Sitting of 18 June 1964

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  NORFOLK ESTUARY BILL
  Lords Amendments considered and agreed to.
  CUMBERLAND COUNTY COUNCIL BILL [Lords]
  To be read a Second time upon Tuesday next.
ORAL ANSWERS TO QUESTIONS
  INDUSTRY, TRADE AND REGIONAL DEVELOPMENT

    North-West
    Mrs. Castleasked the Secretary of State for Industry, Trade and Regional Development when he will publish his proposals for the development of the North-West.
    The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath): Before publishing proposals for the future development of the North-West, I must await the report of the North-West Regional Study Group which is now at work.
    Mrs. Castle: Is the right hon. Gentleman aware that we in the North-West are tired of waiting for this kind of treatment which is urgently required in the area? Is it not absurd that the South-East Study, for example, should have been given priority over this region? Is the right hon. Gentleman further aware that the Lancashire and Mersey-side Industrial Development Association, in its latest annual report, points out that the drift of working population from the North-West is still disturbing?
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    What is the good of introducing industries at a later date if the population has left? When can we expect this report?
    Mr. Heath: I announced on 2nd March that the Study Group was beginning this work. If the results are to be useful and fruitful, then the Group must be given a sufficient time to complete the study. The study of the South-East was primarily a land use study, which took two years. I hope that we shall be able to complete the North-West Study in considerably less time; but it certainly cannot be done in three months.
    Mr. Hiley: Am I right in assuming that my right hon. Friend is taking into account the extreme shortage of labour in large parts of this region? Will he make sure that nothing is done to make that problem worse?
    Mr. Heath: This is a very large and important region which has these contrasts of a great shortage of labour in some parts and a surplus in others, and this is one of the aspects of it which must be fully studied.

    Hallmarking Legislation
    Dame Edith Pittasked the Secretary of State for Industry, Trade and Regional Development what proposals he has for bringing up to date the legislation on hallmarking and the work of assay offices.
    The Minister of State, Board of Trade (Mr. Edward du Cann): We have accepted that the existing legislation on hallmarking requires revision, but I cannot say when it will be possible to introduce the necessary Measure.
    Dame Edith Pitt: As there is need for consolidation, which my hon. Friend agrees, and this is an important part of consumer protection, will my hon. Friend take all measures possible to ensure that this is part of the legislative programme of the next Government?
    Mr. du Cann: My hon. Friend is entirely right. The present legislation is an accretion of centuries, it is archaic and confused, and undoubtedly reform is required. This will inevitably be a major task. In respect of the second part of my hon. Friend's question, I am

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    sure I can say that if we continue to have a Conservative Administration we shall make progress.
    Sir P. Roberts: In view of the important work done by the Assay Office at Sheffield, may I ask my hon. Friend whether when he has some preliminary information he will make a report as soon as possible?
    Mr. du Cann: We shall certainly bear this point in mind, and I will certainly give an undertaking to my hon. Friend to keep in touch with him on the matter.

    Republic of Ireland (Imports and Exports)
    Mr. McMasterasked the Secretary of State for Industry, Trade and Regional Development (1) what duties are levied by Eire on imports from the United Kingdom;
    (2) what duties are levied by the United Kingdom on imports from Eire.
    Mr. du Cann: The duties payable by British goods imported into the Irish Republic are stated in the Tariff of the Irish Republic of which there is a copy in the Library. Most goods from the Republic enter Britain duty free.
    Mr. McMaster: While thanking my hon. Friend for that reply, might I ask him if he is aware of the imbalance in trade due to the difference in the tariffs imposed by the Republic of Ireland on United Kingdom goods and the fact that there are no tariffs, or practically none, in the reverse direction? Is he aware that the imbalance that results favours Northern Ireland in trade between Northern Ireland the Republic of Ireland?
    Mr. du Cann: This is certainly a complex matter. At least one-fifth of British exports to the Republic are not subject to duty. A very much larger number is entering the Republic duty free. The agreements provide for a review from time to time, and we shall always be ready to consider any particular case which my hon. Friend wants to bring to our attention.
    Mr. Jay: Would it be rash to suggest that the difficulties could be solved if the Republic of Ireland were to join E.F.T.A., or is that so sensible a sug
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    gestion that it has no chance of being accepted?
    Mr. du Cann: The right hon. Gentleman's suggestions are always sensible. The difficulty about a suggestion of this sort is that it is not a matter for which I am responsible.

    Paper Mill, Fort William
    Mr. N. McLeanasked the Secretary of State for Industry, Trade and Regional Development what amount is now being advanced by the Government on loan and on remittance of interest on the loan, respectively, in respect of the pulp and paper mill project at Fort William.
    Mr. Heath: The total sum to be advanced in respect of the first phase of the project is expected to be £8 million. Grants in respect of interest are expected to amount to some £1,200,000. If the firm decided to proceed with the second phase of the project, the Government are prepared to consider advancing a further sum not exceeding £2 million if the need for this is established.
    Mr. McLean: In view of the very large sums of Government money which, together with private enterprise, will play a tremendous rôle in the northwest of Scotland, will my right hon. Friend bear in mind that communications with and access to this great project are extremely important, and will he give an assurance that in connection with any proposals for cutting down railway services or in connection with spending money on inadequate roads he will consult the Secretary of State for Scotland and other Ministers?
    Mr. Heath: Yes, Sir. I shall be in the closest touch with the Secretary of State for Scotland and the Minister of Transport.
    Mr. Emrys Hughes: Can we take it that the firm has definitely not refused the £8 million in protest at recent speeches by the Leader of the Opposition?
    Mr. Heath: I understand that the project is going ahead. Perhaps those concerned have not read the speeches of the Leader of the Opposition.
    Mr. Proudfoot: Is my right hon. Friend convinced that the project will be viable, and how has the paper industry in Scotland fared since tariffs have been lowered by E.F.T.A.?
    Mr. Heath: I have great confidence in the project. The paper industry has been able to maintain its own position even with the acceleration of the lowering of the tariffs on paper. We are in the closest touch with our E.F.T.A. partners about this and no problem arises.

    Independent Film Exhibitors (Pay Television)
    Mr. Edelmanasked the Secretary of State for Industry, Trade and Regional Development if he is aware of the concern of independent film exhibitors in connection with the competition offered by pay television; and what action he is taking to protect the interests of independent exhibitors in this matter.
    Mr. Heath: Yes, Sir. I am satisfied that the legitimate interests of the exhibitors in the areas of the pay television experiments will be adequately protected by the arrangement announced by my hon. Friend the Assistant Postmaster-General on 5th May.
    Mr. Edelman: Could the right hon. Gentleman say when he will announce the terms of compensation which should arise for independent exhibitors in the areas where there will be experimental pay television?
    Mr. Heath: Some of the details of the arrangements are still being worked out by my Department and that of my right hon. Friend the Postmaster-General in consultation with the interests concerned. As soon as they are completed, we shall make an announcement.
    Mr. Swingler: As the pay television companies will be in direct competition with cinematograph exhibitors, will they be obliged to pay the statutory levy for film production?
    Mr. Heath: I should like to have notice of that. It is an important matter. If the hon. Gentleman will table a Question, I will certainly give him the details.

    Film Quotas
    Mr. Swinglerasked the Secretary of State for Industry, Trade and Regional
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    Development if he will raise the film quota to 40 per cent. for the forthcoming year.
    Mr. Heath: No, Sir. I have decided to accept the advice of the Cinematograph Films Council to maintain the prescribed quotas at 30 per cent. for first feature films and 25 per cent. for the supporting programme for the exhibitors' quota year beginning the 1st January, 1965.
    Forty-five per cent. of the first feature films shown by the two major circuit companies in 1963 were British. Both these companies announced at the end of last year that they were reasonably confident that this would be the case in 1964. They have now informed me that on the assumption that British films continue to be available in sufficient numbers and quality, they expect this position to continue in 1965.
    Mr. Swingler: In view of what the right hon. Gentleman has said and the fact that it appears that the major circuits have no difficulty in fulfilling their quota of more than 40 per cent., is this not an unrealistic decision? Is not the object of the quota to stimulate film production? Would he not, therefore, consider raising the quota so that there will be more film production and the circuits will be able to fulfil a bigger quota?
    Mr. Heath: No, Sir. The answer which I have given can give confidence to the British film production industry. Two circuits require its films and want them to be available in sufficient numbers and quality. Therefore, we get the result that we wanted to achieve without any of the international disadvantages involved in altering the quota.

    Computers
    Mr. Pounderasked the Secretary of State for Industry, Trade and Regional Development what is the current level of import duty charged on computers entering this country from the United States of America; when this rate was introduced; and what was the previous level.
    Mr. Heath: The duty is 14 per cent. ad valorem. It was reduced from 17½ per cent. ad valorem in October 1962 as a result of G.A.T.T. tariff negotiations.
    Mr. Pounder: While it would be unrealistic to advocate a further increase in the level of duty on computer imports, what assistance does my right hon. Friend feel he could give to the British computer industry, an industry which is essential to the national economy, bearing in mind the difficult period through which it is passing at the present time, an instance of which is provided by the Belfast computer factory?
    Mr. Heath: The best help to the British computer industry would be that British industry as a whole should modernise as rapidly as it can and move over to the use of computers and computer control.
    Mr. Denzil Freeth: Would my right hon. Friend agree that the duty upon the hardware in the computer is a relatively small part of the cost to a customer of running a computer, and that the important thing is the standard of programming and servicing?
    Mr. Heath: Yes, Sir; I would agree entirely with that.

    Local Employment Acts (Bishop Auckland)
    Mr. Boydenasked the Secretary of State for Industry, Trade and Regional Development how many new jobs have so far been created by the operation of the Local Employment Act; and how many others are expected to materialise this year in the Bishop Auckland constituency.
    Mr. Heath: Projects being assisted under the Local Employment Acts up to the end of May are expected to provide about 120 additional jobs in the Bishop Auckland constituency. It is estimated that projects for which applications for assistance are still under consideration would provide another 330. In addition, two advance factories have been built with room to employ another 90 people.
    Mr. Boyden: Would the right hon. Gentleman care to set the figures against the following ones—that at the beginning of 1960 there were more than 2,000 people unemployed in the area, that since that date 5,500 miners have lost their jobs and that, in addition, there are several closures of factories? How does he expect to cope with the problem in the area with the small figures which
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    he has put forward? Does he expect to fulfil the promises made at the last General Election by the time of the next General Election?
    Mr. Heath: The figures which the hon. Gentleman has given show the problem that we face in areas of that kind in bringing in new industry and persuading it to go there. I have given the figures for jobs which are eventually expected, and they should be a considerable help. When one bears in mind the present un- employment figure of 1,483, it is high but these projects should greatly contribute to the solution of the problem.
    Mr. Bourne-Arton: While I have no wish to appear to gloat because Darlington, the neighbouring constituency, is in a growth zone whereas the hon. Gentleman's constituency is not, has he noticed that the tremendous developments in both Darlington and Aycliffe, which should accrue in the long run to the interests even of his constituency, are probably better served by having this growth nourished by good communications rather than by any packet development somewhere where industry does not want to go?
    Mr. Heath: We have, altogether, offered £133,000 for this area alone for projects and the two advance factories, and some £900,000 for 16 projects on the Aycliffe Industrial Estate, where it was recognised that many of the jobs would be filled by people from Bishop Auckland travelling there to work.

    Electrical Equipment for Mechanically Propelled Vehicles (Report)
    Mr. Jayasked the Secretary of State for Industry, Trade and Regional Development what decision Her Majesty's Government has now reached on the recommendations of the Monopolies Commission in its Report of February. 1963, on the supply of electrical equipment for mechanically propelled land vehicles.
    Mr. Heath: As I have previously informed the House, two of the three outstanding recommendations are covered by the legislation on resale price maintenance and the Government's proposals in the White Paper on monopolies, mergers and restrictive practices, and I am in touch with the British Starter

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    Battery Association to ascertain their intentions in the light of the Monopolies Commission recommendation and the proposals in the White Paper.
    Mr. Jay: As there are four recommendations and not two made by the Report, and as this inquiry started in April, 1957, and the Report has been in the hands of the Board of Trade since February, 1963, is it not rather an extraordinary record of incompetence, even for the present Government, that we still have no final decision and no action by the President of the Board of Trade?
    Mr. Heath: No, Sir. I cannot accept that at all. It was not possible to publish the Report, for reasons which the right hon. Gentleman knows perfectly well, until just before Christmas. Since then one of the recommendations has been dealt with by the publication of the Report itself, which has made public the situation concerning some of the firms. Two of the others are covered by the legislation and the proposals made in the White Paper, and the fourth, as I have said, is under discussion with the firms.
    Mr. Jay: Is not the right hon. Gentleman aware that it was not necessary to publish the Report for the Board of Trade to start thinking about it? It has been in the hands of the Board of Trade since February last year, yet the right hon. Gentleman says today that in respect of at least one recommendation he is still in consultation with the manufacturers and has taken no action.
    Mr. Heath: I am in consultation with them because this is the way in which we should handle this problem.

    Yorkshire (Regional Development)
    Mr. Jegerasked the Secretary of State for Industry, Trade and Regional Development what steps are being taken to co-ordinate the activities of his Group studying regional development in Yorkshire with the Boundary Commissioners who have recently issued a special report on the West Riding.
    Mr. du Cann: No question of coordination arises. The work of the Local Government Commission on the West Yorkshire Special Review was completed when their report and final proposals were published last February. The Group now working in Leeds will certainly study that report.
    Mr. Jeger: But is not the hon. Gentleman aware that a fortnight ago his right hon. Friend said that he was setting in hand a study group to develop the East and West Ridings of Yorkshire and adjacent areas. If, in the meantime, the special Boundary Commission has set on foot plans for altering the local government boundaries and services, that will have a serious effect on any regional industrial development in the future.
    Mr. du Cann: I am well aware of the Answer which my right hon. Friend gave, and I think that the hon. Gentleman will know that I have recently returned from a short tour of the area. As for the other points which he makes, naturally my right hon. Friend will be in close touch with the Minister of Housing and Local Government.
    Mr. Worsley: Can my hon. Friend say whether, in this gathering of information which is taking place, he intends to get the views of local industrialists and others about the needs of Yorkshire?
    Mr. du Cann: I should like to tell my hon. Friend that local views and opinions will be borne in mind and considered.

    The Hartlepools
    Commander Keransasked the Secretary of State for Industry, Trade and Regional Development how many firms have set up industries in The Hartlepools since the Act of 1960 and other subsequent Government measures, to the latest convenient date; how much additional labour these measures have provided for men and women; and how many applications are now under consideration.
    Mr. Heath: Between 1st April, 1960, and the 31st May, 1964, three new projects have started up in The Hartlepools. Assistance has been offered to five other new projects and assistance to seven more is still under consideration. Altogether, projects receiving assistance or offers of assistance under the Local Employment Acts during this period are estimated to represent additional jobs for 1,800 men and 600 women. Twenty-four applications for financial assistance are at present under consideration.
    Commander Kerans: Would not my right hon. Friend agree that this shows a considerable improvement, due to the measures which the Government have taken since 1960? Can my right hon. Friend say whether there is any possibility of the car industry coming to The Hartlepools, where land and port facilities are available?
    Mr. Heath: I agree that great progress is being made. I announced in April the building of an advance factory also in The Hartlepools. I have no information about the motor car industry.
    Mr. Popplewell: Can the right hon. Gentleman say offhand how many firms have closed during this period? From his visits to the North-East, and from the visits of the Economic Secretary to that area, is the right hon. Gentleman aware that the number of firms going up there is not compensating the number of firms closing down? There is still a tremendous deficiency. Is the right hon. Gentleman doing anything to expedite the matter, and to ensure that in The Hartlepools and in other parts of the North-East this leeway is taken up and that we shall get a sufficient number of firms to take up the slack caused by a number of firms closing down and thus leaving people unemployed?
    Mr. Heath: I cannot give a detailed answer to that question. If the hon. Gentleman puts down a Question, I shall give him the information. There is a later Question by him about one specific instance.
    Mr. Hocking: To enable the House to assess the effectiveness of the policy of transferring work from areas such as the Midlands, can my right hon. Friend say what effect the setting up of this new factory in The Hartlepools has had on the unemployment figures?
    Mr. Heath: I cannot give the exact figures for any particular period. If my hon. Friend puts down a Question, I shall give him the comparison.
    Mr. Shinwell: In the absence of information from the right hon. Gentleman, may I ask him whether he is aware that the figures are well known to us on this side of the House, particularly those in the neighbourhood of The Hartlepools? Is the right hon.
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    Gentleman aware that they have the highest rate of unemployment in the country, apart from Northern Ireland? Has the right hon. Gentleman no concern for these constituencies in the North-East which are represented by Tory Members? Does not it worry him that they are all going to be thrown out at the next election?
    Mr. Heath: I think that the Answer which I have given to the House, which the right hon. Gentleman has heard, shows the amount which has been done in The Hartlepools, as well as in the whole of the North-East, during this period.

    Twechar and Croy
    Mr. Benceasked the Secretary of State for Industry, Trade and Regional Development what steps he is taking to speed up industrial development in the Twechar and Croy area of Dunbartonshire.
    Mr. Heath: Twechar and Croy form part of the natural catchment area for the new town of Cumbernauld, which has been designated a growth area in the White Paper on Central Scotland. I am continuing to make full use of my powers under the Local Employment Acts to attract new industry to the area. Already 1,700 jobs are in prospect there.
    Mr. Bence: This is a matter which affects two villages and the town of Kilsyth in West Sterling. Is the right hon. Gentleman aware that these two villages may well decay unless some local industry is stimulated? It is not sufficient to suggest that new industries will be provided in Cumbernauld, because that area is for Glasgow's overspill. We must have new industries to save this triangle of Croy, Twechar and Kilsyth. Will the right hon. Gentleman take steps to bring new industries to this area where all the collieries are being closed?
    Mr. Heath: The object of attracting industrial growth to this area was to provide employment around the area as a whole. We must now concentrate on doing that.
    Mr. Rankin: While accepting to some extent what the right hon. Gentleman said, may I ask whether it is not the

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    case that Cumbernauld is now very far behind schedule? Can the right hon. Gentleman say what is being done to bring it up to schedule?
    Mr. Heath: My right hon. Friend the Secretary of State for Scotland is pressing on with Cumbernauld as hard as he can.
    Mr. W. Baxter: Is the right hon. Gentleman aware that this triangle of Croy, Twechar and Kilsyth has lost its main industry, namely, coal mining? There is now very little or no industry within it. Is there any possibility of the right hon. Gentleman providing an advance factory in that area so as to encourage some industrialists to go there? We recognise the magnitude of the problem facing the right hon. Gentleman, but anybody looking at this problem in an unbiassed way must come to the conclusion that there is a grave need for some new industries to come to this area.
    Mr. Heath: I know about the pit closures. I understand that the majority of miners are being redeployed and that long-term redundancies are not expected to exceed 125, but we must concentrate on the growth areas to create a centre of industry which will provide employment for these areas.

    Industrial Site, Clydebank
    Mr. Benceasked the Secretary of State for Industry, Trade and Regional Development what progress has been made in bringing into use the industrial site in Clydebank leased to Ingersoll-Rand Limited.
    Mr. du Cann: I have nothing to add to my right hon. Friend's reply to the hon. Member on 6th February.
    Mr. Bence: This situation is serious, and perhaps I might refer the hon. Gentleman to the supplementary questions which I have been asking since 1951. Will he do something about releasing this industrial site in Clydebank, because the Borough of Clydebank could get firms to go there if the land were free? We cannot tolerate the situation of a piece of land which has been frozen in the hands of an American company for five years. This is a blot on the industrial development of the
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    area. Will the hon. Gentleman do something about this and get the land back from Ingersoll-Rand Ltd. so that it can be used by the Borough of Clydebank?
    Mr. du Cann: I understand the hon. Gentleman's long and continuing concern in the matter. Perhaps I should say that, if he has any specific proposals for firms who want to come to this area, we are ready to entertain them. The hon. Gentleman referred to earlier supplementary questions on the subject. My right hon. Friend invited him to let him have any information that he wished him to consider. That invitation is still open.
    Mr. Bence: On a point of order. In view of the unsatisfactory nature of the Answers that I have been getting for years on this matter, I beg to give notice that I shall raise the matter on the Adjournment at the earliest possible opportunity.
    Mr. Speaker: I will treat that as relating to the last Answer only, otherwise it is irregular.

    Dundee
    Mr. Doigasked the Secretary of State for Industry, Trade and Regional Development how many new jobs have been provided in Dundee since 1951, excluding additions to firms already in Dundee in 1951.
    Mr. du Cann: Firms new to Dundee since 1951 are now employing about 1,200 persons.
    Mr. Doig: Does not the right hon. Gentleman consider that that is a deplorable figure for such a long period in respect of an officially designated development area? Is the Minister aware that more jobs have been lost through the closure of foundries and the contraction of the shipyards than have been brought there? Would he agree that were it not for the new industries brought to the area by the last Labour Government, Dundee would be in a very sad state today?
    Mr. du Cann: The hon. Gentleman's Question relates to new industries coming to Dundee. This matter ought to be considered in the context of the large expansions of existing firms and of further plans for the future, of which

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    he is aware. That gives a balanced picture. To take one factor on its own is not representative.
    Mr. Gilmour: Can my right hon. Friend say what the rate of unemployment is in Dundee, as compared with the rest of Scotland, as a result of the new jobs offered?
    Mr. du Cann: The figure of unemployment in Dundee in May, 1964, was 2·8 per cent., and there is no doubt that it has been reduced partly as a result of Her Majesty's Government's efforts.

    Industrial Development Certificates
    Mr. Doigasked the Secretary of State for Industry, Trade and Regional Development how many industrial development certificates were issued during the year ended 31st March, 1964, for Scotland, London and south-east England, and the Midlands of England, respectively; and how many jobs they provided.
    Mr. Heath: For Scotland, 177 industrial development certificates were issued with an estimated employment of over 14,000. For London and southeast England—consisting of the standard regions eastern, London and southeastern and southern—the comparable figures were 725 certificates to employ 20,470. For the Midlands—consisting of the Midland standard region and the north Midland Region, including Lincolnshire—429 certificates to employ just under 7,800.
    Mr. Doig: Does not the Secretary of State consider that this is a scandalous figure, when we realise that in Scotland, and particularly in the Dundee area, there is a need for many more jobs, whereas in the other two areas there are already far too many jobs? Does he not agree that this is very bad planning by his Department?
    Mr. Heath: I do not agree. If we look not only at the total but also at the proportions of these figures we see the real picture. The fact is that in the South-East there is 31·6 per cent. of the employment, and the proportion of potential new jobs is 24 per cent.; in Scotland there is 8·4 per cent. of the employment, and 16·7 per cent.—twice as much—of the new jobs. The other
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    factor which must be considered is that the average number of jobs per industrial development certificate in the South-East is 28. This means that the schemes are all of a very small nature and not of a kind which can go to other parts of the country.
    Mr. Ross: Having given us the employment percentages, will the right hon. Gentleman give us the unemployment percentages in each area?
    Mr. Heath: With great respect to the hon. Member, to all those of us who are trying to increase employment in Scotland that does not help, nor is it relevant to these figures. What is relevant is the fact that over the whole of the South-East, where we have a large proportion of the population, even with the smallest expansions there is bound to be this sort of arrangement.

    Factory Building (Steel Supplies)
    Mr. Milneasked the Secretary of State for Industry, Trade and Regional Development what discussions he has had with the steel industry in order to speed up supplies of steel to assist in the speedy construction of factories in development districts; and what has been the outcome.
    Mr. Heath: None, Sir. I am not aware of any need for such discussions.
    Mr. Milne: Is the right hon. Gentleman aware that it is not important only to provide jobs in the North-East but also to provide them quickly; that many orders for building steel are holding up the development of factories—[HON. MEMBERS: "Where?"] I am asking the Minister if he is aware that orders placed for steel by the end of June will not be ready for delivery until well into September, and I am telling him that this means moving into the winter months for the building trade, which curtails the amount of building time from 12 months to 9 months and is a factor which his Department should be looking into at this stage.
    Mr. Heath: If anybody gives me any specific instances where factory building in the Norm-East is being held up, or is likely to be held up, I will see what action can be taken, but during my visits to the North-East I had no examples brought to my notice.
    Mr. Ridley: Does not my right hon. Friend agree that the production of steel is still well below capacity, and that the only time when building was delayed by a shortage of steel was during the period of building licences and controls?

    Industrial Estate, Lanarkshire
    Miss Herbisonasked the Secretary of State for Industry, Trade and Regional Development if, in view of his recent visit to the area, he has now reached a decision on the need for an additional industrial estate in Lanarkshire.
    Mr. Heath: No, Sir. I am still considering this question.
    Miss Herbison: Is the Minister aware of the great need for an industrial estate in the area which he visited? Since he has said on a number of occasions today that the important thing is to bring industry to growth areas, he will be aware that part of the area which he covered is in the growth area of Central Scotland. I hope that when he makes the decision he will decide upon an industrial estate. May I thank him for the time that he gave to the area?
    Mr. Heath: I thank the hon. Lady for her kind remarks. Having had an opportunity of surveying the area myself fairly thoroughly and discussing it with my advisers, we are now giving it careful consideration. I will keep in touch with the hon. Lady.
    Mr. Dempseyasked the Secretary of State for Industry, Trade and Regional Development when building work will start on the new industrial estate for North Lanarkshire; when the first factory will be ready for occupation; and what estimate he has now made of the number of jobs to be provided within the foreseeable future.
    Mr. Heath: As a result of revised development plans on the part of the Lanarkshire County Council affecting the area as a whole, unexpected difficulties have arisen in relation to the proposals made by the Industrial Estates Management Corporation for Scotland. The Office for Scotland and the Management Corporation are discussing these difficulties with the county council and with the Scottish Development Department,
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    but until they are resolved development of the industrial estate cannot proceed.
    Mr. Dempsey: Is the Minister aware that he has not yet told us anything about the number of jobs which will be provided? Is it not contradictory that the chairman of the industrial estate has issued a statement to all the Scottish Press as to the number of factories to be built, but the Minister tells us today that he is unable to make any statement? Will he bear in mind the fact that nearly 10,000 people are unemployed at the moment and that that situation will be seriously aggravated by the school-leavers next week? Will he "get cracking" with the building of this new estate?
    Mr. Heath: The fact is that the Industrial Estates Management Corporation cannot "get cracking" because of the new developments of the Lanarkshire County Council. The first thing that must be done is to have that question resolved.
    Mr. Dempsey: The right hon. Gentleman should make a statement to that effect.

    North-East
    Mr. Shinwellasked the Secretary of State for Industry, Trade and Regional Development if he will make a statement on his recent visit to the North-East; and what further plans he has for the introduction of new industries and expansion of existing industries in the area.
    Mr. Heath: With permission, since it is somewhat long, I will circulate a statement in reply to the first part of the right hon. Gentleman's Question in the OFFICIAL REPORT.
    In the course of my tour, I saw much evidence of the substantial development already under way in the area. Jobs in prospect now number nearly 32,000, compared with less than 18,000 a year ago. In terms of I.D.C.s, 96 were issued in the first five months of this year, involving some 12,000 jobs. Comparative figures for last year were 44 and 2,400.
    I am confident that the development of the Government's existing policies for the area will continue to lead to the introduction of new industries and expansion of existing ones. Already

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    I.D.C.s issued this month exceed, in number and prospective employment, the total of I.D.C.s issued for the whole of June last year.
    Mr. Shinwell: What is the earthly use of the right hon. Gentleman's talking about jobs in prospect? When are these proposals to be implemented? Will he stop boasting about what he has done in the North-East? Did not even his best friends tell him that over 2,500 miners are still registered on the employment exchanges there; that over 4,000 building construction workers are out of work, besides large numbers of shipbuilding and engineering workers? Will he do something about the people who are still unemployed and stop all his boasting and bragging?
    Mr. Heath: Why does not the right hon. Gentleman stop exaggerating the problem and give some acknowledgment of the real progress that is being made in his own constituency, and particularly in Peterlee, as I saw when I visited it? Does not he realise that we shall all say that he has no interest whatever in jobs in prospect for his constituents? He has just said so.
    Mr. Montgomery: I am sure that most people will appreciate what my right hon. Friend has said. Does not he agree that it would be better for the areas of higher unemployment if hon. Members opposite would not refer to industrialists as going there with begging bowls?
    Mr. Shinwell: The right hon. Gentleman has referred to the new town of Peterlee, in my constituency. Is he aware that only yesterday I received a letter from the general manager of the Peterlee Corporation asking me to ask a Question in the House of Commons and to approach Ministers, particularly the right hon. Gentleman, because applications and inquiries have sharply fallen, and very little has been done for Peterlee? Is he aware of these facts? Since he has attacked me about my interest in the area, will he resign from his constituency and fight me at the General Election?
    Mr. Heath: This is not the picture that I was given when I visited Peterlee. I opened a new factory there and on the day I did so the management announced
    1470
    that already it was going to double its capacity because of its success.
    Following is the statement:
    I visited the North East for the third time on 14th–15th May.
    On the 14th I formally opened Wellbar House, a new Government building designed to bring together under one roof the regional offices of the Government Departments concerned with implementing the Government's proposals for the North East. At a Press Conference I announced the Government's willingness to offer a grant of £150,000 to a consortium of local authorities towards the conversion of Middleton St. George Airport, to be run in conjunction with Woolsington Airport.
    On the 15th I gave the opening speech at a Conference on "Investment in Innovation" organised by D.S.I.R. and held at the University of Durham.
    While in the area I visited a factory at Cramlington, now three-quarters of the way to full production, for which the first sod was cut less than a year ago; drove the first stake at Seaton Delaval for the British subsidiary of an American firm; visited an organ-building firm in Durham; opened, at Newton Aycliffe, the subsidiary of a Swedish firm; and at Peterlee New Town met the Development Corporation, toured the new town, and opened a new factory in the industrial estate. Though the firm began production there only in January, its Chairman that day announced its intention to expand.
    I had a useful discussion with the Mayors of Hartlepool and West Hartlepool, in the course of which I gave details of three developments of interest to the area; the starting date for the new advance factory; the approval of a 25,000 square feet extension to an existing firm; and the firm prospect of a 75,000 square feet factory for a newcomer.

    Regional Economic Development
    Mr. Hector Hughesasked the Secretary of State for Industry, Trade and Regional Development if he will publish figures relating to the progress so far made in each region in implementing his plans for achieving a more even spread of economic activity throughout the country.
    Mr. Heath: The steady reduction in unemployment throughout the country is evidence of the increasing success of the Government's economic and regional policies. I have just made a statement about the present position in the North-East in answer to the right hon. Member for Easington (Mr. Shinwell). Where Central Scotland is concerned, my right hon. Friend has already told the House that a full progress report will be published in the autumn. Meanwhile, I can

    1471
    tell the hon. and learned Member that 79 I.D.C.'s, involving some 5,500 jobs, have been issued in the first 5 months of this year. Comparative figures for last year were 57 and 3,800.
    Mr. Hughes: Does the right hon. Gentleman realise that my Question comes appropriately after the Question by my right hon. Friend the Member for Easington (Mr. Shinwell)? Is he aware that the Government have made plans for the north-east of England and are apparently under the impression that this island ends at the River Tweed, because they have made no plans for north-east Scotland? Will the right hon. Gentleman look into that, because trade, industry and employment are required in north-east Scotland?
    Mr. Heath: As the hon. and learned Gentleman knows, there are two further studies now proceeding in Scotland under the Scottish Development Department, and I hope that they will be of assistance to him.
    Mr. Manuel: Can the right hon. Gentleman indicate what stage has been reached in the surveys for the whole area, especially with reference to the provision of more schools and locations for industry, roads and communications? Is he aware that I understood from the Answer to a Question which I put a short time ago to the Scottish Office that no progress was being made?
    Mr. Heath: I said that the full progress report for which the hon. and learned Gentleman asked will be published by the Secretary of State in the autumn.

    Anglo-Soviet Trade Agreement
    Mr. Hector Hughesasked the Secretary of State for Industry, Trade and Regional Development if he will give details of the protocol signed on 23rd April for the prolongation of the 1959 Anglo-Soviet Trade Agreement for a further period of five years, indicating the commodities to which it relates; and if he will make a statement on the effects on British imports from and exports to Russia the agreement has had from 1959 up to the most recent convenient date, with particular reference to trade with Scotland.
    Mr. Heath: The protocol extends without change the 1959 Anglo-Soviet Trade Agreement which provides a general framework within which all Anglo-Soviet trade takes place. I propose to publish the text of the protocol as a White Paper. Between 1959 and 1963 United Kingdom imports from Russia increased by 44 per cent. and exports to Russia by 102 per cent. Many Scottish firms shared in this trade.
    Mr. Hughes: Is the Minister aware of the peculiar fact that Russian ships come regularly to Aberdeen to discharge cargoes there and go away empty, thereby wasting manpower, ships and fuel? Will he look into this anomaly and rectify it?
    Mr. Heath: The ships could easily go away full if the Soviet Government would buy more goods from Scotland and Aberdeen with which to fill them.
    Sir C. Osborne: I recognise that there is room for imports and exports to increase by ten times, but will my right hon. Friend bear in mind that we buy twice as much from the Soviet Union as they buy from us? Will he press them to buy more consumer goods and so provide more work for our own people?
    Mr. Heath: In the recent negotiations we not only renewed the Anglo-Soviet Trade Agreement, but I received assurances from the Soviet Government that the imbalance existing in our trade will now be reduced.

    Mercer Rotary Radial Engine
    Mr. A. Robertsasked the Secretary of State for Industry, Trade and Regional Development if he will take action to encourage the development in this country of the Mercer rotary radial engine.
    Mr. du Cann: I understand that the firm concerned with the development of this engine has already approached the National Research Development Corporation, who did not feel able to give it financial support. I will, of course, consider any information that the hon. Member may care to send me.
    Mr. Roberts: Will the hon. Gentleman bear in mind that now the Japanese Government are in this project? Is he aware that this is another case of British

    1473
    "know-how" and ingenuity being lost by the project going abroad? Is the hon. Gentleman prepared to take the initiative and approach the inventor of this engine—who lives in Bradford—to discuss this engine and its potentialities?
    Mr. du Cann: I do not think that I can accept what the hon. Gentleman said in the first part of his supplementary question. I repeat that I shall be happy to consider any further information which he provides for me. He will know that the information will be considered seriously.
    Mr. John Hall: Can my hon. Friend explain what is the Mercer rotary radial engine?
    Mr. du Cann: I cannot pretend that that is a matter which does not arise from this Question. I have a paper on the subject, but it would take too long to explain it to the House. Perhaps I may refer my hon. Friend to the issue of the Motor Cycle of 5th July, 1962.

  COMMON MARKET
  Mr. Stonehouseasked the Prime Minister what machinery exists for coordinating the activities of the Foreign Secretary and the Secretary of State for Industry, Trade and Regional Development with regard to Great Britain's relations with the Common Market.
  Mr. Blytonasked the Prime Minister to what extent the actions of the Foreign Secretary and the Secretary of State for Industry, Trade and Regional Development with regard to the Common Market are subject to co-ordination by official machinery.
  The Prime Minister (Sir Alec Douglas-Home): On all matters concerning relations with the six and the European Free Trade Association machinery for coordination exists both at official and ministerial levels.
  Mr. Blyton: Is the Prime Minister aware that the last official statement of policy was made by the Secretary of State for Industry, Trade and Regional Development? Have pronouncements on Common Market policy been transferred from the Foreign Office to the Secretary of State for Industry, Trade and Regional Development? Is the right hon. Gentle
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  man aware that we were told yesterday that he had said the Common Market was a dead duck and could not quack? Will he quack to the Commonwealth Prime Ministers and tell them that for the next five years their economies will not be placed in jeopardy by any attempt to enter the Common Market?
  The Prime Minister: I think I said that the political issue was a dead duck. So far as policy is concerned—I have made many answers locally on this—the answer to the hon. Gentleman is that there is no political issue before us now. As to the future, if there should be any development, Parliament would be consulted.
  Mr. Stonehouse: Is the Prime Minister aware that there is a great deal of confusion in Europe about which Minister is speaking on this subject with real authority? Is he aware that in the very important interview which the Secretary of State for Industry, Trade and Regional Development gave to Opera Mundi there was no reference to the guarantees to the Commonwealth which many of us regard as being very important? Does the Prime Minister stand by this repudiation of the Commonwealth by the Secretary of State for Industry, Trade and Regional Development?
  The Prime Minister: There is no question of the repudiation of the Commonwealth. My right hon. Friend was not talking about negotiations at all. He was talking about the question of European development in general.
  Mr. H. Wilson: Since the terms of entry into Europe will probably be one of the biggest political issues during the lifetime of this Parliament, and since the Prime Minister clearly intends to fight the next General Election without any statement at all of the conditions under which Her Majesty's Government would consider going into Europe, would he at any rate give a pledge that he will not go into Europe without further reference to the electorate?
  The Prime Minister: I have told the right hon. Gentleman many times that there is no issue now. I cannot say whether an issue will arise even in the lifetime of the next Parliament. If an issue does arise, the Government of the day will consult Parliament.
  Mr. Ridley: Would not my right hon. Friend agree that there is also need to co-ordinate the activities of the right hon. Member for Belper (Mr. G. Brown) and the right hon. Member for Huyton (Mr. H. Wilson), which are greatly different?
  Mr. Speaker: Order. That Question cannot arise in relation to Questions to the Prime Minister.
  Mr. H. Wilson: Since the right hon. Gentleman has said that this may have to be submitted to the next Parliament, will he now answer my question and either state the minimum conditions which he would require before the election, or give a pledge that if it comes up the issue will be resubmitted to the electorate with the terms the Government propose?
  The Prime Minister: No, Sir.

  HOOLIGANISM
  Mr. Brockwayasked the Prime Minister if, in view of the recent teen-age hooliganism at seaside resorts, he will arrange for the preparation by the Ministers concerned of a co-ordinated policy to take account of the social problems involved, particularly the necessity to provide alternative forms of sentence for offenders, and the need for youth centres and healthy outlets for the physical energy and adventurous spirit of youth, and the inclusion of sites for these purposes in housing estates and congested areas.
  The Prime Minister: The Government are fully alert to these problems and to the need for co-ordinated action.
  Mr. Brockway: Will not the right hon. Gentleman seriously consider whether we have not failed to adjust ourselves to the social phenomenon that a large section of the youth have expanded spending power without expanding power of life? May I ask two things? First, whether he considers that there is not an alternative method of correction for young offenders than fines, imprisonments, detentions, which often increase their anti-social attitude? Secondly, would it not be desirable for us to show that we are with the younger generation by a dynamic pattern of
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  public provision of recreation, competitive games and encouragement to join national and international spheres of social service?
  The Prime Minister: There are a whole series of problems here which, of course, are very much in our minds and which deserve investigation. My right hon. Friend the Home Secretary has an Advisory Committee on Juvenile Delinquency. Research is being conducted by the National Foundation for Educational Research to investigate the factors in organisation and life at school which could affect the behaviour, education and attainments of school children. We are trying our best to see this problem and to see how it could be remedied. I hope the hon. Member will not concentrate on alternative sentences. I think probation and other problems of that kind should be looked at and improved.
  Sir G. Nicholson: Is my right hon. Friend aware that there are various forms of activity and sports which could make a great contribution in this direction but that they cannot get off the ground properly without some, not particularly substantial, contribution from the State? Is he aware that in most foreign countries these sort of activities are supported, in particular parachuting? I am thinking of the support Her Majesty's Government have given to the Olympic Games. Will my right hon. Friend pay attention to these sort of matters?
  The Prime Minister: Yes, Sir, certainly. Of course, a great deal more money is being spent now on the provision of buildings, swimming baths, gymnasia and the like, but the bill for local education authorities' facilities is running at £22 million a year, in addition to the expenditure of £20 million for the provision of youth centres. I could give my hon. Friend figures to show that we are doing a lot more, but I think that still more should be done.
  Miss Bacon: May I refer the Prime Minister to a publication issued today, Crime, a challenge to us all? Is he aware that this report, issued by a committee set up by my right hon. Friend the Leader of the Opposition, deals with all these problems and would help young

  1477
  people in the way which my hon. Friend the Member for Eton and Slough (Mr. Brockway) asks?
  The Prime Minister: I have not had time to read that report yet. I was asked about Government action. As I said, we are giving very intensive attention to this matter. As the hon. Lady knows, Lord Amory is taking charge of the Royal Commission, which we have asked to look at the problem of the under 21s first of all.

  YOUNG PEOPLE IN COMMUNITY LIFE
  Mr. A. Hendersonasked the Prime Minister whether he will request the Home Secretary, the Secretary of State for Education and Science, and the Minister of Labour, to undertake a joint investigation into the industrial, social and economic problems specially concerning all young people in community life.
  The Prime Minister: There are already a number of research projects in hand which bear upon this matter, and my right hon. Friends the Home Secretary and the Secretary of State for Scotland have recently appointed an Advisory Committee on Juvenile Delinquency to consider and advise on the problems of juvenile delinquency and on measures for its reduction. I think that the object which the right hon. and learned Gentleman has in mind will be best served by pursuing these various projects.
  Mr. Henderson: Would not the Prime Minister agree that delinquency is only one aspect of the problem of adolescence in community life and that education, social environment, industry and recreational training are all major aspects of the problem? Would not he consider having a more comprehensive inquiry into the problem of adolescence divorced from an inquiry into delinquency which is the responsibility of the Advisory Committee on Juvenile Delinquency set up by the Home Secretary?
  The Prime Minister: I do not think my right hon. Friend the Home Secretary can do better than to surround himself with people who really understand these problems, get the benefit of their advice, and set up various research bodies to look into this problem. If the right hon. and
  1478
  learned Member has particular ideas which he would like to give to me or to my right hon. Friend, in addition to what we are doing, I should be glad to receive them.
  Mrs. Slater: Does not the Prime Minister remember that there has been the Wolfenden Committee Report on sport and the Albemarle Committee Report on youth? From those two could not a start be made showing greater concern for youth problems? Will he inquire into some areas such as Stoke-on-Trent, where excellent youth work has been done and where juvenile delinquency is not so great as it is in some areas?
  The Prime Minister: Following the Wolfenden Report the youth service is taking a very vigorous part in this matter and improving and extending, particularly training for youth leaders and providing new premises and the like. The Opposition need not urge us in this matter; we are anxious to do the maximum we can about a problem which concerns all parts of the House.

  MISSILES (EXPORT)
  Mr. Ginsburgasked the Prime Minister if he is satisfied with the arrangements for co-ordination between Government Departments in the supply of missiles to foreign Governments, especially so far as prices are concerned; and if he will make a statement.
  The Prime Minister: Yes, Sir. Sales are normally made by the manufacturer, the price and other terms of the contract being negotiated directly between the firm and the foreign Government. The sale of missiles is subject to the grant of an export licence and Government Departments consider proposals in the light of security, strategic, political and economic factors.
  Mr. Ginsburg: Has the attention of the Prime Minister been called to questions on the Bloodhound issue in the Swiss Parliament? Have representations been made from the Swedish and Swiss Governments to the British Government? Would he agree that the excessively high profits at home made on missiles have the effect of damaging our trading reputation abroad?
  The Prime Minister: On the latter point, I remind the hon. Member that these sales to foreign Governments are made in the face of the fiercest competition, almost always, and there is available a choice for foreign Governments. As to representations, we have not had any from these Governments, although I have seen an account of the question and answer in the Swiss Parliament.
  Lord Balniel: Is my right hon. Friend aware that the aircraft industry has exported missiles and aircraft equipment to the value of £840 million in the last five years? Many thousands of my constituents who work in this industry are not so worried about competitive efficiency, because they can hold their own in world markets. What they are really worried about are the proposals of the Opposition to nationalise the industry.
  Mr. W. Hamilton: Is the right hon. Gentleman not aware that there have been discussions in the Swiss Parliament about the extortionate profits made by Ferrantis on the Bloodhound project and that the Swiss Government know that the British Government are negotiating for a payment back from Ferranti's of part of that £5 million profit which Ferranti's made? If representations are made by the Swiss Government and by the Swedish Government to the right hon. Gentleman and his Government for copies of the Ferranti report as they seek to negotiate a reduction in prices, will he consider these matters?
  The Prime Minister: The Swiss Government or the Swedish Government can perfectly well make representations if they wish, but I doubt whether they would use the hon. Member as a channel.
  Mr. Hamilton: In view of the unsatisfactory nature of the Prime Minister's replies, I beg to give notice that I shall raise the matter on the Adjournment.

  QUESTIONS TO THE PRIME MINISTER
  Mr. Emrys Hughesasked the Prime Minister if, between now and the end of the Session, he will arrange an extra day for Questions to the Prime Minister.
  The Prime Minister: No, Sir.
  Mr. Hughes: Does the Prime Minister realise that he lost a shift last week in this place? We regard him as the chief shop steward of this factory. He went away without leave in working hours last week to a bingo display, when he took advantage of the innocence of a lot of poor women. Does he not think he could make up for the lost time by doing an extra shift?
  The Prime Minister: I think the hon. Member is crediting me with rather extraordinary powers. I was one man to 6,000 women.

  HONOURS (POLITICAL SERVICES)
  Mr. Shinwellasked the Prime Minister if he will define the phrase, political services, as it is used by him in preparing his list for honours.
  The Prime Minister: Like my predecessors, I have adopted the Political Honours Scrutiny Committee's interpretation, namely, "service to a political party".
  Mr. Shinwell: Does the right hon. Gentleman imagine that he has defined in that Answer what is meant by "political services"? Will he explain to the House how from time to time honours are awarded to Members of the Tory Party who have performed no particular service except to keep their mouths shut? [Laughter.] In view of that derisory interruption, may I ask the right hon. Gentleman whether he is aware that I have never asked for any honours nor do I need them? What is the qualification for making anybody a knight or baronet? Will he explain this, because the public are intensely interested in it. Will he give an assurance that in future, particularly on the Dissolution, he will refrain from embarking on what is an archaic and farcical inanity?
  The Prime Minister: I consulted the precedents which I thought were most respectable. While it is true that under the Labour Government they did not make many political baronets, I have looked up the last four honours lists under the Labour Government and 75 per cent. of the peerages were for political services.
  Several Hon. Members rose—
  Mr. Speaker: Order. The reason for my stopping further supplementary questions is that this Question was asked after 3.30 p.m. by mistake. I thought that the right hon. Member for Easington (Mr. Shinwell) intended to ask a supplementary question on the previous Question.
  Mr. Shinwell: In view of the unsatisfactory nature of the answer, I beg to give notice that I shall raise the matter on the Adjounment.

LAGOS (ARREST OF DR. V. L ALLEN)
3.30 p.m.
Mrs. White(by Private Notice) asked the Secretary of State for Commonwealth Relations whether he will make a statement on the arrest in Lagos yesterday of Dr. Victor Allen.
The Under-Secretary of State for Commonwealth Relations and for the Colonies (Mr. John Tilney): Dr. V. L. Allen, who is on a visit to Nigeria, was arrested on Tuesday evening, and formally charged yesterday in the Lagos Chief Magistrate's Court under Section 63 of the Nigerian Criminal Code, with the offence of managing or assisting in the management of an unlawful society.
Dr. Allen was remanded in custody until 1st July. He has been visited by a member of the British High Commission which has despatched telegrams to his family and to Leeds University and are arranging legal representation for him.
Our High Commission will be keeping in close touch with the progress of this case and will do everything possible to ensure that Dr. Allen's interests are safeguarded.
I should add that my hon. Friend the Member for Leeds, North-West (Sir D. Kaberry) has already been in touch with me as Dr. Allen is one of his constituents.
Mrs. White: May we have an assurance that everything will be done to see that Dr. Allen has the freest possible access to his legal adviser? His family lives in my constituency. He was my constituent before he went to Leeds. I saw his father last night and I have spoken to his wife. I believe that I am
1482
fully entitled, therefore, to raise this matter.
May I also ask that when the present period of remand comes to an end representation may be made that he should be allowed bail? Will the Minister accept my assurance that those who know Dr. Allen and his family very well indeed would vouch absolutely for his personal integrity, and that bail to any reasonable amount would be forthcoming?
Mr. Tilney: Certainly, the High Commission will do all that it possibly can to help Mr. Allen, but as the case is sub judice I do no think that the House would wish me to make any further comment.

BUSINESS OF THE HOUSE
Mr. H. Wilson: May I ask the Leader of the House whether he will state the business for next week?
The Lord Privy Seal (Mr. Selwyn Lloyd): Yes, Sir. The business for next week will be as follows:
MONDAY, 22ND JUNE—Supply [19th Allotted Day]: Committee.
Debate on Leisure and Sport.
As the House is aware, the Chairman of Ways and Means has set down opposed Private Business for consideration at seven o'clock.
Remaining stages of the Drugs (Prevention of Misuse) Bill.
TUESDAY, 23RD JUNE—Second Reading of the Malicious Damage Bill, and of the Refreshment Houses Bill.
Motion on the Cranbrook Sunday Cinematograph Order.
WEDNESDAY, 24TH JUNE—Completion of the remaining stages of the Hire Purchase (No. 2) Bill [Lords].
THURSDAY, 25TH JUNE—A Motion to take note of the Report on Developments and Government Action in Wales and Monmouthshire, 1963, when it is expected that the main discussion will be on Housing, and on an Opposition Amendment.
Remaining stages of the Emergency Laws (Re-enactments and Repeals) Bill.
FRIDAY, 26TH JUNE—Private Members' Bills.
MONDAY, 29TH JUNE—The proposed business will be: Supply [20th Allotted Day]: Committee.
Debate on Agriculture.
Remaining stages of the Perpetuities and Accumulations Bill [Lords].
Mr. Wilson: Is the right hon. and learned Gentleman aware that on Thursday's business it is the intention of my right hon. Friend to move the Opposition Amendment at the earliest possible stage in the proceedings so as to get the fullest possible debate on it?
Secondly, reverting to a question which I put to the right hon. and learned Gentleman last week, is he yet in a position to tell us when the Minister of Aviation will make a statement on the question of the cancellation of the VC10, in view of his regrettable inability to deal with this question at Question Time?
Mr. Lloyd: I understand the point which the right hon. Gentleman made about Thursday's business. It is hoped that the form of the Amendment will be such as not unduly to restrict the discussion, but will be wide, so that the debate can go as wide as possible on Welsh affairs.
My right hon. Friend the Minister of Aviation hopes to make a statement as soon as possible.
Dame Irene Ward: In view of the fact that I was looking forward to my right hon. and learned Friend answering my Motion on the Order Paper today, and that it will not be reached, may I ask whether we may have an assignation for next week so that he can answer my Motion?
[To call attention to the need to speed up the good business of the Government; and to move, That, in the opinion of this House, it is desirable that there should be a speeding up of legislative or administrative action where good results would accrue to the nation; and in particular that this House would welcome a decision on the provision of higher technological education for the North-East coast as is envisaged through the appropriate upgrading of Rutherford College, particularly in view of the need to convince employers taking advantage of the pro
1484
gressive policy of the Board of Trade to establish factories in the North-East that a sufficient number of higher qualified personnel is readily available; that it would further welcome legislative action by Her Majesty's Government prior to the receipt of the Allen Report on rating to relieve local authorities of certain education charges or interest charges on public loans as a means of relieving those living on small fixed incomes of the ever-increasing burden of rates for which, in order to meet their liability, they are quite unable to extend their static incomes; and that this House, which congratulates Her Majesty's Government on providing ever additional financial support for the arts, would at the same time welcome an independent inquiry into the controversy arising over the London Opera Centre, having regard in recent years to the Arts Council's methods of using grants and appointments to protect their own hierarchy and to eliminate those who dare to criticise the policies pursued.]
Mr. Lloyd: I have noticed the terms of my hon. Friend's almost all-embracing Motion. I am not sure, however, that I can promise to meet her request this afternoon.
Mr. J. Hynd: Will the Leader of the House tell us whether the Government intend to hold an early debate on the result and the implications of the recent Geneva conference on world trade and its aims?
Mr. Lloyd: That might be a topic for discussion, and I will consider the matter, but there is no time for it next week.
Mr. Goodhart: In view of the large number of electors already on holiday in the autumn, will my right hon. and learned Friend find extra time for further consideration of the Representation of the People Act 1949 (Amendment) Bill, introduced by my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies)? In view, also, of the desirability of getting all-party agreement before changing the rules governing voting, would my right hon. Friend have discussions with the Opposition to see whether they would facilitate the passage of the Bill?
Mr. Lloyd: I entirely agree with my hon. Friend that as many people as possible should have the chance to

1485
vote. I think that he is quite right in indicating that it would be difficult for the Government to facilitate a Private Members' Bill dealing with the electoral law except after consultation between the parties. That, I think, has been the practice in the past.
I think that there must be some uncertainty about time, but if the Opposition are willing to join in trying to make this a workable Measure the Government will be prepared to consider the question of facilitating its passage further.
Mr. Bottomley: While recognising the need for the Governor to take prompt action during the crisis in British Guiana, may I ask whether the Leader of the House can tell us what has happened to the Statutory Instrument, which does not appear to be laid on the Table and is not available in the Library, concerning the state of emergency in British Guiana?
Mr. Lloyd: If the right hon. Gentleman had given me notice of that question, I might have been able to answer it. I cannot answer it without notice.
Mr. W. Yates: As there is a constitutional discussion concerning South-West Arabia in progress at the moment, in which far-reaching changes are proposed without the consent of the people, will my right hon. and learned Friend allow the House to have time to debate the matter as soon as the results of the conference are announced?
Mr. Lloyd: I certainly cannot promise that. I am sure that my right hon. Friend will keep the House informed.
Mr. H. Wilson: May I revert to the right hon. and learned Gentleman's previous answer about consultations concerning one aspect of electoral law reform? Is he not aware that there are very many suggestions from both sides of the House covering a wide area of electoral law reform, covering many subjects, including the legitimacy of certain forms of election expenditure? We are more than willing to enter into discussions with the right hon. and learned Gentleman on all these questions, but is he aware that there would be a general feeling that one should not legislate on this piecemeal by taking so late in this Parliament one item out of the hundreds of reforms that are necessary?
Mr. Lloyd: This is a Measure dealing with one aspect, namely, the ability to vote at the forthcoming General Election, which might be a matter of substantial urgency and importance to certain people. Therefore, I think that a case could be made out for taking this Measure piecemeal and, if the Opposition are willing, dealing with it.
Mr. Wilson: Is it not a fact that none of them would have been on holiday if the Prime Minister had had the courage to face the electorate earlier? [Interruption.] Have it any time you like. Liverpool, Scotland, last week, was quite a good sign.
Mr. Speaker: Order. I do not know that that particular topic arises on the business for next week.
Mr. Wilson: Mr. Speaker, since you did not stop the intervention of the hon. Member for Beckenham (Mr. Goodhart), which, I presumed, was equally out of order, I thought it in order to reply to it.
May I, therefore, put this point to the right hon. and learned Gentleman, who suggests that we take this one Measure and that Government time be provided for it? Would he, then, be prepared to provide Government time also for a Measure to deal with the question of publication of election expenditure?
Mr. Lloyd: We should have to look at the proposed Measure. With respect to the right hon. Gentleman, I suggest that this is not a matter of political debating points. This is the convenience of the electorate.
Mr. McMaster: Will my right hon. and learned Friend consider granting an early date for a debate on Northern Ireland, which has been promised?
Mr. Lloyd: I am bearing in mind my hon. Friend's interest in this matter.
Mr. Bowles: Will the Leader of the House find time for a debate on Motion 124 to see how far the attitude of the Government towards the marriage of Chrysler and Rootes has been affected by the number of Tory MP.s who have been married to American women?
[That this House views with concern the acquisition by foreign investors of controlling interests in key industries

1487
such as the motor industry; and calls on Her Majesty's Government to strengthen its powers to prevent such transactions when they appear to be contrary to the national interest.]
Mr. Lloyd: Without commenting on the form of the hon. Gentleman's question, may I say that I know that the hon. Member for Coventry, North (Mr. Edelman) has a Question on the Order Paper for Tuesday, 23rd June, for answer by my right hon. Friend the Chancellor of the Exchequer. I think that we had better await that answer.
Sir G. Nicholson: May I direct my right hon. and learned Friend's attention to items Nos. 19, 20 and 21 of the Orders of the Day, of each of which this is said:
"This Instrument has not been considered by the Select Committee on Statutory Instruments."?
Surely it is a bad practice that there should be put down amongst the Orders of the Day Statutory Instruments which have not been considered by the Select Committee?
Mr. Lloyd: I think that my hon. Friend is on a perfectly good point that these Statutory Instruments should not be taken until there has been a reasonable opportunity for consideration. However, I do not think that there is any suggestion that they should be taken today.
Mr. Wade: May I ask, once again, when there will be a debate on the White Paper on Monopolies and Mergers and Restrictive Practices?
Mr. Lloyd: I answered the hon. Gentleman. Either this month or next month; anyhow, as soon as I can conveniently arrange it.
Miss Vickers: Has my right hon. and learned Friend seen Motion 118, in the name of the hon. Member for Fife, West (Mr. W. Hamilton) and other hon. Members, on the question of Abortion Law Reform?
[That this House views with concern the present unsatisfactory state of the law in relation to abortion due to difficulties of interpretation and to the uncertainty of the judgment of the courts in particular cases; it deplores a situation in which pregnant women who can afford sympathetic
1488
and skilled treatment have the possibility of a legal abortion on health grounds, while those who lack the means or proper advice are driven to take desperate and harmful measures; it therefore calls for revision of the Offences Against the Person Act 1861 so as to clarify and liberalise the law with a view to reducing the havoc and danger of illegal abortion.]
Does my right hon. and learned Friend realise that 100,000 women have illegal abortions and at least 25,000 go into hospital, each year. Is there any opportunity in the near future for revising the 1861 Act?
Mr. Lloyd: I think that my right hon. Friend the Home Secretary explained the Government's attitude on this matter in an answer to my hon. and gallant Friend the Member for The Hartlepools (Commander Kerans) on 4th June. I have nothing to add to that reply.
Mr. Woodburn: Would the right hon. and learned Gentleman reconsider his answer about legislation to meet the urgent problems connected with the electoral register? The law purports to give every young person a vote at 21. As it stands, a large number of people who have been 21 for some months will not be able to vote at the coming election because of the curious electoral registration arrangement. Some of them will not vote until they are 24 or 25. If the right hon. and learned Gentleman intends to legislate for this election, would he consider this very urgent problem?
Mr. Lloyd: I certainly agree with the right hon. Gentleman that this is a matter for consideration. I would like to see the form of legislation designed to deal with it before answering the latter part of his question.
Mr. Lee: May I revert to the point raised by my right hon. Friend the Leader of the Opposition? Is the Leader of the House aware that the Minister of Aviation has had Sir Giles Guthrie's Report in his hands for some time now? We are not asking him to wait until his conclusions on Sir Giles's Report are ready. We would prefer to have his report on Sir Giles's recommendations on the VC.10. Is the Leader of the House aware that we understand that the Minister of Aviation's report

1489
back to Sir Giles is due on 31st July and that we believe that to be just a little late?
Mr. Lloyd: I will take note of what the hon. Gentleman has said and convey it to my right hon. Friend. I understand that the matter is still under discussion, but my right hon. Friend has told me that he will make a statement as soon as possible.
Mr. Short: Since the travel concessions Bill, which would enable old, blind and disabled people to keep their cheap fares, has been blocked by Tory M.P.s on six occasions, and since the right hon. and learned Gentleman now understands this matter rather better because I have explained it to him, will he say whether the Government will now give time for my Bill, or introduce legislation of their own before the Summer Recess?
Mr. Lloyd: This matter has been discussed with me, not only by the hon. Gentleman but by some of my hon. Friends. I have nothing to add today to what I have previously said.
Mr. Ross: In view of what the Leader of the House said about the Government's willingness to facilitate the passage of one Private Member's Bill before the end of the Session, will he say whether there are any other Bills which the Government are prepared similarly to treat? Could we be told the titles of those Bills?
Mr. Lloyd: The hon. Gentleman must not misrepresent me. I said that these matters of electoral reform should follow consultation between the parties. I said that in this case, if the Opposition were willing to facilitate the Bill, the Government would do the same.
Mr. Ross: Will the Leader of the House answer my question? Do the Government intend similarly to treat any other Private Members' Bills?
Mr. Lloyd: Not at the moment, no.
Mr. H. Wilson: Is not the right hon. and learned Gentleman aware that there have been discussions under the aegis of the Home Office on this question with all the parties represented? Is he not aware that expert opinion is that to give effect to the Bill would mean that
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the date for registering postal votes would have to be made one week earlier—in other words, almost immediately after the dissolution of Parliament—which would rule out many thousands of people entitled to postal votes so that those going on holiday should be included? Would the right hon. and learned Gentleman avoid committing himself too far on this principle until it has been properly examined?
Mr. Lloyd: The point that the right hon. Gentleman makes has been made before. In my own view, I do not think that it is an insuperable difficulty.
Mr. Monslow: As we have a limited time for the debate on nationalisation which follows shortly, could the right hon. and learned Gentleman set aside—we would welcome it—another day for a debate on nationalisation?
Mr Lloyd: I hope that the hon. Gentleman will use his influence with the right hon. Gentleman the Leader of the Opposition, so that the intention of the Amendment in the names of my hon. Friend the Member for Rye (Mr. Godman Irvine) and others on the Order Paper is accepted.
Mr. F. M. Bennett: As that question has been raised, may I ask my right hon. and learned Friend whether he has had any formal response to that invitation, because we are all willing to help the Leader of the Opposition in this matter?
Mr. G. Brown: Would not the right hon. and learned Gentleman, even at this late stage, accept the Motion which we have tabled and which would meet everybody's point of view?
[That, notwithstanding the Order of the House of 13th November, 1963, relating to the business for Thursday, 18th June, private Members' notices of motions shall have precedence until Ten o'clock on that day.]
Mr. Lloyd: The right hon. Gentleman is making a suggestion in that Motion to increase the amount of time given to private Members. He will recall that he was a member of the Government which, during their six years in office, gave an average of seven days a Session to private Members. We have given 21 days.
Mr. Warbey: May I press the right hon. and learned Gentleman to give

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time to debate the Government's international economic policy in view of the fact that the Government have committed this country to some fairly far-reaching decisions at the recent conference on world trade at Geneva? Will the Government submit those decisions for the endorsement or otherwise of the House?
Mr. Lloyd: Not next week.
Mr. Rankin: Seeing that the Report on Nuclear Power for Ship Propulsion has been studied by the Government for the last five or six weeks—at least, I hope that they have been studying it—could the right hon. and learned Gentleman tell us whether or not he will fulfil the promise which was made and enable us to debate that Report?
Mr. Lloyd: I will certainly bear in mind what the hon. Member has said.
Mr. Dalyell: Is it the intention of the Government to find time to debate the Henniker Heaton Report on day release?
Mr. Lloyd: Certainly not next week.
Mr. W. Hamilton: Further to the question asked by my hon. Friend the Member for Kilmarnock (Mr. Ross) about Private Members' Bills, is it not a fact that all such Bills will be guillotined on 26th June? If the Government seek to facilitate the passage of other Private Members' Bills, does this not mean that there must be some amendment of the Standing Orders or other special Orders before that can be done?
Mr. Lloyd: I do not think so and, in any event, I was dealing with one particular Bill.
Mr. Lipton: Can the right hon. and learned Gentleman say when we will be receiving the Report of the Committee
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of Privileges, which seems to be taking a long time to deal with the problem of the Lord President of the Council and Secretary of State for Education and Science?
Mr. Lloyd: I do not think that the hon. Member can have studied the available documents as carefully as one might have expected, because official notification has been given that the Report has been submitted, and it will be published as soon as it can be printed.
Mr. Lubbock: In view of what the Leader of the House has said about amending the Representation of the People Act prior to the next General Election, and of the Government's sympathetic attitude towards the Bill of the hon. Member for the Isle of Thanet (Mr. Rees-Davies) and the practical difficulties in the way of implementing his proposals, which have been referred to by the Leader of the Opposition, would the Government consider giving time for the Representation of the People Act, 1949 (Amendment) (No. 2) Bill, which deals with a more limited section of the electorate, and which is entirely non-controversial?
Mr. Lloyd: I should have to study the terms of that Bill before answering the hon. Member's question.
Mr. A. Lewis: In view of the debate on agriculture which the right hon. and learned Gentleman announced for next week, would he make arrangements for his right hon. Friend to be prepared to tell the House on how many occasions during the last 50 years, other than this week, we have had to import carcase meat at the expense of hard-earned dollars?
Mr. Lloyd: I do not think that that is a question on business.

NATIONALISATION
Mr. Speaker: Before I call the hon. Member for Rye (Mr. Godman Irvine) to move the Motion standing in his name, it is probably convenient for me now to say that I propose to select the Amendment standing in the name of the hon. Member for Greenwich (Mr. Marsh) and other hon. Members and no other Amendment to the Motion.
3.53 p.m.
Mr. Bryant Godman Irvine: I beg to move,
That this House, having regard to the wide-ranging threats of nationalisation contained in the Labour Party's official policy statement, "Signposts for the Sixties", and to the fact that the Labour Party, under Clause Four of its constitution, remains committed to State ownership of all the means of production, distribution and exchange, urges Her Majesty's Opposition to make clear to the nation exactly which industries and which firms it would nationalise or take under any form of State control.
It has taken nine years for me to have the good fortune to come out top in the Ballot for Private Members' Motions. It is somewhat satisfactory to find more than a modest amount of interest has been shown, in all quarters of the House, in my Motion. It is also satisfactory to note that a certain number of other Motions have been put down arising from my original Motion.
One point which seems to have arisen, and which is certainly not always usual for Private Members' Motions, is that I detected, only a day or two after my Motion was tabled, in a speech made by the Leader of the Opposition, some words which had a bearing on the Motion. The right hon. Gentleman is shaking his head and would appear to be indicating dissent, but he will recall that he said that there were Conservatives who were pressing the Opposition to be more specific about their proposals for nationalisation.
With that courtesy to which we are accustomed from the right hon. Gentleman, he went on to say:
"Repeated questions, and what they call challenges on public ownership, can bear only two interpretations. Either they cannot read, which considering their educational background is improbable, or being literate they choose to twist what they have read."
I thought that that quotation would be a very good start to what I have to say
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today. I hope that the right hon. Gentleman will be satisfied by the time I sit down, not only that I and my hon. Friends can read, but that what I am doing—
Mr. A. E. Oram rose—
Mr. Irvine: I will not give way.
Mr. Oram rose—
Hon. Members: Give way.
Mr. Irvine: No.
Mr. Speaker: Order. If the hon. Gentleman who is on his feet does not give way other hon. Members must not persist in trying to intervene. I suggest that we will perhaps get through what I hope will be a cheerful afternoon a little more expeditiously if I am not called upon to shout "Peru, Peru".
Mr. Irvine: I was merely indicating that I was hoping that by the time I sit down—
Hon. Members: Sit down now.
Mr. Irvine:—hon. Members opposite will at least admit that some hon. Members on this side of the House can read and are able to—
Mr. Oram rose—
Mr. Irvine: I will not give way.
Mr. Speaker: Order.
Mr. Irvine: Not only can we read, but we are able to question the policy statements of the Opposition. I am not prepared to give way to hon. Members opposite just now, for I think that they should at least allow me to develop some of my arguments before I am interrupted.
I notice that the Leader of the Opposition has today suggested that some of the national opinion polls are not conducted in perhaps the way which would receive his lull approval. It is odd that it is only just at this moment he should decide to say that they are not giving him the satisfastion they have in the past. I hope that the right hon. Gentleman has at least had a look at the one which was published on 12th June, and which indicated that only one person in three in this country believes that the Labour Party is giving enough details of its policy to the nation.
Several Hon. Members rose—
Mr. Irvine: Not yet.
If the Opposition appreciate that only one person in three believes that the country is receiving enough details of that party's policy, it is by no means entirely satisfactory for them to say that we are twisting some of the facts when we take the same view as the majority.
Mr. Guy Barnett rose—
Mr. Irvine: I will not give way yet.
Mr. Archie Manuel: Have the decency to give way.
Mr. Irvine: There is only a short time for our debate. If I gave way to everyone, no one would be able to speak.
I hope that hon. Members opposite will listen to what I have to say about Clause Four. That is something that they like to discuss from time to time, although I noticed that they did not discuss it at Scarborough last year. I have made a few observations about it in my Motion. I have had another look at Clause Four and it is quite clear that it relates to control of "each industry" and, therefore, it is a very wide-ranging mandate for the Opposition.
On the first occasion on which he made a speech in this House as Leader of the Opposition, the right hon. Member for Huyton (Mr. H. Wilson), said that Clause Four was the policy of the whole party. That was on 18th February last year. I have with me a little book which, I am sure, will have been read from cover to cover by all hon. Members opposite.
Mr. W. Hamilton: "Fanny Hill"?
Mr. Irvine: It is the speakers' notes, published in March by the Labour Party. [Laughter.] I am delighted to note that that causes such merriment to hon. Members opposite. On page 6 of that document it is stated that Clause Four itself "is not a policy statement". So, on the one hand, we have the Leader of the Opposition saying that it is the policy of the whole party and, on the other, this very important document saying that it is not a policy statement but "a broad expression of philosophy and approach."
1496
The document goes on:
"In short, any decision on a further extension of common ownership is left to the party policy statement".
That, of course, brings us back to this little yellow document called "Signposts for the Sixties". I want to examine it for a few moments to see whether it meets all the criteria that have been set by the right hon. Member for Huyton and others. The right hon. Gentleman says that
"Signposts contains the policies of the Labour Movement. No Opposition in history has been more detailed, specific and clear".
I will, therefore, examine this document for details which are specific and clear. I picked out a total of nine major sectors of industry which may be included. First, it refers to
"… greater control over the investment policies of pension funds and private insurance companies …"
I do not know what you would think, Mr. Speaker, but the term "greater control" does not seem to me to give any indication of detail. Nor is it specific or clear. About 20 million people have their pensions arranged through occupational and private schemes and a great number of them would be interested to hear further details from the Opposition.
Mr. Harold Wilson: Being ever helpful, I think that I might help the hon. Gentleman at this point. Is he not aware that, three weeks after that statement was published, exactly the same proposal was made by the then Chancellor of the Exchequer—now the Leader of the House—in his summer crisis Budget? The right hon. and learned Gentleman announced that he was instructing insurance companies not to lend money for property speculation and, subsequently, in pursuance of our policy, the Conservative Chancellor of the Exchequer has asked insurance companies to put up money for particular export credit projects.
Mr. Irvine: I am most grateful to the right hon. Gentleman the Leader of the Opposition for any assistance that he may give me. I am glad of assistance from whatever quarter it comes. I have the greatest confidence in Conservative Chancellors of the Exchequer. I would have no such confidence in any possible

1497
Chancellor who might come from the party opposite.
The Motion asks the Opposition to make their plans clear, and it is on that ground that I say that the term "greater control" meets none of the three criteria the right hon. Gentleman has himself laid down. There was a time when the Labour Party suggested that the insurance industry should be nationalised, but that is not in the shopping list today. I wonder why. Perhaps the Co-operative Insurance Society, being the third largest in the country, has had something to say about it.
The second set of circumstances dealt with in "Signposts for the Sixties" that I want to mention is the aircraft industry.
Hon. Members: Ferranti.
Mr. George Brown: Where is the hon. Gentleman reading now?
Mr. Irvine: If the right hon. Member for Belper (Mr. G. Brown) has something to say I would be pleased to give way.
Mr. Brown: I would only say that, since the hon. Gentleman has dealt with (c) of his Aims of Industry brief before dealing with (a), it took me a little time to catch up, but I have the place now.
Mr. Irvine: I am sure that the right hon. Gentleman will be able to deal with that when he makes his speech. I am going through the—
Mr. Brown: Aims of Industry pamphlet.
Mr. Irvine: I find it most interesting that the Opposition Front Bench seems to have been supplied freely with the Aims of Industry pamphlet. I am going through their own pamphlet, "Signposts for the Sixties". The quotations I am giving are from that document. I would have thought that the right hon. Member for Belper would have recognised them without my assistance.
" Signposts for the Sixties" says, of the aircraft industry, that
"… new forms of State participation will be necessary …"
Does this meet any of the three criteria set by the Leader of the Opposition? Is that statement detailed, specific or clear?
Lord Balniel: It is just dishonest.
Mr. Irvine: When the right hon. Gentleman the Member for Belper replies he will be able to make it quite clear, so that there will be no doubt. On 17th February last, the hon. Member for Newton (Mr. F. Lee) said that the aircraft industry would not be nationalised and, therefore, it may well be that, although the industry is mentioned in "Signposts for the Sixties', it is no longer on the list.
The third section of industry I would like to deal with is covered by this quotation:
"Another field where public ownership may well have to be extended is in those private industries which through the receipt of subsidies or loans, are dependent on the State for their continued existence."
Can anybody suggest that that is a specific statement, that everyone knows where he stands? It seems to be as general a statement as it could possibly be. Therefore, contrary to the document which the right hon. Member for Belper has, I refer him to an excellent document, published by his party last March, which says:
"Cotton, shipping and aircraft are three examples …"
Thus, we have the hon. Member for Newton saying on 17th February that aircraft will not be nationalised and then we read a document published in March saying that the industry is an excellent example of what "Signposts for the Sixties" says. The other examples—cotton and shipping—are not, as far as I know, included in the current list that the Opposition are proposing.
The fourth lot I would like to look at is the pharmaceuticals.
Mr. G. Brown: Hear, hear. Page 16.
Mr. Irvine: Page 17.
Sir Harmar Nicholls: On a point of order. Is there anything in our rules of debate, Mr. Speaker, which says that less respect should be paid when a back bencher is moving a Motion than when a member of the two Front Benches is moving a Motion?
Mr. Speaker: None at all, but in the general interest we have to listen to quite a lot of things with which we do not severally agree, and time is fairly achieved for counter-expressions and we do better at getting on if there is not quite so much noise. [Interruption.]
Mr. Irvine: If the right hon. Member for Belper (Mr. G. Brown) would like to make an intervention, I shall be happy to give way.
The next item with which I want to deal is pharmaceuticals. "Signposts" says that the National Health Service is spending £80 million a year on pharmaceuticals and adds:
"Why should we not protect the taxpayer by arranging that it should meet its requirements increasingly from public enterprise, either through new, publicly owned undertakings or by the acquisition of existing ones?"
In October, 1961, the right hon. Gentleman the Leader of the Opposition, in almost precisely those words, said that that was what the Labour Party would do. I am not aware at this moment that that is what the Labour Party is saying it will do. Indeed, in the House on 27th April, the hon. Member for St. Pancras, North (Mr. K. Robinson), who is in his place and who will be able to correct me if he so wishes—
Mr. Manuel: Take your hand out of your pocket.
Mr. Speaker: My hand was not in my pocket.
Mr. Manuel: I apologise for my interjection, Mr. Speaker, but is there any way in which the Chair can control the unseemly behaviour of an hon. Member who is moving a Motion?
Mr. Speaker: I do not wish to intervene all the time, but it is not in order to make a loud running commentary while some other hon. Member is making a speech. The House would enjoy itself more if it made a little more progress.
Mr. Irvine: I was asking whether pharmaceuticals were on the list, because on 27th April the hon. Member for St. Pancras, North was apparently asking what was the authority for suggesting anything of the sort. If the hon. Member, who is such an expert in these matters, is not aware of what is the authority for saying that pharmaceuticals are on the list, this is certainly something which should be cleared up during today's debate.
Fifthly, there is a reference to removing the restrictions on publicly-owned industries to develop the equipment and machinery we need.
Mr. G. Brown: Here it is.
Mr. Irvine: Does the right hon. Gentleman want to intervene? I say once again that if the right hon. Member for Belper wants to intervene, I shall be happy to give way.
Workers in the firms supplying the nationalised industries would certainly like to know what the proposals are. Nobody can say that the mere statement that restrictions should be ended is in any way clear and precise.
Then we come to steel. The reason for nationalising steel is the most woolly of the lot. It says:
"Where vast concentrations of economic power have created monopolies, the Government, on behalf of the people, has the right to insist that such economic empires be made accountable to the public interest. That is our case for renationalising steel."
Those of us in the House who have experience of the difficulties in obtaining accountability from the nationalised industries will regard that as a most peculiar reason for taking over a great industry. I would have thought that, quite apart from the Iron and Steel Board and the other ways in which that industry is kept under control, there are 276,000 shareholders, three shareholders for every two workmen, who would be able to exercise a far better control than is exercised over any nationalised industry today.
Further than that, anybody who has travelled in different parts of the world will know, particularly in the Commonwealth, the difficulties which will arise in the industry if it should find itself nationalised. The people of this country would like to know, if the industry is to be taken over, whether it is proposed by the Opposition that they are to take over five companies, 10 companies, or the 92 companies taken over last time, or the whole total of 262 companies and 310 works.
Mr. Brian O'Malley: Will the hon. Gentleman give way?
Mr. Irvine: Finally, what is to happen to the ancillary operations of the steel industry, which is a very complicated industry in the way it is connected with various others? That should be made clear. I commend to the Opposition the statement made by the hon. Member for

1501
Bristol, South-East (Mr. Benn), when this subject was under discussion in 1951. He started by saying:
"At a time when there is a very real threat to our standard of living,"—
That, of course, was in the last few months of the last Labour Government—
"it would be psychologically disastrous to have an iron and steel industry which was doing very well indeed from a business point of view."—[OFFICIAL REPORT, 7th February, 1951; Vol. 483, c. 1782.]
I would have thought that that situation applied today.
The seventh comes after the word "chaos".
Mr. John Morris rose—
Mr. Irvine: The seventh I want to mention comes after the word "chaos" and says that that provides the
"case for creating an integrated and publicly owned transport system."
If anyone wants to test whether there is chaos in the transport industry I would suggest that he looks at the use made of the capacity of the whole industry. The private sector of the industry by this test increased its efficiency by 4 per cent. between 1952 and 1962, whereas British Road Services went down by 12 per cent. during a similar period.
If we are to have nationalisation of transport, how is it to be done? What are the proposals? Are there to be distance limits? Is it to be a matter of 25 miles? Is it to be nationalisation without compensation?
Mr. John McCann: Have an election and find out.
Mr. Anthony Kershaw: Now the cat is out of the bag. Now we know.
Mr. Irvine: The hon. Member for Rochdale (Mr. McCann) has completely summarised the purpose of the debate. My reason for this Motion is to find out before the election, and I hope that the opportunity which we are giving to the Opposition today will be taken by them so that the people of the country can know.
The right hon. Gentleman the Leader of the Opposition said in Washington a year ago:
"We shall rebuild this integrated system not so much on the basis of buying off every lorry … as we did last time."
We have had another year for him to have thought about this matter and he
1502
has told us how he will not do it. Is it not time that he was able to give some indication of what he intends to do?
Then, what about C licences? In 1947, C licences were vigorously supported by the co-operative societies, and it will be interesting to note what proposals the Opposition have about those licences today.
The next item is land, but as we spent a whole day on this subject less than a fortnight ago, I do not think that we need deal with it any further today. [HON. MEMBERS: "Oh."] If hon. Members opposite are interested in the matter, I commend to them the speech made by my right hon. Friend the Minister of Housing and Local Government, who made it quite clear that the proposals in "Signposts" would not work.
Lastly, there are a lot of even more woolly suggestions about "the commanding heights of the economy", and so on and so forth.
Of the nine sectors I have picked out for consideration there are only three that anybody can be certain are on the present shopping list of the Opposition, but if anybody should wish to add to the list today this is a very good opportunity. The three that I think are clearly on the list are steel, road transport and land—
Mr. H. Wilson: What about water?
Mr. Irvine: I shall come to water in a moment.
I want to look at some of the suggestions that have been made by the right hon. Gentleman the Leader of the Opposition, quite apart from the policy statements. In 1952, he was saying that he wanted heavy engineering, the heavy fertiliser industry, shipping, aircraft, textile machinery and machine tools. I do not know that all those are on the list today. In 1960, he was saying that there was
"An unanswerable case for the public ownership of the defence industry in this country."
I do not know whether that is on the list now.
In the statement that he made, to which I have already referred and which was reported in the Sunday Times last Sunday, the right hon. Gentleman said:
"We have said we shall take the steel industry into public ownership. Signpost makes clear too our intention to create a

1503
publicly owned national water undertaking and the public ownership of all urban building land on which new building or redevelopment is planned."
A moment ago I heard the right hon. Gentleman ask, from a reclining position, "What about water?" He was chairman of the committee that dealt with this policy statement in "Signposts". Having made the suggestion that some hon. Members on this side of the Chamber may not be able to read, I assume that he means that he is able to read quite happily—[Interruption.] What I want to suggest to the right hon. Gentleman is that anybody who reads "Signposts", and knows what is in it, knows that there is no reference whatever to water in it at all. He is, therefore, suggesting that we cannot read, and he is saying that he wants to nationalise something that is not, in fact, in the party policy statement.
Another thing that I believe is quite clear is that in the earlier statement the right hon. Gentlemen referred to nationalisation, whereas now, for some reason that he may like to explain on some occasion, he always talks about public ownership.
Mr. H. Wilson: As the hon. Gentleman has sat down, I presume that he wants me to reply to him. I think that he understands, though some of his hon. Friends may not, that by "nationalisation" we mean the transfer to public ownership of assets at present in private ownership. Steel is an example. I also use, and so do most people who are literate in these fields, the phrase "public ownership" to cover such developments as the creation of new publicly-owned industries that do not exist today. For example, the present Government created, under public ownership, the Atomic Energy Authority—they did not nationalise it.
Mr. Irvine: That, of course, makes it crystal clear. But in 1952 the right hon. Gentleman intended to nationalise shipping, the fertiliser industry, and so on, yet in his more recent speeches he talks about public ownership, and seems to prefer the use of that word. I should like to ask him whether, perhaps, he has not taken to heart the observation of the right hon. Member for Battersea, North (Mr. Jay), who said
1504
after the last General Election, "The word 'nationalise' has become damaging to the Labour Party."
Perhaps I may just summarise what appears to me to be the result of what I have said. There is not only the list that I have referred to but, at one time or another, 26 industries have been included in one shopping list or another by the Opposition. In 1955, there were only two industries on the list. Today, we find nine in the policy statement, of which I think that three are strong runners at the moment, and I am doubtful about the remaining six. Water is outside the list and it is outside the policy statement, but the right hon. Gentleman has said quite clearly that it is in. The right hon. Gentleman's list has only two industries out of the nine included in "Signposts", and one outside. There are seven others that the right hon. Gentleman has suggested ought to be in.
In those circumstances, can anybody say that the proposals of the Opposition are detailed, specific or clear? I therefore commend the Motion with some confidence to the House.
4.27 p.m.
Mr. Richard Marsh: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"noting the successful achievements of the public sector of the economy, particularly in the fuel industries where new production techniques are being developed which will cut costs substantially, and noting the confidence in that section of the steel industry remaining in public hands, as expressed by the Prime Minister, approves the policy of the Labour Party set out in the statement, Signposts for the Sixties".
It is intriguing that this Amendment should be based upon speeches made by Ministers. It is extremely unfortunate that when Ministers are pinned down on the subject of nationalised industry they give, lip-service to it, but that when they can do a dirty little bit of damage they do it.
The hon. Member for Rye (Mr. Godman Irvine) started by telling us that he could read. I disagree entirely with some of my hon. Friends who seem to have some scepticism about that; the hon. Gentleman proved conclusively that he can read, but I remain quite

1505
unconvinced about his ability to understand. He started by quoting, for example, a national opinion poll—a very objective source—published by Aims of Industry—
Mr. Godman Irvine rose—
Hon. Members: Sit down.
Mr. Marsh: Using the hon. Gentleman's own yardstick, I presume that he would not expect me to give way to anybody other than Ministers.
But to continue, I think that this particular pamphlet is extremely important. It can be obtained for 2s. from Aims of Industry. On page 7, for example, it deals in its opinion poll with how important the electorate believes this squalid attempt to make political capital to be. It gives a list of 10 decisive issues. Nationalisation features as eighth on the list. The last two are defence and the independent nuclear deterrent. Therefore, the understanding by hon. and right hon. Members opposite of the electorate is not perhaps quite as clear as they seem to think.
Page 10 of the pamphlet is extremely interesting. It shows that an overwhelming majority of people want to see more planning of the economy. On page 12, there is a detailed series of questions addressed to the electorate and to people generally as to what issues they think the Labour Party is likely to nationalise. There is a list of 14. The first is steel, the second road transport and the third mining. Therefore, the usefulness of the document is gone.
The other figure which the hon. Member for Rye did not mention is that only 7·6 per cent. of those surveyed wanted to see denationalisation, but one appreciates that much of the hon. Member's speech had to be fairly selective.
Mr. Godman Irvine: That is not the figure that I was quoting. Mine was from the national opinion poll, which appeared in the Daily Mail.
Mr. Marsh: It is the same poll.
As I understand, the hon. Member had two main points. The first was that he did not know what was the attitude of the Labour Party towards nationalisation, The second was that if he knew what it was he would not agree with
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it. I should have thought that our attitude to nationalisation was fairly simple. In my view
"The Socialist remedy should be accepted in regard to industries and services where it is obvious that private enterprise has exhausted its social usefulness or where the general welfare of the economy requires that certain basic industries and services need now to be conducted in the light of broader social considerations than the profit motive provides."
Hon. Members: Karl Marx.
Mr. Marsh: No. It is a quotation from "The Middle Way", written by the right hon. Member for Bromley (Mr. H. Macmillan). I am surprised that hon. Members opposite should show such discourtesy to his memory. The right hon. Gentleman made only one mistake and that was the appointment of his successor, and we shall put that right at the General Election.
I do not believe that the definition laid down by the right hon. Gentleman could be bettered, but the point made by right hon. Gentlemen opposite over and over again is that they do not know what Labour Party policies are on public ownership. I am sure that they will not mind if I spend the next couple of minutes explaining the policies to them, and I and a number of my hon. Friends will be available in the Tea Room after the debate to answer questions.
The policy of the Labour Party remains quite unchanged. It is the policy laid down in "Signposts for the Sixties". [HON. MEMBERS: "Oh."] If hon. Members do not listen they will go out clouded in the same abysmal ignorance as that in which they came in. This is the policy laid down in the Labour Party conference and agreed to by the late Hugh Gaitskell, by my right hon. Friend the Leader of the Opposition, by the whole of the conference, and by my hon. and right hon. Friends.
First, we say that we will take the steel industry into public ownership. That is perfectly clear. Hon. Members opposite dispute and argue whether we should do that. They raise that issue, and quite rightly. They fought the by-election at Rutherglen on it, and that was the most decisive of the 60 by-elections of this Parliament, with the exception of Faversham, where we did even better and where we also had a dispute about public ownership.

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Although I agree that this is not mentioned in this document—but it is mentioned elsewhere—we are to create a publicly-owned water undertaking. We intend to take into public ownership all urban building land on which new building and redevelopment is planned; and if there is one thing which I should have thought is beyond dispute from either side of the House it is that hon. and right hon. Members opposite cannot say that in the last 13 years their alternative has been particularly successful in halting the racket in land prices.
We propose to end the transport muddle by having an integrated service on road and rail. "Signposts" makes it quite clear that we intend to achieve this more by taking artificial restrictions off the existing and profitable British Road Services and allowing it to expand and compete than by a mass statutory transfer of private road undertakings to public ownership.
This is the crucial point. [HON. MEMBERS: "Explain it."] I have every intention of explaining it, and if hon. Members want more detail we on this side of the House will arrange and pay for W.E.A. lectures to ensure that they understand it. Hon. Members opposite refuse to understand the difference between nationalisation—the statutory transfer of existing privately-owned assets to public ownership—and the creation of new publicly-owned industries based on science and technology. My right hon. Friend the Member for Huyton (Mr. H. Wilson) said that the Conservative Party created the Atomic Energy Authority. It was not nationalisation. It was the creation of new industry within the public sector.
Hon. Members opposite ask, "Which industries?" How can anyone forecast the industries of tomorrow? In 1948, when the Labour Party set up the National Research Development Corporation to develop new inventions, no one could have forecast such triumphs as the Hovercraft and the Atlas computer, or the other 400 new projects which State-sponsored research development has made possible.
We have said that in some cases new industries would be private, paying a royalty where public money was in
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volved. In some cases there would be a partnership between public and private control. In other cases they would be wholly publicly owned. Thirdly, and this has been made clear time and time again, we have said that where private industry comes to the Treasury for subsidies we shall insist, as any sensible private investor would insist, on a proportionate share in the control and profits.
Fourthly, we have made clear our intention to use any appropriate methods, including joint partnership projects, to protect the taxpayer against excessive profits in defence contracts. With the memory of Ferranti fresh in our minds I hope that hon. Members opposite will not see anything wrong with that. We will also take steps in the same way against racketeering prices by foreign-controlled drug interests in respect of sales to the National Health Service.
Hon. Members opposite may disagree with this policy, but it is a policy which has been put forward, and we can argue about it. Surely hon. Members opposite will have noticed it. They seem quite satisfied with it now. Yet that was a direct quotation from the speech which my right hon. Friend the Member for Huyton made last Saturday. They find it acceptable now, but they did not even know before that it was there. One of the troubles here is that there is more space devoted in some of the Press to asking the questions than to publishing the answers.
I come back to the point about constant denigration of the public industries. Right hon. and hon. Members opposite ought to make up their own minds on exactly where they stand. Do they intend to denationalise any of the existing publicly-owned industries?
Hon. Members: Answer.
Mr. Marsh: I shall willingly give way to the Secretary of State for Industry and Trade if he wishes to answer. It is a perfectly clear question. Do they intend to denationalise any one of the existing publicly-owned industries? Parliament and the country are entitled to know. Not only is it a fair question but, with respect, it is a very important one, for this reason. At present, the total net value of the assets of the

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publicly-owned industries in this country is well in excess of £6,500 million.
Sir Cyril Osborne: It is £8,400 million.
Mr. Marsh: It is quite simple. The hon. Gentleman is including the Post Office and I am leaving it out. That is where his figures are wrong.
A vast amount of taxpayers' money is involved, and right hon. and hon. Gentlemen on the Front Bench opposite are trustees of it. Any director of a company who had the same blatant disloyalty to his own company would be turned out at once. In fact, of course, whatever their more naïve hon. Friends on the back benches think, right hon. Gentlemen opposite have not the faintest intention of getting rid of the nationalised industries. Indeed, many of our nationalised industries were creatures of their own creation. It is not a specifically Labour Party affair at all. This is something in which even Conservatives have taken a hand.
Sir C. Osborne: No; the £8,400 does not include the Post Office.
Mr. Marsh: I am always interested in what the hon. Gentleman says. I have read his speeches, with great profit, ever since I joined the Labour League of Youth. I think that the Labour Party has published more of them than anyone else.
Sir C. Osborne: Perhaps that is why the hon. Gentleman is so well educated.
Mr. Marsh: With respect, it is why I am on this side of the House and not that.
One thing which we on this side intend to do—make no mistake about it—is to break down some of the obstacles deliberately put in the way of our publicly-owned industries by hon. and right hon. Members opposite. They talk sometimes about the position of the British Transport Commission. Our publicly-owned transport undertakings want to manufacture components. They have the ability and capacity to do so, but they are prevented for no reason other than the pressure of private vested interests.
Obviously, a large public sector is essential for any degree of State planning. If one opposes State planning, then, of
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course, one can dispense with the idea of a publicly-owned sector. If, on the other hand, one accepts the idea of any State planning, one must have a large publicly-owned sector, if for no other reason than to be able to use it to influence the direction of the economy and have some effect on investment.
We hear a great deal about the losses of the publicly-owned industries. The schizophrenic approach of hon. and right hon. Members opposite to matters of public money is quite astonishing. There is a Question down today about the losses incurred by the publicly-owned industries in the last 17 years. When hon. Gentlemen read the Answer, I hope that they will bear in mind, at the same time, an Answer given on 2nd February, 1960, in reply to my right hon. Friend the Member for Easington (Mr. Shinwell).
My right hon. Friend asked for the total financial assistance provided by the taxpayer to private industry between 1951 and 1959, and the reply from the then Chancellor was that subsidies to private industry and agriculture amounted to £2,311 million and that loans in the same period totalled £84 million. That is the measure of State assistance which has been given. Is it so wrong or so wicked that the taxpayer, asked to put up that sort of money, asks for some say in how his money is spent? When this is in dispute, we do not hear about that from hon. Members opposite.
Mr. W. Hamilton: The figure I have been given by the research section of the Library is that, from 1952 to 1964, the total of loans and subsidies to private industry came to £4,342 million.
Mr. Marsh: That is the latest figure. The one I quoted was somewhat earlier.
Another point which needs to be made is that one does not judge the ability of publicly-owned industry purely on the counting of profits. Whereas the private entrepreneur is primarily concerned with maximising the profit to his shareholders, a public industry must be primarily concerned with the social benefit of the nation. [HON. MEMBERS: "Oh."] This is a good point. If hon. Members disagree, they have a simple answer: get rid of the nationalised industries. If they intend to keep them, then they should give some of those on whose shoulders they place the task of running the indus

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tries, if not a modicum of encouragement, at least not constant denigration.
Of course, hon. and right hon. Gentlemen opposite do not really believe that public ownership is bad for the nation. Every modern industrial nation today has a large public sector. This is true in Gaullist France. It is true in Italy. It is true in Britain under this Conservative Government. It is true in every industrial modern nation. Why, then, do they run this constant campaign?
Mr. Manuel: Ignorance.
Mr. Marsh: My hon. Friend is too generous. It is not ignorance at all. They do it for no other reason than having to please the faceless men behind them who pay their election expenses. Some of them—I make this point deliberately—do it to such an extent that they degrade themselves to the level of political pimps.
Hon. Members: Oh.
Mr. Marsh: Then there is the question of steel. If ever there was a classic case for public ownership, it is to be found in the British steel industry. It is one of the basic industries on which every other industry in this country depends [Interruption.] Yes, I believe that, when every other industry depends upon a particular basic industry like that, control of it should not be in the hands of a small group of people not accountable to the nation. The primary duty of the people at present in control, understandably, is to maximise the profits for their own shareholders. It is intolerable in a democracy that small groups of men should have this enormous power over the economic destiny of the nation.
Sir Ian Orr-Ewing: What about the Leader of the Opposition?
Mr. Marsh: I do not want to be unkind, but as long as they have the present Prime Minister, the one danger which does not face hon. Members opposite is the possibility of it ever becoming a one-man band.
When we look at the measure of control and how it is spread in this massive industry, we find that the chairman and general manager of John Summers, of Stewart and Lloyds and G.K.N. all sit
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on the board of United Steel. The chairman of the Steel Company of Wales is also a director of G.K.N. and the chairman of each of these five companies is an alternate director on another of the boards, while the Steel Company of Wales and English Steel all have a director in common as does English Steel and R.T.B. There never was a clearer case of industrial incest than that which is provided by steel.
Look at the performance. Its capacity was inadequate almost every year right up to last year and it is only adequate now because of its miserable export performance. If one looks at its development [Interruption] Anybody on this side of the House is perfectly willing to debate this issue on this matter in particular or on public ownership in general with any hon. Member opposite.
Italy produces 7½ million tons of steel from one State-owned steel plant. The French are now building a new plant at Dunkirk which will produce 10 million tons a year. The Russians are having an argument about whether their new plant will produce 12 million or 24 million tons of steel a year. There are 30 scattered plants in this country and not one of them has an output of more than 3 million tons of steel a year. [Interruption] There are a number of hon. Members who want to take part in this debate, but as the hon. Member for Peterborough (Sir H. Nicholls) interrupts I shall mention the other interesting example of broadcasting. I would say that, here again, is another clear case. [Interruption] There are plenty of buyers for the B.B.C. if it wants to sell out, but no one wants to buy because the contribution that it makes to the community is recognised.
Sir Harmar Nicholls: The hon. Gentleman has kept his promise for the most part. He said that he would be categorical in stating what the policy of his party was and he had the assent of the Leader of the Opposition while he was doing it. He was categorical on dealing with steel, road transport and water, and we shall deal with that at the election. Can he be just as categorical, and can we have the assent or dissent of his right hon. Friend, that in the event of his party winning the next election it will not nationalise the machine tool industry? The hon. Member was categorical about

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some things. Cannot he be just as categorical on this?
Mr. Marsh: The machine tool industry—I will send the hon. Gentleman a copy of "Signposts for the Sixties"—is specifically quoted as a typical example of the sort of industry which, in my view, is not ripe for old style nationalisation, but in which there is a real need for the State to be able to undertake this sort of initiative—
Mr. David Gibson-Watt rose—
Hon. Members: Sit down.
Mr. Marsh: I cannot envisage anyone on either side expecting a back bencher to give way to a Whip.
Mr. Deputy-Speaker (Sir William Anstruther-Gray): The House will make better progress if we observe the rules of order that only one hon. Member may be on his feet at a time.
Mr. Victor Goodhew: On a point of order, Mr. Deputy-Speaker. I think that the hon. Member is under the misapprehension that my hon. Friend the Member for Hereford (Mr. Gibson-Watt) is a Whip.
Mr. Deputy-Speaker: I was unable to discern anything that is a point of order in that.
Mr. Marsh: It is surprising that hon. Members opposite want the answers and then do everything they can to stop them. There are plenty of hon. Members on both sides who wish to speak. If I did an injustice to the hon. Member by calling him a Whip, I apologise to him.
Whatever the argument about any particular point, I think that hon. and right hon. Members did right to make this a major election issue. It is right that it should be so. It is an extremely important issue on both sides. We are determined, on this side, to make British industry accountable to the nation. We are determined to ensure that our people shall no longer be economic lodgers in their own country. We are determined to put these arguments at the next General Election and to implement this policy after it.
4.58 p.m.
Sir Peter Roberts: I want—[HON. MEMBERS: "Declare your interest."] I want to deal with the question of steel. In doing this it is natural
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under the normal procedure of this House to declare an interest, which I am very pleased and proud to do. I am the chairman of one of the big steel companies in this country in Sheffield and I also am in some form or another a shareholder in various steel companies. I do not think that the House should disapprove of this interest because it shows that at least I have some knowledge of what I am talking about.
May I first refer to the speech of the hon. Member for Greenwich (Mr. Marsh), which I think put clearly his Socialist principles. We know the statement of Socialist policy. It goes back a very long way. But I think that there are other things besides Socialism which we must consider when discussing the great basic industry of steel, as the hon. Member referred to it. So far this afternoon we have heard the statement that steel is to be nationalised. That raises the question why. So far the only answer that we have had is that this is Socialism. We should, however, look at the matter a bit more closely.
Before I go into detail, I should like to take up one point which the hon. Member for Greenwich made. He talked about using the W.E.A. to put over his Socialist ideas. He may have used some other initials, but I thought that he referred to the W.E.A., which is a non-political body, I hope. I will discuss this matter with the hon. Gentleman afterwards round the tea table, as he offered.
A number of hon. Members opposite have affirmed that they wish to nationalise—I think that that is the right word in this case—the steel industry. Let us consider what that means. So far, the only reason that we have had for this is that it is good Socialism. But this House and the country must look further than that. We must look to the economy of the country. I want to ask a number of questions in order to see whether hon. and right hon. Members opposite think that the system of nationalisation will be more efficient than the existing system. I am asking for information.
Let us first take capacity. The hon. Member for Greenwich said that it is better now than it was. I do not propose to go too far into detail except to say that by 1965, when the newest plants come into operation, capacity will be running at about 33½ million crude tons.

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Today the demand is about 27 million tons, which we are glad to see. There is considerable extra capacity—
Mr. O'Malley: Will the hon. Gentleman give way?
Sir P. Roberts: No. I think that it would be better if back bench speakers did not give way. It only leads to a good deal of delay. I hope that the hon. Member for Rotherham (Mr. O'Malley) will be able to catch your eye, Mr. Deputy-Speaker. The arguments which I have listened to for two, three, four, five or even more years, usually put forward by the right hon. Member for Vauxhall (Mr. Strauss), about the low capacity of the industry, do not apply today.
I want now to turn to the question of development. I notice that some time ago the right hon. Gentleman the Leader of the Opposition got involved in a discussion about oxygen development in this country compared with Germany. He was talking about oxygen development, as I understand it, and not the rather long-term, old-fashioned oxygen method of Bessemer steel making which has been going on in Germany for some time. Since the right hon. Gentleman made this remark, and since I thought that some hon. Member opposite might try to develop it, I thought it proper to get the best evaluation which I could of the development of the oxygen process in this country. The best estimates which I can find relate to what will happen in 1965–66; we have records on this. The figures show that in 1965–66, 25 per cent. of United Kingdom production, which is now being planned, will come through the oxygen process; that in West Germany the figure will be 17 per cent.; in the United States 15 per cent.; and in France 11 per cent.
Mr. R. E. Winterbottom rose—
Sir P. Roberts: Let me finish the argument. Admittedly there has been a move on the Continent to introduce this new development quicker than here. But those who went in first may well not be best off in the end. I look at the developments which were going on four or five years ago. They were not efficient. New processes have been introduced, and I am sure that the United Kingdom in
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dustry will by 1965–66 have the latest and best processes and will be in advance of some of those companies abroad which went in for these plants earlier than we did.
Mr. Winterbottom rose—
Sir P. Roberts: I will give way to my honourable colleague from Sheffield. He may know something about this.
Mr. Winterbottom: May I put this question to the hon. Gentleman on his statement that in future 25 per cent. of steel will be produced by the oxygen process? I know that it is a technical question, but, nevertheless, it is an important one. What are the possibilities of producing steel next year by the oxygen process—that is, by the pure oxygen process as distinct from using oxygen lancing, in other words, by making steel by the L.D., Kaldo or Rotor process? My figure is quite different from the hon. Gentleman's. My figure, even allowing for the developments already planned, is 15 per cent.
Sir P. Roberts: I tried to cover that point in what I was saying. I was talking about new developments and not the old process of oxygen insertion into the steel. The figures which I gave included steel into which oxygen is inserted in one way or another.
I was dealing with the point made by the Leader of the Opposition—it was a denigratory point, whatever the hon. Member for Greenwich may say—that the British industry was behind Continental practice in the oxygen method. One can very easily cloud the issue by talking about other methods. We will be leading the world by 1965–66 with the latest K.D. process and Kaldo process, which is not quite so successful.
There have also been criticisms that we have not had as many bright ideas about steel development as other countries. I have heard this criticism on one or two occasions, and it is incorrect. United Kingdom steel production is about 10 per cent. of world production. No one can expect us to produce all the bright ideas. The percentage of ideas which we have produced is greater than our 10 per cent. of world production. I should like to mention three. The continuous casting process is one of the biggest developments in the Steel Co. of

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Wales and another in Canada. The Ajax oxygen process is now being developed, and there is the hardened steel roll production for alloy strip mills. These are British developments and we are proud of them. I hope that in the political battle which no doubt we shall have we will not run down either the nationalised industries or the private enterprise industries of this country. Let us try to consider the matter purely from the economic point of view, and the best interest of the nation.
I turn to the question of prices. There have been some criticisms of the price structure of the industry. It is said that British engineering industries are having to pay a higher price for steel than their competitors abroad. I thought that this matter should be checked and looked into. I have had this done by the Iron and Steel Federation, which has the best methods of finding this out. This is factual information and it can be checked. The difficulty is that there is a different tax structure in the price, there is a different quality in the price and there is a different rail charge in the price.
The easiest and best comparison is the price of the steel delivered to the consumer, and the answer comes out as follows. United Kingdom prices are definitely lower for thin flat products. They are normally lower for heavy products and they are just about competitive for light products. Again, I have taken the top and bottom ends of the range so that hon. Members can see the sort of comparison which we are talking about. That deals with open-hearth steel quality, remembering that on the Continent Bessemer steel quality is usually about £4 or £5 per ton less.
In the case of sheet steel, the United Kingdom price to the consumer is £55 per ton. The comparable prices are: the United States of America, £61; West Germany, £65; France, which has the Bessemer steel, which, therefore, costs less, but adding on the extra quality, £63; and Belgium, £65. It is in this range that we are best, where we have spent the most money on the latest developments, and our prices are lowest.
At the other end of the scale, our position concerning billets is not yet as good as it should be. The comparable figures are £32 for the United Kingdom, £40
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for the United States, £39 for West Germany, £29 plus £4 for France and £33 plus £5 for Belgium. On the economic aspect, it is therefore possible to say that the present pricing system is advantageous to the British industrialist.
Mr. Ellis Smith: What about shipbuilding?
Sir P. Roberts: We are cheaper basically with plates than the Continent.
Let me continue and look at another point. We discussed this kind of argument across the Floor of the House on coal nationalisation, which I remember well. One of the big arguments at that time was that there were bad labour relations in the mines. That argument cannot be applied to the steel industry today. We have not had some of the difficult arguments and debates which we had in the past concerning coal. Incidentally, in the steel industry, we have a system of relating the wages of steelmakers to the cost of living index. I ask hon. Members, on both sides, to note how well this system works and I suggest that it might be considered in other industries.
Moving on to the question of how nationalisation would do better than the existing organisation of the steel industry, I must raise the subject of taxation. The hon. Member for Greenwich used a lot of figures and talked about subsidies which had been given to the industry. Before a subsidy is given, however, there must be taxation from which to give it. Again, I have looked up some figures to see what the steel industry has paid in taxation towards the social and educational development of the industry. In the period from 1957 to 1961, the steel industry contributed £350 million to the Exchequer through Profits Tax and Income Tax. One could say that if there were a policy under nationalisation of no profit, then the profit would come higher up the industrial line. But from the national viewpoint of taxation it is obviously better to take the money at the basic start of the industrial tax system rather than to follow it through the various subsequent channels of industry.
If we make a comparison with British Railways and the National Coal Board during that same period—I do not necessarily complain of this—instead of putting

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£350 million into the Exchequer for the social development of the country, British Railways and the Coal Board together received a refund of £10 million. I am not in any way criticising, but hon. Members opposite must realise that if we take nationalisation on the basis which has been discussed today, which usually means no profit or some loss, we would lose a great deal of profitable taxation, of which I am not ashamed, which goes towards building up of the national social life.
Therefore, the questions which I want to ask right hon. and hon. Members opposite are whether the industry would, in fact, do better under nationalisation; whether it would do better in regard to development, prices and labour relations; and whether it would continue to add to the national Exchequer. So far, on all the figures which I have shown, it is undeniable that hon. Members opposite have not made a case. If they want to go before the country and say that the figures which I have given are wrong or that nationalisation would do better, the onus is upon them to prove it. This they have not done.
Having dealt with the question of whether nationalisation could be more economically efficient, let us consider whether the system of nationalisation is best applicable to the steel industry as such. A lot of thinking about this has to be done by right hon. and hon. Members opposite. As yet, we have not had any experience of what I call an intensive international nationalised industry. The only one which we have had is the aircraft industry, which is so tied up with Government subsidies all round the world that it is not comparable. We have not, however, had intensive experience of a highly competitive industry being nationalised.
The hon. Member for Greenwich mentioned nationalised plants in Italy, in France at Dunkirk, which we know about, and in Austria, which was the result of the war. Basically, however, those companies are still being run on a profitable basis under the capitalist share-owning system. Apart from Russia, where steel is used inside their own great monopolistic ring, we have not seen any example of nationalisation of this nature.
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The only small example which we have had concerned the National Coal Board when it came up against cheaper competitive coal prices from the U.S.A. for the Steel Company of Wales. But a restriction was imposed by the Government and the cheaper coal was not allowed to be imported. In view of the fact that steel is a highly competitive and strenuous industry, these facts should be borne in mind. What are the difficulties which we have experienced from nationalisation? I am not attempting to denigrate; I am stating what I understand to be the administrative difficulties. The first is a tendency to become monolithic. I believe that some of the steel companies have become too big, particularly in the United States of America, where some of the companies are of a vast size. Even in this country, some of the companies have got too big a structure.
My experience is that the right sort of unit is a plant with a total labour force of something like 4,000 people. Once we get above that size, we lose a great deal. We might gain something in rationalisation, which tends, however, to lead to redundancy, but we lose something in the sense of belonging to a company and being part of a team. It is a fact that many of the workpeople and staff in the industry are proud to belong to their company. I am proud to mention again my company of Hadfields. I am honoured to find that people who have worked in the firm for, perhaps, as long as 50 years still come back to our functions, and are as proud of Hadfields as I am. There is something in this which we should not lose.
The second point in the monolithic argument is that within the monolithic structure there are pockets of loss which do not show up and which continue to be allowed to exist. I think that this is worth looking at, and I want to give one example of it. Again, I am not doing it to denigrate the National Coal Board. I am merely giving figures and I want to say before I do so that in the Coke Oven Division of the Coal Board they have some of the ablest men and some of the latest equipment such as the Avenue plant at Chesterfield. Let us look at this pocket of loss in the accounts of the Board, the latest ones for which are for 1962.
Mr. W. Hamilton: Interest charges.
Sir P. Roberts: I put interest charges in.
In 1962, the Coke Oven Division lost £7,775,000, and with interest charges of £1,880,000 added to that it amounts to a total of £9,650,000. That is a big enough figure in itself in the National Coal Board's accounts. But then one should look at the sales value on which this loss has occurred. The sales value of the total of the products of the Coke Oven Division was £49½ million—nearly £50 million. So there is a loss of nearly £10 million on a sales turnover of £50 million, which is 20 per cent. or 4s. in the £. As I say, this is an organisation with the ablest men and with the best equipment, but it is the system itself which allows this to happen.
Mr. W. Hamilton: Come off it.
Sir P. Roberts: If we take—
Dr. Jeremy Bray: Will the hon. Gentleman give way?
Sir P. Roberts: As I was saying, if we—
Dr. Bray: Will the hon. Gentleman give way?
Hon. Members: Sit down.
Mr. Deputy-Speaker: Order, As the House well knows, only one hon. Member may speak at one time.
Sir P. Roberts: If we take this type of pocket of loss and refer to it in the private enterprise context, the first thing that tends to happen is that the unions come along and say, "This is not good enough." We can get some very helpful advice on pockets of loss of this kind from those on the shop floor, who often see it first. If that does not work, then we get the shareholders saying, "What does the board think it is doing losing 20 per cent. on the turnover?" If that does not work, then the staff are dissatisfied and leave. These are the sort of safeguards which are brought to bear at the moment under the private enterprise system. When we get to the monolithic concept of nationalisation in a highly competitive world market we cannot afford any kind of inefficiency arising from such system.
Therefore, let me, if I may, see how far the arguments of the hon. Member
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for Greenwich have led. The hon. Gentleman says, first, that the Labour Party is going to nationalise the steel industry, but he does not say how, when, or how much. Nor has any other hon. Gentleman opposite made out the case that nationalisation would be more efficient. They have made out no case to prove that nationalisation is a system which would work in this type of industry. Therefore, we come back to the only answer that is left to us, and the only answer that we have been given today. The answer is Socialism, back to Karl Marx, back to 1840, and Labour Party Clause Four. But it is not 1840 today, it is 1964; and we cannot have these old-fashioned, out-of-date Socialist ideas attacking the most vital basic industry of our country.
I do not object to hon. Members pushing their ideas, but I find that there is some objection from hon. Members opposite when some of us on this side of the House or even some companies and their shareholders try to defend themselves. If, again, right hon. and hon. Members opposite would say what they are going to do, when they are going to do it and how much they are going to pay, and if the amount were to be astronomical, then the shareholders in steel companies might use their money to support hon. Members opposite. However, we do not know, and since no case has been made out, and no amount of money has been mentioned, surely the shareholders in the steel companies are entitled to defend themselves.
I very much doubt whether enough money has yet been paid to the Conservative Party in order to defend the industry. Let me say to the right hon. Member for Belper (Mr. G. Brown), who may be going to reply for the Opposition—perhaps he is not, but perhaps he will pass on our comments to whoever is going to reply—and who I know has a very good sense of fair play, that if he were to receive a letter from somebody saying that they were going to come to his house and take away his grandfather clock, presuming he has one, but did not tell him when they were coming or how they were coming or how much they were going to pay, then the right hon. Gentleman would be entitled to buy a watch-dog.

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I would not blame him. That is the same position as far as levies from the companies and money from the shareholders are concerned.
We have heard the hon. Member for Cardiff, South-East (Mr. Callaghan) making a great fuss about funds being raised in order to defend the right of property and the assets of the steel industry. Let no one say that to defend one's property is not a proper thing to do.
Let me end by saying that the Labour Party, so far, has refused to say why it wants to nationalise steel. All it has done is to look and bow to the great statue of Karl Marx. It is unable to say how nationalisation will be more efficient, and how nationalisation as a system will work in the steel industry. I hope that the Amendment to the Motion which we are discussing will be defeated.
Mr. Arthur Lewis: On a point of order. I do not wish to take part in the debate, Mr. Deputy-Speaker, but may I ask you whether or not you could appeal to hon. Members not to take half an hour each in which to make their contributions in such a limited debate?
Mr. Deputy-Speaker: I think that we had better make use of what time we have got.
5.27 p.m.
Mr. John Morris: I will try to be as brief as possible and to follow the hon. Member for Sheffield, Heeley (Sir P. Roberts). He doubts whether the shareholders have paid enough yet to fight our party's plan to bring this industry under public ownership. Perhaps his and other companies will disclose how much they have paid so that we can measure whether they have paid enough. Perhaps his own company will disclose what they have paid the Federation.
Sir P. Roberts: I have made inquiries and I think that it is about £1,000.
Mr. Morris: Perhaps the hon. Gentleman and all the other company directors of the steel industry have gone to their shareholders one after the other to seek their permission so to do. That is not
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the situation. Many steel companies refuse to disclose to their shareholders how much they have contributed.
The situation is that the contributions of the steel masters to avoid a Labour victory at the next General Election is such that already a coach and four has been driven through our electoral practices. The limitations which are now imposed on these Parliamentary candidates are nothing to what the steel masters can indeed pay. We remember the last General Election and how much Stewarts and Lloyds paid. It was well over £¼ million—in fact it was some £300,000. We never knew how much the Steel Company of Wales paid in order to finance the campaign of Colin Hurry.
I will deal with some of the points raised. The hon. Gentleman dealt first with capacity. It may well be that capacity today is in the region of optimum, but it has taken us since 1951 to reach that position. We remember the long battles that went on between 1951 and 1958 between the Federation of the steel owners, the Federation trying to stop the Steel Board from setting up its new development that was so necessary. As a result the country has had to pay dearly year by year in our series of balance of payments crises.
The hon. Member was proud of the development. Mr. W. F. Cartwright, managing director of the Steel Company of Wales, said as far back as 1958 that he could not help noticing that nearly all the items regarding the development of new steel-making processes appearing in the Iron and Steel Institute's "Journal" were of foreign origin. Criticism was made by the Iron and Steel Board about lack of research in the British steel industry.
The hon. Gentleman was proud of the prices in the industry. I do not dispute the prices. They are governed not by the steel industry but by the Iron and Steel Board. The Board has imposed maximum prices, but they have been adopted as the minimum prices by a large part of the industry. If prices are so low and competitive, why have we a shocking export record compared with the Common Market countries? If we have all these advantages, the capacity and the techniques and our prices are competitive, why are we not able to sell very much better abroad than we are doing?

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I can give figures of export sales of this great industry compared with the Common Market countries. The record of Stewarts and Lloyds, the great campaigners on this issue, is far worse than other parts of the industry. The exact amount of its exports in recent years does not show a plus basis at all. When one looks at the national total of tubes, of which it has a virtual monopoly, it has a minus figure from 1953 to 1962.
The hon. Member declared his interest, and I declare mine. I am anxious that we should have an effective and competitive industry. It is bad for the industry to remain a political shuttlecock. I am sure that when the time comes after the next General Election, no longer will it be open to the Tory Party to denationalise it. When the last denationalisation Measure was brought before the House in 1953, the present Minister of Power confessed that the industry was being denationalised for purely doctrinal reasons.
We are all entitled to know what the Government's views are. We were told in the Tory manifesto in 1959 that they were utterly opposed to any extension of nationalisation by whatever means. That was their view. But what was one of their first acts after 1959? They nationalised Whitehead, of Newport. We had to pay for that. It was sold back by the nation to private investors for £3·4 million, and eventually it became necessary to nationalise it again. I concede that some £3·6 million of profits had been ploughed back in the meantime. Putting the two together, it is a total of £7 million. What the country had to pay when the Tory Government nationalised that industry once again was more than £10 million. The British public had to pay through the nose for that piece of nationalisation. Where does the Tory manifesto, with its statement that they were utterly opposed to any extension of nationalisation by whatever means, stand now?
The 1953 Act pledged the Tory Party to continue the process of denationalisation. We were told from time to time that it remained the intention of Her Majesty's Government to complete the denationalisation of the steel industry. We were told that as recently as 1962. In the meantime, the important words which we have heard from time to time, to the effect that the Government propose to do
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this in the lifetime of this Parliament, were conspicuous by their absence. I challenge the Minister to state where Richard Thomas and Baldwin stand on this, if the Government have made a pledge that they intend to denationalise the concern and if they believe that nationalisation should not be extended.
Why, when there was a need for a new strip mill and a large amount of investment, did the Government have to go to the great publicly-owned concern, Richard Thomas and Baldwin, and ask it to carry out the work? The answer may be that Richard Thomas and Baldwin was not the only firm in it. There was another firm, a privately-owned one in it, I concede. It was Colvilles, of Scotland. But whose money was it? When an expansion was needed, was the interest of the country put first and not the interest of a private concern? It was the country's money, and most of it came from the public's money in Colville.
I would quote a statement made in an advertisement by Stewarts and Lloyds in The Times on 12th March this year. The question asked was:
"State-owned steel—is it reasonable? Does it seem to you to be sensible to treat this company as a political football? Does the uncertainty which must then prevail help to recruit and keep the people we need? Is it right to keep those whom we employ as well as those with whom we trade in a state of continuing uncertainty?"
That is the situation in regard to Richard Thomas and Baldwin year after year. We have asked the Government about this month after month, and they will not tell us what their plans are.
I asked the Prime Minister on 24th March this year what his intentions were in the present Administration and what he intended to do with the concern? There was no certainty at all. Allegations have been made that the staggering losses of Richard Thomas and Baldwin are one of the burdens of the taxpayers. Let us look at the situation. In other departments, the firm of Richard Thomas and Baldwin has consistently made profits. The whole company until this major piece of expansion had been making profits for many years. However, when the great expansion took place and a large amount of money was injected into the company, it was natural to expect that at the beginning of

1527
such investment no great profits would be shown. Any reasonable businessman would expect a loss at the end of the first year after the new plan began. Let us look at the situation of the sister company in this respect, Colvilles, of Scotland, which was expanding at the same time. It made a loss of £4·7 million, and the chairman had to tell his shareholders that it could not be expected that such large schemes should become immediately pofitable at the start of the production. That is the defence.
I have a far better witness than the chairman of Colvilles. I have the Prime Minister himself. I asked him on 24th March—he is a man we can expect to believe on these occasions—whether he was satisfied with the record and management of Richard Thomas and Baldwin to date. I did not want to commit him for some future date; I merely asked him about the situation up to 24th March. The Prime Minister said that he was satisfied with the record and management of that great publicly-owned concern up to 24th March.
What reason can there be for some of the steel masters and other people in different parts of the country denigrating these great publicly-owned industries and Richard Thomas and Baldwin in particular? What I have referred to is the kind of advertisement which is being issued by Stewarts and Lloyds—and partly financed by the Tory Party—to try to show that the company is doing something improper and wrong and that the losses are due to the monolithic character of that part of the industry.
The Richard Thomas and Baldwin concern is entitled to know the Government's intentions. This company has been kept dangling on a piece of string since 1953, and particularly since 1959. So far the Government have not dared to make a final pronouncement of their intentions.
Mr. A. Woodburn: Sir Andrew McCance managed Colvilles when it was originally under private enterprise. He then managed it when it was under public enterprise. He manages it now that it is back again under private enterprise. Is it suggested that he behaved improperly when the firm was under
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public enterprise, but that he worked conscientiously when it was under private enterprise?
Mr. J. Morris: I am obliged to my right hon. Friend.
How effective is the present system of ownership whereby the industry is partly public, but the bulk of it is privately owned, and there is this so-called supervision by the Iron and Steel Board? Recently we had two private Bills for South Wales because we in South Wales, like other parts of the country, need new iron ore ports. Richard Thomas and Baldwin came down to the House to promote a Bill to build a new iron ore port for £18 million, and the Steel Company of Wales is proposing to build another iron ore port for £15 million.
If this supervision was worth while, if it was effective, if there was someone looking at this industry, not from the point of view of any particular firm, but rather from the point of view of the nation as a whole, one would have expected there to be some kind of plan to examine the advantages of those schemes. It may be that both schemes are needed. It may be that only one is needed. It may be that neither is needed. But such was the Government's interest in those two major measures, which at the end of the day will be financed by public money, that when the issue was debated in the House the Minister of Power did not come down to listen to the debate. That illustrates the supervisory powers of the Minister and of the Iron and Steel Board over this industry.
I am taking up far too much time, and I propose to sit down shortly to allow other hon. Members to speak. [HON. MEMBERS: "Hear, hear."] I propose to deal with some of the points which have been raised in this famous pamphlet issued by Stewarts and Lloyds. The first yardstick is: is capacity adequate? That was the point made by the hon. Gentleman. We all know that over the years capacity has been inadequate. It may be that that situation is on the point of solution, but when there is a clash between private interests and public need in this country, private interests always come first. The difficulty in the past has been the clash between the Iron and Steel Board and the Federation.

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Next it asks: are operations efficient? We all know that in this respect there is a need for rationalisation. Stewarts and Lloyds produce steel tubes at three centres, and there are three major companies in Lincolnshire. The chairman of the South Durham board suggested that either one or both of his neighbours should give up what they were producing and allow him to go it alone. The hon. Gentleman thought that the optimum need of this industry was 4,000 men. That will not do in this day and age. There is a need to rationalise this industry, but there is no hope of doing it except by public ownership.
The next yardstick is: is the quality of management and labour force adequate? I am sure that there is an immense potential in both these fields, but they are operating within the narrow confines of the needs of their own companies, and there is no one to look at the interests of the nation as a whole.
The last yardstick is: is the industry's sales effort forceful and effective? I am making no attack on what the industry has succeeded in doing so far, but when one compares its efforts in exports with those of the Common Market countries, one realises that they are not good enough, particularly with regard to steel tubes, in which Stewarts and Lloyds play a prominent part.
This is a great industry. It is a monopolistic industry. I can only quote the words of Lord Beveridge, that where there is a great industry of this kind, which is in itself monolithic and monopolistic, there is no suggestion of competition. Mr. Judge at the Restrictive Practices Court conceded that competition played no part in this industry. When there is a great industry of this kind, a monopolistic and monolithic industry, and when there is no suggestion of competition within it, it should be accountable to the nation.
5.45 p.m.
Mr. F. M. Bennett: We have heard a number of interesting remarks from hon. Gentlemen opposite, but I must confess that few of them appeared to have any relevance to the Motion, which seeks to discover which industries the Labour Party would nationalise if it was returned to power at the next election.
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If right hon. and hon. Gentlemen opposite are right in all that they say on behalf of nationalisation, that may be a useful argument for it, but its only relevance to the Motion is for them to say that it is also their intention to nationalise the lot. All their arguments are in favour of nationalisation, and all that we are asking them to do is to say so clearly and to give specific details. [Interruption.] I intend to make my speech. If hon. Gentlemen opposite continue to interrupt me, it will prevent other hon. Members from taking part in the debate.
The right hon. Member for Belper (Mr. G. Brown) seemed to have Aims of Industry unduly on his mind. Let me tell him that I have not received any documents at all. The documents at my disposal are entirely from Labour Party sources, and it is on Labour Party statements that I intend to speak this afternoon.
I have here a rather seedy little booklet entitled "Ammunition" with a sub-title, "Speakers' Notes, No. 9". It sets out a number of arguments. As a weapon, this ammunition must be about the wettest thing since the French bowmen damped their bowstrings at Agincourt and lost the battle It says:
"Every Tory M.P. who makes wild allegations about Labour's plans for industry or who demands to know whether company X or Y is going to be nationalised should be prepared to answer these questions:
First, what firms are contributing to his local Tory association?"
I think that that is a rather personal question. [HON. MEMBERS: "Answer."] I have no objection to answering it. There is no significant industry in Torquay, so no firms contribute to my party, but I am sure that if there were firms there they would be only too glad to do so.
The next question to be answered is:
"Second, how many directorships in private firms does he possess?"
Even the most inexperienced Labour canvassers could get hold of a copy of "Who's Who", or the Directory of Directors, or some other established reference book to discover that. I hope that hon. Gentlemen opposite will answer some similar questions about retainers and things like that, which do not appear in reference books.
The next question to be answered is:
"Third, is he himself in receipt of an income from dividends or capital gains?"

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Yes, I am, and I think that many other hon. Members opposite, too, are interested in income from dividends. All I can say is that in the newspapers, a couple of days ago, a most distinguished Member of another place—Lady Gaitskell—headed the names in a new investment trust designed specifically to encourage people, presumably not all of them Conservatives or reactionaries, to invest in her unit trust.
Again and again we have heard the claim made that all we need to do is to rely on "Signposts for the Sixties". That is the "bible." That is all we need to know. But that view is not shared by every hon. Member opposite. I learnt with extreme interest of the remarks made by the hon. Member for Blackburn (Mrs. Castle) in November, 1961, when she said:
"Give this document"—
"Signposts"—
"to a man like Ian Mikardo and you could have this country's industry transformed. But give it to someone like Woodrow Wyatt and you won't get very far."
If everyone else is clear about "Signposts for the Sixties" it is certain that the hon. Member for Blackburn is not.
The hon. Member for Ebbw Vale (Mr. M. Foot) also does not seem too keen to abide by the "bible." In 1960, he seemed to be writing a version of his own when he said:
"The leadership must be prepared to accept that they were committed to the hilt to a full-blooded programme for public ownership. Clause Four stands unimpaired and undiluted. That is the fact, and no one can deny it."
I do not notice many contributions to "Signposts" in that little lot.
Let us move to consider some specific industries. Again, I have no quotations from Conservative documents. They are all from Labour records. In 1961, the hon. Member for Newton (Mr. Lee) openly advocated full public ownership of the aircraft industry. This year he reversed his position, and make a statement on it, but in May of this year the A.E.U. National Committee, at its annual conference, passed a resolution urging public ownership of all independent airlines. If the party opposite goes from Box to Cox and from Cox to Box,
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backwards and forwards again and again, it is clear that it is right and necessary that we should be debating a Motion of this kind now.
On 13th February, 1964, the Confederation of Shipbuilding and Engineering Unions proposed nationalisation of the whole machine tool industry. I want to know whether the Opposition accept that, or whether they have sent a note to the Confederation repudiating the recommendation. I want to know that today. In May, 1964, the annual conference of Building Trades Workers passed a resolution in favour of the nationalisation of the building industry and building materials. Again, has a little note been sent telling it that it is not on?
In June of this year the chemical workers' annual conference advocated that the next Labour Government must nationalise the chemical industry. Has that union received a rocket for that suggestion, or is it to be included in the next edition of "Signposts"? As recently as last Sunday the hon. Member for Coventry, East (Mr. Crossman), one of the brain children of the benches opposite, with his usual flair for letting cats out of bags at inconvenient moments, advocated nationalisation of the motor industry. I wonder what concern that caused among his colleagues, when they realised that they had another contribution from him towards policymaking for a new edition of "Signposts".
Mr. R. H. S. Crossman: I am delighted to have the opportunity to put the hon. Member straight. What I said last Sunday is something that I am sure will commend itself to the hon. Member. I said that if it came to a choice between a British firm acquiring American capital and being subjected thereby to American control, on the one hand, and being subject to British Government control and having thereby partial or wholesale nationalisation, on the other, I was for nationalisation—and so were all the workers of Coventry.
Mr. Bennett: I am glad to hear the hon. Member say that because his party has dropped all claims concerning the recent contribution by American industry, about which he is apparently still complaining. If his party is still so

1533
critical of the situation why has it not followed up the futile Questions it addressed to the House and which it withdrew smartly soon afterwards?
Now let us consider the Young Socialists—the young torch carriers who will be sitting on the benches opposite when all the present occupants have gone to another place. They are the ones with whom the future lies. These young men recently passed a resolution demanding the nationalisation of all land, the building industry, steel, chemicals, banks, finance houses, insurance, shipbuilding, motor manufacture, and building societies, and the municipalisation of housing. Is all that coming into "Signposts" as part of the Labour programme?
It may be said that all these do not bind a future Labour Government, and do not represent policy making. All I can say is that these unions very much help to pay the piper. I wonder what will happen when the time comes for them to start calling the tune. [An HON. MEMBER: "Tell us about the Tory women."] I should be glad to tell them about the Tory women if they would tell us about their plans.
Now I shall try to bring myself right up to date. I have studied recent by-election addresses to see what I can find out from them. In Bury St. Edmunds the Labour candidate said that the only industry on the list was steel—so he has not read "Signposts", because he left out road haulage, water, and the rest. In Devizes, the Labour candidate approved the nationalisation of steel and road haulage, but no more, so he had a different version. The new hon. Member for Rutherglen (Mr. Mackenzie) played much more safely. He wrote vaguely about the public ownership of key industries, without naming any of them, apart from steel. He will be a very good member of any Labour Shadow Cabinet.
Finally, in this connection, the real plum should go to the Labour candidate for Winchester. He wrote a carefully detailed election address and never mentioned nationalisation, public ownership, social ownership or any other State ownership of key industries. He kept right out of it.
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The whole purpose of the debate has been to force the Socialist Party out into the open and to prevent its members from continuing a practice which, if they were members of the private firms which they so much despise, would put them all in gaol for issuing fraudulent prospectuses. It is quite a clever game, but the opinion polls are beginning to show that the people are seeing through it The right hon. Gentleman the Member for Belper who, I understand is to reply for the Opposition, gave the game away in an interesting statement in May last year, when he said:
"The fewer detailed commitments my party have when we enter office, the greater will be our opportunities then."
As for the Leader of the Opposition, I want to make my closing remarks to him, because he has taken such an intense personal interest in the whole of this matter since it first came before the House. He is the archdeacon of deception by silence in this matter. And yet, in 1957, in a rare moment of frankness, he said:
"When, for economic reasons, we need to acquire an industry or firm—its economic control—we should honestly say so."
That is all that we are asking the Leader of the Opposition to do. We say to him frankly that sucking a pipe in sheep's clothing and saying nothing is no way of fulfilling that splendid declaration. We now ask him to fulfil it properly.
6.0 p.m.
Mr. Arthur Holt: I am sure that the hon. Member for Torquay (Mr. F. M. Bennett) would not expect a reply to his speech from me. I do not suppose that he expects a reply from anybody. The House enjoyed his knockabout turn and I am sure that it was a great satisfaction to him and to his hon. and gallant Friend the Member for Knutsford (Sir W. Bromley-Davenport).
I intervene, in what I think an entirely "phoney" and irrelevant and out-of-date quarrel between the other two parties in the House, to say a word on behalf of the millions of people in the country, many of whom are constituents of hon. Members opposite and most of whom are absolutely bored to tears with this argument. It is an astonishing matter to me that in February of last year

1535
the Conservative Party thought that it would be on some kind of election winner if it used this old red herring again.
I should like to bring the House back to the consideration of serious matters. We are concerned about economic growth, a rising standard of living, getting more exports, and the like. There is little, if any, indication that ownership, as such, has anything to do with that. What creates economic growth in these modern times is, basically, a right kind of consistent economic policy being followed by the Government, and industrial efficiency, from top management down; promotion policies which ensure that the most able people can get to the top and take over the leadership of a firm, whether it be nationalised or private, large or small; consultation throughout industry and good labour relations.
If we are talking about taking Britain into the latter part of this century and achieving a rate of economic growth which we have not yet achieved it is these matters to which the House should give its attention—and to which I believe the country wishes the House to give attention—rather than to the kind of nonsense we have heard this afternoon.
Ownership is important, but not in that respect. It has little to do with economic efficiency and the achievement of growth. It is important politically, and in relation to questions of power and expression of opinion, and that sort of thing. Our experience over the years has shown that a great deal more attention should be given to this aspect. The chief thing to avoid is a concentration of power through ownership. It is important to safeguard against concentration of power in the private sector—perhaps even more so than in the public sector. It is important to guard against concentrations of power which, I suggest, are not related particularly to industrial efficiency, but to other things—to the spread of ideas, politics, and so on. To drag, once again, the question of ownership into an argument about growth and economics, as if it were a vital point, is pure nonsense. I thought that most people had accepted this. An argument went on in the Labour Party for a number of years on the need to examine
1536
the question of ownership in a more rational context and in a less doctrinaire atmosphere.
Certainly, the question of ownership has nothing to do with the problems of the steel industry. The hon. Member for Pontypridd (Mr. A. Pearson) made an interesting speech about this being the solution to the problems of the industry. I am not an authority on the industry, but those who have examined its problems say that the important thing is to seek the kind of arrangements for pricing—the basis point of pricing is what I think they call it—which is used in the Common Market countries and which, if it were spread throughout the steel-making countries of the world, would give a measure of stability and genuine competition which would safeguard the interests of the public and help to bring about the efficient production of steel. The question of ownership, or change of ownership in the steel industry, is quite irrelevant to the problems of the industry.
Mr. F. A. Burden: Will the hon. Gentleman give way?
Mr. Holt: No, I have not much time.
The Tory Party, as I said earlier, with the Labour Party, appears to be taking a more pragmatic attitude to the question of ownership. Figures have been quoted today about subsidies given to nationalised industry and even larger subsidies and loans to private enterprise. A lot of that has been done under Tory Governments. We have seen a Tory Government set up the public ownership of the Atomic Energy Authority. We have seen a Tory Government defend the taking over of a private firm by Richard Thomas and Baldwin. We have seen a Tory Government lend public money to a private company, such as Colvilles, and the like.
I should have thought all these were pragmatic approaches to problems which existed at the time. There might be an argument that when the Government put money in Colvilles they should have insisted on having one or two directors on the board. These are perfectly proper things for discussion, but they are not really things which it can be argued should divide one part of the nation from the other on extreme doctrinaire grounds.

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On the other hand, the Government followed an extremely doctrinaire attitude when the last legislation on transport went through the House. They insisted that perfectly good railway workshops should not be allowed to take on contracts for outside work or be hived off from some of the railway works, as some road transport undertakings were, into a holding company. They could have been hived off into separate companies so that it could be seen that they competed with private enterprise on a fair and proper basis.
There is no reason at all why the railway workships should not have been dealt with in a pragmatic, undoctrinaire way for the benefit of the country and those working in them.
Mr. William Ross: The hon. Member spoke for the Liberal Party on that occasion and supported the Government on that Act.
Mr. Holt: The hon. Member will also know that I spoke in favour of the railway workshops being allowed to do exactly what I have been describing. I voted with the Opposition on the particular Amendments about the railway workshops.
It is a great misfortune that when there are many more important matters to be argued, and argued openly on the hustings in the next few months, this old bogy should be raised as if it were a matter which, in fact, divides hon. Members. It does not and their record stands to be examined on it. It is a great pity when there are so many other things to be discussed and argued out that this bogy should have been raised.
The public is not impressed by the arguments about nationalisation, as every opinion poll has shown. The public is bored stiff with it. Hon. Members opposite will find that though they have raised this matter for party advantage when they are at the nadir of their fortunes, and think that it will bring them some success, it will do nothing of the sort. It will have no effect at all except that, if they go on with it, the people will become more and more bored with them.
6.12 p.m.
The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath): As I am rising now I should like to give the House an explanation. It has long been the convention of this House, which has been confirmed by the authorities, that the Government have the right to wind up a debate. This I believe still to be the case. This includes private Members' days. Certainly, during the time that I have been in the House, and in the experience I had in my previous capacity, this has been accepted, but on this occasion the Opposition have refused to adhere to the convention. [HON. MEMHERS: "It is not a convention."] It is a convention. We are not debating a Government Motion; it is a Private Member's Motion.
Mr. Ross: The right hon. Gentleman decided to support it.
Mr. Heath: The hon. Member has not yet heard what I have to say. The position is that, to avoid what I believe would be an unseemly situation for the House, I am quite prepared to wind up now and to sit down in sufficient time to allow the right hon. Member for Belper (Mr. G. Brown), who, I understand, is to follow, so say whatever he wishes in explanation.
Sir C. Osborne: What about the right hon. Member for Battersea, North (Mr. Jay)?
Mr. Heath: That is perhaps an interesting question, which I shall come to in a moment.
This has been a somewhat unusual debate because it has given, and will give, the right hon. Member for Belper an opportunity of clarifying the policy which his party would follow if they became the Government. Although I agree with much of what the hon. Member for Bolton, West (Mr. Holt) said, I must disagree with his statement that this debate is unimportant. I believe the subject is of great importance, and very great importance to the people of this country, but its relationship to current problems, is an entirely different question, with which I propose to deal at the end of my speech.

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I believe this is an important debate which deserves the attention of the House. Even if hon. Members opposite have not clarified their policy beyond what has been set out in "Signposts for the Sixties", they have at least made it abundantly clear in every speech made from the opposite benches and from their whole attitude throughout the debate that they not only support present nationalisation and future nationalisation as set out in "Signposts for the Sixties" but positively revel in every idea of nationalisation.
My hon. Friend the Member for Louth (Sir C. Osborne) asked why the right hon. Member for Battersea, North (Mr. Jay) was not answering this debate. He of course would be "a natural". He is the Shadow President of the Board of Trade. If hon. Members opposite should come into power whatever would be left of the Board of Trade after the right hon. Member for Belper had made his seizure of it, the right hon. Member for Battersea, North would be in charge. But the right hon. Member for Battersea, North is, unfortunately, unreliable in these matters. He is not doctrinally sound. He has deviationist tendencies on Clause Four. He was the first to call nationalisation a dirty word. No wonder he is not taking part tonight and is not even on the Opposition Front Bench.
We might have expected the Leader of the Opposition to reply to this debate because he has attached so much importance to this matter. [HON. MEMBERS: "Where is the Prime Minister?"] It is perfectly natural for us for the Minister responsible to reply, but the Shadow Minister is unable to do so. We accepted last night what he said about strategy, that he had little experience and did not know what bases and weapons were for, but on this subject he is a foremost authority, one of our leading economists.
He has had great experience as a student, a lecturer, at the Board of Trade as a civil servant and, finally, as a Minister in the 'forties when he went to the Board of Trade. This is of great significance because constantly in this policy we see him jobbing back to those days. Those, of course, were the days. What bliss it was to be politically alive but to be young, and at the Board of Trade was very heaven. There was
1540
that exciting meeting with Mr. Mikoyan of which we never ceased to hear and the meetings with people from overseas one never met before.
So the right hon. Member for Belper is to wind up for the Opposition because he is the least committed on this issue of all right hon. Gentlemen opposite. Perhaps he might commit himself further. When revision of Clause Four was under discussion, he, of course, supported Mr. Gaitskell as his Leader, as he always did. Although we have always respected his loyalty if not his judgment, this was precisely the moment when the right hon. Member for Huyton (Mr. H. Wilson) was making one of his several attempts to do in the late Leader of the Opposition. So now we see the right hon. Gentleman showing loyalty again to the right hon. Member for Huyton.
One of the interesting things when my hon. Friend the Member for Rye (Mr. Godman Irvine) put this Motion down was the immediate reaction of some hon. Members opposite who put down an Amendment. It was in the name of the hon. and learned Member for Ipswich (Mr. D. Foot), supported by one of the hon. Ladies opposite, and the Amendment looks back to 1906. This was a perfectly natural reaction from the back benches opposite. They quoted the words of my right hon. Friend the Member for Woodford (Sir W. Churchill). My right hon. Friend, in the exuberance of youth, said these things. At that time, any idea of public ownership was an attractive theory. Now, he has had experience. It is no longer a theory, and it is no longer attractive.
If people want to look back to 1906, 60 years back, why not look 600 years back or 6,000 years back? Let us look to the Book of Proverbs—
"Let us swallow them up alive as the grave; and whole, as those that go down into the pit … we shall fill our house with spoil."
An obvious prophecy of nationalisation.
I have been asked, "What about existing nationalised industries?" Here we have to make several things plain. My hon. Friends, who have been attacking hon. and right hon. Members opposite, have been attacking them about the vagueness of their policy in the future and also about the fact that they intend to nationalise at all. This is not an attack on those who are serving at present in the nationalised industries.
Mr. Walter Monslow: Is it not? The right hon. Gentleman should look behind him.
Mr. Heath: It is not what is being debated today. What is being debated is the future of the Labour Party on nationalisation. [Interruption.] If hon. Members will listen for a moment, what this Government have done to the nationalised industries is to change the means of operation and the concept behind them in order to achieve a more efficient industry where it has been nationalised. This has been done in a number of ways. It has been done by a decentralisation of the decision making inside an industry. [HON. MEMBERS: "Dr. Beeching."] In the whole transport industry, there has been a decentralisation of decision making. That is what hon. Members opposite objected to. Second, there has been a tremendous amount of investment in these industries, totalling today nearly £8,000 million, taking them all together. These things must be taken account of as a whole. We have to recognise the good things which the nationalised industries have done in the way of prices, for instance, but, at the same time, we have to bear in mind that overall, as the Answer in today's HANSARD shows, they have made the quite considerable loss of about £800 million.
The hon. Member for Greenwich (Mr. Marsh) compared this with, as he put it, about £2,000 million—he was corrected by his hon. Friend the Member for Fife, West (Mr. W. Hamilton)—in subsidies including subsidies to agriculture. Are we to deduce from that that the hon. Gentleman extends the logic of his argument to agriculture? Of course, the consumer gets the benefit of the subsidy to agriculture.
Mr. W. Hamilton: Oh, no. Will the right hon. Gentleman give way?
Mr. Heath: The hon. Member for Greenwich is, therefore, saying—
Sir C. Osborne: Let him get in and put his foot in it.
Mr. Hamilton: I am glad that the right hon. Gentleman is prepared to give way and let me put my foot in it. Is he aware that Mr. Paul Chambers, the chairman of I.C.I., addressing the National Farmers' Union about a year ago, said that it was sheer humbug to suggest that
1542
farm subsidies were not a direct payment to farmers?
Mr. Heath: Of course they are a direct payment to farmers—they are made that way—and the consumer benefits.
Mr. Hamilton: He denied that, too.
Mr. Heath: Is the hon. Member for Greenwich saying that all the measures he suggests should be taken in cases where Government money is paid in this way should apply also to farmers and to agriculture? That is the logical conclusion of his argument.
Mr. Marsh: It is not the logical conclusion at all, and the right hon. Gentleman knows that it is not. All I am saying is that when there is talk, on the one hand, of losses of £800 million by the nationalised industries, the right hon. Gentleman should not shut his mind, on the other hand, to the £4,000 million put into the private sector.
Mr. Heath: I am not shutting my mind to anything. I am asking the hon. Gentleman whether he applies his argument in its logical conclusion to agriculture. That he will not face.
Our task in relation to nationalised industry today has been to make it as efficient as we can and to introduce the financial disciplines which it lacked before.
Mr. Denis Howell: That makes it all right, does it?
Mr. Heath: This is the question which hon. Members opposite must answer. The right hon. Gentleman the Leader of the Opposition is anxious to have an economy which is not based on finance. He is constantly saying this in all his speeches about economics. For example, at Liverpool he said
"So first we need an economic policy based not on finance"—
Mr. H. Wilson: Go on—"but …".
Mr. Heath:
—"but on industrial purpose".
What the right hon. Gentleman never explained is what industrial purpose is.
Mr. Wilson: Read on.
Mr. Heath: What does it mean, not based on finance? Are the financial disciplines which have been introduced

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into the nationalised industries while we have been in power all to be swept aside again?
Mr. Wilson: Is the right hon. Gentleman asking?
Mr. Heath: We have this splendid mass of verbiage and talk of economic purpose or some other national purpose, but a completely ill-defined approach to any financial discipline.
Mr. Wilson: If the right hon. Gentleman will do me the courtesy of reading what I said, he will see that I was referring to an economy based on purposiveness and industrial production, and not, as under this present Government, on the predominance of speculative finance. It was a reference not to the control of nationalised industries but—he will find the words if he looks it up—to the fact that—[Interruption.] The right hon. Gentleman asked me a question. Do not hon. Members want to hear the answer?
Mr. Heath: This is all tied up with the right hon. Gentleman's ideas on the economy. I have studied all his speeches with the greatest care, endeavouring to find out what the real basis of his economic policy is. He is constantly telling us that, of course, we must concentrate, as he puts it, on the hard core of the economy, we must concentrate on building new factories to meet the hard core of the economy and to help our exports. Exactly what are our exports dependent on? What are our foreign exchange earnings dependent on? They are dependent on cars, on whisky and on tourists, all of which contribute an enormous amount to our foreign exchange. But this is what the right hon. Gentleman calls a speculative "candy-floss" economy. The late Aneurin Bevan used to spin words about a "marzipan" society, but the right hon. Gentleman the Leader of the Opposition is becoming almost indecently addicted to the "candy-floss" society concept. This is no answer to our economic problems.
In another speech, the right hon. Gentleman said that there should be no attempt at personal aggrandisement and that there must be an economic purpose. Yet he is the first to belabour us to give more and more incentives to
1544
industry. What is an incentive for but to make more profits for investment and distribution and to enable the people working in the industry and the shareholders to get a better living? That is the whole point of incentives.
How often has the right hon. Gentleman criticised the Economic European Community for so-called autarchy. Yet he is the first to suggest that we should limit imports, make things ourselves, and keep out foreign investment. Keep it at bay, he says. That is autarchy in a Little England.
Then the right hon. Gentleman compares our position in all the league tables with other countries. We always get the morals—Germany, we are told; the United States, we are told; Japan, we are told. But these are all the great free enterprise countries. The right hon. Gentleman never asks us to compare us with the authoritarian State-controlled economies. No; he always says that we must compare ourselves with what the private enterprise economies have done. He says that that supports a policy of nationalisation whenever possible.
Now we hear about the begging-bowl. The right hon. Gentleman said, quite rightly, that this was nothing new; it had been said before, and it is in "Signposts for the Sixties". The exact phrase is there—"the begging-bowl". The right hon. Gentleman is quite right, and there is usually very little original in what he says. I want to read this paragraph, because it is particularly important:
"The Capitalist Begging-Bowl. Another field where public ownership may well have to be extended is in those private industries which, through the receipt of subsidies or loans, are dependent on the State for their continued existence.… Where national assistance is required by manufacturing industry, it should be made conditional on public participation in the enterprise—the setting up, for example, of a joint venture, with the State as at least an equal partner."
The whole of the industrial location policy of this country—I thought that the right hon. Gentleman was concerned earlier with industrial location—is based on grants and loans—what the right hon. Gentleman and his party would call subsidies—to private industry.
Mr. H. Wilson: We started it.
Mr. Heath: I am not criticising the Labour Party for having done that. What

1545
I am saying is that this means that the whole of this policy will be affected by this directive. There can be no doubt about it. The right hon. Gentleman raised this question in the Rootes case. He raised the whole question of investment of this kind. These industrialists are not going round with a begging-bowl. Most of them would far rather expand in their present locations. What is happening is that the inducements are there to offset the disadvantages, economically speaking, of going to another district. [Interruption.] I have quoted the words. The right hon. Gentleman cannot deny them. There was no qualification of any kind about the development districts. It is plain that this policy extends to them.
Then we have had the recent instance of Rootes, which is a very good example of the approach of the Opposition. First, it was the right hon. Gentleman, who was xenophobic; his attitude was, "Keep them out altogether". Then the hon. Member for Coventry, North (Mr. Edelman) said, "Nationalise it". That was the first reaction. The hon. Gentleman wrote an article saying:
"Even if it means partial or full nationalisation, then do it".
Mr. H. Wilson: The right hon. Gentleman says, "Americanise it".
Mr. Heath: I do not say anything of the sort. What I say is that, if there is an American investment to go into a development which will strengthen it, well and good. Some people are saying that the right hon. Gentleman has been behaving like this to pick up a few votes at the election. I believe this to be merely unjust and unfair. It is not a question with the right hon. Gentleman of trying to pick up a few votes. The right hon. Gentleman is like this. The first reaction always of the other side to any problem is, "Nationalise it."
What does it do? Psychologically, I agree, it gives hon. Members opposite the feeling that they are imposing their will on independent companies and individuals. What does it do in fact? It changes ownership. By changing ownership it does not in itself solve any problem connected with industry today. What are the problems which are sometimes quoted by hon. Members
1546
opposite as leading to nationalisation? First, there is the shortage of capital.
Mr. G. Brown: I ask the right hon. Gentleman not to overlook the time.
Mr. Heath: If the right hon. Gentleman's hon. Friends did not interrupt so much, I should be able to finish on time. The problems which are put forward for nationalisation are, first, the shortage of capital, but this can be raised and, with proper taxation policies, is available. Where a Government contribution is made, it is very often made for special reasons, and the question then arises whether there should be any kind of Government representation. What the Government have to do is to see that there is security for the money they are investing. That they have always done, without entering into all the difficulties, very often, of management and control which the other side so obviously want.
Then there is the question of seizing the commanding heights of power. That has always been at the bottom of so many of the arguments of the right hon. Gentleman. Today this is an old-fashioned idea, for this reason. It can be dealt with in two ways. One is by monopoly legislation such as we are proposing in the White Paper. [Interruption.] This is the reason why it is old-fashioned, because where an industry is important in the economy today we have since Keynes developed all the other means of handling the economy. This idea was pre-Keynes. It takes no account of Keynesian developments and is entirely outmoded. Speaking of the "commanding heights" I remind the House that the hon. Lady the Member for Cannock (Miss Lee) said this:
"I hope that no one in our ranks will insult the intelligence of the British public by asking them to believe that water is a commanding height but that the vast free enterprise empire of I.C.I. is a mere obscure hillock."
Hon. Members: Cheating.
Mr. Heath: I am not cheating in the least.
Mr. G. Brown: The right hon. Gentleman has had 28 minutes.
Mr. Heath: I want to sum up by stating my own attitude and that of the Government to future nationalisation. The right hon. Gentleman and his hon.

1547
Friends nationalised during their last period of power, and they have paid heavily for it ever since. They are now proposing to nationalise steel, for which there is no reason; road transport, which is quite capable of expanding without renationalisation; water, which is quite unnecessary because of the Water Resources Act, 1963; and land for housing, but that is no answer to the housing problem.
In fact the real condemnation of the right hon. Gentleman and his hon. Friends is that the whole of this policy is irrelevant. It is irrelevant to all our problems. It is irrelevant to exports. It is irrelevant to tariff problems in the developed world. It is irrelevant to the developing world and its problems. It is irrelevant to the modernisation of British industry. It is irrelevant to training and redundancy. It is irrelevant to an incomes policy. It is irrelevant to the whole question of labour relations. We on this side of the House are against any extension of nationalisation. We shall resist it, and so win the election.
6.40 p.m.
Mr. George Brown rose—
Hon. Members: Hear, hear.
Mr. Speaker: Order.
Mr. Brown: This must be the first time that I have been equally loudly cheered by hon. Members on both sides of the House.
The right hon. Gentleman the Secretary of State for Industry and Trade was very bad-tempered at being asked to speak before the last speaker on this side of the House. He showed his bad temper by wilfully breaking the agreement we had entered into and by talking for 10 minutes more than he had asked for.
Mr. Kenneth Lewis rose—
Hon. Members: Sit down.
Mr. Lewis: On a point of order. May I seek your advice, Mr. Speaker, on the comment that the right hon. Gentleman just made—
Hon. Members: Sit down.
Mr. Lewis: —about the apportionment of time? May I point out to you
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that this is a private Member's occasion and that the right hon. Gentleman has no right to do that?
Mr. Brown: A cheat is a cheat on a private Members' day as well as on any day. I can well understand why the right hon. Gentleman was so upset at being asked to speak before me, since, obviously, the speech which he wanted to make had nothing whatever to do with the Motion. He only just remembered to mention the word "nationalisation" in passing.
This debate was opened by the hon. Member for Rye (Mr. Godman Irvine), who, in a few days' time, on the Adjournment, will protest against the closure of railway stations around Bexhill by Dr. Beeching. [Interruption.] He will, then, be having an opportunity which he would not have had under private enterprise.
Today's debate has shown the total cant and humbug with which the party opposite approaches this question of public ownership. The Tories have been nationalising for 50 years—[HON. MEMBERS: "And you?"]—while we have been doing it for only five years, but in our five, let us be fair, we nationalised as many things as they nationalised in their 50. That is quite right because they are ten times slower than we are—and that goes for everything. Their first nationalisation Measure was in 1904 and was of the Metropolitan Water Board. Their last was in 1954, the Atomic Energy Authority. Between time they did London's buses, Northern Ireland's buses, the B.B.C. and the Central Electricity Generating Board—yet Ministers opposite think that they have the right to come here tonight and say that we want to nationalise everything while they are not interested in nationalisation.
Not only have they done as much nationalising as anybody else, but, in addition, in their speeches they are continually claiming credit for what they call the achievements of the nationalised institutions. The Chancellor of the Exchequer did it in his Budget speech, when there was not a word about nationalisation being a bad thing. The Prime Minister remembered to do it, although on another occasion he called the nationalised institutions "a junk yard", just as the Chief Secretary once called the people who served in them Quislings.
Hon. Members: Shame.
The Chief Secretary to the Treasury and Paymaster-General (Mr. John Boyd-Carpenter): I hope that the right hon. Gentleman will get his facts right. If he is attributing words to me, he should make it quite clear that I referred, and this is on the record, to people not then serving on nationalised boards but who might be tempted by an offer of an appointment on them not to defend the private industries for which they were then responsible; who might be tempted, in other words, to jump on what they thought was a Labour bandwagon but which turned out to be a Labour hearse.
Mr. Brown: So the right hon. Gentleman did say it, although now he tries to justify it. His intervention was not up to his usual standard.
Despite the insults which hon. and right hon. Gentlemen opposite throw—and they thought that throwing them would gain them political dividends—at the men who are prepared to serve the nation rather than their own private profit—[HON. MEMBERS: "Oh."]—and despite everything else they say, the truth is that they need nationalisation, they introduced it and they have praised it. They know, despite the rubbish they have spoken this afternoon, that public ownership of the equity undertakings is not bad per se.
Hon. Members opposite understand that we are to have a mixed economy. Every country to which the right hon. Gentleman referred—countries which he called "free enterprise countries"—are mixed economy countries. In a mixed economy world there must be some public and some private enterprise. The real point is that hon. Members opposite do not object to nationalisation. They only object to the public owning the equity in enterprises which are profitable. They do not mind us having the rest.
If they believe, and have believed, that nationalisation is so bad, why have they been in office for 13 years yet have denationalised so little? The right hon. Gentleman just spoke about £800 million in losses, but if he thought that those losses were so wrong, is he not aware that he and the Government have had ample power for the last 13 years
1550
in which to put the matter right? Why did they not do it? Who stopped the party opposite doing it? Was it the right hon. Member for Wolverhampton, South-West (Mr. Powell)? I can see the Secretary of State rubbing his own sore back where I pointed a finger behind him. The right hon. Member for Wolverhampton, South-West told us that it took the power of back benchers to make a reluctant Government denationalise even parts of steel and road transport. In other words, the Government as a whole did not even want to do that.
The classic statement for public enterprise is this:
"… where the general welfare of the economy requires that certain basic industries and services need now to be conducted in the light of broader social considerations than the profit motive provides".
That statement was made by the right hon. Member for Bromley (Mr. H. Macmillan), and he did not go any further than that. It remains his classic statement.
Of the nationalised bodies we now have, there are only two which really come under attack. Most of the nationalised bodies—nationalised by the Conservatives, too—are not being attacked. The two which get attacked all the time are railways and the coal industry. Let us face it. Not only would both of those have ground to a halt had they not been nationalised, but, in addition, the Government—these administrators who have been in office for 13 years—have been restricting, limiting and inhibiting both of them. If our people have had to pay heavily for these services, the responsibility, after 13 years of Tory interference, lies with the Conservative Party, not with us.
I am asked—and if the Minister had not taken my time I could have replied at length—what will we do, since we are about to become Her Majesty's Government.—[Laughter.] Yes, my right hon. Friends will soon be producing the detailed Bills. Meanwhile, let me tell the prospective Opposition precisely what they will have to face. It will not be the rubbish printed in "Entitled to Know", not the silly stuff that the Minister trotted out just now, but what is in "Signposts for the Sixties".
In the first place, we shall take into public ownership the freehold interest

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in urban land as it becomes ripe for development—and if hon. and right hon. Members opposite think that this is a bad thing for us to say, let them ask Mrs. Olsen, who was their candidate at Faversham, what she has to say. They might even like to read the leader in the Evening Standard last Monday, headed "Racket in Land". The fact is that they are the only people in the country who believe that the land racket can stay as it is. They are the people who created the racket in land, their friends are the people who benefit by the racket in land; and we shall deal with it in the way we have said.
We shall take into public ownership the steel industry—[Interruption.] I do not quarrel with a lot of what the hon. Baronet the Member for Sheffield, Heeley (Sir P. Roberts) said about the steel industry. I do not want to denigrate the industry, or argue about what it has done or not done. It is quite unnecessary to do that, but I do say that this industry is basic to our economy. Its record, in some respects, has not fitted what the economy as planned by the nation would have required of it. If we are to have a planned economy, if we are to have our basic industries answering that economy, there is every case for the steel industry being responsible to the plan that we make—[Interruption.]—and, monopolised as the industry is, cartelised as it is, price rigged as it is, it is not possible to assure that. Indeed, the Tories recognised this when the present Commonwealth Secretary said that he could not give the industry back to private industry just like that, but must set up a national board to try to control it.
The right hon. Gentleman did that because he understood that the industry could not be allowed to operate as a totally private cartel, but, in practice, the board cannot control it and, clearly, since the Tories themselves recognise that this is not private enterprise, since they recognise that it cannot respond to normal private enterprise requirements, since they know that it needs public money to develop, rationalise and modernise, on every single count it is sensible and intelligent to take it into public ownership.
We shall extend the operations of the British Road Services. As to the private
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hauliers, we, like the present Administration, will await the outcome of the committee that has been set up on licensing—just as hon. Members opposite will—and then we shall consider what happens there in the light of that committee's report. But anybody on that side of the House who believes that we can have an integrated transport service without having a wider area of publicly-owned road services to integrate with the railways is living in Cloud-Cuckoo-Land.
We shall have a publicly-owned national water supply [Laughter]. Hon. Members opposite set out to ask the questions and they are going to hear the answers. I have given them a list of our specific commitments for public enterprise in the next Parliament—[HON. MEMBERS: "No."] Now I will tell them something else. [HON. MEMBERS: "What else? "] No more commitments for take-overs in that sense, but do not let us be totally illiterate and immature on this matter. There are other areas for public enterprise [Interruption.] Shall I tell hon. Members where?
Where the taxpayers are being asked to put up their money, such as for the Fort William pulp and paper making mill, they are entitled to a stake in the industry. Where private enterprise will not move industries fast enough into the development districts of the North-East, the North-West, Scotland and Wales, public enterprise should go in and do it. Where industry is over-monopolised and competition does not exist, publicly-owned industry and public enterprise should go in. These are not areas of take-over; these are the obvious areas for purposeful national expansion in the interests of our people, either in partnership, or in extension, or in place of private enterprise.
There is no difficulty about this, but since the Minister has not left me my full time—[HON. MEMBERS: "Oh."]—I cannot finish the whole argument. But may I tell him this?
We heard a lot about confrontation a little while ago. I am willing to go with the right hon. Gentleman on television and finish the argument there.
Mr. Herbert W. Bowden Mr. Herbert W. Bowden (Leicester, South-West) rose in his place, and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the words proposed to be left out stand part
of the Question:—
The House divided: Ayes 312, Noes 235.

Division No. 109.]

AYES

[7.2 p.m.

Agnew, Sir Peter

Emery, Peter

Kerr, Sir Hamilton

Allan, Robert (Paddington, S.)

Emmet, Hon. Mrs. Evelyn

Kershaw, Anthony

Amery, Rt. Hon. Julian

Errington, Sir Eric

Kimball, Marcus

Arbuthnot, Sir John

Erroll, Rt. Hon. F. J.

Kirk, Peter

Ashton, Sir Hubert

Farey-Jones, F. W.

Kitson, Timothy

Atkins, Humphrey

Farr, John

Lagden, Godfrey

Awdry, Daniel (Chippenham)

Fell, Anthony

Lambton, Viscount

Balniel, Lord

Finlay, Graeme

Lancaster, Col. C. G.

Barber, Rt. Hon. Anthony

Fisher, Nigel

Langford-Holt, Sir John

Barlow, Sir John

Fletcher-Cooke, Charles

Leather, Sir Edwin

Barter, John

Forrest, George

Leavey, J. A.

Batsford, Brian

Foster, Sir John

Legge-Bourke, Sir Harry

Bennett, F. M. (Torquay)

Fraser, Rt. Hn. Hugh (Stafford&Stone)

Lewis, Kenneth (Rutland)

Bennett, Dr. Reginald (Gos & Fhm)

Fraser, Ian (Plymouth, Sutton)

Lilley, F. J. P.

Berkeley, Humphry

Freeth, Denzil

Lindsay, Sir Martin

Bevins, Rt. Hon. Reginald

Galbraith, Hen. T. G. D.

Linstead, Sir Hugh

Bidgood, John C.

Gammans, Lady

Litchfield, Capt. John

Biffen, John

Gardner, Edward

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

Biggs-Davison, John

George, Sir John (Pollok)

Lloyd, Rt. Hon. Selwyn (Wirral)

Bingham, R. M.

Gibson-Watt, David

Longbottom, Charles

Bishop, Sir Patrick

Giles, Rear-Admiral Morgan

Lubbock, Eric

Black, Sir Cyril

Gilmour, Ian (Norfolk, Central)

Lucas, Sir Jocelyn

Bossom, Hon. Clive

Gilmour, Sir John (East Fife)

Lucas-Tooth, Sir Hugh

Bourne-Arton, A.

Glyn, Dr. Alan (Clapham)

McAdden, Sir Stephen

Bowen, Roderic (Cardigan)

Godber, Rt. Hon, J. B.

MacArthur, Ian

Box, Donald

Goodhart, Philip

McLaren, Martin

Boyd-Carpenter, Rt. Hon. John

Goodhew, Victor

Maclean, SirFitzroy (Bute&N. Ayrs)

Boyle, Rt. Hon. Sir Edward

Gough, Frederick

McLean, Neil (Inverness)

Braine, Bernard

Grant-Ferris, R.

Macloed, Rt. Hn. Iain (Enfield, W.)

Brewis, John

Green, Alan

McMaster, Stanley R.

Bromley-Davenport, Lt.-Col. Sir Walter

Gresham Cooke, R.

Macmillan, Rt. Hn. Harold (Bromley)

Brooke, Rt. Hon. Henry

Macmillan, Maurice (Halifax)

Brown, Alan (Tottenham)

Griffiths, Eldon (Bury St. Edmunds)

Maddan, Martin

Browne, Percy (Torrington)

Grimond, Rt. Hon. J.

Maginnis, John E,

Bryan, Paul

Grosvenor, Lord Robert

Maitland, Sir John

Buck, Antony

Gurden, Harold

Markham, Major Sir Frank

Bullard, Denys

Hall, John (Wycombe)

Marlowe, Anthony

Bullus, Wing Commander Eric

Hamilton, Michael (Wellingborough)

Marples, Rt. Hon. Ernest

Burden, F. A.

Harris, Frederic (Croydon, N. W.)

Marten, Neil

Butcher, Sir Herbert

Harris, Reader (Heston)

Mathew, Robert (Honlton)

Butler, Rt.Hn. R. A. (SaffronWalden)

Harrison, Brian (Maldon)

Matthews, Gordon (Meriden)

Campbell, Gordon

Harrison, Col. Sir Harwood (Eye)

Maude, Angus (Stratford-on-Avon)

Carr, Compton (Barons Court)

Harvey, John (Walthamstow, E.)

Maudling, Rt. Hon. Reginald

Carr, Rt. Hon. Robert (Mitcham)

Harvie Anderson, Miss

Mawby, Ray

Channon, H. P. G.

Hastings, Stephen

Maxwell-Hyslop, R. J.

Chataway, Christopher

Heald, Rt. Hon. Sir Lionel

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

Chichester-Clark, R.

Heath, Rt. Hon. Edward

Mills, Stratton

Clark, Henry (Antrim, N.)

Henderson, John (Cathcart)

Misoampbell, Norman

Cleaver, Leonard

Hendry, Forbes

Montgomery, Fergus

Cole, Norman

Hicks Beach, Maj. W.

More, Jasper (Ludlow)

Cooke, Robert

Hiley, Joseph

Morgan, William

Cooper, A. E.

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

Mormon, Charles (Devizes)

Cooper-Key, Sir Neill

Hirst, Geoffrey

Morrison, John (Salisbury)

Cordeaux, Lt.-Col. J. K.

Hobson, Rt. Hon. Sir John

Mott-Radclyffe, Sir Charles

Corfield, F. V.

Hocking, Philip N.

Neave, Airey

Costain, A. P.

Hogg, Rt. Hon. Quintin

Nicholls, Sir Harmar

Coulson, Michael

Holland, Philip

Nicholson, Sir Godfrey

Courtney, Cdr. Anthony

Hollingworth, John

Noble, Rt. Hon. Michael

Craddock, Sir Beresford (Spelthorne)

Holt, Arthur

Nugent, Rt. Hon. Sir Richard

Crawley, Aidan

Hopkins, Alan

Oakshott, Sir Hendrie

Critchley, Julian

Hornby, R. P.

Orr, Capt. L. P. S.

Crosthwaite-Eyre, Col. Sir Oliver

Hornsby-Smith, Rt. Hon. Dame P.

Orr-Ewing, Sir Ian (Hendon, North)

Crowder, F. P.

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

Osborn, John (Hallam)

Cunningham, Sir Knox

Hughes Hallett, Vice-Admiral John

Osborne, Sir Cyril (Louth)

Curran, Charles

Hughes-Young, Michael

Page, Graham (Crosby)

Currie, G. B. H.

Hulbert, Sir Norman

Page, John (Harrow, West)

Dalkeith, Earl of

Hurd, Sir Anthony

Pannell, Norman (Kirkdale)

Dance, James

Hutchison Michael Clark

Partridge, E.

d'Avigdor-Goldsmid, Sir Henry

Iremonger, T. L.

Pearson, Frank (Clitheroe)

Deedes, Rt. Hon. W. F.

James, David

Peel, John

Digby, Simon Wingfield

Jennings, J. C.

Percival, Ian

Doughty, Charles

Johnson, Eric (Blackley)

Peyton, John

Douglas-Home, Rt. Hon. Sir Alec

Johnson Smith, Geoffrey

Pickthorn, Sir Kenneth

Drayson, G. B.

Jones, Arthur (Northants, S.)

Pike, Miss Mervyn

du Cann, Edward

Joseph, Rt. Hon. Sir Keith

Pitman, Sir James

Duncan, Sir James

Kaberry, Sir Donald

Pitt, Dame Edith

Elliot, Capt. Walter (Carshalton)

Kerans, Cdr. J. S.

Pounder, Rafton

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

Kerby, Capt. Henry

Powell, Rt. Hon. J. Enoch

Price, David (Eastleigh)

Soames, Rt. Hon. Christopher

Tweedsmuir, Lady

Prior, J. M. L.

Spearman, Sir Alexander

van Straubenzee, W. R.

Prior-Palmer, Brig. Sir Otho

Speir, Rupert

Vaughan-Morgan, Rt. Hon. Sir John

Proudfoot, Wilfred

Stainton, Keith

Vickers, Miss Joan

Pym, Francis

Stanley, Hon. Richard

Wade, Donald

Quennell, Miss J. M.

Stodart, J. A.

Walder, David

Rawlinson, Rt. Hon. Sir Peter

Stoddart-Scott, Col. Sir Malcolm

Walker, Peter

Redmayne, Rt. Hon. Martin

Studholme, Sir Henry

Walker-Smith, Rt. Hon. Sir Derek

Rees, Hugh (Swansea, W.)

Summers, Sir Spencer

Wall, Patrick

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

Tapsell, Peter

Ward, Dame Irene

Renton, Rt. Hon. David

Taylor, Sir Charles (Eastbourne)

Webster, David

Ridley, Hon. Nicholas

Taylor, Edwin (Bolton, E.)

Wells, John (Maidstone)

Ridsdale, Julian

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

Whitelaw, William

Rippon, Rt. Hon. Geoffrey

Taylor, Sir William (Bradford, N.)

Williams, Dudley (Exeter)

Roberts, Sir Peter (Heeley)

Teeling, Sir William

Williams, Paul (Sunderland, S.)

Robson, Brown, Sir William

Temple, John M.

Wills, Sir Gerald (Bridgwater)

Ropner, Col. Sir Leonard

Thomas, Sir Leslie (Canterbury)

Wilson, Geoffrey (Truro)

Royle, Anthony (Richmond, Surrey)

Thomas, Peter (Conway)

Wise, A. R.

Russell, Sir Ronald

Thompson, Sir Kenneth (Walton)

Wolrige-Gordon, Patrick

Sandys, Rt. Hon. Duncan

Thompson, Sir Richard (Croydon, S)

Wood, Rt. Hon. Richard

Scott-Hopkins, James

Thorneycroft, Rt. Hon. Peter

Woodhouse, C. M.

Seymour, Leslie

Thornton-Kemsley, Sir Colin

Woollam, John

Sharples, Richard

Thorpe, Jeremy

Woreley, Marcus

Shaw, M.

Tiley, Arthur (Bradford, W.)

Shepherd, William

Tilney, John (Wavertree)

TELLERS FOR THE AYES:

Skeet, T. H. H.

Touche, Rt. Hon. Sir Gordon

Mr. Godman Irvine and

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

Turner, Colin

Mr. W. Clark.

Smyth, Rt. Hon. Brig. Sir John

Turton, Rt. Hon. R. H.

NOES

Abse, Leo

Edwards, Rt. Hon. Ness (Caerphilly)

Jones, Elwyn (West Ham, S.)

Ainsley, William

Edwards, Robert (Bilston)

Jones, J. Idwal (Wrexham)

Albu, Austen

Edwards, Walter (Stepney)

Jones, T. W. (Merioneth)

Allaun, Frank (Salford, E.)

Evans, Albert

Kelley, Richard

Allen, Scholefield (Crewe)

Fernyhough, E.

Kenyon, Clifford

Bacon, Miss Alice

Finch, Harold

Key, Rt. Hon. C. W.

Barnett, Guy

Fitch, Alan

King, Dr. Horace

Beaney, Alan

Fletcher, Eric

Lawson, George

Bellenger, Rt. Hon. F. J.

Foley, Maurice

Ledger, Ron

Bence, Cyril

Foot, Dingle (Ipswich)

Lee, Frederick (Newton)

Benn, Anthony Wedgwood

Foot, Michael (Ebbw Vale)

Lee, Miss Jennie (Cannock)

Bennett, J. (Glasgow, Bridgeton)

Forman, J. C

Lever, Harold (Cheetham)

Benson, Sir George

Galpern, Sir Myer

Lewis, Arthur (West Ham, N.)

Blyton, William

George, LadyMeganLloyd (Crmrthn)

Lipton, Marcus

Boardman, H.

Ginsburg, David

Loughlin, Charles

Boston, T.

Gordon Walker, Rt. Hon. P. C.

Mabon, Dr. J. Dickson

Bottomley, Rt. Hon. A. G.

Gourlay, Harry

McBride, N.

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

Greenwood, Anthony

McCann, J.

Bowles, Frank

Grey, Charles

MacColl, James

Boyden, James

Griffiths, David (Rother Valley)

MacDermot, Niall

Bradley, Tom

Griffiths, Rt. Hon. James (Llanelly)

Mclnnes, James

Bray, Dr. Jeremy

Griffiths, W. (Exchange)

McKay, John (Wallsend)

Brockway, A. Fenner

Gunter, Ray

MacKenzie, J. G.

Broughton, Dr. A. D. D.

Hale, Leslie (Oldham, W.)

Mackie, John (Enfield, East)

Brown, Rt. Hon. George (Belper)

Hamilton, William (West Fife)

McLeavy, Frank

Butler, Herbert (Hackney, C.)

Hannan, William

MacMillan, Malcolm (Western Isles)

Butler, Mrs. Joyce (Wood Green)

Harper, Joseph

MacPherson, Malcolm

Callaghan, James

Hart, Mrs. Judith

Mahon, Simon

Carmichael, Neil

Hayman, F. H.

Mallalieu, E. L. (Brigg)

Castle, Mrs. Barbara

Healey, Denis

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

Chapman, Donald

Henderson, Rt. Hn. Arthur (RwlyRegis)

Manuel, Archie

Cliffe, Michael

Herbison, Miss Margaret

Mapp, Charles

Collick, Percy

Hewitson, Capt. M.

Marsh, Richard

Corbet, Mrs. Freda

Hill, J. (Midlothian)

Mason, Roy

Craddock, George (Bradford, S.)

Hilton, A. V.

Mellish, R. J.

Crosland, Anthony

Holman, Percy

Mendelson, J. J.

Crossman, R. H. S.

Houghton, Douglas

Millan, Bruce

Cullen, Mrs. Alice

Howell, Charles A. (Perry Barr)

Milne, Edward

Dalyell, Tam

Howell, Denis (Small Heath)

Mitchison, G. R.

Darling, George

Howie, W.

Monslow, Walter

Davies, G. Elfed (Rhondda, E.)

Hughes, Cledwyn (Anglesey)

Moody, A. S.

Davies, Harold (Leek)

Hughes, Emrys (S. Ayrshire)

Morris, Charles (Openshaw)

Davies, Ifor (Gower)

Hughes, Hector (Aberdeen, N.)

Morris, John (Aberavon)

Davies, S. O. (Merthyr)

Hunter, A. E.

Moyle, Arthur

Deer, George

Hynd, H. (Accrington)

Mulley, Frederick

Delargy, Hugh

Hynd, John (Attercliffe)

Noel-Baker, Francis (Swindon)

Dempsey, James

Irvine, A. J. (Edge Hill)

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

Diamond, John

Janner, Sir Barnett

Oliver, G. H.

Doig, Peter

Jay, Rt. Hon. Douglas

O'Malley, B. K.

Donnelly, Desmond

Jeger, George

Oram, A. E.

Driberg, Tom

Jenkins, Roy (Stechford)

Oswald, Thomas

Ede, Rt. Hon. C.

Johnson, Carol (Lewisham, S.)

Owen, Will

Edelman, Maurice

Jones, Dan (Burnley)

Padley, W. E.

1556

1557

Paget, R. T.

Rodgers, W. T. (Stockton)

Thomas, George (Cardiff, W.)

Pannell, Charles (Leeds, W.)

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

Thomas, Iorwerth (Rhondda, W.)

Pargiter, G. A.

Ross, William

Thompson, Dr. Alan (Dunfermline)

Parker, John

Royle, Charles (Salford, West)

Thomson, G. M. (Dundee, E.)

Parkin, B. T.

Shinwell, Rt. Hon. E.

Thornton, Ernest

Paton, John

Short, Edward

Tomney, Frank

Pavitt, Laurence

Silkin, John

Wainwright, Edwin

Pearson, Arthur (Pontypridd)

Silverman, Julius (Aston)

Warbey, William

Peart, Frederick

Silverman, Sydney (Nelson)

Weitzman, David

Pentland, Norman

Slater, Mrs. Harriet (Stoke, N.)

Wells, William (Walsall, N.)

Popplewell, Ernest

Slater, Joseph (Sedgefield)

White, Mrs. Eirene

Prentice, R. E.

Small, William

Whitlock, William

Price, J. T. (Westhoughton)

Smith, Ellis (Stoke, S.)

Wigg, George

Probert, Arthur

Snow, Julian

Wilkins, W. A.

Proctor, W. T.

Sorensen, R. W.

Willey, Frederick

Pursey, Cmdr. Harry

Soskice, Rt. Hon. Sir Frank

Williams, D. J. (Neath)

Randall, Harry

Spriggs, Leslie

Williams, W. T. (Warrington)

Rankin, John

Stewart, Michael (Fulham)

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

Redhead, E, C.

Stonehouse, John

Wilson, Rt. Hon. Harold (Huyton)

Rees, Merlyn (Leeds, S.)

Stones, William

Winterbottom, R. E.

Reid, William

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

Woodburn, Rt. Hon. A.

Rhodes, H.

Swain, Thomas

Woof, Robert

Roberts, Albert (Normanton)

Swingler, Stephen

Wyatt, Woodrow

Roberts, Goronwy (Caernarvon)

Symonds, J. B.

Zilliacus, K.

Robertson, John (Paisley)

Taverne, D.

Robinson, Kenneth (St. Pancras, N.)

Taylor, Bernard (Mansfield)

TELLERS FOR THE NOES:

Mr. Steele and Mr. Skeffington.

The Parliamentary Secretary to the Treasury (Mr. Martin Redmayne)The Parliamentary Secretary to the Treasury (Mr. Martin Redmayne) rose in his place, and claimed, That the Main Question be now put.
Main Question put accordingly:—
The House divided: Ayes 310, Noes 235.

Division No. 110.]

AYES

[7.14 p.m.

Agnew, Sir Peter

Chichester-Clark, R.

Fraser, Ian (Plymouth, Sutton)

Allan, Robert (Paddington, S.)

Clark, Henry (Antrim, N.)

Freeth, Denzil

Amery, Rt. Hon, Julian

Clark, William (Nottingham, S.)

Galbraith, Hon. T. G. D.

Arbuthnot, Sir John

Cleaver, Leonard

Gammans, Lady

Ashton, Sir Hubert

Cole, Norman

Gardner, Edward

Atkins, Humphrey

Cooke, Robert

George, Sir John (Pollok)

Awdry, Daniel (Chippenham)

Cooper, A. E.

Gibson-Watt, David

Balniel, Lord

Cooper-Key, Sir Neil

Giles, Rear-Admiral Morgan

Barber, Rt. Hon. Anthony

Cordeaux, Lt.-Col. J. K.

Gilmour, Ian (Norfolk, Central)

Barlow, Sir John

Corfïeld, F. V.

Gilmour, Sir John (East Fife)

Barter, John

Costain, A. P.

Clyn, Dr. Alan (Clapham)

Batsford, Brian

Coulson, Michael

Godber, Rt. Hon. J. B.

Bennett, Dr. Reginald (Gos. & Fhm)

Courtney, Cdr. Anthony

Goodhart, Philip

Berkeley, Humphry

Craddock, Sir Beresford (Spelthorne)

Goodhew, Victor

Bevins, Rt. Hon. Reginald

Crawley, Aidan

Gough, Frederick

Bidgood, John C.

Crosthwaite-Eyre, Col. Sir Oliver

Grant-Ferris, R.

Biffen, John

Crowder, F. P.

Green, Alan

Biggs-Davison, John

Cunningham, Sir Knox

Gresham Cooke, R.

Bingham, R. M.

Curran, Charles

Griffiths, Eldon (Bury St. Edmunds)

Bishop, Sir Patrick

Currie, G. B. H.

Grimond, Rt. Hon. J.

Black, Sir Cyril

Dalkeith, Earl of

Grosvenor, Lord Robert

Bossom, Hon. Clive

Dance, James

Gurden, Harold

Bourne-Arton, A.

d'Avigdor-Goldsmid, Sir Henry

Hall, John (Wycombe)

Bowen, Roderic (Cardigan)

Deedes, Rt. Hon. W. F.

Hamilton, Michael (Wellingborough)

Box, Donald

Digby, Simon Wingfield

Harris, Frederic (Croydon, N. W.)

Boyd-Carpenter, Rt. Hon. John

Doughty, Charles

Harris, Reader (Heston)

Boyle, Rt. Hon. Sir Edward

Douglas-Home, Rt. Hon. Sir Alec

Harrison, Brian (Maldon)

Braine, Bernard

Drayson, G. B.

Harrison, Col. Sir Harwood (Eye)

Brewis, John

du Cann, Edward

Harvey, John (Walthamstow, E.)

Bromley-Davenport, Lt.-Col. Sir Walter

Duncan, Sir James

Harvie Anderson, Miss

Brooke, Rt. Hon. Henry

Elliot, Capt. Walter (Carshalton)

Hastings, Stephen

Brown, Alan (Tottenham)

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

Hay, John

Browne. Percy (Torrington)

Bryan, Paul

Emery, Peter

Heald, Rt. Hon. Sir Lionel

Buck, Antony

Errington, Sir Eric

Heath, Rt. Hon. Edward

Bullard, Denys

Erroll, Rt. Hon. F. J.

Henderson, John (Cathcart)

Bullus, Wing Commander Eric

Farey-Jones, F, W.

Hendry, Forbes

Burden, F. A.

Farr, John

Hicks Beach, Maj. W.

Butcher, Sir Herbert

Fell, Anthony

Hiley, Joseph

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

Finlay, Graeme

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

Campbell, Gordon

Fisher, Nigel

Hirst, Geoffrey

Carr, Compton (Barons Court)

Fletcher-Cooke, Charles

Hobson, Rt. Hon. Sir John

Carr, Rt. Hon. Robert (Mitcham)

Forrest, George

Hocking, Philip N.

Channon, H. P. G.

Foster, Sir John

Hogg, Rt. Hon. Quintin

Chataway, Christopher

Fraser, Rt. Hn. Hugh (Stafford&Stone)

Holland, Philip

Hollingworth, John

Matthews, Gordon (Meriden)

Shepherd, William

Holt, Arthur

Maude, Angus (Stratford-on-Avon)

Skeet, T. H. H.

Hopkins, Alan

Maudling, Rt. Hon. Reginald

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

Hornby, Ft. P.

Mawby, Ray

Smyth, Rt. Hon. Brig. Sir John

Hornsby-Smith, Rt. Hon. Dame P.

Maxwell-Hyslop, R, J.

Soames, Rt. Hon. Christopher

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

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

Spearman, Sir Alexander

Hughes Hallett, Vice-Admiral John

Mills, Stratton

Speir, Rupert

Hughes-Young, Michael

Miscampbell, Norman

Stainton, Keith

Hulbert, Sir Norman

Montgomery, Fergus

Stanley, Hon. Richard

Hurd, Sir Anthony

More, Jasper (Ludlow)

Stodart, J. A.

Hutchison, Michael Clark

Morgan, William

Stoddart-Scott, Col. Sir Malcolm

Iremonger, T. L.

Morrison, Charles (Devizes)

Studholme, Sir Henry

James, David

Mott-Radclyffe, Sir Charles

Summers, Sir Spencer

Jennings, J. C.

Neave, Airey

Tapsell, Peter

Johnson, Eric (Blackley)

Nicholls, Sir Harmar

Taylor, Edwin (Bolton, E.)

Johnson Smith, Geoffrey

Nicholson, Sir Godfrey

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

Jones, Arthur (Northants, S.)

Noble, Rt. Hon. Michael

Taylor, Sir William (Bradford, N.)

Joseph, Rt. Hon. Sir Keith

Nugent, Rt. Hon. Sir Richard

Teeling, Sir William

Kaberry, Sir Donald

Oakshott, Sir Hendrie

Temple, John M.

Kerans, Cdr. J. S.

Orr, Capt. L. P. S.

Thatcher, Mrs. Margaret

Kerr, Sir Hamilton

Orr-Ewing, Sir Ian (Hendon, North)

Thomas, Sir Leslie (Canterbury)

Kershaw, Anthony

Osborn, John (Hallam)

Thomas, Peter (Conway)

Kimball, Marcus

Osborne, Sir Cyril (Louth)

Thompson, Sir Kenneth (Walton)

Kirk, Peter

Page, Graham (Crosby)

Thompson, Sir Richard (Croydon, S.)

Kitson, Timothy

Page, John (Harrow, West)

Thorneycroft, Rt. Hon. Peter

Lagden, Godfrey

Pannell, Norman (Kirkdale)

Thornton-Kemsley, Sir Colin

Lambton, Viscount

Partridge, E.

Thorpe, Jeremy

Lancaster, Col. C. G.

Pearson, Frank (Clitheroe)

Tiley, Arthur (Bradford, W.)

Langford-Holt, Sir John

Peel, John

Tilney, John (Wavertree)

Leather, Sir Edwin

Percival, Ian

Touche, Rt. Hon. Sir Gordon

Leavey, J. A.

Peyton, John

Turner, Colin

Legge-Bourke, Sir Harry

Pickthorn, Sir Kenneth

Turton, Rt. Hon. R. H.

Lewis, Kenneth (Rutland)

Pike, Miss Mervyn

Tweedsmuir, Lady

Lilley, F. J. P.

Pitman, Sir James

van Straubenzee, W. R.

Lindsay, Sir Martin

Pitt, Dame Edith

Vaughan-Morgan, Rt. Hon. Sir John

Linstead, Sir Hugh

Pounder, Rafton

Vickers, Miss Joan

Litchfield, Capt. John

Powell, Rt. Hon. J. Enoch

Wade, Donald

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

Price, David (Eastleigh)

Walder, David

Lloyd, Rt. Hon. Selwyn (Wirral)

Prior, J. M. L.

Walker, Peter

Longbottom, Charles

Prior-Palmer, Brig. Sir Otho

Walker-Smith, Rt. Hon. Sir Derek

Lubbock, Eric

Proudfoot, Wilfred

Wall, Patrick

Lucas, Sir Jocelyn

Pym, Francis

Ward, Dame Irene

Lucas-Tooth, Sir John

Quennell, Miss J. M.

Webster, David

McAdden, Sir Stephen

Rawlinson, Rt. Hon. Sir Peter

Wells, John (Maidstone)

MacArthur, Ian

Redmayne, Rt. Hon. Martin

Whitelaw, William

McLaren, Martin

Rees, Hugh (Swansea, W.)

Williams, Dudley (Exeter)

Maclean, SirFitzroy (Bute&N. Ayrs)

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

Williams, Paul (Sunderland, S.)

McLean, Neil (Inverness)

Renton, Rt. Hon. David

Wills, Sir Gerald (Bridgwater)

Macleod, Rt. Hn. Iain (Enfield, W.)

Ridley, Hon. Nicholas

Wilson, Geoffrey (Truro)

McMaster, Stanley R.

Rippon, Rt. Hon. Geoffrey

Wise, A. R.

Macmillan, Rt. Hn. Harold (Bromley)

Roberts, Sir Peter (Heeley)

Wolrige-Gordon, Patrick

Macmillan, Maurice (Halifax)

Robson Brown, Sir William

Wood, Rt. Hon. Richard

Maddan, Martin

Ropner, Col. Sir Leonard

Woodhouse, C. M.

Maginnis, John E.

Royle, Anthony (Richmond, Surrey)

Woollam, John

Maitland, Sir John

Russell, Sir Ronald

Worsley, Marcus

Markham, Major Sir Frank

Sandys, Rt. Hon. Duncan

Yates, William (The Wrekin)

Marlowe, Anthony

Scott-Hopkins, James

Marples, Rt. Hon. Ernest

Seymour, Leslie

TELLERS FOR THE AYES:

Marten, Neil

Sharples, Richard

Mr. Godman Irvine and

Mathew, Robert (Honlton)

Shaw, M.

Mr. F. M. Bennett.

NOES

Abse, Leo

Bray, Dr. Jeremy

Davies, Ifor (Gower)

Ainsley, William

Brockway, A. Fenner

Davies, S. O. (Merthyr)

Albu, Austen

Broughton, Dr. A. D. D.

Deer, George

Allaun, Frank (Salford, E.)

Brown, Rt. Hon. George (Belper)

Delargy, Hugh

Allen, Scholefield (Crewe)

Butler, Herbert (Hackney, C.)

Dempsey, James

Bacon, Miss Alice

Butler, Mrs. Joyce (Wood Green)

Diamond, John

Barnett, Guy

Callaghan, James

Dodds, Norman

Beaney, Alan

Carmichael, Neil

Doig, Peter

Bellenger, Rt. Hon. F. J.

Castle, Mrs. Barbara

Donnelly, Desmond

Bence, Cyril

Chapman, Donald

Driberg, Tom

Benn, Anthony Wedgwood

Cliffe, Michael

Ede, Rt. Hon. C.

Bennett, J. (Glasgow, Bridgeton)

Collick, Percy

Edelman, Maurice

Benson, Sir George

Corbet, Mrs. Freda

Edwards, Rt. Hon. Ness (Caerphilly)

Blyton, William

Craddock, George (Bradford, S.)

Edwards, Robert (Bilston)

Boardman, H.

Crosland, Anthony

Edwards, Walter (Stepney)

Boston, T.

Crossman, R. H. S.

Evans, Albert

Bottomley, Rt. Hon. A. G.

Cullen, Mrs. Alice

Fernyhough, E.

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

Dalyell, Tam

Finch, Harold

Bowles, Frank

Darling, George

Fitch, Alan

Boyden, James

Davies, G. Elfed (Rhondda, E.)

Fletcher, Eric

Bradley, Tom

Davies, Harold (Leek)

Foley, Maurice

1560

1561

Foot, Dingle (Ipswich)

Mabon, Dr. J. Dickson

Reid, William

Foot, Michael (Ebbw Vale)

McBride, N.

Rhodes, H.

Forman, J. C.

McCann, J.

Roberts, Albert (Normanton)

Galpern, Sir Myer

MacColl, James

Roberts, Goronwy (Caernarvon)

George, Lady MeganLloyd (Crmrthn)

MacDermot, Niall

Robertson, John (Paisley)

Ginsburg, David

Mclnnes, James

Robinson, Kenneth (St. Pancras, N.)

Gordon Walker, Rt. Hon. P. C.

McKay, John (Wallsend)

Rodgers, W. T. (Stockton)

Gourlay, Harry

MacKenzie, J. G.

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

Greenwood. Anthony

Mackie, John (Enfield, East)

Ross, William

Grey, Charles

McLeavy, Frank

Royle, Charles (Salford, West)

Griffiths, David (Rother Valley)

MacMillan, Malcolm (Western Isles)

Shinwell, Rt. Hon. E.

Griffiths, Rt. Hon. James (Llanelly)

MacPherson, Malcolm

Short, Edward

Griffiths, W. (Exchange)

Mahon, Simon

Silkin, John

Gunter, Ray

Mallalieu, E. L. (Brigg)

Silverman, Julius (Aston)

Hale, Leslie (Oldham, W.)

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

Silverman, Sydney (Nelson)

Hamilton, William (West Fife)

Manuel, Archie

Slater, Mrs. Harriet (Stoke, N.)

Hannan, William

Mapp, Charles

Slater, Joseph (Sedgefield)

Harper, Joseph

Marsh, Richard

Small, William

Hart, Mrs. Judith

Mason, Roy

Smith, Ellis (Stoke, S.)

Hayman, F. H.

Mellish, R. J.

Snow, Julian

Healey, Denis

Mendelson, J. J.

Sorensen, R. W.

Henderson, Rt. Hn. Arthur (Rwly Regis)

Millan, Bruce

Soskice, Rt. Hon. Sir Frank

Herbison, Miss Margaret

Milne, Edward

Spriggs, Leslie

Hewitson, Capt. M.

Mitchison, G. R.

Stewart, Michael (Fulham)

Hill, J. (Midlothian)

Monslow, Walter

Stonehouse, John

Hilton, A. V.

Moody, A. S.

Stones, William

Holman, Percy

Morris, Charles (Openshaw)

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

Houghton, Douglas

Morris, John (Aberavon)

Swain, Thomas

Howell, Charles A. (Perry Barr)

Moyle, Arthur

Swingler, Stephen

Howell, Denis (Small Heath)

Mulley, Frederick

Symonds, J. B.

Howie, W.

Noel-Baker, Francis (Swindon)

Taverne, D.

Taylor, Bernard (Mansfield)

Hughes, Cledwyn (Anglesey)

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

Thomas, George (Cardiff, W.)

Hughes, Emrys (S. Ayrshire)

Oliver, G. H.

Thomas, Iorwerth (Rhondda W.)

Hughes, Hector (Aberdeen, N.)

O'Malley, B. K.

Thompson, Dr. Alan (Dunfermline)

Hunter, A. E.

Oram, A. E.

Thomson, G. M. (Dundee, E.)

Hynd, H. (Accrington)

Oswald, Thomas

Thornton, Ernest

Hynd, John (Attercliffe)

Owen, Will

Tomney, Frank

Irvine, A. J. (Edge Hill)

Padley, W. E.

Wainwright, Edwin

Janner, Sir Barnett

Paget, R. T.

Warbey, William

Jay, Rt. Hon. Douglas

Pannell, Charles (Leeds, W.)

Weitzman, David

Jeger, George

Pargiter, G. A.

Wells, William (Walsall, N.)

Jenkins, Roy (Stechford)

Parker, John

White, Mrs. Eirene

Johnson, Carol (Lewisham, S.)

Parkin, B. T.

Whitlock, William

Jones, Dan (Burnley)

Paton, John

Wigg, George

Jones, Elwyn (West Ham, S.)

Pavitt, Laurence

Wilkins, W. A.

Jones, J. Idwal (Wrexham)

Pearson, Arthur (Pontypridd)

Willey, Frederick

Jones, T. W. (Merioneth)

Peart, Frederick

Williams, D. J. (Neath)

Kelley, Richard

Pentland, Norman

Williams, W. T. (Warrington)

Kenyon, Clifford

Popplewell, Ernest

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

Key, Rt. Hon. C. W.

Prentice, R. E.

Wilson, Rt. Hon. Harold (Huyton)

King, Dr. Horace

Price, J. T. (Westhoughton)

Winterbottom, R. E.

Lawson, George

Probert, Arthur

Woodburn, Rt. Hon. A.

Ledger, Ron

Proctor, W. T.

Woof, Robert

Lee, Frederick (Newton)

Pursey, Cmdr. Harry

Wyatt, Woodrow

Lee, Miss Jennie (Cannock)

Randall, Harry

Zilliacus, K.

Lever, Harold (Cheetham)

Rankin, John

Lewis, Arthur (West Ham, N.)

Redhead, E. C.

TELLERS FOR THE NOES:

Loughlin, Charles

Rees, Merlyn (Leeds, S.)

Mr. Steele and Mr. Skeffington.

Resolved,
That this House, having regard to the wide-ranging threats of nationalisation contained in the Labour Party's official policy statement, "Signposts for the Sixties", and to the fact that the Labour Party, under Clause Four of its constitution, remains committed to State ownership of all the means of production, distribution and exchange, urges Her Majesty's Opposition to make clear to the nation exactly which industries and which firms it would nationalise or take under any form of State control.
Mr. William Yates (The Wrekin): On a point of order. Through inadvertence, Mr. Speaker, I failed to get here in time to record my vote on the first Division and I should not like the Chair or anyone in the House to misunderstand my posi
1562
tion. I am absolutely and utterly opposed to any further nationalisation.
Mr. Speaker: Order. I do not understand the point of order which the hon. Member is raising.
Mr. Yates: The orders are that a Member of the House must endeavour to be here within seven minutes of the Division bells going. [HON. MEMBERS: "Six."] Owing to traffic problems in the city I was late. I thought that people might think that I had abstained on the Division, when I have done no such thing.
Mr. Speaker: The hon. Member had better advise himself about what is or what is not a point of order.

ORDERS OF THE DAY

  FINANCE BILL
  Further considered in Committee [Progress, 10th June].
  [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

  FINANCE BILL

    New Clause.—(EXTENSION OF RELIEF FOR A MARRIED WOMAN EMPLOYING A CHILDMINDER.)
    In section 214 of the Income Tax Act 1952 (under which a relief is given in respect of persons taking charge of a widower's or widow's children or acting as his or her housekeeper), after subsection (3) there shall be inserted the following subsection:—
    "(4) This section shall apply to a claimant being a married woman employed by a local education authority as a teacher as it applies to a claimant being a widow, with the substitution of the words 'her husband' for the words 'her deceased husband':
    Provided that—

    (a) no relief shall be allowed under this subsection unless the claimant proves that she was employed by one or more local education authorities as a teacher throughout the year of assessment preceding the year of assessment for which the claim is made and is still so employed in that year; and

    (b) it shall not be necessary for a claimant under this subsection to show that a female person employed as mentioned in subsection (1) of this section is also resident with her and her hubsand; and

    (c) a deduction of tax to be allowed under this subsection shall be a deduction from the amount of income tax with which the claimant or her husband is chargeable in respect of her emoluments as a teacher "—[Mr. Lubbock.]

    Brought up, and read the First time.
    7.27 p.m.
    Mr. Eric Lubbock: I beg to move, That the Clause be read a Second time.
    This new Clause is, I think, self-explanatory. It would give to a married woman teacher the same allowance as is now given under the Income Tax Act, 1952 to a widower, or a widow for the employment of a housekeeper to look after the children. We have put this new Clause down in the context of the very grave teacher shortage which the country faces today, and which should not need any further emphasing in this Committee.
    1564
    It is obvious that for the individual child the most important thing in the whole of his schooling is the amount of individual attention that he gets from the teacher. Therefore, everything that we can do in this Committee to make sure that the numbers of teachers in our schools are increased must per se be a good thing. The situation is far from happy at the moment, and I am afraid will remain so for many years to come. As the Minister of State for Education and Science said when speaking to the Women's Press Club at the beginning of March this year,
    "We are still 60,000 teachers short of the number needed to get rid of oversize classes."
    He went on to say that on present recruiting plans, although we shall recruit 300,000 teachers during the 1960's, of whom 200,000 will be women, 190,000 of these will have been lost during the same period. So by 1970, some six years from now, we shall in fact still be 35,000 teachers short of our target, without making any allowance for the raising of the school leaving age to 16. That creates the demand for an additional 20,000 teachers in itself.
    If I may refer to the Report of the Ministry of Education for England and Wales, Cmnd. 2316, in page 3 it is stated:
    "The further massive increase in teacher supply that is needed underlies the urgent need to recruit from all sources. As well therefore as expanding the training colleges, more married women teachers must be persuaded to return to the classrooms."
    Yet, if one looks at the table in page 74 of this Report, one finds that the number returning in the period 1st February, 1963, to 31st January, 1964, was in fact smaller than the equivalent for a year earlier.
    7.30 p.m.
    Almost as many young women are leaving the teaching profession as are joining it, largely because of earlier marriage and earlier family building. It is estimated, for example, by the National Advisory Council for Education that in 1965 alone the number of women teachers leaving the profession, 18,000, will be only 600 short of the number joining it. Last year 30,000 teachers were recruited, but the teaching force in schools increased by only 4,500. Therefore, we believe that everything possible must be done to ensure that married women teachers return to the schools as soon as possible. This

    1565
    is a particularly urgent matter now in the light of what we know about the coming bulge in the primary school population.
    There is considerable evidence to show that revised Income Tax arrangements of the kind which we propose in this new Clause would encourage married women to return to teaching. First, I would mention the Kelsall Report, "Women and Teaching", published at the end of last year, which was an independent survey by the professor of sociological studies at the University of Sheffield. A very large sample of women from three different cohorts was followed up, and they were asked for their views on the measures likely to attract women back into teaching. One of these measures was the kind of allowance which we envisage in this new Clause.
    The Report states that the proposal
    "that married women returning to teaching should be given some tax allowance in respect of additional domestic help commanded a significant degree of support which was fairly evenly distributed between graduates and non-graduates, and between pre-war and post-war cohorts."
    If one includes all the women in this survey who gave the improvement of tax incentives as one example of an inducement which would bring them back into full-time or part-time teaching, that represents quite a substantial proportion of the respondents.
    Two other Reports arrived at similar findings. One was the British Federation of University Women Report entitled "Women Graduates and the Teaching Profession", edited by Dr. M. Collins, lecturer in education at the University of Leicester School of Education. This came out in May this year. One of its conclusions is that expanding the home-help system would meet the difficulty of teachers coping with their own homes. I agree that that is not precisely the same as we envisage in this new Clause, but the effect of it would be the same. This Report found that many of the graduates who are not teaching considered that the lack of domestic help was a major deterrent to their return.
    The same conclusion was arrived at in another Report entitled "The Employment of Cambridge Graduates", published in May last year, which emphasised that the possibility of "unoccupied" married women graduates taking paid work depended almost entirely on their
    1566
    having reliable domestic help. In this survey, 49 per cent. of the 1952–53 women graduates who completed the questionnaires and 38 per cent. of the 1937–38 group were: not in paid jobs at the time of the survey, and all but a few of these were married with children. I think, therefore, that it can be accepted universally that there is evidence to show that married women could be encouraged into teaching if the 75 per cent. relief were available to them which is at present available to widows who have a female person in the capacity of a housekeeper to look after any child they may have at home.
    The new Clause allows relief to the claimant only if she has been employed by one or more local education authorities as a teacher in the year preceding the year of assessment for which the claim is made. The Clause has been so worded as to ensure that the facts available about the regularity of employment of those teachers have been proved before the relief is given. It might be found that if this principle were accepted the Inland Revenue did not need to restrict it quite as strictly as we have done in the Clause. There is an obvious conflict, I think, between making the relief available as quickly as possible so that we can get married women back into the classrooms soon and ensuring that the relief was paid to those who had returned on a regular basis. However, I do not think that that is an argument against accepting the Clause. The only conclusion that one can draw from that is that one needs to give the Clause a trial and then it could be extended later if it were found successful in its object.
    The Clause restricts the concession to teachers who are employed by local education authorities. It might be asked why it should not also be applied to other professions in which married women are needed very badly, such as the nursing profession. I should have no objection to it being extended, but I think that the need for married women to come back to the classrooms is probably the most severe social need that we have at the moment.
    One other objection which might be made to the Clause is that it would encourage married women to neglect their family responsibilities and to return to the teaching profession before they were ready to do so. But I do not think that that would be a valid objection, because

    1567
    teachers are responsible people and they would not do this unless they felt that their family commitments were properly fulfilled.
    I should like to quote something which was said by the Secretary of State for Education and Science last week. He stated:
    "Two enemies of education are dogmatism and uniformity".
    That could well be applied to our consideration of the taxation system. I do not wish to hear a reply from the Government Front Bench to the effect that this Clause cannot be incorporated in the Finance Bill because it does not fit in with the rules under which we determine our taxation. That would be a very illogical answer and one which would disappoint the Committee very much.
    How are the teachers to be attracted back to the classrooms? I do not believe that it can be done purely by the sort of advertising campaign which was carried on in April and May. I think that a much greater incentive needs to be given to married women teachers to encourage them to come back into the teaching profession. There is a large number of schemes in the Kelsall Report, which has been out for several months, but I have seen no sign of action being taken on any of them. This is one positive proposal which I believe would have the needed effect, and I very much hope that the Government will accept it.
    Dame Irene Ward: I am very glad that the hon. Member for Orpington (Mr. Lubbock) has tabled this new Clause with the support of other members of the Liberal Party. I apologise for not being in the Committee when the hon. Member rose to move it. I am, however, interested in it and I was determined to catch your eye, Mr. Blackburn, if I could, in order that I might tell the Treasury Minister that this is the kind of thing for which many of us have been asking of various Chancellors of the Exchequer and various Governments over a period of years with, I am bound to say, no success. Although I am always an optimist, I doubt very much whether, as was surmised by the hon. Member, the new Clause will be acceptable to the Treasury at this stage. Although my hon. Friend the Economic
    1568
    Secretary was very forthcoming the other night, for which I was personally very grateful, after a great deal of pressure, I think that probably tonight we will hear all the old arguments which have been put forward year after year.
    My objection to Government is that everything is so departmentalised that we never seem to be able to discuss all the actions that could be taken to build up our teacher force with all the Minissters at the same time. If this type of suggestion were to be made when my right hon. Friend the Minister of State for Education and Science was sitting on the Front Bench instead of my hon. Friend the Financial Secretary, my right hon. Friend would immediately say that this was a matter for the Treasury and not for him. It is a tremendous weakness in Government when all of us who are interested in providing the best possible education know that there is this great shortage of teachers and are not able to obtain a comprehensive discussion on a matter of this kind.
    The hon. Member for Orpington was quite right. If a Treasury Minister were to accept the new Clause, I would immediately wish to go forward with all the various Clauses that I have moved in the past, generally at half-past six in the morning, over the many years when I have been in the House of Commons. This is not simply a matter for the teaching profession. There are many other professions. It has always been held by all the women's societies to be unfair that widows and widowers with resident housekeepers can get this tax concession when spinsters and bachelors, many of them disabled or with elderly parents to support, are not permitted to obtain the same taxation relief. This is a gross injustice in our taxation laws.
    I have had some acrimonious correspondence with my right hon. Friend the Chancellor of the Exchequer on this very matter. My hon. Friend is always charming about these things, but we are always told, as, no doubt, we will be told tonight, that nothing can be done about the new Clause but that it will be considered before the next Finance Bill. One could almost compile a phrase book of the sort of replies that we get from Treasury Ministers.

    1569
    They come every year and I am bored with them. They simply keep on coming.
    When I raised this matter by correspondence with the Chancellor of the Exchequer, I said that when Lord Amory was Chancellor and the matter was raised in a slightly different context, he said that he would look at it again before the next Finance Bill. But, of course, nothing happened. By the time the next Finance Bill came along, Lord Amory was no longer Chancellor; we had another one. We have another one now. We are still no nearer to obtaining our objective.
    What makes me extremely angry is that we never seem to have a proper inquiry into these taxation anomalies and injustices. Although the Chancellor said that he could assure me that he had looked at all these proposals which were made when Lord Amory was Chancellor, there are different ways of looking at things. I do not think that men look at things of this kind as well as women do, although I must except the hon. Member for Orpington, because he has put down the Clause.
    I congratulate the hon. Member on getting the Clause selected. It is rather a new one from the Clause which has been argued over the years. I suppose that even the Chair occasionally gets tired of the same Clauses coming up year after year and never having attention.
    The Temporary Chairman (Mr. F. Blackburn): The same speeches, not the same Clauses.
    Dame Irene Ward: They are the same speeches with a kind of difference, Mr. Blackburn.
    I congratulate the hon. Member for Orpington on finding a new idea in tune with modern requirements. That is the basis of the Clause. He has hit the nail on the head. Every paper which one picks up has something to say about how we should attract married women teachers back to the teaching profession. During the war, when we wanted to draft married women into industry, the Chancellor of the Exchequer gave a fairly good relief to attract men back. Spinsters have caught up with that, because they were drafted into the war effort willy-nilly. Married women, however, had certain concessions to enable them to serve the
    1570
    war effort, as they did, and rightly so, with great enthusiasm.
    7.45 p.m.
    I should like my hon. Friend the Financial Secretary to accept the new Clause, but that is almost asking too much, because he knows what would follow from me on Report. I would try to get some more Clauses put down. I should like to know whether my hon. Friend has had representations from his right hon. Friend the Minister of State for Education and Science on this matter. Has it even penetrated my right hon. Friend what action might be taken in this direction to help to build up incentives to married women teachers to come back? I doubt very much whether my my right hon. Friend has had any correspondence or conversations with my hon. Friend the Economic Secretary. Knowing what Governments are, I am pretty certain that my hon. Friend would not tell me even if he had, because that would strengthen the case for the new Clause.
    If my hon. Friend is not accepting the new Clause, I want to know whether he will undertake that we can have the matter rediscussed on Report. He was so forthcoming the other night that I hope that with his pleasant temperament he will be as amenable tonight. I want the whole system of anomalies in taxation to be looked at properly. The Royal Commission on Taxation was rather a long time ago. All Chancellors of the Exchequer use the Royal Commission when it suits their case and disregard it when it does not. It is about time that we had a new approach to this matter.
    I therefore support the new Clause and I hope that we shall have a reply from my hon. Friend the Financial Secretary in the same amicable terms as on the last occasion when we were concerned with an earlier new Clause to the Finance Bill. I hope at least that on Report he will be in a position to give us a proper appreciation of how the Treasury in modern times view the use of the taxation instrument to try to achieve the return of those in the professions to services which need replenishing by experienced people who could come back and do the work.
    Mr. Merlyn Rees: I congratulate: the hon. Member for Orpington (Mr. Lubbock) on raising the general question of teacher supply, which

    1571
    those of us who have worked in the schools and whose children are in the State schools know will be the major educational problem of the next 10 years. I know from my brief experience in the House of Commons and before that the hon. Lady the Member for Tynemouth (Dame Irene Ward) always looks after the general interests of professional women who are at work. Nevertheless, I should be sorry if the Government were to accept the Clause in its present form.
    The first argument against the Clause is that it would be wrong to place women teachers in a separate category from any other sort of women, professional or otherwise, who are working. There are many reasons for this. A recent market research survey stated that certain professions were way up the list and certain professions were way down it in public esteem. Among those at the bottom were politicians and teachers, which rather put me in a double doghouse. There is something in this survey and I feel sure that to place women teachers on a pedestal in this way would be wrong.
    There are other ways of helping women teachers. I am encouraged in this view by the Kelsall Report, at Tables 25 and 26, which as the result of an investigation among the older and the younger women teachers show that what would be of far greater assistance to the younger women than any tax help would be nursery schools for their children. In any case, even if the Clause were accepted, the tax relief which they would get, being young people and way down on the income scale, and their husbands being way down on the income scale, would be small. The gain would be much more to people who were older and who would be far less likely to have the problem that we have in mind.
    The best way to deal with this is inside the education system. This is the place to provide nursery schools which will provide facilities for teachers' children irrespective of the income of the teacher or the combined married couple. There should be a nursery school system. In addition, it is important to provide for part-time work in the schools. The young married woman teacher who has to fit into the nine to four period and cannot get away during the daytime often
    1572
    will not consider coming back to teaching; although she would like to help the community, she also has to think of her children and be with them at mealtimes, and so on. Also, the pension and superannuation arrangements for women teachers are a drawback to getting them back into the schools.
    There is one method which could be adopted which, I think, is in order in this discussion because it comes under the aegis of the Treasury, and I think it would help both younger and older women teachers. The whole question of the taxation of combined incomes should be looked into. This would be not only for women teachers but for any other women who were working, because on the whole, in spite of the growing number of women in the professions these days, women go out to work because they need the money, and even if a girl is working in a factory, she is playing a part in the economic effort.
    To make a judgment which said that we needed women teachers and would encourage them to come back by special help as suggested in this Clause would be wrong. Therefore, much as I know the need for more women teachers in the schools, I feel that this is the wrong way to go about it.
    The Financial Secretary to the Treasury (Mr. Alan Green): This has been a short debate. Each point has been put with such clarity and brevity that I am grateful to those who have taken part.
    The hon. Member for Orpington (Mr. Lubbock) drew attention to what I agree is a very serious problem—an insufficiency of teachers. The problem will be with us for some time, I am sure, whatever Government there is after the General Election and a great sustained effort will have to be made to get enough teachers into the schools. I entirely agree that one source, the main source, is married women who have left teaching to found a home and have a family. This is a potential source of very valuable recruits. I have absolutely no difficulty in approving the intention of the Clause, but the hon. Member for Leeds, South (Mr. Merlyn Rees) put his finger on the main reason why I cannot recommend it to the Committee.

    1573
    It is only fair to point out to the hon. Member for Orpington, in case he has an opportunity to move the Clause again on Report—I would point out to my hon. Friend the Member for Tyne-mouth (Dame Irene Ward) that I have no objection to that but I do not control the selection—that there is a very substantial defect in his Clause. I do not make this the reason for rejecting it, although I could not accept the Clause because of the defect. As the Clause is drafted, the proposed allowance would be available to a married woman teacher whether or not she had a young child which needed looking after. That would be the effect because the Clause would extend Section 214 of the Income Tax Act, 1952, which has that effect.
    Within the point of discrimination made by the hon. Member for Leeds, South there are two discriminations in the Clause as worded. Even taking married women teachers, it applies only to some of them. There are all those in private schools, for example; there are many establishments where women teachers work. There are many in domestic science schools, many of which are private establishments and not run by the local authority. One would have to find means of removing that discrimination within a discrimination. Otherwise it would be wholly unacceptable to the teaching profession, let alone the rest.
    My main ground is that I do not believe that this is the right way to go about the problem. I accept at once that the intention in the mind of the hon. Member for Orpington might not have been to get the Clause accepted. I do not accuse the hon. Member of doing anything wrong. My hon. Friend the Member for Tynemouth put her finger on the difficulty. This is a good way to get a discussion and have a good, sharp area of public activity with which to illustrate it. But I believe that we should all agree that if we are to increase the already quite good allowances for married women we must do it in equity without discrimination.
    I take the point of the hon. Member for Leeds, South. Young or middle-aged married women who work in factories have just as much right in equity to an allowance of this character as any chosen members of any given profession. There
    1574
    fore, it is in equity that I must advise the Committee to reject the Clause.
    I also take the point about the shortage of married women teachers. Many efforts are being made to attract them, and those efforts will have to go on being made. I am sorry that I cannot enter into an education debate at this moment. In any case, you, Mr. Blackburn, would not allow me to.
    General incentives in the shape of allowances to make it easier for married women to go to work are, I can assure the Committee, very carefully considered, because their importance is obvious. What one has to be sure about is that one section of the population, whether men or women, whether a certain class of men or a certain class of women, whether because they are old or handicapped and so on, is not given something which another section is not. Where it is deemed right, where the practice sticks, where Governments of different kinds adhere to it—where it is deemed right to have a special allowance or a special differentiation between the ways in which the different classes are taxed, one ought always to be ensuring that the differentials are right in terms of the economic climate of each year in which they can be considered. One ought to do this, and I can assure my hon. Friend that this is done.
    Dame Irene Ward: My hon. Friend is speaking very good sense and I do not disagree with him, but the point is that widows and widowers have an allowance for housekeepers. We have always been trying to get equity with them but have not made progress.
    Mr. Green: One of our problems, particularly in regard to the housekeeper allowance, as the hon. Member for Sowerby (Mr. Houghton) knows, is that it has long been regarded as an anomaly. I am not sure that one can cure an anomalous situation by creating more anomalies.
    I accept that this really is a difficulty, but the main point on which I wanted to conclude was to say that I accept the real need to look each year at these differentials which have been created—for good reasons in all cases—first, to see whether they really continue to be sustainable, and, secondly, if it is possible to retain them—and I believe that in practically every case they will be

    1575
    retained—whether the differential which they represent between those in receipt of such allowances and those who cannot by the nature of things receive them is the right one.
    8.0 p.m.
    My right hon. Friend has decided that because of the substantial changes which he made in allowances last year, it would not be appropriate to make these changes this year. But, as I told the Committee the other day, he has reserved to himself the serious consideration of one of them, namely, age exemption relief on the specific ground that those people who have retired are living on inelastic incomes. I must advise the Committee to reject the new Clause.
    Mr. Lubbock: I anticipated that the hon. Gentleman might use that argument of discretion against the form in which the new Clause was drafted, but I think I also said that if the principle was accepted we would have no objection to extending it to other professions.
    As the hon. Gentleman concentrated his remarks so heavily on this aspect of discrimination, I should like to ask whether, if we put down a similar Clause on Report, taking into account the wording to which he alluded, to make it apply to other professions as well, it would be more acceptable to the Government. I shall be delighted if the hon. Lady the Member for Tynemouth (Dame Irene Ward) joins us in putting down such a new Clause on Report.
    I appreciate everything that the hon. Gentleman said about the nature of the discrimination, although I would not have thought that the first point about women teaching in private schools was particularly important. As I understand, there is no shortage of staff there. One of the things to which I was concerned to draw attention was the need to encourage married women back into the State schools. I think that the hon. Gentleman will accept that the same need does not apply in private schools.
    I should like to ask the question asked by the hon. Lady the Member for Tynemouth: have any discussions taken place between the hon. Gentleman's Department and the Ministry of Education about the findings of the Kelsall Report?
    1576
    This Report concentrates on the answers that were given by a wide sample of teachers to the question of how they thought they would be attracted back into the classrooms. It is important for the Government to make use of this information which has been provided by a more elaborate survey than any other which has been undertaken on this subject. I would be grateful to the hon. Gentleman if he would say a word on that.
    Mr. Green: If I might be allowed to reply, perhaps I can tell the hon. Gentleman that the Treasury—and I know that he will appreciate this—is extremely interested, and is bound to be, in any efforts by the Ministry of Education, with the help of such reports as the Kelsall Report, or indeed through the normal processes of consultation with local authorities, unions, and schools in general, to obtain teachers, but, apart from any other single factor, that will cost money. The Treasury always wants to know what it will cost.
    I assure the hon. Gentleman that there has been close consultation with the Ministry of Education. I have played a small part in this myself. There have been discussions on how to sustain this compaign to get more married women teachers back into the schools. I can give that general assurance. I do not suppose that the hon. Gentleman would expect me to produce out of the back of my head details of chapter and verse, but I promise him that that consultation does take place. I am sorry that my hon. Friend the Member for Tynemouth was not here to hear me say that, because it might have comforted her a little.
    I do not think that I can make encouraging noises about what would be the result of putting down a new Clause on Report to apply the proposed provisions to all married women, which is the only way in which a charge of discrimination can be avoided. In all honesty I do not think that I can do that. I do not have my right hon. Friend sitting next to me to tell me what I may or may not do, or how far I may or may not go.
    I cannot estimate the cost of such a proposal, but I expect that if it was applied to all married women it would be substantial. To apply it to married women teachers alone would probably

    1577
    not cost very much—only about £1 million—but to apply it to all married women going to work to an extent which would be significant—and the point is that it has to be significant to make the difference between staying at home and going to work—would be very expensive, and I cannot see how my right hon. Friend could fit it into the context of this Budget.
    I must in honesty give the hon. Gentleman that answer, but he will know that I am not the person who says whether anything put down on Report will be selected or not.
    Question put and negatived.

    New Clause.—(POWER TO OBTATN INFORMATION AS TO PAYMENTS FOR POLITICAL PURPOSES.)
    (1) Every person carrying on a trade or business, who, out of the receipts of the trade or business, makes payments for political purposes, shall, if required to do so by notice from an inspector, make and deliver to the inspector, within the time specified in the notice, a return of all such payments made during a year specified in the notice, giving the names and addresses of the persons to whom the payments were made and stating in each case the amount of the payment:
    Provided that

    (a) no such payment to any person shall be required to be included in any such return if the total amounts of the payments made to that person which would otherwise have fallen to be included in the return does not exceed five pounds; and

    (b) the year specified in a notice under this section should not be a year ending more than 3 years before the date of the service of the notice.

    (2) This section shall apply to payments made at any time after 6th April, 1962.
    (3) In this section "payments for political purposes" means payments, whether for a consideration or otherwise, for the purpose of promoting or opposing changes of law, including payments in support of or in opposition to a political party or candidates for a parliamentary election, but not including any payments to be returned under section 69 (returns as to election expenses) of the Representation of the People Act 1949.
    (4) The Income Tax Acts, and in particular Part II of the Income Tax Act 1952, shall have effect as if this section were contained in the said Part II between sections 29 and 30.—[Mr. Callaghan.]
    Brought up, and read the First time.
    Mr. James Callaghan: I beg to move, That the Clause be read a Second time.
    The Clause is concerned with power to obtain information as to payments for political purposes. Hon. Members will see that companies which carry on a trade or business
    "shall, if required to do so by notice from an inspector, make and deliver to the inspector, within the time specified in the notice, a return of all such payments made during a year specified in the notice, giving the names and addresses of the persons to whom the payments were made and stating in each case the amount of the payment."
    As the Clause goes on to say, that information would not be asked for where the payment made to any person did not exceed £5, nor for
    "a year ending more than 3 years before the date of the service of the notice."
    The Clause would, however, apply to payments
    "made at any time after 6th April, 1962."
    There is then a definition of what is meant by "payments for political purposes".
    The purpose of the Clause is to ensure that Income Tax is properly paid on payments made by a company for political purposes, because there is evidence that tax is not being paid on a number of these contributions, and to that extent the taxpayers are financing the payment by companies of their political contributions.
    I emphasise that the Clause deals with public companies, and not with individuals who make payments in their individual capacities, because those who pay contributions to political parties in their individual capacities pay them out of taxed income, and that is the same for everybody whoever they may be. There can be no quibble about that, and I know of no demand or request that individual contributions made out of taxed income to political parties should be made known.
    We are concerned with the companies. Individuals may continue to make their contributions secretly in any form they like. The land speculator will still be free to contribute to the coffers of the Conservative Party, and no one will ever know anything about it until his name appears in the Honours List.
    The difference between individuals and organised bodies was recognised 50 years ago, in the case of the trade unions. For the last half century they have been required to make detailed returns of

    1579
    political expenditure, down to the last halfpenny. I have referred before in this Committee, in conjunction with some of my hon. Friends who are here this evening, to the very stringent requirements laid upon trade unions if they desire to enter into political activities, including the balloting of their members before they embark on any such activities. They have to set up a separate fund, distinct from their own trade union fund, and there is a detailed requirement that, year by year, they shall account to the Registrar-General of Friendly Societies for the way in which the money has been spent.
    They account in detail. Anybody who sees their accounts knows this to be true. There has always been a discrimination, in that private companies have never had the obligation to make these returns in the same way that trade unions have. This difference was not very significant in the early days, but it has become significant within the last 15 years because of the concerted drive that has been made by one of the major political parties to secure contributions towards its funds, directly or indirectly, by public companies.
    This has reached the proportions of a large-scale business. Tory Party touts are operating in all the major industrial centres of Britain. Their purpose is to call upon companies—and I shall have something further to say about that later—and seek contributions towards Tory Party funds.
    Mr. Albert Evans: I suppose that my hon. Friend is aware that the invitations that go out to firms are not restricted to public companies. Private companies and partnerships are also invited to make contributions to the funds of the Conservative Party. As I understand the Clause, such private firms are also covered.
    Mr. Callaghan: That is true, but we are in the major sense concerned with the activities of public companies, which are operating on shareholders' money. That is the major group with which we are concerned, and the Clause endeavours to bring under scrutiny the payments made.
    The taxation position is not wholly clear. The law is much more dubious than Conservative Party collectors seem
    1580
    to think. Mr. Harold Williams, writing in the South Wales Echo last week, quoted a Conservative Central Office spokesman as saying:
    "If they"—
    Conservative company directors—
    "think it is in the interests of the company to pay a subscription to an organisation, they are at liberty to do so."
    The Leader of the House, speaking to the Foreign Press Association—and I cannot imagine that it was very interested in this subject—said, referring to our Clause:
    "It is not an altruistic wish for information. It is because they hope thereby to stop subscriptions to the Conservative Party."
    We had better get it clear at the beginning that the issue is not as simple as all this, and that it is very doubtful whether many companies have a right to contribute to the Conservative Party under their articles of association, because it is not in pursuance of their trade. The view expressed by the Liberal and Conservative spokesman on the South Wales Echo is so sweeping as to be utterly misleading.
    We are indebted to the hon. and learned Member for Northwich (Mr. J. Foster) for telling us a lot about the law on this matter. I should like to read what he said. He applied several tests for deciding whether a company's contribution to a political party can or cannot be allowed for deduction of tax. He said:
    "It must be wholly and exclusively laid out or expended for the purposes of the company's trade."
    The hon. and learned Member quoted the relevant section of the Act, and went on to say:
    "It is, therefore, possible for a payment to be disallowed as a deduction on the grounds that it was not made wholly and exclusively for the purposes of a company's trade: such a situation could arise if the motives of the company in making a payment were to benefit the whole industry of which it was a member, and not to benefit the company itself."
    The hon. and learned Member then referred to the latest case in which this question arose—on which he did not go into detail—namely, Joseph L. Thompson, Shipbuilders v. Chamberlain, Inspector of Taxes.
    Joseph L. Thompson made a contribution to the Economic League, a body which, in my view, is of direct benefit to the Conservative Party. The company claimed this contribution as a deduction

    1581
    for tax purposes from its profits. This was resisted, and the case went to the courts. The judge concluded:
    "When the whole of the evidence is considered the conclusion is irresistible that the payments were made and applied for the purpose of the Economic League. Those purposes are not confined to the Company's trade; they extend not only to shipbuilding generally but to the industry generally, and even include national purposes. The purposes of the Economic League are not the purposes of the Company's trade."
    It should be clearly understood by everyone that contributions to the Economic League cannot be and should not be allowed as a deduction from a company's profits for tax purposes.
    8.15 p.m.
    This brings me to my first example, and it is the biggest example that I shall give. I understand from a shareholder that the leading manufacturers in the cement industry contribute 2d. a ton to the Cement Makers' Federation. Since 1,400 million tons of cement are manufactured each year, an income of about £100,000 a year is so provided. I understand that out of this sum the Federation contributes £5,000 per annum to Aims of Industry and £5,000 per annum to British United Industrialists. If this has been going on since the last General Election—and I have no concern with the preceding period—those two organisations have benefited to the tune of £50,000 from the cement industry alone.
    We all know the work of Aims of Industry, and I do not wish to focus on that organisation at the moment, but British United Industrialists is not so well known. This organisation is indistinguishable from the Tory Party. It is a front organisation, which refrains from publishing accounts of its receipts and expenditure. It claims exemption on the ground that it is a private company. No one knows what sums are paid into this private company, or to whom it pays them out, although it said, after the last General Election, that for the years up to 1959 no less than 95 per cent. of its revenue had gone to the Conservative and National Liberal Parties and 5 per cent. to Aims of Industry.
    In view of the decision of Mr. Justice Ungoed-Thomas, to which I have referred, it seems highly doubtful whether contributions to British United Industrialists are allowable for tax
    1582
    purposes. It cannot be claimed that these payments, which go straight into the coffers of the Conservative Party, are wholly or exclusively laid out or expended for the purposes of the company's trade
    During the last 10 years some company directors seem to have thought that they could drive a coach and horses through the 1952 Income Tax Act. That arose out of a misunderstanding following the Tate and Lyle case, and it is as well that the legal position should be clearly stated, in so far as it is clear at present. There is no reason that I know of why anyone should acquiesce in the Cement Makers' Federation's financing its private political convictions out of shareholders' funds. If it wants to do that it should pay for it itself.
    There is even less reason why these payments should be subsidised by the general taxpayer. I would hazard a guess—it can be no more; but I am taking a line through the fact that it has paid out £25,000—that the cement industry has probably collected over £1 million for Tory Party funds. I therefore ask the Chief Secretary whether he can tell us whether subscriptions to British United Industrialists are allowable, or allowed, as deductions for tax purposes. What is the practice in relation to this?
    I come to my second illustration, and that is Allied Ironfounders. This company does not seem to be sure whether it has paid any money to the Conservative Party or not. Some editions of the Evening News tonight say:
    "Allied Ironfounders Ltd. this afternoon denied that they had informed the Conservative Party that they would make no more contributions to Tory funds … The spokesman would not confirm that Allied Ironfounders had been giving undisclosed sums to the Conservative Party … A spokesman at Conservative Central Office this afternoon had no comment to make on the matter."
    This disappeared from the later editions of the Evening News. As the company is not sure, perhaps I ought to remind Allied Ironfounders, as well as the Conservative Central Board of Finance, that the cheque was sent in October. There was then a dispute about where it ought to go and on 26th February the Conservative Central Board of Finance stated that in reply to a request from Allied Ironfounders £150 was

    1583
    being devoted as part of a contribution to Ealing, North, Conservative Association, and that raised that association's special fund to the grand total of £1,957 10s. I hope that there will not be any dubiety in the mind of Allied Ironfounders about whether it has been making any contribution or not.
    Has this contribution been made for the purposes of the company's trade? What services does it expect to get for it? Or has it been made as a political contribution to the Conservative Party? It so happens that it has been sent to Ealing, North, I imagine because there is a subsidiary of Allied Iron-founders in the constituency.
    Mr. Charles Loughlin: There is one in mine, too.
    Mr. Callaghan: I agree with my hon. Friend. I will give a list of other places where there are subsidiaries: Bilston, Coalbrookdale, Audenshaw, Manchester, Falkirk, Long Eton, Thornaby-on-Tees, Welwyn, Wellingborough, and Mill Hill. Do they all get a share of the "swag"? Did every constituency where there is a a subsidiary company of Allied Ironfounders get part of this contribution? If so, for what purpose? If it was for the purpose of the company's trade, if it expected some return for it, all the more reason why it should be made public.
    I have said here before, and everyone knows, that the miners make a contribution for which I am grateful—it is not large—to my expenses. That is known, so people can judge, when I speak about the miners, to what extent I am speaking for the miners and using my independent judgment. It is not known to everybody, when the hon. Member for Ealing, North (Mr. Barter) speaks, for whom he is speaking. When applications for planning permission are put in by Allied Iron-founders, to what extent does it hope to get a return?
    Let me read what was said by the hon. and learned Member for Northwich about this in deciding whether a particular payment is within the power of the company to make and is reasonably exclusive to carrying on the contributor's business. Is it made bona fide? Is it done for the benefit and to promote the prosperity of the contributing company?
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    Now listen to this. The hon. and learned Member said in his commentary:
    "Only if a company were to make an entirely voluntary subscription, with no expectations of any service in return, would any questions arise whether the subscription was in its powers".
    I should like to know about Allied Ironfounders. Did it make this subscription which, in the words of the hon. and learned Member, would be within its power, in order to get a service in return? If so, what was the service? Or did it make it as a general contribution to the Conservative Party as an entirely voluntary subscription, in which case the question arises whether it is empowered to do so? It is time that some of these issues were understood. It is not open to any company to make political subscriptions to the Conservative Party, the Communist Party, or the Labour Party just because the directors like to think that it would be a nice thing to do.
    I turn to Fisons. I mention this firm only because it illustrates the last question which I was asking in relation to Allied Ironfounders. I suspect that Allied Ironfounders' cheque was split up among the subsidiary companies in a number of constituencies, but as the company cannot remember whether it paid any money at all it is no use asking whether it has gone to individual constituencies. Fisons is clearer about it. It has admitted that it has been its practice for the last nine years to pay amounts ranging from £50 to £250 per annum to local Conservative association offices in those constituencies in which the company or its subsidiary companies operates factories or branch offices. As Lord Netherthorpe said during a recent by-election, the total last year was £2,320.
    These payments are made, he said, direct to the Conservative Party. Under what authority? By what right? Is it challengeable and are they allowed for Income Tax purposes? These are questions in which, in my view, we are getting very close to corruption. It is quite reasonable to ask that an answer should be given to the question whether these payments have been allowed for tax deduction purposes. It would be intolerable if the taxpayers, inadvertently or deliberately, were being asked to subsidise this kind of payment.
    The chairman of Fisons, in his address, after he had been pressed about

    1585
    this by a shareholder who was at that time living in Kenya, said that he was getting continual requests to contribute to charitable, educational, political and other appeals. I think that here he has a real point. Frequently, these political contributions are so mixed up, and mixed in, with other payments to charitable, educational and other appeals that they are indistinguishable to inspectors of taxes or to anybody else. I ask the Chief Secretary: how do inspectors of taxes apply themselves to this part of their duties? The purpose of the Clause is to ensure that these payments are distinguishable where the inspector has reason to believe they are made, and, therefore, he can separate them out and ensure that no tax is deductible by the company in these cases.
    When I say that they are all mixed in, I can quote an example which has now ceased to exist, but it will be a little light illustration, especially for some of my hon. Friends. The Southwestern Electricity Board was nationalised in 1948. For several years afterwards it continued to subscribe to what were euphemistically described as other bodies, outside bodies. The outside bodies were the Conservative Party and the board continued for some years to contribute to the Conservative Party.
    This went on for eight years before one of the members of the board, who had been recently appointed, discovered it, and then it was so indefensible that it was immediately stopped. There is a need—and it is to this that the Clause is directed—to disentagle these political payments from other payments.
    Mr. Stratton Mills: Is not it possible for an inspector of taxes to ask for items on a balance sheet to be explained? Is it not also possible for him to inspect the books of a company in detail?
    Mr. Callaghan: That is so and it makes this Clause all the more necessary. If they have powers and have not exercised them, it is about time that specific powers were written into our legislation.
    I come to one example in which tax can be avoided by companies which want to help the Conservative Party, namely, through the use of subsidised advertising. I quote one example, that of the Birming
    1586
    ham Conservative Diary and Year Book, whose advertising director is Mr. H. E. G. Harvey. In the middle of last year he wrote a letter—it has taken a long time to amass this information, but it has gradually come in. It was marked "Confidential" and addressed to "just a few of our special friends". That is rather peculiar wording, I must say. He asked them to advertise in the year book. He emphasised, of course, that it would not carry the name of the Conservative Party. I suppose that it was so unpopular that he did not want to put people off. The subsidy to the Conservative Party in Birmingham at the expense of the taxpayer is because ridiculously high rates are charged for advertising in this book.
    8.30 p.m.
    A whole page advertisement in the Birmingham Diary and Year Book costs £125. There is at least one hon. Member from Birmingham sitting below the Bar of the House who could no doubt tell us what is the circulation of the book. I doubt whether it is very great, but, to enable him to make a comparison, I have found that the cost of a whole-page advertisement in T.V. Times, with 1,000 readers, is not anything like £125. It costs 2s. 8d. In the Radio Times it cost 3s. 3d., and in the Reader's Digest 2s. 1d. Those businessmen who advertise in the Birmingham Diary and Year Book as a cover for raising Conservative Party funds are not only using shareholders' money uneconomically and in a way that is to be deplored, but they are also being subsidised by the taxpayer, because advertising is allowed as a genuine deduction for tax purposes.
    There is a firm of advertising practitioners which supports an hon. Member opposite. I have not given him notice and, therefore, I do not propose to mention his name. The firm has written to a number of other companies asking for support for the hon. Member. It says in its letter that he has been very active in the Lobbies and in Committee in getting amendments made to the Television Advertising Levy. [HON. MEMBERS: "Name him.'"] I am not naming the hon. Member. The company says that to set an example—and it asks others to follow its example—it proposes to contribute immediately a sum equivalent to

    1587
    10s. per employee per head to the funds of the Conservative Party. I do not believe the firm has any right to make this contribution and could be challenged by the shareholders. Even if it has, we ought to know what hidden subsidies are going to hon. Members opposite in order to influence them in doing their work in this House.
    This is an illustration of where a company is itself taking the initiative in trying to get other companies to subscribe. What causes the greatest resentment, according to my correspondence, is the open touting which goes on by agents of the Conservative Party for funds. Recently, a director of a public company told me that his secretary was telephoned and asked for a business appointment for someone from a city 50 miles away. When the person arrived he flashed a letter, which was meant to impress, signed by Lord Poole. The purpose was to assure the directors of the company and others—it was not an individual, personal letter—that the Conservative Party would not forget its friends, promising to remember any assistance given, and asking for a donation.
    Mr. Arthur Lewis: More knighthoods.
    Mr. Callaghan: The director asked whether he could keep the letter, but he was told that was not possible. When he intimated that he was averse to making such a contribution, the agent adopted an arrogant attitude and said that his company was almost alone in the district in not contributing. Hon. Members opposite sometimes pretend that secrecy is a means of protecting people against pressure from a Labour Government. I assure them that many companies think that the reverse is true, and that if they do not contribute they will be in trouble. I assure the Chief Secretary to the Treasury and other hon. Members that there is a growing number of companies which would welcome the need for disclosure, because it would enable them to resist the pressing demands made upon them by Conservative Party touts.
    It is time the Conservative Party realised that British industry is not the handmaiden of the Tory Party. One of the advantages of bringing these matters into the open and getting this information
    1588
    disclosed is that it will enable companies to stand up against the pressure which is being exerted. I think that the Committee will be interested in some replies given to shareholders who are taking an increasing interest in this matter. I will give the replies of 10 companies which have assured their shareholders that it is their policy not to make political contributions directly or indirectly.
    English and Overseas Investments Ltd., says:
    "This company has never contributed towards the funds of any political party, and it is not this company's intention to do so."
    The Metal Box Company says:
    "We do not make any direct contribution to a political party. So far as we are aware we do not contribute indirectly to any organisation which includes political activities amongst its objects."
    Mecca Ltd. says:
    "I confirm that this company makes no contributions either directly or indirectly to any political party or organisation."
    The Reed Paper Group says:
    "It is not the practice of the company to contribute to political party or associated organisations."
    Fine Spinners and Doublers Ltd. says:
    "Your Board holds the view that in a company such as this with a large number of shareholders many political views must be represented and it would be wrong to make contributions to any party."
    Radiation Ltd. says much the same and Pye says:
    "I know of no donations made by this company to any political organisation."
    Wolseley Ltd., Leicester, says:
    "It is not the policy of the company directly to support any particular political parties."
    The Halifax Building Society says:
    "The Society has made no contribution over the last few years to political funds nor to such groups as Aims of Industry and the Economic League."
    I think that its intentions are absolutely clear. It does not want, and does not intend, to contribute directly or indirectly; and I am sure that many other companies do not wish to do so.
    I now give a list of 20 companies which refused to say whether they do so or not.
    Mr. Stratton Mills: On a point of order. You will note, Sir Robert, that the new Clause deals specifically with

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    notice to be served by an inspector of taxes about details of political contributions. The hon. Member is now advancing an argument, which would be a suitable argument for a Companies Bill or a Representation of the People Bill—[An HON. MEMBER: "Are you a shareholder?"]—that full publicity should be given for each of these contributions, which is an entirely different point from that in the new Clause.
    The Deputy-Chairman (Sir Robert Grimston): I find nothing out of order in the way that the hon. Member is developing his case for the new Clause.
    Mr. Callaghan: If it will comfort the hon. Member, at the end of each paragraph I will say how it relates to the particular Clause, though that may be a little wearisome. I can assure him that I will keep in order.
    English Electric has a capital of £33 million. Its answer to a request to say whether, in fact, it makes any payments is as follows:
    "In view of the many thousands of our stockholders, it would be quite impossible to deal with detailed questions regarding the running of our business. Moreover, to make information available to one stockholder which was not available to all would be invidious."
    That, I think, is a most ingenuous reply. When I recall that it has at least one strong member of the Conservative Party sitting on its board and one who takes the Conservative Whip in the House of Lords, it seems to me that it has a special responsibility to "come clean" on matters of this sort.
    International Distillers and Vintners, with a capital of £110 million, says that the information is confidential and cannot be disclosed. It, too, has a member of the board who takes the Whip in the House of Lords. Land Securities relies on the old formula that it is unable to give information to a single shareholder which is not available to all. Its chairman, Sir Harold Samuel, was knighted last year.
    Mr. W. Hamilton: For political services.
    Mr. Callaghan: Charringtons, of course, has a former Member of this House on its board. It says that a few companies make donations of insubstantial amounts to local constituency parties but it gives no detail.
    1590
    I come to Courtaulds—and with Courtaulds, of course we have special connections in the House and in the other place. It says:
    "It has always been the policy of the board not to authorise payments to political organisations. From time to time in the past small payments have been to both Aims of Industry and the Economic League."
    It all depends what one means by "small". Fisons' chairman, Lord Netherthorpe, thought that its contribution of £2,000 was small in relation to the capital of the company, which was £6 million to £7 million. I remind the chairman of Courtaulds that its capital is £97 million and that against this a sum of £100,000 is rather small, too.
    Next, what about A.E.I.? Here we have Viscount Chandos and Sir Robert Renwick, who is chairman of British United Industrialists Ltd., the man who sets out to collect the money for the Tory Party. I ask the House to listen to this for a dubious reply. I thought that I would bring this out for itself:
    "The Company subscribes to many organisations, such as chambers of commerce, employers' associations, trade associations, etc., which by their nature are concerned with political affairs, but which exist for the representation and protection of the interests of members or subscribers. Aims of Industry is among the organisations of this kind to which we subscribe, as we believe that its work helps in the protection of the shareholders' interests. The Company does not subscribe to any political party; this has, I believe, been the Board's policy since the inception of the Company: it certainly has been the policy for the past seventeen years of which I can speak with personal knowledge".
    I should like to know whether Sir Robert Renwick, chairman of British United Industrialists Ltd. sends a letter to Associated Electrical Industries, on which he sits as director, asking for a subscription and whether it is made, because if it is, this is one of the most disingenuous letters I have ever seen. The director and secretary says that the company subscribes
    "to many organisations … concerned with political affairs".
    But this is the key question which is dodged—and I do not suppose that the inspector of taxes knows the answer either! I am sure that he has no idea what is happening in this case. It may well be the case, until Associated Electrical Industries tells us the full amount

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    of these payments, that the taxpayer is at present subsidising contributions to the Conservative Party made by Associated Electrical Industries.
    The Leyland Motor Corporation, of course, also has a former Tory Minister on its board. It says:
    "There are, of course, nearly 70,000 shareholders, and if the directors felt that the interests of these shareholders were more fully protected by making a donation of any kind, then it would be their duty to consider seriously making any such payment, and it would be a matter entirely in the discretion of the directors whether or not to contribute in this way".
    If that is the reply to a shareholder, I can only say that one gets much better service if one belongs to a trade union, because no general secretary would get away with a reply like that—and if he did, the Registrar-General of Friendly Societies would want to know why. On Ranks Hovis McDougall Ltd. we have a former member of the Cabinet sitting on the board—Lord Tenby. This might almost be a Ministerial reply. I admit that he had a great deal of experience in making such replies but it is a splendid reply to the question, "Do you contribute to political parties?" It is:
    "I am able to say"—
    this is by Viscount Tenby—
    "that no payments of this sort are made unless the board or a committee of the board unanimously resolve that such payments are in the interests of the company and therefore also of the share and stockholders".
    This is supposed to be giving information to a shareholder who asks a specific question.
    Imperial Tobacco says that it makes no direct contributions to political parties—we have to watch every word in these replies—but it does subscribe to various national organisations.
    A shareholder has written to me about a number of companies of which he is a shareholder and to which he has written. I will summarise his reply, because I have not seen the original letters. I have seen the originals of the letters which I have quoted so far.
    "F. W. Woolworth",
    says the shareholder.
    "are very cagey and probably do give. Bass, Mitchell and Butler give when it is in the interest of the company to do so. Shell
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    Transport and Trading Company wrote a long screed which, I think, boils down to the fact that they do give, but they are not going to tell me."
    Thomas Firth and John Brown—and here is a variation in the replies—say:
    "I am sure you will appreciate that it is not ethical that details of the company's activities should be disclosed to any individual shareholder."
    There is a whole variety of replies, like those of Powell Duffryn, Great Universal Stores, Tadcaster Brewery who say, in effect "We cannot tell individuals. It would not be proper to give to one individual this information …" I want to remove that disability from them.
    8.45 p.m.
    Mr. Lubbock: The hon. Gentleman mentioned Shell a moment ago. I happen to have here a letter from the secretary of Shell, in which he refers to a booklet entitled "Shell Grants". In that booklet it is stated that organisations with political aims are not given support by any Shell company.
    Mr. Callaghan: I am ready to accept that. I prefaced what I had to say by saying that at this stage I have not seen the original of the letter. I am quoting what I am told by a shareholder. The shareholder says:
    "Shell Transport and Trading Co. wrote a long screed which, I think, boils down to they do give, but they are not going to tell me."
    Hon. Members may have different information. If so, they can quite easily clear the matter up.
    Ideal Building and Land Development said:
    "It is not the practice of the directors to disclose details."
    Allnatt London Properties said:
    "As a matter of policy the directors do not make the information you request available to any one shareholder."
    Guest, Keen and Nettlefolds failed to reply to an initial letter written by a shareholder asking, among other questions, what sum was contributed by the company to the Conservative Party, but, being persistent, the shareholder wrote again. He then had a letter saying:
    "I am very sorry that we have not replied."
    It made a general reply, but specifically refused to give any information in response to the direct question: do you contribute to the Conservative Party?

    1593
    Austin Reed was unable to give information to one shareholder.
    The British Motor Corporation's reply was as follows:
    "Any donations or subscriptions agreed by the board are always made in the best interests of the Corporation and it would not serve those interests to make further comment."
    The shareholder then proposed that the company should circularise his resolution on this subject of political contributions. He had a very enlightening reply. The company said that it would be glad to supply him with a list of shareholders, and he could do it himself, but that it would cost him £275 and—
    "on receipt of your remittance we will put the work in hand".
    If the resolution was to be proposed—I now quote from its letter:
    "We should also require a remittance to cover the cost of printing and circulating the notice of the resolution and, if the resolution has to be despatched separately this would be in the region of £1,400."
    Needless to say, the shareholder took the matter no further, but he never got a straight reply.
    Finally, a company I am asked not to name, but the information has been given to me by a director known to a number of hon. Members who disagrees with the present practice of subscriptions and has subsequently persuaded his colleagues to withdraw from it. The subscription list he found in his company was as follows: Aims of Industry, 100 guineas; Economic League, 100 guineas, a highly dubious contribution; it is very doubtful whether it had the power to make it; local Conservative association, 100 guineas—again, highly dubious, and it is very doubtful whether it had the power to make it: Conservative Central Board of Finance, 100 guineas; two local "good works" organisations run by Conservative women, 22 guineas; campaign fund for no purpose other than to give this fund to the Conservative Party, £250—total £700.
    Mr. Donald Box: Why not name the company?
    Mr. Callaghan: Because the director has asked me not to, and I do not propose to do so. I have given hon. Members enough names this afternoon for my bona fides not to be called in question on this. This is the only company whose
    1594
    name I am not giving. I do not intend to give it, because there are plenty of people who need protection.
    I think that the Committee will be amused finally to hear of a conversation which is reputed to have gone on in the board room of a company. One of my correspondents tells me that it ran like this, on a proposal by a director that a contribution should be made to the Conservative Party:
    "Deaf director: I did not hear what this director is proposing.
    Chairman: He says that you should pay the subscription to the Conservative Party yourself.
    Deaf director: But I do.
    Chairman: This is the firm's subscription and he suggests that you might pay your share of it direct
    Deaf director: But if we did it that way, I should have to pay the tax on it."
    I think that this is typical of the conversations which go on in a great many board rooms today. I believe that the taxpayers are subsidising the Conservative Party to the tune of hundreds of thousands of pounds over the life of a Parliament, money that should be paid by the directors themselves, if they have the authority to do so, but which is not and which is now paid partly by the Chancellor of the Exchequer.
    There is a need to protect those companies and shareholders who wish to resist the strong-arm tactics of the Conservative Central Office, of which I have given some illustrations tonight. The inspectors of taxes should be armed with greater powers to enable them to obtain this information where they think that this sort of thing is going on and to disallow payment where it is being done in a way not susceptible to advancing the interests of the company.
    I consider that it is impudence now to suggest that to support the Conservative Party is to support the interests of a company's trade. How can anyone suggest such a thing when we have had three years of stop-go? How can any director believe that he is advancing the best interests of his company to return to power a Government who have a stop-go after every General Election?
    This is not a legal matter. We are verging on the edge of the political, because I suggest that it is more in the director's interest to support the Labour

    1595
    Party—with our endeavours, through an incomes policy and other means, to get rid of stop-go—than to have this lot in power. I am not suggesting that he would be right to finance the Labour Party because of this, but I suggest, equally, that it is wrong to support the Conservative Party, probably being ultra vires in doing so.
    In moving the proposed Clause I have said sufficient to show that there is probably a need, in addition to the Clause, for other steps to be taken to revise company law procedure so as to make publication to shareholders a normal matter. When the Leader of the House says that we are bringing up this matter because we want to stop subscriptions to the Conservative Party, the answer is not that at all. These subscriptions, when made, should be made public. No one should be able to deny a shareholder the right to know what is being done in his name. They should be made in such circumstances that the inspectors of taxes can determine whether or not they are in the interests of the company's trade, and, if not, they should be disallowed.
    Mr. Angus Maude: The comparative moderation with which the hon. Member for Cardiff, South-East (Mr. Callaghan) moved the proposed Clause has given a certain spurious air of responsibility to what was a purely political speech. If there should be any question among hon. Members opposite as to whether it was a purely political exercise, two things should clearly prove it.
    First, the hon. Member admitted that there was no need for this Clause at all. He said that power already exists and that the inspector of taxes is already able to ask for this information if he needs it. If this is so, why does the hon. Gentleman, backed by a considerable and well organised campaign of muck-raking and trouble stirring—[HON. MEMBERS: "Withdraw."]—I do not in the least wish to withdraw that remark.
    What the hon. Member for Cardiff, South-East has been doing has been deliberately to organise a campaign designed to cause trouble to those companies which genuinely believe that it is in their interests to make political
    1596
    contributions. He has done that in the hope that the shareholders of those companies will, by continually asking questions and writing letters, frighten the directors out of doing what they believe to be their duty. This is, therefore, a purely political exercise. The hon. Member admitted that the Clause is unnecessary and that powers already exist.
    Secondly, this exercise has been undertaken in default of any economic or financial policy on the part of the Opposition. It is one of a long series of gimmicks and stunts which we have come to expect from them.
    I now turn to one or two points in the hon. Member's speech—one of, I thought, considerable seriousness, because at one point he said that this was not simply a matter of contributions or, indeed, of Income Tax laws; he said that it was coming perilously near to corruption—[HON. MEMBERS: Hear, hear."]—I am interested to know that the hon. Gentleman and his hon. Friends consider that that was a helpful and reasonable contribution to the debate—
    Mr. William Hamilton: It was quite right.
    Mr. Maude: —so perhaps, it might be well if we were to get this quite clear for the record. On 7th December, 1949, the then Attorney-General—Sir Hartley Shawcross, as he was—said:
    "So far as the electoral law is concerned, private citizens are entitled to make such donations to political funds as they think proper. This right is enjoyed by them both individually and collectively, thus, subject to the rules of their own constitution and of the general law, corporate organisations such as industrial concerns, the co-operative societies or trade unions, whether of employers or employed, are entitled to make contributions to party funds whether secretly or publicly, as in the two cases put to me."
    Later, he said:
    "There is nothing whatever to prevent anybody, any hon. Members, any trade unions, any industrial companies, making subscriptions to political funds of any party which they choose. That is perfectly legal; it is legal now, and would be legal even in the middle of an election. That money goes into the bank. So long as it remains in the bank, it does not have the slightest effect on the conduct of the election. When it is taken out of the bank by the political party concerned and devoted to expenditure on propaganda calculated to promote one candidature or disparage another, then it comes within the scope

    1597
    of the statute, but nothing I have said and nothing that the statute says in any way restricts contributions by individuals or corporate bodies to political funds."—[OFFICIAL REPORT, 7th December, 1949; Vol. 470, c. 1889–97.]
    Mr. G. R. Mitchison: Perhaps the hon. Member will allow me to intervene for a moment. Sir Hartley Shawcross was talking about electoral law. We are talking about Income Tax, and whether the taxpayer should be obliged, by these admissible deductions, to contribute to these political funds. Moreover, for this is a question of whether it is within the powers of the company or not, the statement was not made in that regard, and it cannot be judged without looking at the memorandum and the articles of the company in question.
    Mr. Maude: I was dealing with the allegation of the hon. Member for Cardiff, South-East that what he had been describing came, I think he said, close to corruption—[Interruption.]—Hon. Members opposite are making my point for me. It is absolutely impossible to reconcile that ruling of the former learned Attorney-General—which, I agree, was in respect of electoral law—with the suggesion that there is something corrupt about companies making contributions to political funds.
    Were it not for the necessity of the Opposition to carry out a political exercise like this, it would never have occurred to them particularly, and if there had not been a General Election imminent they would not have done that. It would never have occurred to them to attempt to suggest that there was justification for the hon. Member to say—
    Mr. Lubbock rose—
    Mr. Maude: No. I do not want to detain the Committee too long. I have already given way once, and the hon. Member gave way once. I really think that there will be more time for the hon. Gentleman to represent his Liberal Party to the electorate.
    9.0 p.m.
    I want to turn to the Clause itself and I shall have some general observations to make after that. In moving the Clause the hon. Member for Cardiff, South-East said that he was concerned only with industrial companies, but that
    1598
    is not what the Clause says. The words are:
    "Every person carrying on a trade or business …"
    The hon. Member and his hon. Friends might reflect a little carefully about the implications of those words because they are extraordinarily dangerous and suggestive.
    "Every person carrying on trade or business" is the small shopkeeper—[HON. MEMBERS: "No."]—yes it is. This is the professional man, this is the jobbing gardener, and if we are to start on the slippery slope of trying to force him to disclose his political subscriptions and affiliations, I hope that hon. Members opposite realise precisely what it is that they are trying to suggest.
    Mr. Callaghan: What we are suggesting is that where a trader claims this as a deduction he should be asked to prove it.
    Mr. Maude: This is not what the Clause says at all.
    Mr. Mitchison: Will the hon. Gentleman give way?
    Mr. Maude: Hon. Members opposite must make up their minds who is conducting this case. I will give way to one of them but not to two alternately.
    Subsection (3) of the proposed new Clause says:
    "In this section 'payments for political purposes' means payments, whether for a consideration or otherwise, for the purpose of promoting or opposing changes of law, including payments in support of or in opposition to a political party or candidates for a parliamentary election …"
    This is the most extraordinary piece of definition that I have ever heard.
    I imagine that it would bring within the purview of the Clause anybody who made a subscription to a campaign for abolishing capital punishment, to a campaign for education, to the A.A. or the R.A.C. or anything that one would like to mention. [An HON. MEMBER: "So what?"] I will tell the hon. Member so what. It is because this is a deliberate first wedge driven into the whole democratic principle of our society. [An HON. MEMBER: "Go back to Australia."] Nothing more gratifies me or proves my case than the unthinking laughter of hon.

    1599
    Members opposite who have failed entirely to understand what are the implications of the election gimmick which their leaders have thought up.
    Let us consider some of the results which might follow. The hon. Member for Cardiff, South-East said in a rather self-righteous sort of way that there is one law for the rich and one for the poor. The trade unions and the friendly societies have to follow the one, and industrial companies have to follow the other. There is a very good reason for this and it is as well that hon. Members should understand it.
    It is perfectly true that a member of a trade union is entitled to contract out of payment of a political levy. The point is that in certain occupations he may very well be compelled to be a member of a trade union if he is to have a job at all, or a worth-while job. This is not so in the case of the shareholder, if he wants to question his directors and force them, in the last resort, to answer, he has the means of doing so at a meeting. Shareholders are not obliged to accept the first letter they receive from a director. They can go to a meeting and, if enough of them go and make a row, they have a perfectly well known means of redress open to them. Ultimately, if they do not like the decision which other shareholders take or which the directors take, they can sell their shares. The ordinary workman, on the other hand, cannot leave a trade union which is making a contribution under the political levy.
    There would be some justification for this nonsense if the other parties were at all forthcoming in the breakdown of their political donations and subscriptions. In fact, they are not. Let there be no mistake about it. It is the disclosure of political affiliations by people who may not want to disclose them which is at stake here. Every individual in the country should realise that this is what is at stake. If we are once to assume that this kind of poking and prying into political affiliations—
    Mr. Bruce Millan rose—
    Mr. Maude: No, I cannot give way again.
    The Deputy-Chairman: If the hon. Member who has the Floor does not give
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    way, the hon. Member for Craigton must not persist.
    Mr. Maude: I have given way several times and I do not want to take much longer. I wish to conclude with one or two general observations about the propriety or otherwise of companies making contributions to semi-political or political organisations.
    The hon. Member for Cardiff, South-East said that the Tory Party had better realise that British industry is no longer its handmaiden. I thought that an interesting phrase because it is usually alleged that industrialists are our masters, and it is a little difficult to see how one can think of them as being simultaneously both our masters and our handmaiden. The hon. Gentleman then proceeded, as I understood him—it was a very interesting point—to say that a large and increasing number of companies do not want to contribute to the Conservative Party at all, which is not what most hon. Members have been saying. The hon. Gentleman wants to make it more difficult, obviously, for those who do.
    Mr. W. Hamilton: No.
    Mr. Maude: Yes, of course he does. He said so explicitly at one point, and he implied it over and over again throughout his speech.
    I have said already, and it cannot be denied, that shareholders can, in the last resort, force their directors to disclose what shareholders want them to disclose. [HON. MEMBERS: "How?"] They can get rid of their directors, if they do not like what is done. [HON. MEMBERS: "How?"] If hon. Members do not know that, they do not know anything at all. I have explained that, if shareholders are dissatisfied, they can, in individual cases, sell their own shares and buy shares in another company which subscribes to the Labour Party or to no party at all.
    It is too ingenuous of hon. Members opposite to pretend that they know of no particularly good reason connected with business and trade for companies in this country to contribute to funds opposed to the nationalisation of their industries. The situation is quite obvious, and, after the speech this evening from that Dispatch Box, it must

    1601
    be more obvious than ever. Plainly, it is in the interest of companies in many industries to do everything they can to ensure that the Government of this country does not fall into the hands of right hon. and hon. Members opposite, not merely because they are asking for something very like a blank cheque to nationalise any industry which falls under their eye—[HON. MEMBERS: "Oh."]—if hon. Members will read tomorrow the concluding words of the speech of the right hon. Member for Belper (Mr. G. Brown), they will see exactly how accurate was my description of their desire. But not only that, and much more important, the hon. Member for Cardiff, South-East suggested that there was no good reason why any firm should want the country to be governed by this party rather than that. There are few companies, few boards of directors and few shareholders in this country who do not remember the results and the experience of being governed by the Labour Party from 1945 to 1951, and that in itself is a justification.
    Mr. Walter Monslow: Is that why the hon. Member went to Australia? He should read again what he said then about the Tories.
    Mr. Maude: I know that hon. Members opposite do not like this, but they had better listen. I come to the doubtful relevance of the hon. Gentleman's references in trying to drag this within the umbrella of the Income Tax. The words he used were, I think, that subscriptions were being subsidised by the taxpayer. That is the most arrant nonsense and indicates, as that sort of phraseology always does, the attitude of hon. Members opposite. Money not taken in tax is not the property of the Chancellor of the Exchequer and never has been.
    We hear from hon. Members opposite—and this has been clear all through every Finance Bill debate—the idea that if taxes are reduced the Chancellor is giving something away. They appear to think that the money of individuals and companies is automatically the property—and certainly in the case of the Labour Government they did their best to make it so—of the State. It is high time that hon. Members opposite learned that individuals and companies do not regard their own property as something on which
    1602
    the State has a lien as soon as a Labour Government is elected. Despite political gimmicks of this kind they can be assured that this time there is not going to be a Labour Government.
    Mr. Dingle Foot: The Committee has just listened to a speech which was little short of fantastic. Not only did the hon. Member for Stratford-on-Avon (Mr. Maude) fail to understand the new Clause but he also failed to understand at every point the implications of his own argument, if indeed argument it could be called.
    He started by asking what was the purpose of this new Clause. I would have thought that to anybody who listened to the speech of my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) the purpose of the Clause was quite obvious. Its purpose is to call attention to the considerable public scandal which affects the standards of our public life.
    Mr. Stratton Mills: Surely the purpose of the speech of the hon. Member for Cardiff, South-East (Mr. Callaghan) was this: if you cannot beat them at the ballot box, stop the money.
    Mr. Foot: The answer to the hon. Member is that we shall beat the party opposite in the ballot box very soon—and in Northern Ireland. Both in the United Kingdom and in Northern Ireland we shall deal with secret payments. The hon. Member for Stratford-on-Avon went on to quote opinions from Sir Hartley Shawcross in 1949. It was apparent from the extract that he read that Sir Hartley Shawcross was dealing simply with election law for the purposes of which subsidies may be given in support of a particular candidate in a particular constituency. He was not in the least concerned with tax law. He was not concerned with the position of a company vis-à-vis its shareholders.
    9.15 p.m.
    Then the hon. Gentleman went on to refer to the new Clause. He gave us to understand that if we passed it we should be interfering with the freedom of small shopkeepers and other similar individuals. The new Clause does not interfere with anyone's freedom. If it becomes law every citizen will be just as free as he is now to make any subscription to any political body out of his taxed income.

    1603
    All that the new Clause does is to make sure that when he files his tax return, if he claims to deduct a payment of this kind, it is shown.
    Then the hon. Gentleman spoke about the position of trade unions. Their position is perfectly clear and has been clear ever since 1913. Before a trade union can give any money for any political purpose, there has to be a resolution of the union and a vote in favour of the majority of the members. Only a month ago, under the Ten Minutes Rule procedure, I introduced a Bill to put companies in precisely the same position as trade unions—no better and no worse. What happened? Although it was a Private Member's Bill, and although there was no question of the Whips being on, I did not receive a single vote in support of it from the party opposite. Hon. Members opposite voted in favour of preserving the privileged position of companies compared with trade unions.
    This is a very serious matter. What we on this side object to is not that directors should decide to give money to the Conservative Party or any other cause which commends itself to them. We say that what they give should be their own money. Do hon. Members opposite really think it right that the directors of any company should be entitled to give away the shareholders' money without their consent and even without their knowledge? That is the issue which I sought to raise in a Bill a month ago and which this new Clause seeks to raise tonight.
    There are three forms of contribution. First, there is the contribution to the specific campaign. That was the sort of contribution which was concerned in the sugar case of Mr. Cube. In that case the proposal had been made that the Government would take over the assets of the company. It was held that it was legitimate for the company to subscribe to a particular campaign in order to resist that legislative proposal. That is one category.
    There is the second category when one is dealing with the Economic League, Aims of Industry, or some other similar organisation. If an organisation exists to conduct a particular campaign that is rather more doubtful. A case was decided recently by Mr. Justice Ungoed-
    1604
    Thomas in which he held that it was not legitimate for tax purposes to make a contribution to an organisation which, in turn, would conduct a specific political campaign.
    There is the third category which is the one with which we are chiefly concerned tonight, and that is contributions made direct to a political party. My hon. Friend the Member for Cardiff, South-East referred—and there have been a good many references in connection with this controversy in the Press and elsewhere—to the opinion given to Aims of Industry by the hon. and learned Member for Northwich (Sir J. Foster). Its purpose was to reassure those who were nervous about these gifts for political purposes. The hon. and learned Member wanted to reassure shareholders, and particularly directors, that they would remain within the law if they contributed to specific campaigns run by Aims of Industry. That was the purpose of the opinion.
    It should, however, be made clear that the opinion given by the hon. and learned Member does not refer in any way to the third category: that is, contributions direct to the funds of a political party. That is quite different. I know that the excuse is made by Lord Netherthorpe and others that their companies are opposed to nationalisation and that the Conservative Party can be relied upon to resist further measures of nationalisation.
    The fallacy of that argument is that nationalisation is only one political issue among many. It is not one of the major political issues. [HON. MEMBERS: "Oh."] That is a matter of opinion. Hon. Members opposite would not, however, dispute that the Conservative Party is concerned with a great many other issues besides nationalisation. There is its foreign policy, its policy in connection with the Commonwealth and its trade and its economic policy. Those are all matters with which a political party is concerned. When money is subscribed to a political party, it is not simply for one single purpose. It goes to support all the policies which that party supports. I suggest that contributions of this kind are, in the first place, of very doubtful legality.
    My hon. Friend the Member for Cardiff, South-East referred to a passage

    1605
    in the opinion of the hon. and learned Member for Northwich when he said:
    "The test of whether a particular payment is within the powers of a company is laid down in the case of Re: Lee Behrens & Co. Ltd."
    and he gives the reference, by Mr. Justice Eve. I pause there to say that that case had nothing whatever to do with political contributions. It was a case about the payment of an annuity to, I think, the widow of one of the directors. The hon. and learned Member goes on to say:
    "Is a payment reasonably incidental to the carrying on of a contributor's business? Is it made bona fide? Is it done for the benefit and to promote the prosperity of the contributing company?"
    He suggests, I have no doubt correctly, that to be lawful a gift must satisfy all those conditions.
    This issue about contributions to a political party direct has never yet been tried out as far as I know in any court, but I suggest that there are at least two possibilities. It may well be—indeed, it is more than a possibility; it is extremely probable—that contributions direct to a political party would be held to be not deductible for tax purposes. Secondly, however, it might depend upon a company's memorandum, but it might well be held in any particular case that such contributions are either ultra vires the company or ultra vires the directors. It needs to be generally known that in that event the directors themselves could be held personally liable for these payments.
    Those are the issues with which we are concerned tonight. It has emerged during the last few months, what very few people realised before—at least, few people on this side of the Committee or among the general public—that the party opposite largely subsists and carries on its operations on secret funds given without the knowledge of the persons to whom those moneys belong.
    Mr. William Clark: I followed with great interest the argument of the hon. Member for Cardiff, South-East (Mr. Callaghan). He does not seem to have read his OFFICIAL REPORTS. He has not, I imagine, referred to the debate on 25th June, 1963, when my right hon. Friend the Chief Secretary dealt with the specific point of the new Clause, saying:
    "It follows that no allowance is due, in computing profits, for payments for political purposes such as contributions to political
    1606
    or party funds or electoral expenses."—[OFFICIAL REPORT, 25th June, 1963; Vol. 679, c. 1286.]
    I should have thought that had the hon. Gentleman done some homework on this there would have been no point in moving the Clause. I can only think that his reason for moving it is to air the view that the Labour Party is now the champion of the shareholders and to do a little electioneering.
    What is asked under the Clause is that a return shall be made to the inspector of taxes. It does not say why. Reference to the 1963 debate will show that these expenses are not allowable for tax purposes. The Clause does not say why there should be a return to the inspector of taxes. It also does not say that the inspector should not ask everybody. Does it mean that the inspector will be directed as to from whom he should request the information? The Clause is being seriously put forward by the Labour Party and hon. Members opposite should have thought out the implications. I also do not think that anybody on this side of the Committee or many hon. Members opposite would altogether agree with the retrospection in the Clause.
    The hon. Member for Cardiff, South-East indicated that a private individual was not affected by the Clause. We need not argue the wording of the Clause, because under that wording a private individual would be affected. To be fair, the hon. Member intimated that a private individual would not be affected, and presumably a partnership or a director-controlled company would not be affected because it is the money of the people running the business and not of the taxpayer. The hon. Member for Cardiff, South-East should withdraw his accusation that the Tory Party is being partially subsidised by the taxpayer. He knows that if a contribution is made to any political party, it is not allowed for tax purposes, and he also knows that the taxpayer does not come into it.
    This leaves us in the position that we are dealing only with public companies. We have to be careful about realising what a "payment" is. The hon. Member for Cardiff, South-East mentioned advertising in local magazines. I should not think that it is only Conservative constituency organisations which have

    1607
    monthly or quarterly magazines. Consequently, I should not think that it would be a very easy job for any inspector to say whether a contribution to a magazine of £10, £20, £50 or £100 was good or bad advertising for the organisation.
    If we are thinking purely of the interests of the shareholders of public companies, why should we restrict this to political advertising? What about charitable advertising and advertising in church magazines? If we are to get into the sphere where we give the Inland Revenue such a power, we must think out a Clause much more carefully than the hon. Member for Cardiff, South-East has apparently done.
    Mr. Stratton Mills: If the argument were accepted, power would have to be given to the inspector of taxes to consider whether any particular advertisement was justified by the return, which would be an excessive power.
    Mr. Clark: I had intended to deal with that point later.
    Let us take a public company and the rights of shareholders in such a company. Let us see what a shareholder wants from the directors of a public company. If he invests £100, he knows what return he will get on it. Let us assume that his return is 5½ per cent. I should have thought that, being a shareholder, he would leave the control of the company to the directors. That is what happens with 99 per cent. of shareholders. What a shareholder wants is not only a return on his investment in a company, but that the company should be managed correctly and economically, and that the fall in the value of the £ is compensated for by an increase in the capital value of his shares.
    9.30 p.m.
    I am not talking about making huge capital gains. I am talking about the average shareholder. All that he wants is a reasonable return on his investment, and to keep in front of any fall in the value of the £. If a director of a company gives a shareholder what he wants, I should have thought that he had carried out his duty to him.
    The Clause does not protect shareholders at all. Hon. Members who have studied it will realise that that is so. Presumably the hon. Gentleman is not particularly wedded to the wording of the new Clause. Its purpose is to show that the Labour Party is the champion of every conceivable person in the country, including those whom it has loathed in the past, the so-called capitalist who owns shares. The party opposite is now the champion even of shareholders.
    But if one accepts that shareholders must have the right to interfere in the management of companies, as my hon. Friend the Member for Belfast, North (Mr. Stratton Mills) said, it means that if there is prestige advertising by a public company, a shareholder will be able to kick up a fuss and question the directors on the matter. What hon. Gentlemen opposite forget is that a shareholder has many rights. If he is prepared to go to the annual general meeting of his company, he can kick up a fuss about any conceivable thing. [HON. MEMBERS: "No."] It is no good hon. Gentlemen opposite saying "No."
    If we accept the premise that a shareholder in a public company is interested in a return on his investments, plus the capital value of his investments remaining static, or perhaps increasing, I should have thought that it was in his interests to make certain that the directors, who are his agents, did not let the assets of the company be nationalised by any political party. That is one thing which we have to get clear on the question whether directors of public companies are entitled, either morally or legally, to invest in, or to make contributions to, organisations such as Aims of Industry.
    Let us assume that a small shareholder invests in a company which is nationalised. Instead of getting a stake in the equity capital of that particular industry, all that he gets is fixed interest bearing stock—Daltons. I would not have thought that that was the sort of thing which shareholders wanted.
    I know that this is something to which hon. Gentlemen opposite do not like to listen, and which they will not admit. There are more than 4 million small investors in this country. They have a

    1609
    vital interest to see that no political party nationalises the industries in which they have invested and changes their equity capital into fixed interest bearing stock, because when that happens their investment either remains static or falls in value unless the Government manipulate the interest structure of the market—something which, between 1945 and 1951, the party opposite found was not a runner.
    I should have thought that after the song and dance made about the Clause we would have been given a tremendously long list of all the wicked industrialists who were supporting the Tory Party. The hon. Member for Cardiff, South-East read out a list of 10, 12, or 15 firms who would not say whether or not they contributed. I should not have thought that this was the rôle of a so-called Shadow Chancellor. I should have thought that it would be better for him to spend his weekends doing a little solid work on economic and financial matters which might concern the party opposite if, in the unlikely event, it was returned to power.
    In referring to these 12 or 15 firms, there was no mention of the co-operative societies. The hon. Member must be fair. He cannot have two rules. He says that private industry must not make these contributions. Is anybody suggesting that co-operative societies do not also make contributions?
    Mr. A. E. Oram: Surely the hon. Member understands that what is at stake in this Clause is the question whether or not shareholders should know what contributions are being made. I can assure him that all the political expenditure of the co-operative societies is authorised by the shareholders, who are fully acquainted with what goes on.
    Mr. Clark: I am sure that the hon. Member is trying to be helpful. I thought I said earlier that the Clause does not help shareholders at all, and that we are really talking about the spirit behind the wording. I am not arguing that the Clause helps shareholders; it cannot possibly help them, because the information asked for is presumably only a matter between the taxpayer and the inspector. As I have said, this information is already in the possession of the taxpayer. We must keep to the spirit of what we are discussing,
    1610
    and we should not try to say that the Clause does this, that or the other. We all know that the Clause, as drafted, is utter nonsense.
    One extremely serious matter has come out of the debate, namely, the inference or innuendo behind all this talk about private companies giving money to various organisations—whether direct to Conservative associations or to Aims of Industry. The innuendo in the speech of the hon. Member for Cardiff, South-East is that some sort of influence is being exercised by these firms who may or may not contribute to these organisations.
    I should have thought that it would be much more honest for the party opposite not to use the cloak of the privilege of this Committee to make accusations and innuendos as to the corruption that is going on in private industry. Directors of public companies have a duty to protect their shareholders according to their lights and according to their way of running the company. It seems extraordinary that most industrialists and investors—and most Labour supporters—do not like nationalisation. I cannot see why directors of public companies who support Aims of Industry, which is fighting nationalisation, should be criticised.
    If a shareholder does not like the management of a particular company, and at the company's annual general meeting he cannot convince the other shareholders of his views, he can sell his shares. It is absolutely vital to remember this when comparing the legal position of shareholders with that of trade unionists. Many trade unionists have to belong to a trade union in order to keep their jobs. They can, if they wish, contract out of the political levy because they do not like their union subscribing to the Labour Party, but they cannot opt out of their trade union without risking being out of work and this is something to which members of the party opposite should pay more attention.
    Something happened the other day which may have been sparked off by the speech of the hon. Member for Cardiff, South-East. The Birmingham Corporation has a superannuation fund with about £3½ million invested in equities. This Socialist-controlled Cor

    1611
    poration decided to write to the stockbroker to the Corporation asking which of the 1,500 companies whose shares were involved subscribed to political funds. This is something else we have to think about more deeply. We have to remember that the Birmingham Corporation superannuation fund is voluntary to employees—[HON. MEMBERS: "No."]—voluntary contributions are made by 15,000 employees of the Birmingham Corporation. I should like to know—perhaps with his financial acumen and knowledge the hon. Member for Cardiff, South-East can tell us; he has done so much research that he might have done a little more in Birmingham—whether the Birmingham Corporation asked the 15,000 employees, whose money is in the fund, whether they were interested in whether a political contribution was being made by the 1,500 firms involved.
    The Birmingham Corporation runs its superannuation scheme on behalf of 15,000 employees who may or may not be affiliated to a political party. There were 1,500 letters which had to be sent out for which someone had to pay. Did the cost of this political investigation by the Birmingham Corporation come out of the superannuation fund or from the funds of the ratepayers of the City of Birmingham? This is something that we have to find out.
    Mr. Denis Howell rose—
    Hon. Members: Give way.
    Mr. Clark: What I cannot understand, is why, when a problem has been posed and half a question asked, the Opposition will never listen to the full question. I am asking, did the money come out of the superannuation fund or from the funds of the ratepayers? It must have come from someone. Secondly, if the answer came back that some of the firms did contribute to political funds, would the Birmingham Corporation swop its equities for gilt-edged? It must be honest about this. I will now give way to the hon. Member.
    9.45 p.m.
    Mr. Denis Howell: I am grateful to the hon. Member for giving way. The point I put to him is that the chairman
    1612
    of the finance committee made it very clear that the purpose of seeking the information was to get knowledge. I put it to the hon. Member that five minutes ago the cardinal point of his case was that if the shareholders did not like what the directors did with their money they could withdraw their investment. I ask him if it is not a little odd that he now objects to Birmingham Corporation even finding the information.
    Mr. Clark: This is typical Socialistic philosophy. When hon. Members opposite are asked a direct question they ignore the question and put another question which has nothing to do with the case. If Birmingham Corporation wants information, why does it not get information on the money which is its own and not on money which belongs to 15,000 employees?
    Mr. A. Lewis: It belongs to Birmingham Corporation.
    Mr. Clark: The hon. Member may think that it belongs to Birmingham Corporation, but I am sufficiently old-fashioned to think that Birmingham Corporation, whatever the structure, is merely the agent for 15,000 employees. The Birmingham Post was absolutely right in dealing with this episode in its editorial on 17th June when it said that this Birmingham effort was electioneering. I suggest that, through the hon. Member for Cardiff, South-East, Labour is again attacking a windmill in order to draw attention away from its lack of policy. I hope that the Committee will reject the Clause.
    Mr. Roy Jenkins: The debate on this new Clause seems to have a very odd effect on hon. Members opposite. I am torn in my mind as to which I find the more depressing, the spectacle of the hon. Member for Nottingham, South (Mr. W. Clark) trying to speak above his intellectual level, or the spectacle of the hon. Member for Stratford-on-Avon (Mr. Maude) trying to speak below his, which is exactly what we have heard in this debate so far. The hon. Member for Stratford-on-Avon, for whom I have a great admiration, has one virtue. When he is arguing a really unconvincing case he makes it quite clear that he knows it is unconvincing. He made that absolutely clear in his speech.

    1613
    In common with the hon. Member for Nottingham, South he made a point that there should be a difference between trade unions and companies in this matter for one overwhelming reason. That apparently was that anyone can sell his shares in a company but no one can contract out of a trade union. As this provision in trade union law dates, with a certain interruption which has been pointed out by my hon. and learned Friend the Member for Ipswich (Mr. D. Foot), from 1913, I should be interested to hear in which occupations the hon. Member for Stratford-on-Avon or the hon. Member for Nottingham, South thinks that membership of a trade union was compulsory in 1913 in order to secure a job. If not, it would be difficult to argue that this fundamental difference in the law should have been made in 1913.
    The hon. Member for Nottingham, South had a great deal to say about the activities of Birmingham Corporation in this matter. As a Member for the City of Birmingham I am extremely happy to comment on this. Reading from a Birmingham local newspaper, the hon. Member quoted almost verbatim in the course of his arguments, but I, reading another Birmingham newspaper, understood that the hon. Member for Birmingham, Selly Oak (Mr. Gurden) had announced that with the other Birmingham Conservative M.P.s he would intervene in force in this debate to attack the Birmingham Corporation. I am sorry to say that he thought—I believe mistakenly—that his case would be better handled by the hon. Member for Nottingham, South.
    Mr. Harold Gurden: I am grateful to the hon. Member for intervening in that way because it gives me an opportunity to intervene, too. I was quite ready to do this, and I had no idea that my hon. Friend the Member for Nottingham, South (Mr. W. Clark) was about to speak on the subject. In fact, he did it very well. As far as the intellectual level is concerned, the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) has always tried to persuade us that he is way above the the clouds. Everybody knows this. We should like him to come down some time.
    Mr. Jenkins: I am glad to know that the hon. Member was expecting to intervene in our debate at any moment. He must have unusual faith in you, Sir Robert, if he expected that you would call him from a sedentary position which, as far as I can see, he has adopted consistently throughout the debate until this moment, when he rose to his feet. I do not know what he means by shaking his head in that way.
    Mr. Denis Howell: Perhaps he is just tired.
    Mr. Jenkins: I will leave the hon. Member and return to the more important point about the activities of Birmingham Corporation. I am informed that at a recent meeting of the Finance Committee of the City of Birmingham, it was proposed by a most distinguished ex-lord mayor, a former chairman of the finance committee, that the city should write to its brokers and ask them to inquire from the companies in which the City's superannuation fund was invested—contributed to partly by the employers of the corporation, but also by the ratepayers of the city of Birmingham—whether they made political contributions. That resolution was put forward.
    Mr. John Biggs-Davison rose—
    Mr. Jenkins: The result—[HON. MEMBERS: "Give way."] Unlike hon. Members opposite, I will certainly give way if some other hon. Member rises to his feet to intervene, but the hon. Member for Chigwell was so courteous as to sit down again as soon as he had got to his feet and I had no opportunity to give way to him.
    Mr. Biggs-Davison: I thought that the hon. Member wanted to finish the sentence which he had started, and I did not want to prevent that. But as he has so kindly given way to me, could he, for the information of the Committee, say whether this inquiry by the brokers was directed towards contributions to any form of political party or organisation or towards contributions to a specific political party or political organisation? Was there any mention of the Conservative Party or Aims of Industry, or was there also mention of other organisations and, if so, which were they?
    Mr. Jenkins: I think that certain examples were given. The question asked was whether there were any political contributions, and the purpose of giving examples was not to hide any contribution which might be made to the Labour Party or Liberal Party but to prevent any front organisation from escaping under the terms of the inquiry. That is a reasonable method of proceeding.
    But when the hon. Member interrupted I was a little further back in describing what happened. This resolution was proposed. Whether because they were taken unawares or because they were perplexed, I do not know, but the Conservative members of the finance committee of the City of Birmingham did not oppose it. They abstained. When a vote was taken they abstained upon it, and the inquiry therefore went forward; and the brokers are undertaking this inquiry. There is no intention, as I understand it, on the part of the finance committee of the City of Birmingham to switch from equities. Recently they have led the way in the move in investing this fund partly in equities, although still more than 50 per cent. is in Treasury stock. But there has been a growth in this direction. If the Corporation received replies indicating that certain companies gave contributions to political parties. I think that it would receive and weigh up that information. I do not think that there would be any automatic switch.
    The point, which hon. Members opposite to a remarkable extent seem completely incapable of appreciating in the debate tonight, is that there are two distinct questions. There is, first, the question whether a political contribution is inappropriate from the point of view of directors acting on behalf of shareholders. There is, secondly, the question why, if it is appropriate, it should have to be made under the cloak of secrecy. There are two separate issues. I would in some cases, perhaps in a large number of cases, argue that tax-free it might be inappropriate, but the main point is not whether it is inappropriate. The main question is whether, if directors believe that it is in the interests of their shareholders that they should make such substantial contributions, they should not at any rate have the courage to stand
    1616
    up and announce in public what they are doing.
    This is a fundamental principle and I do not understand what the hon. Member for Nottingham, South means by shaking his head in mat way. Does he think that directors do this already? If they do, what is the argument about? The hon. Gentleman knows full well—my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) indicated this over and over again by his quotations—that directors not only make these contributions but are ashamed of doing it and are afraid to tell their shareholders what they are doing.
    Of course, directors are entitled to a certain amount of freedom in how they interpret the interests of their shareholders, but I did not understand why the hon. Member for Nottingham, South drew a distinction between the freedom which directors should have to act on behalf of their shareholders and the freedom which city councillors should have to act on behalf of their wage earners. The system of council elections may have certain imperfections, the poll may not be as high as we would always wish it to be, but as a form of democracy, compared with what happens in most of our public companies, it is without question positively Athenian.
    There is no question but that the city councillors of Birmingham have been the subject of publicity. Everybody knows what they have been doing. They have been brought under the eye of public scrutiny. They have been talked about and criticised in the Birmingham papers and in the national Press, and even by the hon. Member for Nottingham, South in the House of Commons. There is no question of them sheltering under the protection of silence.
    The important point is that, if these contributions are to be made, they should be made publicly and clearly, and directors should say what they are doing and stand up and answer to their shareholders. It is no good hon. Members opposite—it is no good the hon. Member for Stratford-on-Avon, who has now disappeared—trying to argue, with some totally inapposite quotation from a former Attorney-General, that, because there is no legal corruption in regard to election expenses under the 1949 Act, there can be no corruption in a broader

    1617
    sense of the word. It is a very old hackneyed quotation from Lord Randolph Churchill that he, after all, equated secrecy and corruption at a time when there was no question of any limit on election expenses. Therefore, the matter cannot be interpreted in this narrow sense.
    I beg at any rate some hon. Members opposite who have a respect for the standards of public life to realise that, however convenient it may be for the Tory Party to have these secret contributions, the day when it is tolerable is drawing to an end and it is a blot upon our national life.
    Mr. Stratton Mills: We have listened to a speech by the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) which, I think, can best be described as some political whitewash for the electioneering of Birmingham Corporation. We have also listened to a speech by the hon. Member for Cardiff, South-East (Mr. Callaghan) which leaves one in very little doubt about his motives for making it in the House of Commons this evening. The motives were nothing else than to raise a scare campaign and indulge in political intimidation. That was the purpose of his speech.
    10.0 p.m.
    This is well demonstrated by two points. First, there is the question of making it three years' retrospective. [Interruption.] Secondly, throughout this discussion there has been the underlying threat that if the names were given of firms which contributed directly or indirectly to the Conservative Party, if the Labour Party gained office those firms would be at some disadvantage in State and public contacts. [Interruption.] I have no doubt that this will be denied when the Opposition spokesman replies to some of the points made during discussion on the Clause. Nevertheless, this threat will remain in the minds of business houses.
    While the hon. Member for Cardiff, South-East was moving the Clause he largely accepted my intervention when I suggested that there already exists power to enable the inspectors of taxes to ultimately look at company account books to see whether they are contributing to political parties. It is clear that this power exists and it is equally clear that
    1618
    Income Tax is payable on any contributions to political parties.
    The hon. Member for Cardiff, South-East attempted to argue—and subtly skated over this—that certain companies were contributing directly to political parties and were avoiding paying tax. Despite making this allegation, he produced not a shred of evidence to support it. It is perfectly legitimate for any company to group together with other companies to oppose State interference. They will continue to do that until the party opposite is drawn away from its nineteenth century dogma and dragged into this century.
    It seemed to me that the hon. Member for Cardiff, South-East came to the Committee very much in a white sheet. I assumed, therefore, that when I looked at the Labour Party's accounts I would find some information about its donations which would be of great interest to me.
    Mr. A. Lewis: Where are your accounts?
    Mr. Stratton Mills: I looked, too, to find what direct equity holdings the Labour Party might have. I thought that it might have shareholdings in some companies. There must be very few investment funds which have done as modestly as the one I found—£320,000 is the value of the fund and it contains only one equity holding. It was purchased at a cost of £370, and so great is the investment skill of the Labour Party that the holding, which is in Buenos Aires Car and Tramways Ltd., is worth not £370, or £3,700, but the princely figure of £37.
    The next thing at which I looked in its accounts followed my assumption that there must be people who contribute to the Labour Party and give it subscriptions because they feel that by doing so they are serving some public purpose. This is a natural assumption for anyone to make. We presume, on this side of the Committee, that if people wish to contribute to our funds there will be other people who would wish to contribute centrally to the Labour fund. However, the accounts for the year ended 31st December, 1962, are revealing. Of course, local Labour Party subscriptions are shown, as are trade union subscriptions—and it should be remembered that

    1619
    the Co-operative lobby in this House, which equals the television lobby, also has its subscriptions shown.
    I can find no trace of subscriptions by individuals to the Labour Party, except that, not in the income and expenditure accounts, but in what is called the "General Fund", there is shown that in 1961 there was a donation of just under £64,000 under the heading of "Donations and Special Appeal." Despite what the Gallup polls may show, the year 1962 showed a drop from just over £64,000 to over £37,000, but I would be interested to know whether there was any breakdown of how the moneys were made up—
    Mr. Callaghan: We are all hoping that in due course we shall get from the hon. Gentleman a similar analysis of Conservative Party funds—something that none of us has ever seen, or are ever likely to see. I would point out that the special appeals which brought in £64,000 in one year and £37,000 in the second year were to make up the deficit under which the Labour Party was working at that time, because the hon. Gentleman will find from the 1960 and 1961 accounts that we were running heavily into a deficit. As we do not have hidden sources of funds, we needed to have special appeals to trade unions and local labour parties. Could we have a similar honest statement about the financial position of the Conservative Party?
    Mr. Stratton Mills: My hon. Friends probably thought that the hon. Gentleman rose not to deal with these special funds, but with what were the individual subscriptions to the Labour Party that are not shown in the accounts at all. There is no heading in these accounts for individual subscriptions to the Labour Party. Are we to assume that there are none, or are we to assume that these accounts are not worth the paper they are printed on?
    We always get a variety of good purposes, good intentions, and a fair volume of waffle, from the Liberal Party. I assumed that we might have heard something from Liberal hon. Members in this debate. I have looked at that party's accounts for 1962. Again, I think that there must be very few investment funds in the country that are actually worth
    1620
    less than the price at which they were bought, but, despite a long period of boom, and growth in the economy, the Liberal Party's investment funds are standing at less than their purchase value—but I let that pass.
    Nevertheless, I wonder whether the Liberal Party delivers full details of its funds. The truth is otherwise. There is a general heading called "Subscriptions, donations, bonds and bequests". Does the £20,592 under that heading include the contributions from merchant bankers of well-known Liberal sympathy? Who, in fact, contributes money to that fund? Is it shown anywhere or, again, is it hidden in the accounts, so making these figures and this information not worth the paper on which they are printed. If the hon. Member for Bolton, West (Mr. Holt) would like to intervene to give us the information, I will gladly give way.
    Mr. Arthur Holt: If the hon. Member will pay us the courtesy of attending one of our annual conferences he will hear these appeals being made publicly, and the names of the people who subscribe read out to the whole audience, including the Press.
    Mr. Stratton Mills: Why is it not in the annual report?
    Mr. Lubbock: The hon. Member is being very childish. He has gone completely off the new Clause. What does he think would be the point in putting in a list of three or four thousand names of all the people who have attended the Liberal Party conference and have subscribed amounts ranging down, in some cases, to 2s. 6d.?
    Mr. Stratton Mills: I cannot help feeling slightly irritated at being called childish by the hon. Member for Orpington (Mr. Lubbock), but if the point made by the party opposite, that details should be given, is valid, £20,592 for a party of the size of the Liberal Party is quite a lot of money. Indeed, if it were divided amongst the number of Liberal Members they would have over £4,000 each.
    Hon. Members: What about the Ulster Unionists?
    Mr. Stratton Mills: I should like to examine two points which arise in the debate. The first is how much detail

    1621
    is a shareholder in a public company entitled to have. My hon. Friend the Member for Nottingham, South (Mr. W. Clark) dealt fully with that point. The other is what threat to democracy is contained in this idea of hon. Members opposite.
    Mr. Callaghan: No one from Northern Ireland can comment about democracy.
    Mr. Stratum Mills: The hon. Member for Cardiff, South-East says—
    Mr. John Biffen: I am sure that my hon. Friend the Member for Belfast, North (Mr. Stratton Mills) would like to have on the record the comments from the Front Bench opposite that no one from Northern Ireland can comment on democracy.
    Mr. Stratton Mills: Yes, I hope that the remarks of the hon. Member for Cardiff, South-East will be underlined in HANSARD by the attention drawn to them by my hon. Friend the Member for Oswestry (Mr. Biffen). I am sure that that is not the view of the Northern Ireland Labour Party, who, I am quite sure, will want to repudiate that statement.
    The arguments put forward by hon. Members opposite are probably very similar to the arguments which we heard in this Chamber when discussion was being entered into on whether there should be secret or private ballots. I am sure that people like hon. Members opposite said then, "It is important that we should know how our friends, our families and neighbours vote." This is a very similar point but, looking at the matter from the company point of view, what happens?
    What are the questions on which a shareholder is entitled to have detailed knowledge? As has been said, the shareholder leaves general control and the daily running of the company in the hands of the directorate. He has no alternative and he can replace the directors if they are not doing a satisfactory job. If we accept the arguments of the hon. Member for Cardiff, South-East there are many other kinds of questions which inquisitive shareholders would feel justified in having written into a Statute by the House of Commons. People might feel entitled to have a list of all the charities to which a company sub
    1622
    scribes. [HON. MEMBERS: "Why not?"] Hon. Members ask why not. Prima facie, one could say that there is something in that argument—
    Mr. A. Lewis: The co-operative society gives a list.
    Mr. Stratton Mills: The subscriptions of a company could give rise to a complaint. A religious organisation, for example, might disagree. [HON. MEMBERS: "Ah."] A company might give a subscription to the Mormon Church, which has been under great attack in many areas, and there could be considerable pressure to ensure that that subscription was cancelled.
    The hon. Lady the Member for Blackburn (Mrs. Castle), for example, might like to know with which countries a company did business. Did it do business with South Africa? The Arab League might want to know whether it did business with Israel. Others might want to know whether it did business with Spain. Shareholders might also want to know from whom the company bought components and where they sent their goods. There is no end to the possible inquisitiveness of shareholders and the consequences cannot always be seen.
    There is also the point, which is a real one, that a company in a constituency in an area which returned a Labour Member to the House with a 40,000 majority might be contributing to Tory Party funds, as it is perfectly entitled to do, as the hon. Member accepted. [HON. MEMBERS: "No."] Oh?
    Mr. Callaghan: If the hon. Gentleman had paid attention to the earlier part of the debate, he would have heard that it is extremely doubtful law to suggest that any company has the right to subscribe to Conservative Party funds.
    10.15 p.m.
    Mr. Stratton Mills: That is not the point with which I was dealing. Let us assume that, by some mischance, there is a period in which the Labour Party holds a very large majority in the House and has a position of great power in the country. A company in an area which is 90 per cent. Labour is making

    1623
    contributions to the Tory Party. Is there not a danger of some of the wild men on the benches opposite, or some of the Trotskyites in the trade movement—I am not speaking of responsible trade union leaders—putting pressure on that company to stop its contribution to Tory funds? That would be a very real threat to democracy in this country.
    1624
    This debate was started as an election gimmick. It has been shown by the examples which have been given on this side of the Committee, and which will, no doubt, be given by my right hon. Friend, to have been a hollow failure by hon. Members opposite.
    Mr. Lubbock: We have just listened to the most ridiculous and childish speech that it has ever been my lot to hear in the House of Commons. It is quite remarkable that the hon. Member for Belfast, North (Mr. Stratton Mills), a Member for Northern Ireland, should dare to talk about a scare campaign and make suggestions about political intimidation.
    Everyone knows that this sort of thing goes on all the time in Northern Ireland. The Tory Party has its committee rooms in caravans outside the polling stations, and Tory workers have managed to convince the gullible electorate in some parts of the province that, unless they can obtain a piece of paper from the people in the committee room, they are not entitled to vote at all. The hon. Gentleman forgets all about the religious discrimination which goes on in Northern Ireland. We do not hear enough about this in the House. It is almost as bad as what has been happening recently in South Africa. It comes ill from the hon. Gentleman to make the sort of speech which he did.
    The hon. Gentleman ignored the fundamental distinction between the contributions which are made by individual members of the Labour and Liberal Parties to their political funds and the contributions made by companies to political funds on behalf of their shareholders. The contributions made to our funds are made at our assembly in the open light of day. The names of people who make the contributions are announced so that the Press, television or whoever is there may hear them. This does not happen in the hon. Gentleman's party, of course. The people who contribute to our funds do so voluntarily, out of their own pockets, out of taxed income.
    The contributions which we are discussing under this Clause are contributions which are decided on in secret by directors on behalf of their shareholders.
    Mr. Holt: On behalf of their political friends.
    Mr. Lubbock: On behalf of their political friends—my hon. Friend corrects me. That is probably nearer the truth.
    The only criticism which I make of the Clause is that it does not go far
    1626
    enough. I should say that probably the reason for that is that the rules of order required it to be put down in this form. I should much sooner have seen a new Clause which would have required contributions to political funds to be stated in the profit and loss account of the company. That is the desirable thing which would not only open this matter to the inspection of the tax people but also to the inspection of the shareholders.
    Hon. Members opposite say that the contributions are taxable. Obviously they have read the booklet of the hon. and learned Member for Northwich (Sir J. Foster) which makes this point by implication. I say that it depends on whether the inspector of taxes knows about these contributions. The position would be quite different from one tax inspector's area to another. Some may be conscientious and ask for all these details, others may not be. As some of the letters which the hon. Member for Cardiff, South-East (Mr. Callaghan) read out have made clear, in some cases these companies may make contributions to a very large number of organisations, and it would be impossible for the auditors or tax inspectors to go through every one individually to see whether it had a political connotation.
    Therefore, the only satisfactory solution is to place the onus on the board of the company concerned and to require it to show these amounts as separate deductions from the profit and loss account, as has to be done in arriving at the net profit in the case of, for example, directors' remuneration.
    Mr. Martin Maddan: How does one define the recipients of these funds which one has to declare? [HON. MEMBERS: "Read the Clause."] I have read it. How does it work?
    Mr. Lubbock: The hon. Member forgets that I am not responsible for the drafting of the Clause. Also, I am not the Chancellor of the Exchequer. It is not for me to suggest how such a definition should be drafted.
    I accept that this is a matter of considerable difficulty, but I wonder whether a clue has not been given inadvertently by some hon. Members opposite who questioned why the Clause should be applied to political contributions only

    1627
    and not extended to other outside bodies which have no apparent connection with the purposes of the businesses concerned. This is the operative point, because there may be some outside organisations to which it is perfectly legitimate to contribute because they may in some way affect the conduct of the business.
    To give one example, I once worked for a company whose headquarters were in a provincial town. The company used to make contributions to the local repertory theatre on the ground that in order to attract high level staff to go to live in the town there had to be a certain type of amenity there which could be offered to people when they applied for the job. This was one way in which the company tried to encourage the cultural life of the community which it thought would indirectly be for the benefit of the company itself. I would accept that as perfectly legitimate, but I think that the shareholders would be entitled to know about it just as much as they would be entitled to know about contributions to political funds.
    The hon. Member for Stratford-on-Avon (Mr. Maude), who has returned to his place, said. I think, that the new Clause would not do anything for the shareholders' interests if it did anything for the taxpayer. It was either he or the hon. Member for Nottingham, South (Mr. W. Clark) who said that all the shareholders want to know is that the company is being properly managed. I do not think that that is quite good enough. If a board of directors is making contributions to a political party or to an organisation which is primarily one with political objects, it is questionable whether it is competent, because this expenditure cannot possibly be for the benefit of the business. If the directors made that error of judgment on what may be a comparatively minor sum compared with the undertaking as a whole, how are the shareholders to know that they have not made a much more major error material to the profit and loss account?
    I have been waiting to hear an explanation from hon. Members opposite of how a contribution of this nature could possibly have any beneficial effect upon the profit and loss account of a
    1628
    business. All that they have said is that it might prevent the business from being taken over by a future Labour Government and that the directors were entitled to take this into account and to base their contributions on that possibility.
    Even that might not be altogether true, because in some circumstances it might be to the benefit of the shareholders for the business to be taken over. I happen to be an opponent of nationalisation, but I would be secretly delighted if after the next General Election the Leader of the Opposition were to offer me 25s. for my Steel Company of Wales shares. I am being a little lighthearted, but I wanted to make it clear that the directors are not necessarily acting in a sense which would maximise the future profit potential of the shareholders by making contributions to an organisation which seeks to avoid nationalisation. I have said this while making perfectly clear my opposition, as I have already done in the Lobby this evening, to any further nationalisation.
    I want to pursue for a moment the question of how extensive is this practice of making contributions. The hon. Member for Cardiff, South-East quoted a few examples and I have one or two more. If, as is quite clear, the Clause will not be accepted, it is up to ordinary individuals to bring out the maximum possible information and to throw what light they can upon these contributions which have been made.
    I, too, have a list of companies, although there are not quite as many as were given by the hon. Member for Cardiff, South-East. I have only 14 and not 15. The first one is particularly interesting. It is the Peninsular & Oriental Steam Navigation Company. A shareholder attended the annual general meeting, as shareholders were advised to do by the hon. Member for Nottingham, South. The shareholder asked the chairman what contributions of this nature were made. The chairman gave a long and interesting explanation why he considered this practice was undesirable, which I should like to quote to the Committee. The chairman said:
    "I think there are several reasons why stockholders might question any contributions by any company to political or quasi-political funds of any sort."

    1629
    That is fairly sweeping, I must say.
    "One reason is that a lot of people feel that donations to any political party or government are somewhat distasteful; they do not like the general idea of them. That was more true in the past perhaps, than it is now, but it still remains the feeling in a good many people's minds and I think you can take it that it remains the feeling in the minds of your Board, multiplied, I may add, by about 25 because we deal with a good many countries in the world, and I suppose that there would be at least 25 countries which we deal with who might at some time expect to jolly us, or hope that they might, to contribute to any particular political party; so that cur natural distrust is not just dislike of doing anything here, but a dislike of doing anything at all, and the more so because we might be expected to."
    That is a fairly good case in favour of the idea behind the new Clause. I am glad that the chairman of the Peninsular & Oriental Steam Navigation Company feels like that and is willing to give such an extensive explanation of his philosophy on the subject to a shareholder at an annual general meeting.
    I do not, however, believe that that would be the general rule. I think that in many cases directors and chairmen are much more reluctant to give the kind of information which might legitimately be demanded by shareholders even if, as was suggested by one hon. Member, one did not accept the refusal in the first place but wrote several letters in pursuance of this aim.
    10.30 p.m.
    I will just run through my list, though I shall not quote in detail all the letters which I have here. First of all I mention the companies which do not make any contribution to political parties or to organisations which support political objects. It is interesting that those companies which do not make any contribution of this kind always seem quite willing to say so in their replies to the shareholders, and the inference which I draw is that the ones which refuse to give this information must be making such contributions, or they would issue a denial.
    There are two companies I have listed here which overlap the list of the hon. Member for Cardiff, South-East. Metal Box, I agree, does not make any contribution, and this letter which I have from the secretary to Shell Transport Ltd., says that that firm does not either. I have already mentioned the P. and O.,
    1630
    although I must qualify that by saying that they would if they felt it was necessary, though from the quotation I have read from the chairman's reply at the annual general meeting it is obvious that it would be some very exceptional circumstances which would make them feel that way. George Wimpey does not. I.C.I. does not, but pays what it calls a modest subscription to the Economic League. Here there arises the question which was raised by the hon. Member for Cardiff, South-East: what does "modest" mean in relation to the assets of a company of the size of I.C.I.? This may be a very big proportion of the expenditure of the Economic League for all we know, unless it is willing to divulge the amount. Sears Holdings does not; the Beecham Group does not make any contribution to political parties, but contributes to British United Industrialists, Ltd., a body which has already been mentioned. United Drapery Stores Ltd. does not.
    Mr. George Wigg: In his investigations into the subscriptions of these companies which are clearly directed to the purposes of the companies and for the companies' good, does the hon. Gentleman know whether I.C.I., which makes a subscription to the Economic League, which helps the Tory Party, subscribes to the Communist Party in Russia as well?
    Mr. Lubbock: They do not actually say so in this letter which I have here, and in fact the motive for their subscription to the Economic League stems largely from that body's strong opposition to Communism.
    Westminster Bank Ltd. makes no payment to political parties, but here is one of those small payments, in this case, to Aims of Industry. Again, one would like to know what a small payment is in relation to a firm of the size of the Westminster Bank. Shell, as I have mentioned, does not support any organisation with political aims.
    Now I come to a list of five companies which my informants have been able to obtain no information from whatsoever. The first is Dorman Long. I suppose that one could justifiably suppose that they have been making subscriptions of this kind. Another two companies in the

    1631
    steel industry are United Steel Companies Ltd. and Guest, Keen and Nettle-fold. Both of these refuse to say. The Distillers Company has refused to say, and finally Wallpaper Manufacturers Ltd.,—[HON. MEMBERS: "A monopoly."]—a particularly interesting company in view of the recent report on monopolies.
    This is a fair cross-section of some of the biggest companies in British industry, and the conclusion which I draw from these researches, which have been undertaken by some friends of mine, is that the practice of making contributions either to political parties or to organisations which have political objects is very much more widespread than anyone in this country has yet imagined. I quite agree with the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), who, I think, made this point, that until these last few months—or certainly not more than a couple of years ago—no one realised what an immense proportion of the financial strength of the party opposite was drawn from this kind of contribution.
    Mr. A. E. Cooper: In his researches, has the hon. Member made inquiries about the amount of money which Montague L. Meyer provides to the Labour Party—the company which once employed the right hon. Gentleman the leader of the Opposition at £3,000 a year and now subscribes a substantial sum annually to the party funds? Has he found out what the Bernstein family and the Samuels provide to the Labour Party? Are all these contributions recorded in the published accounts of the Labour Party?
    Mr. Lubbock: I have no doubt the hon. Member will be able to make a speech later if he chooses.
    Hon. Members: Answer.
    Mr. Wigg: The hon. Member for Orpington (Mr. Lubbock) is not in the Labour Party.
    Mr. Lubbock: If the hon. Member for Ilford, South (Mr. Cooper) had been in his place when I started to give the information about these companies, he would have heard that I said I had information relating to 14 of them—
    Mr. Cooper: On a point of order. I have been in my place for the last hour and a half.
    The Chairman: I do not think that is a point of order.
    Mr. Lubbock: If the hon. Member has been in his place for as long as he says he has, it only shows that he has not paid much attention to what I have said. In any case, I do not think he can expect me to answer on behalf of the Labour Party. There are plenty of hon. Members present who would be delighted to answer for the Labour Party later on.
    The contributions which are made by individuals to the Liberal and Labour Parties are published in those parties' accounts. The hon. Member for Belfast, North has already given this information to the Committee. As has already been said, if anyone wishes to attend the Liberal Assembly which takes place every year, he can get the name of every person who makes a contribution. It really surprises me that the hon. Member for Ilford, South can think of no better tactic than to talk about the accounts of the Liberal and Labour Parties, bearing in mind the party opposite has got no accounts at all.
    Mr. A. Lewis: If the hon. Member for Ilford, South (Mr. Cooper) had been here earlier, he would have heard his hon. Friend the Member for Belfast, North (Mr. Stratton Mills) refer to the Liberal Party accounts and go into the Labour Party accounts in detail, but he had to confess that there are no published accounts of the Ulster Unionist Party or the party opposite. He just cannot find them.
    Mr. Lubbock: The hon. Gentleman is quite right. Obviously the hon. Member for Ilford, South has not been paying the slightest attention to the debate.
    Mr. John Hall: Will the hon. Gentleman give way?
    Mr. Lubbock: No. I have given way enough. When I attempted to intervene during the speech of the hon. Member for Stratford-on-Avon earlier, not once but several times he refused to give way. Bearing that in mind, I think I have been very courteous in giving way several times to hon. Members opposite. I do not intend to do so again.

    1633
    One important question which has been raised is whether or not the contributions are deductible for tax purposes. I agree with the hon. Member for Cardiff, South-East that it would appear from the booklet of the hon. and learned Member for Northwich that expert opinion makes it quite clear that these expenses are not deductible for tax purposes. He says in his conclusion:
    "It is possible for a payment to be disallowed as a deduction on the grounds that it was not made wholly and exclusively for the purposes of a company's trade."
    I tried to show at the beginning that under no conceivable feat of curious logic could a board of directors pretend that this kind of payment was wholly and exclusively for the purposes of the company's trade. I hope this will be made clear by the Chief Secretary so that Income Tax inspectors may read what is said in the OFFICIAL REPORT and take action on it accordingly.
    Finally, could anyone possibly maintain that it is ethically right for boards of directors to make this kind of contribution without consulting their shareholders? Certainly in many cases it may be legally wrong. As the hon. and learned Member for Ipswich (Mr. D. Foot) pointed out, unless a clause is contained in the memorandum of the company entitling it to make this kind of contribution, it may well be ultra vires. But, even supposing there is some phrase which entitles it to do this, I still think that it is ethically wrong and that it should not be permitted to do it without disclosing the fact to the light of day.
    Therefore, although the Clause may be defective in respect of its wording, although it does not go as far as I should like it to in that it does not compel boards of directors to publish these sums in their profit and loss accounts, I hope very much that it will be given a Second Reading.
    The Chief Secretary to the Treasury and Paymaster-General (Mr. Boyd-Carpenter): It might be of service to the Committee if I addressed a few observations to it at this stage, the more so because we have a good deal of work still before us on the Bill before we depart tonight.
    This has been a very curious debate for a debate on a new Clause on the Finance Bill, and there have been
    1634
    moments when we have seemed to be discussing all sorts of interesting and, it seemed to me, rather controversial topics not necessarily very closely related to the new Clause moved by the hon. Member for Cardiff, South-East (Mr. Callaghan) two and a half hours ago.
    The first point we want to establish from the hon. Member and his supporters is whether the Clause is put forward as a genuine and sincere attempt to protect the Revenue by improving the tax law—
    Mr. John Hynd: Improving moral standards.
    Mr. Boyd-Carpenter: —or, as a right hon. Member opposite says, as something to do with moral standards. Is it a serious proposal in relation to enforcement of the Revenue, in which case I can deal with it on that basis, or is it intended as a kind of political manoeuvre to enforce publication of information which hon. Members opposite think, rightly or wrongly, may be politically advantageous to them?
    I suggest that one has only to look at the new Clause and listen, as I have, to every speech made in the debate to see clearly that it is the second alternative which is the real purpose. That appears if one looks at the Clause itself. It is fantastically wide. It relates not only to companies but to any individual—every person carrying on a trade or business, an individual trader, a one-man business or an individual shopkeeper. If is true that in the course of the debate the hon. Member for Cardiff, South-East said that the Opposition were aiming at companies, but the Clause goes, and, I suggest to the Committee, deliberately goes, very much wider than that.
    10.45 p.m.
    Nor is it confined to cases in which subscriptions; to political bodies are claimed as expenses for tax purposes. It is not limited to that. It even covers, or would cover, the case, which I understand is not uncommon, in which a company makes a contribution either to a political party or to a charity outside the scope of charities which are allowable for tax purposes as a deduction in respect of that company, informs the inspector, and indicates that no claim in respect of expenses is being made.

    1635
    No distinction is made, or sought to be made, between the class of contribution which under our law as it now stands is allowable as a deduction for tax purposes—I have in mind the class of case covered by the Tate & Lyle decision—and an ordinary contribution to an ordinary political party which, as I understand the law, is not so allowable. No distinction whatever is made, and it proposes to empower the Inland Revenue to demand the completion of this form in every one of those cases. That, of itself, obviously would raise in the minds of even naive people a suspicion that this has very little to do with the enforcement of the tax law. It is also completely unnecessary for the protection of the Revenue.
    Where any payment is claimed as a deduction for tax purposes, inspectors of taxes have the power—which they exercise frequently—to challenge the expenses claimed, to ask for particulars, and, if they are not given, to disallow the claim. It is the greatest nonsense to say, as some hon. Gentlemen have said in the course of the debate, that contributions, subsidised by the taxpayer, are being made to the Conservative Party. If a claim is made for the expenses of a trade which, without disclosing it and with intention to defraud, include a political contribution of the kind that is not allowable, that is an offence; and if a deduction is disguised as something else and a false return is made, the normal penalties will apply. The form of notice proposed therefore adds nothing to the existing powers.
    If the hon. Gentleman really thinks that it does, why does he confine this new weapon which he proposes for the Inland Revenue to political contributions? Many other things may be, and I regret to say sometimes are, sought wrongly to be claimed as expenses of the business. Charitable subscriptions outside the allowable character could be so claimed, and far more important from the point of view of the enforcement of taxation are personal expenses or improvements disguised as repairs.
    If the hon. Gentleman really has found a new way of teaching the Inland Revenue to do its business and he puts this forward as a means of improving the armament of the Inland Revenue, why does he confine it to political contri
    1636
    butions which, whatever their significance in other directions, are plainly not as significant from the point of view of the Revenue as the kind of things to which I have been referring?
    The hon. Gentleman knows—though I do not think that many of his hon. Friends do—that even for what quite plainly is the real purpose of this proposal, namely, to obtain publication of the details of political subscriptions, this Clause would be wholly and completely ineffective. As the hon. Gentleman knows, the officers of the Inland Revenue are bound by an oath, which they take with the greatest seriousness, not to disclose the information obtained in the course of their duties to anyone outside the Inland Revenue.
    The suggestion that the Clause would enable secret contributions and all that kind of thing to be dragged into the daylight rests on a complete fallacy, unless it is the view of hon. Gentlemen opposite that officers of the Inland Revenue should disregard the oaths which they have taken. It would take a great deal more than hon. Gentlemen opposite to make that honourable body of public servants do anything of the sort.
    The hon. Member spent a large part of his speech, as foreseen in the trailers which he put out at the week-end, by reading out a large number of names of companies and of replies which had been obtained from them. I hope that he will agree with me that he made no suggestion that in any of these cases was there any irregularity or evasion of tax. He used the word "corruption." Other hon. Members have used the words "subsidised at the expense of the taxpayer." In fairness to these companies, run, as we know, by honourable men. I think that it should be made plain "Aye" or "No" by the hon. Member whether he is alleging that they are evading the tax laws. If the hon. Member lacks the courage to answer that question I will ask him another.
    Mr. W. Hamilton: The right hon. Gentleman is quibbling.
    Mr. Boyd-Carpenter: I will answer that. The hon. Member for Cardiff. South-East is singularly loyal to the odd and not very intelligent ideas which have dominated him throughout his

    1637
    political life. I will ask him another question. He read out the answers to questions. The Committee knows that the form of an answer very often follows the form of the inquiry. He told us nothing about the inquiry. From whom were the inquiries? They were not by any chance, were they, from Birmingham Corporation? Will the hon. Member tell us that? The hon. Member spent a great deal of time this afternoon advocating the value of bringing things out into the open—no secrecy, no concealment—but he seems to have forgotten his own fine principles as the evening has passed.
    Mr. Gurden: Does my right hon. Friend realise that in a speech trying to excuse the Birmingham Corporation for using the ratepayers' money for the collection of this information the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) deliberately misled the Committee by saying that in this inquiry of companies, which was requested by the Corporation—
    Mr. Anthony Wedgwood Benn: On a point of order. Is it in order for an hon. Member to say that another hon. Member has deliberately misled the Committee.
    The Chairman: It would be better if those words were withdrawn.
    Mr. Gurden: May I complete what I was saying?
    Hon. Members: Withdraw.
    The Chairman: Order. I hope that the hon. Member will first bear in mind that he is intervening in the Minister's speech and, secondly, that I expressed the opinion that it would be better if the words "deliberately misrepresented" were withdrawn.
    Mr. Gurden: I withdraw the word "deliberately," but I still go on to show that the hon. Member misled the Committee, even though it was inadvertently in his opinion, by using the words "to all political parties. That inquiry was not made by the Birmingham Corporation. They just made—
    The Chairman: Order. The hon. Member's intervention in the right hon. Gentleman's speech is too long. Mr. Boyd-Carpenter.
    Mr. Boyd-Carpenter: This interval has given the hon. Member for Cardiff, South-East time to reflect on the question I put to him. By whom were these inquiries made?
    Mr. Callaghan: We are in Committee and I am entitled to make another speech at the end of the Chief Secretary's remarks, if he would prefer it that way. Otherwise, if he wishes. I will give him the answers to his two questions now—in which case he can comment on them, following which I will make some remarks. Would the right hon. Gentleman rather I continued now?
    Mr. Boyd-Carpenter Mr. Boyd-Carpenter indicated assent.
    Mr. Callaghan: The Chief Secretary asked, first, who were the inquiries from. The answer is that they were from individual shareholders who were disgusted at what is going on and who volunteered the information to me in the light of the statements I have made. Oddly enough, the Chief Secretary replied in the debate last year to my remarks on this topic. He may remember that I moved a similar new Clause on that occasion. It was after that that I began to get communications from shareholders. As I have answered that question, perhaps the right hon. Gentleman will now withdraw the suggestion he made about my lacking courage.
    He asked, secondly, if these companies are evading tax. In the absence of the information, I do not know. That is what I said in my first speech. On that occasion I asked the right hon. Gentleman a question, which I repeat; are these subscriptions paid to British United Industrialists, which go as to 95 per cent. to the Conservative Party, allowed by the inspectors of taxes as a deduction? If the Chief Secretary will answer this question I will then reply to his question about whether or not some of these people are evading tax.
    Hon. Members: Answer the question.
    Mr. Callaghan: I will go so far as to say this, to be absolutely just. I believe that where the subscriptions are brought out and it is easy for the inspectors of taxes to distinguish, there is no evasion. But where, as I have shown,

    1639
    boards consolidate subscriptions, there may be a measure of evasion going on.
    Mr. Boyd-Carpenter: The hon. Gentleman, having disclosed that he knows nothing to support any charge of tax evasion against—[Interruption]—any one of those companies which he saw fit to mention by name, it would have been better for him to have withdrawn the allegation.
    As to his question about the law, it is not for me—if necessary, it is for the courts—to lay down the law. But the law is, on this branch, reasonably clear; that if these subscriptions are covered by the decision in the Tate and Lyle case they would, as I understand it, be allowed for tax purposes. If they were not, they would not be so allowable. That is the position.
    Mr. Callaghan: As this special organisation of British United Industrialists has been set up to collect large sums for the Conservative Party, I will repeat my question. Does the Inland Revenue allow subscriptions to the Conservative Party as a deduction for tax purposes? If it does—and I am ready to take the answer from the right hon. Gentleman either way—there is a substantial subsidy going from the taxpayer straight into the pockets of the Conservative Party.
    Mr. Boyd-Carpenter: The hon. Gentleman knows perfectly well that it must depend on the circumstances of particular subscriptions. As he knows, in the Tate and Lyle case the payment was made by Tate and Lyle to Aims of Industry to conduct a campaign to protect the interests of that company. Unless I know the circumstances of each and every subscription made in each case and by every body to which the hon. Gentleman referred, it would be very wrong of me to seek to lay down the law.
    Hon. Members: Answer.
    Mr. Boyd-Carpenter: The duty is on the inspectors of taxes to get the facts of the case, to apply, in the first place, their own knowledge of the law and to come to a decision; and if their decision is wrong, it can be appealed against and taken, if necessary—as happened in
    1640
    the Tate and Lyle case—to the highest court in the land. The hon. Gentleman knows that perfectly well.
    11.0 p.m.
    Mr. Callaghan: As the articles of association of British United Industrialists show quite clearly that the aims are political, there is surely a general instruction to inspectors of taxes as to the manner in which these payments should be allowed. May I ask whether such an instruction exists? If it does not, does the right hon. Gentleman intend to issue one in respect of these payments? Finally, as this body has probably collected, as far as can be estimated, anything up to £1 million for the Conservative Party, what steps has he taken to ensure that the integrity of the Revenue has been safeguarded?
    Mr. Boyd-Carpenter: The hon. Gentleman knows perfectly well, first of all, as I have already said to the Committee, that straight subscriptions to political parties are not admissible. I have already said that and, if it pleases the hon. Gentleman, I will say it again. It would certainly be extremely wrong of me to say anything as to the instructions that the Inland Revenue may or may not issue in respect of particular organisations. The hon. Gentleman knows that as well as I do, and perhaps better. I think that it comes very ill from the hon. Gentleman, having made charges—half made charges—and admitting that he had not a scrap of evidence to justify them, then to come forward and demand particulars about the treatment of a particular taxpayer.
    Mr. Cooper: Is my right hon. Friend aware that Mr. Ian Mikardo, the prospective Labour candidate for the Poplar division, recently circulated all the industrialists in that division, under the guise of his public relations business, asking for this precise information about which industrialists were providing funds for this or that political party? May I ask my right hon. Friend whether the expenses incurred by Mr. Mikardo's business are liable to be tax deductible?
    Mr. Boyd-Carpenter: I am afraid that I must reply to my hon. Friend, as I replied to the hon. Member for Cardiff, South-East, that the affairs of an individual taxpayer are plainly not matters

    1641
    I should disclose to the Committee, and I am sure my hon. Friend will appreciate that.
    The hon. and learned Member for Ipswich (Mr. D. Foot) took the point that the purpose of this Clause was to call attention to a considerable public scandal. He will now realise that whether that is the purpose it is certainly not the effect. It has nothing whatever to do with it.
    But the hon. and learned Gentleman further suggested that, tax apart, contributions by a limited company to political funds might be outside the powers of a board of directors—might be ultra vires the company. Obviously, no one could form a view of that without knowing the articles of association of the particular company, but it has been a feature of life in this country for very many years for public companies to make contributions in a variety of directions. I do not recollect any case in which the right of a board to make these payments as a matter of law has ever been challenged. That, I must say, leaves in my mind the very considerable doubt as to whether the hon. and learned Gentleman's apprehensions are well founded. If they are, the answer lies with anyone interested. The courts are open. If the hon. and learned Gentleman or his friends want to challenge the action of a particular company, no one can stop them.
    Mr. D. Foot: I am sure that the right hon. Gentleman is wrong. I am thinking in particular of a railway company which in the days before nationalisation subscribed to an exhibition in London and that was held to be ultra vires the company. There have been a number of cases where subscriptions have been held to be ultra vires the company. What I have suggested here is that it ought to be more widely realised that subscriptions of this kind may be very well held to be ultra vires the company and that, therefore, the directors would be personally liable for these payments.
    Mr. Boyd-Carpenter: I do not think that the hon. and learned Gentleman could have heard what I said. I said subscriptions to political organisations. None of the cases to which he has referred relate to political organisations. Therefore, the hon. and learned Gentleman, with respect—and I have always
    1642
    respected him since he gave me my first speech on the paper at the Oxford Union—is not discussing what is material here, contributions to political parties. Unless and until the practice of a great many years has been ruled by a court of law to be outside the authority of a particular company I shall be inclined to believe that what has taken place under the practice of many years is within their powers.
    The fact that this proposal has not been put forward in a way that bears any relationship whatever to what is intended does not detract from the fact that its purpose is plain; nor does it leave it, I think, on its merits free from criticism or not entitled to an answer. Quite bluntly, the hope of hon. Members opposite is that if companies are bound to publish their subscriptions to a political party they can be intimidated from giving that support. Trouble can be organised with the unions and with their labour. Trouble can be organised with some of their customers. Trouble can be organised with Labour-controlled local authorities where they happen to operate. Hon. Members opposite know that and, if they were honest with themselves, that this is the purpose of the Clause.
    I accept, and this at least we can agree on, that if that intimidation were successful—and intimidation in this country is not often successful—the main sufferer would, of course, be the Conservative Party. It is not our fault that the overwhelming majority of people with practical experience of running a business would regard the coming into office of a Labour Government as a disaster from which they think it right to try to protect their companies and their shareholders.
    They remember the ineptitude with which Labour when in office handled our economy. They remember the biennial financial crises. They remember 1947 when the Labour Government were kept going only by American loans which we are still repaying. They remember 1949 when they were forced to devalue the £. They remember 1951 when they produced the financial crisis from which they ran away rather than dare tackle. They remember the threats of nationalisation, which we heard repeated this afternoon by the right hon. Member for Belper (Mr. G. Brown) who explicitly threatened nationalisation over the

    1643
    widest possible sector of our economy; and they remember, too, the sneers of the right hon. Gentleman the Leader of the Opposition about industry with its begging bowl.
    It is not altogether surprising that in these circumstances people in responsible positions and with a knowledge of the working of our economy would regard the return to office of right hon. and hon. Members opposite as a disaster. The fault is theirs—theirs and their policies—that this is so.
    What is the objection to publicity? I will ask the Committee to recall that the ballot is secret. That is to prevent intimidation. Indeed, if we look throughout the world secret ballots are regarded as the basis of freedom because, in the absence of secrecy of the ballot, pressures can be brought to bear upon people to conceal their political opinions and to abstain from supporting views in which they believe.
    If we are going to force, as this Clause would propose, everyone—not only the great companies, which can probably take care of themselves but the small trader and the small shopkeeper in the small town—to publish such subscriptions, which is the Opposition's intention, it will prevent subscriptions being made. If the small trader and shop keeper is to be forced to publish, the Committee knows perfectly well that in many cases this may succeed in preventing him from making that subscription at all.
    As to limited companies, we are told that the individual shareholder should know in order that, if he wishes, he should be able to challenge. That indicates an ignorance of the principle on which limited companies are run. They are run successfully only if the shareholders have confidence in the board and if the board has considerable freedom to handle the assets of the company. If we are to start saying that a shareholder must know of a political contribution in order that he may challenge it, where will we stop? He could equally demand to know about a charitable contribution in order to challenge it—[HON. MEMBERS: "Why not?"]—or a wage payment. Why not? Because it would bring the operations of limited companies to a standstill if
    1644
    one did not have confidence in one's directors. If a shareholder has no confidence in his board his expedient is simple. He can sell his shares and go elsewhere, and that is the difference between a shareholder and a trade unionist.
    Mr. Lubbock rose—
    Mr. Boyd-Carpenter: There have been three separate and two simultaneous attempts to intervene and it would show discrimination of the crudest character if I gave way to anybody. I hope that at this stage the Committee will forgive me, because I hope that soon we shall be able to come to a decision.
    There is a distinction which I would seek to make between a trade union and a company. A shareholder even in a company which has the good sense to contribute to the Conservative Party can always, without detriment to himself, sell his shares and go elsewhere. A member of a trade union has no such expedient open to him. If he leaves his union he leaves the employment in which his skill has been acquired.
    There is also a profound difference in the legal position of the two bodies. If it is seriously suggested that trade unions with their great privileges, their freedom from action for torts, and so on, are to be placed in the position of companies, I suppose that the similarities should be extended over the whole field. I have never known a trade union leader to ask for that. I suggest that if one has a board of directors one should trust them as a shareholder to manage the affairs of their companies with the right to make political contributions which will protect the companies, first of all, from the threat of nationalisation—and the courts have ruled that in certain circumstances this is an allowable expense—or to protect them from the damage which they would suffer from a Government composed of hon. and right hon. Members opposite. In those circumstances I suggest that directors are not only entitled but are bound to take that action. We have been told how clear the Labour Party is in this matter and how it publishes its accounts and discloses its subscriptions.
    Mr. Roy Jenkins: Would the right hon. Gentleman like to tell the Committee, when he advances the argument that directors are bound to do this,

    1645
    whether he thinks that the directors of companies like Shell, which has announced that it is not making contributions, are misrepresenting the interests of their shareholders?
    11.15 p.m.
    Mr. Boyd-Carpenter: I said that, when they take the view, which seems to be a very reasonable one to take, that the interests of their company would be menaced by certain political developments, it is quite right for them to make their contributions.
    I do not criticize those who take the other view. I do not criticize wealthy men who support the party opposite. I have not even so far asked about their contributions—Mr. Sidney Bernstein, Mr. Jack Hylton, Mr. Lewis Cohen and other wealthy, distinguished and eminent people who publicly support the party opposite and, I am sure, as generous people, subscribe to it. We have not been told what their subscriptions are [Interruption.] Perhaps the hon. Member for West Ham, North (Mr. A. Lewis) would like to tell us what their subscriptions are.
    Mr. A. Lewis: What I was about to tell the Minister is that the members of the Labour Party are able to find out what are the contributions from every source, unlike shareholders of private companies. If the right hon. Gentleman were a member of the Labour Party and he wanted to do so, he could find out, too.
    Mr. Boyd-Carpenter: If I understand him, the hon. Gentleman knows the answer to the question what these gentlemen have contributed, and he will not tell the Committee.
    Mr. Lewis: I am trying to explain to the Minister that, as a shareholder in a company, I am not allowed to find out, but, as a member of the Labour Party, I can find out. The information is available to everyone who wants to know.
    Mr. Boyd-Carpenter: Apparently, the hon. Gentleman knows, but he will not tell the Committee.
    Mr. Lewis: Jack Hylton, £5,000.
    Mr. Boyd-Carpenter: I am obliged. What about Mr. Bernstein and Mr. Cohen?
    Mr. Lewis: It is in the record.
    Mr. Boyd-Carpenter: I am much obliged.
    Mr. Lewis: But when do the Tories publish their accounts?
    Mr. Boyd-Carpenter: We know that the Labour Party's disclosure is very partial indeed. Headquarters accounts are published, but I remind the Committee that, in 1962, less than half the proceeds of trade union political levy, £750,000 a year, with reserve of £1¾ million, appeared in the headquarters accounts. The rest was, presumably, spent for political purposes, either spent direct by the trade unions or paid to constituency parties. The Labour Party headquarters accounts show only £1,000 of the co-operative movement's political expenditure. None of the rest.
    There was an interesting article by Mr. Martin Harrison, lecturer in Government at Manchester University, about contributions in kind outside the political levy altogether, by trade unions to the Labour Party. I commend this article to hon. Members.
    Mr. Callaghan: Plainly, the right hon. Gentleman does not understand the Central Office brief and he does not understand how a trade union functions. The simple truth, as he ought to know, is that every sum of money paid out by a trade union for political purposes, whether it be paid to the headquarters at Transport House or whether it be paid to a local constituency party, is shown in the return made to the Registrar of Friendly Societies by the trade unions. Therefore, if hon. Members want to do a little simple arithmetic, all they have to do is to go to the Registrar of Friendly Societies, find the accounts of the trade unions, and then add up the total sum which is paid out by the unions, whether to local constituency parties or to the headquarters of the Labour Party. There is no possible parallel between that and the secrecy with which Tory financial affairs are conducted.
    Mr. Boyd-Carpenter: The hon. Gentleman, deliberately, I think, misses the point. First, what he said must have been true, or I should not have been able to give the evidence to the Committee, but

    1647
    what he did not appreciate is that these payments are shown as going to various organs of the Labour Party, and, unless they go to the headquarters, it is not shown how they are spent. I commend to hon. Members opposite Mr. Harrison's article on the support which is given outside the political levy and outside all these disclosures we are told about—organisers sent to assist at elections, motor cars, premises, poster sites—all used to support the Labour Party.
    The hon. Gentleman the Member for Cardiff, South-East, has completely missed the point. He stood clothed in a metaphorical white sheet because the headquarters accounts were published. He omitted to tell us that expenditures far larger than those involved in the headquarters accounts are not published at all.
    Mr. Callaghan: The Chief Secretary is completely in ignorance. There are a great many trade unions whose local branches have no control over the political funds. When the sums are paid, they are paid centrally into the funds of the local constituencies. This is not universally true, but it is true of nearly every trade union. When the Chief Secretary has finished, he still will not have explained away the researches which show that the Conservative Party has at its command funds at least three times as great as those of the Labour Party.
    Mr. Boyd-Carpenter: The hon. Member, in that rather lengthy intervention, has only confirmed what I was saying: that the Labour Party is in no position to vaunt itself because its headquarters accounts are published without admitting that by far the largest sums which go to support it are not covered by those accounts.
    This debate has been characteristic—[Interruption]—of the Labour Party that anything which is not to their advantage is unfair or, indeed, they venture to hint, corrupt. I remind the Committee that the proposal on which we shall be asked to vote proposes to use the public service to do their dirty work for them. It is significant that they must know that the Clause would fail in the purpose which, they have now admitted, lies behind it unless the officers of the Inland Revenue
    1648
    broke the oaths which they have taken. If the Labour Party, therefore, intend to vote on the Clause—
    Mr. George Brown: Do not talk rubbish.
    Mr. Boyd-Carpenter: —they will make it clear to the country either that this is an insincere proposal disguised to deceive people into believing that it would be effective to do what hon. Members opposite know that it cannot do, or that they are prepared to serve their squalid party purposes by prostituting the public service.
    Mr. Mitchison: I hope not to take up the time of the Committee for more than a minute or two. I realise that hon. Members, on both sides, would like to divide. I am not suggesting that anybody has been out of order, but we have been roaming into all sorts of funny places—dark caverns, board rooms full of Tory politicians, Ulster democracy—
    Mr. Stanley R. McMaster: What is wrong with Ulster democracy?
    Mr. Mitchison: —and—[Interruption]—darkest of all, the recesses of the Chief Secretary's mind. His speech was one of the most remarkable efforts I have ever heard and I shall not trouble the Committee by going into it now.
    We are discussing whether certain taxpayers are to be obliged, on demand, to give information for the purposes of the Revenue. If that information ought to be given and is not given, the people who will suffer are other taxpayers, because they will have to find the money if these people get out of it.
    It is said that the phrase "for political purposes" is widely drawn. Of course it is. I am not as contemptuous of the intelligence of the inspectors of taxes as their political chief appears to be. They will, presumably, only ask for this information when they require it and when there is reason to require it. If they are to do that, it is necessary, to meet all the shifts that the Tory Party has continually used to disguise what are, in effect, political contributions to it, that the definition should be wide.
    I turn now to the essential reason why the information is particularly required.

    1649
    The Clause follows two other Sections in the Revenue legislation. One is about bank credits, the other is about commissions and fees. If the information can be got in any other way, why on earth were those Sections put into Revenue legislation?
    All that they are doing here is to provide inspectors of taxes with the power to find out the purpose for which these contributions are being made. The Chief Secretary was perfectly correct in saying that contributions by a company to the Conservative Party, Aims of Industry, the Economic League, and that other shadow front organisation, the British something-or-other, are all inadmissible for deductions.
    The trouble begins when one gets beyond that. The right hon. Gentleman is also perfectly correct in saying that
    the inspectors must know the facts, for the essential question with which we are concerned is one of facts, and the sole purpose of this proposed Clause is to get those facts available for the Revenue. Yet, the Revenue, through its political head, refuses the power.
    I ask the Committee to say without hesitation that the Revenue should be protected and that those not entitled to make deductions should not be able to conceal not only their evasion of tax, but their avoidance of tax by the withholding of facts. I ask the Committee to support this Clause.
    Question put, That the Clause be read a Second time—
    The Committee divided: Ayes 85, Noes 159.

    Division No. 111.]

    AYES

    [11.26 p.m.

    Ainsley, William

    Holt, Arthur

    Pavitt, Laurence

    Benn, Anthony Wedgwood

    Houghton, Douglas

    Peart, Frederick

    Boston, T.

    Hynd, H. (Accrington)

    Pentland, Norman

    Bottomley, Rt. Hon. A. C.

    Irvine, A. J. (Edge Hill)

    Price, J. T. (Westhoughton)

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

    Hynd, John (Attercliffe)

    Probert, Arthur

    Bowen, Roderic (Cardigan)

    Janner, Sir Barnett

    Randall, Harry

    Brockway, A. Fenner

    Jeger, George

    Redhead, E. C.

    Broughton, Dr. A. D. D.

    Jenkins, Roy (Stechford)

    Rees, Merlyn (Leeds, S.)

    Butler, Herbert (Hackney, C.)

    Jones, Dan (Burnley)

    Short, Edward

    Callaghan, James

    Lee, Frederick (Newton)

    Slater, Joseph (Sedgefield)

    Carmichael, Neil

    Lewis, Arthur (West Ham, N.)

    Sorensen, R. W.

    Castle, Mrs. Barbara

    Loughlin, Charles

    Soskice, Rt. Hon. Sir Frank

    Cliffe, Michael

    Lubbock, Eric

    Stones, William

    Craddock, George (Bradford, S.)

    McBride, N.

    Swingler, Stephen

    Crossman, R. H. S.

    McCann, J.

    Taverne, D.

    Dalyell, Tam

    MacColl, James

    Taylor, Bernard (Mansfield)

    Davies, C. Elfed (Rhondda, E.)

    MacDermot, Niall

    Thomas, Iorwerth (Rhondda, W.)

    Diamond, John

    Mallalieu, E. L. (Brigg)

    Thorpe, Jeremy

    Evans, Albert

    Marsh, Richard

    Wainwright, Edwin

    Fernyhough, E.

    Mason, Roy

    Warbey, William

    Fitch, Alan

    Mendelson, J. J.

    Whitlock, William

    Foley, Maurice

    Millan, Bruce

    Wilkins, W. A.

    Foot, Dingle (Ipswich)

    Milne, Edward

    Willey, Frederick

    Foot, Michael (Ebbw Vale)

    Mitchison, G. R.

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

    Greenwood, Anthony

    Griffiths, Rt. Hon. James (Llanelly)

    Morris, Charles (Openshaw)

    Winterbottom, R. E.

    Griffiths, W. (Exchange)

    Oliver, G. H.

    Woof, Robert

    Hart, Mrs. Judith

    O'Malley, B. K.

    Hilton, A. V.

    Oram, A. E.

    TELLERS FOR THE AYES:

    Holman, Percy

    Oswald, Thomas

    Mr. Grey and Mr. Ifor Davies.

    NOES

    Atkins, Humphrey

    Buck, Antony

    du Cann, Edward

    Awdry, Daniel (Chippenham)

    Carr, Compton (Barons Court)

    Elliot, Capt. Walter (Carshalton)

    Barter, John

    Carr, Rt. Hon. Robert (Mitcham)

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

    Berkeley, Humphry

    Chataway, Christopher

    Errington, Sir Eric

    Bidgood, John C.

    Chichcster-Clark, R.

    Farey-Jones, F. W.

    Biffen, John

    Clark, William (Nottingham, S.)

    Farr, John

    Biggs-Davison, John

    Cleaver, Leonard

    Fell, Anthony

    Bishop, Sir Patrick

    Cooke, Robert

    Finlay, Graeme

    Black, Sir Cyril

    Cooper, A. E.

    Fisher, Nigel

    Bossom, Hon, Clive

    Courtney, Cdr. Anthony

    Fletcher-Cooke, Charles

    Bourne-Arton, A.

    Crawley, Aidan

    Fraser, Ian (Plymouth, Sutton)

    Box, Donald

    Crowder, F. P.

    Freeth, Denzil

    Boyd-Carpenter, Rt. Hon. John

    Curran, Charles

    Gammans, Lady

    Boyle, Rt. Han. Sir Edward

    Dance, James

    Gardner, Edward

    Bromley-Davenport, Lt.-Col. Sir Walter

    d'Avigdor-Goldsmid, Sir Henry

    Gibson-Watt, David

    Brown, Alan (Tottenham)

    Deedes, Rt. Hon. W. F.

    Giles, Rear-Admiral Morgan

    Bryan, Paul

    Drayson, G. B.

    Glyn, Dr. Alan (Clapham)

    Goodhew, Victor

    McLean, Neil (Inverness)

    Scott-Hopkins, James

    Green, Alan

    MacLeod, Sir John (Ross&Cromarty)

    Shaw, M.

    Griffiths, Eldon (Bury St. Edmunds)

    McMaster, Stanley R.

    Shepherd, William

    Grosvenor, Lord Robert

    Macmillan, Maurice (Halifax)

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

    Gurden, Harold

    Maddan, Martin

    Spearman, Sir Alexander

    Hall, John (Wycombe)

    Maitland, Sir John

    Stainton, Keith

    Hamilton, Michael (Wellingborough)

    Marten, Neil

    Summers, Sir Spencer

    Harris, Reader (Heston)

    Maude, Angus (Stratford-on-Avon)

    Tapsell, Peter

    Harvey, John (Walthamstow, E.)

    Maudling, Rt. Hon. Reginald

    Taylor, Sir Charles (Eastbourne)

    Hastings, Stephen

    Maxwell-Hyslop, R. J.

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

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

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

    Taylor, Sir William (Bradford, N.)

    Hirst, Geoffrey

    Mills, Stratton

    Temple, John M,

    Hobson, Rt. Hon. Sir John

    Miscampbell, Norman

    Thatcher, Mrs. Margaret

    Holland, Philip

    More, Jasper (Ludlow)

    Thomas, Sir Leslie (Canterbury)

    Hopkins, Alan

    Morrison, Charles (Devizes)

    Thompson, Sir Kenneth (Walton)

    Hornby, R. P.

    Neave, Airey

    Thompson, Sir Richard (Croydon, S.)

    Hughes-Young, Michael

    Orr, Capt. L. P. S.

    Thornton-Kemsley, Sir Colin

    Iremonger, T. L.

    Page, John (Harrow, West)

    Touche, Rt. Hon. Sir Gordon

    James, David

    Page, Graham (Crosby)

    Turner, Colin

    Johnson, Eric (Blackley)

    Pannell, Norman (Kirkdale)

    Turton, Rt. Hon. R. H.

    Johnson Smith, Geoffrey

    Partridge, E.

    van Straubenzee, W. R.

    Jones, Arthur (Northants, S.)

    Pearson, Frank (Clitheroe)

    Vaughan-Morgan, Rt. Hon. Sir John

    Joseph, Rt. Hon. Sir Keith

    Peel, John

    Walder, David

    Kaberry, Sir Donald

    Percival, Ian

    Walker, Peter

    Kerans, Cdr. J. S.

    Pickthorn, Sir Kenneth

    Walker-Smith, Rt. Hon. Sir Derek

    Kerr, Sir Hamilton

    Pitman, Sir James

    Wall, Patrick

    Kirk, Peter

    Powell, Rt. Hon. J. Enoch

    Webster, David

    Kitson, Timothy

    Prior, J. M. L.

    Wells, John (Maidstone)

    Lambton, Viscount

    Prior-Palmer, Brig. Sir Otho

    Williams, Dudley (Exeter)

    Langford-Holt, Sir John

    Proudfoot, Wilfred

    Wilson, Geoffrey (Truro)

    Leavey, J. A.

    Rawlinson, Rt. Hon. Sir Peter

    Wise, A. R.

    Legge-Bourke, Sir Harry

    Redmayne, Rt. Hon. Martin

    Wood, Rt. Hon. Richard

    Lilley, F. J. P.

    Rees, Hugh (Swansea, W.)

    Worsley, Marcus

    Litchfield, Capt. John

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

    Yates, William (The Wrekin)

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Renton, Rt. Hon. David

    Longbottom, Charles

    Ridsdale, Julian

    TELLERS FOR THE NOES:

    MacArthur, Ian

    Russell, Sir Ronald

    Mr. McLaren and Mr. Pym.

New Clause.—(ABOLITION OF STAMP DUTY ON RECEIPTS.)
(1) No stamp duty shall be chargeable under the heading "Receipt" (which as amended by section 34 of the Finance Act 1920 imposed a duty of twopence upon a receipt for £2 or upwards) in Schedule 1 to the Stamp Act 1891.
(2) Subsection (2) of section 101 (which provided for cancellation of the adhesive stamp by the person giving the receipt), section 102, which provided the terms upon which receipts might be stamped after execution) and paragraphs (1) and (3) of section 103 (which provided a penalty for offences in reference to receipts) of the Stamp Act 1891 and section 34 of the Finance Act 1920 shall be repealed.—[Mr. Graham Page.]
Brought up, and read the First time.
Mr. Graham Page: I beg to move, That the Clause be read a Second time.
The Deputy-Chairman (Sir R. Grimston): With this proposed new Clause can be discussed new Clause No. 52—(Stamp duty on receipts)—and Amendments Nos. 38, 39 and 40.
Mr. Page: I suggest that this new Clause is far more important than the one which we have been discussing up till now because if the Committee were to accept this Clause it would achieve what it sets out to do, that is to abolish the 2d. stamp on receipts. When I mentioned
1652
to an hon. Member my pleasure that this Clause was to be selected, he said, "I thought stamps on receipts had already been abolished." That, I think, shows in what disregard receipts are held at present and, indeed, the disrepute into which the law in relation to receipts has fallen.
May I state what is the law at present with regard to 2d. stamps on receipts? If ever a receipt or an acknowledgment is given, it must bear a 2d. stamp. If it does not do so, the maximum penalty is a fine of £10. The Stamp Act, 1891, which imposed this penalty and which made it an offence if a receipt did not bear a 2d. stamp, refers not only to a receipt but to an acknowledgment as well. Therefore, any form of acknowledgment that a sum of money has been paid requires a 2d. stamp. The Stamp Act also refers to a receipt or an acknowledgment for any cash or security, so that the acknowledgment not only of cash but of a cheque also requires a 2d. stamp. I suppose the answer might be, "Do not give a receipt at all." But the Stamp Act makes it an offence not to give a receipt if one is asked to give it.
How has it come about that receipts are now so seldom given? I find that I am not getting very much attention

1653
from the Treasury Bench. I am getting great attention from right hon. and hon. Members opposite but not from my own Treasury Bench.
Mr. Mitchison: What about the Liberal Party?
Mr. Page: I am not getting any attention from the Liberal Party because they are not here. I ask my right hon. Friend the Chief Secretary to the Treasury to listen to what I am saying because I think it is important.
We have got to the stage now where very few people give any receipt at all, and if they give a receipt they do not put a 2d. stamp on it. How has this come about? It started to come about in 1957 with the Cheques Act which abolished the need for endorsement of cheques. In making it necessary that an unendorsed cheque should have the same effect that an endorsed cheque had previously had, it was necessary to state in the Cheques Act that an unendorsed cheque, if it were a paid cheque, should be an acknowledgment of payment. But in the course of the debates on that Measure I myself had to call attention to a very old case in 1800, the case of Egg v. Barnett in which it was held that a paid cheque was evidence of payment; that is, it had the same effect as a receipt.
Section 3 of the Cheques Act, 1957, provided that an unendorsed cheque which appears to have been paid by the banker on whom it is drawn is evidence of a receipt by the payee of the sum payable by that cheque. Therefore, that Act, although it made no change in the law relating to receipts, made people realise that receipts were unnecessary if the payment was made by cheque. Generally speaking, the public then made no distinction between a payment by cheque and a payment by cash, and it was thought that stamped receipts were no longer necessary. Stamped receipts are still necessary. If a receipt is given, it should be stamped. A receipt cannot be refused if the payer asks for it. Yet the law is not flouted in this respect. I think that we should not cling doggedly to a law which is in disrepute and is not enforced.
Does the Chancellor of the Exchequer hang on to the law for any reason of revenue? Is it producing any funds for the Exchequer? At the time of the 1957
1654
Act the 2d. stamp on receipts was producing £5 million in revenue; in the year 1957–58 the revenue dropped to £38 million; in 1958–59 to £2·3 million; and now it has dropped to £1·6 million. These are estimated figures. They are estimated because the 2d. receipt stamp is collected mainly by postage stamp and the Post Office pays over to the Commissioners of Inland Revenue what it estimates has been used by way of 2d. stamps on receipts. So the £1·6 million is an estimate by the Post Office of the use of 2d. stamps by way of receipt.
I think that the figure is a little suspect. I notice that the figure for 1959–60 was £1·8 million and for the three following years it has remained static at £1·6 million a year. I wonder whether the Exchequer did not really want to admit what is obvious to everybody, that fewer and fewer receipts are being given and fewer and fewer are being stamped with 2d. Every year the stamping of receipts obviously becomes less and less. Calculating from the figure of £1·6 million, the estimated revenue, I very much doubt whether as many as something over 190 million receipts a year are given.
Mr. William Shepherd: Can my hon. Friend say how the Post Office assesses what is used?
Mr. Page: I have not a clue, but at the foot of the accounts in the Report of the Commissioners of Her Majesty's Inland Revenue for the year ended 31st March, 1963, there is a note stating that the duty on receipts is collected mainly by means of adhesive postage stamps which the law allows to be used for either postal or Revenue purposes, and that the Post Office receives in the first instance the whole of the amount realised by the sale of such stamps and subsequently pays over to that Department the estimated value of the stamps used for Inland Revenue as distinct from postal purposes. That is the only clue which we have of how the Post Office estimates how many 2d. stamps are used for receipts. That is why I say that it is suspect when that figure remains statistic for three years.
11.45 p.m.
I have a feeling that the Commissioners of Inland Revenue are not prepared to admit what is obvious to everyone,

1655
namely, that receipts are dwindling in number, and that they want to argue that there are still 190 million receipts given each year. If that is so, surely a large proportion of those are given by conscientious bodies such as Government Departments, nationalised industries, and so on? And, if that is so, it is merely a matter of passing money from one pocket to another.
Would the Chancellor lose very much if he gave up this farcical collection of 2d on receipts? I should have thought that he ought to lose it so far as he is taking it away from public bodies who may be conscientiously going on giving receipts, and that he ought to lose it so far as it comes from private interests, from commerce, and from the professions, because he would get the tax in another way if he gave up trying to collect it by 2d. stamps on receipts.
Receipts and all that is involved in giving them are, of course, an allowance against taxable income. The cost of giving a receipt can be calculated. I would calculate it as follows. Taking the printed forms of receipt which have to be made out, or typing the receipt, or writing it, completing those forms, perhaps having forms embossed with the stamp, or licking the 2d. stamp and putting it on the receipt form, addressing the envelope in which to send off the receipt, folding the receipt and putting it in the envelope, I should have thought that a reasonable estimate of the value of the time spent on sending out receipts was between 8d. and 1s. for each receipt. To that of course one must add the cost of the stationery, and so on. That is a charge against taxable income, so that my right hon. Friend the Chancellor in collecting his 190 million receipts a year is losing the tax on about 10d. in each case and collecting only 2d. in return.
Mr. Douglas Houghton: The Clause does not abolish receipts. It proposes to abolish the stamp on receipts, so presumably receipts could still be given, and would be desired by many people.
Mr. Page: They could still be given, and if they were asked for, no doubt they would be given, but, as the law stands at present, if they are given, a 2d. stamp has to be placed on them.
1656
Never was there so much time wasted in so many offices to collect so few pennies. It is no wonder that so many sensible people refuse to take part in this farce any longer, and that so many people have ceased to give receipts, and ceased to stamp even those acknowledgements which they give.
The Economic Secretary to the Treasury (Mr. Maurice Macmillan): I readily admit that the revenue from this duty is not a very large or significant amount in the context of any Budget, but before I come to the details of the Clause I would point out that there are a number of minor revenue points of this nature and that it is not unreasonable for the Chancellor in a Budget which is increasing taxation to decide that none of them has sufficient priority over the others to be dealt with in his Budget. It is for this reason that I hope that my hon. Friend the Member for Crosby (Mr. Graham Page) will not press the Clause. It is not that we are clinging doggedly to this duty, to use his phrase. In general terms it is perhaps not the time to make this concession when similar and other minor taxes are still in existence.
There is another objection to the Clause. That is the effect which it has on the obligation to give a receipt on request. New Clause No. 33 attempts to retain the obligation to give a receipt on request by leaving in force part of Section 103 of the Stamp Act, 1891, in respect of the necessity to give a receipt where the receipt would be liable to Stamp Duty under the present law. The difficulty is that the terms of the Clause would mean that there would be no receipts liable to Stamp Duty under the present law. My hon. Friend has unintentionally succeeded in drafting his Clause so as to abolish the obligation to give a receipt on demand.
It works like this. If he looks at the effect on Section 103 he will see that the Clause leaves the following words:
"If any person … in any case where a receipt would be liable to duty refuses to give that receipt duly stamped … he shall incur a fine of ten pounds."
There would be no case under the Clause in which a receipt would be liable to duty and there would be no obligation to give a receipt.
Mr. Graham Page: I provided for that in a previous year in a Clause which I tabled and I was told that the Clause was out of order for that very reason. That is why I have drafted the Clause in this way this year.
Mr. Macmillan: My hon. Friend seems in successive years to have been on the horns of a particular unfortunate dilemma; either he is out of order or he goes further than he intends. I cannot, of course, deal with the former Clause, but on the latter I assure him that in drafting the Clause he has removed this obligation.
The total amount of revenue is not very large. My figures are slightly different from those given by my hon. Friend. I am advised that receipts from the duty were £2½ million in 1963–64 and that the loss to the Exchequer would be about £1½ million in the first year. But I do not think that we need to let £1 million separate us in this case when it is not part of my argument that the duty brings in a significant revenue, nor do I deny that receipts are being given less and less. No one with any practical experience would try to counter that part of my hon. Friend's argument.
Mr. Page: According to the Report of the Commissioners of Inland Revenue the revenue from receipts for three consecutive years was £1·6 million, £1·6 million and £1·6 million. It is astonishing that for the one following year, 1963–64, if my hon. Friend quoted that year, it has suddenly leapt up by £1 million. This seems extraordinary and needs a little more explanation.
Mr. Macmillan: I will look into the matter, but I can only repeat that I am advised that the receipts for 1963–64 are estimated at about £2½ million. Part of the payment is collected by means of the Inland Revenue in impressed stamps as well as the 2d. adhesive stamps bought from the Post Office,
I urge my hon. Friend not to press his Clause. I think he will accept that this is not a great burden, although it is a nuisance. I accept that it is one of those taxes which should be kept under review and which, with the progress we have been making in simplifying business procedures, should be watched carefully. Nobody would stand on the strict principle that the whole revenue would
1658
be vitiated by the abolition of this duty. Perhaps as the use of cheques becomes more frequent we shall need to bring in more safeguards with its abolition, if in future it should be decided to repeal this duty. It would be necessary to consider whether a provision should be made in regard to the legal obligation to give receipts, stamped or otherwise, on request, and that is one point which is entirely omitted from the new Clause entitled "Stamp duty on receipts" and accidentally omitted from the new Clause entitled "Abolition of stamp duty on receipts".
Mr. Houghton: I am sure that the hon. Member for Crosby (Mr. Graham Page) will rot press this Clause, because he can see that there are not enough of my hon. Friends present to enable him to make a demonstration.
That this is a silly little tax there is no doubt. I object to taxes which are not enforced. I do not so much care whether they are fair or unfair, but let us have them enforced. One just cannot get this tax enforced. How on earth the Post Office estimates the number of stamped receipts given I simply do not know. How can anyone even make a guess at the revenue from this tax? I agree that this matter should be kept under review. Note of it has been taken on this side of the Committee and it may be one of the many things the Labour Government will do.
Question put and negatived.

New Clause.—(REDUNDANCY PAYMENTS.)
Where pursuant to any arrangement or agreement a sum becomes payable to the holder of an office or employment in connection with the termination of his office or employment due to redundancy such sum shall not be assessable under Schedule E but shall be subject to the provisions of section 37 of the Finance Act 1960.—[Mr. Graham Page.]
Brought up, and read the First time.
Mr. Graham Page: I beg to move, That the Clause be read a Second time.
The Deputy-Chairman (Sir R. Grimston): With this proposed new Clause can be discussed new Clause No. 53—"Redundancy payments".
Mr. Page: The point involved here is that if an employee's service is terminated and the employer

1659
makes a voluntary payment, that payment is not liable to tax in the hands of the employee or allowable as an expense against taxable income unless it exceeds £5,000. If, on the other hand, on the termination of employment, a contract takes effect and the employee has a right to a payment as a result of the termination of that employment, then it is taxed as if it were his salary or wage.
That is the position for payments not over £5,000. If they are received as of right, they are taxable. If they are ex gratia, they are tax free. If they are over £5,000, then by Section 37 of the Finance Act, 1960, whether or not they are made in pursuance of a legal obligation, they are chargeable to tax under Schedule E if—and here I bring in Section 38 of the 1960 Act—they are over £5,000. The words at the end of the new Clause No. 37
"… shall be subject to the provisions of section 37 of the Finance Act 1960"
are intended to do exactly the same thing as Section 38 did; that is to say, the Clause would apply only to sums up to £5,000.
12 m.
It must, I think, be entirely accepted that if we are to modernise industry there will be many occasions when redundancy will occur, when it will be necessary to cut down the number of employees and to terminate their employment. It is, therefore, essential that employers should recognise their financial obligations to those who have to be sacked in order to modernise the industry: that not only should they recognise their financial obligations to those employees whose contracts are terminated, but that they should be seen to recognise them; not that it should be merely done by an under-the-counter, "old boy" method of "We'll pay you something ex gratia."
We say to the employers that it is good commercial practice, that it is good labour relations, and it is acting in all humanity that they should recognise this obligation to their employees while, on the other hand, we say in law, and in tax law in particular, "If you do recognise your obligation by putting it in a contract and making it enforceable, the recipients will have to pay tax on the
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money you pay them." So it is left to the vague basis of "Well, you'll be paid, but I shall not put it in writing." In short, the employer will not bind himself by contracting to pay on termination of the contract because, if he does so, that money will be taxable in the hands of the sacked employee.
If the voluntary payment is free of tax, so should the contractual payment be. The employer should not be deterred, by tax on the contractual payment, from binding himself to make payment on redundancy. As industrial development accelerates—as, indeed, it surely will—this will become more and more urgent. But it has become of particular urgency this year, in that the Contracts of Employment Act is shortly to come into operation.
By that Act the employer is under an obligation to provide a written statement of the terms of employment, and he should insert in that written statement the particulars of the payments that will be made on termination of contract, and the redundancy he binds himself to pay. But if he does put that into the written statement—as, indeed, I think he is required to do by the Contracts of Employment Act—at once that payment becomes taxable in the hands of the recipient. By accepting this Clause, my right hon. Friend the Chancellor of the Exchequer could bring about a very great benefit to labour relations in the modernisation of industry.
Mr. W. Clark: I support the new Clause, but I should like to take the other side of the counter from that taken by my hon. Friend the Member for Crosby (Mr. Graham Page). He has spoken, quite rightly, about the position of the employee, but I want to take the position of the employer.
Quite obviously, it is essential in the modernisation and rationalisation of industry that there will be some firms closing down and others starting up. As I understand it, the law at present is that redundancy payments paid on the cessation of trading are not allowed for tax purposes because they are not expenses wholly incurred for trade but incurred only when ceasing to trade. I am sure that my hon. Friend who is to reply will agree that this is anomalous.
Here we have the Government, on the one hand, saying that they will be

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generous with regard to redundancy payments due to employees, if my hon. and learned Friend's Clause is accepted, but it is anomalous that if the employer wants to be generous he is further penalised in that he is not allowed to charge the redundancy payments for tax purposes. In those circumstances, although I cannot move my new Clause No. 53, I should be glad if my hon. Friend would say a word about it when he replies.
Mr. Green: Although it is a little late, unfortunately, to discuss this matter, I accept at once that both these new Clauses touch on a very important matter indeed. This I instantly accept. I think that the Committee will recall that earlier this year my right hon. Friend the Minister of Labour made a statement in which he said that this whole question of redundancy and, therefore, the related matters such as have been raised tonight, were being considered by the Government in consultation with the main interests involved.
I suggest to my hon. Friends that there is a fundamental point here, that it is probably wrong to legislate in a sense piecemeal—although they have intelligibly anticipated the points that are liable to be made—in advance of a clearer picture of how to deal with redundancy generally in which both sides of the Committee, I am sure, are thoroughly interested.
I can perhaps give a particular reason in the case of each of these two new Clauses as now drafted why I believe that it would be wrong to try to legislate piecemeal on this point. On new Clause No. 37, the real difficulty is that my hon. and learned Friend is quite right in saying that all redundancy payments made ex gratia—under the £5,000 limit—or made in lieu of notice, which I think covers the point which he raised on the Contracts of Employment Act in so far as we know it now to be applicable in such cases—are not treated as income in the ordinary sense for tax purposes. Therefore, he is quite right in saying that over the last part of the field the practice and application of the law are already what he seeks to make them. But if we go the whole hog, so to speak, and apply, as he wishes to apply, to all contracted redundancy payments at this moment in time this same
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application of the law, then I must tell him that as worded there is a real chance of avoidance which can be very simply contrived.
An employee, for example, gets taken on on a modest salary with a relatively handsome terminal payment if dismissed on redundancy grounds. The drafting of the Clause would lay us open to this. The employee is then dismissed at the end of the year and he collects his capital sum, instead of his income, in terms of the redundancy payment promised to him under the contract which he has. After a decent interval of time he re-emerges as an employee of that same company or of an associated company. This would be a genuine risk of avoidance inherent in the drafting of my hon. Friend's Clause,
It is for that reason that I am afraid that I cannot accept the Clause because it would not really tie in with what we all want to do subsequently, and that is to avoid the prospect of avoidance and to give a definitely better treatment to those who pursue the Government policy of producing better redundancy payments in their firms.
The Clause would not do what my hon. Friend wants it to do without this great risk of avoidance. We do not want to spoil the thing by its being open to abuse. I have great sympathy with the intention and spirit of most of the Clause but I think that my hon. Friend the Member for Nottingham, South (Mr. W. Clark) would agree that limitations really are necessary and must be devised to ensure that there is no avoidance.
One must take care in circumstances, for instance, where the cessation of trading will involve amalgamation and reconstruction which is the obvious example, and there are the usual problems associated with controlling shareholders and the directors. Both my hon. Friends have put their fingers on a very important matter for which I am certain appropriate legislation must be devised. It would be more sensible to try to get a clearer picture of the whole redundancy field and then we would get the matter right and avoid abuses which would spoil a very necessary improvement in our whole industrial and trading arrangements. If my hon. Friends will accept that, which has been said sympathetically,

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I hope that the Amendment may be withdrawn.
Mr. John Diamond: That is a very unsatisfactory answer to a very good Clause. I preface my remarks by saying how delighted I was to hear the hon. Member for Crosby (Mr. Graham Page) turn over a new leaf, as it were, in his attitude towards severance payment generally. Everything that he said was acceptable. I have heard in Committee upstairs on different legislation the hon. Member expressing sentiments with which I did not agree and I therefore welcome this conversion.
The Government have responsibility in this matter. It may have been in his Budget statement a year ago, or even two years ago, that I heard the Chancellor of the Exchequer promise that the whole of this field would be looked at because, he said, he was fully aware that there were these developments in severance payments, that there were private schemes and that the whole tax system was out of date in relation to modern schemes. He said that the whole thing would be looked at and that suggestions would be brought before the House of Commons. That has not happened. What the Financial Secretary has said is merely what could have been properly said two years ago. The Government should have looked at the matter and brought forward proposals.
It is not the job of back benchers on either side of the Committee to bring forward a watertight scheme to cover all sorts of possibilities. Only the Government have the resources available to them, but they have not done this. The Financial Secretary is not making any contribution to the solution of our problem beyond saying that we ought to wait until the precise form of Government law on severence payment has been decided.
Mr. Green: I am sure that the hon. Member does not want to be unfair. I pointed out to my hon. Friend, and I saw him agreeing with me, that the vast bulk of redundancy payments are not treated as being normal earnings and normal income. The new Clause therefore would really not do much and there would be great risk of avoidance.
Mr. Diamond: I will deal with the difficulties of the risk of avoidance, but
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I was dealing with the Government's failure to carry out a promise which the Chancellor of the Exchequer made at the time of a Budget speech that he would bring forward proposals dealing with the whole issue. He has not done so. That is the simple point which I am making. If that had been done, we could have had a proper scheme which we could have examined, with all the relevant points before us.
12.15 a.m.
As to the question of avoidance, I was not all that impressed by what the Financial Secretary said. I may not have followed his argument completely, but the challenge he put against the scheme proposed by the hon. Member for Crosby was that it opened the door to avoidance. It seems to me that that would apply not only under the hon. Gentleman's proposal but under the existing tax law. There is very little to prevent some of these things happening now. I may not have followed the hon. Gentleman's argument completely, but that is how it appears to me. However, that is a minor point. The major point is that we have had no proposals such as we were entitled to expect from the Government.
It is no sufficient answer to say that we have not got Government legislation on this and we do not know precisely what we should be catering for. We were promised Government legislation, but the Government changed their mind, being pushed away from the idea by the action or attitude of employers. If we have not yet got Government legislation and, every time they come near to proposing something, they run away from it, there will be a long time before we have satisfactory Government legislation with regard to severance payments and redundancy payments generally, and we shall never have a satisfactory arrangement in relation to the tax aspect of the matter.
Private schemes are affected. Private schemes are going ahead all the time. Negotiations are taking place between employers and trade unions representing employees, and many employers are alleging that the existing state of the tax law is a deterrent to working out a satisfactory scheme. Therefore, so far as there are private schemes going on, something ought to have been done.

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No one will attempt to usurp the right of the hon. Member for Crosby in saying what he wants done about this particular Clause. I only say that I agree with the Financial Secretary that it was very helpful that the matter should be aired and brought before us. It is a pity that the debate came on so late, but it has been well worth considering. I am sorry that the Government are not ready to come forward with a definite proposal.
Mr. Graham Page: I appreciate the point which my hon. Friend the Financial Secretary made about the possibility of tax avoidance if the new Clause were accepted as it stands. There is a very simple remedy for that. The Clause could be restricted to a capital payment proportionate to the wage in some way. That would be a simple but effective addition to the Clause.
I am very disappointed that my hon. Friend could not go further than he did in acceptance of the new Clause, because I think that the Government have been overtaken by their own legislation. They have been overtaken by the Contracts of Employment Act, and it is necessary for employers to put some confirmation in the written statement under that Act of what will happen on termination of the employment. By so doing they bring the payments within the tax law. To that extent, the Contracts of Employment Act has, by a side-wind, altered the tax position.
I am sorry that my hon. Friend cannot take the matter further tonight. Of course, I cannot press it further now. I am happy that he has accepted the principle, and, on that basis, I beg to ask leave to withdraw the Motion.
Motion and Clause, by leave, withdrawn.

New Clause.—(DEATH DUTIES; ADMINISTRATION EXPENSES.)
Reasonable administration expenses shall be allowed against death duties.—[Mr. W. Clark]
Brought up, and read the First time.
Mr. W. Clark: I beg to move. That the Clause be read a Second time.
The Temporary Chairman (Sir Samuel Storey): It will be in order to discuss at the same time new Clause No. 55—"Death duties; valuation of stocks and shares".
Mr. Clark: I am much obliged, Sir Samuel. My hon. Friend the Economic Secretary will realise that my right hon. and hon. Friends and I are not wedded to the wording of these Clauses. All we want to do is to have a short debate on the subject. I apologise as much as anyone for the lateness of the hour, but I think that a short debate on death duties generally in this connection would be valuable. Neither Clause seeks to reduce the rates of Estate Duty. The starting rate is now 80 per cent. but that is, possibly, the subject for another debate.
In the first Clause, we are attempting to get a claim for expenses against the gross estate. I am sure that the hon. Member for Gloucester (Mr. Diamond) will agree that if one employs an accountant to do one's books or prepare one's accounts, the accountancy charges are a legitimate charge against the profits of the business. In the case of an estate, whether small or large, the executors or administrators are put to a certain amount of professional expense, either legal or accountancy, and there is no possibility of charging that expenditure against the gross estate. Consequently, it is high time that an allowance should be given against the gross estate.
I appreciate that the wording of the Clause is far too wide for the Government to accept it, but its spirit is that something should be done. Obviously, there would have to be limits; whether a percentage of the gross estate or only the legal expenses, I am not arguing. An allowance should, however, be given for the administration expenses of any estate, whether large or small.
The second of the two Clauses deals with the valuation of assets for Estate Duty purposes. Anybody who has had anything to do with estates knows that if the executors take shares in the estate, for example, they are unable to deal with those shares until they obtain probate. Depending upon the complications of the estate, probate can take a long time, sometimes over a year, but the average, being fairly expeditious, would be two or three months. This means that after somebody's death, nobody is able to sell the shares and not until two or three months after the date of death can anybody deal with the assets of the estate.

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The new Clause suggests different dates for valuation. Again, we are not wedded to the wording of the Clause, which gives three alternatives: valuation at date of death, realisation value or valuation six months after death. This might be considered to be too generous to the estate or to the executors and it might be that one should stipulate realisation value or date of death value, or realisation value or the value six months after the date of death.
We are not making too much of that in our argument, but I ask my hon. Friend the Economic Secretary to assure us that very soon the Government will do something about death duties, because, first, it is anomalous that no administration expenses are allowed against an estate, and secondly, executors are sometimes put in an impossible position because of the date of valuation for death duty purposes of the assets of the estate.
Mr. Graham Page: I support my hon. Friend the Member for Nottingham, South (Mr. W. Clark). There is no fairness in not allowing the charging of administration expenses against estates, not only the normal legal expenses of obtaining representation to an estate, but the expenses of the realisation of the property, which must be realised to divide it between the beneficiaries of the estate, the commission on the sale of property, whether real property or shares, and the legal costs on the sale.
12.30 a.m.
In giving an example, I should declare an interest. The case to which I refer is at present going through my office. The estate is worth half a million pounds and the costs on the realisation of estate, £10,000 roughly, and the executors have to pay—
Mr. Diamond: Does the hon. Gentleman mean that in a case which his office is looking after he is going to allow more than £400,000, out of an estate of half a million, to go to the beneficiaries?
Mr. Page: I thought that the hon. Gentleman was going to make a serious point. What I am talking about is an estate of half a million pounds, spread over a great many shares, and a considerable amount of real property. The beneficiaries have to pay tax on costs
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of £10,000, and the Estate Duty on an estate of this size is 75 per cent. So that, in fact, the beneficiaries are out of pocket to the extent of £10,000 costs, plus three-quarters of that amount, which is another £7,500.
They are out of pocket because the law as it stands rules that they must pay all the expenses and 75 per cent. Estate Duty on those expenses—in other words, very nearly double the amount.
The other Clause concerns the evaluation of stock as at the date of death and when dealing with this, what happens is that one laboriously goes through the Stock Exchange List for the day after the date of death, takes a quarter up on the selling price of the difference between selling and buying price, and estimates the value of the stock as at the date of death. But one never realises at that figure. Of course, one may be fortunate. Stock may have gone up since the date of death, but it is a fiction to say that one is required to pay duty on the value as at the date of death.
What happens is that the executors have to borrow the Estate Duty from the bank, and pay bank interest accruing between the date of payment of duty and the date or grant of representation. So, interest has to be paid by having to borrow money and then, to add insult to injury, one has to pay interest on the Estate Duty from the date of death until the time that it is paid. All this is in addition to having to pay on the value of the shares at the date of death, when they cannot possbily be realised at that date, and I think that we should get some realism into this and look at the whole matter from a practical point of view.
Mr. Maurice Macmillan: These two Clauses taken together are, in fact, proposals which I think it will be agreed would make a really substantial alteration in principle over the whole system of paying death duties. I would not argue with my hon. Friend the Member for Nottingham, South (Mr. W. Clark) about the wording of the Clauses. He has drawn the first one as widely as possible for the purpose of having a debate, unfortunately rather early in the morning, but it is not on the details of the wording that I argue at this stage.

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My hon. Friend said he did not want to reduce the rate, but in practice, the effect of the Clause about administration expenses would tend to do that since they are, rather naturally, thinly spread, proportionate to the size of the estate. It would mean a percentage reduction over the whole field of estate duty and it might well be argued that that would be a fairer and more practical way of achieving what he wants. As I shall come to mention, there are certain considerable practical difficulties in his proposal.
My hon. Friend the Member for Crosby (Mr. Graham Page) referred with some emphasis to the date of death. This is a point which is inherent in a death duty which is an estate duty. I think it is fair to say that the arguments put forward on both these new Clauses are really suggesting that Estate Duty should become in some form at least, as to some part of it and its method of administration, an inheritance duty. I quite accept that in practice property cannot change hands on death without incurring a good deal of expense. To an ordinary person there is a sort of inherent feeling that those expenses, like others, ought not to be charged to tax, but apart from the wording of the Clause, and whatever its wording, it would be a quite difficult decision to make, to know what would be a reasonable deduction, and so on.
The cost of administration, for example, cannot be split up among various items of property, and it does seem illogical to allow deduction from the value of the Estate Duty as a whole and relief at the full rate, if the expenses were incurred on particular items attracting the lower rate of duty. Again, it would not be possible to make deduction till the administration of the estate were complete, by which time Estate Duty would have been paid. Almost every case would, therefore, require corrective accounts to be submitted to the Estate Duty Office, and there would be a considerable addition of staff needed; so the cost of collection would be increased at the same time as the yield was diminished.
The main objection to the Clause, however, is one of principle. Administration expenses were deductible for the
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purposes of Legacy Duty and Succession Duty, but these were what were technically known as acquisition duties-which only sought to tax the actual benefit to the legatee or the successor, and these were abolished in 1949. The deduction of expenses does not really fit into the concept of Estate Duty, which is a mutation duty imposed on the total value of separate items at the time of death without regard to destination. Either one looks at what the beneficiary gets, which is the net sum, or at what the estate is worth at the time of death, which is the gross sum. If expenses arising after death were allowed there might be a case for bringing into the value of the estate the increase in value during the period of administration.
Turning for a moment to the other new Clause, No. 55, the purpose of it is clear. I think that in a time of slump the fall in the value of shares in an estate awaiting probate could indeed bring a considerable amount of hardship, but I am happy to say that that has not been the general experience; even in cases where share values were falling the Inland Revenue has not had complaints or cases of hardship brought to its notice.
Again, I would not rest the argument about the practical difficulties on the wording of the Clause but on the trouble of having a variable duty at all. If we tried to solve the problem by means of an optional date of valuation there would be quite a lot of administrative complications. To begin with, what sort of period would one extend this to? I agree that stocks and shares are a most vulnerable form of property in a time of slump, but other assets—land—may well suffer. I think that if one did have this sort of concession it ought to apply not only to stocks and shares but to all property on equal terms. There is the difficulty that the executor is not the only person responsible for the payment of death duty. Trustees of settled property and donees are also liable for duty on property in their hands. It would be difficult to allow the executor to impose his preference if there were any conflict of interest.
The hon. Gentleman said that executors were put in a difficult position by the present law. I think that they would be left in a difficult position by the adoption

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of new Clause No. 55. There would inevitably be difficulties of delay in administration. The executors might have to wait till the end of six months before obtaining probate so that they could tell which was the most advantageous date, and it might even be necessary to make a duplicate valuation. I think that in many cases it would add to the burden of executors, and in some cases the option of choosing the date could be embarrassing. Take, for example, the case of a large estate consisting mostly of a large holding of shares in a few companies whose value is likely to be affected by the death. There might be some conflict of interest between the live and the dead members of the family or trust, who were shareholders in the companies.
Again there are the difficulties which my hon. Friend mentioned and which exist now. They would still exist. I refer to the difficulties of having to make arrangements for the provisional payment of duty. The new Clause does not deal with the assets which have changed their character between the date of the death and the end of whatever period may be decided upon. There is also the question of company shares being devalued by the issue of bonus shares. There are many of these examples of administrative complication. However, the main reason for resisting the Clause, particularly this year, is the loss, although I agree it would not be heavy over a long period. It might be of the order of £5 million a year. There would be an initial extra cost, decreasing as the years went by, it is true, arising from the inevitable delay in obtaining probate. This year it would amount to some £10 million to £15 million.
The purpose behind these two Clauses is clear, and it is fair to say that, particularly with regard to the problem which new Clause No. 55 seeks to solve, in the case of slump there would be some possibility of considerable hardship. I do not think, however, that I can recommend the Committee to accept that new Clause this year. On new Clause No. 50, apart from the practical difficulties, there is the inherent difficulty of principle. This is a step in turning an Estate Duty into an inheritance duty. I know that some of my hon. Friends, and perhaps
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even some of my right hon. Friends, might not regard this as necessarily a backward step, but it is one that cannot be readily discussed further at this time of the morning, and certainly it is one which the Chancellor could not include in this year's Finance Bill.
I hope, therefore, that my hon. Friend will not press the Clause now.
Question put and negatived.

New Clause.—(INCOME TAX: CARRY FORWARD OF RELIEF FOR QUALIFYING PREMIUMS.)
For subsection (2) of section 23 of the Finance Act 1956 (Retirement annuity relief) there shall be substituted the following subsection:—
"(2) If in any year of assessment a reduction or a greater reduction would be made under this section in the relevant earnings of an individual but for an insufficiency of net relevant earnings, the amount of the reduction which would be made but for that insufficiency (less the amount of any reduction which is made in that year), shall be carried forward to the next following year and shall be treated for the purposes of relief under this section as increasing the amount of the qualifying premium payable in or for that following year and so on for succeeding years as necessary until fully relieved."—[Sir H. d'Avigdor-Goldsmid.]
Brought up, and read the First time.
Sir Henry d'Avigdor-Goldsmid: I beg to move, That the Clause be read a Second time.
This perhaps is a Clause which is particularly suitable to be presented at this hour when the audience is few, because it deals with a very limited class of taxpayer, and seeks to remove an injustice which that limited class of taxpayer suffers. The class of taxpayer to whom it refers is the individual who is self-employed in a trade or profession with a variable income which has been in the neighbourhood of £7,500 or more. It is not a very large class, but the background for the Clause is as follows.
When Sir James Millard Tucker reported some years ago, a serious attempt was made in the Finance Act, 1956, to embody many of the recommendations of his Report, particularly with regard to putting the self-employed person on a par for various taxation purposes with the salaried employee. It was provided in Section 22 of that Act that such an

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individual was allowed to deduct from his net earnings in a year the amount of any premium that he paid in that year under an approved contract for a life annuity on retirement, a scheme which in the case of employed persons is known as a top hat scheme, and this was an attempt to extend the advantages of the scheme to self-employed persons.
The Section went on to describe the amount of the deduction, which it termed a qualifying premium. It was limited to 10 per cent. of the person's income or £750 whichever was less. There was, however, a further amelioration granted so as to meet the difficulties of the self-employed person with a fluctuating income. He was allowed to make up another year the shortfall of income in any year in which 10 per cent. of his income did not amount to as much as the approved insurance premium. This was allowed as a carry-forward for following years.
However, by some accident of drafting which did not apparently come to the notice of the Committee at that time, the limit of £750 remained applicable in any one year despite the shortfall provisions. The result of this was that, to take the extreme case of an individual who had taken out a policy with an annual premium of £750, if he had a shortfall of income in any year so that it fell below £7,500 and, therefore, 10 per cent. of it did not come up to the amount of his insurance premium, £750, the carry-forward provisions were not of any value to him, because even if he had an income of £10,000 next year, the maximum deduction in respect of the insurance premium was £750.
This is a technical point which applies to a very limited number of people and I imagine that the cost to the Exchequer is nil or so small as not to be comparable to the cost of the stamps that we discussed recently. I also think that it is a valuable point that we seek in this Committee to try to do justice between one taxpayer and another, and wherever these anomalies exist, whatever the time of night, it is our duty to bring them to the attention of the Government for discussion to expose the case—not a very hard one in this instance, but there is a certain hardship which could, it seems to me, be reasonably overcome.
12.45 a.m.
Mr. Green: I accept that my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) has pointed to an unintentional anomaly produced by the provisions of Section 23(2) of the Finance Act, 1956. The point was brought to our attention last autumn by the Institute of Chartered Accountants in England and Wales, and again early this year by the corresponding Scottish Institute.
My hon. Friend is right. So far as can be established, the anomaly applies to a very few cases only, but it is a real anomaly, and because it applies to a very few cases, it was decided that the proper way to deal with it there and then was for the Board of Inland Revenue to authorise a new extra-statutory concession to deal with this technical but real point.
The terms of the concession were made known in a notice issued to the technical Press early in April, and the concession will be reported to the Comptroller and Auditor-General and published in the annual report of the Commissioners of Inland Revenue in the usual way. I ask my hon. Friend to study the terms of the extra-statutory concession which I believe meets the point which he has described tonight, and as I have seen it put forward by these bodies from outside.
The Clause is defective from a drafting point of view, and although in this Committee I never seek to make that a reason for rejecting a new Clause, one has to point that out to one's hon. Friends if they still want to put it down on Report. Perhaps my hon. Friend would like to consider between now and Report whether this extra-statutory concession does not fully meet his case. If it does, I suggest that the Clause is unnecessary in this Bill. But if my hon. Friend is not satisfied that it meets the case, perhaps he would like to reconsider the Clause, and I shall endeavour to help him on the drafting point. On that offer, I hope that he may feel that he need not press the Clause.
Mr. Mitchison: It is late—or early—but I wonder why the Government have not done anything about this. This is, apparently, an anomaly on a small scale. It is admitted to be an anomaly. It is not a very costly matter. It came

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to light last autumn, and an extra-statutory concession was made in written form, as these concessions are. I have never liked these extra-statutory concessions. I have never quite understood the reason for them.
Why do the Government leave it to their hon. Friends to bring them forward in statutory form—right or wrong in the drafting does not matter for this purpose—instead of doing it themselves? I am rather puzzled about this. I hope that the Minister will be able to explain how this has happened.
Mr. Millan: This point about extra-statutory concessions is worth pursuing for a moment or two, because there is considerable doubt among hon. Members, as well as among people outside, about the basis on which the Board of Inland Revenue decides that an extra-statutory concession should be granted in the first place.
What statutory authority is there for the Board of Inland Revenue making extra-statutory concessions? Why did the Board choose to do it in a case like this, and not in other equally worthy cases and anomalies which are brought to the attention of the Government from time to time?
There is another new Clause which one of my hon. Friends will move later this morning where the same kind of extra-statutory concession could equally well apply, but it has not been applied there. I wonder whether the Financial Secretary could say a little more about these extra-statutory concessions.
I see no reason why, if the Government want to get rid of this anomaly, they should not accept the Clause. I am not terribly enthusiastic about it, but if this is an anomaly and the Government want to put it right, I do not see why it should not be done by putting a Clause in the Finance Bill, rather than by an extra-statutory concession. The hon. Gentleman ought to give us a little further explanation of this.
Mr. Green: I am happy to try to answer that question. Both the hon. and learned Member for Kettering (Mr. Mitchison) and the hon. Member for Glasgow, Craigton (Mr. Millan) heard me say that I accept that this is an
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anomaly. We have met it as quickly as we can with an extra-statutory concession, which was produced in April, and I have offered the Committee to look at the matter to see whether it can or cannot be satisfactorily dealt with by Report. We have sought to meet what is admitted to be an anomaly. I think that that was not an unfair offer to make.
Sir H. d'Avigdor-Goldsmid: I am a little uncertain about the statutory foundation for an extra-statutory concession and I must consult those who know more about these matters than I do to see whether they are satisfied to live with an extra-statutory concession. The least I can do is to reserve their right and mine in the matter to put the Clause down again on Report. I can then do so if the interested people feel that an extra-statutory concession does not meet the point which they have raised. I beg to ask leave to withdraw the Motion.
Motion and Clause, by leave, withdrawn.

New Clause.—(EXEMPTION FROM TAX FOR ANNUITIES PAID BY WAY OF COMPEN SATION FOR NATIONAL SOCIALIST PERSECUTION AND LOSS OF OFFICE THEREBY.)
Notwithstanding subsection (1) of section 22 of the Finance Act 1961, annuities payable under the Federal German Compensation Law for Public Service (B.W.G. öD) shall not be regarded as income for any income tax purposes, provided that any such annuity has been awarded and is paid on condition that the recipient thereof has renounced such further or other claim or claims as he might otherwise have possessed for tax-free compensation under BEG (Federal Compensation Law) for racial persecution and such exemption shall operate retrospectively from the date of the granting of such annuities.—[Mr. Gurden.]
Brought up, and read the First time.
Mr. Gurden: I beg to move, That the Clause be read a Second time.
I make no apology for keeping the Committee at this late hour, because it is important to get this matter cleared up. I am not clear whether my right hon. Friend is in sufficient sympathy with the new Clause to shorten the proceedings by telling me that he will give me what I have requested.
Hon. Members may think that it is a very odd situation that those who have

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suffered under Nazi persecution should be taxed on their compensation, but that is the case still for a few people. Using the words of my hon. Friend the Financial Secretary, I can only say that it is an unintentional anomaly.
Compensation was given—in many cases very much less than had been claimed—to those who had suffered under Nazi persecution, and later the House made changes in a Finance Bill to free those who received this compensation from tax on it. I may be wrong, but I believe that it was an international agreement that those who had suffered loss should not be taxed on the compensation. It is, after all, not an income which ought to be chargeable to tax. It is compensation for loss of property and goods which these people owned in countries which were taken over by the Nazis.
This seemed to be all set to right, but it has come to the notice of some of us that the German Government did not compensate all these people who were still alive—fortunately some of them are still alive—under this Federal compensation law.
One of my constituents, a Mr. Kollman, had his compensation claim changed from the ordinary Federal compensation law to another Federal law, but in respect of compensation for public service. That, in effect, is compensation for loss of office. Mr. Kollman—and I want to make it clear that he was not a German but a Czech—accepted the change in his compensation payment from the ordinary law to the one I mentioned because he was told, on being threatened by the German Government, that his claim would not be admitted unless he changed it to the other law.
No justification was given for the change. Several cases like this have come to my notice. Certainly in Mr. Kollman's case no reason or excuse was given by the German authorities. It should be remembered that under the ordinary Federal compensation law Mr. Kollman would have paid no tax. The Germans were recently asked why the change from one law to another was made, but they reply saying that our difficulties are domestic. One cannot blame Mr. Kollman for accepting the change, for at the time this House had
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not put to right the question of Income Tax payable on this compensation. It was at a later date that the Government attempted to do justice to these people.
When it was found that the Finance Act, 1961, and other legislation did not cover the situation, attempts were made to put the matter right. Those attempts were not successful in Britain, and Mr. Kollman wrote to the German Government asking them to put his claim back under the ordinary Federal compensation law so that he would not be liable to Income Tax, but they refused. The Germans claimed that this was a purely domestic matter for Mr. Kollman in this country, and I suppose that they were right.
In raising this matter I am not asking for any breach of the existing principles which operate in these cases. The principles, as I understand them, have been established so that compensation paid to these people, who lost everything in Czechoslovakia and elsewhere, should not be charged for Income Tax. As I said, this is not an income, but compensation for loss. Not much money is going to Mr. Kollman. The Germans whittled down his claim to the lowest possible figure.
It might interest the Committee to know some details in Mr. Kollman's case. He lost all but one of his relations. Including cousins and other relatives, 60 people went into the gas chamber. Every bit of the property owned by those 60 people was confiscated by the Germans. In terms of value, that property was worth about £30,000. Naturally Mr. Kollman is getting a very small part of that sum in compensation—a small, quarterly payment—but even that is subject to Income Tax. Fortunately, the man is able to earn a living as a teacher. He married a Birmingham girl, and they live in my constituency. He is subject to tax on his earnings as a teacher, of course, but this compensation should clearly not be taxed.
I will not go further into the argument, because it has all been discussed during the passage of an earlier Finance Bill. As I say, it was agreed, not only by this country but by others, that this compensation should not be taxed, and I therefore hope that my right hon. Friend will be able to accept this new Clause.
1.0 a.m.
Mr. Boyd-Carpenter: This is obviously a subject that commands the sympathy of the Committee and, if I may say so, I particularly admire and respect the characteristic persistence with which my hon. Friend the Member for Birmingham, Selly Oak (Mr. Gurden) has pursued two successive Financial Secretaries on the particular case to which he referred, and which, as he has indicated, lies behind this new Clause. I am afraid, however, that there are very real difficulties in meeting him on it, and it might be helpful to the Committee if I were briefly to describe what has been done on the subject.
To begin with, the payments made by way of compensation by the German Government were subject to tax in this country in the ordinary way as income, but by Section 22 of the Finance Act, 1961, a provision was inserted in our law on the following lines. It was provided that where the compensation was not subject to tax in Germany, that type of compensation should not be taxable here As my hon. Friend has indicated, a number of other countries concerned took similar action.
That, of course, still left taxable here those forms of compensation which would have been taxable if the person concerned had been in Germany. There were two good reasons for this. The kind of compensation which German law exempted from tax—and which we therefore followed in the Finance Act, 1961—was true compensation payments in the sense of payments for personal injuries, loss of and damage to trade or profession, and so on. On the other hand. German law did not exempt from tax such matters as the restitution to an individual of the social security benefits or public service pensions which, if they had never been withdrawn by the Nazis but had continued to be payable, would have been taxable. The German Government have restored them, but restored them on that basis. Therefore, our legislation in 1961, as did the legislation of other countries, left them similarly exposed to tax.
The Committee will probably think that reasonable, and it is also right to assume that the German benefits—which, under German law, are taxable—were calculated for compensation purposes on
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the basis that they would be subject to tax. Therefore, the recipient here remains subject to our tax. There is no question of double taxation; in so far as German tax is paid, that will be credited to the taxpayer under the double taxation agreement with the Federal German Republic.
I agree that this case, from the point of view both of my hon. Friend and of his constituent, is rather provoking. The original claim was in respect of a form of compensation exempt from tax under German law and, therefore, since 1961, under ours; but the discussions and negotiations of my hon. Friend's constituent had with the German Government resulted in the matter being settled on the basis of the restitution of his public service pension which, had he been in Germany, and had there been no Nazi persecution, would have been taxable. Had he been in Germany now and had it been restored to him it would have been taxable and, therefore, under our 1961 legislation it is also taxable here.
I can understand his disappointment with the result of his discussions with the German Government and that the compensation awarded to him was in a taxable form, but I think my hon. Friend will appreciate that it would do violence to the very proper course on which this Committee decided in 1961 if we were to go further than the German Government and other countries and proceed to exempt from taxation here payments which are taxable in Germany and which the Germans no doubt calculated on the basis that they would be taxable.
Therefore, much as I sympathise with my hon. Friend's constituent and much as I admire the pertinacity of my hon. Friend in pressing this case, I really do not think that I can advise the Committee to meet him by an alteration of the law which, I think, from every significant point of view would do violence to the not unsatisfactory solution at which we arrived on this problem.
Mr. Gurden: I am afraid that I do not go all the way with my right hon. Friend in his argument. Quite clearly, my new Clause would not create a new principle because it would apply only to those cases where a claim had been recognised under the Federal compensation law. It would not apply to everyone who accepted compensation for

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public and welfare services. Clearly, my constituent had no claim for public service and no claim for welfare service. He had very little employment, and what he had was in Czechoslovakia and not in Germany. I cannot agree that my right hon. Friend's case is entirely sound. I appreciate the point that he makes, but for the life of me I can see no justification for withdrawing the Motion and Clause. I must leave it there.
Mr. Boyd-Carpenter: I see my hon. Friend's point, but, with respect, I think that he is on a false point. What he is saying now, and it is consistent with the Clause, is that it would be all right that compensation of this sort should be taxable in Germany but that it should be exempted from tax here if it has been accepted in negotiation in lieu of a nontaxable form of compensation. I think that one has only to analyse the proposition to see that that would hardly be fair. It would mean that those who had originally put in claims for a taxable form of compensation would be taxable, but that those who put in claims in a form not acceptable to the German Government, and therefore the claims had been settled on the basis of an award of another form of compensation, would not be taxable.
I think that on reflection my hon. Friend will see that it would be difficult to satisfy people in the first category that they had been fairly treated if people in the second category were given exemption from tax as this Clause seeks to do.
Mr. Anthony Fell: My hon. Friend's point surely arises from the fact that this man, his constituent, was forced into a category which he should not have been in. I accept, of course, the fact that my right hon. Friend has no control over that, and that neither have the Government perhaps, but surely it is not beyond the wit of the Government to make some sort of exception in an exceptional case of this sort.
Mr. E. G. Willis: Surely this is a case in which we ought to use what has been talked about previously, the extra-statutory authority, in order to do justice.
Mr. Gurden: The change in the compensation was made before the House
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dealt with the matter in 1961. It was imposed by a German court and there was no opportunity for my constituent to appear before that court. This was all done without his knowledge and in his absence and he had either to sign acceptance or there was nothing. It did not appear to matter at that time. It was the action of the House of Commons that made it matter afterwards.
Mr. Boyd-Carpenter: The important point which my hon. Friends are on relates to the action of the German Government or, as my hon. Friend has just added, the German court. If it is a fact that this man was awarded the wrong form of compensation by the German court or the German Government—that to which under German law he would not be entitled—then the remedy seems to be to approach the German Government and have the matter righted. My information does not square with that of my hon. Friend the Member for Selly Oak but he may well be right and I may well be wrong. If he likes to discuss the matter with me I am prepared to consider whether in the circumstances an approach should be made to the German Government. I think that that, rather than create an obvious anomaly in our tax law, would be the right way to handle it.
Mr. Gurden: Then I would be quite willing to withdraw. An approach has been made to the German Government, but in the circumstances I beg to ask leave to withdraw the Motion.
Motion and Clause, by leave, withdrawn.

New Clause.—(FEU DUTY.)
(1) In assessing the liability to income tax of any person for the year 1963–64 or any subsequent year, any payment of feu-duty made by that person shall be treated as a general charge on income.
(2) No person shall by virtue of this section be liable to pay any more tax than that person would have been liable to pay if this section had not been passed.—[Mr. Willis.]
Brought up, and read the First time.
Mr. Willis: I beg to move, That the Clause be read a Second time.
The new Clause seeks to revert to the pre-1963 practice in Scotland of allowing feu duty to be treated as a general charge against income. The intricacy of calculation in connection with this matter is not

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a field into which I would normally enter even at my brightest and best.
Mr. Callaghan: Where are the Law Officers?
Mr. Willis: That is another matter, and it shows that I am not at my brightest and best that I have not called attention to their absence. After one o'clock in the morning I enter this field with even greater trepidation, but I feel bound to raise the matter even at this hour because owner-occupiers in Scotland have felt a great deal of concern about it. I have had correspondence with the Financial Secretary about it and I should like to thank him for his letters.
Many owner-occupiers when they received a Schedule A form for Income lax at the end of last year found that they were being charged with certain sums. They were worried and could not understand this because they thought that with the abolition of Schedule A there would be no more tax to pay. They could not understand why they had to pay a certain proportion of their Income Tax in January. Many of them spoke to me about it at the time and I believe that my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) had a Question down on the subject. People then began to have a vague understanding that in future feu duty would not be allowable as a general charge against income and that Income Tax would be payable on it. This meant in a number of cases, where assessment under Schedule A was offset by maintenance charges, that people found themselves worse off as a result of the abolition of the Schedule A assessment than they were prior to that abolition. I am indebted to my hon. Friend the Member for Glasgow, Craigton (Mr. Millan), who has very nobly tried to assist me to understand this matter. I am not sure that I have been a good pupil, but that is no fault of his, and I have no doubt that, if he catches the eye of the Chair later on, he will be able to explain matters much better than I can.
1.15 a.m.
As I understand it, the history of the matter and the Government's argument on it go something like this. Prior to 1940, feu duties were not intended to be treated as a general charge against income, that is, any kind of income, but only as a set-off against Schedule A tax
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which was paid. Feu duties were originally, prior to 1940, paid gross. Therefore, if Schedule A tax was assessed at tax on £20 and there was a gross feu duty of £10, Schedule A tax would be reduced to tax on £10. If Schedule A tax was not payable, because of maintenance claims, then feu duty was payable gross and there was no further adjustment; in other words, there was no tax allowance for that feu duty paid. That was the law. But the practice, as the hon. Gentleman admitted in his letter to me of 9th June, was rather different. The practice was that it was allowed as a charge against income.
In the Finance Act, 1940 by Section 17—and later, in the Income Tax Act, 1952, by Section 177—there was a change providing that feu duty would be paid net. In that case, with a Schedule A assessment of £20, Schedule A tax was payable on £20 but tax deducted from the feu duty of £10 was retained as a set-off. If this had been the only change made in 1940, then, where no Schedule A tax was payable, the tax deducted from feu duty paid would have had to be paid over to the Revenue.
In 1940 another change was made which, according to the Government, was a mistake, namely, that the feu duty became a general charge on income. Even so, there was no effective change when Schedule A was payable, but when Schedule A tax was not payable, because of a maintenance claim, the tax deducted from the feu duty paid was not accounted for to the Revenue.
This unexpected result, according to the Financial Secretary's letter to me of 4th May, would have been of only minor importance if maintenance claims eliminating Schedule A tax altogether had been few; but, because Schedule A valuations remained at the pre-war levels and the cost of repairs continued to rise, the number of cases in which Schedule A tax was eliminated altogether increased. Therefore, the anomaly of allowing feu duty as a general charge against income increased in importance. This was the position prior to the abolition of Schedule A.
The opportunity was taken when Schedule A was abolished, in 1963, to put this matter right, by providing that feu duties would no longer be treated as a general charge on income.

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As I understand it, that is the Government's argument. I hope that I have stated it correctly.
Mr. Green Mr. Green indicated assent.
Mr. Willis: My first point is that the Government say that the change in 1940 was made for purely technical reasons. They imply that the result of making feu duties a general charge on income was a mistake. I am not so certain about this. If it was a mistake, why was it not rectified during the period which has elapsed since 1940? Why was it not rectified particularly in view of the fact that the Government could clearly see that this was becoming increasingly important and that it was becoming more and more the practice, as the Financial Secretary has said, for the maintenance claims completely to eliminate Schedule A, with the result that the feu duty was becoming increasingly a general charge upon income?
I find it difficult to understand that the Government did nothing about this. I cannot help feeling that what happened in 1940 was that the Government accepted what had been the practice in Scotland before, namely, that this situation had obtained in practice even though it had not been the legal position. It is difficult to understand why no change was made if it was simply an error.
The Financial Secretary admitted in his letter to me of 9th June that prior to 1940, feu duties were, in practice, allowed as a general charge on income. He will remember this.
Mr. Green: The hon. Member is being fair and accurate. The words I used were that
"until 1940 there was no distinction between feu duties and rents under short leases for tax purposes".
An owner-occupier who paid a feu duty could not deduct from it more than the Schedule A tax that he paid.
Mr. Willis: In his letter to me of 9th June, however, the Financial Secretary said:
"When we exchanged letters on this subject recently I said that until 1940 there was no distinction between feu duties and rents under short leases for tax purposes. I have since been informed that, while this was the law, it seems likely that in practice the Inland Revenue did not trouble to restrict maintenance claim repayments by proprietors of feus to the
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balance of the tax under the net Schedule A assessment after deducting the amount of tax on the feu duty. In those days maintenance claims were rare and feu duties small, and the point was no doubt regarded as unimportant."
I take that as admitting that the practice in Scotland prior to 1940 was what was made legal—accidentally, according to the Government—by the steps taken in 1940.
Therefore, what was done in 1963 was to reverse a principle which had been applied to feu duties in Scotland, not simply for the short period of 24 years, to which the hon. Gentleman referred in his letter to me which I received tonight, but as long back as one could wish to go. This seems to me to have always been the practice.
Mr. Callaghan: It was an extra-statutory concession.
Mr. Willis: I do not know whether it was an extra-statutory concession, but this appears to me, according to what the Financial Secretary has said, to have been the Scottish practice until 1963. This practice should not have been reversed by the legislation that was passed last year. It should have been continued and this would have been more in accord with the Scottish attitude towards feu duties.
In the course of our rather lengthy correspondence, the Financial Secretary says that feu duties are similar to rents and all sorts of other things. I should have thought that the feu duty was more in the nature of an interest payment. It is certainly looked upon by the legal profession in Scotland more as an interest payment than anything else. I think that it is true to say that when feus are advertised for sale in Scotland they are, in fact, advertised as such. Therefore, it seems to me that they are very much akin to the interest which one pays on mortgages, and which are accepted as a general charge against income. I should have thought that that was the analogy more applicable than the analogy which the Minister has made in the course of his long correspondence with me on this subject.
Then, because there is this Scottish legal attitude, I submit that we have another reason for saying that what was the practice until 1963 in Scotland should have been continued afterwards.

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The whole question of general charges against income is very involved. It is full of anomalies, and it is very difficult for the ordinary owner-occupier to understand why his feu duty cannot be accepted as a charge against income while his bank overdraft can be. There seems to be no rhyme or reason in that difference, and Scottish owner-occupiers think that there is more justification for the feu duty to be accepted as a charge against income than charges on a bank overdraft.
Does the Minister realise that a great many owner-occupiers are now worse off than they were prior to the abolition of the Schedule A tax? By virtue of the change which has taken place, an extra burden has been placed on owner-occupiers. That is particularly unfortunate in Scotland for, if the Government wish to encourage home owenrship, as I believe they do, then the Government's practice must not be to prevent it. In Scotland there has been considerable discussion over the last two or three years about whether we are building sufficient owner-occupier houses. This. I would point out, has a relationship to industry, and it seems to me that there is a case for encouraging more owner-occupiers in Scotland. It should be encouraged to a much greater extent proportionately with the population. If the Government would like to see this, then it seems that we have another argument for accepting this Clause.
I will say no more, because I think that the Minister is pretty fully seized of the facts. I hope that he has listened to my few points and, having heard them, I ask him to be more kindly disposed towards my case and perhaps even to promise to look at this matter and introduce a Clause of his own to meet the points which I have raised.
1.30 a.m.
Mr. Bruce Millan: I rise to make only two points. First, how much would this concession cost if the Clause was accepted? My own impression is that it would not be much. Second, would the Minister deal with this question of anomalies in regard to charges on income, for example, mortgage interest, which is accepted as a general charge on income? That is so although it re
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lates specifically to one particular item, namely, the purchase of a house. Of course, there is no corresponding hypothetical income now against which that can be set, as there was previously, when we had Schedule A on owner-occupiers. The main argument which I think the hon. Gentleman will put will be that feu duty is very much analogous to rent; but, after all, mortgage interest is also very much analogous to rent, because rent is, as I think the economists would describe it, merely a form of interest payment.
The whole question of charges on income is muddled at present. I do not believe that there is really any discernible principle running through the tax law on this matter. For example, the anomaly of the difference between the treatment of bank overdraft interest and the treatment of hire purchase interest ought to be looked at. The whole question seems to be full of anomalies. The fact is that what the Government did in 1963 did impose on certain owner-occupiers in Scotland not a reduction in their total tax liability, because of the abolition of Schedule A, but an increase. It does not seem to me that there was any reason in principle why that should have happened, if my hon. Friend's suggestion had been adopted in 1963. I think that the Government ought to look at the whole matter very carefully.
Mr. Green: Perhaps I had better begin by answering first the first question by the hon. Gentleman the Member for Glasgow, Craigton (Mr. Millan) on cost, because this is, perhaps, the easiest one. So far as I can estimate it, the hon. Gentleman is quite right: the cost is small; perhaps £1 million a year. However, that, of course, is not really the point, although he was quite right to have asked that question. I hope that the hon. Gentleman the Member for Edinburgh, East (Mr. Willis) will forgive me if I try to deal first with the consequential questions which his hon. Friend raised. It is not from any disrespect to the hon. Gentleman the Member for Edinburgh, East. I promise him he was quite right in what he said—though I am not saying that it is necessarily the case that I accept it; but he put it perfectly fairly and quite rightly.
The whole matter as to whether mortgage interest or interest on other forms

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of indebtedness or acceptance of obligations should be distinct or should no longer be distinct perhaps from ground rent is, I quite agree, no doubt bound to be a perennial and debateable point. It is not disposed of by the new Clause. Rent has the distinguishing characteristic—at least, it is intended to have—that it confers on the payer of rent a right to occupation of land or premises. This is what rent is supposed to do. As to what is or is not rent I will come to in a moment.
Payment of rent conveys that right, and it is in this sense that it is perhaps distinguishable—though I dare not debate it further, for I am sure that I should be clean out of order—from the forms of interest payment which the hon. Gentleman has suggested. I quite agree that this is a very interesting subject for debate but I doubt whether it arises here. What does arise here, firstly, I think, is whether or not feu duty is properly called a form of rent. [Interruption] The hon. Gentleman raised this point. If he did not I certainly shall not pursue it, because I certainly would much rather not, but according to a note I took down of what he said, he queried whether it really was more analogous to a ground rent or more analogous to a mortgage interest. I think that he did.
Mr. Willis: My point was that it is more analogous to an interest payment. Advertisements for the sale of feus put it in this way.
Mr. Green: The only answer that I can give the hon. Gentleman is this. I will not pretend to give a sort of court judgment, because it would be foolish of me to try to do so, but I believe that, so far, it has been treated as a form of rent. I stand to be corrected on this, but I do not think that it has been successfully challenged in the courts. I do not say that no case could ever successfully be brought to prove that it should not have been so treated, but I think that this is the way that it has been treated so far, and so far this treatment has not been challenged successfully.
This being the case, the Inland Revenue has no option but to consider feu duty in the same way as it considers ground rents in England and Wales, and although I accept straight away that there are technical differences, I do not
1690
think the Inland Revenue, seeking to play fairly between England and Scotland, has any option, as the matter now stands, but to treat it as a form of rent. Therefore, the Inland Revenue must not seek to make rent allowable as a charge against general income in Scotland when it is not allowed to be a charge against general income in England. The hon. Member for Edinburgh, East may not agree with my argument, but I think that he is following me and I am not trying to be unfair.
The hon. Gentleman was right to read out the correspondence that I wrote to him, and I should like to pay him a tribute for being good enough to read sufficient of that correspondence and not to read selected parts of it. I agree with him that in practice the law was not really applied in Scotland. Neither he nor I were responsible for the law or the practice of the law. The law itself was not changed, and it did not really matter very much. It was not a matter that caused any anxiety either to the Revenue or to the payers of the feu duties.
The real difficulty arose after the war when, for reasons which I can well understand, the decision was taken not to proceed with the normal quinquennial revaluation for Schedule A purposes. The hon. Gentleman was quite right in saying that coterminous with that decision went the rise in repair costs, so that the gap between reality and the Schedule A valuation, and what could be set off against it legitimately for the maintenance and repair of an owner-occupied dwelling, widened at both ends.
The fact that that revaluation did not take place was one of the reasons why the application of the law affecting Schedule A had fallen way behind the times and it had become a tax which was costly to collect. If one knew the law one could always make a maintenance claim. One could get away with no Schedule A tax on the majority of dwellings.
Simply because one could not do it on a new house, but could on an old one, the anomaly was thereby made the greater. The anomalies were growing within Schedule A. The alternative solutions were as follows. One could have a complete revaluation of Schedule A to show that as a notional tax it was a

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proper one to retain. If one is going to retain a tax on notional income, one must revalue everything right up to the proper current valuation, and that will take a good deal of time and create a difficulty because people will not understand it. The other alternative is to abolish Schedule A and bring in a new code for taxing rents. Both these things were done in my right hon. Friend's Finance Act.
The consequence is that certain owner-occupiers who used to get the benefit of being able, because of an out-of-date valuation, to set off either the ground rent or the feu duty against the tax on their general income, which would not have been possible if a Schedule A revaluation had been properly carried out, no longer got that benefit. That is really the situation. But because that anomaly existed under which they were getting a totally uncovenanted benefit for a number of years, it followed, as it always must follow when that kind of anomaly exists, that because they were escaping—good luck to them!—for a number of years their share of the tax burden—not a great one in each case, but still a share—that burden was falling on other people. This was not an anomaly which could be kept if one was going to abolish Schedule A, which was the decision taken by my right hon. Friend's predecessor. It was hardly right to perpetuate the anomaly by some Clause in a Finance Bill.
I accept that the removal of a benefit, which is what we are really talking about, is resented by those who no longer have it. I entirely accept this, and I have to stand the racket in political terms for the removal of the benefit. But it would have been desperately anomalous to have perpetuated it, which is, I think, the only way in which I can meet the complaints of those who now find themselves paying a little more tax than they were before.
The generality of people has, I believe, benefited—there is no doubt about that—but a number of people have now found themselves paying more tax in this way. I have to accept that that is the case. But to try to perpetuate what I can only describe as a privilege—[Interruption.] Not only the present Government but our predecessors, the Labour Government, perfectly understandably, did not proceed with the process of revaluation on which alone this tax on notional income, which
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was the Schedule A tax, could be fairly assessed across all owner-occupiers.
I assure the hon. Member for Cardiff, South-East (Mr. Callaghan) that if he will think this through he will find that this is true. As his hon. and learned Friend the Member for Kettering (Mr. Mitchison) pointed out, this benefit did not apply to a new house. It required revaluation—
Mr. Callaghan: Why not let it be set off against general income? If the only argument is that one cannot set off one's ground rent, do that too. What about the analogy of a man with a bank overdraft which he is allowed to charge against his income? Is this not a similar situation?
1.45 a.m.
Mr. Green: I understand that argument. I thought that I had dealt with it. I also thought that there was a certain amount of acceptance, not necessarily of the force of the argument, but of the logic with which it was pursued. Perhaps the hon. Gentleman was not listening—not that I blame him for that.
I had better say a word or two about this, because one has to be careful not to perpetuate an inequity which benefits some people. It is because it is inequitable that it must hurt some people, because they have to bear the burden of the privilege which other people are getting.
Of course, it is open to argument whether ground rent, or feu duty, or whatever it is, should be allowed against general income, but I beg the hon. Gentleman to realise the consequences of advancing that argument. If we say that ground rent is not rent but an interest charge, we relieve people who pay ground rent, which is a charge permitting the occupancy of land or premises, which I would have thought was wrong. I am not a lawyer, but it has been held to be wrong. Perhaps the matter had better be tested again in the courts. If we do this, why should not we allow all rent against general income? Why should not a tenant have the same privilege?
Mr. Callaghan: The hon. Gentleman is now exposing the whole fallacy of the Schedule A case.
Mr. Green: I do not know from which end of the argument on Schedule A the hon. Gentleman is advancing his case. I do not know which end it is.
Mr. Callaghan: It does not matter.
Mr. Green: It matters enormously. On the one hand, he is saying that ground rent, though not all rents—or is he saying all rents?—should be charged against general income. So far, he has said that ground rents, or feu duties, should be charged against general income. On the other hand, he is saying—
Mr. Callaghan: I am saying that there is no logic in the Government's case, and never has been, and that they are displaying illogicality again. Either we allow rent as a charge against income, in which case we have no right to allow it only for the Schedule A taxpayer, but should allow it for the general tenant who pays rent, whether ground rent or rent payable to a landlord, or we close it up. The Government, for the sake of political expediency, have got themselves into this illogicality purely on Schedule A, and now they are incapable of defending themselves against my hon Friend.
Mr. Green: I am sorry, but the hon. Gentleman has not thought this through at all. It may be a most telling debating point to say that he thought of it years before I was heard of, but he has forgotten v/hat he thought of in the process. I do not have the wonderful memory which some people have, but I think that what the hon. Gentleman and his hon. Friends said about the abolition of Schedule A might make interesting reading. I shall look it up and let the hon. Gentleman know my findings at a later date. I do not think that he was making the same argument then as he is making tonight.
Let us come back to the Clause. That is what we are really talking about. This does not affect any of the arguments that I have made in response to the Clause. The law has so far held that feu duty and ground rent are not to be charged against general income. This is unquestionably the case.
I am sorry that as a consequence of the abolition of Schedule A and the new code of taxing rents, which the hon. Member must not overlook when he talks about this matter, certain people will pay some more tax, but what they are paying is the tax which they were managing quite happily to escape because Schedule A revaluations were not carried out initially by a Labour
1694
Government, successively by Labour Governments, and subsequently by Conservative Government. That is the truth of the matter. It is worth looking into the history to see where the story starts.
I cannot recommend the Committee to accept the Clause because—I do not wish to pin my argument on this—it is defective in drafting. If the hon. Member wishes to put it down on Report, I am prepared to tell him in which technical sense it is defective. I offer him that facility if he wishes to have it. But it is on the more general ground that if I accepted it I should be perpetuating an anomaly which I should find it impossible to defend that I ask the hon. Member to withdraw it.
Mr. Mitchison: It is very hard to get any lawyer to explain the differences between English and Scots law, because English lawyers do not understand Scots law and Scots lawyers do not understand English law. In this instance there is even more of a muddle because the Government, owing to their political deficiencies, have no Scots Law Officer in the House and have apparently not thought it necessary to have a representative from the Scottish Office here. We are left to the lucubrations of the Financial Secretary on what seems to be fundamentally a legal question.
I am not concerned for the moment with the history of the matter, which seems to me to turn on the question, "Is it right to regard a Scottish feu duty as something in the nature of an interest payment, a charge, or, on the other hand, as rent?" The right hon. Gentleman and the Treasury have apparently persuaded themselves that it is rent, because they say that it is in some way—as it is—associated with land. But rent is something paid by a tenant to a landlord, and in England, at any rate, it corresponds with an interest in the land which we call a tenancy. The landlord has a corresponding interest in the land; he has a right to go back on the land at the end of the tenancy. The rent is in the nature of a periodical payment which ends when the tenancy ends. I may be a long period—it is in a building lease—or it may be only a matter of a week or two. It is very elastic.
But the feu has two peculiarities which have nothing in common with that. One

1695
is that it goes on for ever, subject to one thing. It is a security. In other words, if the feu superior is not paid he can irritate the feu and take back the property. I think that irritating a feu is difficult, but I can say nothing about that. As my hon. Friend pointed out, feu duties are simply, on the other hand, a form of investment. I think that as an executor I am the owner of about half-a-dozen small feu duties. They are unmarketable things. They are sold by advertisement in the papers through writers to the signet or solicitors. I have never seen the property and never expect to see it. They go on being paid. I have no obligation in respect of the property, nor has a feu superior under Scots law.
The Financial Secretary is, perhaps, forgetting that there is something corresponding to a mortgage in Scotland. Talk in Scotland about equity redemption and one is not understood, but talk about bonds or dispositions in security and one is. That is their equivalent to a mortgage. There is no question but that an interest on a bond or disposition is chargeable against one's general income. When one looks at the real nature of these things one finds that one is dealing with something that is unknown to English law, something which represents a conception we do not understand. However, so far as one can look at it logically, it is far nearer a bond or disposition in security than it is to an English rent.
One talks about a ground rent, but what is it? I have never understood the difference between a ground rent and any other rent, except some of the very short rents. There are, for example, rent charges, which are another variety, and it would be interesting to know what the position is on that subject. They are a north of England matter as a rule, but I suggest that this is not a question of a number of people having successfully "got away with it"—I will not say "dodged the law"—and it is a question of whether it is fair to treat this kind of payment in this way.
On going into the matter further it may be found that what my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) said is the right answer and that a great many of these charges are illogical. As to keeping to what we
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have now, the feu, I suggest that the Government could consider, with the advice of the Scottish Law Officers and others, what it is right to do about feu duties.
To add a personal word, when I first saw the new Clause I said to myself, "This will be interesting" and I was inclined to think that my hon. Friend was wrong. Having heard his views on the subject, and knowing a little about it myself, I have come to the conclusion that he was perfectly right, not necessarily on the point about what has happened in the past but on the broad question of how to treat this kind of payment. I hope that, in these circumstances, the Government will undertake to look at the matter again and let my hon. Friend know their decision as soon as possible so that he may revert to it on Report.
Mr. Green: The hon. and learned Member for Kettering (Mr. Mitchison) has made a fair point and with most of his remarks I could not agree more. I certainly would not set myself up to argue the intricacies of this matter. Indeed, this is probably an issue for the courts to decide.
I have offered to consider this matter and I can assure the hon. and learned Member for Kettering that I mean that offer. Although I said that the hon. Member's new Clause as drafted is technically defective, if he wishes to see me about those defects I will give him my poor but honest views in an effort to help him correct those technical defects. I cannot give any guarantees about him raising the matter on Report' because that is a question of selection, which is not my function. I should, however, make it clear that even if we can get over those defects I suspect that will not resolve the real argument as to whether or not this is rent.
If the hon. Member would like to ventilate the general argument again, I will do my best so to get, in technical terms, his Clause framed that the argument can be revived, if it is selected. I do not think that I could make a fairer offer than that, and I do make it.
2.0 a.m.
Mr. Callaghan: I do not wish to introduce a note of acerbity at this stage, but I hope that the Financial Secretary

1697
will not go on saying that he is not competent to argue these things; if he is not competent to do so, he should not be there. This is not a matter for the courts but a matter for Parliament, and the Financial Secretary ought to be willing to tell us what he thinks is a charge on income that should be allowed against Income Tax. If Parliament can abolish Schedule A, it can decide a question like this, and it is no use the Financial Secretary hiding behind the courts by saying it should be taken to the courts to see whether they think it is matter of rent or interest.
Parliament can say what it is, and it is absolutely wrong that we should be left in a situation which has developed mainly as a result of the abolition of Schedule A. People should not have to pay more tax because of that abolition—it is ridiculous. The hon. Gentleman should go back to the Treasury and say "This situation cannot be permitted to continue—we shall regard this as a charge on income." In that case, a new Clause could be framed, and the difficulty dealt with. That is what his duty is between now and Report.
Mr. Green: Perhaps I may add a word, as I have had this no doubt very agile political proposition put to me. May I point out to the hon. Gentleman that he is not talking about the same things that we have been talking about. If he wants to put down a new Clause that deletes rents, however defined by the courts—and I am sorry that he does not seem to like the courts very much in a matter of this kind; but when he reads what he has said I do not think that he will want to stick to it—a new Clause quite different in character from this one, which makes rent a charge against general income, he is welcome to do so. I do not know whether or not it would be selected, but, if it were selected, we would have a debate.
That is not what this is about. This is about feu duty in Scotland. I have offered to help his hon. Friend as best I may to bring this into discussion if the new Clause is again selected on Report, and I cannot now enter into a great discussion on what should or should not be chargeable to general income—because not only would rent be called into question but travel to work, and the rest. If
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the hon. Gentleman wants to put down a new Clause to cover those general matters—who am I to stop him framing it?
Mr. Mitchison: With respect, this is not a matter for the courts, and I cannot think why the hon. Gentleman should think that it is. The question is whether this form of charge, rent, interest—call it what we will—should or should not be a deduction from Income Tax. The Financial Secretary said, and it seems sense, that it should be decided on whether it is to be regarded as a charge to income or as a rent on land. So be it—but what court is to decide that? I should not have thought that to be a question that a court could decide. It must be a matter for Parliament.
Mr. Willis: We have had an interesting little debate, and I am grateful for the support of my hon. and learned Friend the Member for Kettering (Mr. Mitchison) who, I think, summed up the matter and put his finger on the knub of the problem, which is: what exactly is feu duty, and what is its character? What I tried to argue—most inadequately, I admit—was that it was more in the nature of an interest payment—my hon. and learned Friend used some legal terminology about it which, I think, had the same meaning—than in the nature of a rent.
I also think, as I believe I said in my first speech, that this might have been the reason why, in practice in Scotland, no matter what the legal position was prior to 1940, or even after, it was allowed to be accepted as a general charge against income was the fact that it was generally recognised as an interest payment. It is an investment. The person who invests does nothing about it. He has no responsibility for anything. All he does is draw interest from the land.
I am grateful to the hon. Gentleman for his offer, of which I shall avail myself, to draft a new Clause for me, and I will put it down again. Of course, whether it will be discussed will be in the discretion of the Chair. In view of the offer which the hon. Gentleman has made, and in the hope that he will once again consider how a feu is regarded in Scotland and will consult the Scottish Law Officers, and to get their views, I

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beg to ask leave to withdraw the Motion.
Motion and Clause, by leave, withdrawn.

Schedule 9.—(REPEALS.)
Mr. Green: I beg to move, in page 37, line 43, column 3, at the end to insert:
"In Schedule 8, in Part IV, the words 'government stock registered or inscribed in the books of the Bank of Ireland in Dublin'."
This is a drafting Amendment to correct a small oversight. Indeed, if I may say so—I do not know whether I am trespassing in saying this—the next Amendment to the Schedule is also a drafting Amendment.
Amendment agreed to.
Further amendment made: In page 39, line 14, leave out "repeal relating to section 121 of" and insert:
"repeals relating to section 121 of and Schedule 8 to".—[Mr Green.]
Schedule, as amended, agreed to.
Bill reported, with Amendments; as amended, to be considered this day and to be printed. [Bill 168.]

YOUNG PERSONS (EMPLOYMENT) [MONEY]
Resolution reported,
That, for the purposes of any Act of the present Session to extend the kinds of occupations in the case of which the hours of employment of young persons employed therein are regulated by the Young Persons (Employment) Act 1938 and to increase the penalty for an offence against section 1 of that Act, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act of the present Session in the sums payable out of moneys so provided by way of Rate-deficiency Grant or Exchequer Equalisation Grant under the enactments relating to local government in England and Wales or in Scotland.
Resolution agreed to.

ANIMALS (RESTRICTION OF IMPORTATION) [MONEY]
Resolution reported,
That, for the purposes of any Act of the present Session to restrict the importation of live animals of certain kinds, it is expedient to authorise the payment, out of moneys provided by Parliament, of any sums required to defray or contribute towards the expenses of the Advisory Committee on the Importation of Animals established under that Act.
Resolution agreed to.

ADJOURNMENT
Resolved, That this House do now adjourn.—[Mr. McLaren.]
Adjourned accordingly at nine minutes past Two o'clock.

INDUSTRY, TRADE AND REGIONAL DEVELOPMENT
  Nuclear Reactors (Export to Roumania)
  Nuclear Reactors (Export to Roumania)
  United Nations Conference on Trade and Development
  United Nations Conference on Trade and Development
  Wallpaper (Monopolies Commission's Report)
  Wallpaper (Monopolies Commission's Report)
  Hong Kong (Engineering Products Exhibition)
  Hong Kong (Engineering Products Exhibition)
  Artificial Silk Goods (Import from Hong Kong)
  Artificial Silk Goods (Import from Hong Kong)
  Development Assistance
  Development Assistance
  National Research Development Corporation
  National Research Development Corporation
  Yorkshire Regional Planning Area
  Yorkshire Regional Planning Area
  Advance Factory, Sanquhar
  Advance Factory, Sanquhar
  Sub-Machine Guns (Import)
  Sub-Machine Guns (Import)
  Velvet Industry
  Velvet Industry
  Factory, Kilnhurst (Use)
  Factory, Kilnhurst (Use)
  Commonwealth and European Economic Community
  Commonwealth and European Economic Community
  Buildings, Scotland (Grants)
  Buildings, Scotland (Grants)
  Sporting Investment Company, London (Advertisements)
  Sporting Investment Company, London (Advertisements)
  Film Industry
  Film Industry
  East Kilbride, Cumbernauld, Glenrothes and Livingston
  East Kilbride, Cumbernauld, Glenrothes and Livingston
  The Hartlepools (Motor Car Industry)
  The Hartlepools (Motor Car Industry)
  Austria
  Austria
  Weights and Measures Act
  Weights and Measures Act
  Mining arid Construction Equipment Exhibition. Peking
  Mining arid Construction Equipment Exhibition. Peking
  Commercial Vehicle Parts (Export to Indonesia)
  Commercial Vehicle Parts (Export to Indonesia)
  Broadcasts (Copyright)
  Broadcasts (Copyright)
  Chemical Industry (Exports to U.S.S.R.)
  Chemical Industry (Exports to U.S.S.R.)
  Livestock Group of Companies (Inquiries)
  Livestock Group of Companies (Inquiries)
TECHNICAL CO-OPERATION
  Expatriate Officers, Mauritius (Inducement Allowance)
  Expatriate Officers, Mauritius (Inducement Allowance)
  Community Development Clearing House
  Community Development Clearing House
  Overseas Pensioners
  Overseas Pensioners
EDUCATION AND SCIENCE
  Pupils and Teachers, Manchester
  Pupils and Teachers, Manchester
  Marine Reactor Research (Report)
  Marine Reactor Research (Report)
  Transfer to Secondary Education (Plowden Committee)
  Transfer to Secondary Education (Plowden Committee)
  Building Projects, Bristol
  Building Projects, Bristol
  Scientists and Engineers
  Scientists and Engineers
  Schools, Shenstone (Deaf Children)
  Schools, Shenstone (Deaf Children)
  Sheffield City Training College (Overseas Students)
  Sheffield City Training College (Overseas Students)
  Agricultural Colleges, Yorkshire (Residential Accommodation)
  Agricultural Colleges, Yorkshire (Residential Accommodation)
  Educational Expenditure
  Educational Expenditure
  Pesticides and Toxic Chemicals (Advisory Committee)
  Pesticides and Toxic Chemicals (Advisory Committee)
  Voluntary Schools (Industrialised Building)
  Voluntary Schools (Industrialised Building)
  Educational Research
  Educational Research
HOME DEPARTMENT
  Child Care Officer Students
  Child Care Officer Students
  Fire Losses
  Fire Losses
  Lonsdale and Blake
  Lonsdale and Blake
  Fall-Out Shelter
  Fall-Out Shelter
  Holders of Provisional Licences (Prosecutions)
  Holders of Provisional Licences (Prosecutions)
  Driving Licences and Road Fund Licences
  Driving Licences and Road Fund Licences
  Summer Time
  Summer Time
MINISTRY OF POWER
  Steel Imports
  Steel Imports
  Natural Gas (Import from Holland)
  Natural Gas (Import from Holland)
  RUMANIA (NUCLEAR REACTOR)
  RUMANIA (NUCLEAR REACTOR)
EMPLOYMENT
  Young Persons, Middlesbrough
  Young Persons, Middlesbrough
WIRELESS AND TELEVISION
  Television Programmes
  Television Programmes
  MINISTERS (PARLIAMENTARY BUSINESS)
  MINISTERS (PARLIAMENTARY BUSINESS)
MINISTRY OF AVIATION
  Aldergrove Airport
  Aldergrove Airport
MINISTRY OF HEALTH
  Chemists (Remuneration)
  Chemists (Remuneration)
SCOTLAND
  Conveyancing (Committee)
  Conveyancing (Committee)
NATIONAL FINANCE
  Giro Principles and Practice
  Giro Principles and Practice

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Manchester
The Earl of Lindsey and Abingdon—Sat first in Parliament after the death of his kinsman.

BRITISH AID FOR OVERSEAS DEVELOPMENT
3.5 p.m.
LORD ALPORT: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government why the British financial contribution to overseas development declined in the year 1963, and what total funds were made available for this purpose from public and private sources respectively.]
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT BLAKENHAM): My Lords, aid to developing countries from British public funds in 1963, as published in the Financial Statistics, was £158 million, as against £150 million in 1962. For the financial year 1963–64 expenditure was £175 million, as against £148 million in 1962–63 and £160 million in 1961–62. These figures do not include the substantial flow of funds to developing countries in the form of British private investment, particulars of which are not yet available for 1963, nor the £24 million of military aid provided in the calendar year 1963. Military aid of £30 million was made available in the financial year 1963–64.
LORD ALPORT: My Lords, I am grateful to my noble friend for his Answer and for the confirmation of the fact that the flow of aid for overseas has not decreased. Perhaps I should add that the reason for my Question was a statement made not long ago in the Council of Europe Committee that our aid overseas had decreased during the year
1284
1963. Therefore, will the Government make every effort to ensure that our contribution to development overseas is known not only in this country by overseas as well?
VISCOUNT BLAKENHAM: My Lords, I am grateful to my noble friend for saying what he has said. I would emphasise that the £175 million of out-turn in 1963–64 was higher than ever before and in fact 16 per cent. above the figure for 1962–63.
THE EARL OF LISTOWEL: My Lords, while it is very satisfactory that there has been this increase in 1963–64, as compared with the year before, is it not a fact that the proportion of the British national product given to overseas aid is still less than the proportion given by either France or Western Germany?
VISCOUNT BLAKENHAM: My Lords, I would ask my noble relative to give me notice of that question.
LORD HAWKE: My Lords, in connection with these figures, would Her Majesty's Government not agree that imports taken by this country from these underdeveloped areas, which are among the largest in the world, are perhaps even a more important factor than the direct development?
VISCOUNT BLAKENHAM: My Lords, I think that there is a lot in what my noble friend says.
LORD WALSTON: My Lords, could the noble Viscount tell us the division of this sum of £175 million, as between actual grants, loans at preferential rates and loans at commercial rates?
VISCOUNT BLAKENHAM: My Lords, I will see whether the noble Lord can have this information, and if it can be conveniently broken down I will write to him about it.

FINANCING OF UNIVERSITY OF RHODESIA
LORD ALPORT: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have any statement to make on the conclusion of the discussions regarding the future financing of the University of Rhodesia.]
THE MINISTER OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (THE MARQUESS OF LANSDOWNE): My Lords, I have arranged for copies of the joint statement issued by the British and Southern Rhodesian Governments on June 4 to be made available in the Library. The substance of this statement is that the Southern Rhodesian Government have now agreed to assume responsibility for the maintenance and development of the College as an independent institution open to all races. The British Government have agreed to contribute £750,000 towards meeting the recurrent expenses of the College in the period up to 1967, a capital grant of £800,000 towards the cost of building the teaching hospital, and a further grant of some £300,000 towards general capital expenditure—a total of £1,850,000.
LORD ALPORT: My Lords, I am grateful to my noble friend for his Answer. May I ask whether, in view of the fact that the conclusion of these discussions reflects great credit on Her Majesty's Government and on the Government of Southern Rhodesia, and, in fact, has given a new lease of life to the University of Rhodesia and Nyasaland, he does not think that it would have been appropriate to make this statement in Parliament initially rather than through the Press? Secondly may I ask him whether every effort will be made by Her Majesty's Government to assist the University of Rhodesia and Nyasaland to recruit the staff which will now be required in order to continue the expansion of the University in the years immediately ahead?
THE MARQUESS OF LANSDOWNE: My Lords, I am much obliged for what my noble friend has said, but I would remind him that in a reply to a Written Question, this statement was made in another place on June 4. As regards assisting the University in the recruitment of staff, I must point out that the management of the University rests with its Council and the ultimate financial responsibility of the University rests with the Southern Rhodesian Government.
LORD TAYLOR: My Lords, the noble Marquess mentioned that the University would be open to all races. May we take it that the staff, students and
1286
patients of the hospital which we are helping to finance will also be of all races?
THE MARQUESS OF LANSDOWNE: My Lords, that is my understanding.

THE INDUSTRIAL INJURIES FUND
3.11 p.m.
LORD TAYLOR: 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 were (a) the annual income of, and (b) the annual expenditure from, the Industrial Injuries Fund for the latest available year; and what are the estimated figures for the next financial year.]
THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN): My Lords, the latest firm figures are those for the financial year 1962–63, which were published in the annual Fund Accounts as a House of Commons Paper in April; but the noble Lord may prefer to have estimated figures for periods after the benefit and contribution increases made last year. The income of the Industrial Injuries Fund in the current financial year is estimated at about £96 million and its expenditure at about £83 million. The corresponding estimated figures for the next financial year, 1965–66, are about £97 million for income and £85 million for expenditure.
LORD TAYLOR: My Lords, from the figures that the noble Lord has given, there is a balance of about £12 million a year. Is there any chance of any part of this £12 million a year being used to prevent industrial injury, or to assist in research in connection with industrial injuries or in the development of industrial health laboratory services?
LORD DRUMALBYN: My Lords, as the noble Lord knows, the question of what research should be undertaken into industrial accidents and diseases, and how it should be financed, is a separate matter, and perhaps the noble Lord will put down a Question on it. As he is aware, the policy has been, as this is a funded scheme, that surpluses should build up over a period of years, so that when the

1287
numbers of beneficiaries reach roughly stability, the contribution income of the fund, together with the income from investments, will be sufficient to meet the outgoings.
BARONESS SUMMERSKILL: My Lords, in view of the surplus income, would not the noble Lord agree that the time has come to review the Schedule of Industrial Diseases with a view to compensating some people—for instance, those with chronic bronchitis where it can be related to industry?
LORD DRUMALBYN: My Lords, as the noble Lady knows, the question of which industrial diseases should be scheduled is constantly under consideration. It is not a question of a new review taking place.
LORD TAYLOR: My Lords, I am not clear from the Answer exactly how this Fund will work. Are we to build up such an enormous surplus that we shall not have to make any more contributions? Is that what the Government have in mind?
LORD DRUMALBYN: No, my Lords. The idea is that it should be possible to build up the Fund to the point where, when the numbers of beneficiaries reach more or less a stable level, outgoings can be met without increasing contributions to the Fund. This is the objective, and this is what is being done at the present time.
LORD TAYLOR: My Lords, I am sorry to be still mystified. Why is it anticipated that the number of recipients of benefit will grow steadily? Surely it is better to prevent industrial injuries and diseases and have a declining number of beneficiaries in the scheme. Is there any evidence that the numbers are still growing and will continue to grow?
LORD DRUMALBYN: My Lords, not only are the numbers growing, but also the liabilities in respect of those people who receive benefit are growing, with un-employability supplement and the other provision for the various contingencies that arise very often as the injury makes it more difficult for a man to obtain employment.
BARONESS SUMMERSKILL: My Lords, this is an important question. If the Fund has a surplus, why cannot it
1288
be distributed in the form of discretionary allowances? Think of the tragic cases of, say, partial pneumoconiosis. There are these cases, and yet the noble Lord says there is this surplus. This seems to me to be wrong. I think it should be distributed in the form of discretionary allowances. He has not, of course, committed himself. Next year he could use the surplus in a different way.
LORD DRUMALBYN: My Lords, as the noble Lady will know, last year we increased the liabilities of the Fund very much, not only by increasing benefits under the Industrial Injuries Act, but also by increasing the supplements to those who receive benefits under the Workmen's Compensation Acts. The balance is required in order to meet the funding requirements of the Act. Another way in which the matter has been dealt with is that on one occasion in 1961 the benefits were increased without an increase in contributions.
LORD TAYLOR: My Lords, am I not right in thinking that there is a fund of many hundreds of millions of pounds now in reserve; that a grant has been made on one occasion for research purposes from this Fund, and that it amounted to less than £100,000—a few thousand pounds only?
LORD DRUMALBYN: My Lords, I think the noble Lord is right in thinking that grants have been made. The actual balance held at the end of 1962–63 was just over £300 million.
LORD TAYLOR: My Lords, is this not a really extraordinary state of affairs? This money is being paid in by all of us if we are at work, and has accumulated to the extent of £300 million-odd, and yet we cannot have any proper industrial health service, industrial hygiene laboratories and the preventive services in industry to prevent the injuries for which this money is accumulating.
LORD DRUMALBYN: My Lords, as the noble Lord will know, it would not be possible to pay out these funds without legislation to authorise their being paid out. As I say, if you have a funded scheme, which is quite different from the principle on which the National

1289
Insurance scheme is operated, it is necessary to cover the liabilities in prospect for the future, as well as the current liabilities.
LORD BOOTHBY: My Lords, will the noble Lord bring in the necessary legislation before the Summer Recess?
LORD DRUMALBYN: My Lords, I am afraid I can hold out to my noble friend no hope of any such thing.
LORD TAYLOR: My Lords, is the noble Lord really right in thinking that he needs legislation, since he has already made one grant from the fund?
BARONESS SUMMERSKILL: Discretionary allowances is the answer.
LORD DRUMALBYN: My Lords, there is a section (I think it is Section 73) which allows only certain payments to be made.

REMOVAL OF NEW SCOTLAND YARD
3.18 p.m.
LORD MORRISON OF LAMBETH: 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 are the reasons for removing the Metropolitan Police headquarters from its historic home at New Scotland Yard to Victoria Street and whether the site at Victoria Street is being rented or purchased.]
THE MINISTER OF STATE, HOME OFFICE (LORD DERWENT): My Lords, this decision was taken because it had become clear that a satisfactory and fully efficient headquarters for the Metropolitan Police could not be provided on its present site, where it has been since 1890. The building now being constructed in Victoria Street will provide modern and efficient accommodation for the offices of both the Commissioner and the Receiver and will be suitably sited in Central London. The building is being taken on a long lease with the intention that it should constitute a permanent headquarters for the Metropolitan Police.
LORD MORRISON of LAMBETH: My Lords, I may be over-sentimental about it, but Scotland Yard is an historic place. It is known all over the world, and everybody knows that it faces the river, with Whitehall at the back of it, which is very convenient sometimes for the Home Office. Is it really necessary to shift it? There was a modern extension of Scotland Yard some few years ago in which the noble and gallant Marshal of the R.A.F., Lord Trenchard, asked for my assistance in getting agreement with the London County Council, which I gladly gave. Therefore, their accommodation has extended. Would it not be better to demolish the present building and put a higher building on the site, which nowadays would be permitted? It seems to me to be anomalous and wrong for Scotland Yard to be round about Victoria Street—and, I understand, a back street of Victoria Street. I would ask the Government to think about it again.
LORD DERWENT: My Lords, I think the noble Lord is being somewhat over-sentimental. New Scotland Yard was moved to its present site only in 1890, and before that it was at the other end of Whitehall. It is not possible to build a suitable building on the present site, and it is essential, in our view, that the Receiver, who for the last three years has had premises away from New Scotland Yard, should once again be in the same building as the police head-quarters.
LORD MORRISON OF LAMBETH: This is all very well. The noble Lord said that New Scotland Yard has been built only since 1890. Only in the last Session of Parliament, noble Lords were saying that the London County Council, which began to function a year before 1890, was an old affair and that it was time it was altered. Why do the Government sing two tunes? Surely the site is all right and they could build a higher building on it. What is the rent to be paid for this place in Victoria Street? If it is a substantial rent, why do not the Government buy the land, unless they can take other premises temporarily during the rebuilding of Scotland Yard on its present site?
LORD DERWENT: My Lords, if the noble Lord will think of his first

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supplementary question he will find that although we were dealing in one case with buildings and in the other case with an organisation, our view was that both needed change since 1890. There is no suitable site for sale in the centre of London, and it is not normally Government practice to publish details of any commercial transaction, such as leases. They are regarded as confidential, for this reason: it would most certainly adversely affect the negotiating position of the Government if they had to publish the terms of their leases.
LORD BOOTHBY: My Lords, could the noble Lord at least give us an assurance that the new building will still be called Scotland Yard?
LORD DERWENT: My Lords, I can give that undertaking, and that has already been announced by my right honourable friend. It will be called "New Scotland Yard".
LORD LINDGREN: My Lords, as modern architecture is more glass than bricks and mortar, would not "The glasshouse" be the better name? Also, in view of the nature of the construction, are the Home Office satisfied with the security?
LORD DERWENT: My Lords, I do not think it would be appropriate for the Home Office to use a military term like "glasshouse".
LORD HOBSON: My Lords, can the noble Lord say whether this building is being built as a specialist building for the purposes of Scotland Yard, or merely for office accommodation? If it is the former, what is the case for having it on a lease?
LORD DERWENT: My Lords, it is being built as a specialist building. It was not possible to get a freehold site in the centre of London, where we think the headquarters of the Metropolitan Police should be.
LORD LINDGREN: My Lords, if it is not possible to get a freehold site, are not the Home Office, like a local authority, able to use compulsory purchase?
LORD DERWENT: My Lords, I am not sure of the answer to that question, but I am almost certain that it is "No" in this particular case.
LORD SILKIN: My Lords, is it really desirable that an important Government Department should be holding its premises on lease? It does not apply to any other Government building. Why should they have this building on lease? Is it not possible to acquire the freehold of these premises?
LORD DERWENT: My Lords, many buildings, of course, are on lease. I can think of two, the Ministry of Education and the Board of Trade. I think you will find also that most of the London prisons are on land leased from local authorities.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, may we take it that the Government are firm in their policy of what they call a free trade in land?
LORD MORRISON OF LAMBETH: My Lords, if the Government wanted a compulsory purchase order is it not clear that the Westminster City Council, or the London County Council, acting on their behalf, would readily get them one? Not that I want them to go to Victoria Street at all. What a dreadful place for the police!
LORD DERWENT: My Lords, the present arrangements for the purchase of this land are considered perfectly satisfactory.
LORD MORRISON OF LAMBETH: We do not know; Parliament must not know.

UNIVERSITIES AND COLLEGE ESTATES BILL
Read 3a (according to Order), and passed.
DIPLOMATIC PRIVILEGES BILL [H.L.]
Read 3a (according to Order): an Amendment (privilege) made; Bill passed, and sent to the Commons.

RESALE PRICES BILL
3.26 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AILWYN in the Chair.]
Clause 1:
Avoidance of conditions for maintaining resale prices
1.—(1) Subject to the provisions of this Act with respect to registration and to the powers of the Restrictive Practices Court thereunder, any term or condition of a contract for the sale of goods by a supplier to a dealer, or of any agreement between a a supplier and a dealer relating to such a sale, shall be void in so far as it purports to establish or provide for the establishment of minimum prices to be charged on the resale of the goods in the United Kingdom; and it shall be unlawful for any supplier of goods (or for any association or person acting on behalf of such suppliers)—

(a) to include in any contract of sale or agreement relating to the sale of goods any term or condition which is void by virtue of this section;

(b) to require, as a condition of supplying goods to a dealer, the inclusion in any contract or agreement of any such term or condition, or the giving of any undertaking to the like effect;

(c) to notify to dealers, or otherwise publish on or in relation to any goods, a price stated or calculated to be understood as the minimum price which may be charged on the resale of the goods in the United Kingdom.

(2) This section applies to patented articles (including articles made by a patented process) as it applies to other goods; and notice of any term or condition which is void by virtue of this section, or which would be so void if included in a contract of sale or agreement relating to the sale of any such article, shall be of no effect for the purpose of limiting the right of a dealer to dispose of that article without infringement of the patent:
Provided that nothing in this section shall affect the validity, as between the parties and their successors, of any term or condition of a licence granted by the proprietor of a patent or by a licensee under any such licence, or of any assignment of a patent, so far as it regulates the price at which articles produced or processed by the licensee or assignee may be sold by him.
(4) Nothing in subsection (1)(c) of this section shall be construed as precluding a
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supplier, or any association or person acting on behalf of a supplier, from notifying to dealers or otherwise publishing prices recommended as appropriate for the resale of goods supplied or to be supplied by the supplier.
LORD SHEPHERD LORD SHEPHERD, moved to add to subsection (1):
"Provided that nothing in this section shall prevent a manufacturer who offers for sale a new manufacture of United Kingdom origin where the capital investment is above £10,000 from entering into an agreemnt for a period of eighteen months with a retailer for the resale of such manufacture at the manufacturer's recommended price".
The noble Lord said: I beg to move the first Amendment which appears on the Marshalled List, but before speaking to it may I say a few words in regard to the Committee stage of this rather important Bill? The Committee will note that an Amendment which was printed last week does not appear on the Marshalled List, and I think some explanation should be given of that. A number of my noble friends felt that the course of the Government in producing this Bill was raising many difficulties which could be avoided. We therefore considered a possible alternative, and we put it in the form of an Amendment. However, on further consideration we felt that, in view of the fact that the House had given a Second Reading to the Bill, it would be perhaps rather early to move, as the first Amendment, what might appear to some as a wrecking Amendment. Therefore, we decided not to proceed with it, but to reserve our position to the Report stage of the Bill.
I think there is general acceptance throughout the Committee that some measures must be taken in regard to resale price maintenance. There may be some who are fervently against resale price maintenance, particularly those like the noble Baroness, Lady Elliot of Harwood, speaking for the Consumers' Council. There are other Peers who feel that resale price maintenance gives a sense of stability, and that many industries and traders would be affected by its abolition. Whatever may be their feelings, I think there are many who may take the divergent view and are concerned about the drafting of the Bill. One has heard such remarks as that the Bill is imprecise, that it is obscure, and that many merchants, whether they are suppliers or

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retailers, may not know their true position until a decision has been taken by the court.
I would suggest to the Committee that we should consider seriously, not only the criticisms but also the disquiet which has been expressed, not only in your Lordships' House but also by the public. if we feel that the Bill needs amendment, I think we should make strenuous efforts to see that Amendments are made. I would beg the Government to recognise that this House, as a revising Chamber, is trying to produce better legislation. We are, I think, free from the emotional atmosphere that was obvious in another place during the passage of this Bill. And may I also say to them that no Government, no matter how frail or fragile they may be, are likely to fall by any Amendment that is passed by your Lordships' House? The final decision will, of course, rest with the House of Commons. Therefore, I would suggest to the Committee that we should proceed in trying to make this a better piece of legislation than many of us feel it is to-day.
The first Amendment that I have placed on the Marshalled List is to make it possible for a manufacturer who produces a new manufacturing line of United Kingdom origin, where the capital investment is above £10,000, to enter into an agreement for a period of eighteen months with a retailer for the resale of such manufacturing line at the manufacturer's recommended price. I would make it perfectly clear that I would not stand by either the figure of £10,000 capital expenditure or the period of eighteen months. What I wish to establish as a principle is that where we are, in fact, making it possible for resale price maintenance as we know it to-day to be broken, a manufacturer who may have in production a new line and, in his view, feels it is necessary that there should be some form of stability in its retailing, should be empowered to make agreements with his retailers for them to sell at a recommended price.
I think 'I should remind the Committee that in 1956 the Government then took the view in abolishing collective agreements—and I think most of us agreed with them then—that it would be right (and I am using the phrase of the noble and learned Earl, Lord
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Kilmuir, in Committee and at Report) to give power to an individual supplier or manufacturer to impose resale price maintenance through the courts. I think that is correct. They then felt, in view of the need of industry for some stability in merchanting, that the provision of Section 25 of that Act was necessary. The Government of to-day have changed their mind to, I would stress, a marginal extent. They believe that resale price maintenance, as such, is against the national interest. But they recognise that there may be possible exceptions: they have provided the necessary machinery in the Bill for the exceptions that are possible, and have given power to the Restrictive Practices Court to decide which classification of goods should continue under Section 25—resale price maintenance enforceable through the courts.
I am not sure—and I should think that many noble Lords are in my position—of the extent of the five gateways that appear in Clause 5. I would stress to the Committee that all these gateways take into account the effect upon the retailer, but are mainly concerned with the effect upon the consumer. I would not disagree in any way that these five gateways should exist and about the way they should be slanted. But I think that it should be significant to the Committee that none of these gateways takes into account the position of the supplier or manufacturer—I would prefer to think of the manufacturer because I think he has something more at stake than the supplier has, if he is a wholesaler.
I have been in commerce, particularly marketing, and I can say, and do so very sincerely, that I recognise the importance of efficient marketing. By "efficient marketing" I do not mean the provision of unfair profit to the retailer as opposed to the consumer, but I mean efficient marketing in the sense that goods are spread throughout the country among various trade outlets; that the supplier will receive the maximum advantage which will follow from your production; and that there is a fair profit to the retailer and a fair price to the consumer. In marketing there has to be this balance.
I would stress to the Committee that no industry can be efficient unless there is efficient marketing. If there is bad marketing at the expense of the consumer,

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then it has a direct effect upon the manufacturer. As I said, the five gateways do not take into account the manufacturer. They relate merely to the retailer and the consumer. The Restrictive Practices Court will have to decide, after the suppliers have registered, which goods shall be classified and which should be exempt. As I said earlier, none of us knows whether the gateways will be wide or whether they will be rather like the eye of a needle. My own view is that they are more likely to be the latter, if one takes account of the decisions already made by the Restrictive Practices Court.
The point is that the Government have established two things: first of all, that there may be exceptions to resale price maintenance, and they have established their gateways. In Clause 1 of the Bill they have declared void all forms of agreements which would impose a minimum price. In general practice, in principle, I think they are right. Because I do not believe it is possible within the gateways to give an appeal to a manufacturer for his line to be exempted, but for some special reason his particular line may need some protection, particularly if it is a new line, I am trying to establish in Clause 1 that for a period a manufacturer should have the right to enter into agreements with retailers in order to give some stability to a new line.
I should like to speak again from personal experience. True, it was not in this country but in Malaya. I was selling a particular quality of cotton goods printed in Carlisle. The particular quality, unfortunately, did not sell anywhere else but in Malaya, and the printing requirement for Malaya was 12,000 yards. Unless I got 12,000 yards there was no business either for me, as the agent in Malaya, or for the printer in Carlisle. I found from my own experience that unless one gave some stability to the merchants who were prepared to place fairly large initial orders, those orders were not available.
I believe this could well be possible in this country, where a manufacturer is producing a new line, and where competition could be such that there was no stability and no sense of security in the mind of the retailer. Many people believe that the manufacturer or the supplier is the man who makes the line
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a success. My experience is that they play a certain part in it, but it is the enthusiasm and the willingness to give support by the retailer or by the dealer that is the cardinal point whether the line will sell. My experience in this is that unless in the very early stages one can give to the dealer a sense of security, he may well feel unable to place the quantity order that is so vital to the manufacturer in the very early days. One can cite many examples.
In regard to the Amendment, when I speak of a new line here I do not envisage, say, in the motor trade if Rootes produced a new mark of Hillman Minx that that would be regarded as a new line; but it would be in the case of Rootes when they produced the new Imp. Here was a vast capital expenditure of considerable risk to the organisation, and I think the Committee will also recognise that the distributors, who place very large orders in the very early stages, take on a considerable risk; and I feel that there should be some form of security for them in support of the manufacturer of the new line. Not only is it a case of buying the new line but there may be the question of spare parts. This is not only a question of motor cars; it could well be a question of textiles. I remember the breakthrough that was made by nylon and terylene. Those were very difficult periods when that particular yarn and cloth was put on the market. At the time it was a question whether it would be successful, but it was the good marketing of the organisation concerned and the form of security available to the buyers and dealers that made it successful.
I hope that the Committee and particularly the Government will see that this is not in any way to open or weaken the Government's determination to deal with resale price maintenance. It is to find a further gateway which is of benefit to the manufacturer. I do not think it is possible for the Restrictive Trade Practices Court when they are dealing with classifications to exclude particular companies who may be making a particular line that is on the fringe of the classification. I think we must recognise that in these classifications there will be fringe industries and fringe lines. I do not think it would be possible to

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have a repeal or an exemption from a general classification, but I think it would be right to give a manufacturer an opportunity of establishing some sense of stability when a new line is being put on to the market. I hope that the Government will look at this Amendment very seriously, because whilst we may be on the side of the consumer—and I think we all are—we should not be acting entirely for the consumer, in fact I think we should act against the consumer, if we were to produce legislation which would in any way prevent or slow down the development of new lines in our industry. I beg to move.
Amendment moved—
Page 2, line 5, at end insert the said proviso. —(Lord Shepherd.)
LORD PEDDIE: This is a hotch-potch Bill with many imperfections, and I am quite sure that in practice it is going to provide a lawyers' paradise, certainly when one comes to interpretation of the true purpose of the Bill. And whatever virtues it may possess, I think the greatest disability is the one that has been highlighted by my noble friend; that is, the effect upon the marketing of new products. I would suggest to your Lordships that the easy availability of new products is in the long-term interest of the consumer, but inability on the part of a manufacturer to have some measure of control over the marketing and the pricing of an entirely new product would place a serious limitation upon his ability to launch it.
If I may give an illustration, a new product may perform a particular function better than the existing product on the market, but superficially it may be difficult to recognise the difference between the new product and the old; and therefore it becomes necessary for the manufacturer of the new product to persuade the retailer and the wholesaler to assist him in launching it. In 99 cases out of 100 the way in which the manufacturer of the new product ensures its launching on the market is to give a bigger margin to the retailer, but under the practice of this clause where there is a bigger margin offered by the manufacturer there lies a greater capacity on the part of the retailer to
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cut the price; and if it is not possible for the manufacturer of the entirely new product to enforce, at least for a limited period of time, a retail price, this new product with the wider margin is going to be the very product where there will be price cutting. As a result, the retailer who is offered this new product, realising that the shopkeeper down the road or in the next street is cutting the price, is disinclined to accept that new product.
I was glad that my noble friend expressed his willingness to withdraw the reference to the £10,000. That is wise, because I think it would be impossible to operate it on that basis. It could be exceedingly difficult for anyone to assess precisely whether there is £10,000, £5,000, more or less, involved in capital terms upon the creation of the new product. But I most certainly support the principle expressed in this Amendment, because I believe that in its application it would strengthen the Bill and, in the long term, would be of greater service to the consumer. It would prevent any limitation upon the willingness on the part of manufacturers to experiment, develop new products, and I believe acceptance of this Amendment would facilitate development and the sale of new products in this country.
LORD CHORLEY: I should like to add a word in support of my noble friend's Amendment. I think it goes a long way towards meeting a point about this Bill which has been rather worrying me. It arises on a part of the Bill which your Lordships will have noticed but which has not so far been underlined in the debates; that is, the fact that patented articles are now withdrawn from protection in respect of price maintenance. That may turn out to be a very serious business, and I think it ought to have had a good deal more attention than it has had.
I personally am not altogether satisfied that our methods of rewarding inventors under the Monopolies Act are quite correct. But we are committed to this. We reward inventors—and we certainly ought to do that, in one way or another. After all, a great deal of the industry of this country has been built up on the fertile invention of our people, who have been one of the most inventive in the world. The Industrial Revolution,

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which was in some ways the most significant affair of the whole of modern civilisation, originated very largely in this country out of the fertility of our people as inventors throughout the whole range of manufacture.
One of the most essential elements in this system, which has been recognised by the courts, is that the inventor is, or was, entitled to attach prices to his commodities, and that ran with the goods, as it were. While the ordinary manufacturer could bind only his immediate purchaser, in the case of a patented article the patentee, and any person to whom he assigned his rights, could fix a price which was not only binding on his first purchaser but binding all down the line. That gave the patented article a considerable advantage at Common Law over other articles, the ordinary commodities of trade. That right has been a valuable right of property to patentees. It is abolished in this Bill. It may be that that is the right thing to do, though I personally feel a little worried about it.
But the reason why I want to support this particular Amendment is that it goes quite a long way towards redressing that particular difficulty; because, in effect, it recognises that at any rate a man who has introduced some new type of commodity on the market should have—for a limited period of time, it is true; but it is a period that is not unsubstantial—a certain advantage in relation to that new type of commodity, that new enterprise which, in effect, he is putting on to the market. In that way, again, the Amendment goes some little distance towards supporting the man who is taking the initiative and is putting something new, something fertile, in the way of invention on the commodity market. That seems to me to be important, and if we do not do something to help these people, who, as I have said, have been one of the mainstays of the great export trade which has kept us alive in this country, it is going to be a serious matter. Therefore I hope that the Government will be able sympathetically to look at this proposal. It may be that they cannot accept the Amendment in the exact form in which it is drafted; but I am quite sure that those people who bring new ideas into business in this way need some sort of support. I hope that if this is not the right way of doing it, the Government
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will be able to think of some way in which they will be able to secure this objective.
3.54 p.m.
LORD COLERAINE: Since I have not spoken on this Bill previously, I must declare that I have an interest in the subject matter of the Bill—indeed, a double interest, both as a manufacturer and as a retailer. The principle behind the Amendment which the noble Lord, Lord Shepherd, has just moved is, I think, broadly the same as that behind another series of Amendments to Clauses 6 and 7 which appear on the Marshalled List under my name and those of two of my noble friends. Broadly speaking, the principle is that, like the noble Lord, Lord Peddie, I believe that it will be virtually impossible to launch a new product on the market unless some protection is given to the manufacturer, and indeed the retailer, by way of a maintained price, at any rate for a certain period. I do not want further to develop that argument now. Perhaps I shall have the opportunity on the later Amendments. But I have some doubts about the present Amendment, not because I disagree with the principle but because it seems to me to be unduly restrictive. I gather that the noble Lord, Lord Shepherd, has withdrawn the insistence on the investment limit of £10,000, and will have no investment limit at all. Is that right?
LORD SHEPHERD: No. I said that I would not stand on £10,000. I recognise that, so far as a large organisation like Rootes is concerned, £10,000 is insignificant; yet £10,000 could be quite a big sum for a small company. So I do not stand on £10,000, and I shall be quite happy to accept any suggestion of the Committee as to what the figure should be. Equally, I do not stand on eighteen months as the period in which stability and security should be given to a new line. Again I would welcome a suggestion from the Committee. It is the principle that I wish to see established. As the noble Lord, Lord Coleraine, knows, it is rather difficult for the Opposition, and indeed for Back-Benchers of any Party, to put forward Amendments that would stand up to exhaustive examination, shall we say, from the noble and learned Lord the Lord Chancellor. But it is the principle behind it, and I am glad that the noble Lord supports that principle.
LORD COLERAINE: I am much obliged to the noble Lord for his explanation; but I still think that his Amendment as drafted is unduly restrictive. I cannot see why it is necessary to have any reference at all to capital investment, because it is perfectly possible and, I should have thought, where it is possible eminently desirable, for a manufacturer to develop a new product entirely using his existing plant, and it would be absurd to force him to make a capital investment that he did not want to make in order to get through the gateways.
The other restriction in this Amendment which seems to be unnecessary is the reference to" a new manufacture of United Kingdom origin". That seems to me to be nationalistic and restrictive in itself, and I cannot see why, if there were some new product which originated in Denmark or the United States, the consumer in this market should be deprived of the advantage of having it manufactured by a British manufacturer here. But I support the principle behind the Amendment, and I hope that my noble friend who is going to reply will be able to say that he will consider this principle.
LORD LUCAS OF CHILWORTH: I listened to the noble Lord, Lord Shepherd, proposing his Amendment with great interest because I wanted to see how he was going to persuade your Lordships to reintroduce into the Bill the very principle which this Bill seeks to destroy. It is no use denying it. The figure of £10,000 is being thrown overboard, so there is no limit. The Amendment seeks to retain the principle of resale price maintenance. You can camouflage that by saying that it is only for a new product. But what is a new product? The noble Lord, Lord Peddie, quite frankly stated that what you wanted to do, if you introduced a new product, was to have resale price maintenance in order that you could offer to the retailers a higher margin and so protect it. Does not the noble Lord, Lord Peddie, really understand that that was the greatest evil of resale price maintenance, because it introduced into retailing a competition in margins, and not a competition in retail prices to the public? That, I have always understood, was inherent in the principle to which noble Lords on the Opposition side have subscribed.
If the noble Lord, Lord Shepherd, will forgive me saying so, I think this is a
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bad Amendment. I will listen to the arguments of the noble Lord, Lord Coleraine, later on. For anybody to stand up in your Lordships' House and say, "Unless you accept this Amendment no new article will ever be introduced on to the market" is something that I do not believe any of your Lordships will accept. Do you mean to tell me that no new product has been pat on the British market unless it has been resale price-maintained? That is just not true. To say that there should be a figure of £10,000, or £10 million, or twopence is to destroy the whole thing.
I beg the noble Lord not to press this. This is a better wrecking Amendment than that which the noble Lord put down originally and which his conscience would not allow him to pursue, so that he thought it would be better to bring it in at some other stage of the Bill. This just would not operate. The noble Lord, Lord Peddie, started his speech to your Lordships by saying that the Bill is now a lawyers' paradise. With this Amendment included, it is going to be paradise and heaven as well. I do not know how one is ever going to implement the Bill if something like this appears in it. In my experience this would defeat the very object which the noble Lord, Lord Shepherd, has in view. It would tie the hands of the introducer of a new product and would make the Bill entirely unworkable.
LORD SHEPHERD: The noble Lord will recognise that it is optional whether the supplier makes an agreement or otherwise.
LORD LUCAS OF CHILWORTH: If it is optional, then do not put it in at all —because nobody is going to exercise the option.
LORD COLERAINE: Might I ask why the noble Lord thinks that this would wreck the Bill—this is a proposed exception to the operation of the Bill—any more than the five gateways in Clause 5?
LORD LUCAS OF CHILWORTH: Because it reintroduces the principle which this Bill was originally designed to destroy; the purpose of the Bill is to do away with resale price maintenance.
LORD CHAMPION: So does Clause 5.
LORD LUCAS OF CHILWORTH: No, That is not right. As this clause is drafted it is not a gateway; it is an open door. The noble Lord himself quite rightly said that the five items in Clause 5 are not gateways: they are the small eyes of very small needles. When we come to discuss them, perhaps I may venture to pass a few observations upon them. This Amendment hits at the very principle of the Bill. It does no good, it does not benefit the introducer of a new product at all, but reintroduces the first evil of resale price maintenance, and that is to take away competitive sale to the public for the benefit of the consumer.
LORD PEDDIE: The noble Lord, Lord Lucas of Chilworth, has certainly not paid sufficient attention to the arguments which have been advanced in support of this Amendment. No statement has been made that it would not be possible to introduce new products.
LORD LUCAS OF CHILWORTH: Unless my hearing was at fault, I think that it was the noble Lord, Lord Coleraine, who said that.
LORD PEDDLE: That is a further indication that the noble Lord was not paying sufficient attention, because he attributed that remark to myself.
LORD COLERAINE: May I qualify it for the benefit of the noble Lord? It would make it very much more difficult to introduce new products.
LORD AIREDALE: I am another who does not understand this argument that it is difficult to introduce a new product without resale price maintenance. I understand that in the grocery trade resale price maintenance is practically dead, and yet whenever I go into a grocer's shop I see great pyramids of new products all over the shop.
LORD DRUMALBYN: I think that the noble Lord, Lord Shepherd, rather opened his flank by his introductory remarks. In the first place he said that this was too early to put down a wrecking amendment, and the noble Lord, Lord Lucas of Chilworth, then said that this is a wrecking Amendment. For reasons that I shall adduce, it comes pretty near to being such. The second flank that he opened was to attack the wording of the Bill on the ground that it was imprecise and obscure. It is true
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that in a later intervention he said that it was to the principle of this Amendment, rather than to the particular words, that he was attached. But the Amendment consists of certain ideas, and I suggest to him that these ideas themselves are somewhat imprecise and obscure.
First of all, what is meant by a manufacturer "of United Kingdom origin"? Secondly, as has already been said, what is a new line? It is all very well to give an example and to say that the Imp would be a new line and that a new model of the Minx would not be a new line. But how new must the line be in order to be new? For example, there are new models of dresses which are introduced every year in production.
LORD LINDGREN: They are styles, not models.
LORD DRUMALBYN: I think they are sometimes called models—and models are inside them as well! Is there to be a perpetual exemption for this kind of novelty under the Bill? Has every new model to be price-maintained for eighteen months? And what happens at the end of eighteen months? Is the restriction automatically cut off? Will there be no further opportunity, despite the provisions for exemption in the Bill, for these particular products to apply for exemption? All these difficulties are involved, but the main difficulty must be to define what a new model is.
These are matters of uncertainty, but on the main principle the point surely is this. The noble Lord is arguing that there are special circumstances for new products which should enable them to be given a blanket exemption without having to go through any of the tests to which other existing products have to be subjected if they are to obtain exemption. I suggest that there is no good reason for giving new products this kind of exemption. There is nothing to prevent suppliers, if necessary, from applying, under Clause 7(1), for exemption under the Bill if that exemption can be justified on any of the grounds listed in Clause 5. The noble Lord says that he does not disagree that these "gateways" should exist. If that is so, why should they not apply to the new products, as well as to existing products. If the interest of the supplier is to be taken into account, why should his interest not

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be taken into account in this way for the existing products as well as for the new products?
The Bill is in the interest of the consumer and of economy as a whole, and should be considered on those grounds. As the noble Lord, Lord Lucas of Chilworth, very cogently said, any number of new products are being introduced all the time without the assistance of resale price maintenance; and in the new climate which the Bill will introduce, surely it will be possible for manufacturers to adjust their practice for new products, as for others, without having recourse to a special exemption to cover all products that are classed as new, however they are to be classed as new, which as I said, is a difficult thing to do.
I would ask noble Lords to realise that all the time any number of new products are coming on to the market. This Amendment would drive a coach and horses right through the Bill—there is no question of that. I do not see how it would be at all possible for the Government to accept an Amendment of this character in principle, quite apart from the actual ideas that are expressed in it and the limitations, as my noble friend Lord Coleraine said. If we were to have such a provision, obviously it could not be expressed in these terms. But I would suggest to your Lordships that it really is not possible to give to new products, however they may be defined, a blanket exemption from being in any way subject to the criteria for exemption expressed in Clause 5.
LORD MABANE: May I ask the noble Lord a question? Can the manufacturer of a product not yet formed but to be produced five years hence register under Clause 6(1) of the Bill?
LORD DRUMALBYN: No. It is perfectly possible for him to apply for registration under Clause 7(1), and in that case he has, of course, to give a prima facie reason for the application.
LORD MABANE: Even for a product that is not yet in manufacture?
THE LORD CHANCELLOR (LORD DILHORNE): I do not think my noble friend was quite right in using the word "register" in that sense. But the provisions of later clauses of the Bill do enable the manufacturer of a new line of goods, let us
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say in a year's time, to apply to the Court for exemption—I can draw the noble Lord's attention to them—and to do that without an entry being made upon the register.
LORD SHEPHERD: Could the noble Lord help me? Can the manufacturer register the goods, and will he have any chance of having that particular line exempted when the classification in which the goods would be included has not been exempted?
4.2 p.m.
THE LORD CHANCELLOR: The answer—and we will come to it when we come to those clauses—is that, as your Lordships will be aware, the decisions of the Court granting or refusing exemption can be reviewed at intervals, should there be a material change of circumstances. I was dealing generally with the point put by my noble friend in relation to completely new goods. Of course, we will consider this point when we get to it in the Bill. If what might be called a new line, however you might define a new line, is really within the class of goods on which the Court has already adjudicated, it would still be possible, as it is under the Bill generally, to make a further application because of there being a change of circumstances. But if it was within a new class, the decision of the Court would operate pending a review by the Court.
VISCOUNT MASSEREENE AND FERRARD: Can the noble and learned Lord tell me how long, in his opinion, the Court will take in these instances to come to a decision? Is it going to take six months, twelve months or fifteen months?
THE LORD CHANCELLOR: I do not really think that that question arises out of this Amendment.
LORD HAWKE: I think my noble friend the Minister is under some slight misapprehension, if he thinks that a rejection of an Amendment of this nature is necessarily in the consumer's interests. I have had the same experience as the noble Lord, Lord Shepherd, at a more distant date but on probably a rather larger scale. My experience in markets where there was no question of any resale price maintenance was that

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no retailer or even wholesaler would look at a new product unless he was guaranteed the monopoly of that product for the market. Of course, it is rather more difficult in this country to enforce such a monopoly for the market, but I can well visualise the position of the traveller going round to try to sell a new product in a city. The first thing he will be asked by retailers, if there is no retail price maintenance on this product, is: "Whom else in this city are you intending to sell to? "Unless he can give the answer, "I will sell to you only", or, "You and so-and-so only", the retailer will not be prepared to take the risk of taking up the product.
LORD DRUMALBYN: Nothing under this Bill will prevent a manufacturer or supplier from undertaking to supply only a particular dealer. He can make a contract perfectly easily and perfectly validly to supply a particular dealer only, under this Bill. As for the other point which my noble friend made, I think that it is quite simple. It is simply this. When the retailer gets possession of goods in any particular case, and if these are new goods, I would agree that no doubt he will require some kind of assurance as to the way in which they are going to be marketed. But once this Bill becomes law, he will know that the only way in which resale price maintenance can be authorised is through an exemption granted by the Restrictive Practices Court in accordance with one of the criteria that are laid down. These criteria are available, and I cannot see why these criteria should not apply equally as much to new products as they do to existing products.
LORD STONHAM: But can the noble Lord explain what he has just said? In dealing with the point raised by the noble Lord, Lord I4awke, he said that there was nothing in this Bill to prevent a supplier from entering into a contract with the dealer whereby the dealer would be the sole trader selling that particular brand of goods in a particular area. This is an extremely common practice. It has a good deal to commend it, both on the part of the supplier and on the part of the dealer, and it has nothing whatever to do, necessarily, with resale price maintenance.
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But Clause 2(3) says this very clearly:
"For the purposes of this Act a supplier of goods shall be treated as withholding supplies of goods from a dealer—
(a) if he refuses or fails to supply those goods to the order of the dealer;".
If the supplier is supplying Messrs. Brown at one end of the High Street, and wants only to supply Messrs. Brown, but Messrs. Smith at the other end of the High Street think it is a good line and place an order with the supplier, how, under Clause 2, is he going to be able to refuse to supply them? I am thinking of what the noble Lord just said, and I cannot square it with Clause 2.
THE LORD CHANCELLOR: We shall be getting to Clause 2 quite soon. What my noble friend said was, in my view, entirely accurate, but I really do not think that one can undertake an exposition of Clause 2 at the time when we are dealing with this particular Amendment to Clause 1. I think it would be more convenient to examine Clause 2 when we get to it. But I should like the noble Lord, if he would, to go forward in considering this particular Amendment, in the hope that I shall be able to satisfy him—and I think I shall —that what my noble friend said about that is quite right.
LORD STONHAM: Since the noble and learned Lord put that so reasonably, of course I agree. But I did not start this; it was his noble friend who got up and said, "There is nothing to prevent this kind of contract." Frankly, I was not intending to prolong the discussion but was simply asking for information.
LORD SHACKLETON: We are going to get into terrible difficulty—it is quite obvious—on this Bill, because the noble and learned Lord started referring to Clause 5. I, personally, am not very sympathetic with my noble friends' Amendment, but the noble and learned Lord's speech has inclined me to question him a little further. As I understand it, he was saying that somebody who invents something, or has some new type of goods, may be enabled under Clause 5 to have those goods exempted. I hope he will make the position absolutely clear to us, but the implication of what he said is that unless, in fact, that particular class of goods has already

1311
been exempted, it seems there is no possibility for the manufacturer to claim exemption.
THE LORD CHANCELLOR: May I interrupt the noble Lord? I do not think I in fact referred to Clause 5. If he will look at Clause 7(1), he will see that that makes provision for late applications.
LORD SHACKLETON: The noble and learned Lord is going rapidly through the Bill. We are now on Clause 7. Suppose there is a completely new invention. Suppose somebody invents an antigravity device which enables the noble and learned Lord to float into the Chamber. This would not fall into any particular class of goods. Perhaps he can relieve my mind by saying that this particular item would be covered under Clause 7(1), because, if so, I should then be with him in opposing this Amendment.
THE LORD CHANCELLOR: If the noble Lord wants to apply resale price maintenance to any new line of floating which the noble Lord would like to invent, provision is made for that under Clause 7, subsection (1). I hope the noble Lord will read the whole Bill. Provision is made under that clause for an application to be made to the Court.
LORD HAWKE: I am a bit befogged by all these exchanges. May I ask my noble and learned friend this question: am I right in thinking, then, that the alternative to resale price maintenance on a new product, which is the giving of a monopoly to a dealer or a retailer for a particular area and so enabling him to pick what price he likes, will be in order?
LORD WAKEFIELD OF KENDAL: Before the answer to that is given, may I ask: what, then, is the position of somebody who desires to distribute widely by mail order?
THE LORD CHANCELLOR: What I was saying a little earlier on was to suggest that we really cannot deal with the Committee stage of this Bill by taking a whole number of Amendments and different clauses all at the same time. There is difficulty, I agree, in dealing with the first Amendment, when noble Lords ask questions, as they quite
1312
rightly do, on what is the position under Clause 2 or any other clause. My noble friend and I have done our best to answer those questions quite shortly for the convenience of the Committee, but if we are challenged upon them then we will endeavour to substantiate by argument the reasons why we have expressed those views. So far as my noble friend's answer is concerned, which was an answer in relation to the interpretation of Clause 2, I would confirm that, in my belief, as the Bill now stands, a manufacturer would be able to adhere to a particular policy, if he wished it, as to the distribution of his goods, by saying for instance, "My policy will be to have not more than one dealer in this particular line at any particular time". But we will come to that in Clause 2, and will then be able to discuss it.
LORD AIREDALE: When the noble and learned Lord the Lord Chancellor referred, as he did, to Clauses 5 and 7, he was referring, was he not, to clauses dealing with goods of a particular class; whereas the point that I think the noble Lord, Lord Shackleton, was making was that if an inventor invents some new product which happens to fall within a class which has not been exempted under either Clause 5 or Clause 7, then neither of those clauses can in any event come to the rescue of the inventor.
THE LORD CHANCELLOR: I had hoped I had made that clear earlier on, when I said that if the new invention was in a class which had been exempted by the Restrictive Practices Court it would continue to be exempted unless and until the matter was reviewed. I also said—and I am sorry if I did not make myself clear—that if the new invention was within a class which either had not been registered by manufacturers or had not been exempted by the Restrictive Practices Court, then resale price maintenance could not apply with regard to that unless and until the matter had come again before the Restrictive Practices Court. I said that earlier on, although it may be my fault for not making myself clear.
LORD AIREDALE: I am much obliged.
LORD SHEPHERD: The short debate we have had on this Amendment illustrates the difficulty which I think most of the Committee feel. Perhaps on this particular Bill there might have been some point if we had had a Second Reading debate on the principle as to what is the Government's intention, and then had had another debate during which we could have discussed all the various clauses and brought them together. However, I think we have had a useful debate. I am glad of the support of the noble Lord, Lord Coleraine, and of the noble Lord, Lord Hawke; and I also take note of the criticisms of my noble friend Lord Shackleton. I think that my noble friend and those who, like the noble Lord, Lord Lucas of Chilworth, are opposed to this Amendment must recognise that the Bill does not sweep away Section 25 of the Restrictive Trade Practices Act. The Government themselves have said that there should be exceptions, and they have laid down the method by which exceptions should arise.
This is not a blanket provision, as the noble Lord, Lord Drumalbyn, has suggested. He poked great fun at the dresses, which, of course, was a good Party point; but that position would have been well covered by the fact which the noble Lord, Lord Coleraine, mentioned as to capital investment. In the manufacture of dresses there would not be anything like such a figure. In any case, the agreement which the manufacturer would enter into would be for only a limited period of eighteen months or so, as suggested in this Amendment.
I think we have had a useful discussion. I should not wish to put this in issue at this stage, because I recognise that much may hinge upon later debate on Clauses 2 and 4 and Clauses 5 and 7; but I think we have had an introduction to the difficulties with which the Committee are presented, in spite of all that went on in another place. I would suggest that if, with the leave of the House, I withdraw this Amendment, we should look at the position as the clauses go by, and if we do not feel happy about the position to help new lines being brought on to the market, then we should come back to it on the Report stage. I hope that meets with the agreement of the Committee.
Amendment, by leave, withdrawn.
4.27 p.m.
VISCOUNT HANWORTHmoved, in the proviso to subsection (2), to leave out the word "licensee", where it occurs the second time, and insert "holder of any such licence". The noble Viscount said: I hope that this is only a drafting Amendment. The intention of the proviso to which this Amendment relates is, I find personally, a little obscure, but presumably it is that if a licensee grants a sub-licence, then under the sub-licence he is able to regulate the price at which the sub-licensee sells the articles which he manufactures under the sub-licence. It can be argued that a sub-licensee is covered by "licensee", but there is some doubt on this; and if the licensee grants a non-exclusive sub-licence—that is to say, a licence which does not preclude the licensee himself from manufacturing and selling—then he, the licensee, may regulate the price at which he himself sells the goods which he manufactures, but may not regulate the price at which the sub-licensee sells. To overcome any possible doubt on the interpretation of this Proviso, the Amendment substitutes the words "holder of any such licence". I beg to move.
Amendment moved—
Page 2, line 19, leave out ("licensee") and insert ("holder of any such licence").(Viscount Hanworth.)
LORD DRUMALBYN: I am not quite certain, really, what the difficulty is that my noble friend has in mind, because the word "licensee" is followed by the words "or assignee". Surely, the sub-licensee would be an assignee for these purposes. Therefore, I do not quite see why my noble friend wants to make the alteration—or, indeed, what advantage the alteration would have for him.
VISCOUNT HANWORTH: If the noble Lord is quite satisfied that the point I was making is met, I certainly do not wish to carry the matter any further.
VISCOUNT COLVILLE OF CULROSS: Before the noble Viscount withdraws his Amendment, I wonder if my noble friend Lord Drumalbyn would just look at this point again. The ordinary use of the word "assignee" is to describe somebody to whom the whole of the licence has been assigned, and not only a part of it, with, as it were, a reversion to go back to the original licensee. That is the

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usual use of the term in the contexts to which I am used. If the sub-licensee is a person who ought to be specifically mentioned in this Bill, then I wonder very much whether "assignee" is apt to deal with it.
THE LORD CHANCELLOR: I think the word "assignee" in itself, is really not apt to deal with it; but I consider the wording of the clause is sufficient to cover both the licensees and the class mentioned, the sub-licensees. However, I will have a further look at that to make quite sure. It is certainly the intention that that should apply. Though I need not take the time of the Committee now, and I think the wording is sufficient to cover sub-licensees as well, I will certainly look at it.
Amendment, by leave, withdrawn.
4.31 p.m.
LORD SHACKLETON LORD SHACKLETON moved, after subsection (2), to insert:
"() If it appears to the Registrar—

(a) that a supplier by any agreement purports to retain ownership in goods up to the date of delivery by a dealer to a consumer. and

(b) that the normal practice of the said supplier up to the date of the agreement has been to supply similar goods to a dealer or dealers for sale, and

(c) that the object of the said agreement is to circumvent the provisions of this section,

then the Registrar may refer the agreement to the court."
The noble Lord said: The purpose of this Amendment is to block up a possible loophole. If your Lordships will examine the Amendment closely you will see that the purpose is to prevent a supplier from enforcing the equivalent of a fixed price by retaining the ownership of the goods by some device. I have not come across an example of this happening, but it seems to me that it would be perfectly possible. I should like the views of the noble Lord, Lord Lucas of Chilworth, on this point, because it may be that this occasionally happens in the motor trade, where it would be possible for a manufacturer to enter into some form of agreement with a retailer by which the ownership of the particular goods remained with the manufacturer or supplier until the actual moment of sale. This could apply also in other fields—for example, in the case of petrol or tyres. Though
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I believe that it would be unlikely to apply in most small consumer goods, I think it would be possible particularly with radio sets and refrigerators.
Even if it does not happen now it is quite clear that with a Bill as complex and, indeed, as open to different interpretations as this, those people who wish to defeat its objects will look for loopholes. I hope the Government will be inclined to look favourably on an Amendment which seeks to serve the main purpose of what they want and which may save them the trouble of amending legislation in the future. I beg to move.
Amendment moved—
Page 2, line 19, at end insert the said subsection.—(Lord Shackleton.)
LORD STONHAM: Before the Minister replies to the Amendment I should like to ask him to consider a very common type of transaction, which again has nothing to do necessarily with resale price maintenance, but in which a manufacturer does retain ownership of the goods. I refer to the case where the goods are delivered to a retailer on approval.
It is quite a common practice for furniture to be delivered to a retail store on approval, on show, as it were, not just for a day or two, but sometimes for several months. A whole display may be in the ownership of the manufacturer whose insurance even covers the goods while they are in the retailer's establishment. They are not invoiced in the ordinary way but only when the retailer says that they have been sold. Then the manufacturer sends an invoice for them. If they are not all sold then, of course, some of the goods are returned. This is quite a frequent type of transaction, and I wonder whether it would be regarded as an attempt at evasion of the terms of the Bill and whether the practice would need to be registered.
LORD SILKIN: I hope that my noble friend will not mind my saying so, but he has not read this Amendment with his usual care. The Amendment provides that where it has hitherto been the normal practice to supply goods for sale, and the practice is changed, by adopting a new method of retaining ownership, for the purpose of circum-venting this Bill, then it should be referred to the Registrar.

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Like my noble friend who moved the Amendment I cannot quote examples of this happening at the present time. Certainly the cases referred to by my noble friend Lord Stonham, which are normal practice, are not the sort of case that we have in mind. We are concerned with a case where a new practice is adopted simply for the purpose of circumventing the Bill. I am not even sure how it does, in fact, circumvent the Bill to retain the ownership. I am not sure whether it does or not; but it has been suggested that this would be a way of circumvention, and I should be glad to have the views of the Minister.
LORD LUCAS OF CHILWORTEL: I join the noble Lord in hoping that the Minister will explain the situation. I feel that the point cannot have escaped the Government's attention. I can illustrate it in this way. When the incidence of purchase tax was introduced into the motor-car industry, the amount of purchase tax on a motor car was so high that no reasonable, commercial-minded dealer in motor cars would ever stock a motor car because of the risk of a purchase tax reduction which was far more than the profit he made. So it was then conceived that the dealer of a high-priced article, such as a motor car, would buy the product from the manufacturer on a kind of hire-purchase system. He paid a deposit on the motor car, which was the amount of the whole-sale price, and left the balance, which was the amount of the purchase tax, to be paid when he sold the motor car to a retail purchaser. In other words, the title remained with the producer until a moment of time. The technical argument, which I hope the noble Lord will explain to the Committee, is at what moment of time does the transaction I have described become a sale for the purpose of deciding whether there is a new agreement between the producer and the seller aimed at circumventing these provisions of the Bill.
I now refer to the point made by the noble Lord, Lord Silkin. It may well be that, coupled with the consignment arrangement, or "sale or return" arrangement—but consignment arrangement is the one have in mind—the producer of a high-priced article—it may be an article like a motor car, a wireless set, a television set, a grand piano and so
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forth—again retains the title, not only under a consignment agreement but under a hire-purchase agreement. At what time does the hire-purchase agreement, where the title rests all the time with the producer, and at what moment of time does the title pass to the seller—not to the retail purchaser—where this Bill bites as regards the price maintenance agreement? I think that is the point that is worrying. I think that an attempt was made in another place to debate this point, but I never felt quite satisfied that the arguments put forward were valid. Perhaps the noble Lord will satisfy us that there is not a loophole, because I have every sympathy with the principle of Lord Shackleton's Amendment.
LORD SILKIN: Again the noble Lord has not really addressed himself to the terms of the Amendment. He is speaking of what might be normal practice. The Amendment does not purport to deal with normal practice at all. It deals with the case where a supplier delivers goods in the normal way as a sale and then, because of this Bill, changes his practice for the express purpose of circumventing the Bill.
LORD LUCAS OF CHILWORTH: With respect to the noble Lord, I have addressed myself to the Amendment. What is a normal practice with one producer is not a normal practice with another. For example, for a manufacturer to have his own hire-purchase agreement is not common practice with all manufacturers. I am interested in the principle of the Amendment, which wants to stop up a loophole of evasion. There are so many ways in which these things can be got round. I hope that the Minister will satisfy the Committee that there is no loophole and that our apprehensions about the law are unfounded.
LORD DRUMALBYN: I would say to the noble Lord, Lord Shackleton, that we are not unsympathetic with what he has in mind here, but I do not think it is necessary to have this kind of Amendment. There are two kinds of case which noble Lords have in mind here. In one case, they have in mind the supplier who might go wholly over to a full agency, where the supplier will be supplying as principal to customers. In the other case, the supplier may devise some means which will enable

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him to keep control of the goods to the point where they reach the consumer.
So far as we can see, the only way in which resale could be avoided would be if the customer were to buy from the principal instead of from the dealer —in other words, if the dealer became agent for the principal and the principal assumed responsibility for his actions within the terms of an agency contract, and even, in some cases, if the agent went beyond his authority under a contract. In the other case, of the so-called sale and return or consignment sale, to which the noble Lord, Lord Lucas of Chilworth, referred, surely resale remains. As the noble Lord said, there comes a point in time—the noble Lord then stopped abruptly, but what I think he was going to say was "if the dealer is to remain the principal, at which the goods must pass to the dealer before they come to the consumer". This has been presumed, I understand, in the purchase tax cases to which the noble Lord referred.
I do not think that any difficulty arises on an attempt to evade the Bill by anything short of a full agency arrangement. The question is whether, in order to prevent the evasion of the provisions of the Bill, we should have a clause such as this, so that any arrangements which appear to be made for an agency to take the place of the present arrangement for selling should be referred by the Registrar for examination. Our view is that this is something which is remote. Suppliers are most unlikely to contemplate setting up agencies all over the country and accepting liability for the actions of dealers acting on their behalf as principals.
I can tell the House that in one particular case which springs to mind—that of motor supply—we have made inquiries and the principal suppliers have given us specific assurances that they have no intention of indulging in any subterfuge in order to find a way round the obligation of the Resale Prices Bill. Therefore we do not think it is necessary to go so far as is suggested in this Amendment.
We feel that the right course is to wait and see whether, in fact, agency arrangements will be used deliberately as a device to circumvent the Bill. If
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so, the Government will certainly take action. It will be necessary to think this through and find a solution to the sort of difficulties indicated. But the difficulties are probably greater than the noble Lord had in mind. For one thing, it would put the Registrar in a somewhat unparalleled position. Under this Bill and under the Restrictive Trade Practices Act he has been given no comparable discretion in respect of any of his other functions, but if this Amendment were to be introduced into the Bill, he would have to be given pretty far-reaching powers to obtain and verify information on the basis of which he could decide whether to make a reference to the Court. Indeed, it might well involve registering this kind of change from existing practice to full agency agreement, so as to give the Registrar notice that that had been done. I wonder whether noble Lords, in putting forward the Amendment, have thought so far ahead as that.
I think we have to look a little further still and see how the Court would deal with agreements that were referred to it. The Amendment does not give the Court power to declare an agreement void, but clearly some such power would be necessary, if the Registrar were to refer such an agreement to the Court. Nor would that alone be adequate. There would certainly be some cases where the Court was not satisfied that an agreement need be declared void, but where, all the same, it might be necessary to provide that the Court should be able to make modifications in the agreement. Obviously, this is a complicated matter and somewhat cuts across the powers and functions of the Registrar. Our general view is that the likelihood of full agency agreements being adopted in order to circumvent the Bill is not very strong, but we give notice that, if they are adopted, we will certainly take action.
On the other side, we do not believe that there is any means that can be devised for preventing a subterfuge which would enable the supplier to control the resale price without also controlling the goods as principal right up to the point of sale to the consumer. For these reasons, I hope that the noble Lord will not press this Amendment.
LORD SILKIN: When the noble Lord says that the Government will certainly take action, does he mean there will be new legislation on the subject?
THE LORD CHANCELLOR: May I in answer to that question say what my approach to this would be, which I think is supported by what my noble friend has just said? When this Bill reaches the Statute Book, I am confident that the vast majority of manufacturers, who are reputable people, will say: "If resale price maintenance in relation to our goods is stopped we shall not seek to get round that by any devious device." I think that is worth saying. I am certain that the reputable ones will take that course. But in saying that one cannot exclude the possibility that there will be a small proportion who, by one means or another, will seek to obtain the advantages they now obtain from resale price maintenance. One can accept that, too. But I do not believe that one can deal with that situation by legislation in advance.
The noble Lord, Lord Silkin, has put the case for the Amendment with extreme reasonableness, and the Amendment is only linked where there has been a departure from the present practice. It is difficult to discuss in debate the precise moment when the change of ownership will take place. But the discussion has shown. I think, that there is no real risk, so far as we can see, of a means of avoidance occurring if, even notionally, the property in the goods is transferred to the dealer at or notionally before the time he sells it to the consumer. That would be caught, as I see it, by the Bill as it now stands.
The suggestion was put forward by the noble and learned Lord, Lord Gardiner, in the course of our Second Reading debate that it would be quite simple to devise methods, analogous to the methods of hire-purchase, whereby the manufacturer retains ownership and merely allows the possession (this was raised by the noble Lord, Lord Stonham) to be in the hands of the dealer, and then the title passes direct from the manufacturer to the purchaser. I do not see how that could be easily achieved, and I do not think it is at all likely.
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My approach to this, frankly, would be this. We think the risk of adoption of this kind of device is remote. But it may be adopted. It would be much better, I think, to take the course that we so often take in regard to our financial legislation. Let us see what the scheme for avoidance is, and then, if I may indulge in some slang, knock that scheme on the head, and make sure we do it. Legislating in advance to stop a possible avoidance device when we do not know what the device is may be singularly inoperative. The noble Lord asked the question: Does this mean fresh legislation? I think I can give him a fairly definite answer to that. If such avoidance devices do happen—and I rather doubt whether they will—then I think there is a case for fresh legislation to deal with it. As my noble friend pointed out, this particular question is raised by the Amendment, but it is not solved by the Amendment: because if you are going to knock a scheme of this sort on the head, you want to make sure that you do knock it on the head, and you would want to give powers to the court to condemn that scheme and in some way make it unlawful. I think it would be wiser to wait and see whether this happens, and then deal with it.
LORD LATHAM: The noble Lord, Lord Drumalbyn, specifically referred to what he termed a "full agency". It would not be necessary to have a full agency; one could have a limited agency. It was the case in the motor trade for many years—whether it is now, I cannot say—that the tyre companies appointed persons as stockists and supplied them with goods on sale or return, and the property in those goods only passed at the time the tyre was sold to the consumer. What would be the situation as regards agreements of limited agency?
THE LORD CHANCELLOR: It is hard to answer a general question like that on limited agency, because it depends on the limits imposed in the individual case. But I would say that, so far as the principal is concerned, he would still be at some considerable risk of finding himself involved in difficulties, and finding himself, as against third parties, having to dispute whether or not that particular agent had been held out for a particular purpose. The point put by the noble Lord is that where tyres

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were supplied (it is not so much a limited agency point) to a dealer on sale or return, how would this Bill apply in that case? I can answer the noble Lord quite simply on that. The dealer sells the tyre to the consumer. If he is to give the title to the consumer, the title in the tyre must pass immediately before he does so from the tyre manufacturer or tyre supplier to the dealer. So the Bill will still bite on that particular transaction. I dealt, first of all, with limited agency, but I do not think it has any bearing on this point. So far as I can see, the Bill will bite on the particular set of facts mentioned by the noble Lord.
LORD STONHAM: Perhaps I may say one word arising out of what the noble and learned Lord has said. He has just cleared up one point in my mind, as to where the title passes. But he used the word "device". I am sure he will accept that the practice of sale or return in certain industries is a perfectly legitimate and proper procedure, and, as my noble friend Lord Silkin said, it would be a customary method of trading. But assuming that a firm at present doing that kind of business—and in most cases it would be only a small fraction of their total business—decided for the wrong reason to do all their business in that way, would the Bill without this Amendment bite?
THE LORD CHANCELLOR: I am glad the noble Lord has intervened to put this point, for the simple reason that I should not like anything I said to be misunderstood. I am certainly not wishing to be at all critical of the practice of supplying goods on sale or return, and I should not like anything that I said to be so inferred. When 1 used the word "device", I was applying it in the context of some newly-devised system that got round the operation of this Bill by preserving the advantages, or alleged advantages, so far as the manufacturer and others were concerned, of resale price maintenance.
LORD SHACKLETON: The noble and learned Lord has been most helpful and conciliatory, and I can understand that there are good reasons for this in regard to a Bill that is already complicated enough: the Government feel that they have the tiger by the tail, and they do not want to add to its fury. They have conceded that there is a possible evasion
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or loophole here. The Lord Chancellor has said that he is quite sure the majority of reputable suppliers will have no wish to try to avoid the effect and intention of the control over resale price maintenance; and, of course, we accept this. He also agreed that there might be the exceptional case—the group who were determined to get round it, or words to that effect—and when that happened he said we must knock them hard and have new legislation, breathing a sigh of relief and hoping that he would not have to explain that legislation when it came about.
THE LORD CHANCELLOR: I may have been breathing heavily, but I certainly was not breathing a sigh of relief.
LORD SHACKLETON: When we introduce legislation, we ought to try to provide for what I think are likely contingencies. May I give a further argument as to why I think something like this is necessary in this Bill? We know only too well what a bad effect legislation of a restrictive kind can have in distorting patterns in industry, in a tendency to force a particular structure on organisation in order to avoid the effect of legislation. It is, of course, notably so in regard to taxation legislation. If we do not put something like this in, it is quite likely that in future we shall not be able to accuse people of evasion of the law. It will be perfectly legal for them to do it.
I admit that my anti-gravity device, which I mentioned, may be a little too futuristic, but there will be many new developments in the course of the next few years, and it may well be that a particular manufacturer, conscious of the failure to provide for his protection, which my noble friend's Amendment might have done, will decide that he will market a new product in a certain way, a way in which he is able to maintain the price of the goods. He can do this in a number of ways. First of all, he can do it by having his own outlets and merely operating through his own shops or garages, whatever they may be. Indeed, this may already apply in the case of petrol. It is perfectly possible that the petrol companies may extend their ownership, and I do not see how, under this Bill, and under my Amendment, we can deal with that. That I quite agree.

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I admit that in my remarks I am raising a very wide issue, but I think it is an important one for us to look at; and this is as convenient a point as any. There are certain manufacturers already who take certain steps to ensure what they regard as a proper return in order to avoid the effect of possible competition between suppliers. Let me take one example. There is certain office photocopying equipment—the Xerox machine is one, and there will no doubt be others—which you cannot buy but have to hire. This has the effect of keeping the price up. There are a number of devices open.
I should like to ask the Government, since we arc on such good terms at the moment on this issue—there is no real difference between us on the desirability of what we want to do and it is only a question of the timeliness—whether they would not look again at this question. There is force in the argument of the noble and learned Lord that it is better to wait and see what form this takes, and then knock it on the head. That means new legislation and, furthermore, it is apt to become retrospective legislation. People may already in good faith have set up a form of distribution through agents to enable them to maintain price control, and at that point the Government want to come and knock them hard. I said there was an obligation on us, if we are going to produce effective legislation, to try to foresee some of these things. I would ask whether the Government would consider these further points. It may be that other noble Lords may have some further observations to make.
THE LORD CHANCELLOR: Of course, we have considered, and given a lot of consideration to, these points; I can assure the noble Lord of that. The Amendment proposed deals only with one possible way in which there might conceivably be an attempt at evasion. It deals in paragraph (a) with the supplier, by an agreement, purporting to retain ownership in goods up to the date of delivery by a dealer to a consumer. As I pointed out, that will not affect the position where notionally the property in the goods must pass from the supplier to the dealer for the dealer to be able to pass the title, or to be able to be in the position to effect a sale from him to the purchaser.
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I hope that nothing I have said led the noble Lord to suppose that under this particular provision there would be evasion. My observations were much more general. Just as when one stops some practice in the taxation field it is impossible to predict in advance the various devices that may be sought to be adopted by various individuals or concerns and to deal with them at the outset, so in this field I think it is really impossible to deal effectively with such risk as there may be of some small section of the manufacturing industry entering into this field. I think the risk is slight, but again I make the point that until you know what that practice is it is not easy to legislate effectively to put an end to it. It is much better, therefore, I believe, to leave this as it is, to watch the situation, and to deal with it in, as we think, the remote event of some suppliers seeking to avoid the operation of this measure and to retain for themselves the advantages of resale price maintenance by devices intended to avoid and escape the operation of this measure.
LORD LATHAM: Surely everyone is entitled to avoid. To evade is another matter.
THE LORD CHANCELLOR: I am not going to enter into a difficult semantic argument with the noble Lord, with which I am most familiar in regard to the tax law, of the difference between "avoidance" and "evasion." As the noble Lord will agree, there are many avoidance devices.
LORD LATHAM: They are quite bone fide.
THE LORD CHANCELLOR: They are no doubt done quite bone fide, but which the Chancellor of the Exchequer has not infrequently to stamp upon and put an end to. I am using the word "avoidance" in that form. This Bill is not making any conduct criminal; that is one of the advantages of this measure. What I am saying is that, if a method was thought out for avoiding the operation of this Bill and securing the advantages of resale price maintenance despite the wishes of Parliament, it would be better to deal with that when it arises than to speculate as to the possible forms it might take.
I would add this. Even if I were wrong about that and I do not carry

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the noble Lords with me, the provision in this Amendment is wholly ineffective to stop even a practice which came within paragraph (a), because all that would happen would be that the Registrar would report to the Court. The Court has no power to do anything. I will be quite frank about this. You would have to put a whole new clause in this Bill to enlarge widely the powers of the Court and the powers of the Registrar. At the end of the day, having done that, one could have no confidence that one had hit the target, because one would not know what the target was at this stage.
LORD LUCAS OF CHILWORTH: May I just add this? I think the Committee should be very grateful to the noble and learned Lord for the exposition he has made; I think it will clear up a lot of misapprehensions. He has laid down the firm intention of the Government not to stand for any avoidance of this particular principle. I quite agree with him. If we were to do what the noble Lord, Lord Shackleton, clearly had in mind, it would mean a major alteration of the Bill, and for myself—I cannot, of course, speak for the mover of the Amendment—with some knowledge of the various devices which can be used, I am quite prepared to leave it where the noble and learned Lord has said the Government would like it left.
LORD SHACKLETON: I am sorry that we are not getting any further. I am very grateful to the noble and learned Lord. I still think there ought to be some provision on the lines of my subsection. The Government have not hesitated to put on to the Court the most onerous tasks in regard to this particular Bill, and I should have thought, if my Amendment is not satisfactory, which I fully understand, that we ought to consider some other words. However, in the circumstances, I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.12 p.m.
LORD SILKIN LORD SILKIN moved to add to subsection (4):
"provided that such notification clearly states that the recommended price is not the minimum price".
The noble Lord said: This Amendment, at any rate, is a simple one, and I hope
1328
that it will be acceptable. Subsection (4) of Clause 1 provides that a supplier may notify to a dealer the price which he recommends as appropriate for the resale of goods supplied or to be supplied by the supplier. Such a notice would be legitimate. But the wording might well be misunderstood in some cases as meaning that that is the minimum price at which the goods should be sold. What I am suggesting is that to avoid any misunderstanding, where a supplier does, in fact, indicate to a dealer the price he recommends, he should state quite clearly that in so doing he is not recommending this as the minimum price. This is merely a clarification Amendment, and I hope that it is acceptable to the Government. I beg to move.
Amendment moved—
Page 2, line 28, at end insert the said words.—(Lord Silkin.)
LORD DRUMALBYN: As I understand it, the Amendment which has been moved by the noble Lord would mean that no notification under this subsection (4) could be given except where it was clearly stated that the recommended price is not the minimum price. I would suggest that this is putting a very wide responsibility on to the supplier. I am not quite clear as to how wide the noble Lord wishes this to go. Perhaps I might explain how we think this is likely to operate, for that will probably best illustrate to noble Lords what we have in mind.
It seems to us that after Clause 1 has come into force it will be unlawful to try to maintain prices on any goods unless the goods have been registered. it follows, I think, that unless dealers are told by suppliers that the goods have been registered they will feel entitled to cease to sell at the old fixed prices. That is what is likely to happen. So I should expect suppliers would take that into account; that is the way they would reason. And suppliers who have been maintaining prices would, I expect, in their own interests, notify dealers if they intended to continue the maintained price pending examination by the Restrictive Practices Court. Indeed, I should expect them perhaps to notify dealers if they had not claimed the registration, because unless they do so I do not see how the dealers can be expected to know what was happening.

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So, if and when the Court decides that goods of any class are to be exempted goods, the suppliers again will probably inform dealers that they are, or are not, as it may be, even though the goods are in a class of exempted goods going to take advantage of the exemption. It seems to me this is what is likely to happen. If the Court decides that the goods of any class are not to be exempted, suppliers may be expected to inform dealers accordingly. In other words, this Bill is going to require changes in price policy wherever suppliers at present have a system of resale price maintenance. It seems to me that they will be bound, in their own interests, to inform dealers of what those changes are going to be.
In many cases, where, for example, the price is actually marked on the goods, suppliers will probably want to treat the price marked as the recommended price; but in all cases where they intend to recommend a price they will want to inform dealers of their price policy which, as I said, they wi11 have to revise in order to bring it into line with the Court's decision. In their own interests they will want to make it clear to dealers that they will not seek to maintain prices under the guise of a recommended price. If they do not do that they will all the time be under suspicion of trying to maintain prices under the guise of a recommended price. So, I think the real point is that, once the Bill has become law, dealers may possibly assume that they are free to sell at any price they chose, and I should expect suppliers right away, in their own interests, to take steps to tell dealers what the position is and what their price policy is.
If one were to go further than that and require on every tin of merchandise on which a price is at present marked simultaneous notification to be given that "this is only a recommended price," and, if, in every indication of a recommended price, we were to require that it should be made clear that it is only a recommended price, I should have thought that we were going very much further than is necessary. After all, in the field of trade people will be talking of these things all the time. I cannot envisage the possibility that, at the time when this Bill is being brought into operation, people will not be talking all
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the time about whether or not, in any particular case, and with regard to particular goods, prices are to be maintained for the time being.
In some cases, as I say, application will have been made for registration, and in such cases the supplier will want to inform the dealer that application has been made for registration. And when that has been done, of course, price maintenance will be able to continue. Alternatively, he may want the present price that he is maintaining to be a recommended price. But either way it seems to me that one can reasonably expect that in the normal course of business his salesmen will, as they go round, inform dealers of what the policy is, and that in many cases he will think it desirable to inform dealers what is his policy.
Therefore, to make it an essential statutory obligation to indicate, whereever a recommended price is suggested, that there should at the same time be a clear statement that that is not a minimum price, hardly seems to me to to be necessary. Therefore, I do not feel that it is necessary that we should accept this Amendment.
LORD SHEPHERD: I am quite sure my noble friend in moving this Amendment did not envisage the statement which is required in the Amendment being put on goods, such as a packet of toothpaste. This I think would be carrying this matter too far. But the noble Lord must be aware of the criticisms that were made by the Restrictive Practices Court and the Registrar's own report on some of the information agreements and information notices to which their attention had been drawn: that these information notices have passed between manufacturers, not in the sense of stipulating minimum prices but recommending a particular course of action and this has in fact become the minimum. This is what my noble friend, I am quite sure, had in mind; not the putting of this notification on the goods, but its being put on the price-list or the general circulars that pass between the various trade organisations. I should have thought, since we are not dealing simply with the transitional period, it would be wise to make it quite clear in any notification—and we have in mind the price-lists and general circulars—that the recommended price is not the minimum price.
LORD MABANE: I think the Amendment should be opposed. I think it would be dreadful if anyone who can recommend prices must say, on every advertisement, on every window bill, "The price is x shillings, but this is not the minimum price". It would cause tremendous confusion.
THE LORD CHANCELLOR: I appreciate the point the noble Lord made with regard to information agreements. Whether they can strictly technically be called agreements is another matter. They are agreements which pass information between parties willing to maintain a restriction. The position here is rather different. I cannot believe, after all the debates in another place and the debates we are likely to have, that when this Bill reaches the Statute Book people will really not know that it is only in the case of the exemptions and those cases which are registered that resale price maintenance will continue. And where it is continued by registration and later perhaps by exemption, then I think the onus must be upon those who are seeking to maintain the resale price maintenance to notify those to whom they supply these goods that they are resale price maintained: and in the absence of this kind of notification, my belief is that everyone will assume, despite the price printed on the article, that there is nothing to stop the retailer from selling at a lower price if he wishes. If that line of argument is right it really is putting an unnecessary burden upon suppliers of goods if every time they supply goods with a price upon them they have to send out notification. I appreciate the noble Lord's point that he does not want it printed on a tin of toothpaste, but he wants a notification to be made; every time there is a new batch or a new price there would have to be a fresh notification. I do not believe it would be right to place that burden upon the supplier, and I really do not see that it would serve any useful purpose. At the end of the day when this Bill reaches the Statute Book the exceptions will be the goods in which resale price maintenance can continue and the majority will be the goods where it cannot continue. Therefore, I believe the approach in the Bill is right.
LORD SHACKLETON: May I ask the noble and learned Lord whether there is any obligation on suppliers whose goods are price maintained where it is agreed to give this information?
THE LORD CHANCELLOR: There is not a statutory obligation, but it will be for them if they wish to maintain resale price maintenance to give notice; otherwise I cannot see that they are likely to be able to maintain it.
LORD SHACKLETON: Might it not meet my noble friend's point if the onus was on them always to indicate that their goods were price maintained, and then dealers would know that all other goods were not price maintained? This might meet the point. I am very much in sympathy with my noble friend's point on this. I think there is room for misunderstanding, and if by some simple device a distinction could be made I should have thought it was desirable.
THE LORD CHANCELLOR: I do not think there is any need to put a statutory obligation upon the supplier who is entitled to maintain resale price maintenance on his goods to take a step which will be absolutely essential if he wishes to retain resale price maintenance in relation to those goods.
LORD SILKIN: I must confess I am very disappointed indeed at the heavy weather which is being made of a very simple Amendment. If this Amendment is not accepted, then I must say I do not see the point of the Committee stage at all. It is being assumed that every dealer is going to be familiar with this Act; even the small shopkeeper around the corner is going to study this Act and understand all the implications of it. I think it is much more likely that when a dealer is notified by a supplier, "These are the prices which we recommend"—and not on each tin, of course not, but he will be notified these are the prices recommended—he will believe, or some dealers will believe, that they are the prices at which one is required to sell, the minimum prices. All that is suggested is that, at the time of the notification, on the circular or any other document it should be stated in clear terms, "These are prices we recommend but they are not to be regarded

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as minimum prices". If that is not accepted, then I really do not understand the point of the Committee stage at all.
THE LORD CHANCELLOR: I am sorry if the noble Lord feels like that about this Amendment. One is always apt to get enthusiastic about one's own Amendments. I remember in years gone by getting very indignant with the noble Lord when he rejected what I thought were very improving Amendments to the Town and Country Planning Bill in 1947. He took a very firm line and nearly broke my heart. I am not trying to break the noble Lord's heart. We do give serious consideration to all the Amendments. I
5.39 p.m.
On Question, Whether Clause 1 shall stand part of the Bill?
THE LORD CHANCELLOR: There is one point I should like to make with
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can only express regret that the noble Lord should be disappointed. I should not like him to think that we do not consider, as carefully as he no doubt considered Amendments in those days, Amendments put up by noble Lords.
LORD SILKIN: I was much more reasonable. If the noble Lord will refer back to those days he will find that a large number of Amendments were accepted.
5.30 p.m.
On Question, Whether the said Amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 31 Not-Contents, 67.

CONTENTS

Addison, V.

Latham, L.

Shackleton, L.

Alexander of Hillsborough, E.

Listowel, E.

Shepherd, L. [Teller.]

Attlee, E.

Morrison, L.

Silkin, L.

Champion, L. [Teller.]

Morrison of Lambeth, L.

Stonham, L.

Chorley, L.

Ogmore, L.

Summerskill, B.

Francis-Williams, L.

Peddie, L.

Taylor, L.

Gaitskell, B.

Rea, L.

Walston, L.

Henderson, L.

Sainsbury, L.

Williams, L.

Henley, L.

St. Davids, V.

Williamson, L.

Hobson, L.

Samuel, V.

Wise, L.

Hughes, L.

NOT-CONTENTS

Aberdare, L.

Digby, L.

Milverton, L.

Ailwyn, L.

Dilhorne, L. (L. Chancellor.)

Monck, L.

Allerton, L.

Drumalbyn, L.

Montgomery of Alamein, V.

Amory, V.

Falkland, V.

Nathan, L.

Ampthill, L.

Ferrers, L.

Newton, L.

Auckland, L.

Ferrier, L.

Northchurch, B.

Balerno, L.

Forster of Harraby, L.

Redesdale, L.

Belhaven and Stenton, L.

Fortescue, E.

Robertson of Oakridge, L.

Bessborough, E.

Fraser of North Cape, L.

St. Aldwyn, E. [Teller.]

Blakenham, V.

Goschen, V. [Teller.]

Sandford, L.

Boston, L.

Greenway, L.

Sandwich, E.

Brecon, L.

Hanworth, V.

Selkirk, E.

Brocket, L.

Hereford, V.

Sinclair of Cleeve, L.

Burton, L.

Howard of Glossop, L.

Somers, L.

Carrington, L.

Iddesleigh, E.

Soulbury, V.

Coleraine, L.

Jellicoe, E.

Stamford, E.

Colville of Culross, V.

Jessel, L.

Strange of Knokin, B.

Conesford, L.

Lambert, V.

Tangley, L.

Cowley, E.

Mabane, L.

Teynham, L.

Daventry, V.

Mackintosh of Halifax, V.

Thurlow, L.

Denham, L.

Margesson, V.

Wakefield of Kendal, L.

Derwent, L.

Massereene and Ferrard, V.

Yarborough, E.

Devonshire, D.

Resolved in the negative, and Amendment disagreed to accordingly.

regard to Clause 1, as we shall be going on with this Bill and it is as well, I think, to get things straight. It may help in our consideration of the Bill at the later stages. The noble and learned Lord, Lord Gardiner, on Second Reading gave an explanation of Clause 1, when he said this: that it is simple

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enough and [OFFICIAL REPORT, VOL 258 (No. 80), col. 835]:
"The only effect of Clause 1 of this Bill is to repeal Section 25 of that Act, except in exempted cases."
I am sorry to say that the noble and learned Lord was in error with regard to that. As I think the noble Lord, Lord Shepherd, sees, Clause 1 prohibits the inclusion of terms in the agreement which operate to restrict prices; it does not expressly repeal Section 25. Section 25 bites only where there is such a term included in the contract. But the mere repeal of Section 25 would not have the effect that Clause 1 of this Bill has. If we are going to understand! this Bill properly as we go along, I think it helpful to the Committee to correct that error.
Clause 1 agreed to.
Clause 2:
Prohibition of other measures for maintaining resale prices
2.—(1) Subject to the provisions of this Act with respect to registration, to the powers of the Restrictive Practices Court thereunder and to the next following section, it shall be unlawful for any supplier to withhold supplies of any goods from a dealer seeking to obtain them for resale in the United Kingdom on the ground that the dealer—
(b) is likely, if the goods are supplied to him, to sell them at a price below that price, or supply them, either directly or indirectly, to a third party who would be likely to do so.
(3) For the purposes of this Act a supplier: of goods shall be treated as withholding supplies of goods from a dealer—

(a) if he refuses or fails to supply those goods to the order of the dealer;

(b) if he refuses to supply those goods to the dealer except at prices, or on terms or conditions as to credit, discount or other matters, which are significantly less favourable than those at or on which he normally supplies those goods to other dealers carrying on business in similar circumstances; or

LORD CONESFORD LORD CONESFORD moved, in subsection (1)(b), after "sell them" to insert "in the United Kingdom". The noble Lord said: The Committee will notice that the first subsection of Clause 2 has paragraph (a) and paragraph (b). In paragraph (a) the words are:
"has sold in the United Kingdom at a price below the resale price goods obtained"
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et cetera. In paragraph (b) it says:
"is likely, if the goods are supplied to him, to sell them at a price below that price"
et cetera. I think it is fairly clear that there is exactly the same case for saying "in the United Kingdom" in paragraph (b) as there is for saying it in paragraph (a). There is no reason at all, so far as I can see, why there should be any distinction in this matter between the two paragraphs. I think that the words "in the United Kingdom" have dropped out simply per incuriam, and I beg to insert them.
Amendment moved—
Page 3, line 1. after ("them") insert ("in the United Kingdom").—(Lord Conesford.)
LORD DRUMALBYN: I can assure my noble friend that these words did not drop out per incuriam. Indeed, it is doubtful if the Amendment is really necessary, because Clause 2(1) is restricted to cases where supplies of goods are withheld from a dealer seeking to obtain them for resale in the United Kingdom. However, I think my noble friend has some case in symmetry, if nothing else, on this matter, and if he thinks this will make the Bill clearer we are quite prepared to accept the Amendment.
On Question, Amendment agreed to.
5.43 p.m.
LORD SHEPHERD LORD SHEPHERD moved to add to subsection (1):
"Provided that for the purposes of this subsection goods' shall not he construed as including any trade mark or guarantee".
The noble Lord said: We now come to a part of the Bill which many people find quite obnoxious. I do not propose at this stage to debate Clause 2, but I think the noble and learned Lord the Lord Chancellor will agree that a case may well arise where a supplier is required to supply goods to a dealer whom he may not wish to supply. In other words, his grounds for withholding goods may not, in the Court's view, be sufficient to outweigh the price-cutting factor. It is one thing for us to require the supplier to supply goods, but I suggest that it is quite another thing to require the supplier to supply the goods with his own trade mark, or possibly with a guarantee.
It may well be that a full range of shoes—the noble Lord, Lord Mabane, drew my attention the other day to the

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case of "K" Shoes—is being sold in a big department store, and the owner of a smaller store close by goes along to the supplier and says: "I wish to purchase shoes from you and to sell them from my shop. I propose to sell below my understanding of the recommended price, but I want only one particular line of shoes, the quick-selling line. I do not want the full range." This is a regular practice and is something many retailers seek to do. I suggest that the supplier may be in some difficulty in refusing to supply them, but in order to protect his interests in relation to the bigger seller, who is buying in good quantities throughout the year, the supplier may say, "I will supply the shoes to the smaller applicant, but I do not propose to supply my particular brand"—in this particular case "K" Shoes.
One could think of other types of merchandise to which this would apply—for example, Burberry coats. In many cases the dealer who specifically goes after goods deliberately to sell them at a lower price than is generally recognised through the trade, is not after particular goods but is after the trade mark to which the supplier and other retailers have contributed their efforts to make into a selling line. I suggest that in that case a supplier should have the right to say: "I will supply, but will not supply with my trade mark."
To take the case on trade marks a little further, assume that a motor distributor, a garage, is out of favour with a motor manufacturer, the supplier—perhaps for not carrying a sufficient number of spares or for not providing the type of mechanical service he should do. As I see it, within this Bill the supplier will be called upon to continue to supply goods to the garage, and it may not be possible for him to take his brand off his goods. Will he be able to withdraw the signs associated with his goods which the garage has displayed? Whether that is a trade mark in this sense I do not know, but perhaps the noble Lord the Minister can help us. In the case of the guarantee much, depends on how the goods are applied. It depends a great deal upon the sales staff of the organisation concerned. In the case of electrical equipment, it depends whether the salesman has sufficient experience to tell the consumer the right equipment to buy to meet the particular circumstances.
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Furthermore, it depends upon the distributor's having the right sort of people to fit the appliance in the person's home.
The Government have said (and many people take this view) that the consumers should have the right to go to whatever shop they wish—perhaps to a shop which gives good, experienced service and provides spare parts and after-sales service. But the Government say (and again other people agree) that the consumer should be able to go to a shop which will sell the goods cheaply and give no service at all: the sort of shop which will reduce prices—and some will reduce them to the bone—and give no form of service at all. They will have no experienced people in the shop for they will not be able to afford to pay them. They will do it as an act of policy in order to sell an article. If such a shop is unable properly to advise its customers or unable correctly to install equipment in a consumer's home, then if the guarantee the suppliers issue with their goods is in any way in danger I suggest that they should be able to say: "We will supply these goods, but we propose to withdraw the guarantee. Therefore, you must make it known to your buyers that when they buy these articles they are buying them without our guarantee." This would go some way towards protecting the interests of the suppliers.
I know that some people will say, "This is against the consumer's interest. Why should the consumer, by going to a cheaper shop, not have the service that the manufacturer normally gives?" The shopper has gone deliberately to that shop; she is going to save money by deliberately going to that shop which does not provide any service, and I think it would be in the interests of the customer if she were informed at a very early stage of the purchase of, for example, a certain type of electrical equipment, that the shop was selling it at a particular price but was giving no service at all.
I am not thinking of shops which sell fractionally below the recommended price. I have in mind one particular company that has for some time had a policy of selling direct at very low prices, and is now in difficulties. There is a limit to how far you can reduce

1339
your margin, whether you are a wholesaler or a retailer. Once you start to reduce it below a certain figure something happens, and the consumer, in the end, is the one who suffers. I suggest that where a supplier is called upon under this Bill to supply goods, though in his judgment that is not the right course, he should have the right to say, not only in his interest but in that of the consumer, "I will supply those goods but without my trade mark." I beg to move.
Amendment moved—
Page 3, line 4, at end insert the said proviso.—(Lord Shepherd.)
LORD MABANE: I think the intention of this Amendment is wholly justified, and I go back for its justification to the Lloyd Jacob Report, which said this:
"We take the view that the manufacturer of a branded article remains responsible for the quality of the goods sold under his own brand. He cannot, therefore, be indifferent to the terms on which his goods are sold to the public. Our evidence has shown that well-known branded articles are particularly liable to be used as loss leaders by distributors, and we are satisfied that their use in this way has not brought any permanent advantage to manufacturers, distributors or the shopping public as a whole. Resale price maintenance offers a convenient means of protecting brands against misuse by distributors in this or other ways."
That is the whole purpose of this proposed Amendment. I think it is quite right that a manufacturer, who over the years has spent a lot of money on, and given great thought to, building up a brand name known to the public and trusted by the public, should be able, if he is required, to supply his goods, to say: "You cannot sell them under my brand name".
LORD LUCAS OF CHILWORTH: I am puzzled by this Amendment. Would the noble Lord, Lord Shepherd, mind explaining it to me? This Bill can apply only to branded goods, those which are sold under a brand name. The noble Lord mentioned "K" shoes. If a shoe shop which buys "K" shoes in quantity wants to sell them at a cut price, what does it have to do? Does it have to scratch the brand off the shoe? Perhaps the noble Lord will reply to me, because my recollection is that the brand is inside the shoe and on the instep
1340
of the shoe. What does the shopkeeper do in such a case? He sells it as a "no name" article.
The noble Lord talked about the guarantee. I wonder whether the noble Lord has ever studied a manufacturers' guarantee. I cannot claim to have studied them all, but in the industry with which I was connected for years the manufacturers' guarantee was never issued to protect the buyer. It was there to protect the manufacturer so that he could contract out of any obligation he had under Common Law: and if the buyer of a motor car could get away without the manufacturer's guarantee he was in Heaven. But he could not do so, because he could not get a motor car without signing a document, a contract, purporting to say that he accepted the manufacturer's guarantee.
The manufacturer's guarantee to the producer was not worth the paper it was written upon. It started off by saying that the manufacturer did not guarantee the article, or the merchandise, for any purpose whatsoever, in Common Law or otherwise. Do your Lordships not realise that the value of any guarantee lies in the good will of the manufacturer and the supplier? That is the guarantee. If a retail purchaser were foolish enough to go on dealing with a shop which never gave him any service, whether it was for a pair of shoes or whether it was for a motor car, that would bring its own reward.
LORD HOBSON: Will the noble Lord allow me to interrupt? While he is on the question of the manufacturer's guarantee, was that not so worded deliberately in order to contract out of the Warranty of Goods Act?
LORD LUCAS OF CHILWORTH: That is what I have just said. I said that it was to contract out of any obligation he had under Common Law. The noble Lord really ought to know that that is in Common Law. That is what I said.
I beg the noble Lord, Lord Shepherd, to realise that this Amendment is absolutely unworkable. You may want to say that the only goods that may be reduced in price are non-branded goods, but the whole purpose of this Bill is to say that price maintenance shall not be practised on branded articles. In regard to the wireless trade, the television trade

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or motor cars, can it be said that the service one can get on any article bears any relation to the price paid for it? The whole question of guarantee rests securely on the producer's and the seller's valuation of your good will. If they do not value your good will then they will not give you the service, whether you have paid the full list price or whether you have obtained the goods at a discount.
What is more, so far as service on some electrical goods is concerned—I expect I am now skating on some rather thin ice—if I could buy any piece of electrical apparatus at 10 per cent. discount, I should be better off than with the value of the service I should get if I look it back after a fault had been disclosed. So the buyer in the street can have the choice. He can go and buy branded goods; he can buy them at a supermarket, pick them out and carry them home, and he can pay one price for them; or he can have them delivered to his door, in which case he will, very likely, have to pay another price for them. But I can assure your Lordships that, in my interpretation of this Amendment, it is absolutely impossible. Again, I do not think the noble Lord realises—
LORD SHEPHERD: May I help the noble Lord?—because I would not want him to be under too much strain. I would suggest that he reads the Amendment and the Bill. The Bill says that it shall be unlawful for him to withhold supplies of any goods, and the Amendment says:
"'goods' shall not be construed as including any trade mark or guarantee".
The goods that the man will supply may be goods that are in the course of manufacture or in the warehouse. If the noble Lord had some experience of trades other than the motor manufacturing side, he would have found that a great many goods are, in fact, made up and labelled when the order has been received (the noble Lord, Lord Mabane, will agree with me here), because many customers like a small, special trade mark put on to their goods. So there would be absolutely no difficulty in dealing with this matter.
May I further correct the noble Lord? It is not a question merely of price-cutters.
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Looking at Clause 2 to-day—and we may be subject to correction later on, when we are dealing with the clause as a whole—it will be seen that it is not only the price-cutter who can get the goods but that any dealer, merely by saying that he intends to be a price-cutter, can get them. This is the effect of it, we think. It is not merely a pricecutter: it is any other dealer whom the supplier does not wish to supply.
LORD LUCAS OF CHILWORTH: I think that in his last remark the noble Lord has anticipated an argument which will take place on another Amendment, because, if he will permit me to say so, his last remark is a total misreading of the Government's intention on another part of the Bill. However, let us argue that later. The reason why I mentioned motor cars is that I thought the noble Lord spoke about the fact that you could not remove the nameplate from the radiator, or the outside signs. Of course you cannot; and, may I say, do not forget that you are dealing only with branded goods; you are not dealing with goods you buy from a manufacturer who sells them without his brand upon them and upon which you put your own brand. That is done, as I am well aware, in regard to many categories of goods. This Bill deals with those goods that are supplied by a supplier with his brand upon them. The noble Lord mentioned "K" shoes. You do not buy unnamed shoes and put a "K" brand upon them; you buy "K" shoes from the "K" shoe manufacturer, whose price protects him. They are his manufacture, his brand. If you have them in your shop you sell them as that brand.
LORD SHEPHERD: You can sell them at what price you like.
LORD LUCAS OF CHILWORTH: And you can sell them at what price you like. As to the other type of goods the noble Lord mentioned—at least, this is my understanding of what the noble Lord said—you buy them as unnamed goods and put your own brand upon them. Those are not price-protected. So I would ask the noble Lord to consider this, first of all. These are branded goods, price-protected by the original manufacturer who supplied them, and I say that this is totally unworkable when you take that into consideration.
LORD STONHAM: The noble Lord, Lord Lucas of Chilworth, varies in manner between the avuncular and the Almighty so far as his knowledge is concerned. Of course, we always acknowledge his limitless awareness of the ramifications of the motor industry, but I think that in answering my noble friend's argument he tended to assume omniscience on a much wider range of products than is usual. I do not agree—in fact, I think it is a libel on a great many manufacturers—that the only value of their guarantee is their assessment of your goodwill. Some of the greatest businesses in the country have been built up because they supply a very good article and are prepared to stand by it.
LORD LUCAS OF CHILWORTH: If the noble Lord would forgive my interrupting him, that is what 1 thought I said. It is the goodwill of the producer which is far more valuable to the customer than any written document. That is what has built up the names of these great manufacturers. I have never known one who would not honour his guarantee in the spirit without the letter.
LORD STONHAM: I think that is mere dialectics, because the value of the guarantee to the consumer lies in the fact that, if there is a defect in the article within the guarantee period, the manufacturer will either put the article right or supply another one. This question of branded goods does not apply only to motor cars, electrical goods or machinery; you can find guarantees when you open a box of branded chocolates, with a packer's number, and if they are defective you can send them back and get another box of chocolates. The point here is the very simple one that in a good many classes of goods the branded name, the recognised name, is one of very great value to the public and, of course, to the manufacturers, which has been built up over the years. Covered by the price is an element of service which, in conditions described by my noble friend Lord Shepherd, cannot he given to the consumer. In many cases retailers just do not employ enough staff to give the service. It is one thing to pick up a package in a shop and take it away if it has on it a brand name which implies, or in fact gives, a specific guarantee; but if the retailer of that article cannot give the service which is stated in the guarantee, and which is normally
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covered by the price, then quite obviously it is doing damage to the consumer and certainly great damage to the manufacturer.
The proposition put forward in my noble friend's Amendment is that under such circumstances the supplier would be justified in withholding from those particular goods his brand name and the guarantee that he would normally give. That means that he would then be, though perhaps unhappy about it, fairly indifferent to the fact that there would be price-cutting in his goods, because those sales would not damage the brand image or the guarantee. I think it is a perfectly reasonable Amendment, and one that many of the greatest and most reputable firms in this country would support.
LORD DRUMALBYN: The noble Lord, Lord Shepherd, in introducing this Amendment, started off by saying that we were now approaching a part of the Bill which is obnoxious to many people. On that, I would only just say this: that this clause does deal with withholding, and that that is one of the principal ways of enforcing resale price maintenance. It is quite clearly something that has to be dealt with. Obnoxious or not, it has to be dealt with if we are to deal with this practice. It seems to me that this Amendment poses quite a simple question, which is: is the fact that a dealer has sold below the resale price, or is likely to sell below the resale price, a good reason to deprive that dealer of the brand-mark on the goods, to withhold the goods bearing that brand-mark, or to say that the goods will not be accompanied by the guarantee? That is the sole question that we have to deal with here.
If we are being asked to say that any form of discrimination in the supply of the goods for the reason that the price has been cut, or is likely to be cut, is a good reason for withholding the trademark or the guarantee, then, quite clearly, I think it cannot be denied that withholding the trade-mark or the guarantee is a form of discrimination. It must be so. Therefore, what the noble Lord is really trying to do is to exclude entirely from the purview of this Bill the supply of goods bearing the trade-mark Of accompanied by a guarantee. I cannot think that that is right. Surely, the

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withholding of the trade-mark is just as much a form of discrimination and just as much a withholding as the other kinds of withholding; that is to say, refusing to supply to a dealer.
"except at prices, or on terms or conditions … which are significantly less favourable than those at or on which he normally supplies those goods to other dealers carrying on business in similar circumstances".
Surely, this is exactly part of that. I do not see that it is right to exclude from that the trade-mark. After all, what happens when a dealer comes along and asks, for supplies of "K" shoes? It is "K" shoes he wants. He wants them because his customers want to buy "K" shoes, or, as the noble Lord, Lord Lucas of Chilworth, said, because of the consumer goodwill created for "K" shoes. Even though you supply shoes from the same last, of the same quality leather, if you refuse to supply the trade-mark as well it would obviously be a form of discrimination and withholding.
This is not to say that there may not be good reasons for not supplying. This is dealt with later on in the clause and we will deal with it when we come to it. But to say that, whether or not there are good reasons for not supplying, the supplier would be entitled not to supply the goods with the trade-mark but only with another trade-mark or with the dealer's own trade-mark or with no trade-mark at all, surely must be a form of discrimination; and for that reason I am afraid we cannot accept this Amendment.
LORD SINCLAIR OF CLEEVE: Would the noble Lord confirm that the goods in respect of which he has been speaking are goods which are not exempted goods under this Act? The opening words of Clause 2, as I read it, makes it apply to goods not exempted. Is that correct?
THE LORD CHANCELLOR: If the goods are exempted goods under later provisions of this Bill then resale price maintenance can continue in relation to those goods. But all we are concerned with here, under this clause, is the enforcement of the abolition of resale price maintenance; where that cannot be carried on in respect of any particular class of goods.
LORD SHEPHERD: I do not propose to press this Amendment because, as the
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noble Lord, Lord Drumalbyn, said—and correctly, I think—much of this problem hinges on subsection (4) which we shall be discussing later. In these circumstances, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
6.14 p.m.
LORD CONESFORD LORD CONESFORD moved, in subsection (3)(a), to leave out "or fails". The noble Lord said: Perhaps I should say, since it will be observed that my name on this Amendment is followed by a number of others on both sides of the Committee, that I and my noble friend Lord Colville of Culross head the list because we put down the Amendment some days earlier and the Opposition put a similar Amendment down later. In saying that, needless to say, 1 welcome the fact that this Amendment is thus supported, but expect that I may possibly give different reasons for wishing to omit these words from those that may be put forward in other quarters. May I point out at the outset that this subsection (3) says that
"a supplier of goods shall be treated as withholding supplies of goods from a dealer"
in circumstances which it then gives in paragraphs (a), (b) and (c), and it will be noted that the introduction of subsection (3) is "For the purposes of this Act" and not merely "for the purposes of this section". Although for the purposes of my argument I think it will be sufficient to refer to this section, it is possible that these words, if they are wrong, will concern other parts of the Bill as well.
"The supplier shall be treated as withholding supplies of goods from a dealer … if he refuses or fails to supply those goods to the order of the dealer".
Let me give one example of where he may fail to supply those goods to the order of the dealer where, it seems to me, it would be preposterous to say that he was withholding them. Suppose he has not got any. Suppose he has completely sold out. Suppose he has sold all his goods to another dealer and a dealer comes along and orders those same goods. Is he really withholding goods if he fails to supply what he has not got? I submit that under the terms of this subsection he is, undoubtedly.
I do not suppose for one moment that, if my noble and learned friend the Lord

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Chancellor is to answer this Amendment, as I rather think he is, he will refer me to subsection (4), as a subsection which gets the Government out of the difficulty that I have described. For that subsection merely says that he shall not be treated as withholding the goods if he has other grounds which, standing alone, would have led him to withhold those supplies. But having reasons to withhold the supplies implies that you have the supplies. Therefore that subsection will not meet the difficulty. I agree with what was said by my noble friend Lord Drumalbyn: that, if we are to have this Bill at all, there must be some such provisions as are included in Clause 2 for preventing defeat of the purpose of the Bill by simply not supplying. I am not even saying that it might not be necessary to put in some words in substitution for those words that I am proposing to omit. All I am saying to the Committee is that those words, as they now stand, cannot be right. I beg to move.
Amendment moved—
Page 3, line 15, leave out ("or fails").—(Lord Conesford.)
THE LORD CHANCELLOR: I hope I may be able to save time by answering my noble and learned friend who concluded his argument by saying that those words in this particular provision cannot be right. I would preface my reply by saying that on this occasion I regret that, in my view, my noble and learned friend cannot be right. He drew the Committee's attention to subsection (4), but I fear and regret that he did not draw your attention to the relevant subsection, which is subsection (1). If my noble and learned friend will look at subsection (1) he will see that what it does is to make it unlawful to withhold supplies "on the ground that …". Any other withholding is not unlawful. If in fact you withhold supplies because you have not got any supplies to deliver you are not withholding supplies on the ground that either paragraph (a) or (b) of subsection (1) applies. That was put in the forefront of my noble and learned friend's argument. He said: "Can he be said to be withholding if he has not got any?". If he has not got any, he will not be withholding supplies on the ground that the dealer has sold in the
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United Kingdom at a price below the resale price or is likely if the goods are supplied to him to sell them below that price. It is only in that case that this clause bites. So what you are seeking to do, for the purpose of subsection (3), is to define what is meant by withholding in that context.
My noble and learned friend may ask why we want to put in the words "or fails" at all. The answer to that I can put shortly and simply. It is to meet the case where a supplier thinks that a dealer comes within paragraphs (a) and (b) of the subsection and intends, if he can, not to supply him. He may say emphatically to the person ordering the goods, "I refuse to supply you". That is one form of withholding supplies. He may not even state the reason. That might have to be established in relation to subsection (1).
But, of course, having received an order from someone whom he suspects is a price cutter, he may not bother to refuse at all. He may just stick the order in his file and do nothing about it. Yet the effect may well he that he is failing to supply goods to the order of a dealer. There is no real refusal, but it is a failure, and a deliberate failure. Why this clause has been drafted in this way is to make sure that the man who deliberately ignores an order cannot come forward and argue that, although he did receive an order, he did nothing about it and therefore could not be said to be withholding supplies. This subsection. as drawn, brings the man who said that within the ambit of subsection (1). Subsection (1) only makes unlawful the withholding of supplies where it is on one of the two grounds mentioned.
I hope I have gone some way to satisfy my noble and learned friend. In view of the reaction only recently to some observation about "strange bedfellows", I say nothing of the arguments being supported both by noble Lords opposite and by some of my noble friends, nor would I describe the alliance between my noble and learned friends on both sides of the Committee as an unholy alliance. At the same time, I must ask my noble and learned friend to look at it again in this light. There is a case for putting in the words "or fails", to cover the instance where there is no actual reply to the order. The case that he gave as an example is not really a good one, because

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if the man has no goods at all and that is the reason why he cannot supply, he cannot be withholding on one of the two grounds mentioned in subsection (1). I intervened at this stage because I thought that that perhaps might help, but, of course, if my noble and learned friend is not satisfied with the arguments I have advanced, I know him well enough to know that he will not leave me alone at this stage.
LORD CONESFORD: I wonder whether I may ask my noble and learned friend to deal with one matter, with which I think he did not deal. It may surprise him to know that I had not overlooked subsection (1), but I thought, supposing the man could not be held to have withheld supplies in any real sense, he should not really have to depend on the definition of motive in subsection (1) to get him out of his difficulty. The point I made in my speech in moving the Amendment, with which I think my noble and learned friend has not dealt, is that the subsection which I am attempting to amend starts off with the words not "for the purpose of this section" but "for the purpose of this Act." Is my noble and learned friend telling me that subsection (3) is important only in the case of things which come within the mischief of subsection (1)?
THE LORD CHANCELLOR: I am sorry I did not deal with that point raised by my noble and learned friend. I noted it, but I forgot to deal with it. The provision dealing with withholding supplies in the Bill is Clause 2, but I think I am right in saying that the expression "withholding supplies" appears elsewhere in the Bill, and it is for the purpose of securing that that phrase should have the same meaning wherever it appears that it is prefaced by the words "for the purpose of this Act." I think it would be undesirable that there should be confusion between the meaning of "witholding supplies" in subsection (2) and the meaning of "withholding supplies" where it appears elsewhere in the Bill, and that is why this definition clause—because it is no more nor less than a definition clause—is prefaced by the words "for the purpose of this Act".
LORD SILKIN: My name is attached to the Amendment. It may surprise
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my noble and learned friend very much to know that, had I proposed to move it, I should have used the same reasons he has mentioned and put up much the same arguments but I am bound to say that I have been impressed by what the noble and learned Lord, the Lord Chancellor, has said. The only question is that subsection (4) says
"…shall not be treated as withholding supplies of goods …"
Why are the same words not used, if those words are necessary?
THE LORD CHANCELLOR: I think the answer is that, having said what is meant by "withholding supplies" in subsection (3), one can read that interpretation into subsection (4).
LORD STONHAM: I see a point of practical difficulty here. The noble and learned Lord has said that if a supplier received an order from a dealer and just stuck it on his file and did nothing about it, he would be failing to supply. On the other hand, would he be covered if he sent the order back to the dealer and said that he could not supply? I have in mind the case where a supplier has estimated his output for a period and told his sales representatives how many goods they can sell. If a dealer then sends in an order—and he might be someone who wants to sell below the price at which most people are selling—and the supplier has supplies, but not more than sufficient to satisfy the orders he had instructed his representatives to book, what would be the position of a supplier in such circumstances?
THE LORD CHANCELLOR: That supplier would come under subsection (4), to which no doubt we shall come. As I explained earlier, he would be able to put forward as the reason for withholding supplies that, under his pattern of distribution, he did not desire to have more than one retailer in a town or in a street, or he would be able to say that he did not have any to supply because all his manufactures were pledged and booked up for six months to come. But I think that this question arises under subsection (4).
LORD HUGHES: I have no legal knowledge whatsoever, and get up to ask a question because I do not know where I am, in view of what the noble and learned Lord has said. If I understand him, Clause 2(1) only makes it illegal for a man to withhold supplies on the

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grounds mentioned in paragraphs (a) and (b). Assuming that someone comes along and wishes supplies, whom the supplier believes to be either an established price cutter or someone, in terms of paragraph (b), who intends to be a price cutter, and he does not wish to supply him for that reason, does the supplier keep himself within the law if he does not mention anything about price-cutting but withholds supplies and, for instance, says, "I do not like your shop. It is a dirty place. It is in the wrong place. It would not be suitable for my goods to be there", or if he states no reason at all? Does he break the law only if he is honest in saying: "I am not supplying you because you are a price cutter."?
THE LORD CHANCELLOR: I think the answer to that again is in subsection (4). It might help the Committee if I quite shortly say a word in answer to the noble Lord as to how the clause is intended to work. You start with subsection (1) declaring what is to be made unlawful—namely, for a supplier to withhold supplies of any goods from a dealer seeking to obtain them for resale, on one of the two grounds mentioned. Subsection (2) defines what is meant by the term "resale price". Subsection (3) defines what is meant by the expression "withholding supplies of goods from a dealer". So you get subsections (2) and (3) really interpreting the meaning of subsection (1). Then you go on to subsection (4), which says:
"For the purposes of this Act a supplier shall not be treated as withholding supplies of goods"—
that is to say, as coming within subsection (1)—
"on any such ground as is mentioned in subsection (1) of this section if, in addition to that ground, he has other grounds which, standing alone, would have led him to withhold those supplies."
The answer to the question put by the noble Lord is this. He will not be held to be doing an unlawful act in consequence of withholding supplies because he has believed the man to be a price cutter if, in addition to that ground for withholding supplies, he has other grounds, whether it be the distribution policy of his shops or anything else, which, standing alone—that is to say, disregarding the weight to be put on the price-cutting factor—would have
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led him to withhold those supplies. What the Court will have to determine in those cases, in the light of the evidence given to the Court, is the question: were the other grounds on which supplies were withheld—the grounds advanced by the supplier—standing alone, grounds which would have led him to withhold those supplies if the man had not been a price cutter and had not been believed to be a price cutter at all? I hope I have made that clear, and I hope the Committee will forgive me, because I think I have set an example that I should not wish to be followed of going rather outside the terms of the Amendment.
LORD HUGHES: The noble and learned Lord has gone to great lengths in attempting to get it into my poor head, and if he has not succeeded I cannot blame him. But I am still in some difficulty. Subsection (4), which he quoted. says:
" … a supplier shall not be treated as withholding supplies of goods … if, in addition to that ground …"
But that is implying that he is saying in the first instance: "I believe you to be a price cutter". What I am asking is: what is the situation where he does not have that ground at all? If he is not claiming in the first instance that the man is a price cutter, or is going to be a price cutter, he cannot have put to him some other ground in addition to something which he has not claimed in the first instance.
THE LORD CHANCELLOR: That is obvious. The short answer is that if he has not withheld supplies on the grounds put forward in Clause 2(1)(a) and (b), Clause 2 does not bite on him at all.
LORD HUGHES: In that case, so long as he is not making the accusation of price-cutting or the intention of price-cutting, he is perfectly free to withhold supplies.
VISCOUNT COLVILLE OF CULROSS: I think not. The noble Lord, Lord Hughes, has not looked at Clause 4(4), where there is a presumption that he is withholding the goods on the grounds set out in Clause 2 if there is a certain state of knowledge proved. In those circumstances, I think the situation envisaged by the noble Lord, Lord Hughes, would be caught.
LORD PEDDIE: May I ask the noble and learned Lord whether the question here is one of deliberately failed? The example was quoted of a dealer putting the order on the file and forgetting all about it. That leaves me with some doubt in my mind as to whether where it was deliberately left on the file it would be a contravention. One can envisage many cases where there is a failure of supply arising out of something that is not under the control of the dealer. It could be the misdirection of the goods; it could be an employee who, for some reason or other, forgets to deal with the transaction. What are the two situations? If you have a quite deliberate case, one can recognise that. But if it is a situation where it is not in the control of the dealer, is it then a contravention?
THE LORD CHANCELLOR: I think I can answer the noble Lord quite simply. I said that Clause 2(3)(a) is really a definition of the meaning in Clause 2(1) of withholding supplies. I think it might help to read Clause 2(1), expanding it a little:
"… it shall be unlawful for any supplier to refuse or to fail to supply goods on the grounds that …"
They are linked together. The failure to supply must be on the ground that the dealer has done (a) or (b), to be caught. I hope I have made that clear, and if not, I am afraid I cannot put it in better language. I am trying to be helpful, and I think I have already covered the point in what I have said.
LORD CONESFORD: I am grateful to the noble Lord, Lord Silkin, for indicating that he was going to move the deletion of these words on very much the same grounds as I put forward. That gives me hope that I shall be acting with the agreement of all who put their names to this Amendment if, in a moment, I ask leave to withdraw it. I agree with my noble and learned friend the Lord Chancellor that paragraphs (a) and (b) in subsection (1) will mean that a man who fails to supply the goods on the ground that he has not got them will escape any serious mischief under subsection (1) by reason of not having the motive set out in paragraphs (a) and (b). But it seems to me altogether unnecessary that he should be put in the position of having to rely on the absence
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of motive when in no real sense has he withheld the goods at all.
What I would ask my noble and learned friend to consider is the addition, in the subsection which I am proposing to amend, of some such words as would make it run as follows:
"If he refuses or, being in a position to supply the goods, fails to supply them …"
That, I think, would probably serve all the purposes both of my noble and learned friend and of the draftsman, and put something a little more reasonable in the clause. I should be grateful if the noble and learned Lord would consider that before a later stage of the Bill. Meanwhile, in view of my noble and learned friend's very reasonable reply, I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.40 p.m.
LORD HOBSON LORD HOBSON moved, in subsection (3)(b), to leave out ("credit"). The noble Lord said: As the Bill stands, I think it is implying that credit has something to do with resale price maintenance. I submit to your Lordships that it does not. The matter of credit raises the question whether the individual has the ability to pay. This should be the prime factor, and it is difficult to assess a person's credit-worthiness. In these circumstances, it seems strange that it has been found necessary to include the word "credit" in this clause, and we should like to know the reasons, whether they are valid or not. At the moment I can think of none. The question of credit is a completely variable factor. It is something which only the tradesman or the retailer or the wholesaler can determine. It is strange to find that credit is associated with the other conditions which are mentioned, and are quite intelligible, in Clause 2. It is perfectly easy to understand that, if he refuses or fails to supply goods to the order of the dealer, or if he refuses to supply goods to the dealer except at old prices. But when it comes to questions of credit, it seems strange that this factor has been introduced when, 1 submit, it is nothing to do with resale price maintenance. If a man insists on credit conditions, surely it is not necessarily a ground for refusing him supplies. We should like to know why this is in the measure. I beg to move.
Amendment moved—
Page 3, line 18, leave out ("credit").—(Lord Hobson.)
LORD SHEPHERD: I should like to support my noble friend in this Amendment. This matter was dealt with in part of my Second Reading speech, and my noble friend Lord Hobson put it very succinctly when he said that there was a considerable difference between goods and credit. At an earlier stage, I suggested that trade-marks and guarantees should not go with the goods. But as the noble Lord, Lord Drumalbyn, said on the Second Reading, they could be part and parcel of the same thing. But I think credit is something utterly different. It may not be within the ability of the supplier to give credit. Many of our manufacturers (shall we say?) finance their sales through other agencies, such as merchant banks, confirming houses, and the like. They call upon this finance.
I would apologise to the Lord Chancellor for the fact that I was away discussing, through the usual channels, the progress of this Bill and therefore I did not hear all he had to say in regard to the previous Amendment. But I gather that a great deal hinges upon the words "the other grounds", which we shall be discussing in greater detail on Monday, because I agree with most noble Lords (and I think the Lord Chancellor would agree) that the words "other grounds" give the main concern. If we can clear this up, then many of our difficulties will disappear. At the moment, as I see it "other grounds" will depend, not on what Parliament has said, but on what the courts may decide. We have heard from the noble and learned Lord the Lord Chancellor, and other Ministers, what are the Government's intentions—that there should be no interference with the general pattern of trade and commerce. I think most of us feel that this was the Government's intention, because they would be extremely foolish if they did anything to upset it.
The noble Lord, Lord Lucas of Chilworth, suggested that I was reading something into the Bill which was not there. I am not the only one who takes the view that the Bill is not clear. In fact, I think the Lord Chancellor would agree that we shall know what it means only when the courts have made a decision,
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and perhaps finally when the Court of Appeal decides. At the present moment, as I see it a supplier may have withheld goods from a dealer because the dealer has asked for credit. I can well understand the Government's Amendment, which they moved in the Commons, to Clause 4, which lays the onus of proof on the dealer. In any case, if the dealer has taken the supplier to court, the onus of proof is upon the dealer to establish the fact that he is a price-cutter or has threatened to reduce prices. I should have thought it would naturally follow that the supplier would have to make a defence.
In regard to credit, it would be relatively easy to say, "This man is insolvent. He is not paying our bills." This happens. But there are other cases where the question of his giving credit arises and often, I would suggest, it arises only from the conduct of the business. One may feel that a dealer is overstocked, that he is bringing far too many goods into his shop. One may also feel that, with his capability of selling he is getting too much credit, and you would presume that if he is asking credit from you he is getting credit from other people. One of the first things a businessman thinks when he sees a shop which is obviously overstocked is that the man is over-trading. One of the first things you do as a merchant is to start making inquiries and perhaps slow down your deliveries, or you may in the end say, "I will deliver only on payment."
Until we have got the "other grounds" cleared up, it seems to me that the supplier, if he has already given credit to this or other dealers in similar circumstances, may be brought up in front of the court to substantiate the reasons why he withheld that credit. True, the onus is on the dealer to show that he was solvent, that he was able to pay the bill, and therefore the allegation that the goods were being held for price-cutting applied. I should have thought it would be difficult for the supplier brought before the court to make his case.
I do not think our attitude to this Amendment should rest on that. I would suggest to the Committee that there is a considerable difference between the supplying of goods and the giving of credit. We would never dream of legislating that the banks, because they give credit to

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millions of people, should give credit to all. But this is largely what the Government are saying in this Bill, until we have "other grounds" cleared up. At the present moment, it seems to me that "other grounds" could mean many things. It could be wide, it could be narrow. At the present moment it would seem to me that a supplier would be in serious difficulties in deciding whether he should or should not give credit to avoid being brought to the court.
LORD GARDINER: My noble friend Lord Shepherd has been inviting the Committee to look at this from the point of view of traders. From the point of view of lawyers, I suppose that we cannot complain if the law is uncertain, because it is good for trade. But from the point of view of the community, to which we must also have regard, of course nothing is worse than uncertainty. The difficulty which I feel, if I may say so, about this clause is that there may be a case, and indeed many cases, in which the supplier does not refuse to supply the goods at all. He offers to supply goods but the retailer, rightly or wrongly, thinks that the terms which he is being offered as to credit are terms which show that he is being discriminated against. If in those circumstances there is talk of an action for damages, and both the retailer and the supplier go to their own solicitors to ask them what the prospects are, it seems to me an impossible task for any lawyer to be able to tell either of them. Because of these circumstances he would be bound to advise them that whether or not an action for damages lies will depend entirely on whether the retailer is being offered goods by the supplier
"on terms or conditions as to credit… which are significantly less favourable than those at or on which he normally supplies those goods to other dealers carrying on business in similar circumstances."
If it is the retailer who has gone to his solicitor, and if it is a supplier whom he has not dealt with before, it would be impossible for anybody, until the action had started and they get what lawyers call "discovery of documents", to tell what the supplier's normal terms as to credit are—if, indeed, there are necessarily such things as "normal terms". The subsection assumes that every supplier has what can properly he called "normal terms" as to credit,
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but I apprehend that in some trades and in many cases the credit given may depend almost entirely on the creditworthiness of the customer.
In the same way, if the supplier, where those circumstances obtain, goes to his solicitor, I should have thought that it would be virtually impossible for any lawyer to tell him whether a judge is or is not likely to take the view that the particular terms or conditions as to credit offered are, or are not, significantly less favourable than those on which he normally supplies those goods to other dealers. His other dealers may all be men with whom he has been used to dealing for years, whereas, in the case of this particular retailer, he may have a good reason for not giving him the same credit.
It is quite true that under Clause 4 the onus of proof will be on the supplier, but the mere fact that the onus of proof will be on the supplier will not make it any easier for the lawyer to advise one party or the other what is likely to happen in the event of an action for damages. I should have thought that the terms as to credit vary so much, and must depend so much on the credit-worthiness of the particular retailer, that the clause would lose nothing very much if the word "credit" were not there, and it would reduce the present virtual impossibility of lawyers being able to advise their clients in circumstances to which I have referred.
LORD DRUMALBYN: May I reply right away to the noble and learned Lord who has just sat down? I am bound to say that I would agree with him that the clause would lose nothing much if the word "credit" were not there, the reason being that in that case credit would then enter into the other matters that are significantly less favourable. So, in point of fact, this particular Amendment, even if carried, would make no difference to the operation of the Bill. But what we are concerned with is whether or not we are to regard a differential treatment in the matter of credit, where it is established, as grounds for considering the goods as being withheld. That is the sole question we have to consider.
One would concede that it is not always easy to find out what the "normal terms of credit" are; but where

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it can be shown that discrimination has been exercised in this way, surely this is precisely one of the ways in which a supplier might be tempted to make it difficult for a dealer who was cutting prices. Therefore, that is why "credit" is included as one of those circumstances which are to be considered in the matter of withholding supplies.
I would not for a moment dispute that it will not be easy to find the facts in every case of this kind, but if a man is asked for cash on delivery, or even for cash with order, in circumstances where he knows that he has previously been supplied with goods on credit, and also he thinks, or knows, that the supplier is aware that he has been cutting prices, then he would have reasonable grounds for supposing that he was being discriminated against because of his price cutting. So I should think that in a case like this it is reasonable to include the terms of credit which may be quite normal—they may be stated on the ordinary price list, for example: "payment at the end of the month following the month of delivery", or something of that kind.
LORD SHACKLETON: May I interrupt the noble Lord for a moment? He has not yet said what are the "reasonable grounds". If the price cutting takes place at a time when the dealer is in trouble and is "trying to raise the wind" one way or the other, it may be a parallel. This might happen at the same time; in which case why should these be reasonable grounds for him to suppose he is being discriminated against for price cutting?
LORD DRUMALBYN: The point the noble Lord has made is, of course, one of the reasons why we can look forward to the Bill again. There is the proviso to Clause 4(4) which says that evidence of requirements in respect of the time or manner of payment is not to raise an assumption that the withholding is on resale price maintenance grounds. That is an exception that is made there.
So, I would suggest to the House that where it can be shown that in any matters the supplier is discriminating against the dealer and supplying on conditions in a manner significantly less favourable than those on whch he normally supplies,
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in any cases of that kind where prices are being cut or it is likely that prices will be cut, it is not unreasonable to suppose that the reason for withholding the supplies in the form of discrimination in credit is because of price cutting Where that is so, I should have thought that this was just one of the things that ought to be prevented by the Bill. I would not say that it would always be easy to prevent, but where it can be established, it is reasonable that we should try to prevent discriminations of this kind.
LORD SILKIN: It is not surprising, after three-and-a-half hours of concentrated attention on this Bill, that the noble Lord is not as lucid in his explanation as one would have expected. We are not disputing the need for something of this sort. The case that my noble and learned friend made was that this clause, and particularly these words, are wholly ineffective for the purpose; they are so vague and so uncertain in their effect. The noble Lord says that it is going to be difficult to enforce; I say it is going to be impossible. I cannot conceive of a case where all the conditions required to be provided will be satisfied. This Amendment is really designed to force the Government to look at this matter again and see whether they cannot make something which really is enforceable and is not sheer window-dressing. It is in that spirit, as I understand it, that the Amendment is being moved.
THE LORD CHANCELLOR: This is no mere window-dressing. I listened with interest to the speech of the noble and learned Lord, Lord Gardiner, on this Amendment, and while I appreciate that circumstances may arise (they often do) where it is difficult for a lawyer to advise his client on what is the best course for his client to take, that is not an argument for not retaining this provision in the Bill. I put it this way to your Lordships. If your Lordships take the view—if noble Lords opposite do take the view—that the sanctions for seeking to enforce resale price maintenance after this Bill has been enacted should be criminal sanctions—and certainly that was not the view in another place of Members of the Party opposite—that is one thing. If you do not take that view—and we do not take

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that view, having considered it very carefully—it is necessary to rely on other procedures.
Under subsection (3), there are three ways in which goods supplies can be withheld. The first is by refusal or failure of the supplier to supply goods, on the ground that there has been price-cutting. Then a trader can be prejudiced not only by the refusal or withholding but also by the imposition, because he is a price-cutter, of discriminatory terms. Thirdly, he can be prejudiced by discriminatory conduct on the part of the supplier. Paragraphs (a), (b) and (c) of subsection (3) deal with those three methods, and the word "credit" is inserted there quite designedly, because that is one of the respects in which the supplier seeking to penalise the price cutter may be discriminatory. It is really headlining one of the matters.
My noble friend was quite right in saying that if you take out "credit" or "discount", so long as you leave in "other matters" the effect of the provision would be the same. But I think it is a matter of convenience that attention should be drawn to this at this stage (we are not, of course, concerned with enforcement here) making it clear in this clause that unlawful withholding, on the ground of price-cutting, or discriminatory conduct, whether in restriction of credit or discount, or other matters, will come within subsection (1) of Clause 2. That is the effect of it. I am certainly always glad to consider any suggestions which are put down for verbal alterations. Here the only Amendment is for the omission of the one word. I do not think that would improve the Bill.
It is difficult, until we come to subsection (4) to put the whole clause in its proper perspective. But I do ask the Committee to bear in mind that in subsection (3), paragraphs (a), (b) and (c) are really listing the different types of discrimination, of withholding, that there may be. They may be withholding by refusal of supplies; by the imposition of discriminatory terms, and by discriminatory conduct—for instance, instead of delivering, requiring the trader to collect the goods. All those matters are brought within the scope of subsection (1) of Clause 2. I do not believe that paragraphs (b) and (c) will be ineffective. If think the Bill would be ineffective if
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provision were not made for treating conduct of that kind, if proved, as being conduct no longer permitted.
LORD SILKIN: Might I suggest that the noble and learned Lord looks at this clause again to see if it can be made more effective? That is the purpose of our Amendment. I admit it makes very little difference whether we leave out "credit". But we do want to make it more effective than it appears to be at the present time.
THE LORD CHANCELLOR: I am glad to hear the noble Lord say that, and of course I can respond. I read this clause a great many times before it saw the light of day; but if the noble Lord says that, it is a very different approach from the very critical approach of the noble Lord who introduced the Amendment.
LORD PEDDIE: The noble Lord, Lord Drumablyn, in opposing my noble friend's Amendment, indicated a particular point: that in his opinion differential treatment regarding credit was considered to be withholding. But I think the main point at issue is that differential treatment regarding credit is not necessarily discriminatory. The real point at issue is whether or not discrimination is being applied, and we can have a situation here which I think justifies the deletion of the word "credit", because in many cases a supplier must necessarily insist upon what may appear to be substantially differential treatment—and justifiably so, because he has little faith in the creditworthiness of the customer.
THE LORD CHANCELLOR: I think I can go this far: that I am substantially in agreement with the noble Lord, except when he said that "credit" must be taken out. If withholding credit is justified on the ground, as the noble Lord, Lord Shepherd, said, that the supplier thinks the man has been over-stocking and his credit is not good, that case will come within subsection (4), I am only on the very narrow point, whether or not subsection (3)(b) should contain the word "credit". The point put by the noble Lord, Lord Peddie, really arises under subsection (4).
LORD SHEPHERD: Might I make a suggestion to the noble and learned Lord the Lord Chancellor? We have agreed

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through the usual channels that we would adjourn this Committee stage at seven o'clock this evening. There is still some doubt. The noble and learned Lord the Lord Chancellor, has admitted that he has read this particular clause time and time again.
THE LORD CHANCELLOR: Not always in this form.
LORD SHEPHERD: We have done the same. I think he will recognise that there is still some disquiet on this side. Might I make the suggestion that we adjourn the discussion and look at it and come back to it on Monday?
THE LORD CHANCELLOR: I would ask your Lordships not to do that, because I think we shall be in a better position to see the full scope of this clause when we get to subsection (4). If you take out the word "credit", you are not getting anywhere because it is still covered by "other matters". We will have a debate on subsection (4) when we shall get this into perspective. Bearing in mind that this is only on the omission of this one word, I feel that we might conclude this Amendment before we adjourn. I am, of course, willing to consider any suggestion or any idea.
LORD HOBSON: In view of the undertaking that the noble and learned Lord the Lord Chancellor will look at this matter further when we come to consider subsection (4), I beg leave to withdraw the Amendment.
Amendment, by leave withdrawn.
House resumed.

PIRATE BROADCASTING
7.8 p.m.
LORD ABERDARE LORD ABERDARE rose to ask Her Majesty's Government whether they will reconsider their decision to await the Council of Europe's Convention on "pirate" broadcasting and will take urgent action in conjunction with other interested nations to prevent this abuse of international agreements. The noble Lord said: My Lords, I beg to ask the Question standing in my name. May I say straight away that I have a very considerable admiration for the skill and enterprise of those who have engaged
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themselves in pirate broadcasting. I think we all have a great admiration for pirates, and certainly in our younger years have thrilled to the tales of their adventures on the high seas. But in those stories the pirates were always eventually brought to justice, and I think we admired equally the exploits of the Royal Navy in bringing them to book. It is the lack of firmness and swift action by the Government in this particular case of "piracy" that has led me to ask my Question. Unless some urgent action is taken, it seems to me that this country may shortly be ringed by an armada of ships, pumping out a continuous programme of "pop" music from dawn to dusk, despite the interests and rights of many other people.
May I briefly describe the history of pirate broadcasting? It dates back to August, 1958, when the first "pirate" broadcasting station, Radio Merkur was set up on board the shin "Cheeta", lying between Denmark and Sweden and broadcasting in Danish. In the next year, 1959, the Administrative Radio Conference met in Geneva and passed a Resolution that
"the establishment and use of broadcasting stations (sound broadcasting and television stations) on board ships, aircraft or any other floating or airborne objects outside international territories is prohibited";
and the Conference went on to pass a Resolution that:
"Administrations ask their Governments to study possible means direct or indirect to prevent or suspend such operations and where appropriate take the necessary action."
In spite of this, in the next three years, 1960 to 1962, four more "pirate" stations appeared: Radio Veronica, broadcasting in Dutch; Cheeta II, broadcasting first in Swedish and later in Danish; Radio Nord, broadcasting in Swedish, and "Lucky Star", broadcasting in Danish. The Scandinavian countries were the first to take action on the recommendations of the Administrative Radio Conference, and in 1962 laws were passed in Sweden, Norway, Denmark and Finland against pirate broadcasting. These laws made it illegal to operate a radio station on the high seas, or in the air space above the high seas, which caused or was liable to cause, interference with broadcast reception in the Scandinavian countries. Furthermore, it was made an offence to be an accomplice in such illegal broadcasting—and an

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accomplice was defined in considerable detail, with which I need not trouble your Lordships at the present moment. In November of the same year a similar law was passed in Belgium. These laws had a considerable effect. In fact, all the "pirate" radio stations that I have mentioned have now been closed down, with the one exception of "Cheeta" which now broadcasts in Swedish.
As your Lordships are aware, this year has seen the first two English "pirate" broadcasting stations—Radio Caroline, which started operations in March, and Radio Atlanta, which started in May. There are many compelling reasons against allowing these "pirate" broadcasting stations to continue their operations, and I should like to remind your Lordships of some of them. In the first place, they constitute a threat to efficient broadcasting. Frequencies on the air are allocated by international agreement. The Copenhagen Agreement of 1948 allocates frequencies on the medium and long wavelengths in the European broadcasting area; and the Stockholm Agreement of 1961 regulates the European allocation of V.H F. frequencies.
With no regard for these international agreements, Radio Caroline is broadcasting on 197·5 metres and Radio Atlanta on 200·7 metres, neither of them wavelengths allocated to this country. The frequency used by Radio Caroline is close to frequencies in use in Czechoslovakia and Belgium, and the Belgium authorities have already made their protest about interference. Radio Atlanta is using frequencies close to a group of French stations, and the French R.T.F. has already made representations to the B.B.C. about interference. Radio Atlanta also interferes with reception of the B.B.C. Home Service on 202 metres on the South-East Coast; and worse may well come as, for various reasons, this type of interference grows more serious in the autumn and winter. It is therefore essential, if we are to honour international agreements into which we have entered in good faith, that we should take urgent steps to close down these "pirate" radio stations.
Secondly, both Radio Caroline and Radio Atlanta broadcast continuous music, mainly on gramophone records, from 6 a.m. to 6 p.m. in breach of the Copyright Act, 1956, which gives record
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manufacturers the right to control the broadcasting of their products. This control is exercised by them through Phonographic Performance, Limited, and Phonographic Performance, Limited, allocates what is called "needle time", which determines the number of records that can be played in any one week. At present, the B.B.C. is allocated 28 hours of needle time a week, spread over the three networks in the domestic sound broadcasting services.
As your Lordships are probably aware, the Government recently approved an extension of the B.B.C.'s hours, to enable them to broadcast more music programmes. The proposal was that the hours of the Third Network should be extended to allow time for more serious music, and that the Light Programme should be extended to run from 5.30 in the morning to 2 o'clock the following morning, with a greater output of light music. But the B.B.C. required more needle time if they were going to meet these proposals and, owing to the opposition of the Musicians' Union, this needle time has not been made available to them—it has not been granted by Phonographic Performance, Limited.
LORD SOMERS: My Lords, I hope my noble friend will forgive me for interrupting, but I am most interested in this subject. Does this allocation of record time for the B.B.C. include records made by themselves—that is to say, recorded performances?
LORD ABERDARE: No, it does not include the broadcasting of a recording of say, a dramatic performance, that performance being recorded by themselves. This refers to commercial records. So even though the B.B.C. want to extend their programmes of light music, they are unable to do so because they have so far been unable to obtain a greater allocation of needle time. The "pirate" radio stations are able to do so only because they are ignoring the provisions of the Copyright Act, 1956. Also, they ignore the rights of composers, publishers, authors, performers and others who may own copyrights in the records.
The B.B.C. have an agreement with the Performing Right Society who

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look after the interests of copyright owners. But this is not so in the case of the "pirate" radio stations. And the fact that they are outside the scope of the law means also that they are free to ignore any Act of Parliament, such as, for instance, the Representation of of the People Act, the Sale of Goods Act or the Merchandise Marks Act. They can ignore laws concerning obscenity, sedition and defamation, and they can break any agreement that may be made with regard to political broadcasting. I am not saying that any of these stations have so far breached any of these Acts; I am saying only that they are in fact free to do so as things stand at the present.
The operation of these "pirate" broadcasting stations has been seized upon by the advocates of commercial radio as an excuse to press their case. Although I personally am opposed to commercial radio, I do not think that the particular Question that I have put down should be extended to cover any arguments on that much wider matter of policy. I feel that this is a matter of policy which should be given much more thought and decided by Parliament as a whole. I would merely say that should it be agreed that commercial radio should be licensed in this country, it would, I am sure, be in such a form, as indeed is the case with commercial television, that commercial radio would have to meet all the provisions of the present legislation, the Copyright Act, 1956, and other relevant legislation, as well as pay proper copyright dues to the Performing Right Society; and, of course, any pirate broadcasting would still be immense and would still have to be dealt with. As I understand it, the Government agree that pirate broadcasting is wrong, but have decided to await the Council of Europe Convention which is not likely to be ratified till the end of the year and will then require further legislation in this country.
The purpose of my Question is to ask them to take more active steps to speed up this process. Rather than await these long-drawn-out negotiations, would it not be possible to call an immediate conference of all interested people and to agree to enact legislation on the lines
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of that which has already proved effective in Scandinavia? It is true, I know, that the difficulties which exist can be dealt with only by international action. But I hope that there can be some means of putting such action into effect more swiftly than is proposed through the Council of Europe. The Postmaster General in another place stated that
" if there were any evidence that life at sea was being imperilled, the Government would not hesitate to review the position."
I hope that they will review the position immediately, before there is any question of life at sea being imperilled, and take swift action.
7.22 p.m.
LORD MORRISON OF LAMBETH: My Lords, the House is indebted to the noble Lord, Lord Aberdare, for having raised this important matter to-day, although it is a pity that, owing to the arrangement of Government business, we should reach the matter at so late an hour; but that is the responsibility of the Government who may have had their own reasons for so doing. I congratulate the noble Lord, Lord Aberdare, on bringing the facts he produced to the notice of the House and the ability with which he has presented them. He must have done a fair amount of research, and his speech has been an exceedingly valuable contribution to the matter which is now before the House.
He raised the important point that Sweden—and also, I gather, Belgium—have passed domestic legislation calculated to "clip the wings" of these gentry, even though they are functioning as he says. If that legislation is effective, that gives the lead to Her Majesty's Government in the United Kingdom to do the same thing, because the longer this hanky-panky goes on the more difficult it is to deal with. I should have thought that a law could be passed prohibiting British citizens from doing things contrary to the public interest—things which, if they spread, might endanger ships at sea and aircraft. I think that aspect ought to be considered by the Government, though I still agree that the ultimate and best solution is an international convention and agreement whereby all the countries take steps to put a stop to it, which, presumably,

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will solve the problem of what happens on the high seas.
The noble Lord was eminently right when he drew attention to the fact that, by this means, the Copyright Act and the protective steps taken on behalf of composers by the Performing Right Society can be sidestepped, and these people can with impunity use recorded music without paying any fees under the Copyright Act or in accordance with the fairly well agreed regulations of the Performing Right Society. I think that is a bad thing.
This "pirate" business has received some support from people who are interested in the development of commerical radio—the same kind of vested interest and Parliamentary pressure lobby that acted in respect of commercial television. The noble Lord has mentioned the point about the possible consequences of commercial radio and the possible motives, and, inevitably, the debate must widen out beyond the strict limits of pirate broadcasting. Why are these people—the people who have set up some respectable sounding organisation in favour of the extension and development of broadcasting and meeting the people's wishes, and so on, with all this stuff—making sympathetic noises about the "pirates"? They want to hang on to the "pirates" in order to make a case for commercial radio. That was their motive, and I think I am right in saying, with regret, that some Conservative Members of Parliament supported them in this respect.
Unfortunately, we have a very weak Postmaster General. I would not say that all Ministers are weak, because it would not be true, but that one certainly is and he has little weight in the Cabinet when he goes there. Therefore, the Government ought to deal with this pirate broadcasting as soon as possible, and I should think they will get, I will not say universal, but overwhelming Parliamentary and public support for the limited amount of legislation which could be brought in on the Swedish and Belgian model. I hope that the Minister in his reply will be able to say that that will be done.
What is the motive of the pressure lobby on this commercial business in, at any rate in part, supporting the "pirate"
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radio on the high seas—one of the most anarchistic developments and experiments in our history? Their motive is this: if the "pirates" on the high seas are not interfered with, then they can make a case for commercial sound radio. Make no mistake, if we got commercial sound radio the commercial sound radio lobby would soon in their own interests put an end to the pirate broadcasting. Having got commercial sound radio, they will then want local commercial sound radio, and from that to another I.T.V. channel. Therefore, one cannot separate this pirate broadcasting from the other considerations which have interested this not very nice lobby which has occurred in connection with British politics. I do not like them, and I do not think they bring credit on our country and its Parliamentary institutions. So I feel that this discussion will have to be wide.
It is said—and I think it is a libel on the British people—that if the people want "pop" radio all the time, then let them have it. I am not one of those who say that "pop" music should not be played on television or sound radio; nor am I against these young chaps with long hair, who seem to cause the most exciting emotions among the girls—and I am not jealous, I am beyond the age of jealousy; it does not come into my age category. If people want "pop" radio, then let them have some of it. I do not particularly want it myself, although some of the music has its attractions. But why should we have "pop" radio pushed down our throats, or rather into our ears, during the whole 24 hours of the day, as if we want nothing else? There has even been criticism of the B.B.C. sound broadcasting on the ground that they do not put on "pop" music all day.
The Minister who is going to reply tried the other day to make me out as a miserable person; of course, he approaches the matter with a bias in favour of the commercial lobby; we all know that. The Minister says that I am miserable, that I am a killjoy, or words to that effect. My Lords, any noble Lord who knows me knows that I am not a killjoy. I enjoy life, I can laugh with anybody, even at the Government—which is not exclusive to me—and therefore that statement is not true. I like people to be happy, and I have spent a lot of my life in helping them to be happy. But anybody

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who says—and this is the implication—that the general run of the British people, particularly in East Anglia, has not got a soul above "pop" radio and "pop" music at any hour of the day or the night, is wickedly slandering the British people. They are not that sort of people. They like some of it, and some of them like more than others like; but it is an absolute slander on the British people to say that they want nothing but "pop" music. One of the greatest achievements of the British Broadcasting Corporation was in the war years—and they did a little immediately before—in putting on first-class concerts of music which enormously improved the British taste for good music over that period of time. Now people come along and say that the British want nothing but "pop". Anybody would think they were a "pop" electorate; that all they want is to listen to "pop" music, to sing it, to kick around with dancing and so on. That is not true, and it is unfair to them.
There is the argument for local radio, an argument in which the British Broadcasting Corporation itself is involved. I do not think it is necessary. I believe that local newspapers do the work with local news. I do not want them to be imperilled. But the big point that I am involved in at the end of the day, my Lords, is that the country, and particularly the Government, are in danger of going television and radio mad. As a matter of fact, we have all the television we need—and perhaps a bit more. Do your Lordships know that there must be a thousand new plays—perhaps more—required every year for television, and there are not a thousand good new plays a year to be found? I look at them to my sorrow, sometimes. I am one of those obstinate, "stick it at all costs" chaps who starts looking at a play and cannot leave it until it is finished. When it is finished I say to myself, "You idiot! Why did you want to stick that out? Why didn't you turn it off at the beginning?" But, of course, I did not know at the beginning what sort of play it was going to be.
The truth is that money is being squandered on producing third-class plays, fifth-class plays, which never ought to see the light of day, because
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the authorities, between them, have to find about a thousand plays a year. The other point is that all this sort of thing means the use of valuable material, material which the nation could use in better ways—through private enterprise, if you like, or otherwise: I am not arguing that point. But the material could be better used. It is using up a lot of specialist labour, including electronic labour, which is not exactly common, as my noble friend Lord Hobson knows; and that is wasteful. I beg of the Government to take a more rational view of how much television and how much radio we want.
So, my Lords, as I said at the beginning, I congratulate the noble Lord, Lord Aberdare, on having asked the Question. In the form in which the atter is raised we cannot have a Division. In any event, at this time of night I do not know that it would do anybody any good if we did have one. But I am glad that he has raised this matter, and I hope that, if there is not a reasonably satisfactory reply from the Government, there will be an opportunity of raising it at some future time in a more decisive and clear-cut form.
7.34 p.m.
LORD HOBSON: My Lords I want to say at the outset that I agree entirely with what my noble friend Lord Morrison of Lambeth has said. He and I were very closely associated in another place when the Television Act was going through. We were, also, of course—and I think that this is not without its importance—deeply conscious of the fact that your Lordships' House, when the White Paper was first presented, did not accept commercial television, and it was only at a later stage, when the Bill came to this place, that there was a final agreement. There is power to stop this pirate broadcasting—of that there can be no doubt or equivocation whatever. There is absolutely no necessity at all to wait for the Council of Europe; and in the last analysis the Council of Europe itself has no power. The Council of Europe is only an instrument of intention and, when it has passed its resolution, it requires the approval of the Council of Ministers before any action can be taken. That should be perfectly understood.

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What I got up to ask is: Why has action not been taken under the Stockholm Convention? Action has been taken by some countries. It has been taken by Belgium; it has been taken by some of the Scandinavian countries. Surely, it is not too much to ask that the British Government should do likewise. Why are they acquiescing in this breaking of the law, as has been pointed out by the noble Lord, Lord Aberdare, not only with regard to commercial broadcasting but also with regard to copyright? It shows a great weakness. As my noble friend Lord Morrison of Lambeth said, it shows the far from tenuous association of the present Postmaster General with the commercial lobby. Therefore, action should be taken. As regards these ships with these "pirate" radio transmitters which are operating outside territorial limits, why is no action taken to "jam" their broadcasts? What is wrong in doing that? We were able to do it during the war. Certain British broadcasts are already "jammed" by other nations.
The next point I want to come to is the question of this tower for which the noble Lord searched, to quote the rather humorous description by the noble Lord, Lord Newton, when this matter was raised in Question in your Lordships' House. Why is action not taken? What I want to ask is: Is that tower within British territorial waters, or not? It is a long time since I went round that part of the Thames Estuary, but I am rather inclined to think that it is within British territorial waters. Here I speak subject to correction, and I may be wrong. But if it is within British territorial waters, why is action not taken immediately? What do we find? We find that this gentleman invades this anti-aircraft tower, which is disused but apparently in good condition. He takes all his gear down there, complete with his disc jockeys. He gets there, and no attempt whatsoever is made to clear him out. Why not?
What would have been the action if a lot of "Teddy boys" or "Mods" and "Rockers" had done likewise; or, shall we say, university students? Why was there this special consideration for this gentleman? One just cannot understand the reason for it. Further, he actually had the cheek, when he ran short of water, to ask for a helicopter to come over; and the R.A.F. said "Yes, we will do it, if you are in dire straits." The whole
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thing is becoming an utter absurdity, and action must be taken by the Government to put an end to it. People just do not want it.
Why is it allowed to go on? It is allowed to go on precisely for the reasons that have been very adequately described by my noble friend Lord Morrison of Lambeth. It is part of the powerful commercial lobby which now wants commercial radio. That is the real reason why no action is taken. I cannot believe—and I speak from a pretty close association with the Post Office over a good few years—that their legal department could not find a way of stopping it. And, as I have said, action must be taken. What about the Government's responsibility to friendly Powers? What about Belgium? There is definite interference with the Belgian radio. Presumably there have been complaints, and yet we are still not prepared to take any action. As I say, the whole thing is becoming an absolute farce.
During the passing of the Television Act, of course, we had experience of the methods of operation of this commercial radio lobby. They were certainly contrary to accepted British Parliamentary standards. I do not want, at this late stage, to give quotations from the book which was written, but the only fair comparison is with the commercial lobbies which one associates with the House of Representatives and the Senate. It was American log-rolling of the worst type—let there be no doubt about that; and if any noble Lord cares to look up and read the speeches which were made in your Lordships' House during the passing of that Bill and during the discussion on the White Paper by the noble Earl, Lord Halifax, he will see precisely what I mean.
I say, in conclusion—there is no point in labouring this matter at this late hour—that I hope that the import of this Unstarred Question by the noble Lord, Lord Aberdare, to whom we are very grateful for raising this matter, will receive the most serious consideration of Her Majesty's Government, and that we shall have this deliberate flouting of the law stopped. Before I sit down, may I say that I have an engagement, and that if I am not here when the noble Lord, Lord Newton, comes to reply he will understand that it is entirely due to the

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lateness of the hour and not to any discourtesy.
7.42 p.m.
THE MINISTER OF STATE FOR EDUCATION AND SCIENCE (LORD NEWTON): I am going to reply now, so I hope that may help the noble Lord, Lord Hobson. As your Lordships know, in recent weeks a great deal has been said and written about "pirate" broadcasting ships and the commercial purposes they serve, but the fundamental nature of the problem presented by them is their irresponsible use of radio frequencies. Your Lordships will appreciate what a shambles there would be if anybody and everybody who wished to operate a wireless transmitter did so and seized whatever frequency he thought best for his purpose. The results would be so chaotic that nobody would be sure of making effective use of any radio frequency at all, whether for broadcasting or other communication services, for navigation, or even for the control of space vehicles. To the extent that radio waves know no frontiers, this problem is an international one, and this was recognised early. For some decades now regulation of the use of the radio frequency spectrum has been co-ordinated internationally by the International Telecommunication Union.
Before replying specifically to the terms of my noble friend's Question, I should like, if the House will bear with me, briefly to review the activities of this international organisation over the last few years in the particular field with which your Lordships are concerned this evening. To begin with, as my noble friend said, in 1959 the I.T.U. convened one of its periodic major radio conferences. Nearly all the countries of the world are members of the Union, and about 800 delegates came together in Geneva to review and revise the Radio Regulations which are annexed to the International Telecommunication Convention. This was a very big undertaking, and it took them between four and five months. One of these regulations expressly prohibits the establishment and use of broadcasting stations on board ships outside national territories, because it is contrary to the orderly use of the radio frequency
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spectrum. But, realising that the operation of such stations takes place outside the jurisdiction of member countries, the Conference, in a recommendation which was associated with the Radio Regulations, urged telecommunication administrations to ask their Governments to study possible means, direct or indirect, of preventing or suspending such operations, and, where appropriate, of taking the necessary action. These revised Regulations came into force in May, 1961, and, since then, countries have been actively considering how best they could give effect to the recommendation I have mentioned.
Inside Europe it was felt that the most effective way of proceeding was to consider the problem on a regional basis. The Conference of European Postal and Telecommunications Administrations examined it and, although that body could not of itself find a solution, it felt that what was needed was concerted action to deal with "pirates". So in 1962, the Council of Europe took the matter on to its agenda in order to see whether a European Convention could be worked out. Such a Convention has been under consideration since then, and, as I told your Lordships on June 2, it is now in an advanced stage of preparation. My Lords, I hope that this brief recital of the background will suffice to convince your Lordships that the solution of this problem of "pirate" broadcasting ships is not simple. It has exercised the minds of many international experts for several years. I must say to the noble Lord, Lord Hobson, that it is quite clear that the International Telecommunication Convention gives of itself to its signatories no power to suppress or prevent piracy: it can act only through its own individual members.
The Wireless Telegraphy Act, 1949, enables the Postmaster General to regulate the use of radio within territorial limits and on British-registered ships elsewhere. It does not extend to foreign-registered or unregistered ships on the high seas, and it could not be amended so as to purport to extend to them without raising serious issues affecting the concept of freedom of the seas—and that is a concept which Her Majesty's Government are anxious to preserve. It would be possible for the Government—assuming the necessary Parliamentary time, of

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course—to legislate unilaterally, without waiting for the completion of the European Convention, but it would still remain possible for the "pirates" to operate off our shores by obtaining their supplies, and so on, from other countries.
Moreover, if British firms could not advertise through the stations, much of the "pirates'" present source of revenue would, of course, be cut off, but this would probably cause them to resort to advertising foreign-made goods for sale in Britain, thus putting British producers at a disadvantage. In other words, foreign "pirates", if I may so describe them, would not be caught by our legislative net it we legislated unilaterally. Therefore there is an obvious need for European countries to act together, and on a uniform basis. The noble Lord, Lord Morrison of Lambeth, recognised that very clearly in a supplementary question which he put to me on June 2, and he recognised it again this evening in his speech.
The member countries of the International Telecommunication Union recognise that they must take further action, and, so far as "pirate" ships in European waters are concerned, our neighbours—that is to say, our European neighbours—feel that the most satisfactory way of proceeding is to have a Convention on the basis of which countries can bring in national legislation on more or less uniform lines. A representative of the International Telecommunication Union has been present at the discussions in Strasbourg, and in agreement with him the draft Convention as it at present stands would permit member countries of the International Telecommunication Union which are outside the Council of Europe to accede to it. The field of application of the provisions of the Convention would therefore be likely to be extended to cover other regions than Europe.
My noble friend has suggested that Her Majesty's Government should reconsider their decision to await the conclusion of this Convention and should take some other, perhaps speedier, action in conjunction with other interested nations. Well, with all respect to my noble friend, I cannot help but wonder exactly what more urgent concerted action should be taken. Collaboration with other interested nations has produced the current preparation of a Convention. If we and
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one or two neighbouring countries were to agree to take more forceful measures (which was another suggestion of his) we should find that we were abusing other international agreements relating to the law of the sea and running counter to the traditional British concept of the freedom of the seas. There are very great legal difficulties involved in an operation of this kind.
I do not wish to underrate the potential danger to which the noble Lord, Lord Morrison of Lambeth, and I both drew attention on June 2 when I repeated to your Lordships the Statement of my right honourable friend. On that occasion the noble Lord, Lord Morrison of Lambeth, referred to the fact that human life might be endangered by the operations of these pirates and I agree with him that a certain risk is involved. The Government also realise only too clearly that the "pirate" stations which are already in existence are causing interference to the reception of authorised broadcasting services in Belgium, France and Czechoslovakia. However, we feel that at present there is nothing to be gained—
LORD MORRISON OF LAMBETH: My Lords, can the noble Lord say that, when the B.B.C. or I.T.V. show a notice apologising for interference from, say, Continental sources, this probably means that pirate broadcasting is interfering with it?
LORD NEWTON: My Lords, I am sorry but I am afraid I have not the faintest idea. I just do not know.
LORD MORRISON OF LAMBETH: If you could find out, I should very much like to know.
LORD NEWTON: My Lords, if I can find out I will do so and will let the noble Lord know.
What I was trying to say was that the Government feel that there is at present nothing to be gained by setting the Council of Europe Agreement on one side and suddenly attempting to interest our neighbours in the consideration of some new but unspecified course of action. We have been engaged in active study of this problem with our friends in the Council of Europe for more than two years, and if some quicker or more effective solution had been found to be

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jointly acceptable then I have little doubt that it would have been adopted already. I understand that our experts have played a prominent part in the shaping of the current Convention. I hope that noble Lords will consider this question objectively and will agree with me that it will not be right to turn away from this promising line of international co-operation just because suddenly, for the first time, we are ourselves being subjected to radio piracy.
My noble friend Lord Aberdare referred to the copyright issues, if I may so describe them, involved in this "piracy" question. Well, I understand that proceedings are being taken on behalf of the makers of the records in respect of these broadcasts, and I think therefore I should not say anything more about that aspect. Again, my noble friend Lord Aberdare just touched on the question of the future, if there is to be any, of commercial radio. The noble Lord, Lord Morrison of Lambeth, said a great deal about it and the noble Lord, Lord Hobson, said a little about it. I do not propose to add anything to what I said about this when I repeated my right honourable friend's Statement on June 2; and, if I did I think I should be out of order and I should not be adhering to the customs of your Lordships' House; and I think in my position I should not get out of order.
However, I should like to say that I took the strongest exception to the criticism of the noble Lord, Lord Morrison of Lambeth, of my right honourable friend the Postmaster-General. The noble Lord, Lord Morrison of Lambeth, said that he was a weak Postmaster-General; and this I consider to be a personal criticism, a personal attack.
LORD MORRISON OF LAMBETH: Hear, hear!
LORD NEWTON: Why did the noble Lord, Lord Morrison of Lambeth, make that attack on my right honourable friend? The noble Lord, Lord Morrison of Lambeth, made that attack because he is as prejudiced against commercial radio as—
LORD MORRISON OF LAMBETH: Your right honourable friend is in favour of it.
LORD NEWTON: —as he is prejudiced against commercial television. It is not good enough, in my view, because he disagrees with the views of my right honourable friend, that he should therefore attack my right honourable friend's capacity as a Minister. The noble Lord, Lord Morrison of Lambeth, also went out of his way, quite needlessly, to say that I approached this problem with a bias towards commercial radio. The noble Lord has not the faintest reason whatever to say that about me. I have never been concerned with any radio or television lobby and, if he wishes to know, I dislike all lobbies just as much as he does. I should like the noble Lord, if he criticises me in future, to make certain of the evidence on which he does it.
The noble Lord, Lord Hobson, asked why we did not jam these "pirates". Jamming would, no doubt, be effective in cutting off a large proportion of the "pirates' "audience; it would be costly and it would take some months to arrange; it would also probably cause the "pirates" to keep changing their frequencies in order to overcome the jamming; and it would also upset the control of the "pirates'" transmitters and so cause them to endanger the safety services and intervene even more seriously with authorised broadcast services abroad. It could be done, but it does seem to me that the advantages would outweigh the disadvantages. As I have said, the whole essence of this problem is the irresponsible use of broadcasting frequencies. Jamming stations would be really adding to that situation of unco-ordinated and unregulated use of frequencies.
My Lords, I would like to end by saying—I recognise and understand the interest which my noble friend and other noble Lords who have spoken have shown in this problem—though I do not think they have all shown interest necessarily for the same reason. But I must reiterate that Her Majesty's Government are still of the opinion that concerted action on the lines of the Council of Europe Convention is the best way of dealing with it. On the basis of present information we confidently hope that the Convention will be signed before the end

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of the year and the policy of the Government remains as outlined in the Statement which I made to your Lordships on June 2.
LORD WAKEFIELD OF KENDAL: My Lords, before the noble Lord sits down, could he tell us what is the legal position about the Fort used for this pirate broadcasting? Since it is constructed on the bed of the sea and above water, surely there must be some sovereignty over that Fort for some country. If that is the case, then that Fort would be within the territorial waters; and if that is the case then surely, without waiting for any Convention—while we fully appreciate all the points my noble friend has made—it should be possible for the Government to take immediate action to stop this nuisance, even if they cannot deal with the other stations on the High Seas. Surely, if this Fort is in territorial waters—it must be under the sovereignty either of this or of some other country—it would be possible quite quickly, as a matter of urgency, to shut down this pirate broadcasting station.
LORD NEWTON: My Lords, it is not quite so simple as that. I do not think that, as a layman, I would venture without notice to answer my noble friend's question about whether a "land" structure in the sea is automatically inside territorial waters, because it is standing on an erection that goes down to the bed of the sea and is not floating on top of the water. As regards the Sutch station, about which I think my noble friend is really concerned, I informed the House on June 2 that consideration is being given to prosecuting for broadcasting in territorial waters, but it is a fairly complicated legal question.
LORD MORRISON OF LAMBETH: My Lords, before the noble Lord sits down, surely the Government have considered whether this fort that has been mentioned by the noble Lord is or is not
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in territorial waters. Does that not seem an obvious thing to have done?
LORD NEWTON: That is what I said.
LORD MORRISON OF LAMBETH: My Lords, the noble Lord did not want me to stand up and interrupt him, and I did not hear what he said. Perhaps he would be good enough to repeat it.
LORD NEWTON: My Lords, I said again to-day, as I said on June 2, that that is being considered.

LONDON TRANSPORT BILL
Reported, with Amendments.
  VOLUNTARY SCHOOLS AND MODERN BUILDING TECHNIQUES
  VOLUNTARY SCHOOLS AND MODERN BUILDING TECHNIQUES