No" to the many points which have been produced in the contributions your Lordships have made to this debate. We had the revolutionary suggestions of the noble Lord, Lord Gladwyn, which require a great deal of examination. We had the scintillating intervention of my noble friend Lord Boothby. I must say I am delighted to hear him speak. I have not heard him for some time. He has not lost his art. We had, I think, a most helpful and practical contribution from the noble Lord, Lord Melchett —I am glad the noble Lord, Lord Taylor, felt that was so. I also appreciated listening to the polished but
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rather depressing contribution of the noble Earl, Lord Halsbury. I do not want to take up his points, but I do not think the British people are quite as unprepared to face up to the facts of life as perhaps he thinks.
I should like, therefore, to give perhaps some of my own impressions of some of the main lines which this debate has followed. Of course I do not think anybody in this country can be blind to the vast expansion in the work of central Government that has taken place since the war, and I should have thought that the noble Lord, Lord Morrison of Lambeth, would have agreed with me when I say that legislation has increased immensely since 1945. I know his objection to the large number of Government Departments; he gave some details of how it has grown. In 1914 there were only fifteen; to-day we have about twenty-five. I hope he will agree with me, and I am glad to say Lord Taylor agrees with me, that these extra Ministers of whom he disapproves are, in fact, pretty hard pressed, and if they had not been supplied with extra numbers Heaven help those Ministers who would have been left on their own to cope with this extra spate of legislation and other matters!
The noble Lord, Lord Todd, is quite right in saying that the fact that communications have brought countries so much closer together, the fact that scientific progress had really outstripped the imagination of the normal individual, has meant that we must consider most seriously the sort of schemes that he has in mind by which we can make ourselves better informed. The key presumably—your Lordships would not disagree with me here—to providing the best sort of machinery of Government lies in the management of the talent we have and in the best use of the time that is available to us. It was, I think, on the need for good management in the machinery of Government that Lord Melchett laid stress in his contribution to the debate.
When we are pleased with our system of Government we say that it is a flexible system which we can adapt as we like to the needs of the moment; and when it seems to creak we call it old-fashioned and draw attention to the need for bringing it up to date. I personally believe—

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and I think the noble Lord, Lord Shackleton, did too—that there are overwhelming merits in the flexibility of the Westminster model. But I think we should all be agreed that it would be better if we placed more emphasis on the need to keep our machinery of Government up-to-date rather than bringing it up-to-date, because this should be a continuous process and should be given continuous attention. This is one of the reasons why I welcome the fact that this debate has in fact taken place.
First of all, coming to Parliament, how can we best use our time in Parliament? Much of the time is taken up, as I have said, by the spate of legislation. Not only the Conservative Party are guilty of this, but certainly the Labour Party were also guilty of it when they were in office. Legislation may not be the only function of Parliament, but only in Parliament can legislation be enacted. It is true that at the end of every Session of Parliament we manage to chalk up an impressive score; but certainly, as speakers in this debate have made clear, it is obvious that there is nothing to be complacent about in this. At the end of every Session there remains a number of useful non-controversial Bills which lie neglected for want of Parliamentary time. The noble Lord, Lord Shackleton, mentioned two which came to his mind. Of course there are difficulties. Lord Shackleton had certain suggestions for dealing with this, and so did my noble friend Lord Auckland.
There are always difficulties about any innovations, and I wonder if we should not consider whether we cannot devise some scheme, maybe on the lines the noble Lord, Lord Shackleton, had in mind, for dealing less ponderously with certain items of non-controversial legislation. Such Bills are submitted (some fail to be submitted for lack of time) to the same ponderous procedure as the main Bills of a Government's programme which are, of course, bound to excite political controversy. Surely there is room here for some simple piece of machinery by which really non-controversial legislation could be recognised and agreed as non-controversial on all sides, and dealt with in some manner which would not stand in the way of the main business of Parliament and would not require the detailed atten-
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tion of more than a handful of Members. Of course, it is a well known tactic of Opposition to delay the main programme Bills of a Government by talking on them at length, and by talking also on Bills of a non-controversial nature and thus denying the Government time. Here, again, by inter-Party agreement that difficulty could be overcome. I believe that this is an example of the way in which we might more profitably make use of our Parliamentary time. I think it would be well worth while starting an experiment of this kind.
The noble Lord, Lord Shackleton, and my noble friend Lord Melchett, spoke about the need for clearer and more information being available to Members of Parliament. I was glad that the noble Lord, Lord Shackleton, paid a tribute to the service which the Library in another place is giving. I think there is a need for as much forward-looking and as much clear information as can be supplied. The "forward looks" which have been developed following the recommendation of the Plowden Report on Public Expenditure should, I think, give people much more valuable information in the fields of finance and defence. Again, certainly your Lord ships drew attention to this, and it should be noted: but arrangements are almost invariably made to allow reasonable time to elapse after the publication of the Report of a Commission or a Committee or a White Paper, so that public opinion has time to form and those who wish to debate such a Report in Parliament may have time to prepare themselves. I certainly agree with the noble Lord, Lord Melchett, that the care, skill and clarity with which these documents are drafted is of considerable importance.
Whether Parliament would do well to extend its system of Committees, and perhaps associate with them specialist assessors as the noble Lord, Lord Shackleton, suggested, is clearly a subject on which people are divided. The noble Lord, Lord Strang, and I think Lord Morrison of Lambeth, did not really favour innovations of this sort, and argued with some force that if we had a system of Committees based on the American system, for instance, this would considerably clog up the machinery of both Ministerial and

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Departmental processes. I think that there is a great deal in that argument. But certainly any device whereby we can more easily profit from professional advice deserves a great deal of consideration. Certainly there are subjects on which we are not sufficiently well in formed. But this, of course, is true not only of the machinery of Government but of life itself, and the need to improve our educational standard at all levels is widely accepted.
I think the Government's acceptance of the assumptions of the Robbins Report means that we can expect a far stronger flow of the specialists in all kinds of scientific knowledge, in its widest sense, which so many people see to-day as one of our fundamental needs. Of course this is going to take time. The country may have to wait a while before we can expect to have an appreciable increase in the proportion of men in high places whose education may have taught them (if, for the moment, I may presume to support the scientists' case) to look forward beyond the frontiers of knowledge in a way which perhaps those of us with a more traditional education are less inclined to do.
May I now turn to the organisation of Government itself? I agree with the noble Lord, Lord Boothby, when he said that, although there has been this spate of interest in this debate, in fact this is a subject which has not been dealt with over the last 40 years to any appreciable extent. He instanced Lord Haldane, Mr. Amery and Mr. Crossman as being three people in the last 50 years who had made any real study of this in political circles. I think it would be wrong to say—and I do not think that many speakers in this debate have the impression—that in fact the structure of Government has remained unchanged. We have been talking about more change; but I think it is only right, in winding up a debate of this sort, to point out that within the last few years there have in fact been many major changes.
There has been, for instance, a wide reorganisation of the Scottish Departments, leading to the emergence of the new Scottish Development Department; The new Ministry of Public Building and Works has incorporated the works organ-
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isations of the three Service Departments; the Prison Commission has been integrated with the Home Office; there has been a large scale reorganisation of our Defence arrangements—which the noble Lord, Lord Morrison of Lambeth, commended—and new machinery has been set up for regional development. In addition, great changes have been taking place in the arrangements for dealing with the affairs of the Common wealth and of the Colonies; and, of course, we have further changes to consider in the general machinery which we need for the conduct of our external affairs.
The point which I should like to make in bringing these changes to your Lordships' notice is that they form part of a continuous process of evolution which bears witness to the never ending effort which any Government have to make to adapt themselves to the needs of the moment. Solutions very often depend on personalities, certainly on Prime Ministers, in the consideration of the right size and composition of the Cabinet itself. This is something which comes very much to the fore with the establishment of a new Administration or when an existing Administration is reshaped.
But it is not only in the structure of the great Departments of State themselves that a Government can make changes to meet new situations. There has, of course, been the establishment—I am rather surprised that nobody mentioned it in this debate—of the National Economic Development Council. And I am sure that this was a well-founded and well-conceived innovation which acknowledged the need for new policies and new attitudes from all sections of the community, if we are to attain the faster growth to the fullest extent. It is here that we seek to harness and unite for the general good the efforts of the employers who are concerned with the management of industry, the trade unions which represent the workers and the Government as a third party operating through its various instruments of economic policy.
I should like now to deal with the subject of Ministers, which has occupied a major part of your Lordships' speeches. The noble Lord, Lord Shackleton, in moving the Motion, had

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very much in mind the burden of responsibility which sits upon the shoulders of Ministers, especially those with departmental responsibilities. I very much share his concern. This concern was also expressed by the noble Viscount, Lord Caldecote, the noble Earl, Lord Selkirk, and the noble Viscount, Lord Hanworth. Rightly or wrongly, we hold the Minister responsible for all the acts of the officials of his Department. I sometimes wonder whether we realise what this means in terms of the working efficiency of Departments whose responsibilities have multiplied so many times in the last few decades. Perhaps the time has come when it should no longer he counted as a virtue that a Minister should try to know so much of what goes on in his Department. There is, after all, little profit in allowing oneself to be so overworked that no time is left for consideration of the really big issues of policy.
Do Ministers have time and opportunity to examine the various aspects of policies as a whole? Have they time to relate them to one another? Is our ministerial system well enough organised to devolve responsibility upon junior colleagues? Are senior Ministers sure enough of general support when they refuse to reopen a matter which has already been competently and adequately dealt with by a junior Minister? I agree with the noble Lord, Lord Morrison of Lambeth. Here I think that Ministers can help themselves. My own belief is that Ministers of State, Under-Secretaries of State and Parliamentary Secretaries are people who should be kept fully in the confidence of the Minister concerned on matters of broad policy, in addition to having substantial responsibility delegated to them. But here one has to get the acceptance of Members of Parliament to the principle that Member; of Parliament and others should accept the enlarged responsibilities of the more junior Ministers and should not always expect as of right to go over their heads to the senior Minister involved.
I think that practically every one of your Lordships who has spoken in this debate has stressed the need for better remuneration, and the noble Lord, Lord Taylor, expressed approval for the action the Government are taking to set
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up this fundamental review of the remuneration of Ministers of the Crown and Members of the House of Commons, as well as the allowances for Members of your Lordships' House, and your Lordships will not expect me to say anything more at the moment.
Now I should like to say something about civil servants. One of the most serious criticisms levelled at the Civil Service, particularly the higher Civil Service, is that it is in constant danger of becoming inbred. Civil servants are thought to be too little in contact with the outside world, except perhaps for the full consultations which they have to undertake with outside bodies. In this way, as it were, their antennae become dulled. Many of those who favour the introduction of men experienced in business and commerce, science and so on into the ranks of the Civil Service at a later stage in their career have in mind what the noble Lord, Lord Shackleton, had about the invaluable part that temporary civil servants played during the war. There is no doubt that this tremendous intake that took place provided a very valuable blood transfusion, but again we have got to keep a balance. I do not think we should take this analogy of war too far. In war time all the resources of the nation are devoted to one purpose, and to an unusual extent these resources obviously are concentrated through the Government service itself. This is not so in peace time; there are many other ways in which people can serve the country without specifically joining the Government service.
Having said that, I would add that I have great sympathy with what has been said on both sides, especially by the noble Lords, Lord Melchett and Lord Todd, about how we can make better use of our scientists, technicians and experts at all times. Should they be recruited on a short-term basis, as was suggested by the noble Lord, Lord Melchett, and the noble Earl, Lord Selkirk? This idea was opposed by the noble Lord, Lord Strang, who felt that rather than service on a short-term basis these experts should be brought in in the position of consultants. By having close working together between the people inside and outside the service we can, I think, get a far more valuable liaison and interchange of views than we are getting at the moment. I sometimes

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think that those who talk about the amateur civil servant greatly underrate the long tradition of training and experience on which the careers of our civil servants are necessarily based. I think it was Lord Strang who used these words in this debate, when he said that administration is a skill in its own right. It is certainly a skill not easily learned, except through long years of experience.
When people talk about "amateurs" do they realise what a diversity of talent there is already within the professional classes of the Civil Service? Training, of course, is very important. I do not believe that it would be right to embark on the massive training commitments of, say, as was suggested by the noble Lord, Lord Shackleton, the French Ecole Nationale d'Administration; but something more than we have had in the past is certainly needed. I am hopeful that the Centre of Administrative Studies which was set up last year will provide a first-class backing in the theory and practice of administration, and all the complications in which it is now involved, for the young civil servants of the administrative class. To an increasing degree these men must be given more chance, as their career develops, to diversify their experience within their own Departments through interchange with the staff of other Departments.
There are also, of course—and I think this is important—opportunities for civil servants to profit from a sabbatical year. This takes the shape, at the moment, of Commonwealth or Harkness, Nuffield and other Fellowships; and it is possible that here the new business schools will add to the opportunities. But perhaps we should be ready to regard it as normal for some people to come into the service at a later stage in their careers, when they have made a name and achieved their capabilities outside that Service at a later stage in their carers, be readier to see civil servants going out to industry and commerce in midcareer—either for a short period or even to complete their working life outside the Service.
In searching for ways of bringing the members of the Civil Service into closer contact with the non-governmental field, we have obviously to be vigilant to
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ensure that we do not lose the inestimable advantages of its being an impartial service and a non-political service. I think we must also face up to the fact that, in the scramble for talent over the last decade or so, neither the public service, nationalised industry, private enterprise nor the universities have all that they would like; and able men who are doing well in a chosen line of country will not always be anxious to change careers, even temporarily. Having said that, my Lords, I would add that these are not objections of principle—nor, indeed, need they be insuperable obstacles; but they are practical difficulties which we should be foolish to overlook.
So, my Lords, I return to the point that I made at the beginning. If we are to solve our difficulties it will be only by wise management of the time and of the talent available to us. Our institutions are as flexible as they need to be, but this flexibility is of little value if we do not take the fullest advantage of it. We must keep this system in constant repair and, above all, we must somehow reserve for those who can best use it the time required to reflect on our needs and find solutions to our problems. We must not let outmoded procedures fritter away the time that we can ill afford. Nor must we be less careful in the use of the men to whom we look to run this system, whether they are politicians or civil servants. Somehow Ministers must be allowed to find time to think and plan ahead, Parliament must have the tools and facilities needed to discharge its responsibilities, and the Civil Service must, by one expedient or another, be enabled to provide advice based on the best wisdom and experience that is to be had from whatever source. My Lords, I end by saying this, as I said at the beginning. I warmly welcome this debate. As a newcomer to this House, I think it has shown your Lordships in one of your most constructive and most helpful moods.
8.45 p.m.
LORD SHACKLETON: My Lords, I am exceedingly grateful to your Lord ships. Everybody has agreed that it has been a very good debate, and I think it would be quite mistaken for me to pick out and deal with so many of the notable contributions. I should like to say to the noble Viscount, Lord Blakenham,

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that he went as far as I felt any Government spokesman could go, and indeed a little farther. For this we are grateful, because it is not really reasonable to expect anyone—except possibly the former noble Viscount, Lord Hailsham—to ignore his Cabinet responsibility.
Of course, both my noble friend Lord Taylor and I enjoy now answering back to our noble friend Lord Morrison of Lambeth, but I must support my noble friend Lord Morrison of Lambeth on one point. I am not in favour of too many independent Ministries; nor do I agree with my noble friend Lord Taylor that the Cabinet is the same as an executive committee. It is neither an executive committee nor an advisory committee. I think it is important to keep this in mind. To this extent, I incline to agree very much with my noble friend Lord Morrison of Lambeth on what might be called—and I am sorry we have to use all these terms—a federal Ministry, the Ministry of Education with wider responsibilities and real powers, and responsibility given to a Minister of State. Perhaps I should not push further my area of agreement with my noble friend.
On the subject of the Prime Minister's Office, I believe this to be important if we are seeking to establish facts. I think there is much evidence that not only is this a myth now—possibly it may have been different when my noble friend was Deputy Prime Minister—but it has been a myth ever since Bagehot wrote. I think Bagehot—and this is one of the points which the noble Lord, Lord Boothby, referring to Dick Cross-man would say—was already out of date, and his concept of primus inter pares was already no longer valid. To that extent, that is the answer when one refers to powerful Prime Ministers like Gladstone. They had already largely destroyed the earlier concept of Cabinet Government. The only reason why I stress this is that it is important, if we can, to look at our institutions as they really are, not because we wish to advocate Presidential Government—nobody wishes to do so—but if the Prime Minister is to fulfil a certain rôle it may as well be recognised, instead of being merely tacitly understood by a few people.
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Some interesting remarks were made about the House of Lords. I could not quite agree with the noble Lord, Lord Somers, that I should like to see a great equality between the two sides or, indeed, between the two Houses. I draw great comfort from a large Tory majority in this House. There is always the delightful spectacle of seeing them gradually working up to the point of ignoring the behest of the noble Earl, Lord St. Aldwyn, and overturning the Government. We must accept the reality that has existed since the days of the Reform Act of, I think, 1832, that this has essentially been a revising Chamber. As Bagehot said, the only service of the Duke of Wellington as a politician was that he did in fact, in the final stages, prevent a conflict between the House of Commons and the Lords; and the Lords accepted that the House of Commons was supreme in major matters where the popular will was involved. It is also clear that we have very great advantages because we do not have this responsibility. We have been able to talk very freely to-day and have drawn on a very wide range of interests. We have even had scientists and engineers. Two of them are present now: the noble Lord, Lord Todd, had to return to Cambridge. This is an appropriate thing for a Member of the House of Lords to have to do.
My Lords, I believe that there is one strong message which my noble friend Lord Champion will have heard and will have taken note of; and I would also ask the noble Viscount, Lord Blakenham, and the noble Earl, Lord St. Aldwyn, to note that we have, in fact, very firmly said in this House that something must be done about the pay of Members of Parliament, quite apart from ourselves—and I am not prepared to argue our position. In this matter, I share the difficulties of my noble friend Lord Taylor. If I may say so to the noble Viscount, Lord Blakenham, it is easy to point to evolution in the matter of the structure of the Government itself —the Cabinet and so on. The problems lie in Parliament, and possibly in the Administration. I suspect that they are greatest in Parliament. If we are, in fact, to fulfil the role that we believe we should play, then some reform or

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some development is unavoidable, as practically every speaker to-day has emphasised.
When it comes to the training of the civil servants, of course we do not just want them taught, if I may say so, more theory of administration; we want them taught some of the realities with which they do not come into contact. They need more economics. They need more experience outside their Departments. The French system of pantouflage may not be appropriate to us, but speaking as somebody who calls himself an administrator (although I am not in the Civil Service) I know that we do rely on a fairly steady flow of certain people at a high level to match those who are already in the business—with the possible exception of Imperial Chemical Industries; and even they may have to go outside, to the Civil Service, to get their Chairman.
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My Lords, I think we have had a really interesting debate. I would only ask that we continue to take this subject seriously, and we hope someone will continue to think about it and that we may return to it so that we can hear some of the eloquence and ability that has been shown in this House to-day. My Lords, I ask leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

POST OFFICE (BORROWING POWERS) BILL
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill, within the meaning of the Parliament Act, 1911; read la, and to be printed.
House adjourned at nine minutes before nine o'clock.